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PREFERRED STOCK PURCHASE AGREEMENT
by and among
US LEC CORP.
and
the Persons listed on Schedule 1 attached hereto
Dated as of April 11, 2000
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.........................................................1
1.1 Definitions...........................................................1
1.2 Accounting Terms......................................................9
ARTICLE II PURCHASE AND SALE OF PREFERRED STOCK..............................10
2.1 Purchase and Sale of the Preferred Stock.............................10
2.2 Closing..............................................................10
ARTICLE III CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE..........10
3.1 Representations and Warranties.......................................10
3.2 Compliance with this Agreement.......................................11
3.3 Officer's Certificate................................................11
3.4 Secretary's Certificate, Good Standing Certificates..................11
3.5 Transaction Documents................................................11
3.6 Payment of Fees......................................................11
3.7 Purchase Permitted by Applicable Laws................................12
3.8 Opinions of Counsel..................................................12
3.9 HSR Clearance........................................................13
3.10 Certificate of Designation........................................13
3.11 Preferred Stock Certificate.......................................13
3.12 Required Contractual Consents.....................................13
3.13 Voting and Tag-Along Agreement....................................13
3.14 Amendment to Senior Loan Agreement................................13
3.15 Required Governmental Consents....................................13
3.16 Regulatory Events.................................................14
3.17 Amendment of Bylaws...............................................14
3.18 Option Agreement..................................................14
3.19 Corporate Governance Agreement....................................14
3.20 Registration Rights Agreement.....................................14
3.21 Listing of Shares.................................................14
3.22 Amendment to Class B Stockholders Agreement.......................14
ARTICLE IV CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CLOSE..............14
4.1 Representations and Warranties True..................................15
4.2 Compliance with this Agreement.......................................15
4.3 Issuance Permitted by Requirements of Laws...........................15
4.4 HSR Clearance........................................................15
4.5 Opinion of Counsel...................................................15
4.6 Transaction Documents................................................15
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................15
5.1 Organization and Qualification.......................................15
5.2 Authority and Authorization..........................................16
5.3 Execution and Binding Effect.........................................16
i
5.4 Governmental Authorizations..........................................16
5.5 Regulatory Authorizations............................................16
5.6 Agreements and Other Documents.......................................17
5.7 Absence of Conflicts.................................................17
5.8 Financial Statements.................................................17
5.9 Disclosure...........................................................18
5.10 Compliance with Material Agreements...............................18
5.11 Labor Matters.....................................................18
5.12 Litigation........................................................18
5.13 Rights to Property................................................19
5.14 Taxes.............................................................19
5.16 No Brokerage Fees.................................................20
5.17 ERISA.............................................................20
5.18 Intellectual Property.............................................20
5.19 Environmental.....................................................21
5.20 Subsidiaries......................................................21
5.21 Transactions with Affiliates......................................21
5.22 Capitalization....................................................21
5.23 Commission Filings................................................22
5.24 Investment Company; Public Utility Holding Company................22
5.25 Securities Act....................................................22
5.26 Books and Records.................................................23
5.27 Certain Payments..................................................23
5.28 Year 2000 Compliance..............................................23
5.29 Trade Relations...................................................23
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..................23
6.1 Authorization; No Contravention......................................23
6.2 Binding Effect.......................................................24
6.3 Accredited Investor; Purchase for Own Account........................24
6.4 Governmental Authorizations..........................................25
6.5 No Brokers or Finders................................................25
6.6 Ownership of Company Securities; Voting and Other Agreements.........25
ARTICLE VII COVENANTS........................................................25
7.1 HSR Clearance........................................................25
7.2 Reservation of Shares................................................26
7.3 PUC Consents.........................................................26
7.4 Delivery of Financial and Business Information.......................26
7.5 Access to Properties.................................................27
7.6 Pre-Closing Covenants................................................27
7.7 Exclusivity..........................................................27
7.8 Tax Matters..........................................................28
7.9 Confidentiality......................................................28
7.10 Schedule 13D and 13G..............................................29
7.11 Election of Directors.............................................29
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7.12 Series C Designation..............................................29
7.13 Additional Covenant...............................................29
ARTICLE VIII INDEMNIFICATION; TERMINATION....................................29
8.1 Indemnification......................................................29
8.2 Notification.........................................................30
8.3 Termination..........................................................30
ARTICLE IX MISCELLANEOUS.....................................................31
9.1 Claims and Suits Under Section 8.1...................................31
9.2 Notices..............................................................31
9.3 Successors and Assigns...............................................33
9.4 Determinations, Requests or Consents.................................33
9.5 Counterparts.........................................................33
9.6 Headings.............................................................33
9.7 Governing Law........................................................33
9.8 Severability.........................................................33
9.9 Rules of Construction................................................34
9.10 Entire Agreement..................................................34
9.12 Publicity.........................................................35
9.13 Further Assurances................................................35
SCHEDULES
Schedule 1 - Closing Purchasers
Schedule 5.4 - Governmental Authorizations
Schedule 5.5 - Regulatory Authorizations
Schedule 5.6 - Agreements and Other Documents
Schedule 5.7 - Absence of Conflicts
Schedule 5.8 - Financial Statements
Schedule 5.10 - Compliance with Material Agreements
Schedule 5.12 - Labor Matters and Litigation
Schedule 5.14 - Taxes
Schedule 5.15 - No Material Adverse Change
Schedule 5.16 - Brokerage Fees
Schedule 5.18 - Intellectual Property
Schedule 5.20 - Subsidiaries
Schedule 5.21 - Transactions with Affiliates
Schedule 5.22 - Capitalization
Schedule 5.29 - Trade Relations
Schedule 6.5 - Brokers or Finders
EXHIBITS
Exhibit A - Form of Certificate of Designation
Exhibit B - Bylaws
iii
Exhibit C - Form of Corporate Governance Agreement
Exhibit D - Form of Registration Rights Agreement
Exhibit E - Form of Officer's Certificate
Exhibit F - Form of Secretary's Certificate
Exhibit G - Form of Preferred Stock Certificate
Exhibit H - Form of Voting and Tag-Along Agreement
Exhibit I - Form of Amendment to Senior Loan Agreement
Exhibit J - Form of Option Agreement
Exhibit K - Form of Certificate of Designation for Series C
Preferred Stock
Exhibit L - Form of Series C Preferred Stock Purchase Agreement
Exhibit M - Additional Covenant
iv
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT is dated as of April 11, 2000,
by and among US LEC CORP., a Delaware corporation (the "Company"), and the
Persons whose names are set forth on Schedule 1 attached hereto (individually, a
"Purchaser" and collectively, the "Purchasers").
STATEMENT OF PURPOSE
WHEREAS, the Company will designate a new series of its preferred
stock, par value $0.01 per share, which shall be called the Company's Series A
Convertible Preferred Stock (the "Preferred Stock"), which shall be convertible
into shares of the Company's Class A common stock, par value $0.01 per share, in
accordance with the terms of the Company's Certificate of Designation amending
the Company's Restated Certificate of Incorporation in the form attached hereto
as Exhibit A (the "Certificate of Designation");
WHEREAS, the Purchasers wish to purchase at the Closing (as defined
below), upon the terms and conditions stated in this Agreement, the number of
shares of the Preferred Stock set forth opposite their name on Schedule 1
attached hereto for an aggregate of 200,000 shares of the Preferred Stock to be
purchased by the Purchasers; and
WHEREAS, the Company and the Purchasers have reached certain agreements
with regard to the foregoing transactions, all upon the terms and conditions
more particularly described herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
As used in this Agreement, and unless the context requires a different
meaning, the following terms have the meanings indicated:
"AFFILIATE" means, with respect to a Person, (a) any director, executive
officer, general partner, managing member or other manager of such Person, (b)
any other Person (other than a Subsidiary) which directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, such Person and (c) if such Person is an individual, any member of
the immediate family (including parents, spouse and children) of such
individual, any trust whose principal beneficiary is such individual or one or
more members of such individual's immediate family and any Person who is
controlled by any such member or trust. The term "control" means (i) the power
to vote 25% or more of the securities or other equity interests of a Person
having ordinary voting power (on a fully diluted basis), or (ii) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Preferred Stock Purchase Agreement, as amended
or supplemented from time to time.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City, New York or Charlotte, North
Carolina are authorized or required by law or executive order to close.
"BYLAWS" means the Bylaws of the Company as amended pursuant to Section
3.17 on or prior to the Closing Date and attached hereto as Exhibit B.
"CERTIFICATE OF DESIGNATION" means the Certificate of Designation of
the Company relating to the Preferred Stock filed with the Secretary of State of
the State of Delaware on or prior to the Closing Date and attached hereto as
Exhibit A, as subsequently amended, supplemented or otherwise modified.
"CERTIFICATE OF INCORPORATION" means the Restated Certificate of
Incorporation of the Company as in effect on the date hereof and as amended by
the Certificate of Designation.
"CLASS B COMMON STOCK" means the Company's Class B common stock, par
value $0.01 per share or any other capital stock of the Company into which such
stock is reclassified or reconstituted.
"CLOSING" has the meaning assigned thereto in Section 2.2.
"CLOSING DATE" has the meaning assigned thereto in Section 2.2.
"CLOSING FAILURE" has the meaning assigned thereto in Section 8.3(a).
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON STOCK" means the Company's Class A common stock, par value
$0.01 per share or any other capital stock of the Company into which such stock
is reclassified or reconstituted.
2
"COMMUNICATIONS LAW" means any and all of (i) the Telecommunications
Act of 1996, the Communications Act of 1934, any similar or successor federal
statute to either and the rules and regulations of the FCC thereunder; and (ii)
any state law governing the provision of telecommunications services and the
rules and regulations of the PUC, all as the same may be in effect from time to
time.
"COMPANY" has the meaning assigned thereto in the Preamble.
"COMPANY INDEMNIFIED PARTY" has the meaning assigned thereto in Section
8.1.
"COMPANY LIABILITIES" has the meaning assigned thereto in Section 8.1.
"COMPETITOR" means any Person that is (directly or through one or more
Affiliates) both (i) engaged in the business of providing telecommunication
services offered by the Company and its Subsidiaries that generate at least 25%
of the Company's consolidated revenues as of the date of the Company's most
recent Form 10-K or 10-Q filed with the Commission and the revenues of such
Person attributable to such services exceed $50 million annualized and (ii) a
competitor of the Company operating in at least 25% of the MSAs (Metropolitan
Statistical Areas) in which the Company and its Subsidiaries are operating as of
the time of the proposed Transfer.
"CONTRACTUAL OBLIGATIONS" means, with respect to a 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.
"CORPORATE GOVERNANCE AGREEMENT" means the Corporate Governance
Agreement dated as of the Closing Date among the Company and the Purchasers
listed on the signature pages thereto and attached hereto as Exhibit C.
"DGCL" has the meaning assigned thereto in Section 2.1.
"ENVIRONMENTAL LAW" means any federal, state, foreign or local statute,
law, rule, regulation, ordinance, code or rule of common law now or hereafter in
effect and in each case as amended, and any judicial or administrative
interpretation thereof, including any legally binding judicial or administrative
order, consent decree or judgment, relating to the environment, employee, health
and safety or Hazardous Materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. ss. 9601 et seq.; the Resource Conservation and Recovery Act,
as amended, 42 U.S.C. ss. 6901 et seq.; the Federal Water Pollution Control Act,
as amended, 33 U.S.C. ss. 1251 et seq.; the Toxic Substances Control Act, 15
U.S.C. ss. 2601 et seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. xx.xx. 201 & 300f et seq.; the Oil Pollution Act
of 1990, 33 U.S.C. ss. 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. ss. 11001 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C. ss.1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C. ss. 651 et seq.; and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
3
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in Section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FCC" means the Federal Communications Commission of the United States
of America, and any successor, in whole or in part, to its jurisdiction.
"FINANCIAL STATEMENTS" has the meaning assigned thereto in Section 5.8.
"GAAP" means generally accepted United States accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means 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" means (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, polychlorinated biphenyls, and radon gas;
(ii) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous substances", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants" or "pollutants", or words of
similar meaning and effect, under any applicable Environmental Law; and (iii)
any other chemical, material or substance the release of which is prohibited,
limited or regulated by any Environmental Law.
"INDEBTEDNESS" means as to any Person, at a particular time, (a)
indebtedness for borrowed money or for the deferred purchase price of property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which such
Person otherwise assures a creditor against loss, (b) obligations under leases
which shall have been or should be, in accordance with GAAP, recorded as capital
leases in respect of which obligations such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
obligations such Person assures a creditor against loss, (c) obligations of such
Person to purchase or repurchase accounts receivable, chattel paper or other
payment rights sold or assigned by such Person, (d) indebtedness or obligations
of such Person under or with respect to letters of credit, notes, bonds or other
debt instruments (other than letters of credit that are cash collateralized) and
(e) all obligations of such Person under any interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in interest rates, in each case whether
contingent or matured.
4
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), priority or other security
agreement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under the Uniform Commercial Code or any other similar
recording or notice statute, and any lease having substantially the same effect
as any of the foregoing).
"MATERIAL ADVERSE CHANGE" means a material adverse change in (i) the
business, operations, assets, condition (financial or otherwise) or properties
of the Company and its Subsidiaries, taken as a whole or (ii) the ability of the
Company to perform its obligations, taken as a whole, under the Transaction
Documents.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (i) the
business, operations, assets, condition (financial or otherwise) or properties
of the Company and its Subsidiaries, taken as a whole, or (ii) the ability of
the Company to perform its obligations, taken as a whole, under the Transaction
Documents.
"MATERIAL CONTROVERSY" means a controversy that arises among the
Company and any of the holders of the Company's outstanding Common Stock in
respect of the purchase of the Preferred Stock pursuant to this Agreement, the
issuance of the Option Agreement, the potential issuance of the Option Preferred
Stock under the Option Agreement, and the proposed issuance and sale by the
Company of up to 25,000 shares of the Company's Series C Convertible Preferred
Stock to some or all of the lenders under the Senior Loan Agreement.
"MULTIEMPLOYER PLAN" means any "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate
makes, is making or is obligated to make contributions or has made or been
obligated to make contributions.
"OPTION AGREEMENT" means the Option Agreement dated as of the Closing
Date among the Company and the Purchasers listed in the signature pages thereto
and attached hereto as Exhibit J.
"OPTION PREFERRED STOCK" means the Series B Convertible Preferred Stock
of the Company or any other capital stock of the Company into which such stock
is reclassified or reconstituted.
"OPTION STOCK DESIGNATION" means the Certificate of Designation of the
Company relating to the Option Preferred Stock to be filed with the Secretary of
State of the State of Delaware in accordance with the terms and conditions of
the Option Agreement, as subsequently amended, supplemented or otherwise
modified.
"ORGANIZATIONAL DOCUMENTS" means with respect to a corporation, the
articles of incorporation and by-laws of such corporation; with respect to a
partnership, the certificate of partnership (or limited partnership, as
applicable) and partnership agreement, together with the analogous documents for
any corporate or partnership general partner; and in any case, any other
document governing the formation and conduct of business by such entity.
5
"OTHER PROPOSAL" has the meaning assigned thereto in Section 7.8
"PBGC" means the Pension Benefit Guaranty Corporation established under
Title IV of ERISA or any other governmental agency, department or
instrumentality succeeding to its functions.
"PERMITTED TRANSFEREE" means (i) any Affiliate of any Purchaser to whom
a Purchaser or another Affiliate of any Purchaser transfers Preferred Stock,
rights under the Option Agreement, or Option Preferred Stock, (ii) any other
Person to whom a Purchaser or an Affiliate of any Purchaser transfers Preferred
Stock, rights under the Option Agreement, or Option Preferred Stock with the
prior written consent of the Board of Directors and (iii) any Person to whom a
transferee described in clause (ii) transfers Preferred Stock, rights under the
Option Agreement, or Option Preferred Stock with the prior written consent of
the Board of Directors and (iv) any THL Holder (as defined in the Corporate
Governance Agreement) and any of the funds affiliated with Xxxx Capital, Inc.
and any general or limited partner of such funds; provided, however, that in no
event shall any such transferee or proposed transferee under any of clauses (i),
(ii), (iii), or (iv) be a Competitor or Person acting as a representative of a
Competitor. No transfer otherwise permissible shall be effective unless the
Permitted Transferee agrees in writing expressly for the Company's benefit to be
bound by the provisions of this Agreement, and in this event, the transferor
shall not be liable for the transferee's performance of its obligations under
this Agreement.
"PERSON" means any individual, firm, corporation, partnership, trust,
limited liability company, 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.
"PLAN" means (i) an "employee pension plan" as defined in Section 3(2)
of ERISA, (ii) an "employee welfare benefit plan" as defined in Section 3(1) of
ERISA or (iii) any other employee benefit or fringe benefit plan or program,
whether established by Requirements of Law, a written agreement or other
instrument, or custom or informal understanding.
"PREFERRED STOCK" means the Series A Convertible Preferred Stock of the
Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"PROXY STATEMENT" has the meaning assigned thereto in Section 7.7.
"PUC" means the public utilities commission for any state or any other
jurisdiction, or any successor agency, and any successor, in whole or in part,
to its functions or jurisdictions.
"PURCHASER(S)" has the meaning assigned thereto in the Preamble and
their successors and permitted assigns.
6
"PURCHASER PREFERRED STOCK" means the Series A Preferred Stock and the
Option Preferred Stock.
"PURCHASER REGULATORY EVENT" means any event in which any Purchaser
becomes subject to regulation as a "carrier," a "telephone company," a "common
carrier," a "public utility," or otherwise under any applicable law or
governmental regulation, federal, state or local, as a result of the purchase of
the Preferred Stock pursuant to this Agreement, the assumed purchase of 100,000
shares of Option Preferred Stock pursuant to the Option Agreement at the
Closing, and the execution and delivery of the Transaction Documents by the
parties thereto at the Closing.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of the Closing Date among the Company and the Purchasers listed on the
signature pages thereto and attached hereto as Exhibit D.
"REGULATION D" means Rule 506 of Regulation D as promulgated by the
Commission.
"REGULATORY AUTHORIZATIONS" means all approvals, authorizations,
licenses, filings, notices, registrations, consents, permits, exemptions,
registrations, qualifications, designations, declarations, or other actions or
undertakings made by, to or in respect of any telecommunications Governmental
Authority, including any certificates of public convenience and all grants,
approvals, licenses, filings and registrations from or to the FCC or any PUC or
under any Communications Law necessary in order to enable the Company or its
Subsidiaries to provide telecommunications service of the type provided or
proposed to be provided by such entity as of the date hereof.
"REGULATORY EVENT" means any of the following events: (i) the Company
or any of its Subsidiaries becomes subject to regulation by any Governmental
Authority in any way that is materially different from the regulation existing
at the date hereof and that would reasonably be expected to have a Material
Adverse Effect, or (ii) the FCC or any PUC issues an order revoking, denying or
refusing to renew, or recommending the revocation, denial or non-renewal of, any
Regulatory Authorization that would reasonably be expected to have a Material
Adverse Effect; provided, however, that the term "Regulatory Event" shall not
include (x) any adverse decision by the FCC, any PUC or Governmental Authority
regarding reciprocal compensation for enhanced service provider (including
Internet service provider) telecommunications traffic or the ability of the
Company or any of its Subsidiaries to collect such reciprocal compensation or
(y) the FCC, any PUC or Governmental Authority enacts Requirements of Law which
restrict, prevent or limit the billing, calculation, collection or payment of
reciprocal compensation for enhanced service provider (including Internet
service provider) telecommunications traffic.
"REPORTABLE EVENT" has the meaning assigned thereto in ERISA for which
notice has not been waived by regulation.
"REPRESENTATIVES" has the meaning assigned thereto in Section 7.9.
"REQUIRED HOLDERS" has the meaning assigned thereto in Section 9.4.
7
"REQUIREMENTS OF LAW" means, with respect to a Person, the
Organizational Documents of such Person, and any law, treaty, rule, regulation,
right, privilege, qualification, license, permit or franchise or determination
of an arbitrator or a court or the FCC, PUC or other Governmental Authority, in
each case applicable to 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, including all applicable
common law, all provisions of all applicable material state and federal
constitutions, statutes, rules, regulations and orders of all governmental
bodies, all Regulatory Authorizations issued to the Company or its Subsidiaries,
all Communications Laws and all Environmental Laws.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR LOAN AGREEMENT" means the Second Amended and Restated Loan and
Security Agreement dated as of December 20, 1999 to which the Company is a party
as a borrower, as amended from time to time in accordance with the terms
thereof.
"SENIOR LOAN DOCUMENTS" means the Senior Loan Agreement and each other
Loan Document as defined and referred to in the Senior Loan Agreement, as
amended from time to time in accordance with the terms thereof.
"SERIES C DESIGNATION" means the Certificate of Designation of the
Company relating to the Series C Preferred Stock to be filed with the Secretary
of State of the State of Delaware in the form attached hereto as Exhibit K.
"SERIES C PREFERRED STOCK" means the Series C Convertible Preferred
Stock of the Company or any other capital stock of the Company into which such
stock is reclassified or reconstituted.
"SERIES C PREFERRED STOCK PURCHASE AGREEMENT" means the Series C
Preferred Stock Purchase Agreement in the form attached hereto as Exhibit L.
"STOCK OPTION PLAN" means the 1998 Omnibus Stock Plan of the Company as
in effect on the date hereof, as it may be amended from time to time, and any
and all stock options and other stock-based awards issued pursuant thereto.
"SUBSIDIARY" means, as to any Person, (i) any corporation more than
fifty percent (50%) of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
8
"TAXES" means all taxes, assessments, fees and other charges levied
upon the properties of the Company and its Subsidiaries as shown upon all
federal, state and local tax returns and reports, U.S. and non-U.S., required to
be filed by such entity.
"TAX RETURN" means any return (including any information return),
report, statement, form or other document required to be filed with or submitted
to any Governmental Authority in connection with the determination, assessment,
collection or payment of any Taxes.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, the
Certificate of Incorporation, the Certificate of Designation, the Option Stock
Designation, the Bylaws, the Corporate Governance Agreement, the Registration
Rights Agreement, the Voting and Tag-Along Agreement and the Option Agreement.
"UNDERLYING COMMON STOCK" means all shares of Common Stock issued or
issuable upon conversion of (i) the Preferred Stock issued pursuant to this
Agreement and (ii) the Option Preferred Stock actually issued pursuant to the
Option Agreement as of the date of any determination (which number shall be
determined, with respect to any given date, based upon the conversion price with
respect to the Preferred Stock or Option Preferred Stock, as applicable, in
effect as of such date without giving effect to the one year limitation on
conversion) without regard to any preferential dividends that accrue or are
issued or paid with respect to the Preferred Stock pursuant to the Certificate
of Designation or the Option Preferred Stock pursuant to the Option Stock
Designation.
"UNITED STATES" and "U.S." shall mean the United States of America.
"VOTING AND TAG-ALONG AGREEMENT" means the Voting and Tag-Along
Agreement dated as of the Closing Date by and among the Purchasers and Xxxxxxx
X. Aab, Melrich Associates, L.P., Xxxxxxx X. Xxxxxxx and SuperSTAR Associates
Limited Partnership and attached hereto as Exhibit H.
"YEAR 2000 COMPLIANT" means that the computer systems and switches and
related equipment and software (i) are capable of recognizing, processing,
managing, representing, interpreting, and manipulating correctly date-related
data for dates earlier and later than January 1, 2000, (ii) have the ability to
provide date recognition for any data element without limitation (including, but
not limited to, date-related data represented without a century designation,
date-related data whose year is represented by only two digits and date fields
assigned special values), (iii) have the ability to automatically function into
and beyond the year 2000 without human intervention and without any change in
operations associated with the advent of the year 2000, (iv) have the ability to
correctly interpret data, dates and time into and beyond the year 2000, (v) have
the ability not to produce noncompliance in existing information, nor otherwise
corrupt such data into and beyond the year 2000, (vi) have the ability to
correctly process after January 1, 2000 data containing dates before that date,
and (vii) have the ability to recognize all "leap years," including February 29,
2000.
1.2 ACCOUNTING TERMS. All accounting terms used herein not expressly
defined in this Agreement shall have the respective meanings given to them in
accordance with sound accounting practice. The term "sound accounting practice"
shall mean such accounting practice as, in the opinion of the independent
certified public accountants regularly retained by the Company, conforms at the
time to GAAP applied on a consistent basis except for changes with which such
accountants concur.
9
ARTICLE II
PURCHASE AND SALE OF PREFERRED STOCK
2.1 PURCHASE AND SALE OF THE PREFERRED STOCK. Subject to the terms and
conditions hereof, the Company agrees to issue to the Purchasers, and each
Purchaser agrees severally and not jointly to purchase from the Company, on the
Closing Date, the number of shares of the Preferred Stock set forth opposite
such Purchaser's name on Schedule 1 for a purchase price of $1,000 per share for
an aggregate purchase price of $200,000,000. The Preferred Stock shall have the
powers, rights and preferences as set forth in the Certificate of Designation,
which Certificate of Designation will be duly adopted by the Board of Directors
prior to the Closing Date in accordance with the provisions of Section 151 of
the Delaware General Corporation Law of the State of Delaware (the "DGCL") and
will be filed with the Secretary of State of the State of Delaware prior to or
contemporaneously with the Closing Date pursuant to the DGCL. A true and correct
copy of the Certificate of Incorporation of the Company as currently in effect
prior to the adoption and filing of the Certificate of Designation has
heretofore been furnished to the Purchasers by the Company.
2.2 CLOSING. Subject to the terms and conditions of this Agreement, the
issuance and purchase of the Preferred Stock shall take place at the closing
(the "Closing") to be held at the offices of Xxxxx & Xxx Xxxxx, PLLC, Charlotte,
North Carolina, at 10:00 a.m., on April __, 2000, or at such other time and
place as the Company and the Purchasers may agree in writing (the "Closing
Date"). At the Closing, the Company shall deliver to the Purchasers certificates
representing the 200,000 shares of the Preferred Stock against delivery to the
Company by the Purchasers of the purchase price therefor by wire transfer of
immediately available funds.
ARTICLE III
CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE
The obligation of each Purchaser to purchase the number of shares of
Preferred Stock set forth opposite its name on Schedule 1 at the Closing, to pay
the purchase price therefor at the Closing and to perform any other obligations
hereunder shall be subject to the reasonable satisfaction as determined by each
Purchaser of the following conditions on or before the Closing Date:
3.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Section 5 hereof shall be true and correct (i) when
made and (ii) on and as of the Closing Date as if made on and as of such date
(except for representations and warranties that speak as of a specific date in
which case the representation or warranty only need be true and correct as of
the specified date).
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3.2 COMPLIANCE WITH THIS AGREEMENT. The Company shall have performed
and complied in all material respects with all of the agreements, obligations,
covenants and conditions set forth in this Agreement or any other Transaction
Document or contemplated herein or therein that are required to be performed or
complied with by the Company on or before the Closing Date.
3.3 OFFICER'S CERTIFICATE. Each Purchaser shall have received a
certificate dated as of the Closing Date from the chief executive officer and
chief financial officer of the Company, substantially in the form of Exhibit E,
to the effect that (a) all representations and warranties of the Company
contained in this Agreement and the Option Agreement are true and correct, (b)
the Company is not in violation in any material respect of any of the covenants
contained in this Agreement, (c) all conditions precedent to the Closing to be
performed by the Company have been duly performed in all material respects, and
(d) no Material Controversy has occurred prior to Closing.
3.4 SECRETARY'S CERTIFICATE, GOOD STANDING CERTIFICATES. Each Purchaser
shall have received a certificate from the Company dated the Closing Date and
signed by the Secretary or an Assistant Secretary of the Company, substantially
in the form of Exhibit F, certifying (a) that the attached copies of the
Certificate of Incorporation, Bylaws or other applicable governance documents
and resolutions of the Board of Directors of the Company (i) authorizing the
issuance of the Preferred Stock pursuant to this Agreement, the issuance of the
Option Preferred Stock pursuant to the Option Agreement and the issuance of any
Common Stock upon conversion thereof and (ii) approving this Agreement, each of
the other Transaction Documents and the transactions contemplated hereby and
thereby to which it is a party, are all true, complete and correct and remain
unamended and in full force and effect, (b) as to the incumbency and specimen
signature of each officer of the Company executing this Agreement and the other
Transaction Documents to which it is a party and any other document delivered in
connection herewith or therewith on behalf of the Company and (c) as to the good
standing of the Company and its Subsidiaries in each such company's state of
incorporation.
3.5 TRANSACTION DOCUMENTS. Each Purchaser shall have received and
approved true, complete and correct copies of the executed Transaction
Documents, each of which will be in full force and effect as of the Closing
Date.
3.6 PAYMENT OF FEES. There shall have been paid by the Company to Xxxx
Capital Partners VI, L.P. a funding fee equal to 1% of the amount funded by Xxxx
Capital CLEC Investors, L.L.C. at the Closing, (b) to Xxxxxx X. Xxx Equity
Advisors IV, L.P. a funding fee equal to 1% of the amount funded by all
Purchasers other than Xxxx Capital CLEC Investors, L.L.C. at the Closing and (c)
to each Purchaser all legal fees and expenses required to be paid or reimbursed
to such Purchaser by the Company pursuant to Section 9.11 hereof. In addition,
the Company shall have paid in full all fees due to First Union Securities, Inc.
in connection with the transactions contemplated by this Agreement as of the
Closing.
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3.7 PURCHASE PERMITTED BY APPLICABLE LAWS. The acquisition of and
payment for the Preferred Stock to be acquired by each Purchaser at the Closing
and the consummation of the transactions contemplated hereby at the Closing (a)
shall not be prohibited by any Requirement of Law, and (b) shall not subject any
Purchaser to any penalty or, in its reasonable judgment, other adverse condition
under or pursuant to any Requirement of Law.
3.8 OPINIONS OF COUNSEL. The Purchasers shall have received (a) from
Xxxxx & Xxx Xxxxx, PLLC, special legal counsel for the Company, a favorable
opinion as of the Closing Date, to the effect that: (i) the Company is duly
organized as a corporation under the DGCL; (ii) the Company is validly existing
and in good standing in the jurisdiction of its incorporation and has the
requisite corporate power to own or lease and operate its property, and to carry
on its business as currently conducted; (iii) each of this Agreement and the
other Transaction Documents executed by the Company is a legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles relating to enforceability; (iv) the Company's execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party were duly authorized by all corporate actions required under its
Organizational Documents and the DGCL; (v) the issuance of the Preferred Stock
and Option Preferred Stock, including the issuance of Preferred Stock and Option
Preferred Stock as preferential dividends pursuant to the Certificate of
Designation and the Option Stock Designation, has been duly authorized by all
corporate action required under the Company's Organizational Documents; (vi)
each of the Certificate of Designation and the Option Stock Designation has been
duly authorized by all corporate action required under the Company's
Organizational Documents and the Certificate of Designation has been filed with
the Secretary of State of Delaware; (vii) the execution, delivery and
performance of the Transaction Documents to which the Company is a party will
not (x) violate the Certificate or Bylaws or (y) violate, to such counsel's
knowledge, any order, writ, injunction or decree of any Governmental Authority;
(viii) upon issuance at the Closing, the Preferred Stock will be validly issued,
fully paid and nonassessable, and will not have been issued in violation of or
be subject to any preemptive rights, and the issuance of the shares of Common
Stock issuable upon conversion of the Preferred Stock has been duly authorized
and such shares have been duly reserved for issuance, and upon issuance will be
validly issued, fully paid and nonassessable, and will not have been issued in
violation of or be subject to any preemptive rights; and (ix) upon issuance
pursuant to the terms of the Option Agreement, the Option Preferred Stock will
be validly issued, fully paid and nonassessable, and will not have been issued
in violation of or be subject to any preemptive rights, and the issuance of the
shares of Common Stock issuable upon conversion of the Option Preferred Stock
has been duly authorized and such shares have been duly reserved for issuance,
and upon issuance will be validly issued, fully paid and nonassessable, and will
not have been issued in violation of or be subject to any preemptive rights; and
(b) from Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, special regulatory counsel to the
Company, a favorable opinion as of the Closing Date to the effect that: (i) no
consents or approvals of the FCC or any PUC are required for the purchase of the
Preferred Stock pursuant to this Agreement, the purchase of 100,000 shares of
Option Preferred Stock at the Closing pursuant to the Option Agreement, and the
execution and delivery at the Closing of the Transaction Documents by the
parties thereto; and (ii) neither the execution and delivery of this Agreement
or the Option Agreement by the Company and the Purchasers, the purchase of the
Preferred Stock and the purchase of 100,000 shares of Option Preferred Stock at
the Closing pursuant to the terms thereof, nor the execution and delivery at the
Closing of the other Transaction Documents by the parties thereto, will, in and
of themselves, subject the Purchasers to regulation as common carriers or
telephone companies under the Communications Act (as defined in such opinion) or
State Telecommunications Act (as defined in such opinion) or State
Telecommunications Laws (as defined in such opinion) in those states in which
the Company and its Subsidiaries are certified to operate as of the Closing. For
purposes of the opinion to be delivered pursuant to clause (b), Xxxxxxx Berlin
Shereff Xxxxxxxx, LLP may assume that 100,000 shares of Option Preferred Stock
are purchased under the Option Agreement at the Closing.
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3.9 HSR CLEARANCE. Any required clearance under the Xxxx-Xxxxx-Xxxxxx
Act to sell the Preferred Stock upon the terms of this Agreement shall have been
obtained.
3.10 CERTIFICATE OF DESIGNATION. On or prior to the Closing, the
Certificate of Designation shall have been duly filed with the Secretary of
State of the State of Delaware, all in accordance with the applicable provisions
of the DGCL, and the Certificate of Designation shall constitute a legal and
valid amendment of the Certificate of Incorporation and, as of the Closing, the
Certificate of Incorporation shall not have been otherwise amended.
3.11 PREFERRED STOCK CERTIFICATE. Each Purchaser shall have received
from the Company a duly executed preferred stock certificate, substantially in
the form of Exhibit G, dated the Closing Date representing the number of shares
of Preferred Stock purchased by it at the Closing.
3.12 REQUIRED CONTRACTUAL CONSENTS. The Company shall have received any
consents required pursuant to the terms of the Senior Loan Agreement or any
other material Contractual Obligation in connection with the execution and
delivery by the Company of this Agreement and the other Transaction Documents
and the consummation of the transactions to be performed by the Company
contemplated by the Transaction Documents.
3.13 VOTING AND TAG-ALONG AGREEMENT. The Purchasers shall have received
a Voting and Tag-Along Agreement, substantially in the form of Exhibit H, dated
the Closing Date duly executed by all parties thereto.
3.14 AMENDMENT TO SENIOR LOAN AGREEMENT. Each Purchaser shall have
received a copy of an amendment to the Senior Loan Agreement, substantially in
the form of Exhibit I, duly executed by all parties thereto.
3.15 REQUIRED GOVERNMENTAL CONSENTS. The Company shall have received
all Regulatory Authorizations and other Governmental Authority approvals or
consents required in connection with the execution and delivery by the Company
of this Agreement and the other Transaction Documents and the consummation of
the transactions to be performed by the Company contemplated by the Transaction
Documents.
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3.16 REGULATORY EVENTS. No Regulatory Event or Purchaser Regulatory
Event shall have occurred and be continuing or shall occur as a result of the
purchase of the Preferred Stock at the Closing.
3.17 AMENDMENT OF BYLAWS. The Bylaws shall have been amended (i) to
permit the holders of at least 50,000 of the outstanding shares of Purchaser
Preferred Stock to call for a meeting of the Company's stockholders, (ii) to
permit any two directors to call a meeting of the Company's board of directors,
(iii) to establish the size of the Company's board at seven directors, (iv) to
require regular meetings of the Company's board of directors to be held at least
once during each of the Company's fiscal quarters and (v) to provide that no
amendment to the preceding provisions of the Bylaws shall be effective without
the approval of holders of 50,000 of the outstanding shares of Purchaser
Preferred Stock. The Bylaws as so amended shall be in full force and effect as
of the Closing and shall not have been further amended.
3.18 OPTION AGREEMENT. The Purchasers shall have received an Option
Agreement, substantially in the form of Exhibit J, dated the Closing Date duly
executed by all parties thereto.
3.19 CORPORATE GOVERNANCE AGREEMENT. The Purchasers shall have received
a Corporate Governance Agreement, substantially in the form of Exhibit C, dated
the Closing Date duly executed by all parties thereto.
3.20 REGISTRATION RIGHTS AGREEMENT. The Purchasers shall have received
a Registration Rights Agreement, substantially in the form of Exhibit D, dated
the Closing Date duly executed by all parties thereto.
3.21 LISTING OF SHARES. The Company shall have filed with The Nasdaq
Stock Market notice of the maximum number of shares of Common Stock potentially
issuable pursuant to the terms of the Certificate of Designation and the Option
Stock Designation other than any such shares as may be issuable upon an
adjustment in the conversion price of the Preferred Stock or the Option
Preferred Stock.
3.22 AMENDMENT TO CLASS B STOCKHOLDERS AGREEMENT. The Purchasers shall
have received, in form and substance reasonably satisfactory to the Purchasers,
the Second Amended and Restated Stockholders' Agreement among the holders of the
Class B Common Stock duly executed by all such holders and in full force and
effect as of the Closing Date.
ARTICLE IV
CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CLOSE
The obligations of the Company to issue and sell the Preferred Stock at
the Closing and to perform its other obligations hereunder at the Closing shall
be subject to the satisfaction as determined by the Company of the following
conditions on or before the Closing Date:
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4.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of each of the Purchasers contained in Section 6 hereof shall be true
and correct on and as of the Closing Date as if made on and as of such date.
4.2 COMPLIANCE WITH THIS AGREEMENT. Each of the Purchasers shall have
performed and complied in all material respects with all of its agreements and
conditions set forth or contemplated herein that are required to be performed or
complied with by each of the Purchasers on or before the Closing Date.
4.3 ISSUANCE PERMITTED BY REQUIREMENTS OF LAWS. The issuance of the
Preferred Stock to be issued by the Company hereunder at the Closing and the
consummation of the transactions contemplated hereby at the Closing (a) shall
not be prohibited by any Requirement of Law and (b) shall not subject the
Company to any penalty or, in its reasonable judgment, other onerous condition
under or pursuant to any Requirement of Law.
4.4 HSR CLEARANCE. Any required clearance under the Xxxx-Xxxxx-Xxxxxx
Act to acquire the Preferred Stock upon the terms of this Agreement shall have
been obtained.
4.5 OPINION OF COUNSEL. The Purchasers shall have delivered to the
Company an opinion dated the Closing Date, from the Purchasers' counsel, Ropes &
Xxxx, in form and substance reasonably acceptable to the Company and its
counsel, to the effect that: (i) each Purchaser's execution, delivery and
performance of this Agreement and the other Transaction Documents was duly
authorized by the requisite corporate, fiduciary, limited liability company or
partnership action required under its Organizational Documents and applicable
state law; (ii) the officer, partner, trustee, managing member or managing
director signing this Agreement and all other documents or instruments
contemplated hereby in its name was duly authorized to do so; and (iii) each of
this Agreement and the other Transaction Documents executed by such Purchaser is
a legal, valid and binding obligation of such Purchaser enforceable in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles relating to enforceability.
4.6 TRANSACTION DOCUMENTS. The Company shall have received copies of
each of the Transaction Documents duly executed by all parties thereto.
ARTICLE V
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 and the other
Transaction Documents, as follows:
5.1 ORGANIZATION AND QUALIFICATION. Each of the Company and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of its state of organization. Each of the Company and its Subsidiaries is
duly qualified to do business and in good standing in each jurisdiction in which
the failure to receive or retain such qualification would reasonably be expected
to have a Material Adverse Effect. As to any such entity that is a limited
liability company, each manager is duly organized, validly existing, in good
standing under the laws of its state of organization, and duly qualified to do
business and in good standing in each jurisdiction in which the failure to
receive or retain such qualification would reasonably be expected to have a
Material Adverse Effect.
15
5.2 AUTHORITY AND AUTHORIZATION. Each of the Company and its
Subsidiaries has all requisite corporate or limited liability company right,
power, authority and legal right to carry on its business, to own or lease its
properties and to execute and deliver and perform its obligations under this
Agreement, and, in the case of the Company, to execute and deliver and to
perform its obligations under the Transaction Documents and consummate the
transactions contemplated by the Transaction Documents. The Company's execution,
delivery and performance of the Transaction Documents and any other documents or
instruments to be delivered pursuant thereto to which it is a party have been
duly and validly authorized by all necessary corporate proceedings on the part
of the Company. Upon issuance, the Preferred Stock, the Option Preferred Stock
and any shares of such stock issuable as preferential dividends pursuant to the
terms thereof, will be validly issued, fully paid and nonassessable, and will
not have been issued in violation of or subject to any preemptive rights, and
the shares of Common Stock issuable upon conversion of the Preferred Stock, the
Option Preferred Stock and any shares of stock issuable as preferential
dividends pursuant to the terms thereof, have been duly authorized and, as of
the Closing, will be reserved for issuance, and upon issuance will be validly
issued, fully paid and nonassessable, and will not have been issued in violation
of or be subject to any preemptive rights.
5.3 EXECUTION AND BINDING EFFECT. This Agreement and all other
Transaction Documents to which the Company is a party have been or will be duly
and validly executed and delivered by the Company, and constitute or, when
executed and delivered, will constitute, the legal, valid and binding
obligations of the Company enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws affecting creditors'
rights generally.
5.4 GOVERNMENTAL AUTHORIZATIONS. Except as set forth on Schedule 5.4,
no authorization, consent, approval, license, exemption or other action by, and
no registration, qualification, designation, declaration or filing with, any
Governmental Authority is or will be necessary in connection with the execution
and delivery of this Agreement or any other Transaction Documents by the
Company, consummation by the Company of the transactions herein or therein
contemplated, performance of or compliance by the Company with the terms and
conditions hereof or thereof or the legality, validity and enforceability hereof
or thereof.
5.5 REGULATORY AUTHORIZATIONS. Each of the Company and its Subsidiaries
holds all Regulatory Authorizations necessary for the conduct of its business as
now conducted and has conducted its business in substantial compliance with such
Regulatory Authorizations. All such Regulatory Authorizations are in full force
and effect, are subject to no further administrative or judicial review and are
therefore final. The Regulatory Authorizations are listed on Schedule 5.5. No
Regulatory Event has occurred and is continuing and no Regulatory Event will
occur as a result of the consummation of the transactions contemplated by the
Transaction Documents.
16
5.6 AGREEMENTS AND OTHER DOCUMENTS. As of the date hereof, the Company
has provided to the Purchasers, accurate and complete copies (or summaries) of
all of the following agreements or documents to which the Company or any of its
Subsidiaries is subject and each of which is listed on Schedule 5.6: (a)
instruments or documents evidencing Indebtedness of the Company or its
Subsidiaries and any security interest granted by the Company or its
Subsidiaries with respect thereto; and (b) instruments and agreements evidencing
the issuance of any equity securities, warrants, rights or options to purchase
equity securities of the Company or its Subsidiaries.
5.7 ABSENCE OF CONFLICTS. The execution and delivery of this Agreement
and the other Transaction Documents to which the Company is a party, the
consummation by the Company of the transactions herein or therein contemplated
and the performance of or compliance with the terms and conditions hereof or
thereof by the Company will not, directly or indirectly (and with or without
notice or the passage of time or both), (a) violate any Requirements of Law
applicable to the Company or its Subsidiaries; (b) conflict with or result in a
breach of or a default under the Organizational Documents of the Company or its
Subsidiaries or any Contractual Obligation to which the Company or its
Subsidiaries is a party or by which such entity or its properties are bound; (c)
result in the creation or imposition of any Lien upon any property (now owned or
hereafter acquired); or (d) violate or conflict with, or give any Governmental
Authority the right to challenge the transactions contemplated by the
Transaction Documents or revoke, withdraw, suspend, cancel, terminate or modify,
any Regulatory Authorization issued to or held by the Company or any Subsidiary
(other than as set forth on Schedule 5.7).
5.8 FINANCIAL STATEMENTS. The Company has furnished to the Purchasers
the most recent annual financial statements (the "Financial Statements"),
certified by the Chief Financial Officer or the Vice-President and Treasurer,
including balance sheets and related statements of income, retained earnings and
cash flow, as described on Schedule 5.8. Such Financial Statements (including
the notes thereto) present fairly the financial condition of the Company and its
Subsidiaries on a consolidated basis as of the end of such fiscal period and the
results of its operations and the changes in its financial position for the
fiscal period then ended, all in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal period. Neither the Company nor its
Subsidiaries has incurred any obligation or liability (absolute, contingent,
liquidated or unliquidated) material to the Company and its Subsidiaries, taken
as a whole, except for (i) those reflected in the Financial Statements on
Schedule 5.8, (ii) those that have been incurred or have arisen in the ordinary
course of business since December 31, 1999, (iii) those disclosed in the
Company's filings with the Commission, (iv) those listed on schedules attached
to this Agreement and (v) those permitted or arising under this Agreement and
the other Transaction Documents. The Company and each of its Subsidiaries have
made and kept books, records and accounts which, in reasonable detail,
accurately and fairly reflect their respective transactions and dispositions of
their assets.
17
5.9 DISCLOSURE. No representation or warranty made by the Company in
this Agreement is or was false or misleading as of the date made in any material
respect (including by omission of material information necessary to make such
representation, warranty or statement not misleading).
5.10 COMPLIANCE WITH MATERIAL AGREEMENTS. As of the date hereof, except
as set forth on Schedule 5.10, neither the Company nor any of its Subsidiaries,
or to the Company's knowledge, any other party is in violation of any term of
any material Contractual Obligation to which it is a party or by which it or its
properties are bound that would reasonably be expected to have a Material
Adverse Effect. To the Company's knowledge, except as set forth on Schedule
5.10, no event has occurred or circumstance exists that (with or without notice
or the passage of time or both) would result in a default in a material respect
under a material Contractual Obligation or would give any party to a Contractual
Obligation the right to exercise any remedy under such Contractual Obligation or
to cancel, terminate or modify such Contractual Obligation which would
reasonably be expected to have a Material Adverse Effect. Except as set forth on
Schedule 5.10, neither the Company nor any Subsidiary has given notice to or
received notice from any other Person relating to an alleged, possible or
potential default under any material Contractual Obligation which would
reasonably be expected to have a Material Adverse Effect.
5.11 LABOR MATTERS. As of the date hereof, (a) no strikes or other
material labor disputes against either the Company or its Subsidiaries are
pending or, to either the Company or its Subsidiaries' knowledge, threatened;
(b) hours worked by and payment made to employees of the Company or any of its
Subsidiaries comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matter; (c) all payments due from
either the Company or its Subsidiaries for employee health and welfare insurance
have been paid or accrued as a liability on the books of such entity; (d)
neither the Company nor any of its Subsidiaries is a party to or bound by any
collective bargaining agreement, management agreement, consulting agreement or
any employment agreement (e) there is no organizing activity involving either
the Company or its Subsidiaries pending or, to either the Company or its
Subsidiaries' knowledge, threatened by any labor union or group of employees;
(f) there are no representation proceedings pending or, to any either the
Company or its Subsidiaries' knowledge, threatened with the National Labor
Relations Board, and no labor organization or group of employees of either the
Company or its Subsidiaries has made a pending demand for recognition; and (g)
except as set forth in Schedule 5.12, there are no complaints or charges against
either the Company or its Subsidiaries pending or, to the knowledge of the
executive officers of the Company, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by either the
Company or its Subsidiaries of any individual which, if adversely determined,
would reasonably be expected to have a Material Adverse Effect.
5.12 LITIGATION.
(a) Except as set forth in Schedule 5.12, there is no pending action,
suit or, to the Company's knowledge, threatened proceeding by or before any
Governmental Authority against the Company or any of its Subsidiaries or
affecting any of its properties, rights or licenses which if adversely decided
would reasonably be expected to have a Material Adverse Effect. To the Company's
knowledge, no event has occurred or circumstance exists that may give rise to or
serve as a basis for any action, suit or proceeding to be brought or threatened
against the Company or any Subsidiary, in which an outcome adverse to the
Company or Subsidiary would reasonably be expected to have a Material Adverse
Effect. There is no pending or, to the Company's knowledge, threatened action,
suit or proceeding that challenges the transactions contemplated by the
Transaction Documents or that would have the effect of preventing, delaying,
making illegal or otherwise interfering with the transactions contemplated by
the Transaction Documents.
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(b) Neither the Company nor any Subsidiary is in violation of any
applicable Requirements of Law the consequences of the violation of which would
reasonably be expected to have a Material Adverse Effect. To the Company's
knowledge, no event has occurred or circumstance exists that (with or without
notice or the passage of time or both) would constitute or result in a violation
by the Company or any Subsidiary of any applicable Requirements of Law the
consequences of the violation of which would reasonably be expected to have a
Material Adverse Effect.
5.13 RIGHTS TO PROPERTY. Each of the Company and its Subsidiaries has
good and marketable title, subject only to the encumbrances permitted under the
Senior Loan Agreement, to all personal property purported to be owned by it and
to all property reflected in the most recent balance sheet referred to in
Section 5.8 (except as sold or otherwise disposed of in the ordinary course of
business as no longer used or useful in the conduct of the business). Each lease
of real and personal property to which the Company or any of its Subsidiaries is
a party is in full force and effect and, except for such defaults as would not
have a Material Adverse Effect, is not subject to termination because of default
or otherwise. The Company and its Subsidiaries do not own nor have they entered
into any contract or commitment to acquire real property or any interest therein
other than such Leases.
5.14 TAXES.
(a) Except as set forth in Schedule 5.14, all Tax Returns required to
be filed by each of the Company and its Subsidiaries have been properly
prepared, executed and filed and were correct and complete in all material
respects, and all Taxes upon such entity or upon any of its respective
properties, incomes, sales or franchises which are shown to be due and payable
thereon have been paid, other than Taxes or assessments the validity or amount
of which such entity is contesting in good faith. The Tax reserves and
provisions for Taxes on the books of each of the Company and its Subsidiaries
are adequate for all open years and for its current fiscal period. Except as set
forth on Schedule 5.14, none of these Tax Returns is currently under audit or
examination, and neither the Company nor any Subsidiary has received notice from
any Governmental Authority that (i) any Tax Return that it filed will be audited
or examined or that (ii) it is or may be liable for additional Taxes in respect
of any Tax Return or for payment of Taxes in respect of a Tax Return that it did
not file (because, for example, it believed that it was not subject to taxation
by the jurisdiction in question).
(b) Except as set forth on Schedule 5.14, the Company and its
Subsidiaries have withheld and paid to the proper Governmental Authorities all
Taxes that they were required to withhold and pay in respect of compensation or
other amounts paid to any employee or independent contractor.
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(c) Except as set forth on Schedule 5.14, neither the Company nor any
Subsidiary has extended the time in which to file any Tax Return, waived the
statute of limitations for any Tax or agreed to any extension of time for a Tax
assessment or deficiency.
5.15 NO MATERIAL ADVERSE CHANGE. Since December 31, 1999, (i) there has
been no Material Adverse Change and (ii) except as set forth on Schedule 5.15
and the transactions contemplated by this Agreement and the other Transaction
Documents, the Company and its Subsidiaries have operated their business in the
ordinary course of business in all material respects.
5.16 NO BROKERAGE FEES. Except as set forth on Schedule 5.16, no
brokerage or other fee, commission or compensation is to be paid by the Company
or any Subsidiary to any Person in connection with the transactions hereunder
except as contemplated herein.
5.17 ERISA.
(a) In the case of each Plan that the Company or any Subsidiary
maintains or contributes to (or ever maintained or contributed to): (i) the Plan
(and each related trust or insurance policy) complies (or complied) in form and
in operation in all material respects with the applicable requirements of ERISA
and the Code, as the case may be; (ii) all required contributions to or premiums
or other payments in respect of the Plan have been paid, and all required
reports and descriptions have been filed with the proper Governmental Authority
or distributed to participants as appropriate; (iii) there have been no
"prohibited transactions' (as defined in Section 406 of ERISA and Section 4975
of the Code) in respect of the Plan; (iv) no action, suit, proceeding,
arbitration, hearing or investigation in respect of the administration of the
Plan or the investment of Plan assets is pending or, to the Company's knowledge,
threatened, and to the Company's knowledge, there is no basis for any such
action, suit, proceeding, arbitration, hearing or investigation; and (v) no Plan
is subject to Title IV of ERISA.
(b) Except to the extent required by Section 4980B of the Code, neither
the Company nor any Subsidiary provides health or other welfare benefits to any
retired or former employee or is obligated to provide health or other welfare
benefits to any active employee following his or her retirement or other
termination of service.
5.18 INTELLECTUAL PROPERTY. Each of the Company and its Subsidiaries
owns or possesses the right to use all patents, trademarks, service marks, trade
names, copyrights, know-how, franchises, software and software licenses used in
or necessary for the operation of its business as currently conducted, free from
burdensome restrictions except where such failure to own or possess the right to
use would not reasonably be expected to have a Material Adverse Effect. All such
rights are described on Schedule 5.18. Each executive officer and senior manager
of the Company and its Subsidiaries has executed and delivered to the Company a
confidentiality agreement. To the Company's knowledge, no present or former
executive officer or senior manager has breached any such agreement.
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5.19 ENVIRONMENTAL. Each of the Company and its Subsidiaries is in
compliance with all Environmental Laws applicable to such entity or its business
except for such non-compliances as in the aggregate would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received notice of, or is aware of, any violation or alleged
violation, or any liability or asserted liability, under any Environmental Law,
with respect to such entity or its business or its premises. The only premises
occupied by the Company and its Subsidiaries are office spaces in multi-tenant
commercial office buildings.
5.20 SUBSIDIARIES. Neither the Company nor its Subsidiaries has any
Subsidiaries, other than the Subsidiaries listed on Schedule 5.20 and all such
Subsidiaries are wholly-owned, directly or indirectly, by the Company.
5.21 TRANSACTIONS WITH AFFILIATES. No Affiliate and no officer or
director of either the Company or any of its Subsidiaries or any individual
related by blood, marriage, adoption or otherwise to any such Affiliate, officer
or director, or any Person in which any such Affiliate, officer, director or
individual related thereto owns any material beneficial interest, is a party to
any agreement, contract, commitment or transaction with the Company or any of
its Affiliates or has any material interest in any material property used by the
Company or any of its Affiliates, except as set forth on Schedule 5.21.
5.22 CAPITALIZATION. As of the Closing Date, the authorized capital
stock of the Company and its Subsidiaries and the issued and outstanding shares
thereof are as described on Schedule 5.22. As of the Closing Date, all
outstanding shares of capital stock of the Company and its Subsidiaries will be
duly authorized and validly issued, fully paid, nonassessable and free and clear
of any Lien created by the Company or any Subsidiary thereof (other than Liens
under the Senior Loan Documents). Except as described in Schedule 5.22, no other
class of capital stock or other ownership interests of the Company or its
Subsidiaries are authorized or outstanding. Except as described in Schedule
5.22, neither the Company nor any Subsidiary is subject to any obligation
(contingent or otherwise) to repurchase, redeem or otherwise acquire its capital
stock or any warrants, options or other rights to acquire its capital stock. The
Company does not have any outstanding securities convertible into capital stock
of the Company (other than the Class B Common Stock and, as of the Closing, the
Preferred Stock); and except for shares of Common Stock reserved for issuance
upon the exercise of outstanding warrants or in connection with the Company
Stock Option Plan, the Company does not have any shares of capital stock
reserved for issuance (other than shares of Common Stock reserved for issuance
upon conversion of the Class B Common Stock and, as of the Closing, upon
conversion of the Preferred Stock). Except as set forth on Schedule 5.22 and
other than the Company's outstanding warrants and stock options and this
Agreement, the Company does not have any commitment to authorize, issue or sell
any of its capital stock or securities convertible into or exchangeable for any
of its capital stock. Neither the Company nor any of its Subsidiaries is a party
to any "phantom stock", employee stock option plan, other equity-based incentive
plan or similar agreement, other than the Company Stock Option Plan. Schedule
5.22 sets forth the number of shares of capital stock reserved for issuance upon
the exercise of options granted or available to be granted under the Company
Stock Option Plan. Schedule 5.22 also lists all of the Company's outstanding
warrants to purchase capital stock. Except as set forth on Schedule 5.22, there
are no preemptive or similar rights to purchase or otherwise acquire equity
securities of, or interests in, the Company or any of its Subsidiaries pursuant
to any Requirements of Law or Contractual Obligations applicable to the Company
or any of its Subsidiaries. There are no existing rights with respect to
registration or sale or resale under the Securities Act or the securities or
blue sky laws of any state or jurisdiction of any securities of the Company or
any of its Subsidiaries. The shares of Preferred Stock to be issued to each
Purchaser on the Closing Date, and any additional shares of Preferred Stock to
be issued as preferential dividends pursuant to the terms thereof will, upon
issuance to such Purchaser, have the designations, preferences, qualifications,
limitations, restrictions and such special and relevant rights as are set forth
in the Certificate of Designation and the DGCL.
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5.23 COMMISSION FILINGS. Since April 23, 1998 (the date of the
Company's initial public offering), the Company has filed with the Commission,
on a timely basis, all registration statements, reports on Form 10-K, 10-Q and
8-K, proxy statements and information statements, and other documents that it
was required to file under the Securities Act or the Exchange Act. As of the
respective dates of such filings, none of the Company's filings with the
Commission contained (and the Company's most recent Form 10-K does not contain)
an untrue statement of a material fact or omitted (and the Company's most recent
Form 10-K does not omit) to state any material fact necessary to make any
statement of a material fact that it contained, in light of the circumstances in
which made, not misleading; and when filed with the Commission, each of such
filings with the Commission complied in all material respects with the
applicable requirements of the Securities Act or Exchange Act, as applicable.
The Company is eligible to file a registration statement on Form S-3 and has
taken all actions which would be required to permit sales of its securities
under Rule 144 under the Securities Act.
5.24 INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY. Neither the
Company nor any of its Subsidiaries is an "investment company" or a "company
controlled by an investment company" or an "affiliated person" or "promoter" or
"principal underwriter" for, an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
5.25 SECURITIES ACT. Based upon the representations and warranties of
each Purchaser in Section 6 of this Agreement, (i) the Preferred Stock to be
issued pursuant to the terms of this Agreement, any Preferred Stock to be issued
as preferential dividends pursuant to the terms thereof and the Common Stock
issuable upon conversion of such Preferred Stock and (ii) the issuance by the
Company thereof, are not required to be registered under the Securities Act or
under the securities or blue sky laws of any state or jurisdiction.
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5.26 BOOKS AND RECORDS. The minute books of the Company and of each of
the Subsidiaries contain, in all material respects, true, complete and accurate
records of all meetings and other corporate actions of each of their respective
stockholders, partners, members, board of directors and all committees, if any,
appointed by its board of directors in each case, since the later of (x) the
formation of the Company or such Subsidiary or (y) the date of the Company's
initial public offering, and accurate and complete copies thereof have been made
available to the Purchasers.
5.27 CERTAIN PAYMENTS. Other than discounts, rebates and incentives
provided to customers and commissions and similar compensation paid to sales
agents in the ordinary course of business, neither the Company nor any
Subsidiary nor any officer, director, employee or agent of the Company or any
Subsidiary or, to the Company's knowledge, any other Person associated with or
acting for or on behalf of the Company or any Subsidiary, has directly or
indirectly made or paid any contribution, gift, bribe, rebate, payoff, kickback
or other payment (whether in money, property or services or any other form) to
any Person (i) in order to gain or pay for favorable treatment in obtaining
business or special concessions or (ii) in violation of any Requirements of Law
(including Section 30A of the Exchange Act).
5.28 YEAR 2000 COMPLIANCE. The computer systems and switches of the
Company (including all software, hardware, workstations and related components,
automated devices, embedded chips and other date sensitive equipment) are Year
2000 Compliant except where the failure to be Year 2000 Compliant would not have
a Material Adverse Effect.
5.29 TRADE RELATIONS. Except as set forth on Schedule 5.29, there
exists no actual or, to the knowledge of the Company, threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between the Company or any of its Subsidiaries and any customer or
supplier that would reasonably be expected to have a Material Adverse Effect or
to prevent the Company or any of its Subsidiaries from conducting their business
after the consummation of the transactions contemplated by this Agreement in
substantially the same manner as it is currently being conducted or is proposed
to be conducted.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser as to itself and not as to any other Purchaser hereby
severally represents and warrants to the Company, as appropriate, as follows:
6.1 AUTHORIZATION; NO CONTRAVENTION. Such Purchaser (unless an
individual) is duly organized, validly existing and in good standing as a
corporation, limited liability company or general or limited partnership under
the laws of the state of its incorporation or formation. The execution, delivery
and performance by such Purchaser of this Agreement (a) is within the such
Purchaser's power and authority and has been duly authorized by all necessary
partnership, company or corporate 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
material Contractual Obligation of such Purchaser, or any material Requirement
of Law directly relating to such Purchaser.
23
6.2 BINDING EFFECT. This Agreement has been duly executed and delivered
by such Purchaser, and this Agreement constitutes the legal, valid and binding
obligation of such Purchaser enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors' rights generally or by general
equitable principles relating to enforceability.
6.3 ACCREDITED INVESTOR; PURCHASE FOR OWN ACCOUNT. Such Purchaser is an
"accredited investor" within the meaning of Regulation D under the Securities
Act. The Preferred Stock to be issued pursuant to the terms of this Agreement,
any Preferred Stock to be issued as preferential dividends pursuant to the terms
thereof and the shares of Common Stock to be issued upon conversion of such
Preferred Stock are being or will be acquired for its own account 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 Act or the
securities laws of any state, without prejudice, however, to the rights of such
Purchaser at all times to sell or otherwise dispose of all or any part of such
Preferred Stock or any shares of Common Stock under an effective registration
statement under the Securities Act, or under an exemption from such registration
available under the Securities Act. If such Purchaser should in the future
decide to dispose of such Preferred Stock or any shares of Common Stock issued
upon conversion of the Preferred Stock, such Purchaser understands and agrees
that it 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, so long as required by law, of a legend on certificates representing
such Preferred Stock or any shares of Common Stock issued upon conversion of the
Preferred Stock 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."
The requirement to include the legend set forth above shall cease and
terminate as to any particular shares of Preferred Stock or Common Stock (a)
when, in the opinion of Ropes & Xxxx, or other counsel reasonably acceptable to
the Company, such legend is no longer required in order to assure compliance by
the Company with the Securities Act or (b) when such shares have been
effectively registered under the Securities Act or transferred pursuant to Rule
144. Whenever (x) such requirement shall cease and terminate as to any such
shares or (y) such shares shall be transferable under paragraph (k) of Rule 144,
the holder thereof shall be entitled to receive from the Company, without
expense, new certificates not bearing the legend set forth above.
24
Such Purchaser also agrees to the imprinting, so long as required by
law, of a legend on certificates representing its shares of Preferred Stock:
"THESE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS, INCLUDING CERTAIN TRANSFER RESTRICTIONS, OF THAT
CERTAIN CORPORATE GOVERNANCE AGREEMENT, DATED AS OF APRIL 11, 2000,
AMONG THE COMPANY AND CERTAIN OF THE COMPANY'S STOCKHOLDERS. A COPY OF
SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST TO THE
COMPANY MADE BY THE HOLDER OF THIS CERTIFICATE."
6.4 GOVERNMENTAL AUTHORIZATIONS. Except for clearance under the
Xxxx-Xxxxx-Xxxxxx Act, no notice to, consent of, or registration, filing or
declaration with, any Governmental Authority is required in connection with such
Purchaser's execution, delivery and performance of this Agreement and the
Transaction Documents and consummation of the contemplated transactions.
6.5 NO BROKERS OR FINDERS. Except as disclosed on Schedule 6.5, no
agent, broker, finder, or investment or commercial banker or other Person or
firm engaged by or acting on behalf of such Purchaser in connection with the
negotiation, execution or performance of this Agreement or the transactions
contemplated herein is or will be entitled to any brokerage or finder's or
similar fee or other commission as a result of this Agreement or such
transaction.
6.6 OWNERSHIP OF COMPANY SECURITIES; VOTING AND OTHER AGREEMENTS.
Immediately following the Closing, such Purchaser will not beneficially own any
securities of the Company other than the Preferred Stock and the Option
Preferred Stock issuable upon the exercise of the Option Agreement. Such
Purchaser does not have any agreements, arrangements or understandings with any
other Person (other than with other Purchasers who are Affiliates of such
Purchaser) with regard to acquiring, holding, voting or disposing of the
securities of the Company other than as set forth in this Agreement and in the
other Transaction Documents to which such Purchaser is a party.
ARTICLE VII
COVENANTS
7.1 HSR CLEARANCE. The Company and each of the Purchasers shall
cooperate with and provide each other, respectively, with any information that
each party reasonably requires and file such notices and responses as may be
necessary to enable each party to obtain any required clearance under the
Xxxx-Xxxxx-Xxxxxx Act. Each such Purchaser required to obtain such clearance
agrees to use all reasonable best efforts to obtain such clearance as promptly
as practicable on or prior to the Closing Date.
25
7.2 RESERVATION OF SHARES. The Company shall at all times reserve and
keep available out of the aggregate of its authorized but unissued shares, free
of preemptive rights, (i) such number of its duly authorized shares of Preferred
Stock as shall be sufficient to enable the Company to pay preferential dividends
pursuant to the terms of the Certificate of Designation with respect to all
shares of Preferred Stock issued thereunder, (ii) such number of duly authorized
shares of Option Preferred Stock as shall be sufficient to enable the Company to
issue the full number of shares of Option Preferred Stock issuable upon exercise
of the Option, (iii) such number of its duly authorized shares of Option
Preferred Stock as shall be sufficient to enable the Company to pay preferential
dividends pursuant to the terms of the Option Stock Designation with respect to
all shares of Option Preferred Stock issued thereunder and (iv) such number of
its duly authorized shares of Common Stock as shall be sufficient to enable the
Company to issue Common Stock upon conversion of all such Preferred Stock and
Option Preferred Stock.
7.3 PUC CONSENTS. The Company shall use all of its commercially
reasonable efforts to obtain all of the authorizations, consents, approvals,
licenses and/or exemptions listed on Schedule 5.4 on or prior to the Closing
Date.
7.4 DELIVERY OF FINANCIAL AND BUSINESS INFORMATION. The Company shall
deliver the following to (i) each Purchaser and (ii) each Permitted Transferee
(holding at least 5% of the Underlying Common Stock), so long as at least 20% of
the Underlying Common Stock continues to be beneficially owned by the Purchasers
and Permitted Transferees:
(a) promptly upon becoming available, one copy of (i) each financial
statement, report, notice or proxy statement sent by the Company or any
Subsidiary to public securities holders generally, and (ii) each regular or
periodic report, each registration statement that has become effective (without
exhibits unless expressly requested), and each final prospectus and all related
amendments filed by the Company or any Subsidiary with the Commission;
(b) promptly, and in any event within 10 days after the Company becomes
aware of the existence of any default under a material Contractual Obligation, a
written notice specifying the nature and period of duration of the default and
the action that the Company is taking or proposes to take with respect to the
default;
(c) concurrently with the delivery of such information to the lenders
under the Senior Loan Agreement, copies of annual and quarterly financial
statements of the Company prepared in accordance with GAAP; and
(d) promptly upon becoming available for each month, the Company's (i)
condensed consolidated financial statements, including income statement, balance
sheet and statement of cash flow, (ii) revenue analysis, (iii) summary of
customer activity, including customers, ISP trunk, voice trunk and voice lines,
(iv) functional organizational chart and staffing analysis, (v) summary of
network cost package, (vi) selling, general and administrative expense analysis,
(vii) capital spending summary, and (viii) summary income statements through
EBITDA by major markets.
26
7.5 ACCESS TO PROPERTIES. The Company shall permit representatives
designated by (i) the Purchasers and (ii) Permitted Transferees holding at least
5% of the Underlying Common Stock (both prior to Closing and for as long as the
Purchasers and their Permitted Transferees own at least 20% of the Underlying
Common Stock), upon reasonable notice, during normal business hours and at such
other times as such Purchasers or Permitted Transferees reasonably may request,
and without unreasonable interference with the Company's operations, to visit
and inspect, at their expense, any of the properties, offices, personnel,
accountants and advisors of the Company and its Subsidiaries with respect to any
of the businesses and assets of the Company and its Subsidiaries, and the
transactions contemplated by the Transaction Documents, and to examine the
corporate and financial records of the Company and its Subsidiaries.
7.6 PRE-CLOSING COVENANTS. At all times after execution of this
Agreement and prior to the Closing (unless and until this Agreement is
terminated in accordance with its terms), the Company shall not, without the
prior written consent of the Purchasers (except as otherwise expressly permitted
or required by this Agreement or any of the Transaction Documents), directly or
indirectly take or commit to take any action that (i) would constitute a
violation of the restrictions in Section 3.2 of the Corporate Governance
Agreement if the action in question were to be taken after the Closing or that
(ii) would cause an adjustment to the Conversion Price under Sections 4.3, 4.4
or 4.5 of the Certificate of Designation if the Certificate of Designation had
been duly filed and in effect as of the date of this Agreement.
7.7 EXCLUSIVITY.
(a) Except for the possible issuance and sale of up to 25,000 shares of
the Company's Series C Convertible Preferred Stock to some of the lenders under
the Senior Loan Agreement, the Company shall not, and shall cause its
Affiliates, employees, investment bankers, attorneys, accountants and other
agents not to, initiate, solicit or encourage any inquiries relating to, or the
making of any Other Proposal or engage in negotiations or discussions with, or
furnish any information to, any third party relating to any Other Proposal. As
used in this Section 7.8, "Other Proposal" means any proposal made by any
Person, other than the Purchasers, as a group, to acquire from the Company or
any of its Affiliates, any convertible preferred stock, any other capital stock
or any securities having equity or profit participation features ("Equity
Securities"), or any debt securities in lieu of, or substitution for, any Equity
Securities; provided, that the term "Other Proposal" shall not include (i) any
proposed acquisition, by sale, merger or otherwise, of all or substantially all
of the Company's outstanding capital stock or assets or (ii) any proposed stock
or asset acquisitions, by sale, merger or otherwise, by the Company or one of
its Affiliates which involves the issuance to the sellers by the Company of its
capital stock as consideration.
The Company shall advise the Purchasers in writing of (i) the receipt,
directly or indirectly, of any inquiries relating to an Other Proposal promptly
following such receipt and (ii) the status of any discussions or negotiations
with respect thereto. Following the receipt, directly or indirectly of any Other
Proposal (or any inquiry referred to in clause (i) above), the Company shall
furnish to the Purchasers either a copy of such Other Proposal (or such inquiry)
or a written summary of such Other Proposal (or such inquiry). In addition, the
Company shall not, and shall cause its Affiliates, employees, investment
bankers, attorneys, accountants and other agents not to, actually consummate, or
enter into any Contractual Obligation or otherwise commit to consummate, any
transaction that includes or would include as any part thereof the acquisition
by any Person, other than the Purchasers, directly or indirectly, from the
Company or any of its Affiliates, any Equity Securities, or any debt securities
in lieu of or substitution for any Equity Securities.
27
(b) The restrictions on and obligations of the Company under Section
7.8(a) shall terminate on the earlier to occur of (i) the Closing Date or (ii)
the termination of this Agreement pursuant to Section 8.3(a).
7.8 TAX MATTERS. The Purchasers intend that no pay-in-kind dividends on
the Preferred Stock or Option Preferred Stock will, when paid or accrued, be
includible in the Purchasers' gross income for federal, state or local tax
purposes. Accordingly, unless the Company concludes in good faith, with the
assistance and advice of its accountants and counsel, that there is no
reasonable basis to make or file any Tax Return that is consistent with such
intention, the Company shall not make or file any Tax Return that is
inconsistent with such intention.
7.9 CONFIDENTIALITY. Each Purchaser will hold, and will use its
reasonable efforts to cause its Permitted Transferees, and each Purchaser's and
each Permitted Transferee's officers, partners, directors, employees,
accountants, counsel, consultants, advisors and agents (the "Representatives")
to hold, in confidence, at all times unless compelled to disclose by judicial or
administrative process or by other Requirements of Law, all confidential
documents and information concerning the Company and it Affiliates that are
furnished to such Purchaser and its Permitted Transferees, except to the extent
that such information can be shown to have been (i) previously known on a
nonconfidential basis by such Purchaser, Permitted Transferee or such
Representatives or (ii) in the public domain through no fault of such Purchaser,
such Permitted Transferee or such Representative. If any Purchaser or Permitted
Transferee, or any of their respective Representatives is requested to disclose
any confidential information by judicial or administrative process or by other
Requirements of Law, such Person shall promptly notify the Company of such
request so that the Company may seek an appropriate protective order. Each
Purchaser agrees that it will not, and will use its reasonable best efforts to
cause its Permitted Transferees and the Representatives not to, use any
confidential documents or information for any purpose other than monitoring and
evaluating its investment in the Company and in connection with the transactions
contemplated by this Agreement. If this Agreement is terminated, each Purchaser
will, and will use its reasonable best efforts to cause its Representatives to,
destroy or deliver to the Company all documents and other materials, and all
copies thereof, obtained by such Purchaser, or on its behalf, from the Company
in connection with this Agreement and an investment in the Company.
28
7.10 SCHEDULE 13D AND 13G. Each Purchaser agrees to provide the Company
with a copy of any Schedule 13D or 13G that it intends to file at any time with
the Commission in connection with their purchase of Preferred Stock in advance
of such filing.
7.11 ELECTION OF DIRECTORS. The Company will cause two representatives
of the Purchasers to be elected to the Company's Board of Directors on the day
immediately following the Closing Date.
7.12 SERIES C DESIGNATION. Without the prior written consent of the
Required Holders, the Company agrees that (a) it will not sell more than an
aggregate of 25,000 shares of Series C Preferred Stock and no such sale shall
occur on or after April 17, 2000, (b) such stock will not be sold for a purchase
price of less than $1,000 per share, (c) such stock will not be sold to any
Person other than the current lenders under the Senior Loan Agreement or their
Affiliates, no one of which will be permitted to purchase more than 10,000
shares of such stock, (d) the Series C Preferred Stock Purchase Agreement will
not be amended, supplemented or otherwise modified in any material respect prior
to the closing thereunder, except to include therein the number of shares of
Series C Preferred Stock to be purchased thereunder and (e) the Series C
Designation will not be amended, supplemented or otherwise modified prior to the
filing of such designation with the Secretary of State of Delaware, except to
include therein the number of shares of Series C Preferred Stock to be created
thereunder.
7.13 ADDITIONAL COVENANT. The parties hereto agree to Exhibit M which
is incorporated herein by this reference.
ARTICLE VIII
INDEMNIFICATION; TERMINATION
8.1 INDEMNIFICATION. Effective upon the Closing, the Company agrees to
indemnify and hold harmless the Purchasers and their Affiliates and their
officers, directors, agents, employees, subsidiaries, partners and controlling
Persons (each, a "Company Indemnified Party") to the fullest extent permitted by
law, from and against any and all losses, demands, actions, costs, claims,
damages, expenses (including reasonable fees, disbursements and other charges of
counsel) or other liabilities (collectively, "Company Liabilities") incurred or
suffered by such Company Indemnified Party resulting from or arising out of (i)
any misrepresentation or breach of any representation or warranty of the Company
in this Agreement, any other Transaction Document or any certificate or
instrument delivered pursuant thereto, (ii) any breach of any covenant or
obligation of the Company in this Agreement or any other Transaction Document,
or (iii) any investigation or proceeding against the Company or any Company
Indemnified Party and arising out of or in connection with this Agreement or any
of the Transaction Documents, whether or not the transactions contemplated by
this Agreement are consummated, which investigation or proceeding requires the
participation of, or is commenced or filed against, any Company Indemnified
Party because of this Agreement, any other Transaction Document or such other
documents or transactions contemplated hereby or thereby; provided that (x) the
Company shall not be liable under Section 8.1(iii) to a Company Indemnified
Party for any liabilities resulting primarily from any actions that involved the
gross negligence or willful misconduct of such Company Indemnified Party or the
breach by any Company Indemnified Party of any representation, warranty,
covenant or other agreement of such Indemnified Party contained herein or in any
other Transaction Documents.
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8.2 NOTIFICATION. The Company Indemnified Party, under Section 8.1(iii)
will, promptly after the receipt of notice of the commencement of any action,
investigation, claim or other proceeding against such Company Indemnified Party
in respect of which indemnity may be sought from the Company under Section
8.1(iii), notify the Company in writing of the commencement thereof. The
omission of any Company 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 Company Indemnified Party under Section 8.1(iii) unless, and only to the
extent that, such omission results in the Company's forfeiture of substantive
rights or defenses or the Company is otherwise irrevocably prejudiced in
defending such proceeding. In case any such action, claim or other proceeding
shall be brought against any Company Indemnified Party and it shall notify the
Company of the commencement thereof, the Company shall be entitled to assume the
defense thereof at its own expense, with counsel satisfactory to the Company
Indemnified Party; provided, that any Company 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 both the Company, on
the one hand, and a Company Indemnified Party, on the other hand, is, or is
reasonably likely to become, a party, such Company 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, (a) the Company has failed
to assume the defense and employ counsel as provided herein, (b) the Company has
agreed in writing to pay such fees and expenses of separate counsel or (c) in
the reasonable opinion of counsel to such Company Indemnified Party, a conflict
or likely conflict exists between the Company, on the one hand, and such Company
Indemnified Party, on the other hand, that would make such separate
representation advisable, provided, however, that the Company shall not in any
event be required to pay the fees and expenses of more than one separate counsel
(and if deemed necessary by such separate counsel, appropriate local counsel who
shall report to such separate counsel). The Company agrees that it will not,
without the prior written consent of a Company Indemnified Party, 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 such
Company 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 such Company 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 a Company Indemnified Party without the prior written consent
of the Company.
8.3 TERMINATION.
(a) This Agreement may be terminated at any time prior to the Closing
Date: (i) by mutual written agreement of the Company and each Purchaser; (ii) by
the Company or the Purchasers if the Closing shall not have been consummated on
or before June 30, 2000, (iii) by the Company or the Purchasers if a
Governmental Authority shall have issued a nonappealable final order, decree or
ruling or taken any action having the effect of permanently restraining or
enjoining the transactions contemplated by this Agreement or (iv) by the Company
if any one of the Purchasers (who is obligated to purchase at least 100,000
shares of the Preferred Stock) defaults in its obligations under this Agreement
to purchase such Preferred Stock (a "Closing Failure").
30
(b) If this Agreement is terminated as permitted by Section 8.3(a),
such termination shall be without liability of any party hereto (or their
respective Affiliates) to any other party hereto; provided, however, that
nothing shall relieve any party from liability if such termination shall result
from the (i) willful failure by any party to fulfill a condition to the
performance of the obligations of the other parties, (ii) willful failure by any
party to perform a covenant of this Agreement, (iii) willful breach by any party
hereto of any representation or warranty contained in this Agreement or (iv) a
Closing Failure. The provisions of Sections 7.10, 8.3, 9.2, 9.8 and 9.11 shall
survive any termination hereof pursuant to Section 8.3.
ARTICLE IX
MISCELLANEOUS
9.1 CLAIMS AND SUITS UNDER SECTION 8.1. No claim may be made or suit
instituted under Section 8.1 with respect to any breach of a representation or
warranty (except if it relates to a breach of Sections 5.1, 5.2, 5.3, 5.8, and
5.22 or if it relates to fraud) after the date that is eighteen (18) months
after the Closing Date or, as to the representations and warranties in Section
5.14 after the expiration of applicable statutes of limitation with respect to
the subject matter of each such representation and warranty, unless the Company
Indemnified Party has given the indemnifying party written notice of such claim
or suit (describing with reasonable specificity the amount of and basis for such
claim or suit) on or prior to such date.
9.2 NOTICES. All notices, requests, claims, demands and other
communications ("Notices") provided for or permitted hereunder shall be made in
writing and shall be by registered or certified first class mail, return receipt
requested, telecopier, recognized overnight courier service or personal
delivery:
(a) if to the Company:
US LEC Corp.
Transamerica Square
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
31
with a required copy to:
Xxxxx & Xxx Xxxxx, PLLC
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx III
Telecopier: (000) 000-0000
(b) if to the Purchasers:
Xxxx Capital, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx X. Xxxxxx
Telecopier: (000) 000-0000
and to:
Xxxxxx X. Xxx Partners, L.P.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxx
Telecopier (000) 000-0000
with a required copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Telecopier: (000) 000-0000
All Notices 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 by the
individual to whom the telecopy is sent, if telecopied.
32
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 and except as otherwise set forth
in the Transaction Documents (including, without limitation, the Corporate
Governance Agreement), the Purchasers may assign any of their rights under this
Agreement, to any Person who is a Permitted Transferee. 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 9, 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 DETERMINATIONS, REQUESTS OR CONSENTS. 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 of the Company
from the terms of any provision of this Agreement, shall be effective (a) only
if it is made or given in writing and signed by the Company and the Required
Holders (as defined below) in accordance with this Section 9.4, and (b) only in
the specific instance and for the specific purpose for which made or given. All
determinations, requests, consents, waivers or amendments to be made by the
Purchasers in their opinion or judgment or with their approval or otherwise
pursuant to this Agreement shall be made (i) at any time following the Closing,
by the holders of at least 51% of the then outstanding Purchaser Preferred Stock
or (ii) at any time prior to the Closing, by Purchasers who have committed to
purchase hereunder at least 51% of the Purchaser Preferred Stock (in either
case, the "Required Holders").
9.5 COUNTERPARTS. 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.
9.7 GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of law of such state.
9.8 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.
33
9.9 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. All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the context may
require.
9.10 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
hereto, and the other Transaction Documents supersede all prior contemporaneous
agreements and understandings between the parties with respect to such subject
matter.
9.11 CERTAIN EXPENSES.
(a) The Purchasers and the Company shall each pay their own fees and
expenses in connection with the negotiation and preparation of this Agreement
and consummation of the transactions contemplated herein with the exception that
the Company shall pay or reimburse the Purchasers for their fees and expenses
(including HSR filing fees, the fees and expenses of their counsel and
accountants, and the expenses incurred by representatives of the Purchasers) for
the negotiation and preparation of the Transaction Documents and the
consummation of the purchase transactions contemplated thereby, including the
exercise of the Option Agreement. Thereafter, subject to the provisions of
Section 9.11(c), the Company shall reimburse the Purchasers for the reasonable
fees and expenses which they incur from time to time in consulting with their
counsel and accountants with respect to the Transaction Documents and any
amendments, supplements, consents or waivers with respect to such documents.
Reasonable documentation shall be provided to the Company by the Purchasers for
all fees and expenses which the Company has agreed to reimburse pursuant to this
Section 9.11(a).
(b) The Company shall not be required to pay or reimburse the
Purchasers for any of their fees and expenses in the event that the Closing does
not occur; provided, however, the Company shall be required to pay or reimburse
the Purchasers for such fees and expenses if the Closing does not occur due to
the failure of the Company to satisfy the closing conditions under Section 3 of
this Agreement.
(c) If any action, suit or proceeding is commenced by any Purchaser
after the Closing arising out of or related to an alleged breach by the Company
of a covenant in any Transaction Document, such Purchaser or Purchasers shall be
entitled to reimbursement by the Company of the attorneys fees and expenses,
accountants fees and expenses and other costs incurred in investigating,
prosecuting or defending such action, suit or proceeding, payable within 10 days
after presentation to the Company of reasonable documentation for such fees,
expenses and costs; provided, however, that the Company shall not be liable for
such fees and expenses in the event that it is finally determined that no such
breach occurred.
34
9.12 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 parties hereto (which
approval will not be unreasonably withheld). 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.
9.13 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 and/or the Certificate of
Incorporation.
[Signature Pages To Follow]
35
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
US LEC CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
XXXX CAPITAL CLEC INVESTORS, L.L.C.
By: Xxxx Capital Fund VI, L.P.,
its Administrative Member
By: Xxxx Capital Partners VI, L.P.,
its General Partner
By: Xxxx Capital Investors VI, Inc.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name:
Title: Managing Director
XXXXXX X. XXX EQUITY FUND IV, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Xxxxxxx X. XxXxxx
-----------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
36
XXXXXX X. XXX FOREIGN FUND IV-B, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Xxxxxxx X. XxXxxx
-----------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
XXXXXX X. XXX FOREIGN FUND IV, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
XXXXXX INVESTMENT HOLDINGS, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Director
1997 XXXXXX X. XXX NOMINEE TRUST
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Trustee
37
XXXXXX X. XXX CHARITABLE
INVESTMENT LIMITED PARTNERSHIP
By: /s/ Xxxxxx X. Xxx
-----------------------------------
Name: Xxxxxx X. Xxx
Title: President
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
XXXXX X. XXXXXXX
THE HARKINS 1995 GIFT TRUST
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Trustee
/s/ Xxxxx X. Xxxxxx
-----------------------------------
XXXXX X. XXXXXX
/s/ X. Xxxxxx Xxxx
-----------------------------------
X. XXXXXX XXXX
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------
XXXXX X. XXXXXXXX
/s/ Xxxxxxx X. XxXxxx
-----------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------
XXXXXX X. XXXXX, XX.
38
/s/ Xxxx X. Xxxxx
-----------------------------------
XXXX X. XXXXX
/s/ Xxxx X. Xxxxxx
-----------------------------------
XXXX X. XXXXXX
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
XXXXXXXX X. XXXXXX
/s/ Xxxx X. Xxxxxxxx
-----------------------------------
XXXX X. XXXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxxx Xxxxxxx
-----------------------------------
XXXXX X. XXXXXXX
/s/ Xxxxx Xxxxx
-----------------------------------
XXXXX X. XXXXX
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
XXXXXX X. XXXXXXXX
/s/ Xxxxx X. Xxxxxx
-----------------------------------
XXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
XXXXXX X. XXXXXXX
39
XXXXXX XXXXXX XXX 1988 IRREVOCABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Trustee: Xxxxxxx X. Xxxxxx
------------------------------------
XXXXXXX XXXXXXX XXX
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
XXXXXXX X. XXXXXX AS CUSTODIAN FOR
XXXXX XXX
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
XXXXXXX X. XXXXXX AS CUSTODIAN FOR
XXXXXX XXX
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxx Xxxxxx
--------------------------------
XXXXX XXXXXX
/s/ Xxxx X. Xxxxxxxx
--------------------------------
XXXX X. XXXXXXXX
--------------------------------
XXXXXX X. XXXXX
/s/ X. Xxxxxx Xxxxx
--------------------------------
X. XXXXXX SPAHT
/s/ Xxxxx X. Xxxxxx
--------------------------------
XXXXX X. XXXXXX
40
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
XXXXXXX X. XXXXXXXX
/s/ Wm. Xxxxxxxx Xxxxx
--------------------------------
WM. XXXXXXX XXXXX
/s/ X. X. Xxxxxxxx
--------------------------------
XXXXX X. XXXXXXXX
/s/ Xxxxx X. Xxxxxxxx
--------------------------------
XXXXX X. XXXXXXXX
/s/ Xxx X. Xxxxxx
--------------------------------
XXX X. XXXXXX
41
