SECURITIES PURCHASE AGREEMENT among NUVOX, INC. and THE PURCHASERS NAMED HEREIN Dated as of July 9, 2002 SERIES A CONVERTIBLE PREFERRED STOCK at $1.50 Per Share

Exhibit (d)(1)(A)

SECURITIES PURCHASE AGREEMENT

among

NUVOX, INC.

and

THE PURCHASERS NAMED HEREIN

Dated as of July 9, 2002

SERIES A CONVERTIBLE PREFERRED STOCK

at $1.50 Per Share

TABLE OF CONTENTS

Page

ARTICLE I. DEFINITIONS		1
ARTICLE II. SALE AND PURCHASE OF SHARES		7
Section 2.1	Sale and Purchase of Shares	7
Section 2.2	Purchase Price	7
Section 2.3	Initial Closing	7
Section 2.4	Second Closing	7
Section 2.5	Defaulting Purchaser	8
Section 2.6	Use of Proceeds	8
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY		8
Section 3.1	Organization and Good Standing	8
Section 3.2	Authorization	8
Section 3.3	Enforceability	8
Section 3.4	Consents	8
Section 3.5	Capitalization	8
Section 3.6	Subsidiaries	8
Section 3.7	Financial Statements; Undisclosed Liabilities	9
Section 3.8	Absence of Certain Developments	10
Section 3.9	Indebtedness and Liens	11
Section 3.10	Indebtedness to and from Officers, Directors and Others	11
Section 3.11	Licenses, Etc.	11
Section 3.12	Solvency	11
Section 3.13	Title to Assets; Leases	11
Section 3.14	Litigation	11
Section 3.15	Tax Returns	11
Section 3.16	Defaults	12
Section 3.17	Burdensome Obligations	12
Section 3.18	Employee Benefit Plans	12
Section 3.19	Representations and Warranties under Related Agreements	13
Section 3.20	Employment Contracts, Labor Relations	13
Section 3.21	Location of Office	13
Section 3.22	Necessary Property	13
Section 3.23	Transaction Costs	13
Section 3.24	Governmental Regulations	13
Section 3.25	Small Business Concern	13
Section 3.26	Disclosure	13
Section 3.27	Governmental Licenses	14
Section 3.28	Compliance with Laws	14
Section 3.29	Acquisition Agreements	14
Section 3.30	Material Contracts and Obligations	14
Section 3.31	Environmental and Safety Laws	15
Section 3.32	Investments in Real Property Holding Interests	15
ARTICLE IV. PURCHASERS’ INVESTMENT REPRESENTATIONS AND WARRANTIES		15
ARTICLE V. CONDITIONS TO PURCHASE		17
Section 5.1	Purchaser’s Conditions on the Initial Closing Date	17
Section 5.2	The Company’s Conditions on the Initial Closing Date	19
Section 5.3	Purchaser’s Conditions on the Second Closing Date	20
Section 5.4	The Company’s Conditions on the Second Closing Date	21
ARTICLE VI. COVENANTS APPLICABLE TO THE COMPANY WHILE ANY OF THE SHARES OF SERIES A PREFERRED STOCK ARE OUTSTANDING		22
Section 6.1	Records and Accounts	22
Section 6.2	Corporate Existence; Subsidiaries; Maintenance of Properties	22
Section 6.3	Insurance	22

Section 6.4	Taxes and Claims	22
Section 6.5	Inspection of Properties and Books	23
Section 6.6	Compliance with Laws, Contracts, Licenses and Permits	23
Section 6.7	Employee Benefit Plans	23
Section 6.8	Further Assurances	24
Section 6.9	Notices	24
Section 6.10	Restrictions on Indebtedness	24
Section 6.11	Restrictions on Liens	24
Section 6.12	Distributions	25
Section 6.13	Merger, Consolidation, Sale of Assets or Other Dispositions	25
Section 6.14	Merger, Consolidation or Other Acquisitions	25
Section 6.15	Transactions with Affiliates	25
Section 6.16	Investments	26
Section 6.17	Joint Ventures	26
Section 6.18	Payments on Permitted Indebtedness	26
Section 6.19	Response Actions	26
Section 6.20	Dilution Protection	26
Section 6.21	Annual Statements	26
Section 6.22	Monthly Statements	27
Section 6.23	Other Financial Information	27
Section 6.24	Officer’s Certificates	27
Section 6.25	Notice of Litigation, Defaults, Etc.	27
Section 6.26	Charter and By-law Amendments	28
Section 6.27	Proprietary Information and Inventions Agreement	28
Section 6.28	SBIC Covenants	28
ARTICLE VII. DEFAULTS		28
Section 7.1	Events of Default	28
Section 7.2	Remedies	29
Section 7.3	Waivers	29
ARTICLE VIII. SUBSEQUENT HOLDERS OF SERIES A PREFERRED STOCK		30
ARTICLE IX. REGISTRATION AND TRANSFER		30
Section 9.1	Register; Transfer and Exchange of Series A Preferred Stock	30
Section 9.2	Replacement of Series A Preferred Stock	30
ARTICLE X. EXPENSES; INDEMNITY		30
Section 10.1	Expenses	30
Section 10.2	Indemnification	31
Section 10.3	Brokers’ Fees	31
Section 10.4	Survival of Obligations	31
ARTICLE XI. NOTICES		31
ARTICLE XII. SURVIVAL AND TERMINATION OF COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES		32
ARTICLE XIII. AMENDMENTS AND WAIVERS		32
ARTICLE XIV. RIGHT TO PUBLICIZE		32
ARTICLE XV. WAIVER OF JURY TRIAL		32
ARTICLE XVI. INCORPORATORS, SHAREHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES AND PARTNERS FREE FROM PERSONAL LIABILITY		32
ARTICLE XVII. SCHEDULES		33
ARTICLE XVIII. ENTIRE AGREEMENT; COUNTERPARTS; SECTION HEADINGS		33
ARTICLE XIX. GOVERNING LAW		33
ARTICLE XX. SEVERABILITY		33
ARTICLE XXI. CERTAIN SPECIAL WAIVERS		33
ARTICLE XXII. AMENDMENT OF SERIES D PURCHASE AGREEMENT		34

LIST OF EXHIBITS

EXHIBIT A	List of Purchasers
EXHIBIT B	Amendment to Stockholders’ Agreement
EXHIBIT C	Agreement and Plan of Merger and Recapitalization
EXHIBIT D	Form of Opinion of Special Counsel to Company
EXHIBIT E	Amendment to Shareholders’ Agreement
EXHIBIT F	Restructuring Letter Agreements
EXHIBIT G	Amendment to Registration Rights Agreement
EXHIBIT H	Amendment to By-Laws

SECURITIES PURCHASE AGREEMENT

NuVox, Inc.
00000 Xxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000

As of July 9, 2002

The Purchasers Named
on Exhibit A Hereto

Ladies and Gentlemen:

The undersigned, NuVox, Inc., a Delaware corporation (the “Company”), hereby agrees with you as follows:

ARTICLE I. DEFINITIONS

For all purposes of this Agreement the following terms shall have the meanings set forth in this Article I:

Amended and Restated Credit Agreement. The term “Amended and Restated Credit Agreement” shall mean the form of credit agreement which shall have been approved by the Board of Directors subsequent to the date of this Agreement in order to reflect the terms of the Company’s debt restructuring contemplated by the letter agreement dated July 1, 2002 among the Company, General Electric Capital Corporation and CIT Lending Services Corporation, substantially in the form attached as Exhibit F (Part 2).

Acquisition. The term “Acquisition” shall mean an acquisition by the Company of all or substantially all of the assets or equity interest of another Person.

Additional Purchaser. The term “Additional Purchaser” shall have the meaning specified in Section 2.7 of this Agreement.

Affiliate. The term “Affiliate” shall mean any Person directly or indirectly controlling, controlled by or under direct or indirect common control with the Company (or other specified Person) and shall include (a) any Person who is a director or beneficial owner of at least 10% of the then outstanding capital stock of the Company (or other specified Person) and Family Members of any such Person, (b) any Person in which the Company (or other specified Person) or an Affiliate (as defined in clause (a) above) of the Company (or other specified Person) shall, directly or indirectly, either beneficially own at least 10% of its then outstanding equity securities or constitute at least a 10% equity participant, and (c) in the case of a specified Person who is an individual, Family Members of such Person; provided, however, that none of the Purchasers nor any of their designated members of the Company’s board of directors shall be deemed an Affiliate of the Company for purposes of this Agreement.

Affiliated Investor. The term “Affiliated Investor” shall mean an Affiliate of a Purchaser which is a holder of shares of Common Stock or Preferred Stock of the Company, and which has assigned to such Purchaser its rights to participate in this transaction and to purchase its Pro Rata Share of the Shares. In the case of any Purchaser which is such an assignee, any references herein to other securities of the Company held by the Purchaser, and references to prior investments made by the Purchaser in the Company, shall be deemed to refer to securities held or prior investments made by such Purchaser’s Affiliated Investor.

Amended Certificate of Incorporation. The term “Amended Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, as amended from time to time, including, without limitation, as amended in connection with the Plan of Recapitalization to be substantially in the form attached as Exhibit B to the Plan of Recapitalization.

Amendment to Registration Rights Agreement. The term “Amendment to Registration Rights Agreement” means the Amendment to Registration Rights Agreement among the company and its shareholders, substantially in the form of Exhibit G hereto.

Amendment to Shareholders’ Agreement. The term “Amendment to Shareholders’ Agreement” means the Amendment to Shareholders’ Agreement among the company and certain of its shareholders, substantially in the form of Exhibit E hereto.

Amendment to Stockholders’ Agreement. The term “Amendment to Stockholders’ Agreement” means the Amendment to Stockholders’ Agreement among the company and its shareholders, in the form of Exhibit B hereto.

Balance Sheet Date. The term “Balance Sheet Date” shall have the meaning specified in Section 3.7(a)(ii) of this Agreement.

Board of Directors. The term “Board of Directors” shall mean the Board of Directors of the Company.

Capital Transaction. The term “Capital Transaction” shall mean any of the following: (i) one or more mergers, consolidations, liquidations, sales of more than 50% of the assets of the Company in a single transaction or series of related transactions, or other similar corporate actions pursuant to which the Company or the holders of Common Stock receive cash, securities or other property; and (ii) the sale by the Company of securities which upon issuance constitute, or upon exercise, exchange or conversion will constitute, 50% or more of the Common Stock and the Preferred Stock of the Company to a Person not an Affiliate of the Company (other than by operation of such sale) by means of a public or private sale.

Certificate of Merger. The term “Certificate of Merger” shall mean the Certificate of Merger in substantially the form attached as Exhibit A to the Plan of Recapitalization.

Charter. The term “Charter” shall include the articles or certificate of incorporation, statute, constitution, joint venture or partnership agreement or articles or other organizational document of any Person other than an individual, each as from time to time amended or modified and in the case of the Company shall mean the Amended Certificate of Incorporation.

Closing. The term “Closing” shall mean the Initial Closing and the Second Closing.

Closing Date. The term “Closing Date” shall mean the Initial Closing Date and the Second Closing Date.

Code. The term “Code” shall mean the Internal Revenue Code of 1986, any successor statute of similar import, and the rules and regulations thereunder, collectively and as from time to time amended and in effect.

Common Stock. The term “Common Stock” shall have the meaning specified in Section 3.5(a) of this Agreement.

Company. The term “Company” shall have the meaning specified in the introduction to this Agreement.

Consolidated or consolidated. The term “Consolidated” or “consolidated” shall mean, with reference to any term defined herein, that term as applied to the accounts of the Company and all of its Subsidiaries, if any, consolidated in accordance with generally accepted accounting principles.

Conversion Stock. The term “Conversion Stock” shall mean the shares of Common Stock issuable upon conversion of the Series A Preferred Stock.

Default. The term “Default” shall mean an event or condition which with the passage of time or giving of notice, or both, would become an Event of Default.

Defaulting Purchaser. The term “Defaulting Purchaser” shall mean a Purchaser which fails to purchase its Shares in accordance with the terms hereof.

Distribution. The term “Distribution” shall mean (a) the declaration or payment of any dividend of cash or property on or in respect of any shares of any class of capital stock of the Company; (b) the purchase, redemption or other retirement of any shares of any class of capital stock of the Company, directly or indirectly or otherwise; or (c) any other distribution on or in respect of any shares of any class of capital stock of the Company.

Employee. The term “Employee” means each current, former or retired employee or officer of the Company or any ERISA Affiliate.

Employee Agreement. The term “Employee Agreement” means each management, employment, severance, consulting, non-compete or confidentiality agreement between the Company or any ERISA Affiliate and any Employee pursuant to which the Company or any ERISA Affiliate has or may have any liability, contingent or otherwise; provided, however, in no event shall the term “Employee Agreement” include any proprietary information and confidentiality and assignment agreements entered into in accordance with Section 6.27 of this Agreement.

Employee Benefit Plan. The term “Employee Benefit Plan” means (other than an Employee Agreement) each pension, welfare, deferred compensation, bonus, stock option, stock purchase, retirement, fringe, severance, performance or incentive plan, agreement or arrangement, funded or unfunded, written or oral, and whether or not legally binding, including each “employee benefit plan” within the meaning of Section 3(3) of ERISA, which is now or previously has been sponsored, maintained, contributed to, or required to be contributed to, or with respect to which any withdrawal liability (within the meaning of Section 4201 of ERISA) has been incurred, by the Company or any ERISA Affiliate, or pursuant to which the Company or any ERISA Affiliate has or may have any liability, contingent or otherwise.

Environmental Law. The term “Environmental Law” means any law, regulation or ordinance relating to air or water quality, waste management, hazardous or toxic substances or the protection of health or the environment.

Equity Incentive Plan. The term “Equity Incentive Plan” shall mean, collectively, (i) the Company’s 1998 Stock Incentive Plan, as amended as of May 16, 2000 and as previously amended, pursuant to which, as of the date hereof (and immediately prior to the effectiveness of the Plan of Recapitalization), an aggregate of 10,000,000 shares of Common Stock have been authorized and allocated for issuance pursuant to awards granted thereunder, of which options and warrants exercisable for up to 7,195,947 shares are outstanding as of Xxxxx 00, 0000, (xx) the NuVox/Trivergent Employee Incentive Plan, as amended as of June 21, 2000 and as previously amended, pursuant to which, as of the date hereof (and immediately prior to the effectiveness of the Plan of Recapitalization), an aggregate of 10,984,000 shares of Common Stock have been authorized and allocated for issuance pursuant to awards granted thereunder, of which options and warrants exercisable for up to 9,292,101 shares are outstanding as of Xxxxx 00, 0000, (xxx) the Company’s 2001 Stock Incentive Plan pursuant to which, among other things, as of the date hereof (and immediately prior to the effectiveness of the Plan of Recapitalization), an aggregate of 32,681,552 shares of Series F preferred stock of the Company have been authorized and allocated for issuance pursuant to awards granted thereunder, of which stock options exercisable for up to 17,951,500 shares of Series F-1 preferred stock are outstanding as of March 31, 2002, (iv) the Company’s 2001 Performance Plan pursuant to which participants thereunder have been awarded varying fixed percentage participations in the equity participation plan described therein, all pursuant to awards to be granted thereunder prior to the date hereof, and (v) any equity incentive programs adopted by the Board of Directors or the Compensation Committee of the Board of Directors in connection with the offering of the Series A Preferred Stock.

ERISA. The term “ERISA” shall mean the federal Employee Retirement Income Security Act of 1974, any successor statute of similar import, and the rules and regulations thereunder, collectively and as from time to time amended and in effect.

ERISA Affiliate. The term “ERISA Affiliate” means each business or entity which is a member of a “controlled group of corporations,” under “common control” or a member of an “affiliated service group” with the Company within the meaning of Sections 414(b), (c) or (m) of the Code, or required to be aggregated with the Company under Section 414(o) of the Code, or is under “common control” with the Company, within the meaning of Section 4001(a)(14) of ERISA.

ERISA Reportable Event. The term “ERISA Reportable Event” shall mean a reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder.

Events of Default. The term “Events of Default” shall have the meaning specified in Section 7.1 of this Agreement.

Exchange Act. The term “Exchange Act” shall mean the Securities Exchange Act of 1934, or any successor federal statute, and the rules and regulations of the SEC thereunder, as the same may be amended from time to time.

Family Members. The term “Family Members” shall mean, as applied to any individual, any spouse, child, grandchild, parent, brother or sister thereof or any spouse of any of the foregoing, and each trust created for the benefit of one or more of such Persons and each custodian of property of one or more such Persons.

FCC. The term “FCC” shall mean the Federal Communications Commission.

Financing Agreements. The term “Financing Agreements” shall mean this Agreement, the Plan of Recapitalization, the Stockholders’ Agreement, the Registration Rights Agreement, the Shareholders’ Agreement and any and every other present or future instrument or agreement from time to time entered into between the Company and the Purchasers or any other holder of the Series A Preferred Stock which relates to this Agreement, all

as from time to time amended or modified, and all statements, reports or certificates delivered by or on behalf of the Company to any holder of the Series A Preferred Stock in connection herewith or therewith.

Generally accepted accounting principles or GAAP. The terms “generally accepted accounting principles” or “GAAP” shall mean accounting principles generally accepted in the United States of America which are (a) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect from time to time and (b) applied on a basis consistent with prior periods.

Guaranteed Pension Plan. The term “Guaranteed Pension Plan” shall mean any employee pension benefit plan within the meaning of
§ 3(2) of ERISA maintained or contributed to by the Company or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Xxxx-Xxxxx-Xxxxxx Act. The term “Xxxx-Xxxxx-Xxxxxx Act” shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.

Hazardous Materials. The term “Hazardous Materials” shall mean, collectively, (a) any petroleum or petroleum products, flammable explosives, radioactive materials, friable asbestos, urea formaldehyde foam insulation, and transformers or other equipment that contain dielectric fluid containing polychlorinated biphenyls (PCBs), (b) any chemicals or other materials or substances as included in the definition of “hazardous substance”, “hazardous waste”, “hazardous materials”, “extremely hazardous wastes”, “restricted hazardous wastes”, “toxic substances”, “toxic pollutants”, “contaminants”, “pollutants” or words of similar import under any Environmental Law; and (c) any other chemical or other material or substance, exposure to which is now prohibited, limited or regulated under any Environmental Law.

Indebtedness. The term “Indebtedness” shall mean all obligations, contingent and otherwise, which in accordance with generally accepted accounting principles should be classified on the obligor’s balance sheet as liabilities, or to which reference should be made by footnotes thereto, including without limitation, in any event and whether or not so classified: (i) all debt and similar monetary obligations, whether direct or indirect; (ii) all liabilities secured by any Lien existing on Property, whether or not the liability secured thereby shall have been assumed; (iii) all guaranties, endorsements and other contingent obligations whether direct or indirect in respect of Indebtedness or performance of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase Indebtedness, or to assure the owner of Indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the Indebtedness held by such owner or otherwise, and (iv) obligations to reimburse issuers of any letters of credit.

Initial Closing. The term “Initial Closing” shall have the meaning specified in Section 2.3 of this Agreement.

Initial Closing Date. The term “Initial Closing Date” shall have the meaning specified in Section 2.3 of this Agreement..

Institutional Directors. The term “Institutional Directors” shall mean those directors of the Company who are not also executive officers of the Company.

Investments. The term “Investments” shall mean (a) any investment in shares of capital stock, evidence of Indebtedness or other securities issued by any other Person, (b) any loan, advance, or extension of credit to, or contribution to the capital of, any other Person, (c) any purchase of the securities or business or integral part of the business of any other Person, or commitment to make such purchase, and (d) any other investment in any other Person; provided, however, that the term “Investment” shall not include (i) trade and customer accounts receivable for services rendered in the ordinary course of business and payable in accordance with customary trade terms, and all letters of credit or other instruments securing the same, (ii) advances to employees for travel expenses, drawing accounts and similar expenditures but only to the extent that (A) each such advance is in an amount less than $2,000, (B) the aggregate amount of such advances outstanding to any individual employee at any particular time does not exceed $5,000, and (C) all such advances outstanding at any particular time do not exceed $25,000, and (iii) stock or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to the Company or any of its Subsidiaries or as security for any such Indebtedness or claim.

IRS. The term “IRS” shall have the meaning specified in Section 3.18 hereof.

Lien. The term “Lien” shall mean (a) any encumbrance, mortgage, pledge, lien, charge or other security interest of any kind upon any Property, or upon the income or profits therefrom; (b) any acquisition of or agreement to have an option to acquire any Property or assets upon conditional sale or other title retention agreement, device or arrangement (including a capitalized lease); or (c) any sale, assignment, pledge or other transfer for security by the Company or any of its Subsidiaries of any accounts, general intangibles or chattel paper, with or without recourse.

Majority Holders. The term “Majority Holders” shall mean the holders of at least 66 2/3% of the Preferred Stock.

Multiemployer Plan. The term “Multiemployer Plan” shall mean any multiemployer plan within the meaning of § 3(37) of ERISA maintained or contributed to by the Company or any ERISA Affiliate.

PBGC. PBGC shall mean the Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

Permitted Indebtedness. The term “Permitted Indebtedness” shall have the meaning specified in Section 6.10 of this Agreement.

Permitted Liens. The term “Permitted Liens” shall have the meaning specified in Section 6.11 of this Agreement.

Person. The term “Person” shall mean an individual, partnership, corporation, association, trust, joint venture, unincorporated organization, and any government, governmental department or agency or political subdivision thereof.

Plan of Recapitalization. The term “Plan of Recapitalization” shall mean the Agreement and Plan of Merger and Recapitalization by and between the Company and NuVox Communications of Texas, Inc. dated as of July 9, 2002 pursuant to which, among other things, each outstanding share of common stock of the Company will be converted into the right to receive 1/100 share of common stock of the Company and each outstanding share of preferred stock will be converted into the right to receive shares of common stock, based on the existing conversion ratios of such shares of preferred stock and taking into account the 1-for-100 merger conversion ratio applicable to the common stock.

Preferred Stock. The term “Preferred Stock” shall mean (a) the Series A Preferred Stock and (b) any shares of any other class or series of preferred stock of the Company hereafter issued, including any shares which are issued to the holders of shares of Preferred Stock upon any reclassification thereof.

Prior Purchase Agreements. The term “Prior Purchase Agreements” shall mean, collectively, (i) the Securities Purchase Agreement among the Company and the holders of the Series B Preferred Stock dated as of March 31, 2000; and (ii) the Securities Purchase Agreement among the Company and the holders of the Series D Preferred Stock, dated as of September 20, 2001, as amended from time to time thereafter, including pursuant to Article XXII hereof.

Private Placement Memorandum. The term “Private Placement Memorandum” shall mean the Company’s Confidential Private Placement Memorandum dated as of July 3, 2002, which has been previously provided to each of the Purchasers.

Pro Rata Share. ‘The term “Pro Rata Share” shall mean, in respect of each Purchaser, its allocated share of the offering of the Shares, determined on the basis of the amount and class of its prior investment in the Company, as shown on Schedule 1 hereto.

Property. The term “Property” shall mean the assets and properties owned and/or operated by the Company and/or its Subsidiaries.

Public Sale. The term “Public Sale” shall mean any sale of securities to the public pursuant to a public offering registered under the Securities Act or to the public through a broker or market-maker pursuant to the provisions of Rule 144 (or any successor rule) adopted under the Securities Act or any other public offering not required to be registered under the Securities Act.

Purchase Price. The term “Purchase Price” shall have the meaning specified in Section 2.2 of this Agreement.

Purchasers. Each of the Persons listed on Exhibit A to this Agreement, and any Person who becomes a party to this Agreement after the date hereof pursuant to Article VIII of this Agreement.

Registration Rights Agreement. The term “Registration Rights Agreement” shall mean the Amended and Restated Registration Rights Agreement dated as of March 31, 2000, as amended from time to time thereafter, including by the Amendment to Registration Rights Agreement, among the Company and its stockholders.

Related Agreements. The term “Related Agreements” shall mean the Financing Agreements (other than this Agreement) and the Amended Certificate of Incorporation.

Revised Financial Model. The term “Revised Financial Model” shall mean a financial model relating to the business of the Company which shall have been approved by the Board of Directors subsequent to the date of this Agreement and which shall be delivered to the Purchasers prior to the Second Closing Date as provided in Section 2.4.

SBA. The term “SBA” shall have the meaning specified in Section 5.1.11 of this Agreement.

SBIC Investor. The term “SBIC Investor” shall have the meaning specified in Section 5.1.11 of this Agreement.

SEC The term “SEC” shall mean the United States Securities and Exchange Commission.

Second Closing. The term “Second Closing” shall have the meaning specified in Section 2.4 of this Agreement.

Second Closing Date. The term “Second Closing Date” shall have the meaning specified in Section 2.4 of this Agreement.

Securities Act. The term “Securities Act” shall mean the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

Series A Preferred Stock. The term “Series A Preferred Stock” shall have the meaning specified in Section 3.5(a) of this Agreement.

Series D Purchase Agreement. The term “Series D Purchase Agreement” shall mean the Securities Purchase Agreement among the Company and certain purchasers dated as of September 20, 2001 pursuant to which the Company sold certain Units (as defined therein) to the purchasers named therein.

Share. The term “Share” shall mean one share of Series A Preferred Stock.

Shareholders’ Agreement. The term “Shareholders’ Agreement” shall mean the Shareholders’ Agreement dated as of August 14, 1998, as amended from time to time thereafter, including if and when executed by the Company and a sufficient number of the stockholders which are a party thereto to cause such amendment to become effective in accordance with its terms by the Amendment to Shareholders’ Agreement, among the Company and certain of its stockholders.

Small Business Act. The term “Small Business Act” shall have the meaning specified in Section 5.1.11 of this Agreement.

Stockholders’ Agreement. The term “Stockholders’ Agreement” shall mean the Amended and Restated Stockholders’ Agreement dated as of March 31, 2000, as amended from time to time thereafter, including by the Amendment to Stockholders’ Agreement, among the Company and its stockholders.

Subsidiary. The term “Subsidiary” shall mean any Person in which the Company shall at the time own directly or indirectly through another Subsidiary at least a majority of its outstanding capital stock (or other shares of beneficial interest) entitled to vote generally.

Supermajority Board Vote. The term “Supermajority Board Vote” shall mean the affirmative vote of at least 66 2/3% of the members of the Board of Directors present at a meeting at which a quorum is present, which vote shall include the affirmative vote of at least four Institutional Directors, if there are six or five Institutional Directors present at the meeting at which such vote occurs, or three Institutional Directors if there are four or three Institutional Directors present at the meeting at which such vote occurs.

United States Bankruptcy Code. The term “United States Bankruptcy Code” shall mean Title 11 of the United States Code as in effect from time to time.

USRPHC. The term “USRPHC” shall have the meaning specified in Section 3.32 of this Agreement.

ARTICLE II. SALE AND PURCHASE OF SHARES

Section 2.1 Sale and Purchase of Shares. Subject to all of the terms and conditions hereof and in reliance on the representations and warranties set forth or referred to herein, the Company agrees to issue and sell to each Purchaser, and each Purchaser commits to purchase, the number of Shares set forth opposite the name of such Purchaser on Exhibit A attached hereto.

Section 2.2 Purchase Price. The per Share purchase price is $1.50 (the “Purchase Price”).

Section 2.3 Initial Closing. The initial closing of the purchase and sale of the Shares to be purchased hereunder (the “Initial Closing”) will take place at the offices of the Company, 00000 Xxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxx 00000, at 10:00 a.m. CDT on July 8, 2002, or at such other time, date and place as the Company and counsel for the Purchasers may agree upon (the “Initial Closing Date”). At the Initial Closing, the Company will deliver to each Purchaser a certificate evidencing the number of shares of Series A Preferred Stock to be purchased by such Purchaser on the Initial Closing Date (which number shall equal the number of Shares, if any, listed next to each such Purchaser’s name on Exhibit A under the column “Initial Closing Date Shares”), against payment of the Purchase Price for all such Shares in immediately available funds. The Series A Preferred Stock to be delivered on the Initial Closing Date will be issued to the appropriate Purchaser on the Initial Closing Date and registered in such Purchaser’s name in the Company’s records.

Section 2.4 Second Closing. The Purchasers shall purchase, and the Company shall issue and sell, additional Shares as follows:

(a) The closing of any such purchase and sale (a “Second Closing”) shall take place at the offices of the Company, 00000 Xxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxx 00000, at 10:00 a.m. CDT at such time and date as shall be set forth in a written notice from the Company to each Purchaser (or such later date agreed to by the Company and the Purchasers), which may be sent by electronic transmission, at least seven (7) calendar days prior to the Second Closing. Such written notice shall include a copy of the Revised Financial Model. The first date on which a Second Closing occurs is referred to herein as the “Second Closing Date.” Prior to the Second Closing Date, the Company shall distribute to each of the Purchasers a copy of the Amended and Restated Credit Agreement.

(b) Each Purchaser which finds the Revised Financial Model unacceptable shall have the option to reduce the number of Shares it will purchase at the Second Closing or may cancel its agreement to purchase Shares at the Second Closing. Each Purchaser which finds the Revised Financial Model to be acceptable, or which finds the Revised Financial Model to be unacceptable but nonetheless desires to purchase Shares at the Second Closing, shall notify the Company in writing, or by electronic transmission, by 5:00 p.m., CDT on the date that is two calendar days prior to the scheduled Second Closing Date (as specified in the Company’s notice referred to in paragraph (a) above) that such Purchaser either (i) finds the Revised Financial Model acceptable and desires to purchase the Shares specified in such notice from such Purchaser at the Second Closing (which number of Shares may be the same or fewer than the number of Shares set forth next to such Purchaser’s name on Exhibit A under the column “Second Closing Date Shares”) or (ii) finds the Revised Financial Model unacceptable, but nonetheless desires to purchase the Shares specified in such notice from such Purchaser at the Second Closing (which number of Shares may be the same as or fewer than the number of Shares set forth next to such Purchaser’s name on Exhibit A under the column “Second Closing Date Shares”). Notwithstanding the foregoing, the Company shall have the absolute right to accept any such notification referred to in the preceding sentence from any Purchaser or only certain Purchasers (as determined by the Company in its sole and absolute discretion) at any time after the expiration of the period referred to in the preceding sentence; provided that no Second Closing may occur at any time after August 31, 2002. If the Company accepts any such notice at any time following the Second Closing Date, the Company and such Purchaser shall promptly close such purchase and sale on such date as specified by Company. Any Purchaser that has not provided a notice to the Company as set forth in this Section 2.4(b) prior to the expiration of such period (as may be extended at any time by the Company in its sole and absolute discretion for any Purchaser or only certain Purchasers) shall be conclusively deemed to have (i) found the Revised Financial Model unacceptable and (ii) elected not to participate in the Second Closing. Any Second Closing that occurs following the Second Closing Date must be approved by the Board of Directors of the Company.

(c) Subject to Section 2.4(b) above and subject to satisfaction of the conditions specified in Section 5.3, each Purchaser which has provided a notice to the Company in the manner set forth in Section 2.4(b) above shall be obligated to purchase on the Second Closing Date (or such later date as may have been agreed to by the Company and the Purchasers) the lesser of the number of Shares set forth next to such Purchaser’s name on Exhibit A under the column “Second Closing Date Shares,” or such number of Shares as may be specified by the Purchaser pursuant to Section 2.4(b).

(d) The maximum number of Shares which the Company will issue and sell in the Initial Closing and the Second Closing, taken together, will not exceed 56,666,666.

(e) At any Second Closing, the Company will deliver to each Purchaser a certificate evidencing the number of shares of Series A Preferred Stock to be purchased by such Purchaser at the Second Closing as provided above against payment of the Purchase Price for all such Shares in immediately available funds. The Series A Preferred Stock to be delivered at the Second Closing will be issued to the appropriate Purchaser on the date of such Second Closing and registered in such Purchaser’s name in the Company’s records in the amount purchased by such Purchaser on the date of such Second Closing. Promptly following the Second Closing Date, the Company shall cause Exhibit A to this Agreement to be amended to reflect the actual purchases made by the Purchasers on the Second Closing Date.

Section 2.5 Defaulting Purchaser. If a Purchaser fails to satisfy all or any portion of its obligation to purchase the Shares required to be purchased by such Purchaser on the Initial Closing Date or the Second Closing Date, as the case may be (acknowledging, for the avoidance of doubt, that no obligation exists on the part of any Purchaser to purchase Shares on the Second Closing Date, unless such Purchaser shall have delivered to the Company a notice described in Section 2.4(b) and the closing conditions contained in Section 5.3 shall have been satisfied), and so long as all of the conditions set forth in Section 5.1 or 5.3 to such Purchaser’s obligations (only to the extent applicable to such Purchaser) have been satisfied, such Purchaser shall be deemed a Defaulting Purchaser, and the Board of Directors may elect in its sole discretion to (i) bring an action to enforce such Purchaser’s obligation to satisfy its obligations to purchase the Shares agreed to be purchased by such Purchaser hereunder, including interest thereon from the time such payment was due until paid at the lesser of (A) 18% per annum, compounded on a monthly basis to the extent permitted by law, or (B) the highest rate permitted by law or (ii) decline to allow the Defaulting Purchaser to purchase Shares.

Section 2.6 Use of Proceeds. The proceeds from the sale of the Shares purchased hereunder will be used as described under the caption “Use of Proceeds” in the Private Placement Memorandum. The Company covenants and agrees to provide the Purchasers with such information as they may reasonably request to verify the use of the proceeds from the sale of the Shares.

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

In order to induce the Purchasers to enter into this Agreement and to purchase the Series A Preferred Stock, the Company hereby represents and warrants as of the date hereof that:

Section 3.1 Organization and Good Standing. The Company is validly existing and in good standing under the laws of the State of Delaware and in each jurisdiction in which it is required to be qualified as a foreign corporation. The Company is not required to be qualified as a foreign corporation in any jurisdiction other than those listed on Schedule 3.1. The Company has the power to own its properties and to carry on its business as now conducted and as proposed to be conducted. Each of the Subsidiaries is validly existing and in good standing under the laws of the jurisdiction of its incorporation.

Section 3.2 Authorization. The execution, delivery and performance by the Company of this Agreement and each Related Agreement, the issuance and sale by the Company of the Shares and the issuance of the Conversion Stock upon conversion of the Series A Preferred Stock, (a) are within its corporate power and authority, (b) have been duly authorized by all necessary corporate, shareholder and other proceedings, and (c) do not conflict with or result in any breach of any provision of, or result in the creation of any Lien upon any of the Property pursuant to, the Amended Certificate of Incorporation or by-laws of the Company or any law, regulation, order, judgment, writ, injunction, license, permit, agreement or instrument, the non-compliance with which would materially adversely affect the business, operations or financial condition of the Company.

Section 3.3 Enforceability. This Agreement and each of the Related Agreements, the issuance and sale by the Company of the Shares hereunder and the issuance of the Conversion Stock upon conversion of the Series A Preferred Stock, constitute, legally binding obligations of the Company enforceable against it in accordance with the terms and provisions hereof and thereof, except to the extent (a) such enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights, (b) that the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefor may be brought and (c) the

enforceability of the indemnity and contribution provisions contained in the Registration Rights Agreement may be limited under federal securities laws.

Section 3.4 Consents. Except as set forth in Schedule 3.4 hereto, the execution, delivery and performance by the Company of this Agreement and each Related Agreement, the purchase and sale of the Shares, and the issuance of the Conversion Stock upon conversion of the Series A Preferred Stock do not require the approval or consent of, or any filing with, any governmental authority or agency or any other Person.

Section 3.5 Capitalization. (a) Capital Stock. As of each Closing Date and immediately prior to the Closing, but after taking into account the Plan of Recapitalization, the authorized capital stock of the Company will consist solely of 500,000,000 shares of common stock, $.01 par value per share (the “Common Stock”), and 400,000,000 shares of Preferred Stock, $.01 par value per share, of which 100,000,000 shares will be designated as Series A Convertible Preferred Stock (the “Series A Preferred Stock”). Of such authorized shares, as of the Initial Closing Date and immediately prior to the Initial Closing, after taking into account the effects of the Plan of Recapitalization, 5,222,444 shares of Common Stock will be issued and outstanding and no shares of Preferred Stock will be issued and outstanding. Schedule 3.5(a) includes a table indicating the number of shares of Common Stock and Preferred Stock of the Company that will be issued and outstanding as of the Initial Closing Date and separately, as of the Second Closing Date, in both cases after giving effect to the proposed issuance of the Shares hereunder set forth opposite the name of each Purchaser on Exhibit A attached hereto (which numbers represent the number of Shares which will be issued if each Purchaser purchases on the Initial Closing Date and the Second Closing Date the number of Shares for which such Purchaser has indicated an interest in purchasing as of the date of this Agreement, but assuming that none of the warrants and options that may be listed or described in Schedule 3.5(b) have been exercised as of the Initial Closing Date). Schedule 3.5(a) also includes a table listing the per share purchase price applicable to, and the aggregate number of shares of Common Stock issuable upon exercise of, the warrants and options listed on Schedule 3.5(b) after (A) taking into account the effects of the Plan of Recapitalization and (B) giving effect to the proposed issuance of Shares hereunder on the Initial Closing Date, and separately on the Second Closing Date, in either case based on the information set forth opposite the name of each Purchaser on Exhibit A attached hereto (using the same numbers as used in preparing the table described in the preceding sentence). All of the issued shares of Common Stock as of the Initial Closing Date will have been duly authorized, validly issued and outstanding, will be fully paid and non-assessable and issued in compliance with applicable state and federal securities laws. As of the Initial Closing Date, all shares of Series A Preferred Stock will have been duly authorized, and, upon payment for the Shares to be issued to the Purchasers on the Initial Closing Date, as provided herein will be validly issued and outstanding, fully paid and non-assessable and upon payment for the Shares to be issued to the Purchasers on the Second Closing Date, as provided herein will be validly issued and outstanding, fully paid and non-assessable.

(b) Options, Etc. Except for (i) shares of Common Stock issuable (A) upon conversion of the Series A Preferred Stock, or (B) pursuant to the options, warrants or other awards listed and described on Schedule 3.5(b), and (ii) the rights provided under the Stockholders’ Agreement, there are no outstanding rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for, or exercisable into, its capital stock.

(c) Purchasers. Except for those Persons listed on Schedule 3.5(c), all of the Purchasers listed on Exhibit A currently own of record shares of Preferred Stock or Common Stock of the Company (exclusive of any Shares being purchased hereunder).

Section 3.6 Subsidiaries. Schedule 3.6 correctly sets forth the name of each Subsidiary of the Company, the jurisdiction of its incorporation and the Persons owning the outstanding capital stock of each such Subsidiary. Each such Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, has all requisite corporate power and authority and all material licenses, permits and authorizations necessary to own its properties and carry on its businesses as now being conducted and is qualified to do business in every jurisdiction in which its ownership of its property or the conduct of its business requires such qualification. All of the outstanding shares of capital stock of each such Subsidiary are validly issued, fully paid and non-assessable. Except for such Subsidiaries, the Company does not own any legal and/or beneficial interest in any corporation, partnership, business trust, joint venture or other trade or business enterprise.

Section 3.7 Financial Statements; Undisclosed Liabilities. (a) Each Purchaser has heretofore been furnished with complete and correct copies of each of the following:

(i) the audited consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2001, as included in the Company’s Annual Report on Form 10-K with respect to the fiscal year then ended, as filed by the Company with the SEC; and

(ii) the unaudited consolidated balance sheet of the Company and its Subsidiaries as of March 31, 2002 (the “Balance Sheet Date”), as included in the Company’s Quarterly Report on Form 10-Q with respect to the quarter then ended, as filed by the Company with the SEC. Schedule 3.7 sets forth the pro forma consolidated balance sheet of the Company and its Subsidiaries as of Balance Sheet Date, taking into account the issuance on the Initial Closing Date and Second Closing Date of all of the Shares contemplated hereby as being issued on such dates (assuming each Purchaser purchases the Shares set forth next to such Purchaser’s name on Exhibit A attached hereto).

(b) The Company’s unaudited consolidated balance sheet as of the Balance Sheet Date was prepared in accordance with generally accepted accounting principles and fairly presents the financial condition of the Company and its Subsidiaries as at the Balance Sheet Date, subject to normal year-end audit adjustments. Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, which are not described in such unaudited balance sheet except for (i) liabilities that may have arisen in the ordinary and usual course of business since the Balance Sheet Date and that individually or in the aggregate do not have and could not reasonably be expected to have a material adverse effect on the Company and its Subsidiaries, taken as a whole, (ii) liabilities not required to be disclosed in accordance with generally accepted accounting principles, (iii) liabilities arising under this Agreement or the Related Agreements, and (iv) other liabilities and obligations expressly disclosed in the Schedules to this Agreement.

(c) The pro forma consolidated balance sheet of the Company referred to in Section 3.7(a)(ii) has been prepared by management of the Company on a reasonable basis taking into consideration the effect of the Plan of Recapitalization and the transactions contemplated hereby as of the Initial Closing Date and none of the Company and its management is aware of any fact which casts doubt on the accuracy or completeness thereof. After giving effect to the Plan of Recapitalization and the transactions contemplated hereby and by the Related Agreements, neither the Company nor any of its Subsidiaries will have any material liabilities, contingent or otherwise, which are not referred to in such balance sheet or in the notes thereto other than liabilities not required to be disclosed in accordance with generally accepted accounting principles and liabilities arising under this Agreement or the Related Agreements.

Section 3.8 Absence of Certain Developments. With respect to the Company and its Subsidiaries, since the Balance Sheet Date, except as indicated on Schedule 3.8 or as disclosed in or referred to in the Private Placement Memorandum, there has not been:

(a) any material adverse change in the assets, properties, liabilities, financial condition, operating results or business of the Company and its Subsidiaries, taken as a whole;

(b) any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the assets, properties, financial condition, operating results or business of the Company and its Subsidiaries, taken as a whole;

(c) any waiver by the Company or any of its Subsidiaries of a valuable right or of a debt owed to it, except in the ordinary course of business and that does not materially and adversely affect the assets, properties, financial condition, operating results or business of the Company and its Subsidiaries, taken as a whole;

(d) any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company or any of its Subsidiaries, except in the ordinary course of business and that does not materially and adversely affect the assets, properties, financial condition, operating results or business of the Company and its Subsidiaries, taken as a whole;

(e) any change or amendment to a material contract or arrangement by which the Company or any of its Subsidiaries or any of their assets or properties are bound or subject, except in the ordinary course of business and that does not materially and adversely affect the assets, properties, financial condition, operating results or business of the Company and its Subsidiaries, taken as a whole;

(f) any sale, assignment or transfer of any patents or patent applications, trademarks or trademark applications, service marks, trade names, corporate names, copyrights or copyright registrations, trade secrets or other intangible assets, except those which are not material to the assets, properties, financial condition, operating results or business of the Company and its Subsidiaries, taken as a whole;

(g) any declaration, payment, setting aside or other distribution of cash or other property to its stockholders with respect to its capital stock or other equity securities (including, without limitation, any warrants, options or other rights to acquire its capital stock or other equity securities), except for repurchases of stock from employees whose employment has been terminated;

(h) any capital expenditures or commitments therefor in excess of those approved by the Board of Directors;

(i) any written agreement by the Company or any Subsidiaries to do any of the things described in this Section 3.8.

Section 3.9 Indebtedness and Liens. Neither the Company nor any of its Subsidiaries has any Indebtedness or Liens upon any of its Property other than Permitted Indebtedness and Permitted Liens.

Section 3.10 Indebtedness to and from Officers, Directors and Others. Except as set forth on Schedule 3.10 hereto, neither the Company nor any of its Subsidiaries is indebted to any director, officer, employee or consultant of the Company or any of its Subsidiaries or to any other Affiliate of the Company, except for amounts due as normal salaries, fees or reimbursement of ordinary business expenses. Except as set forth on Schedule 3.10, no director, officer, employee or consultant of the Company or any of its Subsidiaries and no other Affiliate of the Company is now, or on the Initial Closing Date will be, indebted to the Company or any Subsidiary of the Company except for ordinary business expense advances.

Section 3.11 Licenses, Etc. Schedule 3.11 sets forth a listing of all franchises, patents, patent applications, patent licenses, patent rights, trademarks, trademark rights, trade names, trade name rights, copyrights, licenses, permits, authorizations, certificates of convenience and necessity, operating rights and other rights as are necessary for the conduct of the Company’s business as currently conducted. All of the foregoing are in full force and effect, and the Company is in compliance with the foregoing without any known conflict with the valid rights of others which could affect or impair in a material manner the business, assets, financial condition or prospects of the Company. The Company does not believe it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by the Company, except for such inventions, trade secrets or proprietary information that have been assigned to the Company. To the Company’s knowledge, the conduct of the Company’s business has not infringed or misappropriated and does not infringe or misappropriate any proprietary rights of other persons or entities, nor, to the Company’s knowledge, would any future conduct as presently contemplated infringe any proprietary rights of other persons or entities, and, to the Company’s knowledge, no conduct of any other Person has infringed or misappropriated or does infringe or misappropriate the proprietary rights of the Company.

Section 3.12 Solvency. Taking into account the consummation of the financing transactions contemplated by this Agreement and the Related Agreements, the Company is solvent, and has tangible and intangible assets having a fair value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured, and its capital is not unreasonably small for the conduct of its business as presently contemplated and the Company has the ability to pay its debts from time to time incurred in connection therewith as such debts mature.

Section 3.13 Title to Assets; Leases. The Company owns and leases no real property except for its leases described on Schedule 3.13. Except as disclosed on Schedule 3.13, the Company enjoys peaceful and undisturbed possession under, and is in compliance with the terms of, such leases and of all leases of real property, except where failure to enjoy such possession or such noncompliance would not have a material adverse effect upon the business, assets, prospects or financial condition of the Company, and all such leases are valid and in full force and effect.

Section 3.14 Litigation. Except as described on Schedule 3.14, there is no litigation, action, suit or proceeding, at law or in equity, or any proceeding before any court, board or other governmental or administrative agency or any arbitrator pending or, to the knowledge of the Company, after due inquiry, threatened, involving the Company and its Subsidiaries. No judgment, decree or order of any court, board or other governmental or administrative agency or arbitrator has been issued against or binds the Company or its assets which has or may have any material adverse effect on the business, assets, financial condition or prospects of the Company and its Subsidiaries, taken as a whole.

Section 3.15 Tax Returns. The Company has filed all tax returns and reports which are required to be filed by it with any foreign, federal, state or local governmental authority or agency and has paid, or made adequate

provision for the payment of, all assessments received and all taxes which have or may become due under applicable foreign, federal, state or local governmental law or regulations with respect to the periods in respect of which such returns and reports were filed. The Company knows of no additional assessments since the dates of such returns and reports for which adequate reserves appearing on the balance sheet referred to in Section 3.7(a)(ii) have not been established. The Company has made adequate provisions for all current or past taxes.

Section 3.16 Defaults. Except as set forth in Schedule 3.16 hereto, neither the Company nor any of its Subsidiaries is in default under any provisions of its respective Charter or by-laws or under any provisions of any franchise, contract, agreement, lease or other instrument to which it is a party or by which it or its property is bound, or in violation of any law, judgment, decree or governmental order, rule or regulation, which default or violation could affect adversely in any material manner the business, assets, prospects or financial condition of the Company and its Subsidiaries, taken as a whole. Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor compliance with its terms and conditions and with the terms and provisions of the Financing Agreements, will conflict or result in breach of, or constitute a default under, any of the material terms, obligations, covenants, conditions or provisions of any restriction or of any material indenture, mortgage, deed of trust, pledge, bank loan or credit agreement, charter, by-law or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective properties may be bound or affected, or any judgment, order, writ, injunction, decree or demand of any court, arbitrator or governmental agency, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or asset of the Company or any of its Subsidiaries.

Section 3.17 Burdensome Obligations. Neither the Company nor any of its Subsidiaries is party to or bound by any agreement, deed, lease or other instrument which is so unusual or burdensome as to affect or impair materially and adversely the business, assets, prospects or financial condition of the Company and its Subsidiaries, taken as a whole, in the foreseeable future.

Section 3.18 Employee Benefit Plans.

(a) Schedule 3.18 contains a true and complete list as of the date hereof of each Employee Benefit Plan and each Employee Agreement and identifies each Employee Benefit Plan which is a Guaranteed Pension Plan. The Company does not have any liability or obligations in respect of any Multiemployer Plan.

(b) With respect to each Employee Benefit Plan, (i) the Company and each ERISA Affiliate have performed all material obligations required to be performed by them under each Employee Benefit Plan; (ii) each Employee Benefit Plan has been established and maintained in all material respects in accordance with its terms and in compliance with all applicable laws, statutes, orders, rules and regulations; (iii) each Employee Benefit Plan intended to qualify under Section 401 of the Code is, and since its inception has been, so qualified; (iv) there are no actions, proceedings, arbitrations, suits or claims pending, or to the knowledge of the Company or any ERISA Affiliate, threatened or anticipated (other than routine claims for benefits), against the Company or any ERISA Affiliate or any administrator, trustee or other fiduciary of any Employee Benefit Plan with respect to any Employee Benefit Plan or against the assets of any Employee Benefit Plan; and (v) no Employee Benefit Plan is under audit or investigation by the Internal Revenue Service (“IRS”), the Department of Labor (the “DOL”) or the PBGC, and to the knowledge of the Company or any ERISA Affiliate, no such audit or investigation is pending or threatened.

(c) Except with respect to the employee incentive programs proposed by management in connection with the offering of the Series A Preferred Stock (which are to be considered by the Board of Directors or the Compensation Committee of the Board of Directors subsequent to the time of the Initial Closing), the execution of, and performance of the transactions contemplated in, this Agreement will not (either alone or upon the occurrence of any additional or subsequent event which gives rise to the payments described below) (i) constitute an event under any Employee Benefit Plan, Equity Incentive Plan or Employee Agreement that will (or may upon the occurrence of any additional or subsequent event which gives rise to the payments described below) result in any material payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Employee; (ii) result in the triggering or imposition of any material restrictions or limitations on the right of the Company or any ERISA Affiliate to amend or terminate any Employee Benefit Plan or Equity Incentive Plan; or (iii) entitle any Employee to any material bonus, retirement, severance, job security or similar benefit or materially enhance such benefit (including acceleration of vesting or exercise of an incentive award). Except with respect to such employee incentive programs proposed by management in connection with the offering of the Series A Preferred Stock, no

payment or benefit which will or may be made by the Company or any ERISA Affiliate with respect to any Employee in connection with the execution of, and performance of the transactions contemplated in, this Agreement could be characterized as an “excess parachute payment,” within the meaning of Section 280G(b)(1) of the Code.

Section 3.19 Representations and Warranties under Related Agreements. All representations and warranties made by the Company in any of the Related Agreements or in the certificates delivered in connection therewith are true and correct in all material respects as of the date hereof with the same force and effect as though made on and as of the date hereof, and such representations and warranties are hereby confirmed to the Purchasers and made representations and warranties of the Company hereunder as fully as if set forth herein. To the best of the Company’s knowledge, all representations and warranties made in the Related Agreements by or on behalf of any party there to other than the Company and the Purchasers are true and correct in all material respects.

Section 3.20 Employment Contracts, Labor Relations. Except as set forth on Schedule 3.20, neither the Company nor any of its Subsidiaries is a party to any written employment agreement, arrangement or understanding with any of its officers or Employees and there are no collective bargaining agreements covering any of the Employees of the Company or any of its Subsidiaries. Neither the Company nor, to the Company’s knowledge, any of its employees, is subject to any noncompete, nondisclosure, confidentiality, employment, consulting or similar agreements relating to, affecting or in conflict with the present or proposed business activities of the Company (other than agreements between the Company and its present and former employees). No consent of any union (or any similar group or organization) is required in connection with the consummation of the transactions contemplated hereby or by the Related Agreements. Except as disclosed in Schedule 3.20, there are no pending, threatened or anticipated (a) employment discrimination charges or complaints against or involving the Company or any of its Subsidiaries before any federal, state, or local board, department, commission or agency, (b) unfair labor practice charges or complaints, disputes or grievances affecting the Company or any of its Subsidiaries, (c) union representation petitions respecting the employees of the Company or any of its Subsidiaries, (d) efforts being made to organize any of the employees of the Company or any of its Subsidiaries or (e) strikes, slow downs, work stoppages, or lockouts or threats thereof affecting the Company or any of its Subsidiaries.

Section 3.21 Location of Office. The Company’s executive offices and the location where its books and records are kept is at the address set forth above.

Section 3.22 Necessary Property. Except as may be set forth in Schedule 3.22 hereto, the properties and assets owned, leased by or licensed to the Company and its Subsidiaries constitute all of the real and personal properties, tangible and intangible, which are necessary, used or useful in the conduct of the businesses of the Company and its Subsidiaries in the manner and to the extent presently conducted. Except as may be set forth in Schedule 3.22, no other material real or personal properties are required for the conduct of the businesses of the Company and its Subsidiaries as presently conducted.

Section 3.23 Transaction Costs. Except as set forth in Section 10.1, Section 10.3 or on Schedule 3.23, there are no Transaction Costs (as defined below) that will be payable by the Company with respect to the offer, issue and sale of the Shares. The Purchasers are not responsible for and have no obligation to pay the Transaction Costs except to the extent provided in Section 10.1. The term “Transaction Costs” shall mean all of the costs, fees, and expenses incurred by the Company in connection with the offer, issue and sale of the Shares, including without limitation, broker’s, finder’s or placement fees or commissions, attorneys’ fees and fees of other professionals.

Section 3.24 Governmental Regulations. The Company is not a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company”, as such terms are defined in the Public Utility Holding Company Act of 1935; nor is the Company a “registered investment company”, or an “affiliated person” or a “principal underwriter” of a “registered investment company”, as such terms are defined in the Investment Company Act of 1940, as amended.

Section 3.25 Small Business Concern. The Company, together with its “affiliates” (as defined in 13 CFR 121.103), qualifies as a “small business concern” within the meaning of the Small Business Investment Act of 1958, as amended, and as a “small concern” within the meaning of the rules and regulations thereunder pertaining to financings by small business investment companies (13 CFR 121.201). The Company conducts its business in all respects and maintains its properties and facilities in such a manner that the financing and financial assistance provided by the Purchasers will comply with 13 CFR 107.720.

Section 3.26 Disclosure. No representation, warranty or statement made in this Agreement, any Related Agreement, or any agreement, certificate, schedule, statement or document furnished by or on behalf of the

Company in connection herewith or therewith contains any untrue statement of material fact or omits to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances in which they were made, not misleading.

Section 3.27 Governmental Licenses. Schedule 3.27 describes and refers to the types of licenses, consents, permits, approvals and authorizations of public or governmental bodies including, without limitation, the FCC, and the states, counties and municipalities in which the businesses of the Company or its Subsidiaries are located, which are required in connection with and are material to the installation, conduct and operation of the business of the Company or its Subsidiaries (collectively referred to as the “Authorizations”).

Section 3.28 Compliance with Laws. Except as set forth on Schedule 3.28, The Company and each of its Subsidiaries are in compliance in all material respects with and have so complied with, and are not in any material respect in default under or in violation of, and the operation of the businesses of the Company and its Subsidiaries do not contravene in any material respect, any statute, law (including Environmental Laws or employment laws), ordinance, decree, order, rule or regulation of any governmental body applicable to the Company or any of its Subsidiaries or any of their respective businesses, including, without limitation, the rules and regulations of the FCC. The Plan of Recapitalization has been consummated in accordance with applicable Delaware law.

Section 3.29 Acquisition Agreements. Except for the transactions contemplated by this Agreement and the Related Agreements, and except as set forth in Schedule 3.29, neither the Company nor any of its Subsidiaries is a party to, bound by or the subject of, any agreement or understanding relating to the purchase or investment by any Person in the assets or stock of the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries is a party to, bound by or the subject of, any agreement or understanding relating to the purchase of or investment by the Company or any of its Subsidiaries in the assets or stock of any Person.

Section 3.30 Material Contracts and Obligations. Attached hereto as Schedule 3.30 is a true, complete and accurate list, categorized by subject matter, of all of the following outstanding contracts, agreements, plans, leases and commitments entered into by the Company or any of its Subsidiaries which are in writing or, to the best of the Company’s knowledge, have been orally agreed to by the Company or any of its Subsidiaries:

        (i)     all purchase orders or contracts for the purchase of materials, products or supplies which are for a term of more than 6 months, or involve aggregate payments by the Company or any of its Subsidiaries of more than $10,000, or which were entered into other than in the ordinary course of business of the Company and its Subsidiaries;

        (ii)     all written employment, consulting or service contracts with any stockholder, director, officer, consultant, advisor or employee of the Company, any person related by blood or marriage to any such Person or any other Affiliate of the Company, and any such oral contracts which are not terminable at will by the Company or any of its Subsidiaries;

        (iii)     all plans, contracts or arrangements providing for stock options or stock purchases, bonuses, pensions, deferred or incentive compensation, retirement or severance payments, profit-sharing, insurance or other benefit plans or programs for any stockholder, director, officer, consultant, advisor or employee of the Company or any of its Subsidiaries;

        (iv)     all contracts for construction or for the purchase of real estate, improvements, fixtures, equipment, machinery and other items which under GAAP constitute capital expenditures;

        (v)     all contracts relating to the rental or use of equipment, vehicles, other personal property or fixtures;

        (vi)     all contracts relating in any way to direct or indirect Indebtedness for borrowed money or evidenced by a bond, debenture, note or other evidence of Indebtedness (whether secured or unsecured) of or to the Company or any of its Subsidiaries, and all Liens with respect to any Property used or owned by the Company or any of its Subsidiaries;

        (vii)     all contracts substantially restricting the Company or any of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, or from using or disclosing any information in its possession (other than routine supplier and customer confidentiality agreements);

        (viii)     all license agreements, either as licensor or licensee;

        (ix)     all joint venture contracts and agreements involving a sharing of profits;

        (x)     all contracts, commitments or shared services arrangement with any Affiliate and all contracts or commitments not made in the ordinary course of its business; and

        (xi)     all other contracts, except those which are (A) cancelable on 30 days’ or less notice without any penalty or other financial obligation or (B) if not so cancelable, involve annual aggregate payments by or to the Company or any of its Subsidiaries of $5,000 or less.

Except as set forth on Schedule 3.30, all contracts, agreements, plans, leases and commitments required to be disclosed to the Purchasers pursuant to this Section 3.30 are valid, binding and in full force and effect as to the Company and its Subsidiaries, and none of the Company or any of its Subsidiaries or, to the best of the Company’s knowledge, any other party thereto, is in material breach or material violation of, or material default under, nor is there any reasonable basis for a claim of material breach or violation by the Company or any of its Subsidiaries of, or default by the Company or any of its Subsidiaries under, the terms of any such contract, agreement, plan, lease or commitment, and no event has occurred which constitutes or, with the lapse of time or the giving of notice or both, would constitute such a material breach, violation or default by the Company or any of its Subsidiaries thereunder.

Section 3.31 Environmental and Safety Laws. To the Company’s knowledge, neither the Company nor any of its Subsidiaries is in violation of any applicable Environmental Law or any applicable statute, law or regulation relating to occupational health and safety and to the Company’s knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation.

Section 3.32 Investments in Real Property Holding Interests. The Company’s capital stock does not constitute a United States real property interest as that term is defined in Section 897(c)(1)(A)(ii) of the Code. The preceding representation is based on a determination by the Company that the Company is not and, since its inception, has not been a United States real property holding corporation (as that term is defined in Section 897(c)(2) of the Code) (a “USRPHC”). From time to time, upon request of any Purchaser, the Company shall make a determination as to its status as a USRPHC. If at any time in the future the Company should become a USRPHC, the Company shall, as promptly as possible, notify each Purchaser of such change in status.

ARTICLE IV. PURCHASERS’ INVESTMENT REPRESENTATIONS AND
WARRANTIES

Each Purchaser, as to itself, severally and not jointly, hereby represents and warrants to the Company and to the directors and control persons (within the meaning of the Securities Act) of the Company as follows:

         (i)     Such Purchaser recognizes that an investment in the Company is highly speculative and involves significant risks, including, without limitation, those disclosed on Schedule 4.1(i) hereto.

        (ii)     Such Purchaser has been afforded the opportunity to ask questions and to receive answers concerning the terms and conditions of the purchase of the Shares and to obtain any additional information which the Company possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of the information set forth in this Agreement. The Company has responded to all inquiries that such Purchaser has made of it concerning the Company, its business, financial condition and prospects or any other matter relating to the operations of the Company and the offering and sale of the Shares. No oral or written statement or inducement which is contrary to the information set forth in this Agreement has been made by or on behalf of the Company to such Purchaser.

        (iii)     Except for (a) certain Purchasers which the Company has separately agreed in writing are not subject to the representation set forth in this paragraph, all of whose names are set forth on Schedule 4.1(iii) or will be set forth on an adjusted Schedule 4.1(iii), and (b) those Purchasers who are purchasing Shares registered under the Securities Act (which Purchasers are also not subject to the representation set forth in this paragraph), such Purchaser is an “accredited investor” (as defined in Rule 501 of Regulation D promulgated under the Securities Act) and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares.

        (iv)     Such Purchaser (a) has adequate means of providing for its current needs and possible contingencies, (b) has no need for liquidity in its investment, (c) is able to bear the economic risks of such investment in the Shares, (d) at the present time, can afford a complete loss of such investment in the Shares.

        (v)     Such Purchaser is purchasing the Shares for its own account, for investment purposes, and not for distribution, assignment or resale to others; provided, however, that nothing contained herein shall prevent any Purchaser and subsequent holders of the Series A Preferred Stock from transferring such securities in compliance with the provisions of Article IX hereof. No other Person has any direct or indirect beneficial interest in the Shares, except as disclosed by such Purchaser to the Company and except investors in such Purchaser.

        (vi)     Such Purchaser understands that (a) there is and will be no market for the Series A Preferred Stock or Common Stock, (b) the sale of the Shares have not been and will not be registered under the Securities Act or any state securities laws in reliance on the exemption for nonpublic offerings provided by Section 4(2) of the Securities Act and Regulation D promulgated thereunder and analogous state securities law provisions, and the securities acquired as a result of such Purchaser’s investment in Shares must be held indefinitely unless they are subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is available, (c) except as expressly provided in the Registration Rights Agreement, the Company is under no obligation to register the Series A Preferred Stock or the Conversion Stock (when issued) on such Purchaser’s behalf or to assist it in complying with any exemption from registration, and (d) none of the Series A Preferred Stock or the Conversion Stock may be sold pursuant to Rule 144 promulgated by the SEC pursuant to the Securities Act unless all of the conditions of that Rule are met.

        (vii)     Such Purchaser understands that no Federal or state agency has passed or will pass upon the Series A Preferred Stock or the Conversion Stock or made or will make any finding or determination as to the fairness of the investment or any recommendation or endorsement of the Series A Preferred Stock or the Conversion Stock. Such Purchaser will not transfer the Series A Preferred Stock or the Conversion Stock issuable upon conversion of the Series A Preferred Stock without registering or qualifying the same under applicable securities laws unless such transfer is exempt under such laws.

        (viii)     Such Purchaser has not been furnished any offering literature other than this Agreement, the written materials described in Schedule 4.1(viii) hereto and other materials which the Company may have provided at the request of such Purchaser, and such Purchaser has relied only on the information contained in this Agreement, the written materials described in Schedule 4.1(viii) hereto and the other information furnished or made available to such Purchaser by the Company, as described in subparagraph (ii) above.

        (ix)     Such Purchaser has its principal place of business or, in the case of individuals, home address at the address set forth in the books and records of the Company as provided to the Company by such Purchaser on or prior to the date hereof.

        (x)     Such Purchaser certifies, under penalties of perjury, (a) that the social security or federal taxpayer identification number previously provided by the Purchaser to the Company is true and complete and (b) that such Purchaser is not subject to backup withholding either because such Purchaser has not been notified that such Purchaser is subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified such Purchaser that such Purchaser is no longer subject to backup withholding.

The representations and warranties of the Purchasers herein shall not limit or modify the representations and warranties of the Company set forth in this Agreement.

Each Purchaser, severally and not jointly, agrees to indemnify and hold harmless the Company, its officers, directors, and control persons (within the meaning of the Securities Act) from and against any and all damage, loss, liability, cost and expense (including reasonable attorneys’ fees) which any of them may incur by reason of any breach of the representations and warranties made by such Purchaser herein; provided, however, that each such Purchaser’s indemnification obligation pursuant to this Article IV shall, with respect to each such Purchaser, be limited to the aggregate Purchase Price of the Shares paid by such Purchaser pursuant to this Agreement. All representations, warranties and covenants in this Agreement, and the indemnification contained in this Article IV, shall survive any closing hereunder.

The certificates evidencing shares of the Series A Preferred Stock shall be imprinted with a legend in substantially the following form:

“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT, AND SUCH SHARES CANNOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO THE REGISTRATION PROVISIONS OF SUCH ACTS OR AN EXEMPTION THEREFROM.

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN A CERTAIN SECURITIES PURCHASE AGREEMENT, A STOCKHOLDERS AGREEMENT AND/OR A SHAREHOLDERS AGREEMENT BY AND AMONG THE COMPANY AND THE PURCHASER OF SUCH SHARES, COPIES OF WHICH ARE AVAILABLE AT THE PRINCIPAL OFFICES OF THE COMPANY.”

ARTICLE V. CONDITIONS TO PURCHASE

Section 5.1. Purchaser’s Conditions on the Initial Closing Date. Each Purchaser’s obligation to purchase the Shares to be purchased on the Initial Closing Date by such Purchaser pursuant to this Agreement is subject to compliance by the Company with its agreements herein contained, and to the satisfaction, on or prior to the Initial Closing Date, of the following conditions unless waived in writing by such Purchaser:

        Section 5.1.1.   Related Agreements. Each of the Related Agreements (other than the Amendment to the Shareholders’ Agreement) shall have been executed and delivered in the forms provided for herein, and each of the Related Agreements shall be in full force and effect and no term or condition thereof shall have been amended, modified or waived, except as contemplated hereby. All covenants, agreements and conditions contained in the Related Agreements which are to be performed or complied with by the Company on or prior to the Initial Closing Date shall have been performed or complied with in all material respects (or waived with the prior written consent of such Purchaser).

        Section 5.1.2   Charter Documents; Good Standing Certificate. Such Purchaser shall have received from the Company (a) a copy, certified by the Secretary of State of Delaware, of the Amended Certificate of Incorporation of the Company, (b) a copy, certified by a duly authorized officer of the Company to be true and complete as of the Initial Closing Date of the by laws of the Company; and (c) certificates, dated not more than ten days prior to the Initial Closing Date, of the Secretaries of State of Delaware and Missouri, as to the Company’s corporate good standing in such states.

        Section 5.1.3   Proof of Corporate Action. Such Purchaser shall have received from the Company copies, certified by a duly authorized officer thereof to be true and complete as of the Initial Closing Date, of the records of all corporate action taken by the Company to authorize the execution, delivery and performance of this Agreement and each of the Related Agreements.

        Section 5.1.4   Incumbency Certificate. Such Purchaser shall have received from the Company an incumbency certificate, dated the Initial Closing Date, signed by a duly authorized officer thereof and giving the name and bearing a specimen signature of each individual, or a true facsimile thereof, who shall be authorized to sign, in the name and on behalf of the Company, this Agreement and each of the Related Agreements, and to give notices and to take other action on behalf of the Company hereunder.

        Section 5.1.5   Legal Opinion. The Purchasers shall have received from Xxxxx Xxxx LLP, special counsel to the Company, a favorable opinion dated the Initial Closing Date, substantially in the form of Exhibit D hereto, and covering such other matters with respect to the transactions contemplated by this Agreement as the Purchasers may reasonably request.

        Section 5.1.6   Lending Banks. The Company and/or one or more of its Subsidiaries shall have entered into the Forbearance Agreement substantially in the form attached hereto as Exhibit F (Part 1) and such Forbearance Agreement shall continue to be in full force and effect. In addition, the letter agreements between the Company and certain of its lenders in substantially the form attached hereto as Exhibit F (Part 2) shall continue to be in effect.

        Section 5.1.7     Representations and Warranties; Officers’ Certificates. The representations and warranties of the Company contained or incorporated by reference herein shall be true and correct in all material respects on and as of the Initial Closing Date with the same force and effect as though made on and as of the Initial Closing Date, except for those representations and warranties which relate specifically to a particular date, provided that such representations and warranties were true and correct in all respects as of such date; no event or condition shall have occurred or would result from the issuance of any of the Series A Preferred Stock which would be a Default or an Event of Default, and the Company shall have performed and complied with, in all material respects, all conditions and agreements required to be performed or complied with by it prior to the Closing, and such Purchaser shall have received on the Initial Closing Date, a certificate to these effects signed by an authorized officer of the Company.

        Section 5.1.8   Legality; Governmental and Other Authorizations. The purchase of the Shares shall not be prohibited by any law or governmental order or regulation. All necessary consents, approvals, licenses, permits, orders and authorizations of, or registrations, declarations and filings with, any governmental or administrative agency or of or with any other Person, with respect to any of the transactions contemplated by this Agreement or any of the Related Agreements (other than the filings with the SEC required to be made pursuant to Regulation D of the Securities Act), shall have been duly obtained or made and shall be in full force and effect.

        Section 5.1.9   Due Diligence. Such Purchaser shall have completed its legal, financial, tax, environmental, accounting and business due diligence review of the Company with the results thereof satisfactory to such Purchaser in its sole discretion.

        Section 5.1.10   Payment of Certain Fees and Disbursements. The Purchasers shall have been reimbursed by the Company pursuant to Section 10.1 of this Agreement for all reasonable out-of-pocket costs and expenses (including, but not limited to, the reasonable legal fees of one counsel to certain of the Purchasers, which shall be Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, with such fees not to exceed $400,000) incurred by them through the Initial Closing Date in connection with the transactions contemplated by this Agreement. The Company shall not have any obligation to reimburse the Purchasers for any costs or expenses for any legal fees other than the fees to Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx described above.

        Section 5.1.11   SBIC Documentation. The Company shall have executed and delivered to each Purchaser that is a Federal licensee (an “SBIC Investor”) under the Small Business Investment Act of 1958, as amended (the “Small Business Act”), upon request of such SBIC Investor, (i) a Size Status Declaration on Form 480 of the United States Small Business Administration (“SBA”), (ii) an Assurance of Compliance on SBA Form 652, (iii) an SBA Certification in substantially the form provided to the Company by such SBIC Investor and (iv) the information required for such SBIC Investor to prepare a Portfolio Financing Report on SBA Form 1031.

        Section 5.1.12   Certification of Securities Holdings. The Company shall have provided to Centennial Fund V, L.P. (“Centennial”) a certification of the direct and indirect holdings of securities of the Company by certain persons designated by Centennial as required by Centennial’s governing documents.

        Section 5.1.13   Minimum Investment. The Purchasers shall purchase at least 8,000,000 Shares at the Initial Closing and shall have agreed to purchase subject to the terms and conditions contained in this Agreement, at least 36,666,666 at the Initial Closing and the Second Closing combined.

        Section 5.1.14   Stockholder Approval. The Plan of Recapitalization shall have been approved and adopted by (i) holders of at least 66 2/3% of the shares of preferred stock of the Company existing as of the date of such approval and (ii) holders of at least 66 2/3% of all of the shares of common and preferred stock (voting on an as converted basis) of the Company existing as of the date of such approval, voting as a single class.

        Section 5.1.15   Amendment to Notice Provision. Immediately prior to the consummation of the Plan of Recapitalization, the Amended and Restated Certificate of Incorporation shall be amended, to decrease the number of days of advance notice required to be given to the holders of preferred stock in order to effectuate the Plan of Recapitalization from 20 days advance written notice to 3 days advance written notice. Such amendment shall have been approved and adopted by (i) holders of at least 66 2/3% of the shares of preferred stock of the Company existing as of the date of such approval and (ii) holders of at least 66 2/3% of all of the shares of common and preferred stock (voting on an as converted basis) of the Company existing as of the date of such approval, voting as a single class.

        Section 5.1.16   Amendment to By-Laws. An amendment to the Company’s by-laws substantially in the form attached hereto as Exhibit H shall have been approved by the Board of Directors and the (i) holders of at least 66 2/3% of the shares of preferred stock of the Company existing as of the date of such approval and (ii) holders of at least a majority of all of the shares of common and preferred stock (voting on an as converted basis) of the Company existing as of the date of such approval, voting as a single class.

        Section 5.1.17   Plan of Recapitalization. All actions required to effectuate the Plan of Recapitalization shall have been completed, including, without limitation, the receipt of any requisite stockholder approval and the filing and effectiveness of the Certificate of Merger.

        Section 5.1.18   General. All instruments and legal, governmental, administrative and corporate proceedings in connection with the transactions contemplated by this Agreement and the Related Agreements shall be reasonably satisfactory in form and substance to the Purchasers, and the Purchasers shall have received copies of all documents which the Purchasers may have reasonably requested in connection therewith, including, without limitation, records of corporate proceedings, the opinion of counsel contemplated by Section 5.1.5 and any consents, licenses, approvals, permits and orders required to be secured by the Company in connection with the transactions contemplated hereby.

Section 5.2 The Company’s Conditions on the Initial Closing Date. The Company’s obligation to issue and sell the Shares to be purchased on the Initial Closing Date pursuant to this Agreement, are subject to compliance by each Purchaser with its agreements herein contained, and to the satisfaction, on or prior to the Initial Closing Date, of the following conditions:

        Section 5.2.1   Related Agreements. The Amendment to Stockholders’ Agreement and the Amendment to Registration Rights Agreement, in the forms provided for herein, shall have been executed and delivered by each of the Purchasers and by at least such additional stockholders of the Company, if any, as shall be required in order for such amendments to become effective in accordance with their terms, and each of the other Related Agreements shall be in full force and effect and no term or condition thereof shall have been amended, modified or waived except with the prior written consent of the Company. All covenants, agreements and conditions contained in the Related Agreements which are to be performed or complied with by the Purchasers on or prior to the Initial Closing Date shall have been performed or complied with in all material aspects (or waived with the prior written consent of the Company).

        Section 5.2.2   Stockholder Approval. The Plan of Recapitalization shall have been approved and adopted by (i) holders of at least 66 2/3% of the shares of preferred stock of the Company existing as of the date of such approval and (ii) holders of at least 66 2/3% of all of the shares of common and preferred stock (voting on an as converted basis) of the Company existing as of the date of such approval, voting as a single class.

        Section 5.2.3   Legality; Governmental and Other Authorizations. The sale of the Shares shall not be prohibited by any law or governmental order or regulation. All necessary consents, approvals, licenses, permits, orders and authorizations of, or registrations, declarations and filings with, any governmental or administrative agency or of or with any other Person, with respect to any of the transactions contemplated by this Agreement or any of the Related Agreements (other than the filings with the SEC required to be made pursuant to Regulation D of the Securities Act), shall have been duly obtained or made and shall be in full force and effect.

        Section 5.2.4   Waiver of Preemptive Rights. The stockholders of the Company shall have waived any and all preemptive rights pursuant to Section 3 of the Stockholders’ Agreement with respect to the sale of the Shares.

        Section 5.2.5   Lending Banks. The Company and/or one or more of its Subsidiaries shall have entered into the Forbearance Agreement substantially in the form attached hereto as Exhibit F (Part 1) and such Forbearance Agreement shall continue to be in full force and effect. In addition, the letter agreements between the Company and certain of its lenders in substantially the form attached hereto as Exhibit F (Part 2) shall continue to be in effect.

        Section 5.2.6   Minimum Investment. The Purchasers shall purchase at least 8,000,000 Shares at the Initial Closing and shall have agreed to purchase subject to the terms and conditions contained in this Agreement, at least 36,666,666 at the Initial Closing and the Second Closing combined.

        Section 5.2.7   Plan of Recapitalization. All actions required to effectuate the Plan of Recapitalization shall have been completed, including, without limitation, the receipt of any requisite stockholder approval and the filing and effectiveness of the Certificate of Merger.

        Section 5.2.8   Amendment to Notice Provision. Immediately prior to the consummation of the Plan of Recapitalization, the Amended and Restated Certificate of Incorporation shall be amended, to decrease the number of days of advance notice required to be given to the holders of preferred stock in order to effectuate the Plan of Recapitalization from 20 days advance written notice to 3 days advance written notice. Such amendment shall have been approved and adopted by (i) holders of at least 66 2/3% of the shares of preferred stock of the Company existing as of the date of such approval and (ii) holders of at least 66 2/3% of all of the shares of common and preferred stock (voting on an as converted basis) of the Company existing as of the date of such approval, voting as a single class.

        Section 5.2.9   Amendment to By-Laws. An amendment to the Company’s by-laws substantially in the form attached hereto as Exhibit H shall have been approved by the Board of Directors and the (i) holders of at least 66 2/3% of the shares of preferred stock of the Company existing as of the date of such approval and (ii) holders of at least a majority of all of the shares of common and preferred stock (voting on an as converted basis) of the Company existing as of the date of such approval, voting as a single class.

        Section 5.2.10   General. All instruments and legal, governmental and administrative and corporate proceedings in connection with the transactions contemplated by this Agreement and the Related Agreements shall be reasonably satisfactory in form and substance to the Company, and the Company shall have received copies of any consents, licenses, approvals, permits and orders secured by any Purchaser in connection with the transactions contemplated hereby.

Section 5.3 Purchaser’s Conditions on the Second Closing Date. Each Purchaser’s obligation to purchase the Shares to be purchased on the Second Closing Date by such Purchaser pursuant to this Agreement is subject to compliance by the Company with its agreements herein contained, and to the satisfaction, on or prior to the Second Closing Date, of the following conditions unless waived in writing by such Purchaser:

Section 5.3.1 Initial Closing. The Initial Closing shall have occurred.

Section 5.3.2 Related Agreements Each of the Related Agreements (other than the Amendment to Shareholders’ Agreement) shall have been executed and delivered in the forms provided for herein, and each of the Related Agreements (other than the Amendment to Shareholders’ Agreement) shall be in full force and effect and no term or condition thereof shall have been amended, modified or waived, except as contemplated hereby. All covenants, agreements and conditions contained in the Related Agreements which are to be performed or complied with by the Company on or prior to the Second Closing Date shall have been performed or complied with in all material respects (or waived with the prior written consent of such Purchaser). In addition, unless this condition is waived by action of the Board of Directors, the Corporation shall have entered into an amendment agreement with Xxxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx relating to the $2.03 common stock purchase warrants held by them, in a form approved by the Board of Directors.

        Section 5.3.3   Lending Banks. The Company and/or one or more of its Subsidiaries shall have entered into such agreements with its senior lenders as may be necessary to effectuate the restructuring of its senior secured debt substantially on the terms provided in the agreements attached hereto as Exhibit F and such restructuring shall have been effectuated prior to or simultaneously with the Second Closing on the Second Closing Date. In addition, the Board of Directors of the Company shall have approved the Amended and Restated Credit Agreement.

        Section 5.3.4   Representations and Warranties; Officers’ Certificates. The representations and warranties of the Company contained or incorporated by reference herein shall be true and correct in all material respects on and as of the Second Closing Date with the same force and effect as though made on and as of the Second Closing Date, except for those representations and warranties which relate specifically to a particular date, provided that such representations and warranties were true and correct in all respects as of such date; no event or condition shall have occurred or would result from the issuance of any of the Series A Preferred Stock which would be a Default or an Event of Default, and the Company shall have performed and complied with, in all material respects, all conditions and agreements required to be performed or complied with by it prior to the Second Closing, and such Purchaser shall have received on the Second Closing Date a certificate to these effects signed by an authorized officer of the Company.

        Section 5.3.5   Acceptance of Revised Business Plan Such Purchaser shall have provided a notice described in Section 2.4(b) hereof to the Company in accordance with Section 2.4(b) hereof.

        Section 5.3.6   Minimum Investment. The Purchasers shall purchase an aggregate of at least 36,666,666 Shares at the Initial Closing and the Second Closing combined.

        Section 5.3.7   Legality; Governmental and Other Authorizations. The purchase of the Shares shall not be prohibited by any law or governmental order or regulation. All necessary consents, approvals, licenses, permits, orders and authorizations of, or registrations, declarations and filings with, any governmental or administrative agency or of or with any other Person, with respect to any of the transactions contemplated by this Agreement or any of the Related Agreements (other than the filings with the SEC required to be made pursuant to Regulation D of the Securities Act with respect to such Second Closing Date purchases), shall have been duly obtained or made and shall be in full force and effect.

        Section 5.3.8   General. All instruments and legal, governmental, administrative and corporate proceedings in connection with the transactions contemplated by this Agreement and the Related Agreements shall be reasonably satisfactory in form and substance to the Purchasers, and the Purchasers shall have received copies of all documents which the Purchasers may have reasonably requested in connection therewith, including any consents, licenses, approvals, permits and orders required to be secured by the Company in connection with the transactions contemplated hereby.

Section 5.4 The Company’s Conditions on the Second Closing Date. The Company’s obligation to issue and sell the Shares to be purchased on the Second Closing Date pursuant to this Agreement are subject to compliance by each Purchaser with its agreements herein contained, and to the satisfaction, on or prior to the Second Closing Date, of the following conditions:

        Section 5.4.1   Initial Closing. The Initial Closing shall have occurred.

        Section 5.4.2   Related Agreements. The Amendment to Stockholders’ Agreement and the Amendment to Registration Rights Agreement, in the forms provided for herein, shall have been executed and delivered by each of the Purchasers and by at least such additional stockholders of the Company, if any, as shall be required in order for such amendments to become effective in accordance with their terms, and each of the other Related Agreements shall be in full force and effect and no term or condition thereof shall have been amended, modified or waived except with the prior written consent of the Company. All covenants, agreements and conditions contained in the Related Agreements which are to be performed or complied with by the Purchasers on or prior to the Second Closing Date shall have been performed or complied with in all material aspects (or waived with the prior written consent of the Company).

        Section 5.4.3   Legality; Governmental and Other Authorizations. The sale of the Shares shall not be prohibited by any law or governmental order or regulation. All necessary consents, approvals, licenses, permits, orders and authorizations of, or registrations, declarations and filings with, any governmental or administrative agency or of or with any other Person, with respect to any of the transactions contemplated by this Agreement or any of the Related Agreements (other than the filings with the SEC required to be made pursuant to Regulation D of the Securities Act), shall have been duly obtained or made and shall be in full force and effect.

        Section 5.4.4   Lending Banks. The Company and/or one or more of its Subsidiaries shall have entered into such agreements with its senior lenders as may be necessary to effectuate the restructuring of its senior secured debt substantially on the terms provided in the letter agreements attached hereto as Exhibit F (Part 2). In addition, the Board of Directors of the Company shall have approved the Amended and Restated Credit Agreement.

        Section 5.4.5   Minimum Investment. The Purchasers shall purchase an aggregate of at least 36,666,666 Shares at the Initial Closing and the Second Closing combined.

        Section 5.4.6   Acceptance of Revised Business Plan The Company shall have received from each Purchaser purchasing Shares on at a Second Closing a notice described in Section 2.4(b) hereof in accordance with Section 2.4(b) hereof.

        Section 5.4.7   General. All instruments and legal, governmental and administrative and corporate proceedings in connection with the transactions contemplated by this Agreement and the Related Agreements shall be reasonably satisfactory in form and substance to the Company, and the Company shall have received copies of any consents, licenses, approvals, permits and orders secured by any Purchaser in connection with the transactions contemplated hereby.

ARTICLE VI.
COVENANTS APPLICABLE TO THE COMPANY WHILE ANY OF THE SHARES
OF SERIES A PREFERRED STOCK ARE OUTSTANDING

The Company covenants that, so long as any of the shares of Series A Preferred Stock are outstanding, the Company will comply and will cause each of its Subsidiaries to comply with the following provisions unless otherwise consented to in writing by the Majority Holders:

Section 6.1. Records and Accounts. Each of the Company and its Subsidiaries will keep true and accurate records and books of account in which full, true and correct entries will be made in accordance with generally accepted accounting principles and will maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its Properties, all contingencies, and all other reserves, all in accordance with GAAP.

Section 6.2 Corporate Existence; Subsidiaries; Maintenance of Properties. The Company and its Subsidiaries will not engage in any business other than providing telecommunications services and those businesses reasonably ancillary thereto. Unless authorized by the Board of Directors each of the Company and its Subsidiaries will (a) preserve and keep in full force and effect its corporate existence, rights and franchises, and (b) maintain all of its Properties used or useful in the conduct of its business in good condition, repair and working order (normal wear and tear excepted) and cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section 6.2 shall prevent the Company or any of its Subsidiaries from discontinuing the operation and maintenance of any of such Properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of such Person’s business and does not in the aggregate materially adversely affect the business of the Company and its Subsidiaries taken as a whole.

Section 6.3 Insurance. Each of the Company and its Subsidiaries will maintain with financially sound and reputable insurance companies, funds or underwriters insurance of the kinds, covering the risks and in the relative proportionate amounts which, in the judgment of the Board of Directors, are usually carried by reasonable and prudent companies conducting businesses similar to that of the Company and its Subsidiaries.

Section 6.4 Taxes and Claims. Each of the Company and its Subsidiaries will pay and discharge, or cause to be paid and discharged, before the same shall become overdue, all taxes, assessments and other governmental charges imposed upon the Company and its Subsidiaries and their Properties, sales and activities, or any part thereof, or upon the income or profits therefrom, as well as all claims for labor, materials, or supplies, which if unpaid might by law become a Lien upon any of their Properties; provided, however, that any such tax, assessment, charge, levy or claim need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings and if the Company or any of its Subsidiaries shall have set aside on its books adequate reserves with respect thereto; and provided, further, that the Company and its Subsidiaries will pay or cause to be paid all such taxes, assessments, charges, levies or claims forthwith upon the commencement of foreclosure on any Lien which may have attached as security therefor.

Section 6.5 Inspection of Properties and Books. Upon the request of any holder of Series A Preferred Stock, the Company will furnish such information regarding the business, affairs, prospects and financial condition of the Company and its Subsidiaries as such holder may reasonably request. Each of the Company and its Subsidiaries shall permit any holder of Series A Preferred Stock, or any of its designated representatives, at their respective cost, to visit and inspect any of the properties of the Company and its Subsidiaries, to examine the books of account of the Company and its Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of each of the Company and its Subsidiaries with, and to be advised as to the same by, officers of such Persons, all at such reasonable times and intervals as such holder may reasonably request. At least three days prior to any interview of an officer of such holder, the chief executive officer of the Company shall be notified of such interview and shall be invited to attend such interview. Prior to making any such inspection or conducting any such interviews, such holder of Series A Preferred Stock and its representatives who are making the inspection or conducting the interviews shall execute confidentiality and non-disclosure agreements reasonably acceptable to the Company and its counsel and such holder and its counsel. Each Purchaser listed on Schedule 6.5 shall be entitled to have one representative attend meetings of the Board of Directors as a non-voting observer. In connection therewith, the Company shall provide each such representative with a copy of all notices, minutes, consents and other materials, financial or otherwise, which the Company provides to members of its Board of Directors concurrently with the delivery of such information to the members of its Board of Directors. Participation by such observers in any meeting of the Board of Directors shall be at the reasonable discretion of the Chairman of the Board. Any such observer may be excluded from all or any portion of any meeting in which the Board of Directors is (i) considering matters with respect to which such observer or any Affiliate of such observer has a conflict of interest, (ii) when deemed reasonably advisable by the Chairman of the Board and/or counsel for the Company to preserve an attorney-client privilege or the confidentiality of any other significant matter and (iii) when the Board of Directors by majority vote otherwise resolves to conduct its proceedings in executive session. The Company shall reimburse out-of-pocket expenses only for one representative of the Purchasers listed on Schedule 6.5 that has not designated or nominated, and does not have a contractual right to designate or nominate, a member of the Board of Directors. Each such holder of Series A Preferred Stock that is required to be a “venture capital operating company” as defined in the regulations promulgated under ERISA shall be entitled to consult with and advise management of the Company on significant business issues, including proposed annual operating plans, and to meet with management on a regular basis to review the Company’s progress in meeting such operating plans.

Section 6.6 Compliance with Laws, Contracts, Licenses and Permits. The Company and each of its Subsidiaries will comply with (a) all applicable laws and regulations, (b) the provisions of its Charter and by-laws, (c) all agreements and instruments by which it or any of its Properties may be bound (including, without limitation, the Related Agreements) (d) all applicable decrees, orders, and judgments and (e) all required approvals, permits and licenses. If at any time while any Series A Preferred Stock is outstanding, any authorization, consent, approval, permit or license from any officer, agency or instrumentality of any government shall become necessary or required in order that any of the Company or its Subsidiaries may lawfully fulfill any of its obligations hereunder, each of the Company and its Subsidiaries will immediately take or cause to be taken all reasonable steps within its power to obtain such authorization, consent, approval, permit or license and furnish the holders of the Series A Preferred Stock with evidence thereof.

Section 6.7 Employee Benefit Plans. Neither of the Company nor any ERISA Affiliate will:

        (a)     engage in any “prohibited transaction” within the meaning of §406 of XXXXX xx §0000 of the Code;

        (b)     permit any Guaranteed Pension Plan to incur an “accumulated funding deficiency”, as such term is defined in §302 of ERISA, whether or not such deficiency is or may be waived;

        (c)     fail to contribute to any Guaranteed Pension Plan to an extent which, or terminate any Guaranteed Pension Plan in a manner which, could result in the imposition of a lien or encumbrance on the assets of the Company or any of its Subsidiaries pursuant to §302(f) or §4068 of ERISA; or

        (d)     permit or take any action which would result in the aggregate benefit liabilities (with the meaning of §4001 of ERISA) of all Guaranteed Pension Plans exceeding the value of the aggregate assets of such plans, disregarding for this purpose the benefit liabilities and assets of any such plan with assets in excess of benefit liabilities.

The Company will (i) promptly upon filing the same with the Department of Labor or the IRS, furnish to each holder of Series A Preferred Stock a copy of the most recent actuarial statement required to be submitted under §103(d) of ERISA and Annual Report, Form 5500, with all required attachments, in respect of each Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch, furnish to each holder of Series A Preferred Stock a copy of any notice, report or demand sent or received in respect of a Guaranteed Pension Plan under §§302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under §§4041A, 4202, 4219, 4242 or 4245 of ERISA.

Section 6.8 Further Assurances. The parties will cooperate with each other and execute such further instruments and documents as any party shall reasonably request to carry out the transactions contemplated by this Agreement.

Section 6.9 Notices. The Company will promptly notify each holder of Series A Preferred Stock in writing of the occurrence of any Default or Event of Default or if any Person shall give any notice or take any other action in respect of a claimed default (whether or not constituting a Default or an Event of Default) under any of the Related Agreements or any other Default with respect to a material agreement to which the Company or any of its Subsidiaries is a party. The Company also covenants and agrees to promptly provide each holder of Series A Preferred Stock with written notice: (a) upon the Company or any of its Subsidiaries’ obtaining knowledge of any violation of any Environmental Law regarding the Property or the operations of the Company or any of its Subsidiaries; (b) upon the Company or any of its Subsidiaries’ obtaining knowledge of any potential or known release, or threat of release, of any Hazardous Materials at, from, or into the Property which it reports in writing or is reportable by it in writing to any governmental authority; (c) upon the Company or any of its Subsidiaries’ receipt of any notice of violation of any Environmental Laws or of any release or threatened release of Hazardous Materials at, from or into the Property, including a notice or claim of liability or potential responsibility from any third party (including without limitation any federal, state or local governmental officials) and including notice of any formal inquiry, proceeding, demand, investigation or other action with regard to (i) the Company, any of its Subsidiaries or any other Person’s operation of the Property or (ii) contamination on, from or into the Property; (d) upon the Company or any of its Subsidiaries’ receipt of notice of any investigation or remediation of offsite locations at which the Company, any of its Subsidiaries or any of their predecessors are alleged to have directly or indirectly disposed of Hazardous Materials; or (e) upon the Company or any of its Subsidiaries’ obtaining knowledge that any expense or loss has been incurred by such governmental authority in connection with the assessment, containment, removal or remediation of any Hazardous Materials with respect to which the Company or any of its Subsidiaries may be liable or for which a Lien may be imposed on the property.

Section 6.10 Restrictions on Indebtedness. Neither the Company nor any of its Subsidiaries will create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than the following (“Permitted Indebtedness”):

        (i)     Indebtedness as set forth in Schedule 6.10 hereto or that is contemplated by the letter agreements attached hereto as Exhibit F (Part 2);

        (ii)     obligations, contingent and otherwise, which in accordance with GAAP are classified on the obligor’s balance sheet as liabilities or referred to in the footnotes thereto, which are incurred in the ordinary course of business and not incurred through (A) the borrowing of money, or (B) the obtaining of credit except for credit on an open account basis customarily extended in connection with normal purchases of goods and services; and

        (iii)     any other Indebtedness of the Company and its Subsidiaries which shall be approved by a Supermajority Board Vote.

Section 6.11 Restrictions on Liens. Neither the Company nor any of its Subsidiaries will create or incur or suffer to be created or incurred or to exist any Lien of any kind upon any of its Properties or assets of any character whether now owned or hereafter acquired, or upon the income or profits therefrom; or transfer any of such Property or assets or the income or profits therefrom for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to payment of its general creditors; or acquire, or agree or have an option to acquire, any property or assets upon conditional sale or other title retention or purchase money security agreement, device or arrangement; or suffer to exist for a period of more than thirty days after the

same shall have been incurred any Indebtedness or claim or demand against it which if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever over its general creditors (other than those claims which the Company is contesting in good faith by appropriate proceedings and as to which the Company shall have set aside on its books adequate reserves with respect thereto); or sell, assign, pledge or otherwise transfer any accounts, contract rights, general intangibles or chattel paper, with or without recourse; provided, however, that the Company and its Subsidiaries may create or incur or suffer to be created or incurred or to exist any of the following (“Permitted Liens”):

        (a)     Liens to secure taxes, assessments and other government charges or claims for labor, material or supplies in respect of obligations not overdue or due but being contested to the extent permitted by Section 6.4;

        (b)     Deposits or pledges made in connection with, or to secure payment of, workmen’s compensation, unemployment insurance, old age pensions or other social security obligations;

        (c)     Liens in respect of final judgments or awards against the Company or any of its Subsidiaries in an aggregate amount of not greater than $100,000 (in excess of available insurance recoveries);

        (d)     Liens of carriers, warehousemen, mechanics and materialmen, and other like Liens;

        (e)     Encumbrances consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and irregularities in the title thereto, landlord’s or lessor’s Liens under leases to which the Company or any of its Subsidiaries is a party, and other minor Liens or encumbrances none of which interferes materially with the use of the property affected in the ordinary conduct of the business of the Company and its Subsidiaries and which defects do not individually or in the aggregate have a material adverse effect on the business, assets, financial condition or prospects of the Company or any of its Subsidiaries;

        (f)     Any Liens on the assets and Property of the Company or any of its Subsidiaries from time to time securing Permitted Indebtedness;

        (g)     Any Liens existing on the date of this Agreement and referred to on Schedule 6.11 attached hereto; and

        (h)     Any other Liens which shall be approved by the Board of Directors by a Supermajority Board Vote.

Section 6.12 Distributions. Unless approved by a Supermajority Board Vote, the Company shall not make any Distribution.

Section 6.13 Merger, Consolidation, Sale of Assets or Other Dispositions. Without the approval of the Board of Directors by a Supermajority Board Vote, neither the Company nor any of its Subsidiaries will become a party to any merger or consolidation in which the Company and/or its Stockholders do not hold a majority of the voting equity in, and do not control, the surviving entity of such merger or consolidation, or sell, lease, sublease or otherwise transfer or dispose of (including, but not limited to, any sale and leaseback transactions) any substantial portion of its Property to any Person whether directly or indirectly or in a single transaction or a series of related transactions, other than sales of inventory and used equipment in the ordinary course of business consistent with past practices; provided, that, the Company or any wholly-owned Subsidiary may engage in any of the above transactions with the Company or any other wholly-owned Subsidiary without such approval, so long as in the case of any merger or consolidation to which it is a party the Company is the surviving entity.

Section 6.14 Merger, Consolidation or Other Acquisitions. Neither the Company nor any Subsidiary shall directly or indirectly, by operation of law or otherwise, become a party to a merger or consolidation in which the Company and/or its Stockholders continue to hold in the aggregate a majority of the voting equity in, or continue to control, the surviving entity of such merger or consolidation, acquire all or substantially all of the assets (other than purchases of inventory made in the ordinary course of the Company’s business) or capital stock of, or otherwise combine with, any Person, unless such acquisition is approved by the Board of Directors by a Supermajority Board Vote, provided that the Company or any wholly-owned Subsidiary may engage in any of the above transactions with the Company or any other wholly-owned Subsidiary without such approval, so long as in the case of any merger or consolidation to which it is a party the Company is the surviving entity.

Section 6.15 Transactions with Affiliates. Unless approved by the Board of Directors by a Supermajority Board Vote, neither the Company nor any of its Subsidiaries will engage in any transaction with any

Affiliate except for transactions contemplated by the Related Agreements and except for transactions by the Company with any Subsidiary or by any Subsidiary with any other Subsidiary.

Section 6.16 Investments. Unless approved by the Board of Directors by a Supermajority Board Vote, the Company will not, and will not permit any of its Subsidiaries to, have outstanding or acquire or commit itself to acquire or hold any Investment except Investments in: (a) marketable direct obligations issued or guaranteed by the United States of America which mature within one year from the date of acquisition thereof or which are subject to a repurchase agreement, exercisable within 90 days from the date of acquisition of such agreement, with any commercial bank or trust company incorporated under the laws of the United States of America or any State thereof or the District of Columbia, (b) commercial paper maturing within one year from the date of acquisition thereof and having, at the date of acquisition thereof, the highest rating obtainable from Xxxxx’x Investors Service, Inc. or Standard & Poor’s Corporation, (c) bankers’ acceptances eligible for rediscount under Federal Reserve Board requirements accepted by any commercial bank or trust company referred to in clause (a) hereof and (d) certificates of deposit maturing within one year from the date of acquisition thereof issued by any commercial bank or trust company referred to in clause (a) hereof and having capital and surplus of at least $100,000,000.

Section 6.17 Joint Ventures. Neither the Company nor any Subsidiary will cause or consent to any joint venture engaging in any activity which would result in a breach of any representation, warranty, covenant or agreement set forth in this Agreement or which would result in the joint venture being in breach of any representation, warranty, covenant or agreement set forth in this Agreement if the joint venture were a Subsidiary.

Section 6.18 Payments on Permitted Indebtedness. Neither the Company nor any of its Subsidiaries shall make (i) any payments of the Indebtedness represented by the Permitted Indebtedness except as specifically required by the terms of the Permitted Indebtedness or (ii) any prepayments (other than mandatory prepayments) of such Permitted Indebtedness. In addition, the Company shall not amend, alter or agree to any such amendment or alteration to the terms and conditions of any of the documents representing the Permitted Indebtedness if such amendment changes the principal amount outstanding, the interest rate or the date of maturity of the Permitted Indebtedness.

Section 6.19 Response Actions. The Company covenants and agrees that if any release or disposal of Hazardous Materials shall occur or shall have occurred on its Property, the Company will cause the prompt containment and removal of such Hazardous Materials and remediation of the Property as necessary to comply in all material respects with all Environmental Laws or to preserve in all material respects the value of the Property.

Section 6.20 Dilution Protection. Except for purchases and sales of Shares contemplated by this Agreement and except for shares of Common Stock to be issued upon conversion of the Series A Preferred Stock, any options or warrants listed on Schedule 3.5(b) hereof or any other options, warrants or rights issued under the Equity Incentive Plan (including the stock purchase and exchange programs established thereunder), and any capital stock of the Company issued pursuant to Acquisitions approved by the Board of Directors as provided in Section 6.14 hereof, without a Supermajority Board Vote, neither the Company nor any of its Subsidiaries will (a) issue, sell, give away, transfer, pledge, mortgage, assign or otherwise dispose of, grant any rights (either preemptive or other) or options to subscribe for or purchase, enter into any agreements, or issue any warrants, providing for the issuance of, in any such case, any capital stock of the Company or any stock or securities convertible into or exchangeable for any capital stock of the Company or (b) designate any series of Preferred Stock of a class which has been authorized in the Company’s Amended Certificate of Incorporation; provided that the foregoing approval shall not be required for the issuance or transfer to the Company or any of its wholly-owned Subsidiaries of securities of any wholly-owned Subsidiary of the Company. Without the affirmative vote of 66-2/3% of the outstanding Common Stock and Preferred Stock (on an as converted basis), voting as a class, the Company will not authorize any additional class of capital stock or increase the number of shares of authorized capital stock from that set forth in Section 3.5 hereof or Schedule 3.5(a) hereto. The Company shall maintain such number of authorized and unissued shares of (x) Common Stock to be issued upon conversion of the Series A Preferred Stock, (y) Common Stock to be issued upon exercise of the warrants or options listed on Schedule 3.5(b), and (z) Common Stock to be issued upon exercise of any options, warrants or rights issued under the Equity Incentive Plan.

Section 6.21 Annual Statements. As soon as available and in any event within 90 days after the close of each fiscal year of the Company commencing with the fiscal year ending December 31, 2002, the Company will deliver to each holder of Series A Preferred Stock holding more than 1% of the aggregate of the outstanding Common Stock and Preferred Stock (on an as converted basis): (a) an audited consolidated balance sheet and statement of income and retained earnings and of cash flows of the Company and its Subsidiaries audited to the

extent so required by any “big five” independent public accounting firm, as selected by the Company, and (b) consolidated internal unaudited balance sheets and statements of income and retained earnings and of cash flows of each Subsidiary of the Company, in each case showing the financial condition of the Company and/or each Subsidiary of the Company as of the close of such fiscal year and the results of the Company’s and/or such Subsidiary’s operations during such fiscal year, all on a consolidated basis, and setting forth in comparative form the comparable statements for the previous fiscal year, if any. Each of the audited financial statements delivered hereunder shall be certified by such accounting firm to have been prepared in accordance with generally accepted accounting principles consistently applied, accompanied by the written statement of such firm to the effect that such firm does not know of the existence of any Default or Event of Default, or if such firm shall have obtained knowledge of any such Default or Event of Default or other event, setting forth the nature thereof.

Section 6.22 Monthly Statements. Within 30 days after the end of each month commencing with the month ending July 31, 2002, the Company will deliver to each holder of Series A Preferred Stock holding more than 1% of the aggregate of the outstanding Common Stock and Preferred Stock (on an as converted basis): (a) a consolidated internal, unaudited balance sheet and statement of income and retained earnings and of cash flows of the Company as of the end of each such month, and (b) consolidated internal unaudited balance sheets and statements of income and retained earnings and of cash flows of each Subsidiary of the Company, in each case including a comparison of such financial statements to the annual operating budget and projected monthly balance sheets and statements of income delivered pursuant to Section 6.23 hereof and certified by the chief financial officer of the Company to be true and correct and to have been prepared in accordance with GAAP consistently applied (other than such footnotes which may be required by GAAP), subject to normal year-end adjustments described in reasonable detail. Furthermore, in connection with the delivery of the second set of monthly financial statements described above following the Second Closing Date (but in any event, no later than September 30, 2002), the Company will deliver to each holder of Series A Preferred Stock holding more than 1% of the outstanding Common Stock and Preferred Stock (on an as converted basis) a revised Schedule 3.5(a) indicating the number of shares of Common Stock and Preferred Stock of the Company that are issued and outstanding as of the Second Closing Date (assuming that none of the warrants that may be listed or described in Schedule 3.5(b) hereof or other options granted or to be granted pursuant to the Equity Incentive Plan have been exercised on the such date unless any such options or warrants have actually been so exercised).

Section 6.23 Other Financial Information. The Company will deliver to each holder of Series A Preferred Stock holding more than 1% of the aggregate of the outstanding Common Stock and Preferred Stock (on an as converted basis) within 30 days prior to the commencement of each fiscal year, (i) an annual operating budget and projected monthly balance sheets and statements of income, (ii) as soon as practical after preparation thereof, complete and correct copies of all quarterly or annual budgetary analyses or forecasts of the Company and its Subsidiaries (if any) prepared by management for the use of the Board of Directors and (iii) updated five-year projections of the Company and its Subsidiaries (if any) prepared by management for the use of the Board of Directors. Promptly after the receipt thereof, the Company will provide to such holders of Series A Preferred Stock copies of any reports as to adequacies in accounting controls submitted by independent accountants with respect to the Company and its Subsidiaries.

Section 6.24 Officer’s Certificates. Together with delivery of consolidated financial statements of the Company pursuant to Section 6.22 above, the Company shall deliver to each holder of Series A Preferred Stock a certificate of the president, chief financial officer or treasurer of the Company, to the effect that such financial statements are true and correct and were prepared in accordance with GAAP and that such officer has caused the provisions of this Agreement and the Series A Preferred Stock to be reviewed and has no knowledge of any Default or Event of Default, or if such officer has such knowledge, specifying such Default or Event of Default and the nature thereof, and what action the Company has taken, is taking or proposes to take with respect thereto.

Section 6.25 Notice of Litigation, Defaults, Etc. The Company will promptly give notice to each holder of Series A Preferred Stock of any litigation or any administrative proceeding to which the Company or any of its Subsidiaries may hereafter become a party which, after giving effect to applicable insurance, may result in any adverse change in the business, assets, prospects or financial condition of the Company and its Subsidiaries taken as a whole. Forthwith upon any officer of the Company obtaining knowledge of any Default or Event of Default hereunder or any default or event of default under any Related Agreement or any agreement relating to any Indebtedness of the Company or any of its Subsidiaries for borrowed money, the Company will furnish a notice specifying the nature and period of existence thereof and what action the Company or any of its Subsidiaries has taken, is taking or proposes to take with respect thereto.

Section 6.26 Charter and By-law Amendments. Except as otherwise specified in this Agreement or as may be contemplated by the Equity Incentive Plan, without the consent of the Majority Holders, the Charter and bylaws of each of the Company and its Subsidiaries (as the same exist on the date hereof) shall not be amended or modified, whether by merger, dissolution or otherwise, if such amendment or modification has, or would, directly or indirectly, adversely affect the rights of holders of the Series A Preferred Stock or the rights or remedies of such holders thereunder or under any of the Related Agreements.

Section 6.27 Proprietary Information and Inventions Agreement. The Company and its Subsidiaries shall each have and enforce a policy requiring each employee with access to proprietary information of the Company or any Subsidiary to enter into a proprietary information and confidentiality and assignment agreement substantially in the form approved by the Board of Directors.

Section 6.28 SBIC Covenants.

        (a)     The Company acknowledges that each Purchaser that is an SBIC Investor is subject to regulation by the SBA as a small business investment company.

        (b)     As a result of the SBIC Investor’s status as Federal licensee, the Company covenants and agrees that, for a period of one year after the Initial Closing Date, the Company shall not make a material change in its primary business activity by becoming involved in real estate financing, project financing, farm land purchasing, relender or reinvestor financing, foreign investment and other businesses as described in 13 C.F.R. Section 107.720, which would make it ineligible for financing as a portfolio company by a small business investment company under 13 C.F.R. Section 107.760(b), a regulation promulgated by the SBA.

        (c)     The Company covenants and agrees that proceeds from the SBIC Investor for its purchase of Series A Preferred Stock will be used for working capital purposes or to otherwise finance the growth, modernization or expansion of the Company. The Company shall provide the SBIC Investor and the SBA reasonable access to the Company’s books and records for the purpose of confirming the use of such proceeds.

The Company shall provide the SBIC Investor with sufficient information to permit such SBIC Investor to comply with its obligations under the Small Business Act, provided, however that the SBIC Investor agrees that it will protect any information which the Company labels as confidential to the extent permitted by law. For a period of two (2) years following the Initial Closing Date, any submission of financial information under Sections 6.21 and 6.22 to the SBIC Investor shall be accompanied by a certificate of the president, chief executive officer, treasurer or chief financial officer, which certificate shall state that the Company is not in material default under any of its covenants set forth in this Section 6.28.

ARTICLE VII. DEFAULTS

Section 7.1. Events of Default. The Majority Holders will be entitled to exercise the remedies provided in Section 7.2 hereof in accordance with the terms thereof if any one or more of the following events (“Events of Default”) shall occur:

        (a)     the Company or any of its Subsidiaries shall fail in any material respect to perform or observe any of the covenants, agreements or provisions to be performed or observed by it under this Agreement or any of the Related Agreements (except to the extent such failure is attributable to actions of any holder of Preferred Stock) (other than covenants, agreements or provisions for which a default in the performance or observance thereof is specifically dealt with elsewhere in this Agreement or any Related Agreement) and the continuance of such failure for a period of thirty days after written notice thereof has been given to the Company by the Majority Holders; or

        (b)     any material representation or warranty made by the Company or any of its Subsidiaries to any Purchaser in or in connection with this Agreement or any Related Agreement or any amendment thereto shall prove to have been materially false on the date as of which it was made; or

        (c)     at any time after the earlier of (I) August 16, 2002 or (II) the date the Forbearance Agreement in the form of Exhibit F (Part 1) has been terminated in accordance with its terms, the Company defaults under any Indebtedness of the Company or any of its Subsidiaries in an amount outstanding which exceeds $1,000,000 in the aggregate, and such default shall continue, without having been duly cured, waived or consented to, beyond the period of grace, if any, therein specified and so as to permit the acceleration thereof, if any acceleration is provided for therein; or

(d) a final judgment which in the aggregate with other outstanding final judgments against the Company or any of its Subsidiaries exceeds $100,000 (in excess of available insurance recoveries) shall be rendered against such Person and, within 60 days after entry thereof, such judgment shall not have been satisfied and discharged or stayed pending appeal or bonded, or within 60 days after expiration of such stay such judgment shall not have been discharged; or

(e) the Company or any of its Subsidiaries shall:

        (i)     commence a voluntary case under Title 11 of the United States Bankruptcy Code as from time to time in effect, or authorize, by appropriate proceedings of its board of directors or other governing body, the commencement of such a voluntary case;

        (ii)     have filed against it a petition commencing an involuntary case under said Title 11 and such petition shall not have been dismissed or stayed within 60 days;

        (iii)     seek relief as a debtor under any applicable law, other than said Title 11, of any jurisdiction relating to the liquidation or reorganization of debtors or to the modification or alteration of the rights of creditors, or consent to or acquiesce in such relief;

        (iv)     have entered against it an order by a court of competent jurisdiction (x) finding it to be bankrupt or insolvent, (y) ordering or approving its liquidation, reorganization or any modification or alteration of the rights of its creditors, or (z) assuming custody of, or appointing a receiver or other custodian for, all or a substantial part of its property; which order shall not be vacated, denied, set aside, or stayed within 60 days from the date of entry; or

        (v)     make an assignment of all or a substantial part of its Property for the benefit of, or enter into a composition with, its creditors, or appoint or consent to the appointment of a receiver or other custodian for all or a substantial part of its Property; or

(f) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall have occurred as a result of which a trustee shall have been appointed by an appropriate United States District Court to administer such Guaranteed Pension Plan or the PBGC shall have instituted proceedings to terminate such Guaranteed Pension Plan, and the Majority Holders shall have determined in their reasonable discretion that such event reasonably could be expected to result in liability of the Company or any of its Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding $100,000.

Section 7.2 Remedies. Upon the occurrence of any of the Events of Default under Section 7.1 hereof, in each and every such case, the Majority Holders may proceed to protect and enforce the rights of all such holders by suit in equity, action at law and/or other appropriate proceeding either for specific performance of any covenant, provision or condition contained or incorporated by reference in this Agreement or in aid of the exercise of any power granted in this Agreement, and in addition, at the option of the Majority Holders, the Majority Holders shall have the right to hire an investment banker to and cause the Company to (i) commence an underwritten public offering of all of the Conversion Stock, (ii) assist in obtaining a private buyer for all of the Conversion Stock, (iii) assist in obtaining a buyer for all the outstanding stock of the Company or all or substantially all of the assets of the Company or (iv) assist in effecting any other similar transaction or series of transactions resulting in the disposition of all the stock or all or substantially all of the assets and business of the Company, in each case at a price solely acceptable to the Majority Holders. The Majority Holders shall have the right to (A) to determine the type of transaction to be effected, (B) to give direction to the investment banker, (C) to negotiate and control the sale process and all documentation and (D) to approve the terms and price of any such transaction. In furtherance of the foregoing (and except for an Event of Default under Section 7.1(f) hereof which shall be automatic), the remedies set forth in this Section 7.2 may only be exercised by the action of the Majority Holders, and not by the action of any single holder of Series A Preferred Stock.

Section 7.3 Waivers. Each of the Company and its Subsidiaries hereby waives, to the extent not prohibited by applicable law, (a) all presentments, demands for performance and notices of nonperformance (except to the extent specifically required by the provisions hereof or any Related Agreement), and (b) any requirement of

diligence or promptness on the part of any holder of Series A Preferred Stock in the enforcement of its rights under the provisions of this Agreement or any Related Agreement.

ARTICLE VIII. SUBSEQUENT HOLDERS OF SERIES A PREFERRED STOCK

The provisions of this Agreement, the Stockholders’ Agreement and the Registration Rights Agreement that are for the benefit of the Purchasers as the holders of any Series A Preferred Stock are, except as otherwise specifically provided in such agreement, also for the benefit of, and enforceable by and binding upon, all subsequent holders of the Series A Preferred Stock, and the provisions of this Agreement, the Stockholders’ Agreement and the Registration Rights Agreement that subject the Purchasers to obligations as the holders of any Series A Preferred Stock also subject all subsequent holders of Series A Preferred Stock thereto.

ARTICLE IX. REGISTRATION AND TRANSFER

Section 9.1. Register; Transfer and Exchange of Series A Preferred Stock. The Company shall keep at its principal office a register in which shall be entered the names and addresses of the holders of the Series A Preferred Stock and the particulars (including without limitation the class thereof, the prices at which each share may be converted into Conversion Stock and the liquidation preference of each share) of the Series A Preferred Stock held by them and of all transfers of Series A Preferred Stock. Upon surrender at such office of any certificate representing shares of Series A Preferred Stock for registration of exchange or transfer, in accordance with the terms hereof or of the Stockholders’ Agreement, the Company shall issue, at its expense, one or more new certificates, in such denomination or denominations as may be requested, for such shares of Series A Preferred Stock and registered as such holder may request. Any certificate representing shares of Series A Preferred Stock surrendered for registration of transfer shall be duly endorsed, or accompanied by a written instrument of transfer duly executed by the holder of such certificate or his attorney duly authorized in writing. The Company shall not be responsible for payment of any transfer taxes due upon any such exchange or transfer.

Section 9.2 Replacement of Series A Preferred Stock. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any certificate representing Series A Preferred Stock and, in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of such mutilation, upon the surrender of such certificate for cancellation to the Company at its principal office, the Company will execute and deliver, in lieu thereof, a new certificate of like tenor. Any certificate representing Series A Preferred Stock in lieu of which any such new certificate has been so executed and delivered by the Company shall not be deemed to be outstanding for any purpose of this Agreement.

ARTICLE X. EXPENSES; INDEMNITY

Section 10.1. Expenses. Whether or not the transactions contemplated by this Agreement shall be consummated, the Company shall pay on demand (accompanied by reasonable supporting details and documentation) all reasonable out-of-pocket fees, costs and expenses incurred by the Purchasers in connection with such transactions hereunder, under any Related Agreements and in connection with any amendments or waivers (whether or not the same become effective) hereof or thereof and, following the occurrence of an Event of Default, all reasonable out-of-pocket expenses incurred by the holders of Series A Preferred Stock in connection with the enforcement of any rights hereunder or with respect to any Series A Preferred Stock. Such fees, costs and expenses shall include without limitation (i) the cost and expenses of preparing and duplicating this Agreement and each Related Agreement; (ii) the cost of delivering to each Purchaser’s principal office, insured to such Purchaser’s satisfaction, the certificates representing the Series A Preferred Stock issued hereunder and the certificates representing any Common Stock delivered to such Purchaser upon any conversion of any shares of Series A Preferred Stock; (iii) the reasonable fees and out-of-pocket expenses and disbursements of one counsel to certain of the Purchasers, which shall be Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx (provided that the Company shall not be obligated to pay or reimburse such fees in an amount exceeding $400,000, and such counsel shall promptly notify the Company if such counsel determines that the amount of such fees will exceed $200,000) in connection with the preparation, administration, interpretation or enforcement of this Agreement and the Related Agreements and other instruments mentioned herein, the Initial Closing and the Second Closing, any amendments, modifications, approvals, consents or waivers hereto, thereto or hereunder requested by the Company; (iv) all taxes (other than taxes determined with respect to income and taxes relating to any transfer of the Series A Preferred Stock other than to the Company), including any recording fees and filing fees and documentary stamp and similar taxes at any time payable in respect of this Agreement, or the issuance of any of the Series A Preferred Stock or the Conversion

Stock; (v) all reasonable out-of-pocket expenses associated with any rights of board attendance, and travel and lodging expenses related thereto, incurred by the board designee of the holders of the Series A Preferred Stock; (vi) reasonable travel expenses incurred by the Purchasers in connection with performing their due diligence in connection with the transactions contemplated hereby; and (vii) filing fees for any filings required to be made by any Purchaser pursuant to the Xxxx-Xxxxx-Xxxxxx Act as a result of the transactions contemplated by this Agreement.

Section 10.2 Indemnification. To the fullest extent permitted by applicable law, the Company shall indemnify, exonerate and hold each Purchaser and its (if applicable) general and limited partners and their respective stockholders, officers, directors, employees and agents free and harmless from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses, including, without limitation, reasonable attorneys’ fees and disbursements, incurred by any of the indemnitees as a result of or relating to (i) any transaction to which the Company is a party which is financed or to be financed in whole or in part directly or indirectly with proceeds from the sale of any of the Shares, (ii) without duplication of the reimbursed expenses paid under Section 10.1, the execution, delivery, performance or enforcement of this Agreement (including, without limitation, the breach by the Company of any of its representations or warranties contained in Article III of this Agreement and any failure by the Company or any of its Subsidiaries to comply with any of its covenants hereunder), the Related Agreements or any instrument contemplated hereby or thereby, (iii) any violation of, or liability under, any Environmental Laws with respect to conditions at the Property or the operations conducted thereon, or (iv) the investigation or remediation of offsite locations at which the Company, any of its Subsidiaries or their predecessors are alleged to have directly or indirectly disposed of Hazardous Materials.

Section 10.3 Brokers’ Fees. The Company shall pay the $750,000 financial advisory fee and expenses of Q Consulting LLC incurred in connection with the Plan of Recapitalization, the debt restructuring contemplated by the letter agreements attached hereto as Exhibit F (Part 2) and the transactions contemplated hereby and shall indemnify the Purchasers with respect thereto. The parties shall indemnify each other against and agree that each will hold the others harmless from any claim, demand or liability for any other broker’s, finder’s or placement fees or lender’s incentive fees alleged to have been incurred by it in connection with the transactions contemplated by this Agreement or the Related Agreements.

Section 10.4 Survival of Obligations. The obligations of the parties under this Article X shall survive payment or transfer of the Shares and the termination of this Agreement.

ARTICLE XI. NOTICES

Any notice or other communication in connection with this Agreement, any Related Agreement or the Series A Preferred Stock shall be deemed to be received if in writing (or in the form of a telecopy) addressed as provided below (a) when actually delivered, in person, (b) when telecopied to said address, confirmed by registered or certified mail, (c) when received if delivered by overnight courier, or (d) in the case of delivery by mail, three business days shall have elapsed after the same shall have been deposited in the United States mails, postage prepaid and registered or certified:

(i) If to the Company, at its principal executive offices, to the attention of the Chief Executive Officer, or at such other address as the Company shall have specified by notice actually received by the addressor,

with copies to:

Xxxxx Xxxx LLP
One Metropolitan Square
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx, Esq.

(ii) If to any Purchaser, then to its address set forth in the books and records of the Company on the date hereof, or at such other address as such Purchaser shall have specified by notice actually received by the addressor; or

(iii) If to any other holder of record of Series A Preferred Stock to it at its address set forth in the applicable register referred to in Article IX hereof.

ARTICLE XII. SURVIVAL AND TERMINATION OF COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES

All covenants, agreements, representations and warranties made herein or in any Related Agreement shall be deemed to have been relied on by the recipient, notwithstanding any investigation made by the recipient or on the recipient’s behalf, and shall survive the execution and delivery of this Agreement and the issuance of the Series A Preferred Stock. Except for the representations and warranties contained herein and as otherwise expressly provided herein or in any such Related Agreement, such covenants, agreements, representations and warranties, shall terminate and be of no further force or effect upon the automatic conversion of the Series A Preferred Stock pursuant to the Amended Certificate of Incorporation of the Company.

ARTICLE XIII. AMENDMENTS AND WAIVERS

Except as otherwise expressly provided herein, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Majority Holders, respectively. Any amendment or waiver effected in accordance with this Article XIII shall be binding upon the Company and each holder of any Series A Preferred Stock. No course of dealing between the Company or any of its Subsidiaries on the one hand, and the holder of any Series A Preferred Stock, on the other hand, shall operate as a waiver of any rights under this Agreement. No delay or omission in exercising any right under this Agreement shall operate as a waiver of such right or any other right. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any other occasion.

ARTICLE XIV. RIGHT TO PUBLICIZE

Each of the parties hereby acknowledges that each party, at its own expense, will have the right to publicly disclose the investments in the Company contemplated hereby, provided, however, that no party may use in a public disclosure the name of any other party without the prior approval by such other party.

ARTICLE XV. WAIVER OF JURY TRIAL

EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING EXISTING UNDER OR RELATING TO THIS AGREEMENT, THE SERIES A PREFERRED STOCK OR ANY OF THE RELATED AGREEMENTS.

ARTICLE XVI. INCORPORATORS, SHAREHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES AND PARTNERS FREE FROM PERSONAL LIABILITY

No recourse under or upon any obligation, covenant or agreement of this Agreement or of any Related Agreement will be had against any incorporator, shareholder (except for obligations specific to any shareholder under this Agreement or any Related Agreement), officer, director, employee, or partner as such, past, present, or future, of the Company or any holder of Series A Preferred Stock or any predecessor or successor entity, either directly or through the Company or any holder of any Series A Preferred Stock, whether by virtue of any constitution, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly understood that this Agreement and the other Related Agreements are solely corporate obligations, and no such personal liability whatsoever will attach to, or is or will be incurred by, the incorporators, shareholders (except for obligations specific to any shareholder under this Agreement or any Related Agreement), officers, directors or employees, as such, of the Company or any holder of Series A Preferred Stock or of any predecessor or successor entity, or any of them, under or by reason of the obligations, covenants, or agreements contained in this Agreement and the Related Agreements; provided that nothing in this Article XVI shall eliminate or limit the liability of any incorporator, shareholder, officer, director, employee or partner (i) for breach of fiduciary duty, if any, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction for which the individual derived an improper personal benefit.

ARTICLE XVII. SCHEDULES

Any matter or item disclosed in any part of a particular Schedule hereto shall be deemed to be disclosed in all parts of the Schedules hereto where such matter is required to be disclosed. Any capitalized term used in the Schedules but not defined therein shall have the meaning ascribed to such term in this Agreement.

ARTICLE XVIII. ENTIRE AGREEMENT; COUNTERPARTS; SECTION HEADINGS

This Agreement and the Related Agreements set forth the entire understanding of the parties hereto with respect to the subject matter hereof and thereof and supersede any prior written or oral understandings with respect thereto. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed as original but all of which together shall constitute one and the same instrument. The headings in this Agreement are for convenience of reference only and shall not alter or otherwise affect the meaning hereof.

ARTICLE XIX. GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE SUBSTANTIVE LAWS OF ANY OTHER STATE, EXCEPT THAT ALL MATTERS RELATIVE TO THE INTERNAL AFFAIRS OF THE COMPANY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE.

ARTICLE XX. SEVERABILITY

If any term or provision of this Agreement or the Series A Preferred Stock, or the application thereof to any Person or circumstance, shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the Series A Preferred Stock, or its application to other Persons or circumstances, shall not be affected thereby and each term and provision hereof shall be enforced to the fullest extent permitted by law.

If the foregoing corresponds with your understanding of our agreement, kindly sign this letter and the accompanying copies thereof in the appropriate space below and return one counterpart of the same to the Company, at the address first listed above.

ARTICLE XXI. CERTAIN SPECIAL WAIVERS

The Purchasers, as parties to one or more of the Prior Purchase Agreements, hereby agree, notwithstanding anything contained herein, in the Prior Purchase Agreements or anywhere else to the contrary, to waive the Company’s compliance with Section 7.18 of each such Prior Purchase Agreement in connection with the transactions contemplated hereby, including without limitation, debt restructuring described in Section 5.1.6 hereof.

The Purchasers, as parties to this Agreement and the Stockholders’ Agreement, hereby agree that, notwithstanding anything contained herein, in the Stockholders’ Agreement or anywhere else to the contrary, and subject to the approval of the Board of Directors or the Compensation Committee of the Board of Directors (a) the Company shall be entitled to issue and sell to one or more institutional investors approved by the Board of Directors which are “accredited investors” (as defined in Rule 501 of Regulation D promulgated under the Securities Act) up to 10,000,000 shares of Series A Preferred Stock at a purchase price of $1.50 per Share and (b) the Company shall be entitled to issue and sell to its employees who are shareholders of the Company on the date of this Agreement additional Shares representing their pro rata shares of the offering, calculated on the same bases as such pro rata shares have been calculated in respect of the Purchasers hereunder, at a purchase price of $1.50 per share, but that such purchases may be financed through a loan program or other employee incentive program approved by the Compensation Committee of the Board of Directors. The Purchasers hereby agree that, notwithstanding anything contained herein, in the Stockholders’ Agreement or elsewhere to the contrary, the Company shall not be required to offer all or any portion of any such additional Shares to the Purchasers or the other stockholders of the Company and each Purchaser hereby waives any and all preemptive rights that such Purchaser may otherwise be entitled to pursuant to the terms of Section 3 of the Stockholders’ Agreement with respect thereto.

ARTICLE XXII. AMENDMENT OF SERIES D PURCHASE AGREEMENT

The Purchasers, as parties to the Series D Purchase Agreement, and the Company hereby amend the Series D Purchase Agreement by addition of the following Article XXIV:

“Article XXIV. Termination of Covenants Under Certain Circumstances

Notwithstanding anything herein to the contrary, the holders of the Series D Warrants shall no longer be entitled to the benefits and protections of the covenants contained in Article VII hereof in the event that the Series D Warrants become exercisable into shares of common stock.”

	Very truly yours, NUVOX, INC.
	By:	/s/ Xxxx X. Xxxxxxx
		Xxxx X. Xxxxxxx, Executive Vice President - Corporate Development and Legal Affairs and Secretary

Accepted and agreed to as of the date first written above:

[Signatures of Purchasers]

List of Schedules

1	Pro Rata Share of each Stockholder
3.1	States of Qualification
3.4	Third Party Consents
3.5(a)	Capitalization
3.5(b)	Options
3.5(c)	Purchasers Who Are Not Current Stockholders
3.6	Subsidiaries
3.7	December 31, 2001, June 30, 2002 and Pro Forma Balance Sheet
3.8	Absence of Certain Developments
3.10	Indebtedness to and from Affiliates
3.11	Licenses, etc.
3.13	Leases
3.14	Litigation
3.16	Defaults
3.18	Employee Benefit Plans
3.20	Employment Contracts, Labor Relations
3.22	Necessary Property
3.23	Transaction Costs
3.27	Authorizations
3.28	Compliance With Law
3.29	Acquisition Agreements
3.30	Material Contracts and Obligations
4.1(i)	Risk Factors
4.1(iii)	Unaccredited Investors
4.1(viii)	Written Materials
6.5	Purchasers with Observer Rights
6.10	Additional Indebtedness
6.11	Liens

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Table of Contents

SECURITIES PURCHASE AGREEMENT among NUVOX, INC. and THE PURCHASERS NAMED HEREIN Dated as of July 9, 2002 SERIES A CONVERTIBLE PREFERRED STOCK at $1.50 Per Share

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