Exhibit 2.2
▇.▇. ▇▇▇▇▇▇▇▇▇ CORPORATION
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Dated as of September 21, 2002
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS...............................................................................1
Section 1.01. Definitions........................................................................1
ARTICLE II. SALE AND PURCHASE OF THE PREFERRED SHARES AND WARRANTS....................................8
Section 2.01. Sale and Purchase of the Preferred Shares and the Warrants.........................8
Section 2.02. Closing............................................................................8
Section 2.03. Use of Proceeds....................................................................9
Section 2.04. Share Adjustment...................................................................9
Section 2.05. Allocation........................................................................10
ARTICLE III. REPRESENTATIONS AND WARRANTIES...........................................................10
Section 3.01. Representations and Warranties of the Company.....................................10
Section 3.02. Representations and Warranties of the Purchasers..................................22
ARTICLE IV. COVENANTS OF THE PARTIES.................................................................23
Section 4.01. Taking of Necessary Action........................................................23
Section 4.02. Conduct of Business...............................................................24
Section 4.03. Financial Statements and Other Reports............................................26
Section 4.04. Restricted Actions................................................................26
Section 4.05. Required Actions..................................................................28
Section 4.06. Termination of Obligations........................................................29
Section 4.07. Inspection of Property............................................................30
Section 4.08. Lost, Stolen, Destroyed or Mutilated Securities...................................30
Section 4.09. Listing...........................................................................30
Section 4.10. Restrictions on Sale or Transfer; Legend..........................................31
Section 4.11. Notice of Breach..................................................................32
Section 4.12. Non-Disclosure; Interim Public Filings............................................32
Section 4.13. Governance Rights.................................................................33
Section 4.14. Other Transaction Documents.......................................................34
Section 4.15. Transfer Taxes....................................................................34
Section 4.16. Dividends.........................................................................35
Section 4.17. Certain Information Rights........................................................35
ARTICLE V. CONDITIONS...............................................................................35
Section 5.01. Conditions of Purchase............................................................35
Section 5.02. Conditions of Sale................................................................37
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TABLE OF CONTENTS
(cont.)
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ARTICLE VI. TERMINATION..............................................................................38
Section 6.01. Termination.......................................................................38
Section 6.02. Effect of Termination.............................................................38
ARTICLE VII. SURVIVAL; CERTAIN REMEDIES...............................................................39
Section 7.01. Survival..........................................................................39
Section 7.02. Indemnification by the Purchasers.................................................39
Section 7.03. Indemnification by the Company....................................................39
Section 7.04. Certain Qualifications............................................................39
Section 7.05. Indemnification Procedures........................................................40
Section 7.06. Liability Limits..................................................................41
Section 7.07. Duplication.......................................................................42
Section 7.08. Exclusive Remedies................................................................42
ARTICLE VIII. MISCELLANEOUS............................................................................42
Section 8.01. Notices...........................................................................42
Section 8.02. Entire Agreement; Amendments; Waivers.............................................43
Section 8.03. Counterparts......................................................................43
Section 8.04. Governing Law.....................................................................43
Section 8.05. Public Announcements..............................................................44
Section 8.06. Closing Payment; Expenses.........................................................44
Section 8.07. Successors and Assigns............................................................44
Section 8.08. Jurisdiction......................................................................44
Section 8.09. Captions; References..............................................................44
Section 8.10. Severability......................................................................45
Section 8.11. Aggregation of Stock..............................................................45
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PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT, dated as of
September 21, 2002 (this "Agreement"), by and among ▇.▇. ▇▇▇▇▇▇▇▇▇ Corporation,
a Delaware corporation (the "COMPANY"), and the investors listed in SCHEDULE A
(each, a "PURCHASER"). Capitalized terms not otherwise defined where used herein
shall have the meanings ascribed thereto in ARTICLE I.
RECITALS:
A. The Company has authorized a new series of its preferred
stock, par value $1 per share, called the Convertible Cumulative Preferred Stock
(the "PREFERRED STOCK"), which is convertible into shares of Common Stock in
accordance with the terms of the Company's Certificate of Designations governing
the Preferred Stock, in the form of EXHIBIT A (the "CERTIFICATE OF
DESIGNATIONS").
B. The Purchasers have agreed to purchase from the Company,
and the Company has agreed to sell to the Purchasers, subject to the terms and
conditions of this Agreement, shares of the Preferred Stock and the Warrants.
C. The Company and the Purchasers desire to set forth certain
agreements herein.
AGREEMENT:
NOW THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereby agree
as follows:
ARTICLE I. DEFINITIONS
Section 1.01. DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth below:
"AFFILIATE" or "AFFILIATE" shall mean, with respect to any
Person, any other Person that directly or indirectly controls or is
controlled by or is under common control with such Person. As used in
this definition, "control" (including its correlative meanings,
"controlled by" and "under common control with") shall mean possession,
directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of
such Person.
"AFFILIATE TRANSACTION" shall have the meaning set forth in
SECTION 4.04(b).
"AGREEMENT" shall have the meaning set forth in the preamble.
"ALLOCATION" shall have the meaning set forth in SECTION 2.05.
"ANCILLARY DOCUMENTS" shall mean the Certificate of
Designations, the Registration Rights Agreement, the Warrants and all
other contracts, agreements and other documents being executed and
delivered by the parties hereto pursuant to or in connection with this
Agreement or the transactions contemplated hereby or thereby, but does
not include the Other Transaction Documents.
"BALANCE SHEET" shall have the meaning set forth in SECTION
3.01(e).
"BUSINESS DAY" shall mean any day, other than a Saturday,
Sunday or a day on which banking institutions in New York City are
authorized or obligated by law or executive order to close.
"CENDON" shall mean CenDon, L.L.C., a Delaware limited
liability company.
"CERTIFICATE OF DESIGNATIONS" shall have the meaning set forth
in the recitals.
"CERTIFICATE OF INCORPORATION" shall have the meaning set
forth in SECTION 3.01(j).
"CLOSING" shall have the meaning set forth in SECTION 2.02(a).
"CLOSING DATE" shall have the meaning set forth in SECTION
2.02(a).
"CLOSING PAYMENT" shall have the meaning set forth in SECTION
8.06(a).
"CODE" shall mean the Internal Revenue Code of 1986.
"COMMITMENT" shall have the meaning set forth in SECTION
3.01(t).
"COMMITMENT LETTER" shall mean the (i) commitment letter,
dated September 18, 2002, among Deutsche Bank Securities Inc., Deutsche
Bank Trust Company Americas, Citicorp North America, Inc., ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., Bear ▇▇▇▇▇▇▇ &
Co. Inc., ▇.▇. ▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇. ▇▇▇▇▇▇▇▇▇ Inc., (ii) the
fee letter, dated September 18, 2002, among Deutsche Bank Securities
Inc., Deutsche Bank Trust Company Americas, Citicorp North America,
Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., Bear ▇▇▇▇▇▇▇ Corporate Lending Inc.,
Bear ▇▇▇▇▇▇▇ & Co. Inc., ▇.▇. ▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇. ▇▇▇▇▇▇▇▇▇
Inc., (iii) the engagement letter, dated September 18, 2002, among
Deutsche Bank Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Bear ▇▇▇▇▇▇▇
& Co. Inc., ▇.▇. ▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇. ▇▇▇▇▇▇▇▇▇ Inc., (iv)
the side letter related to an increase in the commitment amount, dated
September 18, 2002, among Deutsche Bank Securities Inc., Deutsche Bank
Trust Company Americas, Citicorp North America, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., Bear ▇▇▇▇▇▇▇ & Co.
Inc., ▇.▇. ▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇. ▇▇▇▇▇▇▇▇▇ Inc., and (v) the
side letter related, in part, to the appointment of joint bookrunners,
dated September 18, 2002, among Deutsche Bank Securities Inc., ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Bear
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▇▇▇▇▇▇▇ & Co. Inc., ▇.▇. ▇▇▇▇▇▇▇▇▇ Corporation and ▇.▇. ▇▇▇▇▇▇▇▇▇ Inc.,
and the exhibits, annexes and schedules to items (i) - (v).
"COMMON STOCK" shall mean the common stock, par value $1 per
share, of the Company, including any associated Right, as defined in
and issued pursuant to the Rights Agreement.
"COMMON STOCK EQUIVALENTS" shall have the meaning set forth in
SECTION 2.04.
"COMPANY" shall have the meaning set forth in the preamble.
"COMPANY CERTIFICATE" shall have the meaning set forth in
SECTION 5.01(d).
"COMPANY INDEMNIFIED PARTY" shall have the meaning set forth
in SECTION 7.02.
"COMPANY PLAN" shall mean each plan, program or policy,
payroll practice, contract, agreement or other arrangement providing
for compensation, severance, termination pay, performance awards, stock
or stock-related awards, profit-sharing, pensions, deferred or
incentive compensation, retirement insurance, fringe benefits or other
material employee benefits for Employees which is now or previously has
been sponsored, maintained, contributed to or required to be
contributed to by the Company or any Company Subsidiary or pursuant to
which the Company or any of the Company Subsidiaries has or may have
any liability.
"COMPANY SUBSIDIARY" and "COMPANY SUBSIDIARIES" shall have the
meanings set forth in SECTION 3.01(b).
"DESIGNATED TRANSFEREE" shall have the meaning set forth in
the Certificate of Designations.
"DONTECH" shall mean the DonTech II partnership created by the
DonTech II Partnership Agreement.
"DONTECH PARTNERSHIP AGREEMENT" shall mean the DonTech II
Partnership Agreement, effective as of August 19, 1997, by and between
▇.▇. ▇▇▇▇▇▇▇▇▇ Inc., a Delaware Corporation, and Ameritech Publishing
of Illinois, Inc.
"EMPLOYEE" shall mean each current, former or retired
employee, officer or director of the Company or a Company Subsidiary.
"EMPLOYEE AGREEMENT" shall mean each employment, severance or
similar agreement, which is in effect on the date hereof or by which
the Company or any Company Subsidiary is bound, between the Company or
a Company Subsidiary and an Employee.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in
SECTION 3.01(q).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as
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amended.
"ERISA AFFILIATE" shall mean, with respect to any Person, any
entity that is (i) a member of a "controlled group of corporations,"
under "common control" or a member of an "affiliated service group"
within the meaning of Sections 414(b), (c) or (m) of the Code with such
person, (ii) required to be aggregated under Section 414(o) of the Code
with such person, or (iii) under "common control" with such person,
within the meaning of Section 4001(a)(14) of ERISA, or any regulations
promulgated or proposed under any of the foregoing Sections of the Code
or ERISA.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"GOLDMAN ENTITIES" shall mean each of GSCP 2000, GS Capital
Partners 2000 Offshore, L.P., a Cayman Islands exempted limited
partnership, GS Capital Partners 2000 Employee Fund 2000, L.P., a
Delaware limited partnership, GS Capital Partners 2000 GmbH & Co.
Beteiligungs KG, a German limited partnership, and ▇▇▇▇▇▇▇ Sachs Direct
Investment Fund 2000, L.P. a Delaware limited partnership.
"GOVERNMENTAL ENTITY" shall mean any court, department, body,
board, bureau, administrative agency or commission or other
governmental authority or instrumentality, whether federal, state,
local or foreign.
"GSCP 2000" shall mean GS Capital Partners 2000, L.P., a
Delaware limited partnership.
"HSR ACT" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976.
"INDEMNIFICATION CLAIM NOTICE" shall have the meaning set
forth in SECTION 7.05(a).
"INDEMNIFIED PARTY" shall have the meaning set forth in
SECTION 7.05(a).
"INDEMNIFYING PARTY" shall have the meaning set forth in
SECTION 7.05(a).
"INTELLECTUAL PROPERTY" shall have the meaning set forth in
SECTION 3.01(r).
"KNOWLEDGE" shall mean the actual knowledge of the officers of
the Company listed on EXHIBIT B after reasonable investigation and
inquiry.
"LIABILITY" shall mean any debt, liability or obligation,
whether known or unknown, asserted or unasserted, accrued, absolute,
contingent or otherwise, whether due or to become due.
"LIENS" shall mean any liens, mortgages, deeds of trust,
pledges, security
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interests, charges, claims, leasehold interests, tenancies,
restrictions and encumbrances of any nature whatsoever.
"LITIGATION" shall have the meaning set forth in SECTION
3.01(h).
"LOSSES" shall mean each and all of the following items:
claims, losses (including, without limitation, losses of earnings),
liabilities, obligations, payments, damages (actual but not punitive or
consequential), charges, judgments, fines, penalties, amounts paid in
settlement, and costs and expenses (including, without limitation,
interest that may be imposed in connection therewith, costs and
expenses of investigation, suits, proceedings, demands, assessments and
fees, expenses and disbursements of counsel, consultants, and other
experts.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any
reference to a state of facts, event, change, effect or condition, such
state of facts, event, change, effect or condition that has had, has,
or could reasonably be expected to have, a material adverse effect on
(i) the business, assets, operations, properties, condition (financial
or otherwise), prospects, contingent liabilities or material agreements
of the Company and the Company Subsidiaries, taken as a whole (ii) the
ability of the Company or any Company Subsidiary to perform its
obligations under this Agreement, the Ancillary Documents or any Other
Transaction Document, or (iii) the validity or enforceability of this
Agreement, the Ancillary Documents or any Other Transaction Document or
the rights or remedies of the Purchasers hereunder and thereunder.
Notwithstanding anything contained herein to the contrary, the
commencement by or against the Company or any Company Subsidiary of any
case, proceeding or other action under any law relating to bankruptcy,
insolvency or reorganization or the seeking of an appointment of a
receiver, trustee, custodian or other similar official for the Company
or any Company Subsidiary or for all or any substantial part of the
Company's or any Company Subsidiary's assets, shall be deemed a
Material Adverse Effect.
"NET INCOME" shall mean with respect to the Net Income for any
period, the amount reported in the line item of the Company's financial
statements for such period entitled "Net Income" which financial
statements appear in the most recent filing by the Company with the
Securities and Exchange Commission.
"OTHER TRANSACTION DOCUMENTS" shall mean the Sprint Purchase
Agreement, the Sprint Transaction Documents, the Senior Credit Facility
Documents, the Senior Subordinated Credit Facility Documents, the
Senior Subordinated Notes Documents and the Commitment Letter.
"PENSION PLAN" shall mean each Company Plan (other than a
"multiemployer plan" (as defined in ERISA Section 3(37)) that is an
"employee pension benefit plan" within the meaning of Section 3(2) of
ERISA.
"PERMITS" shall mean any licenses, permits, accreditations,
consents, registrations, certificates, and other governmental or
regulatory permits, accreditations, authorizations or approvals
required for the operation of the businesses of the Company and the
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Company Subsidiaries and for the ownership, lease or operation of the
Company's and the Company Subsidiaries' properties.
"PERMITTED LIENS" shall mean (i) Liens for Taxes not yet due
and payable, (ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and repairmen incurred in the
ordinary course of business and not yet delinquent, (iii) matters of
record set forth on the title insurance policy insuring title to the
owned real property and (iv) zoning, building or other restrictions,
variances, covenants, rights of way, encumbrances, easements and other
minor irregularities in title, none of such items in (i) - (iv) which,
individually or in the aggregate, materially and adversely detract from
the value of the owned or leased real property based on its current use
or interfere in any material respect with the current use or occupancy
of such owned or leased real property.
"PERSON" or "PERSON" shall mean an individual, corporation,
association, partnership, group (as defined in Section 13(d)(3) of the
Exchange Act and the rules and regulations promulgated thereunder),
trust, joint venture, business trust or unincorporated organization, or
a government or any agency or political subdivision thereof.
"PREFERRED SHARES" shall have the meaning set forth in SECTION
2.01.
"PREFERRED STOCK" shall have the meaning set forth in the
recitals.
"PRINCIPAL MARKET" shall have the meaning set forth in SECTION
4.09.
"PURCHASE PRICE" shall have the meaning set forth in SECTION
2.01.
"PURCHASER" shall have the meaning set forth in the preamble.
"PURCHASER DESIGNEES" shall mean the Directors (i) elected by
the Purchasers to the Company's Board of Directors pursuant to Section
8 of the Certificate of Designations and (ii) designated pursuant to
SECTION 4.13(a).
"PURCHASER INDEMNIFIED PARTY" shall have the meaning set forth
in SECTION 7.03.
"PURCHASER'S CERTIFICATE" shall have the meaning set forth in
SECTION 5.02(d).
"REGISTRABLE SHARES" shall have the meaning set forth in the
Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" shall mean the registration
rights agreement to be executed by the Company and each Purchaser at
the Closing, which shall be substantially in the form attached hereto
as EXHIBIT C.
"REPORTS" shall have the meaning set forth in SECTION 3.01(f).
"RIGHTS AGREEMENT" shall mean the Rights Agreement, dated as
of October 27, 1998, as amended, by and between the Company and The
Bank of New York (successor
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to First Chicago Trust Company of New York), as Rights Agent.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SECTION 203" shall have the meaning set forth in SECTION
3.01(s).
"SECURITIES ACT" shall mean the Securities Act of 1933.
"SENIOR CREDIT FACILITY" shall mean the Senior Facilities, as
defined in the Commitment Letter.
"SENIOR CREDIT FACILITY DOCUMENTS" shall mean any and all
agreements, documents and instruments evidencing or governing the
Senior Credit Facility.
"SENIOR OFFICER'S CERTIFICATE" shall have the meaning set
forth in SECTION 4.03(a).
"SENIOR SUBORDINATED CREDIT FACILITY" shall mean the Senior
Subordinated Facility, as defined in the Commitment Letter.
"SENIOR SUBORDINATED CREDIT FACILITY DOCUMENTS" shall mean any
and all agreements, documents and instruments evidencing or governing
the Senior Subordinated Credit Facility.
"SENIOR SUBORDINATED NOTES" shall have the meaning set forth
in the Commitment Letter.
"SENIOR SUBORDINATED NOTES DOCUMENTS" shall mean any and all
agreements, documents and instruments evidencing or governing the
Senior Subordinated Notes.
"SPECIFIED PURCHASE PRICE" shall have the meaning set forth in
SECTION 2.01.
"SPRINT" shall mean Sprint Corporation, a Kansas corporation.
"SPRINT PURCHASE AGREEMENT" shall mean the Stock Purchase
Agreement, dated as of September 21, 2002, by and among Sprint, Centel
Directories LLC, a Delaware limited liability company, and the Company.
"SPRINT TRANSACTION" shall mean the purchase and sale of the
Shares (as defined in the Sprint Purchase Agreement) pursuant to the
terms and subject to the conditions of the Sprint Purchase Agreement
and the other Sprint Transaction Documents.
"SPRINT TRANSACTION DOCUMENTS" shall mean the Sprint Purchase
Agreement and the Ancillary Agreements (as defined in the Sprint
Purchase Agreement).
"SUBSIDIARY" shall mean, with respect to any corporation (the
"parent") any other corporation, association or other business entity
of which more than 50% of the shares of the voting stock are owned or
controlled, directly or indirectly, by the parent or one or more
Subsidiaries of the parent, or by the parent and one or more of its
Subsidiaries.
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"TAX" and "TAXES" shall mean any and all federal, state,
local, foreign or other taxes of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any taxing authority, including,
without limitation, taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net
worth, and taxes or other charges in the nature of excise, withholding,
ad valorem or value added, and includes, without limitation, any
liability for Taxes of another person, as a transferee or successor,
under Treas. Reg. Section 1.1502-6 or analogous provision of law or
otherwise.
"TAX RETURN" shall mean any return, report or similar
statement (including the attached schedules) required to be filed with
respect to any Tax, including, without limitation, any information
return, claim for refund, amended return or declaration of estimated
Tax.
"TERMINATING BREACH" shall have the meaning set forth in
SECTION 6.01(e).
"TRANSFER" shall have the meaning set forth in SECTION
4.10(a).
"VOTING EQUITY INTERESTS" shall have the meaning set forth in
the Certificate of Designations.
"WARRANTS" shall have the meaning set forth in SECTION 2.01.
ARTICLE II. SALE AND PURCHASE OF THE PREFERRED SHARES AND WARRANTS
Section 2.01. SALE AND PURCHASE OF THE PREFERRED SHARES AND
THE WARRANTS. Subject to the terms and conditions of this Agreement, and in
reliance upon the representations and warranties hereinafter set forth, the
Company will sell to the Purchasers, and the Purchasers will purchase from the
Company, (i) 200,000 shares of the Preferred Stock (as such number may be
adjusted pursuant to SECTION 2.04, the "PREFERRED SHARES") and (ii) warrants to
purchase 1,650,000 shares of Common Stock on the terms and subject to the
conditions of the certificate for the Warrants in substantially the form
attached hereto as EXHIBIT D (the "WARRANTS"), for an aggregate purchase price
of $200.0 million (the "PURCHASE PRICE"). The number of shares of the Preferred
Stock and the number of warrants to be purchased by each Purchaser at the
Closing and the portion of the aggregate purchase price to be paid by each
Purchaser at the Closing in the exchange therefor, shall be as specified in
SCHEDULE A (with respect to each such Purchaser, such Purchaser's "SPECIFIED
PURCHASE PRICE").
Section 2.02. CLOSING.(a) Subject to the satisfaction or
waiver of the conditions set forth in this Agreement, the closing of the
transactions contemplated by SECTION 2.01 (the "CLOSING") shall take place
immediately prior to or concurrently with the closing of the Sprint Transaction,
or at such other time as may be mutually agreed upon by the Purchasers and the
Company (the "CLOSING DATE"). The Closing shall occur on the Closing Date at the
offices of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
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(b) At the Closing: (i) the Company will deliver to the
Purchasers certificates for the Preferred Shares to be sold in accordance with
the provisions of SECTION 2.01 registered in the respective names and
proportions set forth in SCHEDULE A; (ii) the Company will deliver to the
Purchasers certificates for the Warrants, to be sold in accordance with the
provisions of SECTION 2.01, in each case duly executed in favor of the
respective names and in the proportions set forth in SCHEDULE A; (iii) subject
to SECTION 8.06(a), each Purchaser, in full payment for the Preferred Shares and
the Warrants, will deliver to the Company immediately available funds, by wire
transfer to such account as the Company shall specify, such Purchaser's
Specified Purchase Price; and (iv) each party shall take or cause to happen such
other actions, and shall execute and deliver such other instruments or
documents, as shall be required under ARTICLE V.
Section 2.03. USE OF PROCEEDS. The Company shall use the
proceeds from the sale of the Preferred Shares and the Warrants solely (i) to
pay the consideration payable to Sprint or its Affiliates in or as a result of
the Sprint Transaction and (ii) to pay the fees and out-of-pocket expenses
relating to the transactions contemplated hereby and under the Other Transaction
Documents.
Section 2.04. SHARE ADJUSTMENT. If, on or prior to the Closing
Date (or in connection with the Senior Credit Facility, the Senior Subordinated
Credit Facility and/or the Senior Subordinated Notes), the Company shall issue
or sell any shares of Common Stock or any options, warrants or other equity
securities of any nature convertible into or exchangeable for shares of Common
Stock ("COMMON STOCK EQUIVALENTS"), then the Company shall issue to the
Purchasers an additional number of shares of Preferred Stock determined by
multiplying the number of Preferred Shares then outstanding (which, in the case
of an adjustment, if any, to be made on the Closing Date, shall be 200,000) by a
fraction, the numerator of which shall be the number of shares of Common Stock
or Common Stock Equivalents issued (a) in the case of an adjustment, if any, to
be made on the Closing Date, from the date hereof to the Closing Date or (b) in
the case of an adjustment, if any, to be made after the Closing Date, since the
later of the Closing Date or the date of any prior adjustment made pursuant to
this SECTION 2.04, and the denominator of which shall be the number of Voting
Equity Interests outstanding immediately prior to such issuance of Common Stock
or Common Stock Equivalents, excluding (1) any Preferred Shares the outstanding,
if any, (2) any shares of Common Stock issuable upon conversion of the Preferred
Shares then outstanding, if any, (3) any shares of Common Stock issuable upon
exercise of the Warrants, and (4) the Common Stock or Common Stock Equivalents
issued (a) in the case of an adjustment, if any, to be made on the Closing Date,
from the date hereof to the Closing Date or (b) in the case of an adjustment, if
any, to be made after the Closing Date, since the later of the Closing or the
date of any prior adjustment made pursuant to this SECTION 2.04. Such number of
additional shares will be allocated in a proportional amount to the Purchasers
based on the allocation contained in SCHEDULE A. SCHEDULE 2.04 sets forth an
example of how this adjustment provision will work.
Section 2.05. ALLOCATION. On or prior to the Closing Date, the
Purchasers will submit to the Company for the Company's approval (which shall
not be unreasonably withheld) an allocation of the Purchase Price (the
"ALLOCATION"), which Allocation will allocate the Purchase Price amongst the
Warrants and the Preferred Shares. The parties agree to report the sale and
purchase of the Preferred Shares and Warrants for all federal, state, local and
foreign tax
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purposes in a manner consistent with the Allocation and agree to take no
position inconsistent with the foregoing (unless otherwise required by a final
determination by the appropriate taxing authority).
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Section 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Purchasers as follows:
(a) ORGANIZATION AND GOOD STANDING OF THE COMPANY;
AUTHORIZATION. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority and governmental authorizations to own, operate
and lease its properties and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each other
jurisdiction in which it owns or leases properties, or conducts business, so as
to require such qualification, except where the failure to be so licensed or
qualified in any such jurisdiction would not constitute a Material Adverse
Effect. The Company has the corporate power and authority to execute and deliver
this Agreement and the Ancillary Documents and perform its obligations hereunder
and thereunder. The execution and delivery of this Agreement and the Ancillary
Documents and the performance by the Company of its covenants and agreements
under this Agreement and the Ancillary Documents have been duly and validly
authorized by the Board of Directors of the Company, and no other corporate
proceedings on the part of the Company (including, without limitation, any
stockholder vote or approval) are necessary to authorize the execution, delivery
and performance of this Agreement or the Ancillary Documents or the consummation
of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of Common Stock upon conversion of the Preferred Stock
and upon exercise of the Warrants). This Agreement and the Ancillary Documents
have been duly executed and delivered by the Company and constitute the valid
and binding agreements of the Company, enforceable against the Company in
accordance with their terms, except that (a) such enforcement may be subject to
any bankruptcy, insolvency, reorganization moratorium, fraudulent transfer or
other laws, now or hereafter in effect relating to or limiting creditors' rights
generally, and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(b) ORGANIZATION AND GOOD STANDING OF COMPANY SUBSIDIARIES AND
DONTECH. (i) SCHEDULE 3.01(b) lists all Subsidiaries of the Company and their
respective jurisdictions of incorporation (collectively, the "COMPANY
SUBSIDIARIES" and each, a "COMPANY SUBSIDIARY;" PROVIDED, that for the purposes
of all other defined terms in this Agreement, SECTION 3.01, SECTION 4.03, and
SECTION 4.07, DonTech shall not be deemed to be a Company Subsidiary, and
PROVIDED, FURTHER, that with respect to the covenants and agreements as to
Company Subsidiaries made in this Agreement, DonTech shall be deemed to be a
Company Subsidiary, but the Company's obligations with respect to DonTech in
this regard shall be limited to the extent the Company has rights under the
DonTech Partnership Agreement that would permit it to comply with such
obligations without violating any obligations of the Company, including its
fiduciary obligations, under the DonTech Partnership Agreement or otherwise in
respect to DonTech). Except as set forth in SCHEDULE 3.01(b), the Company owns,
directly or indirectly, all the shares
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of outstanding capital stock of each Company Subsidiary. Except as set forth in
SCHEDULE 3.01(b), (a) there are outstanding no securities or rights convertible
into or exchangeable for shares of any capital stock of any Company Subsidiary
and (B) there are no contracts, commitments, understandings or arrangements by
which any Company Subsidiary is bound to issue additional shares of its capital
stock or options, warrants or rights to purchase or acquire any additional
shares of its capital stock. All of the shares of capital stock of each of the
Company Subsidiaries are duly and validly authorized, fully paid and
non-assessable and, except as set forth in SCHEDULE 3.01(b), are owned by the
Company free and clear of any Lien with respect thereto. Each Company Subsidiary
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and has all requisite corporate power
and authority and governmental authorizations to own, operate and lease its
properties and to carry on its business as it is now being conducted, and is
duly licensed or qualified to do business in each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification, except where the failure to be so licensed or qualified in any
such jurisdiction would not constitute a Material Adverse Effect.
(ii) To the Company's knowledge, DonTech is a general
partnership duly organized, validly existing and in good standing under
the laws of the State of Illinois, and has all requisite power and
authority and governmental authorizations to own, operate and lease its
properties and to carry on its business as it is now being conducted,
and is duly licensed or qualified to do business in each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, except where failure to
be so licensed or qualified in any such jurisdiction would not
constitute a Material Adverse Effect. The Company, indirectly through
▇.▇. ▇▇▇▇▇▇▇▇▇ Inc., owns 50% of the general partnership interests of
DonTech.
(c) NO CONFLICTS. Except as set forth in SCHEDULE 3.01(c),
neither the execution and delivery of this Agreement or the Ancillary Documents
nor the consummation of the transactions contemplated by this Agreement or the
Ancillary Documents will (i) conflict with or result in any breach of any
provision of the incorporation documents or By-laws of the Company or any
Company Subsidiary, (ii) except for applicable requirements of the HSR Act,
require any filing with, or the obtaining of any permit, authorization, consent
or approval of, any Governmental Entity, (iii) violate, conflict with or result
in a default (or any event which, with notice or lapse of time or both, would
constitute a default) or require any consent under, or give rise to any right of
termination, cancellation or acceleration under, any of the terms, conditions or
provisions of any note, mortgage, other evidence of indebtedness, guarantee,
license, agreement, lease or other contract, instrument or obligation to which
the Company or any Company Subsidiary or, to the Company's knowledge, DonTech is
a party or by which the Company or any Company Subsidiary or any of their
respective assets or, to the Company's knowledge, DonTech or any of its
respective assets may be bound, or (iv) violate any order, injunction, decree,
statute, rule or regulation applicable to the Company, excluding from the
foregoing clauses (ii), (iii) and (iv) such requirements, violations, conflicts,
defaults or rights that would not constitute a Material Adverse Effect.
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(d) CAPITALIZATION. SCHEDULE 3.01(d) sets forth (i) the
authorized capital stock of the Company, the number of shares of each class of
capital stock issued and outstanding and the number of shares of Common Stock
reserved for issuance in connection with employee benefit, stock option and
dividend reinvestment plans in each case as of the date hereof, and (ii) all
options, warrants, rights to subscribe to, scrip calls, contracts, undertakings,
arrangements and commitments to issue which may result in the issuance of equity
securities of the Company, in each case setting forth the identity of the holder
thereof, the exercise or similar price and the date of expiration or termination
thereof. All of the issued and outstanding shares of the Company's capital stock
have been duly and validly authorized and issued and are fully paid and
non-assessable and are not subject to any preemptive rights. Except as set forth
in SCHEDULE 3.01(d) or pursuant to this Agreement, the Rights Agreement, the
Warrants or the Certificate of Designations, (i) no equity securities of the
Company are or may be required to be issued by reason of any options, warrants,
rights to subscribe to, scrip calls or commitments of any character whatsoever,
(ii) there are outstanding no securities or rights convertible into or
exchangeable for shares of any capital stock of the Company, and (iii) there are
no contracts, commitments, understandings or arrangements by which the Company
is bound to issue additional shares of its capital stock or securities or rights
convertible into or exchangeable for shares of any capital stock of the Company,
or options, warrants or rights to purchase or acquire any additional shares of
its capital stock. Neither the Company nor any Company Subsidiary is subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its capital stock. Except as set forth in SCHEDULE 3.01(d), there
are no contracts, agreements or understandings between the Company and any
Person granting such Person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company owned or to be owned by such Person or to require the Company to
include such securities in any other registration statement filed by the Company
under the Securities Act.
(e) FINANCIAL STATEMENTS. The Company has previously delivered
to the Purchasers copies of (i) the consolidated balance sheet of the Company
and the Company Subsidiaries as of December 31 for the fiscal years 2000 and
2001, and the related consolidated statements of operations, statements of
stockholders' equity and cash flows for the fiscal years 1999 through 2001,
inclusive, as reported in the Company's Annual Report on Form 10-K (as amended)
for the fiscal year ended December 31, 2001, filed by the Company with the SEC
under the Exchange Act, in each case accompanied by the audit report of
PricewaterhouseCoopers LLP, independent public accountants, and (ii) the
unaudited consolidated balance sheet of the Company and the Company Subsidiaries
as of June 30, 2002 (the "BALANCE SHEET") and the related unaudited consolidated
statement of operations, statements of stockholders' equity and cash flows for
the three- and six-month periods then ended as reported in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed with
the SEC under the Exchange Act. All of such financial statements fairly present
the consolidated financial position of the Company and the Company Subsidiaries
as of the dates shown and the results of the consolidated operations, statements
of stockholders' equity and cash flows of the Company and the Company
Subsidiaries for the respective fiscal periods or as of the respective dates
therein set forth, in each case subject, as to interim statements, to changes
resulting from year-end adjustments (none of which will be material in amount
and effect). All of such financial statements have been prepared in accordance
with GAAP consistently applied
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during the periods involved, except as otherwise set forth in the notes thereto,
and the Company and the Company Subsidiaries have no liabilities or obligations
of any nature (absolute, accrued, contingent or otherwise) which are not fully
reflected or reserved against in the balance sheet as of June 30, 2002, included
in such financial statements, except for liabilities that may have arisen in the
ordinary and usual course of business and consistent with past practice and
that, individually or in the aggregate, would not constitute a Material Adverse
Effect. Neither the Company nor any Company Subsidiary has entered into any
off-balance sheet arrangements or transactions.
(f) REPORTS. The Company has filed all reports, registration
statements, proxy statements and other materials, together with any amendments
required to be made with respect thereto, that were required to be filed with
the SEC under the Securities Act or the Exchange Act after July 1, 1998 (all
such reports and statements are collectively referred to herein as the
"REPORTS") and with the New York Stock Exchange. As of their respective dates,
the Reports, including the financial statements contained therein, complied in
all material respects with all of the statutes and published rules and
regulations enforced or promulgated by the regulatory authority with which they
were filed, except to the extent the information in any Report has been revised
or superseded by a later filed Report, did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. There are no facts
existing as of the date hereof peculiar to the Company or any Company Subsidiary
which the Company has not disclosed in the Reports or to the Purchasers in
writing which, either individually or in the aggregate, would constitute a
Material Adverse Effect. To the Company's knowledge, there are no facts existing
as of the date hereof peculiar to DonTech that the Company has not disclosed in
the Reports or to the Purchasers in writing which, either individually or in the
aggregate, would constitute a Material Adverse Effect.
(g) COMPLIANCE WITH APPLICABLE LAW. Each of the Company, each
Company Subsidiary and, to the Company's knowledge, DonTech is not in default or
violation in any respect of any law, statute, rule, regulation, policy or
guideline of any Governmental Entity applicable to the Company, any of the
Company Subsidiaries or DonTech, as the case may be, other than such defaults or
violations that, either individually or in the aggregate, would not constitute a
Material Adverse Effect, and the business of the Company, the Company
Subsidiaries and, to the Company's knowledge, DonTech, are in compliance in all
material respects with all applicable federal, state, local and foreign
governments' laws and regulations. None of the Company the Company Subsidiaries
or, to the Company's knowledge, DonTech is in default under or in breach of any
order, judgment or decree of any arbitrator or other Governmental Entity, and
neither the Company, nor any Company Subsidiary or, to the Company's knowledge,
DonTech is a party or subject to any order, judgment or decree of any arbitrator
or other Governmental Entity.
(h) LITIGATION. As of the date of this Agreement, except as
set forth in the Reports or in SCHEDULE 3.01(h), there is no claim, action,
suit, investigation, proceeding or governmental investigation pending or, to the
Company's knowledge, threatened by or before any arbitration tribunal, self
regulatory agency or body (including, without limitation, the New York Stock
Exchange), Governmental Entity or by any third party (a "LITIGATION") (i)
against or
-13-
involving the Company or any of the Company Subsidiaries or involving any of
their respective properties or assets, (ii) to the Company's knowledge, against
or involving DonTech or involving any of its respective properties or assets or
(iii) which challenges the validity of this Agreement or which could reasonably
be expected to adversely affect or restrict the Company's ability to consummate
the transactions contemplated by this Agreement and the Ancillary Documents.
(i) EMPLOYEE BENEFITS.
(i) SCHEDULE 3.01(i)(i) contains a true and complete list of (i)
each material Company Plan and (ii) each material Employee Agreement.
Except as set forth on SCHEDULE 3.01(i)(i), the Company and the Company
Subsidiaries do not have any plan or legally binding commitment (i) to
establish any new Company Plan or to modify or terminate any Company
Plan or (ii) to enter into, modify or terminate any Employee Agreement.
(ii) Current, accurate and complete copies of all documents
embodying or relating to each Company Plan and each Employee Agreement
have been made available to the Purchasers.
(iii) Neither the Company nor a Company Subsidiary has, or has ever
had, any ERISA Affiliates other than the Company or a Company
Subsidiary.
(iv) Each Company Plan and Employee Agreement has been established
and maintained in accordance with its terms in all material respects
and all applicable laws, statutes, orders, rules and regulations. Each
Company Plan intended to qualify under Section 401 of the Code has a
favorable determination letter from the Internal Revenue Service to the
effect that it is so qualified and, if the letter for such a plan is
not current, such plan is the subject of a timely request for a current
favorable determination letter.
(v) No steps have been taken to terminate any Pension Plan, no
termination of any Pension Plan has occurred and no event has occurred
and no condition exists that could constitute grounds for terminating
any Pension Plan. Each Pension Plan has been maintained in compliance
with the minimum funding standards of ERISA and the Code and no such
Pension Plan has incurred any "accumulated funding deficiency," as
defined in Section 412 of the Code and Section 302 of ERISA, whether or
not waived. The funded status of each Pension Plan as reflected in the
most recent actuarial report is accurate and such report fairly
presents the funded status of such Pension Plan on the basis set forth
therein.
(vi) No Company Plan is under audit or investigation by the
Internal Revenue Service, the Department of Labor, the Pension Benefit
Guaranty Corporation or other governmental agency and, to the knowledge
of the Company and the Company Subsidiaries, no such audit or
investigation has been threatened. There are no actions, proceedings,
arbitrations, suits or claims pending, or to the knowledge of the
Company or any
-14-
Company Subsidiaries, threatened or anticipated (other than routine
claims for benefits) against the Company or any Company Subsidiaries or
any administrator, trustee or other fiduciary of any Company Plan with
respect to any Company Plan or Employee Agreement, or against any
Company Plan or against the assets of any Company Plan.
(vii) Except as set forth on SCHEDULE 3.01(i)(vii), neither the
Company nor the Company Subsidiaries maintains or contributes to any
Company Plan which provides, or has any liability to provide, life
insurance, medical, severance or other employee welfare benefits to any
Employee upon his retirement or termination of employment, except as
may be required by Section 4980B of the Code.
(viii) Except as set forth on SCHEDULE 3.01(i)(viii), the execution
and performance of the transactions contemplated in this Agreement will
not (either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any Company Plan or
Employee Agreement that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligations to fund
benefits with respect to any Employee or (ii) result in the triggering
or imposition of any restrictions or limitations on the right of the
Company or a Company Subsidiary to amend or terminate any Company Plan.
The execution and performance of the transactions contemplated in this
Agreement will not cause any payment or benefit which will or may be
made by the Company or a Company Subsidiary with respect to any
Employees to be characterized as an "excess parachute payment," within
the meaning of Section 280G(b)(1) of the Code.
(ix) There are no, and have never been any, collective bargaining
agreements or other labor union or similar contracts governing any
Employees.
(x) The Company and the Company Subsidiaries are in compliance in
all material respects with all applicable federal, state and local
laws, rules and regulations respecting employment.
(j) ABSENCE OF CERTAIN CHANGES. Since December 31, 2001, the business
of the Company and the Company Subsidiaries and, to the Company's knowledge,
DonTech has been operated in the usual and ordinary course consistent with past
practice and, except as set forth in the Reports or in SCHEDULE 3.01(j) or as
provided in this Agreement or the Ancillary Documents:
(i) there has been no event, condition or change that individually
or in the aggregate constitutes a Material Adverse Effect;
(ii) none of the Company, the Company Subsidiaries or, to the
Company's knowledge, DonTech has entered into any material transaction
or incurred any material liability or material obligation, except in
the ordinary course of its business consistent with past practice;
-15-
(iii) none of the Company, the Company Subsidiaries or, to the
Company's knowledge, DonTech has sold or transferred a material amount
of the assets it owns except in the ordinary course of its business;
(iv) none of the Company, the Company Subsidiaries or, to the
Company's knowledge, DonTech has incurred any indebtedness other than
indebtedness to trade creditors incurred in the ordinary course of
business;
(v) none of the Company, the Company Subsidiaries or, to the
Company's knowledge, DonTech has changed its accounting policies or
procedures as in effect on December 31, 2001;
(vi) neither the Company nor any Company Subsidiary has amended or
in any way altered its Restated Certificate of Incorporation, as
amended ("CERTIFICATE OF INCORPORATION") or By-laws;
(vii) the Company has not changed the number of shares of the
authorized or issued capital stock of the Company, issued or granted
any option, warrant, call, commitment, subscription, right to purchase
or agreement of any character relating to the authorized or issued
capital stock of the Company or any Company Subsidiary, or any
securities convertible into shares of such stock (except for grants of
options to purchase Common Stock to be granted pursuant to Company
Plans), split, combined or reclassified any shares of the capital stock
of the Company, declared, set aside or paid any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of the capital stock of the Company, or redeemed or
otherwise acquired any shares of such capital stock;
(viii) the Company has not increased the number of members of the
Board of Directors of the Company;
(ix) none of the Company, the Company Subsidiaries or, to the
Company's knowledge, DonTech has acquired any assets other than in the
ordinary and usual course of business;
(x) none of the Company, the Company Subsidiaries or, to the
Company's knowledge, DonTech has entered into employment agreements
with any Employee (other than an agreement terminable at will without
any financial penalty), or granted any increase in the compensation
(including employee benefits) of any employee, except for increases (A)
in the ordinary course of business and consistent with past practice,
(B) as a result of collective bargaining or (C) as required by any
employment or other agreement, policy or plan currently in effect; and
(xi) none of the Company, the Company Subsidiaries or, to the
Company's knowledge, DonTech has agreed, whether in writing or
otherwise, to
-16-
take any action that, if taken, would render any of the
representations set forth in this SECTION 3.01(j) untrue.
(k) PREFERRED SHARES AND WARRANTS. The Preferred Shares have
been duly authorized by all necessary corporate action. When issued and sold
against receipt of the consideration therefor, the Preferred Shares will be
validly issued, fully paid and nonassessable, will not subject the holders
thereof to any personal liability and will not be subject to any preemptive
rights except as contemplated by this Agreement and the Certificate of
Designations. When issued and sold against receipt of the consideration
therefor, the Warrants will not subject the holders thereof to any personal
liability and will not be subject to any preemptive rights except as
contemplated by this Agreement and the Warrants. The Company has 21,909,939
shares of Common Stock that are in treasury and listed on the New York Stock
Exchange. A total of 20,500,000 of such treasury shares of Common Stock have
been duly reserved for issuance upon the conversion or redemption of the
Preferred Shares and the exercise of the Warrants. The shares of Common Stock
issuable upon conversion or redemption of the Preferred Shares and upon exercise
of the Warrants have been duly and validly authorized and, if and when issued,
will be validly issued, fully paid and non-assessable and will not be subject to
any preemptive rights except as contemplated by this Agreement, the Warrants and
the Certificate of Designations. At the Closing, the Purchasers will receive
valid title to the Preferred Shares and the Warrants, free and clear of any Lien
(other than any restrictions on transfer under state and/or federal securities
laws).
(l) OFFERING OF SECURITIES. Based in part on the
representations and warranties of the Purchasers in SECTION 3.02, it is not
necessary in connection with the offer, sale and delivery of the Preferred
Shares and the Warrants to the Purchasers to register the offer and sale of the
Preferred Shares and the Warrants under the Securities Act. The Company has not,
directly or indirectly, offered, sold or solicited any offer to buy and will
not, directly or indirectly, offer, sell or solicit any offer to buy, any
security of a type or in a manner which would be integrated with the sale of the
Preferred Shares and the Warrants and require any of the Preferred Shares or the
Warrants to be registered under the Securities Act. None of the Company, its
Affiliates or any person acting on its or any of their behalf has engaged or
will engage in any form of general solicitation or general advertising (within
the meaning of Rule 502(c) under the Securities Act) in connection with the
offering of the Preferred Shares and the Warrants.
(m) BROKERS AND FINDERS. Except for the engagement of Bear,
▇▇▇▇▇▇▇ & Co., Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc. (the fees and expenses of
each which will be borne solely by the Company), neither the Company nor any of
its Affiliates has employed any financial advisor or finder or incurred any
liability for any financial advisory or finders' fees in connection with this
Agreement or the transactions contemplated by this Agreement.
(n) PERMITS. The Company, each Company Subsidiary and, to the
Company's knowledge, DonTech, possesses all Permits required for the conduct of
its respective businesses, except where the failure to possess any such Permit
would not constitute a Material Adverse Effect, and none of the Company, any
Company Subsidiary nor, to the Company's knowledge, DonTech has received any
notice of proceedings relating to the revocation or modification of any such
Permit that, if determined adversely to the Company, DonTech or any such Company
Subsidiary, individually or in the aggregate, would constitute a Material
Adverse Effect. All of
-17-
such Permits of the Company and the Company Subsidiaries and, to the Company's
knowledge such Permits of DonTech are valid and in full force and effect, and
the Company, each of the Company Subsidiaries and to the Company's knowledge,
DonTech have duly performed and are in compliance in all respects with all of
their obligations under such Permits, except where the failure to perform or
comply, individually or in the aggregate would not constitute a Material Adverse
Effect. No event has occurred with respect to any of such Permits of the Company
and the Company Subsidiaries or, to the Company's knowledge, such Permits of
DonTech that allows, or after notice or lapse of time or both would allow, the
suspension, limitation, revocation, non-renewal or termination thereof or would
result in any other impairment of the rights of the holder thereof in and under
any of such Permits that, if such event or events occurred, individually or in
the aggregate, would constitute a Material Adverse Effect, and no terminations
thereof or proceedings to suspend, limit, revoke or terminate any Permits of the
Company and the Company Subsidiaries or, to the Company's knowledge, such
Permits of DonTech, have been threatened that, if acted upon, individually or in
the aggregate, would constitute a Material Adverse Effect.
(o) TITLE TO PROPERTIES; INSURANCE. Except as set forth in
SCHEDULE 3.01(o), the Company, the Company Subsidiaries and, to the Company's
knowledge, DonTech have good and marketable title to all real properties and all
other properties and assets owned by them that are material to their respective
businesses, in each case free from Liens other than Permitted Liens. Except as
set forth in SCHEDULE 3.01(o), the Company, the Company Subsidiaries and, to the
Company's knowledge, DonTech hold any leased real or personal property that is
material to their business under valid and enforceable leases enforceable
against the Company, the Company Subsidiaries or, to the Company's knowledge,
DonTech, with no exceptions that would materially interfere with the use made or
to be made thereof by them, in each case free from Liens other than Permitted
Liens. The Company, the Company Subsidiaries and, to the Company's knowledge,
DonTech have at all times maintained in full force and effect property damage,
liability and other insurance with financially sound and reputable insurers at
levels of coverage reasonable and customary for the Company's industry.
(p) TAXES. All material Tax Returns required to be filed by
the Company and each Company Subsidiary (provided that for the purposes of this
SECTION 3.01(p) only, DonTech and CenDon shall each be deemed a Company
Subsidiary), and, to the Company's knowledge, DonTech, have been filed, and all
such Tax Returns are true, complete and correct in all material respects.
Neither the Company nor any of the Company Subsidiaries, or to the Company's
knowledge, DonTech has any liability for Taxes other than Taxes (i) currently
payable without penalty or interest or (ii) being contested in good faith and by
appropriate proceedings and for which, in the case of both clauses (i) and (ii),
adequate reserves have been established on the Balance Sheet and books and
records of the Company or the Company Subsidiaries, as applicable. There are no
proposed Tax assessments against the Company or any of the Company Subsidiaries,
or to the Company's knowledge, DonTech. Neither the Internal Revenue Service nor
any other taxing authority has asserted any currently ongoing claim for Taxes,
nor to the Company's knowledge, is threatening to assert any claims for such
Taxes, against the Company or any of the Company Subsidiaries or DonTech. The
Company and each of the Company Subsidiaries, and, to the Company's knowledge,
DonTech have withheld or collected and paid over to the appropriate Governmental
Entities (or are properly holding for such payment) all
-18-
Taxes required by law to be withheld or collected. There are no Liens for Taxes
upon the assets of the Company or any of the Company Subsidiaries, or to the
Company's knowledge, DonTech (other than Liens for Taxes that are not yet due).
Neither the Company nor any of the Company Subsidiaries, or to the Company's
knowledge, DonTech (i) has any liability under Treasury Regulation Section
1.1502-6 or analogous state, local, or foreign law provision for the Taxes of an
entity other than the Company or any of the Company Subsidiaries or DonTech, as
applicable, or (ii) is a party to a Tax sharing or Tax indemnity agreement or
any other commitment of a similar nature with any entity other than the Company
or any of the Company Subsidiaries that remains in effect and under which the
Company or any of the Company Subsidiaries could have any material liability for
Taxes. No claim has been made by a taxing authority in a jurisdiction where the
Company or any of the Company Subsidiaries does not file Tax Returns that the
Company or any of the Company Subsidiaries is or may be subject to taxation by
that jurisdiction. To the Company's knowledge, no claim has been made by a
taxing authority in a jurisdiction where DonTech does not file Tax Returns that
DonTech is or may be subject to taxation by that jurisdiction. Neither the
Company nor any of the Company Subsidiaries or to the Company's knowledge,
DonTech is the subject of any currently ongoing audit or examination with
respect to a material amount of Taxes, nor, to the Company's knowledge, has any
such audit been threatened or proposed, by any taxing authority.
(q) ENVIRONMENTAL MATTERS. The Company, the Company
Subsidiaries and, to the Company's knowledge, DonTech (i) are in compliance with
all applicable statutes, rules, regulations, decisions or orders of any
Governmental Entity relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, "ENVIRONMENTAL
LAWS"), (ii) have not generated, manufactured, treated, stored or disposed of
any hazardous substances on any owned or operated (or previously owned or
operated) real property, except in compliance with Environmental Laws, (iii) are
not liable for any off-site disposal or contamination pursuant to any
Environmental Laws, and (iv) are not subject to any pending claims relating to
any Environmental Laws, which in each of clauses (i) through (iv) individually
or in the aggregate, would constitute a Material Adverse Effect.
(r) INTELLECTUAL PROPERTY. The Company, the Company
Subsidiaries and, to the Company's knowledge, DonTech license, own or possess,
or can acquire on reasonable terms, all patents, patent rights, licenses,
inventions, copy-rights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names, Internet domain names,
designs, logos, slogans and general intangibles of like nature, together with
goodwill, and registrations and applications relating to any of the foregoing,
as applicable ("INTELLECTUAL PROPERTY"), currently employed by them in
connection with the respective business now operated by them, except where the
failure to own or possess or otherwise be able to acquire such Intellectual
Property, individually or in the aggregate, would not constitute a Material
Adverse Effect. The Intellectual Property owned or used by the Company, the
Company Subsidiaries and, to the Company's knowledge, DonTech has been duly
maintained, is valid and subsisting, in full force and effect, and has not been
cancelled, expired or abandoned, except where such cancellation, expiration or
abandonment would not constitute a Material Adverse Effect. None of the Company,
the Company Subsidiaries or, to the Company's knowledge, DonTech has received
any notice of
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infringement of or conflict with asserted rights of others with respect to any
of such Intellectual Property which, singly or in the aggregate, which, if
determined adversely to the Company, would constitute a Material Adverse Effect.
(s) DGCL SECTION 203 AND RIGHTS AGREEMENT. The Board of
Directors of the Company has taken all action necessary to exempt from the
provisions of Section 203 of the Delaware General Corporation Law ("SECTION
203") and from being deemed an "Acquiring Person" under the Rights Agreement, to
the extent applicable, this Agreement, any acquisition by the Purchasers or
their Affiliates of the Preferred Shares or the Warrants pursuant to this
Agreement, the Warrants and the Certificate of Designations and any conversion
or exercise by the Purchasers or their Affiliates of the Preferred Shares or the
Warrants into Common Stock. No agreement or instrument to which the Company or
the Company Subsidiaries is a party or by which any of them is bound, and no
state statute similar to Section 203 that is applicable to the Company or the
Company Subsidiaries imposes any restrictions on business combinations or
similar transactions with interested stockholders of a nature similar to those
set forth in Section 203. True and correct copies of the resolutions heretofore
adopted by the Company's Board of Directors to implement the foregoing actions
with respect to Section 203 and the Rights Agreement, have been delivered to the
Purchasers and such resolutions are in full force and effect and have not been
amended or modified.
(t) COMMITMENTS. (i) This Agreement, the Ancillary Documents,
the Other Transaction Documents, the agreements, documents and instruments set
forth on SCHEDULE 3.01(t) and other schedules to this Agreement and all
documents referenced in or attached as exhibits to the Reports constitute, as of
the date of this Agreement all of the material contracts or agreements (whether
written or oral), including any amendments thereto, (A) to which the Company,
any Company Subsidiaries or, to the Company's knowledge, DonTech is a party or
(B) by or to which the Company, any Company Subsidiaries or any of their
properties or, to the Company's knowledge, DonTech or its properties may be
bound or subject (individually a "COMMITMENT" and collectively, the
"COMMITMENTS"). SCHEDULE 3.01(t) sets forth a complete and correct list of
Commitments of the following type:
Commitments relating to any Litigation;
Commitments containing covenants of the Company or any Company
Subsidiaries or any successor thereto not compete, not to engage in any line of
business or conduct business in any geographical area or with any Person, or not
to disclose certain information; and
Commitments with any Affiliate.
(ii) Complete and correct copies (or, if oral, full
written descriptions) of all Commitments required to be listed
on SCHEDULE 3.01(t), including all amendments thereto, have
been made available to the Purchasers. All of the Commitments
are valid, binding, in full force and effect and enforceable
in accordance with their respective terms by the Company, a
Company Subsidiary or, to the Company's knowledge, DonTech (as
the case may be) against the respective counter parties to
such Commitments, except where the failure to be valid,
binding, enforceable or in full force and effect does not
constitute a Material
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Adverse Effect. Except as set forth on SCHEDULE 3.01(t), (a)
there is no breach, violation or default and no event that,
with or without notice or the passage of time or both, would
constitute a breach, violation or default, or give rise to any
Lien or right of termination, modification, cancellation,
prepayment, suspension, limitation, revocation or acceleration
under, any Commitment, (B) none of the Company, the Company
Subsidiaries or, to the Company's knowledge, DonTech or any
other party to any of the Commitments is in arrears in respect
of the performance or satisfaction of the terms and conditions
on its part to be performed or satisfied under any of such
Commitments, and (C) no waiver thereunder has been granted by
any of the Parties thereto except in each of clauses (A)-(C)
where any such failure does not, individually or in the
aggregate, constitute a Material Adverse Effect.
(u) ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
the Reports or SCHEDULE 3.01(u) or the other Schedules to this Agreement, the
Company does not have any Liabilities other than (a) Liabilities reserved
against or otherwise disclosed in the Balance Sheet or the footnotes thereto,
(b) other Liabilities which were incurred after June 30, 2002 in the ordinary
course of business consistent (in amount and kind) with past practice (none of
which is a liability resulting from breach of contract, breach of warranty,
tort, infringement, claim or lawsuit) and which, individually or in the
aggregate, do not exceed $1,500,000 and (c) Liabilities incurred in connection
with this Agreement, the Ancillary Agreements and any Other Transaction
Document.
(v) DISCLOSURE. Neither this Agreement nor any other Ancillary
Document, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
(w) HOLDING COMPANY ACT AND INVESTMENT COMPANY ACT. Neither
the Company nor any of the Company Subsidiaries or, to the Company's knowledge,
DonTech is: (i) a "public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or an "affiliate"
of such a "subsidiary company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended, or (ii) a "public utility," as defined
in the Federal Power Act, as amended. None of the Company, any Company
Subsidiary or, to the Company's knowledge, DonTech is an "investment company" as
defined in the Investment Company Act of 1940, as amended or is controlled by or
under control with an Affiliate of, an "investment company."
(x) SOLVENCY. The Company is not, and after giving effect to
the issuance and sale of the Preferred Shares and the Warrants and the
application of the proceeds therefrom will not be, insolvent within the meaning
of Title 11 of the United States Code, the General Corporation Law of the State
of Delaware, or the General Laws of the State of New York.
(y) D&O INSURANCE. The Company maintains director and officer
liability insurance coverage in the aggregate amount of $100 million, which
policy has no per individual deductible.
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Section 3.02. REPRESENTATIONS AND WARRANTIES OF THE
PURCHASERS. Each Purchaser represents and warrants to, and agrees with, the
Company as follows:
(a) ORGANIZATION. Such Purchaser is a limited partnership duly
organized and validly existing under the laws of the state or country of its
jurisdiction of formation. Such Purchaser has the power and authority to execute
and deliver this Agreement and the Ancillary Documents to which it is a party
and perform its obligations hereunder and thereunder. The execution and delivery
of this Agreement and the Ancillary Documents to which it is a party and the
performance by such Purchaser of its covenants and agreements under this
Agreement and the Ancillary Documents to which it is a party have been duly and
validly authorized by the general partner of such Purchaser, and no further
proceedings on the part of such Purchaser are necessary to authorize the
execution, delivery and performance of this Agreement or the Ancillary Documents
to which it is a party or the consummation of the transactions contemplated
hereby and thereby. This Agreement and the Ancillary Documents to which such
Purchaser is a party have been duly executed and delivered by the Purchaser and
constitute the valid and binding agreements of such Purchaser, enforceable
against such Purchaser in accordance with their terms, except that (a) such
enforcement may be subject to any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws, now or hereafter in effect,
relating to or limiting creditors' rights generally, and (b) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(b) AUTHORIZATION; NO CONFLICTS. Neither the execution and
delivery of this Agreement or the Ancillary Documents to which such Purchaser is
a party nor the consummation of the transactions contemplated by this Agreement
or the Ancillary Documents to which such Purchaser is a party will (i) conflict
with or result in any breach of any provision of the organization documents or
by-laws of such Purchaser, (ii) except for the applicable requirements of the
HSR Act, require any filing with, or the obtaining of any permit, authorization,
consent or approval of, any Governmental Entity, (iii) violate, conflict with or
result in a default (or any event which, with notice or lapse of time or both,
would constitute a default) or require any consent under, or give rise to any
right of termination, cancellation or acceleration under, any of the terms,
conditions or provisions of any note, mortgage, other evidence of indebtedness,
guarantee, license, agreement, lease or other contract, instrument or obligation
to which such Purchaser is a party or by which such Purchaser or any of its
assets may be bound, or (iv) violate any order, injunction, decree, statute,
rule or regulation applicable to such Purchaser, excluding from the foregoing
clauses (ii), (iii) and (iv) such requirements, violations, conflicts, defaults
or rights that would not adversely affect the ability of such Purchaser to
consummate the transactions contemplated by this Agreement.
(c) BROKERS AND FINDERS. Neither such Purchaser nor any of its
officers, directors, employees or agents has utilized any broker, finder,
placement agent or financial advisor or incurred any liability for any fees or
commissions in connection with any of the transactions contemplated hereby or by
the Ancillary Documents.
(d) Investment Representations.
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(i) Such Purchaser is an "accredited investor" within
the meaning of Rule 501 of Regulation D promulgated under the
Securities Act and was not organized for the specific purpose
of acquiring the Preferred Shares or the Warrants;
(ii) such Purchaser has sufficient knowledge,
sophistication and experience in financial and business
matters as are necessary to evaluate the risks and merits of
an investment in the Company;
(iii) such Purchaser has had an opportunity to
discuss the Company's business, management and financial
affairs with the Company's management;
(iv) the Preferred Shares and the Warrants being
acquired by such Purchaser are being acquired for its own
account for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof; and
(v) such Purchaser understands that (A) none of the
Preferred Shares, the shares of Common Stock issuable upon
conversion or redemption thereof, the Warrants or the shares
of Common Stock issuable upon the exercise thereof have been
registered under the Securities Act and are being offered and
sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (B) the
Preferred Shares, the shares of Common Stock issuable upon
conversion or redemption thereof, the Warrants and the shares
of Common Stock issuable upon the exercise thereof must be
held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such
registration, (C) the Preferred Shares, the shares of Common
Stock issuable upon conversion or redemption thereof, the
Warrants and the shares of Common Stock issuable upon the
exercise thereof will bear a legend to such effect, as
applicable, and (D) the Company will make a notation on its
transfer books to such effect.
ARTICLE IV. COVENANTS OF THE PARTIES
Section 4.01. TAKING OF NECESSARY ACTION. Each of the parties
hereto shall use its reasonable best efforts promptly to take or cause to be
taken all action and promptly to do or cause to be done all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement. Without limiting the
foregoing, the Company and each Purchaser will, and the Company shall cause each
Company Subsidiary to, use its reasonable best efforts to make all filings
(including, without limitation, under the HSR Act) and obtain all consents of
Governmental Entities which may be necessary or, in the reasonable opinion of
the Purchasers or the Company, as the case may be, advisable for the
consummation of the transactions contemplated by this Agreement and the
Ancillary Documents and with respect to the Company and the Company
Subsidiaries, any Other Transaction Document and all third party consents and
filings set forth in SCHEDULE 4.01.
Section 4.02. CONDUCT OF BUSINESS. (a) Except as otherwise
required to perform its obligations under this Agreement or any agreement
contemplated herein, as set forth in SCHEDULE 4.02, or as otherwise agreed to in
writing by the Purchasers, from the date hereof to the
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Closing Date, the Company shall, and shall cause each Company Subsidiary to (i)
conduct its business only in the ordinary course and consistent with past
practice; (ii) use its reasonable best efforts to preserve and maintain its
assets and properties and its relationships with its customers, suppliers,
clients, advertisers, distributors, agents, officers and employees and other
Persons with which it has significant business dealings; (iii) use its
reasonable best efforts to maintain all of the material assets it owns or uses
in the ordinary course of business consistent with past practice; (iv) use its
reasonable best efforts to preserve the goodwill and ongoing operations of its
business; (v) maintain its books and records in the usual, regular and ordinary
manner, on a basis consistent with past practice; (vi) perform and comply in all
material respects with its Commitments; (vii) maintain insurance in full force
and effect with respect to its business with responsible companies, comparable
in amount, scope and coverage to that in effect on the date of this Agreement;
and (viii) comply in all material respects with applicable laws.
(b) Except as expressly contemplated by this Agreement or as
set forth on SCHEDULE 4.02, between the date hereof and the Closing Date, the
Company shall not, and shall cause each Company Subsidiary not to, do any of the
following without the prior written consent of the Purchasers:
(i) amend or in any way alter its Certificate of
Incorporation or By-laws;
(ii) engage in any other act, other than in the ordinary
course of business and consistent with past practice, that
would constitute a Material Adverse Effect or in any way delay
or impair consummation of the transactions contemplated by
this Agreement, the Ancillary Documents or any Other
Transaction Agreement;
(iii) change the number of shares of the authorized or
issued capital stock of the Company, issue or grant any
option, warrant, call, commitment, subscription, right to
purchase or agreement of any character relating to the
authorized or issued capital stock of the Company or any
Company Subsidiary, or any securities convertible into shares
of such stock (except for grants of options to purchase Common
Stock granted pursuant to employee benefit plans of the
Company not to exceed the amount set forth in SCHEDULE 4.02
and, other than the issuance of equity securities in
connection with the Senior Credit Facility, the Senior
Subordinated Credit Facility and/or the Senior Subordinated
Notes for which an adjustment is made pursuant to SECTION
2.04), split, combine or reclassify any shares of the capital
stock of the Company, declare, set aside or pay any dividend
or other distribution (whether in cash, stock or property or
any combination thereof) in respect of the capital stock of
the Company, or redeem or otherwise acquire any shares of such
capital stock, other than open market purchases of Common
Stock not in excess of the lesser of $25 million or 25% of the
Company's Net Income for the immediately preceding twelve
months in any given twelve month period;
-24-
(iv) issue any equity securities other than the issuance
of equity securities in connection with the Senior Credit
Facility or the Senior Subordinated Credit Facility for which
an adjustment is made pursuant to SECTION 2.04.;
(v) enter into any transaction or incur any liability or
obligation, except in the ordinary course of business;
(vi) sell, transfer or otherwise dispose of any assets,
except in the ordinary course of business;
(vii) incur any Lien (other than a Permitted Lien) or
indebtedness other than (A) indebtedness to trade creditors
incurred in the ordinary course of business or (B) pursuant to
the Senior Credit Facility or the Senior Subordinated Credit
Facility, or vary the terms of any existing Lien or
indebtedness;
(viii) change its independent accountants, accounting
policies or procedures;
(ix) acquire any assets other than in the ordinary and
usual course of business;
(x) enter into an Employee Agreement with any Employee
(other than an agreement terminable at will without any
financial penalty), vary the terms of any Company Plan in any
material way or grant any material increase in the
compensation (including employee benefits) of any Employee,
except for increases or variances (A) in the ordinary course
of business and consistent with past practice, (B) as a result
of collective bargaining, or (C) as required by any employment
or other agreement, policy or plan currently in effect;
(xi) do any other act which is reasonably likely to cause
any representation or warranty in this Agreement to be or
become untrue in any material respect;
(xii) transfer, grant, amend or knowingly terminate any of
its rights under any of the Company's Intellectual Property
other than in the ordinary course of business consistent with
past practices;
(xiii) enter into any transactions or agreements of any
kind with any of its Affiliates, other than with any Company
Subsidiary or between any Company Subsidiaries, including the
making of any loans, advances or investments to or in such
entity, except for transactions or agreements on terms at
least as favorable to the Company entering into such
transactions or agreements as the terms which would be
available with independent third parties at arm's length;
(xiv) make any change in the Company's or any Company
Subsidiary's Tax accounting methods, any new election with
respect to Taxes or any
-25-
modification or revocation of any existing election with
respect to Taxes or settle or otherwise dispose of any Tax
audit, dispute, or other Tax proceeding; or
(xv) agree to take any of the actions restricted by this
SECTION 4.02.
Section 4.03. FINANCIAL STATEMENTS AND OTHER REPORTS. Subject
to SECTION 4.06, the Company covenants that, from and after the Closing Date, it
will deliver to each Purchaser:
(a) as soon as practicable and in any event no later than the
day that a Form 10-Q is required to be filed by the Company with the SEC
following each quarterly period (other than the last quarterly period) in each
fiscal year, consolidated statements of operations, statements of stockholders'
equity and cash flows of the Company for the period from the beginning of the
then current fiscal year to the end of such quarterly period, and a consolidated
balance sheet of the Company as of the end of such quarterly period setting
forth in each case in comparative form figures for the corresponding period or
date in the preceding fiscal year, together with a certificate from a senior
officer of the Company to the effect that such financial statements have been
prepared in accordance with GAAP consistently applied during the periods
involved (subject to year-end adjustments) and that such financial statements
fairly present the results of operations and changes in financial position,
stockholders' equity, cash flows and financial position of the Company and the
Company Subsidiaries as of and for the period then ended (such certificate, the
"SENIOR OFFICER'S CERTIFICATE"); provided, however, that delivery pursuant to
SECTION 4.03(c) of a copy of the Company's periodic report on Form 10-Q or such
period filed with the SEC shall be deemed to satisfy the requirements of this
SECTION 4.03(a);
(b) as soon as practicable and in any event no later than the
day that a Form 10-K is required to be filed by the Company with the SEC
following the end of each fiscal year, a consolidated balance sheet of the
Company as of the end of such fiscal year and the related consolidated
statements of operations, statements of stockholders' equity and cash flows for
such fiscal year, setting forth in each case in comparative form the
corresponding figures from the preceding fiscal year, together with the audit
report of PricewaterhouseCoopers LLP or other independent public accountants of
recognized standing selected by the Company; provided, however, that delivery
pursuant to SECTION 4.03(c) below of a copy of the Annual Report on Form 10-K of
the Company for such fiscal year filed with the SEC shall be deemed to satisfy
the requirements of this SECTION 4.03(b); and
(c) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall send to
its stockholders and copies of all such registration statements, other than
registration statements relating to employee benefit or dividend reinvestment
plans, and all such regular and periodic reports on Forms 10-K, 10-Q and 8-K (or
similar or substitute forms) as it shall file with the SEC.
Section 4.04. RESTRICTED ACTIONS. Subject to SECTION 4.06,
from and after the Closing Date, the Company shall not, and shall not permit any
Company Subsidiary to, directly or indirectly, take any of the following actions
without the prior written consent of at least a majority of the then-outstanding
Preferred Shares or the affirmative vote in person or by proxy at a meeting
called for that purpose of the holders of at least a majority of the Preferred
Shares voting thereat:
-26-
(a) sell, lease, transfer or otherwise dispose of any asset or
assets of the Company or Company Subsidiaries, including the capital stock of
any Company Subsidiary, other than a disposition of all or substantially all of
the Company's assets in a transaction governed by Section 271 of the Delaware
General Corporation Law, unless (i) the aggregate net proceeds received in
connection with all of such transactions in any given twelve-month period
(whether paid in cash or property) does not exceed $115 million, or (ii) such
transaction is between the Company or its wholly owned Company Subsidiary, on
the one hand, and any other wholly owned Company Subsidiary, on the other hand;
(b) enter into or suffer to exist any contract, agreement,
arrangement or transaction with any Affiliate (other than DonTech, any Company
Subsidiary, and any company that is acquired pursuant to the Other Transaction
Documents), officer, director or stockholder holding greater than 5% of the
Company's outstanding Common Stock (an "AFFILIATE TRANSACTION"), unless such
Affiliate Transaction (i) is determined by a majority of the Board of Directors
to be fair and reasonable to the Company, and no less favorable to the Company
than could have been obtained in an arm's length transaction with a third party,
and (ii) is approved by a majority of the members of the Board of Directors that
are disinterested in such transaction;
(c) materially alter its principal line of business as
conducted on the Closing Date;
(d) incur, create, guarantee, become or be liable in any
manner with respect to or permit to exist (other than pursuant to the Other
Transaction Documents) any Indebtedness (as such term will be defined by the
parties prior to the Closing Date) if the Leverage Ratio (as such term will be
defined by the parties prior to the Closing Date), as at such time, is greater
than 5.0 to 1.0; provided, however, that nothing in this SECTION 4.04(d) shall
prohibit the Company from incurring up to $25 million of Indebtedness in any
given twelve-month period;
(e) acquire (by merging or consolidating with, or by
purchasing an equity interest in or a portion of the assets of, or by any other
manner) any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any assets in excess of $100 million in any given twelve-month period,
other than inventory and other assets to be sold or used in the ordinary course
of business;
(f) amend the Certificate of Incorporation of the Company to
authorize the creation or issuance, or the increase in the authorized amount, of
the Preferred Stock, any Parity Securities (as defined in the Certificate of
Designations) or Senior Securities (as defined in the Certificate of
Designations), or to authorize the creation or issuance of securities
convertible into or exchangeable for, or options, warrants or other rights to
acquire, the Preferred Stock, any Parity Securities or Senior Securities;
(g) reclassify any series of Junior Securities (as defined in
the Certificate of Designations) as Senior Securities or Parity Securities;
(h) amend, repeal or change (whether by merger, consolidation
or otherwise) any of the provisions of the Certificate of Incorporation or
By-laws of the Company or the provisions of the Certificate of Designations or
the Warrants in any manner that would alter or
-27-
change the powers, preferences or rights of the shares of the Preferred Stock or
the Warrants, as the case may be, so as to affect them adversely, or otherwise
restrict the rights, preferences or privileges of the Preferred Stock or the
Warrants;
(i) pay or declare any dividend or distribution on any shares
of its capital stock (other than dividends on the Common Stock payable in
additional shares of Common Stock) or apply any of its assets to the redemption,
retirement, purchase or acquisition, directly or indirectly, through Company
Subsidiaries or otherwise, of any shares of its capital stock (other than (A)
redemptions, retirements, purchases or acquisitions of the Preferred Stock in
accordance with the terms of the Certificate of Designations, and (B) (x) the
repurchase of shares of Common Stock from employees or former employees of the
Company who acquired such shares directly from the Company and which repurchases
are approved by a majority of the board of directors and (y) open market
purchases, which, in the case of both (x) and (y) taken together are not in
excess of the lesser of $25 million or 25% of the Company's Net Income for the
immediately preceding twelve months in any given twelve-month period);
(j) sell, offer for sale or solicit offers to buy any security
(as defined in the Securities Act) that would be integrated with the sale of the
Preferred Shares and the Warrants in a manner that would require the
registration under the Securities Act of the sale of the Preferred Shares and
the Warrants to the Purchasers or any Affiliate of the Purchasers;
(k) prior to the 18-month anniversary of the Closing Date,
issue any equity securities (or securities exchangeable for or convertible into
equity securities, or any options, warrants, rights to subscribe to, scrip
calls, contracts, undertakings, arrangements or commitments to issue which may
result in the issuance of equity securities of the Company) other than a
Permitted Issuance (as defined in the Certificate of Designations);
(l) increase the number of directors comprising the board of
directors to more than ten directors; or
(m) amend, modify or supplement any provision of the Rights
Agreement in a manner that adversely affects the rights and benefits of any
Purchaser under any such provision.
Section 4.05. REQUIRED ACTIONS. Subject to SECTION 4.06, from
and after the Closing Date, the Company shall and, where applicable, shall cause
each Company Subsidiary to:
(a) use its reasonable best efforts to maintain at all times a
valid listing for the Common Stock on the NYSE or another national securities
exchange;
(b) maintain and keep its properties in good repair, working
order and condition, and from time to time make all necessary or desirable
repairs, renewals and replacements;
(c) maintain or cause to be maintained with financially sound
and reputable insurers that have a rating of "A" or better as established by
Best's Rating Guide (or an equivalent rating with such other publication of a
similar nature as shall be in current use), (i) public liability and property
damage insurance with respect to their respective businesses and
-28-
properties against loss or damage of the kinds and in amounts customarily
carried or maintained by companies of established reputation engaged in similar
businesses and (ii) directors' and officers' liability insurance providing at
least the same coverage and amounts and containing terms and conditions which
are not less advantageous in any material respect, in each case than the
directors' and officers' liability insurance maintained by the Company as of the
Closing Date;
(d) pay and discharge when due all Tax liabilities,
assessments and governmental charges or levies imposed upon its properties or
upon the income or profits therefrom (in each case before the same become
delinquent and before penalties accrue thereon), unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP, consistently applied, are being maintained by the Company;
(e) at all times cause to be done all things necessary to
maintain, preserve and renew all Permits required for the conduct of its
respective business;
(f) comply with all applicable laws, rules and regulations of
all Governmental Entities, the violation of which would constitute a Material
Adverse Effect;
(g) maintain proper books of record and account which present
fairly in all respects its financial condition and results of operations and
make provisions on its financial statements for all such proper reserves as in
each case are required in accordance with GAAP, consistently applied;
(h) reserve and keep available out of its authorized shares of
Common Stock, solely for the purposes of issuance upon conversion of the
Preferred Shares and exercise of the Warrants, such number of shares of Common
Stock as are issuable upon the conversion of all outstanding Preferred Shares
and exercise of all Warrants as such number may change from time to time; and
(i) use its reasonable best efforts to at all times file all
reports (including annual reports, quarterly reports and the information,
documentation and other reports) required to be filed by the Company under the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder, and the Company shall use its reasonable best efforts to file each
of such reports on a timely basis, all to the extent required to enable such
holders to sell securities pursuant to Rule 144 promulgated under the Securities
Act (as such rule may be amended from time to time) or any similar rule or
regulation hereafter adopted by the SEC and to enable the Company to register
securities with the SEC on Form S-3 or any similar short-form registration
statement.
Section 4.06. TERMINATION OF OBLIGATIONS. The obligations of
the Company set forth in SECTION 4.03, SECTION 4.04 and SECTION 4.05 (other than
the obligations set forth in SECTION 4.04(h) and SECTION 4.05(h)) shall
terminate and no longer be of any effect from and after such time as the
Purchasers no longer have the right pursuant to the Certificate of Designations
to elect a Director of the Company.
Section 4.07. INSPECTION OF PROPERTY. Until the Closing Date
or the earlier termination of this Agreement, the Company will permit
representatives of the Purchasers to visit
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and inspect any of the properties of the Company or any of the Company
Subsidiaries, to examine the corporate books, records, agreements and files of
the Company and make copies or extracts therefrom and to request information at
reasonable times and intervals concerning the general status of the Company's
financial condition and operations, all upon reasonable notice and at such
reasonable times and as often as such Purchaser may reasonably request. The
Purchasers will, and will instruct each of their respective Affiliates,
associates, partners, employees, agents and advisors to, hold in confidence all
such information as is confidential or proprietary, will use such information
only in connection with the purchase of the Preferred Shares and the Warrants in
accordance with this Agreement and, if this Agreement is terminated in
accordance with its terms, will deliver promptly to the Company all copies of
such information (and any copies, compilations or extracts thereof or based
thereon) then in their possession or under their control.
Section 4.08. LOST, STOLEN, DESTROYED OR MUTILATED SECURITIES.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of any certificate for any security of the Company
and, in the case of loss, theft or destruction, upon delivery of an undertaking
by the holder thereof to indemnify the Company (and, if requested by the
Company, the delivery of an indemnity bond sufficient in the judgment of the
Company to protect the Company from any loss it may suffer if a certificate is
replaced), or, in the case of mutilation, upon surrender and cancellation
thereof, the Company will issue a new certificate for an equivalent number of
shares or warrants.
Section 4.09. LISTING. The Company shall promptly secure the
listing of all of the Registrable Shares (as defined in the Registration Rights
Agreement), other than any shares of the Preferred Stock and the Warrants, upon
each national securities exchange and automated quotation system (as applicable,
the "PRINCIPAL MARKET"), if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all
Registrable Shares from time to time issuable under the terms of the Certificate
of Designations. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this SECTION 4.09.
Section 4.10. RESTRICTIONS ON SALE OR TRANSFER; LEGEND. No
Purchaser will, directly or indirectly, offer, sell, transfer, assign, pledge,
hypothecate or otherwise dispose of the beneficial ownership of (any such act, a
"TRANSFER") any Preferred Shares or Warrants prior to the first anniversary of
the Closing Date, except for, and subject in each case to compliance with all
applicable requirements of law and the receipt of any necessary governmental
approvals, (i) a Transfer by any Purchaser to an Affiliate of such Purchaser or
a Designated Transferee, provided that prior to such Transfer each such
transferee consents in writing with the Company to be bound by the restrictions
on transfer set forth in this SECTION 4.10 and assumes all other rights and
obligations of the Purchasers under this Agreement and the Registration Rights
Agreement; (ii) a Transfer to the Company or to a wholly owned direct or
indirect subsidiary of the Company; (iii) a Transfer pursuant to a merger or
consolidation in which the Company is a constituent corporation; (iv) a Transfer
pursuant to a bona fide third party tender offer or exchange offer; (v)
redemptions and conversions of the Preferred Shares in accordance with the terms
of the Certificate of Designations; and (vi) exercise of the Warrants in
accordance with their terms. From and after the first anniversary of the Closing
Date none of the foregoing restrictions on
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Transfer shall apply, so long as such Transfer is made in compliance with all
applicable requirements of law and any necessary governmental approvals have
been obtained.
(b) The Purchasers acknowledge and agree that as of the date
hereof none of the Preferred Shares, the shares of Common Stock issuable upon
conversion thereof, the Warrants or the shares of Common Stock issuable upon the
exercise thereof have been nor will be registered under the Securities Act or
the securities laws of any state and that they may be sold or otherwise disposed
of only in one or more transactions registered under the Securities Act and,
where applicable, such laws or as to which an exemption from the registration
requirements of the Securities Act and, where applicable, such laws, is
available. The Purchasers acknowledge that, except as provided in the
Registration Rights Agreement, the Purchasers have no right to require the
Company to register the Preferred Shares, the shares of Common Stock issuable
upon conversion thereof, the Warrants or the shares of Common Stock issuable
upon exercise thereof. The Purchasers further acknowledge and agree that each
certificate for the Preferred Shares and the Warrants shall bear the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE SUCH A
REGISTRATION IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS. THIS CERTIFICATE IS ISSUED
PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A PREFERRED STOCK AND WARRANT PURCHASE
AGREEMENT DATED AS OF SEPTEMBER 21, 2002 BETWEEN THE COMPANY
AND THE PURCHASERS REFERRED TO THEREIN, A COPY OF WHICH IS ON
FILE WITH THE COMPANY. EXCEPT AS PROVIDED IN SUCH PREFERRED
STOCK AND WARRANT PURCHASE AGREEMENT, THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE NOT TRANSFERABLE AND ANY
PURPORTED TRANSFER IN VIOLATION OF THE PROVISIONS OF SUCH
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT SHALL BE VOID
AND OF NO FORCE AND EFFECT.
(c) Any holder of the Preferred Shares or the Warrants may
request the Company to remove the legend described herein from the certificates
evidencing such Preferred Shares or Warrants by submitting to the Company such
certificates, together with an opinion of counsel reasonably satisfactory to the
Company to the effect that such legend is no longer required under the
Securities Act or this Agreement.
Section 4.11. NOTICE OF BREACH. From the date hereof through
the Closing Date, as promptly as practicable, and in any event not later than
five business days after the Company becomes aware thereof, the Company shall
provide the Purchasers with written notice of (a) any representation or warranty
of the Company contained in this Agreement, the Ancillary Documents or any Other
Transaction Document being untrue or inaccurate in any material respect at any
time from the date hereof to the Closing Date, or (b) any failure of the Company
to comply with or satisfy in any material respect any covenant, condition or
agreement to be
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complied with or satisfied by the Company under this Agreement, the Ancillary
Documents or any Other Transaction Document; provided, however, that the
delivery of any notice pursuant to this SECTION 4.11 shall not limit or
otherwise affect the remedies available to the Purchasers, or modify in any way
any disclosure made in this Agreement, the Ancillary Documents or any Other
Transaction Document or the schedules hereto or thereto as of the date hereof.
Section 4.12. NON-DISCLOSURE; INTERIM PUBLIC FILINGS. Subject
to SECTION 8.05, the Company shall deliver to the Purchasers complete and
correct copies of all press releases and public filings made between the date
hereof and the Closing Date. The Company shall not disclose the name or identity
of any of the Purchasers as a Purchaser without the prior written consent of
such Purchaser, except in connection with the Company's filing of a Form 8-K
under the Exchange Act, as a result of this Agreement, the Ancillary Documents
or any Other Transaction Document or the transactions contemplated hereby and
thereby, or other similarly required Exchange Act reports or is required by
applicable law or the rules or regulations of any exchange on which securities
of the Company are listed or traded, in which case prior to making such
disclosure the Company shall give written notice to such Purchaser, describing
in reasonable detail the proposed content of such disclosure, shall permit such
Purchaser to review and comment upon the form and substance of such disclosure
and shall take such comments into account (but shall not be required to accept
such comments) in making such disclosure.
Section 4.13. GOVERNANCE RIGHTS. (a) (i) The Purchasers shall
be entitled to elect directors as set forth in the Certificate of Designations.
(ii) In addition, if the Purchasers convert Preferred Stock following delivery
by the Company of a notice of redemption in accordance with the provisions of
Section 5(a) of the Certificate of Designations, such conversion shall not
affect their rights to designate directors and in such case, the Purchasers
shall continue to be entitled to designate directors as and to the extent they
would have had such rights had the Purchasers not converted any Preferred Stock
beneficially owned by them, namely that at such time, (x) as the outstanding
shares of Common Stock then owned by the Purchasers, their respective Affiliates
or any Designated Transferees constitutes less than 50% of the number of shares
of Common Stock beneficially owned by them immediately after the Closing Date
(as such number may be adjusted for stock dividends, stock splits, combinations
and recapitalizations and other similar events), the number of directors the
Purchasers are then entitled to designate and elect under this SECTION
4.13(a)(ii) shall be reduced by one; and (y) as the outstanding shares of Common
Stock then owned by the Purchasers, their respective Affiliates or any
Designated Transferees constitutes less than 15% of the number of shares of
Common Stock beneficially owned by them immediately after the Closing Date (as
such number may be adjusted for stock dividends, stock splits, combinations and
recapitalizations and other similar events), the Purchasers shall not be
entitled to designate or elect any directors under this SECTION 4.13(a)(ii). No
conversion of Preferred Stock shall result in any Purchaser Designee being
required to resign or be removed from the board of directors prior to the
expiration of his then applicable term. To the extent Purchaser Designees are to
be members of any class of directors, the identity of such class shall be as
reasonably requested by the Purchasers. (iii) For so long as GSCP 2000 and its
Affiliates collectively beneficially own a number of shares of Common Stock
(which beneficial ownership shall assume immediate convertibility of all shares
of Preferred Stock then owned) that is not less than 7.5% of the number of
shares of Common Stock beneficially owned (which beneficial ownership shall
assume immediate convertibility of all shares of Preferred Stock then owned) by
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them immediately after the Closing (as such number may be adjusted for stock
dividends, stock splits, combinations and recapitalizations and other similar
events), GSCP 2000 shall have the right to designate, at all times and from time
to time, one non-voting observer to the board of directors.
(b) At any time the Purchasers shall be entitled to designate
a Purchaser Designee (or a replacement therefor), the Company shall exercise all
authority under applicable law to cause any slate of directors presented to
stockholders for election of directors to the board of directors to contain such
Purchaser Designee(s) and use its reasonable best efforts to have such Purchaser
Designee(s) elected to the board of directors.
(c) Prior to the Closing, each of the Company and the board of
directors shall take such action as may be necessary (including seeking any
necessary vote or approval of any stockholder of the Company, taking any action
necessary to expand the size of the board of directors, or causing any existing
director to resign in order to make room for the Purchaser Designees) to cause
the Purchaser Designees to be elected to the board of directors.
(d) Purchasers and the Company agree that one Purchaser
Designee shall have the right, subject to compliance with applicable NYSE and
SEC rules and regulations, to sit on each Committee of the board of directors.
(e) If requested by a majority of the Purchasers, the Company
will use its best efforts (in accordance with the certificate of incorporation
and by-laws of the Company and the DGCL) to cause the removal of any Purchaser
Designee (in accordance with the certificate of incorporation and by-laws of the
Company and the DGCL). If any vacancy among the Purchaser Designees caused by
removal or by the death, retirement or resignation of any Purchaser Designee
exists, the Purchasers shall have the right to designate a replacement director
for such Purchaser Designee and the Company shall exercise all authority under
applicable law to cause such replacement director to be duly elected as a
director of the Company. In the event that the term of any director who at such
time is a Purchaser Designee is to expire, then in connection with any meeting
of the Company's stockholders at which a successor to such director is to be
elected, the Company shall nominate a Purchaser Designee designated by the
Purchasers and shall recommend that stockholders vote in favor of such
individual's election to the board of directors in any proxy statement,
information statement or other communication to stockholders issued or
disseminated by the Company. In the event of any vacancy among the Purchaser
Designees, the board of directors shall not take any action not approved by the
remaining Purchaser Designee (or by the Purchasers if there be no remaining
Purchaser Designee) during the period from the time the Purchasers inform the
Company of a designee to fill any such vacancy to the time such designee is duly
appointed or elected to the board of directors. Whenever the number of directors
that the Purchasers have the right to designate is reduced in accordance with
the Certificate of Designations, the Purchaser will cause the appropriate number
of Purchaser Designee(s) to promptly tender their resignation(s) from the board
of directors.
(f) At any time GSCP 2000 shall be entitled to designate a
non-voting observer to the board of directors, the Company shall permit any such
non-voting observer to attend each meeting of the board of directors of the
Company and each meeting of any committee thereof and to participate in all
discussions during each such meeting; provided, however, that the
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Company reserves the right to exclude such non-voting observers from access to
any material or meeting or portion thereof if the Company believes that such
exclusion is reasonably necessary to preserve the attorney-client privilege or
to protect confidential proprietary information. The Company shall send to the
non-voting observers the notice of the time and place of such meeting in the
same manner and at the same time as it shall send such notice to its directors
or committee members, as the case may be. The Company shall also provide to the
non-voting observers copies of all notices, reports, minutes and consents at the
time and in the manner as they are provided to the board of directors or
committee, except for information reasonably designated as proprietary
information reasonably designated as proprietary information by the board of
directors. At any time GSCP 2000 shall be entitled to designate a non-voting
member to the board of directors, GSCP 2000 shall also be entitled to consult
with and advise management of the Company on significant business issues,
including management's proposed annual operating plans, and management will meet
with representatives of GSCP 2000 at the Company's facilities at mutually
agreeable times for such consultation and advice, including to review progress
in achieving said plans. Upon notice given by GSCP 2000 to the Company, the
Company shall commence to give GSCP 2000 reasonable advance written notice of
any significant new initiatives or material changes to existing operating plans
and shall afford GSCP 2000 adequate time to meet with management to consult on
such initiatives or changes prior to implementation.
(g) Notwithstanding SECTION 4.13(f), for so long as any
Purchaser holds any Preferred Shares, the Company shall provide to the
Purchasers copies of all notices, reports, minutes and consents at the time and
in the manner as they are provided to the board of directors or committee,
except for information reasonably designated as proprietary information by the
board of directors.
(h) The rights set forth in this SECTION 4.13 are intended to
satisfy the requirement of contractual management rights for purposes of
qualifying GSCP 2000's interests in the Company as venture capital investments
for purposes of the Department of Labor's "plan assets" regulations, and in the
event such rights are not satisfactory for such purposes, GSCP 2000, the Company
and the Purchasers shall reasonably cooperate in good faith to agree upon
mutually satisfactory management rights which satisfy such regulations.
Section 4.14. OTHER TRANSACTION DOCUMENTS. The Company shall
keep Purchasers fully informed of, provide Purchasers will copies of all drafts
of, and discuss with the Purchasers on a timely basis, each of the Other
Transaction Documents and shall not, without the prior written consent of each
Purchaser, (i) execute any of the Other Transaction Documents to be executed
after the date hereof or (ii) amend, waive, supplement or modify any provisions
of any of the Other Transaction Documents executed on or prior to the date
hereof.
Section 4.15. TRANSFER TAXES. The Company shall be responsible
for any Liability with respect to any transfer, stamp or similar non-income
Taxes that may be payable in connection with the execution, delivery and
performance of this Agreement including, without limitation, any such Taxes with
respect to the issuance of the Preferred Shares or shares of Common Stock
issuable upon conversion thereof.
Section 4.16. DIVIDENDS. The Company agrees that, after the
tenth anniversary of the Closing Date, it shall pay cash dividends on the
Preferred Stock on a current basis so long as
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it is not precluded from doing so under law. In furtherance thereof, the Company
shall refrain from entering into any agreements which would preclude such
payments, seek a waiver under any agreements which would prevent such payments
at any time and take whatever actions are necessary, including revaluing assets,
to create surplus for the purpose of paying such dividends.
Section 4.17. CERTAIN INFORMATION RIGHTS. Between the date
hereof and the Closing Date, the Company shall inform the Purchasers promptly of
any inquiries, discussions, offers or proposals for, or negotiations looking
toward, any purchase or other acquisition of any of the capital stock of or
equity interests in (whether newly issued or currently outstanding) the Company
or any of the Company Subsidiaries; and the Company shall provide promptly to
the Purchasers copies of any written documents prepared by or received by the
Company or its advisors in connection therewith.
ARTICLE V. CONDITIONS
Section 5.01. CONDITIONS OF PURCHASE. The obligations of each
Purchaser to purchase the Preferred Shares and the Warrants at the Closing are
subject to satisfaction or waiver of each of the following conditions on or
prior to the Closing Date:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties of the Company contained in this Agreement and
the Ancillary Documents shall be true and correct in all material respects
(disregarding for these purposes any materiality, Material Adverse Effect or
corollary qualifications contained therein) on and as of the date of this
Agreement or the date of such Ancillary Documents, as the case may be, and on
and as of the Closing Date with the same effect as though made on and as of such
date, and the Company shall have performed all obligations and complied with all
agreements, undertakings, covenants and conditions required hereunder and
thereunder to be performed by it at or prior to the Closing.
(b) NO INJUNCTION. There shall not be in effect any statute,
rule, order, decree or injunction of a court or agency of competent jurisdiction
which enjoins or prohibits consummation of the transactions contemplated hereby.
(c) REGULATORY APPROVALS. All permits, consents,
authorizations, orders and approvals of, and filings and registrations required
under any federal or state law, rule or regulation for or in connection with the
execution and delivery of this Agreement and the Ancillary Documents and the
consummation by the parties hereto of the transactions contemplated on such
parties' part hereby and thereby shall have been obtained or made and all
statutory waiting periods thereunder in respect thereof shall have expired,
including without limitation, any waiting periods under the HSR Act.
(d) COMPANY CERTIFICATE. The Company shall have delivered to
the Purchasers a certificate, dated the Closing Date, signed by its chief
executive officer and its chief financial officer, in form and substance
reasonably satisfactory to the Purchasers to the effect that the conditions set
forth in this SECTION 5.01 have been satisfied (the "COMPANY CERTIFICATE").
(e) REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement shall have been executed and delivered by the parties thereto and
shall be in full force and effect.
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(f) CERTIFICATE OF DESIGNATIONS. The Certificate of
Designations shall have been duly filed with the Secretary of State of Delaware
and shall have become effective and shall be in full force and effect.
(g) CERTAIN TRANSACTION DOCUMENTS. (A) the Other Transaction
Documents executed prior to or simultaneously with this Agreement shall not have
been amended, modified, supplemented, or provisions thereof waived, in violation
of SECTION 4.14, (b) the Other Transaction Documents a form of which is attached
to an Other Transaction Document executed prior to or simultaneously with this
Agreement shall, at the time of execution thereof, be in all material respects
in the form as so attached (and the documentation pursuant to which the Special
Purpose Vehicle Term Sheet (as defined in the Sprint Purchase Agreement) shall
give effect in all material respects to the terms set forth in such Term Sheet
and be otherwise reasonably satisfactory to the Purchasers), and (C) the
Purchasers shall be satisfied in their sole discretion with the form and
substance of any other of the Other Transaction Documents to be prepared after
the execution of this Agreement.
(h) OTHER TRANSACTIONS. The transactions contemplated by the
Other Transaction Documents that by their terms are to be completed prior to or
concurrently with the Closing (which shall include, without limitation, the
Sprint Transaction) shall have been completed immediately prior to or
concurrently with the Closing in accordance with the terms and provisions of the
applicable Other Transaction Document.
(i) LEGAL OPINION. The Purchasers shall have received, dated
the Closing Date and addressed to each Purchaser, an opinion of ▇▇▇▇▇, Day,
▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Company, substantially in the form attached
hereto as EXHIBIT E.
(j) SIMULTANEOUS CLOSING BY OTHER PURCHASERS. Each other
Purchaser shall concurrently purchase and pay for the Preferred Shares and the
Warrants set forth opposite its name in SCHEDULE A.
(k) DIRECTORS. The Purchaser Designees shall have been elected
to the Board of Directors of the Company, effective as of the Closing and the
Board of Directors of the Company shall consist of no more than ten directors.
(l) MATERIAL ADVERSE CHANGE. There shall not have occurred
since December 31, 2001 any event or occurrence which has resulted in or could
reasonably be expected to result in any material adverse change in the business,
assets, operations, properties, condition (financial or otherwise), prospects,
contingent liabilities or material agreements of the Company and the business
acquired pursuant to the Sprint Transaction, taken as a whole.
(m) NYSE APPROVAL. The NYSE shall (1) not have withdrawn its
advice that stockholder approval of the issuance of Common Stock upon conversion
of the Preferred Shares and exercise of the Warrants is not required under Rule
312 of the NYSE Listed Company Manual and (2) have confirmed that the terms of
the Preferred Stock, as set forth in the Certificate of Designations and this
Agreement, comply with the NYSE's Voting Rights Policy as set forth in Rule 313
of the NYSE Listed Company Manual, which advice shall not have been withdrawn.
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(n) DEBT FINANCING. The Company shall have received proceeds
from the financing contemplated by the Commitment Letter on the terms and
subject to the conditions thereof.
Section 5.02. CONDITIONS OF SALE. The obligation of the
Company to sell the Preferred Shares and the Warrants at the Closing is subject
to satisfaction or waiver of each of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS The
representations and warranties of the Purchasers contained in this Agreement
shall be true and correct in all material respects (disregarding for these
purposes any materiality, Material Adverse Effect or corollary qualifications
contained therein) on and as of the date of this Agreement and on and as of the
Closing Date with the same effect as though made on and as of such dates, and
the Purchasers shall have performed all obligations and complied with all
agreements, undertakings, covenants and conditions required hereunder to be
performed at or prior to the Closing.
(b) NO INJUNCTION. There shall not be in effect any statute,
rule, order, decree or injunction of a court or agency of competent jurisdiction
with enjoins or prohibits consummation of the transactions contemplated hereby.
(c) REGULATORY CONSENTS. (i) All permits, consents,
authorizations, orders and approvals of, and filings and registrations required
under federal or state law, rule or regulation for or in connection with the
execution and delivery of this Agreement and the Ancillary Documents to which
such Purchaser is a party and the consummation by the parties hereto of the
transactions contemplated on such parties' part hereby and thereby shall have
been obtained or made and all statutory waiting periods thereunder in respect
thereof shall have expired.
(d) PURCHASER'S CERTIFICATE. Each Purchaser shall have
delivered to the Company a certificate, dated the Closing Date, in form and
substance reasonably satisfactory to the Company to the effect that the
condition set forth in SECTION 5.02(a) have been satisfied (the "PURCHASER'S
CERTIFICATE").
(e) NYSE APPROVAL. The NYSE shall (1) not have withdrawn its
advice that stockholder approval of the issuance of Common Stock upon conversion
of the Preferred Shares and exercise of the Warrants is not required under Rule
312 of the NYSE Listed Company Manual and (2) have confirmed that the terms of
the Preferred Stock, as set forth in the Certificate of Designations and this
Agreement, comply with the NYSE's Voting Rights Policy as set forth in Rule 313
of the NYSE Listed Company Manual, which advice shall not have been withdrawn.
(f) DEBT FINANCING. The Company shall have received proceeds
from the financing contemplated by the Commitment Letter on the terms and
subject to the conditions thereof.
(g) OTHER TRANSACTIONS. The transactions contemplated by the
Other Transaction Documents that by their terms are to be completed prior to or
concurrently with the Closing (which shall include, without limitation, the
Sprint Transaction) shall have been
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completed immediately prior to or concurrently with the Closing in accordance
with the terms and provisions thereof.
(h) PURCHASE PRICE. The Purchasers shall have delivered
immediately prior to or concurrently with the Closing in immediately available
funds, by wire transfer to such account as the Company shall have specified, an
amount equal to the purchase price to have been paid pursuant to SECTION 2.01.
ARTICLE VI. TERMINATION
Section 6.01. TERMINATION. This Agreement may be terminated on
or any time prior to the Closing:
(a) by the mutual written consent of each of the Purchasers
and the Company; or
(b) by either the Company or the Purchasers if the Sprint
Purchase Agreement shall have been terminated pursuant to its terms; or
(c) by the Purchasers if the Closing shall not have occurred
prior to January 31, 2003, unless the failure of such occurrence shall be due to
the failure of the Purchasers to perform or observe any agreement set forth
herein required to be performed or observed by the Purchasers on or before the
Closing; or
(d) by the Company or the Purchasers if a Governmental Entity
shall have issued a nonappealable final order, decree or ruling or taken any
other action having the effect of permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement; or
(e) by the Purchasers or the Company, (i) if any
representation or warranty of the other party set forth in this Agreement or in
any other Ancillary Document shall be untrue in any material respect when made,
or (ii) upon a breach in any material respect of any covenant or agreement on
the part of the other set forth in this Agreement or in any other Ancillary
Document (either (i) or (ii) above being a "TERMINATING BREACH"); provided,
that, each Terminating Breach would cause the conditions to the non-terminating
party's obligations not to be satisfied and such Terminating Breach is not cured
within 20 days after written notice from the non-breaching party.
Section 6.02. EFFECT OF TERMINATION. In the event of the
termination of this Agreement as provided in SECTION 6.01, all obligations and
agreements of the parties set forth in this Agreement shall forthwith become
void except for the obligations set forth in SECTION 8.05 and SECTION 8.06
(which shall remain in full force and effect) and there shall be no liability or
obligation on the part of the parties hereto except as otherwise provided in
this Agreement. Notwithstanding the foregoing, the termination of this Agreement
under SECTION 6.01(c) shall not relieve either party of any liability for breach
of this Agreement prior to the date of termination.
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ARTICLE VII. SURVIVAL; CERTAIN REMEDIES
Section 7.01. SURVIVAL. The representations and warranties of
the parties contained in this Agreement shall expire on the second anniversary
of the Closing, except that the representations and warranties set forth in
SECTIONS 3.01(a) and 3.01(d), shall survive indefinitely and the representations
and warranties set forth in SECTIONS 3.01(i)(iii) and 3.01(p) shall survive
until thirty days following the expiration of the applicable statute of
limitations. After the expiration of such periods, any claim by a party hereto
based upon any such representation or warranty shall be of no further force and
effect unless a party has asserted a claim in accordance with this ARTICLE VII
for breach of any such representation or warranty prior to the expiration of
such period, in which event any representation or warranty to which such claim
relates shall survive with respect to such claim until such claim is resolved as
provided in this ARTICLE VII. The covenants and agreements of the parties
contained in this Agreement shall survive the Closing in accordance with their
terms without limitation as to time, unless a specified period is set forth in
this Agreement, in which event such specified period will control.
Section 7.02. INDEMNIFICATION BY THE PURCHASERS. Each
Purchaser, severally and not jointly, shall, from and after the Closing Date,
indemnify the Company and its Affiliates and agents, and the officers,
directors, employees, successors, transferees and assigns of each of them (each,
a "COMPANY INDEMNIFIED PARTY") against and hold them harmless from and against
all Losses incurred by any of them based upon, resulting from or arising out of
(i) the breach of any representation or warranty of such Purchaser contained in
this Agreement or (ii) the breach of or failure to perform any covenant or
agreement of such Purchaser contained in this Agreement.
Section 7.03. INDEMNIFICATION BY THE COMPANY. The Company
shall, from and after the Closing Date, indemnify each of the Purchasers and
each of their respective Affiliates and agents and the officers, directors,
employees, members, successors, transferees and assigns of each of them (each,
an "PURCHASER INDEMNIFIED PARTY") against and hold them harmless from and
against all Losses incurred by any of them based upon, resulting from or arising
out of (i) the breach of any representation or warranty of the Company contained
in this Agreement, (ii) the breach of or failure to perform any covenant or
agreement of the Company contained in this Agreement or (iii) the Litigation
entitled DonTech vs. Adoption World v. Ameritech Corporation (Case Number 98 L
13197).
Section 7.04. CERTAIN QUALIFICATIONS. The Material Adverse
Effect and other materiality (or correlative meaning) qualifications included in
the representations, warranties, covenants and agreements contained herein shall
have no effect on any provisions in this ARTICLE VII concerning the indemnities
of the Company or the Purchasers with respect to such representations,
warranties, covenants and agreements, each of which representations, warranties,
covenants and agreements shall be read as though there were no Material Adverse
Effect or other materiality qualification for purposes of such indemnities. All
knowledge qualifications included in the representations, warranties, covenants
and agreements contained herein with respect to DonTech or its business,
operations, assets, financial condition, liabilities or agreements shall have no
effect on any provisions of this Article VII concerning the indemnities of the
Company with respect to such representations, warranties, covenants and
agreements, each of which shall be read as though there were no such knowledge
qualifications for purposes of such indemnities.
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Section 7.05. Indemnification Procedures.
(a) An Purchaser Indemnified Party or a Company Indemnified
Party, as the case may be (for purposes of this SECTION 7.05, an "INDEMNIFIED
PARTY"), shall give the indemnifying party under SECTION 7.02 or 7.03, as
applicable (for purposes of this SECTION 7.05, an "INDEMNIFYING PARTY"), prompt
written notice (the "INDEMNIFICATION CLAIM NOTICE") of any third party claim for
which it will seek indemnification hereunder; provided that failure of the
Indemnified Party to give the Indemnifying Party prompt written notice as
provided herein shall not relieve the Indemnifying Party of any of its
obligations hereunder except to the extent that the Indemnifying Party is
prejudiced thereby. The Indemnifying Party shall have the right to assume,
through counsel of its own choosing, which counsel shall be reasonably
satisfactory to the Indemnified Party, the defense of any third party claim
which is the subject of indemnification hereunder at its own expense. If the
Indemnifying Party elects to assume the defense of any such claim, the
Indemnified Party may participate with its own counsel in such defense, but in
such case the fees and expenses of counsel to the Indemnified Party shall be
paid by the Indemnified Party. The Indemnified Party shall, upon reasonable
notice, provide the Indemnifying Party with access to its records and personnel
relating to any such claim during normal business hours and shall otherwise
cooperate with the Indemnifying Party in the defense or settlement thereof, and
the Indemnifying Party shall reimburse the Indemnified Party for all its
reasonable out-of-pocket expenses in connection therewith. If the Indemnifying
Party elects to direct the defense of any such claim, the Indemnified Party
shall not pay, or permit to be paid, any part of such claim unless the
Indemnifying Party consents in writing to such payment (which consent shall not
be unreasonably withheld) or unless the Indemnifying Party withdraws from or
fails to maintain the defense of such claim or unless a final judgment from
which no appeal may be taken by or on behalf of the Indemnifying Party is
entered against the Indemnified Party for indemnification; PROVIDED that, if the
third party claimant is prepared to settle its claim by payment to it of a
specified amount and, notwithstanding the request of the Indemnified Party for
consent to the proposed settlement, the Indemnifying Party does not consent
thereto, then the Indemnifying Party shall indemnify the Indemnified Party
separately for the difference, if any, between the specified amount of the
proposed settlement and the amount which is finally adjudicated to be the amount
of the Liability to the third party. No settlement in respect of any third-party
claim may be effected by the Indemnifying Party without the Indemnified Party's
prior written consent (which consent shall not be unreasonably withheld). If the
Indemnifying Party shall fail to undertake any such defense (or shall fail upon
request to advise the Indemnified Party in writing that it will undertake such
defense) within 30 days of receipt of the Indemnification Claim Notice, or
subsequently withdraws from or fails to maintain the defense of such claim, the
Indemnified Party shall have the right to undertake the defense or settlement
thereof at the Indemnifying Party's expense. If the Indemnified Party assumes
the defense of any such claim pursuant to the previous sentence it may conduct
such defense (including entering into any settlement) as it reasonably deems
appropriate.
(b) Notwithstanding the foregoing, with respect to any claim
that the Indemnifying Party is defending, the Indemnified Party shall have the
right to retain separate counsel to represent it and the Indemnifying Party
shall pay the fees and expenses of such separate counsel if there are conflicts
that make it reasonably necessary for separate counsel to represent the
Indemnified Party and the Indemnifying Party.
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(c) In the event that an Indemnified Party asserts the
existence of a claim with respect to Losses (but excluding claims resulting from
the assertion of Liability by third parties), it shall give written notice to
the Indemnifying Party. Such written notice shall state that it is being given
pursuant to this SECTION 7.05(c), specify the nature and amount of the claim
asserted, and indicate the date on which such assertion shall be deemed accepted
and the amount of the claim deemed a valid claim (such date to be established in
accordance with the next sentence). If the Indemnifying Party, within 30 days
after the mailing of notice by such Indemnified Party, shall not give written
notice to such Indemnified Party announcing its intent to contest such assertion
of such Indemnified Party, such assertion shall be deemed accepted and the
amount of claim shall be deemed a valid claim. In the event, however, that the
Indemnifying Party contests the assertion of a claim by giving such written
notice to such Indemnified Party within said period, then the parties shall act
in good faith to reach agreement regarding such claim. In the event that
litigation shall arise with respect to any such claim, the prevailing party
shall be entitled to reimbursement of costs and expenses incurred in connection
with such litigation including attorney fees, if the parties hereto, acting in
good faith, cannot reach agreement with respect to such claim within ten days
after such notice.
(d) The parties agree to treat any indemnification payments
made by the Company pursuant to this Agreement for Tax purposes as adjustments
to the purchase price of the Preferred Shares.
Section 7.06. LIABILITY LIMITS. (a) Notwithstanding anything
to the contrary set forth in this Agreement, except for fraud, the Purchaser
Indemnified Parties shall not make a claim against the Company for
indemnification under SECTION 7.03(i) (not including indemnification for
breaches of the representations and warranties made by the Company in SECTION
3.01(i)(iii)) for Purchaser Losses unless and until the aggregate amount of
Purchaser Losses under SECTION 7.03(i) (not including indemnification for
breaches of the representations and warranties made by the Company in SECTION
3.01(i)(iii)) exceeds $1,000,000 and then the Purchaser Indemnified Parties
shall be entitled to indemnification from first dollar. Further, the Company's
indemnification obligations pursuant to SECTION 7.03(i) shall not exceed in the
aggregate $100,000,000.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, except for fraud, the Company Indemnified Parties shall not make a
claim against the Purchasers for indemnification under SECTION 7.02(i) for
Company Losses unless and until the aggregate amount of Company Losses under
SECTION 7.02(i) exceeds $1,000,000 and then the Company Indemnified Parties
shall be entitled to indemnification from first dollar. Further, the Purchasers'
indemnification obligations pursuant to SECTION 7.02(i) shall not exceed in the
aggregate $100,000,000.
Section 7.07. DUPLICATION. Any Liability for indemnification
hereunder shall be determined without duplication of recovery by reason of the
state of facts giving rise to such Liability constituting a breach of more than
one representation, warranty, covenant or agreement; provided, however, that
subject to there being no duplication of recovery, the Indemnified Party shall
be entitled to recover to the maximum extent provided in this Agreement (by way
of example, if any Indemnified Party's entitlement to indemnification is both by
reason for a breach of a representation and warranty to which the two year
survival period of SECTION 7.01 applies
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and by reason of a breach of a representation and warranty to which such
survival period does not apply, the Indemnified Party shall be entitled to
indemnification without regard to such two year survival period). The amount of
any Loss for which indemnification is provided under this ARTICLE VII shall be
calculated (i) net of any amounts actually recovered by the Indemnified Party
(A) under insurance policies with respect to such Loss and (B) any amounts
actually recovered from third parties pursuant to indemnification or otherwise
with respect to such Loss, and (ii) net of any tax benefits obtained or
reasonably expected to be obtained by the Indemnified Party or its affiliates
with respect to such Loss.
Section 7.08. EXCLUSIVE REMEDIES. Except for fraud, the
provisions of this ARTICLE VII set forth the exclusive rights and remedies of
the Purchasers and the Company to seek or obtain damages from any party after
the Closing Date with respect to breaches of representations, warranties or
covenants under this Agreement (other than any remedy or relief arising from the
failure of any party to perform its obligations under the Ancillary Documents);
PROVIDED, HOWEVER, that nothing herein shall limit any remedy in equity.
ARTICLE VIII. MISCELLANEOUS
Section 8.01. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally, by facsimile or sent by overnight courier as follows:
If to the Purchasers, to:
GS Capital Partners 2000, L.P.
GS Capital Partners 2000 Offshore, L.P.
GS Capital Partners 2000 GmbH & Co. Beteiligungs KG
GS Capital Partners 2000 Employee Fund, ▇.▇.
▇▇▇▇▇▇▇ Sachs Direct Investment Fund 2000, L.P.
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, Esq.
with a copy to (which shall not constitute notice):
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Shine, Esq.
If to the Company, to:
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▇.▇. ▇▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
with a copy to (which shall not constitute notice):
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address or addresses as shall be designated in writing. All
notices shall be effective when received.
Section 8.02. ENTIRE AGREEMENT; AMENDMENTS; WAIVERS. This
Agreement and the Ancillary Documents set forth the entire agreement between the
parties hereto with respect to the transactions contemplated by this Agreement.
Any provision of this Agreement may be amended or modified in whole or in part
at any time by an agreement in writing among the parties hereto executed in the
same manner as this Agreement. No failure on the part of any party to exercise,
and no delay in exercising, any right shall operate as a waiver thereof nor
shall any single or partial exercise by any party of any right preclude any
other or future exercise thereof or the exercise of any other right. No
investigation by the Purchasers of the Company prior to or after the date hereof
shall stop or prevent the Purchasers from exercising any right hereunder or be
deemed to be a waiver of any such right.
Section 8.03. COUNTERPARTS. This Agreement may be executed by
facsimile signature and may be executed in one or more counterparts, each of
which shall be deemed to constitute an original, but all of which together shall
constitute one and the same documents.
Section 8.04. GOVERNING LAW. This Agreement shall be governed
by, and interpreted in accordance with, the laws of the State of New York
applicable to contracts made and to be performed in that State without giving
effect to any conflict of laws rules or principles that might require the
application of the laws of another jurisdiction.
Section 8.05. PUBLIC ANNOUNCEMENTS. Each of the parties hereto
agree to hold in strict confidence and not to publicly disclose the status of
any discussions or relations between the parties with respect to the subject
matter of this Agreement until such time as the parties mutually agree to
publicly disclose such information or are legally obligated (whether by federal
securities laws, the rules of any stock exchange or otherwise) to disclose such
information. Subject to the provisions of the previous sentence, the parties
hereto will cooperate with each other in the development and distribution of all
news releases and other public information disclosures with respect to this
Agreement and any of the transactions contemplated hereby, and
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neither party hereto will make any news releases or other information
disclosures with respect to the subject matter of this Agreement without the
prior consent of the other party hereto.
Section 8.06. CLOSING PAYMENT; EXPENSES. On the Closing Date,
the Company will pay to each Purchaser 1% of the portion of the purchase price
paid by such Purchaser to the Company on the Closing Date (the "CLOSING
Payment"). Any obligation owed by the Company to the Purchasers pursuant to this
SECTION 8.06 shall be offset by the Purchasers against the amount of the
obligation owed to the Company by the Purchasers pursuant to SECTION 2.02(b).
(b) The Company shall pay (i) all fees, costs and expenses
incurred by it in connection with the preparation, negotiation, execution, and
performance of this Agreement or any of the transactions contemplated by this
Agreement or the Other Transaction Documents, (ii) the reasonable third party
and out-of-pocket expenses (including, without limitation, all reasonable fees
and expenses of each counsel, accountants and consultants of each such party)
incurred by the Purchasers or their Affiliates since August 16, 2002 in
connection with the preparation, negotiation, execution, and performance of this
Agreement or any of the transactions contemplated by this Agreement and (iii)
all costs of filings required under the HSR Act in connection with the execution
and performance of this Agreement. Without limiting the generality of the
foregoing, the expenses referred to in clause (iii) above shall be paid by the
Company when due or payable and on the Closing Date or the date on which this
Agreement is terminated pursuant to Article VI hereof, the Company shall pay all
expenses listed in clause (ii) of the previous sentence which have accrued as of
such date.
Section 8.07. SUCCESSORS AND ASSIGNS. Subject to applicable
law and the provisions of SECTION 4.10, each Purchaser may assign its rights
under this Agreement in whole or in part to any of its respective Affiliates or
any Designated Transferee, but no such assignment shall relieve such Purchaser
of its obligations hereunder. The Company may not assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of each of the Purchasers. Any purported assignment in violation of this
SECTION 8.07 shall be void.
Section 8.08. JURISDICTION. The courts of the State of New
York in New York County and the United States District Court for the Southern
District of New York shall have jurisdiction over the parties with respect to
any dispute or controversy between them arising under or in connection with this
agreement and, by execution and delivery of this agreement, each of the parties
to this Agreement submits to the jurisdiction of those courts, including but not
limited to the IN PERSONAM and subject matter jurisdiction of those courts,
waives any objections to such jurisdiction on the grounds of venue or FORUM NON
CONVENIENS, the absence of IN PERSONAM or subject matter jurisdiction and any
similar grounds, consents to service of process by mail (in accordance with
SECTION 8.01) or any other manner permitted by law, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement.
Section 8.09. CAPTIONS; REFERENCES. The captions contained in
this Agreement are for reference purposes only and are not part of this
Agreement. Unless otherwise indicated, all references to Articles, Sections,
subsections, Schedules or Exhibits in this Agreement refer to the Articles,
Sections, subsections and clauses of, and the Schedules or Exhibits to, this
Agreement.
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Section 8.10. SEVERABILITY. Should any part of this Agreement
for any reason be declared invalid, such decision shall not affect the validity
of any remaining portion, which remaining portion shall remain in full force and
effect as if this Agreement had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Agreement without
including therein any such part or parts which may, for any reason, be hereafter
declared invalid.
Section 8.11. AGGREGATION OF STOCK. All shares of capital
stock held or acquired by each of the Goldman Entities shall be aggregated
together for the purpose of determining the availability and exercise of any
right of each such Goldman Entity under this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by the
respective duly authorized officers of the parties hereto, all as of the date
first above written.
▇.▇. ▇▇▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:President and Chief Executive Officer
GS CAPITAL PARTNERS 2000, L.P.
By: GS Advisors 2000, L.L.C.
Its General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President
GS CAPITAL PARTNERS 2000 OFFSHORE, L.P.
By: GS Advisors 2000, L.L.C.
Its General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President
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GS CAPITAL PARTNERS 2000 GmbH & CO. BETEILIGUNGS KG
By: ▇▇▇▇▇▇▇ Sachs Management GP GmbH
Its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Managing Director
GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P.
By: GS Employee Funds 2000 GP, L.L.C.
Its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ DIRECT INVESTMENT FUND 2000, L.P.
By: GS Employee Funds 2000 GP, L.L.C.
Its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President
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