EXHIBIT IV
STOCK PURCHASE AGREEMENT, dated as of March 4, 1996, between
INTERCEL, INC., a Delaware corporation (the "Seller"), and MPX
SYSTEMS, INC., a South Carolina corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller wishes to issue and to sell to the
Purchaser, and the Purchaser wishes to purchase from the Seller,
100,000 shares (the "Shares") of a new series of convertible
preferred stock of the Seller designated Series B Convertible
Preferred Stock, par value $0.01 per share (the "Preferred
Stock"), upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the terms of the Preferred Stock are set forth
in the form of Certificate of Designation attached as Annex I
hereto (the "Certificate of Designation");
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 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Acquisition Documents" has the meaning specified in
Section 7.01.
"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 March 4, 1996, between the Seller
and the Purchaser (including the Exhibits hereto and the
Disclosure Schedule) and all amendments hereto made in accordance
with the provisions of Section 9.09.
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"Assets" means the properties, assets 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.
"Atlanta Asset Purchase Agreement" means the Asset
Purchase Agreement among GTE Mobilnet Incorporated, InterCel
Atlanta Licenses, Inc. and the Seller, pursuant to which the
Seller proposes to acquire the license granted by the United
States Federal Communications Commission to provide personal
communications services utilizing 1.8 Ghz in the Atlanta Major
Trading Area.
"Atlanta MTA Acquisition Closing" means the closing of
the transactions contemplated by the Atlanta Asset Purchase
Agreement.
"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 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
Prospectus or contemplated by this Agreement, the Atlanta Asset
Purchase Agreement, the Equipment Purchase Agreement and the
Ericsson Agreement).
"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" has the meaning specified
in the recitals to this Agreement.
"Closing" has the meaning specified in Section 2.03.
"Closing Date" has the meaning specified in
Section 2.03.
"Commission" means the United States Securities and
Exchange Commission.
"Common Stock" means the common stock, par value $0.01
per share, of the Seller.
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"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.
"Credit Agreement" means the Credit Agreement, dated as
of March 4, 1996, among InterCel PCS Services, Inc., as Borrower,
Ericsson Inc., as Initial Lender, and Ericsson Inc., as Agent.
"Current Market Value" means, as of a particular date,
the average of the 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.
"Disclosure Schedule" means the Disclosure Schedule
attached hereto, dated as of the date hereof, and forming a part
of this Agreement.
"Encumbrance" means any security interest, pledge,
mortgage, lien, charge, encumbrance, adverse claim, preferential
arrangement or restriction of any kind, including, without
limitation, any restriction on the use, voting, transfer, receipt
of income or other exercise of any attributes of ownership.
"Equipment Purchase Agreement" means the Acquisition
Agreement, dated as of March 4, 1996, between Ericsson Inc. and
InterCel PCS Services, Inc., in connection with the sale by
Ericsson Inc. to InterCel PCS Services, Inc. of switches and PCS
1900 equipment.
"Ericsson Agreement" means the Stock Purchase
Agreement, dated as of March 4, 1996, between the Seller and
Ericsson Inc., relating to the purchase of 100,000 shares of
Series A Convertible Preferred Stock, par value $0.01 per share,
of the Seller.
"Ericsson Closing" means the closing of the
transactions contemplated by the Ericsson Agreement.
"Escrow Agent" has the meaning specified in the Escrow
Agreement.
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"Escrow Agreement" has the meaning specified in
Section 2.04.
"Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
"Governmental Authority" means any United States
federal, state or local or any foreign government, governmental,
regulatory or administrative authority, agency or commission or
any court, tribunal, or judicial or arbitral body.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered
by or with any Governmental Authority.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
"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 United States Federal
Communications Commission.
"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.
"Loss" has the meaning specified in Section 7.02.
"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.
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"Person" means any individual, partnership, limited
liability company, firm, corporation, association, trust,
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.
"Prospectus" means the Seller's Prospectus dated
February 1, 1996, relating to 7,373,211 shares of Common Stock.
"Purchase Price" has the meaning specified in
Section 2.02.
"Purchaser" has the meaning specified in the preamble
to this Agreement.
"Reference Balance Sheet" means the audited
consolidated balance sheet (including the related notes and
schedules thereto) of the Seller, dated as of December 31, 1995,
a copy of which the Seller has provided to the Purchaser prior to
the execution of this Agreement.
"Reference Balance Sheet Date" means December 31, 1995.
"Sale" has the meaning specified in Section 5.10(b).
"SEC Reports" has the meaning specified in Section
3.06(a).
"Securities Act" means the United States Securities Act
of 1933, as amended.
"Seller" has the meaning specified in the preamble to
this Agreement.
"Shares" has the meaning specified in the recitals to
this Agreement.
"Subsidiaries" means any and all corporations,
partnerships, limited liability companies, joint ventures,
associations and other entities controlled by the Seller directly
or indirectly through one or more intermediaries.
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"Tax" or "Taxes" means any and all taxes, fees, levies,
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 7.02(b).
"U.S. GAAP" means United States generally accepted
accounting principles and practices as in effect from time to
time and applied consistently throughout the periods involved.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. 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 2.02. Purchase Price. The aggregate purchase
price for the Shares shall be $75,000,000.00 (the "Purchase
Price"), representing a purchase price of $750.00 per Share.
SECTION 2.03. 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").
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SECTION 2.04. Escrow. On a date mutually agreed by
the Seller and the Purchaser (but no later than the closing date
of the Senior Note offering contemplated by the Seller), the
Seller and the Purchaser shall enter into an Escrow Agreement
with the Escrow Agent substantially in the form of Exhibit 2.04
(the "Escrow Agreement"). In accordance with the terms of the
Escrow Agreement, on such date (or as soon thereafter as
practicable, as mutually agreed by the Seller and the Purchaser),
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.
SECTION 2.05. Closing Deliveries by the Seller. At
the Closing, the Seller shall deliver or cause to be delivered to
the Purchaser:
(a) a receipt for the Purchase Price;
(b) stock certificates evidencing the Shares duly
registered in the name of the Purchaser, in form reasonably
satisfactory to the Purchaser; and
(c) the opinions, certificates and other documents
required to be delivered pursuant to Section 6.02.
SECTION 2.06. 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 6.01.
SECTION 2.07. Closing Deliveries by the Escrow Agent.
At the Closing, pursuant to the terms of the Escrow Agreement,
the Escrow Agent shall deliver to the Seller the Purchase Price
in cash by wire transfer in immediately available funds to a bank
account in the United States to be designated by the Seller, by
written notice to the Purchaser at least five Business Days prior
to the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this
Agreement, the Seller hereby represents and warrants to the
Purchaser as follows:
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SECTION 3.01. 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 and to
consummate the transactions contemplated hereby and thereby. 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. 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, except for the stockholder approval contemplated by
Section 5.09 (which shall have been obtained prior to the
Closing). This Agreement has been, and upon its execution the
Escrow Agreement shall have been, duly executed and delivered by
the Seller, and (assuming due authorization, execution and
delivery by the Purchaser) this Agreement constitutes, and upon
its execution the Escrow Agreement will constitute, a legal,
valid and binding obligation of the Seller enforceable against
the Seller in accordance with its terms.
SECTION 3.02. Capital Stock of the Seller. The
authorized capital stock of the Seller consists of 39,000,000
shares of Common Stock and 1,000,000 shares of preferred stock,
par value $0.01 per share. By the Closing Date, the Seller will
duly increase the authorized capital stock of the Seller to
consist of 55,000,000 shares of Common Stock and 1,000,000 shares
of preferred stock, par value $0.01 per share. As of the date
hereof, (i) 26,823,694 shares of Common Stock are issued and
outstanding, all of which are validly issued, fully paid and
nonassessable and (ii) no shares of preferred stock are issued
and outstanding. None of the issued and outstanding shares of
Common Stock was issued in violation of any preemptive rights.
Except as disclosed in Section 3.02 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. Except as disclosed in Section 3.02 of
the Disclosure Schedule, there are no outstanding contractual
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obligations of the Seller to repurchase, redeem or otherwise
acquire any shares of Common Stock. 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 and registration of the Shares in the name
of the Purchaser in the stock records of the Seller, 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.
SECTION 3.03. 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.
SECTION 3.04. No Conflict. Assuming that all
consents, approvals, authorizations and other actions described
in Section 3.05 have been obtained and all filings and
notifications listed in Section 3.05 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 date hereof and as of the Closing
Date, (a) 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, (b) 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
(c) except as set forth in Section 3.04(c) 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
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time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or
result in the creation of any Encumbrance on any of the Shares or
on any of the assets or properties of the Seller or any
Subsidiary pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise
or other instrument or arrangement 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 3.05. 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, except
(a) as described in Section 3.05 of the Disclosure Schedule,
(b) pursuant to the notification requirements of the HSR Act,
(c) the filing with the Secretary of State of the State of
Delaware of the Certificate of Designation contemplated by
Section 5.01, and (d) any filings required to effect any
registration pursuant to Section 5.05.
SECTION 3.06. 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 Report on Form 10-K for the fiscal year ended December 31,
1994, (B) its Quarterly Reports on Form 10-Q for the periods
ended March 31, 1995, June 30, 1995, and September 30, 1995,
(C) all proxy statements relating to the Seller's meetings of
stockholders (whether annual or special) held since December 31,
1994, (D) the Prospectus and the related Registration Statement
on Form S-1 and (E) its Current Reports on Form 8-K dated after
December 31, 1994 (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) The SEC Reports and any other forms, reports and
other documents filed by the Seller with the Commission after 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.
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(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
expected, individually or in the aggregate, to be material in
amount).
(d) Since December 31, 1994 there has not been any
change, occurrence or circumstance in the business, results of
operations or financial condition of the Seller or any 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.
SECTION 3.07. No Undisclosed Liabilities. There are
no Liabilities of the Seller or any Subsidiary, other than
Liabilities (i) disclosed in Section 3.07 of the Disclosure
Schedule, (ii) reflected in the SEC Reports, (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.
SECTION 3.08. Conduct in the Ordinary Course; Absence
of Certain Changes, Events and Conditions. Since the Reference
Balance Sheet Date, except as disclosed in any subsequently filed
SEC Reports 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 3.09. Litigation. Except as set forth in the
SEC Reports or as disclosed in Section 3.09 of the Disclosure
Schedule, 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 best knowledge of the Seller, threatened to be brought by or
before any Governmental Authority) that has, has had or could
have a Material Adverse Effect or could reasonably be expected to
affect the legality, validity or enforceability of this Agreement
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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 best 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 have a Material Adverse Effect and which
have not been disclosed in this Agreement, the Disclosure
Schedule or the SEC Documents or otherwise disclosed to the
Purchaser by the Seller in writing.
SECTION 3.12. Delivery of Certain Documents. The
Seller has delivered to the Purchaser a true and complete copy of
the most recent draft of each of the Atlanta Asset Purchase
Agreement, the Equipment Purchase Agreement, the Credit
Agreement, the Ericsson Agreement and all exhibits, schedules and
agreements related thereto or in any way entered into in
connection with the transactions contemplated thereby.
SECTION 3.13. Private Placement. Assuming the
accuracy of the representations and warranties of the Purchaser
contained in Sections 4.05 and 4.06, 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 United States Federal Communications Commission.
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.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Seller to enter into this
Agreement, the Purchaser hereby represents and warrants to the
Seller as follows:
SECTION 4.01. Organization and Authority of the
Purchaser. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State
of South Carolina and has all necessary corporate 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 has been, and upon its execution
the Escrow Agreement will be, duly executed and delivered by the
Purchaser, and (assuming due authorization, execution and
delivery by the Seller) this Agreement constitutes, and upon its
execution the Escrow Agreement will constitute, a legal, valid
and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms.
SECTION 4.02. No Conflict. 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 4.03,
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,
(a) violate, conflict with or result in the breach of any
provision of the Articles of Incorporation or By-laws of the
Purchaser, (b) conflict with or violate any Law or Governmental
Order applicable to the Purchaser or (c) 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
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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 4.03. 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
consent, approval, authorization or other order of, action by,
filing with, or notification to, any Governmental Authority,
except pursuant to the notification requirements of the HSR Act.
SECTION 4.04. Litigation. There are no Actions by or
against the Purchaser, pending before any Governmental Authority
(or, to the best 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 best knowledge of the Purchaser, are there any such
Governmental Orders threatened to be imposed by any Governmental
Authority), which 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.
SECTION 4.05. Investment Purpose. The Purchaser is
acquiring the Shares solely for the purpose of investment and not
with a view to, or for offer or sale in connection with, any
distribution thereof.
SECTION 4.06. Accredited Investor. The Purchaser is
an "accredited investor" within the meaning of Rule 501 under the
Securities Act.
SECTION 4.07. 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.
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ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Filing of Certificate of Designation.
The Seller covenants and agrees that, as promptly as practicable
after the stockholder approval referred to in Section 6.02(g) is
obtained and, in any event, prior to the Closing, the Seller will
file the Certificate of Designation with the Secretary of State
of the State of Delaware in accordance with the Delaware General
Corporation Law.
SECTION 5.02. 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 5.03. Regulatory and Other Authorizations;
Notices and Consents. (a) The Seller and the Purchaser shall
use all reasonable efforts to obtain all authorizations,
consents, orders and approvals of all Governmental Authorities
and officials that may be or become necessary 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.
15
SECTION 5.04. 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.
SECTION 5.05. Registration Rights. Effective at the
Closing, the Purchaser and the Seller shall each have the rights
and obligations set forth in Annex II.
SECTION 5.06. 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 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
16
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 5.07. 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
2.05, register the Shares in the name of the Purchaser in the
stock records of the Seller.
SECTION 5.08. Delivery of Certain Documents. The
Seller shall deliver to the Purchaser true and correct copies of
the Atlanta Asset Purchase Agreement, the Equipment Purchase
Agreement, the Credit Agreement, the Ericsson Agreement and all
exhibits, schedules and agreements related thereto or in any way
entered into in connection with the transactions contemplated
thereby, as soon as practicable following the execution and
delivery thereof by the parties thereto.
SECTION 5.09. Seller Stockholders' Meeting. The
Seller shall call and hold a meeting of its stockholders as
promptly as practicable after the execution of this Agreement to
consider and vote upon (i) a proposal to increase the authorized
number of shares of Common Stock and (ii) the issuance and terms
of the Shares, including, without limitation, the convertibility
thereof into shares of Common Stock. The Board of Directors of
the Seller shall recommend approval of such matters, and the
Seller shall take all lawful action to solicit such approval.
The Seller represents and warrants to the Purchaser that
stockholders Beneficially Owning more than 50% of the outstanding
shares of Common Stock have agreed to vote in favor of such
approval.
SECTION 5.10. Certain Information. (a) For a period
of at least three 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 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, the Seller shall provide the Purchaser
with a copy of each such report and other information.
17
(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 5.11. Conduct of Business of the Seller.
Prior to the Closing, the Seller agrees (except to the extent
that the Purchaser shall otherwise consent in writing) as
follows:
(a) Dividends; Changes in Stock. The Seller shall
not take or permit to be taken any action that would result in an
adjustment to the Conversion Price (as defined in the Certificate
of 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 5.12. 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 6.01. Conditions to Obligations of the Seller.
The obligations of the Seller to consummate the transactions
contemplated by this Agreement shall be subject to the
satisfaction (or waiver by the Seller, at its sole discretion),
at or prior to the Closing, of each of the following conditions:
18
(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
6.01(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 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 6.01(b) shall not apply if the
Seller has directly or indirectly solicited or encouraged any
such Action;
(c) Resolutions of the Purchaser. The Seller shall
have received a true and complete copy, certified by the
Secretary or an Assistant Secretary of the Purchaser, of the
resolutions duly and validly adopted by the Board of Directors of
the Purchaser evidencing its authorization, if required by law,
of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby;
(d) Incumbency Certificate of the Purchaser. The
Seller shall have received a certificate of the Secretary or an
Assistant Secretary of the Purchaser certifying the names and
signatures of the officers of the Purchaser authorized to sign
this Agreement and the other documents to be delivered hereunder;
19
(e) Legal Opinion. The Seller shall have received
from XxXxxx Law Firm, P.A., counsel to the Purchaser, a legal
opinion, addressed to the Seller and dated the Closing Date, in
form and substance reasonably satisfactory to the Seller, 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 (assuming New York law is identical in all
respects to South Carolina law);
(f) Consents and Approvals. The Purchaser and the
Seller shall have received, each in form and substance reasonably
satisfactory to the Seller, all authorizations, consents, orders
and approvals of all Governmental Authorities and officials and
all third party consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement;
(g) Related Transactions. Each of the Ericsson
Closing and the Atlanta MTA Acquisition Closing shall have
occurred or shall occur simultaneously with the Closing; and
(h) Commercial Agreements. Ericsson Inc. and the
Seller shall have executed and delivered the Equipment Purchase
Agreement.
SECTION 6.02. Conditions to Obligations of the
Purchaser. The obligations of the Purchaser to consummate the
transactions contemplated by this Agreement shall be subject to
the satisfaction (or waiver by the Purchaser, at its sole
discretion), at or prior to the Closing, of each of the following
conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Seller contained in this
Agreement shall have been true and correct in all material
respects when made and shall be true and correct in all material
respects as of the Closing with the same force and effect as if
made as of the Closing, other than such representations and
warranties as are made as of another date, which shall be true
and correct as 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
6.02(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
20
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 6.02(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 Xxxxx & Xxxxxxx L.L.P., counsel to the Seller, a
legal opinion, addressed to the Purchaser and dated the Closing
Date, in form and substance reasonably satisfactory to the
Purchaser, as to (i) the due authorization, 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 and (iii) the validity of the
Shares, the due authorization of the shares of Common Stock into
which the Shares may be converted and related matters;
21
(f) Consents and Approvals. The Purchaser and the
Seller shall have received, each in form and substance reasonably
satisfactory to the Purchaser, all authorizations, consents,
orders and approvals of all Governmental Authorities and
officials and all third party consents necessary or desirable for
the consummation of the transactions contemplated by this
Agreement;
(g) Stockholder Approval. The stockholders of the
Seller shall have approved (i) the increase in the authorized
number of shares of Common Stock and (ii) the issuance and terms
of the Shares, including the convertibility thereof into shares
of Common Stock;
(h) Related Transactions. (i) Each of the Ericsson
Closing and the Atlanta MTA Acquisition Closing shall have
occurred or shall occur simultaneously with the Closing and (ii)
the Purchaser shall have received true and correct copies of the
Atlanta Asset Purchase Agreement, the Equipment Purchase
Agreement, the Credit Agreement, the Ericsson Agreement and all
exhibits, schedules and agreements related thereto or in any way
entered into in connection with the transactions contemplated
thereby, which shall be substantially identical to the drafts of
each such agreement delivered pursuant to Section 3.12;
(i) Commercial Agreements. Ericsson Inc. and the
Seller shall have executed and delivered the Equipment Purchase
Agreement;
(j) Organizational Documents. The Purchaser shall
have received a copy of (i) the Certificate of Incorporation, as
amended, of the Seller, 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;
(k) 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 dated the Closing Date;
and
(l) 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.
22
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Survival of Representations and
Warranties. (a) The representations and warranties of the
Seller contained in this Agreement and in the Exhibits to this
Agreement and the Disclosure Schedule (collectively, the
"Acquisition Documents"), shall survive the Closing until the
second anniversary of the Closing Date. 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 second anniversary of the Closing Date.
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.
SECTION 7.02. 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.
23
(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 7.02 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
indemnifying party is materially prejudiced by such failure and
shall not relieve the indemnifying party from any other
24
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 7.03. 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 7.02 shall be an
amount equal to the Purchase Price.
25
ARTICLE VIII
TERMINATION AND WAIVER
SECTION 8.01. Termination. This Agreement may be
terminated at any time prior to the Closing:
(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, (iii) the Seller shall not have complied in
all material respects with any covenant or agreement to be
complied with by it and contained in this Agreement; or (iv) the
Seller or any Subsidiary makes a general assignment for the
benefit of creditors, or any proceeding shall be instituted by or
against the Seller or any Subsidiary seeking to adjudicate any of
them a bankrupt or insolvent, or seeking liquidation, winding up
or reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any Law relating to bankruptcy,
insolvency or reorganization; or
(b) by the Seller if, between the date hereof and
the time scheduled for the Closing: (i) any representation or
warranty of the Purchaser contained in this Agreement shall not
have been true and correct in all material respects when made,
(ii) the Purchaser shall not have complied in all material
respects with any covenant or agreement to be complied with by it
and contained in this Agreement; or (iii) the Purchaser makes a
general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against the Purchaser
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under
any Law relating to bankruptcy, insolvency or reorganization; or
(c) by either the Seller or the Purchaser if the
Closing shall not have occurred on or prior to September 30,
1996; 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
26
(e) by the mutual written consent of the Seller and
the Purchaser.
SECTION 8.02. Effect of Termination. (a) In the
event of termination of this Agreement as provided in Section
8.01, 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.
(b) In the event of termination of this Agreement as
provided in Section 8.01, the Escrow Agent shall, pursuant to the
provisions of the Escrow Agreement, return the Purchase Price to
the Purchaser.
SECTION 8.03. Waiver. Either party to this Agreement
may (a) extend the time for the performance of any of the
obligations or other acts of the other party, (b) 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 (c) waive compliance with any of the
agreements or conditions of the other party contained herein.
Any such extension or waiver shall be valid only if set forth in
an instrument in writing signed by the party to be bound thereby.
Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the
same term or condition, or a waiver of any other term or
condition, of this Agreement. The failure of any party to assert
any of its rights hereunder shall not constitute a waiver of any
of such rights.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. 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.
27
SECTION 9.02. 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 9.02):
(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:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
(b) if to the Purchaser:
MPX Systems, Inc.
c/o SCANA Corporation
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx
with a copy (which shall not constitute notice) to:
XxXxxx Law Firm, P.A.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
SECTION 9.03. 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
28
(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 9.04. Headings. The descriptive headings
contained in this Agreement are for convenience of reference only
and shall not affect in any way the meaning or interpretation of
this Agreement.
SECTION 9.05. 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 9.06. 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.
SECTION 9.07. 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 SCANA Corporation or to a subsidiary controlled by
SCANA Corporation, but no such assignment shall relieve the
Purchaser of any of its obligations under this Agreement.
29
SECTION 9.08. 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 9.09. Amendment. This Agreement may not be
amended or modified except (a) by an instrument in writing signed
by, or on behalf of, the Seller and the Purchaser or (b) by a
waiver in accordance with Section 8.03.
SECTION 9.10. Governing Law. This Agreement shall be
governed by the laws of the State of New York.
SECTION 9.11. Counterparts. This Agreement may be
executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.12. Specific Performance. The parties
hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms 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.
30
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/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
MPX SYSTEMS, INC.
By: /s/ X.X. Xxxxxxxxx
Name: X.X. Xxxxxxxxx
Title: President
31
EXHIBIT 2.04
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of [_________], 1996 (this
"Agreement"), among INTERCEL, INC., a Delaware corporation (the
"Seller"), MPX SYSTEMS, INC., a South Carolina corporation (the
"Purchaser"), and ________________, a ________________ (the
"Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller have entered into
a Stock Purchase Agreement, dated as of March 4, 1996 (the
"Purchase Agreement"; terms defined in the Purchase Agreement and
not otherwise defined herein being used herein as therein
defined), pursuant to which the Purchaser has agreed to purchase
from the Seller, and the Seller has agreed to sell to the
Purchaser, the Shares;
WHEREAS, it is contemplated under the Purchase
Agreement that the Purchaser will deposit or cause to be
deposited into escrow the sum of $75,000,000 in cash (the "Escrow
Amount"), to be held and disbursed by the Escrow Agent in
accordance with this Agreement; and
WHEREAS, a copy of the Purchase Agreement has been
delivered to the Escrow Agent, and the Escrow Agent is willing to
act as the Escrow Agent hereunder;
NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements contained herein and in the Purchase
Agreement, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. Appointment and Agreement of Escrow Agent. The
Purchaser and the Seller hereby appoint the Escrow Agent to serve
as, and the Escrow Agent hereby agrees to act as, escrow agent
upon the terms and conditions of this Agreement.
2. Establishment of the Escrow Fund. (a) Pursuant
to Section 2.04 of the Purchase Agreement, the Purchaser shall
deliver to the Escrow Agent on the date hereof the Escrow Amount.
32
The Escrow Agent shall hold the Escrow Amount and all interest
and other amounts earned thereon (the "Escrow Fund") in escrow
pursuant to this Agreement.
(b) Each of the Purchaser and the Seller confirms to
the Escrow Agent and to each other that the Escrow Fund is free
and clear of all Encumbrances except as may be created by this
Agreement and the Purchase Agreement.
3. Distributions from the Escrow Fund. (a) Upon
the satisfaction or waiver of all conditions to the Closing set
forth in Article VI of the Purchase Agreement, and upon receipt
by the Purchaser of the stock certificates evidencing the Shares
as contemplated by Section 2.05 of the Purchase Agreement, the
Purchaser shall notify the Escrow Agent in writing to such
effect, and the Escrow Agent shall, as promptly as practicable
after its receipt of such notice, liquidate all investments in
the Escrow Fund and pay in full to the Seller at the Closing in
immediately available funds all such amounts as shall be received
upon the liquidation of such investments (and any and all other
amounts then on deposit in the Escrow Fund).
(b) Upon the termination of the Purchase Agreement,
the Seller or the Purchaser shall notify the Escrow Agent in
writing to such effect, and the Escrow Agent shall, as promptly
as practicable after its receipt of such notice, liquidate all
investments in the Escrow Fund and pay in full to the Purchaser
in immediately available funds all such amounts as shall be
received upon the liquidation of such investments (and any and
all other amounts then on deposit in the Purchaser Escrow Fund).
4. Maintenance of the Escrow Fund; Termination of
the Escrow Fund. (a) The Escrow Agent shall continue to
maintain the Escrow Fund until the earlier of (i) the time at
which the Escrow Fund is disbursed in accordance with Section 3
and (ii) the termination of this Agreement.
(b) The Escrow Agent shall invest and reinvest
moneys on deposit in the Escrow Fund, unless joint written notice
to the contrary is received from the Seller and the Purchaser, in
any combination of the following: (a) readily marketable direct
obligations of the Government of the United States or any agency
or instrumentality thereof or readily marketable obligations
unconditionally guaranteed by the full faith and credit of the
Government of the United States, (b) insured certificates of
deposit of, or time deposits with, any commercial bank that is a
member of the Federal Reserve System and which issues (or the
33
parent of which issues) commercial paper rated as described in
clause (c), is organized under the laws of the United States or
any State thereof and has combined capital and surplus of at
least $1 billion or (c) commercial paper in an aggregate amount
of no more than $1,000,000 per issuer outstanding at any time,
issued by any corporation organized under the laws of any State
of the United States, rated at least "Prime-1" (or the then
equivalent grade) by Xxxxx'x Investors Services, Inc. or "A-1"
(or the then equivalent grade) by Standard & Poors Ratings Group.
5. Assignment; Successors. This Agreement may not
be assigned by operation of Law or otherwise without the express
written consent of the other parties hereto (which consent may be
granted or withheld in the sole discretion of such other
parties); provided, however, that the Purchaser may, without the
consent of the other parties, assign this Agreement prior to the
Closing to SCANA Corporation or to a subsidiary controlled by
SCANA Corporation to which the Purchaser has assigned any of its
rights under the Purchase Agreement, but no such assignment shall
relieve the Purchaser of any of its obligations under this
Agreement. This Agreement shall be binding upon and inure solely
to the benefit of the parties hereto and their permitted assigns.
6. Escrow Agent. (a) Except as expressly
contemplated by this Agreement or by joint written instructions
from the Purchaser and the Seller, the Escrow Agent shall not
sell, transfer or otherwise dispose of in any manner all or any
portion of the Escrow Fund, except pursuant to an order of a
court of competent jurisdiction.
(b) The duties and obligations of the Escrow Agent
shall be determined solely by this Agreement, and the Escrow
Agent shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Agreement.
(c) In the performance of its duties hereunder, the
Escrow Agent shall be entitled to rely upon any document,
instrument or signature believed by it in good faith to be
genuine and signed by any party hereto or an authorized officer
or agent thereof, and shall not be required to investigate the
truth or accuracy of any statement contained in any such document
or instrument. The Escrow Agent may assume that any Person
purporting to give any notice in accordance with the provisions
of this Agreement has been duly authorized to do so.
34
(d) The Escrow Agent shall not be liable for any
error of judgment, or any action taken, suffered or omitted to be
taken, hereunder except in the case of its gross negligence, bad
faith or willful misconduct. The Escrow Agent may consult with
counsel of its own choice and shall have full and complete
authorization and protection for any action taken or suffered by
it hereunder in good faith and in accordance with the opinion of
such counsel.
(e) The Escrow Agent shall have no duty as to the
collection or protection of the Escrow Fund or income thereon,
nor as to the preservation of any rights pertaining thereto,
beyond the safe custody of any such property actually in its
possession.
(f) As compensation for its services to be rendered
under this Agreement, for each year or any portion thereof, the
Escrow Agent shall receive a fee in the amount specified in
Schedule A to this Agreement and shall be reimbursed upon request
for all expenses, disbursements and advances, including
reasonable fees of outside counsel, if any, incurred or made by
it in connection with the preparation of this Agreement and the
carrying out of its duties under this Agreement. All such fees
and expenses shall be the responsibility of the Seller.
(g) The Seller shall reimburse and indemnify the
Escrow Agent for, and hold it harmless against, any loss,
liability or expense, including, without limitation, reasonable
attorneys' fees, incurred without gross negligence, bad faith or
willful misconduct on the part of the Escrow Agent arising out
of, or in connection with the acceptance of, or the performance
of, its duties and obligations under this Agreement; provided
that the Purchaser shall reimburse and indemnify the Escrow Agent
for, and hold it harmless against, any such loss, liability or
expense incurred as a result of gross negligence, bad faith or
willful misconduct on the part of the Purchaser.
(h) The Escrow Agent may at any time resign by
giving twenty Business Days' prior written notice of resignation
to the Seller and the Purchaser. The Seller and the Purchaser
may at any time jointly remove the Escrow Agent by giving ten
Business Days' prior written notice signed by each of them to the
Escrow Agent. If the Escrow Agent shall resign or be removed, a
successor Escrow Agent, which shall be a bank or trust company
having assets in excess of $2 billion, shall be appointed by the
Seller and the Purchaser by written instrument executed by the
Seller and the Purchaser and delivered to the Escrow Agent and to
such successor Escrow Agent and, thereupon, the resignation or
removal of the predecessor Escrow Agent shall become effective
35
and such successor Escrow Agent, without any further act, deed or
conveyance, shall become vested with all right, title and
interest to all cash and property held hereunder of such
predecessor Escrow Agent, and such predecessor Escrow Agent
shall, on the written request of the Seller, the Purchaser or the
successor Escrow Agent, execute and deliver to such successor
Escrow Agent all the right, title and interest hereunder in and
to the Escrow Fund of such predecessor Escrow Agent and all other
rights hereunder of such predecessor Escrow Agent. If no
successor Escrow Agent shall have been appointed within twenty
Business Days of a notice of resignation by the Escrow Agent, the
Escrow Agent's sole responsibility shall thereafter be to hold
the Escrow Fund until the earlier of its receipt of designation
of a successor Escrow Agent, a joint written instruction by the
Seller and the Purchaser and termination of this Agreement in
accordance with its terms.
7. Termination. This Escrow Agreement shall
terminate on the date on which there is no property remaining in
the Escrow Fund.
8. 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 8):
(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:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
36
(b) if to the Purchaser:
MPX Systems, Inc.
c/o SCANA Corporation
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx
with a copy (which shall not constitute notice) to:
XxXxxx Law Firm, P.A.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
(c) if to the Escrow Agent, to:
___________________________________
___________________________________
___________________________________
___________________________________
Telecopy: _______________________
Attention: _______________________
9. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and
shall not affect in any way the meaning or interpretation of this
Agreement.
10. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced
by any rule of 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 by this Agreement is 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 by this Agreement are consummated as originally
contemplated to the greatest extent possible.
37
11. Entire Agreement. This Agreement and the
Purchase Agreement constitute the entire agreement of the parties
hereto with respect to the subject matter hereof and supersede
all prior agreements and undertakings, both written and oral,
among the Seller, the Purchaser and the Escrow Agent with respect
to the subject matter hereof.
12. No Third Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their 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.
13. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on
behalf of, the Seller, the Purchaser and the Escrow Agent or
(b) by a waiver in accordance with Section 14 of this Agreement.
14. Waiver. Any party hereto may (i) extend the time
for the performance of any obligation or other act of any other
party hereto or (ii) waive compliance with any agreement or
condition contained herein. Any such extension or waiver shall
be valid only if set forth in an instrument in writing signed by
the party or parties 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.
15. Governing Law. This Agreement shall be governed
by the laws of the State of New York.
16. 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 when taken together
shall constitute one and the same agreement.
38
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
INTERCEL, INC.
By
Title:
MPX SYSTEMS, INC.
By
Title:
[ESCROW AGENT]
By
Title:
39
SCHEDULE A
[Escrow Agent Fees]
40
ANNEX I
CERTIFICATE OF THE DESIGNATIONS, POWERS, PREFERENCES
AND RELATIVE, PARTICIPATING OR OTHER RIGHTS, AND THE
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, OF
SERIES B CONVERTIBLE PREFERRED STOCK
($0.01 Par Value)
OF
INTERCEL, INC.
_________________
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
_________________
INTERCEL, INC., a Delaware corporation (the
"Corporation"), does hereby certify that the following
resolutions were duly adopted by the Board of Directors of the
Corporation pursuant to authority conferred upon the Board of
Directors by Article FOURTH of the Certificate of Incorporation
of the Corporation, which authorizes the issuance of up to
1,000,000 shares of preferred stock, at a meeting of the Board of
Directors duly held on [__________], 1996:
RESOLVED, that the issue of a series of preferred
stock, $0.01 par value, of the Corporation is hereby authorized
and the designation, powers, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, in addition
to those set forth in the Certificate of Incorporation of the
Corporation, are hereby fixed as follows:
Section (1) Number of Shares and Designation.
100,000 shares of the preferred stock, $0.01 par value, of
the Corporation are hereby constituted as a series of the
preferred stock designated as Series B Convertible Preferred
Stock (the "Series B Preferred Stock"). Without the consent
41
of the then current holders of shares of Series B Preferred
Stock as provided for herein, the number of shares of Series
B Preferred Stock may not be increased and may not be
decreased below the number of then currently outstanding
shares of Series B Preferred Stock.
Section (2) Definitions. For purposes of the
Series A Preferred Stock, the following terms shall have the
meanings indicated:
"Board of Directors" shall mean the board of
directors of the Corporation or any committee
authorized by such Board of Directors to perform any of
its responsibilities with respect to the Series B
Preferred Stock.
"Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions
in the State of New York are authorized or obligated by
law or executive order to close.
Common Stock" shall mean the Common Stock of the
Corporation, par value $0.01 per share.
"Conversion Price" shall mean the conversion price
per share of Common Stock into which the Series B
Preferred Stock is convertible, as such Conversion
Price may be adjusted pursuant to Section (7). The
initial Conversion Price shall be $16.50 (equivalent to
the rate of 45.4545 shares of Common Stock for each
share of Series B Preferred Stock).
"Current Market Price" shall mean, as of a
particular date, the average of the high bid and low
asked prices per share of Common Stock in the over-the-
counter market, as reported by the NASDAQ Stock Market
or such other system then in use, or such other
exchange or inter-dealer quotation system on which the
Common Stock is principally traded or authorized to be
quoted.
"Issue Date" shall mean the first date on which
shares of Series B Preferred Stock are issued.
"NASDAQ Stock Market" shall mean the National
Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System.
42
"Person" shall mean any individual, firm,
partnership, corporation or other entity, and shall
include any successor (by merger or otherwise) of such
entity.
"Securities" shall have the meaning set forth in
paragraph (d)(iii) of Section (7).
"Series A Preferred Stock" shall mean the series
of preferred stock, $0.01 par value, of the Corporation
designated as Series A Convertible Preferred Stock.
"Subsidiaries" shall mean any and all
corporations, partnerships, limited liability
companies, joint ventures, associations and other
entities controlled by the Corporation directly or
indirectly through one or more intermediaries.
"Trading Day" means a day on which the NASDAQ
Stock Market, or such other exchange or inter-dealer
quotation system on which the Common Stock is
principally traded or authorized to be quoted, is open
for the transaction of business.
"Transaction" shall have the meaning set forth in
paragraph (e) of Section (7).
"Transfer Agent" means such agent or agents of the
Corporation as may be designated by the Board of
Directors of the Corporation as the transfer agent for
the Series B Preferred Stock.
Section (3) Dividends. (a) The holders of shares
of the Series B Preferred Stock shall be entitled to
receive, when and if declared by the Board of Directors out
of funds legally available therefor, dividends in an amount
per share of Series B Preferred Stock equal to the dividends
payable on the number of shares of Common Stock into which
one share of Series B Preferred Stock is then convertible,
determined as of the date fixed for determining holders of
shares of Common Stock entitled to receive such dividends.
Each such dividend shall be payable in arrears to the
holders of record of shares of the Series B Preferred Stock,
as they appear on the stock records of the Corporation at
the close of business on such record dates, not more than 60
days preceding the payment dates thereof, as shall be fixed
by the Board of Directors.
43
(b) Except as provided in Section 5(a), holders of
shares of Series B Preferred Stock called for redemption on
a redemption date between a dividend payment record date and
the dividend payment date shall not be entitled to receive
the dividend payable on such dividend payment date.
(c) So long as any shares of the Series B Preferred
Stock are outstanding, no dividends shall be declared or
paid or set apart for payment on any class or series of
stock of the Corporation ranking, as to dividends, on a
parity with the Series B Preferred Stock, for any period,
nor shall any shares ranking on a parity with the Series B
Preferred Stock be redeemed or purchased by the Corporation
or any Subsidiary, unless dividends declared and paid on the
Common Stock have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment
thereof set apart for such payment on the Series B Preferred
Stock in accordance with paragraph (a) of this Section (3).
Section (4) Liquidation Preference. (a) In the
event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart
for the holders of Common Stock or any other series or class
or classes of stock of the Corporation ranking junior to the
Series B Preferred Stock, upon liquidation, dissolution or
winding up, the holders of the shares of Series B Preferred
Stock shall be entitled to receive $750.00 per share plus an
amount equal to all dividends declared and unpaid thereon to
the date of final distribution to such holders; thereafter,
such holders shall be entitled to share ratably with the
holders of the shares of Common Stock as provided in
paragraph (b) of this Section (4). If, upon any
liquidation, dissolution or winding up of the Corporation,
the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of Series A
Preferred Stock, Series B Preferred Stock and any other
shares of stock ranking, as to liquidation, dissolution or
winding up, on a parity with the Series B Preferred Stock,
shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments in respect thereof, then
such assets, or the proceeds thereof, shall be distributed
among the holders of shares of Series A Preferred Stock,
Series B Preferred Stock and any such other stock ratably in
accordance with the respective amounts which would be
payable on such shares of Series A Preferred Stock, Series B
44
Preferred Stock and any such other stock if all amounts
payable thereon were paid in full. For the purposes of this
Section (4), (i) a consolidation or merger of the
Corporation with one or more corporations, (ii) a sale or
transfer of all or substantially all of the Corporation's
assets or (iii) a statutory share exchange shall not be
deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary.
(b) Subject to the rights of the holders of shares
of any series or class or classes of stock ranking on a
parity with or prior to Series B Preferred Stock, upon any
liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of
Series B Preferred Stock, as provided in paragraph (a) of
this Section (4), holders of shares of Series B Preferred
Stock shall be entitled to share ratably with holders of
shares of Common Stock and any other class or series
entitled to participate with the Common Stock in the event
of liquidation, dissolution or winding up, in any and all
assets remaining to be paid or distributed, such that
distributions shall be made in respect of each share of
Series B Preferred Stock in an amount equal to the
distributions made in respect of the number of shares of
Common Stock into which such share of Series B Preferred
Stock is then convertible.
Section (5) Redemption at the Option of the
Corporation. (a) Series B Preferred Stock may not be
redeemed by the Corporation prior to the fifth anniversary
of the Issue Date. After the fifth anniversary of the Issue
Date, the Corporation, at its option, may redeem the shares
of Series B Preferred Stock, in whole or in part, for an
aggregate redemption price of $750.00 per share plus an
amount per share equal to declared and unpaid dividends, if
any, to the date fixed for redemption, out of funds legally
available therefor, at any time or from time to time,
subject to the notice provisions and provisions for partial
redemption described below; provided, however, that the
Corporation must redeem the shares of Series A Preferred
Stock and the shares of Series B Preferred Stock on a pro
rata basis.
(b) In the event the Corporation shall redeem
shares of Series A Preferred Stock and Series B Preferred
Stock, notice of such redemption shall be given by first
class mail, postage prepaid, mailed not less than 20 nor
more than 60 days prior to the redemption date, to each
45
holder of record of the shares to be redeemed, at such
holder's address as the same appears on the stock records of
the Corporation, which notice shall be unconditional and
irrevocable. Each such notice shall state: (1) the
redemption date; (2) the number of shares of Series A
Preferred Stock and Series B Preferred Stock to be redeemed
and, if less than all the shares held by such holder are to
be redeemed, the number of such shares to be redeemed from
such holder; (3) the redemption price; (4) the place or
places where certificates for such shares are to be
surrendered for payment of the redemption price; and (5) the
then current conversion price. Notice having been mailed as
aforesaid, from and after the redemption date (unless
default shall be made by the Corporation in providing money
for the prompt payment of the redemption price), (i) the
shares of the Series B Preferred Stock so called for
redemption shall no longer be deemed to be outstanding, and
(ii) all rights of the holders thereof as stockholders of
the Corporation (except the right to receive from the
Corporation the redemption price without interest thereon
after the redemption date) shall cease. If the Corporation
fails to provide money for the payment of the redemption
price within 30 days after the redemption date, the
redemption price shall accrue interest at the rate of 15%
per annum.
Upon surrender in accordance with said notice of the
certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall
so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the applicable redemption
price aforesaid. If fewer than all the outstanding shares
of Series A Preferred Stock and Series B Preferred Stock are
to be redeemed, shares to be redeemed shall be selected pro
rata (as nearly as may be) by the Corporation from
outstanding shares of Series A Preferred Stock and Series B
Preferred Stock not previously called for redemption. If
fewer than all the shares represented by any certificate are
redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
Section (6) Shares to be Retired. All shares of
Series B Preferred Stock purchased or redeemed by the
Corporation or converted shall be retired and cancelled and
shall be restored to the status of authorized but unissued
shares of preferred stock, without designation as to series.
46
Section (7) Conversion. Holders of shares of
Series B Preferred Stock shall have the right to convert all
or a portion of such shares into shares of Common Stock, as
follows:
(a) Subject to and upon compliance with the
provisions of this Section (7), a holder of shares of Series
B Preferred Stock shall have the right, at his, her or its
option, at any time after the fourth anniversary of the
Issue Date, to convert such shares, in whole or in part,
into the number of fully paid and nonassessable shares of
Common Stock (calculated as to each conversion to the
nearest 1/100th of a share) obtained by dividing the
aggregate liquidation preference of such shares by the
Conversion Price and by surrender of such shares so to be
converted by the holder thereof, such surrender to be made
in the manner provided in paragraph (b) of this Section (7);
provided, however, that the right to convert shares called
for redemption pursuant to Section (5) shall terminate at
the close of business on the date fixed for such redemption,
unless the Corporation shall default in making prompt
payment of the amount payable upon such redemption. Any
share of Series B Preferred Stock may be converted, at the
request of its holder, in part into Common Stock. If a part
of a share of Series B Preferred Stock is converted, then
the Corporation will convert such share into the requested
shares of Common Stock (subject to paragraph (c) of this
Section (7)) and issue a fractional share of Series B
Preferred Stock evidencing the remaining interest of such
holder.
(b) In order to exercise the conversion right, the
holder of each share of Series B Preferred Stock to be
converted shall surrender the certificate representing such
share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Transfer Agent or, if no
Transfer Agent has been appointed by the Corporation, at the
principal office of the Corporation, accompanied by written
notice to the Corporation that the holder thereof elects to
convert its shares of Series B Preferred Stock or a
specified portion thereof. Unless the shares issuable on
conversion are to be issued in the same name as the name in
which such share of Series B Preferred Stock is registered,
each share surrendered for conversion shall be accompanied
by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or such holder's
duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory
to the Corporation demonstrating that such taxes have been
paid).
47
Holders of shares of Series B Preferred Stock at the
close of business on a dividend payment record date shall be
entitled to receive the dividend payable on such shares
(except that holders of shares called for redemption on a
redemption date between such record date and the dividend
payment date shall not be entitled to receive such dividend
on such dividend payment date) on the corresponding dividend
payment date notwithstanding the conversion thereof
following such dividend payment record date and prior to
such dividend payment date.
As promptly as practicable after the surrender of
certificates for shares of Series B Preferred Stock as
aforesaid, the Corporation shall issue and shall deliver at
such office to such holder, or on his, her or its written
order, (i) a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of
such shares in accordance with the provisions of this
Section (7), (ii) if less than the full number of shares of
Series B Preferred Stock evidenced by the surrendered
certificates is being converted, a new certificate or
certificates, of like tenor, for the number of shares
evidenced by such surrendered certificates less the number
of shares being converted, and (iii) any fractional interest
in respect of a share of Common Stock arising upon such
conversion shall be settled as provided in paragraph (c) of
this Section (7).
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on
which the certificates for shares of Series B Preferred
Stock shall have been surrendered and such notice received
by the Corporation as aforesaid, and the person or persons
in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such
time on such date and such conversion shall be at the
Conversion Price in effect at such time on such date, unless
the stock transfer books of the Corporation shall be closed
on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at
the close of business on the next succeeding day on which
such stock transfer books are open, but such conversion
shall be at the Conversion Price in effect on the date upon
which such shares shall have been surrendered and such
notice received by the Corporation. All shares of Common
Stock delivered upon conversion of the Series B Preferred
Stock shall upon delivery be duly and validly issued and
fully paid and nonassessable.
48
(c) No fractional shares or scrip representing
fractions of shares of Common Stock shall be issued upon
conversion of the Series B Preferred Stock. Instead of any
fractional interest in a share of Common Stock which would
otherwise be deliverable upon the conversion of a share of
Series B Preferred Stock, the Corporation shall pay to the
holder of such share an amount in cash (computed to the
nearest cent) equal to such fraction of a share multiplied
by the Current Market Price of one share of Common Stock on
the Trading Day immediately preceding the date of
conversion. If more than one share shall be surrendered for
conversion at one time by the same holder, the number of
full shares of Common Stock issuable upon conversion thereof
shall be computed on the basis of the aggregate number of
shares of Series B Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from
time to time as follows:
(i) In case the Corporation shall after the
Issue Date (A) pay a dividend or make a distribution on
its Common Stock in shares of its Common Stock,
(B) subdivide its outstanding Common Stock into a
greater number of shares, (C) combine its outstanding
Common Stock into a smaller number of shares or
(D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion
Price in effect immediately prior thereto shall be
adjusted so that the holder of any share of Series B
Preferred Stock thereafter surrendered for conversion
shall be entitled to receive the number of shares of
Common Stock of the Corporation which such holder would
have owned or have been entitled to receive after the
happening of any of the events described above had such
share of Series B Preferred Stock been converted
immediately prior to the happening of such event or the
record date therefor, whichever is earlier. An
adjustment made pursuant to this subparagraph (i) shall
become effective immediately after the close of
business on the record date in the case of a dividend
or distribution (except as provided in paragraph (h)
below) and shall become effective immediately after the
close of business on the record date in the case of a
subdivision, combination or reclassification.
49
(ii) In case the Corporation shall issue after
the Issue Date (a) rights or warrants to all holders of
Common Stock entitling them (for a period expiring
within 180 days after the record date mentioned below)
to subscribe for or purchase Common Stock at a price
per share less than the Conversion Price at the record
date for the determination of shareholders entitled to
receive such rights or warrants or (b) shares of Common
Stock or securities exercisable for (including rights
or warrants other than those referred to in clause (a)
above and subparagraph (iii) below) or exchangeable or
convertible into shares of Common Stock at a price per
share (or having an exercise, exchange or conversion
price per share) less than the then current Conversion
Price (other than securities issued in a transaction in
which a pro rata share of such securities have been
reserved by the Corporation for distribution to the
holders of Series B Preferred Stock upon conversion),
then in each such case the Conversion Price in effect
immediately prior thereto shall be adjusted to equal
the price determined by multiplying (I) the Conversion
Price in effect immediately prior to the date of
issuance of such rights, warrants or shares of Common
Stock (or securities exercisable for or exchangeable or
convertible into shares of Common Stock) by (II) a
fraction, the numerator of which shall be the sum of
(A) the number of shares of Common Stock outstanding on
the date of issuance of such rights, warrants or shares
of Common Stock (or securities exercisable for or
exchangeable or convertible into shares of Common
Stock) (without giving effect to any such issuance) and
(B), in the case of (a) above, the number of shares
which the aggregate proceeds from the exercise of such
rights or warrants for Common Stock or, in the case of
(b) above, the number of shares which the aggregate
consideration receivable by the Corporation for the
total number of shares of Common Stock (or securities
exercisable for or exchangeable or convertible into
shares of Common Stock) so issued would purchase at the
Conversion Price in effect immediately prior to the
date of issuance, and the denominator of which shall be
the sum of (A) the number of shares of Common Stock
outstanding on the date of issuance of such rights,
warrants or shares of Common Stock (or securities
exercisable for or exchangeable or convertible into
Common Stock) (without giving effect to any such
issuance) and (B), in the case of clause (a) above, the
number of additional shares of Common Stock offered for
50
subscription or purchase or, in the case of clause (b)
above, the number of shares of Common Stock so issued
or into which the exercisable, exchangeable or
convertible securities may be exercised, exchanged or
converted. Such adjustment shall be made successively
whenever any such rights, warrants or shares of Common
Stock (or securities exercisable for or exchangeable or
convertible into Common Stock) are issued, and shall
become effective immediately after such record date or,
in the case of the issuance of Common Stock, after the
date of issuance thereof (or in the case of securities
exercisable for or exchangeable or convertible into
shares of Common Stock, the date on which holders may
first exercise, exchange or convert the same in
accordance with the respective terms thereof). In
determining whether any rights or warrants entitle the
holders of Common Stock to subscribe for or purchase
shares of Common Stock at less than the Conversion
Price in effect immediately prior to the date of such
issuance, and in determining the aggregate offering
price of shares of Common Stock (or securities
exercisable for or exchangeable or convertible into
shares of Common Stock), there shall be taken into
account any net consideration received or receivable by
the Corporation upon issuance and upon exercise of such
rights or warrants or upon issuance of shares of Common
Stock (or securities exercisable for or exchangeable or
convertible into shares of Common Stock), the value of
such consideration, if other than cash, to be
determined by the Board of Directors in good faith or,
if higher, the aggregate exercise, exchange or
conversion price set forth in such exercisable,
exchangeable or convertible securities. The aggregate
consideration received by the Corporation in connection
with the issuance of shares of Common Stock or of
rights, warrants or securities exercisable for or
exchangeable or convertible into shares of Common Stock
shall be deemed to be equal to the sum of the aggregate
net offering price of all such securities plus the
minimum aggregate amount, if any, payable upon the
exercise of such rights or warrants and conversion of
any such exercisable, exchangeable or convertible
securities into shares of Common Stock.
(iii) In case the Corporation shall distribute
to all holders of its Common Stock any shares of
capital stock of the Corporation (other than Common
Stock) or evidences of its indebtedness or assets
(other than a regular cash dividend that the Board of
51
Directors determines, in good faith, can be maintained
by the Corporation for at least four consecutive
periods covering not less than one year and that the
Board of Directors intends to maintain for at least
four consecutive periods covering not less than one
year, out of profits or surplus) or rights or warrants
to subscribe for or purchase any of its securities
(excluding those referred to in subparagraph (ii)(a)
above) (any of the foregoing being hereinafter in this
subparagraph (iii) called the "Securities"), then in
each such case, unless the Corporation elects to
reserve shares or other units of such Securities for
distribution to the holders of the Series B Preferred
Stock upon the conversion of the shares of Series B
Preferred Stock so that any such holder converting
shares of Series B Preferred Stock will receive upon
such conversion, in addition to the shares of the
Common Stock to which such holder is entitled, the
amount and kind of such Securities which such holder
would have received if such holder had, immediately
prior to the record date for the distribution of the
Securities, converted his or her shares of Series B
Preferred Stock into Common Stock (such election to be
based upon a determination by the Board of Directors
that such reservation will not materially adversely
affect the interests of any holder of Series B
Preferred Stock in any such reserved Securities), the
Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying (I) the
Conversion Price in effect immediately prior to the
date of such distribution by (II) a fraction, the
numerator of which shall be the Current Market Price
per share of the Common Stock on the record date
mentioned below less the fair market value (as
determined by the Board of Directors, whose
determination shall, if made in good faith, be
conclusive) of the portion of the capital stock or
assets or evidences of indebtedness so distributed or
of such rights or warrants applicable to one share of
Common Stock, and the denominator of which shall be the
Current Market Price per share of the Common Stock.
Such adjustment shall become effective immediately,
except as provided in paragraph (h) below, after the
record date for the determination of stockholders
entitled to receive such distribution.
52
(iv) No adjustment in the Conversion Price
shall be required unless such adjustment would require
an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason
of this subparagraph (iv) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment; and provided further that any
adjustment shall be required and made in accordance
with the provisions of this Section (7) (other than
this subparagraph (iv)) not later than such time as may
be required in order to preserve the tax-free nature of
a distribution to the holders of shares of Common
Stock. All calculations under this Section (7) shall
be made to the nearest cent (with $.005 being rounded
upward) or to the nearest 1/100 of a share (with .005
of a share being rounded upward), as the case may be.
Anything in this paragraph (d) to the contrary
notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such reductions in
the Conversion Price, in addition to those required by
this paragraph (d), as it in its discretion shall
determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of
rights or warrants to purchase stock or securities, or
a distribution of other assets (other than cash
dividends) hereafter made by the Corporation to its
stockholders shall not be taxable.
(v) No adjustment in the Conversion Price
shall be required in the event of any dividend,
distribution or issuance to holders of shares of Common
Stock pursuant to subparagraph (i), (ii) or (iii) above
if holders of shares of Series B Preferred Stock have
received the same dividend, distribution or issuance in
accordance with Section (3).
(e) In case the Corporation shall be a party to any
transaction (including without limitation a merger,
consolidation, sale of all or substantially all of the
Corporation's assets or recapitalization of the Common Stock
and excluding any transaction as to which paragraph (d)(i)
of this Section (7) applies) (each of the foregoing being
referred to as a "Transaction"), in each case as a result of
which shares of Common Stock shall be converted into the
right to receive stock, securities or other property
(including cash or any combination thereof), each share of
Series B Preferred Stock which is not converted into the
right to receive stock, securities or other property in
53
connection with such Transaction shall thereafter be
convertible into the kind and amount of shares of stock and
other securities and property receivable (including cash)
upon the consummation of such Transaction by a holder of
that number of shares or fraction thereof of Common Stock
into which one share of Series B Preferred Stock was
convertible immediately prior to such Transaction. The
Corporation shall not be a party to any Transaction unless
the terms of such Transaction are consistent with the
provisions of this paragraph (e) and it shall not consent or
agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor
or purchasing entity, as the case may be, for the benefit of
the holders of the Series B Preferred Stock which will
contain provisions enabling the holders of the Series B
Preferred Stock which remains outstanding after such
Transaction to convert into the consideration received by
holders of Common Stock at the Conversion Price immediately
after such Transaction. The provisions of this paragraph
(e) shall similarly apply to successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend
(or any other distribution) on the Common Stock (other
than a regular cash dividend that the Board of
Directors determines can be maintained by the
Corporation for at least four consecutive periods
covering at least one year and that the Board of
Directors intends to maintain for at least four
consecutive periods covering at least one year out of
profits or surplus); or
(ii) the Corporation shall authorize the
granting to the holders of the Common Stock of rights
or warrants to subscribe for or purchase any shares of
any class or any other rights or warrants; or
(iii) there shall be any reclassification of
the Common Stock (other than an event to which
paragraph (d)(i) of this Section (7) applies) or any
consolidation or merger to which the Corporation is a
party and for which approval of any stockholders of the
Corporation is required, or the sale or transfer of all
or substantially all of the assets of the Corporation,
then the Corporation shall cause to be filed with the
Transfer Agent and shall cause to be mailed to the
holders of shares of the Series B Preferred Stock at
their addresses as shown on the stock records of the
54
Corporation, as promptly as possible, but at least 15
days prior to the applicable date specified in clauses
(A) and (B) below, a notice stating (A) the date on
which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to
such dividend, distribution or rights or warrants are
to be determined or (B) the date on which such
reclassification, consolidation, merger, sale or
transfer is expected, that holders of Common Stock of
record shall be entitled to exchange their shares of
Common Stock for securities or other property
deliverable upon such reclassification, consolidation,
merger, sale or transfer. Failure to give such notice
or any defect therein shall not affect the legality or
validity of the proceedings described in this Section
(7).
(g) Whenever the Conversion Price is adjusted as
herein provided, the Corporation shall prepare a notice of
such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which such
adjustment becomes effective and shall promptly mail such
notice of such adjustment of the Conversion Price to the
holder of each share of Series B Preferred Stock at his, her
or its last address as shown on the stock records of the
Corporation.
(h) In any case in which paragraph (d) of this
Section (7) provides that an adjustment shall become
effective immediately after a record date for an event, the
Corporation may defer until the occurrence of such event (A)
issuing to the holder of any share of Series B Preferred
Stock converted after such record date and before the
occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to
such adjustment and (B) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (c) of
this Section (7).
(i) For purposes of this Section (7), the number of
shares of Common Stock at any time outstanding shall not
include any shares of Common Stock then owned or held by or
for the account of the Corporation.
55
(j) If any action or transaction would require
adjustment of the Conversion Price pursuant to more than one
paragraph of this Section (7), only one adjustment shall be
made and such adjustment shall be the amount of adjustment
which has the highest absolute value.
(k) In case the Corporation shall take any action
affecting the Common Stock other than action described in
this Section (7), which in the opinion of the Board of
Directors would materially adversely affect the conversion
rights of the holders of the shares of Series B Preferred
Stock, the Conversion Price for the Series B Preferred Stock
may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time, as the Board of Directors
may determine to be equitable in the circumstances.
(l) The Corporation covenants that it will at all
times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued
shares of Common Stock or its issued shares of Common Stock
held in its treasury, or both, for the purpose of effecting
conversion of the Series B Preferred Stock, the full number
of shares of Common Stock deliverable upon the conversion of
all outstanding shares of Series B Preferred Stock not
theretofore converted. For purposes of this paragraph (l),
the number of shares of Common Stock which shall be
deliverable upon the conversion of all outstanding shares of
Series B Preferred Stock shall be computed as if at the time
of computation all such outstanding shares were held by a
single holder.
Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par
value of the shares of Common Stock deliverable upon
conversion of the Series B Preferred Stock, the Corporation
shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Conversion Price.
The Corporation shall use all reasonable efforts to
list the shares of Common Stock required to be delivered
upon conversion of the Series B Preferred Stock prior to
such delivery, on the NASDAQ Stock Market or such other
exchange or inter-dealer quotation system on which the
Common Stock is principally traded or authorized to be
quoted.
56
Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon conversion of
the Series B Preferred Stock, the Corporation shall use all
reasonable efforts to comply with all federal and state laws
and regulations thereunder requiring the registration of
such securities with, or any approval of or consent to the
delivery thereof by, any governmental authority, and any
such conversion or delivery shall be subject to any
applicable requirements of law or regulation.
(m) The Corporation shall pay any and all
documentary stamp or similar issue or transfer taxes payable
in respect of the issue or delivery of shares of Common
Stock on conversion of the Series B Preferred Stock pursuant
hereto; provided, however, that the Corporation shall not be
required to pay any tax which may be payable in respect of
any transfer involved in the issue or delivery of shares of
Common Stock in a name other than that of the holder of the
Series B Preferred Stock to be converted and no such issue
or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the
Corporation the amount of any such tax or has established,
to the reasonable satisfaction of the Corporation, that such
tax has been paid.
Section (8) Ranking. Any class or classes of stock
of the Corporation shall be deemed to rank:
(i) prior to the Series B Preferred Stock, as
to dividends or as to distribution of assets upon
liquidation, dissolution or winding up, if the holders
of such class shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in
preference or priority to the holders of Series B
Preferred Stock;
(ii) on a parity with the Series B Preferred
Stock, (A) as to dividends, if such stock shall be
Series A Preferred Stock or Common Stock or if the
holders of such class of stock and the Series B
Preferred Stock shall be entitled to the receipt of
dividends in proportion to their respective amounts of
declared and unpaid dividends per share, without
preference or priority one over the other, or (B) as to
distribution of assets upon liquidation, dissolution or
winding up, whether or not the redemption or
57
liquidation prices per share thereof be different from
those of the Series B Preferred Stock, if such stock
shall be Series A Preferred Stock or if the holders of
such class of stock and the Series B Preferred Stock
shall be entitled to the receipt of amounts
distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of
liquidation prices, without preference or priority one
over the other; and
(iii) junior to the Series B Preferred Stock,
(A) as to dividends, if the holders of Series B
Preferred Stock shall be entitled to the receipt of
dividends in preference or priority to the holders of
shares of such stock, or (B) as to distribution of
assets upon liquidation, dissolution or winding up, if
such stock shall be Common Stock or if the holders of
Series B Preferred Stock shall be entitled to receipt
of amounts distributable upon liquidation, dissolution
or winding up in preference or priority to the holders
of shares of such stock.
Section (9) Voting. (a) Except as herein
provided or as otherwise from time to time required by law,
holders of Series B Preferred Stock shall have no voting
rights.
(b) So long as any shares of the Series B Preferred
Stock remain outstanding, the consent of the holders of at
least two-thirds of the shares of Series B Preferred Stock
outstanding at the time given in person or by proxy, either
in writing or at any special or annual meeting, shall be
necessary to permit, effect or validate any one or more of
the following:
(i) The authorization, creation or issuance,
or any increase in the authorized or issued amount, of
any class or series of stock ranking prior to Series B
Preferred Stock as to dividends or the distribution of
assets upon liquidation, dissolution or winding up;
(ii) The increase in the authorized or issued
amount of Series B Preferred Stock; or
58
(iii) The amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Certificate of Incorporation
of the Corporation (including any of the provisions
hereof) which would affect any right, preference or
voting power of Series B Preferred Stock or of the
holders thereof; provided, however, that any increase
in the amount of authorized preferred stock or the
creation and issuance of other series of preferred
stock, or any increase in the amount of authorized
shares of such series or of any other series of
preferred stock, in each case ranking on a parity with
or junior to the Series B Preferred Stock with respect
to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up,
shall not be deemed to affect such rights, preferences
or voting powers.
The foregoing voting provisions shall not apply if, at
or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all
outstanding shares of Series B Preferred Stock shall have
been redeemed or sufficient funds shall have been deposited
in trust to effect such redemption, scheduled to be
consummated within 30 days after such time.
Section (10) Record Holders. The Corporation and
the Transfer Agent may deem and treat the record holder of
any shares of Series B Preferred Stock as the true and
lawful owner thereof for all purposes, and neither the
Corporation nor the Transfer Agent shall be affected by any
notice to the contrary.
59
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be made under the seal of the Corporation and
signed by [_______________], its [_______________], and attested
by [_______________], its [_______________], this [____] day of
[___________], 1996.
INTERCEL, INC.
By
(Corporate Seal)
Attest:
By
60
ANNEX II
Registration Rights
(a) The Purchaser shall have the right at any time
after the Closing to make three requests of the Seller in writing
for registration under the Securities Act of shares of Common
Stock into which Shares have been converted or are to be
converted prior to the closing of the offering pursuant to such
registration (the "Securities"): with respect to the first such
request to register under the Securities Act at least $20 million
in market value of Securities Beneficially Owned by the Purchaser
(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. 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
61
to be prepared and filed by the Seller if the Seller is, at such
time, either (A) conducting, or proposing to file with the
Commission within 90 days a registration statement with respect
to, an underwritten public offering for the account of the Seller
of equity securities (or securities convertible into equity
securities) or is subject to a contractual obligation not to
engage in a public offering and is advised in writing by its
managing underwriter or underwriters (with a copy to the
Purchaser) that such offering would in its or their opinion be
adversely affected by the registration so requested or (B)
subject to an existing contractual obligation to its underwriters
not to engage in a public offering. Notwithstanding any other
provision of this Annex II, the Seller may postpone action under
this Annex II for as long as it reasonably deems necessary (but
no longer than 90 days) if the Seller determines, in its
reasonable discretion, that effecting the registration at such
time might (i) adversely affect a pending or contemplated
financing, acquisition, disposition of assets or stock, merger or
other significant transaction, or (ii) require the Seller to make
public disclosure of information the public disclosure of which
at such time the Seller in good faith believes could have a
significant adverse effect upon the Seller.
No securities may be registered on a registration
statement requested by the Purchaser pursuant to the first
paragraph of paragraph (a) of this Annex II without the
Purchaser's express written consent, unless the amount of such
securities is subject to reduction prior to any reduction in the
number of securities originally requested by the Purchaser in the
event the lead underwriter of the related offering believes that
the success of such offering would be materially and adversely
affected by inclusion of all the securities requested to be
included therein.
At any time after the Closing, if the Seller proposes
to file a registration statement under the Securities Act with
respect to an offering of its equity securities (i) for its own
account (other than a registration statement on Form S-4 or S-8
(or any substitute form that may be adopted by the Commission))
or (ii) for the account of any holders of its securities
(including pursuant to a demand registration), then the Seller
shall give written notice of such proposed filing to the
Purchaser as soon as practicable (but in any event not less than
5 Business Days before the anticipated filing date), and such
notice shall offer the Purchaser the opportunity to register such
number of shares of Securities as the Purchaser requests. If the
Purchaser wishes to register securities of the same class or
series as the Seller or such holder, such registration shall be
on the same terms and conditions as the registration of the
62
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 by them; provided, however,
that the Seller must provide prompt written notice of such
written opinion to the Purchaser. The Purchaser shall have the
right at any time to convert its request for a Piggyback
Registration into a requested registration pursuant to the first
paragraph of paragraph (a) of this Annex II.
(b) In connection with any offering of shares of
Subject Stock registered pursuant to this Annex II, the Seller
(i) shall furnish to the Purchaser such number of copies of any
prospectus (including any preliminary prospectus) as it may
reasonably request in order to effect the offering and sale of
the Subject Stock to be offered and sold, but only while the
Seller shall be required under the provisions hereof to cause the
registration statement to remain current and (ii) take such
action as shall be necessary to qualify the shares covered by
such registration statement under such "blue sky" or other state
securities laws for offer and sale as the Purchaser shall
reasonably request; provided, however, that the Seller shall not
be obligated to qualify as a foreign corporation to do business
under the laws of any jurisdiction in which it shall not then be
qualified or to file any general consent to service of process in
any jurisdiction in which such a consent has not been previously
filed. If applicable, the Seller 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. Upon any registration
63
becoming effective pursuant to this Annex II, 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.
(c) The Purchaser shall pay all underwriting
discounts and commissions related to shares of Subject Stock
being sold by the Purchaser and the fees and disbursements of
counsel and other advisors to the Purchaser. All other fees and
expenses in connection with the first requested registration
pursuant to the first paragraph of paragraph (a) of this Annex
II, including, without limitation, all registration and filing
fees, all fees and expenses of complying with securities or "blue
sky" laws, fees and disbursements of the Seller's counsel and
accountants (including the expenses of "cold comfort" letters
required by or incident to such performance and compliance) and
any fees and disbursements of underwriters customarily paid by
issuers in secondary offerings, shall be paid by the Seller, and
all such other fees and expenses in connection with the second
and third requested 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..
(d) In the case of any offering registered pursuant
to this Annex II, the Seller agrees to indemnify and hold the
Purchaser, each underwriter of Securities under such registration
and each person who controls any of the foregoing within the
meaning of Section 15 of the Securities Act and the directors and
officers of the Purchaser, harmless against any and all losses,
claims, damages, liabilities or action to which they or any of
them may become subject under the Securities Act or any other
statute or common law or otherwise, and to reimburse them for any
legal or other expenses reasonably incurred by them in connection
with investigating any claims and defending any actions, insofar
as any such losses, claims, damages, liabilities or actions shall
arise out of or shall be based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the
registration statement relating to the sale of such Subject
Stock, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus (as amended or supplemented if the Seller
shall have filed with the Commission any amendment thereof or
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supplement thereto), if used prior to the effective date of such
registration statement, or contained in the prospectus (as
amended or supplemented if the Seller shall have filed with the
Commission any amendment thereof or supplement thereto), or the
omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading;
provided, however, that the indemnification agreement contained
in this paragraph (d) shall not apply to such losses, claims,
damages, liabilities or actions which shall arise from the sale
of Subject Stock by the Purchaser if such losses, claims,
damages, liabilities or actions shall arise out of or shall be
based upon any such untrue statement or alleged untrue statement,
or any such omission or alleged omission, (x) made in reliance
upon and in conformity with information furnished in writing to
the Seller by the Purchaser or any such underwriter specifically
for use in connection with the preparation of the registration
statement or any preliminary prospectus or prospectus contained
in the registration statement or any such amendment thereof or
supplement thereto or (y) made in any preliminary prospectus, and
the prospectus contained in the registration statement in the
form filed by the Seller with the Commission pursuant to Rule
424(b) under the Securities Act shall have corrected such
statement or omission and a copy of such prospectus shall not
have been sent or given to such person at or prior to the
confirmation of such sale to him.
(e) In the case of each offering registered
pursuant to this Annex II, the Purchaser and each underwriter
participating therein shall agree, in the same manner and to the
same extent as set forth in paragraph (d) of this Annex II,
severally to indemnify and hold harmless the Seller and each
person, if any, who controls the Seller within the meaning of
Section 15 of the Securities Act, and the directors and officers
of the Seller, and in the case of each such underwriter, the
Purchaser, each person, if any, who controls the Purchaser within
the meaning of the Securities Act and the directors, officers and
partners of the Purchaser, with respect to any statement in or
omission from such registration statement or any preliminary
prospectus (as amended or as supplemented, if amended or
supplemented as aforesaid) or prospectus contained in such
registration statement (as amended or as supplemented, if amended
or supplemented as aforesaid), if such statement or omission
shall have been made in reliance upon and in conformity with
information furnished in writing to the Seller by the Purchaser
or such underwriter specifically for use in connection with the
preparation of such registration statement or any preliminary
prospectus or prospectus contained in such registration statement
or any such amendment thereof or supplement thereto.
65
(f) Each party indemnified under paragraph (d) or
(e) of this Annex II shall, promptly after receipt of notice of
the commencement of any action against such indemnified party in
respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the commencement thereof. The
omission of any indemnified party to so notify an indemnifying
party of any such action shall not relieve the indemnifying party
from any liability in respect of such action which it may have to
such indemnified party on account of the indemnity agreement
contained in paragraph (d) or (e) of this Annex II, unless the
indemnifying party was prejudiced by such omission, and in no
event shall relieve the indemnifying party from any other
liability which it may have to such indemnified party. In case
any such action shall be brought against any indemnified party
and it shall notify an indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it may desire, jointly with any
other indemnifying party similarly notified, to assume the
defense thereof, and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such
indemnified party under paragraph (d) or (e) of this Annex II for
any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, other
than reasonable costs of investigation; provided, however, that
if there exists or is reasonably likely to exist a conflict of
interest that would make it inappropriate in the judgment of the
indemnified party, in its sole and absolute discretion, for the
same counsel to represent both the indemnified party and the
indemnifying party, then the indemnified party shall be entitled
to retain its own counsel, in each jurisdiction for which the
indemnified party determines counsel is required, at the expense
of the indemnifying party. No such third party claim may be
settled by the indemnifying party or the indemnified party
without the prior written consent of the other, which consent
shall not be unreasonably withheld.
(g) If the indemnification provided for under
paragraph (d) or (e) shall for any reason be held by a court to
be unavailable to an indemnified party under paragraph (d) or (e)
hereof in respect of any loss, claim, damage or liability, or any
action in respect thereof, then, in lieu of the amount paid or
payable under paragraph (d) or (e) hereof, the indemnified party
and the indemnifying party under paragraph (d) or (e) hereof
shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably
incurred in connection with investigating the same), (i) in such
proportion as is appropriate to reflect the relative fault of the
Seller and the prospective seller of Securities covered by the
66
registration statement which resulted in such loss, claim, damage
or liability, or action in respect thereof, with respect to the
statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law,
in such proportion as shall be appropriate to reflect the
relative benefits received by the Seller and such prospective
seller from the offering of the securities covered by such
registration statement. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. In
addition, no Person shall be obligated to contribute hereunder
any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not
be unreasonably withheld.
(h) Notwithstanding anything to the contrary
contained in this Agreement, the maximum amount of indemnifiable
losses which may be recovered from an indemnifying party arising
out of or resulting from the causes enumerated in paragraph (d)
or (e) shall be an amount equal to the Purchase Price.
(i) Capitalized terms not defined in this Annex
shall have the meanings set forth in the Agreement.
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CONFORMED COPY
STOCK PURCHASE AGREEMENT
Between
INTERCEL, INC.
and
MPX SYSTEMS, INC.
Dated as of March 4, 1996
68
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms 1
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Shares 6
SECTION 2.02. Purchase Price 6
SECTION 2.03. Closing 6
SECTION 2.04. Escrow 6
SECTION 2.05. Closing Deliveries by the Seller 6
SECTION 2.06. Closing Deliveries by the Purchaser 7
SECTION 2.07. Closing Deliveries by the Escrow Agent 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 3.01. Organization, Authority and Qualification
of the Seller 7
SECTION 3.02. Capital Stock of the Seller 7
SECTION 3.03. Subsidiaries 8
SECTION 3.04. No Conflict 8
SECTION 3.05. Governmental Consents and Approvals 9
SECTION 3.06. Seller SEC Documents; Financial Statements 9
SECTION 3.07. No Undisclosed Liabilities 10
SECTION 3.08. Conduct in the Ordinary Course; Absence of
Certain Changes, Events and Conditions 10
SECTION 3.09. Litigation 10
SECTION 3.10. Compliance with Laws 10
SECTION 3.11. Full Disclosure 11
SECTION 3.12. Delivery of Certain Documents 11
SECTION 3.13. Private Placement 11
SECTION 3.14. FCC Regulations 11
SECTION 3.15. Brokers 11
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.01. Organization and Authority of the Purchaser 11
SECTION 4.02. No Conflict 12
SECTION 4.03. Governmental Consents and Approvals 12
SECTION 4.04. Litigation 12
SECTION 4.05. Investment Purpose 13
SECTION 4.06. Accredited Investor 13
SECTION 4.07. Brokers 13
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Filing of Certificate of Designation 13
SECTION 5.02. Treatment of Shares as Equity 13
SECTION 5.03. Regulatory and Other Authorizations; Notices
and Consents 13
SECTION 5.04. Notice of Developments 14
SECTION 5.05. Registration Rights 14
SECTION 5.06. Resale Restrictions 14
SECTION 5.07. Registration of Shares 15
SECTION 5.08. Delivery of Certain Documents 15
SECTION 5.09. Seller Stockholders' Meeting 15
SECTION 5.10. Certain Information 15
SECTION 5.11. Conduct of Business of the Seller 16
SECTION 5.12. Further Action 16
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.01. Conditions to Obligations of the Seller 16
SECTION 6.02. Conditions to Obligations of the Purchaser 18
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Survival of Representations and Warranties 20
SECTION 7.02. Indemnification 20
SECTION 7.03. Limits on Indemnification 22
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ARTICLE VIII
TERMINATION AND WAIVER
SECTION 8.01. Termination 22
SECTION 8.02. Effect of Termination 23
SECTION 8.03. Waiver 23
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Expenses 24
SECTION 9.02. Notices 24
SECTION 9.03. Public Announcements 25
SECTION 9.04. Headings 25
SECTION 9.05. Severability 25
SECTION 9.06. Entire Agreement 26
SECTION 9.07. Assignment 26
SECTION 9.08. No Third Party Beneficiaries 26
SECTION 9.09. Amendment 26
SECTION 9.10. Governing Law 26
SECTION 9.11. Counterparts 26
SECTION 9.12. Specific Performance 26
EXHIBITS
Exhibit 2.04 Form of Escrow Agreement
ANNEXES
Annex I Certificate of the Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series B Convertible Preferred Stock ($0.01 Par Value)
of InterCel, Inc.
Annex II Registration Rights
71
