EXHIBIT 4.16
EXECUTION VERSION
SECURITIES EXCHANGE AGREEMENT
This SECURITIES EXCHANGE AGREEMENT is dated as of February 4, 2000 (the
"Agreement") by and among Halifax Fund L.P., The Gleneagles Fund Company,
Palladin Overseas Fund Limited, Colonial Penn Life Insurance Company, Palladin
Securities L.L.C. and Palladin Partners I, L.P. (collectively "Holders") and
Able Telcom Holding Corp. ("Company").
WHEREAS, the Holders have entered into that certain Convertible
Preferred Stock Purchase Agreement with the Company, dated June 26, 1998,
including all exhibits thereto, attached hereto as EXHIBIT A (the "Purchase
Agreement"); and pursuant thereto, on June 30, 1998, the Holders acquired 2,000
shares of Series B Preferred Stock (the "Preferred Shares");
WHEREAS, the Holders and the Company entered into a letter agreement
dated October 7, 1999, attached hereto as EXHIBIT B (the "Letter Agreement"),
whereby the Holders and the Company agreed to adjust the Conversion Price of the
Preferred Shares, the Pricing Period and the Triggering Event Redemption Price
of the Preferred Shares;
WHEREAS, the Holders currently hold 404 Preferred Shares with a
Conversion Price equal to $2.844; and
WHEREAS, the Holders desire to covert 250 Preferred Shares and, in
consideration of such conversion, the Company desires to issue to the Holders
Common Stock and warrants exercisable for shares of Common Stock and the Holders
desire to exchange 154 Preferred Shares and, in consideration of such exchange,
the Company desires to issue to the Holders the Closing Cash Payment (as defined
below).
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE 1.
EXCHANGE OF THE PREFERRED SHARES
1.1 CONVERSION AND EXCHANGE OF THE PREFERRED SHARES AND PAYMENT OF THE
CLOSING CASH PAYMENT. At the Closing (as defined below):
(a) The Company will issue and deliver to the Holders, pro
rata, 301,787 shares of Common.
(b) The Company will issue and deliver to the Holders, pro
rata, warrants exercisable for 66,246 shares of Common Stock at the price per
share set forth therein (the "First Warrants") attached hereto as EXHIBIT C.
(c) The Company will issue and deliver to the Holders, pro
rata, warrants exercisable for 100,000 shares of Common Stock at a price per
share equal to $10.127 (the "Second Warrants", and together with the First
Warrants, the "Warrants") attached hereto as EXHIBIT D.
EXECUTION VERSION
(d) The Company will pay to the Holders, pro rata, a cash
payment, by wire transfer in immediately available funds to an account
designated by the Holders, in an amount equal to $5,816,394 (the "Closing Cash
Payment").
(e) The Company will deliver an executed Registration Rights
Agreement dated February 4, 2000 covering the Common Stock and the shares of
Common Stock issuable upon exercise of the Warrants.
(f) The Company will deliver an opinion of counsel to the
Company satisfactory in form and substance to the Holders.
(g) The Holders will deliver to the Company the Preferred
Shares.
(h) The closing of the exchange of the Preferred Shares and
the issuance of the Common Stock and Warrants (the "Closing"), shall take place
at the offices of Xxxxxx & Xxxxxx, 000 00xx Xxxxxx X.X., Xxxxxxxxxx, X.X., at
10:00 a.m., local time on February 4, 2000 or such other time and place and/or
on such other date as the Holders and the Company may agree. As conditions to
the Closing, all of the representations and warranties contained in Sections 1.3
and 1.4 hereof shall be true and correct as of the Closing as certified by both
the Holders and Company at the Closing.
1.2 ADJUSTMENT TO NUMBER OF SHARES OF COMMON STOCK ISSUED AT CLOSING.
At the end of the period that is one hundred (100) Trading Days from the date
hereof, the Holders will deliver a notice to the Company setting forth the
Average Price and the calculation of any adjustment required as described below:
If the Average Price is less than the Closing Price, the Company will
issue to the Holders, pro rata, additional shares of Common Stock in an amount
equal to (i) the Remaining Redemption Price divided by (ii) the Average Price,
minus (iii) the total number of shares issued pursuant to Section 1.1(a) and
total number of shares to be issued pursuant to the exercise of First Warrants
issued pursuant to Section 1.1(b); provided, however, if the Company is unable
to issue shares pursuant to the foregoing as a result of the failure to obtain
stockholder approval for the issuance of Common Stock to the Holders in excess
of the Maximum Share Amount, then the Company shall pay the Holders, pro rata, a
cash payment, by wire transfer in immediately available funds to an account
designated by the Holders, in an amount equal to (i) the Current Redemption
Price multiplied by (ii) an amount equal to (A) the Remaining Redemption Price
divided by (B) the Average Price, minus (C) the total number of shares issued
pursuant to Section 1.1(a) and total number of shares to be issued pursuant to
the exercise of First Warrants issued pursuant to Section 1.1(b).
1.3 COMPANY REPRESENTATIONS AND WARRANTIES.
In connection with the exchange of the Preferred Shares and the
issuance of the Common Stock and Warrants hereunder, the Company represents and
warrants to the Holders that:
(a) The Company has all requisite corporate power and
authority to enter into and perform this Agreement and to consummate the
transaction contemplated hereby and to issue the Common Stock and Warrants in
accordance with the terms hereof.
2
EXECUTION VERSION
(b) The execution and delivery of this Agreement and the
Warrants and the consummation by the Company of the transactions contemplated
hereby and thereby, including the issuance of the Common Stock and the Warrants
contemplated by this Agreement have been duly authorized by all necessary
corporate action, and no further consent or authorization of the Company or its
Board of Directors (or any committee or subcommittee thereof) or its
stockholders is required.
(c) This Agreement constitutes, and upon execution, issuance
and delivery thereof, the Warrants shall constitute, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of creditors' rights and
remedies or by other equitable principles of general application.
(d) The Common Stock and the shares of Common Stock issuable
upon the exercise of the Warrants are duly authorized and reserved for issuance
and, upon such conversion in accordance with the Warrants, such Common Stock and
such shares of Common Stock issuable upon the exercise of the Warrants, will be
validly issued, fully paid and non-assessable, free and clear of any and all
taxes, liens, claims and encumbrances, and entitled to be traded on the Nasdaq
NMS, the American Stock Exchange or the New York Stock Exchange, and the holders
of such Common Stock and such shares of Common Stock issuable upon the exercise
of the Warrants shall be entitled to all rights and preferences accorded to a
holder of Common Stock. The outstanding shares of Common Stock are currently
listed on the Nasdaq NMS.
1.4 HOLDERS' REPRESENTATIONS AND WARRANTIES
In connection with the exchange of the Preferred Shares and the
issuance of the Common Stock and Warrants hereunder, each of the Holders
represents and warrants to the Company that:
(a) Such Holder has the legal capacity and authority to enter
into and perform all of its obligations under this Agreement. This Agreement
constitutes the legal, valid and binding obligation of such Holder, enforceable
against such Holder in accordance with its terms. The execution, delivery and
performance of this Agreement does not and will not conflict with, violate,
cause a breach of or constitute a default under (i) any agreement, contract or
other instrument or obligation to which such Holders is a party or by which such
Holder is bound or (ii) any judgment, order, decree, statute, rule or regulation
to which such Holder is subject.
(b) Such Holder is an "accredited investor," as such term is
defined in Rule 501 of Regulation D promulgated under the Act. Such Holder and
its agents and representatives have such knowledge and experience in financial
and business matters as to enable it to utilize the information made available
to them in connection with the transactions contemplated hereby to evaluate the
merits and risks of an investment in the Common Stock and the Warrants and to
make an informed decision with respect thereto, and such an evaluation and
informed decision have been made.
(c) Such Holder is entering into this Agreement for its own
account and such Holder has no present arrangement (whether or not legally
binding) at any time to sell the Common Stock or Warrants to or through any
person or entity; PROVIDED, however, that by making the
3
EXECUTION VERSION
representations herein, such Holder does not agree to hold the Common Stock or
Warrants for any minimum or other specific term and reserves the right to
dispose of the Common Stock and Warrants at any time in accordance with federal
and state securities laws applicable to such disposition.
1.5 DEFINITIONS. Defined terms used herein and not otherwise defined
shall have the meaning ascribed thereto in the Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:
(a) "Average Price" means the average of the fifty low Trading
Prices on the Nasdaq NMS during each pair of two consecutive Trading Days from
the date hereof and ending on that date which is one hundred (100) Trading Days
from the date hereof. Notwithstanding the foregoing, if the Average Price is
less than $4.00, then the "Average Price" for this purpose shall be $4.00, and
if the Average Price is greater than $9.50, then the "Average Price" for this
purpose shall be $9.50.
(b) "Closing Price" means $7.79 the average closing bid price
for the Common Stock on the ten consecutive Trading Days immediately preceding
the Closing Date.
(c) "Conversion Amount" means the number of shares resulting
from the Conversion Rate multiplied by 404.
(d) "Conversion Price" means $2.844.
(e) "Conversion Rate" means the number of shares of Common
Stock resulting from dividing the Value of the Preferred Stock by the Conversion
Price.
(f) "Current Redemption Price" means $12.125, per share.
(g) "Maximum Share Amount" means 368,033 shares of Common
Stock.
(h) "Remaining Redemption Price" equals the Maximum Share
Amount multiplied by the Closing Price.
(i) "Total Redemption Price" means 96% times 404 multiplied by
the product of: (i) the Conversion Rate times (ii) the Current Redemption Price.
(j) "Trading Day" means any day on which the Common Stock is
traded for any period on the Nasdaq National Market ("Nasdaq"), or on the
principal securities exchange or other securities market where the Common Stock
is listed or traded.
(k) "Trading Price" means the trading price for the Common
Stock on Nasdaq as reported by Bloomberg Financial Markets ("Bloomberg"), or, if
Nasdaq is not the principal trading market for the Common Stock, the trading
price of the Common Stock on the principal securities exchange or trading market
where the Common Stock is listed or traded as reported by Bloomberg.
(l) "Value of Preferred Stock" means $5200, plus interest
since November 1, 1998 at a per annum rate of 4% per share of Preferred Stock.
4
EXECUTION VERSION
ARTICLE 2.
GENERAL PROVISIONS
2.1 LEGENDS. The Holders understand and agree that, in addition to any
other legends required by applicable law, the certificate or certificates
representing the Common Stock and the Warrants will bear legends substantially
to the effect set forth below and that a stop transfer order may be placed with
respect thereto.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
2.2 SURVIVAL. The representations, warranties and covenants contained
in this Agreement shall survive the purchase and sale of the Common Stock and
the Warrants pursuant to this Agreement.
2.3 AMENDMENT. This Agreement may be amended, or any provision hereof
may be waived, at any time by an agreement in writing of the parties hereto.
2.4 ENTIRE AGREEMENT; SUCCESSORS. This Agreement contains the entire
agreement among the parties hereto with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral, other than documents referred to herein. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
2.5 NO ASSIGNMENT. No party hereto may assign any of its rights or
obligations under this Agreement to any other person without the written consent
of the other party.
2.6 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally,
by facsimile or sent by overnight express or by registered or certified mail,
postage prepaid, addressed as follows:
The Holders:
c/o The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx XX 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
The Company:
Able Telcom Holding Corp.
0000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxx 000
5
EXECUTION VERSION
Xxxxxxx, XX. 00000
Attn: President
Facsimile: (000) 000-0000
All such deliveries shall be deemed effective when received by the
person entitled to such receipt or when delivery has been attempted but refused
by such person. Any party may change the person or address to which such
deliveries shall be made with respect to such party by delivering notice thereof
to the other party hereto in accordance with this Section.
2.7 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
2.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
2.9 GOVERNING LAW AND VENUE. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
New York applicable to agreements made and entirely to be performed within such
jurisdiction. The party bringing any action under this Agreement shall only be
entitled to choose the federal or state courts in the State of New York as the
venue for such action, and each party consents to the jurisdiction of the court
chosen in such manner for such action.
2.10 FURTHER ASSURANCES. Subject to the terms and conditions herein
provided, each of the parties hereto shall use reasonable efforts to take, or
cause to be taken, such action, to execute and deliver, or cause to be executed
and delivered, such additional documents and instruments and to do, or cause to
be done, all things necessary, proper or advisable under the provisions of this
Agreement and under applicable law to consummate and make effective the
transactions contemplated by this Agreement.
6
EXECUTION VERSION
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
HOLDERS:
HALIFAX FUND, L.P.
THE GLENEAGLES FUND COMPANY
PALLADIN OVERSEAS FUND LIMITED
COLONIAL PENN LIFE INSURANCE COMPANY
By:
-------------------------------------------
The Palladin Group, L.P., as
Attorney-in-Fact and Investment Advisor
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
PALLADIN SECURITIES L.L.C.
By:
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Principal
PALLADIN PARTNERS I, L.P.
By:
-------------------------------------------
The Palladin Group, L.P., as
Attorney-in-Fact and Investment Advisor
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
ABLE TELCOM HOLDING CORP.
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
7
EXECUTION VERSION
EXHIBIT C
COMMON STOCK PURCHASE WARRANT
