EXHIBIT 10.1
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SECURITIES PURCHASE AGREEMENT
dated as of October 7, 1999
by and between
METROMEDIA FIBER NETWORK, INC.
and
▇▇▇▇ ATLANTIC INVESTMENTS, INC.
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TABLE OF CONTENTS
SECURITIES PURCHASE AGREEMENT
Section Page
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1. DEFINITIONS........................................................1
2. PURCHASE OF SECURITIES............................................10
2.1 Purchase of Securities at First Closing...........................10
2.2 Closing...........................................................10
2.3 First Closing Deliveries..........................................12
2.3A Second Closing Deliveries.........................................12
2.4 Use of Proceeds...................................................13
2.5. First Closing Adjustments.........................................13
3. PURCHASER'S REPRESENTATIONS AND WARRANTIES........................14
3.1 Investment Intention..............................................14
3.2 Accredited Investor...............................................14
3.3 Corporate Existence...............................................14
3.4 Corporate Power; Authorization; Enforceable Obligations...........14
3.5 Brokers...........................................................15
3.6 Disclosure of Information.........................................15
3.7 Investment Experience.............................................15
3.8 Restricted Securities.............................................15
3.9 Investigation.....................................................15
3.10 Purchaser.........................................................15
4. COMPANY'S REPRESENTATIONS AND WARRANTIES..........................16
4.1 Authorized and Outstanding Shares of Capital Stock................16
4.2 Authorization and Issuance of Securities..........................16
4.3 Securities Laws...................................................16
4.4 Corporate Existence; Compliance with Law; Permits.................17
4.5 Subsidiaries......................................................17
4.6 Corporate Power; Authorization; Enforceable Obligations...........18
4.7 SEC Documents; Financial Statements; Undisclosed Liabilities......18
4.8 Ownership of Property.............................................19
4.9 Material Contracts................................................20
4.10 Environmental Protection..........................................20
4.11 Labor Matters.....................................................21
4.12 Taxes.............................................................21
4.13 No Litigation.....................................................22
4.14 Brokers...........................................................22
4.15 Patents, Trademarks, Copyrights and Licenses......................22
4.16 Ordinary Course of Business; No Material Adverse Change...........22
4.17 ERISA.............................................................23
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Section Page
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4.18 Insurance.........................................................24
4.19 Year 2000 Compliance..............................................24
4.20 Regulatory Matters................................................24
4.21 No Vote...........................................................24
4.22 Employment Agreements.............................................24
4.23 Investment Company Act............................................25
5. COVENANTS OF COMPANY AND PURCHASER................................25
5.1 Conduct Business in Ordinary Course...............................25
5.2 Director..........................................................26
5.3 Regulatory and Other Authorizations...............................28
5.4 Access to Information.............................................29
5.5 Further Assurances................................................29
5.6 Use of Proceeds...................................................29
5.7 Affiliate Contracts...............................................30
5.8 Notification of Certain Events....................................30
5.9 Modification of Terms in Certain Circumstances....................30
5.10 Proxy Statement; Registration Statement...........................30
6. FIRST CLOSING CONDITIONS TO OBLIGATION OF PURCHASER...............32
6.1 Representations and Warranties....................................32
6.2 Covenants.........................................................32
6.3 HSR Act...........................................................32
6.4 No Orders.........................................................32
6.5 No Investigations.................................................32
6.6 Opinion of Counsel................................................33
6.7 Transaction Documents.............................................33
6.8 Material Adverse Change...........................................33
6.9 Delivery of Securities............................................33
6.10 Consents and Approvals............................................33
6.11 Parent Ownership; Certain Other Events............................34
6.12 Good Standing Certificates........................................34
6.13 Franchise Agreement...............................................34
6A. SECOND CLOSING CONDITIONS TO OBLIGATION OF PURCHASER..............34
6.1A Representations and Warranties....................................34
6.2A Covenants.........................................................35
6.3A HSR Act...........................................................35
6.4A No Orders.........................................................35
6.5A No Investigations.................................................35
6.6A Opinion of Counsel................................................35
6.7A Transaction Documents.............................................36
6.8A Delivery of Securities............................................36
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Section Page
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6.9A Consents and Approvals............................................36
6.10A Parent Ownership..................................................36
6.11A Good Standing Certificates........................................36
6.12A Consummation of the First Closing.................................36
7. FIRST CLOSING CONDITIONS TO OBLIGATION OF COMPANY.................37
7.1 Representations and Warranties....................................37
7.2 Covenants.........................................................37
7.3 HSR Act...........................................................37
7.4 No Orders.........................................................37
7.5 Transaction Documents.............................................37
7.6 No Investigations.................................................37
7.7 Consents and Approvals............................................38
7.8 Franchise Agreement...............................................38
7A. SECOND CLOSING CONDITIONS TO OBLIGATION OF COMPANY................38
7.1A Representations and Warranties....................................38
7.2A Covenants.........................................................38
7.3A HSR Act...........................................................38
7.4A No Orders.........................................................38
7.5A Transaction Documents.............................................39
7.6A No Investigations.................................................39
7.7A Consents and Approvals............................................39
7.8A Stockholder Approval..............................................39
7.9A Consummation of the First Closing.................................39
8. INDEMNIFICATION...................................................39
8.1 Indemnification...................................................39
8.2 Limitations on Indemnification for Breaches of Representations,
Warranties and Covenants..........................................40
8.3 General Indemnification Procedures................................40
8.4 Tax Treatment of Indemnity Payments...............................42
9. MISCELLANEOUS.....................................................42
9.1 Successors and Assigns............................................42
9.2 Amendments; Etc...................................................42
9.3 Entire Agreement..................................................42
9.4 Fees, Costs and Expenses..........................................42
9.5 Severability......................................................43
9.6 Governing Law.....................................................43
9.7 Waiver of Jury Trial..............................................43
9.8 Notices...........................................................43
9.9 Survival..........................................................44
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Section Page
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9.10 Section and Other Headings........................................45
9.11 Counterparts......................................................45
9.12 Publicity.........................................................45
9.13 Termination.......................................................45
9.14 Remedies..........................................................46
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TABLE OF CONTENTS
SECURITIES PURCHASE AGREEMENT
Schedules
Schedule 3.4 - Corporate Power; Authorization: Enforceable Obligation
Schedule 4.1 - Authorized and Outstanding Shares of Capital Stock
Schedule 4.4(a) - Corporate Existence; Compliance with Law
Schedule 4.4(b) - Permits
Schedule 4.5 - Subsidiaries
Schedule 4.6 - Required Consents
Schedule 4.7(b) - SEC Documents; Financial Statements; Undisclosed
Liabilities
Schedule 4.9 - Material Contracts
Schedule 4.10 - Environmental Protection
Schedule 4.11 - Labor Matters
Schedule 4.12 - Taxes
Schedule 4.13 - Litigation
Schedule 4.15 - Patents, Trademarks, Copyrights and Licenses
Schedule 4.16 - Ordinary Course of Business; No Material Adverse Change
Schedule 4.17 - ERISA
Schedule 4.17(b)- ERISA Compliance
Schedule 4.20 - Regulatory
Schedule 6.5 - No Investigations
Schedule 6.13 - Form of Franchise Agreement
Exhibits
Exhibit A [Intentionally Omitted]
Exhibit B Notes Registration Rights Agreement
Exhibit C Indenture
Exhibit D Stockholders Agreement
Exhibit E Shares Registration Rights Agreement
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated as of October 7, 1999, by and between
Metromedia Fiber Network, Inc., a Delaware corporation ("Company"), and ▇▇▇▇
Atlantic Investments, Inc., a Delaware corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Company has agreed to issue and sell to Purchaser, and Purchaser
has agreed to purchase from Company, upon the terms and conditions hereinafter
provided, the following: (i) up to 25,558,109 shares (the "Shares") of the
Company's Class A Common Stock, $0.01 par value per share (the "Class A Common
Stock"), and (ii) one or more convertible subordinated notes in the aggregate
principal amount of up to $975,281,364, which shall be governed by, and are
convertible into shares of Class A Common Stock pursuant to, and in accordance
with, the terms of the Indenture (as hereinafter defined) (the "Convertible
Notes").
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1. DEFINITIONS
"Affiliate" shall have the meaning given such term in Rule 12b-2 under the
Exchange Act.
"Affiliate Contracts" shall mean all agreements, contracts and other
instruments between Company or any of its Subsidiaries, on the one hand, and
Metromedia Company or any of its Affiliates, on the other hand.
"Agreement" shall mean this Securities Purchase Agreement, including all
amendments, modifications and supplements hereto and any appendices, exhibits
and schedules hereto or thereto, and shall refer to such agreement as the same
may be in effect at the time such reference becomes operative.
"Basket" shall have the meaning set forth in Section 8.2(a) hereof.
"Beneficial Ownership" (including correlative meanings) shall mean the
ownership of a security (as defined in the Securities Act) as defined under Rule
13d-3 under the Exchange Act.
"Benefit Plans" shall have the meaning set forth in Section 4.17(a)
hereof.
"Business Day" shall mean any day that is not a Saturday, a Sunday or a
day on which commercial banks are required or permitted by law to be closed in
the City of New York in the State of New York.
"Business Plan" shall have the meaning set forth in Section 2.4 hereof.
"Charges" shall mean all federal, state, county, city, municipal, local,
foreign or other governmental (including, without limitation, PBGC) taxes at the
time due and payable, levies, assessments, charges or Liens upon or relating to
(i) Company's or any of its Subsidiaries' employees, payroll, income or gross
receipts, (ii) Company's or any of its Subsidiaries' ownership or use of any of
its assets, or (iii) any other aspect of Company's or any of its Subsidiaries'
business.
"Class A Common Stock" shall have the meaning set forth in the recitals to
this Agreement.
"Class B Common Stock" shall mean the Company's Class B Common Stock, par
value $.01 per share.
"Class B Permitted Holder" shall have the meaning ascribed to such term in
the Company Charter.
"Common Stock" shall mean collectively the Class A Common Stock and the
Class B Common Stock and any recapitalization or reclassification of either such
class of Common Stock.
"Company" shall have the meaning set forth in the first paragraph of this
Agreement.
"Company Charter" shall mean the Amended and Restated Certificate of
Incorporation of Company as the same may be amended from time to time.
"Company Plans" shall have the meaning set forth in Section 4.17(a)
hereof.
"Company SEC Documents" shall have the meaning set forth in Section 4.7(a)
hereof.
"Company Stockholders Meeting" shall have the meaning set forth in
Section 5.10(a) hereof.
"Confidentiality Agreement" shall have the meaning set forth in Section
5.4 hereof.
"Conversion Price" shall have the meaning set forth in the Indenture.
"Convertible Notes" shall have the meaning set forth in the recitals to
this Agreement.
"Environmental Laws" shall mean all foreign, federal, state and local
laws, statutes, ordinances and regulations, now or hereafter in effect, and in
each case as amended or supplemented from time to time, and any judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree or judgment, relative to the applicable
real estate, relating to the regulation and protection of worker health and
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species
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and vegetation). Environmental Laws include but are not limited to the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. ss. 9601 et seq.) ("CERCLA"); the Hazardous Material
Transportation Act, as amended (49 U.S.C. ss. 1801 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. ss. 136 et
seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C. ss.
6901 et seq.) ("RCRA"); the Toxic Substance Control Act, as amended (15 U.S.C.
ss. 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. ss. 740 et seq.);
the Federal Water Pollution Control Act, as amended (33 U.S.C. ss. 1251 et
seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. ss. 651 et
seq.) ("OSHA"); and the Safe Drinking Water Act, as amended (42 U.S.C. ss. 300f
et seq.), and any and all regulations promulgated thereunder, and all analogous
state and local counterparts or equivalents and any transfer of ownership
notification or approval statutes that relate to worker health and safety or the
environment.
"Environmental Liabilities and Costs" shall mean all liabilities,
obligations, responsibilities, remedial actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including
all fees, disbursements and expenses of counsel, experts and consultants and
costs of investigation and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim, suit, action or demand by any
Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law (including any thereof
arising under any Environmental Law, permit, order or agreement with any
Governmental Authority) and which relate to any environmental condition
regulated under any Environmental Law or in connection with any other
environmental matter or Spill or the presence of a Hazardous Substance or
threatened Spill of any Hazardous Substance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time and any
regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to Company, any trade or
business (whether or not incorporated) under common control with Company and
which, together with Company, are treated as a single employer within the
meaning of Sections 414(b), (c), (m) or (o) of the IRC, excluding Purchaser and
each other Person which would not be an ERISA Affiliate if Purchaser did not own
any issued and outstanding shares of Stock of Company or the Convertible Notes.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and all rules and regulations promulgated thereunder.
"Facility" shall have the meaning set forth in Section 4.10(a) hereof.
"FCC" shall mean the Federal Communications Commission.
"Fiber Optic Private Network Agreement" shall mean the Fiber Optic Private
Network Agreement by and between ▇▇▇▇ Atlantic Global Networks, Inc. and
Metromedia Fiber Network Services, Inc., on terms mutually agreeable to the
proposed parties thereto,
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as such agreement may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof.
"First Closing" shall have the meaning set forth in Section 2.2(a) hereof.
"First Closing Date" shall have the meaning set forth in Section 2.2(a)
hereof.
"First Closing Date Notes" shall have the meaning set forth in Section 2.5
hereof.
"First Closing Date Notes Purchase Price" shall have the meaning set forth
in Section 2.1(b) hereof.
"First Closing Date Shares" shall have the meaning set forth in Section
2.5 hereof.
"First Closing Date Shares Purchase Price" shall have the meaning set
forth in Section 2.1(a) hereof.
"First Closing Termination Date" shall have the meaning set forth in
Section 9.13(a)(iii) hereof.
"Franchise Agreement" means the Franchise Agreement, dated as of December
20, 1993, between the City of New York and National Fiber Network, Inc., as such
agreement may be amended, supplemented or otherwise modified from time to time
and in accordance with the terms thereof.
"Future Company SEC Documents" shall have the meaning set forth in Section
4.7(a) hereof.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state,
local or other political subdivision thereof, any court, arbitrator, official,
agency, department or other Person exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, or any
foreign, federal, state or local govern mental or regulatory agency, authority,
commission or instrumentality.
"Group" shall have the meaning given such term in Section 13(d)(3) of the
Exchange Act.
"Hazardous Substance" shall have the meaning set forth in Section 4.10(a)
hereof.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1974, as amended.
"Indemnified Party" shall have the meaning set forth in Section 8.3(a)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 8.3(a)
hereof.
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"Indemnity Payment" shall have the meaning set forth in Section 8.4
hereof.
"In-Region States" has the meaning assigned to such term in the
Telecommunications Act.
"Indenture" shall mean the Indenture by and among Company and U.S. Bank
Trust National Association, as trustee, substantially in the form attached
hereto as Exhibit C, as such indenture may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"InterLATA Services" has the meaning assigned to such term in the
Telecommunications Act.
"Investment Company Act" shall have the meaning set forth in Section 4.23
hereof.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and any
successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor thereto.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
preemptive right, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
as to assets owned by the relevant Person under the Uniform Commercial Code or
comparable law of any jurisdiction).
"Losses" shall have the meaning set forth in Section 8.1(a) hereof.
"Material Adverse Change" shall mean any change, occurrence or effect that
is or is reasonably likely to be materially adverse to the business, assets,
operations, condition (financial or otherwise), or results of operations of
Company and its Subsidiaries, taken as a whole; provided, however, that changes,
occurrences or effects (i) resulting from events, changes, developments,
condition or circumstances in worldwide, national or local conditions
(political, regulatory, economic or otherwise), (ii) relating to the industries
in which Company operates, (iii) relating to the failure by Company to meet the
revenue or earnings predictions of equity analysts as reflected in the First
Call consensus estimate, or any other external revenue or earnings predictions
or expectations for any period ending on or after the date of this Agreement,
and (iv) relating to changes in law or accounting principles occurring after the
date of this Agreement, shall, in each case, not be deemed to constitute a
"Material Adverse Change."
"Material Adverse Effect" shall mean any change, occurrence or effect that
is or is reasonably likely to be materially adverse to the business, assets,
operations, condition
5
(financial or otherwise), or results of operations of Company and its
Subsidiaries, taken as a whole.
"Material Contracts" shall mean (i) all of Company's and its Subsidiaries'
material contracts that would be required to be filed with the SEC pursuant to
item 601(b)(10) of Regulation S-K of the Securities Act, (ii) all agreements,
leases or other instruments to which Company or any of its Subsidiaries is a
party or by which Company, its Subsidiaries or its properties are bound, which
involve payments by or to Company or its Subsidiaries of more than $10,000,000,
(iii) all of Company's and its Subsidiaries' loan agreements, bank lines of
credit agreements, indentures, mortgages, deeds of trust, pledge and security
agreements, factoring agreements, conditional sales contracts, letters of
credit, guarantees or any other instruments evidencing or representing
indebtedness of Company or any of its Subsidiaries, (iv) all non-competition and
similar agreements to which Company or any of its Subsidiaries is a party that
materially restrict Company's or any of its Subsidiaries' ability to engage in
any business, (v) all contracts for the employment of any executive officer of
Company or its Subsidiaries, (vi) all collective bargaining, union and similar
labor contracts of Company or its Subsidiaries, (vii) all warrant, option or
other agreements or instruments providing for the purchase or acquisition by any
means, or the right to purchase or acquire, shares of capital stock of Company
or any of its Subsidiaries with a value in excess of $5,000,000, (viii) all
material joint venture or partnership agreements, (ix) all material licenses
relating to intellectual property owned or used by Company or any of its
Subsidiaries, (x) all standstill agreements, and (xi) all Affiliate Contracts.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 3(37) of ERISA, and to which Company, any of its Subsidiaries or any
ERISA Affiliate is making, is obligated to make, has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.
"NASDAQ/NMS" shall have the meaning set forth in Section 5.10(a) hereof.
"Notes Registration Rights Agreement" shall mean the Registration Rights
Agreement relating to the Convertible Notes, by and between Company and
Purchaser, substantially in the form attached hereto as Exhibit B, as such
agreement may be amended, supplemented or otherwise modified from time to time
and in accordance with the terms thereof.
"Original Per Share Purchase Price" shall have the meaning set forth in
Section 5.9 hereof.
"Other Per Share Purchase Price" shall have the meaning set forth in
Section 5.9 hereof.
"Parent" shall mean Metromedia Company and its respective Parent Related
Persons.
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"Parent Related Persons" shall mean Related Persons (as such term is
defined in the 10% Notes Indenture).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit" shall mean any license, franchise, permit, consent, approval,
waiver or certificate.
"Permitted Liens" shall mean the following: (i) Liens for taxes or
assessments or other governmental charges or levies, to the extent such amounts
are not yet due and payable or are being contested in good faith by appropriate
proceedings or to the extent that nonpayment thereof is permitted by the terms
of this Agreement; (ii) pledges or deposits securing obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (iii) pledges or deposits securing bids, tenders,
contracts (other than contracts for the payment of money) or leases to which
Company or any of its Subsidiaries is a party as lessee made in the ordinary
course of business; (iv) Liens arising solely by virtue of any statutory or
common law provision relating to bankers' liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; (v) workers, mechanics, suppliers, carriers,
warehousemen's or other similar liens arising in the ordinary course of business
and securing indebtedness, not yet due and payable; (vi) deposits securing or in
lieu of surety, appeal or customs bonds in proceedings to which Company or any
of its Subsidiaries is a party; (vii) Liens arising in the ordinary course of
business in connection with obligations that are not overdue or which are being
contested in good faith and by appropriate proceedings, including, but not
limited to, Liens under bid, performance and other surety bonds, appeal bonds,
landlord Liens arising under leases of real property, Liens on advance or
progress payments received from customers under contracts for the sale, lease or
license of goods, software or services and upon the products being sold or
licensed, in each case securing performance of the underlying contract or the
repayment of such advances in the event final acceptance of performance under
such contracts does not occur, and Liens upon funds collected temporarily from
others pending payment or remittance on their behalf; and (viii) zoning
restrictions, easements, licenses, or other restrictions on the use of real
property or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or
marketability of such real property, leases or leasehold estates.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether foreign, federal, state, county, city, municipal or
otherwise, including, any instrumentality, division, agency, body or department
thereof).
"Proxy Statement" shall have the meaning set forth in Section 5.10(a)
hereof.
"Purchaser" shall have the meaning set forth in the first paragraph of
this Agreement.
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"Purchaser Directors" shall have the meaning set forth in Section 5.2(a)
hereof.
"Purchaser Representative" shall have the meaning set forth in Section
5.2(e) hereof.
"Regulatory Relief Date" means the date on which the Purchaser has
obtained pursuant to Section 271 of the Telecommunications Act, the approval of
the FCC to provide InterLATA Services in all states that are, with respect to
Purchaser, In-Region States (as such term is defined in Section 271(i)(1) of the
Telecommunications Act), such approval to be either an affirmative approval or a
waiver from the restrictions of the Telecommunications Act.
"Requisite Company Vote" shall mean the approval of the issuance and sale
of the Second Closing Date Shares and the Second Closing Date Notes and the
issuance of shares of Class A Common Stock issuable upon the conversion of the
Second Closing Date Notes pursuant to this Agreement by a majority of holders of
Class A Common Stock and Class B Common Stock, voting as a single class, that
are present in person or by proxy at a duly called meeting of Company's
stockholders.
"SEC" shall mean the U.S. Securities and Exchange Commission, or any
successor thereto.
"Second Closing" shall have the meaning set forth in Section 2.2(b)
hereof.
"Second Closing Date" shall have the meaning set forth in Section 2.2(b)
hereof.
"Second Closing Date Notes" shall have the meaning set forth in Section
2.2(b)(ii) hereof.
"Second Closing Date Notes Purchase Price" shall have the meaning set
forth in Section 2.2(b)(ii) hereof.
"Second Closing Date Shares" shall have the meaning set forth in Section
2.2(b)(i) hereof.
"Second Closing Date Shares Purchase Price" shall have the meaning set
forth in Section 2.2(b)(i) hereof.
"Second Closing Termination Date" shall have the meaning set forth in
Section 9.13(a)(iii).
"Securities Act" shall mean the Securities Act of 1933, as amended, and
all rules and regulations promulgated thereunder.
"Shares" shall have the meaning set forth in the recitals to this
Agreement.
8
"Shares Registration Rights Agreement" shall mean the Equity Registration
Rights Agreement, relating to the Shares, by and between Company and Purchaser,
substantially in the form attached hereto as Exhibit E, as such agreement may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
"Spill" shall have the meaning set forth in Section 4.10(a) hereof.
"Stock" shall mean all shares, options, warrants, general or limited
partnership interests, limited liability company membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity whether
voting or nonvoting, including, without limitation, common stock, preferred
stock, or any other "equity security" (as such term is defined in Rule 3a11-1
under the Exchange Act).
"Stockholders Agreement" shall mean the Stockholders Agreement among
Purchaser, Company, Parent and each Class B Permitted Holder, substantially in
the form attached hereto as Exhibit D, as such agreement may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"Subsidiary" shall mean, with respect to any Person, (i) any corporation
of which an aggregate of 50% or more of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of such
Person, and (ii) any partnership, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contributions) of 50% or more.
"System" shall have the meaning set forth in Section 4.19 hereof.
"Telecommunications Act" means the U.S. federal statute known as the
Communications Act of 1934, as amended by the Telecommunications Act of 1996, as
amended.
"10% Notes Indenture" shall mean that certain Indenture, dated as of
November 25, 1998, between Company and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as
trustee, relating to Company's 10% Series A and Series B Senior Notes due 2008,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Third-Party Claim" shall have the meaning set forth in Section 8.3(a)
hereof.
"Transaction Documents" shall mean this Agreement, the Fiber Optic Private
Network Agreement, the Shares Registration Rights Agreement, the Notes
Registration Rights Agreement, the Indenture and the Stockholders Agreement.
9
"Year 2000 Compliant" shall have the meaning set forth in Section 4.19
hereof.
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
consistently applied. That certain terms or computations are explicitly modified
by the phrase "in accordance with GAAP" shall in no way be construed to limit
the foregoing.
The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole, including any exhibits and schedules
hereto, as the same may from time to time be amended, modified or supplemented,
and not to any particular section, subsection or clause contained in this
Agreement. The words "includes" or "including" and other words of similar import
shall mean "including, without limitation," unless the context expressly
otherwise requires.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter.
2. PURCHASE OF SECURITIES
2.1 Purchase of Securities at First Closing. (a) At the First
Closing referred to in Section 2.2(a) below, subject to the terms and conditions
set forth herein, Company shall issue and sell to Purchaser, and Purchaser shall
purchase from Company, 23,027,856 shares of Class A Common Stock plus the number
of shares of Class A Common Stock issuable pursuant to Section 2.5 below for the
price per share equal to $28.00 (such price, in the aggregate, the "First
Closing Date Shares Purchase Price").
(b) At the First Closing, subject to the terms and conditions
set forth herein, Company shall issue and sell to Purchaser, and Purchaser shall
purchase from Company, Convertible Notes in the aggregate principle amount of
$790,855,674 plus the aggregate principal amount of the Convertible Notes being
purchased pursuant to Section 2.5 below for the price of 100% of the aggregate
principal amount of the Convertible Notes to be purchased at the First Closing
(such price, in the aggregate, the "First Closing Date Notes Purchase Price").
(c) Company and Purchaser agree to treat the First Closing
Date Shares Purchase Price as the purchase price for the First Closing Date
Shares and the First Closing Date Notes Purchase Price as the purchase price for
the First Closing Date Notes for all tax purposes unless a contrary treatment is
required by law.
2.2 Closing. (a) The closing of the purchase and sale of the First
Closing Date Shares and the First Closing Date Notes hereunder (the "First
Closing") shall be held at the offices of Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 a.m. on the date that all of the conditions
set forth in Articles 6 and 7 are
10
satisfied or waived, or at such other time and place as Company and Purchaser
mutually agree (the date of the First Closing being hereinafter referred to as
the "First Closing Date"). The obligations of the Company and the Purchaser to
consummate the First Closing shall not, in any manner, be conditioned upon the
consummation of the Second Closing.
(b) On the Business Day following the date the conditions set
forth in Section 6A and Section 7A are satisfied or waived (the "Second Closing
Date"), Purchaser shall purchase from Company and Company shall sell to
Purchaser at a closing (the "Second Closing") to be held at the offices of Weil,
Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (or at such other
date and place as Company and Purchaser mutually agree) the following:
(i) a number of shares of Class A Common Stock (the
"Second Closing Date Shares") equal to the difference between (x)
25,558,109 and (y) the amount of First Closing Date Shares, for the price
per share equal to $28.00 (such price, in the aggregate, the "Second
Closing Date Shares Purchase Price"); provided, that, if the number of
shares to be sold pursuant to this Section 2.2(b)(i) would cause Purchaser
to Beneficially Own in excess of 9.9% of the issued and outstanding shares
of Common Stock on the Second Closing Date after giving effect to the
issuance of the Second Closing Date Shares, such number shall be reduced
so that such number of shares equals 9.9% of the issued and outstanding
shares of Common Stock on the Second Closing Date after giving effect to
the issuance of the Second Closing Date Shares; and
(ii) a principal amount of Notes (the "Second Closing
Date Notes") equal to the difference between (x) $975,281,364 and (y) the
principal amount of the First Closing Date Notes, for the price of 100% of
the aggregate principal amount of the Notes to be so purchased (such
price, in the aggregate, the "Second Closing Date Notes Purchase Price");
provided, that, if the number of shares of Class A Common Stock into which
the First Closing Date Notes and the Second Closing Date Notes would
convert exceeds 10% of the issued and outstanding shares of Common Stock
on the Second Closing Date after giving effect on an as-converted basis to
the issuance of the Second Closing Date Notes and the Second Closing Date
Shares, such principal amount of the Second Closing Date Notes shall be
reduced so that such Second Closing Date Notes and the First Closing Date
Notes would, in the aggregate, convert into 10% of the issued and
outstanding shares of Common Stock on the Second Closing Date, after
giving effect on an as-converted basis to the issuance of the Second
Closing Date Shares and the Second Closing Date Notes.
(c) Company and Purchaser agree to treat the Second Closing
Date Shares Purchase Price as the purchase price for the Second Closing Date
Shares and the Second Closing Date Notes Purchase Price as the purchase price
for the Second Closing Date Notes for all tax purposes unless a contrary
treatment is required by law.
11
2.3 First Closing Deliveries. (a) At the First Closing, Company will
deliver to Purchaser (i) a certificate or certificates representing the First
Closing Date Shares and (ii) a note or notes representing the First Closing Date
Notes in the form attached as Exhibit A to the Indenture against payment of the
First Closing Date Shares Purchase Price and the First Closing Date Notes
Purchase Price, as the case may be, therefor by wire transfer of immediately
available funds to an account designated by Company in writing two (2) Business
Days prior to the First Closing Date.
(b) The certificate or certificates representing the First
Closing Date Shares shall be subject to a legend restricting transfer under the
Securities Act, such legend to be substantially as follows:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933,
as amended. Such shares may not be sold or transferred in the absence of
such registration or an opinion of counsel reasonably satisfactory to the
Company as to the availability of an exemption from registration.
The shares represented by this certificate are subject to restrictions on
transfer, including any sale, pledge or other hypothecation, set forth in
a stockholders agreement between the Company, ▇▇▇▇ Atlantic Investments,
Inc., Metromedia Company and certain other stockholders of the Company, a
copy of which agreement may be obtained at no cost by written request made
by the holder of record of this certificate to the secretary of the
Company at the Company's principal executive offices."
(c) Company agrees to remove from the First Closing Date
Shares the first legend set forth in paragraph (b) above in connection with a
transfer pursuant to an effective Registration Statement (as defined in the
Shares Registration Rights Agreement) or upon receipt of an opinion of counsel
in form and substance reasonably satisfactory to Company that the First Closing
Date Shares are eligible for transfer without registration under the Securities
Act. Company agrees to remove from the First Closing Date Shares the second
legend set forth in paragraph (b) above in accordance with the provisions of the
Stockholders Agreement.
2.3A Second Closing Deliveries. (a) At the Second Closing, Company
will deliver to Purchaser (i) a certificate or certificates representing the
Second Closing Date Shares and (ii) a note or notes representing the Second
Closing Date Notes in the form attached as Exhibit A to the Indenture against
payment of the Second Closing Date Shares Purchase Price and the Second Closing
Date Notes Purchase Price, as the case may be, therefor by wire transfer of
immediately available funds to an account designated by Company in writing two
(2) Business Days prior to the Second Closing Date.
(b) The certificate or certificates representing the Second
Closing Date Shares shall be subject to a legend restricting transfer under the
Securities Act, such legend to be substantially as follows:
12
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933,
as amended. Such shares may not be sold or transferred in the absence of
such registration or an opinion of counsel reasonably satisfactory to the
Company as to the availability of an exemption from registration.
The shares represented by this certificate are subject to restrictions on
transfer, including any sale, pledge or other hypothecation, set forth in
a stockholders agreement between the Company, ▇▇▇▇ Atlantic Investments,
Inc., Metromedia Company and certain other stockholders of the Company, a
copy of which agreement may be obtained at no cost by written request made
by the holder of record of this certificate to the secretary of the
Company at the Company's principal executive offices."
(c) Company agrees to remove from the Second Closing Date
Shares the first legend set forth in paragraph (b) above in connection with a
transfer pursuant to an effective Registration Statement (as defined in the
Shares Registration Rights Agreement) or upon receipt of an opinion of counsel
in form and substance reasonably satisfactory to Company that the Second Closing
Date Shares are eligible for transfer without registration under the Securities
Act. Company agrees to remove from the Second Closing Date Shares the second
legend set forth in paragraph (b) above in accordance with the provisions of the
Stockholders Agreement.
2.4 Use of Proceeds. Company shall use the proceeds of the First
Closing Date Notes Purchase Price and the Second Closing Date Notes Purchase
Price for the cost of the engineering, construction, installation, acquisition,
lease, development or improvement of telecommunications assets and the proceeds
of the First Closing Date Shares Purchase Price and the Second Closing Date
Shares Purchase Price for the foregoing uses and for working capital and general
corporate purposes, in each case, as the same have been set forth in, or
otherwise contemplated by, Company's business plan (the "Business Plan")
presented to Purchaser.
2.5. First Closing Adjustments. If, between the date hereof and the
First Closing Date, Company shall issue any shares of Class A Common Stock for
any reason (i) the number of shares of Class A Common Stock to be purchased by
Purchaser at the First Closing hereunder pursuant to Section 2.1(a) and (ii) the
aggregate principal amount of the Convertible Notes to be purchased by Purchaser
at the First Closing hereunder pursuant to Section 2.1(b) shall both be
automatically increased, as the case may be, such that (x) in the case of clause
(i), Purchaser shall Beneficially Own the lesser of (I) 9.9% of the shares of
Common Stock then issued and outstanding on the First Closing Date without
giving effect to such issuance of shares of Class A Common Stock to Purchaser
and (II) 25,558,109 shares of Class A Common Stock (such shares of Class A
Common Stock to be so purchased at the First Closing after giving effect to the
foregoing, (the "First Closing Date Shares"), and (y) in the case of clause
(ii), the principal amount of the Convertible Notes to be purchased by Purchaser
at the First Closing shall be equal to the lesser of (A) the product of (I) 10%
of the shares of Common Stock then issued
13
and outstanding on the First Closing Date (without giving effect to such
issuance of the First Closing Date Notes or the First Closing Date Shares to
Purchaser) multiplied by (II) $34.00 and (B) $975,281,364 (such Notes to be so
purchased at the First Closing after giving effect to the foregoing, the "First
Closing Date Notes").
3. PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser makes the following representations and warranties to Company:
3.1 Investment Intention. As of the date hereof, Purchaser is
purchasing, and, as of the First Closing Date and the Second Closing Date (if
any) Purchaser will purchase, the securities pursuant to this Agreement for its
own account, for investment purposes and not with a present view to the
distribution thereof.
3.2 Accredited Investor. Purchaser is an "accredited investor" (as
that term is defined in Rule 501 of Regulation D under the Securities Act) and
by reason of its business and financial experience, it has such knowledge,
sophistication and experience in business and financial matters as to be capable
of evaluating the merits and risks of the prospective investment, is able to
bear the economic risk of such investment and is able to afford a complete loss
of such investment.
3.3 Corporate Existence. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
3.4 Corporate Power; Authorization; Enforceable Obligations. The
execution, delivery and performance by Purchaser of this Agreement and the other
Transaction Documents to be executed by it, and the consummation of the
transactions contemplated hereby and thereby: (i) are within Purchaser's
corporate power; (ii) have been duly authorized by all necessary corporate
action; (iii) do not require the consent or approval of, or any filing with, any
Governmental Authority or any other Person (except in connection with consents,
approvals or filings that may result from the matters set forth on Schedule
4.4(b) hereto, except for filings under the HSR Act and filings specified in
Schedule 4.6 hereto and except to the extent previously obtained or made or as
specified in Schedule 3.4 hereto or as would not materially impair Purchaser's
ability to consummate the transactions contemplated by this Agreement or any
other Transaction Document); and (iv) are not in contravention of any provision
of Purchaser's certificate of incorporation or by-laws. This Agreement has been,
and each of the other Transaction Documents to which Purchaser is a party will
be, at or prior to each of the First Closing and the Second Closing (if any),
duly executed and delivered by Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto), this Agreement
constitutes, and the other Transaction Documents when so executed and delivered
will constitute, the legal, valid and binding obligations of Purchaser,
enforceable against it in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
14
3.5 Brokers. Except for those brokers or finders to whom Purchaser
is solely responsible for the payment of any brokerage or finder's fees, no
broker acting on behalf of Purchaser brought about the consummation of any of
the transactions contemplated pursuant to this Agreement and Purchaser does not
have any obligation to any Person in respect of any brokerage or finder's fees
(or any similar obligation) in connection with the transactions contemplated by
this Agreement.
3.6 Disclosure of Information. Purchaser has had full access to all
information it considers necessary or appropriate to make an informed investment
decision with respect to the securities to be purchased by it pursuant to this
Agreement. Purchaser has had an opportunity to ask questions and receive answers
from Company regarding the terms and conditions of the offering of the
securities pursuant to this Agreement and to obtain additional information
necessary to verify any information furnished to Purchaser or to which Purchaser
had access.
3.7 Investment Experience. Purchaser understands that the purchase
of the securities pursuant to this Agreement involves substantial risk.
Purchaser has experience as an investor in securities of companies and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment in Company and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of this
investment in Company and protecting its own interests in connection with this
investment.
3.8 Restricted Securities. Purchaser understands that the securities
to be purchased by it pursuant to this Agreement are characterized as
"restricted securities" under the Securities Act inasmuch as they are being
acquired from Company in a transaction not involving a public offering, and that
under the Securities Act such securities may be resold without registration
under the Securities Act only in certain limited circumstances. Purchaser is
familiar with Rule 144 of the Securities Act, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
3.9 Investigation. Purchaser has conducted its own investigation of
Company and hereby acknowledges that the only representations and warranties of
Company in connection with Purchaser's purchase of the securities pursuant to
this Agreement are those expressly made by Company in Article 4 of this
Agreement.
3.10 Purchaser. Purchaser is a significant subsidiary of ▇▇▇▇
Atlantic Corporation and has, as of the date hereof, and will have as of each of
the First Closing Date and the Second Closing Date (if any), a consolidated
tangible net worth (as determined in accordance with GAAP) of not less than $2
billion.
15
4. COMPANY'S REPRESENTATIONS AND WARRANTIES
Company makes the following representations and warranties to Purchaser:
4.1 Authorized and Outstanding Shares of Capital Stock. As of
October 5, 1999, the authorized capital stock of Company consisted of (a)
2,404,031,240 shares of Class A Common Stock, $0.01 par value per share, of
which 198,835,335 shares were issued and outstanding; (b) 522,254,782 shares of
Class B Common Stock, $0.01 par value per share, of which 33,769,272 shares were
issued and outstanding; and (c) 20,000,000 shares of Preferred Stock, $0.01 par
value per share, none of which were issued and outstanding. All of such issued
and outstanding shares are validly issued, fully paid and non-assessable. No
shares of capital stock are held by Company as treasury stock as of the date of
this Agreement and no shares of capital stock of Company shall be held by
Company as treasury stock as of the First Closing and the Second Closing (if
any). Except as set forth on Schedule 4.1 hereto and agreements with brokers or
finders to whom Company is solely responsible for the payment of any brokerage
or finder's fees, (i) there is no existing option, warrant, call, commitment or
other agreement to which Company or any of its Subsidiaries is a party
requiring, and there are no convertible securities of Company outstanding which
upon conversion would require, the issuance of any additional shares of Stock of
Company or other securities convertible into shares or equity securities of
Company, other than the securities to be issued pursuant to this Agreement, and
(ii) there are no agreements to which Company is a party with respect to the
voting or transfer of the Stock of Company. Except as set forth on Schedule 4.1
hereto, there are no stockholders' preemptive rights or rights of first refusal
or other similar rights with respect to the issuance of Stock by Company. True,
correct and complete copies of the certificate of incorporation and by-laws of
Company have been made available to Purchaser.
4.2 Authorization and Issuance of Securities. The issuance of the
securities pursuant to this Agreement has been duly authorized by all necessary
corporate action on the part of Company (except in the case of the issuance of
the Second Closing Date Shares, Second Closing Date Notes and the shares of
Class A Common Stock that may be issued upon conversion of the Second Closing
Date Notes, which remain subject to the Requisite Company Vote) and, upon
delivery to Purchaser of the securities to be issued pursuant to this Agreement
against payment in accordance with the terms hereof, the securities to be issued
pursuant to this Agreement will have been validly issued, free and clear of all
Liens. The issuance of shares of Class A Common Stock upon conversion of the
Convertible Notes has been duly authorized by all necessary corporate action on
the part of Company (except for the Requisite Company Vote) and, when issued
upon conversion of the Convertible Notes, such Class A Common Stock will have
been validly issued, fully paid and non-assessable. Company has duly reserved an
adequate number of shares of Class A Common Stock for issuance pursuant to the
terms of the Convertible Notes.
4.3 Securities Laws. In reliance in part on the investment
representations contained in Sections 3.1, 3.2, 3.6, 3.7, 3.8 and 3.9, the
offer, issuance, sale and delivery of the securities to be issued pursuant to
this Agreement, as provided in this Agreement, are exempt from the registration
requirements of the Securities Act and all applicable state
16
securities laws, and are otherwise in compliance with such laws. Neither Company
nor any Person acting on its behalf has taken or will take any action (including
any offering of any securities of Company under circumstances which would
require the integration of such offering with the offering of the securities to
be issued pursuant to this Agreement under the Securities Act and the rules and
regulations of the SEC thereunder) which would subject the offering, issuance or
sale of the securities to be issued pursuant to this Agreement, to the
registration requirements of Section 5 of the Securities Act.
4.4 Corporate Existence; Compliance with Law; Permits. (a) Company
and each of its Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware in the
case of Company and each jurisdiction as set forth on Schedule 4.4(a) hereto in
the case of its Subsidiaries; (ii) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction as set forth on
Schedule 4.4(a) hereto where its ownership or lease of property or the conduct
of its business requires such qualification (except for jurisdictions in which
such failure to so qualify or to be in good standing would not, individually or
in the aggregate, have a Material Adverse Effect); (iii) has the requisite
corporate power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it operates
under lease, and to conduct its business as now being conducted; (iv) is in
compliance with its certificate or articles of incorporation and by-laws; and
(v) is in compliance with all applicable provisions of law, except for such
non-compliance which would not, individually or in the aggregate, have a
Material Adverse Effect.
(b) Each of Company and its Subsidiaries has obtained all
material Permits from all Persons, including Governmental Authorities, that are
needed for the ownership of and the conduct or operation of their respective
businesses as currently being conducted (including all Permits required by any
Environmental Law, all health and safety Permits, all certificates of occupancy
and all certificates of public convenience and necessity or the equivalent). All
Permits issued by any Governmental Authority to Company or any of its
Subsidiaries for the purpose of building, maintaining or operating any
telecommunications systems or providing any telecommunications services
(including all franchise agreements with any Governmental Authority or
certificates of public convenience and necessity, but excluding Permits relating
solely to construction or rights of way for construction) are listed on Schedule
4.4(b) hereto. Except as set forth on Schedule 4.4(b) hereto or as would not,
individually or in the aggregate, have a Material Adverse Effect: (i) all such
Permits are in full force and effect (provided that, in the case of certificates
of public convenience and necessity, the Material Adverse Effect qualification
shall not be applicable); (ii) no violations have occurred, are continuing to
occur or have been recorded in respect of any such Permit; (iii) no claim is
pending or, to the knowledge of Company and its Subsidiaries, threatened, to
revoke or limit any such Permit; and (iv) each of Company and its Subsidiaries
is in compliance with the terms and conditions of all such Permits in all
respects.
4.5 Subsidiaries. There currently exist no Subsidiaries of Company
other than as set forth on Schedule 4.5 hereto, which sets forth such
Subsidiaries, together with their respective jurisdictions of organization, and
the authorized and outstanding capital Stock of each such Subsidiary, by class
and number and percentage of each class owned by Company
17
or a Subsidiary of Company or any other Person. There are no options, warrants,
rights to purchase or similar rights covering capital Stock for any such
Subsidiary. Except as set forth on Schedule 4.5 hereto or in the Company SEC
Documents, neither Company nor any of its Subsidiaries is engaged in any joint
venture or partnership with any other Person.
4.6 Corporate Power; Authorization; Enforceable Obligations. (a) The
execution, delivery and performance by Company of this Agreement, the other
Transaction Documents to which it is a party and all instruments and documents
to be delivered by Company, the issuance and sale of the securities hereunder
and the consummation of the other transactions contemplated by any of the
foregoing: (i) are within Company's corporate power and authority; (ii) have
been duly authorized by all necessary or proper corporate action (except for the
Requisite Company Vote); (iii) are not in contravention of any provision of
Company's certificate of incorporation or by-laws; (iv) will not violate any law
or regulation, or any order or decree of any court or governmental
instrumentality to which Company or any of its Subsidiaries is a party or to
which its assets are bound; (v) will not conflict with or result in the breach
or termination of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which Company or any of its Subsidiaries is a party or by which
Company, any of its Subsidiaries or any of their respective property is bound;
(vi) will not result in the creation or imposition of any Lien upon any of the
property of Company or any of its Subsidiaries; and (vii) do not require the
consent or approval of, or any filing by Company or any of its Subsidiaries
with, any Governmental Authority or any other Person (except, in the case of
clauses (iv) through (vii), as would not have, individually or in the aggregate,
a Material Adverse Effect or that would adversely affect the ability of Company
to consummate, or that would prevent or delay in any material respect, the
transactions contemplated by this Agreement or any other Transaction Documents
in any material respect, and except for filings under the HSR Act, filings
specified in Schedule 3.4 hereof and to the extent previously obtained or made
or as specified in Schedule 4.6 hereof). This Agreement has been, and each of
the other Transaction Documents will be at or prior to Closing, duly executed
and delivered by Company and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and the other Transaction Documents when so executed and delivered will
constitute, the legal, valid and binding obligations of Company, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
4.7 SEC Documents; Financial Statements; Undisclosed Liabilities.
(a) Each form, report, schedule, registration statement and definitive proxy
statement filed by Company with the SEC since August 1, 1997 and prior to the
date hereof (as such documents have been amended prior to the date hereof, the
"Company SEC Documents"), as of their respective dates, complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act. None of the Company SEC Documents, as of their respective dates, contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
the
18
light of the circumstances under which they were made, not misleading. Company
has made available to Purchaser true, accurate and complete copies of all of the
Company SEC Documents. The consolidated financial statements of Company and its
Subsidiaries included in such reports comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto or, in the case of the unaudited
interim financial statements, as permitted by Form 10-Q of the SEC) and fairly
present in all material respects (subject, in the case of the unaudited interim
financial statements, to normal, year-end audit adjustments) the consolidated
financial position of Company and its Subsidiaries as at the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended. Since December 31, 1998, neither Company nor any of its Subsidiaries has
incurred any material liabilities or obligations (whether absolute, accrued,
fixed, contingent, liquidated, unliquidated or otherwise and whether due or to
become due) of any nature, except liabilities, obligations or contingencies (a)
which are reflected on the audited balance sheet of Company and its Subsidiaries
as at December 31, 1998, (including the notes hereto), or (b) which (i) were
incurred in the ordinary course of business after December 31, 1998 and
consistent with past practices, or (ii) are disclosed or reflected in the
Company SEC Documents filed after December 31, 1998. Since August 1, 1997, the
Company has timely filed with the SEC all forms, reports and other documents
required to be filed prior to the date hereof, and no Subsidiary of Company has
filed, or been required to file, any form, report or other document with the
SEC, in each case, pursuant to the Securities Act, the Exchange Act or the rules
and regulations thereunder. From the date hereof until the Second Closing Date,
Company will timely file all forms, reports, schedules and registration
statements required to be filed by the Securities Act or Exchange Act ("Future
Company SEC Documents"). All such Future Company SEC Documents and the
consolidated financial statements included therein shall comply in all material
respects with the representations and warranties made by Company in this Section
4.7 with respect to the Company SEC Documents.
(b) Except as set forth on Schedule 4.7(b) or described in the
Company SEC Documents, no dividends or other distributions have been declared,
paid or made upon any shares of capital Stock of Company, nor have any shares of
capital Stock of Company been redeemed, retired, purchased or otherwise acquired
for value by Company since December 31, 1998.
4.8 Ownership of Property. Each of Company and its Subsidiaries has
good and valid and insurable fee simple title to its owned real property, free
and clear of all Liens, except Permitted Liens. Each of Company and its
Subsidiaries has valid leasehold interests in each of its leases, good and valid
title to, or valid leasehold interests in, all of its other properties and
assets free and clear of all Liens, except Permitted Liens. Each of such leases
is valid and enforceable in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in
19
equity) and is in full force and effect, except to the extent that such lack of
validity or enforceability would not, individually or in the aggregate, have a
Material Adverse Effect. None of Company, any of its Subsidiaries nor, to its
knowledge, any other party to any such lease is in default of its obligations
thereunder or has delivered or received any notice of default under any such
lease, nor has any event occurred which, with the giving of notice, the passage
of time or both, would constitute a default under any such lease, except to the
extent that such default would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. Neither Company nor any of its
Subsidiaries is obligated under or a party to, any option, right of first
refusal, or any other contractual right to purchase, acquire, sell, assign or
dispose of any material real property owned or leased by Company or such
Subsidiary.
4.9 Material Contracts. Schedule 4.9 hereto contains a true, correct
and complete list of all Material Contracts that are described in clauses (i),
(iii) (to the extent related to indebtedness for borrowed money in excess of
$10,000,000), (iv), (viii), (x) and (xi) of the definition of "Material
Contracts." Each Material Contract is a valid and binding agreement of Company
or its Subsidiaries, as the case may be, enforceable against Company or such
Subsidiary in accordance with its terms, except as would not have a Material
Adverse Effect (subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity)). Company and each of its Subsidiaries has
fulfilled or received a waiver from all obligations required pursuant to the
Material Contracts to have been performed by Company or such Subsidiary on its
part except as would not, individually or in the aggregate, result in a Material
Adverse Effect. Except as set forth in Schedule 4.9 hereto, neither Company nor
any of its Subsidiaries is in default or breach, nor to Company's or its
Subsidiaries' knowledge is any third party in default or breach, under or with
respect to any Material Contract except as would not, individually or in the
aggregate, result in a Material Adverse Effect.
4.10 Environmental Protection. (a) Except as set forth on Schedule
4.10 hereto, to Company's and its Subsidiaries' knowledge, all real property
owned, leased or otherwise operated by Company and its Subsidiaries (each, a
"Facility") is free of contamination from any substance, waste or material (i)
currently identified to be toxic or hazardous pursuant to, or which could
reasonably be expected to result in liability under, any Environmental Law or
(ii) within the definition of a substance which is toxic or hazardous under any
Environmental Law, including any asbestos, pcb, radioactive substance, methane,
volatile hydrocarbons, industrial solvents, oil or petroleum or chemical liquids
or solids, liquid or gaseous products, or any other material or substance which,
could reasonably be expected to result in any Environmental Liabilities and
Costs ("Hazardous Substance") which, in either case, could have, individually or
in the aggregate, a Material Adverse Effect. Except as set forth on Schedule
4.10 hereto or in the Company SEC Documents, neither Company nor any of its
Subsidiaries has caused or suffered to occur any release, spill, migration,
leakage, discharge, spillage, uncontrolled loss, seepage, or filtration of
Hazard Substances at or from the Facility (a "Spill") which
20
could, individually or in the aggregate, result in Environmental Liabilities and
Costs which could reasonably be expected to have a Material Adverse Effect.
(b) Company and each Subsidiary have generated, treated,
stored and disposed of any Hazardous Substances in full compliance with
applicable Environmental Laws, except for such non-compliances which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(c) Except as set forth on Schedule 4.10, Company and each
Subsidiary have obtained, or have applied for, and are in compliance with all
Permits required under Environmental Laws (except for such failures which would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect) and neither Company nor any of its Subsidiaries has any
knowledge of any proceedings to substantially modify or to revoke any such
Permit.
(d) Except as set forth on Schedule 4.10 hereto or in the
Company SEC Documents, there are no investigations, proceedings or litigation
pending or, to Company's or its Subsidiaries' knowledge, threatened affecting or
against Company, any of its Subsidiaries or the Facilities relating to
Environmental Laws or Hazardous Substances which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
4.11 Labor Matters. (a) There are no strikes or other labor disputes
against Company or any of its Subsidiaries pending or, to Company's or its
Subsidiaries' knowledge, threatened. To Company's or its Subsidiaries'
knowledge, there is no organizing activity involving Company or any of its
Subsidiaries pending or threatened by any labor union or group of employees.
There are no representation proceedings pending or, to Company's or its
Subsidiaries' knowledge, threatened with the National Labor Relations Board, and
no labor organization or group of employees of Company or its Subsidiaries has
made a pending demand for recognition. There are no complaints or charges
against Company or any of its Subsidiaries pending or, to Company's or its
Subsidiaries' knowledge, threatened to be filed with any Governmental Authority
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by Company or any of its Subsidiaries of
any individual that would have, individually or in the aggregate, a Material
Adverse Effect.
(b) Except as set forth on Schedule 4.11 hereto or in the Company
SEC Documents, neither Company nor any of its Subsidiaries is, or during the
five (5) years preceding the date hereof was, a party to any labor or collective
bargaining agreement and there are no labor or collective bargaining agreements
which pertain to employees of Company or its Subsidiaries.
4.12 Taxes. Except as set forth on Schedule 4.12, all material
federal, state, local and foreign tax returns, reports and statements required
to be filed by Company and its Subsidiaries have been timely filed with the
appropriate Governmental Authority and all such returns, reports and statements
are true, correct and complete in all material respects. All material Charges
and other impositions due and payable for the periods
21
covered by such returns, reports and statements have been paid prior to the date
on which any fine, penalty, interest or late charge may be added thereto for
nonpayment thereof, or any such fine, penalty, interest, late charge or loss has
been paid. No material tax audits or other administrative or judicial
proceedings are pending or, to the Company's knowledge, threatened with regard
to any Charges for which Company or any Subsidiary may be liable and no material
assessment of Charges is proposed against Company or any Subsidiary.
4.13 No Litigation. Except as disclosed on Schedule 4.13 hereto or
in the Company SEC Documents, no action, claim or proceeding is now pending or,
to the knowledge of Company or its Subsidiaries, threatened against Company or
any of its Subsidiaries, at law, in equity or otherwise, before any court,
board, commission, agency or instrumentality of any foreign, federal, state, or
local government or of any agency or subdivision thereof, or before any
arbitrator or panel of arbitrators which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
4.14 Brokers. Except for those brokers or finders to whom Company is
solely responsible for the payment of any brokerage or finder's fees, no broker
or finder acting on behalf of Company or any of its Subsidiaries brought about
the consummation of the transactions contemplated pursuant to this Agreement and
neither Company nor any of its Subsidiaries has any obligation to any Person in
respect of any brokerage or finder's fees (or any similar obligation) in
connection with the transactions contemplated by this Agreement.
4.15 Patents, Trademarks, Copyrights and Licenses. Except as set
forth on Schedule 4.15 hereto and except with respect to those patents,
trademarks, copyrights and licenses the loss of which would not have,
individually or in the aggregate, a Material Adverse Effect, Company and each of
its Subsidiaries owns or has the right to use all licenses, patents, patent
applications, copyrights, service marks, trademarks and registrations and
applications for registration thereof, and trade names necessary to continue to
conduct its business as heretofore conducted by it and now being conducted by
it. To Company's knowledge, Company and each of its Subsidiaries conducts its
businesses without infringement or claim of infringement of any license, patent,
copyright, service ▇▇▇▇, trademark, trade name, trade secret or other
intellectual property right of others except where the same would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect. To Company's knowledge, there is no infringement by others of any
license, patent, copyright, service ▇▇▇▇, trademark, trade name, trade secret or
other intellectual property right of Company or any of its Subsidiaries, except
where the same would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
4.16 Ordinary Course of Business; No Material Adverse Change. Except
as set forth on Schedule 4.16 hereto or in response to the events described
therein, or as disclosed in the Company SEC Documents, since June 30, 1999,
Company and each of its Subsidiaries has conducted its operations only in the
ordinary course of business consistent with past practice. Except as disclosed
on Schedule 4.16 hereto or in the Company SEC
22
Documents, no event has occurred since June 30, 1999 which has had or would be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Change.
4.17 ERISA. (a) Schedule 4.17(a) hereto sets forth a list of each
material pension, retirement, savings, disability, dental, health, life, death
benefit, group insurance, profit-sharing, deferred compensation, stock option,
bonus, incentive, severance pay or other employee benefit plan, trust,
arrangement, contract, commitment, agreement or policy (collectively, "Benefit
Plans") sponsored or maintained by Company or its Subsidiaries, in which present
or former employees of Company or any Subsidiary participate (collectively, the
"Company Plans"). Correct and complete copies of the following documents, which
are correct and complete in all material respects, with respect to each of the
Company Plans (other than a Multiemployer Plan), have been made available to
Purchaser, to the extent applicable: (i) any plans, all material amendments
thereto and related trust documents, and amendments thereto; (ii) the most
recent Forms 5500 and all schedules thereto and the most recent actuarial
report, if any; (iii) the most recent IRS determination letter; (iv) summary
plan descriptions; (v) material written communications to employees relating to
the Company Plans; and (vi) written descriptions of all material non-written
agreements relating to the Company Plans.
(b) No Company Plan is subject to Title VI of ERISA. Except as
set forth in Schedule 4.17(b) hereto and except as, individually or in the
aggregate, would not or would not reasonably be expected to have a Material
Adverse Effect: (A) the Company Plans have been administered and are in
compliance with the terms of such plan and all applicable laws, (B) no
"reportable event" (as such term is used in Section 4043 of ERISA other than
those events for which the thirty (30) day notice has been waived pursuant to
the regulations), "prohibited transaction" (as such term is used in Section 406
of ERISA or Section 4975 of the IRC) or "accumulated funding deficiency" (as
such term is used in Section 412 or 4971 of the IRC) has heretofore occurred
with respect to any Company Plan and (C) each Company Plan intended to qualify
under Section 401(a) of the IRC has received a favorable determination from the
IRS regarding its qualified status and no notice has been received from the IRS
with respect to the revocation of such qualification. None of the Company Plans
provides for post-employment life or health insurance, benefits or coverage for
any participant or any beneficiary of a participant, except as may be required
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,
and at the expense of the participant or the participant's beneficiary.
(c) There is no litigation or administrative or other
proceeding involving any Company Plan nor has Company or any of its Subsidiaries
received notice that any such proceeding is threatened, in each case, that would
have or would reasonably be expected to have a Material Adverse Effect. Neither
Company nor any of its Subsidiaries has incurred, nor, to Company's knowledge,
is reasonably likely to incur, any withdrawal liability with respect to any
Multiemployer Plan which remains unsatisfied in an amount which would have,
individually or in the aggregate, a Material Adverse Effect. The termination of,
or withdrawal from, any Company Plan or Multiemployer Plan to which Company or
any of its Subsidiaries contributes, on or prior to the Second Closing
23
Date, will not subject Company or any of its Subsidiaries to any liability under
Title IV of ERISA that would have, individually or in the aggregate, a Material
Adverse Effect.
4.18 Insurance. There are in full force and effect for the benefit
of Company and its Subsidiaries insurance policies and bonds providing adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of Company and its Subsidiaries in accordance with
prudent business practice in the industry of Company and Subsidiaries. No notice
has been given or claim made to cancel or void any such policies or bonds or to
reduce the coverage provided thereby, except as would not have, individually or
in the aggregate, a Material Adverse Effect.
4.19 Year 2000 Compliance. Each system comprised of software,
hardware, databases or embedded control systems (microprocessor controlled or
controlled by any robotic or other device) (collectively, a "System") that
constitutes any material part of, or is used in connection with the use,
operation or enjoyment of, any material tangible or intangible asset or real
property of Company or any of its Subsidiaries will not be materially adversely
affected by the advent of the year 2000, the advent of the twenty-first century
or the transition from the twentieth century through the year 2000 and into the
twenty-first century ("Year 2000 Compliant") in a manner that could reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect. Company has no reason to believe that it or any of its Subsidiaries may
incur material expenses arising from or relating to the failure of any of their
Systems as a result of the advent of the year 2000, the advent of the
twenty-first century or the transition from the twentieth century through the
year 2000 and into the twenty-first century.
4.20 Regulatory Matters. Except as provided in Schedule 4.20 hereto
and as would not have, individually or in the aggregate, a Material Adverse
Effect, each of Company and its Subsidiaries: (i) has completed all regulatory
applications, filings and tariffs, has received all regulatory certificates or
other approvals, and has otherwise complied with all regulatory requirements
necessary to offer any and all services currently offered by Company or any of
its Subsidiaries; and (ii) with respect to any planned or future services that
it may offer, it will complete all regulatory applications, filings and tariffs,
will obtain all regulatory certificates or other approvals and will otherwise
comply with all regulatory requirements necessary to offer any and all such
services.
4.21 No Vote. No vote or consent of Company's stockholders or of the
holder's of the Company's 10% Series A or Series B Senior Notes due 2008 is
required to approve this Agreement or any of the other Transaction Documents or
for Company to consummate the transactions and perform its obligations
contemplated hereby and thereby, except to obtain the Requisite Company Vote in
connection with the issuance of the Second Closing Date Shares, the Second
Closing Date Notes and the shares of Class A Common Stock issuable upon
conversion of the Second Closing Date Notes.
4.22 Employment Agreements. The execution by Company of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby will not result in Company being
required to make any
24
payments, or accelerate or increase any payments required to be made by Company,
under any employment agreement to which Company or any of its Subsidiaries is a
party.
4.23 Investment Company Act. Company and each Subsidiary of Company
either (i) is not an "investment company," or a company "controlled" by, or an
"affiliated company" with respect to, an "investment company," within the
meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder (the "Investment Company Act") or (ii)
satisfies all conditions for an exemption from the Investment Company Act, and,
accordingly, neither Company nor any Subsidiary of Company is required to be
registered under the Investment Company Act.
5. COVENANTS OF COMPANY AND PURCHASER
5.1 Conduct Business in Ordinary Course. (a) From the date hereof
until the First Closing, except as contemplated by this Agreement or with the
prior written consent of Purchaser, Company shall, and shall cause its
Subsidiaries to:
(i) conduct their businesses only in the ordinary course
consistent with past practice;
(ii) use their reasonable best efforts to (A) preserve
the present business operations, organization (including management
and the sales force) and goodwill of Company and its Subsidiaries,
and (B) preserve their present relationship with Persons having
material business dealings with Company and its Subsidiaries;
(iii) maintain (A) all of the assets and properties of
Company and its Subsidiaries in their current condition, ordinary
wear and tear excepted, and (B) insurance upon all of the properties
and assets of Company and its Subsidiaries in such amounts and of
such kinds comparable to that in effect on the date of this
Agreement;
(iv) (A) maintain the books, accounts and records of
Company and its Subsidiaries in the ordinary course of business
consistent with past practices, (B) continue to collect accounts
receivable and pay accounts payable utilizing normal procedures, and
(C) comply with all material contractual and other obligations
applicable to the operation of Company and its Subsidiaries; and
(v) comply in all material respects with applicable
laws, including Environmental Laws.
(b) From the date hereof until the First Closing (except, in
the case of clauses (i), (ii), (iii) and, to the extent applicable, (vi) below,
which shall be from the date hereof until the Second Closing), except as
otherwise expressly contemplated by this Agreement or with the prior written
consent of Purchaser, Company shall not, and shall cause its Subsidiaries not
to:
25
(i) declare, set aside, make or pay any dividend or
other distribution in respect of the capital stock of Company or any
of its Subsidiaries or repurchase, redeem or otherwise acquire any
outstanding shares of the capital stock or other securities of, or
other ownership interests in, Company or any of its Subsidiaries;
(ii) effect any recapitalization, reclassification,
stock split or like change in the capitalization of Company or any
of its Subsidiaries;
(iii) amend the certificate of incorporation or by-laws
of Company;
(iv) introduce any material change with respect to the
operation of Company or any of its Subsidiaries, including any
material change in the types, nature, composition or quality of its
products or services, or make any material change in product
specifications or prices or terms of distributions of such products,
except in accordance with the Business Plan;
(v) conduct their respective businesses in a manner or
take, or cause to be taken, any action that would reasonably be
expected to prevent or materially delay Company or Purchaser from
consummating the transactions contemplated hereby or by the other
Transaction Documents in accordance with the terms hereof or thereof
(regardless of whether such action would otherwise be permitted or
not prohibited hereunder) as a result of antitrust concerns or
telecommunications regulatory concerns, including those relating to
building, maintaining or operating any telecommunications systems or
providing any telecommunications services; or
(vi) agree to do anything prohibited by this Section 5.1
or anything that would make any of the representations and
warranties of Company in this Agreement or the other Transaction
Documents untrue or incorrect in any material respect as of any time
through and including the First Closing Date or the Second Closing
Date, as the case may be.
5.2 Director. (a) From and after the date that any of the
Convertible Notes held by Purchaser or any of its Affiliates are converted
pursuant to and in accordance with the Indenture and, upon such conversion,
Purchaser and its Affiliates Beneficially Own at least 5% of the then issued and
outstanding shares of Common Stock, Purchaser shall be entitled to designate, at
its option, two individuals who shall be reasonably satisfactory to Company at
the time of initial designation to serve on its Board of Directors (the
"Purchaser Directors"). One of the Purchaser Directors shall be one of Company's
directors that is elected by holders of Class B Common Stock in accordance with
Article THIRD, Section 4.2(a)(iv) of the Company Charter (unless no such shares
remain issued and outstanding, in which case, such designee shall be a Class A
Director (as defined in the Company Charter) or such other director elected by
the then holders of common stock of Company) and shall serve in such capacity in
accordance with the
26
Company Charter and by-laws of Company. The other Purchaser Director shall be
one of Company's directors that is elected by holders of Class A Common Stock in
accordance with Article THIRD, Section 4.2(a)(iv) of the Company Charter (unless
no such shares remain issued and outstanding, in which case, such designee shall
be a director elected by the then holders of common stock of Company) and shall
serve in such capacity in accordance with the Company Charter and by-laws of
Company. Promptly following such designations, Company's Board of Directors will
take all action necessary to elect the Purchaser Directors as members of
Company's Board of Directors and thereafter Company shall continue to nominate
the Purchaser Directors, solicit proxies and otherwise encourage their
respective re-election, in each case, to the extent Company takes such action
with respect to the election of its other directors.
(b) Purchaser shall provide (or cause to be provided) to
Company the information about the Purchaser Directors that it is required under
applicable federal securities laws to be included in any proxy statement or
other solicitation materials relating to any stockholder solicitation or action
by Company's stockholders relating to the election of directors.
(c) Notwithstanding anything in this Agreement to the
contrary, the obligations that Company has under this Section 5.2 will
terminate, without further action by any Person, upon the date on which
Purchaser and its Affiliates no longer Beneficially Own, for a period of ninety
(90) consecutive days, in excess of 5% of the then issued and outstanding shares
of Common Stock. At such time, each of the Purchaser Directors shall promptly
resign their respective positions as members of Company's Board of Directors.
(d) In the event that Purchaser shall desire to appoint either
or both of the directors it is entitled to designate to Company's Board of
Directors in accordance with Section 5.2(a) above otherwise than in connection
with a solicitation of or action by Company's stockholders relating to the
election of directors, then as soon as practicable upon written notice from
Purchaser, Company shall cause such person or persons to be appointed to its
Board of Directors.
(e) From and after the First Closing Date and otherwise in the
event Purchaser shall be entitled to designate directors to Company's Board of
Directors in accordance with Section 5.2(a) above but does not exercise its
right to designate at least one such director, Purchaser shall be entitled to
designate in writing, from time to time, to Company's Board of Directors one
representative (the "Purchaser Representative") as an observer (with no right to
vote) at each meeting of Company's Board of Directors and such Board of
Directors shall furnish (or cause to be furnished) to Purchaser, to the
attention of the Purchaser Representative, and at the same time and in the same
manner furnished to the directors of Company, notice of each such meeting and
any other materials relevant to such meeting as provided to the directors of
Company. The Purchaser Representative shall treat all such information as
confidential in accordance with such duties regarding confidentiality as would
be generally applicable to a director receiving such information.
Notwithstanding the foregoing, Purchaser agrees that the Purchaser
Representative shall be
27
required to excuse himself or herself from any meeting of Company's Board of
Directors if at any time the outside counsel of Company reasonably determines
that (i) the participation of the Purchaser Representative presents a conflict
of interest or a potential conflict of interest, whether the conflict arises out
of Purchaser's business, Company's business or any other matter or (ii) the
Purchaser Representative must be excused from deliberations of Company's Board
of Directors so as to maintain the legal privilege of such deliberations.
(f) For so long as Purchaser shall be entitled to have a
director on or an observer to Company's Board of Directors in accordance with
this Section 5.2, Company shall take all permissible action necessary so that
Purchaser can effect its rights under this Section 5.2, and shall not amend,
modify or alter its certificate of incorporation or by-laws in a manner that
would adversely affect or contravene Purchaser's rights under this Section 5.2.
5.3 Regulatory and Other Authorizations. (a) Each of Company and
Purchaser shall use its reasonable best efforts (and cooperate fully with the
other party in promptly seeking) to obtain all authorizations, consents, orders
and approvals of Governmental Authorities that may be or may become necessary
for the execution and delivery of, and the performance of its obligations
pursuant to, this Agreement and the other Transaction Documents, including:
(i) making, as promptly as practicable after the date
hereof an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions
contemplated by this Agreement, which filing shall request early
termination of the waiting periods imposed by the HSR Act;
(ii) complying at as early a date as possible with any
Request for Additional Information to cause termination of the
waiting periods under the HSR Act and to prevent the entry by a
court of competent jurisdiction of an order enjoining the
consummation of the transactions contemplated by this Agreement; and
(iii) prior to the exercise of Purchaser's conversion
rights with respect to the Convertible Notes under the Indenture,
making an appropriate filing of a Notification and Report Form
pursuant to the HSR Act with respect to the transactions
contemplated in the Indenture, which filing shall request early
termination of the waiting periods imposed by the HSR Act and
complying at as early a date as possible with any Request for
Additional Information to cause termination of the waiting periods
under the HSR Act and to prevent the entry by a court of competent
jurisdiction of an order enjoining the consummation of the
transactions contemplated by the Indenture.
(b) On and after the Regulatory Relief Date, Company shall use
its reasonable best efforts (and cooperate fully with Purchaser) to comply with
the provisions of Section 272 of the Telecommunications Act as implemented by
the FCC, and
28
the accounting and other rules, regulations and orders of any Governmental
Authority that may be or may become necessary for the execution and delivery of,
and the performance of its obligations pursuant to, this Agreement and the other
Transaction Documents.
(c) Nothing in this Section 5.3 shall require Company or any
of its Affiliates or Purchaser or any of its Affiliates to sell or otherwise
dispose of, or permit the sale or other disposition of, any assets, in each
case, whether as a condition to obtaining any approval from a Governmental
Authority or any other Person or for any other reason.
5.4 Access to Information. Company shall, and shall cause each of
its Subsidiaries to, afford to Purchaser and to the officers, employees,
accountants, counsel, financial advisors and other representatives of Purchaser,
reasonable access during normal business hours during the period prior to the
First Closing Date to all of their respective properties, books, contracts,
commitments, personnel and records and, during such period, Company shall, and
shall cause each of its Subsidiaries to, furnish promptly to Purchaser (i) a
copy of each Future Company SEC Document and (ii) all other information
concerning their respective business, properties and personnel as Purchaser may
reasonably request. Except as required by applicable law, Purchaser will hold,
and will cause its respective officers, employees, accountants, counsel,
financial advisors and other representatives and Affiliates to hold, any
nonpublic information in confidence to the extent required by, and in accordance
with, the provisions of the Non-Disclosure Agreement, dated August 9, 1999,
among Company, Parent and ▇▇▇▇ Atlantic Corporation (the "Confidentiality
Agreement").
5.5 Further Assurances. From the date hereof until the Second
Closing Date, each of Company and Purchaser shall use its reasonable best
efforts to (i) take all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and other Transaction Documents and
(ii) cause the fulfillment at the earliest practicable date of all of the
conditions to their respective obligations to consummate the transactions
contemplated by this Agreement and the other Transaction Documents (other than
with respect to those conditions set forth in Section 6.11 hereof). Without
limiting the foregoing, such actions shall include obtaining all Permits of
Governmental Authorities, making all filings and required submissions with
Governmental Authorities, obtaining all consents and approvals from parties to
any agreements or contracts with Company or any of its Subsidiaries as are
necessary for the consummation of the transactions contemplated hereby and by
the other Transaction Documents, defending any lawsuit or legal challenges,
whether judicial or administrative, challenging this Agreement or the other
Transaction Documents or any of the transactions contemplated hereby or thereby
and providing all information reasonably requested by a party hereto for the
purpose of taking any of the actions described above.
5.6 Use of Proceeds. Company will use the proceeds of the First
Closing Date Shares Purchase Price, the Second Closing Date Shares Purchase
Price, the First Closing Date Notes Purchase Price and the Second Closing Date
Notes Purchase
29
Price only for lawful purposes in accordance with Section 2.4 hereof, as
applicable and such uses shall not contravene any applicable law or any
provisions hereof.
5.7 Affiliate Contracts. From the date hereof until the Second
Closing Date, Company shall not, and shall cause its Subsidiaries not to, amend,
modify or waive any provision of, or terminate or allow to be terminated, any
Affiliate Contract in any manner materially adverse to Company or any of its
Subsidiaries.
5.8 Notification of Certain Events. From the date hereof until the
First Closing Date, Company shall promptly notify Purchaser of the existence of
any event referred to in Section 6.11 or Section 6.10A hereof.
5.9 Modification of Terms in Certain Circumstances. From the date
hereof until the First Closing Date, if Company consummates, publicly announces
or otherwise has entered into an agreement with respect to the private sale of
25,000,000 or more shares of its Stock to a Person or any Group (other than the
transactions contemplated by this Agreement) pursuant to a transaction that is
exempt from the registration requirements of the Securities Act (excluding the
issuance of any shares of Class A Common Stock upon the exercise or conversion
of outstanding options and warrants to purchase shares of Class A Common Stock)
for a purchase price per share of Class A Common Stock (the "Other Per Share
Purchase Price") that is less than $28.00 (the "Original Per Share Purchase
Price"), then the provisions of this Agreement will be deemed modified and
amended so that: (i) the First Closing Date Shares Purchase Price and the Second
Closing Date Shares Purchase Price shall be equal to the number of First Closing
Date Shares or Second Closing Date Shares, as the case may be, multiplied by the
Other Per Share Purchase Price; (ii) the Conversion Price (as defined in the
Indenture) shall be equal to the Other Per Share Purchase Price multiplied by a
fraction the numerator of which is $34.00 and the denominator of which is the
Original Per Share Purchase Price; and (iii) the First Closing Date Notes
Purchase Price and the Second Closing Date Notes Purchase Price shall be equal
to the amount of First Closing Date Notes or Second Closing Date Notes, as the
case may be, divided by $34.00, and then such quotient shall be multiplied by
the Other Per Share Purchase Price multiplied by a fraction the numerator of
which is $34.00 and the denominator of which is the Original Per Share Purchase
Price. Company shall promptly notify Purchaser of the existence of any
transaction with respect to which this Section 5.9 would apply.
5.10 Proxy Statement; Registration Statement. (a) As promptly as
practicable after the execution of this Agreement, Company shall make a good
faith determination in consultation with Purchaser whether stockholder approval
is required for (i) the issuance of the First Closing Date Shares and the First
Closing Date Notes (and the shares of Class A Common Stock issuable upon
conversion of such notes), or (ii) solely for the issuance of the Second Closing
Date Shares and the Second Closing Date Notes (and the shares of Class A Common
Stock issuable upon conversion of such notes). If the Company concludes based on
the advice of outside counsel, after consultation with counsel to Purchaser,
that approval is required for the issuance of the First Closing Date Shares and
the First Closing Date Notes (and the shares of Class A Common Stock
30
issuable upon conversion of such notes) because of the issuance of the Second
Closing Date Shares and the Second Closing Date Notes, and the Second Closing
Date Shares and the Second Closing Date Notes (and the shares of Class A Common
Stock issuable upon conversion of such notes), Company and Purchaser shall use
their reasonable best efforts to consummate the First Closing as promptly as
practicable, but shall not be obligated in its sole discretion to consummate,
and the Agreement shall be modified inter alia to delete all references to, the
Second Closing, or the Second Closing Date, and references to the Second Closing
Date Shares and the Second Closing Date Notes. In the event the Company
determines that the Requisite Company Vote is only required for the issuance of
the Second Closing Date Shares and Second Closing Date Notes (and the shares of
Class A Common Stock issuable upon conversion of such notes) the Company shall
prepare and file with the SEC in connection with its next succeeding Annual
Meeting of Stockholders (or next special meeting if prior to such Annual
Meeting) a proxy statement of the Company relating to the meeting of the
Company's stockholders (the "Company Stockholders Meeting") to be held to
consider approval of the issuance of the issuance of the Second Closing Date
Shares and Second Closing Date Notes (and the shares of Class A Common Stock
issuable upon conversion of such notes) (the "Proxy Statement"). The Company
shall use its reasonable best efforts to cause the Proxy Statement to become
cleared as promptly as practicable by the SEC. The Company shall use its
reasonable commercial efforts to file the Proxy Statement no later than April
20, 2000, and to hold the Company Stockholders Meeting no later than May 31,
2000. The Purchaser or the Company, as the case may be, shall furnish all
information concerning the Purchaser or the Company as the other party may
reasonably request in connection with such actions and the preparation of the
Proxy Statement. As promptly as practicable after the Proxy Statement is cleared
by the SEC, the Proxy Statement will be mailed to the stockholders of the
Company. The Company shall cause the Proxy Statement to comply as to form and
substance in all material respects with the applicable requirements of (i) the
Exchange Act, including Sections 14(a) and 14(d) thereof and the respective
regulations promulgated thereunder and (ii) the rules and regulations of
NASDAQ's National Market ("NASDAQ/NMS").
(b) The Company will, through its Board of Directors,
unanimously recommend, and the Proxy Statement shall include the unanimous and
unconditional recommendation of the Board of Directors of the Company, to the
stockholders of the Company that they vote, as required by NASDAQ/NMS, in favor
of the issuance of the Second Closing Date Shares and the Second Closing Date
Notes (and the shares of Class A Common Stock issuable upon conversion of such
notes).
(c) The Company shall call and hold the Company Stockholders
Meeting as promptly as practicable after the mailing date of the Proxy Statement
for the purpose of voting upon the issuance of the Second Closing Date Shares
and Second Closing Date Notes (and the shares of Class A Common Stock issuable
upon conversion of such notes). The Company shall use its reasonable best
efforts (through its agents or otherwise) to solicit from its stockholders
proxies in favor of the issuance of the Second Closing Date Shares and Second
Closing Date Notes (and the shares of Class A Common
31
Stock issuable upon conversion of such notes), and shall take all other action
necessary to secure the Requisite Company Vote.
6. FIRST CLOSING CONDITIONS TO OBLIGATION OF PURCHASER
Purchaser's obligation to purchase the First Closing Date Shares and First
Closing Date Notes at the First Closing and consummate the transactions
contemplated hereby are subject to the satisfaction or fulfillment on or prior
to the First Closing Date of the following conditions:
6.1 Representations and Warranties. The representations and
warranties of Company contained in Article 4 of this Agreement (i) that are
qualified as to materiality or Material Adverse Effect shall be true and correct
in all respects as provided herein and (ii) that are not so qualified shall be
true and correct in all material respects, in each case, as of the date of this
Agreement and as of such First Closing Date as though made at and as of such
First Closing Date, except to the extent that they expressly refer to an earlier
or specific time, in which case they shall be true and correct as of such time.
Purchaser shall have received a certificate signed on behalf of Company by an
officer of Company to such effect on the First Closing Date. Purchaser shall
have also received a certificate signed on behalf of Company by an officer of
Company certifying as to the matters contained in Section 4.1 hereof as of the
First Closing Date.
6.2 Covenants. All covenants and agreements contained in this
Agreement to be performed by Company on or prior to the First Closing Date shall
have been performed or complied with in all material respects. Purchaser shall
have received a certificate signed on behalf of Company by an officer of Company
to such effect on the First Closing Date.
6.3 HSR Act. The waiting period (and any extensions thereof) under
the HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
6.4 No Orders. No statute, rule, regulation, decree, preliminary or
permanent injunction, temporary restraining order or other order or ruling of
any nature of any Governmental Authority shall be in effect that (i) restrains,
prevents or materially changes the transactions contemplated hereby, or (ii)
requires or requests any amendment, modification or waiver of any provision of
this Agreement or any of the other Transaction Documents.
6.5 No Investigations. There shall not be any pending suit, action,
investigation or proceeding by any Governmental Authority that seeks to (i)
restrain or prohibit the purchase and sale of the First Closing Date Shares or
the First Closing Date Notes or any of the other transactions contemplated by
this Agreement, (ii) require the payment of any damages, fees or other amounts
by Purchaser or any of its Affiliates in connection with the purchase of the
First Closing Date Shares or the First Closing Date Notes by Purchaser or the
consummation of the transactions contemplated hereby or by any other Transaction
Document that are, individually or in the aggregate, in an amount in
32
excess of the amount set forth on Schedule 6.5 hereto, (iii) prohibit or limit
the ownership or operation by Purchaser or any of its Affiliates of, or compel
Purchaser or any of its Affiliates to dispose of or hold separate, any business
or assets, in each case, as a result of the purchase of the First Closing Date
Shares or the First Closing Date Notes or any of the other transactions
contemplated by this Agreement, or (iv) require any amendment, modification or
waiver of any provision of this Agreement or any of the other Transaction
Documents.
6.6 Opinion of Counsel. Purchaser shall have received an opinion
reasonably satisfactory to it, dated as of the First Closing Date, of ▇▇▇▇,
Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, outside counsel to Company, with respect to
(or to the effect that, as applicable, and subject to customary exceptions and
qualifications): (i) the due authorization, execution and delivery by Company of
this Agreement and each other Transaction Document, to which Company is a party;
(ii) the validity, binding nature and enforceability as to Company of this
Agreement and each other Transaction Document to which Company is a party which
is governed by New York law; (iii) due incorporation and good standing of
Company; (iv) due authorization and valid issuance of the First Closing Date
Shares or the First Closing Date Notes to be issued and sold pursuant to this
Agreement (including that the same are free from preemptive rights pursuant to
law or the Company Charter); (v) registration under the Securities Act was not
required for the offer and sale of the First Closing Date Shares or the First
Closing Date Notes pursuant to this Agreement; and (vi) the execution and
delivery by Company of this Agreement and each other Transaction Document to
which it is a party and the performance by Company of its obligations hereunder
and thereunder will not conflict with, constitute a default under or violate (A)
the Company Charter or by-laws of Company, (B) any judgment, injunction or order
of any Governmental Authority binding on Company of which such counsel is aware,
or (C) the 10% Notes Indenture and the Master Loan and Security Agreement, dated
as of April 14, 1999, by and between Company and AboveNet Communications, Inc.
6.7 Transaction Documents. Each of the Transaction Documents shall
have been duly and validly executed and delivered by each of the parties
thereto. The Fiber Optic Private Network Agreement shall have been executed and
remain in full force and effect.
6.8 Material Adverse Change. No Material Adverse Change shall have
occurred since the date hereof.
6.9 Delivery of Securities. Certificate or certificates representing
the First Closing Date Shares and note or notes representing the First Closing
Date Notes in the form attached as Exhibit A to the Indenture shall have been,
or shall at the First Closing be, validly delivered and transferred to
Purchaser, free and clear of any and all Liens.
6.10 Consents and Approvals. All consents and approvals of all
Governmental Authorities and all other Persons that are necessary to consummate
the transactions contemplated hereby and for Purchaser to receive the benefits
contemplated by this Agreement shall have been obtained.
33
6.11 Parent Ownership; Certain Other Events.
(a) As of the First Closing, Parent shall own of record and
beneficially such number of shares of Common Stock that represents not less than
50.1% of the voting power of all of the issued and outstanding shares of Common
Stock as of such time. As of the First Closing, the Class B Permitted Holders
shall own of record and beneficially all of the Stock of Parent.
(b) At any time between the date hereof and the First Closing
Date, neither Company nor any other Person shall have publicly announced a
transaction which, if effected, would result in, or consummated a transaction
that resulted in, a Change of Control (as such term is defined in the
Stockholders Agreement) or any other transaction of the type that is referred to
in Section 2.3(c) of the Stockholders Agreement.
(c) At any time between the date hereof and the First Closing
Date, Company shall not have consummated, publicly announced or filed a
registration statement with respect to the issuance or sale pursuant to a
registration statement to be filed under the Securities Act of 25,000,000 or
more shares of Stock or other equity or convertible debt securities that are
convertible into 25,000,000 or more shares of Common Stock (excluding with
respect to the issuance of Class A Common Stock upon the exercise of employee
stock options, warrants, calls, options or other rights to purchase or otherwise
acquire shares of capital stock of Company in effect, existing or outstanding,
as the case may be, as of the date hereof).
6.12 Good Standing Certificates. Purchaser shall have received from
Company long-form good standing certificates, dated within five (5) Business
Days preceding the First Closing Date, and related bring-down memoranda, dated
as of the First Closing Date, for Company and each of its domestic Subsidiaries
issued by the Secretary of State in the jurisdiction of organization of each
such entity.
6.13 Franchise Agreement. The Franchise Agreement in effect on the
date hereof shall have been amended and restated substantially in the form of
Schedule 6.13 hereto.
6A. SECOND CLOSING CONDITIONS TO OBLIGATION OF PURCHASER
Purchaser's obligation to purchase the Second Closing Date Shares and
Second Closing Date Notes at the Second Closing are subject to the satisfaction
or fulfillment on or prior to the Second Closing Date of the following
conditions:
6.1A Representations and Warranties. The representations and
warranties of Company contained in Article 4 of this Agreement (other than
Section 4.16) (i) that are qualified as to materiality or Material Adverse
Effect shall be true and correct in all respects as provided herein and (ii)
that are not so qualified shall be true and correct in all material respects, in
each case, as of the date of this Agreement and as of such Second Closing Date
as though made at and as of such Second Closing Date, except to the extent
34
that they expressly refer to an earlier or specific time, in which case they
shall be true and correct as of such time. Purchaser shall have received a
certificate signed on behalf of Company by an officer of Company to such effect
on the Second Closing Date. Purchaser shall have also received a certificate
signed on behalf of Company by an officer of Company certifying as to the
matters contained in Section 4.1 hereof as of the Second Closing Date.
6.2A Covenants. All covenants and agreements contained in this
Agreement to be performed by Company on or prior to the Second Closing Date
shall have been performed or complied with in all material respects. Purchaser
shall have received a certificate signed on behalf of Company by an officer of
Company to such effect on the Second Closing Date.
6.3A HSR Act. The waiting period (and any extensions thereof) under
the HSR Act applicable to the transactions to be consummated on the Second
Closing hereby shall have expired or been terminated.
6.4A No Orders. No statute, rule, regulation, decree, preliminary or
permanent injunction, temporary restraining order or other order or ruling of
any nature of any Governmental Authority shall be in effect that (i) restrains,
prevents or materially changes the transactions contemplated hereby, or (ii)
requires or requests any amendment, modification or waiver of any provision of
this Agreement or any of the other Transaction Documents.
6.5A No Investigations. There shall not be any pending suit, action,
investigation or proceeding by any Governmental Authority that seeks to (i)
restrain or prohibit the purchase and sale of the securities hereunder or any of
the other transactions contemplated by this Agreement, (ii) require the payment
of any damages, fees or other amounts by Purchaser or any of its Affiliates in
connection with the purchase of the securities by Purchaser pursuant to this
Agreement or the consummation of the transactions contemplated hereby or by any
other Transaction Document that are, individually or in the aggregate, in an
amount in excess of the amount set forth on Schedule 6.5 hereto, (iii) prohibit
or limit the ownership or operation by Purchaser or any of its Affiliates of, or
compel Purchaser or any of its Affiliates to dispose of or hold separate, any
business or assets, in each case, as a result of the purchase of the securities
pursuant to this Agreement or any of the other transactions contemplated by this
Agreement, or (iv) require any amendment, modification or waiver of any
provision of this Agreement or any of the other Transaction Documents.
6.6A Opinion of Counsel. Purchaser shall have received an opinion
reasonably satisfactory to it, dated as of the Second Closing Date, of ▇▇▇▇,
Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, outside counsel to Company, with respect to
(or to the effect that, as applicable, and subject to customary exceptions and
qualifications): (i) the due authorization, execution and delivery by Company of
this Agreement and each other Transaction Document, to which Company is a party;
(ii) the validity, binding nature and enforceability as to Company of this
Agreement and each other Transaction Document to which Company is a party which
is governed by New York law; (iii) due incorporation and
35
good standing of Company; (iv) due authorization and valid issuance of the
Second Closing Date Shares and Second Closing Date Notes to be issued and sold
pursuant to this Agreement (including that the same are free from preemptive
rights pursuant to law or the Company Charter); (v) registration under the
Securities Act was not required for the offer and sale of the Second Closing
Date Shares and the Second Closing Date Notes pursuant to this Agreement; and
(vi) the execution and delivery by Company of this Agreement and each other
Transaction Document to which it is a party and the performance by Company of
its obligations hereunder and thereunder will not conflict with, constitute a
default under or violate (A) the Company Charter or by-laws of Company, (B) any
judgment, injunction or order of any Governmental Authority binding on Company
of which such counsel is aware, or (C) the 10% Notes Indenture and the Master
Loan and Security Agreement, dated as of April 14, 1999, by and between Company
and AboveNet Communications, Inc.
6.7A Transaction Documents. Each of the Transaction Documents shall
have been duly and validly executed and remain in full force and effect.
6.8A Delivery of Securities. Certificate or certificates
representing the Second Closing Date Shares and a note or notes evidencing the
Second Closing Date Notes in the form attached as Exhibit A to the Indenture
shall have been, or shall at the Second Closing be, validly delivered and
transferred to Purchaser, free and clear of any and all Liens.
6.9A Consents and Approvals. All consents and approvals of all
Governmental Authorities and all other Persons that are necessary to consummate
the transactions contemplated hereby and for Purchaser to receive the benefits
contemplated by this Agreement shall have been obtained.
6.10A Parent Ownership. (a) As of the Second Closing, Parent shall
own of record and beneficially such number of shares of Common Stock that
represents not less than 50.1% of the voting power of all of the issued and
outstanding shares of Common Stock as of such time. As of the Second Closing,
the Class B Permitted Holders shall own of record and beneficially all of the
Stock of Parent.
(b) At any time between the date hereof and the Second Closing
Date, neither Company nor any other Person shall have publicly announced a
transaction which, if effected, would result in, or consummated a transaction
that resulted in, a Change of Control (as such term is defined in the
Stockholders Agreement) or any other transaction of the type that is referred to
in Section 2.3(c) of the Stockholders Agreement.
6.11A Good Standing Certificates. Purchaser shall have received from
Company long-form good standing certificates, dated within five (5) Business
Days preceding the Second Closing Date, and related bring-down memoranda, dated
as of the Second Closing Date, for Company and each of its domestic Subsidiaries
issued by the Secretary of State in the jurisdiction of organization of each
such entity.
6.12A Consummation of the First Closing. The First Closing shall
have been consummated in accordance with the terms of this Agreement.
36
7. FIRST CLOSING CONDITIONS TO OBLIGATION OF COMPANY
Company's obligation to issue or sell the First Closing Date Shares and
the First Closing Date Notes at the First Closing and consummate the
transactions contemplated hereby are subject to the satisfaction or fulfillment
on or prior to the First Closing Date of the following conditions:
7.1 Representations and Warranties. The representations and
warranties of Purchaser contained in Article 3 of this Agreement (i) that are
qualified as to materiality or Material Adverse Effect shall be true and correct
in all respects as provided herein and (ii) that are not so qualified shall be
true and correct in all material respects, in each case, as of the date of this
Agreement and as of such First Closing Date as though made at and as of such
First Closing Date, except to the extent that they expressly refer to an earlier
or specific time, in which case they shall be true and correct as of such time.
Company shall have received a certificate signed on behalf of Purchaser by an
officer of Purchaser to such effect on the First Closing Date.
7.2 Covenants. All covenants and agreements contained in this
Agreement to be performed by Purchaser on or prior to the First Closing Date
shall have been performed or complied with in all material respects. Company
shall have received a certificate signed on behalf of Purchaser by an officer of
Purchaser to such effect on the First Closing Date.
7.3 HSR Act. The waiting period (and any extensions thereof) under
the HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
7.4 No Orders. No statute, rule, regulation, decree, preliminary or
permanent injunction, temporary restraining order or other order of any nature
of any Governmental Authority shall be in effect that restrains or prevents the
transactions contemplated hereby; provided, however, that in the case of a
decree, injunction or other order, Company shall have used reasonable efforts to
prevent the entry of any such decree, injunction or other order and to appeal as
promptly as possible any such decree, injunction or other order.
7.5 Transaction Documents. Each of the Transaction Documents shall
have been duly and validly executed and delivered by the each of the parties
thereto.
7.6 No Investigations. There shall not be any pending suit, action,
investigation or proceeding by any Governmental Authority that seeks to (i)
restrain or prohibit the purchase and sale of the First Closing Date Shares or
First Closing Date Notes or any of the other transactions contemplated by this
Agreement, (ii) require the payment of any damages, fees or amounts by Company
or any of its Affiliates in connection with the purchase of the First Closing
Date Shares or First Closing Date Notes by Purchaser or the consummation of the
transactions contemplated hereby or by any other Transaction Document that are,
individually or in the aggregate, in an amount in excess of the amount set forth
on Schedule 6.5 hereto, (iii) compel Company or any of its Affiliates to dispose
of
37
or hold separate any business or assets, in each case, as a result of the
purchase of the First Closing Date Shares or First Closing Date Notes or any of
the other transactions contemplated by this Agreement, or (iv) require any
amendment, modification or waiver of any provision of this Agreement or any of
the other Transaction Documents.
7.7 Consents and Approvals. All consents and approvals of all
Governmental Authorities and all other Persons that are necessary to consummate
the transactions contemplated hereby and for Company to receive the benefits
contemplated by this Agreement shall have been obtained.
7.8 Franchise Agreement. The Franchise Agreement in effect on the
date hereof shall have been amended and restated substantially in the form of
Schedule 6.13 hereto.
7A. SECOND CLOSING CONDITIONS TO OBLIGATION OF COMPANY
Company's obligation to issue or sell the Second Closing Date Shares and
the Second Closing Date Notes at the Second Closing are subject to the
satisfaction or fulfillment on or prior to the Second Closing Date of the
following conditions:
7.1A Representations and Warranties. The representations and
warranties of Purchaser contained in Article 3 of this Agreement (i) that are
qualified as to materiality or Material Adverse Effect shall be true and correct
in all respects as provided herein and (ii) that are not so qualified shall be
true and correct in all material respects, in each case, as of the date of this
Agreement and as of such Second Closing Date as though made at and as of such
Second Closing Date, except to the extent that they expressly refer to an
earlier or specific time, in which case they shall be true and correct as of
such time. Company shall have received a certificate signed on behalf of
Purchaser by an officer of Purchaser to such effect on the Second Closing Date.
7.2A Covenants. All covenants and agreements contained in this
Agreement to be performed by Purchaser on or prior to the Second Closing Date
shall have been performed or complied with in all material respects. Company
shall have received a certificate signed on behalf of Purchaser by an officer of
Purchaser to such effect on the Second Closing Date.
7.3A HSR Act. The waiting period (and any extensions thereof) under
the HSR Act applicable to the transactions to be consummated on the Second
Closing hereby shall have expired or been terminated.
7.4A No Orders. No statute, rule, regulation, decree, preliminary or
permanent injunction, temporary restraining order or other order of any nature
of any Governmental Authority shall be in effect that restrains or prevents the
transactions contemplated hereby; provided, however, that in the case of a
decree, injunction or other order, Company shall have used reasonable efforts to
prevent the entry of any such decree, injunction or other order and to appeal as
promptly as possible any such decree, injunction or other order.
38
7.5A Transaction Documents. Each of the Transaction Documents shall
have been duly and validly executed and remain in full force and effect.
7.6A No Investigations. There shall not be any pending suit, action,
investigation or proceeding by any Governmental Authority that seeks to (i)
restrain or prohibit the purchase and sale of the securities hereunder or any of
the other transactions contemplated by this Agreement, (ii) require the payment
of any damages, fees or amounts by Company or any of its Affiliates in
connection with the purchase of the securities pursuant to this Agreement by
Purchaser or the consummation of the transactions contemplated hereby or by any
other Transaction Document that are, individually or in the aggregate, in an
amount in excess of the amount set forth on Schedule 6.5 hereto, (iii) compel
Company or any of its Affiliates to dispose of or hold separate any business or
assets, in each case, as a result of the purchase of the securities pursuant to
this Agreement or any of the other transactions contemplated by this Agreement,
or (iv) require any amendment, modification or waiver of any provision of this
Agreement or any of the other Transaction Documents.
7.7A Consents and Approvals. All consents and approvals of all
Governmental Authorities and all other Persons that are necessary to consummate
the transactions contemplated hereby and for Company to receive the benefits
contemplated by this Agreement shall have been obtained.
7.8A Stockholder Approval. The issuance of and sale of the Second
Closing Date Shares and the Second Closing Date Notes and the issuance of shares
of Class A Common Stock issuable upon conversion of the Second Closing Date
Notes pursuant to this Agreement shall have been duly approved by the Requisite
Company Vote.
7.9A Consummation of the First Closing. The First Closing shall have
been consummated in accordance with the terms of this Agreement.
8. INDEMNIFICATION
8.1 Indemnification. (a) Subject to the terms and conditions of this
Article 8 and Section 9.9 hereof, Company agrees to indemnify and hold Purchaser
and each of its officers, directors and Affiliates harmless from and against any
and all liabilities, obligations, damages, losses, deficiencies, costs,
penalties, interest and expenses (including, without limitation, reasonable
attorneys' fees) (collectively, "Losses"), including those arising from
third-party claims, arising out of, based upon, attributable to or resulting
from: (i) the failure of any of the representations or warranties of Company set
forth in Sections 4.2, 4.3, 4.4, 4.6, 4.12, 4.14, 4.17, 4.19, 4.20 and 4.21
hereof, to be true and correct as of the First Closing Date; and (ii) the breach
of any covenant or other agreement on the part of Company under the terms of
this Agreement, in each case, to the extent not waived by Purchaser.
(b) Subject to the terms and conditions of this Article 8 and
Section 9.9 hereof, Purchaser agrees to indemnify and hold Company and each of
its
39
officers, directors and Affiliates harmless from and against any and all Losses,
including those arising from third-party claims, arising out of, based upon,
attributable to or resulting from: (i) the failure of any of the representations
or warranties of Purchaser set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6,
3.7 and 3.8 hereof, to be true and correct as of the First Closing Date; and
(ii) the breach of any covenant or other agreement on the part of Purchaser
under the terms of this Agreement.
8.2 Limitations on Indemnification for Breaches of Representations,
Warranties and Covenants. (a) An Indemnifying Party (as defined below) shall not
have any liability to an Indemnified Party (as defined below) under clause (i)
of Section 8.1(a) hereof or clause (i) of Section 8.1(b) hereof, as the case may
be, unless the aggregate amount of Losses to such Indemnified Party finally
determined to arise thereunder based upon, attributable to or resulting from the
failure of any representation or warranty to be true and correct exceeds
$25,000,000 (the "Basket") and, subject to Section 8.2(b) below, and in such
event, such Indemnifying Party shall only be required to pay the entire amount
of such Losses in excess of the Basket.
(b) The aggregate amount that an Indemnified Party shall be
entitled to recover pursuant to Section 8.1 for any Loss or Losses shall not
exceed $845,000,000.
(c) The amount of an Indemnifying Party's liability under this
Article 8 to an Indemnified Party for any Loss shall be determined by taking
into account any insurance proceeds actually received by such Indemnified Party
with respect to such Loss (after deducting reasonable costs and expenses
incurred in connection with recovery of such proceeds).
(d) Except for claims of fraud or similar claims, the
indemnification provided in this Article 8 shall be the sole and exclusive
remedy after the First Closing Date in the case of the First Closing Date Shares
and the First Closing Date Notes, or the Second Closing Date in the case of the
Second Closing Date Shares and the Second Closing Date Notes, for any claims for
indemnification relating to the subject matter of this Agreement for which
indemnification is available; provided that nothing contained herein shall limit
rights or remedies expressly provided for in this Agreement or any other
Transaction Document or rights or remedies which, as a matter of applicable law
or public policy, cannot be limited or waived.
8.3 General Indemnification Procedures.
(a) A Person entitled to make a claim for indemnification
under Section 8.1 (an "Indemnified Party") against a party (the "Indemnifying
Party") required thereunder to indemnify such Indemnified Party not involving a
claim or action by a third party shall give written notice of the assertion of
such claim covered by such indemnity to the Indemnifying Party, which notice
shall set forth in reasonable detail, the amount of such claim and a description
of the basis for such claim with reference to the provision of this Agreement
under which liability is asserted. In the event that any suit, action or
proceedings shall be instituted by any third party or that any claim or demand
shall be
40
asserted by any third party in respect of which indemnification may be sought
under Section 8.1 or 8.2 (a "Third-Party Claim"), the Indemnified Party shall
reasonably promptly cause written notice of the assertion of such Third Party
Claim of which it has knowledge to be forwarded to the Indemnifying Party. The
Indemnifying Party shall have the right, at its sole option and expense, to be
represented by counsel of its choice and to defend against, negotiate, settle or
otherwise take over control and deal with any Third- Party Claim, and if the
Indemnifying Party elects to defend against, negotiate, settle or otherwise take
over control and deal with any Third-Party Claim, the Indemnifying Party's
choice of counsel must be reasonably satisfactory to the Indemnified Party, and
the Indemnifying Party shall within twenty (20) days of such notice (or sooner,
if the nature of the Third-Party Claim so requires) notify the Indemnified Party
of its intent to do so. If the Indemnifying Party elects not to defend against,
negotiate, settle or otherwise take over control and deal with any Third-Party
Claim, fails to notify the Indemnified Party of its election as herein provided
or contests its obligation to indemnify the Indemnified Party for such Losses
under this Agreement, the Indemnified Party may defend against, negotiate,
settle or otherwise deal with such Third-Party Claim; provided, that if the
Indemnifying Party contests its obligations to indemnify the Indemnified Party,
and if it is finally determined that any such Third-Party Claim was not a claim
for which indemnification was available under this Article 8, the Indemnified
Party shall reimburse the Indemnifying Party for any expenses advanced on its
behalf; provided, further, that the Indemnified Party shall keep the
Indemnifying Party fully informed of the facts of the Third-Party Claim and the
progress of the defense thereof. If the Indemnified Party defends any
Third-Party Claim, then the Indemnifying Party shall reimburse the Indemnified
Party for the reasonable and documented expenses of defending such Third- Party
Claim with respect to which it is entitled to be indemnified hereunder upon
submission of periodic bills. If the Indemnifying Party shall assume the defense
of any Third-Party Claim, the Indemnified Party may participate, at his, her or
its own expense, in the defense of such Third-Party Claim; provided, however,
that such Indemnified Party shall be entitled to participate in any such defense
with separate counsel at the expense of the Indemnifying Party (as provided
above) if (i) so requested by the Indemnifying Party to participate or (ii) in
the reasonable opinion of counsel to the Indemnified Party, a conflict or
potential conflict exists between the Indemnified Party and the Indemnifying
Party that would make such separate representation advisable; and provided
further, that the Indemnifying Party shall not be required to pay for more than
one such counsel for all Indemnified Parties in connection with any Third-Party
Claim. The parties hereto agree to cooperate fully with each other in connection
with the defense, negotiation or settlement of any such Third-Party Claim.
(b) After any final judgment or award shall have been rendered
by a court, arbitration board or administrative agency of competent jurisdiction
and the expiration of the time in which to appeal therefrom, or a settlement
(which is reasonably acceptable to the Indemnifying Party) shall have been
consummated, or the Indemnified Party and the Indemnifying Party shall have
arrived at a mutually binding agreement with respect to a claim for
indemnification under Section 8.1, including any Third-Party Claim, the
Indemnified Party shall forward to the Indemnifying Party notice of any sums due
and owing by the Indemnifying Party pursuant to this Agreement, with respect to
such matter
41
and the Indemnifying Party shall be required to make payment of all sums so due
and owing to such Indemnified Party by wire transfer of immediately available
funds within ten (10) Business Days after the date of such notice.
(c) The failure of the Indemnified Party to give reasonably
prompt notice of any Third-Party Claim shall not release, waive or otherwise
affect the Indemnifying Party's obligations with respect thereto except to the
extent that the Indemnifying Party can demonstrate actual loss and prejudice as
a result of such failure.
8.4 Tax Treatment of Indemnity Payments. The parties agree that any
indemnity payment made pursuant to this Article 8 (an "Indemnity Payment") shall
be treated by the parties for all tax purposes as an adjustment to the First
Closing Date Shares Purchase Price; provided, however, that if the amount of any
indemnity payments exceeds the First Closing Date Shares Purchase Price, any
such excess shall be treated for all tax purposes as an adjustment to the First
Closing Date Notes Purchase Price.
9. MISCELLANEOUS
9.1 Successors and Assigns. No party may assign this Agreement or
any of its rights or obligations hereunder to any Person without the prior
written consent of the other party; provided, however, that Purchaser may assign
its rights and obligations hereunder to any direct or indirect majority-owned
subsidiary of ▇▇▇▇ Atlantic Corporation to whose board of directors or
comparable governing body ▇▇▇▇ Atlantic Corporation or one of its majority-owned
subsidiaries appointed a majority of the members; provided, that, any such
assignee shall agree in writing to be bound hereby and no such assignment shall
act as a novation of Purchaser's obligations hereunder unless the consolidated
net worth, as determined in accordance with GAAP, of the assignee prior to and
after giving effect to such assignment equals or exceeds $2 billion. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Except as provided
in Article 8, nothing in this Agreement shall create or be deemed to create any
third party beneficiary rights in any Person not a party to this Agreement.
9.2 Amendments; Etc. No amendment, modification, termination, or
waiver of any provision of this Agreement, and no consent to any departure by a
party to this Agreement from any provision of this Agreement, shall be effective
unless it shall be in writing making specific reference hereto and signed and
delivered by each other party to this Agreement, and then it shall be effective
only in the specific instance and for the specific purpose for which it is
given.
9.3 Entire Agreement. This Agreement, the other Transaction
Documents and the Confidentiality Agreement, embody the entire agreement and
understanding of the parties and supersede all prior agreements or
understandings with respect to the subject matter thereof.
9.4 Fees, Costs and Expenses. Except as otherwise provided in
Article 8, all fees, costs and expenses (including attorneys' fees and expenses)
incurred by any
42
party hereto in connection with the preparation, negotiation and execution of
this Agreement and the consummation of the transactions contemplated hereby,
shall be the sole and exclusive responsibility of such party.
9.5 Severability. Wherever 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 shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
9.6 Governing Law. This Agreement and the obligations arising
hereunder shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York applicable to contracts made and performed in
such State, without regard to the principles thereof regarding conflict of laws,
and any applicable laws of the United States of America. Purchaser and Company
agree to submit to personal jurisdiction and to waive any objection as to venue
in the federal or New York State courts located in the County of New York, State
of New York. Service of process on Purchaser or Company in any action arising
out of or relating to any of the Transaction Documents shall be effective if
mailed to such party at the address listed in Section 9.8 hereof.
9.7 Waiver of Jury Trial. The parties hereto waive all right to
trial by jury in any action or proceeding to enforce or defend any rights under
the Transaction Documents.
9.8 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made and shall be effective (i) upon receipt if delivered personally, (ii)
upon receipt of a transmission confirmation if sent by facsimile (with a
confirming copy sent by overnight courier), and (iii) on the next Business Day
if sent by Federal Express, United Parcel Service, Express Mail or other
reputable overnight courier to the parties at the following addresses (or at
such other address for a party as shall be specified by notice):
If to Company:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Metromedia Fiber Network, Inc.
c/o Metromedia Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
43
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
▇▇▇▇ Atlantic Investments, Inc.
1095 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇ Atlantic Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Associate General Counsel-Mergers & Acquisitions
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
and
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to the Persons designated above to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
9.9 Survival. The representations and warranties contained in
Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 4.2, 4.3, 4.4, 4.6, 4.12, 4.14,
4.17, 4.19, 4.20 and 4.21 hereof, and the applicable obligations of the parties
to indemnify each other pursuant to Section 8.1 hereof, shall survive the
execution, delivery and acceptance hereof by the parties hereto and the First
Closing, and any examination or due diligence inquiry by a party hereto, until
the later of (i) December 31, 2000 and (ii) the date that is one year
44
after the First Closing Date; provided, however, that the representations and
warranties contained in Section 4.19 shall survive only until March 31, 2000 to
the extent the First Closing has occurred prior thereto or, if the First Closing
occurs after March 31, 2000, it will expire at the First Closing. Except as set
forth in the preceding sentence, no other representation or warranty in this
Agreement shall survive the First Closing. All covenants and agreements
contained in this Agreement (which terms do not include representations and
warranties) shall, except as provided in such covenant or agreement, survive the
First Closing and shall remain operative and in full force and effect. The
obligations to indemnify and hold harmless a Person pursuant to Article 8 hereof
shall survive only until the expiration of the applicable survival period
referred to above for the representation and warranty under which the claim for
indemnification is being made; provided, however, that such obligations to
indemnify and hold harmless shall not terminate with respect to any such item as
to which an Indemnified Party shall have, before the expiration of the
applicable period, previously made a bona fide good faith claim by delivering a
notice (stating in reasonable detail the basis of such claim) to the
Indemnifying Party.
9.10 Section and Other Headings. The article, section and other
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
9.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
9.12 Publicity. Neither Purchaser nor Company shall issue any press
release or make any public disclosure regarding the transactions contemplated
hereby unless such press release or public disclosure is approved by the other
party in advance. Notwithstanding the foregoing, each of the parties hereto may,
in documents required to be filed by it with the SEC or other regulatory bodies,
make such statements with respect to the transactions contemplated hereby as
each may be advised by counsel is legally necessary or advisable, and may make
such disclosure as it is advised by its counsel is required by law, subject, in
any such case, to advance consultation with Purchaser.
9.13 Termination. (a) This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the First
Closing Date or the Second Closing Date:
(i) by mutual written consent of the parties hereto;
(ii) by either Company or Purchaser if the other
materially breaches this Agreement and such breach remains uncured
for thirty (30) days after receipt by the breaching party of written
notice thereof;
(iii) by either Company or Purchaser if (A) the First
Closing Date shall not have occurred on or before March 31, 2000
(the "First Closing Termination Date"); provided, however, that, in
the event
45
that, after Company and Purchaser have made the initial filings they
are required to make under the HSR Act or pursuant to Section 5.3
hereof, any Governmental Authority has requested additional
information from Company or Purchaser or has not approved or
otherwise indicated its intention that it will not approve the
transactions contemplated by the Transaction Documents in connection
with such filings, the First Closing Termination Date shall
automatically be extended to June 30, 2000 and (B) with respect to
the Second Closing, the Second Closing Date shall not have occurred
on or prior to the later of (x) April 30, 1999 and (y) the First
Closing Date (the "Second Closing Termination Date"); provided,
however, that in the event the Company has submitted its Proxy
Statement to the SEC and such Proxy Statement has not been approved
for mailing to the Company's stockholders, the Second Closing
Termination Date shall be extended until 30 days following the date
such Proxy Statement is mailed to stockholders ; and
(iv) by either Company or Purchaser, if either such
party in good faith reasonably determines that any of the applicable
conditions to such party's obligations will not be fulfilled by the
First Closing Termination Date or the Second Closing Termination
Date, as the case may be and delivers to the other party written
notice to such effect containing a description of any such
conditions it believes will not be satisfied, in which case, this
Agreement shall terminate within ten (10) days after receipt of such
notice by the other party unless the other party reasonably
demonstrates that such condition is capable of being satisfied and
such party has taken and continues to take diligent steps to so
remedy such condition.
The right to terminate this Agreement under this Section 9.13 shall
not be available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the inability of any condition
to be satisfied.
(b) In the event of termination of this Agreement by either
Company or Purchaser as provided in this Section 9.13, this Agreement shall
forthwith become null and void and there shall be no liability or obligation on
the part of Company or Purchaser, except with respect to the last sentence in
Section 5.4 hereof, Sections 9.4, 9.6, 9.8, 9.12 hereof and this Section 9.13;
provided, however, that in the case of termination as provided in Section
9.13(a)(ii) hereof, the breaching party shall not be absolved from any liability
with respect to a breach of this Agreement.
9.14 Remedies. Subject to Section 8.2(d), Purchaser's rights and
remedies under this Agreement shall be cumulative and nonexclusive of any other
rights and remedies which Purchaser may have under any other agreement,
including the other Transaction Documents, by operation of law or otherwise.
[Signatures appear on following page.]
46
IN WITNESS WHEREOF, Company and Purchaser have executed this Agreement as
of the day and year first above written.
METROMEDIA FIBER NETWORK, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
▇▇▇▇ ATLANTIC INVESTMENTS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
47