The Transactions. The Parties confirm their intention that, on and subject to the terms and conditions of this Participation Agreement, they shall carry out the following transactions, and enter into and deliver the following agreements and instruments (such agreements and instruments herein referred to collectively as the "Transaction Documents") at a closing to occur on October 18, 1999 the ("Closing") and, where appropriate, at a further closing (the "Subsequent Closing") to occur within five Business Days following the satisfaction of the conditions set out in Section 6(c), in each case as provided for in Section 2(b) below: (i) the entering into, at the Closing, between each of Telematica, TCW, IFC and Glacier, and the Company of a Stock Purchase Agreement in the form of Exhibit A to this Participation Agreement (each a "CCI Stock Purchase Agreement" and, collectively, the "CCI Stock Purchase Agreements"), and the purchase and sale, pursuant to such CCI Stock Purchase Agreements, of 7,733,332 shares in the aggregate of Series C Convertible Preferred Stock issued by the Company and having the rights and preferences set out in Schedule 2 to this Participation Agreement (the "Rights and Preferences of Series C Shares") for an aggregate purchase price, in cash or other immediately available funds, of Fifty-Eight Million United States Dollars (US$58,000,000), such purchases and sales of Series C Shares to occur as follows: (A) the purchase by and sale to Telematica of an aggregate of 3,333,333 Series C Shares pursuant to its CCI Stock Purchase Agreement, 2,000,000 being purchased and sold at the Closing and 1,333,333 being purchased and sold at the Subsequent Closing, in each case for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Twenty Five Million United States Dollars (US$25,000,000), Fifteen Million United States Dollars (US$15,000,000) being payable at the Closing and Ten Million United States Dollars (US$10,000,000) being payable at the Subsequent Closing, (B) the purchase by and sale to TCW of an aggregate of 3,333,333 Series C Shares pursuant to its CCI Stock Purchase Agreement, 2,000,000 being purchased and sold at the Closing and 1,333,333 being purchased and sold at the Subsequent Closing, in each case for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Twenty Five Million United States Dollars (US$25,000,000), Fifteen Million United States Dollars (US$15,000,000) being payable at the Closing and Ten Million United States Dollars (US$10,000,000) being payable at the Subsequent Closing, (C) the purchase by and sale to IFC of 666,666 Series C Shares pursuant to its CCI Stock Purchase Agreement, at the Subsequent Closing, for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Five Million United States Dollars (US$5,000,000) payable at the Closing, and (D) the purchase by and sale to Glacier of 400,000 Series C Shares, pursuant to its CCI Stock Purchase Agreement, at the Closing, for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Three Million United States Dollars (US$3,000,000) payable at the Closing, and the commitment by the Company to apply the proceeds of such sale in the manner set out in Schedule 3 to this Participation Agreement; (ii) the conversion by Internexus, at the Closing, of the principal and interest amounts of the Internexus December Note, the MetroNet Note and the Bridge Notes into 1,328,911 Series C Shares and the conversion by FondElec, at the Closing, of the principal amount of the FondElec December Note into 666,666 Series C Shares; (iii) the entering into, at the Closing, by the Investors, and the Company of an Option Agreement in the form of Exhibit B to this Participation Agreement (the "Option Agreement"), granting an option to each Investor to acquire further Series C Shares within nine months following the Closing Date, on the same terms and conditions as set out in the CCI Stock Purchase Agreement attached hereto as Exhibit A, except that the maximum number of Series C Shares acquired by each Investor shall be 40% of the number to be acquired by it as contemplated in subsection 2(a)(i), in the case of Telematica, TCW, IFC and Glacier, or 40% of the number received upon conversion as contemplated in subsection 2(a)(ii), in the case of FondElec and Internexus; (iv) the granting to each Investor of a Series C Warrant in the form of Exhibit C to this Participation Agreement (each a "Series C Warrant" and, collectively, the "Series C Warrants"), providing for the issuance by the Company of 2,432,226 shares of Common Stock, such grants to occur as follows: (A) the grant to Telematica, as to 500,000 shares, at the Closing, and as to 333,333, at the Subsequent Closing, (B) the grant to TCW, as to 500,000 shares, at the Closing, and as to 333,333, at the Subsequent Closing, (C) the grant to IFC, as to 166,666 shares, at the Subsequent Closing, (D) the grant to Glacier, as to 100,000 shares, at the Closing, (E) the grant to Internexus, as to 332,228 shares, at the Closing, and (F) the grant to FondElec, as to 166,666 shares, at the Closing; (v) the granting to each of FondElec and Internexus, at the Closing, of a FondElec/Internexus Warrant in the form of Exhibit D to this Participation Agreement (each, a "FondElec/Internexus Warrant"), providing for the issuance to each of them, in each case at the same time and for the same price as the Series C Warrants are subject to exercise, as to 260,000 shares each of Common Stock; (vi) the entering into, at the Closing, among the Company, the Investors, and the D'Ambrosios of a CCI Shareholders' Agreement in the form of Exhibit E to this Participation Agreement (the "CCI Shareholders' Agreement") for the purpose of setting out how the Investors and the D'Ambrosios will exercise their rights as shareholders with respect to, among other matters, corporate governance, the election of directors and the disposition of their Company Equity; (vii) the entering into, at the Closing, among the Investors, the Company, the D'Ambrosios and certain other parties of an Amended and Restated Registration Rights Agreement in the form of Exhibit F to this Participation Agreement (the "Registration Rights Agreement") for the purpose of setting out the rights of the Investors, the D'Ambrosios and such other parties to require or join in the registration of their shares of common stock of the Company under U.S. Securities Laws; (viii) the entering into, at the Closing, among Telematica, FondElec, WCI de Cayman, Inc., a Cayman Islands limited liability company and a Subsidiary ("WCI") and Chispa Dos Inc., a Cayman Islands limited liability company ("CCI Salvador") of a Subscription and Refinance Agreement in the form of Exhibit G to this Participation Agreement (the "Salvador Subscription Agreement"), and the purchase, at the Subsequent Closing, through the subscription of unissued shares of CCI Salvador common stock, by Telematica from CCI Salvador, and the sale by CCI Salvador to Telematica, of 59.1550 shares of common stock of CCI Salvador (the "Salvador Shares", as further described in the Salvador Subscription Agreement) for a purchase price, in cash or other immediately available funds of Five Million Five Hundred Twenty-Five Thousand United States Dollars (US$5,525,000); the contribution, at the Subsequent Closing, by WCI to CCI Salvador of Nine Hundred One Thousand Seven Hundred and Sixty United States Dollars (US$901,760) of its accounts receivable from CCI Salvador in exchange and in subscription for 9.6549 shares of common stock of CCI Salvador; and the payment, at the Subsequent Closing, by CCI Salvador, utilizing a portion of the proceeds of the sale of the Salvador Shares, of Three Million Eight Hundred Sixty-Four Thousand Five Hundred Twenty-Nine United States Dollars (US$3,864,529) to repay Three Million Five Hundred Thousand United States Dollars (US$3,500,000) of the principal amount of that certain Promissory Note of CCI Salvador made to FondElec and dated ▇▇▇▇▇ ▇, ▇▇▇▇ ("▇▇▇▇▇▇▇▇ Note"), and accrued interest thereon through October 14, 1999; (ix) the entering into, at the Closing, among CCI Salvador, Telematica, WCI, FondElec and the other shareholders of CCI Salvador of an Amended and Restated Salvador Shareholders' Agreement in the form of Exhibit H to this Participation Agreement (the "Salvador Shareholders' Agreement"), for the purpose of setting out how Telematica and such other shareholders will manage the business of CCI Salvador, and provisions regarding the disposition of their equity interests in CCI Salvador; and (x) the entering into, at the Closing, between the Company and an affiliate of Telematica of a letter of intent in the form of Exhibit I to this Participation Agreement ("Colombia Letter of Intent").
Appears in 2 contracts
Sources: Participation Agreement (Convergence Communications Inc), Participation Agreement (TCW Group Inc)
The Transactions. The Parties confirm their intention that, on and subject to the terms and conditions of this Participation Agreement, they shall carry out the following transactions, and enter into and deliver the following agreements and instruments (such agreements and instruments herein referred to collectively as the "Transaction Documents") at a closing to occur on October 18, 1999 the ("Closing") and, where appropriate, at a further closing (the "Subsequent Closing") to occur within five Business Days following the satisfaction of the conditions set out in Section 6(c), in each case as provided for in Section 2(b) below:
(i) the entering into, at the Closing, between each of Telematica, TCW, IFC and Glacier, and the Company of a Stock Purchase Agreement in the form of Exhibit A to this Participation Agreement (each a "CCI Stock Purchase Agreement" and, collectively, the "CCI Stock Purchase Agreements"), and the purchase and sale, pursuant to such CCI Stock Purchase Agreements, of 7,733,332 shares in the aggregate of Series C Convertible Preferred Stock issued by the Company and having the rights and preferences set out in Schedule 2 to this Participation Agreement (the "Rights and Preferences of Series C Shares") for an aggregate purchase price, in cash or other immediately available funds, of Fifty-Eight Million United States Dollars (US$58,000,000), such purchases and sales of Series C Shares to occur as follows:
(A) the purchase by and sale to Telematica of an aggregate of 3,333,333 Series C Shares pursuant to its CCI Stock Purchase Agreement, 2,000,000 being purchased and sold at the Closing and 1,333,333 being purchased and sold at the Subsequent Closing, in each case for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Twenty Five Million United States Dollars (US$25,000,000), Fifteen Million United States Dollars (US$15,000,000) being payable at the Closing and Ten Million United States Dollars (US$10,000,000) being payable at the Subsequent Closing,
(B) the purchase by and sale to TCW of an aggregate of 3,333,333 Series C Shares pursuant to its CCI Stock Purchase Agreement, 2,000,000 being purchased and sold at the Closing and 1,333,333 being purchased and sold at the Subsequent Closing, in each case for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Twenty Five Million United States Dollars (US$25,000,000), Fifteen Million United States Dollars (US$15,000,000) being payable at the Closing and Ten Million United States Dollars (US$10,000,000) being payable at the Subsequent Closing,
(C) the purchase by and sale to IFC of 666,666 Series C Shares pursuant to its CCI Stock Purchase Agreement, at the Subsequent Closing, for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Five Million United States Dollars (US$5,000,000) payable at the Closing, and
(D) the purchase by and sale to Glacier of 400,000 Series C Shares, pursuant to its CCI Stock Purchase Agreement, at the Closing, for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Three Million United States Dollars (US$3,000,000) payable at the Closing, and the commitment by the Company to apply the proceeds of such sale in the manner set out in Schedule 3 to this Participation Agreement;
(ii) the conversion by Internexus, at the Closing, of the principal and interest amounts of the Internexus December Note, the MetroNet Note and the Bridge Notes into 1,328,911 Series C Shares and the conversion by FondElec, at the Closing, of the principal amount of the FondElec December Note into 666,666 Series C Shares;
(iii) the entering into, at the Closing, by the Investors, and the Company of an Option Agreement in the form of Exhibit B to this Participation Agreement (the "Option Agreement"), granting an option to each Investor to acquire further Series C Shares within nine months following the Closing Date, on the same terms and conditions as set out in the CCI Stock Purchase Agreement attached hereto as Exhibit A, except that the maximum number of Series C Shares acquired by each Investor shall be 40% of the number to be acquired by it as contemplated in subsection 2(a)(i), in the case of Telematica, TCW, IFC and Glacier, or 40% of the number received upon conversion as contemplated in subsection 2(a)(ii), in the case of FondElec and Internexus;
(iv) the granting to each Investor of a Series C Warrant in the form of Exhibit C to this Participation Agreement (each a "Series C Warrant" and, collectively, the "Series C Warrants"), providing for the issuance by the Company of 2,432,226 shares of Common Stock, such grants to occur as follows:
(A) the grant to Telematica, as to 500,000 shares, at the Closing, and as to 333,333, at the Subsequent Closing,
(B) the grant to TCW, as to 500,000 shares, at the Closing, and as to 333,333, at the Subsequent Closing,
(C) the grant to IFC, as to 166,666 shares, at the Subsequent Closing,
(D) the grant to Glacier, as to 100,000 shares, at the Closing,
(E) the grant to Internexus, as to 332,228 shares, at the Closing, and
(F) the grant to FondElec, as to 166,666 shares, at the Closing;
(v) the granting to each of FondElec and Internexus, at the Closing, of a FondElec/Internexus Warrant in the form of Exhibit D to this Participation Agreement (each, a "FondElec/Internexus Warrant"), providing for the issuance to each of them, in each case at the same time and for the same price as the Series C Warrants are subject to exercise, as to 260,000 shares each of Common Stock;
(vi) the entering into, at the Closing, among the Company, the Investors, and the D'Ambrosios of a CCI Shareholders' Agreement in the form of Exhibit E to this Participation Agreement (the "CCI Shareholders' Agreement") for the purpose of setting out how the Investors and the D'Ambrosios will exercise their rights as shareholders with respect to, among other matters, corporate governance, the election of directors and the disposition of their Company Equity;
(vii) the entering into, at the Closing, among the Investors, the Company, the D'Ambrosios and certain other parties of an Amended and Restated Registration Rights Agreement in the form of Exhibit F to this Participation Agreement (the "Registration Rights Agreement") for the purpose of setting out the rights of the Investors, the D'Ambrosios and such other parties to require or join in the registration of their shares of common stock of the Company under U.S. Securities Laws;
(viii) the entering into, at the Closing, among Telematica, FondElec, WCI de Cayman, Inc., a Cayman Islands limited liability company and a Subsidiary ("WCI") and Chispa Dos Inc., a Cayman Islands limited liability company ("CCI Salvador") of a Subscription and Refinance Agreement in the form of Exhibit G to this Participation Agreement (the "Salvador Subscription Agreement"), and the purchase, at the Subsequent Closing, through the subscription of unissued shares of CCI Salvador common stock, by Telematica from CCI Salvador, and the sale by CCI Salvador to Telematica, of 59.1550 shares of common stock of CCI Salvador (the "Salvador Shares", as further described in the Salvador Subscription Agreement) for a purchase price, in cash or other immediately available funds of Five Million Five Hundred Twenty-Five Thousand United States Dollars (US$5,525,000); the contribution, at the Subsequent Closing, by WCI to CCI Salvador of Nine Hundred One Thousand Seven Hundred and Sixty United States Dollars (US$901,760) of its accounts receivable from CCI Salvador in exchange and in subscription for 9.6549 shares of common stock of CCI Salvador; and the payment, at the Subsequent Closing, by CCI Salvador, utilizing a portion of the proceeds of the sale of the Salvador Shares, of Three Million Eight Hundred Sixty-Four Thousand Five Hundred Twenty-Nine United States Dollars (US$3,864,529) to repay Three Million Five Hundred Thousand United States Dollars (US$3,500,000) of the principal amount of that certain Promissory Note of CCI Salvador made to FondElec and dated ▇▇▇▇▇ ▇March 3, ▇▇▇▇ 1999 ("Salvador Note"), and accrued ▇▇▇▇▇▇▇▇ Note"), and accrued interest thereon through ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ October 14, 1999;
(ix) the entering into, at the Closing, among CCI Salvador, Telematica, WCI, FondElec and the other shareholders of CCI Salvador of an Amended and Restated Salvador Shareholders' Agreement in the form of Exhibit H to this Participation Agreement (the "Salvador Shareholders' Agreement"), for the purpose of setting out how Telematica and such other shareholders will manage the business of CCI Salvador, and provisions regarding the disposition of their equity interests in CCI Salvador; and
(x) the entering into, at the Closing, between the Company and an affiliate of Telematica of a letter of intent in the form of Exhibit I to this Participation Agreement ("Colombia Letter of Intent").
Appears in 1 contract
The Transactions. The Parties confirm their intention that, on Section 1.1. Initial Purchase of Sterling Common Stock by the Purchaser.
(a) Upon the terms and subject to the terms and conditions of set forth in this Participation Agreement, they shall carry out on the following transactionsClosing Date (as defined in Section 2.1(a) hereof), the Selling Stockholders severally will sell, assign, transfer and deliver to the Purchaser, and enter into the Purchaser will purchase and deliver acquire from the following agreements and instruments Selling Stockholders an aggregate of eighty-seven thousand six hundred ninety-seven (such agreements and instruments herein referred to collectively as the "Transaction Documents"87,697) at a closing to occur on October 18, 1999 the ("Closing") and, where appropriate, at a further closing shares of Sterling Common Stock (the "Subsequent ClosingSterling Purchased Stock") to occur within five Business Days following the satisfaction ), free and clear of all mortgages, pledges, security interests, encumbrances, liens (statutory or other), conditional sale agreements, claims, charges, limitations or similar restrictions ("Liens"). The respective number of shares of the conditions Sterling Purchased Stock to be sold by each of the several Selling Stockholders is set out in Section 6(c)forth on Exhibit A hereto next to each such Selling Stockholder's name.
(b) On the Closing Date, as consideration for its purchase of the Sterling Purchased Stock from the Selling Stockholders, the Purchaser (X) will issue and deliver to each of the Selling Stockholders, in the respective amounts indicated on Exhibit A hereto next to each case as provided for in Section 2(b) below:
such Selling Stockholder's name, the following: (i) the entering into, at the Closing, between each one million one hundred twenty-four thousand five hundred thirty-six (1,124,536) shares of Telematica, TCW, IFC and Glacier, and the Company of a Purchaser Common Stock Purchase Agreement in the form aggregate, free and clear of Exhibit A to this Participation Agreement all Liens, (each a "CCI Stock Purchase Agreement" and, collectively, the "CCI Stock Purchase Agreements"), ii) Notes with principal and the purchase and sale, pursuant to such CCI Stock Purchase Agreements, of 7,733,332 shares interest payable at maturity in the aggregate of Series C Convertible Preferred Stock issued by the Company and having the rights and preferences set out in Schedule 2 to this Participation Agreement three million eight hundred twenty-four thousand dollars (the "Rights and Preferences of Series C Shares") for an aggregate purchase price, in cash or other immediately available funds, of Fifty-Eight Million United States Dollars (US$58,000,000$3,824,000.00), such purchases and sales of Series C Shares to occur as follows:
(A) the purchase by and sale to Telematica of an aggregate of 3,333,333 Series C Shares pursuant to its CCI Stock Purchase Agreement, 2,000,000 being purchased and sold at the Closing and 1,333,333 being purchased and sold at the Subsequent Closing, in each case for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Twenty Five Million United States Dollars (US$25,000,000), Fifteen Million United States Dollars (US$15,000,000) being payable at the Closing and Ten Million United States Dollars (US$10,000,000) being payable at the Subsequent Closing,
(B) the purchase by and sale to TCW of an aggregate of 3,333,333 Series C Shares pursuant to its CCI Stock Purchase Agreement, 2,000,000 being purchased and sold at the Closing and 1,333,333 being purchased and sold at the Subsequent Closing, in each case for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Twenty Five Million United States Dollars (US$25,000,000), Fifteen Million United States Dollars (US$15,000,000) being payable at the Closing and Ten Million United States Dollars (US$10,000,000) being payable at the Subsequent Closing,
(C) the purchase by and sale to IFC of 666,666 Series C Shares pursuant to its CCI Stock Purchase Agreement, at the Subsequent Closing, for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Five Million United States Dollars (US$5,000,000) payable at the Closing, and
(D) the purchase by and sale to Glacier of 400,000 Series C Shares, pursuant to its CCI Stock Purchase Agreement, at the Closing, for a purchase price per share of Seven and 50/100 United States Dollars (US$7.50), being an aggregate purchase price of Three Million United States Dollars (US$3,000,000) payable at the Closing, and the commitment by the Company to apply the proceeds of such sale in the manner set out in Schedule 3 to this Participation Agreement;
(ii) the conversion by Internexus, at the Closing, of the principal and interest amounts of the Internexus December Note, the MetroNet Note and the Bridge Notes into 1,328,911 Series C Shares and the conversion by FondElec, at the Closing, of the principal amount of the FondElec December Note into 666,666 Series C Shares;
(iii) Warrants to purchase three hundred three thousand nine hundred forty-two (303,942) shares of Purchaser Common Stock in the entering intoaggregate, at (Y) will grant the ClosingPut Option to the Selling Stockholders, by the Investorsas provided in, and pursuant to Section 1.2 hereof, and (Z) will grant the Company of an Option Agreement right to earn the Earnout Pool Amount (as defined in the form of Exhibit B to this Participation Agreement (the "Option Agreement"Section 1.3 hereof), granting an option as provided in and pursuant to each Investor to acquire further Series C Shares within nine months following the Closing Date, on the same terms and conditions as set out in the CCI Stock Purchase Agreement attached hereto as Exhibit A, except that the maximum number of Series C Shares acquired by each Investor shall be 40% of the number to be acquired by it as contemplated in subsection 2(a)(i), in the case of Telematica, TCW, IFC and Glacier, or 40% of the number received upon conversion as contemplated in subsection 2(a)(ii), in the case of FondElec and Internexus;
(iv) the granting to each Investor of a Series C Warrant in the form of Exhibit C to this Participation Agreement (each a "Series C Warrant" and, collectively, the "Series C Warrants"), providing for the issuance by the Company of 2,432,226 shares of Common Stock, such grants to occur as follows:
(A) the grant to Telematica, as to 500,000 shares, at the Closing, and as to 333,333, at the Subsequent Closing,
(B) the grant to TCW, as to 500,000 shares, at the Closing, and as to 333,333, at the Subsequent Closing,
(C) the grant to IFC, as to 166,666 shares, at the Subsequent Closing,
(D) the grant to Glacier, as to 100,000 shares, at the Closing,
(E) the grant to Internexus, as to 332,228 shares, at the Closing, and
(F) the grant to FondElec, as to 166,666 shares, at the Closing;
(v) the granting to each of FondElec and Internexus, at the Closing, of a FondElec/Internexus Warrant in the form of Exhibit D to this Participation Agreement (each, a "FondElec/Internexus Warrant"), providing for the issuance to each of them, in each case at the same time and for the same price as the Series C Warrants are subject to exercise, as to 260,000 shares each of Common Stock;
(vi) the entering into, at the Closing, among the Company, the Investors, and the D'Ambrosios of a CCI Shareholders' Agreement in the form of Exhibit E to this Participation Agreement (the "CCI Shareholders' Agreement") for the purpose of setting out how the Investors and the D'Ambrosios will exercise their rights as shareholders with respect to, among other matters, corporate governance, the election of directors and the disposition of their Company Equity;
(vii) the entering into, at the Closing, among the Investors, the Company, the D'Ambrosios and certain other parties of an Amended and Restated Registration Rights Agreement in the form of Exhibit F to this Participation Agreement (the "Registration Rights Agreement") for the purpose of setting out the rights of the Investors, the D'Ambrosios and such other parties to require or join in the registration of their shares of common stock of the Company under U.S. Securities Laws;
(viii) the entering into, at the Closing, among Telematica, FondElec, WCI de Cayman, Inc., a Cayman Islands limited liability company and a Subsidiary ("WCI") and Chispa Dos Inc., a Cayman Islands limited liability company ("CCI Salvador") of a Subscription and Refinance Agreement in the form of Exhibit G to this Participation Agreement (the "Salvador Subscription Agreement"), and the purchase, at the Subsequent Closing, through the subscription of unissued shares of CCI Salvador common stock, by Telematica from CCI Salvador, and the sale by CCI Salvador to Telematica, of 59.1550 shares of common stock of CCI Salvador (the "Salvador Shares", as further described in the Salvador Subscription Agreement) for a purchase price, in cash or other immediately available funds of Five Million Five Hundred Twenty-Five Thousand United States Dollars (US$5,525,000); the contribution, at the Subsequent Closing, by WCI to CCI Salvador of Nine Hundred One Thousand Seven Hundred and Sixty United States Dollars (US$901,760) of its accounts receivable from CCI Salvador in exchange and in subscription for 9.6549 shares of common stock of CCI Salvador; and the payment, at the Subsequent Closing, by CCI Salvador, utilizing a portion of the proceeds of the sale of the Salvador Shares, of Three Million Eight Hundred Sixty-Four Thousand Five Hundred Twenty-Nine United States Dollars (US$3,864,529) to repay Three Million Five Hundred Thousand United States Dollars (US$3,500,000) of the principal amount of that certain Promissory Note of CCI Salvador made to FondElec and dated ▇▇▇▇▇ ▇, ▇▇▇▇ ("▇▇▇▇▇▇▇▇ Note"), and accrued interest thereon through October 14, 1999;
(ix) the entering into, at the Closing, among CCI Salvador, Telematica, WCI, FondElec and the other shareholders of CCI Salvador of an Amended and Restated Salvador Shareholders' Agreement in the form of Exhibit H to this Participation Agreement (the "Salvador Shareholders' Agreement"), for the purpose of setting out how Telematica and such other shareholders will manage the business of CCI Salvador, and provisions regarding the disposition of their equity interests in CCI Salvador; and
(x) the entering into, at the Closing, between the Company and an affiliate of Telematica of a letter of intent in the form of Exhibit I to this Participation Agreement ("Colombia Letter of Intent")Section 1.3 hereof.
Appears in 1 contract
The Transactions. The Parties confirm their intention that, on and subject to the terms and conditions of this Participation Agreement, they shall carry out the following transactions, and enter into and deliver the following agreements and instruments (such agreements and instruments herein referred to collectively as the "Transaction Documents") at a closing to occur on October 18, 1999 the ("Closing") and, where appropriate, at a further closing (the "Subsequent Closing") to occur within five Business Days following the satisfaction of the conditions set out in Section 6(c), in each case as provided for in Section 2(b) below6:
(i) the entering intoexecution and delivery, at the Closing, of identical Stock Purchase Agreements between each of Telematica, TCW, IFC and Glacier, Investor and the Company of a Stock Purchase Agreement substantially in the form of Exhibit A to this Participation Agreement (each a an "CCI Individual Stock Purchase Agreement" and, collectively, the "CCI Individual Stock Purchase Agreements"), and the purchase and sale, pursuant to such CCI Individual Stock Purchase AgreementsAgreements and the Option described in Section 2(d), of 7,733,332 Two Million Six Hundred Forty-Three Thousand Six Hundred Thirty-Six (2,643,636) shares in the aggregate of Series C D Convertible Preferred Stock issued by of the Company and Company, par value US$.001 per share ("Series D Shares") having the rights and preferences set out in Schedule 2 to this Participation Agreement (the "Series D Shares Rights and Preferences of Series C SharesPreferences") for an aggregate purchase price, in cash or other immediately available funds, funds of FiftyTwenty-Four Million Five Hundred Eighty-Five Thousand Eight Million Hundred Fifty United States Dollars (US$58,000,00024,585,850), such purchases and sales of Series C D Shares to occur as follows:
(A) the purchase by and sale to Telematica TCW of an aggregate of 3,333,333 One Million Seventy-Five Thousand Two Hundred Sixty-Eight (1,075,268) Series C D Shares pursuant to its CCI Stock Purchase Agreement, 2,000,000 being purchased and sold at the Closing and 1,333,333 being purchased and sold at the Subsequent Closing, in each case for a purchase price per share of Seven Nine and 50/100 30/100ths United States Dollars (US$7.509.30), being an aggregate purchase price of Twenty Five Million United States Dollars (US$25,000,000), Fifteen Million United States Dollars (US$15,000,000) being payable at the Closing and Ten Million United States Dollars (US$10,000,000) being payable at the Subsequent Closing),
(B) the purchase by and sale to TCW TELEMATICA of an aggregate of 3,333,333 One Million Seventy-Five Thousand Two Hundred Sixty-Eight (1,075,268) Series C D Shares pursuant to its CCI Stock Purchase Agreement, 2,000,000 being purchased and sold at the Closing and 1,333,333 being purchased and sold at the Subsequent Closing, in each case for a purchase price per share of Seven Nine and 50/100 30/100ths United States Dollars (US$7.509.30), being an aggregate purchase price of Twenty Five Million United States Dollars (US$25,000,000), Fifteen Million United States Dollars (US$15,000,000) being payable at the Closing and Ten Million United States Dollars (US$10,000,000) being payable at the Subsequent Closing),
(C) the purchase by and sale to IFC Priu, of 666,666 an aggregate of One Hundred Eighty-Two Thousand Seven Hundred Ninety-Five (182,795) Series C D Shares pursuant to its CCI Stock Purchase Agreement, at the Subsequent Closing, for a purchase price per share of Seven Nine and 50/100 30/100ths United States Dollars (US$7.509.30), being an aggregate purchase price of Five Million United States ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars (US$5,000,000) payable at the Closing, and1,700,000),
(D) the purchase by and sale to Glacier Ostry of 400,000 an aggregate of One Hundred Thirty-Nine Thousand Seven Hundred Eighty-Four (139,784) Series C Shares, pursuant to its CCI Stock Purchase Agreement, at the Closing, D Shares for a purchase price per share of Seven Nine and 50/100 30/100ths United States Dollars (US$7.509.30), being an aggregate purchase price of Three Million ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars (US$1,300,000);
(E) the purchase by and sale to Glacier of an aggregate of Eighty-Six Thousand Twenty-One (86,021) Series D Shares for a purchase price per share of Nine and 30/100ths United States Dollars (US$3,000,0009.30), being an aggregate purchase price of Eight Hundred Thousand United States Dollars (US$800,000),
(F) payable at the Closingpurchase by and sale to MCM III of an aggregate of Eighty-Four Thousand Five Hundred (84,500) Series D Shares for a purchase price per share of Nine and 30/100ths United States Dollars (US$9.30), and the commitment by the Company to apply the proceeds being an aggregate purchase price of such sale in the manner set out in Schedule 3 to this Participation Agreement;Seven Hundred Eighty-Five Thousand Eight Hundred Fifty United States Dollars (US$785,850),
(ii) the conversion by Internexus, at the Closing, grant to each Investor of the principal and interest amounts one or more internal rate of the Internexus December Note, the MetroNet Note and the Bridge Notes into 1,328,911 Series C Shares and the conversion by FondElec, at the Closing, of the principal amount of the FondElec December Note into 666,666 Series C Shares;
(iii) the entering into, at the Closing, by the Investors, and the Company of an Option Agreement return warrants in the form of Exhibit B B-1 to this Participation Agreement (the "Option Agreement"), granting an option to each Investor to acquire further Series C Shares within nine months following the Closing Date, on the same terms and conditions as set out in the CCI Stock Purchase Agreement attached hereto as Exhibit A, except that the maximum number of Series C Shares acquired by each Investor shall be 40% of the number to be acquired by it as contemplated in subsection 2(a)(i), in the case of Telematica, TCW, IFC and Glacier, or 40% of the number received upon conversion as contemplated in subsection 2(a)(ii), in the case of FondElec and Internexus;
(iv) the granting to each Investor of a Series C Warrant in the form of Exhibit C to this Participation Agreement (each a an "Series C IRR Warrant" and, collectively, the "Series C IRR Warrants"), providing for the issuance by the Company of 2,432,226 up to Three Hundred Ninety-Six Thousand Five Hundred Fourty-Four (396,544) shares in the aggregate of Common Stock, which number corresponds to approximately 15% of the number of the Series D Shares to be acquired by the Investors under Section 2(a)(i), such grants to occur as followsunder the terms and conditions set forth therein:
(A) the grant grants to Telematica, as TCW of up to 500,000 shares, at the Closing, and as to 333,333, at the Subsequent ClosingOne Hundred Sixty-One Thousand Two Hundred Ninety (161,290) shares of Common Stock,
(B) the a grant to TCW, as TELEMATICA of up to 500,000 shares, at the Closing, and as to 333,333, at the Subsequent ClosingOne Hundred Sixty-One Thousand Two Hundred Ninety (161,290) shares of Common Stock,
(C) the a grant to IFC, as Priu of up to 166,666 shares, at the Subsequent ClosingTwenty-Seven Thousand Four Hundred Nineteen (27,419) shares of Common Stock,
(D) the a grant to Glacier, as Ostry of up to 100,000 shares, at the ClosingTwenty Thousand Nine Hundred Sixty-Seven (20,967) shares of Common Stock,
(E) the a grant to Internexus, as Glacier of up to 332,228 shares, at the ClosingTwelve Thousand Nine Hundred Three (12,903) shares of Common Stock, and
(F) a grant to MCM III of up to Twelve Thousand Six Hundred Seventy-Five (12,675) shares of Common Stock;
(iii) the grant to FondEleceach Investor of one or more performance warrants in the form of Exhibit B-2 to this Agreement (each a "Performance Warrant" and, collectively, the "Performance Warrants"), providing for the issuance by the Company of up to Three Hundred Ninety-Six Thousand Five Hundred Fourty-Four (396,544) shares of Common Stock, which number corresponds to approximately 15% of the number of the Series D Shares to be acquired by the Investors under Section 2(a)(i), such grants to occur under the terms and conditions set forth therein:
(A) a grant to TCW of up to One Hundred Sixty-One Thousand Two Hundred Ninety (161,290) shares of Common Stock,
(B) a grant to TELEMATICA of up to One Hundred Sixty-One Thousand Two Hundred Ninety (161,290) shares of Common Stock,
(C) a grant to Priu of up to Twenty-Seven Thousand Four Hundred Nineteen (27,419) shares of Common Stock,
(D) a grant to Ostry of up to Twenty Thousand Nine Hundred Sixty-Seven (20,967) shares of Common Stock,
(E) a grant to Glacier of up to Twelve Thousand Nine Hundred Three (12,903) shares of Common Stock, and
(F) a grant to MCM III of up to Twelve Thousand Six Hundred Seventy-Five (12,675) shares of Common Stock;
(iv) the grant to each Investor of a financing warrant in the form of Exhibit B-3 to this Agreement (each a "Financing Warrant" and, collectively, the "Financing Warrants"), providing for the issuance by the Company of such number of Series D Shares as shall be determined pursuant to 166,666 shares, at the Closingterms and conditions provided therein;
(v) the granting to each of FondElec execution and Internexusdelivery, at the Closing, of a FondElec/Internexus Warrant Registration Rights Agreement among the Investors and the Company in the form of Exhibit D C to this Participation Agreement (each, a "FondElec/Internexus Warrant"), providing for the issuance to each of them, in each case at the same time and for the same price as the Series C Warrants are subject to exercise, as to 260,000 shares each of Common Stock;
(vi) the entering into, at the Closing, among the Company, the Investors, and the D'Ambrosios of a CCI Shareholders' Agreement in the form of Exhibit E to this Participation Agreement (the "CCI Shareholders' Agreement") for the purpose of setting out how the Investors and the D'Ambrosios will exercise their rights as shareholders with respect to, among other matters, corporate governance, the election of directors and the disposition of their Company Equity;
(vii) the entering into, at the Closing, among the Investors, the Company, the D'Ambrosios and certain other parties of an Amended and Restated Registration Rights Agreement in the form of Exhibit F to this Participation Agreement (the "Registration Rights Agreement") for the purpose of setting out the rights of the Investors, the D'Ambrosios and such other parties Investors to require or join in the registration of their shares of common stock of the Company Common Stock under U.S. Securities Laws;; and
(viiivi) the entering intoexecution and delivery, at the Closing, among Telematica, FondElec, WCI de Cayman, Inc., a Cayman Islands limited liability company and a Subsidiary ("WCI") and Chispa Dos Inc., a Cayman Islands limited liability company ("CCI Salvador") of a Subscription Shareholder Joinder Agreement among the Investors and Refinance Agreement the Company in the form of Exhibit G D to this Participation Agreement (the "Salvador Subscription Shareholder Joinder Agreement"), and the purchase, at the Subsequent Closing, through the subscription of unissued shares of CCI Salvador common stock, by Telematica from CCI Salvador, and the sale by CCI Salvador to Telematica, of 59.1550 shares of common stock of CCI Salvador (the "Salvador Shares", as further described in the Salvador Subscription Agreement) for a purchase price, in cash or other immediately available funds of Five Million Five Hundred Twenty-Five Thousand United States Dollars (US$5,525,000); the contribution, at the Subsequent Closing, by WCI to CCI Salvador of Nine Hundred One Thousand Seven Hundred and Sixty United States Dollars (US$901,760) of its accounts receivable from CCI Salvador in exchange and in subscription for 9.6549 shares of common stock of CCI Salvador; and the payment, at the Subsequent Closing, by CCI Salvador, utilizing a portion of the proceeds of the sale of the Salvador Shares, of Three Million Eight Hundred Sixty-Four Thousand Five Hundred Twenty-Nine United States Dollars (US$3,864,529) to repay Three Million Five Hundred Thousand United States Dollars (US$3,500,000) of the principal amount of that certain Promissory Note of CCI Salvador made to FondElec and dated ▇▇▇▇▇ ▇, ▇▇▇▇ ("▇▇▇▇▇▇▇▇ Note"), and accrued interest thereon through October 14, 1999;
(ix) the entering into, at the Closing, among CCI Salvador, Telematica, WCI, FondElec and the other shareholders of CCI Salvador of an Amended and Restated Salvador Shareholders' Agreement in the form of Exhibit H to this Participation Agreement (the "Salvador Shareholders' Agreement"), for the purpose of setting out how Telematica and such other shareholders will manage forth certain restrictions on the business Investors to the transfer of CCI Salvador, and provisions regarding the disposition of their equity interests securities in CCI Salvador; and
(x) the entering into, at the Closing, between the Company and an affiliate acquired pursuant to the terms of Telematica of a letter of intent in the form of Exhibit I to this Participation Agreement ("Colombia Letter of Intent")Agreement.
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