Exhibit 14
SECURITIES PURCHASE AGREEMENT
DATED OCTOBER-, 1999
BETWEEN VENTURES IN COMMUNICATIONS H, L.L.C.,
ONEPOP4T COMMUNICATIONS CORP.,
AND
CAIS INTERNET, INC.
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of
October ------ ~, 1999 between Ventures in Communications 11, L.L.C., a
Delaware limited liability company (the "Company"), OnePoint Communications
Corp., a Delaware corporation ("OnePoint") and CAIS Internet, Inc., a Delaware
corporation (the "Purchaser"). Except as otherwise indicated herein,
capitalized terms used herein are defined in Section 9 hereof
The parties hereto agree as follows:
Section 1. Authorization and Closing.
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I A. Authorization of the Common Units. The Company shall
authorize the issuance and sale to the Purchaser of 10,000 of its common units
(the "Common Units"), each having the rights and obligations set forth in
Ventures in Communications 11, L.L.C. Operating Agreement dated as of April 29,
1998, (as amended from time to time, the "LLC Agreement") a copy of which as
amended through the date hereof, is attached hereto in Exhibit A.
IB. Purchase and Sale of the Common Units. At the Closing,
the Company shall sell to the Purchaser and, subject to the terms and
conditions set forth herein, the Purchaser shall purchase from the Company
10,000 Common Units at a price of $257.40 per unit.
I C. The Closing. The closing of the purchases and sales of
the Common Units (the "Closing") shall take place at the offices of Xxxxxxxx &
Xxxxx, 000 X. Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, at 10:00 a.m. on October 1999
or at such other place or on such other date as may be mutually agreeable to
the Company and Purchaser. At the Closing, the Purchaser shall pay an
aggregate of $2,574,000 by wire transfer of immediately available funds to the
account specified in writing by the Company and the Company and Purchaser
shall execute and deliver to the Company a counterpart to the LLC Agreement
(the "LLC Counterpart") indicating Purchaser's purchase of the Common Units
and agreement to be bound by the terms thereof
Section 2. Conditions to the Closing.
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2A. Conditions to Purchaser's Obligations. The
obligation of Purchaser to purchase and pay for the Common Units at the
Closing is subject to the satisfaction as of the Closing of the
following conditions:
(i) The representations and warranties of the
Company contained in Section 5 hereof and OnePoint contained in
Section 6 hereof shall be true and correct in ail material respects
at and as of the Closing as though then made, except to the extent of
changes caused by the transactions expressly contemplated herein, and
the Company shall
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have performed in all material respects all of the covenants required
to be performed by it hereunder prior to the Closing.
(ii) OnePoint shall have entered into a joint
marketing agreement in form and substance as set forth in Exhibit B
attached hereto (the "Joint Marketing Agreement"), and the Joint
Marketing Agreement shall be in full force and effect as of the
Closing.
(iii) The Company shall have delivered to
Purchaser all of the following documents:
(x) an Officer's Certificate, dated the date
of the Closing, stating that the conditions specified
in Section I and paragraphs 2A(i) and (ii),
inclusive, have been fully satisfied;
(y) certified copies of the resolutions duly
adopted by the Company's board of directors
authorizing the execution, delivery and performance
of this Agreement, the LLC Counterpart and the
issuance and sale of the Common Units; and
(z) such other documents relating to
the transactions contemplated by this Agreement as
Purchaser or its counsel may reasonably request.
(iv) All limited liability company and other
proceedings taken or required to be taken by the Company in connection
with the transactions contemplated hereby to be consummated at or
prior to the Closing and all documents incident thereto shall be
reasonably satisfactory in form and substance to Purchaser and its
counsel.
(v) The purchase of Common ' Units by Purchaser
hereunder shall not be prohibited by any applicable law or
governmental rule or regulation and shall not subject such Purchaser
to any penalty, liability or, in Purchaser's judgment, other onerous
condition under or pursuant to any applicable law or governmental rule
or regulation, and the purchase of the Common Units by Purchaser
hereunder shall be permitted by laws, rules and regulations of the
jurisdictions and governmental authorities and agencies to which such
Purchaser is subject.
2B. Conditions to the Company's Obligations. The obligation
of the Company to sell the Common Units to Purchaser at the Closing is subject
to the satisfaction as of the Closing of the following conditions:
(i) The representations and warranties of Purchaser
contained in Section 4 hereof shall be true and correct in all
material respects at and as of the Closing as though then made, and
Purchaser shall have performed in all material respects all of the
covenants required to be performed by it hereunder prior to the
Closing.
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(ii) Purchaser, or its wholly owned Subsidiary,
shall have entered into the Joint Marketing Agreement, and the Joint
Marketing Agreement shall be in full force and effect as of the
Closing.
(iii) Purchaser shall have delivered to the
Company all of the following documents:
(x) an Officer's Certificate, dated the date
of the Closing, stating that the conditions specified in
Section I and paragraphs 2B(i) and (ii) have been fully
satisfied,
(y) certified copies of the resolutions duly
adopted by Purchaser's board of directors authorizing the
execution, delivery and performance of this Agreement and the
LLC Counterpart; and
(z) such other documents relating to
the transactions contemplated by this Agreement as the
Company or its counsel may reasonably request.
(iv) All corporate and other proceedings taken or
required to be taken by Purchaser in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and
all documents incident thereto shall be reasonably satisfactory in
form and substance to the Company and its counsel.
(v) The sale of Common Units by the Company
hereunder shall not be prohibited by any applicable law or
governmental rule or regulation and shall not subject the Company to
any penalty, liability or, in the Company's judgment, other onerous
condition under or pursuant to any applicable law or governmental rule
or regulation, and the sale of the Common Units by the Company
hereunder shall be permitted by laws, rules and regulations of the
jurisdictions and governmental authorities and agencies to which such
Company is subject.
2C. Waiver. Any condition specified in this Section 2
may be waived by Purchaser or the Company, as appropriate; provided that no
such waiver shall be effective against a party unless it is set forth in a
writing executed by such party.
Section 3. Covenants.
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3A. Financial Statements and Other Information. The Company
shall deliver within ten days after transmission thereof, copies of all
financial statements, proxy statements, reports and any other general written
communications which the Company sends to its members or OnePoint sends to its
stockholders and copies of all registration statements and all regular, special
or periodic reports which the Company or OnePoint files with the Securities and
Exchange Commission or with any securities exchange on which any of their
respective securities are then listed.
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3B. Inspection of Property . The Company shall permit any
representatives designated by Purchaser upon reasonable notice and during
normal business hours, to (i) visit and inspect any of the properties of the
Company and its Subsidiaries, (ii) examine the corporate and financial records
of the Company and its Subsidiaries and make copies thereof or extracts
therefrom and (iii) discuss the affairs, finances and accounts of any such
corporations with the directors, officers, key employees and independent
accountants of the Company and its Subsidiaries.
3C. Public Disclosures. None of the parties hereto shall, nor
shall the Company permit OnePoint to, disclose the other parties' names or
identities or describe the transaction contemplated hereby in any press release
or other public announcement or in any document or material filed with any
governmental entity without the prior written consent of the other parties,
unless such disclosure is required by applicable law or governmental
regulations or by order of a court of competent jurisdiction, in which case
prior to making such disclosure the disclosing party shall notify the other
parties describing such disclosure. It is agreed and understood that the
foregoing sentence shall not prohibit either Purchaser or OnePoint from making
disclosures about the transaction contemplated hereby in its filings with the
Securities and Exchange Commission so long as prior to making such disclosure
the disclosing party shall notify the other parties of such disclosure.
3D. Warrants. If at March 31, 2000 (the "First Warrant Date")
neither the Company nor OnePoint has received aggregate proceeds of at least
twenty million dollars ($20,000,000) from one or more of the following
occurring after the date hereof. (i) the issuance of one or more of equity
securities, securities with equity or profit participation features or voting
rights, or other securities issued in connection with such securities or (ii)
a sale of assets (each, a "Funding Event"); then in either case the Company
shall issue to Purchaser a warrant (the "Warrant") for the purchase of a
number of Common Units of the Company equal to 1% of the Company's outstanding
Common Units as of the date of this Agreement.
If at June 30, 2000 (the "Second Warrant Date")
neither the Company nor OnePoint has received aggregate proceeds of at least
twenty million dollars ($20,000,000) from one or more Funding Events occurring
after the date hereof, then the Company shall issue to Purchaser an additional
Warrant for the purchase of a number of the Common Units of the Company equal
to 2% of the Company's outstanding Common Units as of the date of this
Agreement.
The Warrants issuable pursuant to this paragraph
3D shall be substantially in the form of Exhibit C attached hereto and shall
provide for an exercise price of $0.01 per unit.
3E. Transfer of Restricted Securities. Restricted Securities
are transferable only pursuant to (i) public offerings registered under the
Securities Act, (ii) Rule 144, Rule 144A or Regulation S of the Securities and
Exchange Commission (or any similar rule or rules then in force) if such rule
is available and (iii) subject to the conditions specified in paragraph 4D
below, any other legally available means of transfer.
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In connection with the transfer of any Restricted
Securities (other than a transfer described in paragraph 3E(i) or (ii) above),
the holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, and if requested by the
Company, an opinion of counsel which (to the Company's reasonable satisfaction)
is knowledgeable in securities law matters to the effect that such transfer of
Restricted Securities may be effected without registration of such Restricted
Securities under the Securities Act.
Section 4. Representations and Warranties of Purchaser. As a
material inducement to the Company to enter into this Agreement and sell the
Common Units hereunder, Purchaser hereby represents and warrants that:
4A. Organization. Purchaser is a corporation organized,
validly existing and in good standing under the laws of the State of Delaware.
4B. Authorization, No Breach. The execution, delivery and
performance of this Agreement, the LLC Counterpart and all other agreements
contemplated hereby to which Purchaser is a party have been duly authorized by
Purchaser. This Agreement, the LLC Counterpart and all other agreements
contemplated hereby to which Purchaser is a party each constitutes a valid and
binding obligation of Purchaser, enforceable in accordance with its terms. The
execution and delivery by Purchaser of this Agreement, the LLC Counterpart and
all other agreements contemplated hereby to which Purchaser is a party, the
purchase of the Common Units, and the fulfillment of and compliance with the
respective terms hereof and thereof by Purchaser, do not and shall not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) give any third party the right to
modify, terminate or accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval, exemption
or other action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency pursuant to, the charter or
bylaws of Purchaser or any Subsidiary, or any law, statute, rule or regulation
to which Purchaser or any Subsidiary is subject, or any agreement, instrument,
order, judgment or decree to which Purchaser or any Subsidiary is subject.
4C. Accredited Investor. Purchaser is an "accredited
investor" as that term is defined in Regulation D promulgated under the
Securities Act. Purchaser has been provided with information in order to
evaluate the merits and risks of the investment contemplated hereby and has
been given the opportunity to ask questions and receive satisfactory answers
concerning the Company and its Subsidiaries and the terms and conditions of
the offering and to obtain such additional information as it has requested in
order to evaluate the merits and risks of the investment contemplated hereby.
4D. Securities Not Registered. Purchaser understands
that the Common Units to be purchased hereunder have not been, and will not
be, registered under the Securities Act or any state or other securities
laws, and are being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering. Purchaser
recognizes that reliance upon such exemptions is based in part upon its
representations contained herein. Purchaser
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represents and warrants that the Common Units will be acquired by it solely for
its account, for investment purposes only and not with a view to the
distribution thereof Purchaser represents and warrants that it (i) is a
sophisticated investor with such knowledge and experience in business and
financial matters as will enable it to evaluate the merits and risks of
investment in the Common Units and (ii) is able to bear the economic risk and
lack of liquidity of an investment in the Common Units.
4E. Brokerage. Purchaser has no liability or obligation
to pay any brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon Purchaser or any Subsidiary.
4F. Government Consent, etc. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by
Purchaser of this Agreement or the other agreements contemplated hereby, or the
consummation by Purchaser of any other transactions contemplated hereby or
thereby, except as expressly contemplated herein or in the exhibits hereto.
Section 5. Representations and Warranties of the Company .
As a material inducement to Purchaser to enter into this Agreement and
purchase the Common Units hereunder, the Company hereby represents and
warrants that:
5A. Organization, Corporate Power and Licenses. The Company
is a limited liability company organized, validly existing and in good
standing under the laws of the State of Delaware and is qualified to do
business in and is in good standing under the laws of each jurisdiction where
such qualification is required, except where the lack of such qualification
would not have a material adverse effect on the financial condition of the
Company and its Subsidiaries taken as a whole. The Company possesses all
requisite limited liability company power and authority and all material
licenses, permits and authorizations necessary to own and operate its
properties, to carry on the businesses in which it is engaged and to carry out
the transactions contemplated by this Agreement.
5B. OnePoint Ownership. The Company has no material assets
other than shares of the Common Stock of OnePoint. The Company does not
conduct any material business other than its ownership of OnePoint Common
Stock. The Company has no material liabilities.
5C. Capitalization and Related Matters.
(i) Immediately prior to the Closing, the number of
outstanding Common Units of the Company shall be as set forth in the
"Capitalization Schedule. " As of the Closing, except as set forth on
the attached "Capitalization Schedule," neither the Company nor any
Subsidiary shall have outstanding any stock or securities convertible
or exchangeable for any shares of its units or capital stock or
containing any profit participation features, nor shall it have
outstanding any rights or options to subscribe for or to purchase its
units or capital stock or any stock or securities convertible into or
exchangeable for its units or capital stock. As
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of the Closing, except as set forth on the attached "Capitalization
Schedule," neither the Company nor any Subsidiary shall be subject to
any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its units or capital stock or any
warrants, options or other fights to acquire its units or capital
stock.
(ii) There are no statutory or contractual
preemptive rights or fights of refusal with respect to the issuance of
the Common Units. To the best of the Company's knowledge, the Company
has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its membership
units. The offer, sale and issuance of the Common Units hereunder do
not require registration under the Securities Act or any applicable
material state securities laws. To the best of the Company's
knowledge, there are no agreements between the Company's members with
respect to voting, except for the LLC Agreement.
5D. Subsidiary. The attached "Subsidiary Schedule" sets forth
the name of each Subsidiary of the Company, its jurisdiction of organization
and the ownership of the equity of such Subsidiary. Each such Subsidiary is
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, possesses all requisite power and authority
and all material licenses, permits and authorizations necessary to own its
properties and to carry on the businesses in which it is engaged and is
qualified and is in good standing under the laws of each jurisdiction where
such qualification is required, except where the lack of such qualification
would not have a material adverse effect on the financial condition of the
Company and its Subsidiaries taken as a whole. All of the outstanding shares of
capital stock of One Point are validly issued, fully paid and nonassessable,
and all such shares are owned by the Company free and clear of any Lien and not
subject to any option or fight to purchase any such shares. Neither the Company
nor any Subsidiary owns or holds the right to acquire any shares of stock or
any other security or interest in any other Person, except as set forth in the
attached "Subsidiary Schedule."
5E. Authorization, No Breach. The execution, delivery and
performance of this Agreement, the LLC Counterpart and all other agreements
contemplated hereby to which the Company is a party, have been duly authorized
by the Company. This Agreement, the LLC Counterpart and all other agreements
contemplated hereby to which the Company is a party each constitutes- a valid
and binding obligation of the Company, enforceable in accordance with its
terms. The execution and delivery by the Company of this Agreement, the LLC
Counterpart and all other agreements contemplated hereby to which the Company
is a party, the offering, sale and issuance of the Common Units hereunder, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Company, do not and shall not (i) conflict with or result in a breach of
the terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon the Company's or OnePoint's units or capital stock or assets pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental
body or agency pursuant to, the LLC Agreement of the Company or the charter or
bylaws of
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OnePoint, or any law, statute, rule or regulation to which the Company or
OnePoint is subject, or any agreement, instrument, order, judgment or decree to
which the Company or OnePoint is subject.
5F. Financial Statements. Attached hereto as the
"Financial Statements Schedule" are the following financial statements:
(i) the audited consolidated balance sheets of
OnePoint and its Subsidiaries as of December 31, 1997 and December 31,
1998, and the related statements of income and cash flows (or the
equivalent) for the respective twelve-month periods then ended; and
(ii) the unaudited consolidated balance sheet of
OnePoint and its Subsidiaries as of June 30, 1999 (the "Latest Balance
Sheet"), and the related statements of income and cash flows (or the
equivalent) for the six-month period then ended.
Each of the foregoing financial statements (including in all cases the notes
thereto, if any) is accurate and complete in all material respects, is
consistent with the books and records of OnePoint (which, in turn, are
accurate and complete in all material respects) and has been prepared in
accordance with generally accepted accounting principles, consistently
applied, subject in the case of the unaudited financial statements to the
absence of footnote disclosure and changes resulting from normal year-end
adjustments (none of which would, alone or in the aggregate, be materially
adverse to the financial condition, operating results, assets, operations or
business prospects of OnePoint and its Subsidiaries taken as a whole).
5G. Absence of Undisclosed Liabilities. The Company and its
Subsidiaries do not have any material obligation or liability (whether
accrued, absolute, contingent, unliquidated or otherwise, whether or not known
to the Company or any Subsidiary, whether due or to become due and regardless
of when asserted) arising out of transactions entered into at or prior to the
Closing, or any action or inaction at or prior to the Closing, or any state of
facts existing at or prior to the Closing other than: (i) liabilities set
forth on the Latest Balance Sheet (including any notes thereto), (ii)
liabilities and obligations which have arisen after the date of the Latest
Balance Sheet in the ordinary course of business (none of which is a liability
resulting from breach of contract, breach of warranty, tort, infringement,
claim or lawsuit) and (iii) other liabilities and obligations expressly
disclosed in the other Schedules to this Agreement.
5H. No Material Adverse Change. Except as set forth on the
attached "Adverse Change Schedule ' " since the date of the Latest Balance
Sheet, there has been no material adverse change in the financial condition,
operating results, assets, operations, business prospects, employee relations
or customer or supplier relations of the Company and its Subsidiaries taken as
a whole.
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51. Absence of Certain Developments.
(i) Except as expressly contemplated by this
Agreement or as set forth on the attached "Developments Schedule,"
since the date of the Latest Balance Sheet, neither the Company nor any
Subsidiary have
(a) issued any notes, bonds or other debt
securities or any capital stock or other equity securities or
any securities convertible, exchangeable or exercisable into
any capital stock or other equity securities;
(b) borrowed any amount or incurred or
become subject to any material liabilities, except current
liabilities incurred in the ordinary course of business and
liabilities under contracts entered into in the ordinary
course of business;
(c) discharged or satisfied any material
Lien or paid any material obligation or liability, other than
current liabilities paid in the ordinary course of business;
(d) declared or made any payment or
distribution of cash or other property to its stockholders
with respect to its capital stock or other equity securities
or purchased or redeemed any shares of 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),
(e) mortgaged or pledged any of its
properties or assets or subjected them to any material Lien,
except Liens for current property taxes not yet due and
payable;
(f) sold, assigned or transferred any
of its material tangible assets, except in the ordinary
course of business, or canceled any material debts or claims;
(g) suffered any material extraordinary
losses or waived any rights of material value, whether or not
in the ordinary course of business or consistent with past
practice;
(h) made capital expenditures or
commitments therefor that aggregate in excess of five million
dollars ($5,000,000);
(i) made any loans or advances to,
guarantees for the benefit of, or any Investments in, any
Persons in excess of one hundred thousand dollars
($100,000) in the aggregate; or
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(j) suffered any damage, destruction or
casualty loss exceeding in the aggregate one hundred thousand
dollars ($100,000), whether or not covered by insurance.
5J. Assets. The Company and each Subsidiary have good and
marketable title to, or a valid leasehold interest in, the material properties
and assets used by them, located on their premises or shown on the Latest
Balance Sheet or acquired thereafter, free and clear of all Liens, except for
properties and assets disposed of in the ordinary course of business since the
date of the Latest Balance Sheet and except for Liens disclosed on the Latest
Balance Sheet (including any notes thereto) and Liens for current property
taxes not yet due and payable.
5K. Tax Matters.
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(i) The Company and each Subsidiary have filed all
Tax Returns which they are required to file under applicable laws and
regulations and have paid all Taxes shown thereon as owing by them
except where the failure to file Tax Returns or pay Taxes would not
have a material adverse effect on the financial condition of the
Company and its Subsidiaries taken as a whole.
(ii) "Tax" or "Taxes" means federal, state, county,
local, foreign or other income, gross receipts, ad valorem, franchise,
profits, sales or use, transfer, registration, excise, utility,
environmental, communications, real or personal property, capital
stock, license, payroll, wage or other withholding, employment, social
security, severance, stamp, occupation, alternative or add-on minimum,
estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest
attributable thereto) whether disputed or not. "Tax Return" means any
return, information report or filing with respect to Taxes, including
any schedules attached thereto and including any amendment thereof
5L. Litigation, etc. Except as set forth on the attached
"Litigation Schedule there are no actions, suits, proceedings, orders,
investigations or claims pending or, to the best of the Company's knowledge,
threatened against the Company or any Subsidiary at law or in equity, or
before or by any governmental department, commission, board, bureau, agency or
instrumentality (including, without limitation, any actions, suits,
proceedings or investigations with respect to the transactions contemplated by
this Agreement); and neither the Company nor any Subsidiary is subject to any
arbitration proceedings. Neither the Company nor any Subsidiary is subject to
any judgment, order or decree of any court or other governmental agency that
is reasonably likely to have a material adverse effect on the financial
condition of the Company and its Subsidiaries taken as a whole.
5M. Brokerage. The Company has no liability or obligation
to pay any brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon the Company or any Subsidiary.
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5N. Governmental Consent, etc. No permit, consent, approval
or authorization of, or declaration to or filing with, any governmental
authority is required in connection with the execution, delivery and
performance by the Company of this Agreement or the other agreements
contemplated hereby, or the consummation by the Company of any other
transactions contemplated hereby or thereby.
50. Compliance with Laws. To the knowledge of the Company,
neither the Company nor any Subsidiary has violated any law or any governmental
regulation or requirement which violation has had or would reasonably be
expected to have a material adverse effect upon the financial condition,
operating results, assets, operations or business prospects of the Company and
its Subsidiaries taken as a whole.
5P. Knowledge. As used in this Section 5, the terms
"knowledge" or "aware" shall mean and include (i) the actual knowledge or
awareness of the Company and its Subsidiaries (which shall include the actual
knowledge and awareness of the officers, directors and key employees of the
Company and its Subsidiaries and the general managers of each facility of the
Company and its Subsidiaries) and (ii) the knowledge or awareness which a
prudent business person would have obtained in the conduct of his business
after making reasonable inquiry and reasonable diligence with respect to the
particular matter in question.
Section 6. Representations and Warranties of OnePoint. As a
material inducement to Purchaser to enter into this Agreement and purchase the
Common Units hereunder, OnePoint hereby represents and warrants that:
6A. Organization, Corporate Power and Licenses. OnePoint is
a corporation organized, validly existing and in good standing under the laws
of the State of Delaware and is qualified to do business in and is in good
standing under the laws of each jurisdiction where such qualification is
required, except where the lack of such, qualification would not have a
material adverse effect on the financial condition of OnePoint and its
Subsidiaries taken as a whole.
6B. Capitalization and Related Matters.
(i) Immediately prior to the Closing, the number of
outstanding shares of common stock of OnePoint shall be as set forth
in the "Capitalization Schedule." As of the Closing, except as set
forth on the attached "Capitalization Schedule," neither OnePoint nor
any of its Subsidiaries shall have outstanding any stock or
securities convertible or exchangeable for any shares of its capital
stock or containing any profit participation features, nor shall it
have outstanding any fights or options to subscribe for or to
purchase its capital stock or any stock or securities convertible
into or exchangeable for its capital stock. As of the Closing, except
as set forth on the attached "Capitalization Schedule," neither
OnePoint nor any of its Subsidiaries shall be subject to any
obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock or any warrants,
options or other fights to acquire its capital stock.
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(ii) To the best of OnePoint's knowledge, OnePoint
has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its Common
Stock.
6C. Subsidiary. The attached "Subsidiary Schedule" sets
forth the name of each Subsidiary of OnePoint, its jurisdiction of organization
and the ownership of the equity of such Subsidiary. Each such Subsidiary is
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, possesses all requisite power and authority
and all material licenses, permits and authorizations necessary to own its
properties and to carry on the businesses in which it is engaged and is
qualified and is in good standing under the laws of each jurisdiction where
such qualification is required, except where the lack of such qualification
would not have a material adverse effect on the financial condition of OnePoint
and its Subsidiaries taken as a whole. All of the outstanding shares of capital
stock of One Point are validly issued, fully paid and nonassessable, and all
such shares are owned by the Company free and clear of any Lien and not subject
to any option or right to purchase any such shares. Neither OnePoint nor any of
its Subsidiaries owns or holds the right to acquire any shares of stock or any
other security or interest in any other Person, except as set forth in the
attached "Subsidiary Schedule."
6D. Authorization, No Breach. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby to
which OnePoint is a party, have been duly authorized by OnePoint. This
Agreement and all other agreements contemplated hereby to which OnePoint is a
party each constitutes a valid and binding obligation of OnePoint, enforceable
in accordance with its terms. The execution and delivery by OnePoint of this
Agreement and all other agreements contemplated hereby to which OnePoint is a
party, and the fulfillment of and compliance with the respective terms thereof
by OnePoint, do not and shall not (i) conflict with or result in a breach of
the terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon OnePoint's capital stock or assets pursuant to, (iv) give any third party
the right to modify, terminate or accelerate any obligation under, (v) result
in a violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with, any
court or administrative or governmental body or agency pursuant to the charter
or bylaws of OnePoint, or any law, statute, rule or regulation to which
OnePoint is subject, or any agreement, instrument, order, judgment or decree to
which OnePoint is- subject.
6E. Financial Statements. Attached hereto as the
"Financial Statements Schedule" are the following financial statements:
(i) the audited consolidated balance sheets of
OnePoint and its Subsidiaries as of December 31, 1997 and December
31, 1998, and the related statements of income and cash flows (or the
equivalent) for the respective twelve-month periods then ended; and
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(ii) the unaudited consolidated balance sheet of
OnePoint and its Subsidiaries as of June 30, 1999 (the "Latest Balance
Sheet"), and the related statements of income and cash flows (or the
equivalent) for the six-month period then ended.
Each of the foregoing financial statements (including in all cases the notes
thereto, if any) is accurate and complete in all material respects, is
consistent with the books and records of OnePoint (which, in turn, are accurate
and complete in all material respects) and has been prepared in accordance with
generally accepted accounting principles, consistently applied, subject in the
case of the unaudited financial statements to the absence of footnote
disclosure and changes resulting from normal year-end adjustments (none of
which would, alone or in the aggregate, be materially adverse to the financial
condition, operating results, assets, operations or business prospects of
OnePoint and its Subsidiaries taken as a whole).
6F. Absence of Undisclosed Liabilities. OnePoint and its
Subsidiaries do not have any material obligation or liability (whether accrued,
absolute, contingent, unliquidated or otherwise, whether or not known to
OnePoint or any Subsidiary, whether due or to become due and regardless of when
asserted) arising out of transactions entered into at or prior to the Closing,
or any action or inaction at or prior to the Closing, or any state of facts
existing at or prior to the Closing other than: (i) liabilities set forth on
the Latest Balance Sheet (including any notes thereto), (ii) liabilities and
obligations which have arisen after the date of the Latest Balance Sheet in the
ordinary course of business (none of which is a liability resulting from breach
of contract, breach of warranty, tort, infringement, claim or lawsuit) and
(iii) other liabilities and obligations expressly disclosed in the other
Schedules to this Agreement.
6G. No Material Adverse Change. Except as set forth on the
attached "Adverse Change Schedule," since the date of the Latest Balance
Sheet, there has been no material adverse change in the financial condition,
operating results, assets, operations, business prospects, employee relations
or customer or supplier relations of OnePoint and its Subsidiaries taken as a
whole.
6H. Absence of Certain Developments.
(i) Except as expressly contemplated by this
Agreement or as set forth on the attached "Developments Schedule,"
since the date of the Latest Balance Sheet, neither OnePoint nor any
of its Subsidiaries have
(a) issued any notes, bonds or other debt
securities or any capital stock or other equity securities
or any securities convertible, exchangeable or exercisable
into any capital stock or other equity securities;
(b) borrowed any amount or incurred or
become subject to any material liabilities, except current
liabilities incurred in the ordinary course of business and
liabilities under contracts entered into in the ordinary
course of business;
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(c) discharged or satisfied any material
Lien or paid any material obligation or liability, other than
current liabilities paid in the ordinary course of business;
(d) declared or made any payment or
distribution of cash or other property to its stockholders
with respect to its capital stock or other equity securities
or purchased or redeemed any shares of its capital stock or
other equity securities (including, without limitation, any
warrants, options or other fights to acquire its capital stock
or other equity securities);
(e) mortgaged or pledged any of its
properties or assets or subjected them to any material Lien,
except Liens for current property taxes not yet due and
payable;
(f) sold, assigned or transferred any
of its material tangible assets, except in the ordinary
course of business, or canceled any material debts or claims;
(g) suffered any material extraordinary
losses or waived any fights of material value, whether or not
in the ordinary course of business or consistent with past
practice;
(h) made capital expenditures or
commitments therefor that aggregate in excess of five million
dollars ($5,000,000),-
(i) made any loans or advances to,
guarantees for the benefit of, or any Investments in, any
Persons in excess of one hundred thousand dollars
($100,000) in the aggregate; or
suffered any damage, destruction
or casualty loss exceeding in the aggregate one hundred
thousand dollars ($ 100, 000), whether or not covered by
insurance.
61. Assets. OnePoint and each Subsidiary have good and
marketable title to, or a valid leasehold interest in, the material properties
and assets used by them, located on their premises or shown on the Latest
Balance Sheet or acquired thereafter, free and clear of all Liens, except for
properties and assets disposed of in the ordinary course of business since the
date of the Latest Balance Sheet and except for Liens disclosed on the Latest
Balance Sheet (including any notes thereto) and Liens for current property
taxes not yet due and payable.
6J. Tax Matters.
(i) OnePoint and each Subsidiary have filed all Tax
Returns which they are required to file under applicable laws and
regulations and have paid all Taxes shown
14
thereon as owing by them except where the failure to file Tax Returns
or pay Taxes would not have a material adverse effect on the financial
condition of OnePoint and its Subsidiaries taken as a whole.
(ii) "Tax" or "Taxes" means federal, state, county,
local, foreign or other income, gross receipts, ad valorem, franchise,
profits, sales or use, transfer, registration, excise, utility,
environmental, communications, real or personal property, capital
stock, license, payroll, wage or other withholding, employment, social
security, severance, stamp, occupation, alternative or add-on minimum,
estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest
attributable thereto) whether disputed or not. "Tax Return" means any
return, information report or filing with respect to Taxes, including
any schedules attached thereto and including any amendment thereof
6K. Brokerage. OnePoint has no liability or obligation to
pay any brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon OnePoint or any of its Subsidiaries.
6L. Governmental Consent, etc. No permit, consent, approval
or authorization of, or declaration to or filing with, any governmental
authority is required in connection with the execution, delivery and
performance by OnePoint of this Agreement or the other agreements contemplated
hereby, or the consummation by OnePoint of any other transactions contemplated
hereby or thereby.
6M. Compliance with Laws. To the knowledge of OnePoint,
neither OnePoint nor any Subsidiary has violated any law or any governmental
regulation or requirement which violation has had or would reasonably be
expected to have a material adverse effect upon the financial condition,
operating results, assets, operations or business prospects of OnePoint and
its Subsidiaries taken as a whole.
6N. Knowledge. As used in this Section 6, the terms
"knowledge" or "aware" shall mean and include (i) the actual knowledge or
awareness of OnePoint and its Subsidiaries (which shall include the actual
knowledge and awareness of the officers, directors and key employees of
OnePoint and its Subsidiaries and the general managers of each facility of
OnePoint and its Subsidiaries) and (Ii) the knowledge or awareness which a
prudent business person would have obtained in the conduct of his business
after making reasonable inquiry and reasonable diligence with respect to the
particular matter in question.
Section 7. Put Option.
-------
7A. Generally. Upon and after the occurrence of a Put
Event, Purchaser may require the Company to repurchase all of the Common Units
(whether held by Purchaser or one or
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more of Purchaser's transferees) pursuant to the terms and conditions in this
Section 7 (the "Put").
7B. Put Notice. Upon the occurrence of a Put Event, Purchaser
may exercise the Put by delivering written notice (the "Put Notice") to the
Company within 30 days following the occurrence of the Put Event. If Purchaser
fails to exercise its fights pursuant to the terms and conditions of this
Section 7 within such 30-day period, then Purchaser shall have no further
fights under this Section 7.
7C. Put Price. Upon the exercise of the Put, the repurchase
price for the Common Units (the "Put Price") will be the price paid for such
Common Units under this Agreement compounded annually at a rate of ten
percent (10%) per annum.
7D. Closing. The closing of the purchase of Common Units
pursuant to the Put (the "Put Closing") will take place on the date designated
by the Company in a written notice to Purchaser, which date will not be more
than 30 days nor less than 5 days after the delivery of the Put Notice. The
Company will pay for the Common Units to be purchased pursuant to the Put by
(i) delivery of a certified check if and to the extent the Company is able to
receive dividends to pay the Put Price in cash under the terms of OnePoint's
loan agreements, indentures, other agreements for borrowed money, charter, and
the provisions of the Delaware General Corporation Law. The Company will pay
the remainder of the Put Price in cash as soon as it is able to receive
dividends to do so under such agreements, documents and laws. In the event that
the Company is unable to pay the entire Put Price in cash, the unpaid portion
thereof will bear interest initially at a rate of twelve percent (12%) per
annum, which rate shall be increased by two percent (2%) for each 90-day period
that the Put Price shall remain unpaid, but in no event shall such interest
exceed sixteen percent (16%).
Section 8. First Refusal Right.
--------------
(i) At least 3 0 days prior to making
any sale, transfer, assignment, pledge or other disposition of (a
"Transfer") any Common Units (other than pursuant to a Sale of the
Company as defined in Section 9 below), Purchaser shall deliver a
written notice (the "Offer Notice") to the Company. The Offer Notice
shall disclose in reasonable detail the identity of the proposed
transferee(s), the proposed number of Common Units to be transferred
and the proposed terms and conditions of the Transfer.
(ii) The Company may elect to purchase
all (but not less than all) of the Common Units specified in the
Offer Notice at the price and on the terms specified therein by
delivering written notice of such election to Purchaser as soon as
practical but in any event within 30 days after the delivery of the
Offer Notice (the "Company Offer Period").
(iii) If the Company elects to purchase
all (but not less than all) of the Common Units offered by Purchaser,
the transfer of such Common Units shall be consummated as soon as
practical after the delivery of the election notices, but in any
event
16
within 10 days of such delivery. If the Company elects not to purchase
all of the Common Units being offered, Purchaser may, within 90 days
after expiration of the 30 day election period, transfer all (but not
less than all) of the Common Units referred to in the Offer Notice to
one or more third parties at a price no less than the price specified
in the Offer Notice and on other terms not materially more favorable
to the transferees than offered to the Company in the Offer Notice.
Any Common Units not transferred within such 90-day period shall be
subject to the provisions of this Section 7 with respect to any
subsequent Transfer. The purchase price specified in any Offer Notice
shall be payable solely in U.S. dollars in immediately available funds
at the closing of the transaction.
Section 8. Sale of the Company.
---------------
8A. Approved Sale. If the Board and the holders of a majority
of the Company's Common Units approve a Sale of the Company to an unaffiliated
party (an "Approved Sale"), Purchaser will consent to and raise no objections
against the Approved Sale, and if the Approved Sale is structured as a sale of
units, Purchaser will agree to sell his Common Units on the terms and
conditions approved by the Board and the holders of a majority of the Company's
Common Units. Purchaser will take all necessary or desirable actions in
connection with the consummation of the Approved Sale.
8B. Obligations. Purchaser's obligations with respect to the
Approved Sale are subject to the satisfaction of the following conditions: (i)
upon the consummation of the Approved Sale, all of the holders of Common Units
will receive the same form and amount of consideration per unit, or if any
holders of Common Units are given an option as to the form and amount of
consideration to be received, all holders will be given the same option; and
(ii) all holders of then currently exercisable rights to acquire shares of
Common Units will be given an opportunity to either (A) exercise such rights
prior to the consummation of the Approved Sale and participate in such sale as
holders of Common Units or (B) upon the consummation of the Approved Sale,
receive in exchange for such rights consideration equal to the amount
determined by multiplying (1) the same amount of consideration per unit
received by the holders of Common Units in connection with the Approved Sale
less the exercise price per units of such rights to acquire Common Units by
(2) the number of units represented by such rights.
Section 9. Definitions.
------------
9A. Definitions. For the purposes of this Agreement,
the following terms have the meanings set forth below:
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular
Person, where "control" means the possession, directly
17
or indirectly, of the power to direct the management and policies of a Person
whether through the ownership of voting securities, contract or otherwise.
"Investment" as applied to any Person means (i) any direct or
indirect purchase or other acquisition by such Person of any notes,
obligations, instruments, stock, securities or ownership interest (including
partnership interests and joint venture interests) of any other Person and (ii)
any capital contribution by such Person to any other Person.
"IRC" means the Internal Revenue Code of 1986, as amended,
and any reference to any particular IRC section shall be interpreted to include
any revision of or successor to that section regardless of how numbered or
classified.
"Liens" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against the Company, any
Subsidiary or any Affiliate, any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code or any similar statute
other than to reflect ownership by a third party of property leased to the
Company or any Subsidiaries under a lease which is not in the nature of a
conditional sale or title retention agreement, or any subordination
arrangement in favor of another Person (other than any subordination arising
in the ordinary course of business).
"Person" means an individual, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof
"Put Event" means the date at which the Company raises at
least $20 million from the issuance of one or more of its equity securities,
securities with equity or profit participation features or voting fights, or
other securities issued in connection with such securities.
"Restricted Securities" means (i) the Common Units issued
hereunder, (ii) any Warrants issued pursuant to paragraph 3C hereof, and (iii)
any securities issued with respect to the securities referred to in clauses
(i) and (ii) above by way of a stock dividend or stock split or in connection
with a combination of units, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) been distributed to the public
through a broker, dealer or market maker pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act or become eligible for sale
pursuant to Rule 144(k)(or any similar provision then in force) under the
Securities Act or (c) been otherwise transferred.
"Sale of the Company" means the sale to any party or group
of related parties pursuant to which such party or parties acquire (i)
ownership units of the Company possessing the voting power to elect a majority
of the directors (whether by merger, consolidation, sale or transfer of the
18
Company's ownership units, reorganization, recapitalization or otherwise) or
(ii) sale of more than 50% of the total assets determined on a consolidated
basis.
"Securities Act" means the Securities Act of 1933, as
amended, or any similar federal law then in force.
"Securities and Exchange Commission" includes any
governmental body or agency succeeding to the functions thereof
"Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended, or any similar federal law then in force.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of members, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a limited liability company, partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority
of limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing member or general partner
of such limited liability company, partnership, association or other business
entity.
Section 10. Miscellaneous.
--------------
I OA. Expenses. The Company and Purchaser shall each
be responsible for all of their respective fees and expenses arising in
connection with the negotiation and execution of this Agreement
including such fees and expenses associated with the consummation of the
transactions contemplated by this Agreement.
I OB. Remedies. Each holder of Common Units shall have all
rights and remedies set forth in this Agreement, the amendment of the Limited
Liability Company Agreement, and all rights and remedies which such holders
have been granted at any time under any other agreement or contract and all of
the rights which such holders have under any law. Any Person having any rights
under any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any material breach of any provision of this Agreement and to
exercise all other rights granted by law.
I OC. Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any
party in connection herewith shall terminate at Closing.
19
I OD. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so
expressed or not. In addition, and whether or not any express assignment has
been made, the provisions of this Agreement which are for Purchaser's benefit
as a purchaser or holder of Common Units (including Common Units issuable upon
exercise of Warrant) are also for the benefit of, and enforceable by, any
subsequent holder of such Common Units.
I OE. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
I OF. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not
contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Agreement.
IOG. Descriptive Headings, Interpretation. The
descriptive headings of this Agreement are inserted for convenience only and
do not constitute a substantive part of this Agreement. The use of the word
"including" in this Agreement shall be by way of example rather than by
limitation.
10H. Governing Law. The limited liability company law of the
State of Delaware shall govern all issues and questions concerning the
relative limited liability company rights and obligations of the Company and
its members. All other issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits
and schedules hereto shall be governed by, and construed in accordance with,
the laws of the State of Illinois, without giving effect to any choice of law
or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Illinois.
- 101. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent as follows:
If to Purchaser:
CAIS Internet, Inc.
0000 00x Xxxxxx, X.X.
20
Washington, D.C. 20037
Attention: Chief Executive Officer
If to the Company or OnePoint:
0000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
I OJ. No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and
no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any of the provisions of this Agreement.
21
IN WITNESS W]HEREOF, the parties hereto have executed this
Agreement on the date first written above.
VENTURES IN COMMUNICATIONS II, L.L.C.
By ______________________
Its ______________________
ONEPOINT COMMUNICATIONS CORP.
By ______________________
Its ______________________
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LIST OF EXHIBITS
Exhibit A - Limited Liability Company Agreement Exhibit B - Joint Marketing
Agreement Exhibit C - Form of Warrant
Capitalization Schedule
I Immediately prior to the transactions contemplated by the Agreement,
the Company has 1,000,000 Common Units outstanding, and has 199,000
Preferred Units outstanding, and OnePoint has 1,000,000 shares of
Common Stock outstanding.
2. The Company also has issued two warrants to Ventures in Communications
L.L.C. ("VIC")
The first of such warrants is exercisable for a total number
of Common Units equal, as a percentage of the total number of
Common Units outstanding immediately after the exercise of
the final warrant, to the result of 9.9% divided by a
fraction, the numerator of which is the number of outstanding
shares of OnePoint's Common Stock owned by the Company at
such time, and the denominator of which is the total number
of outstanding shares of OnePoint Common Stock at such time.
Such fraction is referred to herein as the "Gross Up
Fraction. "
The second warrant is exercisable for a total number of
Common Units equal, as a percentage of the total number of
Common Units outstanding immediately after the exercise of
the final warrant, to the result of 2.0% divided by the Gross
Up Fraction.
3. OnePoint has outstanding warrants to purchase I 11, 125 shares of its
Common Stock, which were issued in May 1998 in connection with its
issuance of 14 Y2% Senior Notes due 2008.
4. Section 9. 10 of the Operating Agreement contains a put right of VIC.
5. Section 9.7 of the Operating Agreement contains pre-emptive rights
with respect to the sale of the Common Units in favor of VIC. VIC has
waived such rights in connection with the proposed transaction.
Subsidiary Schedule
The Subsidiaries of the Company and OnePoint are as follows:
Jurisdiction of Ownership of Outstanding
Name of Subsidiary Organization Equity
OnePoint Communications Corp. Delaware 100% owned by the Company
OnePoint Communications- Delaware 100% owned by OnePoint
Colorado, LLC Communications Corp.
OnePoint Communications-Illinois, Delaware 100% owned by OnePoint
LLC Communications Corp.
OnePoint Communications-Georgia, Delaware 100% owned by OnePoint
LLC Communications Corp.
OnePoint Communications Delaware 100% owned by OnePoint
Holdings, LLC Communications Corp.
OnePoint Services LLC Delaware Majority owned by OnePoint
Communications Corp., with
minority interest TBD for
management (newly established
entity)
OnePoint Prepaid Services LLC Delaware 100% owned by OnePoint
Communications-Colorado,
LLC
Mid-Atlantic RMTS Holdings LLC Delaware 50% owned by OnePoint
Communications Holdings,
LLC; 50 % owned by South
Central Development Company
LP
VIC-RMTS-DC, LLC Delaware 95% owned by OnePoint
Communications Holdings,
LLC, 5% owned by Mid
Atlantic RMTS Holdings, LLC
(see Developments Schedule for
information regarding the
Company's negotiations with the
Mid-Atlantic entities).
2. OnePoint Communications Holdings, LLC has certain rights of first refusal to
acquire the units of Mid-Atlantic Telcom Plus Holding, LLC and is negotiating
to acquire the remaining units of VIC-RMTS-DC, LLC that it does not own,
directly or indirectly.
Material Adverse Change Schedule
I . See the Developments Schedule for information regarding negotiations
with the MidAtlantic entities.
Developments Schedule
I OnePoint executed a Call On Term-Term Note in the amount of
$16,000,000 in favor of The Northern Trust Company as of August 30,
1999.
2. OnePoint has signed an agreement with Lucent Technologies Inc. to
purchase telecommunications network equipment, and is negotiating with
Comdisco to lease telecommunications network equipment.
3. OnePoint is in negotiations with its joint venture partner to end the
joint venture and resolve pending arbitration between the parties.
Pursuant to these negotiations, OnePoint or a subsidiary would
purchase the membership units of VIC-RMTS-DC, LLC that it does not
own, directly or indirectly, and would consent to the sale of all of
the membership units or all or substantially all of the assets of
Mid-Atlantic Telcom Plus, LLC.
Litigation Schedule
I . See the Developments Schedule and the Financial Statements Schedule for
information regarding OnePoint's dispute with the Mid-Atlantic entities.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
VENTURES IN COMMUNICATIONS II, L.L.C.
By _________________________
Its ________________________
ONEPOINT COMMUNICATIONS CORP.
By _________________________
Its ________________________
CAIS INTERNET, INC.
By _________________________
Its ________________________
22
