EXECUTION COPY
Exhibit 10.29.1
PURCHASE AGREEMENT
dated as of
August 22, 2002 and
amended as of October 29, 2002
by and among
ITC/\DeltaCom, Inc.,
the Several Purchasers named herein
and
ITC Holding Company, Inc.
TABLE OF CONTENTS
Page
ARTICLE I
ISSUANCE AND SALE OF PREFERRED SHARES, WARRANTS AND NEW
COMMON STOCK
1.1. Issuance, Purchase and Sale.......................................... 2
1.2. Closing.............................................................. 3
1.3. Deliveries........................................................... 3
1.4. Capitalized Terms.................................................... 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Organization; Subsidiaries........................................... 4
2.2. Due Authorization.................................................... 4
2.3. Capitalization....................................................... 5
2.4. SEC Reports.......................................................... 6
2.5. Litigation........................................................... 6
2.6. Absence of Certain Changes........................................... 6
2.7. Consents; No Violations.............................................. 6
2.8. Brokers or Finders................................................... 7
2.9. No General Solicitation or Advertising; No Integration............... 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
3.1. Acquisition for Investment........................................... 7
3.2. Accredited Investor Status........................................... 8
3.3. Information.......................................................... 8
3.4. Government Review.................................................... 8
3.5. Sale or Transfer..................................................... 8
3.6. Residency............................................................ 8
3.7. No Brokers or Finders................................................ 9
3.8. Organization......................................................... 9
3.9. Due Authorization.................................................... 9
3.10. Consents: No Violations.............................................. 9
3.11. Litigation .......................................................... 10
3.12. Availability of Funds................................................ 10
3.13. Redemption or Purchase of Holding Capital Stock...................... 10
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HOLDING
4.1. Organization........................................................... 10
4.2. Due Authorization...................................................... 10
4.3. Consents; No Violations................................................ 11
4.4. Litigation............................................................. 11
4.5. Availability of Funds.................................................. 11
4.6. Redemption or Purchase of Holding Capital Stock........................ 11
ARTICLE V
COVENANTS
5.1. Public Announcements................................................... 11
5.2. Consents, Approvals and Filings........................................ 12
5.3. Reasonable Best Efforts................................................ 12
5.4. Listing................................................................ 12
5.5. Preferred Stock Certificate of Designation............................. 12
5.6. Reservation of New Common Stock........................................ 12
5.7. Board Representation Rights............................................ 13
5.8. Confidential Treatment of Confidential Information..................... 13
5.9. Registration Rights.................................................... 13
5.10. Redemption Obligations of Holding...................................... 13
5.11. Obligation of Holding to Vote in Favor of the Plan..................... 14
5.12. Obligation by Xxxxxx to Vote in Favor of the Plan...................... 14
5.13. Further Assurances..................................................... 15
5.14. Waiver of Right to Participate in Rights Offering...................... 15
ARTICLE VI
PURCHASERS' REPRESENTATIVE
ARTICLE VII
CONDITIONS
7.1. Conditions to Obligations of the Purchasers, Holding and the Company
at Closing............................................................. 15
7.2. Additional Conditions to Obligations of the Purchasers and Holding
at the Closing......................................................... 16
7.3. Additional Conditions to Obligations of the Company at the Closing..... 18
7.4. Independent Purchase Obligations....................................... 18
ARTICLE VIII
TERMINATION
8.1. Termination............................................................ 19
8.2. Effect of Termination.................................................. 19
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ARTICLE IX
XXXXXX GUARANTEE
9.1. Xxxxxx Guarantee...................................................... 20
9.2. Guarantee Absolute.................................................... 20
ARTICLE X
MISCELLANEOUS
10.1. Definitions .......................................................... 20
10.2. Survival of Representations and Warranties............................ 23
10.3. Fees and Expenses .................................................... 23
10.4. Enforcement .......................................................... 23
10.5. Restrictive Legends .................................................. 23
10.6. Successors and Assigns ............................................... 25
10.7. Inspections; No Other Representations ................................ 25
10.8. Entire Agreement ..................................................... 26
10.9. Notices .............................................................. 26
10.10. Business Days ........................................................ 27
10.11. Amendments; Waivers................................................... 27
10.12. Counterparts ......................................................... 27
10.13. Descriptive Headings; Interpretation; No Strict Construction.......... 28
10.14. References ........................................................... 28
10.15. Governing Law ........................................................ 28
10.16. Exclusive Jurisdiction; Venue ........................................ 28
10.17. Waiver of Jury Trial ................................................. 29
10.18. Severability ......................................................... 29
10.19. Delivery by Facsimile ................................................ 29
Exhibit A - Form of Preferred Stock Certificate of Designation
Exhibit B - Form of Warrant Agreement
Exhibit C - Form of Registration Rights Agreement
Schedule 1 - Purchasers' Committed Amounts
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TABLE OF DEFINED TERMS
Affiliate ................................................................. 20
Agreement ................................................................. 1
Bankruptcy Code ........................................................... 1
Bankruptcy Court .......................................................... 1
Bankruptcy Documents ...................................................... 20
beneficial owner .......................................................... 20
beneficially own .......................................................... 20
Business Day .............................................................. 20
Capital Stock ............................................................. 20
Chapter 11 Case ........................................................... 1
Closing ................................................................... 3
Closing Date .............................................................. 3
Commitment ................................................................ 20
Commitment Shares ......................................................... 1
Committed Amount .......................................................... 2
Company ................................................................... 1
Company Board ............................................................. 20
Company Disclosure Schedule ............................................... 4
Company Existing Securities ............................................... 14
Confidential Information .................................................. 21
Consents, Approvals and Filings ........................................... 7
Conversion Shares ......................................................... 5
Delaware Secretary of State ............................................... 7
Disclosure Statement ...................................................... 21
Effective Date ............................................................ 21
Encumbrances .............................................................. 4
Exchange Act .............................................................. 21
Filing Date ............................................................... 1
Governmental Entity ....................................................... 21
Guaranteed Obligations .................................................... 20
Holding ................................................................... 1
Investor Suitability Questionnaire ........................................ 21
Xxxxxx .................................................................... 1
Xxxxxx Subscription Agreement ............................................. 1
Laws ...................................................................... 21
Litigation ................................................................ 6
Majority Purchasers ....................................................... 21
Material Adverse Effect ................................................... 22
New Common Stock .......................................................... 1
NMS ....................................................................... 12
Notes ..................................................................... 22
Order ..................................................................... 22
Person .................................................................... 22
Plan ...................................................................... 22
Preferred Shares .......................................................... 2
Preferred Stock Certificate of Designation ................................ 2
Process Agent ............................................................. 28
Purchaser ................................................................. 1
Purchaser's Committed Amount .............................................. 2
Purchasers ................................................................ 1
Purchasers' Counsel ....................................................... 22
Purchasers' Representative ................................................ 15
Registration Rights Agreement ............................................. 13
Reorganization ............................................................ 1
Rights .................................................................... 5
Rights Offering ........................................................... 2
SCANA ..................................................................... 1
SCANA Purchase Agreement .................................................. 2
SCANA Subscription Agreement .............................................. 1
SEC ....................................................................... 6
SEC Reports ............................................................... 6
Securities ................................................................ 7
Securities Act ............................................................ 22
Series A Preferred Stock .................................................. 1
Subsidiary ................................................................ 22
Terminating Company Breach ................................................ 19
Terminating Purchaser Breach .............................................. 19
Transaction Documents ..................................................... 23
Transfer .................................................................. 14
Transferee ................................................................ 14
Warrant Agreement ......................................................... 3
Warrant Shares ............................................................ 5
Warrants .................................................................. 1
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement"), dated as of August 22,
2002 and amended as of October 29, 2002, is made among ITC/\DeltaCom, Inc., a
Delaware corporation (the "Company"), ITC Holding Company, Inc. a Delaware
corporation ("Holding"), and the persons and other entities whose names are set
forth in Schedule 1 hereto (collectively, the "Purchasers" and individually, a
"Purchaser").
RECITALS
WHEREAS, on June 25, 2002 (the "Filing Date"), the Company filed a
voluntary bankruptcy petition (the "Chapter 11 Case") with the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") in
contemplation of a financial reorganization (the "Reorganization") pursuant to a
plan of reorganization that will be subject to confirmation pursuant to chapter
11 of title 11 of the United States Code (the "Bankruptcy Code");
WHEREAS, the Company's plan of reorganization requires the Company to
raise gross proceeds of at least $30,000,000 from the issuance and sale of
shares of convertible redeemable preferred stock, par value $.01 per share, of
the Company (the "Series A Preferred Stock");
WHEREAS, prior to the filing of the Chapter 11 Case, the Company
entered into (i) a subscription agreement (the "Xxxxxx Subscription Agreement")
with Xxxxxxxx X. Xxxxxx, III ("Xxxxxx") and Holding pursuant to which Xxxxxx has
committed to purchase Series A Preferred Stock and warrants (the "Warrants") to
purchase shares of the Common Stock, par value $.01 per share, of the Company
(the "New Common Stock") for an aggregate purchase price of $15,000,000, subject
to Xxxxxx'x right to assign all or any portion of his commitment to purchase the
Series A Preferred Stock and the Warrants to a limited number of qualified
investors; and (ii) a subscription agreement (the "SCANA Subscription
Agreement") with SCANA Corporation ("SCANA") pursuant to which SCANA has
committed to purchase Series A Preferred Stock and Warrants for an aggregate
purchase price of $15,000,000;
WHEREAS, in consideration for his purchase commitment set forth in the
Xxxxxx Subscription Agreement, the Company has agreed to issue to Xxxxxx 500,000
shares of New Common Stock (the "Commitment Shares");
WHEREAS, on or prior to the date hereof, Xxxxxx has assigned portions
of his commitment to purchase the Series A Preferred Stock and Warrants and of
his right to receive Commitment Shares to the other Purchasers and the Company
now wishes, upon the terms and subject to the conditions set forth in this
Agreement, to (i) sell to the Purchasers, and the Purchasers wish to purchase
from the Company, 150,000 shares of Series A Preferred Stock and Warrants
exercisable for 510,000 shares of New Common Stock for an aggregate purchase
price of $15,000,000 and (ii) issue to the Purchasers the Commitment Shares;
WHEREAS, the shares of Series A Preferred Stock and Warrants shall be
issued in units consisting of one share of Series A Preferred Stock and 3.40
Warrants;
WHEREAS, in accordance with the Xxxxxx Subscription Agreement, each
Purchaser who is a stockholder of Holding will not be obligated to purchase such
stockholder's Series A Preferred Stock and Warrants, unless it receives funding
from Holding for such purpose and the other conditions to its obligations
hereunder are satisfied;
WHEREAS, Holding, which is currently a stockholder of the Company, has
agreed pursuant to the Xxxxxx Subscription Agreement to provide such funding to
each Purchaser who is a stockholder of Holding but only if certain releases of
Holding and its affiliates referred to herein by the Company and the other
persons referred to therein become legally binding as part of the Plan and only
if the Company agrees with Holding that Holding and its affiliates shall obtain
such releases, and the Company is willing to make such agreement with Holding so
that Holding will fund such purchases; and
WHEREAS, as of the date hereof and in accordance with the SCANA
Subscription Agreement, SCANA has entered into a purchase agreement (the "SCANA
Purchase Agreement") to purchase 150,000 shares of Series A Preferred Stock and
Warrants exercisable for 510,000 shares of New Common Stock for an aggregate
purchase price of $15,000,000 upon the terms and conditions set forth in such
agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
ISSUANCE AND SALE OF PREFERRED SHARES, WARRANTS AND NEW
COMMON STOCK
1.1. Issuance, Purchase and Sale
(a) (i) Subject to the terms and subject to the conditions of this
Agreement, the Company shall sell to each Purchaser, and each Purchaser shall
purchase from the Company, the number of shares of Series A Preferred Stock (the
"Preferred Shares") at a stated price of $100 per share which is set forth
opposite such Purchaser's name in column (1) of Schedule 1 attached hereto. The
Preferred Shares to be purchased and sold at Closing shall be issued pursuant to
a certificate of designation substantially in the form of Exhibit A hereto (the
"Preferred Stock Certificate of Designation"). Each Purchaser shall pay for its
Preferred Shares the amount set forth opposite such Purchaser's name in column
(4) of Schedule 1 (such amount, as adjusted pursuant to Section 1.1(a)(ii), a
"Purchaser's Committed Amount," and the aggregate purchase price of $15,000,000,
as adjusted pursuant to Section 1.1(a)(ii), the "Committed Amount").
(ii) The Committed Amount shall be reduced by $1.00 for every
$2.00 of gross proceeds received by the Company from the sale of Series A
Preferred Stock and Warrants in the rights offering of such securities (the
"Rights Offering") made to holders of common stock and preferred stock of the
Company pursuant to the Plan. Upon any adjustment of the Committed Amount, the
number of Preferred Shares to be purchased and sold at the
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Closing to the Purchasers hereunder shall be proportionately reduced and such
reduction shall be apportioned pro rata against each Purchaser's Committed
Amount. At least two Business Days prior to Closing, the Company shall provide
written notice to each Purchaser of the amount, if any, by which a Purchaser's
Committed Amount shall be reduced as a result of purchases made pursuant to the
Rights Offering, and the parties hereto agree that such reductions shall be
reflected in a new version of Schedule 1 hereto, which absent any manifest error
shall be deemed to replace the existing Schedule 1 without any further action by
the parties hereto.
(b) At the Closing, the Company shall issue to each Purchaser the
number of Warrants set forth opposite such Purchaser's name in column (2) of
Schedule 1, for no additional consideration, provided, however, that if the
Committed Amount and the number of Preferred Shares to be purchased and sold at
the Closing shall be reduced pursuant to Section 1.1(a)(ii), the number of
Warrants issuable at the Closing to the Purchasers shall be proportionately
reduced and such reduction shall be apportioned pro rata against each
Purchaser's Committed Amount. The Warrants shall be issued pursuant to a warrant
agreement substantially in the form of Exhibit B hereto, which shall be in
effect as of the Closing (the "Warrant Agreement").
(c) At the Closing, the Company shall issue to each Purchaser the
number of Commitment Shares set forth opposite such Purchaser's name in column
(3) of Schedule 1; provided, however, that each fractional Commitment Share set
forth opposite a Purchaser's name in column (3) on Schedule 1 shall, if such
fractional Commitment Share represents at least .50 of a Commitment Share, be
rounded up to the next highest whole Commitment Share or, if such fractional
Commitment Share represents less than .50 of a Commitment Share, be rounded down
to the next lowest whole Commitment Share.
(d) The Preferred Shares and Warrants shall be issued at the Closing
in the ratio of one share of Series A Preferred Stock to 3.40 Warrants.
1.2. Closing. The closing of the purchase and sale of the Preferred
Shares and Warrants and the issuance of the Commitment Shares (the "Closing")
shall take place at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 at 10:00 a.m. (New York City time) on the Effective Date (the
date of the Closing, the "Closing Date").
1.3. Deliveries. At the Closing, the Company shall deliver to each
Purchaser (i) stock certificates, each registered in the name of such Purchaser,
representing the Preferred Shares being purchased by such Purchaser and the
Commitment Shares being issued to such Purchaser, (ii) the Warrants, each of
which shall be substantially in the form of the warrant certificate attached as
an exhibit to the Warrant Agreement, being acquired by such Purchaser at the
Closing, and (iii) such other instruments and documents as are specified in
Section 7.2. Delivery of such stock certificates and Warrants and such other
instruments and documents shall be made against receipt by the Company of the
purchase price payable therefor equal to the Purchaser's Committed Amount, which
shall be paid by wire transfer of immediately available funds to an account
designated in writing by the Company (such designation to be received by such
Purchaser at least two Business Days prior to the Closing Date), and such other
instruments and documents as are specified in Section 7.3.
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1.4. Capitalized Terms. Capitalized terms not otherwise defined in
this Agreement shall have the meanings ascribed to such terms in Section 10.1.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each Purchaser and Holding, as
of the date hereof and as of the Effective Date (except to the extent that any
representation or warranty herein is stated to be made as of another date, in
which case such representation or warranty shall be true as of that date), as
set forth in this Article II. Each reference in this Article II to a Schedule
shall be to the disclosure schedule delivered by the Company to the Purchasers
on or before the date of this Agreement (the "Company Disclosure Schedule").
2.1. Organization; Subsidiaries.(a) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to carry
on its business as it is now being conducted. The Company is duly qualified and
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction in which the character of its assets owned or held under lease
or the nature of its business makes such qualification necessary, except where
the failure so to qualify or be licensed would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) Except as set forth on Schedule 2.1(b) or as disclosed in the SEC
Reports or the Bankruptcy Documents, (i) the Company owns, either directly or
indirectly, all of the Capital Stock or other equity interests of the
Subsidiaries free and clear of all liens, charges, claims, security interests,
restrictions, options, proxies, voting trusts or other encumbrances
(collectively, the "Encumbrances") and (ii) there are no outstanding
subscription rights, options, warrants, convertible or exchangeable securities
or other rights of any character whatsoever relating to issued or unissued
Capital Stock or other equity interests of any Subsidiary, or any Commitments of
any character whatsoever relating to issued or unissued Capital Stock or other
equity interests of any Subsidiary or pursuant to which any Subsidiary is or may
become bound to issue or grant additional shares of its Capital Stock or other
equity interests or related subscription rights, options, warrants, convertible
or exchangeable securities or other rights, or to grant preemptive rights.
Except for the Subsidiaries or as disclosed in the SEC Reports, the Company does
not own, directly or indirectly, any interest in any Person in excess of 9.9% of
the outstanding equity of such Person.
2.2. Due Authorization. Subject to any required approvals of the
Bankruptcy Court, the Company shall have the requisite corporate power and
authority to enter into this Agreement and each of the other Transaction
Documents to which it is a party and shall have the requisite corporate power
and authority to consummate the transactions contemplated hereby and thereby.
The execution and delivery by the Company of this Agreement and each of the
other Transaction Documents to which it is a party, the issuance, sale and
delivery of the Preferred Shares, the Warrants and the Commitment Shares by the
Company, and the compliance by the Company with each of the provisions of this
Agreement and each of the other Transaction Documents to which it is a party
(including the reservation and issuance of the New
4
Common Stock issuable upon conversion of the Series A Preferred Stock (the
"Conversion Shares") and the reservation, issuance and sale of the New Common
Stock issuable upon exercise of the Warrants (the "Warrant Shares), and the
consummation by the Company of the transactions contemplated hereby and thereby)
(i) are within the corporate power and authority of the Company and (ii) upon
confirmation of the Plan, shall have been duly authorized by all necessary
corporate action of the Company. Subject to any required approvals of the
Bankruptcy Court, this Agreement has been, and each of the other Transaction
Documents to which the Company is a party when executed and delivered by the
Company shall be, duly and validly executed and delivered by the Company.
Assuming due authorization, execution and delivery by each Purchaser of the
Transaction Documents to which it is a party, this Agreement constitutes, and
each of such other Transaction Documents when executed and delivered by the
Company shall constitute, a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as such
enforcement is limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally and for limitations
imposed by general principles of equity. The terms, designations, powers,
preferences and relative, participating, optional and other special rights,
qualifications, limitations and restrictions of the Series A Preferred Stock
shall be as set forth in the Preferred Stock Certificate of Designation. After
giving effect to the Reorganization, (x) the Preferred Shares shall be validly
reserved for issuance and, when issued and delivered in accordance with the
terms of this Agreement, shall be validly issued and outstanding, fully paid and
non-assessable, and not subject to the preemptive or other similar rights of the
stockholders of the Company, (y) the Conversion Shares and the Warrant Shares
shall be validly reserved for issuance and, when issued and delivered in
accordance with the terms of the Preferred Stock Certificate of Designation and
the Warrant Agreement, respectively, shall be duly and validly issued and
outstanding, fully paid and non-assessable, and not subject to the preemptive or
other similar rights of the stockholders of the Company and (z) the Commitment
Shares, when issued and delivered in accordance with the terms of this
Agreement, shall be validly issued and outstanding, fully paid and
non-assessable, and not subject to the preemptive or other similar rights of the
stockholders of the Company.
2.3. Capitalization. After giving effect to the Reorganization, (i)
the authorized Capital Stock of the Company shall consist of 250,000,000 shares
of New Common Stock and 5,000,000 shares of preferred stock, par value $.01
share, (ii) all of the issued and outstanding Capital Stock shall be duly
authorized and will be validly issued, fully paid and non-assessable, (iii) no
shares of Capital Stock of the Company shall be subject to the preemptive or
other similar rights of the stockholders of the Company, and (iv) except as
disclosed in the SEC Reports or the Bankruptcy Documents or as otherwise
contemplated by Article I, there shall be no outstanding subscription rights,
options, warrants, convertible or exchangeable securities or other rights of any
character whatsoever (collectively, "Rights") relating to issued or unissued
Capital Stock of the Company, or any Commitments of any character whatsoever
relating to issued or unissued Capital Stock of the Company or pursuant to which
the Company is or may become bound to issue additional shares of its Capital
Stock or grant related Rights, or to grant preemptive or other similar rights.
5
2.4. SEC Reports. Except as set forth in Schedule 2.4, the Company
has timely filed with the Securities and Exchange Commission (the "SEC") all
reports, proxy statements, registration statements and other documents required
to be filed by it under the Securities Act and the Exchange Act since January 1,
2001 (including the financial statements and other financial data contained
therein) (collectively, the "SEC Reports"). On the date of its filing, each SEC
Report did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
2.5. Litigation. (a) Except as set forth on Schedule 2.5(a) or as
disclosed in the SEC Reports or the Bankruptcy Documents, there is no claim,
action, suit, investigation or proceeding (collectively, "Litigation") pending
or, to the knowledge of the Company, threatened against the Company or any of
the Subsidiaries or involving any of their respective properties or assets by or
before any court, arbitrator or other Governmental Entity which (i) challenges
or seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by this Agreement or (ii) if resolved adversely to the Company or a
Subsidiary, would reasonably be expected to have a Material Adverse Effect.
(b) Except as disclosed in the SEC Reports or the Bankruptcy
Documents, neither the Company nor any of the Subsidiaries is in default under
or in breach of any order, judgment or decree of any court, arbitrator or other
Governmental Entity, except for defaults or breaches which, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
2.6. Absence of Certain Changes. Except as disclosed in the SEC
Reports or the Bankruptcy Documents, since December 31, 2001, neither the
Company nor any of the Subsidiaries has suffered any change, event or
development or series of changes, events or developments which, individually or
in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.
2.7. Consents; No Violations. After giving effect to the
consummation of the other transactions to occur on the Effective Date, in the
case of clauses (i) and (ii) below, neither the execution, delivery or
performance by the Company of this Agreement or any of the other Transaction
Documents to which it is a party nor the consummation of the transactions
contemplated hereby or thereby shall (i) conflict with, or result in a breach or
a violation of, any provision of the Restated Certificate of Incorporation or
bylaws of the Company or of the certificate of incorporation, bylaws or other
organizational documents of any of the Subsidiaries; (ii) except as set forth on
Schedule 2.7, constitute, with or without notice or the passage of time or both,
a breach, violation or default, create an Encumbrance, or give rise to any right
of termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration, under any Law or any provision of any agreement or
other instrument to which the Company or any of the Subsidiaries is a party or
pursuant to which any of them or any of their assets or properties is subject,
except for breaches, violations, defaults, Encumbrances, or rights of
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration, which, individually or in the aggregate, would not
reasonably be expected to have a
6
Material Adverse Effect; or (iii) other than as contemplated by the Bankruptcy
Documents, require any consent, order, approval or authorization of,
notification or submission to, filing with, license or permit from, or exemption
or waiver by, any Governmental Entity or any other Person (collectively, the
"Consents, Approvals and Filings") on the part of the Company or any of the
Subsidiaries, except for (a) the filing of the Preferred Stock Certificate of
Designation with the Secretary of State of the State of Delaware (the "Delaware
Secretary of State"), (b) the Consents, Approvals and Filings required under the
Securities Act, the Exchange Act and applicable state securities laws, (c) the
Consents, Approvals and Filings required under rules of the Nasdaq Stock Market,
(d) the Consents, Approvals and Filings set forth on Schedule 2.7 and (e) such
other Consents, Approvals and Filings which the failure of the Company or any of
the Subsidiaries to make or obtain would not reasonably be expected to have a
Material Adverse Effect or materially adversely affect the ability of the
Company to consummate the transactions contemplated by this Agreement or any
Transaction Document.
2.8. Brokers or Finders. Except for UBS Warburg LLC, Xxxxxx Xxxxxxx
& Co. Incorporated and the other Company agents identified in the Bankruptcy
Documents, whose fees shall be paid by the Company, no agent, broker, investment
banker or other Person is or shall be entitled to any broker's or finder's fee
or any other investment banking commission or similar fee from the Company or
any of the Subsidiaries in connection with any of the transactions contemplated
by this Agreement to occur on the Effective Date.
2.9. No General Solicitation or Advertising; No Integration. With
respect to any offering to the Purchasers of the Preferred Shares, the Warrants,
the Commitment Shares, the Conversion Shares or the Warrant Shares
(collectively, the "Securities") made without registration under the Securities
Act and applicable state securities laws, the Company has not (i) engaged in any
general solicitation or general advertising (as such terms are used in Rule
502(c) of the Securities Act), or (ii) made any offers or sales of any security
under circumstances that would require registration of the Securities being
offered or sold under this Agreement under the Securities Act or any state
securities law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally and not jointly represents and warrants to
the Company with respect to the Securities it is acquiring hereunder as of the
date hereof and as of the Effective Date, as set forth in this Article III.
3.1. Acquisition for Investment. Such Purchaser is acquiring the
Securities for its own account, for investment and not with a view to, or for
sale in connection with, the distribution thereof within the meaning of the
Securities Act (it being understood that except as otherwise provided in this
Agreement and the Transaction Documents to which it is a party, such Purchaser
does not agree to hold the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
the Securities Act and state securities laws applicable to such disposition).
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3.2. Accredited Investor Status. Such Purchaser is an "accredited
investor," as that term is defined in Rule 501(a) of Regulation D under the
Securities Act. The information provided by such Purchaser in the Investor
Suitability Questionnaire furnished to the Company is accurate and complete.
Such Purchaser has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investment
in the Securities and is capable of bearing the economic risks of such
investment. Such Purchaser understands that its investment in the Securities
involves a significant degree of risk.
3.3. Information. Such Purchaser and its advisers have been
furnished with all materials relating to the business, finances and operations
of the Company and its Subsidiaries and materials relating to the offer and sale
of the Securities which have been requested by such Purchaser or its advisers.
Such Purchaser and its advisers have been afforded the opportunity to ask
questions of the Company's management concerning the Company and its
Subsidiaries and the Securities. Such Purchaser has been provided with copies
of, and has carefully reviewed, the SEC Reports and the Bankruptcy Documents.
3.4. Government Review. Such Purchaser understands that no
Governmental Entity has passed upon or made any recommendation or endorsement of
the Securities.
3.5. Sale or Transfer. Such Purchaser understands that (i) except
as provided in this Agreement or the Registration Rights Agreement, the sale or
re-sale of the Securities has not been and is not being registered under the
Securities Act or any applicable state securities laws, and the Securities may
not be sold or otherwise transferred unless (a) the Securities are sold or
transferred pursuant to an effective registration statement under the Securities
Act and applicable state securities laws, (b) such Purchaser shall have
delivered to the Company an opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration, or (c) the
Securities are sold pursuant to Rule 144 under the Securities Act; (ii) any sale
of such Securities made in reliance on Rule 144 may be made only in accordance
with the terms of such Rule and further, if such Rule is not applicable, any
sale of such Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the Securities Act) may require compliance with another exemption
under the Securities Act or the rules and regulations of the SEC thereunder; and
(iii) neither the Company nor any other Person is under any obligation to
register such Securities under the Securities Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder (in each
case, other than pursuant to the Registration Rights Agreement).
3.6. Residency. In the case of any Purchaser that is not a natural
person, the principal offices of such Purchaser and the offices of such
Purchaser in which it made its decision to purchase the Securities are located
at the address set forth in such Purchaser's Investor Suitability Questionnaire
or as otherwise specified to the Company in writing. In the case of any
Purchaser that is a natural person, the principal residence of such Purchaser is
located
8
at the address set forth in such Purchaser's Investor Suitability Questionnaire
or as otherwise specified to the Company in writing.
3.7. No Brokers or Finders. No agent, broker, investment banker or
other Person is or shall be entitled to any broker's or finder's fee or any
other commission or similar fee from such Purchaser in connection with the
transactions contemplated by this Agreement to occur on the Closing Date.
3.8. Organization. In the case of any Purchaser that is not a
natural person, such Purchaser is an entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of formation and has the
requisite power and authority to carry on its business as it is now being
conducted.
3.9. Due Authorization. Such Purchaser has the requisite power and
authority to enter into this Agreement and each of the other Transaction
Documents to which it is a party and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by such Purchaser of this
Agreement and each of the other Transaction Documents to which it is a party and
the compliance by such Purchaser with each of the provisions of this Agreement
and each of the Transaction Documents to which it is a party (including the
consummation by such Purchaser of the transactions contemplated hereby and
thereby) (i) are within the power and authority of such Purchaser and (ii) have
been duly authorized by all necessary action on the part of such Purchaser. This
Agreement has been, and each of the other Transaction Documents to which it is a
party when executed and delivered by such Purchaser shall be, duly and validly
executed and delivered by such Purchaser. Assuming due authorization, execution
and delivery by the Company of the Transaction Documents to which it is a party,
this Agreement constitutes, and each of such other Transaction Documents when
executed and delivered by such Purchaser shall constitute, a valid and binding
agreement of such Purchaser enforceable against such Purchaser in accordance
with its terms, except as such enforcement is limited by bankruptcy, insolvency
and other similar laws affecting the enforcement of creditors' rights generally
and for limitations imposed by general principles of equity.
3.10. Consents: No Violations. Neither the execution, delivery or
performance by such Purchaser of this Agreement or any of the other Transaction
Documents to which it is a party nor the consummation of the transactions
contemplated hereby or thereby shall (i) in the case of any Purchaser that is
not a natural person conflict with, or result in a breach or a violation of, any
provision of the certificate of incorporation, bylaws or other organizational
documents of such Purchaser; (ii) constitute, with or without notice or the
passage of time or both, a breach, violation or default, create an Encumbrance,
or give rise to any right of termination, modification, cancellation,
prepayment, suspension, limitation, revocation or acceleration, under any Law,
or any provision of any agreement or other instrument to which such Purchaser is
a party or pursuant to which such Purchaser or any of its assets or properties
is subject, except for breaches, violations, defaults, Encumbrances, or rights
of termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration, which, individually or in the aggregate, would not
materially adversely affect the ability of such
9
Purchaser to consummate the transactions contemplated by this Agreement or any
Transaction Document to which it is a party; or (iii) require any Consents,
Approvals and Filings on the par t of such Purchaser, except for (a) the
Consents, Approvals and Filings required under the Exchange Act and applicable
state securities laws, (b) the Consents, Approvals and Filings set forth on
Schedule 3.10 and (c) such other Consents, Approvals and Filings which the
failure of such Purchaser to make or obtain would not materially adversely
affect the ability of such Purchaser to consummate the transactions contemplated
by this Agreement or any Transaction Document.
3.11. Litigation. There is no Litigation pending or, to the knowledge
of such Purchaser, threatened against such Purchaser or any of its Affiliates or
involving any of its properties or assets by or before any court, arbitrator or
other Governmental Entity which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement.
3.12. Availability of Funds. Such Purchaser has, or if such Purchaser
is a stockholder of Holding, upon the purchase by Holding of such Purchaser's
capital stock of Holding as contemplated by this Agreement shall have,
sufficient funds to pay the purchase price for the Preferred Shares and the
Warrants to be acquired by it hereunder.
3.13. Redemption or Purchase of Holding Capital Stock. If such
Purchaser is a stockholder of Holding, such Purchaser has agreed with Holding on
the price and other terms upon which the purchase or redemption of such
Purchaser's capital stock of Holding by Holding as contemplated by this
Agreement shall be consummated.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HOLDING
Holding represents and warrants to the Company and each Purchaser as
of the date hereof and as of the Closing Date, as set forth in this Article IV.
4.1. Organization. Holding is an entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation
and has the requisite power and authority to carry on its business as it is now
being conducted.
4.2. Due Authorization. Holding has the requisite power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery by Holding of this Agreement and the
compliance by Holding with each of the provisions of this Agreement (including
the consummation by Holding of the transactions contemplated hereby) (i) are
within the power and authority of Holding and (ii) have been duly authorized by
all necessary action on the part of Holding. This Agreement has been duly and
validly executed and delivered by Holding. Assuming due authorization, execution
and delivery by the Company, this Agreement constitutes a valid and binding
agreement of Holding enforceable against Holding in accordance with its terms,
except as such enforcement is limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally and for
limitations imposed by general principles of equity.
10
4.3. Consents; No Violations. Neither the execution, delivery or
performance by Holding of this Agreement (including, without limitation, the
performance of Holding's obligations pursuant to Section 5.10) nor the
consummation of the transactions contemplated hereby shall (i) conflict with, or
result in a breach or a violation of, any provision of the certificate of
incorporation or bylaws of Holding; (ii) constitute, with or without notice or
the passage of time or both, a breach, violation or default, create an
Encumbrance, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or acceleration,
under any Law, or any provision of any agreement or other instrument to which
Holding is a party or pursuant to which Holding or its assets or properties is
subject, except for breaches, violations, defaults, Encumbrances, or rights of
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration, which, individually or in the aggregate, would not
materially adversely affect the ability of Holding to perform its obligations
under this Agreement and to consummate the transactions contemplated by this
Agreement; or (iii) require any Consents, Approvals and Filings on the part of
Holding, except for such Consents, Approvals and Filings which the failure of
Holding to make or obtain would not materially adversely affect the ability of
Holding to perform its obligations under this Agreement and to consummate the
transactions contemplated by this Agreement.
4.4. Litigation. There is no Litigation pending or, to the knowledge
of Holding, threatened against Holding or any of its Affiliates or involving any
of its properties or assets by or before any court, arbitrator or other
Governmental Entity which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the performance by Holding of its obligations under
this Agreement or the transactions contemplated by this Agreement.
4.5. Availability of Funds. Holding has sufficient funds to pay the
purchase price for all the capital stock of Holding that it may become obligated
to redeem or purchase as contemplated by this Agreement.
4.6. Redemption or Purchase of Holding Capital Stock. Holding has
agreed with
each Purchaser that owns capital stock of Holding and who shall have such
capital stock purchased or redeemed by Holding as contemplated by this Agreement
on the price and other terms on which such purchase or redemption of capital
stock shall be consummated, and there are no unsatisfied conditions
with respect to such purchase or redemption.
ARTICLE V
COVENANTS
5.1. Public Announcements. The Company, Holding and the Purchasers
shall consult with each other before issuing any press release with respect to
this Agreement or the transactions contemplated hereby and shall not issue any
such press release or make any such public statement with respect thereto
without the prior consent of the others, which consent shall not be unreasonably
withheld, delayed or conditioned; provided, however, that a party may, without
the prior consent of the other party, issue such press release or make such
public statement as may upon the advice of counsel be required by Law, by rules
of the Nasdaq Stock Market, by any other automated quotation system on which the
Company's securities or, if
11
applicable, the securities of any Purchaser are quoted or to be quoted or by any
national securities exchange on which the Company's securities or, if
applicable, the securities of any Purchaser are listed or to be listed,
provided, further, that, to the extent time permits, such party has used all
reasonable best efforts to consult with the other parties prior thereto.
5.2. Consents, Approvals and Filings. Subject to the terms of this
Agreement and the confirmation of the Plan, the Company, Holding and each
Purchaser shall use its reasonable best efforts to take, or cause to be taken,
all actions, and do, or cause to be done, and to assist and cooperate with the
other party in doing, all things necessary, proper, desirable or advisable to
obtain and make all Consents, Approvals and Filings required to be obtained or
made by the Company and its Subsidiaries, Holding or such Purchaser, as the case
may be, in connection with the authorization, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby.
5.3. Reasonable Best Efforts. Except as otherwise expressly provided
in this Agreement and subject to the Company's duties and obligations under Law
(including, without limitation, the Bankruptcy Code), the Company, Holding and
each Purchaser each shall use its reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws to consummate the transactions
contemplated by this Agreement. In furtherance and not in limitation of the
other covenants of the parties contained in this Agreement, if any
administrative or judicial action or proceeding, including any proceeding by a
private party, is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement, each party shall cooperate in all
respects with the other party and use its reasonable best efforts to contest and
resist any such action or proceeding and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order, whether temporary,
preliminary or permanent, that is in effect and that prohibits, prevents or
restricts the consummation of the transactions contemplated by this Agreement.
5.4. Listing. The Company shall use reasonable efforts to have the
New Common Stock quoted on the National Market System of the Nasdaq Stock Market
(the "NMS") or listed on a national securities exchange or quoted on another
national automated quotation system other than the NMS for so long as any
Securities are outstanding.
5.5. Preferred Stock Certificate of Designation. On or prior to the
Closing Date, the Company Board shall approve and adopt the Preferred Stock
Certificate of Designation authorizing such Preferred Shares, and the Company
shall cause such Preferred Stock Certificate of Designation to be filed with the
Delaware Secretary of State.
5.6. Reservation of New Common Stock. From and after the Closing
Date, the Company at all times shall reserve and keep available, free of
preemptive rights, solely for issuance and delivery upon conversion of the
Preferred Shares and upon exercise of the Warrants, the number of shares of New
Common Stock from time to time issuable upon conversion of all of the Preferred
Shares or upon exercise of the Warrants, in each case at the time outstanding.
12
5.7. Board Representation Rights. The Company shall take all
corporate action necessary to provide the Purchasers with the benefit of the
Company Board representation rights set forth in the Preferred Stock Certificate
of Designation.
5.8. Confidential Treatment of Confidential Information. (a) In the
event any Purchaser (including its officers, employees, counsel, accountants,
partners and other authorized representatives) obtains from the Company or the
Subsidiaries any Confidential Information, such Purchaser (i) shall treat all
such Confidential Information as confidential, (ii) shall use such Confidential
Information only for the purposes contemplated in this Agreement and (iii) shall
not disclose such Confidential Information to any third party except to such
officers, employees, counsel, accountants, partners and other authorized
representatives of such Purchaser who need to know such Confidential Information
for the purpose of effectuating the transactions contemplated by this Agreement
and who have been informed of and have agreed to protect the confidential nature
of such Confidential Information (and such Purchaser shall be responsible for
compliance with this Section 5.8 by such officers, employees, counsel,
accountants, partners and other authorized representatives). Notwithstanding the
preceding sentence, if such Purchaser or any of its authorized representatives
becomes legally required pursuant to applicable law or regulation (including
securities laws or regulations or the regulations of the NMS or any applicable
stock exchange) or regulatory, legal or judicial process (including by
deposition, interrogatory, request for documents, subpoena or similar process)
to disclose any of the Confidential Information, such Purchaser shall provide
the Company with prompt prior written notice of such requirement so that the
Company may seek a protective order or other appropriate remedy or waive in
writing compliance with the provisions of this Agreement. If such protective
order or other remedy is not obtained and such a written waiver has not been
received from the Company that would permit such required disclosure, such
Purchaser and its authorized representatives shall disclose only that portion of
the Confidential Information which the Purchaser is advised in the opinion of
its counsel is legally required to be disclosed and shall take all reasonable
steps to preserve the confidentiality of the Confidential Information by
cooperating with the Company to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be accorded the Confidential
Information.
(b) Upon the Company's request at any time, a Purchaser shall (i)
return to the Company or destroy all documents (including any copies thereof)
embodying the Confidential Information and (ii) certify in writing to the
Company, within ten days following the Company's request, that all such
Confidential Information has been returned or destroyed.
5.9. Registration Rights. On or prior to the Closing Date, the
Company shall enter into the Registration Rights Agreement with the Purchasers
and SCANA Corporation substantially in the form of Exhibit C hereto (the
"Registration Rights Agreement"), which agreement shall then be in full force
and effect, and the Company shall comply with the terms thereof.
5.10. Redemption Obligations of Holding. Subject to the terms and
conditions of this Agreement, on or prior to the Closing Date, Holding shall
redeem or purchase from a Purchaser that holds capital stock of Holding such
amount of the capital stock of Holding
13
held by such Purchaser as shall be necessary to enable such Purchaser to have
immediately available funds at the Closing in an amount equal to such
Purchaser's Committed Amount, provided, that nothing herein contained shall be
deemed to preclude a sale or business combination of or involving Holding prior
to the Closing Date, provided, further, that, as part of such transaction (or
series of related transactions), the Purchasers that hold capital stock of
Holding receive consideration for such Holding capital stock sufficient for such
Purchasers to fulfill their commitment to purchase the Series A Preferred Stock
and the Warrants as specified in this Agreement. The aggregate purchase price of
securities Holding shall be obligated to purchase pursuant to this Agreement
shall not exceed $15,000,000.
5.11. Obligation of Holding to Vote in Favor of the Plan. Holding
hereby acknowledges to the Company that it supports the terms of the Plan.
Holding agrees that, for so long as it is the beneficial owner of Notes, common
stock of the Company or Series B-1 or Series B-2 Cumulative Convertible
Preferred Stock of the Company (collectively, the "Company Existing
Securities"), it (i) shall vote, or shall cause its Subsidiaries that own
Company Existing Securities of record to vote, its claims in respect of the
Company Existing Securities in favor of the Plan and (ii) shall not object to,
delay, impede or take any other action to interfere, directly or indirectly,
with the acceptance or implementation of the Plan, including commencing any
action to oppose or object to the Plan. The provisions of this Section 5.11
shall not in any way limit or condition the right of Holding or any of its
subsidiaries to sell, transfer or otherwise dispose of (a "Transfer") any or all
of the Company Existing Securities at any time or to any person (a "Transferee")
in the sole and absolute discretion of Holding or any such Subsidiary; provided,
however, that, if and to the extent that Holding or any such Subsidiary
Transfers any of the Company Existing Securities before the date of confirmation
of the Plan, Holding shall use its reasonable best efforts to obtain, or to
cause such Subsidiary to obtain, the agreement of the Transferee prior to the
effectiveness of such Transfer to be bound by the terms of this Section 5.11
with respect to the Company Existing Securities being Transferred to the
Transferee. Such agreement of the Transferee shall be confirmed in a writing,
which may include a trade confirmation issued by a broker or dealer, acting as
principal or as agent for the Transferee, stating that such agreement is a term
of such Transfer.
5.12. Obligation by Xxxxxx to Vote in Favor of the Plan. Xxxxxx hereby
acknowledges to the Company that he supports the terms of the Plan. Xxxxxx
agrees that, for so long as he is the beneficial owner of Company Existing
Securities, he (i) shall vote his claims in respect of the Company Existing
Securities in favor of the Plan and (ii) shall not object to, delay, impede or
take any other action to interfere, directly or indirectly, with the acceptance
or implementation of the Plan, including commencing any action to oppose or
object to the Plan. Xxxxxx shall not Transfer any of his Company Existing
Securities before the date of confirmation of the Plan except to a Transferee
who agrees prior to the effectiveness of such Transfer to be bound by the terms
of this Section 5.12 with respect to the Company Existing Securities being
Transferred to the Transferee. Such agreement of the Transferee shall be
confirmed in a writing, which may include a trade confirmation issued by a
broker or dealer, acting as principal or as agent for the Transferee, stating
that such agreement is a term of such Transfer.
14
5.13. Further Assurances. At any time or from time to time after the
date of this Agreement, the Company, on the one hand, and each of the Purchasers
and Holding, on the other hand, agree to cooperate with each other, and at the
request of any other party, to execute and deliver any further instruments or
documents and to take all such further action as such other party may reasonably
request in order to evidence or effectuate the consummation of the transactions
contemplated by this Agreement or by the other Transaction Documents and
otherwise to carry out the intent of the parties hereunder or thereunder.
5.14. Waiver of Right to Participate in Rights Offering. The
Purchasers hereby irrevocably and unconditionally waive any and all rights that
they have as of the date hereof or may have after the date hereof to subscribe
for Series A Preferred Stock and Warrants pursuant to the Rights Offering.
ARTICLE VI
PURCHASERS' REPRESENTATIVE
Subject to the last sentence of this Article VI, the Purchasers hereby
appoint Xxxxxx as the Purchasers' exclusive agent to act on the Purchasers'
behalf with respect to the matters specified in this Article VI. Such
representative, or such other representative as the Purchasers may appoint from
time to time to replace Xxxxxx, is hereinafter referred to as the "Purchasers'
Representative." The Purchasers' Representative shall take any and all actions
which the Purchasers' Representative believes are necessary or appropriate under
this Agreement for and on behalf of the Purchasers as fully as if the Purchasers
were acting on their own behalf, including, without limitation, receiving notice
of and defending any claims pursuant to this Agreement, giving notice of and
asserting any claims pursuant to this Agreement, consenting to, compromising or
settling claims made pursuant to this Agreement, taking any and all other
actions specified in or contemplated by this Agreement to be taken by the
Purchasers prior to, on or after the Closing Date and engaging counsel,
accountants or other representatives in connection with the foregoing matters.
The Company and Holding shall have the right to rely upon all actions taken or
omitted to be taken by the Purchasers' Representative pursuant to this
Agreement, all of which actions or omissions shall be legally binding upon each
of the Purchasers. Notwithstanding the foregoing, the Purchasers' Representative
shall not act on behalf of UBS Warburg LLC or its affiliates with respect to any
matters arising under this Agreement.
ARTICLE VII
CONDITIONS
7.1. Conditions to Obligations of the Purchasers, Holding and the
Company at Closing. The obligations of each Purchaser, Holding and the Company
to consummate the transactions contemplated hereby to be consummated at the
Closing are subject to the satisfaction or waiver at or prior to the Closing
Date of each of the following conditions:
(a) no preliminary or permanent injunction or other Order by any
Governmental Entity which prevents the consummation of the transactions
contemplated
15
hereby shall have been issued and remain in effect (each party agreeing to
use its reasonable best efforts to have any such injunction or Order
lifted);
(b) no statute, rule, regulation or other Law shall have been enacted
by any Governmental Entity which would prevent or make illegal the
consummation of the transactions contemplated by this Agreement;
(c) any Consents, Filings and Approvals that are necessary for the
consummation of the transactions contemplated by this Agreement shall have
been made or obtained except where (i) the Company's failure to make or
obtain such Consents, Filings and Approvals would not have a Material
Adverse Effect or a material adverse effect on the Company's ability to
perform its obligations under this Agreement, provided that any failure by
the Company to obtain any necessary or required consents fromany party to
lawsuits or other proceedings which challenge the Company's rights to use
its network easements, rights-of-way, franchises or licenses shall not be
deemed a failure to satisfy this condition, or (ii) the failure of such
Purchaser or Holding to obtain such Consents, Filings and Approvals would
not have a material adverse effect on the ability of such Purchaser or
Holding, as the case may be, to perform its obligations under this
Agreement;
(d) the Company's plan of reorganization shall have been confirmed by
the Bankruptcy Court on substantially the terms set forth in the Plan, and
an unstayed order by such Bankruptcy Court approving the transactions
contemplated by the Company's plan of reorganization on substantially the
terms set forth in the Plan, shall have been entered, on or before December
31, 2002; and
(e) the other transactions contemplated by the Plan to occur on the
Effective Date (including, without limitation, the cancellation of the
Notes and the Company's existing equity securities and the issuance of the
New Common Stock) shall have been consummated substantially concurrently
with the sale and purchases under this Agreement on substantially the terms
set forth in the Plan.
7.2. Additional Conditions to Obligations of the Purchasers and
Holding at the Closing. The obligations of each Purchaser and Holding to
consummate the transactions contemplated hereby to be consummated at the Closing
shall be subject to the satisfaction or waiver at or prior to the Closing Date
of each of the following additional conditions (except in the case of the
condition set forth in Section 7.2(h), which shall only be a condition to the
obligations hereunder of any Purchaser that is a stockholder of Holding):
(a) the representations and warranties of the Company contained in
this Agreement shall have been true and correct in all respects at and as
of the date they were made, and shall be true and correct in all respects
at and as of the Closing Date (unless any such representations and
warranties are stated to be made as of a date other than the date hereof,
in which case they shall have been true and correct in all respects as of
that date); provided, that this condition shall be deemed satisfied unless
the failure of such representations and warranties to be true and correct
in all respects (without regard to any
16
qualifiers with respect to materiality or Material Adverse Effect set forth
therein) would have, in the aggregate, a Material Adverse Effect or would
have, in the aggregate, a material adverse effect on the Company's ability
to perform its obligations under this Agreement;
(b) the Company shall have performed, in all material respects, all of
its obligations contemplated herein to be performed by the Company on or
prior to the Closing Date;
(c) from the date hereof through the Closing Date, there shall not
have occurred, and be continuing, a Material Adverse Effect;
(d) the Company and the holders of Notes representing at least 51% of
the principal amount of all outstanding Notes (including Appaloosa
Management L.P. and its affiliates that beneficially own or control Notes)
shall be legally bound by releases as set forth in Sections 11.6 and 11.7
of the Plan;
(e) the Preferred Stock Certificate of Designation with respect to the
Preferred Shares to be issued at the Closing and as dividends on the
Preferred Shares shall have been duly filed with the Delaware Secretary of
State in accordance with the laws of the State of Delaware, and the
Preferred Stock Certificate of Designation shall be in full force and
effect and the Purchasers shall have received evidence of such filing;
(f) the Warrants shall be duly issued in accordance with the Warrant
Agreement and the Warrant Agreement shall be in full force and effect;
(g) the Conversion Shares issuable upon conversion of the Preferred
Shares and the Warrant Shares issuable upon exercise of the Warrants shall
have been duly authorized and reserved for issuance;
(h) Holding shall have complied with its obligations to purchase or
redeem capital stock of Holding pursuant to Section 5.10 (or, if there
shall have been a sale or business combination of or involving Holding
prior to the Closing Date, the Purchasers that hold capital stock of
Holding shall have received, as part of such transaction (or series of
related transactions), consideration for such Holding capital stock
sufficient for such Purchasers to fulfill their commitment to purchase the
Series A Preferred Stock and the Warrants as specified in this Agreement);
and
(i) the Company shall have delivered the following to each Purchaser:
(i) an officer's certificate certifying as to the Company's
compliance with the conditions set forth in clauses (a) and (b) of
this Section 7.2;
(ii) a counterpart of the Registration Rights Agreement executed
by the Company;
17
(iii) the certificates and Warrants specified in Section 1.1(b);
(iv) such other documents as may be required by this Agreement or
reasonably requested by the Purchasers and Holding.
7.3. Additional Conditions to Obligations of the Company at the
Closing. The obligations of the Company to consummate the transactions
contemplated hereby to be consummated at the Closing shall be subject to the
satisfaction or waiver at or prior to the Closing Date of each of the following
additional conditions:
(a) the representations and warranties of the Purchasers and Holding
contained in this Agreement shall have been true and correct in all
respects at and as of the date they were made, and shall be true and
correct in all respects at and as of the Closing Date (unless any such
representations and warranties are stated to be made as of a date other
than the date hereof, in which case they shall have been true and correct
in all respects as of that date); provided, that this condition shall be
deemed satisfied unless the failure of such representations and
warranties to be true and correct in all respects (without regard to any
qualifiers with respect to materiality or material adverse effect set forth
therein) would have, in the aggregate, a material adverse effect on the
ability of any Purchaser or Holding to perform its obligations under this
Agreement;
(b) the Purchasers and Holding shall have performed, in all material
respects, all of their respective obligations contemplated herein to be
performed by them on or prior to the Closing Date;
(c) Holding shall be legally bound by a release releasing the Company
and its officers, directors, employees and affiliates in substantially the
form of the release of Holding and its affiliates by the Company set forth
in Section 11.6 of the Plan; and
(d) each Purchaser shall have delivered the following to the Company:
(i) such Purchaser's Committed Amount, as adjusted in accordance
with Section 1.1.(a)(ii), payable for the Preferred Shares being
purchased by such Purchaser at the Closing; and
(ii) such other documents as may be required by this Agreement or
reasonably requested by the Company.
7.4. Independent Purchase Obligations. The obligations of each
Purchaser under this Agreement shall be several and not joint with the
obligations of any other Purchaser, and, subject to the obligations of Xxxxxx
set forth in Article IX, no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser. Without limiting the
generality of the foregoing, no purchase of Preferred Shares by any Purchaser
hereunder shall be a condition precedent to the obligation of any other
Purchaser to purchase Preferred Shares hereunder.
18
ARTICLE VIII
TERMINATION
8.1. Termination. This Agreement may be terminated at any time before
the Closing Date:
(a) by mutual written agreement of the Company and the Majority
Purchasers;
(b) by the Company (i) upon a breach of any covenant or agreement on
the part of any Purchaser or Holding set forth in this Agreement or if any
representation or warranty of any Purchaser or Holding set forth in this
Agreement shall not be true and correct, in either case such that the
conditions set forth in Section 7.3(a) or 7.3(b) would not be satisfied (a
"Terminating Purchaser Breach"); provided, that such Terminating Purchaser
Breach shall not have been waived or cured within 30 days after written
notice of such Terminating Purchaser Breach is given to such Purchaser or
Holding, as the case may be, by the Company; or (ii) if any condition to
the Company's obligations to close at the Closing set forth in Article VII
has not been satisfied as of the Closing Date or satisfaction of such a
condition is or becomes impossible (other than because of the failure of
the Company to comply with its obligations under this Agreement), and the
Company has not waived such condition; and
(c) by the Majority Purchasers (i) upon a breach of any covenant or
agreement on the part of the Company set forth in this Agreement or if any
representation or warranty of the Company set forth in this Agreement shall
not be true and correct, in either case such that the conditions set forth
in Section 7.2(a) or 7.2(b) would not be satisfied (a "Terminating Company
Breach"); provided, that such Terminating Company Breach shall not have
been waived or cured within 30 days after written notice of such
Terminating Company Breach is given to the Company by the Majority
Purchasers; or (ii) if any condition to the Purchasers' obligations to
close set forth in Article VII has not been satisfied as of the Closing
Date or satisfaction of such a condition is or becomes impossible (other
than because of the failure of the Purchasers to comply with their
obligations under this Agreement), and the Majority Purchasers have not
waived such condition.
8.2. Effect of Termination. If this Agreement is terminated by either
the Company or the Purchasers pursuant to the provisions of Section 8.1, this
Agreement shall forthwith become void and there shall be no further obligations
with respect to the sale and purchase of the Securities on the part of the
Company or the Purchasers or their respective stockholders, directors, officers,
employees, agents or representatives, except for the provisions of Article IX
and Sections 5.1, 5.8, 10.1, 10.2, 10.3, 10.4, 10.8, 10.9, 10.13, 10.14, 10.15,
10.16 and 10.17, all of which shall survive any termination of this Agreement;
provided, that nothing in this Section 8.2 shall relieve any party hereunder
from liability for any willful breach of this Agreement.
19
ARTICLE IX
XXXXXX GUARANTEE
9.1. Xxxxxx Guarantee. Xxxxxx hereby absolutely, irrevocably and
unconditionally guarantees to the Company (as a primary obligor and not as a
surety only) the due and punctual payment of each Purchaser's Committed Amount
payable by each Purchaser pursuant to this Agreement (collectively, the
"Guaranteed Obligations").
9.2. Guarantee Absolute. Xxxxxx guarantees that the Guaranteed
Obligations will be duly and punctually paid strictly in accordance with the
terms of this Agreement. If for any reason a Purchaser shall fail or be unable
duly and punctually to pay any Guaranteed Obligation as and when the same shall
become due or otherwise required, Xxxxxx shall, subject to the terms and
conditions of this Agreement, forthwith duly and punctually pay such Guaranteed
Obligation. Xxxxxx further agrees that this Agreement constitutes a guarantee of
payment when due and not of collection and is in no way conditioned or
contingent upon any attempt to collect from any Purchaser. Xxxxxx'x liability
under this Agreement shall be absolute, unconditional, irrevocable and
continuing.
ARTICLE X
MISCELLANEOUS
10.1. Definitions. The following terms, as used in this Agreement,
shall have the following meanings:
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act.
"Bankruptcy Documents" shall mean the Plan and the Disclosure
Statement.
"beneficial owner" or "beneficially own," or any derivation of such
terms, shall have the meaning set forth in Rule 13d-3 under the Exchange Act.
"Business Day" shall mean any day except Saturday, Sunday and any
legal holiday or a day on which banking institutions in The City of New York or
the State of Georgia generally are authorized or required by law or other
governmental actions to close.
"Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of such Person's capital stock, and
any and all rights (other than any evidence of indebtedness), warrants or
options exchangeable for or convertible into such capital stock.
"Commitment" shall mean a contract, agreement, understanding,
arrangement and commitment of any nature whatsoever, whether written or oral,
including all amendments thereof and supplements thereto.
"Company Board" shall mean the Board of Directors of the Company.
20
"Confidential Information" shall mean information relating to the Company's
business, intellectual property and processes, operations, strategies, liquidity
and financial condition, Reorganization terms, pricing policies, markets,
customers, distribution, sales, marketing and production and future business
plans and any other information of a "confidential" nature, specifically
including any information that is identified orally or in writing by the Company
to be confidential, or that any Purchaser should reasonably understand under the
circumstances to be a trade secret or information of a similar nature, provided,
that Confidential Information shall not include any such information which (i)
was in the public domain on the date hereof or subsequently comes into the
public domain other than through the fault or negligence of a Purchaser, (ii)
was lawfully obtained by a Purchaser from a third party without breach of this
Agreement and otherwise not in violation of the Company's rights, (iii) was
known to a Purchaser at the time of disclosure of such Confidential Information
to a Purchaser by the Company, provided that a Purchaser was not, at such time,
subject to any confidentiality obligation with respect thereto, or (iv) was
independently developed by a Purchaser without making use of any Confidential
Information.
"Disclosure Statement" shall mean the Company's disclosure statement, dated
August 22, 2002 and as amended or supplemented through the date hereof, relating
to the Plan, including, without limitation, all exhibits and schedules thereto,
which is subject to approval by the Bankruptcy Court pursuant to Section 1125 of
the Bankruptcy Code.
"Effective Date" shall mean the date upon which the transactions
contemplated by the Plan to become effective on such date, including, without
limitation, the cancellation of the Notes and the Company's existing equity
securities and the issuance of the New Common Stock, become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor federal statute, in each case as the same shall be in effect at
the time.
"Governmental Entity" shall mean any supranational, or United States or
foreign national, federal, state or local, judicial, legislative, executive,
administrative or regulatory body or authority.
"Investor Suitability Questionnaire" shall mean the questionnaire completed
by each Purchaser and delivered by such Purchaser to the Company prior to the
date of this Agreement.
"Laws" shall mean all United States and foreign national, federal, state,
and local laws, statutes, ordinances, rules, regulations, orders, and decrees.
"Majority Purchasers" shall mean (i) prior to the Closing Date, Purchasers
having the right hereunder to purchase Preferred Shares representing in the
aggregate at least 51% of the Committed Amount and (ii) after the Closing Date,
Purchasers holding securities representing at least a majority of the Conversion
Shares on an as-converted basis.
21
"Material Adverse Effect" shall mean a material adverse effect on the
business, financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole; except that any of the following changes,
events, conditions or effects shall not constitute a "Material Adverse Effect":
(i) changes or conditions in the industry or the industry sector in which the
Company and its Subsidiaries operate that do not disproportionately affect the
Company and its Subsidiaries; (ii) the effect of the pendency or consummation of
the transactions contemplated by this Agreement; (iii) any material adverse
effect that shall have been or will be eliminated or rendered immaterial by the
Reorganization as of the Effective Date; or (iv) a bankruptcy filing or filings
of the Company and one or more of the Company's Subsidiaries and the
continuation of such bankruptcy cases.
"Notes" shall mean the Company's 11% Senior Notes due 2007, 8?% Senior
Notes due 2008, 9 3/4% Senior Notes due 2008 and 4 1/2% Convertible Subordinated
Notes due 2006.
"Order" shall mean any order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, sentence, subpoena, writ or
award issued, made, entered or rendered by any court, administrative agency or
other Governmental Entity or by any arbitrator.
"Person" shall mean any natural person, firm, corporation, limited
liability company, partnership, company or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Plan" shall mean the Company's plan of reorganization, dated August 22,
2002 and as amended or supplemented through the date hereof, which is subject to
confirmation by the Bankruptcy Court.
"Purchasers' Counsel" shall mean Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP, which
shall be the single counsel representing all of the Purchasers hereunder.
"Restated Certificate of Incorporation" shall mean the certificate of
incorporation of the Company restated and filed pursuant to the Plan and
including the Preferred Stock Certificate of Designation.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, in each case as the same shall be in effect at the
time.
"Subsidiary" shall mean in the case of any Person, each corporation,
partnership or other entity of which shares of Capital Stock or other equity
interests having ordinary voting power (other than Capital Stock or other equity
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, directly or
indirectly, or the management of which is otherwise controlled, directly or
indirectly, or both, by such Person and which, in the case of the Company, shall
be each corporation, partnership or other entity listed on Schedule 10.1.
22
"Transaction Documents" shall mean this Agreement, the Preferred Stock
Certificate of Designation, the Warrant Agreement, the Warrants and the
Registration Rights Agreement.
10.2. Survival of Representations and Warranties. All representations and
warranties set forth in this Agreement or in any writing delivered by any party
in connection herewith shall survive the transactions contemplated by this
Agreement to be consummated at the Closing (regardless of any investigation,
inquiry, or examination made by any party or on its behalf or any knowledge of
any party or the acceptance by any party of any certificate or opinion) for a
period of one year following the Closing Date.
10.3. Fees and Expenses. On the Closing Date, the Company shall pay, (i) in
an amount not to exceed $150,000, the reasonable fees and expenses of
Purchasers' Counsel and all other costs and expenses incurred by the Purchasers
in connection with the negotiation, preparation, execution, delivery and
performance of this Agreement, and (ii) in an amount not to exceed $40,000, the
reasonable fees and expenses of Holding incurred by Holding in connection with
the negotiation, preparation, execution, delivery and performance of this
Agreement.
10.4. Enforcement(a). (a) The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific intent or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof, in addition to any
other remedy to which they may be entitled by law or equity.
(b) Holding's obligations set forth in this Agreement (including, without
limitation, Holding's redemption and purchase obligations pursuant to Section
5.10) are for the benefit of, and may be directly enforced by, Xxxxxx, each
other Purchaser that is a stockholder of Holding and/or the Company.
10.5. Restrictive Legends. (a) Each certificate representing any of the
Preferred Shares shall bear a legend in substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE SHALL BE REDEEMABLE AND
CONVERTIBLE INTO THE COMPANY'S COMMON STOCK IN THE MANNER AND ACCORDING TO
THE TERMS SET FORTH IN THE CERTIFICATE OF DESIGNATION.
(b) Each certificate representing any of the Preferred Shares, Conversion
Shares, Warrant Shares or Commitment Shares shall bear legends in substantially
the following form:
THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OR SERIES OF
CAPITAL STOCK. THE CORPORATION SHALL FURNISH TO ANY HOLDER UPON
23
REQUEST AND WITHOUT CHARGE THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF
STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
OF SUCH PREFERENCES AND/OR RIGHTS OF EACH CLASS OR SERIES AUTHORIZED TO BE
ISSUED BY THE CORPORATION SO FAR AS THEY HAVE BEEN FIXED AND DETERMINED AND
OF THE AUTHORITY OF THE BOARD OF DIRECTORS TO FIX AND DETERMINE THE
DESIGNATIONS, VOTING RIGHTS, PREFERENCES, LIMITATIONS AND SPECIAL RIGHTS OF
THE CLASSES AND SERIES OF SECURITIES OF THE CORPORATION.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
AND SUBJECT TO THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF AUGUST
22, 2002, AS AMENDED FROM TIME TO TIME (THE "PURCHASE AGREEMENT"). A COPY
OF THE PURCHASE AGREEMENT IS AVAILABLE UPON REQUEST FOR INSPECTION AT THE
OFFICES OF THE CORPORATION.
The second legend set forth immediately above and any applicable stop
transfer orders shall be removed, and the Company shall issue certificates
without such legend, with respect to any of such Securities transferred in any
sale or transfer permitted by the terms of this Agreement with respect to which
the provisions of this Agreement provide that the transferee of such Securities
shall not be subject to the restrictions of this Agreement.
In addition, certificates representing any of the Preferred Shares,
Conversion Shares, Warrant Shares or Commitment Shares issued in a transaction
exempt from the registration requirements of the Securities Act and applicable
state securities laws, or as to which the subsequent transfer or disposition of
such Securities shall require registration or qualification thereof under the
Securities Act or applicable state securities laws, shall bear a legend in
substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS, OR ARE SUBJECT TO RESTRICTIONS ON
TRANSFER UNDER THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES MAY NOT BE
SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN A
TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE SECURITIES ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN A
24
TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE
SECURITIES LAWS. THE CORPORATION RESERVES THE RIGHT PRIOR TO ANY SUCH
TRANSACTION TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO IT WITH
RESPECT TO COMPLIANCE WITH THE FOREGOING RESTRICTIONS.
The legend set forth immediately above and any applicable stop transfer
orders shall be removed, and the Company shall issue certificates without such
legend, with respect to any of such Securities with respect to which the Company
has received an opinion from counsel to the applicable Purchaser, in form and
substance and from counsel reasonably satisfactory to the Company (which opinion
shall be in addition to any opinion required to be provided pursuant to Section
3.5), to the effect that the subsequent transfer or other disposition of such
Securities shall not require registration under the Securities Act.
(c) Each Warrant shall bear legends substantially in the form of the
legends set forth in the form of Warrant appended to the Warrant Agreement
attached hereto as Exhibit B.
(d) The Company, at its discretion, may cause a stop transfer order to be
placed with its transfer agent with respect to the certificates for the
Securities.
10.6. Successors and Assigns. Except as otherwise expressly provided
herein, (i) all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or
not, and (ii) no party may assign or delegate all or any portion of its rights,
obligations or liabilities under this Agreement without the prior written
consent of each other party to this Agreement; provided, that any such consent
required to be given by the Purchasers shall be effective if given by the
Majority Purchasers. Nothing herein contained shall be deemed to preclude a sale
or business combination of or involving Holding, provided, that as part of such
transaction (or series of related transactions), the Purchasers that hold
capital stock of Holding receive consideration for such Holding capital stock
sufficient for such Purchasers to fulfill their commitment to purchase the
Series A Preferred Stock and the Warrants as specified in this Agreement.
Without limiting the generality of the foregoing, this Agreement shall survive
the death or disability of Xxxxxx and each other Purchaser that is a natural
person.
10.7. Inspections; No Other Representations. Each Purchaser is an informed
and sophisticated purchaser, and has undertaken such investigation and has been
provided with and has evaluated such documents and information as it deems
necessary to enable it to make an informed decision with respect to the
execution, delivery and performance of this Agreement. Each Purchaser agrees to
accept the Preferred Shares, Warrants and Commitment Shares based upon its own
inspection, examination and determination with respect thereto as to all
matters, and without reliance upon any express or implied representations or
warranties of any nature made by or on behalf or imputed to the Company, except
as expressly set forth in this Agreement. Without limiting the generality of the
foregoing, each Purchaser acknowledges that the Company makes no representation
or warranty with respect to any projections, estimates or
25
budgets delivered to or made available to any Purchaser of future revenues,
future results of operations (or any component thereof), future cash flows or
future financial condition (or any component thereof) of the Company and its
Subsidiaries or the future business and operations of the Company and the
Subsidiaries except as expressly set forth in this Agreement.
10.8. Entire Agreement. This Agreement (including the Schedules hereto) and
the other Transaction Documents constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof, and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and
therein. Without limiting the generality of the foregoing, the parties hereto
agree and acknowledge that this Agreement shall supersede and replace in its
entirety the Xxxxxx Subscription Agreement, which shall, on and after the date
hereof, be terminated in full and no longer be in force or effect.
10.9. Notices. All notices, demands, requests, consents or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given (i)
when delivered personally to the recipient, (ii) when telecopied to the
recipient (with hard copy sent to the recipient by reputable overnight courier
service (charges prepaid) that same day) if telecopied before 5:00 p.m. New York
City time on a Business Day, and otherwise on the next Business Day, (iii) one
Business Day after being sent to the recipient by reputable overnight courier
service (charges prepaid), or (iv) on the first Business Day that is at least
five days after the date of deposit in the United States mails for delivery by
certified mail. Such notices, demands, requests, consents and other
communications shall be sent to the following Persons at the following
addresses:
(i) if to the Company, to:
ITC/\DeltaCom, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: J. Xxxxxx Xxxxxx, Esq.
Senior Vice President, General Counsel
and Secretary
(ii) if to the Purchasers (other than UBS Warburg LLC), to:
Xxxxxxxx X. Xxxxxx, III
c/o ITC Holding Company, Inc.
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to
Purchasers' Counsel:
26
Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx/X. Xxxx Xxxxxxx
(iii) if to UBS Warburg LLC, to:
UBS Warburg LLC
000 Xxxxxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000 0000
Attention: Xxx Xxxxxxxxx
(iv) if to Holding, to:
ITC Holding Company, Inc.
0000 00/xx/ Xxxxxx
Xxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
10.10. Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is not a Business Day, the time period
shall automatically be extended to the Business Day immediately following such
day.
10.11. Amendments; Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given without the written consent thereto of the Company, Holding and the
Majority Purchasers. Notwithstanding the foregoing, any such amendment,
modification, supplement, waiver or consent with respect to a matter that
relates exclusively to the rights or obligations of (i) a particular Purchaser
and that does not directly or indirectly affect the rights or obligations of any
other Purchaser or of Holding, may be entered into or given solely by the
Company and such affected Purchaser and (ii) Holding and that does not directly
or indirectly affect the rights or obligations of any Purchaser, may be entered
into or given solely by the Company and Holding; provided that the provisions of
this sentence may not be amended, modified or supplemented, and no waiver or
consent to departure from such provisions may be given, except in accordance
with the provisions of the immediately preceding sentence.
10.12. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
27
10.13. Descriptive Headings; Interpretation; No Strict Construction. The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns,
and verbs shall include the plural and vice versa. Reference to any agreement,
document, or instrument means such agreement, document, or instrument as amended
or otherwise modified from time to time in accordance with the terms thereof
and, if applicable, hereof. The use of the words "include" or "including" in
this Agreement shall be by way of example rather than by limitation. The use of
the words "or," "either" or "any" shall not be exclusive. The parties to this
Agreement have participated jointly in the negotiation and drafting of this
Agreement. If an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. The parties
agree that prior drafts of this Agreement shall be deemed not to provide any
evidence as to the meaning of any provision hereof or the intention of the
parties hereto with respect to this Agreement.
10.14. References. When a reference is made in this Agreement or any other
Transaction Document to a Section, Exhibit, Schedule or Appendix, such reference
shall be to a Section of or an Exhibit or a Schedule or Appendix to this
Agreement or such other Transaction Document, unless otherwise indicated.
10.15. Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Delaware applicable to contracts executed and to be performed wholly within such
state.
10.16. Exclusive Jurisdiction; Venue. Any process against the Company or a
Purchaser in, or in connection with, any suit, action or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby, may be
served personally or by certified mail pursuant to the notice provision set
forth in Section 10.9 with the same effect as though served on it personally.
Each of the parties hereto hereby irrevocably submits in any suit, action or
proceeding by the parties hereto arising out of or relating to this Agreement or
any of the transactions contemplated hereby to the exclusive jurisdiction and
venue of the federal and state courts of the State of Delaware and irrevocably
waives any and all objections to exclusive jurisdiction and review of venue that
any such party may have under the laws of the State of Delaware or the United
States. Without limiting the other remedies, this Agreement shall be enforceable
by specific performance. Each of the foregoing parties hereby irrevocably
designates RL&F Service Corp. (the "Process Agent"), with offices at the date
hereof at One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000, as
its designee, appointee and agent to receive, for and on its behalf, service of
process in the State of Delaware in any legal action or proceedings with respect
to this Agreement and the transactions contemplated hereby, and such service
shall be deemed complete upon delivery thereof to the Process Agent, provided
that in the case of any such service upon the Process Agent, the party effecting
such service shall also deliver a copy thereof to the other party in accordance
with the notice provision set forth in Section 10.9. Each party shall take all
such action as may be necessary to continue such
28
appointment in full force and effect or to appoint another agent, who will
thereafter be referred to herein as the "Process Agent," so that each such party
shall at all times have an agent for service for the foregoing purposes in the
State of Delaware.
10.17. Waiver of Jury Trial. The Company, the Purchasers and Holding
hereby waive any right they may have to a trial by jury in respect of any
action, proceeding or litigation directly or indirectly arising out of, under or
in connection with this Agreement or the Transaction Documents.
10.18. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
render invalid or unenforceable any other provision of this Agreement.
10.19. Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall reexecute original forms thereof and deliver them to all
other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract, and each such party forever waives any such defense.
29
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
Company:
ITC/\DeltaCom, Inc.
By: /s/
--------------------------
Name:
Title:
Holding:
ITC Holding Company, Inc.
By: /s/
--------------------------
Name:
Title:
Purchasers:
Xxxxxxxx X. Xxxxxx, III
By: /s/
--------------------------
Name:
Brindlee Capital, LLC
By: /s/
--------------------------
Name:
Title:
Xxxxx Investment Partners, L.P.
By: /s/
---------------------------------
Name:
Title:
The Xxxxxx Partnership, Limited
Partnership
By: /s/
---------------------------------
Name:
Title:
The Xxxxxx Partnership (QP), Limited
Partnership
By: /s/
---------------------------------
Name:
Title:
Xxxxx X. Xxxxxxx
By: /s/
---------------------------------
Name:
Xxxxx X. Xxxxxx, Xx.
By: /s/
---------------------------------
Name:
CT Communications Northeast, Inc.
By: /s/
---------------------------------
Name:
Title:
31
Xxxxx X. Xxxx
By: /s/
-------------------------------------
Name:
Xxxxxxx Xxxxxx Xxxxxx
By: /s/
------------------------------------
Name:
Xxxxxxxx X. Xxxxxx, III
By: /s/
------------------------------------
Name:
Xxxxxxxx X. Xxxxxx, III, Charitable
Remainder Trust
By: /s/
------------------------------------
Name:
Title:
The 1997 Trust FBO Xxxxxxxx X. Xxxxxx, XX
By: /s/
------------------------------------
Name:
Title:
The 1999 Trust FBO Xxxxxxxx X. Xxxxxx, XX
32
By: /s/
---------------------------------
Name:
Title:
Xxxxx Xxxxxx Xxxxxx
By: /s/
---------------------------------
Name:
Xxxxxxxxx Xxxxxx Xxxxxx
By: /s/
---------------------------------
Name:
Xxxxx Xxxxx Xxxxxx XX
By: /s/
---------------------------------
Name:
X. Xxxxx Xxxxxx & Co.
By: /s/
---------------------------------
Name:
Title:
Xxxx Xxxxxxxx Xxxxxx
By: /s/
---------------------------------
Name:
Title:
33
Xxxxxxxxx X. Xxxxxx
By: /s/
---------------------------------
Name:
Xxxxxx XxXxxxxx
By: /s/
---------------------------------
Name:
Xxxxxx XxXxxxxx
By: /s/
---------------------------------
Name:
North State Telephone Company
By: /s/
---------------------------------
Name:
Title:
Xxxxxxx X. Xxxxx III
By: /s/
---------------------------------
Name:
Xxxxxxx X. Xxxxxxx
By: /s/
---------------------------------
Name:
34
UBS Warburg LLC
By: /s/
---------------------------------
Name:
Title:
35
SCHEDULE 1
Purchasers' Committed Amounts
(1) (2) (3) (4)
Number of Number of Purchaser's
Name Preferred Number of Commitment Committed
of Purchaser Shares Warrants Shares Amount
--------------- ------------ ------------ ------------ --------------
Brindlee Capital, LLC 2,484.6167 8,447.6968 8,333 $ 248,461.67
Xxxxx Investment Partners, L.P. 526.1027 1,788.7492 1,765 $ 52,610.27
The Xxxxxx Partnership,
Limited Partnership 4,969.2333 16,895.3932 16,667 $ 496,923.33
The Xxxxxx Partnership (QP),
Limited Partnership 14,907.7000 50,686.1800 50,000 $ 1,490,770.00
Xxxxx X. Xxxxxxx 5,217.6950 17,740.1630 17,500 $ 521,769.50
Xxxxx X. Xxxxxx, Xx. 2,484.6167 8,447.6968 8,333 $ 248,461.67
CT Communications Northeast, Inc. 11,926.1600 40,548.9440 40,000 $ 1,192,616.00
Xxxxx X. Xxxx 993.8467 3,379.0788 3,333 $ 99,384.67
Xxxxxxx Xxxxxx Xxxxxx 7,453.8500 25,343.0900 25,000 $ 745,385.00
Xxxxxxxx X. Xxxxxx, III 35,266.9868 119,907.7551 118,283 $ 3,526,698.68
Xxxxxxxx X. Xxxxxx, III
Charitable Remainder Trust 439.3697 1,493.8570 1,474 $ 43,936.97
Xxxxxxxx X. Xxxxxx, XX 361.5813 1,229.3764 1,213 $ 36,158.13
The 1997 Trust FBO Xxxxxxxx X. Xxxxxx, XX 1,258.1105 4,277.5757 4,220 $ 125,811.05
The 1999 Trust FBO Xxxxxxxx X. Xxxxxx, XX 3,191.4404 10,850.8974 10,704 $ 319,144.04
Xxxxx Xxxxxx Xxxxxx 2,484.6167 8,447.6968 8,333 $ 248,461.67
Xxxxxxxxx Xxxxxx Xxxxxx 4,099.6175 13,938.6995 13,750 $ 409,961.75
Xxxxx Xxxxx Xxxxxx XX 15,653.0850 53,220.4890 52,500 $ 1,565,308.50
X. Xxxxx Xxxxxx & Co. 1,987.6933 6,758.1572 6,667 $ 198,769.33
Xxxx Xxxxxxxx Xxxxxx 2,561.4311 8,708.8657 8,591 $ 256,143.11
Xxxxxxxxx X. Xxxxxx 4,969.2333 16,895.3932 16,667 $ 496,923.33
Xxxxxx XxXxxxxx 993.8467 3,379.0788 3,333 $ 99,384.67
Xxxxxx XxXxxxxx 993.8467 3,379.0788 3,333 $ 99,384.67
North State Telephone Company 4,969.2333 16,895.3932 16,667 $ 496,923.33
Xxxxxxx X. Xxxxx III 4,969.2333 16,895.3932 16,667 $ 496,923.33
Xxxxxxx X. Xxxxxxx 1,987.6933 6,758.1572 6,667 $ 198,769.33
UBS Warburg LLC 11,926.1600 40,548.9440 40,000 $ 1,192,616.00
--------------- ------------ ------------ ------------ --------------
TOTALS 149,077.0000 506,861.8000 500,000 $14,907,700.00
4
