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EXHIBIT 10(b)
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STOCK PURCHASE AGREEMENT
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BETWEEN
POWERTEL, INC.
AND
ITC WIRELESS, INC.
DATED AS OF JUNE 22, 1998
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS .......................................................... 1
SECTION 1.1 Certain Defined Terms ....................................... 1
ARTICLE II PURCHASE AND SALE .................................................... 5
SECTION 2.1 Purchase and Sale of the Shares ............................ 5
SECTION 2.2 Purchase Price ............................................. 5
SECTION 2.3 Closing .................................................... 6
SECTION 2.4 Closing Deliveries by the Seller ........................... 6
SECTION 2.5 Closing Deliveries by the Purchaser ........................ 6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER ........................ 6
SECTION 3.1 Organization, Authority and Qualification of the Seller .... 6
SECTION 3.2 Capitalization of the Seller ............................... 7
SECTION 3.3 Subsidiaries ............................................... 7
SECTION 3.4 No Conflict ................................................ 8
SECTION 3.5 Governmental Consents and Approvals ........................ 8
SECTION 3.6 Seller SEC Reports; Financial Statements ................... 9
SECTION 3.7 No Undisclosed Liabilities ................................. 9
SECTION 3.8 Conduct in the Ordinary Course; Absence of
Certain Changes, Events and Conditions ..................... 9
SECTION 3.9 Litigation ................................................. 10
SECTION 3.10 Compliance with Laws ....................................... 10
SECTION 3.11 Full Disclosure ............................................ 10
SECTION 3.12 Private Placement .......................................... 10
SECTION 3.13 FCC Regulations ............................................ 10
SECTION 3.14 Brokers .................................................... 10
SECTION 3.15 Delivery of Certain Documents .............................. 10
SECTION 3.16 No Consideration for Consent ............................... 11
SECTION 3.17 Delivery of Business Plan .................................. 11
SECTION 3.18 Licenses ................................................... 11
SECTION 3.19 Other Licenses and Approvals ............................... 12
SECTION 3.20 Tax Matters ................................................ 12
SECTION 3.21 FCC Change of Control ...................................... 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER ..................... 13
SECTION 4.1 Organization and Authority of the Purchaser ................ 13
SECTION 4.2 No Conflict ................................................ 13
SECTION 4.3 Governmental Consents and Approvals ........................ 13
SECTION 4.4 Litigation ................................................. 14
SECTION 4.5 Investment Purpose ......................................... 14
SECTION 4.6 Accredited Investor ........................................ 14
SECTION 4.7 Brokers .................................................... 14
ARTICLE V ADDITIONAL AGREEMENTS ................................................ 14
SECTION 5.1 Filing of Certificate of Designations ...................... 14
SECTION 5.2 Treatment of Shares as Equity .............................. 14
SECTION 5.3 Regulatory and Other Authorizations; Notices and Consents .. 14
SECTION 5.4 Notice of Developments ..................................... 15
SECTION 5.5 Registration Rights ........................................ 15
SECTION 5.6 Resale Restrictions ........................................ 15
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SECTION 5.7 Registration of Shares ..................................... 16
SECTION 5.8 Reservation of Common Stock ................................ 16
SECTION 5.9 Delivery of Certain Documents .............................. 16
SECTION 5.10 Certain Information ........................................ 16
SECTION 5.11 Conduct of Business of the Seller .......................... 17
SECTION 5.12 Use of Funds ............................................... 17
SECTION 5.13 Further Action ............................................. 17
ARTICLE VI CONDITIONS TO CLOSING ............................................... 17
SECTION 6.1 Conditions to Obligations of the Seller .................... 17
SECTION 6.2 Conditions to Obligations of the Purchaser ................. 18
ARTICLE VII INDEMNIFICATION ..................................................... 20
SECTION 7.1 Survival of Representations and Warranties ................. 20
SECTION 7.2 Indemnification ............................................ 21
SECTION 7.3 Limits on Indemnification .................................. 22
ARTICLE VIII TERMINATION AND WAIVER ............................................ 23
SECTION 8.1 Termination ................................................ 23
SECTION 8.2 Effect of Termination ...................................... 23
SECTION 8.3 Waiver ..................................................... 23
ARTICLE IX GENERAL PROVISIONS ................................................... 24
SECTION 9.1 Expenses ................................................... 24
SECTION 9.2 Notices .................................................... 24
SECTION 9.3 Public Announcements ....................................... 25
SECTION 9.4 Headings ................................................... 25
SECTION 9.5 Severability ............................................... 25
SECTION 9.6 Entire Agreement ........................................... 26
SECTION 9.7 Assignment ................................................. 26
SECTION 9.8 No Third Party Beneficiaries ............................... 26
SECTION 9.9 Amendment .................................................. 26
SECTION 9.10 Governing Law .............................................. 26
SECTION 9.11 Counterparts ............................................... 26
SECTION 9.12 Specific Performance ....................................... 26
EXHIBITS
6.1(e) Form of Opinion of Purchaser's Legal Counsel
6.2(e) Form of Opinion of Seller's Legal Counsel
ANNEXES
Annex I .................................................................I-1
Annex II ................................................................II-1
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This STOCK PURCHASE AGREEMENT, dated as of June 22, 1998, is entered
into between POWERTEL, INC., a Delaware corporation (the "Seller"), and ITC
WIRELESS, INC., a Delaware corporation (the "Purchaser").
WITNESSETH:
WHEREAS, the Seller wishes to issue and to sell to the Purchaser, and
the Purchaser wishes to purchase from the Seller, 50,000 shares (the "Shares")
of a new series of convertible preferred stock of the Seller designated Series F
6.5% Cumulative Convertible Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the terms of the Preferred Stock are set forth in the form of
Certificate of Designations attached as Annex I hereto (the "Certificate of
Designations");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Purchaser and the Seller
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry, proceeding
or investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"Agreement" or "this Agreement" means this Stock Purchase Agreement,
dated as of June 22, 1998, between the Seller and the Purchaser (including the
Exhibits and Annexes hereto and the Disclosure Schedule) and all amendments
hereto made in accordance with the provisions of Section 9.9.
"Approvals" has the meaning specified in Section 3.5.
"Assets" means the properties, assets (including, without limitation,
Licenses) and contract rights used or intended to be used in the conduct of the
Business or otherwise owned, leased or used by the Seller or any Subsidiary or,
with respect to contract rights, to which the Seller or any Subsidiary is a
party or is bound.
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"Beneficially Own" with respect to any securities means having
beneficial ownership as determined pursuant to Rule 13d-3 under the Exchange
Act, including having beneficial ownership pursuant to any agreement,
arrangement or understanding, whether or not in writing.
"Business" means the business of the Seller and the Subsidiaries as
currently conducted and, as contemplated by the Seller on the date hereof and on
the Closing Date, to be conducted.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"Certificate of Designations" has the meaning specified in the recitals
to this Agreement.
"Closing" has the meaning specified in Section 2.3.
"Closing Date" has the meaning specified in Section 2.3.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.01 per share, of
the Seller.
"Communications Act" means the Federal Communications Act of 1934, as
amended.
"Control" (including the terms "controlled by" and "under common control
with"), with respect to the relationship between or among two or more Persons,
means the possession, directly or indirectly or as trustee or executor, of the
power to direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
"Disclosed by Seller" with respect to information concerning any event,
fact or circumstance, includes information contained in the Seller's SEC
Reports, annual and other reports furnished by Seller to its stockholders as a
group, and press releases of the Seller disseminated to (i) the Dow Xxxxx News
Service or (ii) the National Association of Securities Dealers, Inc. Automated
Quotation System or other national securities exchange ("Press Releases"), as
well as information disclosed directly to the Purchaser by the Seller in this
Agreement, the 1997 Financial Statements, the 1998 Financial Statements or in
writing and attached hereto or delivered pursuant to Section 6.2. If the
Purchaser has a representative on the Seller's Board of Directors, "Disclosed by
Seller" shall also mean written information and materials which are or have been
disclosed or distributed during the term of service of such representative to
the Seller's Board of Directors or any committee thereof on which such
representative serves or written evidence (such as minutes, resolutions and
written consents) of
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the meetings of the Board of Directors or any committee thereof on which such
representative serves which are distributed during the term of service of such
representative.
"Disclosure Schedule" means the Disclosure Schedule attached hereto,
dated as of the date hereof, and forming a part of this Agreement.
"Encumbrance" means any security interest, pledge, mortgage, lien,
charge, encumbrance, adverse claim, preferential arrangement or restriction of
any kind, including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Executive Officer" has the meaning set forth in Rule 405 of Regulation
C adopted by the Commission under the Securities Act without regard to whether
any party to this Agreement is a registrant as used in Rule 405.
"FCC" means the United States Federal Communications Commission.
"FCC Licenses" means all licenses granted by the FCC to the Seller for
and related to the provision of personal communications services and cellular
services in connection with the Seller's Business.
"Governmental Authority" means any United States federal, state or local
or any foreign government, regulatory or administrative authority, or any
governmental agency, department, board or commission, or any court, tribunal, or
judicial, arbitral or investigative body or other governmental tribunal.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Knowledge" of a party with respect to such party's representation or
warranty concerning any event, fact or circumstance means the current actual
knowledge of that party's Executive Officers of information which, after
reasonable consideration by such Executive Officers, would be recognized by
reasonable persons of similar experience in such positions as relevant to the
representation or warranty qualified by the words "to the knowledge" of a party,
"known to" a party or a similar phrase. Knowledge does not include information
not within such current actual knowledge that might be revealed if the party's
files were searched or if any other investigation were made.
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"Law" means any United States federal, state, local or foreign statute,
law, ordinance, regulation, rule, code, order, other requirement or rule of law,
including, without limitation, any requirement or rule of law of the FCC.
"Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising under
any Law, Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking.
"Licenses" means all FCC Licenses and all other licenses, permits
(including construction permits), consents, approvals and other authority issued
by any Governmental Authority in connection with the legal and proper operation
of the Seller's Business.
"Loss" has the meaning specified in Section 7.2(a).
"Material Adverse Effect" means any circumstance, change in or effect on
the Business, the Seller or any Subsidiary that, individually or in the
aggregate with any other circumstances, changes in, or effects on, the Business,
the Seller or any Subsidiary: (a) is, or would reasonably be expected to be,
materially adverse to the Business, operations, Assets or Liabilities,
prospects, results of operations or financial condition of the Seller and the
Subsidiaries, taken as a whole; or (b) would reasonably be expected to
materially adversely affect the ability of the Seller and the Subsidiaries to
operate or conduct the Business.
"1997 Financial Statements" means the audited annual consolidated
financial statements of the Company and the notes and schedules thereto for the
year ended December 31, 1997.
"1998 Financial Statements" has the meaning specified in Section 3.2(b).
"Person" means any individual, partnership, limited liability company,
firm, corporation, association, trust, joint venture, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Exchange Act.
"Preferred Stock" has the meaning specified in the recitals to this
Agreement.
"Purchase Price" has the meaning specified in Section 2.2.
"Purchaser" has the meaning specified in the preamble to this Agreement.
"Reference Balance Sheet Date" means March 31, 1998.
"Related Agreements" has the meaning specified in Section 3.15.
"Sale" means any sale, assignment, transfer, distribution or other
disposition of shares of Common Stock or of a participation therein, whether
voluntarily or by operation of law.
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"SEC Reports" has the meaning specified in Section 3.6(a).
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Seller" has the meaning specified in the preamble to this Agreement.
"Series E Stock Purchase Agreement" means that certain Stock Purchase
Agreement of even date herewith between the Seller and SCANA Communications,
Inc., as purchaser thereunder, with respect to the sale and purchase of 50,000
shares of the Seller's Series E 6.5% Cumulative Convertible Preferred Stock.
"Shares" has the meaning specified in the recitals to this Agreement.
"Subsidiaries" means any and all corporations, partnerships, limited
liability companies, joint ventures, associations and other entities controlled
by the Seller directly or indirectly through one or more intermediaries.
"Tax" or "taxes" means any and all taxes, fees, levies, assessments,
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains, taxes;
license, registration and documentation fees; and customs duties, tariffs, and
similar charges.
"Third Party Claims" has the meaning specified in Section 7.2(b).
"U.S. GAAP" means United States generally accepted accounting
principles and practices as in effect from time to time and applied consistently
throughout the periods involved.
ARTICLE II
PURCHASE AND SALE
SECTION 2.1 Purchase and Sale of the Shares. Upon the terms and subject
to the conditions of this Agreement, at the Closing, the Seller shall sell to
the Purchaser, and the Purchaser shall purchase from the Seller, the Shares.
SECTION 2.2 Purchase Price. The aggregate purchase price for the Shares
shall be $75,000,000.00 (the "Purchase Price"), representing a purchase price of
$1,500.00 per Share.
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SECTION 2.3 Closing. Upon the terms and subject to the conditions of
this Agreement, the issuance, sale and purchase of the Shares contemplated by
this Agreement shall take place at a closing (the "Closing") to be held at 10:00
A.M. local time on a date and at a location mutually agreed to by the parties
upon the satisfaction or waiver of all conditions to the obligations of the
parties set forth in Article VI, or at such other place or at such other time or
on such other date as the Seller and the Purchaser may mutually agree upon in
writing (the day on which the Closing takes place being the "Closing Date").
SECTION 2.4 Closing Deliveries by the Seller. At the Closing, the Seller
shall deliver or cause to be delivered to the Purchaser a receipt for the
Purchase Price, stock certificates evidencing the Shares duly registered in the
name of the Purchaser, in a form reasonably satisfactory to the Purchaser, and
the opinions, certificates and other documents required to be delivered pursuant
to Section 6.2.
SECTION 2.5 Closing Deliveries by the Purchaser. At the Closing, the
Purchaser shall deliver to the Seller the Purchase Price in immediately
available funds together with the opinions, certificates and other documents
required to be delivered pursuant to Section 6.1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this Agreement, the
Seller hereby represents and warrants to the Purchaser as follows:
SECTION 3.1 Organization, Authority and Qualification of the Seller. The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all necessary power and
authority to enter into this Agreement, to carry out its obligations hereunder,
to consummate the transactions contemplated hereby and to conduct its Business,
except where the failure to be in good standing would not have a Material
Adverse Effect. The Seller is duly licensed or qualified to do Business and is
in good standing in each jurisdiction in which the properties owned or leased by
it or the operation of its Business makes such licensing or qualification
necessary, except as would not have a Material Adverse Effect. The execution and
delivery of this Agreement by the Seller, the performance by the Seller of its
obligations hereunder and the consummation by the Seller of the transactions
contemplated hereby, including, without limitation, the issuance of the
Preferred Stock in accordance with the terms of this Agreement and the
Certificate of Designations, have been duly authorized by all requisite action
on the part of the Seller. This Agreement has been duly executed and delivered
by the Seller, and (assuming due authorization, execution and delivery by the
Purchaser) this Agreement constitutes a legal, valid and binding obligation of
the Seller enforceable against the Seller in accordance with its terms.
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SECTION 3.2 Capitalization of the Seller. (a) The authorized capital
stock of the Seller consists of 100,000,000 shares of Common Stock and 1,000,000
shares of preferred stock, par value $0.01 per share. As of the date hereof, (i)
26,948,955 shares of Common Stock are issued and outstanding, all of which are
validly issued, fully paid and nonassessable, and (ii) 300,000 shares of
preferred stock (not including the Preferred Stock) are issued and outstanding,
all of which are validly issued, fully paid and nonassessable. None of the
issued and outstanding shares of Common Stock or preferred stock was issued in
violation of any preemptive rights. All issuances of such issued and outstanding
shares when made were registered or exempt from registration under the
Securities Act, except where the failure of such issuances to be registered or
exempt from registration would not, individually or in the aggregate, have a
Material Adverse Effect. Except as disclosed in the SEC Reports and in Schedule
3.2 of the Disclosure Schedule, there are no options, warrants, convertible
securities or other rights, agreements, arrangements or commitments of any
character to which the Seller is a party relating to the issuance or sale of
capital stock of the Seller or obligating the Seller to issue or sell any shares
of capital stock of, or any other equity interest in, the Seller or its
Subsidiaries. Except as disclosed in Schedule 3.2 of the Disclosure Schedule,
there are no outstanding contractual obligations of the Seller to repurchase,
redeem or otherwise acquire any shares of Common Stock or shares of capital
stock of its Subsidiaries. Upon issuance of the Shares to the Purchaser at the
Closing and payment therefor pursuant to this Agreement and the Certificate of
Designations, the Shares will be validly issued, fully paid and nonassessable
and free of preemptive rights. By the Closing Date, the shares of Common Stock
issuable upon conversion of the Shares will be duly authorized and reserved for
issuance upon such conversion and, upon issuance of such shares in accordance
with the Certificate of Designations, will be validly issued, fully paid and
nonassessable and free of preemptive rights. Upon consummation of the
transactions contemplated by this Agreement, including the issuance of the
Shares, registration of the Shares in the name of the Purchaser in the stock
records of the Seller and delivery of the Shares, the Purchaser will own the
Shares free and clear of all Encumbrances, other than Encumbrances resulting
from any action, or failure to take action, by the Purchaser. All shares of
Common Stock issued as dividends with respect to the Shares will be validly
issued, fully paid and nonassessable and free of preemptive rights. Upon the due
declaration and issuance of a dividend payable in Common Stock with respect to
the Shares, the registration of such shares of Common Stock in the name of the
Purchaser in the stock records of the Seller and delivery of such shares of
Common Stock, the Purchaser will own all such shares of Common Stock free and
clear of all Encumbrances, other than Encumbrances resulting from any action, or
failure to take any action, by the Purchaser.
(b) The outstanding indebtedness of Seller as of March 31, 1998
is accurately reflected (subject to normal and recurring adjustments and other
revisions which were not and are not known or reasonably expected to be material
in amount) in the Seller's balance sheet at March 31, 1998 contained in the
Seller's unaudited quarterly consolidated financial statements and the notes and
schedules thereto for the quarter ended March 31, 1998 (the "1998 Financial
Statements").
SECTION 3.3 Subsidiaries. Each Subsidiary: (i) is duly organized and
validly existing under the laws of its jurisdiction of organization; (ii) has
all necessary power and
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authority to own, operate or lease the properties and assets owned, operated or
leased by such Subsidiary and to carry on its business as it has been and is
currently conducted by such Subsidiary; and (iii) is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which the
properties owned or leased by it or the operation of its business makes such
licensing or qualification necessary or desirable, except where the failure to
be so duly licensed or qualified would not have a Material Adverse Effect. Each
Subsidiary is wholly owned, directly or indirectly, by the Seller.
SECTION 3.4 No Conflict. Assuming that all Approvals described in
Section 3.5 have been obtained, that approval of the Certificate of Designations
and the issuance of the Shares has been obtained from the holders of the
Seller's Series A, Series B, Series C and Series D Preferred Stock and that all
filings and notifications listed in Schedule 3.5 of the Disclosure Schedule have
been made, the execution, delivery and performance of this Agreement by the
Seller, and the issuance of the Shares and the performance of the Seller's
obligations in accordance with the Certificate of Designations, do not and will
not: (i) violate, conflict with or result in the breach of any provision of the
certificate of incorporation or by-laws (or similar organizational documents) of
the Seller or any Subsidiary as in effect on the date hereof or on the Closing
Date; (ii) conflict with or violate (or cause an event which could have a
Material Adverse Effect as a result of) any Law or Governmental Order as in
effect on the date hereof or on the Closing Date applicable to the Seller, any
Subsidiary or any of their respective assets, properties or businesses; or (iii)
conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any Encumbrance on any of the Shares or on any of the assets or
properties of the Seller or any Subsidiary pursuant to, any note, bond, mortgage
or indenture, contract, agreement, lease, sublease, license, permit, franchise
or other instrument or arrangement as in effect on the date hereof or on the
Closing Date to which the Seller or any Subsidiary is a party or by which any of
the Shares or any of such assets or properties is bound or affected.
SECTION 3.5 Governmental Consents and Approvals. The execution, delivery
and performance of this Agreement by the Seller and the performance of the
Seller's obligations in accordance with the Certificate of Designations do not
and will not require any consent, approval, authorization or other order of,
action by, filing with or notification to any Governmental Authority on the part
of the Seller pursuant to Laws as they are in effect on the Closing Date
(collectively, the "Approvals"), except: (i) as described in Schedule 3.5 of the
Disclosure Schedule; (ii) pursuant to the notification requirements of the HSR
Act; (iii) the filing with the Secretary of State of the State of Delaware of
the Certificate of Designations contemplated by Section 5.1; and (iv) any
filings required to effect any registration pursuant to Section 5.5. Subject to
the exceptions set forth in clauses (i), (ii) and (iv) above, the Seller will
obtain all such Approvals on or before the Closing Date.
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SECTION 3.6 Seller SEC Reports; Financial Statements.
(a) The Seller has filed all forms, reports and documents
required to be filed by it with the Commission, and has heretofore made
available to the Purchaser, in the form filed with the Commission (excluding any
exhibits thereto), (i) its Annual Report on Form 10-K for the fiscal years ended
December 31, 1995, 1996 and 1997, (ii) its Quarterly Report on Form 10-Q for the
period ended March 31, 1998 and (iii) all proxy statements relating to the
Seller's meetings of stockholders (whether annual or special) held since
December 31, 1995 (collectively, the "SEC Reports").
(b) Except as set forth in Schedule 3.6 of the Disclosure
Schedule, the SEC Reports and any other forms, reports and other documents filed
by the Seller with the Commission as of the date of this Agreement (i) were
prepared in all material respects in accordance with the requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations thereunder and (ii) did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
(c) The financial statements (including, in each case, any notes
thereto) contained in the SEC Reports were prepared in accordance with U.S. GAAP
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto), and each fairly presented the financial
position, results of operations and cash flows of the Seller and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not known or reasonably expected, individually or in the aggregate, to be
material in amount).
(d) Since March 31, 1998 there has not been any change,
occurrence or circumstance affecting the Business, results of operations or
financial condition of the Seller or any Subsidiary that has had, individually
or in the aggregate, a Material Adverse Effect, other than changes, occurrences
and circumstances referred to in any subsequently filed SEC Reports or otherwise
Disclosed by Seller.
SECTION 3.7 No Undisclosed Liabilities. There are no Liabilities of the
Seller or any Subsidiary, other than Liabilities (i) disclosed in Schedule 3.7
of the Disclosure Schedule, (ii) reflected in the SEC Reports, the 1997
Financial Statements, the 1998 Financial Statements or otherwise Disclosed by
Seller, (iii) not required to be reflected in a consolidated balance sheet of
the Seller and its Subsidiaries or in the notes thereto prepared in accordance
with U.S. GAAP or (iv) incurred since the Reference Balance Sheet Date in the
ordinary course of business and which do not have a Material Adverse Effect.
SECTION 3.8 Conduct in the Ordinary Course; Absence of Certain Changes,
Events and Conditions. Since the Reference Balance Sheet Date, except as
Disclosed by Seller in any subsequently filed SEC Reports or Press Releases, as
reflected in the 1997 Financial Statements,
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the 1998 Financial Statements or as contemplated by this Agreement, the Business
of the Seller and the Subsidiaries has been conducted in the ordinary course,
and the Seller has not suffered any Material Adverse Effect.
SECTION 3.9 Litigation. Except as set forth in the SEC Reports, as
reflected in the 1997 Financial Statements or the 1998 Financial Statements, as
disclosed in Schedule 3.9 of the Disclosure Schedule or otherwise Disclosed by
Seller, there are no Actions by or against the Seller or any Subsidiary (or by
or against any Affiliate thereof and relating to the Business, the Seller or any
Subsidiary), or affecting the Business or any of the Assets, pending before any
Governmental Authority (or, to the knowledge of the Seller, threatened to be
brought by or before any Governmental Authority) that has, has had or could
reasonably be expected to have a Material Adverse Effect or could reasonably be
expected to affect the legality, validity or enforceability of this Agreement or
the consummation of the transactions contemplated hereby. None of the Seller,
the Subsidiaries nor any of the Assets is subject to any Governmental Order
(nor, to the knowledge of the Seller, are there any such Governmental Orders
threatened to be imposed by any Governmental Authority) which has, has had or
could have a Material Adverse Effect.
SECTION 3.10 Compliance with Laws. The Seller and the Subsidiaries have
each conducted and continue to conduct the Business in all material respects in
accordance with all Laws and Governmental Orders applicable to the Seller or any
Subsidiary or any of the Assets or the Business, and neither the Seller nor any
Subsidiary is in material violation of any such Law or Governmental Order.
SECTION 3.11 Full Disclosure. The Seller is not aware of any facts
pertaining to the Seller, any Subsidiary or the Business which could reasonably
be expected to have a Material Adverse Effect and which have not been disclosed
in this Agreement, the Disclosure Schedule or the SEC Reports or otherwise
Disclosed by Seller.
SECTION 3.12 Private Placement. Assuming the accuracy of the
representations and warranties of the Purchaser contained in Sections 4.5 and
4.6, the offer and sale of the Shares to the Purchaser pursuant to this
Agreement are, and the issuance of Common Stock (i) upon conversion of the
Shares and (ii) as dividends with respect to the Shares will be, exempt from
registration under the Securities Act as in effect on the Closing Date.
SECTION 3.13 FCC Regulations. After giving effect to the issuance of the
Shares to the Purchaser, the ownership of capital stock of the Seller by aliens
or their representatives or by a foreign government or representative thereof or
by any corporation organized under the laws of a foreign country does not exceed
the limitations set forth in the rules and regulations of the FCC.
SECTION 3.14 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Seller.
SECTION 3.15 Delivery of Certain Documents. The Seller has delivered (or
will deliver pursuant to Section 5.9) to the Purchaser a true and complete copy
of: (i) the 1997
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Financial Statements, the 1998 Financial Statements and the Certificate of
Designations; and (ii) all agreements set forth on Schedule 3.15 of the
Disclosure Schedule (including all appendices, schedules, exhibits and other
attachments thereto), including, without limitation, the Series E Stock Purchase
Agreement (collectively, the "Related Agreements"). Assuming due execution and
delivery thereof by all parties thereto, each of the Related Agreements to which
the Seller is a party creates a legally binding obligation of each party
thereto, enforceable against such parties in accordance with the respective
terms and conditions thereof, except (i) as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other laws regarding
fraudulent conveyances, fraudulent transfers and preferential transfers), and
(ii) as may be limited by the exercise of judicial discretion and the
application of principles of equity including, without limitation, requirements
of good faith, fair dealing, conscionability and materiality (regardless of
whether such agreements are considered in a proceeding in equity or at law).
SECTION 3.16 No Consideration for Consent. No Person has received or
will receive any consideration of any kind for or in connection with the
granting of any consent by such Person to the sale and issuance of the Preferred
Stock or of the Seller's Series E 6.5% Cumulative Convertible Preferred Stock.
SECTION 3.17 Delivery of Business Plan. The Seller has delivered (or
will deliver pursuant to Section 5.9) to the Purchaser a true and complete copy
of the Seller's business plan and such plan is, on and as of the date hereof,
the current business plan of the Seller. The historical factual information
contained in such business plan is correct in all material respects, does not,
when read together with the SEC Reports, omit to state any material fact
necessary to make the statements therein not misleading and fairly reflects the
Seller's projections as of the date hereof.
SECTION 3.18 Licenses. Except to the extent it would not have a Material
Adverse Effect: (i) all FCC Licenses are in full force and effect and have been
duly issued in the name of, or validly assigned to, the Seller or one of its
Subsidiaries and no default or breach exists thereunder; (ii) no event has
occurred with respect to the FCC Licenses that permits, or after giving notice,
lapse of time or both would permit, revocation or termination of such FCC
Licenses or would result in any material impairment of the rights of the holder
thereof; and (iii) all FCC Licenses are in effect for the usual FCC License
terms and are unimpaired by any condition or other restriction imposed by the
FCC or other Governmental Authority (other than restrictions and conditions
generally applicable to licenses of the same or similar type or class).
Except to the extent it would not have a Material Adverse Effect: (i)
all applications necessary for renewal or extension of the FCC Licenses have
been timely filed in accordance with the requirements of the FCC or other
Governmental Authority issuing such FCC Licenses; (ii) the Seller has not been
informed that any of the FCC Licenses will not be renewed in the ordinary
course; and (iii) no allegations, complaints, charges, investigations, renewal
or revocation hearings, or other proceedings have been threatened or initiated
in any forum, nor has any Governmental Authority (including, but not limited to,
the FCC) proposed, announced, used, or
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adopted any amendment, modification, or change to any law or regulation, with
respect to or impacting upon such FCC Licenses.
Except to the extent that it would not have a Material Adverse Effect,
each of the Seller and its Subsidiaries: (i) is in compliance with the
provisions of the Communications Act as implemented, interpreted and applied by
the FCC; (ii) is in compliance with FCC requirements immediately following the
Closing; (iii) has duly and timely filed all reports and other filings which are
required to be filed by it under the Communications Act or any other applicable
law, rule or regulation of any Governmental Authority; and (iv) is in compliance
with all such laws, rules and regulations, the noncompliance with which would
have a Material Adverse Effect on the continuation of any License held by the
Seller or any of its Subsidiaries. Except to the extent it would not have a
Material Adverse Effect, all information provided by or on behalf of Seller or
any Subsidiary in any filing with the FCC was, at the time of filing, true,
complete and correct in all material respects when made, and the FCC has been
notified of any substantial or significant changes in such information as may be
required in accordance with applicable laws, rules and regulations.
SECTION 3.19 Other Licenses and Approvals. Except to the extent it would
not have a Material Adverse Effect, each of the Seller and its Subsidiaries has
or has the right to use all Licenses and Approvals that are necessary for the
Seller and its Subsidiaries to carry on the Business as currently conducted.
SECTION 3.20 Tax Matters. Except to the extent it would not have a
Material Adverse Effect: (i) each of Seller and its Subsidiaries has filed all
federal, state, local and other tax returns which are required to be filed by it
within the period required for such filings and any extensions granted therefor
and within the period that the same may be filed without interest or penalties;
(ii) each such Person has paid, or made adequate provision for the payment of,
all taxes (if any), including any interest and penalties thereon, which have or
may become due and payable pursuant to any of the said returns or pursuant to
any matters raised by audits or for other reasons known to it; and (iii) each
such Person has made adequate provision for all current taxes. Except as
disclosed in Schedule 3.20 of the Disclosure Schedule, no audit by any
Governmental Authority of the federal, state, local or other tax returns, forms
or information statements of the Seller or any of its Subsidiaries with respect
to such taxes is currently in progress or overtly threatened.
SECTION 3.21 FCC Change of Control. Based upon the Seller's knowledge of
the ownership of its stock as of the Closing Date, no assignment or transfer of
control for purposes of the rules and regulations of the FCC will occur by
reason of the sale of the Shares and the Series E 6.5% Cumulative Convertible
Preferred Stock; provided, however, that no representation or warranty is made
as to the effect of the issuance of dividends or other distributions with
respect to the Shares.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Seller to enter into this Agreement, the
Purchaser hereby represents and warrants to the Seller as follows:
SECTION 4.1 Organization and Authority of the Purchaser. The Purchaser
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Purchaser, the performance by the Purchaser of
its obligations hereunder and the consummation by the Purchaser of the
transactions contemplated hereby have been duly authorized by all requisite
action on the part of the Purchaser. This Agreement has been duly executed and
delivered by the Purchaser, and (assuming due authorization, execution and
delivery by the Seller) this Agreement constitutes a legal, valid and binding
obligation of the Purchaser enforceable against the Purchaser in accordance with
its terms.
SECTION 4.2 No Conflict. Except as disclosed by the Purchaser to the
Seller in writing prior to Closing, assuming compliance with the notification
requirements of the HSR Act and the making and obtaining of all filings,
notifications, consents, approvals, authorizations and other actions referred to
in Section 4.3, except as may result from any facts or circumstances relating
solely to the Seller, the execution, delivery and performance of this Agreement
by the Purchaser do not and will not as of the Closing Date: (i) violate,
conflict with or result in the breach of any provision of the certificate of
incorporation or by-laws of the Purchaser; (ii) conflict with or violate any Law
or Governmental Order applicable to the Purchaser; or (iii) conflict with, or
result in any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under, require any
consent that has not been obtained under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation, or cancellation
of, or result in the creation of any Encumbrance on any of the assets or
properties of the Purchaser pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which the Purchaser is a party or by which any of
such assets or properties are bound or affected, which in any such case would
have a material adverse effect on the ability of the Purchaser to consummate the
transactions contemplated by this Agreement.
SECTION 4.3 Governmental Consents and Approvals. The execution, delivery
and performance of this Agreement by the Purchaser do not and will not require
any Approvals on the part of the Purchaser except pursuant to the notification
requirements of the HSR Act and the filing requirements of Sections 13 and 16(a)
of the Exchange Act. The Purchaser shall obtain or comply with such Approval
requirements in a timely manner.
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SECTION 4.4 Litigation. There are no Actions by or against the
Purchaser, pending before any Governmental Authority (or, to the knowledge of
the Purchaser, threatened to be brought by or before any Governmental Authority)
that could reasonably be expected to affect the legality, validity or
enforceability of this Agreement or the consummation of the transactions
contemplated hereby. The Purchaser is not subject to any Governmental Order
(nor, to the knowledge of the Purchaser, are there any such Governmental Orders
threatened to be imposed by any Governmental Authority), which could reasonably
be expected to materially adversely affect the legality, validity or
enforceability of this Agreement or the consummation of the transactions
contemplated hereby.
SECTION 4.5 Investment Purpose. The Purchaser is acquiring the Shares
and, if any of the Common Stock to be issued upon conversion of the Shares or as
dividends with respect to the Shares is, when acquired, not subject to immediate
resale under Rule 144 promulgated pursuant to the Securities Act or is not to be
resold solely pursuant to a registration statement to be filed and declared
effective pursuant to the Securities Act, the Purchaser will acquire such shares
of Common Stock for the Purchaser's own account solely for the purpose of
investment and not with a view to, or for offer or sale in connection with, any
distribution thereof.
SECTION 4.6 Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 under the Securities Act.
SECTION 4.7 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 Filing of Certificate of Designations. The Seller covenants
and agrees that at or prior to the Closing, the Seller will file the Certificate
of Designations with the Secretary of State of the State of Delaware in
accordance with the Delaware General Corporation Law.
SECTION 5.2 Treatment of Shares as Equity. The Seller covenants and
agrees that it will treat the Shares as equity, and not as debt, for accounting
and tax purposes and further covenants and agrees that it will not take any
action or position that is inconsistent with such treatment.
SECTION 5.3 Regulatory and Other Authorizations; Notices and Consents.
(a) The Seller and the Purchaser shall use all reasonable
efforts to obtain all Approvals of all Governmental Authorities that may be or
become necessary for each of them
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to obtain for their execution and delivery of, and the performance of their
respective obligations pursuant to, this Agreement. Each party hereto agrees to
make an appropriate filing pursuant to the HSR Act, if required, with respect to
the conversion of the Shares and any shares of Common Stock issued as dividends
with respect thereto at such times as the Purchaser may request and to supply as
promptly as practicable to the appropriate Governmental Authorities any
additional information and documentary material that may be requested pursuant
to the HSR Act.
(b) The Seller shall or shall cause the Subsidiaries to give
promptly such notices to third parties and use its or their reasonable efforts
to obtain such third party consents as are necessary in connection with the
transactions contemplated by this Agreement.
(c) The Purchaser shall cooperate and use all reasonable efforts
to assist the Seller in giving such notices and obtaining such consents;
provided, however, that the Purchaser shall have no obligation to give any
guarantee or other consideration of any nature in connection with any such
notice or consent or to consent to any change in the terms of any agreement or
arrangement which the Purchaser in its sole and absolute discretion may deem
adverse to the interests of the Purchaser.
SECTION 5.4 Notice of Developments.
(a) Prior to the Closing, the Seller shall promptly notify the
Purchaser in writing of (i) all events, circumstances, facts and occurrences
arising subsequent to the date of this Agreement which could reasonably be
expected to result in any breach of a representation or warranty or covenant of
the Seller in this Agreement or which could reasonably be expected to have the
effect of making any representation or warranty of the Seller in this Agreement
untrue or incorrect and (ii) all other developments material to the Seller and
the Subsidiaries, taken as a whole, affecting the Assets, Liabilities, business,
financial condition, operations, results of operations or prospects of the
Seller, any Subsidiary or the Business.
(b) Prior to the Closing, the Purchaser shall promptly notify
the Seller in writing of all events, circumstances, facts and occurrences
arising subsequent to the date of this Agreement which could reasonably be
expected to result in any breach of a representation or warranty or covenant of
the Purchaser in this Agreement or which could reasonably be expected to have
the effect of making any representation or warranty of the Purchaser in this
Agreement untrue or incorrect.
SECTION 5.5 Registration Rights. Effective at the Closing, the Purchaser
and the Seller shall each have the rights and obligations set forth in Annex II,
which is incorporated by reference herein.
SECTION 5.6 Resale Restrictions.
(a) The Purchaser acknowledges that the Shares, the shares of
Common Stock into which the Shares are convertible and all shares of Common
Stock that are to be issued as dividends with respect to the Shares have not
been registered under the Securities Act or any
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state securities law, and the Purchaser hereby agrees not to offer, sell or
otherwise transfer, pledge or hypothecate such shares unless and until
registered under the Securities Act and any applicable state securities law or
unless such offer, sale, transfer, pledge or hypothecation is exempt from
registration or is otherwise in compliance with the Securities Act and such
laws.
(b) During the period ending one year after the Closing Date,
the Purchaser shall not, without the prior written consent of the Seller which
shall not be unreasonably withheld, (i) offer, pledge, sell or otherwise
transfer or dispose of, directly or indirectly, any Shares or any shares of
Common Stock into which any of such Shares may be converted, or (ii) enter into
any swap or similar agreement that transfers, in whole or in part, any of the
economic consequences of ownership of such Shares or any shares of Common Stock
into which such Shares may be converted, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Shares or such other
securities, in cash or otherwise, other than a pledge, grant of security
interest or other encumbrance effected in a bona fide transaction with an
unrelated and unaffiliated pledgee; provided, however, that the Purchaser may at
any time enter into any such transaction described in clause (i) or (ii) above
with an Affiliate of the Purchaser without the prior written consent of the
Seller.
SECTION 5.7 Registration of Shares. The Seller shall, upon issuance of
the Shares and prior to the delivery of stock certificates evidencing the Shares
pursuant to Section 2.4, register the Shares in the name of the Purchaser in the
stock records of the Seller.
SECTION 5.8 Reservation of Common Stock. The Seller agrees that as of
the Closing Date the Seller will reserve and will thereafter keep reserved for
issuance out of the authorized but unissued shares of the Common Stock such
number of shares of Common Stock into which the outstanding shares of the
Preferred Stock are from time to time convertible.
SECTION 5.9 Delivery of Certain Documents. The Seller shall deliver to
the Purchaser true and correct copies of this Agreement and the Related
Agreements, all exhibits, schedules, annexes and agreements related hereto as
soon as practicable following the execution and delivery hereof by the parties
hereto.
SECTION 5.10 Certain Information. For a period commencing on the date of
this Agreement and ending not earlier than two years from the date that the
Preferred Stock first becomes convertible into Common Stock, for so long as the
Seller is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Seller shall file all reports and other information required
to be filed by Section 13 or 15(d) under the Exchange Act, as the case may be,
as shall be necessary in order that the conditions to the availability of Rule
144 under the Securities Act, as such Rule may be amended, in connection with
any Sale of shares of Common Stock by the Purchaser shall be met. For so long as
the Seller is required to file reports and other information pursuant to Section
13 or 15(d) of the Exchange Act and this Section 5.10, unless the Purchaser no
longer holds any Shares or shares of Common Stock issued upon conversion of the
Shares, the Seller shall provide the Purchaser with a paper copy of each such
report and other information within a reasonable period of time following the
filing of such report or other information with the Commission.
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SECTION 5.11 Conduct of Business of the Seller. Prior to the Closing,
the Seller agrees (except to the extent that the Purchaser shall otherwise
consent in writing) as follows:
(a) Dividends; Changes in Stock. The Seller shall not take or
permit to be taken any action that would result in an adjustment to the
Conversion Price (as defined in the Certificate of Designations) pursuant to
Section (7)(d) of the Certificate of Designations if the Shares were issued and
outstanding at the time of such action.
(b) Certain Matters. The Seller shall not take or permit to be
taken any action in respect of which holders of Shares would be entitled to vote
pursuant to Section (9) of the Certificate of Designations if the Shares were
outstanding at the time of such action.
SECTION 5.12 Use of Funds. The Seller shall use the proceeds from the
sale of the Preferred Stock and the Seller's Series E 6.5% Cumulative
Convertible Preferred Stock by December 31, 1999 solely for the buildout of
existing personal communications services (PCS) markets for which Licenses have
been issued to Powertel or its Subsidiaries.
SECTION 5.13 Further Action. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things necessary, proper or advisable under applicable Law,
and execute and deliver such documents and other papers, as may be required to
carry out the provisions of this Agreement and consummate and make effective the
transactions contemplated by this Agreement.
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.1 Conditions to Obligations of the Seller. The obligations of
the Seller to consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction (or waiver by the Seller, at its sole
discretion), at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Purchaser contained in this Agreement
shall have been true and correct in all material respects when made and shall be
true and correct in all material respects as of the Closing, with the same force
and effect as if made as of the Closing, other than such representations and
warranties as are made as of another date, which shall be true and correct in
all material respects as of such date (provided, however, that if any portion of
any representation or warranty is already qualified by materiality, for purposes
of determining whether this Section 6.1(a) has been satisfied with respect to
such portion of such representation or warranty, such portion of such
representation or warranty as so qualified must be true and correct in all
respects), and the covenants and agreements contained in this Agreement to be
complied with by the
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Purchaser at or before the Closing shall have been complied with in all material
respects, and the Seller shall have received a certificate from the Purchaser to
such effect signed by a duly authorized officer thereof;
(b) No Proceeding or Litigation. No Action shall have been
commenced by or before any Governmental Authority against either the Seller or
the Purchaser seeking to restrain or materially and adversely alter the
transactions contemplated by this Agreement which, in the reasonable, good faith
determination of the Seller, is likely to render it impossible or unlawful to
consummate such transactions; provided, however, that the provisions of this
Section 6.1(b) shall not apply if the Seller has directly or indirectly
solicited or encouraged any such Action;
(c) Resolutions of the Purchaser. The Seller shall have received
a true and complete copy, certified by the Secretary or an Assistant Secretary
of the Purchaser, of the resolutions duly and validly adopted by the Board of
Directors of the Purchaser evidencing its authorization, if required by law, of
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby;
(d) Incumbency Certificate of the Purchaser. The Seller shall
have received a certificate of the Secretary or an Assistant Secretary of the
Purchaser certifying the names and signatures of the officers of the Purchaser
authorized to sign this Agreement and the other documents to be delivered
hereunder;
(e) Legal Opinion. The Seller shall have received from counsel
to the Purchaser a legal opinion, addressed to the Seller and dated the Closing
Date, the form and substance of which shall be substantially as set forth in
Exhibit 6.1(e) attached hereto;
(f) Consents and Approvals. The Seller shall have received (or
received evidence of), each in form and substance reasonably satisfactory to the
Seller, all Approvals and all third party consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement; and
(g) Closing of Series E Transaction. Closing of the transaction
contemplated by the Series E Stock Purchase Agreement shall have occurred or
shall occur simultaneously with the Closing.
SECTION 6.2 Conditions to Obligations of the Purchaser. The obligations
of the Purchaser shall be subject to the satisfaction (or waiver by the
Purchaser, at its sole discretion), at or prior to the Closing, of each of the
following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Seller contained in this Agreement shall
have been true and correct in all material respects when made and shall be true
and correct in all material respects as of the Closing with the same force and
effect as if made as of the Closing, other than such representations and
warranties as are made as of another date, which shall be true and correct as
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of such date (provided, however, that if any portion of any representation or
warranty is already qualified by materiality, for purposes of determining
whether this Section 6.2(a) has been satisfied with respect to such portion of
such representation or warranty, such portion of such representation or warranty
as so qualified must be true and correct in all respects), and the covenants and
agreements contained in this Agreement to be complied with by the Seller at or
before the Closing shall have been complied with in all material respects, and
the Purchaser shall have received a certificate of the Seller to such effect
signed by a duly authorized officer thereof;
(b) No Proceeding or Litigation. No Action shall have been
commenced by or before any Governmental Authority against either the Seller or
the Purchaser, seeking to restrain or materially and adversely alter the
transactions contemplated by this Agreement which, in the reasonable, good faith
determination of the Purchaser, is likely to render it impossible or unlawful to
consummate such transactions or which could have a Material Adverse Effect;
provided, however, that the provisions of this Section 6.2(b) shall not apply if
the Purchaser has directly or indirectly solicited or encouraged any such
Action;
(c) Resolutions of the Seller. The Purchaser shall have received
a true and complete copy, certified by the Secretary or an Assistant Secretary
of the Seller, of the resolutions duly and validly adopted by the Board of
Directors of the Seller and, to the extent that such authorization is necessary,
the stockholders of the Seller evidencing their authorization of the execution
and delivery of this Agreement, the issuance and terms of the Shares including,
without limitation, the convertibility thereof into shares of Common Stock, and
the consummation of the transactions contemplated hereby;
(d) Incumbency Certificate of the Seller. The Purchaser shall
have received a certificate of the Secretary or an Assistant Secretary of the
Seller certifying the names and signatures of the officers of the Seller
authorized to sign this Agreement and the other documents to be delivered
hereunder;
(e) Legal Opinion. The Purchaser shall have received from Xxxxxx
Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P., counsel to the Seller, a legal opinion,
addressed to the Purchaser and dated the Closing Date, the form and substance of
which shall be substantially as set forth in Exhibit 6.2(e) attached hereto;
(f) Consents and Approvals. The Purchaser shall have received
(or received evidence of), each in form and substance reasonably satisfactory to
the Purchaser, all Approvals and all third party consents necessary or desirable
for the consummation of the transactions contemplated by this Agreement which
the Seller has the obligation to obtain;
(g) Financing. The Purchaser shall have obtained a commitment
from a lender acceptable to the Purchaser to enable the Purchaser to borrow such
funds as are necessary to pay the Purchase Price in cash on the Closing Date,
and such commitment shall be in effect and all conditions thereto satisfied on
the Closing Date;
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(h) Organizational Documents. The Purchaser shall have received
a copy of the certificate of incorporation and by-laws of the Seller, certified
by the Secretary or an Assistant Secretary of the Seller, and a true and correct
copy of the Certificate of Designations and evidence of the filing thereof;
(i) Good Standing. The Purchaser shall have received a good
standing certificate for the Seller from the Secretary of State of the State of
Delaware, dated as of a date not earlier than five Business Days prior to the
Closing Date and accompanied by a bring-down certificate signed by the Secretary
or an Assistant Secretary of the Seller dated within one day prior to the
Closing Date;
(j) No Material Adverse Effect. No event or events shall have
occurred which, individually or in the aggregate, have, or could have, a
Material Adverse Effect; and
(k) Closing of Series E Transaction. Closing of the transaction
contemplated by the Series E Stock Purchase Agreement shall have occurred or
shall occur simultaneously with the Closing.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Survival of Representations and Warranties.
(a) The representations and warranties of the Seller to the
Purchaser contained in this Agreement shall survive the Closing until the later
of the second anniversary of the Closing Date or the conversion of all Shares
into Common Stock. Neither the period of survival nor the liability of the
Seller with respect to the Seller's representations and warranties shall be
reduced by any investigation made at any time by or on behalf of the Purchaser.
If written notice of a claim has been given prior to the expiration of the
applicable representations and warranties by the Purchaser to the Seller, then
the relevant representations and warranties shall survive as to such claim,
until such claim has been finally resolved.
(b) The representations and warranties of the Purchaser to the
Seller contained in this Agreement shall survive the Closing until the later of
the second anniversary of the Closing Date or the conversion of all Shares into
Common Stock. Neither the period of survival nor the liability of the Purchaser
with respect to the Purchaser's representations and warranties shall be reduced
by any investigation made at any time by or on behalf of the Seller. If written
notice of a claim has been given prior to the expiration of the applicable
representations and warranties by the Seller to the Purchaser, then the relevant
representations and warranties shall survive as to such claim, until such claim
has been finally resolved.
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SECTION 7.2 Indemnification.
(a)(i) The Purchaser, its successors and assigns, and the
stockholders, officers, directors, employees, Affiliates and agents of the
Purchaser and its successors and assigns shall be indemnified and held harmless
by the Seller for any and all Liabilities, losses, damages, claims, costs and
expenses, interest, awards, judgments and penalties (including, without
limitation, attorneys' and consultants' fees and expenses) actually suffered or
incurred by them (including, without limitation, any Action brought or otherwise
initiated by any of them) (hereinafter a "Loss"), arising out of or resulting
from:
(A) the breach of any representation or warranty
made by the Seller contained in this Agreement; or
(B) the breach of any covenant or agreement by the
Seller contained in this Agreement.
(ii) The Seller, its successors and assigns, and the
stockholders, officers, directors, employees, Affiliates and agents of the
Seller and its successors and assigns shall be indemnified and held harmless by
the Purchaser for any and all Losses actually suffered or incurred by them,
arising out of or resulting from:
(A) the breach of any representation or warranty
made by the Purchaser in this Agreement; or
(B) the breach of any covenant or agreement by the
Purchaser contained in this Agreement.
To the extent that the Seller's or the Purchaser's undertakings set forth in
this Section 7.2 may be unenforceable, the Seller or the Purchaser, as the case
may be, shall contribute the maximum amount that it is permitted to contribute
under applicable law to the payment and satisfaction of all Losses incurred by
the Purchaser or the Seller, as the case may be.
(b) An indemnified party shall give the party from which
indemnification is sought notice of any matter which an indemnified party has
determined has given or could give rise to a right of indemnification under this
Agreement, within 60 days of such determination, stating the amount of the Loss,
if known, and method of computation thereof, and containing a reference to the
provisions of this Agreement in respect of which such right of indemnification
is claimed or arises; provided, however, that the failure to provide such notice
shall not release the indemnifying party from any of its obligations under this
Article VII except to the extent the indemnifying party is materially prejudiced
by such failure and shall not relieve the indemnifying party from any other
obligation or Liability that it may have to any indemnified party otherwise than
under this Article VII. The obligations and Liabilities of an indemnifying party
under this Article VII with respect to Losses arising from claims of any third
party which are subject to the indemnification provided for in this Article VII
("Third Party Claims") shall be governed by and contingent upon the following
additional terms and conditions: If an indemnified party shall
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receive notice of any Third Party Claim, the indemnified party shall give the
indemnifying party notice of such Third Party Claim within 30 days of the
receipt by the indemnified party of such notice; provided, however, that the
failure to provide such notice shall not release the indemnifying party from any
of its obligations under this Article VII except to the extent the indemnifying
party is materially prejudiced by such failure and shall not relieve the
indemnifying party from any other obligation or Liability that it may have to
any indemnified party otherwise than under this Article VII. If the indemnifying
party acknowledges in writing its obligation to indemnify the indemnified party
hereunder against any Losses that may result from such Third Party Claim, then
the indemnifying party shall be entitled to assume and control the defense of
such Third Party Claim at its expense and through counsel of its choice if it
gives notice of its intention to do so to the indemnified party within five days
of the receipt of such notice from the indemnified party; provided, however,
that if there exists or is reasonably likely to exist a conflict of interest
that would make it inappropriate in the judgment of the indemnified party, in
its sole and absolute discretion, for the same counsel to represent both the
indemnified party and the indemnifying party, then the indemnified party shall
be entitled to retain its own counsel, in each jurisdiction for which the
indemnified party determines counsel is required, at the expense of the
indemnifying party. In the event the indemnifying party exercises the right to
undertake any such defense against any such Third Party Claim as provided above,
the indemnified party shall cooperate with the indemnifying party in such
defense and make available to the indemnifying party, at the indemnifying
party's expense, all witnesses, pertinent records, materials and information in
the indemnified party's possession or under the indemnified party's control
relating thereto as is reasonably required by the indemnifying party. Similarly,
in the event the indemnified party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the indemnifying party shall
cooperate with the indemnified party in such defense and make available to the
indemnified party, at the indemnifying party's expense, all such witnesses,
pertinent records, materials and information in the indemnifying party's
possession or under the indemnifying party's control relating thereto as is
reasonably required by the indemnified party. No such Third Party Claim may be
settled by the indemnifying party or the indemnified party without the prior
written consent of the other.
SECTION 7.3 Limits on Indemnification. Notwithstanding anything to the
contrary contained in this Agreement, the maximum amount of indemnifiable Losses
which may be recovered from an indemnifying party arising out of or resulting
from the causes enumerated in Section 7.2 shall be an amount equal to the
Purchase Price. The provisions of this Article VII shall survive the Closing and
any termination of this Agreement.
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ARTICLE VIII
TERMINATION AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated as
follows:
(a) by the Purchaser if, between the date hereof and the
time scheduled for the Closing: (i) an event or condition occurs that has
resulted in a Material Adverse Effect; (ii) any representation or warranty of
the Seller contained in this Agreement shall not have been true and correct in
all material respects when made or as of the Closing Date; (iii) the Seller
shall not have complied in all material respects with any covenant or agreement
to be complied with by it and contained in this Agreement; or (iv) the Seller or
any Subsidiary makes a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against the Seller or any Subsidiary
seeking to adjudicate any of them a bankrupt or insolvent, or seeking
liquidation, winding up or reorganization, arrangement, adjustment, protection,
relief or composition of its debts under any Law relating to bankruptcy,
insolvency or reorganization; or
(b) by the Seller if, between the date hereof and the time
scheduled for the Closing: (i) any representation or warranty of the Purchaser
contained in this Agreement shall not have been true and correct in all material
respects when made; (ii) the Purchaser shall not have complied in all material
respects with any covenant or agreement to be complied with by it and contained
in this Agreement; or (iii) the Purchaser makes a general assignment for the
benefit of creditors, or any proceeding shall be instituted by or against the
Purchaser seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up or reorganization, arrangement, adjustment, protection,
relief or composition of its debts under any Law relating to bankruptcy,
insolvency or reorganization; or
(c) by either the Seller or the Purchaser if the Closing
shall not have occurred on or prior to June 30, 1998; or
(d) by either the Purchaser or the Seller in the event that
any Governmental Authority shall have issued an order, decree or ruling or taken
any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree, ruling or
other action shall have become final and nonappealable; or
(e) by the mutual written consent of the Seller and the
Purchaser.
SECTION 8.2 Effect of Termination. In the event of termination of
this Agreement as provided in Section 8.1, this Agreement shall forthwith become
void and there shall be no liability on the part of either party hereto except
that nothing herein shall relieve either party from liability for any breach of
this Agreement occurring prior to termination.
SECTION 8.3 Waiver. Either party to this Agreement may: (i) extend
the time for the performance of any of the obligations or other acts of the
other party; (ii) waive any
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inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered by the other party pursuant hereto; or (iii)
waive compliance with any of the agreements or conditions of the other party
contained herein. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party to be bound thereby. Any waiver
of any term or condition shall not be construed as a waiver of any subsequent
breach or a subsequent waiver of the same term or condition, or a waiver of any
other term or condition, of this Agreement. The failure of any party to assert
any of its rights hereunder shall not constitute a waiver of any of such rights.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Expenses. If the Closing occurs, upon presentation to the
Seller of reasonably detailed invoices, the Seller shall reimburse the Purchaser
for (i) up to $100,000 in costs and expenses, including, without limitation,
fees and disbursements of counsel, actually incurred by the Purchaser in
connection with this Agreement and the transactions contemplated hereby (but
excluding all amounts subject to reimbursement pursuant to clause (ii) of this
Section 9.1), and (ii) up to $100,000 in costs and expenses actually required to
be paid by the Purchaser to a lender to reimburse such lender for reasonable
out-of-pocket costs and expenses actually incurred by such lender (including,
without limitation, the reasonable fees and expenses for counsel to such lender)
in connection with a loan of all or substantially all of the Purchase Price to
the Purchaser on or prior to the date of this Agreement. Except as otherwise
specified in this Agreement (including in the preceding sentence of this Section
9.1), all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.
SECTION 9.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.2):
(a) if to the Seller:
Powertel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
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with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxx IV, Esq.
(b) if to the Purchaser:
ITC Wireless, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, III
with a copy (which shall not constitute notice) to:
ITC Wireless, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx
SECTION 9.3 Public Announcements. No party to this Agreement shall make,
or cause to be made, any press release or public announcement or otherwise
communicate with any news media in respect of this Agreement or the transactions
contemplated hereby without the prior written consent of the other party (which
shall not be unreasonably withheld or delayed), and the parties shall cooperate
as to the timing and contents of any such press release or public announcement;
provided, however, that with respect to any disclosure required by law or by a
listing agreement with the National Association of Securities Dealers, Inc.
Automated Quotation System National Market System or any national securities
exchange to which the Purchaser or the Seller is a party, the party required to
make such disclosure shall use its best efforts to consult with the other party
as to the timing and contents of such disclosure and to obtain such consent
prior to the time such disclosure is required to be made.
SECTION 9.4 Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 9.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby are not affected in any
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manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
SECTION 9.6 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between
the Seller and the Purchaser with respect to the subject matter hereof.
SECTION 9.7 Assignment. This Agreement may not be assigned by operation
of Law or otherwise without the express written consent of the Seller and the
Purchaser (which consent may be granted or withheld in the sole discretion of
the Seller or the Purchaser); provided, however, that the Purchaser may, without
the consent of the Seller, assign this Agreement to an entity that is an
Affiliate of the Purchaser, but no such assignment shall relieve the Purchaser
of any of its obligations under this Agreement; and provided further, however,
that the rights granted pursuant to Annex II may be transferred in accordance
with Annex II.
SECTION 9.8 No Third Party Beneficiaries. Except for the provisions of
Article VII relating to indemnified parties, this Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their successors
and permitted assigns, and nothing herein, express or implied, is intended to or
shall confer upon any other Person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 9.9 Amendment. This Agreement may not be amended or modified,
except: (i) by an instrument in writing signed by, or on behalf of, the Seller
and the Purchaser; or (ii) by a waiver in accordance with Section 8.3.
SECTION 9.10 Governing Law. This Agreement shall be governed by the laws
of the State of New York without reference to the principles or rules governing
conflicts of laws.
SECTION 9.11 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the term hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
POWERTEL, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive
Officer
ITC WIRELESS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Senior Vice President, General
Counsel and Secretary
31
ANNEX I
CERTIFICATE OF THE DESIGNATIONS, POWERS, PREFERENCES AND RELATIVE PARTICIPATING
OR OTHER RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, OF
SERIES F 6.5% CUMULATIVE CONVERTIBLE PREFERRED STOCK
($0.01 Par Value)
OF
POWERTEL, INC.
--------------------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------------------
POWERTEL, INC., a Delaware corporation (the "Corporation"), does hereby
certify that the following resolutions were duly adopted by the Board of
Directors of the Corporation pursuant to authority conferred upon the Board of
Directors by Article FOURTH of the Certificate of Incorporation of the
Corporation, which authorizes the issuance of up to 1,000,000 shares of
preferred stock, by consent of the Board of Directors dated June 15, 1998:
RESOLVED, that the issue of a series of preferred stock, $0.01 par
value, of the Corporation is hereby authorized and the designations, powers,
preferences and relative, participating or other rights, and qualifications,
limitations or restrictions thereof, in addition to those set forth in the
Certificate of Incorporation of the Corporation, are hereby fixed as follows:
Section (1) Number of Shares and Designation. 50,000 shares of the
preferred stock, $0.01 par value, of the Corporation are hereby constituted as a
series of the preferred stock designated as Series F 6.5% Cumulative Convertible
Preferred Stock (the "Series F Preferred Stock"). Without the consent of the
then current holders of shares of Series F Preferred Stock as provided for
herein, the number of shares of Series F Preferred Stock may not be increased
and may not be decreased below the number of then currently outstanding shares
of Series F Preferred Stock.
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Section (2) Definitions. For purposes of the Series F Preferred Stock,
the following terms shall have the meanings indicated:
"Base Shares" shall have the meaning set forth in paragraph (a)
of Section (3).
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Series F
Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Common Stock" shall mean the Common Stock of the Corporation,
par value $0.01 per share.
"Conversion Price" shall mean the conversion price per share of
Common Stock into which the Series F Preferred Stock is convertible, as
such Conversion Price may be adjusted pursuant to Section (7). The
initial Conversion Price shall be $22.01 (equivalent to the rate of
approximately 68.15 shares of Common Stock for each share of Series F
Preferred Stock).
"Current Market Price" shall mean, as of a particular date, the
average of the closing high bid and low asked prices per share of Common
Stock in the over-the-counter market, as reported by the Nasdaq Stock
Market or such other system then in use, or such other exchange or
inter-dealer quotation system on which the Common Stock is principally
traded or authorized to be quoted.
"Dividend Junior Stock" shall have the meaning set forth in
paragraph (d) of Section (3).
"Dividend Parity Stock" shall have the meaning set forth in
paragraph (c) of Section (3).
"Dividend Payment Date" shall have the meaning set forth in
paragraph (a) of Section (3).
"Dividend Period" shall have the meaning set forth in paragraph
(a) of Section (3).
"Dividend Value" shall have the meaning set forth in paragraph
(a) of Section (3).
"Excess Dividend Amount" shall have the meaning set forth in
paragraph (e) of Section 3.
"Initial Convertibility Date" shall mean the fifth anniversary
of the Issue Date.
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"Initial Market Price" shall mean $17.75 per share, and shall be
proportionately adjusted for any: (i) dividend or distribution made on the
Common Stock in shares of Common Stock; (ii) subdivision of the Common Stock
into a greater number of shares; (iii) combination of the Common Stock into a
smaller number of shares; or (iv) issuance of shares of capital stock by
reclassification of the Common Stock.
"Issue Date" shall mean the first date on which shares of Series
F Preferred Stock are issued.
"Liquidation Preference" shall have the meaning set forth in
paragraph (a) of Section (4).
"Mandatory Redemption Date" shall have the meaning set forth in
paragraph (b) of Section (5).
"Mandatory Redemption Price" shall have the meaning set forth in
paragraph (b) of Section (5).
"Minimum Price" shall have the meaning set forth in paragraph
(d)(ii) of Section (7).
"Nasdaq Stock Market" shall mean the National Market System of
the National Association of Securities Dealers, Inc. Automated Quotation System.
"Optional Redemption Date" shall have the meaning set forth in
paragraph (a) of Section (5).
"Optional Redemption Price" shall have the meaning set forth in
paragraph (a) of Section (5).
"Person" shall mean any individual, firm, partnership, joint
venture, corporation, limited liability company, association or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"Redemption Date" shall have the meaning set forth in paragraph
(c) of Section (5).
"Redemption Notice" shall have the meaning set forth in
paragraph (c) of Section (5).
"Redemption Price" shall have the meaning set forth in paragraph
(c) of Section (5).
"Securities" shall have the meaning set forth in paragraph
(d)(iii) of Section (7).
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"Series A Preferred Stock" shall mean the series of preferred
stock, $0.01 par value, of the Corporation designated as Series A Convertible
Preferred Stock.
"Series B Preferred Stock" shall mean the series of preferred
stock, $0.01 par value, of the Corporation designated as Series B Convertible
Preferred Stock.
"Series C Preferred Stock" shall mean the series of preferred
stock, $0.01 par value, of the Corporation designated as Series C Convertible
Preferred Stock.
"Series D Preferred Stock" shall mean the series of preferred
stock, $0.01 par value, of the Corporation designated as Series D Convertible
Preferred Stock.
"Series E Preferred Stock" shall mean the series of preferred
stock, $0.01 par value, of the Corporation designated as Series E 6.5%
Cumulative Convertible Preferred Stock.
"Series E Certificate of Designations" shall mean the
Certificate of the Designations, Powers, Preferences and Relative Participating
or Other Rights, and the Qualifications, Limitations or Restrictions Thereof, of
Series E 6.5% Cumulative Convertible Preferred Stock ($0.01 Par Value) of
Powertel, Inc., as filed with the Secretary of State of the State of Delaware,
as such may be amended from time to time.
"Specified Indentures" shall mean the following: (i) the
Indenture dated June 10, 1997 governing the 11 1/8% Senior Notes Due 2007 of the
Corporation; (ii) the Indenture dated April 19, 1996 governing the 12% Senior
Discount Notes Due May 2006 of the Corporation; and (iii) the Indenture dated
February 7, 1996 governing the 12% Senior Discount Notes Due February 2006 of
the Corporation.
"Subsidiaries" shall mean any and all corporations,
partnerships, limited liability companies, joint ventures, associations and
other entities controlled by the Corporation directly or indirectly through one
or more intermediaries.
"Trading Day" means a day on which the Nasdaq Stock Market, or
such other exchange or inter-dealer quotation system on which the Common Stock
is principally traded or authorized to be quoted, is open for the transaction of
business.
"Transaction" shall have the meaning set forth in paragraph (e)
of Section (7).
"Transfer Agent" means such agent or agents of the Corporation
as may be designated by the Board of Directors as the transfer agent for the
Series F Preferred Stock.
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Section (3) Dividends.
(a) Holders of the outstanding shares of Series F Preferred
Stock will be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends on each share of
the Series F Preferred Stock, calculated and payable quarterly (each such
quarterly period being hereinafter called a "Dividend Period"), at a rate per
annum equal to 6.5% of the Liquidation Preference of such share; provided,
however, that without first obtaining stockholder approval pursuant to the rules
of the Nasdaq Stock Market, or, in lieu thereof, if allowed by the Nasdaq Stock
Market, otherwise delivering notice to stockholders, the aggregate number of
shares of Common Stock that are issued as dividends pursuant to this Section (3)
at a price below the Initial Market Price shall not exceed 20% of the number of
shares of Common Stock that are issued and outstanding as of the Issue Date (the
"Base Shares"). If the aggregate number of shares of Common Stock that have been
issued as dividends on the Series F Preferred Stock pursuant to this Section (3)
at a price below the Initial Market Price exceeds at any time 5% of the Base
Shares, the Corporation agrees, for the benefit of the holders of the Series F
Preferred Stock, to seek (if not previously obtained) approval at the next
annual meeting of the Corporation's stockholders of the issuance of any future
dividends payable in Common Stock pursuant to this paragraph (a) of this Section
(3) which may exceed 20% of the Base Shares.
All dividends on shares of the Series F Preferred Stock, to the
extent accrued, shall be cumulative, whether or not earned or declared, on a
daily basis from the last date through which dividends have been paid or, if no
dividends have been paid, from the date upon which each such share of Series F
Preferred Stock was initially issued, and shall be payable quarterly in arrears
on March 15, June 15, September 15 and December 15 of each year (each a
"Dividend Payment Date"), commencing on September 15, 1998, to holders of record
on the Business Day immediately preceding the relevant Dividend Payment Date.
Such dividends shall accrue whether or not they have been declared and whether
or not there are net profits, surplus or other funds of the Corporation legally
available for the payment of dividends.
Dividends on the Series F Preferred Stock shall be, at the
option of the Corporation, payable (i) in cash or (ii) through the issuance of a
number of fully paid and nonassessable shares (rounded up or down to the nearest
whole number) of Common Stock equal to the amount of the dividend owed divided
by the Dividend Value of the Common Stock; provided, however, that the
Corporation shall not pay any dividends on the Series F Preferred Stock in cash
prior to the date that all obligations under each of the Specified Indentures
shall have been satisfied in full unless all restrictions set forth in the
Specified Indentures with respect to the payment of such cash dividends have
been waived or otherwise satisfied in accordance with the terms of such
Specified Indentures; and provided further, however, that dividends with respect
to a Dividend Payment Date that are not paid in cash within 90 days of such
Dividend Payment Date shall thereafter be payable solely in shares of Common
Stock on the basis of the Dividend Value with respect to such Dividend Payment
Date, as set forth in this Section (3), and shall no longer be payable in cash.
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The "Dividend Value" of the Common Stock with respect to a
Dividend Payment Date means the product of (x) 95% and (y) the average of the
last sales price for the Common Stock as reported by the Nasdaq Stock Market, or
the principal securities exchange or other securities market on which the Common
Stock is then being traded, for the five Trading Days immediately preceding such
Dividend Payment Date.
(b) All dividends paid with respect to shares of the Series F
Preferred Stock pursuant to paragraph (a) of this Section (3) shall be paid pro
rata to the holders entitled thereto.
(c) No dividend whatsoever shall be declared or paid upon, or
any funds or shares of Common Stock set apart for the payment of dividends upon,
any outstanding share of the Series F Preferred Stock with respect to any
Dividend Period unless all dividends for all preceding Dividend Periods have
been declared and paid (or declared and a sufficient sum or number of shares of
Common Stock set apart for the payment of such dividend) upon all outstanding
shares of Series F Preferred Stock. No dividend will be declared or paid upon
any stock that ranks on a parity with the Series F Preferred Stock with respect
to dividends (the "Dividend Parity Stock"), and no shares of Dividend Parity
Stock shall be redeemed, purchased or otherwise acquired by the Corporation for
consideration through a sinking fund or otherwise, unless (A) all accrued and
unpaid dividends have been paid on the Series F Preferred Stock for all prior
Dividend Periods and (B) sufficient funds or shares of Common Stock have been
paid or set apart for the payment of the dividend for the Dividend Period for
which a dividend is next payable on the Series F Preferred Stock.
Notwithstanding the provisions of this paragraph (c), if accrued dividends on
the Series F Preferred Stock for all prior Dividend Periods have not been paid
in full and sufficient funds or shares of Common Stock have not been paid or set
apart for the payment of the dividend for the Dividend Period for which a
dividend is next payable on the Series F Preferred Stock, the Corporation may
declare a dividend on the Series F Preferred Stock and any Dividend Parity Stock
for any Dividend Period if such dividend will be declared ratably in proportion
to accrued and unpaid dividends on the Series F Preferred Stock and such
Dividend Parity Stock.
(d) The Corporation will not (i) declare, pay or set apart funds
or shares of Common Stock for the payment of any dividend or other distribution
with respect to any stock that ranks junior to the Series F Preferred Stock with
respect to dividends ("Dividend Junior Stock") or (ii) redeem, purchase or
otherwise acquire for consideration any Dividend Junior Stock through a sinking
fund or otherwise, unless (A) all accrued and unpaid dividends with respect to
the Series F Preferred Stock at the time of such event have been paid or funds
or shares of Common Stock have been set apart for payment of such dividends and
(B) sufficient funds or shares of Common Stock have been paid or set apart for
the payment of the dividend for the Dividend Period for which a dividend is next
payable on the Series F Preferred Stock. Notwithstanding anything in this
Certificate of Designations to the contrary, the Corporation may repurchase,
redeem or otherwise acquire Dividend Junior Stock in exchange for Dividend
Junior Stock and Dividend Parity Stock in exchange for Dividend Parity Stock or
Dividend Junior Stock.
(e) So long as any shares of the Series F Preferred Stock are
outstanding, if dividends in excess of the quarterly dividend amount set forth
in paragraph (a) of Section (3)
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(such excess being the "Excess Dividend Amount") shall be declared or paid or
set apart for payment in any Dividend Period on any Dividend Junior Stock or
Dividend Parity Stock, dividends equal to the Excess Dividend Amount shall be
contemporaneously declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Series F Preferred Stock with
such payment with respect to each share of Series F Preferred Stock being equal
to the distributions that would be made in respect of the aggregate of: (i) the
number of shares of Common Stock into which such share of Series F Preferred
Stock is then convertible; and (ii) the number of shares of Common Stock that
the Corporation would be required to issue as of such date in payment of all
dividends that, pursuant to paragraph (a) of Section (3), have accrued but
remain unpaid as of such date.
(f) Dividends on the Series F Preferred Stock on account of
arrears for any past Dividend Period and dividends on the Series F Preferred
Stock in connection with any optional redemption may be declared and paid at any
time, without reference to any Dividend Payment Date, to holders of record on
the Business Day immediately prior to the payment thereof, as may be fixed by
the Board of Directors.
(g) Dividends payable on the Series F Preferred Stock for any
period other than a Dividend Period shall be computed on the basis of a 360-day
year consisting of twelve 30- day months. If a Dividend Payment Date is not a
Business Day, payment of dividends shall be made on the next succeeding Business
Day and dividends accruing for the intervening period shall be paid on the next
succeeding Dividend Payment Date.
Section (4) Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of Common Stock or any other series or
class or classes of stock of the Corporation ranking junior to the Series F
Preferred Stock upon liquidation, dissolution or winding up, the holders of the
shares of Series F Preferred Stock shall be entitled to receive $1,500.00 per
share (the "Liquidation Preference"); thereafter, such holders shall be
entitled, with respect to their Series F Preferred Stock and all dividends
accrued and unpaid thereon to the date of final distribution to such holders, to
share on an as if converted to Common Stock basis with the holders of the shares
of Common Stock as provided in paragraph (b) of this Section (4). If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of the shares
of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and
any other shares of stock ranking, as to liquidation, dissolution or winding up,
on a parity with the Series F Preferred Stock, shall be insufficient to pay in
full the liquidation preferences of all of such series and liquidating payments
in respect thereof, then such assets, or the proceeds thereof, shall be
distributed among the holders of shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and any such other stock ratably in
accordance with the respective amounts which would be payable with respect to
the liquidation preferences of such shares of
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Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and
any such other stock if all liquidation preferences payable thereon were paid in
full. For the purposes of this Section (4), (i) a consolidation or merger of the
Corporation with one or more entities, (ii) a sale or transfer of all or
substantially all of the Corporation's assets or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary; provided, however, that any subsequent distribution,
liquidation, dissolution or winding up of the Corporation shall remain subject
to this Section (4).
(b) Subject to the rights of the holders of shares of any series
or class or classes of stock ranking on a parity with or prior to Series F
Preferred Stock, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Series
F Preferred Stock, as provided in paragraph (a) of this Section (4), holders of
shares of Series F Preferred Stock shall be entitled to share ratably with
holders of shares of Common Stock and any other class or series entitled to
participate with the Common Stock in the event of liquidation, dissolution or
winding up, in any and all assets remaining to be paid or distributed, such that
distributions shall be made in respect of each share of Series F Preferred Stock
in an amount equal to the distributions made in respect of the aggregate of: (i)
the number of shares of Common Stock into which such share of Series F Preferred
Stock is then convertible; and (ii) the number of shares of Common Stock that
the Corporation would be required to issue as of such date in payment of all
dividends that, pursuant to paragraph (a) of Section (3), have accrued but
remain unpaid as of such date.
Section (5) Redemption.
(a) Series F Preferred Stock may not be redeemed by the
Corporation prior to the Initial Convertibility Date. After the Initial
Convertibility Date and subject to the restrictions set forth in Section (3)
hereof, the Corporation, at its option, may redeem the shares of Series F
Preferred Stock, in whole or in part, at any time or from time to time upon such
date or dates as may be fixed by the Corporation for redemption (each an
"Optional Redemption Date"), for an aggregate redemption price in cash equal to
the Liquidation Preference per share plus an amount per share equal to the value
on a day selected by the Board of Directors of the Corporation that is within
five days of the Optional Redemption Date of all accrued and unpaid dividends,
if any, to the applicable Optional Redemption Date (the "Optional Redemption
Price"), out of funds legally available therefor, subject to the notice
provisions and provisions for partial redemption described below; provided,
however, that in connection with any redemption effected pursuant to this
paragraph (a) of Section (5), the Corporation must redeem the shares of Series A
Preferred Stock, the shares of Series B Preferred Stock, the shares of Series C
Preferred Stock, the shares of Series D Preferred Stock, the Shares of Series E
Preferred Stock and the shares of Series F Preferred Stock then eligible for
redemption pro rata in proportion to their respective liquidation preferences.
(b) Each share of Series F Preferred Stock (if not earlier
redeemed or converted) shall be subject to mandatory redemption in whole (to the
extent of lawfully available funds therefor) on June 1, 2010 (the "Mandatory
Redemption Date") at a redemption price in cash
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39
equal to the Liquidation Preference per share plus the value on a day selected
by the Board of Directors of the Corporation that is within five days of the
Mandatory Redemption Date of an amount per share equal to all accrued and unpaid
dividends thereon, if any, to the Mandatory Redemption Date (the "Mandatory
Redemption Price"). The Corporation shall take all actions required or permitted
by the Delaware General Corporation Law to permit the redemption described in
this paragraph (b) of Section (5).
(c) In the event of a redemption pursuant to paragraph (a) or
(b) of this Section (5), the Corporation shall give notice of such redemption (a
"Redemption Notice") by first class mail, postage prepaid, mailed not less than
20 nor more than 60 days prior to the Optional Redemption Date or the Mandatory
Redemption Date, as the case may be (each a "Redemption Date"), to each holder
of record of the shares of Series F Preferred Stock to be redeemed, at such
holder's address as the same appears on the stock records of the Corporation,
which Redemption Notice shall be unconditional and irrevocable. Each such
Redemption Notice shall state: (1) the Redemption Date; (2) the number of shares
of each series to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (3) the Optional Redemption Price or the Mandatory Redemption Price, as
the case may be (each a "Redemption Price"); (4) the place or places where
certificates for such shares are to be surrendered for payment of the Redemption
Price; (5) the then current Conversion Price; and (6) that no default of the
Corporation is then existing under any material loan document, indenture or
other borrowing, which default has a material adverse effect on the Corporation.
The Redemption Notice having been mailed as aforesaid, from and after the
applicable Redemption Date (unless default shall be made by the Corporation in
providing money for the prompt payment of the applicable Redemption Price), (i)
the shares of the Series F Preferred Stock so called for redemption and not
converted prior to 5:00 p.m. New York time on the Redemption Date shall no
longer be deemed to be outstanding, and (ii) all rights of the holders thereof
as stockholders of the Corporation (except the right to receive from the
Corporation the Redemption Price without interest thereon after the Redemption
Date) shall cease. If the Corporation fails to provide money for the payment of
the Redemption Price within 30 days after the Redemption Date, the Redemption
Price shall accrue interest at the rate of 15% per annum until paid.
Upon surrender in accordance with a Redemption Notice of the
certificates for the shares so redeemed (properly endorsed or assigned for
transfer, if the Corporation shall so require and the Redemption Notice shall so
state), such shares shall be redeemed by the Corporation at the applicable
Redemption Price. If fewer than all the outstanding shares of Series F Preferred
Stock are to be redeemed, the shares of Series F Preferred Stock to be redeemed
shall be selected pro rata (as nearly as may be possible) by the Corporation
from outstanding shares of Series F Preferred Stock held by each holder thereof
and not previously called for redemption. If fewer than all the shares
represented by any certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.
Section (6) Shares to be Retired. All shares of Series F Preferred Stock
purchased or redeemed by the Corporation or converted shall be retired and
canceled and shall be restored to the status of authorized but unissued shares
of preferred stock, without designation as to series.
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40
Section (7) Conversion. Holders of shares of Series F Preferred Stock
shall have the right to convert all or a portion of such shares into shares of
Common Stock as follows:
(a) Subject to and upon compliance with the provisions of this
Section (7), a holder of shares of Series F Preferred Stock shall have the
right, at his, her or its option, at any time on or after the Initial
Convertibility Date, to convert such shares, in whole or in part, into the
number of fully paid and nonassessable shares of Common Stock (calculated as to
each conversion to the nearest 1/100th of a share) obtained by dividing the
aggregate Liquidation Preference of such shares by the Conversion Price and by
surrender of such shares so to be converted by the holder thereof, such
surrender to be made in the manner provided in paragraph (b) of this Section
(7); provided, however, that the right to convert shares called for redemption
pursuant to Section (5) shall terminate at 5:00 p.m. New York time on the
Redemption Date for such redemption, unless the Corporation shall default in
making prompt payment of the amount payable upon such redemption. Any share of
Series F Preferred Stock may be converted, at the request of its holder, in part
into Common Stock. If a part of a share of Series F Preferred Stock is
converted, then the Corporation will convert such share into the requested
shares of Common Stock (subject to paragraph (c) of this Section (7)) and issue
a fractional share of Series F Preferred Stock evidencing the remaining interest
of such holder. The Corporation shall issue, pay and deliver all accrued and
unpaid dividends with respect to the shares of Series F Preferred Stock so
converted in accordance with paragraph (b) of this Section (7).
(b) In order to exercise the conversion right, the holder of
each share of Series F Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent or, if no Transfer
Agent has been appointed by the Corporation, at the principal office of the
Corporation, accompanied by written notice to the Corporation that the holder
thereof elects to convert its shares of Series F Preferred Stock or a specified
portion thereof. Unless the shares issuable on conversion are to be issued in
the same name as the name in which such share of Series F Preferred Stock is
registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder or such holder's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).
Holders of shares of Series F Preferred Stock at the close of business
on a dividend payment record date shall be entitled to receive the dividend
payable on such shares (except that holders of shares called for redemption on a
Redemption Date between such record date and the Dividend Payment Date shall not
be entitled to receive such dividend on such Dividend Payment Date) on the
corresponding Dividend Payment Date notwithstanding the conversion thereof
following such dividend payment record date and prior to such Dividend Payment
Date.
As promptly as practicable after the surrender of certificates for
shares of Series F Preferred Stock as aforesaid, the Corporation shall issue,
pay and deliver at such office to such
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41
holder, or on his, her or its written order, (i) a certificate or certificates
for the number of full shares of Common Stock issuable upon the conversion of
such shares in accordance with the provisions of this Section (7), (ii) if less
than the full number of shares of Series F Preferred Stock evidenced by the
surrendered certificates is being converted, a new certificate or certificates,
of like tenor, for the number of shares evidenced by such surrendered
certificates less the number of shares being converted, (iii) all accrued and
unpaid dividends with respect to the shares of Series F Preferred Stock so
converted and (iv) any fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in paragraph (c) of
this Section (7).
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for shares of
Series F Preferred Stock shall have been surrendered and such notice received by
the Corporation as aforesaid, and the person or persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become the holder or holders of
record of the shares represented thereby at such time on such date and such
conversion shall be at the Conversion Price in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such person or persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date upon which such shares shall have been
surrendered and such notice received by the Corporation. All shares of Common
Stock delivered upon conversion of the Series F Preferred Stock shall upon
delivery be duly and validly issued and fully paid and nonassessable.
(c) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the Series F Preferred
Stock. Instead of any fractional interest in a share of Common Stock which would
otherwise be deliverable upon the conversion of a share of Series F Preferred
Stock, the Corporation shall pay to the holder of such share an amount in cash
(computed to the nearest cent) equal to such fraction of a share multiplied by
the Current Market Price of one share of Common Stock on the Trading Day
immediately preceding the date of conversion. If more than one share shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate number of shares of Series F Preferred Stock so
surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) In case the Corporation shall after the Issue Date (A)
pay a dividend or make a distribution on its Common Stock in shares of
its Common Stock without making a corresponding dividend or distribution
with respect to its Series F Preferred Stock, (B) subdivide its
outstanding Common Stock into a greater number of shares, (C) combine
its outstanding Common Stock into a smaller number of shares or (D)
issue any shares of capital stock by reclassification of its Common
Stock, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the holder of any share of Series
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F Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock or capital
stock of the Corporation which such holder would have owned or have been
entitled to receive after the happening of any of the events described
above had such share of Series F Preferred Stock been converted
immediately prior to the happening of such event or the record date
therefor, whichever is earlier. An adjustment made pursuant to this
subparagraph (i) shall become effective immediately after the close of
business on the record date in the case of a dividend or distribution
(except as provided in paragraph (h) below) and shall become effective
immediately after the close of business on the record date in the case
of a subdivision, combination or reclassification.
(ii) In case the Corporation shall issue after the Issue Date
(a) options, warrants or other rights to all holders of Common Stock
entitling them (for a period expiring within 180 days after the record
date mentioned below) to subscribe for or purchase Common Stock at a
price per share less than the lower of the Initial Market Price or the
Conversion Price (the "Minimum Price") at the record date for the
determination of stockholders entitled to receive such options, warrants
or other rights or (b) shares of Common Stock (excluding shares of
Common Stock issued or issuable as dividends with respect to the Series
F Preferred Stock pursuant to paragraph (a) of Section (3) hereof and
Common Stock issued or issuable as dividends with respect to the Series
E Preferred Stock pursuant to paragraph (a) of Section (3) of the Series
E Certificate of Designations) or securities exercisable for (including
options, warrants or other rights other than those referred to in clause
(a) above and subparagraph (iii) below) or exchangeable or convertible
into shares of Common Stock) at a price per share (or having an
exercise, exchange or conversion price per share) less than the then
current Minimum Price (other than securities issued in a transaction in
which a pro rata share of such securities have been reserved by the
Corporation for distribution to the holders of Series F Preferred Stock
upon conversion), then in each such case the Conversion Price in effect
immediately prior thereto shall be adjusted to equal the price
determined by multiplying (I) the Conversion Price in effect immediately
prior to the date of issuance of such options, warrants, other rights or
shares of Common Stock (or securities exercisable for or exchangeable or
convertible into shares of Common Stock) by (II) a fraction, the
numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the date of issuance of such options,
warrants or other rights or shares of Common Stock (or securities
exercisable for or exchangeable or convertible into shares of Common
Stock) (without giving effect
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43
to any such issuance) and (B), in the case of (a) above, the number of
shares which the aggregate proceeds from the exercise of such options,
warrants or other rights for Common Stock or, in the case of (b) above,
the number of shares which the aggregate consideration receivable by the
Corporation for the total number of shares of Common Stock (or
securities exercisable for or exchangeable or convertible into shares of
Common Stock) so issued would purchase at the Minimum Price in effect
immediately prior to the date of issuance, and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding
on the date of issuance of such options, warrants or other rights or
shares of Common Stock (or securities exercisable for or exchangeable or
convertible into Common Stock) (without giving effect to any such
issuance) and (B), in the case of clause (a) above, the number of
additional shares of Common Stock offered for subscription or purchase
or, in the case of clause (b) above, the number of shares of Common
Stock so issued or into which the exercisable, exchangeable or
convertible securities may be exercised, exchanged or converted. Such
adjustment shall be made successively whenever any such options,
warrants or other rights or shares of Common Stock (or securities
exercisable for or exchangeable or convertible into Common Stock) are
issued, and shall become effective immediately after such record date
or, in the case of the issuance of Common Stock, after the date of
issuance thereof (or in the case of securities exercisable for or
exchangeable or convertible into shares of Common Stock, the date on
which holders may first exercise, exchange or convert the same in
accordance with the respective terms thereof). In determining whether
any options, warrants or other rights entitle the holders of Common
Stock to subscribe for or purchase shares of Common Stock at less than
the Minimum Price in effect immediately prior to the date of such
issuance, and in determining the aggregate offering price of shares of
Common Stock (or securities exercisable for or exchangeable or
convertible into shares of Common Stock), there shall be taken into
account any net consideration received or receivable by the Corporation
upon issuance and upon exercise of such options, warrants or other
rights or upon issuance of shares of Common Stock (or securities
exercisable for or exchangeable or convertible into shares of Common
Stock), the value of such consideration, if other than cash, to be
determined by the Board of Directors in good faith or, if higher, the
aggregate exercise, exchange or conversion price set forth in such
exercisable, exchangeable or convertible securities. The aggregate
consideration received by the Corporation in connection with the
issuance of shares of Common Stock or of options, warrants or other
rights or securities exercisable for or exchangeable or convertible into
shares of Common Stock shall be deemed to be equal to the sum of the
aggregate net offering price of all such securities plus the minimum
aggregate amount, if any, payable upon the exercise of such options,
warrants or other rights and conversion of any such exercisable,
exchangeable or convertible securities into shares of Common Stock.
(iii) In case the Corporation shall distribute to all holders of
its Common Stock as a class any shares of capital stock of the
Corporation (other than Common Stock) or evidences of its indebtedness
or assets (other than a regular cash dividend that the Board of
Directors determines, in good faith, can be maintained by the
Corporation for at least four consecutive periods covering not less than
one year and that the Board of Directors intends to maintain for at
least four consecutive periods covering not less than one year, out of
profits or surplus) or options, warrants or other rights to subscribe
for or purchase any of its securities (excluding those referred to in
subparagraph (ii)(a) above) (any of the foregoing being hereinafter in
this subparagraph (iii) called the "Securities"), then in each such
case, unless the Corporation elects to reserve shares or other units of
such Securities for distribution to the holders of the Series F
Preferred Stock upon the conversion of the shares of Series F Preferred
Stock so that any such holder converting shares of Series F Preferred
Stock will receive upon such conversion, in addition to the shares of
the Common Stock to which such holder is entitled, the amount and kind
of such Securities which such holder would have received if such holder
had, immediately prior to
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the record date for the distribution of the Securities, converted his or
her shares of Series F Preferred Stock into Common Stock (such election
to be based upon a determination by the Board of Directors that such
reservation will not materially adversely affect the interests of any
holder of Series F Preferred Stock in any such reserved Securities), the
Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying (I) the Conversion Price in effect
immediately prior to the date of such distribution by (II) a fraction,
the numerator of which shall be the Current Market Price per share of
the Common Stock on the record date mentioned below less the fair market
value (as determined by the Board of Directors, whose determination
shall, if made in good faith, be conclusive) of the portion of the
capital stock or assets or evidences of indebtedness so distributed or
of such rights or warrants applicable to one share of Common Stock, and
the denominator of which shall be the Current Market Price per share of
the Common Stock. Such adjustment shall become effective immediately,
except as provided in paragraph (h) below, after the record date for the
determination of stockholders entitled to receive such distribution.
(iv) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least
1% in such price; provided, however, that any adjustments which by
reason of this subparagraph (iv) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment; and
provided further that any adjustment shall be required and made in
accordance with the provisions of this Section (7) (other than this
subparagraph (iv)) not later than such time as may be required in order
to preserve the tax-free nature of a distribution to the holders of
shares of Common Stock. All calculations under this Section (7) shall be
made to the nearest cent (with $.005 being rounded upward) or to the
nearest 1/100 of a share (with .005 of a share being rounded upward), as
the case may be. Anything in this paragraph (d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in
addition to those required by this paragraph (d), as it in its
discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of options, warrants or
other rights to purchase stock or securities, or a distribution of other
assets (other than cash dividends) hereafter made by the Corporation to
its stockholders shall not be taxable.
(v) No adjustment in the Conversion Price shall be required in
the event of any dividend, distribution or issuance to holders of shares
of Common Stock pursuant to subparagraph (i), (ii) or (iii) above if
holders of shares of Series F Preferred Stock have received the same
dividend, distribution or issuance in accordance with Section (3)
hereof.
(e) In case the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (d)(i) of this Section
(7) applies) (each of the foregoing being referred to as a "Transaction"), in
each case as a result of which shares of Common Stock shall be converted into
the right to receive stock, securities or other property (including cash or any
combination thereof),
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45
each share of Series F Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock and
other securities and property receivable (including cash) upon the consummation
of such Transaction by a holder of that number of shares or fraction thereof of
Common Stock into which one share of Series F Preferred Stock was convertible
immediately prior to such Transaction. The Corporation shall use reasonable
efforts to deliver notice of any Transaction to the holders of Series F
Preferred Stock at least 20 days prior to the earlier of the consummation or the
record date therefor; provided however, that any unintentional failure by the
Corporation to deliver such required notice shall not impair or affect the
validity or provisions of any such Transaction; and provided, further, that any
failure by the Corporation to deliver such required notice shall toll the time
period in which the holders of Series F Preferred Stock may convert their shares
as aforementioned until such notice is delivered by the Corporation. The
Corporation shall not be a party to any Transaction unless the terms of such
Transaction are consistent with the provisions of this paragraph (e) and it
shall not consent or agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the Series F
Preferred Stock which will contain provisions enabling the holders of the Series
F Preferred Stock which remains outstanding after such Transaction to convert
into the consideration received by holders of Common Stock at the Conversion
Price immediately after such Transaction. The provisions of this paragraph (e)
shall similarly apply to successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock (other than a regular cash
dividend that the Board of Directors determines can be maintained by the
Corporation for at least four consecutive periods covering at least one
year and that the Board of Directors intends to maintain for at least
four consecutive periods covering at least one year out of profits or
surplus); or
(ii) the Corporation shall authorize the granting to
the holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of any class or any options, warrants or other
rights; or
(iii) there shall be any reclassification of the
Common Stock (other than an event to which paragraph (d)(i) of this
Section (7) applies) or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required, or the sale or transfer of all or substantially
all of the assets of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of shares of the Series F Preferred Stock at
their addresses as shown on the stock records of the Corporation, as promptly as
possible, but at least 15 days prior to the applicable date specified in clauses
(A) and (B) below, a notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or warrants, or,
if a record is not
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46
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, sale or transfer is expected, that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reclassification, consolidation, merger,
sale or transfer. Failure to give such notice or any defect therein shall not
affect the legality or validity of the proceedings described in this Section
(7).
(g) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price, the calculation of
such adjusted Conversion Price and the date on which such adjustment becomes
effective and shall promptly mail such notice of such adjustment of the
Conversion Price to the holder of each share of Series F Preferred Stock at his,
her or its last address as shown on the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section (7)
provides that an adjustment shall become effective immediately after a record
date for an event, the Corporation may defer until the occurrence of such event
(A) issuing to the holder of any share of Series F Preferred Stock converted
after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such holder
any amount in cash in lieu of any fraction pursuant to paragraph (c) of this
Section (7).
(i) For purposes of this Section (7), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation.
(j) If any action or transaction would require adjustment of the
Conversion Price pursuant to more than one paragraph of this Section (7), only
one adjustment shall be made and such adjustment shall be the amount of
adjustment which has the highest absolute value.
(k) In case the Corporation shall take any action affecting the
Common Stock other than action described in this Section (7), which in the
opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of the shares of Series F Preferred Stock, the
Conversion Price for the Series F Preferred Stock may be adjusted, to the extent
permitted by law, in such manner, if any, and at such time, as the Board of
Directors may determine to be equitable in the circumstances.
(l) The Corporation covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or its issued shares of Common
Stock held in its treasury, or both, for the purpose of effecting conversion of
the Series F Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series F Preferred
Stock not theretofore converted. For purposes of this paragraph (1), the number
of shares of
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Common Stock which shall be deliverable upon the conversion of all outstanding
shares of Series F Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
(m) Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value of the shares of Common
Stock deliverable upon conversion of the Series F Preferred Stock, the
Corporation shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully paid and nonassessable shares of Common Stock at such adjusted
Conversion Price.
(n) The Corporation shall use all reasonable efforts to list the
shares of Common Stock required to be delivered upon conversion of the Series F
Preferred Stock and all shares of Common Stock issued as dividends with respect
to the Shares, prior to such issuance and delivery, on the Nasdaq Stock Market
or such other exchange or interdealer quotation system on which the Common Stock
is principally traded or authorized to be quoted.
(o) Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon conversion of the Series F
Preferred Stock or upon the payment of dividends with respect to the Shares, the
Corporation shall use all reasonable efforts to comply with all federal and
state laws and regulations thereunder requiring the registration of such
securities with, or any approval of or consent to the delivery thereof by, any
governmental authority, and any such conversion or delivery shall be subject to
any applicable requirements of law or regulation.
(p) The Corporation shall pay any and all documentary stamp or
similar issue or transfer taxes or fees payable in respect of the issue or
delivery of shares of Common Stock on conversion of the Series F Preferred Stock
or upon the payment of dividends with respect to the Shares pursuant hereto
imposed by any Governmental Authority (including, without limitation, any fee in
respect of an HSR Act filing); provided, however, that the Corporation shall not
be required to pay any tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock in a name other than
that of the holder of the Series F Preferred Stock to be converted and no such
issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Corporation the amount of any such tax or has
established, to the reasonable satisfaction of the Corporation, that such tax
has been paid.
Section (8) Ranking. Any class or series of stock of the Corporation
shall be deemed to rank:
(i) prior to the Series F Preferred Stock, as to dividends or as
to distribution of assets upon liquidation, dissolution or winding up,
if the holders of such class shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders
of Series F Preferred Stock;
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(ii) on a parity with the Series F Preferred Stock, (A) as to
dividends, if such stock is Series E Preferred Stock or if the holders
of such class of stock and the Series F Preferred Stock shall be
entitled to the receipt of dividends in proportion to their respective
amounts of declared and unpaid dividends per share, without preference
or priority one over the other, or (B) as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the redemption or
liquidation prices per share thereof be different from those of the
Series F Preferred Stock, if such stock shall be Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock or Series E Preferred Stock or if the holders of such
class of stock and the Series F Preferred Stock shall be entitled to the
receipt of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of liquidation
prices, without preference or priority one over the other; and
(iii) junior to the Series F Preferred Stock, (A) as to
dividends payable pursuant to paragraph (a) of Section (3) hereof, if
such stock is Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock, Series D Preferred Stock or Common Stock, or as to
all dividends, if holders of Series F Preferred Stock shall be entitled
to the receipt of all dividends in preference or priority to the holders
of shares of such stock, or (B) as to distribution of assets upon
liquidation, dissolution or winding up, if such stock shall be Common
Stock or if the holders of Series F Preferred Stock shall be entitled to
receipt of amounts distributable upon liquidation, dissolution or
winding up in preference or priority to the holders of shares of such
stock.
Section (9) Voting.
(a) Except as herein provided or as otherwise from time to time
required by law, holders of Series F Preferred Stock shall have no voting
rights.
(b) So long as any shares of the Series F Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
Series F Preferred Stock outstanding at the time given in person or by proxy,
either in writing or at any special or annual meeting, shall be necessary to
permit, effect or validate any one or more of the following:
(i) the authorization, creation or issuance, or any
increase in the authorized or issued amount, of any class or series of
stock ranking prior to (or convertible, exercisable or exchangeable into
any class or series of stock ranking prior to) Series F Preferred Stock
as to dividends or the distribution of assets upon liquidation,
dissolution or winding up;
(ii) the increase in the authorized or issued amount of
Series F Preferred Stock; or
(iii) the amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions of the
Certificate of Incorporation of the Corporation (including any of the
provisions hereof) which would affect any right,
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preference or voting power of Series F Preferred Stock or of the holders
thereof, provided, however, that any increase in the amount of
authorized preferred stock or the creation and issuance of other series
of preferred stock, or any increase in the amount of authorized shares
of such series or of any other series of preferred stock, in each case
ranking on a parity with or junior to the Series F Preferred Stock with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to affect
such rights, preferences or voting powers.
The foregoing voting provisions shall not apply if, at or prior
to the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series F Preferred Stock
shall have been redeemed or sufficient funds shall have been deposited in trust
to effect such redemption, scheduled to be consummated within 30 days after such
time.
Section (10) Record Holders. The Corporation and the Transfer Agent may
deem and treat the record holder of any shares of Series F Preferred Stock as
the true and lawful owner thereof for all purposes, and neither the Corporation
nor the Transfer Agent shall be affected by any notice to the contrary.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
made under the seal of the Corporation and signed by [ ], its [ ], and attested
by [ ] its [ ], this [ ] day of [ ], 1998.
POWERTEL, INC.
By
----------------------------
(Corporate Seal)
Attest:
By
-------------------------------------
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ANNEX II
Registration Rights
(a) The Purchaser or any party to whom the rights granted pursuant to
this Annex II are transferred pursuant to paragraph (i) of this Annex II shall
have the right at any time following the second anniversary of the Closing to
make an aggregate of three requests of the Seller in writing for registration
under the Securities Act of shares of Common Stock into which Shares have been
converted or are to be converted prior to the closing of the offering pursuant
to such registration and/or shares of Common Stock that have been issued with
respect to the Shares (the "Securities"). Any party who loans the Purchase Price
(the "Loan") to the Purchaser in connection with the purchase of the Shares (the
"Lender"), and any transferee of the rights of the Lender set forth in this
Annex II pursuant to paragraph (i) of this Annex II (a "Lender Transferee"),
shall have the right beginning as of the Closing Date to make in writing that
number of registration requests of Seller determined by subtracting the number
of registration requests that have previously been made pursuant to this Section
(a) from three, for registration under the Securities Act with respect to shares
of Common Stock pledged by the Purchaser as of the Closing Date (the "Pledged
Common Stock") to the Lender as security for the Loan, to the extent that (x)
the Lender or a Lender Transferee acquires the Pledged Common Stock pursuant to
the exercise of remedies in connection with the Loan, or is otherwise entitled
to and desires to sell such Pledged Common Stock pursuant to the exercise of
such remedies, and (y) at the time the Pledged Common Stock is acquired or is
entitled and desired to be sold by the Lender or a Lender Transferee pursuant to
the exercise of such remedies, such Pledged Common Stock may not be resold
without restriction pursuant to the Securities Act (including pursuant to Rule
144(k) thereunder), and in such case, the term "Securities" as used in this
Annex II shall be deemed to include the Pledged Common Stock. With respect to
the first such request to register under the Securities Act, at least $20
million in market value of Securities Beneficially Owned by the Purchaser shall
be registered (the shares subject to such request and any other request
hereunder being referred to as the "Subject Stock"), and each subsequent such
request must be at least 6 months following the completion of the prior offering
pursuant to a registration statement with respect to the Subject Stock which was
effective until the earlier of the completion of such offering or three months;
provided, however, that the Purchaser shall not be entitled to exercise, and the
Seller shall be obligated not to recognize the exercise of, the third of such
requests unless and until (i) the Purchaser has repaid all loans of funds used
by the Purchaser to acquire the Shares and provides written evidence to the
Seller from the Purchaser's lender(s) of such repayment or (ii) the Purchaser
provides written evidence to the Seller of the consent of the Purchaser's
lender(s) to the exercise of the Purchaser's third registration request. The
Seller shall use all reasonable efforts to cause the Subject Stock to be
registered under the Securities Act as soon as reasonably practicable after
receipt of a request so as to permit promptly the sale thereof, and in
connection therewith, the Seller shall prepare and file, on such appropriate
form as the Seller in its discretion shall determine, a registration statement
under the Securities Act to effect such registration. The Seller shall use all
reasonable efforts to list all Subject Stock covered by such registration
statement on any national securities exchange on which the Common Stock is
52
then listed or to list such Subject Stock on the National Association of
Securities Dealers, Inc. Automated Quotation System or National Market System.
The Purchaser hereby undertakes to provide all such information and materials
and take all such action as may be required in order to permit the Seller to
comply with all applicable requirements of the Commission and to obtain any
desired acceleration of the effective date of such registration statement. Any
registration statement filed at the Purchaser's request hereunder will not count
as a requested registration unless effectiveness is maintained until the earlier
of completion of the offering or three months. Notwithstanding the foregoing,
the Seller (i) shall not be obligated to cause any special audit to be
undertaken in connection with any such registration (provided that this
provision shall not relieve the Seller of its obligation to obtain any required
consents with respect to financial statements in prior periods) and (ii) shall
be entitled to postpone for a reasonable period (not to exceed 90 days) of time
the filing of any registration statement otherwise required to be prepared and
filed by the Seller if the Seller is, at such time, either (A) conducting, or
proposing to file with the Commission within 90 days a registration statement
with respect to, an underwritten public offering for the account of the Seller
of equity securities (or securities convertible into equity securities) or is
subject to a contractual obligation not to engage in a public offering and is
advised in writing by its managing underwriter or underwriters (with a copy to
the Purchaser) that such offering would in its or their opinion be adversely
affected by the registration so requested or (B) subject to an existing
contractual obligation to its underwriters not to engage in a public offering.
Notwithstanding any other provision of this Annex II, the Seller may postpone
action under this Annex II for as long as it reasonably deems necessary (but no
longer than 90 days) if the Seller determines, in its reasonable discretion,
that effecting the registration at such time might (i) adversely affect a
pending or contemplated financing, acquisition, disposition of assets or stock,
merger or other significant transaction, or (ii) require the Seller to make
public disclosure of information the public disclosure of which at such time the
Seller in good faith believes could have a significant adverse effect upon the
Seller.
No securities may be registered on a registration statement requested by
the Purchaser pursuant to the first paragraph of paragraph (a) of this Annex II
without the Purchaser's express written consent, unless the amount of such
securities is subject to reduction prior to any reduction in the number of
securities originally requested by the Purchaser in the event the lead
underwriter of the related offering believes that the success of such offering
would be materially and adversely affected by inclusion of all the securities
requested to be included therein.
At any time after the Closing, if the Seller proposes to file a
registration statement under the Securities Act with respect to an offering of
its equity securities (i) for its own account (other than a registration
statement on Form S-4 or S-8 or any substitute form that may be adopted by the
Commission) or (ii) for the account of any holders of its securities (including
pursuant to a demand registration), then the Seller shall give written notice of
such proposed filing to the Purchaser as soon as practicable (but in any event
not less than 5 Business Days before the anticipated filing date), and such
notice shall offer the Purchaser the opportunity to register such number of
shares of Securities as the Purchaser requests. If the Purchaser wishes to
register securities of the same class or series as the Seller or such holder,
such registration shall be on the same terms and conditions as the registration
of the Seller's or such holders' securities (a "Piggyback Registration").
Notwithstanding anything contained herein, if the lead underwriter of
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an offering involving a Piggyback Registration delivers a written opinion to the
Seller that the success of such offering would be materially and adversely
affected by inclusion of all the securities requested to be included, then the
number of securities to be registered by the Purchaser shall be reduced prior to
any reduction in the number of securities to be registered pursuant to clauses
(i) and (ii) of the first sentence of this paragraph; provided, however, that
the Seller must provide prompt written notice of such written opinion to the
Purchaser. The Purchaser shall have the right at any time to convert its request
for a Piggyback Registration into a requested registration pursuant to the first
paragraph of paragraph (a) of this Annex II.
(b) In connection with any offering of shares of Subject Stock
registered pursuant to this Annex II, the Seller (i) shall furnish to the
Purchaser such number of copies of any prospectus (including any preliminary
prospectus) as it may reasonably request in order to effect the offering and
sale of the Subject Stock to be offered and sold, but only while the Seller
shall be required under the provisions hereof to cause the registration
statement to remain current and (ii) take such action as shall be necessary to
qualify the shares covered by such registration statement under such "blue sky"
or other state securities laws for offer and sale as the Purchaser shall
reasonably request; provided, however, that the Seller shall not be obligated to
qualify as a foreign corporation to do business under the laws of any
jurisdiction in which it shall not then be qualified or to file any general
consent to service of process in any jurisdiction in which such a consent has
not been previously filed. If applicable, the Seller and the Purchaser shall
enter into an underwriting agreement with a managing underwriter or underwriters
selected by the Purchaser (reasonably satisfactory to the Seller) containing
representations, warranties, indemnities and agreements then customarily
included by an issuer in underwriting agreements with respect to secondary
distributions; provided, however, that such underwriter or underwriters shall
agree to use their best efforts to ensure that the offering results in a
distribution of the Subject Stock sold in accordance with the terms of this
Agreement. In connection with any offering of Subject Stock registered pursuant
to this Annex II, the Seller shall (x) furnish to the underwriter, at the
Seller's expense, unlegended certificates representing ownership of the Subject
Stock being sold in such denominations as reasonably requested and (y) instruct
any transfer agent and registrar of the Subject Stock to release any stop
transfer orders with respect to such Subject Stock. If Purchaser enters into an
underwriting agreement with respect to the Subject Stock, Purchaser's
representations, warranties and indemnities contained therein shall be made
severally rather than jointly with the Company or any other selling stockholder
and shall be limited to (i) Purchaser's ownership of the Subject Stock, (ii)
Purchaser's authority to enter into the underwriting agreement and related
matters, (iii) any information provided by Purchaser for inclusion in the
registration statement, and (iv) such other matters as are at the time of such
underwriting customarily included in underwriting agreements with the Managing
Underwriter relating to sales of common stock by a selling stockholder where the
failure by the Purchaser to make such representations, warranties or indemnities
causes the Managing Underwriter to refuse to conduct or complete the offering.
In the event an offering of Subject Stock fails to close due to the Purchaser's
unwillingness, inability or other failure to comply with clause (iv) of the
immediately preceding sentence, then Purchaser agrees that the Seller shall be
deemed to have satisfied all of its obligations to conduct the related offering
of such Subject Stock, shall be excused from any failure of any obligation of
Seller with respect thereto and shall not be liable for the failure of such
offering of such Subject Stock to close. Upon any registration becoming
effective pursuant to this Annex II, the Seller shall use all
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reasonable efforts to keep such registration statement current for such period
as shall be required for the disposition of all of said Subject Stock; provided,
however, that such period need not exceed three months.
(c) The Purchaser shall pay all underwriting discounts and commissions
related to shares of Subject Stock being sold by the Purchaser and the fees and
disbursements of counsel and other advisors to the Purchaser. All other fees and
expenses in connection with the first requested registration pursuant to the
first paragraph of paragraph (a) of this Annex II, including, without
limitation, all registration and filing fees, all fees and expenses of complying
with securities or "blue sky" laws, fees and disbursements of the Seller's
counsel and accountants (including the expenses of "cold comfort" letters
required by or incident to such performance and compliance) and any fees and
disbursements of underwriters customarily paid by issuers in secondary
offerings, shall be paid by the Seller, and all such other fees and expenses in
connection with the second and third requested registrations pursuant to this
Annex II shall be borne equally by the Purchaser and the Seller; provided,
however, that in the event the Purchaser fails to convert Shares into Common
Stock prior to any such offering, such that such offering is not able to be
completed, the Purchaser shall pay all such other fees and expenses.
(d) In the case of any offering registered pursuant to this Annex II,
the Seller agrees to indemnify and hold the Purchaser, each underwriter of
Securities under such registration and each person who controls any of the
foregoing within the meaning of Section 15 of the Securities Act and the
directors and officers of the Purchaser, harmless against any and all losses,
claims, damages, liabilities or action to which they or any of them may become
subject under the Securities Act or any other statute or common law or
otherwise, and to reimburse them for any legal or other expenses reasonably
incurred by them in connection with investigating any claims and defending any
actions, insofar as any such losses, claims, damages, liabilities or actions
shall arise out of or shall be based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the registration statement
relating to the sale of such Subject Stock, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading or (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus (as amended or
supplemented if the Seller shall have filed with the Commission any amendment
thereof or supplement thereto), if used prior to the effective date of such
registration statement, or contained in the prospectus (as amended or
supplemented if the Seller shall have filed with the Commission any amendment
thereof or supplement thereto), or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the indemnification agreement contained in this paragraph (d)
shall not apply to such losses, claims, damages, liabilities or actions which
shall arise from the sale of Subject Stock by the Purchaser if such losses,
claims, damages, liabilities or actions shall arise out of or shall be based
upon any such untrue statement or alleged untrue statement, or any such omission
or alleged omission, (x) made in reliance upon and in conformity with
information furnished in writing to the Seller by the Purchaser or any such
underwriter specifically for use in connection with the preparation of the
registration statement or any preliminary prospectus or prospectus contained in
the registration statement or any such amendment thereof or supplement
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thereto or (y) made in any preliminary prospectus, and the prospectus contained
in the registration statement in the form filed by the Seller with the
Commission pursuant to Rule 424(b) under the Securities Act shall have corrected
such statement or omission and a copy of such prospectus shall not have been
sent or given to such person at or prior to the confirmation of such sale to
him.
(e) In the case of each offering registered pursuant to this Annex II,
the Purchaser and each underwriter participating therein shall agree, in the
same manner and to the same extent as set forth in paragraph (d) of this Annex
II, severally to indemnify and hold harmless the Seller and each person, if any,
who controls the Seller within the meaning of Section 15 of the Securities Act,
and the directors and officers of the Seller, and in the case of each such
underwriter, the Purchaser, each person, if any, who controls the Purchaser
within the meaning of the Securities Act and the directors, officers and
partners of the Purchaser, with respect to any statement in or omission from
such registration statement or any preliminary prospectus (as amended or as
supplemented, if amended or supplemented as aforesaid) or prospectus contained
in such registration statement (as amended or as supplemented, if amended or
supplemented as aforesaid), if such statement or omission shall have been made
in reliance upon and in conformity with information furnished in writing to the
Seller by the Purchaser or such underwriter specifically for use in connection
with the preparation of such registration statement or any preliminary
prospectus or prospectus contained in such registration statement or any such
amendment thereof or supplement thereto.
(f) Each party indemnified under paragraph (d) or (e) of this Annex II
shall, promptly after receipt of notice of the commencement of any action
against such indemnified party in respect of which indemnity may be sought
hereunder, notify the indemnifying party in writing of the commencement thereof.
The omission of any indemnified party to so notify an indemnifying party of any
such action shall not relieve the indemnifying party from any liability in
respect of such action which it may have to such indemnified party on account of
the indemnity agreement contained in paragraph (d) or (e) of this Annex II,
unless the indemnifying party was prejudiced by such omission, and in no event
shall relieve the indemnifying party from any other liability which it may have
to such indemnified party. In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it may desire, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under paragraph (d) or (e) of this Annex II for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation; provided,
however, that if there exists or is reasonably likely to exist a conflict of
interest that would make it inappropriate in the judgment of the indemnified
party, in its sole and absolute discretion, for the same counsel to represent
both the indemnified party and the indemnifying party, then the indemnified
party shall be entitled to retain its own counsel, in each jurisdiction for
which the indemnified party determines counsel is required, at the expense of
the indemnifying party. No such third party claim may be settled by the
indemnifying party or the indemnified party without the prior written consent of
the other, which consent shall not be unreasonably withheld.
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(g) If the indemnification provided for under paragraph (d) or (e) shall
for any reason be held by a court to be unavailable to an indemnified party
under paragraph (d) or (e) hereof in respect of any loss, claim, damage or
liability, or any action in respect thereof, then, in lieu of the amount paid or
payable under paragraph (d) or (e) hereof, the indemnified party and the
indemnifying party under paragraph (d) or (e) hereof shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), (i) in
such proportion as is appropriate to reflect the relative fault of the Seller
and the prospective seller of Securities covered by the registration statement
which resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as shall
be appropriate to reflect the relative benefits received by the Seller and such
prospective seller from the offering of the securities covered by such
registration statement. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be unreasonably
withheld.
(h) Notwithstanding anything to the contrary contained in this
Agreement, the maximum amount of indemnifiable losses which may be recovered
from an indemnifying party arising out of or resulting from the causes
enumerated in paragraph (d) or (e) shall be an amount equal to the Purchase
Price.
(i) All, but not less than all, of the rights and obligations granted
under this Annex II to cause the Seller to register Securities may be assigned,
transferred or otherwise conveyed, in whole but not in part, by the Purchaser to
(i) any Affiliate of the Purchaser, or (ii) to any transferee other than an
Affiliate of the Purchaser who acquires at least 500,000 shares of Securities,
provided that in either circumstance the Purchaser gives the Seller written
notice (at the time of, or within a reasonable time after, such transfer)
stating the name and address of such Affiliate or other transferee, and such
Affiliate or other transferee provides its agreement, in a form reasonably
satisfactory to the Seller, to be bound by the provisions of this Annex II. The
rights and corresponding obligations granted under this Annex II also may be
assigned, transferred or otherwise conveyed, in whole or in part, from time to
time: (i) by the Purchaser to the Lender or a party that is serving as
collateral agent or that has otherwise been appointed an agent in connection
with the Loan (the "Agent"); (ii) by the Lender to the Agent or to a single
transferee (or to a single party acting as agent for multiple transferees) of
all or a portion of the Loan; or (iii) by the Lender, the Agent or a transferee
of the Lender pursuant to clause (ii) above to the Purchaser with respect to any
Securities that are released from a lien imposed in connection with the Loan.
(j) Capitalized terms not defined in this Annex II shall have the
meanings set forth in the Agreement.
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(k) Any successor to Seller (whether by merger, consolidation, sale of
assets, assignment or otherwise) shall expressly assume in writing the Seller's
obligations hereunder.
(l) Notwithstanding the foregoing, to the extent that the provisions of
indemnification and contribution contained in an underwriting agreement entered
into in connection with any underwritten public offering are in conflict with
the foregoing provisions, the provisions set forth in the underwriting agreement
shall control.
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