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EXHIBIT 10.2
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STOCK PURCHASE AGREEMENT
BY AND AMONG
SPECTRASITE HOLDINGS, INC.,
WHITNEY EQUITY PARTNERS, L.P.,
X. X. XXXXXXX III, X.X.
XXXXXXX STRATEGIC PARTNERS III, L.P.,
XXXXXX-XXXXXX MEDIA PARTNERS, L.P.,
KITTY HAWK CAPITAL LIMITED PARTNERSHIP, III,
KITTY HAWK CAPITAL LIMITED PARTNERSHIP, IV,
EAGLE CREEK CAPITAL, L.L.C.
THE NORTH CAROLINA ENTERPRISE FUND, L.P.,
XXXXXX FAMILY LIMITED PARTNERSHIP,
XXXXXXX X. XXXXXX,
XXXX X. XXXXXXX
AND
XXXXX X. XXXXXX
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DATED AS OF MARCH 23, 1998
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS........................................................3
1.1 Definitions........................................................3
1.2 Accounting Terms: Financial Statements.............................9
1.3 Knowledge of the Company...........................................9
ARTICLE 2 PURCHASE AND SALE OF THE PREFERRED STOCK...........................9
2.1 Purchase and Sale of the Shares....................................9
2.2 Closings..........................................................10
2.3 Default Shares ................................................10
2.4 Financial Accounting Positions; Tax Reporting.....................11
2.5 Fees and Expenses.................................................11
ARTICLE 3 CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO
PURCHASE THE SHARES...............................................12
3.1 Representations and Warranties....................................12
3.2 Compliance with this Agreement....................................12
3.3 Compliance with the Series A Purchase Agreements; No defaults.....12
3.4 Secretary's Certificate...........................................13
3.5 Documents.........................................................13
3.6 Purchase of Shares Permitted by Applicable Laws...................13
3.7 Opinion of Counsel................................................13
3.8 Approval of Counsel to the Purchaser..............................13
3.9 Consents and Approvals............................................13
3.10 Registration Rights Agreement.....................................14
3.11 Stockholders' Agreement...........................................14
3.12 Certificate of Incorporation and By-laws..........................14
3.13 No Material Judgment or Order.....................................14
3.14 Good Standing Certificate.........................................14
3.15 Pro Forma Balance Sheet...........................................14
3.16 Stock Option Plan.................................................14
3.17 D & O Insurance...................................................14
3.18 Tower Agreements..................................................14
3.19 Bank Loan.........................................................15
3.20 Xxxxx Key-Man Insurance...........................................15
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ARTICLE 4 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO
ISSUE AND SELL THE SHARES.........................................15
4.1 Representations and Warranties....................................15
4.2 Compliance with this Agreement....................................15
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................16
5.1 Existence and Power...............................................16
5.2 Authorization; No Contravention...................................16
5.3 Governmental Authorization; Third Party Consents..................16
5.4 Binding Effect....................................................16
5.5 No Legal Bar......................................................16
5.6 Litigation........................................................17
5.7 Compliance with Laws..............................................17
5.8 No Default or Breach..............................................17
5.9 Title to Properties...............................................17
5.10 Use of Real Property..............................................17
5.11 Taxes.............................................................18
5.12 Financial Condition...............................................18
5.13 ERISA.............................................................19
5.14 Disclosure........................................................19
5.15 Absence of Certain Changes or Events..............................19
5.16 Environmental Matters.............................................19
5.17 Investment Company/Government Regulations.........................20
5.18 Subsidiaries......................................................20
5.19 Capitalization....................................................21
5.20 Private Offering..................................................22
5.21 Broker's, Finder's or Similar Fees................................22
5.22 Labor Relations...................................................22
5.23 Employee Benefit Plans............................................23
5.24 Patents, Trademarks, Etc..........................................23
5.25 Potential Conflicts of Interest...................................24
5.26 Trade Relations...................................................24
5.27 Outstanding Borrowings............................................24
5.28 Material Contracts................................................24
5.29 Insurance.........................................................25
5.30 Solvency..........................................................25
5.31 Compliance with the Series A Purchase Agreement; No Defaults......25
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..................26
6.1 Authorization; No Contravention...................................26
6.2 Binding Effect....................................................26
6.3 No Legal Bar......................................................26
6.4 Experience........................................................26
6.5 Purchase for Own Account..........................................26
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6.6 Exemption.........................................................27
6.7 Accredited Investor...............................................27
6.8 No Public Market..................................................27
6.9 ERISA.............................................................27
6.10 Broker's, Finder's or Similar Fees................................27
6.11 Governmental Authorization; Third Party Consent...................27
ARTICLE 7 INDEMNIFICATION...................................................28
7.1 Indemnification...................................................28
7.2 Notification......................................................29
7.3 Limitations on Indemnification....................................29
7.4 Registration Rights Agreement.....................................30
ARTICLE 8 AFFIRMATIVE COVENANTS.............................................30
8.1 Financial Statements and Other Information........................30
8.2 Preservation of Corporate Existence...............................33
8.3 Payment of Obligations............................................34
8.4 Compliance with Laws..............................................34
8.5 Inspection........................................................34
8.6 Maintenance of Properties; Insurance..............................34
8.7 Books and Records.................................................35
8.8 Use of Proceeds...................................................35
8.9 Board Nominees....................................................35
8.10 Granting of Options...............................................35
8.11 Business Activities...............................................35
8.12 Key-Man Life Insurance............................................35
8.13 Board Consent.....................................................36
8.14 Reservation of Shares.............................................36
ARTICLE 9 MISCELLANEOUS.....................................................36
9.1 Survival of Representations and Warranties........................36
9.2 Notices...........................................................36
9.3 Successors and Assigns............................................40
9.4 Amendment and Waiver..............................................40
9.5 Signatures and Counterparts.......................................40
9.6 Headings..........................................................40
9.7 Governing Law.....................................................41
9.8 Jurisdiction......................................................41
9.9 Severability......................................................41
9.10 Rules of Construction.............................................41
9.11 Entire Agreement..................................................41
9.12 Certain Expenses..................................................41
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9.13 Publicity.........................................................42
9.14 Further Assurances................................................42
9.15 Obligations of the Parties........................................42
9.16 Amendment of Series A Purchase Agreement..........................42
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EXHIBITS
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A Certificate of Amendment
B Amended and Restated Registration Rights Agreement
C Second Amended and Restated Stockholders' Agreement
D Compliance Certificate
E Stock Option Plan
SCHEDULES
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1 List of Purchasers and Allocation of Numbers of Initial Shares at First
Closing
2 List of Purchasers and Allocation of Number of Additional Shares at Second
Closing
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STOCK PURCHASE AGREEMENT
AGREEMENT (the "AGREEMENT"), dated as of March 23, 1998, by and among
SPECTRASITE HOLDINGS, INC. (the "COMPANY"), a Delaware corporation, WHITNEY
EQUITY PARTNERS, L.P. ("JHW II"), a Delaware limited partnership, X. X. XXXXXXX
III, L.P. ("JHW III"), a Delaware limited partnership, WHITNEY STRATEGIC
PARTNERS III, L.P. ("JHW STRATEGIC III"), a Delaware limited partnership,
XXXXXX-XXXXXX MEDIA PARTNERS, L.P. ("XXXXXX"), a Delaware limited partnership,
KITTY HAWK CAPITAL LIMITED PARTNERSHIP, III ("KITTY HAWK III"), a Delaware
limited partnership, KITTY HAWK CAPITAL LIMITED PARTNERSHIP, IV ("XXXXX XXXX
XX"), a Delaware limited partnership, EAGLE CREEK CAPITAL, L.L.C. ("EAGLE
CREEK"), a Washington limited liability company, THE NORTH CAROLINA ENTERPRISE
FUND, L.P. ("NCEF"), a North Carolina limited partnership, XXXXXX FAMILY LIMITED
PARTNERSHIP ("XXXXXX XX"), an Arkansas limited partnership, XXXXXXX X. XXXXXX
("XXXXXX"), a North Carolina resident, XXXX X. XXXXXXX ("XXXXXXX"), a North
Carolina resident, and XXXXX X. XXXXXX ("XXXXXX"), a North Carolina resident
(each of JHW II, JHW III, JHW Strategic III, Xxxxxx, Xxxxx Hawk III, Xxxxx Xxxx
XX, Eagle Creek, NCEF, Xxxxxx XX, Xxxxxx, Xxxxxxx and Xxxxxx individually, a
"Purchaser" and collectively, the "Purchasers").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Stock Purchase Agreement (the
"SERIES A PURCHASE AGREEMENT"), dated as of May 12, 1997, by and among
Integrated Site Development, Inc. ("INTEGRATED" or the "COMPANY"), a Delaware
corporation, (now known as SpectraSite Holdings, Inc.), U.S. Towers, Inc. ("UST"
or "SPECTRASITE"), a Delaware corporation (now known as SpectraSite
Communications, Inc.), Telesite Services, LLC ("TELESITE"), an Arkansas limited
liability company, which merged into SpectraSite, and Metrosite Management, LLC
("METROSITE"), an Arkansas limited liability company JHW II and Kitty Hawk III,
(A) JHW II purchased 3,203,118 shares of 8% Series A Cumulative Convertible
Redeemable Preferred Stock, $.001 par value per share, of the Company (the
"SERIES A PREFERRED STOCK"), and (B) Kitty Hawk III purchased 259,712 shares of
Series A Preferred Stock; and
WHEREAS, pursuant to the terms of the Stock Contribution Agreement,
dated as of May 12, 1997, by and among Xxxxxxx X. Xxxxx ("XXXXX"), Xxxxxx X.
Xxxx ("LONG") and UST, (A) Xxxxx acquired 687,395 shares of common stock, $0.001
par value per share, of the Company (the "COMMON STOCK"), and (B) Long acquired
162,605 shares of Common Stock; and
WHEREAS, pursuant to the terms of the Membership Interests
Contribution Agreement, dated as of May 12, 1997, by and among Integrated, Xxx
X. Xxxxxx, Xxxxxxxx Xxxxxx, the Xxxxxx XX, The Central Arkansas Opportunity
Foundation, a charitable trust organized under the laws of Arkansas, Telesite
and Metrosite, the Xxxxxx XX acquired 490,517 shares of Common Stock; and
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WHEREAS, a warrant held by PCX Corporation ("PCX"), a Delaware
corporation, to purchase 150,000 shares of Common Stock has been transferred and
assigned to NCEF, Kitty Hawk III, Xxxxx, Xxxxxx X. Lutkewich ("LUTKEWICH"),
Xxxxxxx, Xxxxxx and Xxxxxx, and, as a result of such assignment, NCEF holds a
warrant (the "NCEF WARRANT") to purchase 33,340.42 shares of Common Stock, Kitty
Hawk III holds a warrant to purchase 33,340.42 shares of Common Stock (the
"KITTY HAWK WARRANT"), Xxxxx holds a warrant to purchase 50,416.05 shares of
Common Stock (the "XXXXX WARRANT"), Lutkewich holds a warrant to purchase
19,901.07 shares of Common Stock (the "LUTKEWICH WARRANT"), Xxxxxxx holds a
warrant to purchase 3,316.85 shares of Common Stock (the "XXXXXXX WARRANT"),
Xxxxxx holds a warrant to purchase 3,316.85 shares of Common Stock (the "XXXXXX
WARRANT") and Xxxxxx holds a warrant to purchase 6,368.34 shares of Common Stock
(the "XXXXXX WARRANT" and together with the NCEF Warrant, the Kitty Hawk
Warrant, the Xxxxx Warrant, the Lutkewich Warrant, the Xxxxxxx Warrant and the
Xxxxxx Warrant, the "PCX STOCKHOLDER WARRANTS"); and
WHEREAS, pursuant to a Certificate of Amendment filed with the
Secretary of State of the State of Delaware on October 29, 1997, Integrated
changed its name to SpectraSite Holdings, Inc.;
WHEREAS, pursuant to Articles of Amendment filed with the Secretary
of State of the State of Arkansas, Telesite changed its name to SpectraSite
Communications, LLC ("SPECTRASITE, LLC");
WHEREAS, pursuant to an Agreement and Plan of Merger, dated October
31, 1997, between UST and SpectraSite, LLC, SpectraSite, LLC merged with and
into UST with UST being the surviving corporation, and UST changed its name to
SpectraSite Communications, Inc.;
WHEREAS, pursuant to a Purchase and Sale Agreement, dated February
27, 1998, by and among Apex Site Management L.P., a Delaware limited partnership
("APEX"), the Company and Metrosite, the Company sold to Apex, and Apex
purchased from the Company, all of the issued and outstanding capital membership
units of Metrosite;
WHEREAS, the Company wishes to sell to the Purchasers, and the
Purchasers wish to purchase from the Company, an aggregate of 7,000,000 shares
of its 8% Series B Cumulative Convertible Redeemable Preferred Stock, $0.001 par
value per share (the "SERIES B PREFERRED STOCK"), for an aggregate purchase
price of $28,000,000, upon the terms and subject to the conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
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ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"ADDITIONAL SHARES" shall have the meaning set forth in Section 2.1
hereof.
"AFFILIATE" shall mean any Person (a) directly or indirectly
controlling, controlled by, or under common control with, the Company, (b)
directly or indirectly owning or holding five percent (5%) or more of any equity
interest in the Company, or (c) five percent (5%) or more of whose voting stock
or other equity interest is directly or indirectly owned or held by the Company.
For purposes of this definition, "control" (including with correlative meanings,
the terms "controlling," "controlled by" and under "common control with") shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGREEMENT" shall mean this Agreement, including the exhibits and
schedules attached hereto, as the same may be amended, supplemented or modified
in accordance with the terms hereof.
"AUDITED FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 5.12 hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"BY-LAWS" shall mean, unless the context in which it is used
otherwise requires, the by-laws of each of the Company and SpectraSite, as in
effect on the applicable Closing Date.
"CERTIFICATE OF AMENDMENT" shall mean the certificate of amendment to
the certificate of incorporation of the Company, which, among other things, sets
forth the terms, limitations and relative rights and preferences of the Series B
Preferred Stock, substantially in the form attached hereto as Exhibit A.
"CERTIFICATE OF INCORPORATION" shall mean the certificate of
incorporation of the Company (as amended), as in effect on the applicable
Closing Date.
"CHARTER DOCUMENTS" shall mean the Certificate of Incorporation and
the SpectraSite Certificate of Incorporation.
"CLOSING" shall mean the First Closing, the Second Closing or the
Default Shares Closing, as the case may be.
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"CLOSING DATE" shall mean the First Closing Date, the Second Closing
Date or the Default Shares Closing Date, as the case may be.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.
"COMMISSION" shall mean the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"COMMON STOCK" shall mean shares of common stock, par value $0.001
per share, of the Company, or any other capital stock of the Company into which
such stock is reclassified or reconstituted.
"COMPANY" shall mean SpectraSite Holdings, Inc., a Delaware
corporation.
"CONDITION OF THE COMPANY" shall mean the assets, business,
properties, operations or financial condition of the Company and its
Subsidiaries, taken as a whole.
"CONTINGENT OBLIGATION" as applied to any Person, shall mean any
direct or indirect liability, contingent or otherwise, of that Person: (i) with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto; (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings; or (iii)
under any foreign exchange contract, currency swap agreement, interest rate swap
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates.
Contingent Obligations shall include (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported or, if not a fixed
and determined amount, the maximum amount so guaranteed.
"CONTRACTUAL OBLIGATIONS" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument to which such
Person is a party or by which it or any of its property is bound.
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"DEFAULT SHARES" shall have the meaning set forth in Section 2.3
hereof.
"DEFAULT SHARES CLOSING" shall have the meaning set forth in Section
2.3 hereof.
"DEFAULT SHARES CLOSING DATE" shall have the meaning set forth in
Section 2.3 hereof.
"DEFINED BENEFIT PLAN" shall mean a defined benefit plan within the
meaning of Section 3(35) of ERISA or Section 414(j) of the Code, whether funded
or unfunded, qualified or non-qualified (whether or not subject to ERISA or the
Code).
"ENVIRONMENTAL LAWS" shall mean any Federal, state, territorial,
provincial or local law, common law doctrine, rule, order, decree, judgment,
injunction, license, permit or regulation relating to environmental matters,
including those pertaining to land use, air, soil, surface water, ground water
(including the protection, cleanup, removal, remediation or damage thereof),
public or employee health or safety or any other environmental matter, together
with any other laws (Federal, state, territorial, provincial or local) relating
to emissions, discharges, releases or threatened releases of any pollutant or
contaminant including, without limitation, medical, chemical, biological,
biohazardous or radioactive waste and materials, into ambient air, land, surface
water, groundwater, personal property or structures, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, discharge or handling of any contaminant, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. 9601 et seq.), the Hazardous Material Transportation
Act (49 U.S.C. 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. 1251 et
seq.), the Clean Air Act (42 U.S.C. 1251 et seq.), the Toxic Substances Control
Act (15 U.S.C. 2601 et seq.), and the Occupational Safety and Health Act (29
U.S.C. 651 et seq.), as such laws have been, or are, amended, modified or
supplemented heretofore or from time to time hereafter and any analogous future
Federal, or present or future state or local laws, statutes and regulations
promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall mean any Person that is treated as a single
employer with any Company or any of its Subsidiaries under Section 414(b), (c),
(m) or (o) of the Code.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"EXERCISABLE SHARES" shall have the meaning assigned to that term in
Section 8.14 hereof.
"FIRST CLOSING" shall have the meaning assigned to that term in
Section 2.2 hereof.
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"FIRST CLOSING DATE" shall have the meaning assigned to that term in
Section 2.2 hereof.
"FINANCIAL STATEMENTS" shall have the meaning assigned to that term
in Section 5.12 hereof.
"GAAP" shall mean generally accepted accounting principles in effect
from time to time within the United States.
"GOVERNMENTAL AUTHORITY" shall mean the government of any nation,
state, city, locality or other political subdivision of any thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"HAZARDOUS MATERIALS" shall mean those substances which are regulated
by or form the basis of liability under any Environmental Laws.
"INDEBTEDNESS" shall mean as to any Person (a) all obligations of
such Person for borrowed money (including, without limitation, reimbursement and
all other obligations with respect to surety bonds, unfunded credit commitments,
letters of credit and bankers' acceptances, whether or not matured), (b) all
obligations of such Person evidenced by notes, bonds, debentures or similar
instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable and accrued
commercial or trade liabilities arising in the ordinary course of business, (d)
all interest rate and currency swaps, caps, collars and similar agreements or
hedging devices under which payments are obligated to be made by such Person,
whether periodically or upon the happening of a contingency, (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (f)
all obligations of such Person under leases which have been or should be, in
accordance with GAAP, recorded as capital leases, (g) all indebtedness secured
by any Lien (other than Liens in favor of lessors under leases other than leases
included in clause (f)) on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is non-recourse to the credit of that Person, and (h) any
Contingent Obligation of such Person.
"INITIAL PUBLIC OFFERING" shall mean the sale by the Company or any
of its Subsidiaries of their capital stock pursuant to a registration statement
on Form S-1 or other Form under the Securities Act.
"INITIAL SHARES" shall have the meaning assigned to that term in
Section 2.1 hereof.
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"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences)
including, without limitation, those created by, arising under or evidenced by
any conditional sale or other title retention agreement, the interest of a
lessor under a Capital Lease Obligation, or any financing lease having
substantially the same economic effect as any of the foregoing.
"OUTSTANDING BORROWINGS" shall mean all Indebtedness of the Company
and its Subsidiaries for money borrowed that is outstanding at the relevant time
of determination.
"PCX STOCKHOLDERS" shall have the meaning assigned to that term in
the fourth Whereas clause.
"PERSON" shall mean any individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, Governmental Authority or other
entity of any kind, and shall include any successor (by merger or otherwise) of
such entity.
"PLANS" shall have the meaning assigned to that term in Section 5.23
of this Agreement.
"PRO FORMA BALANCE SHEET" shall mean the pro forma consolidated
balance sheet of the Company and its Subsidiaries delivered pursuant to Article
3 hereof.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Amended and Restated
Registration Rights Agreement substantially in the form attached hereto as
Exhibit B.
"REQUIREMENTS OF LAW" shall mean as to any Person, the Charter
Documents and By-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation, right, privilege, qualification,
license or franchise or determination of an arbitrator or a court or other
Governmental Authority (including without limitation, the Federal Communications
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
and all Federal and State securities laws, and the rules and regulations
promulgated thereunder), in each case applicable or binding upon such Person or
any of its property or to which such Person or any of its property is subject or
pertaining to any or all of the transactions contemplated or referred to herein.
"SECOND CLOSING" shall have the meaning assigned to that term in
Section 2.2 hereof.
"SECOND CLOSING DATE" shall have the meaning assigned to that term in
Section 2.2 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.
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"SERIES A PURCHASE AGREEMENT" shall have the meaning ascribed to such
term in the first Whereas clause hereof.
"SERIES B PREFERRED STOCK" shall have the meaning ascribed to such
term in the fifth Whereas clause.
"SHARES" shall have the meaning assigned to that term in Section 2.1
hereof.
"SOLVENT" shall mean, with respect to the Company and its
Subsidiaries considered as a whole, based on the Financial Statements, (i) the
assets and the property of the Company and its Subsidiaries, considered as a
whole, exceed the aggregate liabilities (including contingent and unliquidated
liabilities) of the Company and its Subsidiaries, considered as a whole, (ii)
after giving effect to the transactions contemplated by this Agreement, the
Company and its Subsidiaries, considered as a whole, will not be left with
unreasonably small capital, and (iii) after giving effect to the transactions
contemplated by this Agreement, the Company and its Subsidiaries, considered as
a whole, are able to both service and pay their liabilities as they mature. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that is likely to
become an actual or matured liability.
"SPECTRASITE" shall have the meaning assigned to that term in the
first Whereas clause hereof.
"SPECTRASITE CERTIFICATE OF INCORPORATION" shall mean the Certificate
of Incorporation of SpectraSite, as in effect on the applicable Closing Date.
"STOCKHOLDERS' AGREEMENT" shall mean the Second Amended and Restated
Stockholders' Agreement, substantially in the form attached hereto as Exhibit C.
"STOCK OPTION PLAN" shall mean the Stock Option Plan of the Company,
a copy of which is attached hereto as Exhibit E.
"STOCK OPTIONS" shall have the meaning assigned to that term in
Section 5.19 of this Agreement.
"SUBSIDIARY" shall mean, with respect to any Person, a corporation or
other entity (i) of which 50% or more of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company or (ii) with respect to which such Person, directly or indirectly,
has the power to elect a majority of the board of directors or similar governing
body, or otherwise direct the management and/or operations thereof.
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"TRANSACTION DOCUMENTS" shall mean collectively, this Agreement, the
Registration Rights Agreement, the Stockholders' Agreement, the Certificate of
Incorporation, the Certificate of Amendment, and the By-laws.
"WHITNEY" shall mean X. X. Xxxxxxx & Co.
1.2 ACCOUNTING TERMS: FINANCIAL STATEMENTS. For purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to such terms in conformity with GAAP. Financial statements
and other information furnished to Purchasers pursuant to this Agreement shall
be prepared in accordance with GAAP as in effect at the time of such
preparation. No Accounting Changes (as defined below) shall affect any financial
covenants, standards or terms in this Agreement; provided that the Company shall
prepare footnotes to each compliance certificate and the financial statements
required to be delivered hereunder that show the differences between the
financial statements delivered (which reflect such Accounting Changes) and the
basis for calculating any financial covenant compliance (without reflecting such
Accounting Changes). "ACCOUNTING CHANGES" means: (a) changes in accounting
principles required by GAAP and implemented by the Company; (b) changes in
accounting principles recommended by the Company's certified public accountants
and implemented by the Company; and (c) changes in carrying value of the
Company's or any of its Subsidiaries' assets, liabilities or equity accounts
resulting from adjustments that were applicable to, but not included in, the Pro
Forma Balance Sheet. All such adjustments resulting from expenditures made
subsequent to the First Closing Date (including, without limitation,
capitalization of costs and expenses or payment of pre-closing date liabilities)
shall be treated as expenses in the period the expenditures are made.
1.3 KNOWLEDGE OF THE COMPANY. All references to the knowledge of the
Company or to facts known by the Company shall mean actual knowledge of, or
notice to, the Chairman, Chief Executive Officer, President, Chief Financial
Officer, or any other officer of the Company or any Subsidiary or any division
of the Company or any Subsidiary.
ARTICLE 2
PURCHASE AND SALE OF THE PREFERRED STOCK
2.1 PURCHASE AND SALE OF THE SHARES.
(a) Subject to the terms and conditions herein set forth, the
Company agrees that it will issue and sell to the Purchasers, and each of the
Purchasers agrees that it will acquire from the Company, on the First Closing
Date, that number of shares of Series B Preferred Stock set forth opposite each
Purchaser's name on Schedule 1 hereto (the " INITIAL SHARES"). The Initial
Shares shall have the powers, rights and preferences set forth in the
Certificate of Amendment. The aggregate purchase price for the Initial Shares
shall be $ 17,000,000.
(b) Subject to the terms and conditions herein set forth, the
Company agrees that it will issue and sell to the Purchasers, and each of the
Purchasers agrees that it will acquire
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from the Company, on the Second Closing Date, that number of shares of Series B
Preferred Stock set forth opposite each Purchaser's name on Schedule 2 hereto
(the "ADDITIONAL SHARES"). The Additional Shares shall have the powers, rights
and preferences set forth in the Certificate of Amendment. The aggregate
purchase price for the Additional Shares shall be $ 11,000,000.
(c) Subject to the terms and conditions herein set forth, the
Company agrees that it will issue and sell, in accordance with the provisions of
Section 2.3 hereof, on the Default Shares Closing Date, the Default Shares (as
defined herein). The Default Shares shall have the powers, rights and
preferences set forth in the Certificate of Amendment. The aggregate purchase
price for the Default Shares shall be equal to the purchase price per share for
such Default Shares times the number of Default Shares being purchased. The
Initial Shares, the Additional Shares and the Default Shares shall be
collectively referred to herein as the "SHARES".
2.2 CLOSINGS.
(a) The issuance and purchase of the Initial Shares shall take place
at the closing (the "FIRST CLOSING") to be held at the offices of Xxxxxxxxx &
Xxxxx PLLC, 0000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxx, XX 00000 at 10:00 a.m.,
Eastern Standard Time, on or before March 24, 1998, or at such other time and
place as the Company and the Purchasers may agree in writing (the "FIRST CLOSING
DATE"). At the First Closing, the Company shall deliver to the Purchasers the
Initial Shares against delivery by the Purchasers to the Company of the purchase
price therefor, payable by wire transfer of immediately available funds to an
account or accounts designated in writing by the Company.
(b) The issuance and purchase of the Additional Shares shall take
place at the closing (the "SECOND CLOSING") to be held at the offices of
Xxxxxxxxx & Xxxxx PLLC, 0000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxx, XX 00000 at
10:00 a.m., Eastern Standard Time, on June 23, 1998, or at such later time and
place as the Company may request (the "SECOND CLOSING DATE"); provided, however,
that in no event shall the Second Closing Date be later than April 1, 1999. At
the Second Closing, the Company shall deliver to the Purchasers the Additional
Shares against delivery by the Purchasers to the Company of the purchase price
therefor, payable by wire transfer of immediately available funds to an account
or accounts designated in writing by the Company.
(c) The issuance and purchase of the Default Shares shall take place
as set forth in Section 2.3(c) hereof.
2.3 DEFAULT SHARES.
(a) If any Purchaser (a "DEFAULTING PURCHASER") fails or
refuses to purchase and pay for the number of Additional Shares agreed to be
purchased by such Purchaser at the Second Closing, the Company shall immediately
give notice thereof to the Purchasers other than the Defaulting Purchaser (the
"NON-DEFAULTING PURCHASERS").
(b) The Non-Defaulting Purchasers shall have the option, which
must be exercised by written notification to the Company and the other
Non-Defaulting Purchasers
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within five (5) Business Days of receipt of the notice set forth in
Section 2.3(a) hereof (the "OPTION PERIOD"), to purchase the Additional Shares
to be purchased by the Defaulting Purchaser (the "DEFAULT SHARES") in the same
proportions as their purchases of the Initial Shares, or in such proportions as
the Non-Defaulting Purchasers may otherwise agree, all upon the price, terms and
conditions set forth herein and in the Transaction Documents.
(c) If the Non-Defaulting Purchasers (or any of them) elect to
exercise their option to purchase some or all of the Default Shares, the
issuance and purchase of such Default Shares shall take place at the closing
(the "DEFAULT SHARES CLOSING") to be held at the offices of Xxxxxxxxx & Xxxxx
PLLC, Suite 400, 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000 at
10:00 a.m., Eastern Standard Time, within twenty (20) Business Days following
the expiration of the Option Period (the "DEFAULT SHARES CLOSING DATE").
2.4 FINANCIAL ACCOUNTING POSITIONS; TAX REPORTING. Each of the
parties hereto agrees to take reporting and other positions with respect to the
Shares which are consistent with the purchase price of the Shares set forth
herein for all financial accounting purposes, unless otherwise required by
applicable GAAP or Commission rules (in which case the parties agree only to
take positions inconsistent with the purchase price of the Shares set forth
herein provided that the Purchasers have consented thereto, which consent shall
not be unreasonably withheld). Each of the parties to this Agreement agrees to
take reporting and other positions with respect to the Shares which are
consistent with the purchase price of the Shares set forth herein for all other
purposes, including without limitation, for all Federal, state and local tax
purposes.
2.5 FEES AND EXPENSES.
(a) The Company shall pay (i) at the First Closing, a
transaction structuring fee of $114,545 to Whitney, $27,273 to Xxxxxx and an
aggregate of $8,182 to Kitty Hawk III and Xxxxx Xxxx XX, and (ii) at each of the
Closings, to the extent not previously paid, an amount equal to the
out-of-pocket expenses (including, without limitation, attorneys' fees, charges
and disbursements, consultants' fees and expenses and due diligence expenses) of
Whitney, JHW II, JHW III, JHW Strategic III, Xxxxxx, Xxxxx Xxxx III and Xxxxx
Xxxx XX incurred in connection with (A) the negotiation, execution, delivery and
filing of the Transaction Documents and any amendments or modifications thereto
and (B) the transactions contemplated by the Transaction Documents.
(b) Until the consummation of an Initial Public Offering, the
Company shall continue to pay Whitney a monitoring fee payable in cash at the
rate of $10,000 per month (calculated for partial months on a daily basis)
payable quarterly on each March 31, June 30, September 30 and December 31, or if
any such date shall not be a Business Day, on the next succeeding Business Day
to occur after such date. Upon consummation of an Initial Public Offering, the
Company shall pay any unpaid portion of the monthly monitoring fees (calculated
on a daily basis) within five (5) Business Days after receipt by any of the
Companies or their Subsidiaries of the proceeds of such Initial Public Offering.
Notwithstanding the foregoing, however, Whitney, after evaluating the level of
its involvement with the Company, may, in its sole discretion, terminate the
monitoring fee prior to an Initial Public Offering.
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(c) All payments contemplated by this Section 2.5 to be made
to, or on behalf of any of Whitney, JHW II, JHW III, JHW Strategic III, Xxxxxx,
Xxxxx Xxxx III or Xxxxx Xxxx XX shall be made by wire transfer of immediately
available funds to an account or accounts designated by such Purchaser.
ARTICLE 3
CONDITIONS TO THE OBLIGATION OF THE PURCHASERS
TO PURCHASE THE SHARES
The obligation of the Purchasers to purchase the Initial Shares, the
Additional Shares or the Default Shares, as the case may be, to pay the purchase
prices therefor at the applicable Closing and to perform any other obligations
hereunder shall be subject to the satisfaction as determined by, or waived by,
the Purchasers of the following conditions on or before the applicable Closing
Date. No Purchaser shall be obligated to purchase any of the Shares to be
purchased by it at such Closing(s) hereunder unless the purchase and sale of
each of the other Shares required to be purchased at such Closing(s) hereunder
occurs simultaneously therewith.
3.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Article 5 hereof shall be true and
correct at and as of the date hereof and the applicable Closing Date as if made
at and as of such date, and the Purchasers shall have received a certificate,
dated as of the applicable Closing Date, signed by the Chairman of the Board,
the President of the Company or the Company's Chief Financial Officer,
certifying compliance with this condition.
3.2 COMPLIANCE WITH THIS AGREEMENT. The Company shall have performed
and complied with all of its agreements and conditions set forth or contemplated
herein that are required to be performed or complied with by the Company on or
before the applicable Closing Date, and the Purchasers shall have received a
certificate, dated as of the applicable Closing Date, signed by the Chairman of
the Board, the President of the Company or the Company's Chief Financial
Officer, certifying compliance with this condition.
3.3 COMPLIANCE WITH THE SERIES A PURCHASE AGREEMENT; NO DEFAULTS.
Except as set forth on Schedule 5.31, each of the parties to the Series A
Purchase Agreement (other than JHW II and Kitty Hawk III) shall have performed
and complied with all of the agreements and conditions contemplated under the
Series A Purchase Agreement and the agreements, instruments and other documents
delivered thereunder or contemplated thereby, including, without limitation, the
Transaction Documents and the Exchange Transaction Documents (as such terms are
defined therein) that are required to be performed or complied with by each such
party, and, except as set forth on Schedule 5.31, there shall be no default by
any such party thereunder. The Purchasers shall have received such certificates
or other evidence as they may reasonably request to establish compliance with
this condition.
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3.4 SECRETARY'S CERTIFICATE. The Purchasers shall have received a
certificate from the Company, dated the date of the applicable Closing Date, and
signed by the Secretary or an Assistant Secretary of the Company, certifying (a)
that the attached copies of the Certificate of Incorporation and By-laws are
true, complete and correct and remain unamended and in full force and effect,
(b) that the attached copies of the resolutions of the Board of Directors of the
Company approving the Transaction Documents to which it is a party and the
transactions contemplated hereby and thereby, are true, complete and correct and
remain unamended and in full force and effect, and (c) as to the incumbency and
specimen signature of each officer or member of the Company executing any
Transaction Document to which it is a party or any other document delivered in
connection herewith on behalf of the Company.
3.5 DOCUMENTS. The Purchasers shall have received true, complete and
correct copies of such agreements, schedules, exhibits, certificates, documents,
financial information and filings as they may reasonably request in connection
with or relating to the transactions contemplated hereby, all in form and
substance satisfactory to the Purchasers.
3.6 PURCHASE OF SHARES PERMITTED BY APPLICABLE LAWS. The acquisition
of and payment for the Shares to be acquired by the Purchasers hereunder and the
consummation of the transactions contemplated hereby and by the other
Transaction Documents (a) shall not be prohibited by any Requirement of Law, (b)
shall not subject the Purchasers to any penalty or other onerous condition under
or pursuant to any Requirement of Law, and (c) shall be permitted by all
Requirements of Law to which the Purchasers or the transactions contemplated by
or referred to herein or in the other Transaction Documents are subject; and the
Purchasers shall have received such certificates or other evidence as they may
reasonably request to establish compliance with this condition.
3.7 OPINION OF COUNSEL. The Purchasers shall have received an
opinion of outside counsel to the Company, dated the applicable Closing Date,
relating to the transactions contemplated by or referred to herein, in form and
substance acceptable to the Purchasers.
3.8 APPROVAL OF COUNSEL TO THE PURCHASERS. All actions and
proceedings hereunder and all agreements, schedules, exhibits, certificates,
financial information, filings and other documents required to be delivered by
the Company or any Subsidiary or hereunder or in connection with the
consummation of the transactions contemplated hereby, and all other related
matters, shall have been in form and substance acceptable to Xxxxxxxx Xxxxx
Singer & Xxxxxxxxx, LLP, counsel to JHW II, JHW III, JHW Strategic III and
Whitney, in its reasonable judgment (including, without limitation, the opinions
of counsel referred to in Section 3.7 hereof).
3.9 CONSENTS AND APPROVALS. All consents, exemptions,
authorizations, or other actions by, or notices to, or filings with,
Governmental Authorities and other Persons in respect of all Requirements of Law
and with respect to those Contractual Obligations of the Company or any
Subsidiary necessary, desirable, or required in connection with the execution,
delivery or performance (including, without limitation, the issuance of Common
Stock upon conversion of the Shares) by the Company or any Subsidiary, or
enforcement against the Company or any Subsidiary, of the Transaction Documents
to which it is a party.
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3.10 REGISTRATION RIGHTS AGREEMENT. The Company shall have duly
executed and delivered the Registration Rights Agreement.
3.11 STOCKHOLDERS' AGREEMENT. The Stockholders' Agreement shall have
been duly executed and delivered by all of the parties thereto.
3.12 CERTIFICATE OF INCORPORATION AND BY-LAWS. The Company shall have
amended its Certificate of Incorporation and By-laws, in form and substance
satisfactory to the Purchasers.
3.13 NO MATERIAL JUDGMENT OR ORDER. There shall not be on the
applicable Closing Date any judgment or order of a court of competent
jurisdiction or any ruling of any Governmental Authority or any condition
imposed under any Requirement of Law which, in the judgment of the Purchasers,
would prohibit the purchase of the Shares hereunder or subject the Purchasers to
any penalty or other onerous condition under or pursuant to any Requirement of
Law if the Shares were to be purchased hereunder.
3.14 GOOD STANDING CERTIFICATE. The Company shall have delivered to
the Purchasers as of the Closing Date, a good standing certificate or the
equivalent thereof for the Company and each of its Subsidiaries for each of
their respective jurisdictions of incorporation or organization, as the case may
be, and all other jurisdictions where they are required to be qualified to do
business.
3.15 PRO FORMA BALANCE SHEET. The Company shall have delivered to the
Purchasers as of the applicable Closing Date a pro forma consolidated balance
sheet of the Company and its Subsidiaries, certified by the chief executive
officer of the Company that such Pro Forma Balance Sheet fairly presents the pro
forma adjustments reflecting the consummation of the transactions contemplated
by this Agreement to be consummated as of each such Closing Date, including,
without limitation, all material fees and expenses in connection therewith.
3.16 STOCK OPTION PLAN. As of the First Closing Date, the Company
shall have adopted, and the requisite number of stockholders shall have
approved, the Stock Option Plan. The Purchasers shall have received such
certificates or other evidence as they may reasonably request to establish
compliance with this condition.
3.17 D & O INSURANCE. The Company shall have in place as of the
applicable Closing Date an insurance policy providing directors' and officers'
liability insurance coverage for each of the members of the Board of Directors
of the Company. The Purchasers shall have received such certificates or other
evidence as they may reasonably request to establish compliance with this
condition.
3.18 TOWER AGREEMENTS. As of the First Closing Date, the Company
and/or its Subsidiaries shall have made bids and received orders based on such
bids to construct and lease at least seventy-five (75) telecommunications
towers. As of each other applicable Closing Date, the Company shall have
delivered to the Purchasers, in a form reasonably satisfactory to
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Whitney, evidence that it or its Subsidiaries have constructed, are constructing
or have entered into written agreements to construct at least seventy-five (75)
telecommunications towers.
3.19 BANK LOAN. As of the Second Closing Date, the Company shall have
entered into definitive agreements with Credit Suisse First Boston and/or
certain other lending institution(s), pursuant to which such institution(s)
shall have provided the Company with a $50,000,000 revolving credit facility.
3.20 XXXXX KEY-MAN INSURANCE. As of the earlier of (i) two (2) months
after the First Closing Date or (ii) the Second Closing Date, the Company shall
have in place a key-man life insurance policy with a reputable and financially
sound insurer on the life of Xxxxxxx X. Xxxxx in the face amount of not less
than $3,000,000. The Purchasers shall have received such certificates or other
evidence as they may reasonably request to establish compliance with this
condition.
ARTICLE 4
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
TO ISSUE AND SELL THE SHARES
The obligations of the Company to issue and sell the Initial Shares,
the Additional Shares or the Default Shares, as the case may be, and perform its
other obligations hereunder relating thereto shall be subject to the
satisfaction as determined by, or waived by, the Company of the following
conditions on or before the applicable Closing Date:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchasers contained in Article 6 hereof shall be true and
correct at and as of the applicable Closing Date, as if made at and as of such
date, and the Company shall have received a certificate, dated as of the
applicable Closing Date, signed by each Purchaser certifying that such
representations and warranties made by such Purchaser are true and correct at
and as of the date hereof and at and as of such Closing Date, as if made at and
as of such date.
4.2 COMPLIANCE WITH THIS AGREEMENT. Each of the Purchasers shall
have performed and complied with all of the respective agreements and conditions
set forth or contemplated herein that are required to be performed or complied
with by such Purchaser on or before the applicable Closing Date, and the Company
shall have received a certificate, dated as of the applicable Closing Date,
signed by each Purchaser certifying that such Purchaser has so performed and so
complied with such agreements and conditions.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchasers, after
giving effect to the transactions contemplated by this Agreement, as follows:
5.1 EXISTENCE AND POWER. The Company and each of its Subsidiaries:
(a) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, as the case
may be; (b) has all requisite power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently, or is currently proposed to be, engaged; (c)
is duly qualified, licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except to the extent that the
failure to do so would not have a material adverse effect on the Condition of
the Company; and (d) has the power and authority to execute, deliver and perform
its obligations under each Transaction Document to which it is or will be a
party.
5.2 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Company of each Transaction Document to which it is a party
and the consummation of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Shares: (a) has been duly
authorized by all necessary corporate action; (b) does not contravene the terms
of the Company's Certificate of Incorporation, By-laws, or any amendment
thereto; and (c) will not violate, conflict with or result in any breach or
contravention of or the creation of any Lien under, any Contractual Obligation
of the Company or any Subsidiary or any Requirement of Law applicable to the
Company or any Subsidiary.
5.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person in respect of any
Requirement of Law, and no lapse of a waiting period under a Requirement of Law,
is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, the Company of the Transaction Documents
to which it is a party or the consummation of the transactions contemplated
hereby or thereby.
5.4 BINDING EFFECT. Each of the Transaction Documents to which it is
a party has been duly executed and delivered by the Company, and constitutes the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
relating to enforceability.
5.5 NO LEGAL BAR. Neither the execution, delivery and performance of
the Transaction Documents nor the issuance of or performance of the terms of the
Shares will violate any Requirement of Law or any Contractual Obligation of the
Company or any Subsidiary. Neither the Company nor any Subsidiary has previously
entered into any agreement which is
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currently in effect or to which the Company or any Subsidiary is currently
bound, granting any rights to any Person which are inconsistent with the rights
to be granted by the Company in the Transaction Documents.
5.6 LITIGATION. Except as set forth on Schedule 5.6, there are no
legal actions, suits, proceedings, claims or disputes pending or threatened, at
law, in equity, in arbitration or before any Governmental Authority against or
affecting the Company or any Subsidiary. No injunction, writ, temporary
restraining order, decree or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of the Transaction Documents.
5.7 COMPLIANCE WITH LAWS. Except as set forth on Schedule 5.7, the
Company and its Subsidiaries are in compliance with all Requirements of Law
applicable to them.
5.8 NO DEFAULT OR BREACH. Except as set forth on Schedule 5.8,
neither the Company nor any Subsidiary is in, and the incurrence of the
obligations of the Company contemplated by the Transaction Documents do not
constitute, nor with the giving of notice or lapse of time or both would
constitute, a default under or with respect to any Contractual Obligation of the
Company or any Subsidiary in any material respect.
5.9 TITLE TO PROPERTIES. Except as set forth on Schedule 5.9, the
Company and/or each of its Subsidiaries has good record and marketable title in
fee simple to, or holds interests as lessee under leases in full force and
effect in, all real property reflected on the Financial Statements or used in
connection with its business.
5.10 USE OF REAL PROPERTY. Except as set forth on Schedule 5.10, the
owned and leased real properties reflected on the Financial Statements or used
in connection with the business of the Company and its Subsidiaries, are used
and operated in compliance and conformity with all applicable leases, contracts,
commitments, licenses and permits, to the extent that the failure so to conform
would, in the aggregate, materially adversely affect the Condition of the
Company; neither the Company nor any Subsidiary has received notice of violation
of any applicable zoning or building regulation, ordinance or other law, order,
regulation or requirement relating to the operations of the Company or any
Subsidiary; and there is no such violation. Except as set forth on Schedule
5.10, all plants and other buildings that are owned or covered by leases
reflected on the Financial Statements or used in connection with the business of
the Company or any Subsidiary, substantially conform with all applicable
ordinances, codes, regulations and requirements, and no law or regulation
presently in effect or condition precludes or materially restricts continuation
of the present use of such properties. Each of the leases for real properties
reflected on the Financial Statements or used in connection with the business of
the Company or any Subsidiary is in full force and effect and the Company and
its Subsidiaries enjoy peaceful and undisturbed possession thereunder. There is
no default on the part of the Company or any Subsidiary or event or condition
which with notice or lapse of terms, or both, would constitute a default on the
part of the Company or any Subsidiary under any of such leases.
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5.11 TAXES. Except as set forth on Schedule 5.11, the Company and its
Subsidiaries have filed or caused to be filed, or have properly filed extensions
for, all tax returns which are required to be filed and have paid or caused to
be paid all taxes required to be paid by them and all assessments received by
them to the extent that such taxes have become due, except taxes the validity or
amount of which is being contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been set aside. The Company and
each of its Subsidiaries have paid or caused to be paid, or have established
reserves that the Company reasonably believes to be adequate in all material
respects for, all tax liabilities applicable to the Company and its Subsidiaries
for all fiscal years which have not been examined and reported on by the taxing
authorities (or closed by applicable statutes).
5.12 FINANCIAL CONDITION.
(a) The Company has delivered to the Purchasers true and
complete copies of the consolidated unaudited balance sheet of the Company and
its Subsidiaries, and the related statements of income, stockholders' equity and
cash flow, for the period beginning May 12, 1997 and ending December 31, 1997
(the "FINANCIAL STATEMENTS"), and will deliver, prior to the earlier of April
30, 1998 or the Second Closing Date, true and complete copies of the
consolidated audited balance sheet of the Company and its Subsidiaries, and the
related statements of income, stockholders' equity and cash flow, for the period
beginning May 12, 1997 and ending December 31, 1997 (the "AUDITED FINANCIAL
STATEMENTS"). The Financial Statements fairly present, and the Audited Financial
Statements will fairly present, in all material respects, the financial position
of the Company and its Subsidiaries as of the date thereof, and the results of
operations and cash flows of the Company and its Subsidiaries as of the date or
for the period set forth therein, all in conformity with GAAP consistently
applied during the period involved, except as otherwise set forth in the notes
thereto and subject to normal year-end audit adjustments.
(b) The Company has not received any letters from any of its
certified public accountants to the management of the Company other than the
auditor's opinion letter that will accompany the above-referenced Audited
Financial Statements.
(c) Each Pro Forma Balance Sheet to be delivered to the
Purchasers pursuant to this Agreement shall set forth the assets and liabilities
of the Company and its Subsidiaries on a pro forma consolidated basis after
taking into account the consummation of the transactions contemplated in this
Agreement. Each such Pro Forma Balance Sheet shall have been prepared by the
Company in accordance with GAAP and shall fairly present in all material
respects the assets and liabilities of the Companies and its Subsidiaries on a
consolidated basis, reflecting the consummation of the transactions contemplated
by this Agreement and based on the assumptions set forth therein.
(d) The projections of the Company and its Subsidiaries on a
consolidated basis heretofore delivered to the Purchasers are based on
assumptions which were reasonable when made and such assumptions and projections
are reasonable on the date hereof and neither the Company nor any of its
Subsidiaries have delivered to any Person any later dated projections.
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5.13 ERISA. The execution and delivery of this Agreement and the
other Transaction Documents, the purchase and sale of the Shares hereunder and
the consummation of the transactions contemplated hereby and thereby will not
result in any prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975 of the Code.
5.14 DISCLOSURE.
(a) Agreement and Other Documents. This Agreement, together
with all exhibits and schedules hereto, and the agreements, certificates and
other documents furnished to the Purchasers by the Company and its Subsidiaries
at each Closing do not or will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which they
were made, not misleading.
(b) Material Adverse Effects. There is no fact known to the
Company, which the Company has not disclosed to the Purchasers in writing which
materially adversely affects or, insofar as the Company can reasonably foresee,
could materially adversely affect, the Condition of the Company or the ability
of the Company or any Subsidiary to perform its or their obligations under the
Transaction Documents, or any agreement or other document contemplated thereby
to which any of them is a party.
5.15 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since May 12, 1997, except
as set forth on Schedule 5.15, neither the Company nor any Subsidiary has (i)
issued any stock, bonds or other corporate securities except for the securities
being issued pursuant to the terms of the Transaction Documents, (ii) borrowed
any amount or incurred any liabilities (absolute or contingent), other than in
the ordinary course of business, in excess of $10,000, (iii) discharged or
satisfied any lien or incurred or paid any obligation or liability (absolute or
contingent), other than in the ordinary course of business, in excess of
$10,000, (iv) declared or made any payment or distribution to stockholders or
purchased or redeemed any shares of its capital stock or other securities, (v)
mortgaged, pledged or subjected to lien any of its assets, tangible or
intangible, (vi) sold, assigned or transferred any of its tangible assets, or
canceled any debts or claims, (vii) sold, assigned or transferred any patents,
trademarks, trade names, copyrights, trade secrets or other intangible assets,
(viii) suffered any losses of property, or waived any rights of substantial
value, (ix) suffered any material adverse change in the Condition of the
Company, (x) expended any material amount, granted any bonuses or extraordinary
salary increases, (xi) entered into any transaction involving consideration in
excess of $50,000 except as otherwise contemplated hereby or (xii) entered into
any agreement or transaction, or amended or terminated any agreement, with an
Affiliate. To the knowledge of the Company, no material adverse change in the
Condition of the Company is threatened or reasonably likely to occur.
5.16 ENVIRONMENTAL MATTERS. Except as described on Schedule 5.16:
(a) The property, assets and operations of the Company and each
Subsidiary are and have been in compliance with all applicable Environmental
Laws; there are no Hazardous Materials stored or otherwise located in, on or
under any of the property or assets
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of the Company or any Subsidiary, including, without limitation, the groundwater
except in compliance with applicable Environmental Laws; and there have been no
releases or threatened releases of Hazardous Materials in, on or under any
property adjoining any of the property or assets of the Company or any
Subsidiary which have not been remediated to the satisfaction of the appropriate
Governmental Authorities.
(b) None of the property, assets or operations of the Company
or any Subsidiary is the subject of any Federal, state or local investigation
evaluating whether (i) any remedial action is needed to respond to a release or
threatened release of any Hazardous Materials into the environment or (ii) any
release or threatened release of any Hazardous Materials into the environment is
in contravention of any Environmental Law.
(c) Neither the Company nor any Subsidiary has received any
notice or claim, nor are there pending, threatened or reasonably anticipated,
lawsuits or proceedings against any of them, with respect to violations of an
Environmental Law or in connection with the presence of or exposure to any
Hazardous Materials in the environment or any release or threatened release of
any Hazardous Materials into the environment, and neither the Company nor any
Subsidiary is or was the owner or operator of any property which (i) pursuant to
any Environmental Law has been placed on any list of Hazardous Materials
disposal sites, including, without limitation, the "NATIONAL PRIORITIES LIST" or
"CERCLIS LIST," (ii) has, or had, any subsurface storage tanks located thereon,
or (iii) has ever been used as or for a waste disposal facility, a mine, a
gasoline service station or, other than for petroleum substances stored in the
ordinary course of business, a petroleum products storage facility.
(d) Neither the Company nor any Subsidiary has any present or
contingent liability in connection with the presence either on or off the
property or assets of the Company or Subsidiary of any Hazardous Materials in
the environment or any release or threatened release of any Hazardous Materials
into the environment.
5.17 INVESTMENT COMPANY/GOVERNMENT REGULATIONS. The Company is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. Neither the Company nor any Subsidiary is subject to regulation
under the Public Utility Holding Company Act of 1935, as amended, the Federal
Power Act, the Interstate Commerce Act, or any federal or state statute or
regulation limiting its ability to incur Indebtedness.
5.18 SUBSIDIARIES.
(a) Schedule 5.18 sets forth a complete and accurate list of
all of the Subsidiaries of the Company, together with their respective
jurisdictions of incorporation or organization. Except as set forth on Schedule
5.18, each such Subsidiary is wholly owned by the Company. All of the
outstanding shares of capital stock of the Subsidiaries that are corporations
are validly issued, fully paid and nonassessable. Except as set forth on
Schedule 5.18, as of the Closing Date, all of the outstanding shares of capital
stock of, or other ownership interests in, each of the Subsidiaries are and will
be owned by the Company free and clear of any Liens, claims, charges or
encumbrances. Except as set forth on Schedule 5.18, no Subsidiary has
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outstanding options, warrants, subscriptions, calls, rights, convertible
securities or other agreements or commitments obligating the Subsidiary to
issue, transfer or sell any securities of the Subsidiary.
(b) Except as set forth on Schedule 5.18, the Company does not
own of record or beneficially, directly or indirectly, (i) any shares of
outstanding capital stock or securities convertible into capital stock of any
other corporation, or (ii) any participating interest in any limited liability
company, partnership, joint venture or other non-corporate business enterprises.
5.19 CAPITALIZATION.
(a) As of each Closing Date and after giving effect to the
transactions contemplated by this Agreement to occur at the First Closing, the
authorized capital stock of the Company will consist of 3,462,830 shares of
Series A Preferred Stock, 7,000,000 shares of Series B Preferred Stock and
12,000,000 shares of Common Stock. As of the First Closing Date and after giving
effect to the transactions contemplated by this Agreement to occur at the First
Closing, there will be (i) 3,462,830 shares of Series A Preferred Stock issued
and outstanding, (ii) 1,340,517 shares of Common Stock issued and outstanding,
(iii) 4,250,000 shares of Series B Preferred Stock issued and outstanding, (iv)
3,462,830 shares of Common Stock (subject to adjustment pursuant to the
Certificate of Incorporation) reserved for issuance by the Company upon the
conversion of Series A Preferred Stock, (v) 7,000,000 shares of Common Stock
(subject to adjustment pursuant to the Certificate of Incorporation) reserved
for issuance by the Company upon the conversion of the Series B Preferred Stock,
(vi) 150,000 shares of Common Stock reserved for issuance pursuant to the
exercise of the PCX Stockholder Warrants, and (vii) 1,817,700 shares of Common
Stock reserved for issuance pursuant to the exercise of stock options issuable
in accordance with the terms of the Stock Option Plan (the "STOCK OPTIONS"), of
which 1,244,700 Stock Options have been granted. As of the Second Closing Date
and after giving effect only to the transactions contemplated by this Agreement
to occur at the Second Closing and assuming that no additional Stock Options has
been granted and, with respect to such Second Closing, that all of the
Additional Shares are purchased pursuant to this Agreement, there will be (i)
3,462,830 shares of Series A Preferred Stock issued and outstanding, (ii)
1,340,517 shares of Common Stock issued and outstanding, (iii) 7,000,000 shares
of Series B Preferred Stock issued and outstanding, (iv) 3,462,830 shares of
Common Stock (subject to adjustment pursuant to the Certificate of
Incorporation) reserved for issuance by the Company upon the conversion of
Series A Preferred Stock, (v) 7,000,000 shares of Common Stock (subject to
adjustment to the Certificate of Incorporation) reserved for issuance by the
Company upon the conversion of the Series B Preferred Stock, (vi) 150,000 shares
of Common Stock reserved for issuance pursuant to the exercise of the PCX
Stockholder Warrants, and (vii) 1,817,700 shares of Common Stock reserved for
issuance pursuant to the exercise of Stock Options, of which 1,244,700 Stock
Options have been granted. The outstanding warrants and all outstanding shares
of capital stock of the Company have been duly authorized by all necessary
corporate action. All outstanding shares of capital stock of the Company are,
and the shares of Common Stock issuable upon conversion of the Series A
Preferred Stock and Series B Preferred Stock, when issued in accordance with the
respective terms and conditions thereof, will be validly issued, fully paid and
nonassessable. The designations, powers, preferences, rights,
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qualifications, limitations and restrictions in respect of each class or series
of authorized capital stock of the Company are as set forth in the Certificate
of Incorporation, and all such designations, powers, preferences, rights,
qualifications, limitations and restrictions are valid, binding and enforceable
and in accordance with all applicable laws. Schedule 5.19 provides an accurate
list, after giving effect to the transactions contemplated by this Agreement, of
(A) all stockholders owning the issued and outstanding Series A Preferred Stock,
Series B Preferred Stock and Common Stock, together with the number of shares
held by each, and (B) all of the holders of warrants, options, rights and
securities convertible into Common Stock of the Company, together with the
number of shares of Common Stock to be issued upon the exercise or conversion of
such warrants, options, rights and convertible securities.
(b) On each applicable Closing Date, except for the outstanding
shares of Series A Preferred Stock, Series B Preferred Stock and the outstanding
options and warrants set forth on Schedule 5.19, there will be no outstanding
securities convertible into or exchangeable for capital stock of the Company or
any Subsidiary or, except as contemplated in the other Transaction Documents
(including, without limitation, the Stockholders' Agreement), options, warrants
or other rights to purchase or subscribe to capital stock of the Company or any
Subsidiary, or contracts, commitments, agreements, understandings or
arrangements of any kind to which the Company or any Subsidiary is a party
relating to the issuance of any capital stock of the Company or any Subsidiary,
any such convertible or exchangeable securities or any such options, warrants or
rights.
5.20 PRIVATE OFFERING. No form of general solicitation or general
advertising was used by the Company or any Subsidiary, or their representatives
in connection with the offer or sale of the Shares. Assuming the accuracy of the
representations and warranties of the Purchasers contained in Article VI hereof,
no registration of the Shares or the Common Stock issuable upon the conversion
of the Shares pursuant to the provisions of the Securities Act or applicable
state securities or "blue sky" laws will be required by the offer, sale or
issuance of the Shares pursuant to this Agreement or the Common Stock issuable
upon conversion of the Shares. The Company agrees that neither the Company, nor
anyone acting on its behalf, will offer or sell the Shares or any other security
so as to require the registration of the Shares or the Common Stock issuable
upon conversion of the Shares pursuant to the provisions of the Securities Act
or any state securities or "blue sky" laws, unless such securities or the Common
Stock issuable upon conversion of the Shares are so registered.
5.21 BROKER'S, FINDER'S OR SIMILAR FEES. There are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
with the transactions contemplated hereby based on any agreement, arrangement or
understanding with the Company or any Subsidiary. The transaction structuring
fee payable to Whitney, Waller, Kitty Hawk III and Xxxxx Xxxx XX pursuant to
Section 2.5 hereof does not constitute a commission or other remuneration paid
or given directly or indirectly for the solicitation of any Purchaser or
prospective purchaser of the Shares.
5.22 LABOR RELATIONS. Neither the Company nor any Subsidiary has
committed or is engaged in any unfair labor practice. Except as set forth in
Schedule 5.22, there is (a) no unfair labor practice complaint pending or
threatened against the Company or any Subsidiary
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before the National Labor Relations Board and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is so
pending or threatened, (b) no strike, labor dispute, slowdown or stoppage
pending or threatened against the Company or any Subsidiary, and (c) no union
representation question existing with respect to the employees of the Company or
any Subsidiary and no union organizing activities are taking place. Neither the
Company nor any Subsidiary is a party to any collective bargaining agreement.
5.23 EMPLOYEE BENEFIT PLANS. Neither the Company nor any Subsidiary
nor any ERISA Affiliate has any actual or contingent, direct or indirect,
liability in respect of any employee benefit plan (as defined in Section 3(3) of
ERISA) or other employee benefit arrangement (collectively, the "PLANS"), other
than those liabilities with respect to such Plans specifically described on
Schedule 5.23(a). Schedule 5.23(a) sets forth all Plans relating to the Company.
The Company has delivered to the Purchasers accurate and complete copies of all
of the Plans. All of the Plans are in substantial compliance with all applicable
Requirements of Law. Except as set forth on Schedule 5.23(b), no "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the Code,
has occurred in respect of any of the Plans, and no civil or criminal action
brought pursuant to Part 5 of Title I of ERISA is pending or, to the best
knowledge of the Company, is threatened against any fiduciary of any such Plan.
No Plan: (i) is subject to Title IV of ERISA, or is otherwise a Defined Benefit
Plan, or is a multiple employer plan (within the meaning of Section 413(c) of
the Code); or (ii) provides for post-retirement welfare benefits or a "parachute
payment" (within the meaning of Section 280G(b) of the Code).
5.24 PATENTS, TRADEMARKS, ETC. The Company and its Subsidiaries own
or are licensed or otherwise have the right to use all patents, trademarks,
service marks, trade names, copyrights, licenses, franchises and other rights
(collectively, the "RIGHTS") being used to conduct their businesses as now
operated (a complete list of licenses or other contracts relating to the
Company's and its Subsidiaries' Rights and of registrations of patents,
trademarks, service marks and copyrights including any applications therefor
constituting such Rights, is attached hereto as Schedule 5.24). No Right or
product, process, method, substance or other material presently sold by or
employed by the Company or any Subsidiary, or which the Company or any
Subsidiary contemplates selling or employing, infringes upon the Rights that are
owned by others. No litigation is pending and no claim has been made against the
Company or any Subsidiary or, to the knowledge of the Company, is threatened,
contesting the right of the Company or any Subsidiary to sell or use any Right
or product, process, method, substance or other material presently sold by or
employed by the Company or any Subsidiary. Neither the Company nor any
Subsidiary has asserted any claim of infringement, misappropriation or misuse by
any Person of any Rights owned by the Company or any Subsidiary or to which it
has exclusive use. Except as set forth on Schedule 5.24, no employee, officer or
consultant of the Company or any Subsidiary has any proprietary, financial or
other interest in any Rights owned or used by the Company or any Subsidiary in
their businesses. Except as set forth on Schedule 5.24, neither the Company nor
any Subsidiary has any obligation to compensate any Person for the use of any
Rights and neither the Company nor any Subsidiary has granted any license or
other right to use any of the Rights of the Company or any Subsidiary, whether
requiring the payment of royalties or not. The Company and its Subsidiaries have
taken all reasonable measures to protect and preserve the security,
confidentiality and value of their Rights, including trade secrets and other
confidential information. All trade secrets and other confidential
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information of the Company and its Subsidiaries are not part of the public
domain or knowledge, nor have they been used, divulged or appropriated for the
benefit of any Person other than the Company or any Subsidiary or otherwise to
the detriment of the Company or any Subsidiary. No employee or consultant of the
Company or Subsidiary has used any trade secrets or other confidential
information of any other Person in the course of his work for the Company or any
Subsidiary. No patent, invention, device, principle or any statute, law, rule,
regulation, standard or code is pending or proposed which would restrict the
Company's or any Subsidiary's ability to use any of the Rights.
5.25 POTENTIAL CONFLICTS OF INTEREST. Except as set forth on Schedule
5.25, no officer, director, stockholder or other security holder of the Company
or any Subsidiary: (a) owns, directly or indirectly, any interest in (excepting
less than 5% stock holdings for investment purposes in securities of publicly
held and traded companies), or is an officer, director, employee or consultant
of, any Person that is, or is engaged in business as, a competitor, lessor,
lessee, supplier, distributor, sales agent or customer of, or lender to or
borrower from, the Company or any Subsidiary; (b) owns, directly or indirectly,
in whole or in part, any tangible or intangible property that the Company or any
Subsidiary used in the conduct of business; or (c) has any cause of action or
other claim whatsoever against, or owes or has advanced any amount to, the
Company or any Subsidiary, except for claims in the ordinary course of business
such as for accrued vacation pay, accrued benefits under employee benefit plans,
and similar matters and agreements existing on the date hereof.
5.26 TRADE RELATIONS. Except as set forth on Schedule 5.26, there
exists no actual or, to the knowledge of the Company, threatened termination,
cancellation or limitation of, or any adverse modification or change in, the
business relationship of the Company or any Subsidiary or its business with any
customer or any group of customers whose purchases are individually or in the
aggregate material to the business of the Company or any Subsidiary, or with any
material supplier, and there exists no present condition or state of facts or
circumstances that would materially adversely affect the Condition of the
Company or prevent the Company or any Subsidiary from conducting its business
after the consummation of the transactions contemplated by this Agreement, in
substantially the same manner in which such business has heretofore been
conducted.
5.27 OUTSTANDING BORROWINGS. Schedule 5.27 lists (i) the amount of
all Outstanding Borrowings of the Company and its Subsidiaries as of the closing
of the transactions contemplated hereby, (ii) the Liens that relate to such
Outstanding Borrowings and that encumber the assets of the Company or any
Subsidiary, (iii) the name of each lender thereof, and (iv) the amount of any
unfunded commitments available to the Company in connection with any Outstanding
Borrowings. Except as indicated on Schedule 5.27, all such Borrowings will
continue in effect after each Closing on the same terms and conditions as in
effect immediately prior to such Closing or on such other terms and conditions
as may be satisfactory to the Purchasers.
5.28 MATERIAL CONTRACTS. Neither the Company nor any Subsidiary is a
party to any Contractual Obligation, or is subject to any charge, corporate
restriction, judgment, injunction, decree, or Requirement of Law, materially
adversely affecting the Condition of the
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Company. Schedule 5.28 lists all contracts, agreements and commitments of the
Company and each Subsidiary as of the First Closing Date, whether written or
oral, other than (a) the Transaction Documents, (b) purchase orders in the
ordinary course of business, and (c) any other contracts, agreements and
commitments of the Company or any Subsidiary that do not extend beyond one year
and involve the receipt or payment of not more than $10,000. Each of the
contracts, agreements and commitments of the Company and its Subsidiaries
required to be set forth on Schedule 5.28 comprises a full and complete copy of
all agreements and understandings between the parties thereto with respect to
the subject matter thereof and all transactions related thereto, and there are
no agreements or understandings, oral or written, or side agreements not
contained therein that relate to or modify the substance thereof. Each of such
documents (i) has been duly authorized by all necessary corporate and other
action on the part of the Company and each Subsidiary which is a party thereto,
(ii) was validly executed and delivered by the Company and each such Subsidiary,
and (iii) is the legal, valid and binding obligation of the Company and each
such Subsidiary and their successors, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws affecting creditors' rights
generally and by general principles of equity relating to enforceablility. Each
of such documents is in full force and effect, none of their provisions have
been waived by any party thereto and there are no defaults thereunder or notice
of defaults delivered pursuant thereto.
5.29 INSURANCE. Schedule 5.29 accurately summarizes all of the
insurance policies or programs of the Company and its Subsidiaries in effect as
of the date hereof, and indicates the insurer's name, policy number, expiration
date, amount of coverage, type of coverage, annual premiums, exclusions and
deductibles, and also indicates any self-insurance program that is in effect.
All such policies are in full force and effect, are underwritten by financially
sound and reputable insurers, are sufficient for all applicable Requirements of
Law and otherwise are in compliance with the criteria set forth in Section 8.6
hereof. All such policies will remain in full force and effect and will not in
any way be affected by, or terminate or lapse by reason of any of the
transactions contemplated hereby.
5.30 SOLVENCY. The Company and its Subsidiaries are Solvent.
5.31 COMPLIANCE WITH THE SERIES A PURCHASE AGREEMENT; NO DEFAULTS.
Except as set forth on Schedule 5.31, each of the parties to the Series A
Purchase Agreement (other than JHW II and Kitty Hawk III) has performed and
complied with all of the agreements and conditions contemplated under the Series
A Purchase Agreement and the agreements, instruments and other documents
delivered thereunder or contemplated thereby, including, without limitation, the
Transaction Documents and the Exchange Transaction Documents (as such terms are
defined therein) that are required to be performed or complied with by each such
party, and, except as set forth on Schedule 5.31, there is no default by any
such party thereunder. The disclosures set forth of Schedule 5.31 shall not
constitute a waiver by JHW II or Kitty Hawk III of any rights or remedies such
party may have with respect to any breach or default by any party to the Series
A Purchase Agreement of the terms of the Series A Purchase Agreement.
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ARTICLE 6
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASERS
Each Purchaser, severally but not jointly, hereby represents and
warrants as to itself or himself as follows:
6.1 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by such Purchaser of each Transaction Document to which such
Purchaser is a party: (a) is within such Purchaser's power and authority and has
been duly authorized by all necessary action; (b) does not contravene the terms
of such Purchaser's organizational documents or any amendment thereof; and (c)
will not violate, conflict with or result in any breach or contravention of any
Contractual Obligation or any Requirement of Law applicable to such Purchaser.
6.2 BINDING EFFECT. This Agreement has been duly executed and
delivered by such Purchaser and each Transaction Document to which such
Purchaser is a party constitutes such Purchaser's legal, valid and binding
obligation, enforceable against such Purchaser in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
6.3 NO LEGAL BAR. The execution, delivery and performance of each
Transaction Document to which such Purchaser is a party by such Purchaser will
not violate any Requirement of Law applicable to such Purchaser.
6.4 EXPERIENCE. Such Purchaser has carefully reviewed the
representations concerning the Company and its Subsidiaries contained in this
Agreement; the officers of the Company have made available to such Purchaser any
and all written information which such Purchaser has requested and have answered
to such Purchaser's satisfaction all inquiries made by such Purchaser; and such
Purchaser has sufficient knowledge and experience in investing in companies
similar to the Company so as to be able to evaluate the risks and merits of the
investment in the Shares and is able financially to bear the risks thereof.
6.5 PURCHASE FOR OWN ACCOUNT. The Shares to be acquired by such
Purchaser pursuant to this Agreement are being or will be acquired for such
Purchaser's own account for investment and with no intention of distributing or
reselling such securities or any part thereof in any transaction that would be
in violation of the securities laws of the United States of America, or any
state, without prejudice, however, to such Purchaser's right at all times to
sell or otherwise dispose of all or any part of the Shares under an effective
registration statement under the Securities Act, or any applicable state
securities laws or under an exemption from such registration available under the
Securities Act, or any applicable state securities laws and subject,
nevertheless, to the disposition of such Purchaser's property being at all times
within such Purchaser's control. If such Purchaser should in the future decide
to dispose of any of the Shares or the Common Stock issuable upon conversion of
the Series B Preferred Stock, such Purchaser
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understands and agrees that such Purchaser may do so only in compliance with the
Securities Act and applicable state securities laws, as then in effect. Such
Purchaser agrees to the imprinting of a legend on certificates representing all
of the Shares to the following effect: "THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS."
6.6 EXEMPTION. Such Purchaser understands that the Shares have not
been registered under the Securities Act on the grounds that the sale provided
for in this Agreement and the issuance of the Shares are exempt from
registration under the Securities Act, and that the Company's reliance on such
exemption is predicated in part on such Purchaser's representations set forth
herein.
6.7 ACCREDITED INVESTOR. Unless such Purchaser otherwise has
indicated in writing to the Company, such Purchaser is an accredited investor
within the definition set forth in Rule 501(a) promulgated under the Securities
Act.
6.8 NO PUBLIC MARKET. Such Purchaser understands that no public
market now exists for any of the securities issued by the Company and that there
is no assurance that a public market will ever exist for any such securities.
6.9 ERISA. No part of the funds used by such Purchaser to purchase
the Shares hereunder constitutes assets of any "employee benefit plan" (as
defined in Section 3(3) of ERISA) or "plan" (as defined in Section 4975 of the
Code) listed on Schedule 5.23(b).
6.10 BROKER'S, FINDER'S OR SIMILAR FEES. There are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
with the transactions contemplated hereby based on any agreement, arrangement or
understanding with such Purchaser or any action taken by such Purchaser. Xxxxxx,
Xxxxx Xxxx III and Xxxxx Xxxx XX hereby further represent that the transaction
structuring fee payable to Whitney, Waller, Kitty Hawk III and Xxxxx Xxxx XX
pursuant to Section 2.5 hereof does not constitute a commission or other
remuneration paid or given directly or indirectly for the solicitation of any
Purchaser or prospective purchaser of the Shares.
6.11 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENT. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person in respect of any
Requirement of Law, and no lapse of a waiting period under a Requirement of Law,
is necessary or required in connection with the execution, delivery or
performance by such Purchaser or enforcement against such Purchaser of this
Agreement or the transactions contemplated hereby.
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ARTICLE 7
INDEMNIFICATION
7.1 INDEMNIFICATION. In addition to all other sums due hereunder or
provided for in this Agreement, the Company agrees to indemnify and hold
harmless each Purchaser and its Affiliates and each of their respective
officers, directors, agents, employees, subsidiaries, partners, attorneys,
accountants and controlling persons (each, an "INDEMNIFIED PARTY") to the
fullest extent permitted by law from and against any and all losses, claims,
damages, expenses (including, without limitation, reasonable fees, disbursements
and other charges of counsel incurred by an Indemnified Party in any action or
proceeding between the Company and such Indemnified Party (or Indemnified
Parties) or between an Indemnified Party (or Indemnified Parties) and any third
party or otherwise) or other liabilities, losses, or diminution in value of the
Shares (collectively, "LIABILITIES") resulting from or arising out of (i) any
breach of any representation or warranty, covenant or agreement of the Company
in this Agreement, the Certificate of Incorporation, the Certificate of
Amendment, the Registration Rights Agreement, the Stockholders' Agreement or the
other Transaction Documents, including, without limitation, the failure to make
payment when due of amounts owing pursuant to this Agreement, the Shares or the
other Transaction Documents, on the due date thereof (whether at the scheduled
maturity, by acceleration or otherwise) or (ii) any legal, administrative or
other actions (including actions brought by either of the Purchasers, the
Company, any Subsidiary or any equity holders of the Company or any Subsidiary
or derivative actions brought by any Person claiming through or in the Company's
or any Subsidiary's name), proceedings or investigations (whether formal or
informal), or written threats thereof, based upon, relating to or arising out of
the Transaction Documents, the transactions contemplated thereby, or any
Indemnified Party's role therein or in the transactions contemplated thereby;
provided, however, that the Company shall not be liable under this Section 7.1
to an Indemnified Party: (a) for any amount paid by the Indemnified Party in
settlement of claims by the Indemnified Party without the Company's written
consent (which consent shall not be unreasonably withheld), (b) to the extent
that it is finally judicially determined that such Liabilities resulted
primarily from the willful misconduct or gross negligence of such Indemnified
Party or (c) to the extent that it is finally judicially determined that such
Liabilities resulted primarily from the breach by such Indemnified Party of any
representation, warranty, covenant or other agreement of such Indemnified Party
contained in this Agreement or any other Transaction Document; provided,
further, that if and to the extent that such indemnification is unenforceable
for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of such Liabilities which shall be permissible under applicable
laws. In connection with the obligation of the Company to indemnify for expenses
as set forth above, the Company further agrees, upon presentation of appropriate
invoices containing reasonable detail, to reimburse each Indemnified Party for
all such expenses (including, without limitation, fees, disbursements and other
charges of counsel incurred by an Indemnified Party in any action or proceeding
between the Company and such Indemnified Party (or Indemnified Parties) or
between an Indemnified Party (or Indemnified Parties) and any third party or
otherwise) as they are incurred by such Indemnified Party; provided, however,
that if an Indemnified Party is reimbursed hereunder for any expenses, such
reimbursement of expenses shall be refunded to the extent it is finally
judicially determined that the Liabilities in question resulted primarily from
(i) the willful misconduct or gross negligence
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of such Indemnified Party or (ii) the breach by such Indemnified Party of any
representation, warranty, covenant or other agreement of such Indemnified Party
contained in this Agreement or any other Transaction Document.
7.2 NOTIFICATION. Each Indemnified Party under this Article 7 will,
promptly after the receipt of notice of the commencement of any action,
investigation, claim or other proceeding against such Indemnified Party in
respect of which indemnity may be sought from the Company under this Article 7,
notify the Company in writing of the commencement thereof. The omission of any
Indemnified Party so to notify the Company of any such action shall not relieve
the Company from any liability which it may have to such Indemnified Party under
this Article 7 unless, and only to the extent that, such omission results in the
Company's forfeiture of material substantive rights or defenses. In case any
such action, claim or other proceeding shall be brought against any Indemnified
Party and it shall notify the Company of the commencement thereof, the Company
shall be entitled to assume and control the defense thereof at its own expense,
with counsel satisfactory to such Indemnified Party in its reasonable judgment;
provided, however, that any Indemnified Party may, at its own expense, retain
separate counsel to participate in such defense. Notwithstanding the foregoing,
in any action, claim or proceeding in which the Company, on the one hand, and an
Indemnified Party, on the other hand, is, or is reasonably likely to become, a
party, such Indemnified Party shall have the right to employ separate counsel at
the Company's expense and to control its own defense of such action, claim or
proceeding if, in the reasonable opinion of counsel to such Indemnified Party, a
conflict or potential conflict exists between the Company, on the one hand, and
such Indemnified Party, on the other hand, that would make such separate
representation advisable; provided, however, that in no event shall the Company
be required to pay fees and expenses under this Article 7 for more than one firm
of attorneys in any jurisdiction in any one legal action or group of related
legal actions. The Company agrees that it will not, without the prior written
consent of the Purchasers, settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the matters contemplated hereby (if any Indemnified Party is a party thereto or
has been actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of the Purchasers and
each other Indemnified Party from all liability arising or that may arise out of
such claim, action or proceeding. The Company shall not be liable for any
settlement of any claim, action or proceeding effected against an Indemnified
Party without its written consent, which consent shall not be unreasonably
withheld. The rights accorded to Indemnified Parties hereunder shall be in
addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise.
7.3 LIMITATIONS ON INDEMNIFICATION.
(a) The Company shall have no indemnification obligation to an
Indemnified Party pursuant to this Article VII with respect to a breach of any
representation or warranty unless such Indemnified Party delivers to the Company
written notice of such breach within the applicable survival period for such
representation or warranty as set forth in Section 9.1 hereof.
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(b) No Indemnified Party shall be entitled to indemnification
under this Article VII unless the aggregate amount of Liabilities to which the
Indemnified Parties are entitled to recover exceeds $50,000. In the event that
such Liabilities exceed an aggregate of $50,000, the Indemnified Parties shall
be entitled to indemnification under this Article VII for all Liabilities in
excess of an aggregate of $25,000. The limitation set forth in this paragraph
(b) shall not apply with respect to any (i) any breach of any representation or
warranty set forth in Section 5.21 hereof, (ii) matter constituting fraud or
intentional or willful misconduct, or (iii) covenant or agreement of the Company
to be performed or complied with from and after the Closing Date.
7.4 REGISTRATION RIGHTS AGREEMENT. Notwithstanding anything to the
contrary in this Article 7, the indemnification and contribution provisions of
the Registration Rights Agreement shall govern any claim made with respect to
registration statements filed pursuant thereto or sales made thereunder.
ARTICLE 8
AFFIRMATIVE COVENANTS
For so long as the Purchasers shall continue to beneficially own an
aggregate number of shares of Series B Preferred Stock that is convertible into
at least five percent (5%) of the aggregate number of shares of Common Stock
into which the shares of Series B Preferred Stock issued pursuant to this
Agreement were convertible in the aggregate as of the latest Closing Date that
shall have occurred (after appropriate adjustment for dividends, subdivisions,
combinations or reclassifications of the Series B Preferred Stock), and until
the payment by the Company of all amounts due to the Purchasers under this
Agreement and the other Transaction Documents, including, without limitation,
all fees, expenses and amounts due at such time in respect of indemnity
obligations under Article 7, the Company hereby covenants and agrees with the
Purchasers as follows:
8.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company shall
maintain, and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of financial statements in conformity with GAAP (it being
understood that monthly financial statements are not required to have footnote
disclosures). The Company shall deliver to the Purchasers each of the financial
statements and other reports described below:
(a) Monthly and Quarterly Financial. As soon as available and
in any event within thirty (30) days after the end of each month, the Company
shall deliver to the Purchasers (i) the consolidated and consolidating balance
sheets of the Company and its Subsidiaries, as at the end of such month and the
related consolidated and consolidating statements of income, stockholders' and
members equity and cash flow for such month and for the period from the
beginning of the then current fiscal year of the Company to the end of such
month (and, with respect to financial statements delivered for months that are
also the last month of any fiscal quarter, accompanied by the related
consolidated and consolidating statements of
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income, stockholders' and member's equity and cash flow for such fiscal quarter)
and (ii) a schedule of the outstanding Indebtedness for borrowed money of the
Company and its Subsidiaries describing in reasonable detail each such debt
issue or loan outstanding and the principal amount and amount of accrued and
unpaid interest with respect to each such debt issue or loan.
(b) Year-End Financial.
(i) As soon as available and in any event within ninety
(90) days after the end of the fiscal year of the Company, the Company shall
deliver to the Purchasers (A) the consolidated and consolidating balance sheets
of the Company and its Subsidiaries as at the end of such year and the related
consolidated and consolidating statements of income, stockholders' and members'
equity and cash flow for such fiscal year, (B) a schedule of the outstanding
Indebtedness for borrowed money of the Company and its Subsidiaries describing
in reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan, and (C) a report with respect to the financial statements from
Ernst & Young or another "Big Six" accounting firm of certified public
accountants selected by the Company and reasonably acceptable to the holders of
a majority of the shares of Series A Preferred Stock and Series B Preferred
Stock, voting as a single class, which report shall be prepared in accordance
with Statement of Auditing Standards No. 58 (the "STATEMENT") entitled "Reports
on Audited Financial Statements" and such report shall be "Unqualified" (as such
term is defined in such Statement). Together with each delivery of financial
statements of the Company and its Subsidiaries pursuant to this subsection
8.1(b), the Company shall deliver to the Purchasers a copy of a letter from the
Company to such accounting firm, which letter shall have been delivered to such
accounting firm prior to its delivery of such financial statements, stating that
an intent of the Company in engaging the accounting firm's professional services
to prepare the audit report relating to such financial statements was to benefit
and influence the Purchasers and their successors or assigns. Such letter shall
state that the Purchasers intend to rely on the audit report and the accounting
firm's professional services provided to the Company and its Subsidiaries.
(ii) Notwithstanding any provision in clause (i) above to
the contrary, in the case of the fiscal year of the Company ended December 31,
1997, the Company shall deliver the financial information and other documents
required pursuant to clause (i) above no later than the earlier of April 30,
1998 or the Second Closing Date.
(c) Company's Compliance Certificate. Together with each
delivery of financial statements of the Company and its Subsidiaries pursuant to
subsections 8.1(a) and 8.1(b) above, the Company shall deliver to the Purchasers
a fully and properly completed compliance certificate (in the form of Exhibit D
hereto or in such other form and substance satisfactory to the Purchasers)
signed by the Company's chief executive officer or chief financial officer.
(d) Accountants' Reports. Promptly upon receipt thereof, the
Company shall deliver to the Purchasers copies of all significant reports
submitted by the Company's certified public accountants in connection with each
annual, interim or special audit
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or review of any type of the financial statements or related internal control
systems of the Company and its Subsidiaries made by such accountants, including
any comment letter submitted by such accountants to management in connection
with their services.
(e) Management Reports. Together with each delivery of
financial statements of the Company and its Subsidiaries pursuant to subsections
8.1(a) and 8.1(b) (but with respect to subsection 8.1(a), with respect only to
financial statements of the Company and its Subsidiaries delivered for months
that are the last month of any fiscal quarter), the Company shall deliver to the
Purchasers a management report (i) describing the operations and financial
condition of the Company and its Subsidiaries for the quarter or fiscal year
then ended and the portion of the current fiscal year then elapsed (or for the
fiscal year then ended in the case of year-end financials), which description,
shall include, without limitation, construction costs, anchor lease rates,
collocation timing and collocation lease rates, (ii) setting forth in
comparative form on a month-to-month basis the corresponding figures from the
most recent projections for the current fiscal year delivered pursuant to
subsection 8.1(f) or otherwise approved by the Board of Directors, and
discussing the reasons for any significant variations, and (iii) setting forth
in reasonable detail the compliance or non-compliance by the Company or any
Subsidiary with any financial or other covenants to which the Company or any
such Subsidiary is subject pursuant to any loan agreement or other agreement
relating to Indebtedness of the Company or such Subsidiary and discussing the
reasons for any non-compliance. The information above shall be presented in
reasonable detail and shall be certified by the chief financial officer of the
Company to the effect that such information fairly presents the results of
operations and financial condition of the Company and its Subsidiaries as at the
dates and for the periods indicated.
(f) Projections. No earlier than sixty (60) days prior nor
later than thirty (30) days after the end of each fiscal year beginning with the
current fiscal year, the Company shall prepare and deliver to the Purchasers
projections of the Company and its Subsidiaries for the next succeeding fiscal
year, on a month to month basis.
(g) SEC Filings and Press Releases. Promptly upon their
becoming available, the Company shall deliver to the Purchasers copies of (i)
all financial statements, reports, notices and proxy statements sent or made
available by the Company or any of its Subsidiaries to their security holders,
(ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by the Company or any of its Subsidiaries with any
securities exchange or with the Commission or any other governmental or private
regulatory authority, and (iii) all press releases and other statements made
available by the Company or any of its Subsidiaries to the public concerning
material developments in the business of the Company or any of its Subsidiaries.
(h) Events of Default, Etc. Promptly upon any officer of the
Company obtaining knowledge of any of the following events or conditions, the
Company shall deliver to the Purchasers copies of all notices given or received
by the Company or any of its Subsidiaries with respect to any such event of
condition and a certificate of the Company's chief executive officer specifying
the nature and period of existence of such event or condition and what action
the Company has taken, is taking and proposes to take with respect thereto: (i)
any condition or event that constitutes a breach of any provision of this
Agreement; (ii) any notice that any Person
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has given to the Company or any Subsidiary or any other action taken with
respect to a claimed default in any agreement evidencing Indebtedness or any
other material agreement to which the Company or any Subsidiary is a party; or
(iii) any event or condition that could reasonably be expected to result in any
material adverse effect on the Condition of the Company.
(i) Litigation. Promptly upon any officer of the Company
obtaining knowledge of (i) the institution of any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Company or
any Subsidiary or any property of the Company or any Subsidiary not previously
disclosed by the Company to the Purchasers or (ii) any material development in
any action, suit, proceeding, governmental investigation or arbitration at any
time pending against or affecting the Company or any Subsidiary or any property
of the Company or any Subsidiary, which, in each case, is reasonably possible to
have a material adverse effect on the Condition of the Company, the Company will
promptly give notice thereof to the Purchasers and provide to the Purchasers
such other information as may be reasonably available to the Company to enable
the Purchasers and their respective counsel to evaluate such matter.
(j) Subsidiaries. Not less than fifteen (15) days prior to
creating a Subsidiary or acquiring the stock of a Person, such that such Person
will become a Subsidiary, the Company shall notify the Purchasers of the
Company's or any Subsidiary's intention to create such Subsidiary or acquire
such stock, and following such notice, such Subsidiary will not be created or
acquired unless such Subsidiary executes a joinder to this Agreement and the
other Transaction Documents in form and substance satisfactory to the
Purchasers.
(k) No Defaults. The Company shall deliver to the Purchasers
concurrently with the delivery of the financial statements referred to in
subsection 8.1(b), a certificate of the Company's Chief Financial Officer in the
form of stating that to his or her knowledge no breach of this Agreement or any
Transaction Document shall have occurred during the period covered thereby,
except as specified in such certificate.
(l) Bank Accounts. The Company shall not establish any bank
account or other account with any financial institution unless it provides
Purchasers with prior written notice thereof.
(m) Other Information. With reasonable promptness, the Company
shall deliver to the Purchasers such other information and data with respect to
the Company or any of its Subsidiaries as from time to time may be reasonably
required by the Purchasers.
8.2 PRESERVATION OF CORPORATE EXISTENCE. The Company shall, and
shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its
corporate existence;
(b) conduct their businesses in accordance with sound business
practices, keep their properties in good working order and condition (normal
wear and tear
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excepted), and from time to time make all needed repairs to, renewals of or
replacements of such properties (except to the extent that any of such
properties are obsolete or are being replaced) so that the efficiency of their
business operations shall be fully maintained and preserved; and
(c) file or cause to be filed in a timely manner all reports,
applications, estimates and licenses that shall be required by a Governmental
Authority.
8.3 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause each
of its Subsidiaries to, pay and discharge as the same shall become due and
payable, all their respective obligations and liabilities, including without
limitation:
(a) all tax liabilities, assessments and governmental charges
or levies upon the Company or any Subsidiary or their properties or assets,
unless the same are being contested in good faith by appropriate proceedings and
adequate reserves in accordance with GAAP are being maintained by the Company or
such Subsidiary;
(b) all lawful claims which the Company or such Subsidiary is
obligated to pay, which are due and which, if unpaid, might by law become a Lien
upon its property, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by the Company or such Subsidiary; and
(c) all payments of principal, interest and other amounts when
due on Indebtedness.
8.4 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause
its Subsidiaries to comply, in all material respects with all Requirements of
Law and with the directions of any Governmental Authority having jurisdiction
over them or their business or property (including all applicable Environmental
Laws).
8.5 INSPECTION. The Company will permit, and will cause each of its
Subsidiaries to permit, representatives of the Purchasers to visit and inspect
any of their properties, to examine their corporate, financial and operating
records and make copies thereof or abstracts therefrom, and to discuss their
affairs, finances and accounts with their respective directors, officers and
independent public accountants, all at such reasonable times during normal
business hours and as often as may be reasonably requested, upon reasonable
advance notice.
8.6 MAINTENANCE OF PROPERTIES; INSURANCE. The Company and its
Subsidiaries shall maintain or cause to be maintained in good repair, working
order and condition all material properties used in their respective businesses
and will make or cause to be made all appropriate repairs, renewals and
replacements thereof. The Company and its Subsidiaries will maintain or cause to
be maintained with financially sound and reputable insurers that have a rating
of "A" or better as established by Best's Rating Guide (or an equivalent rating
with such other publication of a similar nature as shall be in current use),
public liability and property damage insurance with respect to their respective
businesses and properties
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against loss or damage of the kinds customarily carried or maintained by
companies of established reputation engaged in similar businesses and in amounts
acceptable to Purchasers and will deliver evidence thereof to Purchasers.
Without limiting the foregoing, the Company and its Subsidiaries will maintain
at all times business interruption insurance in an amount satisfactory to the
Board of Directors of the Company, and directors' and officers' liability
insurance coverage for each of the members of the Board of Directors of the
Company in amounts satisfactory to the Board of Directors of the Company;
provided, however, that the Company shall not be obligated to purchase or
maintain such insurance in the event that reasonable terms and pricing are not
commercially available.
8.7 BOOKS AND RECORDS. The Company shall, and shall cause each of
its Subsidiaries to, keep proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets and
businesses of the Company and each of its Subsidiaries in accordance with GAAP
consistently applied to the Company and its Subsidiaries taken as a whole.
8.8 USE OF PROCEEDS. The Company shall use the proceeds of the sale
of the Shares at the Closing hereunder only for (i) the fees and expenses in
connection with the transactions contemplated hereunder and under the
Transaction Documents, and (ii) general corporate purposes.
8.9 BOARD NOMINEES. The Company shall maintain a Board of Directors
consisting of the number of directors specified in Section 5 of the
Stockholders' Agreement and use its best efforts to have the nominees designated
pursuant to Section 5 of the Stockholders' Agreement elected to the Board of
Directors of the Company in accordance with the terms thereof.
8.10 GRANTING OF OPTIONS. The Company may grant up to an aggregate of
1,817,700 Stock Options, of which 1,244,700 Stock Options have been granted as
of the First Closing Date and 573,000 Stock Options are to be granted in the
future. If the Stock Options are granted, the Company shall grant the Stock
Options at an exercise price equal to at least the per share fair market value
of the Common Stock (as determined by the Company's Board of Directors) at the
time of such grant.
8.11 BUSINESS ACTIVITIES. The Company shall engage in no business or
business activity other than the businesses and business activities in which it
is currently engaged and the performance of its obligations under the
Transaction Documents.
8.12 KEY-MAN LIFE INSURANCE. The Company shall at all times maintain
a key-man life insurance policy with a reputable and financially sound insurer
on the life of Xxxxxxx X. Xxxxx in the face amount of not less than $3,000,000.
Such insurance policy shall (a) be in full force and effect by no later than the
earlier of (i) two (2) months after the First Closing Date or (ii) the Second
Closing Date, (b) name the Company as beneficiary and (c) provide that such
insurance policy may not be canceled unless the insurance carrier gives at least
30 days' prior written notice of such cancellation to Purchasers.
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8.13 BOARD CONSENT. The Company shall obtain the consent of the
Company's Board of Directors prior to entering into any single contract or
agreement for the purchase, lease, construction or management of
telecommunication towers that involve the receipt or payment of in excess of
$10,000,000.
8.14 RESERVATION OF SHARES. The Company shall at all times reserve
and keep available out of its authorized Common Stock, solely for the purpose of
issuance or delivery upon (a) exercise of the warrants set forth on Schedule
5.19, the Stock Options, and (b) conversion of the Shares, the maximum number of
shares of capital stock that may be issuable or deliverable upon such exercise
or conversion, as the case may be (the "EXERCISABLE SHARES"). The Exercisable
Shares shall, when issued or delivered and paid for in accordance with such
warrants, the Stock Options or the Certificate of Amendment with respect to the
Shares, as the case may be, be duly and validly issued and fully paid and
non-assessable. The Company shall issue such capital stock in accordance with
the provisions of such warrants, the Stock Options or the Certificate of
Amendment with respect to the Shares, as the case may be, and shall otherwise
comply, in each case, with the terms thereof.
ARTICLE 9
MISCELLANEOUS
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement, any investigation by or on behalf of either
Purchaser, acceptance of the Shares and payment therefor, or termination of this
Agreement until November 30, 1999, except for the representations and warranties
set forth in Sections 5.11, 5.13 and 5.16 and matters constituting fraud or
intentional or willful misconduct, which shall survive for the applicable
statute of limitation periods (including extensions or waivers thereof). If
notification of a breach of any representation or warranty is given on or before
the applicable survival period, any claim with respect to such breach shall
survive until finally resolved by agreement of the parties or nonappealable
court order.
9.2 NOTICES. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(a) if to Whitney (or JHW II, JHW III or JHW Strategic III):
c/o X. X. Xxxxxxx & Co.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
Xxxxxx X. X' Xxxxx
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with a copy to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
(b) if to Xxxxxx:
Xxxxxx-Xxxxxx Media Partners, L.P.
c/o Xxxxxx-Xxxxxx Management Group, Inc.
0 Xxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Xx.
with a copy to:
Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
c) if to Kitty Hawk III:
Kitty Hawk Capital Limited Partnership, III
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: W. Xxxxx Xxxxxx
with a copy to:
Xxxxx Xxxxx Mulliss & Xxxxx, LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telefacsimile Number: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxxx, Esq.
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(e) if to Kitty Hawk Capital Limited Partnership IV:
Kitty Hawk Capital Limited Partnership, IV
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: W. Xxxxx Xxxxxx
(f) if to Eagle Creek:
Eagle Creek Capital, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx, 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
(g) if to NCEF:
The North Carolina Enterprise Fund, L.P.
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
with a copy to:
Xxxxxx & Xxxxxxx, LLP
0000 Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(g) if to Xxxxxx X.X.:
c/o Xxx X. Xxxxxx, III
00000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
with a copy to:
Friday, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Price X. Xxxxxxx, Esq.
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(h) if to Xxxxxx:
Xxxxxxx X. Xxxxxx
c/o PCX Corporation
0000 X.X. Xxxxxxx 00 Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
(i) if to Xxxxxxx:
Xxxx X. Xxxxxxx
c/o PCX Corporation
0000 X.X. Xxxxxxx 00 Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
(j) if to Xxxxxx:
Xxxxx X. Xxxxxx
c/o PCX Corporation
0000 X.X. Xxxxxxx 00 Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
(k) if to the Company:
SpectraSite Holdings, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxx
Xx. Xxx X. Xxxxxx, III
with a copy to:
Xxxxxxxxx & Xxxxx PLLC
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
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9.3 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of the parties
hereto. Subject to applicable securities laws, the Purchasers may assign any of
its rights under any of the Transaction Documents to any Person, and, subject to
the terms of the Stockholders' Agreement, any holder of any of the Shares or any
of the Common Stock issuable upon conversion of the Series B Preferred Stock may
assign any such securities to any Person. The Company may not assign any of its
rights under this Agreement without the prior written consent of the Purchasers.
Except as provided in Article 7, no Person other than the parties hereto and
their successors and permitted assigns is intended to be a beneficiary of any of
the Transaction Documents.
9.4 AMENDMENT AND WAIVER.
(a) No failure or delay on the part of any of the parties
hereto in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
parties hereto at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any party from the terms of any provision of
this Agreement, shall be effective (i) only if it is made or given in writing
and signed by all of the parties hereto, and (ii) only in the specific instance
and for the specific purpose for which made or given; provided, however, that
any amendment, supplement or modification of or to any provision of Article 8
hereof, and any consent to any departure by any party from the terms of any
provision of Article 8 hereof, shall be effective if it is made or given in
writing and signed by the Purchasers holding a majority of the issued and
outstanding shares of Series B Preferred Stock (provided that such majority
shall include the Whitney Funds and Xxxxxx). Except where notice is specifically
required by this Agreement, no notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar or
other circumstances.
9.5 SIGNATURES AND COUNTERPARTS. Telefacsimile transmissions of any
executed original document and/or retransmission of any executed telefacsimile
transmission shall be deemed to be the same as the delivery of an executed
original. At the request of any party hereto, the other parties hereto shall
confirm telefacsimile transmissions by executing duplicate original documents
and delivering the same to the requesting party or parties. This Agreement may
be executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
9.6 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.
9.8 JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY
AGREES THAT THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE SHARES, THE JHW II OPTION OR ANY AGREEMENTS OR TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK
AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH
COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE
AND ANY CLAIM THAT THE SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN
SECTION 9.2, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.
9.9 SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
9.10 RULES OF CONSTRUCTION. Unless the context otherwise requires,
"or" is not exclusive, and references to sections or subsections refer to
sections or subsections of this Agreement.
9.11 ENTIRE AGREEMENT. This Agreement, together with the exhibits and
schedules hereto and the other Transaction Documents, is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein. This Agreement, together with the exhibits and
schedules hereto and the other Transaction Documents, supersede all prior
agreements and understandings between the parties with respect to such subject
matter. Notwithstanding the foregoing, the Series A Purchase Agreement, as
amended in Section 9.16, shall remain in full force and effect and shall not be
superseded by the terms of this Agreement.
9.12 CERTAIN EXPENSES. The Company agrees to pay all reasonable
expenses of Whitney, JHW II, JHW III, JHW Strategic III, Xxxxxx, Xxxxx Xxxx III,
Xxxxx Xxxx XX and NCEF (including reasonable fees, charges and disbursements of
counsel) incurred in connection with
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any amendment, supplement, modification or waiver of or to any provision of this
Agreement (including, without limitation, a response to a request by the Company
for such Purchasers' consent to any action otherwise prohibited hereunder), the
Certificate of Amendment, or consent to any departure by the Company from, the
terms of any provision of this Agreement or the Certificate of Amendment.
9.13 PUBLICITY. Except as may be required by applicable law, none of
the parties hereto shall issue a publicity release or announcement or otherwise
make any public disclosure concerning this Agreement or the transactions
contemplated hereby, without prior approval by the other party hereto. If any
announcement is required by law to be made by any party hereto, prior to making
such announcement such party will deliver a draft of such announcement to the
other parties and shall give the other parties an opportunity to comment
thereon.
9.14 FURTHER ASSURANCES. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations, or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
9.15 OBLIGATIONS OF THE PARTIES. Each Purchaser's obligations and the
obligations of the Company hereunder and are subject to the execution and
delivery by the other Purchaser of this Agreement. The obligations of each
Purchaser hereunder and under the other Transaction Documents to which such
Purchaser is a party shall be several and not joint, and no Purchaser shall be
liable or otherwise responsible for the acts or omissions of any other
Purchaser.
9.16 AMENDMENT OF SERIES A PURCHASE AGREEMENT. The Company, JHW II
and Kitty Hawk hereby consent and agree that, effective upon the execution of
this Agreement by the parties hereto, the Series A Purchase Agreement shall be
amended to: (i) delete Section 8.10 thereof in its entirety and to substitute in
lieu thereof the following:
"8.10 BOARD NOMINEES. The Company shall maintain a Board of
Directors consisting of the number of directors specified in Section 5 of
the Second Amended and Restated Stockholders' Agreement, dated as of March
23, 1998, by and among the Company (now known as SpectraSite Holdings,
Inc.), a Delaware corporation, WEP, X. X. Xxxxxxx III, L.P., a Delaware
limited partnership, Whitney Strategic Partners III, L.P., a Delaware
limited partnership, Xxxxxx-Xxxxxx Media Partners, L.P., a Delaware limited
partnership, Kitty Hawk, Kitty Hawk Capital Limited Partnership, IV, a
Delaware limited partnership, Eagle Creek Capital, L.L.C., a Washington
limited liability company, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxx, Xxxxxx Family
Limited Partnership, an Arkansas limited partnership, The North Carolina
Enterprise Fund, L.P., a North Carolina limited partnership, Xxxxxx X.
Xxxxxxxxx, Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx, as such
agreement may be amended from time to time (the "Stockholders' Agreement"),
and use its best efforts to have the nominees designated pursuant to
Section
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5 of the Stockholders' Agreement elected to the Board of Directors of the
Company in accordance with the terms thereof.";
and (ii) amend Section 8.13 thereof to (A) delete entirely the requirement to
obtain or maintain key-man life insurance on the life of Xxx X. Xxxxxx, III, and
(B) change the date by which the key-man life insurance policy on the life of
Xxxxx must be in full force and effect to the earlier of (i) two (2) months
after the First Closing Date or (ii) the Second Closing Date.
The Company, JHW and Kitty Hawk III further agree that such amendment
of the Series A Purchase Agreement constitutes full compliance with Section 9.4
of the Series A Purchase Agreement and that, except as herein amended, the terms
and provisions of the Series A Purchase Agreement shall continue unchanged and
in full force and effect as originally executed.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective officers hereunto duly authorized
as of the date first above written.
SPECTRASITE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title:President
WHITNEY EQUITY PARTNERS, L.P.
By: X. X. Xxxxxxx Equity Partners, LLC,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
A Managing Member
X. X. XXXXXXX III, L.P.
By: X. X. Xxxxxxx Equity Partners III, LLC
Its General Partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
A Managing Member
WHITNEY STRATEGIC
PARTNERS III, L.P.
By: X. X. Xxxxxxx Equity Partners III, LLC
Its General Partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
A Managing Member
[FIRST SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
51
XXXXXX-XXXXXX MEDIA PARTNERS, L.P.
By: /s/ Xxxxxx -Xxxxxx Media, LLC
------------------------------
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxxxxx, Xx.
A General Partner
KITTY HAWK CAPITAL LIMITED
PARTNERSHIP, III
By: Kitty Hawk Partners Limited Partnership, III
Its General Partner
By: /s/ W. Xxxxx Xxxxxx
------------------------------
Name: W. Xxxxx Xxxxxx
A General Partner
KITTY HAWK CAPITAL LIMITED
PARTNERSHIP, IV
By: Kitty Hawk Partners LLC, IV
Its General Partner
By: /s/ W. XXXXX XXXXXX
------------------------------
Name: W. XXXXX XXXXXX
A Manager
EAGLE CREEK CAPITAL, L.L.C.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
A Manager
[SECOND SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
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THE NORTH CAROLINA ENTERPRISE FUND, L.P.
By: The North Carolina Enterprise Corporation,
General Partner
By:/s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title:President & CEO
XXXXXX FAMILY LIMITED PARTNERSHIP
By:/s/ Xxxx X. Xxxxxx III
-------------------------------
Name: Xxxx X. Xxxxxx III
Title: Managing General Partner
/s/ XXXXXXX X.XXXXXX
----------------------------------
XXXXXXX X. XXXXXX
/s/ XXXX X. XXXXXXX
----------------------------------
XXXX X. XXXXXXX
/s/ XXXXX X. XXXXXX
----------------------------------
XXXXX X. XXXXXX
[THIRD SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
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