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EXHIBIT 10(a)
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
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BETWEEN
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INTERCEL, INC.
AND
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THE XXXX ALTERNATIVE
INCOME FUND, L.P.
DATED AS OF MAY 23, 1997
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TABLES OF CONTENTS
ARTICLE I DEFINITIONS................................................................. 1
SECTION 1.1 Certain Defined Terms....................................................... 1
ARTICLE II PURCHASE AND SALE........................................................... 7
SECTION 2.1 Purchase and Sale of the Shares............................................. 7
SECTION 2.2 Purchase Price.............................................................. 7
SECTION 2.3 Closing..................................................................... 7
SECTION 2.4 Escrow...................................................................... 7
SECTION 2.5 Closing Deliveries by the Seller............................................ 7
SECTION 2.6 Closing Deliveries by the Purchaser......................................... 8
SECTION 2.7 Closing Deliveries by the Escrow Agent...................................... 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER................................ 8
SECTION 3.1 Organization, Authority and Qualification of the Seller..................... 8
SECTION 3.2 Capitalization of the Seller................................................ 8
SECTION 3.3 Subsidiaries................................................................ 9
SECTION 3.4 No Conflict................................................................. 9
SECTION 3.5 Governmental Consents and Approvals......................................... 10
SECTION 3.6 Seller SEC Documents; Financial Statements.................................. 10
SECTION 3.7 No Undisclosed Liabilities.................................................. 11
SECTION 3.8 Conduct in the Ordinary Course: Absence
of Certain Changes, Events and Conditions................................... 11
SECTION 3.9 Litigation.................................................................. 11
SECTION 3.10 Compliance with Laws........................................................ 11
SECTION 3.11 Full Disclosure............................................................. 11
SECTION 3.13 Private Placement........................................................... 12
SECTION 3.14 FCC Regulations............................................................. 12
SECTION 3.15 Brokers..................................................................... 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................. 12
SECTION 4.1 Organization and Authority of the Purchaser................................. 12
SECTION 4.2 No Conflict................................................................. 12
SECTION 4.3 Governmental Consents and Approvals......................................... 13
SECTION 4.4 Litigation.................................................................. 13
SECTION 4.5 Investment Purpose.......................................................... 13
SECTION 4.6 Accredited Investor......................................................... 13
SECTION 4.7 Brokers..................................................................... 13
ARTICLE V ADDITIONAL AGREEMENTS....................................................... 13
SECTION 5.1 Filing of Certificate of Designation........................................ 13
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...................................................... 14
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SECTION 5.5 Registration Rights......................................................... 15
SECTION 5.6 Resale Restrictions......................................................... 15
SECTION 5.7 Registration of Shares...................................................... 15
SECTION 5.9 Certain Information......................................................... 15
SECTION 5.10 Conduct of Business of the Seller........................................... 16
SECTION 5.11 Further Action.............................................................. 16
ARTICLE VI CONDITIONS TO CLOSING....................................................... 16
SECTION 6.1 Conditions to Obligations of the Seller..................................... 16
SECTION 6.2 Conditions to Obligations of the Purchaser.................................. 17
ARTICLE VII INDEMNIFICATION............................................................. 19
SECTION 7.1 Survival of Representations and Warranties.................................. 19
SECTION 7.2 Indemnification............................................................. 20
SECTION 7.3 Limits on Indemnification................................................... 21
ARTICLE VIII TERMINATION AND WAIVER...................................................... 21
SECTION 8.1 Termination................................................................. 21
SECTION 8.2 Effect of Termination....................................................... 22
SECTION 8.3 Waiver...................................................................... 22
ARTICLE IX GENERAL PROVISIONS.......................................................... 23
SECTION 9.1 Expenses.................................................................... 23
SECTION 9.2 Notices..................................................................... 23
SECTION 9.3 Public Announcements........................................................ 24
SECTION 9.4 Headings.................................................................... 24
SECTION 9.5 Severability................................................................ 24
SECTION 9.6 Entire Agreement............................................................ 24
SECTION 9.7 Assignment.................................................................. 25
SECTION 9.8 No Third Party Beneficiaries................................................ 25
SECTION 9.9 Amendment................................................................... 25
SECTION 9.10 Management Rights........................................................... 25
SECTION 9.11 Confidentiality............................................................. 26
SECTION 9.12 Governing Law............................................................... 28
SECTION 9.13 Counterparts................................................................ 28
SECTION 9.14 Specific Performance........................................................ 28
EXHIBITS
EXHIBIT 2.4 Form of Escrow Agreement
ANNEXES
ANNEX I.......................................................................................I-1
ANNEX II.....................................................................................II-1
ANNEX III...................................................................................III-1
ANNEX IV.....................................................................................IV-1
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THIS STOCK PURCHASE AGREEMENT, dated as of May 23, 1997, is entered
into between INTERCEL, INC., a Delaware corporation (the "Seller"), and THE XXXX
ALTERNATIVE INCOME FUND, L.P., a Delaware limited partnership (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 C
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
Certificate of Designation filed with the Secretary of State of the State of
Delaware on March 13, 1997, a copy of which is attached as Annex I, as amended
or to be amended as set forth in Annex IV.
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:
"Acquisition Documents" has the meaning specified in Section 7.1.
"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 May 23, 1997, between the Seller and the Purchaser (including the
Annexes hereto, the Exhibits 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
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 and "Beneficial
Ownership" mean 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 contemplated as of the date hereof by the Seller to be
conducted (as described in the Debt Offering Memorandum or contemplated by this
Agreement); provided, however, that the Business of Seller shall not be deemed
to include or refer to the business of providing cellular telephone and related
services as formerly conducted by Unity Cellular Systems, Inc., a Maine
corporation and a subsidiary of the Seller, and Northern Maine Cellular
Partnership, a Maine general partnership and a former majority-owned subsidiary
of Unity Cellular Systems, Inc.
"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 Designation" means the Certificate of Designation for
the Preferred Stock as filed with the Secretary of State of the State of
Delaware on March 13, 1997 and attached hereto as Annex I, as amended or to be
amended as set forth in Annex IV hereto.
"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.
"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.
"Current Market Value" means, 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 National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or
such other exchange or inter-dealer quotation system on which the Common Stock
is then principally traded or authorized to be quoted.
"Debt Offering Memorandum" means the draft (as of May 20, 1997) of the
Confidential Offering Memorandum (subject to completion, revision and amendment
pursuant to the agreement of the Seller and the placement agents thereunder)
relating to the proposed issuance
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by the Seller of High Yield Debt instruments for aggregate gross proceeds of not
less than $100 million.
"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 Purchaser by Seller in this Agreement,
the Debt Offering Memorandum, the 1996 Financial Statements, the 1997 Financial
Statements or in writing and attached hereto or delivered pursuant to Section
6.2 hereof. The Press Releases issued by Seller since September 30, 1996 are
attached hereto in the Disclosure Schedule.
"Disclosure Schedule" means the Disclosure Schedule attached hereto,
dated as of the date hereof, and forming a part of this Agreement.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which is (i) maintained by, or for employees
of, the Seller, any of its Subsidiaries or any ERISA Affiliate or (ii) has at
any time within the preceding six years been maintained by, or for the employee
of, the Seller, any of its Subsidiaries or any current or former ERISA
Affiliate.
"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.
"Environmental Actions" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, proceeding, judgment, letter
or other communication from or to any Governmental Authority, or any other
Person involving or alleging violations of Environmental Laws or Releases of
Hazardous Materials from (i) any assets, properties or businesses of the Seller
or any of its Subsidiaries (or its or their corporate predecessors); (ii) from
adjoining properties or businesses; or (iii) from or onto any facilities which
received Hazardous Materials generated by the Seller or any of its Subsidiaries
(or its or their corporate predecessors).
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq., as amended; the Resource
Conservation and Recovery Act, 42 U.S.C. 6901 et seq;, as amended; the Clean Air
Act, 42 U.S.C. 7401 et seq., as amended; the Clean Water Act, 33 U.S.C. 1251 et
seq., as amended; the Occupational Safety and Health Act, 29 U.S.C. 655 et seq.,
and any other Governmental Authority's laws, statutes, regulations, rules or
ordinances imposing liability or establishing standards of conduct or emission
for protection or safety of the environment or concerning public or occupational
health.
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"ERISA" means the federal Employee Retirement Income Security Act of
1974, any successor statute of similar import, and the rules and regulations
thereunder, collectively and as from time to time amended and in effect.
"ERISA Affiliate," as applied to the Seller or any of its Subsidiaries,
means any Person who is a member of a group which is under common control with
the Seller or any of its Subsidiaries, or who together with the Seller or any of
its Subsidiaries is treated as a single employer within the meaning of Section
414(b) and (c) of the Internal Revenue Code of 1986, as amended.
"Escrow Agent" has the meaning specified in the Escrow Agreement.
"Escrow Agreement" has the meaning specified in Section 2.4.
"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 provisions 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, governmental, regulatory or administrative
authority, agency, department, board, investigative body or commission or any
court, tribunal, or judicial or arbitral body or other tribunal.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"Hazardous Materials" means (a) any element, compound, chemical or
other material (in whatever form or state) that is defined, listed or otherwise
classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous
substance, extremely hazardous substance or chemical, hazardous waste, special
waste, or solid waste under any Environmental Law; (b) petroleum and its refined
products and by-products; (c) polychlorinated biphenyls; (d) any substance
exhibiting a hazardous waste characteristic including but not limited to
corrosivity, ignitability, toxicity or reactivity as well as any radioactive or
explosive materials and materials otherwise damaging to the environment; and (e)
any raw materials, building components, including but not limited to
asbestos-containing materials, and manufactured products containing any of the
materials or substances described in (a) through (d).
"High Yield Debt" means the issue of high yield debt instruments
proposed to be sold by the Seller pursuant to the Debt Offering Xxxxxxxxxx.
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"XXX Xxx" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"IRS" means the Internal Revenue Service or any successor thereto.
"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.
"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.
"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 in the manner in which it is currently operated
or conducted or contemplated to be operated or conducted by the Seller and the
Subsidiaries.
"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.
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"Purchaser" has the meaning specified in the preamble to this
Agreement.
"Reference Balance Sheet" means the unaudited consolidated balance
sheet (including the related notes and schedules thereto) of the Seller, dated
as of March 31, 1997, a copy of which the Seller has provided to the Purchaser
prior to the execution of this Agreement.
"Reference Balance Sheet Date" means March 31, 1997.
"Related Agreements" has the meaning specified in Annex III attached
hereto.
"Release" means any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing (including the
abandonment or discarding of barrels, containers or other closed receptacles
containing Hazardous Materials) of Hazardous Materials into the environment.
"Sale" has the meaning specified in Section 5.9(b).
"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 D Preferred Stock Purchase Agreement" means that certain Stock
Purchase Agreement of even date herewith between the Seller and SCANA
Communications, Inc., a South Carolina corporation, as purchaser thereunder,
with respect to the sale and purchase of 50,000 shares of Seller's Series D
Preferred Stock ("Series D Preferred Stock"), together with all attachments,
annexes and exhibits thereto, all documents and agreements executed in
connection therewith, and all amendments, supplements and modifications thereof.
"Shares" has the meaning specified in the recitals to this Agreement.
"Subsidiaries" means any and all Persons controlled by the Seller
directly or indirectly through one or more intermediaries; provided, however,
that the term "Subsidiaries" shall not include either Unity Cellular Systems,
Inc. or Northern Maine Cellular Partnership.
"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).
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"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.
"1996 Financial Statements" means the audited annual consolidated
financial statements and the notes and schedules thereto for the year ended
December 31, 1996.
"1997 Financial Statements" has the meaning specified in Section
3.2(b).
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 $22,500,000.00 (the "Purchase Price"), representing a purchase price of
$450.00 per Share.
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"). The
parties agree that the Closing Date shall be the date on which pricing of the
offering of the High Yield Debt is scheduled to occur between the Seller and the
lead placement agent under the Debt Offering Memorandum, which date is currently
contemplated to be on or about June 4, 1997. The Seller agrees to provide the
Purchaser notice of any change in the date on which such pricing is scheduled to
occur as soon as reasonably practicable after such new pricing date is
established and, in any event, at least two (2) days prior to such new pricing
date.
SECTION 2.4 Escrow. On or before the Closing Date, the Seller, the
Purchaser and the Escrow Agent shall enter into an Escrow Agreement with the
Escrow Agent substantially in the form of Exhibit 2.4 (the "Escrow Agreement").
In accordance with the terms of the Escrow Agreement, on or before the Closing
Date, the Purchaser shall deposit with the Escrow Agent the Purchase Price, to
be managed and paid out by the Escrow Agent in accordance with the terms of the
Escrow Agreement, and the Seller shall deposit with the Escrow Agent a stock
certificate(s) evidencing the Shares, to be held and delivered by the Escrow
Agent in accordance with the terms and provisions of the Escrow Agreement.
SECTION 2.5 Closing Deliveries by the Seller. At the Closing, the
Seller shall deliver or cause to be delivered to the Purchaser the opinions,
certificates and other documents required to be delivered pursuant to Section
6.2. and to the Escrow Agent, stock certificate(s) evidencing the Shares duly
registered in the name of the Purchaser.
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SECTION 2.6 Closing Deliveries by the Purchaser. At the Closing, the
Purchaser shall deliver to the Seller the opinions, certificates and other
documents required to be delivered pursuant to Section 6.1, and shall deliver
the Purchase Price monies to the Escrow Agent in accordance with the Escrow
Agreement.
SECTION 2.7 Closing Deliveries by the Escrow Agent. At or before the
Closing, the Escrow Agent shall accept and hold the Purchase Price monies and
stock certificate(s) evidencing the Shares pursuant thereto.
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 set forth in Annex III
hereto (which is incorporated herein by reference) and 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 and the Escrow Agreement, to carry out
its obligations hereunder and thereunder, to consummate the transactions
contemplated hereby and thereby and to conduct its Business, except where the
failure to be so qualified or 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 and the Escrow Agreement by the Seller, the performance by the
Seller of its obligations hereunder and thereunder and the consummation by the
Seller of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Preferred Stock in accordance with the terms of
this Agreement and the Certificate of Designation, have been duly authorized by
all requisite action on the part of the Seller. This Agreement and the Escrow
Agreement have been duly executed and delivered by the Seller, and (assuming due
authorization, execution and delivery by the Purchaser) this Agreement and the
Escrow Agreement constitute the legal, valid and binding obligations of the
Seller enforceable against the Seller in accordance with their respective terms.
SECTION 3.2 Capitalization of the Seller. (a) The authorized capital
stock of the Seller consists of 55,000,000 shares of Common Stock and 1,000,000
shares of preferred stock, par value $0.01 per share. As of May 20, 1997, (i)
26,865,099 shares of Common Stock are issued and outstanding, all of which are
validly issued, fully paid and nonassessable and (ii) 200,000 shares of
preferred stock are issued and outstanding (not including the Preferred Stock
and the Series D Preferred Stock). None of the issued and outstanding shares of
Common Stock or preferred stock was issued in violation of any preemptive
rights. Except as disclosed 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
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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
Designation, 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 Designation, 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 as provided in the Escrow
Agreement, 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.
(b) The outstanding indebtedness of Seller as of March 31,
1997 is accurately reflected (subject to normal and recurring adjustments and
other revisions which were not and are not reasonably expected to be material in
amount) in the Seller's balance sheet at March 31, 1997 contained in the
Seller's unaudited quarterly consolidated financial statements and the notes and
schedules thereto for the quarter ended March 31, 1997 (the "1997 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 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 and all filings and notifications listed in
Schedule 3.5 of the Disclosure Schedule have been made, the execution, delivery
and performance of this Agreement and the Escrow Agreement by the Seller, and
the issuance of the Shares and the performance of the Seller's obligations in
accordance with the Certificate of Designation, 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 (or similar
organizational documents) of the Seller or any Subsidiary; (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 applicable to the Seller, any
Subsidiary or any of their respective assets, properties or businesses; or (iii)
except as set forth in Schedule 3.4(iii) of the Disclosure Schedule, 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,
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franchise or other instrument or arrangement 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 and the Escrow Agreement by the
Seller do not and will not require any consent, approval, authorization or other
order of, action by, filing with or notification to any Governmental Authority
(collectively, the "Approvals"), except: (i) as described in Schedule 3.5 of the
Disclosure Schedule; (ii) as may be required pursuant to the notification
requirements of the HSR Act; (iii) the filing with the Secretary of State of the
State of Delaware of the Amendment to the Certificate of Designation
contemplated by Section 5.1; and (iv) any filings required to effect any
registration pursuant to Section 5.5. Subject to the foregoing exceptions, the
Seller shall obtain the foregoing Approvals on or before the Closing Date.
SECTION 3.6 Seller SEC Documents; 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), (A) its Annual
Reports on Form 10-K for the fiscal years ended December 31, 1995 and 1996, (B)
its Quarterly Reports on Form 10-Q for the periods ended March 31, 1996, June
30, 1996, September 30, 1996 and March 31, 1997, (C) all proxy statements
relating to the Seller's meetings of stockholders (whether annual or special)
held since December 31, 1995, (D) the Seller's Prospectus dated April 16, 1996
and the related Registration Statement on Form S-1 with respect to the offering
by Seller of certain debt obligations which mature in 2006, and (E) its Current
Reports on Form 8-K dated after December 31, 1995 (the forms, reports and other
documents referred to in clauses (A), (B), (C), (D) and (E) above being referred
to herein, collectively, as the "SEC Reports").
(b) Except as set forth on 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 reasonably expected, individually or in the aggregate, to be material in
amount).
(d) Since March 31, 1997 there has not been any change,
occurrence or circumstance in the Business, results of operations or financial
condition of the Seller or any
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Subsidiary having, 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 1996
Financial Statements, the 1997 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 1996 Financial Statements, the 1997 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 1996 Financial Statement, or the 1997 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 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 Escrow
Agreement or the consummation of the transactions contemplated hereby or
thereby. 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, the SEC Reports or otherwise
Disclosed by Seller.
SECTION 3.12 Delivery of Certain Documents. The Seller has delivered to
the Purchaser a true and complete copy of the 1996 Financial Statements and the
1997 Financial
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Statements, and the most recent drafts of the Debt Offering Memorandum and all
Related Agreements.
SECTION 3.13 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 is exempt from registration under the Securities Act.
SECTION 3.14 FCC Regulations. After giving effect to the issuance of
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 rules and regulations of the FCC.
SECTION 3.15 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.
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 limited partnership 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 and the Escrow Agreement, to carry out
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Escrow Agreement by the Purchaser, the performance by the Purchaser of
its obligations hereunder and thereunder and the consummation by the Purchaser
of the transactions contemplated hereby and thereby have been duly authorized by
all requisite action on the part of the Purchaser. This Agreement and the Escrow
Agreement have been duly executed and delivered by the Purchaser, and (assuming
due authorization, execution and delivery by the Seller) this Agreement and the
Escrow Agreement constitute the legal, valid and binding obligations of the
Purchaser enforceable against the Purchaser in accordance with their respective
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, and except as may result from any facts or circumstances
relating solely to the Seller, the execution, delivery and performance of this
Agreement and the Escrow Agreement by the Purchaser do not and will not, as of
the date hereof and as of the Closing Date: (i) violate, conflict with or result
in the breach of any provision of the Limited Partnership Agreement of the
Purchaser; (ii) conflict with or violate
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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 or 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 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 or the Escrow Agreement.
SECTION 4.3 Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement and the Escrow Agreement by the
Purchaser do not and will not require any Approvals, 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.
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 Escrow Agreement or the consummation of
the transactions contemplated hereby or thereby. 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 Escrow
Agreement or the consummation of the transactions contemplated hereby or
thereby.
SECTION 4.5 Investment Purpose. The Purchaser is acquiring the Shares
and the shares of Common Stock to be issued upon conversion for its 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 Designation. The Seller covenants
and agrees that at or prior to the Closing, the Seller will file the Amendment
to the Certificate of Designation, a copy of which is attached as Annex IV
hereto, with the Secretary of State of the
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State of Delaware in accordance with the Delaware General Corporation Law and
cause the Certificate of Designation, as amended, to be effective thereunder.
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 to obtain for their execution and delivery of, and the performance
of their respective obligations pursuant to, this Agreement and the Escrow
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 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 in any respect; 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 in any respect.
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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 and the shares of Common Stock into which the Shares are convertible
have not been registered under the Securities Act or any state securities law,
and 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 beginning on the date of this Agreement
and ending one year after the Closing Date, the Purchaser shall not, without the
prior written consent of the Seller: (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.
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 2.5, register the Shares in the name of the Purchaser in the
stock records of the Seller.
SECTION 5.8 Delivery of Certain Documents. The Seller shall deliver to
the Purchaser true and correct copies of this Agreement and the Related
Agreements, the Escrow Agreement and all exhibits, schedules, annexes and
agreements related hereto and thereto, as soon as practicable following the
execution and delivery hereof by the parties hereto and thereto.
SECTION 5.9 Certain Information. (a) For a period of at least two years
from the date of this Agreement, 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 (as amended or to be amended) under the Securities Act
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 5.9(a),
unless the Purchaser no longer holds any Shares or shares of Common Stock, the
Seller shall provide the Purchaser with a paper copy of each such report and
other information at or about the same time as filed with the Commission.
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(b) For purposes of this Agreement, "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.
SECTION 5.10 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 Designation) pursuant to
Section (7)(d) of the Certificate of Designation 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 Designation if the Shares were
outstanding at the time of such action.
SECTION 5.11 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 execute this Agreement and perform its obligations hereunder
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 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 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
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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) Partnership Certificate. The Seller shall have received a
true and complete certificate of the general partner of the Purchaser confirming
that it has the authority under the Purchaser's partnership agreement to execute
and deliver this Agreement and the Escrow Agreement on behalf of the Purchaser
and to consummate the transactions contemplated hereby and thereby;
(d) Incumbency Certificate of the Purchaser. The Seller shall
have received a certificate (and applicable power of attorney) of the general
partner of the Purchaser certifying the names and signatures of the
representatives 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
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP, 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, as to: (i) the due authorization, execution and delivery by the
Purchaser of this Agreement and the Escrow Agreement; and (ii) the
enforceability against the Purchaser of this Agreement and the Escrow Agreement;
(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 which the
Purchaser has the obligation to obtain; and
(g) Closing of Related Transactions. Closing of the
transactions contemplated by the Series D 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 to execute this Agreement and perform its obligations hereunder
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
(including those set forth in Annex III hereto) 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 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
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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 shareholders 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 & Scarborough, 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, as to: (i) the due authorization by all necessary corporate
action, execution and delivery by the Seller of this Agreement and the Escrow
Agreement; (ii) the enforceability against the Seller of this Agreement and the
Escrow Agreement; (iii) the validity of the Shares and the due authorization of
the shares of Common Stock into which the Shares may be converted; and (iv) the
good standing of the Seller and each Subsidiary under the laws of their
respective State(s) of incorporation or organization, and related matters;
(f) FCC Opinion. The Purchaser shall have received from Kurtis
& Associates, L.P., special 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(f) attached hereto, as to certain
matters relating to the FCC Licenses.
(g) 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;
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(h) Closing of Related Transactions. Closing of the
transactions contemplated by the Series D Stock Purchase Agreement shall have
occurred or shall occur simultaneously with the Closing;
(i) Organizational Documents. The Purchaser shall have
received a copy of: (i) the certificate of incorporation, as amended, of the
Seller, and the Certificates of Designations, as amended, with respect to the
Preferred Stock and the Series D Preferred Stock, certified by the Secretary of
State of the State of Delaware, as of a date not earlier than five Business Days
prior to the Closing Date and accompanied by a certificate of the Secretary or
Assistant Secretary of the Seller, dated as of the Closing Date, stating that no
amendments have been made to such certificate of incorporation since such date;
and (ii) the by-laws of the Seller, certified by the Secretary or Assistant
Secretary of the Seller;
(j) 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 of the Secretary or
Assistant Secretary of the Seller dated within twenty-four hours of the Closing
Date; and
(k) 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.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Survival of Representations and Warranties. (a) The
representations and warranties of the Seller to Purchaser contained in this
Agreement (including Annex III hereto) and in the Exhibits to this Agreement and
the Disclosure Schedule (collectively, the "Acquisition Documents"), shall
survive the Closing until the later of the second anniversary of the Closing
Date or the conversion of the Preferred Stock 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
contained in the Acquisition Documents shall survive the Closing until the later
of the second anniversary of the Closing Date or the conversion of the Preferred
Stock 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 the Acquisition Documents; or
(B) the breach of any covenant or agreement
by the Seller contained in the Acquisition Documents.
(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 the Acquisition Documents; or
(B) the breach of any covenant or agreement by the
Purchaser contained in the Acquisition Documents.
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 whom
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 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
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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.
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
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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 or as of the Closing Date; (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 the Purchaser if the closing of the offering of debt
contemplated by the Debt Offering Memorandum and the receipt by Seller of a
minimum of $100 million in gross proceeds therefrom shall not have occurred on
or prior to June 30, 1997; provided, however, that the Purchaser must notify the
Seller in writing within five Business Days of notice from the Seller of the
failure of such closing contemplated by the Debt Offering Memorandum to occur of
Purchaser's election to proceed (in which case, Purchaser agrees to waive any
conditions to Closing and breaking escrow which are not then met due to the
failure of such closing under the Debt Offering Memorandum) or to terminate this
Agreement or else this Agreement automatically shall be deemed to be terminated;
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.
(a) 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.
(b) In the event of termination of this Agreement as provided
in Section 8.1, the Escrow Agent shall, pursuant to the provisions of the Escrow
Agreement, return the Purchase Price to the Purchaser and shall return the
certificate(s) evidencing the Shares to the Seller.
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 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
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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. Except as otherwise specified in this Agreement,
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; provided however, that the Seller shall reimburse the Purchaser for
the fees and disbursements of Purchaser's counsel actually incurred in
connection with this Agreement and the transactions contemplated hereby up to an
aggregate of $15,000 (not including the $15,807 invoiced to Seller by
Purchaser's outside counsel for services rendered in connection with the Stock
Purchase Agreement dated as of March 14, 1997 between the Seller and Purchaser,
which agreement was terminated by the parties pursuant to the Termination
Agreement dated as of April 30, 1997).
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:
InterCel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxx, Xx.
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
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(b) if to the Purchaser:
The Xxxx Alternative Income Fund, L.P.
00 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Partner
with a copy (which shall not constitute notice) to:
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
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 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 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 and the Escrow Agreement
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between the Seller and the Purchaser with
respect to the subject matter hereof and thereof.
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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 prior to
the Closing to a Person who controls, is controlled by or is under common
control with the Purchaser, but no such assignment shall relieve the Purchaser
of any of its obligations under this Agreement.
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 Management Rights For so long as the Purchaser holds
Common Stock or Shares convertible into Common Stock which, in the aggregate,
have a Current Market Value of $15 million, the Purchaser shall have the
following rights:
(a) Attendance at Meetings. The Purchaser shall have the right to
receive notice of, and have one of its representatives (the "Observer") attend
all meetings of Seller's board of directors (the "Board") and all meetings of
committees of the Board on a non-voting basis. The Purchaser shall receive all
materials distributed to the Board and committees of the Board at the same time
as the materials are distributed to the Board and committees. If any director of
the Seller who is also a director or Executive Officer of a Person that has a
class of Securities registered with the Commission or on a national exchange or
is otherwise subject to the reporting requirements of the Exchange Act, requests
that the Purchaser's representative not be allowed to remain present during any
portion of any meeting of the Board or any committee thereof due to the material
non-public information about such Person which is to be discussed or disclosed
at such meeting, the Purchaser agrees that its representative shall not be
entitled to attend such portion(s) of such meeting(s) and shall comply with any
such request from such director of the Board.
(b) Consultation Right. The Purchaser shall have the right to regularly
consult with Seller's Board and executive and financial management with respect
to Seller's Business and to make proposals with respect to such Business. The
parties agree that the Board and executive and financial management are under no
obligation to take any action with respect to the proposals and other advice
given by the Purchaser; however, Seller agrees to direct its executive and
financial management and the Board to take such proposals and advice seriously
and give due consideration thereto.
(c) Books and Records. The Purchaser shall have the right, upon
reasonable notice and at reasonable times during business hours, to inspect, and
Seller shall keep and make available to the Purchaser at Seller's principal
office all of the following:
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(i) Copies of Seller' Federal, state and local income tax or
information returns (including any schedules and exhibits thereto) and reports,
if any, with respect to the six most recent fiscal years (or, if shorter, since
the commencement of Seller's Business), or for such longer period required by
any waivers extending periods of limitation to assess any such Taxes;
(ii) The audited financial statements of Seller for the six
most recent fiscal years (or, if shorter, since the commencement of Seller's
Business), or for such longer period required by any waivers extending periods
of limitation to assess any Federal, state or local Taxes; and
(iii) Seller's books and records for the six most recent
fiscal years (or, if shorter, since the commencement of Seller's Business), or
for such longer period required by any waivers extending periods of limitation
to assess any Federal, state or local Taxes.
SECTION 9.11 Confidentiality.
(a) The Purchaser acknowledges that the relationship set forth in
Section 9.10 above places the Observer and the Purchaser in a position to learn
confidential information, both written and oral, about the Seller's business
operations, financial condition, assets and affairs, including but not limited
to copies of unaudited financial statements of the Seller, negotiations between
the Seller and third parties and other information which is highly sensitive in
nature. All information, data, reports, discussions, prospects, compilations,
financial plans, negotiations, prospects, memoranda and other materials (in any
form) received by or communicated to the Observer directly or indirectly by
Seller pursuant to Section 9.10 above (collectively "Confidential Information"),
shall be treated as strictly confidential by the Purchaser in accordance with
the terms and provisions of Section 9.11(b) through (f) below. The term
"Confidential Information," however, does not include information that: (i) is
filed with the Commission and which is not subject to a pending request for
confidential treatment made to the Commission or any other Governmental
Authority; (ii) becomes generally available to the public other than as a result
of an improper disclosure by the Purchaser or its representatives and employees;
(iii) was available to the Purchaser or its representatives (provided the
Purchaser, its representatives and employees have no knowledge that such
information was obtained, directly or indirectly, from a source that was bound
by a confidentiality agreement with or other obligation of secrecy to the Seller
or its representatives); (iv) becomes available to the Purchaser or its
representatives and employees, directly or indirectly, from a source other than
the Seller or its representatives and employees, provided that such source is
not known by the Purchaser, its representatives or employees to be bound by a
confidentiality agreement with or other obligation of secrecy to the Seller or
its representatives and Affiliates; or (v) a director of the Board is under no
obligation or duty to keep confidential.
(b) For a period of two years from the date the Purchaser receives such
information, the Purchaser agrees to keep all Confidential Information to itself
and not to use, reveal, transfer, market, publish, divulge or otherwise disclose
to any Person, directly or indirectly, any Confidential Information without the
express written consent of the Seller (which consent may be withheld in the sole
discretion of Seller). The Purchaser agrees that the Purchaser will not, without
the Seller's prior written consent (which consent may be withheld in the sole
discretion of Seller), make or permit to be made any copies, abstracts or
summaries of the Confidential
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Information, except as necessary to assist the Purchaser in exercising its
rights under Section 9.10 above. The Purchaser also agrees that, promptly upon
demand, after the Purchaser ceases to have the right to an Observer under
Section 9.10 above, the Purchaser will return to the Seller or destroy all
written or tangible Confidential Information received by the Purchaser or its
representative and employees (without retaining any copies thereof) and shall
destroy all notes, reports and other materials prepared by or for the Purchaser
based in whole or in part on Confidential Information received by the Purchaser.
The Purchaser agrees to execute any additional confidentiality agreement
required by the Seller in connection with any Confidential Information on
substantially the same terms as the Seller has agreed to be bound with respect
to such Confidential Information. The Purchaser agrees not to use for any
purpose any portion of the Confidential Information except to exercise its
rights pursuant to Section 9.10 above and not to use the Confidential
Information in any way which is detrimental to the Seller.
(c) It is each party's responsibility to ensure that its officers,
directors, investment advisors, attorneys, employees, partners, affiliates and
other representatives who are given access to the Confidential Information will
be bound by and will conduct themselves in accordance with the terms of this
Section 9.11. Neither the Seller nor its Affiliates nor their representatives
make (or shall be deemed to have made) any representation or warranty as to the
accuracy or completeness of any Confidential Information (except as may be
specifically provided elsewhere in this Agreement). Neither the Seller nor its
Affiliates nor their representatives will have any liability to the Purchaser,
its employees, agents or representatives resulting from the use of the
Confidential Information by the Purchaser or its permitted employees, agents or
representatives (except as may be specifically provided in this Agreement).
(d) The Purchaser acknowledges that it is aware, and that it will
advise its officers, directors, partners, advisors, attorneys, employees and
other representatives who become informed of any Confidential Information, that
the securities laws of the United States and various states prohibit any Person
who has received material nonpublic information with respect to an issuer from
trading in any securities of such issuer or from communicating such information
to any other Person under circumstances in which it is reasonably foreseeable
that such other Person may trade in any such securities. Without in any way
limiting the obligations of the Purchaser pursuant to the provisions of this
Agreement (other than this Section 9.11(d)) and applicable law, this Section
9.11(d), by itself, shall not give rise to an additional cause of action by the
Seller against the Purchaser which is not available to the Seller pursuant to
other terms and provisions of this Agreement or applicable law.
(e) In the event that the Purchaser is requested or required (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) in any judicial or administrative
proceeding or is otherwise required by Law to disclose any Confidential
Information, the Purchaser will give the Seller prompt notice of such request or
requirement so that the Seller may seek an appropriate protective order or other
relief. It is further agreed that if, in the absence of a protective order or
the receipt of a waiver hereunder, the Purchaser is nonetheless, in the
considered and reasoned opinion of its counsel required by Law, to disclose
Confidential Information, the Purchaser may disclose such Confidential
Information as required by Law, without liability hereunder; provided, however,
that the Purchaser gives the Seller written notice of the Confidential
Information to be disclosed as far in advance of its disclosure as is
practicable and that the Purchaser use commercially
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reasonable efforts to obtain assurances that confidential treatment will be
accorded to such Confidential Information; and, further provided, the Purchaser
will furnish only that portion of the Confidential Information which is legally
required.
(f) The Seller acknowledges that the Purchaser and its representatives
review, and will continue to review, other potential investments in the
securities of issuers other than Seller (including, without limitation,
investments in other entities which may conduct a business of or similar to that
conducted by the Seller). This Agreement does not limit or prohibit the
Purchaser's ability to participate or invest, directly or indirectly, in any
such other securities. The Purchaser acknowledges and agrees that,
notwithstanding any other term or provision of this Agreement to the contrary,
upon any breach by the Purchaser or its employees, agents or representatives of
any of the terms or provisions of this Agreement, in addition to all of its
other rights and remedies hereunder and under applicable law, the Seller shall
be entitled to immediately revoke the rights of the Purchaser under Section 9.10
above. This Section 9.11 shall survive the Closing and any termination of this
Agreement.
SECTION 9.12 Governing Law. This Agreement shall be governed by the
laws of the State of New York.
SECTION 9.13 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 9.14 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.
(SIGNATURES BEGIN ON NEXT PAGE)
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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.
INTERCEL, INC.
By: /s/ Xxxx X. Xxxxx
-------------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
THE XXXX ALTERNATIVE
INCOME FUND, L.P.
By: WRH PARTNERS, L.L.C., General
Partner
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Attorney-in-Fact
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ANNEX II
REGISTRATION RIGHTS
(a) The Purchaser shall have the right at any time after the Closing to
make three requests, one of which may be a Shelf Request (as defined in
paragraph (b) hereof), 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 (the "Securities"): with respect to the first of any such request
to register under the Securities Act at least $10 million in market value of
Securities Beneficially Owned by the Purchaser (the shares subject to any such
request hereunder being referred to as the "Subject Stock"), and with each
subsequent such request being 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. 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 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 (other than in
the case of a Shelf Registration, in which case effectiveness must be maintained
for an aggregate of six months or until completion of the offering, whichever
occurs first). 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
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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, other than Purchaser's, 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 10 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 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 originally requested 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) Upon the request of the Purchaser (the "Shelf Request"), the
Seller shall:
(i) as promptly as reasonably practicable, prepare and file
pursuant to SEC Rule 415 on Form S-3 or such other form as Seller in its
discretion shall determine with the SEC, and thereafter shall use all reasonable
efforts to cause to be declared effective as promptly as reasonably practicable,
a Shelf Registration Statement relating to the offer and sale of the Shares by
the Purchaser from time to time in accordance with the methods of distribution
elected by the Purchaser and set forth in the Shelf Registration Statement;
(ii) use all reasonable efforts to keep the Shelf Registration
Statement effective in order to permit the prospectus forming part thereof to be
useable by the Purchaser for an aggregate period of six months, or for such
shorter period that will terminate when all Shares
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covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding; and
(iii) notwithstanding any other provisions hereof, use all
reasonable efforts to ensure that (A) any Shelf Registration Statement and any
amendments thereto and any prospectus forming part thereof and any supplement
thereof complies in all material respects with the Securities Act and the rules
and regulation thereunder, (B) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of material fact or omit to state 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 and (C) any prospectus
forming part of any Shelf Registration Statement, and any supplement to such
prospectus (as amended or supplemented from time to time), does not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements, in light of the circumstances under which they
were made, not misleading.
(c) 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 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, and (iii) any information provided by Purchaser for inclusion in the
registration statement. Upon any registration becoming effective pursuant to
this Annex II (other than a Shelf Registration Statement), the Seller shall use
all 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.
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(d) 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) (which may be the Shelf Request, if any) 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 registration
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.
(e) 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 (e)
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 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.
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(f) 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 (e) 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.
(g) Each party indemnified under paragraph (e) or (f) 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 (e) or (f) 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 (e) or (f) 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.
(h) If the indemnification provided for under paragraph (e) or (f)
shall for any reason be held by a court to be unavailable to an indemnified
party under paragraph (e) or (f) 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 (e) or (f) hereof, the indemnified party and the
indemnifying party under paragraph (e) or (f) hereof shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in
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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.
(i) 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 (e) or (f) shall be an amount equal to the Purchase
Price.
(j) Capitalized terms not defined in this Annex shall have the
meanings set forth in the Agreement.
(k) Any successor to the Seller (whether by merger, consolidation, sale
of assets, assignment or otherwise) shall expressly assume in writing the
Seller's obligations hereunder.
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ANNEX III
ADDITIONAL REPRESENTATIONS
AND WARRANTIES OF SELLER
As an inducement to the Purchaser to enter into this Agreement, the
Seller hereby represents and warrants, to the knowledge of Seller and except as
otherwise Disclosed by Seller, as follows:
1. Intellectual Property. Each of the Seller and its Subsidiaries has
or has the right to use all franchises, patents, patent applications, patent
licenses, patent rights, trademarks, trademark rights, trade names, trade name
rights, copyrights, licenses, permits, authorizations and other intellectual
property rights as are necessary for the Business as currently conducted, except
to the extent that the failure to have any of them would not have a Material
Adverse Effect. All of the foregoing are in full force and effect, and each of
the Seller and its Subsidiaries is in compliance with the foregoing without any
conflict with the rights of others which could have a Material Adverse Effect.
2. Title to Assets; Leases. Prior to, upon and immediately after the
Closing, each of the Seller and its Subsidiaries owns or has the right to use
all of the Assets necessary for the Business as currently conducted, the absence
of which would have a Material Adverse Effect. Prior to, upon and immediately
after the Closing, each of the Seller and its Subsidiaries enjoys peaceful and
undisturbed possession of all leases of real property on which facilities
operated by it are situated and all leases of other Property used in its
Business, and all such leases are valid and in full force and effect, in each
case the absence of which would have a Material Adverse Effect.
3. Related Agreements. The Purchaser has heretofore or simultaneously
herewith been furnished with complete and correct copies of the agreements set
forth on the Disclosure Schedule and all appendices, schedules, exhibits and
other attachments thereto, including, without limitation, the Series C Stock
Purchase Agreement between the Seller and The Xxxx Alternative Income Fund, L.P.
relating to Series C Convertible Preferred Stock (collectively, together with
the Transaction Documents other than this Agreement and the Escrow Agreement,
the "Related Agreements"). Assuming due execution and delivery thereof by all
parties thereto, each of the Related Agreements creates a legally binding
obligation of each party thereto, enforceable against such parties in accordance
with the respective terms and provisions thereof. This Agreement, the Escrow
Agreement, the Debt Offering Memorandum and the Related Agreements are the only
material agreements relating to the High Yield Debt, the financing thereof and
the transactions contemplated hereby to which the Seller or any Subsidiary is a
party. "Transaction Documents" means this Agreement (including the Annexes), the
Escrow Agreement and the Certificate of Designation.
4. Environmental Protection. Except as would not have a Material
Adverse Effect, (i) the operations of the Seller and each of its Subsidiaries
are in compliance with
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Environmental Laws; (ii) there has been no Release at any of the properties
presently or formerly owned or operated by the Seller or any of its Subsidiaries
or any disposal or treatment facility which received Hazardous Materials
generated by the Seller or any of its Subsidiaries or any of its or their
predecessor(s) in interest; (iii) no Environmental Actions have been asserted
against the Seller or any of its Subsidiaries or any of its or their
predecessor(s) in interest nor does the Seller or any of its Subsidiaries have
knowledge or notice of any threatened or pending Environmental Action; and (iv)
no Environmental Actions have been asserted against any facilities that may have
received Hazardous Materials generated by the Seller or any of its Subsidiaries
or any of its or their predecessor(s) in interest.
5. Withholding; Union Contracts, Labor Relations. Each of the Seller
and its Subsidiaries has withheld all amounts required by law or agreement to be
withheld by it from the wages, salaries, benefits and other payments to or for
the benefit of its employees, and is not liable for any arrears of wages or any
taxes or penalties for failure to comply with any of the foregoing except where
the failure to withhold would not have a Material Adverse Effect. Neither the
Seller nor any of its Subsidiaries is a party to any employment agreement,
arrangement or understanding other than as disclosed on the Disclosure Schedule.
There are no, and there have never been any, collective bargaining agreements
covering any of the employees of the Seller or any of its Subsidiaries. Except
as disclosed on the Disclosure Schedule, none of the Seller, any Subsidiary
thereof or any employee of the Seller or any Subsidiary thereof is subject to
any employment agreement or non-competition agreement with any former employer
or any other Person which agreement would have a Material Adverse Effect due to
(i) any information which the Seller or any Subsidiary thereof would be
prohibited from using under the terms of such agreements or (ii) any legal
considerations relating to unfair competition, trade secrets or proprietary
information.
6. Business; Property and Licenses.
(a) Business and Property. Neither the Seller nor any of its
Subsidiaries engages in or currently proposes to engage in any business or
activity unrelated to the Business, other than the direct or indirect ownership
of the capital stock of or other interests in the Seller's Subsidiaries, Unity
Cellular Systems, Inc. and Northern Maine Cellular Partnership.
(b) Licenses. There is set forth in the Disclosure Schedule a
description of all FCC Licenses which, as of the Closing, will be held by the
Seller or any of its Subsidiaries and indicating which such Person holds each
such FCC License. Except to the extent it would not have a Material Adverse
Effect: (i) all of such 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 such 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).
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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 adopted any amendment, modification, or
change to any law or regulation, with respect to or impacting upon such FCC
Licenses.
(c) 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.
(d) Operation and Maintenance of Equipment. No Person owning or
operating any equipment and other tangible personal property in connection with
the operation of the Business has used, operated or maintained the same in a
manner which now or hereafter could result in the cancellation or termination of
the right of the Seller or any Subsidiary to use or make use of the same which
could result in a Material Adverse Effect. All of the material equipment and
other tangible personal property which will be owned by the Seller or any
Subsidiary upon the Closing is in good operating condition and repair (subject
to normal wear and tear) and has been used, operated and maintained in
compliance with all material applicable laws, rules and regulations, including,
without limitation, any Licenses and Environmental Laws the failure of
compliance with which could result in a Material Adverse Effect.
7. FCC Matters. Except to the extent 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 and restrictions
relating to FCC License ownership, and will continue to be in such compliance
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 the 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.
8. Representations and Warranties under Related Agreements. All
representations and warranties made by the Seller or any of its Subsidiaries in
any of the Related Agreements or in the certificates delivered in connection
therewith are true and
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correct in all material respects as of the date hereof with the same force and
effect as though made on and as of the date hereof, except to the extent that
any of such representations and warranties relate expressly to an earlier date
or may have been affected by the consummation of the transactions contemplated
and permitted or required by this Agreement and the Related Agreements. All
representations and warranties made in the Related Agreements by or on behalf of
any party thereto other than the Seller or any of its Subsidiaries are true and
correct in all material respects as of the date hereof with the same force and
effect as though made on and as of the date hereof, except to the extent that
any of such representations and warranties related expressly to an earlier date
or may have been affected by the consummation of the transactions contemplated
and permitted or required by this Agreement and the Related Agreements, which
representations and warranties were true in all material respects as of such
earlier date or without giving effect to the consummation of such transactions,
as the case may be.
9. Tax Returns. 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. 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.
10. ERISA.
(a) No Other Plans. None of the Seller, any of its Subsidiaries or any
ERISA Affiliate maintains or contributes to, or has any obligation under, any
Employee Benefit Plans other than those identified on the Disclosure Schedule.
(b) ERISA and Code Compliance and Liability. Each of the Seller, its
Subsidiaries and each ERISA Affiliate is in compliance with all applicable
provisions of ERISA and the regulations and published interpretations thereunder
with respect to all Employee Benefit Plans except where failure to comply would
not result in a material liability to any such Person and except for any
required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has been determined
by the IRS to be so qualified, and each trust related to such plan has been
determined to be exempt under Section 501(a) of the Code, the absence of which
determination could have a Material Adverse Effect. No material liability,
whether the form of a funding liability, tax liability, or otherwise, has been
incurred by the Seller, any of its Subsidiaries or any ERISA Affiliate which
remains unsatisfied with respect to any Employee Benefit Plan or any
Multiemployer Plan.
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(c) ERISA Litigation. No material proceeding, claim, lawsuit and/or
investigation is existing or overtly threatened concerning or involving any (i)
employee welfare benefit plan (as defined in Section 3(10) of ERISA) currently
maintained or contributed to by the Seller, any of its Subsidiaries or any ERISA
Affiliate, (ii) Pension Plan or (iii) Multiemployer Plan, the outcome of which
could have a Material Adverse Effect.
(d) Termination Event. Except to the extent it would not have a
Material Adverse Effect, no Termination Event has occurred or is reasonably
expected to occur. "Termination Event" means (i) a "Reportable Event" described
in Section 4043 of ERISA; (ii) the withdrawal of the Seller, and of its
Subsidiaries or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) OR
4068(f) of ERISA; (iii) the termination of a Pension Plan, the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; (iv) the institution of
proceedings to terminate, or the appointment of a trustee with respect to, any
Pension Plan by the PBGC; (v) any other event or condition which would
constitute grounds under Section 4042(a) of the ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan, (vi) the partial
or complete withdrawal of the Seller, any of its Subsidiaries or any ERISA
Affiliate from a Multiemployer Plan; (vii) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 or ERISA; (viii) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or 4245 of ERISA; or (ix) any event or condition which results in
the termination of a Multiemployer Plan under Section 40141A or ERISA or the
institution by the PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
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