Exhibit 1
---------
STOCK PURCHASE AGREEMENT
DATED AS OF NOVEMBER 1, 2000
BETWEEN
PSINET INC.
AND
XPEDIOR INCORPORATED
TABLE OF CONTENTS
Page
ARTICLE I Purchase and Sale....................................................1
Section 1.1 Purchase and Sale.................................................1
Section 1.2 Preferred Stock...................................................1
Section 1.3 Closing...........................................................1
Section 1.4 Deliveries at Closing.............................................1
ARTICLE II Representations and Warranties of Xpedior...........................2
Section 2.1 Organization and Qualification....................................2
Section 2.2 Capitalization....................................................2
Section 2.3 Authority Relative to this Agreement and the Transactions.........3
Section 2.4 No Conflicts; Required Filings and Consents.......................4
Section 2.5 Reports and Financial Statements..................................4
Section 2.6 Litigation........................................................6
Section 2.7 Absence of Certain Changes or Events..............................6
Section 2.8 Taxes.............................................................6
Section 2.9 Compliance with Applicable Laws...................................7
Section 2.10 Material Contracts..............................................7
Section 2.11 Restrictions on Business Activities.............................7
Section 2.12 Brokers; Expenses...............................................8
Section 2.13 Private Offering................................................8
Section 2.14 Investment Company..............................................8
ARTICLE III Representations and Warranties of PSINet...........................8
Section 3.1 Organization and Qualification....................................8
Section 3.2 Authority Relative to this Agreement..............................8
Section 3.3 No Conflicts, Required Filings and Consents.......................9
Section 3.4 Brokers...........................................................9
Section 3.5 Investment Intent.................................................9
Section 3.6 Status............................................................9
ARTICLE IV Covenants..........................................................10
Section 4.1 Access to Information...........................................10
Section 4.2 Furnishing of Information.......................................10
Section 4.3 Integration.....................................................10
Section 4.4 Adoption of Shareholder Rights Plan.............................11
Section 4.5 Transfer Restrictions...........................................11
Section 4.6 Acknowledgment of Dilution......................................12
Section 4.7 Copies and Use of Disclosure Materials..........................12
Section 4.8 Increase in Authorized Shares...................................12
Section 4.9 Listing of Underlying Shares....................................12
Section 4.10 Conversion Obligations of Xpedior...............................13
Section 4.11 Rights and Warrants.............................................13
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ARTICLE V General Provisions..................................................13
Section 5.1 Survival of Representations, Warranties and Agreements..........13
Section 5.2 Notices.........................................................13
Section 5.3 Specific Performance............................................14
Section 5.4 Entire Agreement................................................14
Section 5.5 Assignments; Parties in Interest................................15
Section 5.6 Governing Law...................................................15
Section 5.7 Headings; Disclosure............................................15
Section 5.8 Certain Definitions and Rules of Construction...................15
Section 5.9 Counterparts....................................................18
Section 5.10 Severability....................................................18
Section 5.11 Fees and Expenses...............................................18
Section 5.12 Amendment.......................................................18
Section 5.13 Waiver..........................................................19
Exhibit A Certificate of Designations
Exhibit B Registration Rights Agreement
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of November 1,
2000, is entered into by and between PSINet INC., a New York corporation
("PSINet"), and XPEDIOR INCORPORATED, a Delaware corporation ("Xpedior").
Capitalized terms used in this Agreement and not defined in context shall have
the meanings ascribed to them in Section 5.8(a).
WHEREAS, the respective Boards of Directors of PSINet and Xpedior have
approved the issuance and sale by Xpedior to PSINet of an aggregate of 300,000
shares of Xpedior's Series B 9% Cumulative Convertible Preferred Stock, par
value $0.01 per share (the "Series B Preferred Stock"), all upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I
Purchase and Sale
Section 1.1 Purchase and Sale. Upon and subject to the conditions of this
Agreement, on the Closing Date, Xpedior shall issue and sell to PSINet, and
PSINet shall purchase from Xpedior, 300,000 shares of Series B Preferred Stock
for an aggregate purchase price of $15,000,000 (the "Purchase Price").
Section 1.2 Preferred Stock. The Series B Preferred Stock shall have the
powers, designations, preferences and relative, participating, optional and
other rights and qualifications, limitations and restrictions as set forth in
the Certificate of Designations in substantially the form attached hereto as
Exhibit A (the "Certificate of Designations").
Section 1.3 Closing. The closing of the Transactions (the "Closing") shall
take place on November 2, 2000, unless another time is agreed to in writing by
the parties hereto. The Closing shall be held at the offices of Xxxxx Xxxxxxx
LLP, 437 Madison Avenue, New York, New York, unless another place is agreed to
in writing by the parties hereto. The date on which the Closing occurs is
referred to herein as the "Closing Date".
Section 1.4 Deliveries at Closing. At the Closing, (a) Xpedior shall
deliver to PSINet (i) a certificate or certificates representing the Series B
Preferred Stock, registered in the name of PSINet or its designee, in a form
satisfactory to PSINet, (ii) an executed copy of the Registration Rights
Agreement, dated as of the Closing Date, by and between Xpedior and PSINet, in
substantially the form attached hereto as Exhibit B (the "Registration Rights
Agreement"), and (iii) all other documents, instruments and writings required to
have been delivered at or prior to the Closing by Xpedior pursuant to this
Agreement or that PSINet may reasonably request; and (b) PSINet shall deliver to
Xpedior (i) the Purchase Price, in immediately available funds, by wire transfer
to the account or accounts designated in writing by Xpedior for such purpose
prior to the Closing Date, (ii) an executed copy of the Registration Rights
Agreement, and (iii) all
other documents, instruments and writings required to have been delivered at or
prior to the Closing by PSINet pursuant to this Agreement or that Xpedior may
reasonably request.
ARTICLE II
Representations and Warranties of Xpedior
Xpedior represents and warrants to PSINet that, except as disclosed on the
Xpedior Disclosure Schedule which has been delivered to PSINet prior to the
execution of this Agreement (the "Xpedior Disclosure Schedule"):
Section 2.1 Organization and Qualification. Xpedior is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Each of Xpedior's Subsidiaries is a corporation or limited
liability company duly organized, validly existing and, if applicable, in good
standing under the laws of the jurisdiction in which it was formed. Each of
Xpedior and its Subsidiaries has the requisite corporate power and authority to
carry on its business as it is now being conducted and is duly qualified or
licensed to do business, and, if applicable, is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification or licensing necessary,
except where the failure to be so organized, qualified, licensed or in good
standing, or to have such power and authority, when taken together with all
other such failures would not have an Xpedior Material Adverse Effect. Xpedior
has heretofore made available to PSINet a complete and correct copy of the
certificate of incorporation, by-laws and other governing documents, each as
amended to the date hereof, of Xpedior and each of its Subsidiaries.
Section 2.2 Capitalization.
(a) The authorized capital stock of Xpedior consists of 100,000,000
shares of common stock, par value $.01 per share (the "Common Stock"), and
5,000,000 shares of preferred stock, par value $0.01 per share, of which
1,000,000 shares are designated as Series A 8 1/2% Cumulative Convertible
Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"), and
of which 300,000 shares shall be designated as Series B 9% Cumulative
Convertible Preferred Stock, par value $0.01 per share, pursuant to Section 1.2.
As of October 30, 2000, (i) 51,371,738 shares of Common Stock were issued and
outstanding, all of which were duly authorized, validly issued, fully paid and
non-assessable, (ii) an aggregate of 15,000,000 shares of Common Stock were
reserved for issuance under stock options issuable pursuant to Xpedior's Stock
Incentive Plan (the "Stock Options"), (iii) an aggregate of 2,000,000 shares of
Common Stock were reserved for issuance pursuant to Xpedior's Employee Stock
Purchase Plan (the "ESPP Shares"), (iv) 1,000,000 shares of Series A Preferred
Stock were issued and outstanding, all of which were duly authorized, validly
issued, fully paid and non-assessable, and (v) no shares of Series B Preferred
Stock were issued or outstanding. As of September 30, 2000, there were
outstanding Stock Options to purchase 11,004,672 shares of Common Stock, none of
which will be subject to accelerated vesting or exercisability in connection
with the execution and delivery of this Agreement or the consummation of the
Transactions.
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(b) The Series B Preferred Stock and the Common Stock issuable in
payment of dividends upon, and upon conversion of, the Series B Preferred Stock,
has been duly authorized and, when issued in accordance with this Agreement and
the Certificate of Designations, will be validly issued, fully paid and
non-assessable, free and clear of any and all liens, charges, claims,
encumbrances, restrictions and rights of first refusal or preemptive rights of
any kind granted by or binding upon Xpedior (collectively, "Liens") other than
restrictions imposed by federal and applicable state securities laws. Xpedior
has an adequate reserve of Series B Preferred Stock and Common Stock to enable
it to perform its conversion and other obligations under this Agreement and the
Certificate of Designations, which number of reserved and available shares of
Series B Preferred Stock and Common Stock is equal to, respectively, at least
the number of shares of Series B Preferred Stock as is issuable pursuant to this
Agreement and the number of shares of Common Stock as is issuable in payment of
dividends upon, and upon conversion in full of, the Series B Preferred Stock,
assuming the payment of all dividends in shares of Common Stock in accordance
with the terms of the Certificate of Designations.
(c) Except as set forth on the Xpedior Disclosure Schedule, there are
no preemptive or other outstanding rights, options, warrants, conversion rights
(including pursuant to convertible securities), stock appreciation rights,
redemption rights, repurchase rights, voting, buy-sell or other agreements,
arrangements, calls, commitments or rights of any kind relating to the issued or
unissued capital stock of Xpedior or any of its Subsidiaries or obligating
Xpedior or any of its Subsidiaries to issue or sell any shares of capital stock
of, or other equity interests in, Xpedior or any of its Subsidiaries. The ESPP
Shares and all shares of capital stock of Xpedior and its Subsidiaries subject
to issuance pursuant to the Stock Options, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and non-assessable. Without
limiting the generality of the foregoing, neither Xpedior nor any of its
Subsidiaries has adopted a shareholder rights plan or similar plan or
arrangement. As of the date of this Agreement, there are no outstanding
contractual obligations of Xpedior or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of Xpedior or any of its
Subsidiaries or to provide material funds to, or make any material investment
(in the form of a loan, capital contribution or otherwise) in, any Person except
as set forth on the Xpedior Disclosure Schedule. Except for the Registration
Rights Agreement or as set forth on the Xpedior Disclosure Schedule, neither
Xpedior nor any Person acting on its behalf has granted to any Person other than
PSINet the right to (i) require Xpedior to file a registration statement under
the Securities Act with respect to Common Stock or other securities of Xpedior
held by them, or which they have a right to acquire, other than such rights as
have heretofore been exercised and satisfied, or (ii) include any shares of
Common Stock or other securities of Xpedior held by them, or which they have a
right to acquire, in any registration statement filed by Xpedior.
(d) Xpedior has taken action to cause Section 203 of the Delaware
General Corporation Law to be inapplicable to Xpedior. The consummation of the
Transactions will not cause PSINet to become an interested stockholder of
Xpedior for the purposes of Section 203 of the Delaware General Corporation Law.
Section 2.3 Authority Relative to this Agreement and the Transactions.
Xpedior has all necessary power and authority to execute and deliver this
Agreement and the Registration Rights Agreement, to perform its obligations
hereunder and to consummate the Transactions.
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The execution and delivery of this Agreement and the Registration Rights
Agreement by Xpedior, and the consummation by Xpedior of the Transactions, have
been duly and validly authorized by all necessary corporate action of the
stockholders and of the board of directors of Xpedior and no other corporate or
stockholder proceedings on the part of Xpedior are necessary to authorize the
execution and delivery of this Agreement and the Registration Rights Agreement,
or to consummate the Transactions. This Agreement and the Registration Rights
Agreement, have each been duly and validly executed and delivered by Xpedior
and, assuming the due authorization, execution and delivery hereof by PSINet, if
applicable, constitutes a legal, valid and binding obligation of Xpedior,
enforceable against Xpedior in accordance with its terms.
Section 2.4 No Conflicts; Required Filings and Consents.
(a) The execution and delivery of this Agreement and the Registration
Rights Agreement by Xpedior do not, and the performance of this Agreement and
consummation of the Transactions by Xpedior will not, (i) conflict with or
violate the certificate of incorporation, by-laws or other governing documents
of Xpedior or any of its Subsidiaries, (ii) assuming the consents, approvals,
authorizations and waivers specified in Section 2.4(b) have been received and
any condition precedent to such consent, approval, authorization or waiver has
been satisfied, conflict with or violate any Law applicable to Xpedior or any of
its Subsidiaries or by which any property or asset of Xpedior or any of its
Subsidiaries is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Xpedior or any of its
Subsidiaries pursuant to, any contract, agreement, note, bond, mortgage,
indenture, credit agreement, lease, license, permit, franchise or other
instrument or obligation to which Xpedior or any of its Subsidiaries is a party
or by which Xpedior or any of its Subsidiaries or any property or asset of
Xpedior or any of its Subsidiaries is bound or affected, except in the case of
clauses (ii) and (iii) for any such conflicts, violations, breaches, defaults or
other occurrences of the type referred to above that would not have an Xpedior
Material Adverse Effect or would not prevent or materially delay the
consummation of the Transactions.
(b) The execution and delivery of this Agreement and the Registration
Rights Agreement by Xpedior do not, and the performance of this Agreement and
the Registration Rights Agreement and consummation of the Transactions by
Xpedior will not, require any consent, approval, authorization, waiver or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic, foreign or supranational (a "Governmental Entity"), except for (i)
filings pursuant to exemptions from the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities or "blue sky" laws ("Blue Sky
Laws") in connection with the sale and issuance of the Series B Preferred Stock,
(ii) filing of one or more Nasdaq Additional Shares Listing Applications in
connection with the issuance and sale of the Common Stock into which the Series
B Preferred Stock is convertible or with which dividends upon the Series B
Preferred Stock may be paid, and (iii) filing and recordation of the Certificate
of Designations as required by the Delaware General Corporation Law, except
where failure to obtain such consents, approvals, authorizations or permits, or
to make such filings
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or notifications, would not have an Xpedior Material Adverse Effect or would not
prevent or materially delay the consummation of the Transactions.
Section 2.5 Reports and Financial Statements.
(a) Xpedior has filed with the U.S. Securities and Exchange Commission
(the "SEC") all forms, reports, schedules, registration statements, definitive
proxy statements, information statements and other filings ("SEC Reports")
required to be filed by it with the SEC since December 1, 1999. As of their
respective dates, the SEC Reports complied as to form in all material respects
with the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Securities Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SEC Reports. As of their
respective dates and as of the date any information from such SEC Reports has
been incorporated by reference, the SEC Reports did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Xpedior has filed all
material contracts and agreements and other documents or instruments required to
be filed as exhibits to the SEC Reports.
(b) The consolidated balance sheets of Xpedior as of December 31,
1999, 1998 and 1997 and the related consolidated statements of operations,
shareholders' equity and cash flows for the years ended December 31, 1999 and
1998 and the period from March 27, 1997 through December 31, 1997 (including the
related notes and schedules thereto) contained in Xpedior's Form 10-K for the
year ended December 31, 1999 (the "Annual Financial Statements") present fairly,
in all material respects, the consolidated financial position and the
consolidated results of operations, retained earnings and cash flows of Xpedior
and its consolidated Subsidiaries as of the dates or for the periods presented
therein in conformity with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved,
except as otherwise noted therein, including in the related notes.
(c) The consolidated balance sheets and the related statements of
operations and cash flows (including, in each case, the related notes thereto)
contained in Xpedior's Form 10-Q for the quarterly periods ended June 30, 2000
and March 31, 2000 (the "Quarterly Financial Statements" and, together with the
Annual Financial Statements, the "Financial Statements") have been prepared in
accordance with the requirements for interim financial statements contained in
Regulation S-X, which do not require all the information and footnotes necessary
for a fair presentation of financial position, results of operations and cash
flows in conformity with GAAP. The Quarterly Financial Statements reflect all
adjustments necessary to present fairly in accordance with GAAP (except as
indicated), in all material respects, the consolidated financial position,
results of operations and cash flows of Xpedior and its consolidated
Subsidiaries for all periods presented therein.
(d) Except as described in the SEC Reports or as set forth on the
Xpedior Disclosure Schedule, the adoption of SEC Staff Accounting Bulletin No.
101 (Revenue Recognition in Financial Statements) effective January 1, 2000 has
not adversely impacted, and will not adversely impact, in any material respect,
the amount or timing of revenue recognition by Xpedior or any of its
Subsidiaries as compared to their prior revenue recognition practices.
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(e) Except for those liabilities that are fully reflected or reserved
against on the Financial Statements or as set forth on the Xpedior Disclosure
Schedule, neither Xpedior nor any of its Subsidiaries has outstanding any
liability of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due) which would be required to be
reflected on a balance sheet or in the notes thereto prepared in accordance with
GAAP, except for liabilities and obligations which have been incurred since June
30, 2000 in the ordinary course of business which are not material in nature or
amount.
Section 2.6 Litigation. Except as disclosed in the SEC Reports or on the
Xpedior Disclosure Schedule, as of the date hereof, there is no civil, criminal
or administrative suit, action or proceeding pending or, to the knowledge of
Xpedior, threatened against or affecting Xpedior or any of its Subsidiaries that
would have an Xpedior Material Adverse Effect, nor is there any judgment,
decree, injunction or order of any Governmental Entity or arbitrator outstanding
against Xpedior or any of its Subsidiaries that would have an Xpedior Material
Adverse Effect.
Section 2.7 Absence of Certain Changes or Events. Except as disclosed in
the SEC Reports or on the Xpedior Disclosure Schedule, or as permitted by
Section 4.1 for events after the date hereof, since June 30, 2000, Xpedior and
each of its Subsidiaries has conducted its business only in the ordinary course
and in a manner consistent with past practice, and since such date there has not
been (a) any Xpedior Material Adverse Effect, (b) any declaration, setting aside
or payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of Xpedior's or any of its Subsidiaries' capital
stock, or any redemption, purchase or other acquisition of any of its or any of
its Subsidiaries' capital stock, (c) any split, combination or reclassification
of any of Xpedior's or any of its Subsidiaries' capital stock or, except with
respect to the Stock Options and the ESPP Shares, any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for any shares of any of Xpedior's or any of its
Subsidiaries' capital stock, (d) any granting by Xpedior or any of its
Subsidiaries to any officer of Xpedior or any of its Subsidiaries of any
increase in compensation or any rights with respect to compensation in the event
of a "change in control" (however defined) of Xpedior, except in the ordinary
course of business consistent with prior practice or as required under
employment agreements in effect as of June 30, 2000, copies of which have been
provided previously to PSINet, (e) any granting by Xpedior or any of its
Subsidiaries to any officer or any group or class of employees of Xpedior of any
increase in severance or termination pay, except as required under employment,
severance or termination agreements or plans in effect as of June 30, 2000,
copies of which have been provided previously to PSINet, or as previously
disclosed to PSINet, (f) any entry by Xpedior or any of its Subsidiaries into
any employment, severance or termination agreement with any officer of Xpedior,
or any increase in benefits available under, or establishment of, any Benefit
Plan, except in the ordinary course of business consistent with past practice or
as previously disclosed to PSINet, or (g) any material change in accounting
methods, principles or practices by Xpedior, except insofar as may have been
required by a change in GAAP.
Section 2.8 Taxes. Xpedior and each of its Subsidiaries have duly filed all
material federal, state, local and foreign income, franchise, excise, real and
personal property and other Tax returns and reports (including, but not limited
to, those filed on a consolidated, combined or unitary basis) required to have
been filed by Xpedior or any of its Subsidiaries prior to the date
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hereof. All of the foregoing returns and reports are true and correct in all
material respects, and Xpedior and its Subsidiaries have paid or, prior to the
Closing Date will pay, all Taxes shown on such returns or reports as being due.
Section 2.9 Compliance with Applicable Laws. Xpedior and each of its
Subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities (the "Permits") necessary for them to
own, lease or operate their properties and assets and to carry on their
businesses substantially as now conducted or presently intended to be conducted,
except for such permits, licenses, variances, exemptions, orders and approvals
the failure of which to hold would not have an Xpedior Material Adverse Effect.
The Permits are valid and in full force and effect except as would not have an
Xpedior Material Adverse Effect. Except as set forth in the SEC Reports filed
prior to the date hereof, the businesses of each of Xpedior and each of its
Subsidiaries have not been, and are not being, conducted in violation of any
Permit or any Law, arbitration award, agency requirement, license or permit of
any Governmental Entity (a "Governmental Regulation"), except for violations or
possible violations that would not have an Xpedior Material Adverse Effect or
prevent or materially burden or materially impair the ability of Xpedior to
consummate the Transactions. Except as set forth in the SEC Reports filed prior
to the date hereof, no material investigation or review by any Governmental
Entity with respect to Xpedior or any of its Subsidiaries is pending or, to
Xpedior's knowledge, threatened, nor has any Governmental Entity indicated an
intention to conduct any such investigation or review. No material change is
required in Xpedior's or any of its Subsidiaries' operations, properties or
procedures to comply with any Permit, Law or Governmental Regulation, and
Xpedior has not received any notice or communication of any material
noncompliance with any Permit or Governmental Regulation that has not been cured
as of the date hereof, except as would not have an Xpedior Material Adverse
Effect.
Section 2.10 Material Contracts. Neither Xpedior nor any of its
Subsidiaries is a party or is subject to any contract, note, bond, mortgage,
indenture, credit agreement, lease, license, agreement, understanding,
instrument, bid or proposal (excluding any contract or arrangement that is or is
associated with a Benefit Plan), or any amendment or modification thereto
(collectively, "Contracts"), that is required to be described in or filed as an
exhibit to any SEC Report that is not so described in or filed as required by
the Securities Act or the Exchange Act, as the case may be. All Contracts to
which Xpedior or any of its Subsidiaries is a party, or by which any of them is
bound, are valid and binding and are in full force and effect and enforceable
against Xpedior, its Subsidiaries and, to the knowledge of Xpedior, the other
party or parties thereto in accordance with their respective terms, and no
consent of any Person is needed in order for each Contract to continue in full
force and effect in accordance with its terms without penalty, acceleration or
rights of early termination by reason of the consummation of the Transactions,
except for any failure to be in full force and effect or failure to obtain a
consent that would not, in the aggregate with all other such failures, have an
Xpedior Material Adverse Effect. Neither Xpedior nor any of its Subsidiaries is
in violation or breach of, or default in any material respect under, any
Contract to which it is a party or by which it is bound, nor, to Xpedior's
knowledge, is any other party to any such Contract in violation or breach of or
default in any material respect under any such Contract.
Section 2.11 Restrictions on Business Activities. Except as set forth on
the Xpedior Disclosure Schedule, there is no Contract, judgment, injunction,
order or decree binding upon
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Xpedior or any of its Subsidiaries or any of their properties which has had or
could reasonably be expected to have the effect of prohibiting or materially
impairing (a) any material business practice of Xpedior, any of its Subsidiaries
or, to the knowledge of Xpedior, PSINet or any of its Affiliates, or (b) the
conduct of any material business by Xpedior, any of its Subsidiaries or, to the
knowledge of Xpedior, PSINet or any of its Affiliates, as currently conducted or
as currently proposed to be conducted by Xpedior and its Subsidiaries.
Section 2.12 Brokers; Expenses. No agent, broker, finder, investment banker
or other firm or Person is or will be entitled to any broker's or finder's fee
or other similar commission or fee in connection with the Transactions based
upon arrangements made by or on behalf of Xpedior.
Section 2.13 Private Offering.
(a) Neither Xpedior nor any Person acting on its behalf has taken or
will take any action which might subject the offering, issuance or sale of the
Series B Preferred Stock (or the Common Stock into which the Series B Preferred
Stock is convertible or with which dividends upon the Series B Preferred Stock
may be paid) to the registration requirement of Section 5 of the Securities Act,
or that would make the Transactions ineligible for exemption under Rule 506
promulgated under the Securities Act. Assuming the accuracy of the
representations and warranties of PSINet set forth in this Agreement, the offer,
sale and issuance of the Series B Preferred Stock to PSINet pursuant to this
Agreement is exempt from the registration requirement of Section 5 of the
Securities Act.
(b) Neither Xpedior nor any Person acting on its behalf has
distributed any offering materials in connection with the offering and sale of
the Series B Preferred Stock, or solicited any offer to buy or sell the Series B
Preferred Stock by means of any form of general solicitation or advertising.
(c) Neither Xpedior nor any Person acting on its behalf has issued or
sold, or offered to issue or sell, any shares of Series B Preferred Stock to any
Person other than PSINet.
Section 2.14 Investment Company. Xpedior is not, and is not controlled by,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
ARTICLE III
Representations and Warranties of PSINet
PSINet represents and warrants to Xpedior that, except as disclosed on the
PSINet Disclosure Schedule which has been delivered to Xpedior prior to the
execution of this Agreement (the "PSINet Disclosure Schedule"):
Section 3.1 Organization and Qualification. PSINet is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York.
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Section 3.2 Authority Relative to this Agreement. PSINet has all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Transactions. The execution and
delivery of this Agreement by PSINet, and the consummation by PSINet of the
Transactions, have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of PSINet are necessary to
authorize the execution and delivery of this Agreement or to consummate the
Transactions. This Agreement has been duly and validly executed and delivered by
PSINet and, assuming the due authorization, execution and delivery hereof by
Xpedior, constitutes a legal, valid and binding obligation of PSINet,
enforceable against PSINet in accordance with its terms.
Section 3.3 No Conflicts, Required Filings and Consents.
(a) The execution and delivery of this Agreement by PSINet does not,
and the performance of this Agreement and consummation of the Transactions by
PSINet will not, (i) conflict with or violate the certificate of incorporation
or by-laws of PSINet, (ii) assuming the consents, approvals, authorizations and
waivers specified in Section 3.3(b) have been received and any condition
precedent to such consent, approval, authorization or waiver has been satisfied,
conflict with or violate any Law applicable to PSINet or by which any property
or asset of PSINet is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of PSINet pursuant to, any
contract, agreement, note, bond, mortgage, indenture, credit agreement, lease,
license, permit, franchise or other instrument or obligation to which PSINet is
a party or by which PSINet or any property or asset of PSINet is bound or
affected, except in the case of clauses (ii) or (iii) for any such conflicts,
violations, breaches, defaults or other occurrences of the type referred to
above that would not prevent or materially delay the consummation of the
Transactions.
(b) The execution and delivery of this Agreement by PSINet does not,
and the performance of this Agreement and consummation of the Transactions by
PSINet will not, require any consent, approval, authorization, waiver or permit
of, or filing with or notification to, any Governmental Entity, except as
required pursuant to the Exchange Act, Merger Control Laws, and regulations
promulgated thereunder, except where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or materially delay the consummation of the Transactions.
Section 3.4 Brokers. No agent, broker, finder, investment banker or other
firm or Person is or will be entitled to any broker's or finder's fee or other
similar commission or fee in connection with the Transactions based upon
arrangements made by or on behalf of PSINet.
Section 3.5 Investment Intent. PSINet is acquiring the Series B Preferred
Stock for its own account for investment purposes only and not with a view to or
for distributing or reselling such Series B Preferred Stock, or any part thereof
or interest therein; provided, however, that this Section 3.5 shall not
prejudice in any way PSINet's right at all times to sell or otherwise convert or
dispose of all or any part of the Series B Preferred Stock (or all or any part
of the Common Stock issuable as a dividend upon the Series B Preferred Stock or
into which the Series B Preferred Stock may be converted) pursuant to an
effective registration statement under the
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Securities Act, or under an exemption from such registration, and, in each case,
in compliance with applicable Blue Sky Laws.
Section 3.6 Status. PSINet is, and at the Closing Date, will be, an
"accredited investor" as defined in Rule 501(a) under the Securities Act.
ARTICLE IV
Covenants
Section 4.1 Access to Information. As soon as practicable after the date
hereof, Xpedior shall use its reasonable best efforts to cooperate with and
assist PSINet and PSINet's independent public accountants in the compilation and
preparation of all financial statements and financial statement schedules of
Xpedior in accordance with GAAP, and to obtain such reports and consents of
Xpedior's independent public accountants, as may be necessary or deemed
advisable by PSINet to comply with its SEC reporting and disclosure
requirements, if any. Xpedior shall deliver to PSINet's independent public
accountants or Xpedior's independent public accountants all engagement letters
and management representation letters as may be reasonably requested by PSINet
or such accountants. Xpedior shall use its reasonable best efforts to cause its
independent public accountants to cooperate with and assist PSINet and its
independent public accountants in the preparation of any financial statements
contemplated by this Section 4.1.
Section 4.2 Furnishing of Information. As long as PSINet owns any shares of
Series B Preferred Stock or Common Stock, Xpedior covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by Xpedior after the date hereof
pursuant to Section 13(a) or 15(d) of the Exchange Act. If at any time prior to
the date on which PSINet may resell all of the shares of Common Stock acquired
by it as a dividend upon, or upon conversion of, the Series B Preferred Stock
without volume restrictions pursuant to Rule 144(k) promulgated under the
Securities Act (as determined by counsel to Xpedior, which may be counsel
employed by Xpedior, pursuant to a written opinion letter to such effect, if
necessary, addressed and acceptable to Xpedior's transfer agent for the benefit
of and also addressed to PSINet) Xpedior is not required to file reports
pursuant to such sections, it will prepare and furnish to PSINet, and make
publicly available, information in accordance with Rule 144(c) promulgated under
the Securities Act. Xpedior further covenants that it will take such further
action as any holder of Series B Preferred Shares may reasonably request, all to
the extent required from time to time to enable such Person to sell such shares
of Common Stock without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing the legal opinion referenced above in this
Section 4.2 (if required by Xpedior's transfer agent). Upon the request of any
such Person, Xpedior shall deliver to such Person a written certification of
Xpedior executed by a duly authorized officer on behalf of Xpedior as to whether
it has complied with such requirements of Rule 144(c).
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Section 4.3 Integration. Xpedior shall not, and shall use its reasonable
best efforts to ensure that none of its Affiliates, agents or representatives
shall, sell, offer for sale, solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Series B Preferred Stock in a
manner that would require the registration under the Securities Act of the issue
or sale of the Series B Preferred Stock to PSINet.
Section 4.4 Adoption of Shareholder Rights Plan. As long as PSINet or any
of its Affiliates owns any shares of Series B Preferred Stock or Common Stock,
Xpedior covenants not to implement a shareholder rights plan, arrangement or any
similar plan or agreement.
Section 4.5 Transfer Restrictions.
(a) Securities may only be disposed of pursuant to an effective
registration statement under the Securities Act, to Xpedior, or pursuant to an
available exemption therefrom or in a transaction not subject to the
registration requirements thereof. In connection with any transfer of any
Securities other than pursuant to an effective registration statement or to
Xpedior, Xpedior may require that the transferor thereof provide to Xpedior an
opinion of counsel selected by the transferor, the form and substance of which
opinion shall be reasonably satisfactory to Xpedior, to the effect that such
transfer does not require registration under the Securities Act. Except as
otherwise expressly provided herein, the Series B Preferred Stock may not be
sold, hypothecated (other than pursuant to a bona fide loan arrangement with a
broker, dealer or financial institution), transferred or otherwise conveyed by
PSINet or any direct or indirect permitted transferee thereof without the prior
written consent of Xpedior, which consent shall not be unreasonably withheld,
delayed or conditioned. Notwithstanding the foregoing, Xpedior hereby consents
to and agrees to register on its book and records (i) any transfer by PSINet to
(A) any Affiliate of PSINet, or (B) any Affiliate of a permitted transferee
company, and (ii) any transfers among any such Affiliates or permitted
transferees. With respect to any such transfer, no documentation shall be
required other than (i) executed transfer documents, and (ii) an executed
instrument of such transferee pursuant to which such transferee makes
representations and warranties to Xpedior to the same effect as those as set
forth in Sections 3.5 and 3.6 and agrees to be bound by the terms of this
Agreement and the Registration Rights Agreement. Any transferee of Securities
pursuant to this Section 4.5(a) shall have the rights and obligations of PSINet
under this Agreement and of a "Holder" under the Registration Rights Agreement.
(b) PSINet agrees to the imprinting, so long as is required by this
Section 4.5(b) of the following legend on the Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
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REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS.
Securities shall not contain the legend set forth above if the conversion of
Series B Preferred Stock, or other issuance of such Securities, occurs at any
time while a registration statement is effective with respect thereto under the
Securities Act or, in the event there is not such an effective registration
statement at such time, if in the opinion of counsel to Xpedior such legend is
not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncement issued by the staff of the SEC).
Xpedior agrees that it will provide PSINet, upon request, with a certificate or
certificates representing the Securities, free from such legend, at such time as
such legend is no longer required hereunder. Xpedior shall not make any notation
on its records or give any instructions to any transfer agent of Xpedior which
enlarge the restrictions on transfer set forth in this Section 4.5.
Section 4.6 Acknowledgment of Dilution. Xpedior acknowledges that the
issuance of the Common Stock upon conversion of the Series B Preferred Stock may
result in dilution of the outstanding shares of Common Stock, which dilution may
be substantial under certain market conditions. Xpedior further acknowledges
that, subject to the terms of the Certificate of Designations and applicable
Law, after the Closing its obligations to issue Common Stock in accordance with
the terms of the Series B Preferred Stock are unconditional and absolute
regardless of the effect of any such dilution.
Section 4.7 Copies and Use of Disclosure Materials. Xpedior consents to the
use of the SEC Reports, any reports filed by Xpedior under the Exchange Act
after the date hereof and any information provided by Xpedior pursuant to
Section 4.2 of this Agreement, and any amendments and supplements thereto, by
PSINet in connection with resales of the Securities other than pursuant to an
effective registration statement. Xpedior makes no representation or warranty as
to the continued completeness or accuracy of any of the SEC Reports or any other
such reports and undertakes no obligations to update any of the SEC Reports or
any such reports after the Closing Date, except as and to the extent required
under the Exchange Act and the Registration Rights Agreement.
Section 4.8 Increase in Authorized Shares. At such time or times as Xpedior
would be, if a notice of conversion were to be delivered on such date, precluded
from converting the then outstanding Series B Preferred Stock by reason of an
insufficient number of authorized shares of Common Stock then being authorized
for issuance, the Board of Directors of Xpedior shall take the actions set forth
in the Certificate of Designations.
Section 4.9 Listing of Underlying Shares. Xpedior shall use its reasonable
best efforts to maintain the listing of its Common Stock on the Nasdaq National
Market (or any other national securities exchange or market on which the Common
Stock is then listed or quoted). In addition, if at any time the number of
shares of Common Stock then issuable upon conversion of all then issued shares
of Series B Preferred Stock, plus the number of shares of Common Stock reserved
for issuance upon payment of dividends upon the Series B Preferred Stock
(assuming all dividends are paid in shares of Common Stock), is greater than the
number of shares of Common Stock theretofore listed with the Nasdaq National
Market (and any such other national securities exchange or market), then Xpedior
shall promptly take such action to file an additional
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shares listing application so that a number of shares equal to the number of
shares of Common Stock as would then be issuable upon conversion of all of the
Series B Preferred Stock, plus the number of shares of Common Stock reserved for
issuance upon payment of dividends upon the Series B Preferred Stock (assuming
all dividends are paid in shares of Common Stock), shall have been listed with
the Nasdaq National Market (and any such other national securities exchange or
market).
Section 4.10 Conversion Obligations of Xpedior. Xpedior shall honor
conversions of the Series B Preferred Stock and shall deliver the Common Stock
in accordance with the terms and conditions and time periods set forth in the
Certificate of Designations. Each of the parties hereto agrees that the other
party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Section 4.10 and to enforce specifically this Section
4.10 and the terms and provisions of this Section 4.10 in any action instituted
in any court of the United States or any state thereof having jurisdiction over
the parties to this Agreement and the matter, in addition to any other remedy to
which they may be entitled, at Law or in equity.
Section 4.11 Rights and Warrants. If Xpedior, at any time while any shares
of Series B Preferred Stock are outstanding, shall issue any rights and/or
warrants to all of the holders of Common Stock as a class entitling them to
subscribe for or purchase shares of Common Stock, then PSINet shall receive an
amount of such rights and/or warrants equal to the number of rights and/or
warrants it would have received, at the time of issuance of such rights and/or
warrants, if it had then converted all of its shares of Series B Preferred Stock
and if all dividends due but not yet paid on the Series B Preferred Stock had
been paid in shares of Common Stock.
ARTICLE V
Conditions Precedent
Section 5.1 Conditions to Each Party's Obligation to Effect the
Transactions. The respective obligations of each party to effect the
Transactions shall be subject to the fulfillment at or prior to the Closing Date
of the following condition: the consummation of the Transactions shall not be
restrained, enjoined or prohibited by any order, judgment, decree, injunction or
ruling of a court of competent jurisdiction.
Section 5.2 Conditions to the Obligation of Xpedior to Effect the
Transactions. The obligation of Xpedior to effect the Transactions shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions, unless waived by Xpedior:
(a) The representations and warranties of PSINet contained in this
Agreement shall be true and correct in all respects on the date hereof and as of
the Closing Date as if made on the Closing Date; provided, however, that (i)
this condition shall be deemed to be satisfied if (A) all inaccuracies in the
representations and warranties of PSINet (other than those set forth in Sections
3.1 and 3.2), without taking into account any qualifications as to materiality,
in the aggregate, do not constitute a PSINet Material Adverse Effect, and (B)
the representations and warranties set forth in Sections 3.1 and 3.2 are true
and correct in all material respects, and (ii)
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such representations and warranties which are made as of a specific date need
only be true as of such date. Xpedior shall have received a certificate of an
authorized officer of PSINet, on behalf of PSINet, to such effect.
(b) PSINet shall have performed or complied in all material respects
with all agreements and covenants required to be performed by it under this
Agreement on or before the Closing Date, and Xpedior shall have received a
certificate of an authorized officer of PSINet, on behalf of PSINet, to such
effect.
(c) PSINet shall have executed and delivered to Xpedior a copy of the
Registration Rights Agreement and all other documents, instruments and writings
required to have been delivered at or prior to the Closing Date by PSINet
pursuant to this Agreement or that Xpedior may reasonably request.
Section 5.3 Conditions to the Obligation of PSINet to Effect the
Transactions. The obligation of PSINet to effect the Transactions shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions, unless waived by PSINet:
(a) The representations and warranties of Xpedior contained in this
Agreement shall be true and correct in all respects on the date hereof and as of
the Closing Date as if made on the Closing Date; provided, however, that (i)
this condition shall be deemed to be satisfied if (A) all inaccuracies in the
representations and warranties of Xpedior (other than those set forth in
Sections 2.1 through 2.3), without taking into account any qualifications as to
materiality, in the aggregate, do not constitute an Xpedior Material Adverse
Effect, and (B) the representations and warranties set forth in Sections 2.1
through 2.3 are true and correct in all material respects, and (ii) such
representations and warranties which are made as of a specific date need only be
true as of such date. PSINet shall have received a certificate of an authorized
officer of Xpedior, on behalf of Xpedior, to such effect.
(b) Xpedior shall have performed or complied in all material respects
with all agreements and covenants required to be performed by it under this
Agreement on or before the Closing Date, and PSINet shall have received a
certificate of an authorized officer of Xpedior, on behalf of Xpedior, to such
effect.
(c) Xpedior shall have filed the Certificate of Designations with the
Secretary of State of the State of Delaware.
(d) Xpedior shall have executed and delivered to PSINet a certificate
or certificates representing the Series B Preferred Stock, registered in the
name of PSINet or its designee, in a form satisfactory to PSINet, a copy of the
Registration Rights Agreement and all other documents, instruments and writings
required to have been delivered at or prior to the Closing Date by Xpedior
pursuant to this Agreement or that PSINet may reasonably request.
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ARTICLE VI
Termination
Section 6.1 Termination. This Agreement may be terminated at any time prior
to the Closing Date:
(a) By mutual written consent of PSINet and Xpedior;
(b) By Xpedior, upon a material breach of this Agreement on the part
of PSINet which has not been cured and which would cause the conditions set
forth in Section 5.2 to be incapable of being satisfied by November 30, 2000;
(c) By PSINet, upon a material breach of this Agreement on the part of
Xpedior which has not been cured and which would cause the conditions set forth
in Section 5.3 to be incapable of being satisfied by November 30, 2000; or
(d) By PSINet or Xpedior if any court of competent jurisdiction shall
have issued, enacted, entered, promulgated or enforced any order, judgment,
decree, injunction or ruling which, after reasonable efforts on the part of
PSINet and Xpedior to resist, resolve or lift, permanently restrains, enjoins or
otherwise prohibits the Transactions and such order, judgment, decree,
injunction or ruling shall have become final and nonappealable.
Section 6.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 6.1, this Agreement shall forthwith terminate
and there shall be no liability hereunder on the part of PSINet or Xpedior or
any of their respective officers or directors, provided that Sections 2.12 and
3.4 (Brokers), this Section 6.2, Section 6.3 (Fees and Expenses) and Section 7.6
(Governing Law) shall survive the termination and remain in full force and
effect; and provided further that each party shall remain liable for any
breaches prior to the termination of this Agreement with respect to such party's
covenants hereunder and representations and warranties hereunder that were known
by such party to be untrue when made.
Section 6.3 Fees and Expenses. Whether or not the Transactions are
consummated, all costs and expenses incurred in connection with this Agreement
and the Transactions shall be paid by the party incurring such expenses, except
as otherwise provided in Section 6.2.
ARTICLE VII
General Provisions
Section 7.1 Survival of Representations, Warranties and Agreements. The
representations, warranties, covenants and agreements in this Agreement shall
survive the Closing.
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Section 7.2 Notices. All notices or other communications under this
Agreement shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by telecopy (with
confirmation of receipt), or by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If to Xpedior:
Xpedior Incorporated
Xxx Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Executive Vice President and Chief Operating Officer
Telecopy: (000) 000-0000
With a copy to:
Xpedior Incorporated
00 Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq., Senior Vice President,
General Counsel and Secretary
Telecopy: (000) 000-0000
And to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
If to PSINet:
PSINet Inc.
00000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
With a copy to:
PSINet Inc.
00000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq., Senior Vice
President and General Counsel
Telecopy: (000) 000-0000
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And to:
Xxxxx Xxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Telecopy: (000) 000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section 5.2.
Section 7.3 Specific Performance. The parties hereto agree that each party
shall be entitled to an injunction or restraining order to prevent breaches of
this Agreement, the Certificate of Designations or the Registration Rights
Agreement, and to enforce specifically the terms and provisions hereof and
thereof in any court of the United States or any state having jurisdiction, this
being in addition to any other right or remedy to which such party may be
entitled under this Agreement, the Certificate of Designations or the
Registration Rights Agreement, at Law or in equity.
Section 7.4 Entire Agreement. This Agreement, the Certificate of
Designations and the Registration Rights Agreement (including the documents and
instruments referred to herein and therein) constitute the entire agreement and
supersede all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
Section 7.5 Assignments; Parties in Interest. Neither this Agreement nor
any of the rights, interests or obligations hereunder may be assigned by any of
the parties hereto (whether by operation of Law or otherwise) without the prior
written consent of the other party. Subject to the foregoing, this Agreement
shall be binding upon and inure solely to the benefit of (a) each party hereto,
and (b) any permitted transferee of the Series B Preferred Stock (or the Common
Stock issuable in payment of dividends upon, or upon conversion of, the Series B
Preferred Stock), and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other Person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement, including to confer
third party beneficiary rights.
Section 7.6 Governing Law. This Agreement shall be governed in all respects
by the Laws of the State of Delaware (without giving effect to the provisions
thereof relating to conflicts of Law). The non-exclusive venue for the
adjudication of any dispute or proceeding arising out of this Agreement or the
performance hereof shall be the courts located in Newcastle County, Delaware,
and the parties hereto each consents to and hereby submits to the jurisdiction
of any court located in Newcastle County, Delaware or any Federal courts located
in Delaware.
Section 7.7 Headings; Disclosure. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement. Any disclosure by
Xpedior or PSINet in any portion of its respective Disclosure Schedule shall be
deemed disclosure in each other portion of such Disclosure Schedule to which
such disclosure reasonably relates on its face.
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Section 7.8 Certain Definitions and Rules of Construction.
(a) As used in this Agreement:
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person; for purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Annual Financial Statements" has the meaning set forth in Section
2.5(b).
"Blue Sky Laws" has the meaning set forth in Section 2.4(b).
"Certificate of Designations" has the meaning set forth in Section 1.2.
"Closing" has the meaning set forth in Section 1.3.
"Closing Date" has the meaning set forth in Section 1.3.
"Common Stock" has the meaning set forth in Section 2.2(a).
"Contracts" has the meaning set forth in Section 2.10.
"Debt" means, with respect to any Person, all indebtedness of such
Person for borrowed money or the deferred purchase price of property or services
(excluding trade payables and other accrued current liabilities arising in the
ordinary course of business), obligations of such Person evidenced by bonds,
notes, indentures or similar instruments, obligations of such Person under
interest rate agreements, currency hedging agreements, commodity price
protection agreements or similar hedging instruments, capital lease obligations
of such Person, redeemable capital stock of such Person and any other
obligations of such Person classified as indebtedness under GAAP.
"ESPP Shares" has the meaning set forth in Section 2.2(a).
"Exchange Act" has the meaning set forth in Section 2.5(a).
"Financial Statements" has the meaning set forth in Section 2.5(c).
"GAAP" has the meaning set forth in Section 2.5(b).
"Governmental Entity" has the meaning set forth in Section 2.4(b).
"Governmental Regulation" has the meaning set forth in Section 2.11.
"Law" or "Laws" means any domestic (federal, state or local), foreign
or supranational law, rule, regulation, order, judgment or decree.
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"Liens" has the meaning set forth in Section 2.2(b).
"Merger Control Laws" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder,
and the Law of any other Governmental Entity with respect to competition,
mergers or other business combinations.
"Permits" has the meaning set forth in Section 2.9.
"Person" shall include individuals, corporations, partnerships, limited
liability companies, trusts, other entities and groups (which term shall include
a "group" as such term is defined in Section 13(d)(3) of the Exchange Act).
"PSINet" has the meaning set forth in the preamble to this Agreement.
"PSINet Material Adverse Effect" means any circumstance, event or
occurrence, or any series of circumstances, events or occurrences, which
individually or in the aggregate with all other circumstances, events or
occurrences would be reasonably likely to have a material adverse effect on the
business, assets, operations, financial condition, revenues or results of
operations of PSINet and its Subsidiaries taken as a whole, other than any
change, circumstances or effect relating to (i) a change after the date of this
Agreement in Law or GAAP, or in any interpretations thereof, that applies to
PSINet or its Subsidiaries, (ii) the economy or securities markets in general,
or (iii) the industries in which PSINet operates in general and not specifically
relating to PSINet.
"PSINet Disclosure Schedule" has the meaning set forth in Article III,
Introduction.
"Purchase Price" has the meaning set forth in Section 1.1.
"Quarterly Financial Statements" has the meaning set forth in Section
2.5(c).
"Registration Rights Agreement" has the meaning set forth in Section
1.4.
"SEC" has the meaning set forth in Section 2.5(a).
"SEC Reports" has the meaning set forth in Section 2.5(a).
"Securities" means the Series B Preferred Stock and the Common Stock
issued or issuable as dividends upon, or upon conversion of, Series B Preferred
Stock.
"Securities Act" has the meaning set forth in Section 2.4(b).
"Series A Preferred Stock" has the meaning set forth in Section 2.2(a).
"Series B Preferred Stock" has the meaning set forth in the preamble to
this Agreement.
"Stock Options" has the meaning set forth in Section 2.2(a).
"Subsidiary" or "Subsidiaries" means, with respect to PSINet, Xpedior
or any other Person, any corporation, partnership, joint venture or other legal
entity of which PSINet, Xpedior
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or such other Person, as the case may be (either alone or through or together
with any other Subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
"Tax" means any federal, state, local, foreign or provincial income,
gross receipts, property, sales, service, use, license, lease, excise,
franchise, employment, payroll, withholding, employment, unemployment insurance,
workers' compensation, social security, alternative or added minimum, ad
valorem, value added, stamp, business license, occupation, premium,
environmental, windfall profit, customs, duties, estimated, transfer or excise
tax, or any other tax, custom, duty, premium, governmental fee or other
assessment or charge of any kind whatsoever, together with any interest, penalty
or addition to tax imposed by, any Governmental Entity.
"Transactions" means the transactions contemplated by this Agreement,
the Certificate of Designations and the Registration Rights Agreement.
"Xpedior" has the meaning set forth in the preamble to this Agreement.
"Xpedior Disclosure Schedule" has the meaning set forth in Article II,
Introduction.
"Xpedior Material Adverse Effect" means any circumstance, event or
occurrence, or any series of circumstances, events or occurrences, which
individually or in the aggregate with all other circumstances, events or
occurrences would be reasonably likely to have a material adverse effect on the
business, assets, operations, financial condition, revenues or results of
operations of Xpedior and its Subsidiaries taken as a whole, other than any
change, circumstances or effect relating to (i) a change after the date of this
Agreement in Law or GAAP, or in any interpretations thereof, that applies to
Xpedior or its Subsidiaries, (ii) the economy or securities markets in general,
or (iii) the industries in which Xpedior operates in general and not
specifically relating to Xpedior.
(b) Other Rules of Construction.
(i) References in this Agreement to any gender shall include
references to all genders. Unless the context otherwise requires, references in
the singular include references in the plural and vice versa. References to a
party to this Agreement or to other agreements described herein means those
Persons executing such agreements.
(ii) The words "include", "including" and "includes" shall each
be deemed to be followed by the phrase "without limitation" or the phrase "but
not limited to" in all places where such words appear in this Agreement. The
word "or" shall be deemed to be inclusive.
(iii) This Agreement is the joint drafting product of PSINet and
Xpedior, and each provision has been subject to negotiation and agreement and
shall not be construed for or against either party as drafter thereof.
(iv) In each case in this Agreement where this Agreement or a
Contract is represented or warranted to be enforceable, such representation or
warranty will be deemed to
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include a limitation thereon to the extent that enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar Laws affecting the enforcement of creditors' rights
generally and to general equitable principles, whether applied in equity or at
Law.
(v) All references in this Agreement to financial terms shall be
deemed to refer to such terms as they are defined under GAAP, consistently
applied.
Section 7.9 Counterparts. This Agreement may be executed in two or more
counterparts which together shall constitute a single agreement.
Section 7.10 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 economics or legal substance of
the Transactions are not affected in any manner materially adverse to either
party. Upon determination that any term or other provision hereof 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 to the fullest extent permitted by applicable Law
in an acceptable manner to the end that the Transactions are fulfilled to the
extent possible.
Section 7.11 Fees and Expenses. Whether or not the Transactions are
consummated, all costs and expenses incurred in connection with this Agreement
and the Transactions shall be paid by the party incurring such expenses.
Section 7.12 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 7.13 Waiver. At any time prior to the Closing, the parties hereto
may, to the extent permitted by applicable Law, (a) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations and warranties by the other
party contained herein or in any documents delivered by the other party pursuant
hereto, and (c) waive compliance with any of the agreements of the other party
or with any conditions to its own obligations contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party.
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IN WITNESS WHEREOF, PSINet and Xpedior have caused this Agreement to be
signed by their respective officers thereunto duly authorized all as of the date
first written above.
PSINET INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Executive Vice President
XPEDIOR INCORPORATED
By: /s/ J. Xxxxx Xxxxxx
------------------------------------------
Name: J. Xxxxx Xxxxxx
Title: President
