EXHIBIT 10.1
INVESTMENT AGREEMENT
dated as of
February 27, 2001
by and between
ITC/\DeltaCom, Inc.
and
ITC Holding Company, Inc.
TABLE OF CONTENTS
Page
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ARTICLE I ISSUANCE AND SALE OF PREFERRED SHARES AND WARRANTS.............. B-1
1.1. Issuance, Purchase and Sale........................................ B-1
1.2. Initial Closing.................................................... B-2
1.3. Draw Downs; Draw Down Closings..................................... B-2
1.4. Deliveries......................................................... B-3
1.5. Calculation of Initial Conversion Price............................ B-3
1.6. Capitalized Terms.................................................. B-3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................. B-3
2.1. Organization; Subsidiaries; Books and Records...................... B-4
2.2. Due Authorization.................................................. B-4
2.3. Capitalization..................................................... B-5
2.4. SEC Reports; Registration; Listing of Common Stock................. B-5
2.5. Financial Statements............................................... B-5
2.6. Absence of Certain Changes......................................... B-6
2.7. Litigation......................................................... B-6
2.8. Consents; No Violations............................................ B-6
2.9. Compliance with Laws; Licenses..................................... B-7
2.10. Commitments........................................................ B-7
2.11. Brokers or Finders................................................. B-7
2.12. Section 203 of the DGCL; Takeover Statute.......................... B-7
2.13. No General Solicitation or Advertising; No Integration............. B-7
2.14. Investment Company Status.......................................... B-8
2.15. Opinion of Financial Adviser....................................... B-8
2.16. Disclosure......................................................... B-8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............... B-8
3.1. Acquisition for Investment......................................... B-8
3.2. Accredited Investor Status......................................... B-8
3.3. Information........................................................ B-8
3.4. Government Review.................................................. B-8
3.5. Sale or Transfer................................................... B-9
3.6. Residency.......................................................... B-9
3.7. No Brokers or Finders.............................................. B-9
3.8. Organization....................................................... B-9
3.9. Due Authorization.................................................. B-9
3.10. Consents, No Violations............................................ B-9
3.11. Litigation......................................................... B-10
3.12. Investment Company Act............................................. B-10
3.13. Availability of Funds.............................................. B-10
ARTICLE IV COVENANTS...................................................... B-10
4.1. Public Announcements............................................... B-10
4.2. HSR Act............................................................ B-10
4.3. Consents, Approvals and Filings.................................... B-11
4.4. Reasonable Best Efforts............................................ B-11
4.5. Company Stockholder Approval; Series A Holder Approval............. B-11
4.6. Listing............................................................ B-11
4.7. Series B Certificate of Designation................................ B-11
4.8. Reservation of Common Stock........................................ B-11
4.9. Use of Proceeds.................................................... B-11
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4.10. Board Representation Rights........................................ B-11
4.11. Confidential Treatment of Confidential Information................. B-12
4.12. Notification of Certain Matters.................................... B-12
4.13. Registration Rights................................................ B-12
4.14. Legends............................................................ B-12
4.15. Compliance with Securities Laws.................................... B-12
4.16. Further Assurances................................................. B-12
ARTICLE V RESTRICTIONS ON TRANSFER........................................ B-13
5.1. Restrictions on Transfer........................................... B-13
5.2. Compliance with Laws; Stop Order................................... B-13
5.3. Separation of Preferred Shares and Warrants........................ B-13
5.4. No Short Sales..................................................... B-13
ARTICLE VI CONDITIONS..................................................... B-13
6.1. Conditions to Obligations of the Purchaser and the Company at Each
Closing............................................................ B-13
6.2. Additional Conditions to Obligations of the Purchaser at Each
Closing............................................................ B-14
6.3. Additional Conditions to Obligations of the Company at Each
Closing............................................................ B-15
ARTICLE VII TERMINATION................................................... B-15
7.1. Termination........................................................ B-15
7.2. Effect of Termination.............................................. B-16
7.3. Extensions; Waiver................................................. B-16
ARTICLE VIII INDEMNIFICATION.............................................. B-16
8.1. Indemnification.................................................... B-16
8.2. Method of Asserting Indemnification for Third Party Claims......... B-17
8.3. Method of Asserting Indemnification for Other Claims............... B-17
8.4. Limitations on Indemnification..................................... B-18
ARTICLE IX MISCELLANEOUS.................................................. B-18
9.1. Definitions........................................................ B-18
9.2. Survival of Representations and Warranties......................... B-21
9.3. Fees and Expenses.................................................. B-21
9.4. Specific Enforcement............................................... B-21
9.5. Restrictive Legends................................................ B-21
9.6. Successors and Assigns............................................. B-23
9.7. Inspections; No Other Representations.............................. B-23
9.8. Entire Agreement................................................... B-23
9.9. Notices............................................................ B-24
9.10. Business Days...................................................... B-24
9.11. Amendments; Waivers................................................ B-24
9.12. Counterparts....................................................... B-24
9.13. Descriptive Headings; Interpretation; No Strict Construction....... B-24
9.14. References......................................................... B-25
9.15. Governing Law...................................................... B-25
9.16. Exclusive Jurisdiction; Venue...................................... B-25
9.17. Waiver of Jury Trial............................................... B-25
9.18. Severability....................................................... B-25
9.19. Delivery by Facsimile.............................................. B-25
TABLE OF DEFINED TERMS..................................................... B-27
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INVESTMENT AGREEMENT
INVESTMENT AGREEMENT (this "Agreement"), dated as of February 27, 2001, is
made between ITC/\DeltaCom, Inc., a Delaware corporation (the "Company"), and
ITC Holding Company, Inc., Delaware corporation (the "Purchaser").
W I T N E S S E T H :
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, the Company wishes to sell to the Purchaser and the Purchaser wishes
to purchase from the Company (i) 150,000 shares in multiple series of
cumulative convertible preferred stock, par value $.01 per share, of the
Company (the "Series B Preferred Stock") and (ii) warrants (the "Warrants") to
purchase shares of the Common Stock, par value $.01 per share, of the Company
(the "Common Stock"); and
WHEREAS, the Purchaser and the Company wish to provide for the purchase and
sale of the Series B Preferred Stock and the Warrants and to establish certain
rights and obligations in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
ISSUANCE AND SALE OF PREFERRED SHARES AND WARRANTS
1.1. Issuance, Purchase and Sale. (a) Upon the terms and subject to the
conditions set forth herein, at each Closing (as defined in Section 1.3(c)) the
Company shall sell to the Purchaser and the Purchaser shall purchase from the
Company (i) shares of Series B Preferred Stock (the "Preferred Shares") at a
stated price of $1,000 per share and (ii) Warrants having an initial exercise
price per share of Common Stock that is equal to the initial conversion price
per share of Common Stock of the Preferred Shares issued and sold at such
Closing. The Preferred Shares to be purchased and sold at each Closing shall be
issued pursuant to a separate certificate of designation in the form of Exhibit
2.2 hereto (the "Series B Certificate of Designation"). The Preferred Shares to
be issued at the Initial Closing (as defined in Section 1.2) shall be
designated by the Company Board as "Series B-1 Cumulative Convertible Preferred
Stock," and each issue of Preferred Shares purchased and sold at any subsequent
Closing shall be designated by the Company Board as a series of the Series B
Preferred Stock. The various series of the Series B Preferred Stock designated
by the Company Board after the Series B- 1 Cumulative Convertible Preferred
Stock shall be consecutively numbered, beginning with "Series B-2 Cumulative
Convertible Preferred Stock" for the series to be purchased and sold at the
first Closing that shall take place after the Initial Closing.
(b) Upon the terms and subject to the conditions set forth herein, at
the Initial Closing the Company shall sell to the Purchaser and the Purchaser
shall purchase from the Company (i) 30,000 Preferred Shares for an aggregate
purchase price of $30,000,000 in cash and (ii) Warrants having an aggregate
exercise price of $9,000,000.
The Company shall have the right, but shall not be obligated, to sell at the
Initial Closing to one or more investors unaffiliated with ITC Holding Company,
Inc. ("Holding") selected by the Company, in its sole discretion, upon the
terms and subject to the conditions set forth in this Agreement, (i) up to
50,000 Preferred Shares committed under this Agreement to be purchased by
Holding after the Initial Closing and (ii) Warrants having an aggregate
exercise price that is equal to 30% of the aggregate purchase price of the
Preferred Shares, if any, sold to such other investors on the Initial Closing
Date. Each such other investor shall be a Qualified
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Investor, except as otherwise provided in this Agreement. If the Company
receives an indication of interest from any such Qualified Investor to purchase
Preferred Shares and Warrants, it shall provide written notice of such
indication of interest to the Purchaser not later than 15 Business Days before
the Initial Closing Date. Such written notice shall specify with respect to
each Qualified Investor (i) the name of such Qualified Investor, (ii) the
number of Preferred Shares and the aggregate exercise price of the Warrants
proposed to be purchased by such Qualified Investor and (iii) information as
may be reasonable and customary concerning the financial capability of such
Qualified Investor to consummate the purchase of such Preferred Shares and
Warrants at the Initial Closing Date. Following receipt of such a notice with
respect to any such Qualified Investor, the Purchaser shall have the right, but
shall not be obligated, to purchase from the Company at the Initial Closing (i)
all but not less than all of the Preferred Shares proposed to be sold to any
such Qualified Investor and (ii) Warrants having an aggregate exercise price
that is equal to 30% of the aggregate purchase price of such Preferred Shares.
To exercise its right to purchase such additional number of Preferred Shares
and Warrants, the Purchaser shall provide the Company with written notice of
such exercise at least ten Business Days prior to the Initial Closing Date. The
Purchaser's notice, which shall constitute a binding agreement upon receipt by
the Company to purchase such Preferred Shares and Warrants on the Initial
Closing Date, shall state the number of additional Preferred Shares for which
the Purchaser has exercised its purchase right pursuant to this paragraph.
Nothing in this paragraph shall limit or restrict the ability of the Company to
pay to any potential investor unaffiliated with Holding customary fees
(including commitment fees) which may be payable whether or not the Purchaser
exercises its purchase right under this paragraph.
(c) Upon the terms and subject to the conditions set forth herein,
during the Commitment Period, the Company, in its sole discretion, may sell to
the Purchaser and the Purchaser shall purchase from the Company, for an
aggregate purchase price of up to $120,000,000 in cash (such $120,000,000
amount, as adjusted pursuant hereto, the "Commitment Amount"), (i) up to
120,000 Preferred Shares at a stated price of $1,000 per share and (ii)
Warrants having an aggregate exercise price calculated in accordance with the
following sentence, based on Draw Downs (subject to the Minimum Draw Down
Amount and the Maximum Draw Down Amount) which the Company, in its sole
discretion, may choose to exercise during the Commitment Period. In connection
with each Draw Down, the Company shall issue to the Purchaser Warrants having
an aggregate exercise price that is equal to 30% of the aggregate purchase
price of the Preferred Shares sold pursuant to such Draw Down. The Commitment
Amount shall be reduced from $120,000,000 by (i) the amount of the aggregate
purchase price paid by any other investors referred to in Section 1.1(b) for
the Preferred Shares and Warrants issued and sold to such other investors at
the Initial Closing and (ii) (A) $1.00 for each $1.33 of Net Proceeds received
by the Company from any sales of Qualifying Debt Securities for cash
consummated by the Company from and after the date of this Agreement and (B)
$1.00 for each $1.00 of Net Proceeds received by the Company from any sales of
Qualifying Equity Securities for cash consummated by the Company from and after
the date of this Agreement.
1.2. Initial Closing. The closing of the purchase and sale of the Preferred
Shares and Warrants pursuant to Section 1.1(b) (the "Initial Closing") shall
take place at the offices of Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000
Xxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000 at 10:00 a.m. on the first
Business Day following the satisfaction or waiver of the applicable conditions
set forth in Article VI (other than those conditions that by their nature are
to be satisfied at such Closing, but subject to the satisfaction or waiver of
those conditions) provided that the Initial Closing may take place at such
other place, time or date as shall be mutually agreed upon by the Company and
the Purchaser (the date of the Initial Closing, the "Initial Closing Date").
1.3. Draw Downs; Draw Down Closings. (a) Upon the terms and subject to the
conditions set forth herein, on any Business Day during the Commitment Period
on which the applicable conditions set forth in Article VI have been satisfied
or waived, the Company may exercise a Draw Down by the delivery of a Draw Down
Notice to the Purchaser. The Company may deliver the initial Draw Down Notice
to the Purchaser before the commencement of the Commitment Period.
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(b) The aggregate purchase price for the Preferred Shares and Warrants
subject to each Draw Down, as specified in the corresponding Draw Down Notice,
shall not be less than the Minimum Draw Down Amount nor more than the Maximum
Draw Down Amount and shall not be more than (i) the Commitment Amount minus
(ii) the aggregate purchase price of all Preferred Shares and Warrants
previously issued and sold pursuant to Draw Downs.
(c) Each closing of the purchase and sale of the Preferred Shares and
Warrants pursuant to Section 1.1(c) (each, a "Draw Down Closing") shall take
place at the offices of Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000 Xxxxxxxxxx
Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000 at 10:00 a.m. on the 30th day following the
receipt by the Purchaser of a Draw Down Notice; provided, that the parties'
obligations at each such closing are subject to the prior satisfaction or
waiver of the applicable conditions set forth in Article VI (other than those
conditions that by their nature are to be satisfied at such Closing, but
subject to the satisfaction or waiver of those conditions) or at such other
place, time or date as shall be mutually agreed upon by the Company and the
Purchaser. The date of each Draw Down Closing is referred to herein as a "Draw
Down Closing Date" Unless mutually agreed by the Company and the Purchaser, no
Draw Down Closing Date shall take place earlier than the 45th day after a prior
Draw Down Closing Date. The first Draw Down Closing may not take place until
the earlier of (x) the 45th day after the Initial Closing Date and (y) June 15,
2001. The Initial Closing and each Draw Down Closing are each referred to
herein as a "Closing" and collectively as the "Closings." The Initial Closing
Date and each Draw Down Closing Date are each referred to herein as a "Closing
Date."
1.4. Deliveries. At each Closing, the Company shall deliver to the Purchaser
(i) stock certificates, each registered in the name of the Purchaser,
representing the Preferred Shares being purchased by the Purchaser at such
Closing, (ii) the Warrants, each of which shall be substantially in the form of
Exhibit 1.4, being purchased by the Purchaser at such Closing and (iii) such
other deliveries as are specified in Section 6.2(j). Delivery of such stock
certificates and Warrants and such other deliveries shall be made against
receipt by the Company of (i) the portion of the purchase price payable
therefor, which shall be paid by wire transfer of immediately available funds
to an account designated in writing by the Purchaser to the Company at least
three Business Days prior to the applicable Closing Date, and (ii) such other
deliveries as are specified in Section 6.3(d).
1.5. Calculation of Initial Conversion Price. The Applicable Conversion
Price of the Preferred Shares that shall be issued and sold to the Purchaser on
the Initial Closing Date shall be equal to the lower of (i) $8.74 and (ii) the
sum of (a) the average of the daily Market Prices of the Common Stock for the
20 consecutive trading days ending on the Business Day immediately preceding
the Initial Closing Date plus (b) 15% of the amount specified in clause (a)
(the "Initial Series B Conversion Price"). The Applicable Conversion Price of
the Preferred Shares that shall be issued and sold to the Purchaser on each
Draw Down Closing Date shall be equal to the lower of (a) the Initial Series B
Conversion Price and (b) the sum of (A) the average of the daily Market Prices
of the Common Stock for the 20 consecutive trading days ending on the Business
Day immediately preceding such Draw Down Closing Date plus (B) 15% of the
amount specified in clause (A). For purposes of this Section 1.5, "Applicable
Conversion Price" and "Market Prices" shall have the meanings given to such
terms in the Series B Certificate of Designation. Each Applicable Conversion
Price shall be rounded to the nearest cent, with 0.5 of a cent rounded down to
the nearest cent.
1.6 Capitalized Terms. Capitalized terms not otherwise defined in this
Agreement shall have the meanings ascribed to such terms in Section 9.1.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser, as of the date hereof
and as of each Closing Date, as set forth in this Article II. Each reference in
this Article II to a Schedule shall be to the disclosure schedule delivered by
the Company to the Purchaser on or before the date of this Agreement (the
"Company Disclosure Schedule").
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2.1. Organization; Subsidiaries; Books and Records. (a) The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to carry on its business as it is now being conducted. The Company is
duly qualified and licensed as a foreign corporation to do business, and is in
good standing in each jurisdiction in which the character of its assets owned
or held under lease or the nature of its business makes such qualification
necessary, except where the failure so to qualify or be licensed would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) Except as set forth on Schedule 2.1(b) or as disclosed in the SEC
Reports (as defined in Section 2.4), (i) the Company owns, either directly or
indirectly, all of the Capital Stock or other equity interests of the
Subsidiaries free and clear of all liens, charges, claims, security interests,
restrictions, options, proxies, voting trusts or other encumbrances
(collectively, the "Encumbrances") and (ii) there are no outstanding
subscription rights, options, warrants, convertible or exchangeable securities
or other rights of any character whatsoever relating to issued or unissued
Capital Stock or other equity interests of any Subsidiary, or any Commitments
(as defined in Section 2.10) of any character whatsoever relating to issued or
unissued Capital Stock or other equity interests of any Subsidiary or pursuant
to which any Subsidiary is or may become bound to issue or grant additional
shares of its Capital Stock or other equity interests or related subscription
rights, options, warrants, convertible or exchangeable securities or other
rights, or to grant preemptive rights. Except for the Subsidiaries or as
disclosed in the SEC Reports, the Company does not own, directly or indirectly,
any interest in any corporation, limited liability company, partnership,
business association or other Person in excess of 9.9% of the outstanding equity
of such corporation, limited liability company, partnership, business
association or other Person.
(c) The Company has made available to the Purchaser true and correct
copies of the Company's certificate of incorporation, as amended and in effect
on the date hereof, and the Company's bylaws, as amended and in effect on the
date hereof. The minute books and other similar records of the Company and its
Subsidiaries as made available to the Purchaser prior to the date hereof contain
a true and complete record, in all material respects, of all actions taken at
all meetings and by all written consents in lieu of meetings of the
stockholders, the boards of directors and committees of the boards of directors
of the Company and the Subsidiaries.
2.2. Due Authorization. The Company has the requisite corporate power and
authority to enter into this Agreement and each of the other Transaction
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by the Company of
this Agreement and each of the other Transaction Documents to which it is a
party, the issuance, sale and delivery of the Preferred Shares and the Warrants
by the Company, and the compliance by the Company with each of the provisions
of this Agreement and each of the other Transaction Documents to which it is a
party (including the reservation and issuance of the Common Stock issuable upon
conversion of the Series B Preferred Stock (the "Conversion Shares") and the
reservation, issuance and sale of the Common Stock issuable upon exercise of
the Warrants (the "Warrant Shares"), and the consummation by the Company of the
transactions contemplated hereby and thereby) (i) are within the corporate
power and authority of the Company and (ii) have been duly authorized by all
necessary corporate action of the Company, subject to (A) the approval and
adoption of each Series B Certificate of Designation by the Company Board, (B)
the Series A Holder Approval and (C) the Company Stockholder Approval. This
Agreement has been, and each of the other Transaction Documents to which the
Company is a party when executed and delivered by the Company shall be, duly
and validly executed and delivered by the Company. Assuming due authorization,
execution and delivery by the Purchaser of the Transaction Documents to which
it is a party, this Agreement constitutes, and each of such other Transaction
Documents when executed and delivered by the Company shall constitute, a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms, except as such enforcement is limited by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors'
rights generally and for limitations imposed by general principles of equity.
The terms, designations, powers, preferences and relative participation,
optional and other special rights, qualifications, limitations and restrictions
of each series of the Series B Preferred Stock shall be as set forth in the
Series B Certificate of
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Designation pursuant to which such series shall be issued. The Preferred Shares
have been validly reserved for issuance and, when issued and delivered in
accordance with the terms of this Agreement, shall be validly issued and
outstanding, fully paid and non-assessable, and not subject to the preemptive
or other similar rights of the stockholders of the Company. The Conversion
Shares and the Warrant Shares have been validly reserved for issuance and, when
issued and delivered in accordance with the terms of the applicable Series B
Certificate of Designation and the Warrants, respectively, shall be duly and
validly issued and outstanding, fully paid and non-assessable, and not subject
to the preemptive or other similar rights of the stockholders of the Company.
2.3. Capitalization. As of the date of this Agreement, the authorized
Capital Stock of the Company consists of (i) 200,000,000 shares of Common
Stock, of which, as of the close of business on February 21, 2001, 62,200,615
shares were issued and outstanding and of which no more than 10,000 additional
shares (excluding any shares issued upon exercise of outstanding options set
forth on Schedule 2.3) have been issued between February 21, 2001 and the date
hereof; and (iii) 5,000,000 shares of Preferred Stock, par value $.01 per
share, of which as of the date hereof, 1,480,771 shares are issued and
outstanding as Series A Convertible Preferred Stock, par value $0.01 per share
(the "Series A Preferred Stock"). As of the date of this Agreement, the Series
A Preferred Stock has an aggregate liquidation value of $10,957,705 and is
convertible into 2,961,542 shares of Common Stock. All of the issued and
outstanding shares of Common Stock and Series A Preferred Stock have been duly
authorized and are validly issued, fully paid and non-assessable. No shares of
Capital Stock of the Company are entitled to preemptive rights. Except as set
forth on Schedule 2.3 or as disclosed in the SEC Reports or as otherwise
contemplated by Article 1, there are no outstanding subscription rights,
options, warrants, convertible or exchangeable securities or other rights of
any character whatsoever (collectively, "Rights") relating to issued or
unissued Capital Stock of the Company, or any Commitments of any character
whatsoever relating to issued or unissued Capital Stock of the Company or
pursuant to which the Company is or may become bound to issue additional shares
of its Capital Stock or grant related Rights, or to grant preemptive rights. To
the extent that any Rights are outstanding, neither the issuance and sale of
the Preferred Shares or Warrants nor any issuance of Conversion Shares or
Warrant Shares shall result in an adjustment of the exercise or conversion
price or number of shares issuable upon the exercise or conversion of any such
Rights. Except as set forth on Schedule 2.3, as disclosed in the SEC Reports or
as otherwise contemplated by Article I, (i) the Company has not agreed to
register any securities under the Securities Act and (ii) there are no voting
trusts, stockholders agreements, proxies or other Commitments or understandings
in effect to which the Company is a party with respect to the voting or
transfer of any of the outstanding shares of Common Stock or Series A Preferred
Stock.
2.4. SEC Reports; Registration; Listing of Common Stock. (a) The Company has
timely filed with the Securities and Exchange Commission (the "SEC") all
reports, proxy statements, registration statements and other documents required
to be filed by it under the Securities Act and the Exchange Act since January
1, 1999 and has made available to the Purchaser complete copies of all such
reports, proxy statements, registration statements and other documents
(including the financial statements and other financial data contained herein)
(collectively, the "SEC Reports"). On the date of its filing, each SEC Report
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC thereunder and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The Company has registered its Common Stock pursuant to Section 12(g) of
the Exchange Act. The Common Stock is currently listed on the National Market
System of The Nasdaq Stock Market, Inc. (the "Nasdaq Stock Market").
2.5. Financial Statements. The consolidated financial statements of the
Company (including any related schedules and notes) included in the SEC Reports
have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") consistently followed throughout the periods
involved (except as may be indicated in the notes thereto and, in the case of
interim financial statements, as permitted by Form 10-Q under the Exchange Act)
and fairly present in accordance with GAAP the consolidated financial
8
condition, results of operations, cash flows and changes in stockholders'
equity of the Company and the Subsidiaries as of the respective dates thereof
and for the respective periods then ended (except as may be indicated in the
notes thereto and except, in the case of interim financial statements, for the
absence of notes and as permitted by Form 10-Q under the Exchange Act and
subject to changes resulting from year-end adjustments, none of which are
material in amount or effect). Except as set forth on Schedule 2.5 or as
disclosed in the SEC Reports, neither the Company nor any of the Subsidiaries
has any liability or obligation (whether accrued, absolute, contingent,
unliquidated or otherwise, whether known or unknown, whether due or to become
due and regardless of when asserted), except liabilities and obligations (i) in
the respective amounts reflected or reserved against in the unaudited
consolidated balance sheet of the Company and the Subsidiaries as of September
30, 2000 (the "Balance Sheet Date"), (ii) incurred in the ordinary course of
business since the Balance Sheet Date or (iii) which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
2.6. Absence of Certain Changes. Except as set forth on Schedule 2.6 or as
disclosed in the SEC Reports, since the Balance Sheet Date, neither the Company
nor any of the Subsidiaries has suffered any change, event or development or
series of changes, events or developments which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect.
2.7. Litigation. (a) Except as set forth on Schedule 2.7(a) or as disclosed
in the SEC Reports, there is no claim, action, suit, investigation or
proceeding (collectively, "Litigation") pending or, to the Knowledge of the
Company, threatened against the Company or any of the Subsidiaries or involving
any of their respective properties or assets by or before any court, arbitrator
or other Governmental Entity which (i) challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this Agreement or
(ii) if resolved adversely to the Company or a Subsidiary, would reasonably be
expected to have a Material Adverse Effect.
(b) Except as disclosed in the SEC Reports, neither the Company nor any of the
Subsidiaries is in default under or in breach of any order, judgment or decree
of any court, arbitrator or other Governmental Entity, except for defaults or
breaches which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
2.8. Consents; No Violations. Neither the execution, delivery or performance
by the Company of this Agreement or any of the other Transaction Documents to
which it is a party nor the consummation of the transactions contemplated
hereby or thereby shall (i) conflict with, or result in a breach or a violation
of, any provision of the certificate of incorporation or bylaws of the Company
or of the certificate of incorporation, bylaws or other organizational
documents of any of the Subsidiaries; (ii) except as set forth on Schedule 2.8,
constitute, with or without notice or the passage of time or both, a breach,
violation or default, create an Encumbrance, or give rise to any right of
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration, under (a) any Law or (b) any provision of any
agreement or other instrument to which the Company or any of the Subsidiaries
is a party or pursuant to which any of them or any of their assets or
properties is subject, except for breaches, violations, defaults, Encumbrances,
or rights of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration, which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect;
or (iii) require any consent, order, approval or authorization of, notification
or submission to, filing with, license or permit from, or exemption or waiver
by, any Governmental Entity or any other Person (collectively, the "Consents,
Approvals and Filings") on the part of the Company or any of the Subsidiaries,
except for (a) the filing of each Series B Certificate of Designation with the
Secretary of State of the State of Delaware (the "Delaware Secretary of
State"), (b) the Consents, Approvals and Filings required under the HSR Act,
(c) the Consents, Approvals and Filings required under the Securities Act, the
Exchange Act and applicable state securities laws, (d) the Consents, Approvals
and Filings required under rules of the Nasdaq Stock Market, (e) the Consents,
Approvals and Filings set forth on Schedule 2.8 and (f) such other Consents,
Approvals and Filings which the failure of the Company or any of the
Subsidiaries to make or obtain would not reasonably be expected to have a
Material Adverse Effect or materially adversely affect the ability of the
Company to consummate the transactions contemplated by this Agreement or any
Transaction Document.
9
2.9. Compliance with Laws; Licenses. (a) Neither the Company nor any of the
Subsidiaries is in violation of any applicable Laws with respect to the conduct
of its business, or the ownership or operation of its properties or assets,
except for failures to comply or violations which, individually or in the
aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect.
(b) The Company and the Subsidiaries have all permits, licenses and franchises
from Governmental Entities required to conduct their businesses as now being
conducted or as presently contemplated to be conducted (collectively, the
"Licenses"), except for such Licenses the absence of which, individually or in
the aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect. The Company and the Subsidiaries are in compliance
with the terms of the Licenses, except for failures to be in compliance which,
individually or in the aggregate, have not had, and would not reasonably be
expected to have, a Material Adverse Effect.
2.10. Commitments. Schedule 2.10 sets forth, as of the date hereof, a
complete and correct list of each contract, agreement, understanding,
arrangement and commitment of any nature whatsoever, whether written or oral,
including all amendments thereof and supplements thereto ("Commitments"), of
the following types to which the Company or any Subsidiary is a party or by or
to which the Company or any Subsidiary or any of their properties may be bound
or subject and which are not filed as exhibits to any SEC Report filed by the
Company with the SEC since January 1, 2000:
(i) Commitments containing covenants purporting to limit the
freedom of the Company or any Subsidiary to compete in any
line of business in any geographic area or to hire any
individual or group of individuals, except in connection with
or resulting from acquisitions;
(ii) Commitments relating to capital expenditures in excess of
$10,000,000;
(iii) Commitments relating to indentures, mortgages, promissory
notes, loan agreements, guarantees, letters of credit or
other substantially similar agreements or instruments of the
Company or any Subsidiary involving amounts in excess of
$1,000,000;
(iv) Commitments in respect of any joint venture, partnership or
other similar arrangement;
(v) Commitments with any Governmental Entity involving payments in
excess of $1,000,000; and
(vi) Commitments relating to interconnection agreements with local
carriers and Commitments with customers, in each case
involving payments in excess of $1,000,000 per calendar year.
2.11. Brokers or Finders. Except for Banc of America Securities LLC and
Xxxxxx Xxxxxxx & Co. Incorporated, whose fees shall be paid by the Company, no
agent, broker, investment banker or other Person is or shall be entitled to any
broker's or finder's fee or any other commission or similar fee from the
Company or any of the Subsidiaries in connection with any of the transactions
contemplated by this Agreement to occur on any Closing Date.
2.12. Section 203 of the DGCL; Takeover Statute. The Company Board has taken
all actions necessary or advisable so that the restrictions contained in
Section 203 of the DGCL applicable to a "business combination" (as defined in
such Section) shall not apply to the execution, delivery or performance of this
Agreement or any of the other Transaction Documents or the consummation of the
transactions contemplated hereby or thereby. The execution, delivery and
performance of this Agreement or any of the other Transaction Documents and the
consummation of the transactions contemplated hereby or thereby shall not cause
to be applicable to the Company any "fair price," "moratorium," "control share
acquisition" or other similar antitakeover statute or regulation enacted under
state or federal laws.
2.13. No General Solicitation or Advertising; No Integration. With respect
to any offering of the Preferred Shares, the Warrants, the Conversion Shares or
the Warrant Shares (collectively, the "Securities") made without registration
under the Securities Act and applicable state securities laws, the Company has
not
10
(i) engaged in any general solicitation or general advertising (as such terms
are used in Rule 502(c) of the Securities Act), or (ii) made any offers or
sales of any security (other than the Securities) under circumstances that
would require registration of the Securities being offered or sold under this
Agreement under the Securities Act or any state securities law.
2.14. Investment Company Status. The Company is not an "investment company,"
as such term is defined in the Investment Company Act (an "Investment
Company"). The Company is not "controlled" by an Investment Company, as such
term is defined in the Investment Company Act.
2.15. Opinion of Financial Adviser. The Company has received the opinion of
Banc of America Securities LLC to the effect that, as of the date of this
Agreement, the consideration to be received by the Company pursuant to Section
1.1(b) is fair from a financial point of view to the Company, subject to the
qualifications and assumptions contained therein.
2.16. Disclosure. Neither this Agreement nor any other Transaction Document,
nor any Schedule or Exhibit hereto or thereto (including the Company Disclosure
Schedule), nor any certificate furnished to the Purchaser by or on behalf of
the Company pursuant to Article VI, when considered together with the other
such documents and written information, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which they were made, not misleading. For purposes of the preceding sentence,
any preliminary document or written information shall be disregarded if a final
or updated version of such document or written information was delivered to the
Purchaser by the Company prior to the date hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as of the date hereof
and as of each Closing Date, as set forth in this Article III. Each reference
in this Article III to a Schedule shall be to the disclosure schedule delivered
by the Purchaser to the Company on or before the date of this Agreement (the
"Purchaser Disclosure Schedule").
3.1. Acquisition for Investment. The Purchaser is acquiring the Securities
for its own account, for investment and not with a view to, or for sale in
connection with, the distribution thereof within the meaning of the Securities
Act (it being understood that except as otherwise provided in this Agreement
and the Transaction Documents to which it is a party, the Purchaser does not
agree to hold the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
the Securities Act and state securities laws applicable to such disposition).
3.2. Accredited Investor Status. The Purchaser is an "accredited investor,"
as that term is as defined in Rule 501(a) of Regulation D under the Securities
Act. The Purchaser has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of its
investment in the Securities and is capable of bearing the economic risks of
such investment. The Purchaser understands that its investment in the
Securities involves a significant degree of risk. Holding is a Qualified
Investor.
3.3. Information. The Purchaser and its advisers have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been
requested by the Purchaser or its advisers. The Purchaser and its advisers have
been afforded the opportunity to ask questions of the Company's management
concerning the Company and the Securities.
3.4. Government Review. The Purchaser understands that no Governmental
Entity has passed upon or made any recommendation or endorsement of the
Securities.
11
3.5. Sale or Transfer. The Purchaser understands that (i) except as provided
in this Agreement or the Registration Rights Agreement, the sale or re-sale of
the Securities has not been and is not being registered under the Securities
Act or any applicable state securities laws, and the Securities may not be sold
or otherwise transferred unless (a) the Securities are sold or transferred
pursuant to an effective registration statement under the Securities Act, (b)
the Purchaser shall have delivered to the Company an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration, or (c) the Securities are sold pursuant to Rule 144 under the
Securities Act; (ii) any sale of such Securities made in reliance on Rule 144
may be made only in accordance with the terms of such Rule and further, if such
Rule is not applicable, any sale of such Securities under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the Securities Act) may require
compliance with another exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register such Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder (in each case, other than pursuant to the Registration
Rights Agreement).
3.6. Residency. The principal offices of the Purchaser and the offices of
the Purchaser in which it made its decision to purchase the Securities are
located in the State of Alabama.
3.7. No Brokers or Finders. Except as set forth on Schedule 3.7, no agent,
broker, investment banker or other Person is or shall be entitled to any
broker's or finder's fee or any other commission or similar fee from the
Purchaser in connection with the transactions contemplated by this Agreement to
occur on any Closing Date.
3.8. Organization. The Purchaser is an entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation
and has the requisite power and authority to carry on its business as it is now
being conducted.
3.9. Due Authorization. The Purchaser has the requisite power and authority
to enter into this Agreement and each of the other Transaction Documents to
which it is a party and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by the Purchaser of this Agreement and each
of the other Transaction Documents to which it is a party and the compliance by
the Purchaser with each of the provisions of this Agreement and each of the
Transaction Documents to which it is a party (including the consummation by the
Purchaser of the transactions contemplated hereby and thereby) (i) are within
the power and authority of the Purchaser and (ii) have been duly authorized by
all necessary action on the part of the Purchaser. This Agreement has been, and
each of the other Transaction Documents to which it is a party when executed
and delivered by the Purchaser shall be, duly and validly executed and
delivered by the Purchaser. Assuming due authorization, execution and delivery
by the Company of the Transaction Documents to which it is a party, this
Agreement constitutes, and each of such other Transaction Documents when
executed and delivered by the Purchaser shall constitute, a valid and binding
agreement of the Purchaser enforceable against the Purchaser in accordance with
its terms, except as such enforcement is limited by bankruptcy, insolvency and
other similar laws affecting the enforcement of creditors' rights generally and
for limitations imposed by general principles of equity.
3.10. Consents, No Violations. Neither the execution, delivery or
performance by the Purchaser of this Agreement or any of the other Transaction
Documents to which it is a party nor the consummation of the transactions
contemplated hereby or thereby shall (i) conflict with, or result in a breach
or a violation of, any provision of the certificate of incorporation, bylaws or
other organizational documents of the Purchaser; (ii) constitute, with or
without notice or the passage of time or both, a breach, violation or default,
create an Encumbrance, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or acceleration,
under (a) any Law, or (b) any provision of any agreement or other instrument to
which the Purchaser is a party or pursuant to which the Purchaser or its assets
or properties is
12
subject, except for breaches, violations, defaults, Encumbrances, or rights of
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration, which, individually or in the aggregate, would not
materially adversely affect the ability of the Purchaser to consummate the
transactions contemplated by this Agreement or any Transaction Document to
which it is a party; or (iii) require any Consents, Approvals and Filings on
the part of the Purchaser, except for (a) the Consents, Approvals and Filings
required under the HSR Act, (b) the Consents, Approvals and Filings required
under the Exchange Act and applicable state securities laws, (c) the Consents,
Approvals and Filings set forth on Schedule 3.10 and (d) such other Consents,
Approvals and Filings which the failure of the Purchaser to make or obtain
would not materially adversely affect the ability of the Purchaser to
consummate the transactions contemplated by this Agreement or any Transaction
Document.
3.11. Litigation. There is no Litigation pending or, to the knowledge of the
Purchaser, threatened against the Purchaser or any of its Affiliates or
involving any of its properties or assets by or before any court, arbitrator or
other Governmental Entity which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement.
3.12. Investment Company Act. The Purchaser is not an Investment Company or
"controlled" by an Investment Company, as such term is defined in the
Investment Company Act.
3.13. Availability of Funds. The Purchaser has sufficient funds to pay the
purchase price for the Preferred Shares and the Warrants to be issued and sold
by the Company pursuant to Article I.
ARTICLE IV
COVENANTS
4.1 Public Announcements. The Company and the Purchaser shall consult with
each other before issuing any press release with respect to this Agreement or
the transactions contemplated hereby and neither shall issue any such press
release or make any such public statement with respect thereto without the
prior consent of the other, which consent shall not be unreasonably withheld,
delayed or conditioned; provided, however, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may upon the advice of counsel be required by Law, by rules of the
Nasdaq Stock Market, by any other automated quotation system on which the
Company's securities or, if applicable, the Purchaser's securities are quoted
or by any national securities exchange on which the Company's securities or, if
applicable, the Purchaser's securities are listed provided that, to the extent
time permits, such party has used all reasonable best efforts to consult with
the other party prior thereto.
4.2 HSR Act. Subject to the terms of this Agreement, the Company and the
Purchaser each shall cooperate and use its reasonable best efforts (i) to make
or obtain, or cause to be made or obtained, all Consents, Approvals and Filings
under antitrust Laws, including the HSR Act, promptly after the date of this
Agreement that are necessary, proper or advisable in order to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement, including using its reasonable best efforts to resolve such
objections, if any, as the Antitrust Division of the Department of Justice or
the Federal Trade Commission or state antitrust enforcement or other
Governmental Entities may assert under antitrust Laws with respect to the
transactions contemplated hereby, (ii) to respond to any requests of any
Governmental Entity for information under antitrust Laws and (iii) to contest
and resist any action, including any legislative, administrative or judicial
action, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) that restricts, prevents or prohibits under any antitrust Law the
consummation of the transactions contemplated by this Agreement. The Company
and the Purchaser shall consult and cooperate with each other, and consider in
good faith the other party's views, in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of either party in connection with
proceedings under or relating to any antitrust Law.
13
4.3 Consents, Approvals and Filings. Subject to the terms of this Agreement,
the Company and the Purchaser each shall use its reasonable best efforts to
take, or cause to be taken, all actions, and do, or cause to be done, and to
assist and cooperate with the other party in doing, all things necessary,
proper, desirable or advisable to obtain and make all Consents, Approvals and
Filings required to be obtained or made by the Company and its Subsidiaries or
the Purchaser, as the case may be, in connection with the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby.
4.4 Reasonable Best Efforts. Except as otherwise expressly provided in this
Agreement, the Company and the Purchaser each shall use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable Laws to
consummate the transactions contemplated by this Agreement. In furtherance and
not in limitation of the other covenants of the parties contained in this
Agreement, if any administrative or judicial action or proceeding, including
any proceeding by a private party, is instituted (or threatened to be
instituted) challenging any transaction contemplated by this Agreement, each
party shall cooperate in all respects with the other party and use its
reasonable best efforts to contest and resist any such action or proceeding and
to have vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order, whether temporary, preliminary or permanent, that is
in effect and that prohibits, prevents or restricts the consummation of the
transactions contemplated by this Agreement; provided, however, that the
Purchaser shall not be required to expend any material funds in connection with
such reasonable best efforts unless the Company shall have agreed to reimburse
the Purchaser for such expenditures.
4.5 Company Stockholder Approval; Series A Holder Approval. Subject to the
terms of this Agreement, the Company shall use its reasonable best efforts to
obtain (i) the Company Stockholder Approval at a meeting of the Company's
stockholders and to ensure that such meeting shall be held not later than
May 31, 2001 and (ii) the Series A Holder Approval.
4.6. Listing. The Company shall use its reasonable best efforts to continue
to have the Common Stock quoted on the National Market System of the Nasdaq
Stock Market (the "NMS"), or listed on a national securities exchange or quoted
on a national automated quotation system other than the NMS for so long as any
Securities are outstanding. The Company shall prepare and submit to the Nasdaq
Stock Market one or more forms entitled "Notification Forms: Listing of
Additional Shares" covering the Conversion Shares and the Warrant Shares and
shall use its reasonable best efforts to submit such forms within the period
prescribed by the applicable rules of the Nasdaq Stock Market.
4.7. Series B Certificate of Designation. Before the issuance of Preferred
Shares at any Closing, the Company Board shall approve and adopt the Series B
Certificate of Designation authorizing such Preferred Shares, and the Company
shall cause such Series B Certificate of Designation to be filed with the
Delaware Secretary of State.
4.8. Reservation of Common Stock. The Company at all times shall reserve and
keep available, free of preemptive rights, solely for issuance and delivery
upon conversion of the Preferred Shares and upon exercise of the Warrants, the
number of shares of Common Stock from time to time issuable upon conversion of
all of the Preferred Shares or upon exercise of the Warrants, in each case at
the time outstanding.
4.9 Use of Proceeds. The proceeds received by the Company under this
Agreement shall be used by the Company for working capital and other general
corporate purposes.
4.10 Board Representation Rights. The Company shall take all corporate
action necessary to provide the Purchaser with the benefit of the Company Board
representation rights set forth in each Series B Certificate of Designation.
14
4.11 Confidential Treatment of Confidential Information. (a) In the event
the Purchaser (including its officers, employees, counsel, accountants,
partners and other authorized representatives) obtains from the Company or the
Subsidiaries any Confidential Information, the Purchaser (i) shall treat all
such Confidential Information as confidential, (ii) shall use such Confidential
Information only for the purposes contemplated in this Agreement, (iii) shall
protect such Confidential Information with the same degree of care as the
Purchaser uses to protect its own proprietary information against public
disclosure, but in no case with less than reasonable care, and (iv) shall not
disclose such Confidential Information to any third party except to such
officers, employees, counsel, accountants, partners and other authorized
representatives of the Purchaser who need to know such Confidential Information
for the purpose of effectuating the transactions contemplated by this Agreement
and who have been informed of and have agreed to protect the confidential
nature of such Confidential Information (and the Purchaser shall be responsible
for compliance with this Section 4.11 by such officers, employees, counsel,
accountants, partners and other authorized representatives).
(b) Upon the Company's request at any time, the Purchaser shall (i)
return to the Company or destroy all documents (including any copies thereof)
embodying the Confidential Information and (ii) certify in writing to the
Company, within ten days following the Company's request, that all such
Confidential Information has been returned or destroyed.
4.12 Notification of Certain Matters. Each party shall give prompt notice to
the other party of, and shall use their respective reasonable best efforts to
prevent or promptly remedy, (i) the occurrence or failure to occur, or the
impending or threatened occurrence or failure to occur, of any event which
occurrence or failure to occur would be likely to cause any of its
representations or warranties in this Agreement to be untrue or inaccurate in
any material respect (or in all respects in the case of any representation or
warranty containing any materiality qualification) at any time after the date
of this Agreement and (ii) any material failure (or any failure in the case of
any covenant, condition or agreement containing any materiality qualification)
on its part to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement. The delivery of any
notice pursuant to this Section 4.12 shall not limit or otherwise affect the
remedies available under this Agreement to any party receiving such notice.
4.13 Registration Rights. The Company shall cause the Registration Rights
Agreement in the form of Exhibit 4.13 (the "Registration Rights Agreement") to
remain in full force and effect, and the Company shall comply with the terms
thereof.
4.14 Legends. The certificates evidencing the Securities shall be free of
legends, except as provided for in Section 9.5.
4.15 Compliance with Securities Laws. Pursuant to the second paragraph of
Section 1.1(b) and as contemplated by Section 9.6, the Company and Holding, as
the case may be, may conduct discussions with institutional investors after the
date hereof regarding the purchase of Securities by such institutional
investors in accordance with this Agreement. In conducting discussions with any
such institutional investors and taking any other actions in connection
therewith, the Company and Holding shall comply, and shall ensure that their
respective Affiliates comply, with all applicable securities laws, including
the Securities Act and the Exchange Act and the rules and regulations
promulgated under the Securities Act and the Exchange Act. Without limiting the
generality of the foregoing, the Company and Holding shall comply, and shall
ensure that their respective Affiliates comply, with the provisions of Exhibit
9.6.
4.16 Further Assurances. At any time or from time to time after the date of
this Agreement, the Company, on the one hand, and the Purchaser, on the other
hand, agree to cooperate with each other, and at the request of the other
party, to execute and deliver any further instruments or documents and to take
all such further action as the other party may reasonably request in order to
evidence or effectuate the consummation of the transactions contemplated by
this Agreement or by the other Transaction Documents and to otherwise carry out
the intent of the parties hereunder or thereunder, including to effect or
otherwise obtain the approval of any
15
future transfer of Securities as contemplated hereby. Without limiting the
generality of the foregoing, the parties agree that, if any provision of this
Agreement or any other Transaction Document shall fail to comply with any rule
or policy of the National Association of Securities Dealers, Inc. or the Nasdaq
Stock Market, the parties shall consult in good faith with respect to the
negotiation of alternative agreements that will provide each of the parties
with substantially the same rights as those provided in this Agreement or such
other Transaction Document.
ARTICLE V
RESTRICTIONS ON TRANSFER
5.1. Restrictions on Transfer. The Purchaser shall not, and shall ensure
that its Affiliates do not, purchase, sell, transfer, assign, convey, gift,
mortgage, pledge, encumber, hypothecate or otherwise dispose of, directly or
indirectly ("Transfer"), any Securities except in accordance with the
provisions of this Agreement, including Section 3.5, and the other Transaction
Documents. Any purported Transfers of Securities in violation of this Article V
shall be null and void.
5.2 Compliance with Laws; Stop Order. (a) The Purchaser shall, and shall
ensure that its Affiliates shall, observe and comply with the Securities Act
and the Exchange Act and the regulations promulgated thereunder and all other
requirements of applicable Law in connection with any permitted Transfer of
Securities, including all requirements of applicable Law relating to the use of
insider information or the trading of securities while in the possession of
nonpublic information.
(b) In order to enforce the provisions of this Article V, the Company
may impose stop transfer instructions with respect to all of the Securities
held by the Purchaser and the Securities of every other Person subject to the
foregoing restrictions.
5.3 Separation of Preferred Shares and Warrants. The Preferred Shares and
Warrants issued at each Closing Date shall not become separately transferable
until the first anniversary of such Closing Date (each such first anniversary
of a Closing Date, a "Separation Date").
5.4 No Short Sales. From the date of this Agreement through the expiration
of the Commitment Period, the Purchaser shall comply, and shall use its
commercially reasonable efforts to cause its Affiliates to comply, with Section
16(c) of the Exchange Act with respect to transactions in the Common Stock to
the same extent as if Section 16(c) of the Exchange Act applied by its terms to
the Purchaser and such Affiliates.
ARTICLE VI
CONDITIONS
6.1. Conditions to Obligations of the Purchaser and the Company at Each
Closing . The obligations of the Purchaser and the Company to consummate the
transactions contemplated hereby to be consummated at each Closing are subject
to the satisfaction or waiver at or prior to the applicable Closing Date of
each of the following conditions:
(a) no preliminary or permanent injunction or other Order by any
Governmental Entity which prevents the consummation of the transactions
contemplated hereby shall have been issued and remain in effect (each party
agreeing to use its reasonable best efforts to have any such injunction or
Order lifted);
(b) the waiting period applicable to the consummation of the
transactions contemplated hereby under the HSR Act shall have expired or been
terminated;
(c) no statute, rule, regulation or other Law shall have been enacted by
any Governmental Entity which would prevent or make illegal the consummation of
the transactions contemplated by this Agreement;
(d) any Consents, Filings and Approvals that are necessary for the
consummation of the transactions contemplated by this Agreement shall have been
made or obtained except where (i) the Company's failure to
16
make or obtain such Consents, Filings and Approvals would not have a Material
Adverse Effect or a material adverse effect on the Company's ability to perform
its obligations under this Agreement or (ii) the Purchaser's failure to obtain
such Consents, Filings and Approvals would not have a material adverse effect
on the Purchaser's ability to perform its obligations under this Agreement; and
(e) no suit, claim, investigation, action or other proceeding shall be
overtly threatened or pending against the Purchaser or the Company or any
Subsidiary before any Governmental Entity which reasonably could be expected to
result in the restraint or prohibition of any such party, or the obtaining of
damages or other relief from any such party, in connection with this Agreement
or the other Transaction Documents or the consummation of the transactions
contemplated hereby or thereby.
6.2. Additional Conditions to Obligations of the Purchaser at Each
Closing. The obligations of the Purchaser to consummate the transactions
contemplated hereby to be consummated at each Closing shall be subject to the
satisfaction or waiver at or prior to the applicable Closing Date of each of
the following additional conditions:
(a) the representations and warranties of the Company contained in this
Agreement shall have been true and correct in all respects at and as of the
date they were made, and shall be true and correct in all respects at and as of
such Closing Date (unless any such representations and warranties are stated to
be made as of a date other than the date hereof, in which case they shall have
been true and correct in all respects as of that date); provided, that this
condition shall be deemed satisfied unless the failure of such representations
and warranties to be true and correct in all respects (without regard to any
qualifiers with respect to materiality or Material Adverse Effect set forth
therein) would have, in the aggregate, a Material Adverse Effect or would have,
in the aggregate, a material adverse effect on the Company's ability to perform
its obligations under this Agreement;
(b) the Company shall have performed, in all material respects, all of
its obligations contemplated herein to be performed by the Company on or prior
to such Closing Date;
(c) from the date hereof through such Closing Date, there shall not have
occurred, and be continuing, a Material Adverse Effect;
(d) the Series B Certificate of Designation with respect to the series
of Preferred Shares to be issued at such Closing and as dividends on Preferred
Shares of such series shall have been duly filed with the Delaware Secretary of
State in accordance with the laws of the State of Delaware, and such Series B
Certificate of Designation shall be in full force and effect;
(e) the Conversion Shares issuable upon conversion of the Preferred
Shares and the Warrant Shares issuable upon exercise of the Warrants shall have
been duly authorized and reserved for issuance;
(f) with respect to the purchase of the Preferred Shares and Warrants by
Holding at any Closing that occurs after the Initial Closing Date, the
stockholders of Powertel, Inc. shall have approved the acquisition of Powertel,
Inc. by VoiceStream Wireless Corporation and/or Deutsche Telecom AG;
(g) the trading of the Common Stock shall not have been suspended by the
SEC or the Nasdaq Stock Market or by any other automated quotation system on
which the Common Stock is quoted or by any national securities exchange on
which the Common Stock is listed;
(h) the Series A Holder Approval and the Company Stockholder Approval
shall have been obtained;
(i) the Company shall have obtained the waiver or amendment of
provisions of the agreements listed on Exhibit 6.2(i) to the extent specified
in such Exhibit; and
17
(j) the Company shall have delivered the following to the Purchaser:
(i) an officer's certificate certifying as to the Company's
compliance with the conditions set forth in clauses (a), (b)
and (c) of this Section 6.2;
(ii) a counterpart of the Registration Rights Agreement
Registration Rights Agreement5.2(g)executed by the Company;
(iii) the certificates and Warrants specified in Section 1.4;
(iv) an opinion of the Company's independent counsel in
substantially the form of, or as to substantially the matters
set forth in, Exhibit 6.2(j)(iv); and
(v) such other documents as may be required by this Agreement or
reasonably requested by the Purchaser.
6.3. Additional Conditions to Obligations of the Company at Each
Closing. The obligations of the Company to consummate the transactions
contemplated hereby to be consummated at each Closing shall be subject to the
satisfaction or waiver at or prior to the applicable Closing Date of each of
the following additional conditions:
(a) the representations and warranties of the Purchaser contained in
this Agreement shall have been true and correct in all respects at and as of
the date they were made, and shall be true and correct in all respects at and
as of such Closing Date (unless any such representations and warranties are
stated to be made as of a date other than the date hereof, in which case they
shall have been true and correct in all respects as of that date); provided,
that this condition shall be deemed satisfied unless the failure of such
representations and warranties to be true and correct in all respects (without
regard to any qualifiers with respect to materiality or material adverse effect
set forth therein) would have, in the aggregate, a material adverse effect on
the Purchaser's ability to perform its obligations under this Agreement;
(b) the Purchaser shall have performed, in all material respects, all of
its obligations contemplated herein to be performed by the Purchaser on or
prior to such Closing Date;
(c) the Series A Holder Approval and the Company Stockholder Approval
shall have been obtained; and
(d) the Purchaser shall have delivered the following to the Company:
(i) the portion of the purchase price payable for the Preferred
Shares and Warrants being purchased at such Closing;
(ii) an officer's certificate certifying as to the Purchaser's
compliance with the conditions set forth in clauses (a) and
(b) of this Section 6.3;
(iii) an opinion of the Purchaser's independent counsel in
substantially the form of, or as to substantially the matters
set forth in, Exhibit 6.3(d); and
(iv) such other documents as may be required by this Agreement or
reasonably requested by the Company.
ARTICLE VII
TERMINATION
7.1. Termination. This Agreement may be terminated at any time:
(a) by mutual written agreement of the Company and the Purchaser;
(b) by the Company (i) upon a breach of any covenant or agreement on the
part of the Purchaser set forth in this Agreement or if any representation or
warranty of the Purchaser set forth in this Agreement shall not be true and
correct, in either case such that the conditions set forth in Section 6.3(a) or
6.3(b) would not be
18
satisfied (a "Terminating Purchaser Breach"); provided, that such Terminating
Purchaser Breach shall not have been waived or cured by the earlier of (x) the
next Closing Date following such Terminating Purchaser Breach or, in the case
of a Terminating Purchaser Breach occurring prior to the Initial Closing Date,
June 30, 2001 (the "Outside Date") or (y) within 30 days after written notice
of such Terminating Purchaser Breach is given to the Purchaser by the Company;
(ii) if any condition to the Company's obligations to close at any Closing set
forth in Article VI has not been satisfied as of each applicable Closing Date
(or, in the case of the Initial Closing, the Outside Date) or satisfaction of
such a condition is or becomes impossible (other than because of the failure of
the Company to comply with its obligations under this Agreement), and the
Company has not waived such condition; or (iii) if the Initial Closing does not
occur on or before the Outside Date (provided that the right to terminate this
Agreement under this Section 7.1(b)(iii) shall not be available to the Company
if the Company's failure to fulfill any of its obligations hereunder has been
the cause of, or resulted in, the failure of the parties to consummate the
Initial Closing on or before the Outside Date); and
(c) by the Purchaser (i) upon a breach of any covenant or agreement on
the part of the Company set forth in this Agreement or if any representation or
warranty of the Company set forth in this Agreement shall not be true and
correct, in either case such that the conditions set forth in Section 6.2(a) or
6.2(b) would not be satisfied (a "Terminating Company Breach"); provided, that
such Terminating Company Breach shall not have been waived or cured by the
earlier of (x) the next Closing Date following such Terminating Company Breach
or, in the case of a Terminating Company Breach occurring prior to the Initial
Closing Date, the Outside Date or (y) within 30 days after written notice of
such Terminating Company Breach is given to the Company by the Purchaser; (ii)
if any condition to the Purchaser's obligation to close set forth in Article VI
has not been satisfied as of each applicable Closing Date (or, in the case of
the Initial Closing, the Outside Date) or satisfaction of such a condition is
or becomes impossible (other than because of the failure of the Purchaser to
comply with its obligations under this Agreement), and the Purchaser has not
waived such condition; or (iii) if the Initial Closing does not occur on or
before the Outside Date (provided that the right to terminate this Agreement
under this Section 7.1(c)(iii) shall not be available to the Purchaser if the
Purchaser's failure to fulfill any of its obligations hereunder has been the
cause of, or resulted in, the failure of the parties to consummate the Initial
Closing on or before the Outside Date).
7.2. Effect of Termination. If this Agreement is terminated by either the
Company or the Purchaser pursuant to the provisions of Section 7.1, this
Agreement shall forthwith become void and there shall be no further obligations
on the part of the Company or the Purchaser or their respective stockholders,
directors, officers, employees, agents or representatives, except for the
provisions of Article VIII and Sections 4.1, 4.11, 9.2, 9.3, 9.4, 9.8, 9.9,
9.15, 9.16 and 9.17, which shall survive any termination of this Agreement;
provided, that nothing in this Section 7.2 shall relieve either party from
liability for any willful breach of this Agreement.
7.3. Extensions; Waiver. At any time prior to the applicable compliance
time, each party may (i) extend the time for the performance of any of the
obligations or other acts of any other party, (ii) waive any inaccuracies in
the representations and warranties contained herein or in any document
delivered pursuant thereto and (iii) waive compliance with any of the
agreements or conditions herein. Any agreement on the part of a party to any
such extension or waiver shall be valid if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE VIII
INDEMNIFICATION
8.1. Indemnification. (a) The Company shall indemnify and hold harmless the
Purchaser, its directors and officers, and each Person, if any, who controls
the Purchaser (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) against all losses, claims, damages,
liabilities and expenses
19
(including reasonable attorneys' and accountants' fees, disbursements and
expenses, as incurred) (collectively, "Losses") incurred by such party arising
out of or based upon (i) any breach of a representation or warranty or breach
of or failure to perform any covenant or agreement on the part of the Company
contained in this Agreement or (ii) any suit, claim, investigation, action or
other proceeding before any Governmental Entity in connection with this
Agreement or the consummation of the transactions contemplated hereby.
(b) The Purchaser shall indemnify and hold harmless the Company, its
directors and officers, and each Person, if any, who controls the Company
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) against all Losses incurred by such party arising out of or based
upon any breach of a representation or warranty or breach of or failure to
perform any covenant or agreement on the part of the Purchaser contained in
this Agreement.
8.2. Method of Asserting Indemnification for Third Party Claims. Any Person
entitled to indemnification hereunder shall give prompt written notice to the
indemnifying party after the receipt by such indemnified party of any written
notice of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which such indemnified party may claim
indemnification pursuant to this Agreement, provided that failure to give such
notification shall not affect the obligations of the indemnifying party
pursuant to this Article VIII except to the extent that the indemnifying party
shall have been actually prejudiced as a result of such failure. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation, unless in the reasonable judgment of any indemnified party,
based on the written opinion of counsel, a conflict of interest is likely to
exist between the indemnifying party and such indemnified party and any other
of such indemnified parties with respect to such claim, in which event the
indemnifying party shall not be liable for the fees and expenses of more than
one counsel for all indemnified parties selected by such parties (which
selection shall be reasonably satisfactory to the indemnifying party), in each
case in connection with any one action or separate but similar or related
actions. An indemnifying party who is not entitled to, or elects not to, assume
the defense of a claim shall not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any
indemnified party, based on the written opinion of counsel, a conflict of
interest is likely to exist between the indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such additional
counsel. No indemnifying party, in defense of any such action, suit, proceeding
or investigation, shall, except with the consent of each indemnified party,
consent to the entry of any judgment or entry into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such action, suit, proceeding or investigation to the extent such liability
is covered by the indemnity obligations set forth in this Section 8.2. No
indemnified party shall consent to entry of any judgment or entry into any
settlement without the consent of each indemnifying party.
8.3. Method of Asserting Indemnification for Other Claims. In the event any
indemnified party should have a claim under Section 8.1 against the
indemnifying party that does not involve a third party claim, the indemnified
party shall deliver a written notification of a claim for indemnity under
Section 8.1 specifying the nature of and basis for such claim, together with
the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such claim (an "Indemnity Notice") with reasonable
promptness to the indemnifying party. The failure by any indemnified party to
give the Indemnity Notice shall not impair such party's rights under Section
8.1 except to the extent that the indemnifying party shall have been actually
prejudiced as a result of such failure. If the indemnifying party notifies the
indemnified party that it
20
does not dispute the claim or the amount of the claim described in such
Indemnity Notice or fails to notify the indemnified party within 30 calendar
days (the "Dispute Period") whether the indemnifying party disputes the claim
or the amount of the claim described in the Indemnity Notice, the Losses in
the amount specified in the Indemnity Notice shall be conclusively deemed a
liability of the indemnifying party under Section 8.1 and the indemnifying
party shall pay the amount of such Losses to the indemnified party on demand.
8.4. Limitations on Indemnification. (a) Notwithstanding any other
provision of this Agreement, any and all indemnification claims relating to
the matters expressly provided for in the Registration Rights Agreement shall
be subject to, and shall be made in accordance with, the Registration Rights
Agreement, rather than pursuant to this Article VIII.
(b) Neither the Company nor the Purchaser shall have any obligation
under this Article VIII to indemnify any Person for lost profits or for
consequential, incidental, punitive or exemplary damages.
(c) The indemnification provided in this Article VIII shall be the sole
and exclusive remedy for monetary damages available to the Company and the
Purchaser for matters for which indemnification is provided under this Article
VIII.
ARTICLE IX
MISCELLANEOUS
9.1. Definitions. The following terms, as used in this Agreement, shall
have the following meanings:
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act.
"Benefit Plans" shall mean the ITC/\DeltaCom, Inc. 1997 Stock Option Plan,
the ITC/\DeltaCom, Inc. Director Stock Option Plan, the ITC Holding Company,
Inc. Amended and Restated Stock Option Plan, the ITC Holding Company, Inc.
NonEmployee Director Stock Option Plan, the ITC/\DeltaCom, Inc. Employee
Profit Sharing & 401(k) Plan and each stock option, stock incentive or other
employee benefit plan of the Company or any Subsidiary of the Company that is
approved by the Company Board from and after the date of this Agreement.
"Business Day" shall mean any day except Saturday, Sunday and any legal
holiday or a day on which banking institutions in New York City, New York or
the State of Georgia generally are authorized or required by law or other
governmental actions to close.
"Capital Stock" shall mean, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock, and any and
all rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such capital stock.
"Commitment Period" shall mean the period (i) commencing on the earlier to
occur of (x) the 45th day after the Initial Closing Date and (y) June 15, 2001
and (ii) expiring on the earliest to occur of (a) the date on which the
Purchaser shall have purchased Preferred Shares and Warrants pursuant to
Section 1.1(c) for an aggregate purchase price equal to the Commitment Amount,
(b) the date this Agreement is terminated pursuant to Section 7.1 and (c) the
first anniversary of the Initial Closing Date.
"Company Board" shall mean the Board of Directors of the Company.
"Company Stockholder Approval" shall mean any authorization or approval of
the issuance, sale, conversion or exercise of the Preferred Shares and the
Warrants, or the exercise of the voting rights of the Preferred Shares, the
Conversion Shares or the Warrant Shares, that is required to be obtained from
the Company's stockholders pursuant to rules, regulations or interpretations
of the National Association of Securities Dealers, Inc. or the Nasdaq Stock
Market.
21
"Confidential Information" shall mean technical and business information
relating to the Company's intellectual property rights, trade secret processes
or devices, techniques, data, formula, inventions (whether or not patentable)
or products, research and development (including research subjects, methods and
results), production, manufacturing and engineering processes, computer
software, costs, profit or margin information, pricing policies, confidential
market information, finances, customers, distribution, sales, marketing and
production and future business plans and any other information of a
"confidential" nature, specifically including any information that is
identified orally or in writing by the Company to be confidential, or that the
Purchaser should reasonably understand under the circumstances to be a trade
secret or information of a similar nature, provided, that Confidential
Information shall not include any such information which (i) was in the public
domain on the date hereof or comes into the public domain other than through
the fault or negligence of the Purchaser, (ii) was lawfully obtained by the
Purchaser from a third party without breach of this Agreement and otherwise not
in violation of the Company's rights, (iii) was known to the Purchaser at the
time of disclosure of such Confidential Information to the Purchaser by the
Company, provided that the Purchaser was not, at such time, subject to any
confidentiality obligation with respect thereto, or (iv) was independently
developed by the Purchaser without making use of any Confidential Information.
"Convertible Notes" shall mean the 4% Convertible Subordinated Notes due
2008 of the Company.
"Convertible Securities" shall mean any warrants, rights or options, whether
or not immediately exercisable, to subscribe for or to purchase Common Stock,
or other securities convertible into or exchangeable for Common Stock.
"DGCL" shall mean the General Corporation Law of the State of Delaware, as
amended, or any successor statute, in each case as the same shall be in effect
at the time.
"Draw Down" shall mean each occasion on which the Company elects to exercise
its right to tender a Draw Down Notice requiring the Purchaser to purchase,
subject to the terms and conditions of this Agreement, the (i) number of
Preferred Shares specified in such Draw Down Notice (subject to the limitations
set forth in Section 1.1) and (ii) the related Warrants which the Purchaser
shall be entitled to receive pursuant to Section 1.1
"Draw Down Notice" shall mean a notice to the Purchaser which shall be given
at least 30 days prior to the applicable Draw Down Closing Date and shall set
forth the aggregate number of Preferred Shares and Warrants that the Purchaser
shall become obligated to purchase pursuant to a Draw Down.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor federal statute, in each case as the same shall be in effect
at the time.
"Governmental Entity" shall mean any supranational, or United States or
foreign national, federal, state or local judicial, legislative, executive,
administrative or regulatory body or authority.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, or any successor federal statute, in each case as the same shall be in
effect at the time.
"Knowledge " with respect to the Company, shall mean the actual knowledge of
Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxx and J. Xxxxxx Xxxxxx.
"Laws" shall mean all United States and foreign national, federal, state,
and local laws, statutes, ordinances, rules, regulations, orders, and decrees.
"Material Adverse Effect" shall mean a material adverse effect on the
business, condition (financial or other) or results of operations of the
Company and its Subsidiaries, taken as a whole.
"Maximum Draw Down Amount" shall mean, as of the date of determination, the
lesser of (i) the portion of the Commitment Amount outstanding as of such date
of determination and (ii) $30,000,000.
22
"Minimum Draw Down Amount" shall mean, as of the date of determination, the
lesser of (i) the portion of the Commitment Amount outstanding as of such date
of determination and (ii) $10,000,000.
"Net Proceeds" shall mean the cash consideration received by the Company for
the issuance and sale of Qualifying Debt Securities or Qualifying Equity
Securities after deduction of commissions, underwriting discounts or allowances
or other expenses paid or incurred by the Company in connection with such
issuance and sale.
"Options" shall mean any warrants, rights or options to purchase Common
Stock or Convertible Securities.
"Order" shall mean any order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, sentence, subpoena, writ or
award issued, made, entered or rendered by any court, administrative agency or
other Governmental Entity or by any arbitrator.
"Person" shall mean any individual, firm, corporation, limited liability
company, partnership, company or other entity, and shall include any successor
(by merger or otherwise) of such entity.
"Qualified Investor" shall mean either (i) a "qualified institutional buyer"
(within the meaning of Rule 144A under the Securities Act) or (ii) a large
institutional "accredited investor" (within the meaning of Rule 501(a) under
the Securities Act) of the type referred to in the SEC no-action letter
captioned Black Box Incorporated (avail. June 26, 1990). For purposes of the
second paragraph of Section 1.1(b) and Section 9.6, the total number of large
institutional accredited investors referred to in clause (ii) above that may
purchase Securities shall not exceed three (or two, if Holding is not a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act).
"Qualifying Debt Securities" shall mean (i) any debt securities of the
Company and (ii) any equity securities of the Company the terms of which
require the Company to pay cash dividends.
"Qualifying Equity Securities" shall mean any Common Stock or other equity
securities of the Company, except for equity securities referred to in clause
(ii) of the definition of Qualifying Debt Securities and equity securities that
are issued or issuable (i) upon the grant or conversion or exercise of any
Options or Convertible Securities issued and outstanding, or committed to be
issued, as of the Initial Closing Date pursuant to this Agreement and the other
Transaction Documents or otherwise (including the Warrants, the Series B
Preferred Stock, the Series A Preferred Stock, the Convertible Notes and any
Options or Convertible Securities issued and outstanding, or committed to be
issued, as of the date of this Agreement under any Benefit Plan) or (ii) upon
the grant or conversion or exercise of any Capital Stock, Options or
Convertible Securities which may be issued or granted after the date of this
Agreement under any Benefit Plan.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, in each case as the same shall be in effect at the
time.
"Series A Holder Approval" means the approval of each Series B Certificate
of Designation and the issuance of the Preferred Shares by the holders of the
Series A Preferred Stock in accordance with the certificate of designation for
the Series A Preferred Stock.
"Subsidiary" shall mean, as to the Company, each corporation, partnership or
other entity of which shares of Capital Stock or other equity interests having
ordinary voting power (other than Capital Stock or other equity interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, directly or indirectly, or
the management of which is otherwise controlled, directly or indirectly, or
both, by the Company, in each case as listed on Schedule 9.1.2.
"Transaction Documents" shall mean this Agreement, each Series B Certificate
of Designation, the Warrants and the Registration Rights Agreement.
23
9.2. Survival of Representations and Warranties. All representations and
warranties set forth in this Agreement or in any writing delivered by any party
in connection herewith shall survive the transactions contemplated by this
Agreement to be consummated at a Closing (regardless of any investigation,
inquiry, or examination made by any party or on its behalf or any knowledge of
any party or the acceptance by any party of any certificate or opinion) for a
period of two years following each such Closing, except for representations and
warranties contained in Sections 2.1, 2.2, 2.3, 2.12, 2.13, 2.14, 3.1, 3.2,
3.3, 3.4, 3.5, 3.6, 3.8, 3.9 and 3.12, which shall survive until the expiration
of the applicable statute of limitations for any claims relating thereto.
9.3. Fees and Expenses. The Company shall be responsible for the payment of
(i) the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses (collectively, the "Fees and Expenses")
incurred by the Company in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the other Transaction
Documents, (ii) the payment of the reasonable Fees and Expenses of Holding
(including the fees and expenses of its financial adviser up to the amount set
forth on Exhibit 9.3) incurred by Holding in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the
other Transaction Documents and (iii) the payment of the reasonable Fees and
Expenses of any Permitted Assignees pursuant to Section 9.6 (up to an aggregate
amount for all such Permitted Assignees as set forth on Exhibit 9.3) incurred
by such Permitted Assignees in connection with any assignment by Holding
pursuant to Section 9.6, except, in each case, to the extent expressly set
forth in this Agreement and the other Transaction Documents.
9.4. Specific Enforcement. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific intent or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof, in addition to any
other remedy to which they may be entitled by law or equity.
9.5. Restrictive Legends. (a) Each certificate representing any of the
Preferred Shares shall bear a legend in substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE SHALL BE REDEEMABLE AS
PROVIDED IN THE CERTIFICATE OF DESIGNATION AND THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION. THE SECURITIES EVIDENCED BY THIS CERTIFICATE
SHALL BE CONVERTIBLE INTO THE COMPANY'S COMMON STOCK IN THE MANNER AND
ACCORDING TO THE TERMS SET FORTH IN THE CERTIFICATE OF DESIGNATION.
(b) Each certificate representing any of the Preferred Shares, Conversion
Shares or Warrant Shares shall bear legends in substantially the following
form:
THE COMPANY IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OR SERIES OF CAPITAL
STOCK. AS REQUIRED UNDER DELAWARE LAW, THE COMPANY SHALL FURNISH TO ANY
HOLDER UPON REQUEST AND WITHOUT CHARGE A FULL SUMMARY STATEMENT OF THE
DESIGNATIONS, VOTING RIGHTS, PREFERENCES, LIMITATIONS AND SPECIAL RIGHTS OF
THE SHARES OF EACH CLASS OR SERIES AUTHORIZED TO BE ISSUED BY THE COMPANY
SO FAR AS THEY HAVE BEEN FIXED AND DETERMINED AND THE AUTHORITY OF THE
BOARD OF DIRECTORS TO FIX AND DETERMINE THE DESIGNATIONS, VOTING RIGHTS,
PREFERENCES, LIMITATIONS AND SPECIAL RIGHTS OF THE CLASSES AND SERIES OF
SECURITIES OF THE COMPANY.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
AND SUBJECT TO THE PROVISIONS OF AN INVESTMENT AGREEMENT DATED AS OF
FEBRUARY 27, 2001, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS
AVAILABLE UPON REQUEST FOR INSPECTION AT THE OFFICES OF THE COMPANY. ANY
SUCH REQUEST SHOULD BE ADDRESSED TO THE SECRETARY OF THE COMPANY.
24
The second legend set forth immediately above and any applicable stop
transfer orders shall be removed, and the Company shall issue certificates
without such legend, with respect to any of such Securities transferred in any
Transfer permitted by the terms of this Agreement with respect to which the
provisions of this Agreement provide that the transferee of such Securities
shall not be subject to the restrictions of this Agreement.
In addition, certificates representing any of the Preferred Shares,
Conversion Shares or Warrant Shares issued in a transaction exempt from the
registration requirements of the Securities Act and applicable state securities
laws, or as to which the subsequent transfer or disposition of such Securities
shall require registration or qualification thereof under the Securities Act or
applicable state securities laws, shall bear a legend in substantially the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS, OR ARE SUBJECT TO RESTRICTIONS ON
TRANSFER UNDER THE SECURITIES ACT OR SUCH LAWS. THE SHARES MAY NOT BE SOLD,
PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN A
TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
The legend set forth immediately above and any applicable stop transfer
orders shall be removed, and the Company shall issue certificates without such
legend, with respect to any of such Securities with respect to which the
Company has received an opinion from counsel to the Purchaser, in form and
substance and from counsel reasonably satisfactory to the Company (which
opinion shall be in addition to any opinion required to be provided pursuant to
Section 3.5), to the effect that the subsequent transfer or other disposition
of such Securities shall not require registration under the Securities Act.
(c) Each certificate representing any of the Preferred Shares issued prior
to the applicable Separation Date shall also bear a legend in substantially the
following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART
OF AN ISSUANCE OF SHARES OF SERIES B- CUMULATIVE
CONVERTIBLE PREFERRED STOCK, PAR VALUE $0.01 PER SHARE, OF ITC/\DELTACOM,
INC. AND WARRANTS INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE
SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF
ITC/\DELTACOM, INC. PRIOR TO THE CLOSE OF BUSINESS ON ,
THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED
SEPARATELY FROM, BUT MAY BE TRANSFERRED ONLY TOGETHER WITH, SUCH WARRANTS.
(d) Each Warrant shall bear legends substantially in the form of the legends
set forth in the form of Warrant attached hereto as Exhibit 1.4. Each Warrant
issued prior to the applicable Separation Date shall also bear a legend in
substantially the following form:
THIS WARRANT WAS INITIALLY ISSUED AS PART OF AN ISSUANCE OF
SHARES OF SERIES B- CUMULATIVE CONVERTIBLE PREFERRED STOCK, PAR VALUE
$.01 PER SHARE (THE "SERIES B PREFERRED STOCK"), OF ITC/\DELTACOM, INC. AND
WARRANTS INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE
SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, OF ITC/\DELTACOM, INC.
PRIOR TO THE CLOSE OF BUSINESS ON , THIS WARRANT MAY NOT BE
TRANSFERRED SEPARATELY FROM, BUT MAY BE TRANSFERRED ONLY TOGETHER WITH,
SUCH SERIES B PREFERRED STOCK.
25
(e) The Company, at its discretion, may cause a stop transfer order to be
placed with its transfer agent with respect to the certificates for the
Securities.
9.6. Successors and Assigns. Except as otherwise expressly provided herein,
(i) all covenants and agreements contained in this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto, whether so expressed or not, and
(ii) no party may assign or delegate all or any portion of its rights,
obligations or liabilities under this Agreement without the prior written
consent of each other party to this Agreement. Notwithstanding the foregoing,
but subject to the last sentence of this Section 9.6 and Exhibit 9.6, Holding,
without the prior written consent of the Company, may assign to other Persons
(each, a "Permitted Assignee") its rights to purchase Preferred Shares and
Warrants at any and all Closings and its related obligations, provided that as
a condition to the effectiveness of any such assignment, the Permitted Assignee
shall (i) be a Qualified Investor, (ii) execute a counterpart signature page to
this Agreement, (iii) agree to be deemed a "Purchaser" bound by this Agreement
(including all of the terms, conditions and covenants of this Agreement that
are applicable to the Purchaser and to Securities held by the Purchaser) and
(iv) agree to have made all of the representations and warranties of Holding
set forth in this Agreement (excluding the representation and warranty set
forth in Section 3.6) and represent and warrant that it is a Qualified
Investor. An assignment by Holding pursuant to the foregoing sentence, (i)
shall not relieve Holding of its obligation under the first paragraph of
Section 1.1(b) to purchase on the Initial Closing Date the 30,000 Preferred
Shares and related Warrants referred to in such paragraph and (ii) except as
provided in the immediately preceding clause (i), shall relieve Holding of its
obligations under this Agreement to purchase the Preferred Shares and Warrants
agreed to be purchased by the Permitted Assignee only if the Permitted Assignee
shall be, and shall furnish Holding and the Company with information that
establishes that it is, an entity with total assets of at least $250 million.
In addition, in the event that the Company sells Preferred Shares and Warrants
to one or more other Persons at the Initial Closing pursuant to the second
paragraph of Section 1.1(b), each such other Person shall (i) execute a
counterpart signature page to this Agreement, (ii) agree to be deemed a
"Purchaser" bound by this Agreement (including all of the terms, conditions and
covenants of this Agreement that are applicable to the Purchaser and to
Securities held by the Purchaser) and (iii) agree to have made all of the
representations and warranties of the Purchaser set forth in this Agreement
(excluding the representation and warranty set forth in Section 3.6) and,
subject to Exhibit 9.6, represent and warrant that it is a Qualified Investor.
The rights and obligations of Holding in Sections 4.15 and 9.3 and in this
Section 9.6 shall not be assignable or otherwise transferable by Holding
without the prior written consent of the Company.
9.7. Inspections; No Other Representations. The Purchaser is an informed and
sophisticated purchaser, and has undertaken such investigation and has been
provided with and has evaluated such documents and information as it deems
necessary to enable it to make an informed decision with respect to the
execution, delivery and performance of this Agreement. The Purchaser agrees to
accept the Preferred Shares and Warrants based upon its own inspection,
examination and determination with respect thereto as to all matters, and
without reliance upon any express or implied representations or warranties of
any nature made by or on behalf or imputed to the Company, except as expressly
set forth in this Agreement. Without limiting the generality of the foregoing,
the Purchaser acknowledges that the Company makes no representation or warranty
with respect to any projections, estimates or budgets delivered to or made
available to the Purchaser of future revenues, future results of operations (or
any component thereof), future cash flows or future financial condition (or any
component thereof) of the Company and its Subsidiaries or the future business
and operations of the Company and the Subsidiaries except as expressly set
forth in this Agreement.
9.8. Entire Agreement. This Agreement and the other Transaction Documents
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof, and no party shall be liable or bound to
any other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein.
26
9.9. Notices. All notices, demands, requests, consents or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given when
(i) delivered personally to the recipient, (ii) telecopied to the recipient
(with hard copy sent to the recipient by reputable overnight courier service
(charges prepaid) that same day) if telecopied before 5:00 p.m. New York City
time on a Business Day, and otherwise on the next Business Day, or (iii) one
Business Day after being sent to the recipient by reputable overnight courier
service (charges prepaid). Such notices, demands, requests, consents and other
communications shall be sent to the following Persons at the following
addresses:
(i) if to the Company, to:
ITC/\DeltaCom, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: J. Xxxxxx Xxxxxx, Esq.
Senior Vice President, General Counsel and Secretary
(ii) if to the Purchaser, to:
ITC Holding Company, Inc.
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
Senior Vice President, General Counsel and Secretary
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.
Notices, demands, requests, consents or other communications required or
desired to be delivered to any permitted transferee of the Purchaser having
rights or obligations pursuant to this Agreement shall be addressed to such
Person at the address and/or to the attention of such person as such Person
shall designate by written notice to the Company.
9.10. Business Days. If any time period for giving notice or taking action
hereunder expires on a day which is not a Business Day, the time period shall
automatically be extended to the Business Day immediately following such day.
9.11. Amendments; Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the written consent thereto of the Company and Holding, prior to the
Initial Closing Date, and the Company and the Purchasers holding a majority of
the outstanding Preferred Shares held by all Purchasers, after the Initial
Closing Date. Notwithstanding the foregoing, a waiver of or consent to
departure from the provisions hereof with respect to a matter that relates
exclusively to the rights of a particular Purchaser and that does not directly
or indirectly affect the rights of any other Purchaser may be given solely by
the Company and such affected Purchaser; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence. Each Purchaser thereafter
shall be bound by any such amendment, modification, supplement, waiver or
consent effected pursuant to this Section 9.11.
9.12. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
9.13. Descriptive Headings; Interpretation; No Strict Construction. The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
27
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns,
and verbs shall include the plural and vice versa. Reference to any agreement,
document, or instrument means such agreement, document, or instrument as
amended or otherwise modified from time to time in accordance with the terms
thereof and, if applicable, hereof. The use of the words "include" or
"including" in this Agreement shall be by way of example rather than by
limitation. The use of the words "or," "either" or "any" shall not be
exclusive. The parties to this Agreement have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties hereto, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement. The parties agree that prior drafts of
this Agreement shall be deemed not to provide any evidence as to the meaning of
any provision hereof or the intention of the parties hereto with respect to
this Agreement.
9.14. References. When a reference is made in this Agreement or any other
Transaction Document to a Section, Exhibit or Schedule, such reference shall be
to a Section of or an Exhibit or a Schedule to this Agreement or such other
Transaction Document, unless otherwise indicated.
9.15. Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Delaware applicable to contracts executed and to be performed wholly within
such state.
9.16. Exclusive Jurisdiction; Venue. Any process against the Company or the
Purchaser in, or in connection with, any suit, action or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby, may
be served personally or by certified mail pursuant to the notice provision set
forth in Section 9.9 with the same effect as though served on it personally.
Each of the Company and the Purchaser hereby irrevocably submits in any suit,
action or proceeding arising out of or relating to this Agreement or any of the
transactions contemplated hereby to the exclusive jurisdiction and venue of the
federal and state courts of the State of Delaware and irrevocably waives any
and all objections to exclusive jurisdiction and review of venue that any such
party may have under the laws of the State of Delaware or the United States.
Without limiting the other remedies, this Agreement shall be enforceable by
specific performance. Each of the foregoing parties hereby irrevocably
designates RL&F Service Corp. (the "Process Agent"), with offices at the date
hereof at One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000, as
its designee, appointee and agent to receive, for and on its behalf, service of
process in the State of Delaware in any legal action or proceedings with
respect to this Agreement and the transactions contemplated hereby, and such
service shall be deemed complete upon delivery thereof to the Process Agent,
provided that in the case of any such service upon the Process Agent, the party
effecting such service shall also deliver a copy thereof to the other party in
accordance with the notice provision set forth in Section 9.9. Each party shall
take all such action as may be necessary to continue such appointment in full
force and effect or to appoint another agent, who will thereafter be referred
to herein as the "Process Agent," so that each such party shall at all times
have an agent for service for the foregoing purposes in the State of Delaware.
9.17. Waiver of Jury Trial. The Company and the Purchaser hereby waive any
right they may have to a trial by jury in respect of any action, proceeding or
litigation directly or indirectly arising out of, under or in connection with
this Agreement or the Transaction Documents.
9.18. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
render invalid or unenforceable any other provision of this Agreement.
9.19. Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement
or instrument and shall be considered to
28
have the same binding legal effect as if it were the original signed version
thereof delivered in person. At the request of any party hereto or to any such
agreement or instrument, each other party hereto or thereto shall reexecute
original forms thereof and deliver them to all other parties. No party hereto
or to any such agreement or instrument shall raise the use of a facsimile
machine to deliver a signature or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of a facsimile
machine as a defense to the formation or enforceability of a contract, and each
such party forever waives any such defense.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the date first above written.
Company:
ITC/\DeltaCom, Inc.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice Chairman, CEO and
President
Purchaser:
ITC Holding Company, Inc.
By: /s/ Xxxxxxxx X. Xxxxxx, III
Name: Xxxxxxxx X. Xxxxxx, III
Title: Chairman and CEO
29
TABLE OF DEFINED TERMS
Definition
Term Location
---- ------------
Affiliate........................................................ Section 8.1
Agreement........................................................ Preamble
Applicable Conversion Price...................................... Section 1.5
Balance Sheet Date............................................... Section 2.5
Benefit Plans.................................................... Section 9.1
Business Day..................................................... Section 9.1
Capital Stock.................................................... Section 9.1
Closing.......................................................... Section 1.3(c)
Closings......................................................... Section 1.3(c)
Closing Date..................................................... Section 1.3(c)
Commitment Amount................................................ Section 1.1(c)
Commitment Period................................................ Section 9.1
Commitments...................................................... Section 2.10
Common Stock..................................................... Recitals
Company.......................................................... Preamble
Company Board.................................................... Section 9.1
Company Disclosure Schedule...................................... Article II
Company Stockholder Approval..................................... Section 9.1
Confidential Information......................................... Section 9.1
Consents, Approvals and Filings.................................. Section 2.8
Convertible Notes................................................ Section 9.1
Convertible Securities........................................... Section 9.1
Conversion Shares................................................ Section 2.2
Delaware Secretary of State...................................... Section 2.8
DGCL............................................................. Section 9.1
Dispute Period................................................... Section 8.3
Draw Down........................................................ Section 9.1
Draw Down Closing................................................ Section 1.3(c)
Draw Down Closing Date........................................... Section 1.3(c)
Draw Down Notice................................................. Section 9.1
Encumbrances..................................................... Section 2.1(b)
Exchange Act..................................................... Section 9.1
Fees and Expenses................................................ Section 9.3
GAAP............................................................. Section 2.5
Governmental Entity.............................................. Section 9.1
Holding.......................................................... Section 1.1(b)
HSR Act.......................................................... Section 9.1
Indemnity Notice................................................. Section 8.3
Initial Closing.................................................. Section 1.2
Initial Closing Date............................................. Section 1.2
Initial Series B Conversion Price................................ Section 1.5
Investment Company............................................... Section 2.14
Investment Company Act........................................... Section 9.1
Knowledge........................................................ Section 9.1
Laws............................................................. Section 9.1
Licenses......................................................... Section 2.9(b)
Litigation....................................................... Section 2.7(a)
Losses........................................................... Section 8.1(a)
30
Definition
Term Location
---- ------------
Market Prices.................................................... Section 1.5
Material Adverse Effect.......................................... Section 9.1
Maximum Draw Down Amount......................................... Section 9.1
Minimum Draw Down Amount......................................... Section 9.1
Nasdaq Stock Market.............................................. Section 2.4(b)
Net Proceeds..................................................... Section 8.1
NMS.............................................................. Section 4.6
Options.......................................................... Section 9.1
Order............................................................ Section 9.1
Outside Date..................................................... Section 7.1(b)
Permitted Assignee............................................... Section 9.6
Person........................................................... Section 9.1
Preferred Shares................................................. Section 1.1(a)
Process Agent.................................................... Section 9.16
Purchaser........................................................ Preamble
Purchaser Disclosure Schedule.................................... Article III
Qualifying Debt Securities....................................... Section 9.1
Qualifying Equity Securities..................................... Section 9.1
Registration Rights Agreement.................................... Section 4.13
Rights........................................................... Section 2.3
SEC.............................................................. Section 2.4(a)
SEC Reports...................................................... Section 2.4(a)
Securities....................................................... Section 2.13
Securities Act................................................... Section 9.1
Separation Date.................................................. Section 5.3
Series A Preferred Stock......................................... Section 2.3
Series B Certificate of Designation.............................. Section 1.1(a)
Series B Preferred Stock......................................... Recitals
Shelf Registration Statement..................................... Section 4.15
Subsidiary....................................................... Section 9.1
Terminating Company Breach....................................... Section 7.1(c)
Terminating Purchaser Breach..................................... Section 7.1(b)
Transaction Documents............................................ Section 8.1
Transfer......................................................... Section 5.1
Warrant Shares................................................... Section 2.2
Warrants......................................................... Recitals
31
