STOCK EXCHANGE AGREEMENT
This STOCK EXCHANGE AGREEMENT is made and entered
into as of June 26, 1995 by and among American Communications
Services, Inc., a Delaware corporation (the "Company") and the
holders (the "Series A Stockholders") of the Company's 9% Series
A Convertible Preferred Stock, $1.00 par value per share (the
"Series A Preferred Stock").
R E C I T A L S:
WHEREAS, for the purpose of obtaining additional
financing the Company is offering for sale shares of 9% Series B-
1 Convertible Preferred Stock, $1.00 par value per share (the
"Series B-1 Preferred Stock"), 9% Series B-2 Convertible
Preferred Stock, $1.00 par value per share (the "Series B-2
Preferred Stock"), 9% Series B-3 Convertible Preferred Stock,
$1.00 par value per share (the "Series B-3 Preferred Stock") and
9% Series B-4 Convertible Preferred Stock, $1.00 par value per
share (the "Series B-4 Preferred Stock"), (the Series B-1
Preferred Stock, Series B-2 Preferred Stock, Series B-3 Preferred
Stock and Series B-4 Preferred Stock hereinafter collectively
referred to as the "Series B Preferred Stock"), and Warrants to
purchase common stock; and
WHEREAS, the Company and the Series A Stockholders
desire to induce certain investors to purchase the Series B
Preferred Stock; and
WHEREAS, the retirement of the Series A Preferred
Stock is necessary to facilitate the consummation of the sale of
the Series B Preferred Stock; and
WHEREAS, the Company and Series A Stockholders deem
it in the best interests of the Series A Stockholders and in the
best interests of the Company to retire the Series A Preferred
Stock; and
WHEREAS, in order to facilitate the retirement of the
Series A Preferred Stock, the Company and the Series A
Stockholders have agreed to exchange the Series A Preferred Stock
for shares of the Company's 9% Series A-1 Convertible Preferred
Stock, $1.00 par value per share (the "Series A-1 Preferred
Stock"), subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, and the
representations, warranties and agreements of the parties
contained herein, the parties hereby agree as follows:
1. SHARE EXCHANGE
1.1 Exchange. Each of the Series A Stockholders
does hereby transfer, assign, convey and deliver to the Company
the number of shares of Series A Preferred Stock set forth
opposite that Stockholder's name on Schedule 1.1, in exchange for
an equal number of Series A-1 Preferred Stock. Each of the
Series A Stockholders has delivered to the Company the
certificate or certificates representing such shares, with duly
executed stock powers endorsed in blank.
1.2 Conditions to Exchange. The transactions
contemplated by this Agreement shall be conditioned upon and
shall occur simultaneously with the consummation of the sale by
the Company of at least 227,500 shares of the Series B Preferred
Stock (the "Series B Preferred Stock Transaction") to the
purchasers thereof pursuant to that certain Series B Preferred
Stock and Warrant Purchase Agreement dated June 21, 1995 (the
"Series B Purchase Agreement"), and at such time, the shares of
Series A Preferred Stock delivered hereunder shall be cancelled
and a new certificate or certificates shall be issued and
delivered promptly to each Series A Stockholder evidencing that
number of shares of Series A-1 Preferred Stock equal to the
number of shares of Series A Preferred Stock set forth opposite
such Series A Stockholder's name on Schedule 1.1. If for any
reason the consummation of such sale of shares of Series B
Preferred Stock shall not have occurred on or before July 15,
1995, the Company shall return promptly to each Series A
Stockholder the certificate or certificates evidencing shares of
Series A Preferred Stock previously delivered to the Company by
such Series A Stockholder.
1.3 Restricted Stock. Each of the Series A
Stockholders does hereby acknowledge that the shares of Series X-
0 Xxxxxxxxx Stock received by that Series A Stockholders pursuant
to this Agreement have not been registered under the Securities
Act of 1933, as amended (the "Securities Act") or the securities
laws of any other jurisdiction and constitute "Restricted
Securities" within the meaning of Rule 144 under the Securities
Act and therefore may not be resold unless registered under the
Securities Act or sold pursuant to an exemption from such
registration. The certificate(s) representing the Series A-1
Preferred Stock issued pursuant to this Agreement shall bear such
legend as the Company deems necessary or appropriate to comply
with the Securities Act and any other applicable federal and
state law.
1.4 Series A Investment Agreement. Sections 3, 4,
5 (with the exception of 5.5 and 5.6), 7 and 8 (including the
subsections thereof, the "Surviving Sections") of the Investment
Agreement dated October 21, 1994 between the Company and the
Series A Stockholders (the "Series A Investment Agreement") and
the definitions of defined terms used in the Surviving Sections
but defined elsewhere in the Series A Investment Agreement shall
remain in full force and effect as if the shares of Series A-1
Preferred Stock issued to the Series A Stockholders hereunder
were issued and sold to the Series A Stockholders pursuant to the
Series A Investment Agreement at the time the shares of Series A
Preferred Stock purchased by the Series A Stockholders thereunder
were issued. Except as provided in the preceding sentence, the
Series A Investment Agreement shall be deemed to be terminated
and the provisions thereof to be null and void and the rights of
the Series A Stockholders with respect to the Series A-1
Preferred Stock and Warrants (as defined in the Series A
Investment Agreement) issued to the Series A Stockholders shall
be governed by and subject to (A) the Certificate of Designations
(the "Certificate of Designations") relating to the Series A-1
Preferred Stock and Series B Preferred Stock, a copy of which is
attached hereto as Exhibit A and made a part hereof, (B) the
Stockholders Agreement dated June 21, 1995 by and among the
Company, the Series A Stockholders (therein called the "Series X-
0 Xxxxxxxxxxxx") and the Series B Stockholders, a copy of which
is attached hereto as Exhibit B and (C) the Registration Rights
Agreement dated June 21, 1995 by and among the Company, the
Series A Stockholders (therein called the "Series A-1
Stockholders") and the Series B Stockholders, a copy of which is
attached hereto as Exhibit B and (C) the Registration Rights
Agreement dated June 21, 1995 by and among the Company, the
Series A Stockholders (therein called the "Series A-1
Stockholers") and the Series B Stockholders, a copy of which is
attached hereto as Exhibit B and (C) the Registration Rights
Agreement dated June 21, 1995 by and among the Company, the
Series A Stockholders (therein the "Series A-1 Stockholders") and
the Series B Stockholders, a copy of which is attached hereto as
Exhibit C.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents sand warrants to the Series A
Stockholders as follows:
2.1 Existence and Power. The Company is validly
existing and in good standing under the laws of its state of
incorporation. The Company has the full corporate power and
authority to enter into and perform this Agreement and each other
instrument it is executing and delivering in connection with this
Agreement (collectively, the "Transaction Documents"). The
Company has the full corporate power and authority to carry on
its business as now conducted, and to own, lease and operate its
properties as it now does. The Company is qualified to do
business as a foreign corporation in each jurisdiction in which
it is required to be qualified.
2.2 Authorization. The execution, delivery and
performance of each of the Transaction Documents have been duly
authorized by all necessary action, and each of the Transaction
Documents constitutes the valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in
general and subject to general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity
or at law).
2.3 Consents of Third Parties. The execution,
delivery and performance of each of the Transaction Documents by
the Company will not (a) violate or conflict with the certificate
of incorporation or by-laws of the Company, the predecessor to
the Company or any of the Company's subsidiaries; (b) conflict
with, or result in the breach, termination or acceleration of, or
constitute a default under, any lease, mortgage, license,
agreement, commitment or other instrument to which the Company or
any of its subsidiaries is a party or by which it or any of its
subsidiaries or any of its or their properties are bound; (c)
constitute a violation of any law, regulation, order, writ,
judgment, injunction or decree applicable to the Company or any
of its subsidiaries or any of the Company's or its subsidiaries'
properties or except as set forth on schedule 2.3, require any
governmental consent, registration or approval; or (d) result in
the creation of any lien upon the properties or assets of the
Company or any of its subsidiaries.
2.4 Litigation. There is no judicial or
administrative action or proceeding pending or, to the best of
the knowledge of the Company, threatened, nor, to the best of the
knowledge of the Company, is there any governmental investigation
pending or threatened, that questions the validity of any of the
Transaction Documents or any action taken or to be taken by the
Company or any of its subsidiaries in connection with any of the
Transaction Documents. Except as set forth on schedule 2.4,
there is not litigation or proceeding pending or, to the best of
the knowledge of the Company, threatened, nor, to the best of the
knowledge of the Company, is there any governmental investigation
pending or threatened, nor is there any order, injunction or
decree outstanding, by or against the Company or any of its
subsidiaries or relating in any manner to any aspect of its or
their properties or businesses (except any such orders,
injunctions or decrees and any administrative proceedings
applicable generally throughout the industry in which the Company
and its subsidiaries operate).
2.5 Validity of Shares. The shares of Series A-1
Preferred Stock issued by the Company in exchange for Series A
Preferred Stock, are validly issued, fully paid and non-
assessable.
3. REPRESENTATIONS AND WARRANTIES OF THE SERIES A
STOCKHOLDERS
The Series A Stockholders each hereby represents and
warrants to the Company as follows:
3.1 Existence and Power. That each Series A
Stockholder is validly existing and in good standing under the
law of the jurisdiction of its organization and has the full
power and authority to enter into and perform this Agreement.
3.2 Authorization. The execution, delivery and
performance by that Series A Stockholder of this Agreement have
been duly authorized by all necessary action, and this Agreement
constitutes the valid and binding obligation of that Series A
Stockholder enforceable against it in accordance with is terms,
except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
3.3 Consents of Third Parties. Except for
conflicts, breaches, terminations, accelerations, defaults and
violations specified in (b) and (c) below that could not
reasonably be expected to have a material adverse effect on that
Series A Stockholder's ability to perform its obligations under
this Agreement, the execution, delivery and performance by that
Series A Stockholder of this Agreement will not: (a) violate or
conflict with its partnership agreement, certificate of
incorporation or by-laws or other similar organizational
documents; (b) conflict with, or result in the breach,
termination or acceleration of, or constitute a default under,
any lease, mortgage, license,
agreement, commitment or other instrument to which it is a party
or by which it or any of its properties are bound; or (c)
constitute a violation of any law, regulation, order, writ,
judgment, injunction or decree applicable to it or any of its
properties or require any governmental consent, registration or
approval.
3.4 Litigation. There is no judicial or
administrative action or proceeding pending or, to the best of
the knowledge of that Series A Stockholder, threatened, nor, to
the best of the knowledge of that Series A Stockholder, is there
any governmental investigation pending or threatened, that
questions the validity of this Agreement or any action taken or
to be taken by it in connection with this Agreement. There is no
litigation or proceeding pending or, to the best of the knowledge
of that Series A Stockholder, threatened, nor, to the best of
the knowledge of that Series A Stockholder, is there any
governmental investigation pending or threatened, nor is there
any order, injunction or decree outstanding, against that Series
A Stockholder that would have a material adverse effect upon that
Series A Stockholder's ability to perform its obligations under
this Agreement.
3.5 Investment. That the Series A Stockholder is
an accredited investor (within the meaning of the rules and
regulations under the Securities Act) and will be acquiring
Series A-1 Preferred Stock for investment and not with a view to
distribution in violation of the Securities Act.
3.6 Brokers. Except as set forth on schedule 3.16
of the Series B Purchase Agreement, no agreement, arrangement or
understanding with any broker or finder in connection with the
transactions contemplated by this Agreement has been entered into
by that Series A Stockholder.
3.7 Ownership. That each Series A Stockholder is
the record and beneficial owner of the shares of Series A
Preferred Stock set forth opposite that Series A Stockholder's
name on Schedule 1.1, free and clear of all liens, claims and
encumbrances of any kind.
4. ADDITIONAL AGREEMENTS
4.1 Indemnification. The Company, on one hand, and
each Series A Stockholder, on the other hand, agree to indemnify
and hold harmless the other party from and against any and all
damage, loss, liability, claim, or expense (including reasonable
attorney's fees) incurred by such other party resulting from, or
which exists or arises due to (i) any inaccuracy, breach or
omission of, from or in, the representations and warranties of
such party contained in this Agreement, or (ii) the
nonfulfillment of any agreement or obligation of such party under
this Agreement.
4.2 Further Acknowledgement. Each of the Series A
Stockholders hereby authorizes the cancellation of the Series A
Preferred Stock to be effective simultaneously upon the closing
of the Series B Preferred Stock Transaction and the issuance of
Series A-1 Preferred Stock to such holder. Each of the Series A
Stockholders acknowledges and agrees that, except as provided
herein, upon the consummation of the transactions contemplated by
this Agreement such Series A Stockholder shall have no rights as
a Series A Stockholder and further, that this Agreement
constitutes a settlement and relinquishment of its rights as a
holder of the Series A Preferred Stock, including but not limited
to, the conversion rights with respect to the Series A Preferred
Stock. Accordingly, in consideration of the agreements made by
the Company hereunder, each of the Series A Stockholders hereby
releases and discharges the Company, and its successors and
assigns, from any and all claims, demands, rights or liabilities
which that Series A Stockholder ever had, now have or may have in
the future, by reason of, arising out of, or in any way connected
with each of the Series A Stockholders' status as a holder of the
Series A Preferred Stock (it being understood, however, that
nothing in this Section 4.2 is intended to affect the claims,
demands, rights or liabilities of the Series A Stockholders under
the Series A Investment Agreement, to the extent those claims,
demands, rights or liabilities remain by reasons of Section 1.4
of this Agreement).
5. GENERAL PROVISIONS
The parties further covenant and agree as follows:
5.1 Amendments. This Agreement may be amended,
supplemented or interpreted at any time only by written
instrument duly executed by each of the parties hereto.
5.2 Contents of Agreement, Parties in Interest,
Assignment. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof. Any
previous agreements or understandings between the parties
regarding the subject matter hereof are merged into and
superseded by this Agreement in accordance with its terms. All
representations, warranties, terms and conditions of this
Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective heirs, legal representatives,
successors and permitted assigns of the parties hereto.
5.3 Severability. In the event that any one or
more of the provisions contained in this Agreement shall be
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 of this
Agreement shall not be in any way impaired.
5.4 Headings. The headings of the Sections and the
subsections of this Agreement are inserted for convenience of
reference only and shall not constitute a part hereof.
5.5 Instruments of Further Assurance. Each of the
parties hereto agrees, upon the request of any of the other
parties hereto, from time to time to executive and deliver to
such other party or parties all such instruments and documents of
further assurance or otherwise as shall be reasonable under the
circumstances, and to do any and all such acts and things as may
reasonably be required to carry out the obligations of such
requested party hereunder.
5.6 Specific Performance, Etc. Each of the parties
hereto will be entitled to specific performance of its rights
under this Agreement. Each of the parties hereto agrees that a
breach of any of the provisions of this Agreement will cause
irreparable injury to the nonbreaching parties, that such
nonbreaching parties have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every provision
contained in this Agreement shall be specifically enforceable
against all parties hereto.
5.7 Governing Law; Jurisdiction. This Agreement
shall be governed, construed and enforced in accordance with the
internal laws of the State of New York, excluding any choice of
law rules which may direct the application of the laws of another
jurisdiction.
5.8 Counterparts. This Agreement may be executed
in counterparts, each of which shall be considered an original,
but all of which together shall constitute the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed
by the parties hereto as of the day and year first above written.
THE COMPANY:
American Communications Services, Inc.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Its: President and COO
THE SERIES A STOCKHOLDERS:
The Xxxx Alternative Income Fund, L.P.
By:
Name:
Its:
Apex Investment Fund I, L.P.
By:
Name:
Its:
IN WITNESS WHEREOF, this Agreement has been executed
by the parties hereto as of the day and year first above written.
THE COMPANY:
American Communications Services, Inc.
By:____________________________________
Name:
Its:
THE SERIES A STOCKHOLDERS:
The Xxxx Alternative Income Fund, L.P.
By: WRH Partners, L.L.C., general partner
By: Paladin Court Co., Inc., general manager
By: *
Name: Xxxxxxx Xxxx
Its: President
* Xxxxxx X. Xxxxxxxx
Attorney-in-fact
Apex Investment Fund I, L.P.
By:____________________________________
Name:
its:
IN WITNESS WHEREOF, this Agreement has been executed
by the parties hereto as of the day and year first above written.
THE COMPANY:
American Communications Services, Inc.
By:____________________________________
Name:
Its:
THE SERIES A STOCKHOLDERS:
The Xxxx Alternative Income Fund, L.P.
By:____________________________________
Name:
Its:
Apex Investment Fund I, L.P.
By: Apex Management Partnership, its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Its: General Partner
Apex Investment Fund II, L.P.
By: Apex Management Partnership, its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Its: General Partner
The Productivity Fund II, L.P.
By: First Analysis Management Company II, its General Partner By:
First Analysis Corporation, General Partner
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Its: Executive Vice President
Ethos Partners L.P.
By:____________________________________
Name:
Its:
Zelus International Ltd.
By:____________________________________
Name:
Its:
Global Opportunity Fund I Ltd.
By:____________________________________
Name:
Its:
U.S. Signal Corporation
By:____________________________________
Name:
Its:
Apex Investment Fund II, L.P.
By:____________________________________
Name:
Its:
The Productivity Fund II, L.P.
By:____________________________________
Name:
Its:
Ethos Partners L.P.
By:____________________________________
Name:
Its:
Zelus International Ltd.
By:____________________________________
Name:
Its:
Global Opportunity Fund I Ltd.
By:____________________________________
Name:
Its:
U.S. Signal Corporation
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Its: Assistant Secretary
Xxxxxxx X. Xxxxxxxx Consulting, Inc. Retirement Plan and Trust
By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Its: Trustee
Prime Management II, L.P.
By:____________________________________
Name:
Its:
Xxxx Xxxxx Capital L.P.
By:____________________________________
Name:
Its:
Xxxx Xxxxx Capital International
By:____________________________________
Name:
Its:
Xxxxxxx X. Xxxxxxxx Consulting, Inc. Retirement Plan and Trust
By:____________________________________
Name: Xxxxxxx X. Xxxxxxxx
Its: Trustee
Prime Management II, L.P.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Its: SVP
Xxxx Xxxxx Capital L.P.
By:____________________________________
Name:
Its:
Xxxx Xxxxx Capital International
By:____________________________________
Name:
Its:
Xxxxxxx X. Xxxxxxxx Consulting, Inc. Retirement Plan and Trust
By:____________________________________
Name: Xxxxxxx X. Xxxxxxxx
Its: Trustee
Prime Management II, L.P.
By:____________________________________
Name:
Its:
Xxxx Xxxxx Capital L.P.
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Its: General Partner
Xxxx Xxxxx Capital International
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Its: Investment Adviser
TABLE OF CONTENTS
Page
1. SHARE EXCHANGE . . . . . . . . . . . . . . . . . . . . . 2
1.1 Exchange . . . . . . . . . . . . . . . . . . . . . 2
1.2 Conditions to Exchange . . . . . . . . . . . . . . 2
1.3 Restricted Stock . . . . . . . . . . . . . . . . . 3
1.4 Series A Investment Agreement. . . . . . . . . . . 3
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . 4
2.1 Existence and Power. . . . . . . . . . . . . . . . 4
2.2 Authorization. . . . . . . . . . . . . . . . . . . 5
2.3 Consents of Third Parties. . . . . . . . . . . . . 5
2.4 Litigation . . . . . . . . . . . . . . . . . . . . 5
2.5 Validity of Shares . . . . . . . . . . . . . . . . 6
3. REPRESENTATIONS AND WARRANTIES OF THE SERIES A
STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Existence and Power . . . . . . . . . . . . . . . 6
3.2 Authorization . . . . . . . . . . . . . . . . . . 7
3.3 Consents of Third Parties . . . . . . . . . . . . . 7
3.4 Litigation . . . . . . . . . . . . . . . . . . . . .8
3.5 Investment . . . . . . . . . . . . . . . . . . . 8
3.6 Brokers. . . . . . . . . . . . . . . . . . . . . . 8
3.7 Ownership. . . . . . . . . . . . . . . . . . . . . 8
4. ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . 8
4.1 Indemnification. . . . . . . . . . . . . . . . . . 8
4.2 Further Acknowledgement. . . . . . . . . . . . . . 8
5. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 9
5.1 Amendments . . . . . . . . . . . . . . . . . . . . 9
5.2 Contents of Agreement, Parties in Interest,
Assignment . . . . . . . . . . . . . . . . . . . . 9
5.3 Severability . . . . . . . . . . . . . . . . . . . 10
5.4 Headings . . . . . . . . . . . . . . . . . . . . . 10
5.5 Instruments of Further Assurance . . . . . . . . . 10
5.6 Specific Performance, Etc. . . . . . . . . . . . . 10
5.7 Governing Law; Jurisdiction. . . . . . . . . . . . 10
5.8 Counterparts . . . . . . . . . . . . . . . . . . . 11
