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EXHIBIT 4.9
AMENDMENT TO STOCK PURCHASE AGREEMENTS
THIS AMENDMENT TO STOCK PURCHASE AGREEMENTS, dated as of June 25, 1999,
is made and entered into between I3S FUNDING I, LLC, a North Carolina limited
liability company ("FUNDING"), BLUE RIDGE INVESTORS LIMITED PARTNERSHIP, a North
Carolina limited partnership ("BLUE RIDGE"), SPOTSWOOD CAPITAL, LLC, a North
Carolina limited liability company ("SPOTSWOOD") (Funding, Blue Ridge and
Spotswood are collectively referred to herein as the "PURCHASERS"); I 3S, INC.,
a Texas corporation (the "COMPANY"); and XXXXX X. XXXXX, XXXX X. XXXXXXX, XXXX
X. XXXXX, XX., XXXXXXX XX PRICE and XXXXXX XXXXXX (the "SHAREHOLDERS").
WITNESSETH:
WHEREAS, Funding, the Company, the Shareholders and, in certain
instances, Blue Ridge and Spotswood entered into those certain Stock Purchase
Agreements, dated as of April 4, 1997, March 31, 1998 (as amended June 30,
1998), and December 30, 1998, respectively (the "FUNDING AGREEMENTS"), whereby
Funding purchased an aggregate of 4,979,777 shares of Class B Common Stock, no
par value per share, of the Company (the "CLASS B COMMON STOCK"); and
WHEREAS, Blue Ridge, the Company, the Shareholders, and in certain
instances, Spotswood entered into those certain Stock Purchase Agreements, dated
as of July 10, 1998, and December 30, 1998, respectively (the "BLUE RIDGE
AGREEMENTS"), whereby Blue Ridge purchased an aggregate of 1,037,232 shares of
Class C Common Stock, no par value per share, of the Company (the "CLASS C
COMMON STOCK"); and
WHEREAS, Spotswood, the Company the Shareholders, and in certain
instances, Blue Ridge entered into those certain Stock Purchase Agreements,
dated as of July 10, 1998, and December 30, 1998, respectively (the "SPOTSWOOD
AGREEMENTS"), whereby Spotswood purchased an aggregate of 1,037,232 shares of
Class C Common Stock; and
WHEREAS, the Company desires to sell up to 2,925,532 shares of Series A
Convertible Preferred Stock, no par value per share, of the Company (the
"PREFERRED STOCK") in a private placement (the "PRIVATE PLACEMENT"); and
WHEREAS, the preferences, limitations and rights of the Class A Common
Stock, no par value per share, of the Company (the "CLASS A COMMON STOCK"), the
Class B Common Stock and the Class C Common Stock (the Class A Common Stock,
Class B Common Stock and Class C Common Stock are collectively referred to
herein as the "COMMON STOCK") must be amended in order to effectuate the Private
Placement; and
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WHEREAS, the Company and the Purchasers entered into that certain
letter agreement dated as of March 2, 1999, as amended April 29, 1999, whereby
they agreed to amend the documentation pertaining to the Class B and Class C
Common Stock to effectuate the Private Placement; and
WHEREAS, the Company and the Purchasers desire to document the
amendments to the preferences, limitations and rights of the Common Stock.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, representations and warranties contained in the Funding Agreements,
Blue Ridge Agreements and Spotswood Agreements (collectively referred to herein
as the "PURCHASE AGREEMENTS") and in this Amendment, the parties hereto agree as
follows:
1. Effectiveness. This Amendment shall be effective as of the date
first above written.
2. Amendments to Purchase Agreements. To reflect the amendments to the
preferences, limitations and rights of the Common Stock, the Purchase Agreements
are hereby amended as follows:
(a) Section 2.b. of the Purchase Agreements is amended
to read in its entirety as follows:
"b. Preemptive Rights/Definitions.
i. The Class B Common Stock and Class C Common Stock shall have
the preemptive rights set forth in the Company's Amended and
Restated Articles of Incorporation.
ii. For purposes of this Agreement, the "1933 Act" shall mean
the Securities Act of 1933, as amended.
iii. For purposes of this Agreement, a "Purchaser Approved
Offering" shall have the same meaning as "Approved Offering" as
defined in the Company's Amended and Restated Articles of
Incorporation."
(b) Section 2.c. of the Purchase Agreements is amended
to read in its entirety as follows:
"c. Right of First Refusal. The Class B Common Stock and Class C
Common Stock shall be entitled to the right of first refusal as set
forth in the Company's Amended and Restated Articles of
Incorporation."
(c) Section 2.d.ii of the Funding Agreements is amended
to read in its entirety as follows:
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"ii. At any time after April 4, 2002, Purchaser may require the
Company, at the Company's expense, to register up to two (2) primary
or secondary offerings of the Company's common stock (including
Purchaser's Common Shares) to the extent legally permissible.
Purchaser shall give the Company written notice of any exercise of
this right, and the Company shall have up to one (1) year from the
date of receipt of such notice to effect such registration."
(d) The first paragraph of Subsection 2.e.i. of the
Funding Agreements is amended to read in its entirety as
follows:
"i. At any time after April 4, 2001, and before the consummation
of a Purchaser Approved Offering, if a bona fide offer is made by
any person (other than Purchaser, or any person or entity related to
or affiliated with Purchaser), to purchase all or substantially all
of the assets or shares of stock of the Company, and Purchaser gives
the Company written notice that it desires such offer to be
accepted, the Company and its shareholders shall either accept the
offer and consummate the sale on the terms and conditions of the
offer, or the Company shall acquire all the equity interests owned
by Purchaser in the Company on the same terms and conditions as the
offer; provided, however, that if such offer is made prior to April
4, 2003, the Company shall have no such obligation unless the total
consideration of such offer is at least $350,000,000."
(e) The first paragraph of Subsection 2.e.i. of the Blue
Ridge Agreements and the Spotswood Agreements is amended to
read in its entirety as follows:
"i. At any time after April 4, 2001, and before the consummation
of a Purchaser Approved Offering, if a bona fide offer is made by
any person (other than Purchaser, or any person or entity related to
or affiliated with Purchaser), to purchase all or substantially all
of the assets or shares of stock of the Company, and Funding gives
the Company written notice that it desires such offer to be
accepted, the Company and its shareholders shall either accept the
offer and consummate the sale on the terms and conditions of the
offer (in which case, if the transaction is a stock sale or merger,
Purchaser also shall sell all of its equity interests in the Company
on those terms and conditions), or the Company shall acquire all the
equity interests owned by Purchaser and Funding in the Company on
the same terms and conditions as the offer; provided, however, that
if such offer is made prior to April 4, 2003, the Company shall have
no such obligation unless the total consideration of such offer is
at least $350,000,000. If at any time Funding approves the sale of
substantially all of the assets or shares of stock of the Company,
then Purchaser shall vote its shares in favor of the Transaction so
approved, or if the transaction is a stock sale or merger, then
Purchaser shall sell all of its equity interests in the Company on
the terms and conditions so approved."
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(f) Subsection 2.e.ii. of the Purchase Agreements is
deleted in its entirety.
(g) Subsection 2.f. of the Purchase Agreements is
amended to read in its entirety as follows:
"f. Right of Co-Sale. In addition to the rights set forth in
Section 2.c., at any time prior to the consummation of a Purchaser
Approved Offering, Purchaser shall have the right to participate pro
rata to the fullest extent of its equity interest in the Company in
any sale or transfer of stock, by any holder of shares of Class A
Common Stock to any third party."
(h) Subsection 2.g.iii. of the Stock Purchase Agreements
is amended to read in its entirety as follows:
"iii. INTENTIONALLY LEFT BLANK."
Subsection 2.g.iv. of the Stock Purchase Agreements is amended
to read in its entirety as follows:
"iv. INTENTIONALLY LEFT BLANK."
(i) Section 2.i. of the Funding Agreements is amended to
add the following as the second paragraph thereof:
"Upon the consummation of a Purchaser Approved Offering and the
related conversion of the Class B Shares to Class A Common Stock,
the Board of Directors will nominate Purchaser's designee, so long
as such designee is reasonably qualified, and recommend in the
Company's proxy statement that the shareholders vote for such
designee. Purchaser shall have such right so long as Purchaser
continues to hold at least 2,489,889 shares of Class A Common Stock
attributable to the Class B Common Stock (subject to adjustment for
subdivisions, combinations, dividends, distributions,
recapitalizations, reclassifications or other changes as set forth
in the Company's Amended and Restated Articles of Incorporation)."
(j) Section 2.i. of the Blue Ridge Agreements and the
Spotswood Agreements is amended to add the following as the
second paragraph thereof:
"Upon the consummation of a Purchaser Approved Offering and the
related conversion of the Class B Common Stock to Class A Common
Stock, the Board of Directors will nominate Funding's designee, so
long as such designee is reasonably qualified, and recommend in the
Company's proxy statement that the shareholders vote for such
designee. Funding shall have such right so long as Funding continues
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to hold at least 2,489,889 shares of Class A Common Stock
attributable to the Class B Common Stock (subject to adjustment for
subdivisions, combinations, dividends, distributions,
recapitalizations, reclassifications or other changes as set forth
in the Company's Amended and Restated Articles of Incorporation)."
(k) The following is added as new Section 2.j. of the
Funding Agreements:
"j. Conversion. Upon the occurrence of a Purchaser Approved
Offering, each share of Class B Common Stock held by Purchaser shall
immediately and automatically be converted into an equal number of
fully paid and nonassessable shares of Class A Common Stock pursuant
to the Company's Amended and Restated Articles of Incorporation."
(l) The following is added as new Section 2.j. of the
Blue Ridge Agreements and the Spotswood Agreements:
"j. Conversion. Upon the occurrence of a Purchaser Approved
Offering, each share of Class C Common Stock held by Purchaser shall
immediately and automatically be converted into an equal number of
fully paid and nonassessable shares of Class A Common Stock pursuant
to the Company's Amended and Restated Articles of Incorporation."
(l) Section 5.c. of the Purchase Agreements is amended
to read in its entirety as follows:
"c. Delivery of Financial Materials. The Company shall deliver
to Purchaser (i) within forty-five (45) days of the end of each
calendar quarter, quarterly and year-to-date balance sheet and
statements of income, changes in stockholders equity, and cash flow
prepared in accordance with GAAP and certified by the Company's
Chief Financial Officer, except such financial statements shall not
contain normal and recurring year end audit adjustments;(ii) within
one hundred twenty (120) days after the fiscal year end, an annual
independent certified audit from an outside accounting firm
reasonably designated by the Company; and (iii) as soon as
practicable, but no later than thirty (30) days after the beginning
of each fiscal year, beginning January 1, 2000, the Company shall
provide to the Purchaser a copy of the annual budget and plan for
such year which shall include, without limitation, plans for
incurrence of indebtedness for borrowed money and projections
regarding types of sources of funds, monthly projected capital and
operating expense budgets and cash flow projections."
3. Amended and Restated Articles of Incorporation. The Purchasers agree
to sign a Unanimous Written Consent in substantially the form attached hereto as
EXHIBIT "A"
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simultaneously with the execution of this Amendment. The Unanimous Written
Consent shall approve those certain Amended and Restated Articles of
Incorporation (which further amend and provide for the preferences, limitations
and rights of the Common Stock) (the "COMPANY'S AMENDED AND RESTATED ARTICLES OF
INCORPORATION") the form of which is attached as EXHIBIT "A" to the Unanimous
Written Consent. The Purchasers agree not to revoke or terminate such consent
unless the prior written consent of the Company has been obtained.
4. Waiver of Certain Rights. Purchasers hereby waive their right of
co-sale and any preemptive right they may have with respect to the sale of the
Preferred Stock in the Private Placement, the issuance of additional shares of
Preferred Stock as dividends thereon, and the issuance of the Class A Common
Stock on the conversion thereof.
5. Definitive Agreement. This Amendment constitutes the definitive
documentation of the Class B Common Stock and Class C Common Stock amendments
contemplated by that certain letter agreement dated March 2, 1999, as amended
April 29, 1999, by and between Funding, Blue Ridge, Spotswood and the Company
(collectively, the "LETTER AGREEMENT"). The Letter Agreement is superseded by
this Amendment and shall no longer be deemed in force or effect.
6. Miscellaneous. Except as expressly amended by this Amendment, all
the terms and provisions of the Purchase Agreements shall remain unmodified and
in full force and effect. This Amendment, together with the Purchase Agreements,
represents the entire agreement of the parties with respect to the matters
addressed herein, and may not be modified or amended except by the written
agreement of all parties. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Amendment shall be
governed by and construed in accordance with the laws of the State of North
Carolina.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.
I 3S, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
------------------------------
Its: President
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I3S FUNDING I, L.L.C.
By: GENEVA ASSOCIATES, L.L.C.,
Manager
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
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Its: Member-Manager
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BLUE RIDGE INVESTORS LIMITED
PARTNERSHIP
By: Blue Ridge Investors Group, Inc.,
General Partner
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx, President
SPOTSWOOD CAPITAL, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx XX
-----------------------------------
Xxxxxxx X. Xxxxxxxx XX,
Member-Manager
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SHAREHOLDERS:
/s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
/s/ Xxxx X. Xxxxxxx
-------------------------------
XXXX X. XXXXXXX
/s/ Xxxx X. Xxxxx, Xx.
-------------------------------
XXXX X. XXXXX, XX.
/s/ Charles Bo Price
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CHARLES BO PRICE
/s/ Xxxxxx Xxxxxx
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XXXXXX XXXXXX
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EXHIBIT "A"
UNANIMOUS WRITTEN CONSENT
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