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EXHIBIT 10.67
SECTION 351 AGREEMENT
AMONG
KNOLOGY, INC.,
INTERCALL, INC.,
VALLEY TELEPHONE COMPANY, INC.,
AND GLOBE TELECOMMUNICATIONS, INC.
Dated as of November 1, 1999
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TABLE OF CONTENTS
Page
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PRELIMINARY STATEMENT..............................................................1
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STATEMENT OF AGREEMENT.............................................................2
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1. DEFINITIONS................................................................2
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2. THE COMPANY TRANSFER.......................................................4
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2.1 Transfer of Equity Interests and KNOLOGY Holdings Note.........4
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2.2 Method of Transfer.............................................4
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2.3 Issuance of Stock..............................................5
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3. THE GLOBE TRANSFER.........................................................5
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3.1 Transfer of ITC Globe Shares...................................5
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3.2 Method of Transfer.............................................5
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4. THE VALLEY TRANSFER........................................................5
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4.1 Transfer of KNOLOGY Holdings Shares............................5
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4.2 Method of Transfer.............................................5
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5. CLOSING....................................................................5
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5.1 Closing Date...................................................5
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5.2 Transactions at Closing........................................6
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5.3 Documentation..................................................7
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5.4 Transactions Subsequent to the Closing.........................7
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5.4.1 Books and Records..................................7
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5.4.2 Miscellaneous......................................7
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5.5 Other Actions..................................................7
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6. REPRESENTATIONS AND WARRANTIES BY INTERCALL................................7
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6.1 Organization and Good Standing of InterCall....................7
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6.2 Authority of InterCall.........................................8
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6.3 Consents.......................................................8
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6.4 Litigation.....................................................8
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6.5 Equity Interests, ClearSource Stock, ClearSource
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Subscription Funds and KNOLOGY Holdings Note...................8
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6.6 Accredited Investor Status.....................................9
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6.7 Representations and Warranties at the Closing..................9
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7. REPRESENTATIONS AND WARRANTIES BY THE COMPANY..............................9
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7.1 Organization and Good Standing of the Company..................9
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7.2 Authority of the Company.......................................9
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7.3 Consents.......................................................10
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7.4 Litigation.....................................................10
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7.5 Capitalization.................................................10
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7.6 Accredited Investor Status.....................................10
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7.7 Representations and Warranties at the Closing..................10
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8. REPRESENTATIONS AND WARRANTIES BY VALLEY AND GLOBE TELECOM.................10
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8.1 Organization and Good Standing of Valley and Globe Telecom.....11
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8.2 Authority of Valley and Globe Telecom..........................11
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8.3 Consents.......................................................11
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8.4 Litigation.....................................................11
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8.6 Representations and Warranties at the Closing..................12
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9. CONDITIONS PRECEDENT TO THE CLOSING OBLIGATIONS OF ALL PARTIES.............12
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9.1 Representations and Warranties.................................12
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9.2 Performance of this Agreement..................................12
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9.3 Litigation Affecting Closing...................................12
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9.4 Approval and Consents..........................................12
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9.5 Stock Authorizations...........................................12
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9.6 Good Faith.....................................................13
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10. COST AND EXPENSES..........................................................13
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11. CONDUCT OF THE PARTIES PENDING THE CLOSING.................................13
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11.1. Corporate Documents............................................13
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11.2 Capitalization, etc............................................13
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11.3 Conduct of Business............................................13
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11.4 Merger, etc....................................................13
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11.5 Equity Interests...............................................13
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12. SURVIVAL...................................................................13
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13. MISCELLANEOUS..............................................................14
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13.1 Entire Agreement...............................................14
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13.2 No Waiver......................................................14
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13.3 Amendment......................................................14
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13.4 Notices........................................................14
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13.5 Severability of Provisions.....................................15
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13.6 Successors and Assigns.........................................15
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13.7 Counterparts...................................................15
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13.8 Governing Law..................................................16
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13.9 Further Instruments and Acts...................................16
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13.10 Assignment.....................................................16
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13.11 Enforcement....................................................16
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13.12 Termination....................................................16
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SECTION 351 AGREEMENT
THIS SECTION 351 AGREEMENT (THIS "AGREEMENT") is made as of November 1,
1999, by and among KNOLOGY, Inc., a Delaware corporation (THE "Company");
InterCall, Inc., a Delaware corporation ("INTERCALL"); Valley Telephone Company,
Inc., an Alabama corporation ("VALLEY"); and Globe Telecommunications, Inc., a
Georgia corporation ("GLOBE TELECOM").
PRELIMINARY STATEMENT
This Agreement is made and entered into under the following
circumstances:
A. InterCall, a wholly-owned subsidiary of ITC Holding Company, Inc.,
a Delaware corporation ("ITC"), is engaged in the business of providing
conference calling services to businesses on both a national and international
basis, and currently provides a portion of its international conference calling
services through a wholly-owned subsidiary. InterCall is the sole stockholder of
each of the Company, Valley, Globe Telecom, Interstate Telephone Company, Inc.,
a Georgia corporation ("INTERSTATE"), and ITC Globe, Inc., a Delaware
corporation ("ITC GLOBE"), and owns approximately 85% of the outstanding shares
of capital stock of KNOLOGY Holdings, Inc., a Delaware corporation ("KNOLOGY
HOLDINGS").
B. Interstate is engaged in the business of providing local telephone
service in western Georgia and a small part of eastern Alabama. Valley is
engaged in the business of providing local telephone service in eastern Alabama.
Globe Telecom is engaged in the business of providing non-regulated services to
customers of Valley and Interstate, and offers Competitive Local Exchange
Company (CLEC) data and long-distance telephone services to business and
residences in certain areas of Georgia. ITC Globe is engaged in the business of
constructing and operating a broadband services network that provides Internet
access and analog and digital cable television service to customers in the
geographic areas now served by Interstate and Valley.
C. KNOLOGY Holdings is engaged in the business of providing broadband
services, including cable television, telephony and Internet access, to
customers in Alabama, Florida, Georgia and South Carolina through various
subsidiaries, over new and upgraded fiber and coaxial cable networks.
D. The parties desire to have the Company become a holding company
with respect to Valley, Interstate, Globe Telecom, ITC Globe and KNOLOGY
Holdings and KNOLOGY Holdings' subsidiaries by having (i) InterCall transfer its
equity ownership interests in each of Interstate, Valley, Globe Telecom, ITC
Globe and KNOLOGY Holdings (together, the "EQUITY INTERESTS") to the Company,
(ii) the Company transfer its equity ownership interest in ITC Globe to Globe
Telecom,
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and (iii) the Company transfer its equity ownership interest in KNOLOGY Holdings
to Valley, all pursuant to Section 351 of the Internal Revenue Code of 1986, as
amended (the "CODE").
E. The parties wish the Company to acquire the Equity Interests as
set forth above, plus (i) 222,832 shares of Series A Preferred Stock and 50,000
shares of Series B Preferred Stock in ClearSource, Inc. (the "CLEARSOURCE
STOCK"), (ii) $5,663,000 in cash, to be used to make subscription payments to
ClearSource (the "CLEARSOURCE SUBSCRIPTION FUNDS") and (iii) a note of KNOLOGY
Holdings in the principal amount of up to $13 million, plus accrued interest
(the "KNOLOGY HOLDINGS NOTE"). The Company has offered to issue 43,918,649
shares of Series A Preferred Stock of the Company in exchange for the transfer
by InterCall to the Company of the Equity Interests, the ClearSource Stock, the
ClearSource Subscription Funds and the KNOLOGY Holdings Note (the "COMPANY
TRANSFER").
F. Following the completion of the Company Transfer (i) the Company
proposes to transfer to Valley, as a capital contribution, the equity ownership
interests in KNOLOGY Holdings, the ClearSource Stock and the ClearSource
Subscription Funds then held by the Company (the "VALLEY Transfer"), and (ii)
the Company proposes to transfer to Globe Telecom, as a capital contribution,
the equity ownership interests in ITC Globe then held by the Company (the "GLOBE
TRANSFER"). The Company Transfer, the Valley Transfer and the Globe Transfer are
sometimes referred to herein collectively as the "CORPORATE TRANSFERS."
NOW THEREFORE, intending to be legally bound, and in consideration of
these premises and the mutual covenants hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
STATEMENT OF AGREEMENT
1. Definitions. The following terms used in this Agreement shall have
the following meanings ascribed to them:
"Agreement" shall mean this Section 351 Agreement in its entirety,
together with all documents incorporated herein by reference.
"ClearSource" shall mean ClearSource, Inc., a Delaware
corporation.
"ClearSource Stock" shall mean the 222,832 shares of Series A
Preferred Stock and 50,000 shares of Series B Preferred Stock of ClearSource
held by InterCall as of the date hereof.
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"ClearSource Subscription Funds" shall mean $5,663,000 in cash
held by InterCall as of the date hereof and to be contributed to the Company to
be used to make subscription payments to ClearSource.
"Closing" shall have the meaning assigned to such term in Section
6 hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the Company's Common Stock, $.01 par
value.
"Company" shall mean KNOLOGY, Inc., a Delaware corporation.
"Company Transfer" shall mean the transfer by InterCall of the
Equity Interests, the ClearSource Stock, the ClearSource Subscription Funds and
the Knology Holdings Note to the Company, in exchange for the issuance of the
Series A Preferred Stock by the Company to InterCall, as described in Section 2.
"Corporate Transfers" shall mean, collectively, the Company
Transfer, the Globe Transfer and the Valley Transfer.
"Equity Interests" shall mean the equity ownership interests held
by InterCall in each of Interstate, Valley, Globe Telecom, ITC Globe and KNOLOGY
Holdings as of the date of this Agreement.
"Globe Telecom" shall mean Globe Telecommunications, Inc., a
Georgia corporation.
"Globe Transfer" shall mean the transfer by the Company of its
equity ownership interest in ITC Globe to Globe Telecom, as described in Section
3 hereto.
"InterCall" shall mean InterCall, Inc., a Delaware corporation.
"Interstate" shall mean Interstate Telephone Company, Inc., a
Georgia corporation.
"ITC" shall mean ITC Holding Company, Inc., a Delaware
corporation.
"ITC Globe" shall mean ITC Globe, Inc., a Delaware corporation.
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"ITC Globe Shares" shall mean all of the issued and outstanding
shares of ITC Globe, Inc.
"KNOLOGY Holdings" shall mean KNOLOGY Holdings, Inc., a Delaware
corporation.
"KNOLOGY Holdings Note" shall mean the Promissory Note dated
October 27, 1999 of KNOLOGY Holdings in the principal amount of up to $13
million plus accrued interest.
"KNOLOGY Holdings Shares" shall mean the 42,565 shares of
preferred stock of KNOLOGY Holdings, Inc. held by InterCall, Inc. as of the date
of this Agreement.
"Parties" shall mean collectively the Company, InterCall, Valley
and Globe Telecom, and "Party" shall mean any one of them.
"Series A Preferred Stock" shall mean the Company's Series A
Preferred Stock, $.01 par value.
"Valley" shall mean Valley Telephone Company, Inc., an Alabama
corporation.
"Valley Transfer" shall mean the transfer by the Company of its
equity ownership interests in KNOLOGY Holdings, the ClearSource Stock and the
ClearSource Subscription Funds to Valley, as described in Section 4 hereto.
2. The Company Transfer.
2.1 Transfer of Equity Interests, the ClearSource Stock,
ClearSource Subscription Funds and KNOLOGY Holdings Note. At the Closing, in
exchange for the issuance of the Series A Preferred Stock provided in Section
2.3, InterCall shall transfer, or cause to be transferred, to the Company, and
the Company shall acquire and accept from InterCall, all of the Equity
Interests, the ClearSource Stock, the ClearSource Subscription Funds and the
KNOLOGY Holdings Note, free and clear of liens and encumbrances. All of the
shares representing the Equity Interests shall be duly authorized, validly
issued, fully-paid and non-assessable. The ClearSource Stock and the Knology
Holdings Note shall be free and clear of liens and encumbrances.
2.2 Method of Transfer. The transfer of the Equity Interests,
the ClearSource Stock, the ClearSource Subscription Funds and the KNOLOGY
Holdings Note to the Company will be evidenced by appropriate stock certificates
and stock powers, assignments and other instruments (in recordable form as
required) executed and delivered by InterCall to the Company at the Closing, as
set forth in this Agreement.
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2.3 Issuance of Stock. At the Closing, in exchange for the
transfer of the Equity Interests, the ClearSource Stock, the ClearSource
Subscription Funds and the KNOLOGY Holdings Note provided in Section 2.1, the
Company shall issue to InterCall 43,918,649 shares of Series A Preferred Stock.
The shares of Series A Preferred Stock to be so issued shall be represented by
stock certificates, the denominations of which shall be designated by InterCall,
shall be duly authorized, validly issued, fully-paid and non-assessable and
shall contain such restrictive legends as the Company reasonably determines are
necessary for compliance with applicable securities laws.
3. The Globe Transfer.
3.1 Transfer of ITC Globe Shares. Immediately following the
Company Transfer described in Section 2 above, as a capital contribution to
Globe Telecom, the Company shall transfer, or cause to be transferred, to Globe
Telecom, and Globe Telecom shall acquire and accept from the Company, the ITC
Globe Shares, free and clear of liens and encumbrances. All of the ITC Globe
Shares shall be duly authorized, validly issued, fully-paid and non-assessable.
3.2 Method of Transfer. The transfer of the ITC Globe Shares to
Globe Telecom will be evidenced by appropriate stock certificates and stock
powers, assignments and other instruments (in recordable form as required)
executed and delivered by the Company to Globe Telecom at the Closing, as set
forth in this Agreement.
4. The Valley Transfer.
4.1 Transfer of KNOLOGY Holdings Shares. Immediately following
the Company Transfer described in Section 2 above, as a capital contribution to
Valley, the Company shall transfer, or cause to be transferred, to Valley, and
Valley shall acquire and accept from the Company, the KNOLOGY Holdings Shares,
the ClearSource Stock and ClearSource Subscription Funds, free and clear of
liens and encumbrances. All of the KNOLOGY Holdings Shares shall be duly
authorized, validly issued, fully-paid and non-assessable. The ClearSource Stock
shall be free and clear of liens and encumbrances.
4.2 Method of Transfer. The transfer of the KNOLOGY Holdings
Shares and the ClearSource Stock to Valley will be evidenced by appropriate
stock certificates and stock powers, assignments and other instruments (in
recordable form as required) executed and delivered by the Company to Valley at
the Closing, as set forth in this Agreement.
5. Closing.
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5.1 Closing Date. The closing and consummation of the Company
Transfer and related transactions provided for herein shall occur and become
effective as soon as practicable, and shall occur simultaneously with transfers
by other holders of shares of capital stock and other ownership interests of
KNOLOGY Holdings to the Company, all pursuant to Section 351 of the Code, upon
the receipt of all necessary approvals and following the execution of this
Agreement, and the closing and consummation of each of the Globe Transfer and
the Valley Transfer and related transactions provided for herein shall occur and
become effective immediately thereafter (such closings being referred to herein
collectively as the "CLOSING"); provided, however, that the Closing shall not
occur prior to satisfaction of the conditions precedent set forth in Section 9
(or in the case of any unsatisfied conditions precedent, the waiver thereof by
the Party entitled to the benefit thereof). The date, time and place of the
Closing may be modified as mutually agreed by the Parties. In the event the
Closing is changed to a different time or date, all references in this Agreement
to the Closing shall be deemed to refer to the time and date agreed upon by the
Parties, in the manner set forth herein.
5.2 Transactions at Closing. At the Closing, the Company
Transfer, the Globe Transfer, the Valley Transfer and related transactions
provided for herein shall be closed and consummated as follows:
5.2.1 InterCall shall deliver to the Company stock
certificates and stock powers, assignments, officer certificates, consents, and
other documents, agreements, and instruments in form and substance required by
this Agreement for the Company Transfer. The Company shall deliver to InterCall
the stock certificates, officer certificates, consents, and other documents,
agreements, and instruments in form and substance required by this Agreement for
the Company Transfer.
5.2.2 The Company shall deliver to Globe Telecom the stock
certificates and stock powers, assignments, officer certificates, consents and
other documents, agreements, and instruments in form and substance required by
this Agreement for the Globe Transfer. Globe Telecom shall deliver to the
Company the stock certificates, officer certificates, and other documents,
agreements, and instruments in form and substance required by this Agreement for
the Globe Transfer.
5.2.3 The Company shall deliver to Valley the stock
certificates and stock powers, assignments, officer certificates, consents and
other documents, agreements, and instruments in form and substance required by
this Agreement for the Valley Transfer. Valley shall deliver to the Company the
stock certificates, officer certificates, and other documents, agreements, and
instruments in form and substance required by this Agreement for the Valley
Transfer.
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5.2.4 The Parties shall deliver any other consents,
amendments, or other documentation, if any is required, from any third party
necessary to permit completion of the Corporate Transfers and related
transactions provided for herein as contemplated in this Agreement.
5.2.5 The Parties shall execute and deliver to each other
a certificate setting forth the effective time and date of the completion of the
Closing.
5.2.6 The Parties will take such other actions at the
Closing as are contemplated by this Agreement.
5.3 Documentation. All the Closing documentation shall be in
customary form (except as otherwise provided herein) for transactions of this
nature and magnitude, shall be in recordable form as necessary, and shall be
duly executed, lawful, and effective as of the time of delivery at the Closing.
5.4 Transactions Subsequent to the Closing.
5.4.1 Books and Records. Since the Parties hereto may need
to have access to the books, records, and documents held by other Parties after
the Closing, each Party agrees that it shall maintain (in accordance with such
Party's normal procedures for its own books and records) for at least three (3)
years after the Closing (or for such longer period as may be required by
applicable law) the respective books, records, and documents of each Party
hereunder as they relate to the Equity Interests. During said period,
representatives of each Party shall be permitted to inspect and make copies of
the books, records and documents of each other Party during normal business
hours and upon reasonable notice for purposes related to such Party's ownership
of all or any portion of the Equity Interests or for any other appropriate
purpose.
5.4.2 Miscellaneous. The Parties shall take such other
actions and comply with other obligations as are required after the Closing
under this Agreement or under documents ancillary hereto.
5.5 Other Actions. The Parties agree that they will at any time
and from time to time do, execute, acknowledge, and deliver, or will cause to be
done, executed, acknowledged, and delivered, all such further acts, deeds,
assignments, transfers, conveyances, documents, instruments, and assurances as
may be reasonably required by any other Party in order to carry out fully and to
effectuate the transactions herein contemplated under, and in accordance with,
the provisions of this Agreement.
6. Representations and Warranties by InterCall. InterCall hereby
represents, warrants, and covenants as follows:
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6.1 Organization and Good Standing of InterCall. InterCall is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has full corporate power and authority to carry on
its business and to own and operate its properties and assets as presently owned
and operated.
6.2 Authority of InterCall. InterCall has taken all corporate
action necessary to approve and authorize the execution of this Agreement, and
to consummate the transactions contemplated hereby. The representatives of
InterCall signing this Agreement have full power and authority to execute this
Agreement in the indicated capacity and to consummate on behalf of InterCall the
transactions contemplated hereby. When executed and delivered, this Agreement
shall constitute a valid and binding obligation of InterCall, enforceable in
accordance with its terms and conditions, except as enforcement may be limited
by applicable bankruptcy, insolvency or similar laws affecting creditors rights
generally and by principles of equity. Neither the execution and the delivery of
this Agreement, nor the consummation by InterCall of the transactions
contemplated hereby, nor the compliance with any of the terms and conditions
hereof: (a) will conflict with or result in the breach by InterCall of any of
the terms, conditions, or provisions of (i) InterCall's certificate of
incorporation or bylaws, or (ii) any material indenture, mortgage, deed of
trust, permit, lease, decree, order, judgment, law or other contract, agreement
or instrument to which InterCall is a party or by which it is bound; or (b) will
constitute an uncured default or event of acceleration of any such indenture,
mortgage, deed of trust, permit, lease, decree, order, judgment, law or other
contract, agreement or instrument.
6.3 Consents. Any material consent of any third party that is
required to be obtained by InterCall in connection with its participation in the
Corporate Transfers and related transactions provided for herein, including
without limitation approval of KNOLOGY Holdings to the assignment of the KNOLOGY
Holdings Note, either has been, or will be, obtained by InterCall as of the
Closing unless waived by each of the other Parties to this Agreement.
6.4 Litigation. There are no judicial or administrative actions
or proceedings pending, or to the best of InterCall's knowledge, threatened that
question the validity of this Agreement or any transaction contemplated hereby,
which if adversely determined would have a material adverse effect upon the
ability of InterCall to enter into this Agreement or perform its obligations
hereunder.
6.5 Equity Interests, ClearSource Stock, ClearSource
Subscription Funds and KNOLOGY Holdings Note. InterCall is, and at the Closing
shall be, the owner of the Equity Interests and the ClearSource Stock, and the
holder of the ClearSource Subscription Funds and the KNOLOGY Holdings Note.
InterCall has, and at the Closing shall have, good and marketable title thereto
and
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the absolute right to assign, convey, transfer, exchange, and deliver the same
to the Company, free and clear of any liens or encumbrances, as required
hereunder.
6.6 Accredited Investor Status. InterCall is, and at the
Closing Date will be, an "accredited investor" (as such term is defined in Rule
501 promulgated under the Securities Act of 1933). InterCall, either alone or in
conjunction with a representative, has such knowledge and experience in
financial and business matters that it is capable of evaluating the risks and
merits of an investment in the Series A Preferred Stock. InterCall hereby
acknowledges that such stock will be subject to resale by it only pursuant to
registration or exemption under applicable federal and state securities laws,
including without limitation SEC Rule 144 (when applicable).
6.7 Representations and Warranties at the Closing. Except as
expressly otherwise permitted in this Agreement, the representations and
warranties of InterCall set forth in this Agreement shall be true at the Closing
as though such representations and warranties were made on such date, unless
they reference a specific earlier date whereupon, at the Closing, they shall be
true as at the earlier date referenced.
7. Representations and Warranties by the Company. The Company hereby
represents, warrants, and covenants as follows:
7.1 Organization and Good Standing of the Company. The Company
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware, and has full corporate power to carry on its
businesses and to own and operate its properties and assets as presently owned
and operated.
7.2 Authority of the Company. The Company has taken all
corporate action necessary to approve and authorize the execution of this
Agreement, and to consummate on behalf of the Company the transactions
contemplated hereby. The representatives of the Company signing this Agreement
have full power and authority to execute this Agreement in the indicated
capacity and to consummate on behalf of the Company the transactions
contemplated hereby. When executed and delivered, this Agreement shall
constitute a valid and binding obligation of the Company, enforceable in
accordance with its terms and conditions except as enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors rights
generally and by principles of equity. Neither the execution and the delivery of
this Agreement, nor the consummation by the Company of the transactions
contemplated hereby, nor the compliance with any of the terms and conditions
hereof: (a) will conflict with or result in the breach by the Company of any of
the terms, conditions or provisions of (i) the Company's certificate of
incorporation or bylaws, or (ii) any material indenture, mortgage, deed of
trust, permit, lease, decree, order, judgment, law, or
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other contract, agreement or instrument to which the Company is a party, or by
which it is bound; or (b) will constitute an uncured default or event of
acceleration of any such indenture, mortgage, deed of trust, permit, lease,
decree, order, judgment, law or other contract, agreement or instrument.
7.3 Consents. Any material consent of any third party that is
required to be obtained by the Company in connection with its participation in
the Corporate Transfers and related transactions provided for herein, either has
been, or will be, obtained by the Company as of the Closing unless waived by
each of the other Parties to this Agreement.
7.4 Litigation. There are no judicial or administrative actions
or proceedings pending, or to the best of the Company's knowledge, threatened,
that question the validity of this Agreement or any transaction contemplated
hereby, which if adversely determined would have a material adverse effect upon
the ability of the Company to enter into this Agreement or perform its
obligations hereunder.
7.5 Capitalization. The authorized capital stock of the Company
consists of 200,000,000 shares of Common Stock and 175,000,000 shares of
preferred stock, of which 75,000,000 shares have been designated as Series A
Preferred Stock and 50,000,000 shares have been designated as Series B Preferred
Stock. As of the date of this Agreement, 100 shares of Common Stock are issued
and outstanding and owned by InterCall, and no shares of preferred stock have
been issued or are outstanding. Except for the issuance of 43,918,649 shares of
Series A Preferred Stock in connection with the Corporate Transfers, the Company
will not change its authorized capital stock or issue any additional shares
thereof prior to the Closing.
7.6 Accredited Investor Status. The Company is, and at the
Closing Date will be, an "accredited investor" (as such term is defined in Rule
501 promulgated under the Securities Act of 1933). The Company, either alone or
in conjunction with a representative, has such knowledge and experience in
financial and business matters that it is capable of evaluating the risks and
merits of an investment in the common stock of each of Valley and Globe Telecom.
The Company hereby acknowledges that such stock will be subject to resale by it
only pursuant to registration or exemption under applicable federal and state
securities laws, including without limitation SEC Rule 144 (when applicable).
7.7 Representations and Warranties at the Closing. Except as
otherwise expressly permitted in this Agreement, the representations and
warranties of the Company set forth in this Agreement shall be true at the
Closing as though such representations and warranties were made on such date,
unless they reference a specific earlier date whereupon, at the Closing, they
shall be true as at the earlier date referenced.
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8. Representations and Warranties by Valley and Globe Telecom. Each
of Valley and Globe Telecom hereby represents, warrants, and covenants as
follows:
8.1 Organization and Good Standing of Valley and Globe Telecom.
Valley is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Alabama, and has full corporate power to carry on
its businesses and to own and operate its properties and assets as presently
owned and operated. Globe Telecom is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Georgia, and has
full corporate power to carry on its businesses and to own and operate its
properties and assets as presently owned and operated.
8.2 Authority of Valley and Globe Telecom. Each of Valley and
Globe Telecom has taken all corporate action necessary to approve and authorize
the execution of this Agreement, and to consummate on behalf of Valley and Globe
Telecom the transactions contemplated hereby. Each of the representatives of
Valley and Globe Telecom signing this Agreement have full power and authority to
execute this Agreement in the indicated capacity and to consummate on behalf of
Valley and Globe Telecom the transactions contemplated hereby. When executed and
delivered, this Agreement shall constitute a valid and binding obligation of
each of Valley and Globe Telecom, enforceable in accordance with its terms and
conditions except as enforcement may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors rights generally and by
principles of equity. Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, nor Valley's or
Globe Telecom's compliance with any of the terms and conditions hereof: (a) will
conflict with or result in the breach by Valley or Globe Telecom of any of the
terms, conditions or provisions of (i) the certificate of incorporation or
bylaws of Valley or Globe Telecom, or (ii) any material indenture, mortgage,
deed of trust, permit, lease, decree, order, judgment, law, or other contract,
agreement or instrument to which Valley or Globe Telecom is a party, or by which
it is bound; or (b) will constitute an uncured default or event of acceleration
of any such indenture, mortgage, deed of trust, permit, lease, decree, order,
judgment, law or other contract, agreement or instrument.
8.3 Consents. Any material consent of any third party that is
required to be obtained by Valley or Globe Telecom in connection with its
respective participation in the Corporate Transfers and related transactions
provided for herein, either has been, or will be, obtained by the applicable
Party as of the Closing unless waived by each of the other Parties to this
Agreement.
8.4 Litigation. There are no judicial or administrative actions
or proceedings pending, or to the best of Valley's or Globe Telecom's knowledge,
threatened, that question the validity of this Agreement or any transaction
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contemplated hereby, which if adversely determined would have a material adverse
effect upon the ability of Valley or Globe Telecom to enter into this Agreement
or perform its respective obligations hereunder.
8.5 Representations and Warranties at the Closing. Except as
otherwise expressly permitted in this Agreement, the representations and
warranties of each of Valley and Globe Telecom set forth in this Agreement shall
be true at the Closing as though such representations and warranties were made
on such date, unless they reference a specific earlier date whereupon, at the
Closing, they shall be true as at the earlier date referenced.
9. Conditions Precedent to the Closing Obligations of All Parties.
The obligations of each of the Parties under this Agreement to consummate the
transactions contemplated by this Agreement are subject to fulfillment or waiver
by such Parties at or prior to the Closing of each of the following conditions:
9.1 Representations and Warranties. The representations and
warranties of each of the other Parties contained in this Agreement shall be
true and correct in all material respects.
9.2 Performance of this Agreement. All other Parties shall have
performed and complied in all material respects with all covenants, conditions,
and agreements required by this Agreement to be performed or complied with by
them prior to or at the Closing.
9.3 Litigation Affecting Closing. On the Closing Date, no
preliminary or permanent injunction or other order issued by any federal or
state court of competent jurisdiction in the United States or by any United
States federal or state government or regulatory authority which restrains,
enjoins or otherwise prohibits the Closing shall be in effect, nor shall any
proceeding for such purpose be pending or threatened by any government entity or
other person or entity, and no statute, rule, regulation or executive order
shall have been promulgated or enacted by any United States federal or state
governmental authority which makes unlawful or otherwise prohibits the
consummation of the Closing.
9.4 Approval and Consents. All approvals, consents, licenses,
permits or authorizations of all persons, corporations, governmental authorities
and other entities required to consummate the transactions contemplated by this
Agreement, or necessary so that the consummation of such transactions will not
result in a breach of any material contract or agreement to which one or more of
the Parties is bound, shall have been obtained, and any required waiting and
notice periods shall have elapsed, other than ordinary course or routine
consents, approvals or authorizations, the failure of which to be obtained will
not materially adversely affect the rights of the Parties hereunder or the
business, operations or financial condition of any Party following the Closing.
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9.5 Stock Authorizations. The Company shall have taken all
corporate actions and proceedings necessary for the issuance to InterCall of the
appropriate number of shares of Common Stock and Series A Preferred Stock in
connection with the Company Transfer. Each of Valley and Globe Telecom shall
have taken all corporate actions and proceedings necessary for the Valley
Transfer and the Globe Transfer.
9.6 Good Faith. In order for any condition precedent in this
Section 9, the accomplishment of which is within the control of a Party, to be
effective for the benefit of such Party, such Party shall have exercised its
good faith best efforts toward the accomplishing of same.
10. Cost and Expenses. Each Party shall pay its own expenses incident
to the preparation and implementation of this Agreement and the expenses and
fees involved in the preparation and delivery of all documents required to be
delivered by or on behalf of such Party hereunder, whether or not the
transactions contemplated hereby are consummated. In the event litigation is
commenced to enforce any rights under this Agreement or to pursue any other
remedy available to any party, all legal expenses or other direct costs of
litigation of the prevailing Party shall be paid by the non-prevailing Party.
11. Conduct of the Parties Pending the Closing. Each of the Parties
covenants and agrees that, except with the consent of the other parties hereto,
from the date hereof until the completion of the Closing:
11.1. Corporate Documents. No modification or amendment will be
made to such Party's certificate of incorporation or bylaws.
11.2 Capitalization, etc. Such Party will not make any change to
its authorized or issued capital stock, declare or pay any dividends outside the
ordinary course of business or inconsistent with past practice, redeem, purchase
or otherwise acquire any of its capital stock, or issue any additional shares of
capital stock.
11.3 Conduct of Business. Such Party will use its best efforts
to maintain and preserve its business organization, employee relationships,
customer relationships, vendor relationships, and goodwill.
11.4 Merger, etc. Except as contemplated in connection with the
Corporate Transfers and related transactions provided for herein, the Parties
will not merge or consolidate with any other business organization, sell or
lease all or substantially all of its assets or agree to do any of the
foregoing.
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11.5 Equity Interests. No Party shall sell, assign, transfer,
convey, give, pledge, hypothecate or otherwise alienate or encumber any of the
Equity Interests or any right, title or interest therein.
12. Survival. It is the express intention and agreement of the parties
hereto that the representations and warranties set forth in this Agreement shall
survive the Closing, for a period equal to one (1) year from the date hereof and
shall expire and be terminated and extinguished forever at such time, except
with respect to claims asserted in good faith pursuant hereto by written notice
to the other Parties at any time within one (1) year following the date hereof.
Any written claim made hereunder must be in writing, must be given within one
(1) year from the date hereof and must set forth the nature and details of the
claim with specificity in order to constitute a valid notice pursuant to the
preceding sentence.
13. Miscellaneous.
13.1 Entire Agreement. This Agreement embodies the entire
agreement and understanding between the Parties hereto as to the matters herein
addressed and supersedes any and all other prior agreements and understandings
relating to the subject matter hereof.
13.2 No Waiver. No failure to exercise, and no delay in
exercising, any right, power or remedy hereunder or under any document delivered
pursuant hereto shall impair any right, power or remedy which the Parties hereto
may have, nor shall any such delay be construed to be a waiver of any of such
rights, powers or remedies, or an acquiescence in any breach or default under
this Agreement, nor shall any waiver of any breach or default of any Party
hereunder be deemed a waiver of any default or breach subsequently occurring.
13.3 Amendment. No provision of this Agreement or any document
or instrument relating to the Agreement may be amended, modified, supplemented,
changed, waived, discharged, or terminated, unless all Parties consent thereto
in writing.
13.4 Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
Party to any other Party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery, overnight or
express mail, addressed as follows:
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(i) If to the Company:
KNOLOGY, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: President
(ii) If to InterCall:
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ Drive
West Point, GA 31833
Attn.: President
(iii) If to Valley:
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ Drive
West Point, GA 31833
Attn.: President
(iv) If to Globe Telecom:
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: President
Each Party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be mailed, delivered
or transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt or the affidavit of messenger being
deemed conclusive evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.
13.5 Severability of Provisions. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
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13.6 Successors and Assigns. This Agreement shall be binding
upon the Parties, and their respective successors and assigns, and shall inure
to the benefit of the Parties and their respective successors and permitted
assigns. This Agreement is for the benefit of the Parties only and is not for
the benefit of any third parties.
13.7 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one Agreement, and
any Party hereto may execute this Agreement by signing any such counterpart. The
authorized attachment of counterpart signature pages shall constitute execution
by the Parties.
13.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (other than the
choice-of-law rules thereof).
13.9 Further Instruments and Acts. From time to time at a
Party's request, whether at or after the Closing and without further
consideration, the other Parties shall execute and deliver such further
instruments of conveyance, transfer, assignment, and exchange and take such
other action as the requesting Party reasonably may require to more effectively
convey and transfer to the requesting Party the properties to be conveyed,
transferred, assigned, and exchanged hereunder, and, if necessary, will assist
the requesting Party in the collection or reduction to possession of such
property.
13.10 Assignment. The right and obligations arising under this
Agreement are not assignable by any Party without the prior written consent of
the other Parties hereto, which shall not be unreasonably withheld.
13.11 Enforcement. Each Party agrees that a failure of such Party
to perform his or its obligations at the Closing would cause irreparable injury
to the other Parties, for which there is no adequate remedy at law. Therefore,
each Party agrees that the other Parties shall have the right, in addition to
all other rights and remedies at law or in equity, to obtain specific
performance of, or injunctive relief respecting, this Agreement, and hereby
consents and agrees that such Party shall not, in any proceeding to obtain
specific performance or injunctive relief, raise as a defense thereto that there
is an adequate remedy at law. In the event that any of the Parties initiates a
proceeding to obtain specific performance or injunctive relief, that Party shall
not be required to post bond.
13.12 Termination. This Agreement, as to all Parties, may be
terminated: (a) by mutual consent in writing of all the Parties to this
Agreement; or (b) by any one or more of the Parties if the Closing shall not
have taken place by April 30, 2000.
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IN WITNESS WHEREOF, the undersigned have executed this Section 351
Agreement under seal, with the corporate parties acting by and through their
duly authorized officers, to be effective as of the date first above written.
KNOLOGY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President, General Counsel
--------------------------------
and Secretary
--------------------------------
(Seal)
INTERCALL, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President, General Counsel
--------------------------------
and Secretary
--------------------------------
(Seal)
VALLEY TELEPHONE COMPANY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President, General Counsel
--------------------------------
and Secretary
--------------------------------
(Seal)
GLOBE TELECOMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President, General Counsel
--------------------------------
and Secretary
--------------------------------
(Seal)
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