EXHIBIT 10.1
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PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
BY AND BETWEEN
ICG COMMUNICATIONS, INC.
AND
THE PURCHASERS LISTED ON SCHEDULE I HERETO
Dated as of
February 27, 2000
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
ARTICLE II SALE AND PURCHASE 6
2.1 Agreement to Sell and to Purchase; Purchase Price. 6
2.2 Closing. 6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 7
3.1 Organization and Standing. 7
3.2 Capital Stock. 8
3.3 Authorization; Enforceability. 9
3.4 No Violation; Consents. 9
3.5 Commission Filings; Financial Statements. 10
3.6 Private Offering. 10
3.7 Provided Information. 11
3.8 Material Adverse Change. 11
3.9 Litigation. 11
3.10 Permits and Licenses. 11
3.11 Intellectual Property, etc. 12
3.12 Board Approval. 12
3.13 British Telecommunications. 12
3.14 Share Exchange Agreement. 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 13
4.1 Organization; Authorization; Enforceability. 13
4.2 Private Placement. 13
4.3 No Violation; Consents. 14
4.4 No Litigation. 15
4.5 No Group Status. 15
ARTICLE V COVENANTS OF THE COMPANY 15
5.1 Operation of Business. 15
5.2 HMTF and Liberty Directors. 16
5.3 Access to Books and Records. 18
5.4 Agreement to Take Necessary and Desirable Actions. 18
5.5 Compliance with Conditions; Commercially Reasonable Efforts. 18
5.6 HSR Act Notification. 19
5.7 Consents and Approvals. 19
5.8 Reservation of Shares. 19
5.9 Use of Proceeds. 20
5.10 Filing of Certificate of Designation. 20
5.11 Listing of Shares. 20
5.12 Periodic Information. 20
5.13 Legends. 20
5.14 Payment; Paying Agent; Certain Information. 21
5.15 Rights Plan. 21
5.16 Proportional Purchase Right. 21
5.17 Modification of Share Exchange Agreement. 22
ARTICLE VI COVENANTS OF THE PURCHASERS 22
6.1 Agreement to Take Necessary and Desirable Actions. 22
6.2 Compliance with Conditions; Commercially Reasonable Efforts. 22
6.3 HSR Act Notification. 22
6.4 Consents and Approvals. 23
6.5 Restrictions on Transfer. 23
6.6 Standstill. 23
ARTICLE VII CONDITIONS PRECEDENT TO CLOSING 24
7.1 Conditions to the Company's Obligations. 24
7.2 Conditions to Each Purchaser's Obligations. 25
ARTICLE VIII MISCELLANEOUS 26
8.1 Survival; Indemnification. 26
8.2 Notices. 28
8.3 Governing Law. 31
8.4 Termination. 31
8.5 Entire Agreement. 32
8.6 Modifications and Amendments. 32
8.7 Waivers and Extensions. 32
8.8 Titles and Headings. 32
8.9 Exhibits and Schedules. 32
8.10 Expenses. 32
8.11 Press Releases and Public Announcements. 32
8.12 Assignment; No Third Party Beneficiaries. 33
8.13 Severability. 33
8.14 Counterparts. 33
8.15 Further Assurances. 33
8.16 Remedies Cumulative. 33
8.17 Several Liability of the Purchasers. 34
8.18 No Duty to Other Purchasers. 34
8.19 Specific Performance. 34
8.20 No Purchaser Affiliate Liability. 34
Exhibits
Exhibit A - Form of Warrant
Exhibit B - Certificate of Designation
Exhibit C - Form of Registration Rights Agreement
Exhibit D - Form of Legal Opinion
Exhibit E - Form of Management Rights Agreement
Schedules
Schedule 3.1(b) - Equity Interests
Schedule 3.2 - Company Capital Stock
Schedule 5.1(iv) - Dividends or Distributions on Capital Stock
This PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT is dated as of
February 27, 2000 (this"Agreement"), by and
between ICG the "Purchasers").
WHEREAS, the Company proposes, subject to the terms and conditions set
forth herein, to issue and sell to the Purchasers 750,000 shares of its 8%
Series A Convertible Preferred Stock, initial liquidation preference $1,000 per
share, par value $0.01 per share (the "Series A Preferred Stock");
WHEREAS, the Company proposes, subject to the terms and conditions set
forth herein, to issue and sell to the Purchasers warrants (each a "Warrant" and
together, the "Warrants") to purchase 10,000,000 shares of the Company's Common
Stock, par value $0.01 per share (the "Warrant Shares"), in substantially the
form of Exhibit A attached hereto;
WHEREAS, subject to the terms and conditions set forth herein, each
Purchaser desires to purchase such Series A Preferred Stock and Warrants from
the Company;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE I
DEFINITIONS
(a) As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing; provided that neither
AT&T Corp. ("AT&T") nor any Subsidiary of AT&T which is not included in AT&T's
Liberty Media Group (as defined in AT&T's Certificate of Incorporation) will be
deemed to be an Affiliate of Liberty.
"Applicable Law" means (a) any United States Federal, state, local or
foreign law, statute, rule, regulation, order, writ, injunction, judgment,
decree or permit of any Governmental Authority and (b) any rule or listing
requirement of any applicable national stock exchange or listing requirement of
any national stock exchange or Commission recognized trading market on which
securities issued by the Company or any of the Subsidiaries are listed or
quoted.
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"Business Day" means any day other than a Saturday, a Sunday, the day
after Thanksgiving or a day when banks in The City of New York are authorized by
Applicable Law to be closed.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock and (ii) with respect to any
other Person, any and all partnership or other equity interests of such Person.
"Certificate of Designation" means the Certificate of Designation of
the Powers, Preferences and Relative, Participating, Optional and Other Special
Rights and Qualifications, Limitations and Restrictions thereof relating to the
Series A Preferred Stock, in the form attached hereto as Exhibit B.
"Commission" means the United States Securities and Exchange
Commission.
"Commission Filings" means all reports, registration statements and
other filings filed by the Company with the Commission (and all notes and
schedules thereto and documents incorporated by reference therein).
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Contract" means any contract, lease, loan agreement, mortgage,
security agreement, trust indenture, note, bond, or other agreement (whether
written or oral) or instrument.
"Conversion Shares" means the shares of Common Stock issuable upon the
conversion of the Series A Preferred Stock in accordance with the terms of the
Certificate of Designation.
"Equity Documents" means this Agreement, the Registration Rights
Agreement, the Certificate of Designation, the Management Rights Agreements, the
Share Exchange Agreement and the Warrants.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"filed," when used with respect to a Commission Filing, means filed
with the Commission and publicly available.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"Gleacher Group" means Gleacher/ICG Investors LLC and its Affiliates.
"Gleacher Holders" means members of the Gleacher Group that are
holders of all or a portion of the Gleacher Shares.
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"Gleacher Shares" means (i) the shares of Series A Preferred Stock
issued to Gleacher on the Closing Date under this Agreement held by members of
the Gleacher Group plus (ii) the shares of Common Stock issued to and held by
members of the Gleacher Group upon conversion of the shares referred to in
clause (i) above.
"Governmental Authority" means (i) any foreign, Federal, state or
local court or governmental or regulatory agency or authority, (ii) any
arbitration board, tribunal or mediator and (iii) any national stock exchange or
Commission recognized trading market on which securities issued by the Company
or any of the Subsidiaries are listed or quoted.
"HMTF" means Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated, a Texas
corporation.
"HMTF Funds" means the funds affiliated with the HMTF Purchaser
identified by the HMTF Purchaser on or prior to the Closing Date.
"HMTF Group" means HMTF and its Affiliates and their respective
officers, directors, partners, members, stockholders and employees (and members
of their respective families and trusts for the primary benefit of such family
members), and HMTF Purchaser and its Affiliates.
"HMTF Holders" means members of the HMTF Group that are holders of all
or a portion of the HMTF Shares.
"HMTF Purchaser" means HM4 ICG Qualified Fund, LLC; HM4 ICG Private
Fund, LLC; HM PG-IV ICG, LLC; HM 4-SBS ICG Coinvestors, LLC; HM 4-EQ ICG
Coinvestors, LLC and HMTF Bridge ICG, LLC.
"HMTF Shares" means the HMTF Issued Series A Preferred Shares held by
members of the HMTF Group plus the shares of Common Stock issued to and held by
members of the HMTF Group upon conversion of the HMTF Issued Series A Preferred
Shares or upon exercise of the Warrants held by members of the HMTF Group.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and applicable rules and regulations.
"Liberty" means Liberty Media Corporation, a Delaware corporation,
provided that if substantially all of the assets of Liberty Media Corporation
are at any time hereafter contributed to Liberty Media Group LLC, a Delaware
limited liability company, then from and after such contribution, Liberty shall
mean Liberty Media Group LLC.
"Liberty Group" means Liberty and its Affiliates.
"Liberty Holders" means members of the Liberty Group that are holders
of all or a portion of the Liberty Shares.
"Liberty Shares" means the Liberty Issued Series A Preferred Shares
held by members of the Liberty Group plus the shares of Common Stock issued to
and held by members
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of the Liberty Group upon conversion of the Liberty Issued Series A Preferred
Shares or upon exercise of the Warrants held by members of the Liberty Group.
"Lien" means any mortgage, pledge, lien, security interest, claim,
restriction, charge or encumbrance of any kind.
"Management Rights Agreements" means the Management Rights Agreements
to be dated as of the Closing Date, to be executed by the Company and delivered
to the HMTF Funds, a form of which is attached as Exhibit E.
"Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise), business, assets or results of operations of
the Company and its Subsidiaries, taken as a whole.
"Permitted Transferee" means, with respect to any Purchaser, or any
Permitted Transferee of any Purchaser, (i) any Purchaser Affiliate of such
Purchaser that is not a holder of Common Stock on the date hereof or an
Affiliate of such holder; (ii) any Person that is a member of the Liberty Group;
and (iii) any Person that is a member of the HMTF Group and any Person
investing, directly or indirectly, in or in parallel with any member of the HMTF
Group; provided, however, that each Permitted Transferee must agree in writing
pursuant to a Permitted Transferee Agreement, in accordance with the provisions
of Section 6.5, to be bound by the terms, and subject to the conditions, of this
Agreement to the same extent, and in the same manner, as the transferring
Purchaser prior to the transfer of any Securities to such Permitted Transferee;
and provided, further, that the transfer of Securities from such Purchaser to
such Permitted Transferee is in compliance with all applicable securities laws.
"Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
"Purchaser Affiliate" means (a) any direct or indirect holder of any
equity interests or securities in any Purchaser (whether limited or general
partners, members, stockholders or otherwise), (b) any Affiliate of any
Purchaser or (c) any director, officer, employee, representative or agent of (i)
such Purchaser, (ii) any Affiliate of such Purchaser or (iii) any holder of
equity interests or securities referred to in clause (a) above.
"Registration Rights Agreement" means the Registration Rights
Agreement, to be dated as of the Closing Date, to be entered into by and among
the Company and the Purchasers, in the form attached hereto as Exhibit C.
"Securities" means the Shares and the Warrants.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Series A Preferred Stock" has the meaning set forth in the first
recital to this Agreement. The Series A Preferred Stock has the designation,
powers, preferences and rights, and qualifications, limitations and restrictions
thereof set forth in the Certificate of Designation.
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"Share Exchange Agreement" means the Share Exchange Agreement between
Quadrangle Investments, Inc. and a Subsidiary of the Company to be dated as of
February 28, 2000.
"Shares" means the shares of Series A Preferred Stock to be issued and
sold by the Company to the Purchasers pursuant to Section 2.1 hereof.
"Subsidiary" means, with respect to any Person (i) a corporation a
majority of whose capital stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by a subsidiary of such Person, or by such Person and one or more subsidiaries
of such Person, (ii) a partnership in which such Person or a subsidiary of such
Person is, at the date of determination, a general partner of such partnership
and has the power to direct the policies and management of such partnership or
(iii) any other Person (other than a corporation) in which such Person, a
subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (A) at
least a majority ownership interest or (B) the power to elect or direct the
election of the directors or other governing body of such Person.
"Transactions" means the transactions contemplated by this Agreement and
the other Equity Documents.
(b) As used in this Agreement, the following terms shall have the
meanings given thereto in the Sections set forth opposite such terms:
Term Section
Agreement. . . . . . . . . . . . . . . . Preamble
Closing. . . . . . . . . . . . . . . . . 2.2
Closing Date . . . . . . . . . . . . . . 2.2
Company. . . . . . . . . . . . . . . . . Preamble
Conversion Agent . . . . . . . . . . . . 5.14(b)(ii)
DGCL . . . . . . . . . . . . . . . . . . 3.2(b)
HMTF Director. . . . . . . . . . . . . . 5.2(a)
HMTF Issued Series A Preferred Shares. . 5.2(a)
Indemnified Party. . . . . . . . . . . . 8.1(c)
Indemnified Person . . . . . . . . . . . 8.1(b)
Indemnifying Party . . . . . . . . . . . 8.1(c)
Information. . . . . . . . . . . . . . . 3.7
Issuance . . . . . . . . . . . . . . . . 2.1
Liberty Director . . . . . . . . . . . . 5.2(b)
Liberty Issued Series A Preferred Shares 5.2(b)(i)
Losses . . . . . . . . . . . . . . . . . 8.1(b)
Notices. . . . . . . . . . . . . . . . . 8.2
Paying Agent . . . . . . . . . . . . . . 5.14(b)(i)
Permitted Transferee Agreement . . . . . 6.5
Projections. . . . . . . . . . . . . . . 3.7
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Term . . . . . . . . . . . . . . . . Section
Purchaser; Purchasers. . . . . . . . . . Preamble
Purchase Price . . . . . . . . . . . . . 2.1
Registrar. . . . . . . . . . . . . . . . 5.14(b)(iii)
Securities Transfer. . . . . . . . . . . 6.5
Supplying Purchasers . . . . . . . . . . 8.18
Warrants . . . . . . . . . . . . . . . . Recitals
Warrant Shares . . . . . . . . . . . . . Recitals
ARTICLE II
SALE AND PURCHASE
2.1 Agreement to Sell and to Purchase; Purchase Price.
On the Closing Date, and upon the terms and subject to the conditions set
forth in this Agreement, the Company shall issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, shall purchase and accept from the
Company such number of Shares and Warrants as is set forth opposite such
Purchaser's name on Schedule 1 hereto (the "Issuance"), for a purchase price of
one thousand dollars ($1,000) per Share (the "Purchase Price"), payable by wire
transfer of immediately available funds to a bank account or bank accounts
designated by the Company described in Section 2.2(a)(i).
2.2 Closing.
The closing of the Issuance to each Purchaser (the "Closing") shall take
place on a date to be specified by the Company and such Purchaser, which shall
be no later than the later of (A) the 2nd Business Day after the date as of
which all of the conditions set forth in Article VII hereof shall have been
satisfied as to the purchase by such Purchaser (or, to the extent permitted,
waived by the party or parties entitled to the benefit thereof) and (B) 15
Business Days after the date hereof or at such other time and date as the
parties hereto shall agree in writing (such date and time, the "Closing Date"),
at the offices of ▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other place as the parties hereto shall agree in
writing.
At the Closing:
(a) Each Purchaser shall deliver:
(i) against delivery of a certificate or certificates representing the
Shares and the Warrants being purchased by such Purchaser pursuant to Section
2.1, an amount equal to the aggregate Purchase Price of such Securities via wire
transfer of immediately available funds to such bank account as the Company
shall designate not later than two Business Days prior to the Closing Date;
(ii) a copy of the Registration Rights Agreement executed by such
Purchaser.
(b) The Company shall deliver to each Purchaser:
PAGE 7
(i) against payment of the Purchase Price therefor, a certificate or
certificates representing the Shares and Warrants being purchased by such
Purchaser pursuant to Section 2.1, which shall be in definitive form and
registered in the name of such Purchaser or its nominee or designee and in a
single certificate or in such other denominations as such Purchaser shall
request not later than two Business Days prior to the Closing Date;
(ii) an opinion of (A) H. ▇▇▇ ▇▇▇▇▇▇, General Counsel of the Company
and (B) ▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP, special counsel to the Company, in
each case dated the Closing Date, covering the matters set forth on Exhibit D,
in form and substance reasonably acceptable to the Purchasers;
(iii) an officer's certificate of the Company as contemplated by
Section 7.2(f);
(iv) a certificate of the secretary of the Company covering such
matters as are customarily covered by such certificates, in form and substance
reasonably acceptable to the Purchasers;
(v) a long-form good standing certificate of the Company issued by the
Secretary of State of the State of Delaware; and
(vi) a copy of the Registration Rights Agreement executed by the
Company.
(c) The Company shall deliver to each Purchaser (or its designee) a
transaction fee equal to 3% of the Purchase Price of the Shares purchased by
such Purchaser, in immediately available funds by wire transfer to an account
designated by Purchasers at least two Business Days prior to the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Purchaser on the date
hereof and on and as of the Closing Date as follows:
3.1 Organization and Standing.
(a) Each of the Company and its material Subsidiaries (the "ICG
Subsidiaries") is duly organized, validly existing and in good standing under
the laws of its state of organization and has all corporate, limited liability
company and partnership power and authority to own its properties and assets and
to carry on its business as it is now being conducted. Each of the Company and
the ICG Subsidiaries is duly qualified to transact business as a foreign entity
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or the nature of its business makes such
qualification necessary, except for any such failures to so qualify or be in
good standing that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
PAGE 8
(b) All of the outstanding shares of Capital Stock of each ICG
Subsidiary have been validly issued and are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all Liens.
The Company does not own any equity interest in any corporation, partnership,
limited liability company, joint venture, or other entity except as provided on
Schedule 3.1(b) hereof.
(c) The Company has delivered to each Purchaser true and complete
copies of the Company's Certificate of Incorporation, as amended to date, and
By-laws, as in effect on the date hereof.
3.2 Capital Stock.
(a) As of the date of this Agreement, the authorized Capital Stock of
the Company consists solely of (i) 100,000,000 shares of Common Stock, par value
$0.01 per share, of which 48,208,955 shares were issued and outstanding as of
the close of business on February 24, 2000 and (ii) 1,000,000 shares of
preferred stock, par value $0.01 per share, of which 12,650.25 shares are issued
and outstanding. Each share of Capital Stock of the Company that will be issued
and outstanding immediately following the Closing, including without limitation
the Shares, will be duly authorized and validly issued and fully paid and
nonassessable, and the issuance thereof will not have been subject to any
preemptive rights or made in violation of any Applicable Law.
(b) Except as set forth on Schedule 3.2, as of the date of this
Agreement, there are (i) no outstanding options, warrants, agreements,
conversion rights, exchange rights, preemptive rights or other rights (whether
contingent or not) to subscribe for, purchase or acquire any issued or unissued
shares of Capital Stock of the Company or any ICG Subsidiary, (ii) no authorized
or outstanding stock appreciation, phantom stock, profit participation, or
similar rights with respect to the Company or any Subsidiary, (iii) no rights,
contracts, commitments or arrangements (contingent or otherwise) obligating the
Company or any ICG Subsidiary to either (A) redeem, purchase or otherwise
acquire, or offer to purchase, redeem, or otherwise acquire, any outstanding
shares of, or any outstanding warrants or rights of any kind to acquire any
shares of, or any outstanding securities that are convertible into or
exchangeable for any shares of, Capital Stock of the Company, or (B) pay any
dividend or make any distribution in respect of any shares of, or any
outstanding securities that are convertible or exchangeable for any shares of,
Capital Stock of the Company, (iv) no agreements or arrangements under which the
Company or any ICG Subsidiary is obligated to register the sale of any of its
securities under the Securities Act (except as provided hereunder) and (v) no
restrictions upon, or Contracts or understandings of the Company or any
Subsidiary, or, to the knowledge of the Company, Contracts or understandings of
any other Person, with respect to, the voting or transfer of any shares of
Capital Stock of the Company or any Subsidiary. Except as set forth on Schedule
3.2, there are no securities or instruments containing antidilution or similar
provisions that will be triggered by the consummation of the Transactions.
Except as set forth on Schedule 3.2, no party has any right of first refusal,
right of first offer, right of co-sale or other similar right regarding the
Company's securities. Except as set forth on Schedule 3.2, there are no
provisions of the Certificate of Incorporation, as amended, or the By-laws of
the Company, no agreements to which the Company is a party and no agreements by
which the Company or any ICG Subsidiary are bound, that would (a) require the
vote of the holders of more than a majority of the shares of
PAGE 9
the Company's issued and outstanding Common Stock, voting together as a single
class, to take or prevent any corporate action, other than those matters
requiring a class vote under General Corporation Law of the State of Delaware
(the "DGCL"), or (b) entitle any party to nominate or elect any director of the
Company or require any of the Company's stockholders to vote for any such
nominee or other person as a director of the Company.
(c) The Conversion Shares and Warrant Shares have been duly authorized
and adequately reserved in contemplation of the conversion of the Series A
Preferred Stock and the exercise of the Warrants, respectively, and, when issued
and delivered in accordance with the terms of the Certificate of Designation or
the Warrants, as the case may be, will have been validly issued and will be
fully paid and nonassessable, and the issuance thereof will not have been
subject to any preemptive rights or made in violation of any Applicable Law.
(d) The holders of the Series A Preferred Stock will, upon issuance
thereof, have the rights set forth in the Certificate of Designation (subject to
the limitations and qualifications set forth therein and under the DGCL).
3.3 Authorization; Enforceability.
The Company has the power and authority to execute, deliver and perform its
obligations under each of the Equity Documents to which it is a party, and has
taken all action necessary to authorize the execution, delivery and performance
by it of each of such Equity Documents and to consummate the Transactions. No
other corporate or stockholder proceeding on the part of the Company or any ICG
Subsidiary is necessary for such authorization, execution, delivery and
consummation. The Company has duly executed and delivered this Agreement and, at
the Closing, the Company will have duly executed and delivered each of the other
Equity Documents to which it is a party to be executed and delivered at or prior
to Closing. This Agreement constitutes, and each of the other Equity Documents
to which it is a party, when executed and delivered by the Company, will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency, reorganization, or
other laws of general application affecting enforcement of creditors' rights or
(b) general principles of equity that restrict the availability of equitable
remedies.
3.4 No Violation; Consents.
(a) The execution, delivery and performance by the Company of each of
the Equity Documents and the consummation by the Company of the Transactions do
not and will not contravene any Applicable Law, except for any such
contravention that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The execution, delivery and
performance by the Company of each of the Equity Documents and the consummation
of the Issuance (i) will not (A) violate, result in a breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under any Contract to
which the Company is a party or by which the Company is bound or to which any of
its assets is subject, or (B) result in the creation or imposition of any Lien
upon any of the assets of the Company, except for any such violations, breaches,
defaults or Liens that would not, individually or in the aggregate, reasonably
be
PAGE 10
expected to have a Material Adverse Effect and (ii) will not conflict with or
violate any provision of the certificate of incorporation or bylaws of the
Company currently in effect or in effect as of the Closing.
(b) Except for (i) the filings by the Company, if any, required by the
HSR Act, (ii) applicable filings, if any, required by applicable federal and
state securities laws, (iii) applicable filings, if any, required by the Federal
Communication Commission and state public utility commissions and (iv) filing of
the Certificate of Designation with the Secretary of State of the State of
Delaware, which, in each case referred to in clauses (i) - (iv), shall be made
(or are not required to be made) on or prior to the Closing Date, no consent,
authorization or order of, or filing or registration with, any Governmental
Authority or other Person is required to be obtained or made by the Company or
the ICG Subsidiaries for the execution and delivery of the Equity Documents or
the consummation by the Company of the Transactions except where the failure to
obtain such consents, authorizations or orders, or make such filings or
registrations, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or a material adverse effect on the
ability of the Company to consummate the Transactions.
3.5 Commission Filings; Financial Statements.
(a) The Company has filed all reports, registration statements and
other filings, together with any amendments or supplements required to be made
with respect thereto, that it has been required to file with the Commission
under the Securities Act and the Exchange Act. As of the respective dates of
their filing with the Commission, the Commission Filings complied in all
material respects with the applicable provisions of the Securities Act and the
Exchange Act and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(b) Each of the historical consolidated financial statements of the
Company (including any related notes or schedules) included in the Commission
Filings was prepared in accordance with GAAP (except as may be disclosed
therein), and complied in all material respects with the rules and regulations
of the Commission. Such financial statements fairly present the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of operations, cash flows and changes
in stockholders' equity for the periods then ended (subject, in the case of the
unaudited interim financial statements, to normal, recurring year-end audit
adjustments). Except as reflected in the Commission Filings filed prior to the
date hereof, the Company does not have any liabilities or obligations of any
nature (whether accrued, absolute, contingent, unasserted or otherwise) that
individually or in the aggregate would be expected to have a Material Adverse
Effect.
3.6 Private Offering.
Based, in part, on the Purchasers' representations in Section 4.2, the
offer and sale of the Securities is exempt from the registration and prospectus
delivery requirements of the Securities Act. Neither the Company, nor anyone
acting on behalf of it, has offered or sold or will offer or sell any
securities, or has taken or will take any other action (including, without
limitation, any offering of any securities of the Company under circumstances
that would require, under the
PAGE 11
Securities Act, the integration of such offering with the offering and sale of
the Securities), that would subject the Issuance to the registration provisions
of the Securities Act.
3.7 Provided Information.
To the knowledge of the Company, all written information (excluding
information of a general economic nature and financial projections) concerning
the Company and the Transactions (the "Information") that has been prepared by
or on behalf of the Company or any of the Company's authorized representatives
and that has been provided to the Purchasers or any of their authorized
representatives in connection with the Issuance, when taken as a whole, was, at
the time made available, correct in all material respects and did not, at the
time made available, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such statements
are made. All financial projections concerning the Company and the Transactions
(the "Projections") that have been prepared by or on behalf of the Company or
any of the Company's authorized representatives and that have been delivered to
the Purchasers or any of their authorized representatives in connection with the
Transactions have been reasonably prepared on a basis reflecting the best
currently available estimates and judgments of the Company's management as to
the future financial performance of the Company and the individual business
segments thereof.
3.8 Material Adverse Change.
Except as disclosed in the Commission Filings filed prior to the date
hereof, since September 30, 1999, there has not been any event, occurrence or
development of a state of circumstances or facts that has had, or could have
reasonably been expected to have, (i) a Material Adverse Effect or (ii) a
material adverse effect on the ability of the Company to perform its obligations
under this Agreement or the other Equity Documents.
3.9 Litigation.
Except as disclosed in Commission Filings filed prior to the date hereof,
there are not any (a) outstanding judgments against or affecting the Company or
any of the ICG Subsidiaries, (b) proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of the ICG
Subsidiaries or (c) investigations by any Governmental Authority that are, to
the knowledge of the Company, pending or threatened against or affecting the
Company or any of the ICG Subsidiaries that (i) in any manner challenge or seek
to prevent, enjoin, alter or materially delay the Transactions or (ii) if
resolved adversely to the Company or any ICG Subsidiary, would have,
individually or in the aggregate, a Material Adverse Effect.
3.10 Permits and Licenses.
The Company and the ICG Subsidiaries have obtained all governmental
permits, licenses, franchises and authorizations required for the Company and
its Subsidiaries to conduct their respective businesses as currently conducted,
except for those of which the failure to obtain would not have a Material
Adverse Effect.
PAGE 12
3.11 Intellectual Property, etc.
The Company and the ICG Subsidiaries have all right, title and interest in,
or a valid and binding license to use, all Company Intellectual Property (as
defined below). The Company and the ICG Subsidiaries (i) have not defaulted in
any material respect under any license to use any Company Intellectual Property,
(ii) are not the subject of any proceeding or litigation for infringement of any
third party intellectual property, (iii) have no knowledge of circumstances that
would be reasonably expected to give rise to any such proceeding or litigation
and (iv) have no knowledge of circumstances that are causing or would be
reasonably expected to cause the loss or impairment of any Company Intellectual
Property, other than a default, proceeding, litigation, loss or impairment that
is not having or would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. "ICG Communications, Inc." is a
registered trademark of the Company in the United States and such registration
has been duly maintained by the Company.
For purposes of this Agreement, "Company Intellectual Property" means
patents and patent rights, trademarks and trademark rights, tradenames and
tradename rights, service marks and service ▇▇▇▇ rights, copyrights and
copyright rights, trade secret and trade secret rights, and other intellectual
property rights, and all pending applications for and registrations of any of
the foregoing that are used in the conduct of the business of the Company and
the ICG Subsidiaries as presently conducted.
3.12 Board Approval.
Prior to the execution of this Agreement, the Board of Directors of the
Company has approved the Transactions, including without limitation the
acquisition of the Shares, the Warrants, the Conversion Shares and the Warrant
Shares by the Purchasers and their respective "affiliates" and "associates" (as
those terms are defined in Section 203 of the DGCL) for all purposes, including
without limitation Section 203 of the DGCL, and no Purchaser or affiliate or
associate (as so defined) of a Purchaser shall as a result of the execution of
this Agreement or consummation of the transactions contemplated by this
Agreement, be subject to any of the restrictions of Section 203 of the DGCL or
any similar provisions of Applicable Law.
3.13 British Telecommunications.
As of the date hereof, the Company and its Subsidiaries do not, directly or
indirectly, beneficially own (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) any shares of any class of capital stock of British
Telecommunications plc, a company organized under the laws of England and Wales
("BT"), or any of its Subsidiaries, or any direct or indirect rights or options
to acquire (through purchase, exchange, conversion or otherwise) any shares of
any class of capital stock of BT or any of its Subsidiaries.
3.14 Share Exchange Agreement.
The representations and warranties of the Subsidiary of the Company that
will be a party to the Share Exchange Agreement to be set forth in the Share
Exchange Agreement will be true and correct when made.
PAGE 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally as to itself only, and not jointly, hereby
represents and warrants to the Company as of the date hereof and as of the
Closing Date as follows:
4.1 Organization; Authorization; Enforceability.
Such Purchaser is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has all corporate or
limited liability company power and authority to own its properties and assets
and to carry on its business as it is now being conducted and as currently
proposed to be conducted. Such Purchaser has the power to execute, deliver and
perform its obligations under each of the Equity Documents to which it is a
party and has taken all action necessary to authorize the execution, delivery
and performance by it of such Equity Documents and to consummate the
Transactions. No other proceedings on the part of such Purchaser are necessary
for such authorization, execution, delivery and consummation. Such Purchaser has
duly executed and delivered this Agreement and, at the Closing, such Purchaser
will have duly executed and delivered each of the other Equity Documents to be
executed and delivered by it at or prior to Closing. This Agreement constitutes,
and each of the other Equity Documents to which such Purchaser is a party, when
executed and delivered by such Purchaser, will constitute, a legal, valid and
binding obligation of such Purchaser enforceable against such Purchaser in
accordance with its terms, except as such enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization, or other laws of general
application affecting enforcement of creditors' rights or (b) general principles
of equity that restrict the availability of equitable remedies.
4.2 Private Placement.
(a) Such Purchaser understands that (i) the offering and sale of the
Securities, the Conversion Shares and the Warrant Shares in the Issuance by the
Company is intended to be exempt from registration under the Securities Act
pursuant to Section 4(2) thereof and (ii) there is no existing public or other
market for the Securities.
(b) Such Purchaser (either alone or together with its advisors) has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks of its investment in the
Securities, the Conversion Shares and the Warrant Shares, and is capable of
bearing the economic risks of such investment.
(c) Such Purchaser is acquiring the Securities, the Conversion Shares
and the Warrant Shares to be acquired hereunder for its own account (or for
accounts over which it exercises investment authority or as otherwise provided
herein), for investment and not with a view to the public resale or distribution
thereof in violation of any securities law.
(d) Such Purchaser understands that the Securities, the Conversion
Shares and the Warrant Shares will be issued in a transaction exempt from the
registration or qualification requirements of the Securities Act and applicable
state securities laws, and that such securities must be held indefinitely unless
a subsequent disposition thereof is registered or qualified under
PAGE 14
the Securities Act and such state securities laws or is exempt from such
registration or qualification.
(e) Such Purchaser (A) has been furnished with or has had full access
to all of the information that it considers necessary or appropriate to make an
informed investment decision with respect to the Securities, the Conversion
Shares and the Warrant Shares and that it has requested from the Company, (B)
has had an opportunity to discuss with management of the Company the intended
business and financial affairs of the Company and to obtain information (to the
extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to
it or to which it had access and (C) can bear the economic risk of (x) an
investment in the Securities, the Conversion Shares and the Warrant Shares
indefinitely and (y) a total loss in respect of such investment, and (D) has
such knowledge and experience in business and financial matters so as to enable
it to understand and evaluate the risks of and form an investment decision with
respect to its investment in the Securities, the Conversion Shares and the
Warrant Shares and to protect its own interest in connection with such
investment.
(f) The foregoing representations with respect to the Conversion Shares
and the Warrant Shares are made only if and to the extent the offering of the
Shares and the Warrants constitutes an offering of the Conversion Shares and the
Warrant Shares.
4.3 No Violation; Consents.
(a) Subject to making the filings and obtaining the consents and
approvals referred to in Section 4.3(b), the execution, delivery and performance
by such Purchaser of each of the Equity Documents to which it is a party and the
consummation of the Transactions, do not and will not contravene any Applicable
Law, except for such contraventions as would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to timely perform its obligations under this
Agreement. The execution, delivery and performance by such Purchaser of each of
the Equity Documents to which it is a party and the consummation of the
Transactions (i) will not (A) violate, result in a breach of or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under any Contract to which
such Purchaser is party or by which such Purchaser is bound or to which any of
its assets is subject, or (B) result in the creation or imposition of any Lien
upon any of the assets of such Purchaser, except for any such violations,
breaches, defaults or Liens that would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Purchaser to timely perform its obligations under this Agreement, and (ii) will
not conflict with or violate any provision of the certificate of incorporation
or bylaws or other governing documents of such Purchaser.
(b) Except for (i) the filings by the Purchaser, if any, required by
the HSR Act, and (ii) applicable filings, if any, with the Commission pursuant
to the Exchange Act, which, in each case, shall be made (or are not required to
be made) on or prior to the Closing Date, no consent, authorization or order of,
or filing or registration with, any Governmental Authority or other Person is
required to be obtained or made by such Purchaser for the execution, delivery
and performance of any of the Equity Documents to which it is a party or the
consummation of the
PAGE 15
Transactions, except where the failure to obtain such consents, authorizations
or orders, or make such filings or registrations, would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to timely perform its obligations under this
Agreement.
4.4 No Litigation.
There are not any (a) outstanding judgments against or affecting the
Purchaser or any of its Subsidiaries, (b) proceedings pending or, to the
knowledge of the Purchaser, threatened against or affecting the Purchaser or any
of its Subsidiaries or (c) investigations by any Governmental Authority that
are, to the knowledge of the Purchaser, pending or threatened against or
affecting the Purchaser or any of its Subsidiaries that, in any case,
individually or in the aggregate, would reasonably be expected to have a
material adverse effect on the ability of such Purchaser to timely perform its
obligations under this Agreement.
4.5 No Group Status.
Neither the Liberty Group, on the one hand, nor the HMTF Group, on the
other hand, is acting as a "group" (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) together with, in the case of the Liberty Group, the HMTF
Group, and in the case of the HTMF Group, the Liberty Group, in each case, with
respect to acquiring, holding, voting or disposing of the Securities.
ARTICLE V
COVENANTS OF THE COMPANY
5.1 Operation of Business.
(a) From the date hereof until the Closing Date, the Company shall, and
shall cause each of the ICG Subsidiaries to:
(i) operate its business in all material respects in the ordinary
course and in compliance with Applicable Laws;
(ii) not adopt any amendment to its charter or bylaws or comparable
organizational documents;
(iii) not split, combine or reclassify any shares of the Company's
Capital Stock;
(iv) except as set forth on Schedule 5.1(iv), not declare or pay any
dividend or distribution (whether in cash, stock or property) in respect of its
Capital Stock or increase the number of shares subject to the Company's stock
incentive and option plan;
(v) not take any action, or knowingly omit to take any action, that
would, or that would reasonably be expected to, result in (A) any of the
representations and warranties of the Company set forth in Article III becoming
untrue or (B) any of the
PAGE 16
conditions to the obligations of the Purchasers set forth in Section 7.2 not
being satisfied or (C) the triggering of any of the anti-dilution adjustments
contained in the Certificate of Designation (had such Certificate been in
effect); or
(vi) enter into any agreement or commitment to do any of the foregoing.
(b) Without the consent of Liberty, neither the Company nor any of its
Subsidiaries will voluntarily acquire or agree to acquire (through purchase,
exchange, conversion or otherwise) beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of any shares of any class of
capital stock of BT or its Subsidiaries or any direct or indirect rights or
options to so acquire any shares of any class of capital stock of BT or any of
its Subsidiaries.
5.2 HMTF and Liberty Directors.
(a) For so long as members of the HMTF Group own any combination of
shares of Common Stock and Series A Preferred Stock representing an amount of
Common Stock (on an as-converted basis) that, taken together, equals at least
the amount of Common Stock that would then have been issuable upon conversion of
50% or more of the shares of Series A Preferred Stock issued to members of the
HMTF Group on the Closing Date under this Agreement (the "HMTF Issued Series A
Preferred Shares"), the holders of a majority of the then outstanding HMTF
Shares shall have the right to designate one member of the Company's Board of
Directors or, if greater, such number of members of the Company's Board of
Directors (rounded up to the next whole number) equal to 10% of the then
authorized number of members of the Company's Board of Directors (each such
director an "HMTF Director"); provided, however, that the right to designate an
HMTF Director under this Section 5.2 shall be suspended at any time that the
HMTF Holders have the right to elect a person to the Board of Directors under
the terms of the Series A Preferred Stock set forth in the Certificate of
Designation. In the event the holders of a majority of the then outstanding
HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director
for election to the Company's Board of Directors and elect to have the Board of
Directors appoint an HMTF Director, they shall so notify the Company in writing
and the Company shall (a) increase the size of the Board of Directors by one and
fill the vacancy created thereby by electing an HMTF Director and (b) in
connection with the meeting of stockholders of the Company next following such
election, nominate an HMTF Director for election as a director by the
stockholders and use its commercially reasonable efforts to cause the HMTF
Director to be so elected. If the holders of a majority of the then outstanding
HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director
for election to the Company's Board of Directors and a vacancy shall exist in
the office of an HMTF Director, the holders of a majority of the then
outstanding HMTF Shares shall be entitled to designate a successor and the Board
of Directors shall elect such successor and, in connection with the meeting of
stockholders of the Company next following such election, nominate such
successor for election as director by the stockholders and use its commercially
reasonable efforts to cause the successor to be elected.
(b) (i) For so long as members of the Liberty Group in the aggregate
own any combination of shares of Common Stock and Series A Preferred Stock
representing an amount of Common Stock (on an as-converted basis) that, taken
together, equals at least the amount of Common Stock that would then have been
issuable upon conversion of 15% of the shares of
PAGE 17
Series A Preferred Stock issued to members of the Liberty Group on the Closing
Date under this Agreement (the "Liberty Issued Series A Preferred Shares"), the
members of the Liberty Group voting together as a single class, by a plurality
of the votes cast or by the written consent of a majority in interest of such
members, shall have a right to designate one member of the Company's Board of
Directors or, if greater, such number of members of the Company's Board of
Directors (rounded up to the next whole number) equal to 10% of the then
authorized number of members of the Company's Board of Directors (each such
director a "Liberty Director"); provided, however, that the right to designate a
Liberty Director under this Section 5.2 shall be suspended at any time that the
Liberty Holders have the right to elect a person to the Board of Directors under
the terms of the Series A Preferred Stock set forth in the Certificate of
Designation. In the event the members of the Liberty Group are entitled under
this Section 5.2 to designate the Liberty Director for election to the Company's
Board of Directors and elect to have the Board of Directors appoint a Liberty
Director, they shall so notify the Company in writing and the Company shall (a)
increase the size of the Board of Directors by one and fill the vacancy created
thereby by electing a Liberty Director and (b) in connection with the meeting of
stockholders of the Company next following such election, nominate a Liberty
Director for election as director by the stockholders and use its commercially
reasonable efforts to cause the Liberty Director to be so elected. If the
members of the Liberty Group are entitled under this Section 5.2 to designate a
Liberty Director for election to the Company's Board of Directors and a vacancy
shall exist in the office of a Liberty Director, the members of the Liberty
Group voting together as a single class, by a plurality of the votes cast or by
the written consent of a majority in interest of such members, shall be entitled
to designate a successor and the Board of Directors shall elect such successor
and, in connection with the meeting of stockholders of the Company next
following such election, nominate such successor for election as director by the
stockholders and use its commercially reasonable efforts to cause the successor
to be elected.
(ii) For so long as members of the Liberty Group in the aggregate own
any combination of shares of Common Stock and Series A Preferred Stock
representing an amount of Common Stock (on an as-converted basis) that, taken
together, equals at least the amount of Common Stock that would then have been
issuable upon conversion of 50% of the Liberty Issued Series A Preferred Shares,
the members of the Liberty Group voting together as a single class, by a
plurality of the votes cast or by the written consent of a majority in interest
of such members, shall have a right, in addition to the rights set forth in
clause (i) above, to designate one additional member of the Company's Board of
Directors or, if greater, such number of additional members of the Company's
Board of Directors (rounded up to the next whole number) equal to 10% of the
then authorized number of members of the Company's Board of Directors (each such
director an "Additional Liberty Director"); provided, however, that the right to
designate an Additional Liberty Director under this Section 5.2 shall be
suspended at any time that the Liberty Holders have the right to elect a person
to the Board of Directors under the terms of the Series A Preferred Stock set
forth in the Certificate of Designation. In the event the members of the
Liberty Group are entitled under this Section 5.2 to designate an Additional
Liberty Director for election to the Company's Board of Directors and elect to
have the Board of Directors appoint an Additional Liberty Director, they shall
so notify the Company in writing and the Company shall (a) increase the size of
the Board of Directors by one and fill the vacancy created thereby by electing
an Additional Liberty Director and (b) in connection with the meeting of
stockholders of the Company next following such election, nominate an Additional
Liberty Director for election as director by the stockholders and use its
commercially reasonable
PAGE 18
efforts to cause an Additional Liberty Director to be so elected. If the
members of the Liberty Group are entitled under this Section 5.2 to designate an
Additional Liberty Director for election to the Company's Board of Directors and
a vacancy shall exist in the office of an Additional Liberty Director, the
members of the Liberty Group voting together as a single class, by a plurality
of the votes cast or by the written consent of a majority in interest of such
members, shall be entitled to designate a successor and the Board of Directors
shall elect such successor and, in connection with the meeting of stockholders
of the Company next following such election, nominate such successor for
election as director by the stockholders and use its commercially reasonable
efforts to cause the successor to be elected.
5.3 Access to Books and Records.
(a) The Company shall afford to each of the Purchasers and the
Purchasers' accountants, counsel and representatives full access upon reasonable
notice during normal business hours throughout the period prior to the Closing
Date (or the earlier termination of this Agreement pursuant to Section 8.4) to
all its properties, books, Contracts, commitments and records (including, but
not limited to, tax returns) and, during such period, shall, upon request,
furnish promptly to each of the Purchasers (i) a copy of each report, schedule
and other document filed or received by any of them pursuant to the requirements
of Federal or state securities laws and (ii) all other information concerning
its business, properties and personnel as the Purchasers may reasonably request,
provided that no investigation or receipt of information pursuant to this
Section 5.3 shall affect any representation or warranty of the Company or the
conditions to the obligations of the Purchasers.
(b) The Company shall supplement the Information and the Projections
from time to time until the Closing Date if there is a material change in the
Information and the Projections previously provided, but no such supplement
shall be given effect for purposes of determining whether the Company has
breached any representations or warranties for purposes of Section 7.2 and
Section 8.1.
5.4 Agreement to Take Necessary and Desirable Actions.
The Company shall (a) subject to the satisfaction of the conditions set
forth in Section 7.1, execute and deliver the Equity Documents and such other
documents, certificates, agreements and other writings, and (b) take such other
actions, in each case, as may be reasonably necessary, desirable or requested
by the Purchasers in order to consummate or implement the Issuance in accordance
with the terms of this Agreement.
5.5 Compliance with Conditions; Commercially Reasonable Efforts.
The Company shall use all commercially reasonable efforts to cause all of
the obligations imposed upon it in this Agreement to be duly complied with, and
to cause the conditions precedent to the obligations of the Purchasers in
Sections 7.2(a) and (b) to be satisfied. Upon the terms and subject to the
conditions of this Agreement, the Company will use all commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable consistent with Applicable Law
to consummate and make
PAGE 19
effective in the most expeditious manner practicable the Issuance in accordance
with the terms of this Agreement.
5.6 HSR Act Notification.
To the extent required by the HSR Act, the Company shall, to the extent it
has not already done so, (a) use all commercially reasonable efforts to file or
cause to be filed, as promptly as practicable after the execution and delivery
of this Agreement, with the United States Federal Trade Commission and the
Antitrust Division of the United States Department of Justice, all reports and
other documents required to be filed by it under the HSR Act concerning the
Transactions and (b) use all commercially reasonable efforts to promptly comply
with or cause to be complied with any requests by the United States Federal
Trade Commission or the Antitrust Division of the United States Department of
Justice for additional information concerning such Transactions, in each case so
that the waiting period applicable to this Agreement and the Transactions under
the HSR Act shall expire as soon as practicable after the execution and delivery
of this Agreement. The Company agrees to request, and to cooperate with the
Purchasers in requesting, early termination of any applicable waiting period
under the HSR Act.
5.7 Consents and Approvals.
The Company (a) shall use all commercially reasonable efforts to obtain all
necessary consents, waivers, authorizations and approvals of all Governmental
Authorities and of all other Persons required in connection with the execution,
delivery and performance by the Company of the Equity Documents or the
consummation of the Issuance and (b) shall diligently assist and cooperate with
the Purchasers in preparing and filing all documents required to be submitted by
the Purchasers to any Governmental Authority in connection with the Issuance
(which assistance and cooperation shall include, without limitation, timely
furnishing, upon written requests, to the Purchasers all information concerning
the Company and the Subsidiaries that counsel to the Purchasers reasonably
determines is required to be included in such documents or would be helpful in
obtaining any such required consent, waiver, authorization or approval).
5.8 Reservation of Shares.
The Company shall:
(a) cause to be authorized and reserve and keep available at all times
during which any of the Shares and Warrants remain outstanding, free from
preemptive rights, out of its treasury stock or authorized but unissued shares
of Capital Stock, or both, solely for the purpose of effecting the conversion or
exercise of the Shares or Warrants pursuant to the terms of the Certificate of
Designation or the Warrants, sufficient shares of Common Stock to provide for
the issuance of the maximum number of shares issuable upon conversion and
exercise of outstanding Shares and Warrants;
(b) issue and cause the transfer agent to deliver such shares of Common
Stock as required upon conversion or exercise of the Shares and Warrants; and
PAGE 20
(c) if any shares of Common Stock reserved for the purpose of issuance
upon conversion of the Shares and exercise of the Warrants require registration
with or approval of any Governmental Authority under any Applicable Law before
such shares may be validly issued or delivered, secure such registration or
approval, as the case may be, and maintain such registration or approval in
effect so long as so required.
5.9 Use of Proceeds.
The Company shall use the proceeds from the Issuance for building out its
network, payment of expenses incurred in connection with the Transactions and
for general corporate purposes.
5.10 Filing of Certificate of Designation.
Prior to the Issuance, the Company shall file the Certificate of
Designation with the Secretary of State of the State of Delaware pursuant to
Section 151(g) of the DGCL.
5.11 Listing of Shares.
The Company shall use all commercially reasonable efforts to cause the
Conversion Shares and the Warrant Shares to be listed or otherwise eligible for
trading on the NASDAQ National Market System or other national securities
exchange.
5.12 Periodic Information.
For so long as the Securities are outstanding the Company shall file all
reports required to be filed by the Company under Section 13 or 15(d) of the
Exchange Act and shall provide the holders of the Securities and prospective
purchasers of such shares with the information specified in Rule 144A(d) under
the Securities Act.
5.13 Legends.
So long as applicable, each certificate representing any portion of the
Securities, shall contain, be stamped or otherwise imprinted with a legend in
the following form (in addition to any legend required under applicable state
securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES. SUCH SHARES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS."
After the above requirement for a legend is no longer applicable with respect to
all or any of the Securities because the applicable Securities are freely
transferable under the Securities Act, the
PAGE 21
Company shall remove such legend upon request from a holder of the applicable
Securities, if outside counsel for such holder reasonably determines that the
transfer of such Securities is no longer restricted by the Securities Act and
outside counsel for the Company reasonably concurs in such determination.
5.14 Payment; Paying Agent; Certain Information.
The Company shall:
(a) make any required payments on the Securities;
(b) maintain (i) an office or agency where the Securities may be
presented for payment (the "Paying Agent"), (ii) an office or agency where the
Securities may be presented for conversion (the "Conversion Agent"), and (iii) a
Registrar, which shall be an office or an agency where the Securities may be
presented for transfer; and
(c) provide certain information to the Purchasers, including such
information and notices as may be necessary for the Purchasers to exercise their
rights under this Agreement and in connection with conversion or exercise of the
Securities.
5.15 Rights Plan.
The Company shall not adopt a "poison pill" shareholder rights plan unless
(a) the Company distributes to holders of the shares of Series A Preferred
Stock, and to the holders of the Warrant Shares upon exercise of the Warrants,
such number of rights as such holders would have received had they converted
their Shares immediately prior to the record date for such distribution and (b)
the terms of such rights plan exempt the ownership and acquisition of securities
of the Company (i) by the Liberty Group, or any member thereof, and (ii) by the
HMTF Group, or any member thereof, in each case subject to compliance with
Section 6.6.
5.16 Proportional Purchase Right.
The Liberty Holders, the HMTF Holders and the Gleacher Holders shall each
have the right, for a period beginning on the Closing Date and ending on the
second anniversary of the Closing Date, to purchase from the Company their pro
rata portion (based on the percentage of the outstanding shares of Common Stock
then held by the Liberty Holders, the HMTF Holders or the Gleacher Holders, as
the case may be, on an as-converted basis) of any securities issued by the
Company so that such Holders, after giving effect to such issuance and
corresponding purchase by such Holders, shall be able to maintain their
proportional ownership interest in the Company. The purchase price for such
purchases shall be equal to the price per share received by the Company in the
issuance giving rise to the purchase right. This proportional purchase right
shall not apply to shares issued pursuant to the Share Exchange Agreement, any
rights or obligations referenced on Schedule 3.2, any shares of capital stock
issued by the Company in lieu of any fees payable in connection with the
Transaction to the Company's financial advisors, or any shares issued pursuant
to any stock option plan or employee benefit plan existing as of the date hereof
or approved by the Board of Directors of the Company. In the event the shares
are issued in connection with an acquisition or other transaction not involving
a financing, the Company will permit the Liberty Holders, the HMTF Holders and
the Gleacher Holders to
PAGE 22
purchase the appropriate number of shares in a separate transaction, with the
purchase price per share equal to the valuation per share of the Common Stock
established by the Board of Directors of the Company in the transaction giving
rise to the purchase right.
5.17 Modification of Share Exchange Agreement.
The Company shall not, and shall cause its Subsidiaries not to, amend,
modify or terminate the Share Exchange Agreement without the prior written
consent of the Liberty Holders and the HMTF Holders.
ARTICLE VI
COVENANTS OF THE PURCHASERS
Each Purchaser, severally as to itself only and not jointly with any other
Purchaser, hereby covenants as follows:
6.1 Agreement to Take Necessary and Desirable Actions.
Each Purchaser shall (a) subject to the satisfaction of the conditions set
forth in Section 7.2, execute and deliver each of the Equity Documents to which
it is a party and such other documents, certificates, agreements and other
writings and (b) take such other actions, in each case, as may be reasonably
necessary, desirable or requested by the Company in order to consummate or
implement the Transactions in accordance with the terms of this Agreement.
6.2 Compliance with Conditions; Commercially Reasonable Efforts.
Each Purchaser shall use all commercially reasonable efforts to cause all
of the obligations imposed upon it in this Agreement to be duly complied with,
and to cause the conditions precedent to the obligations of the Company in
Sections 7.1(a) and (b) (as they relate to such Purchaser) to be satisfied. Upon
the terms and subject to the conditions of this Agreement, each Purchaser will
use all commercially reasonable efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable consistent with Applicable Law to consummate and make effective in the
most expeditious manner practicable the Transactions in accordance with the
terms of this Agreement. Nothing herein shall be construed to require a
Purchaser or any of its Affiliates to divest or otherwise rearrange the
composition of any assets or agree to any conditions or requirements which are,
or are reasonably likely to be, materially adverse or burdensome to such
Purchaser or its Affiliates, as applicable. Nothing set forth in this Section
6.2 shall impose any obligations with respect to any filing or approval under
the HSR Act, which requirements are the subject of Section 6.3.
6.3 HSR Act Notification.
To the extent required by the HSR Act, each Purchaser shall, if it has not
already done so, (a) use all commercially reasonable efforts to file or cause to
be filed, as promptly as practicable after the execution and delivery of this
Agreement, with the United States Federal Trade Commission and the Antitrust
Division of the United States Department of Justice, all reports and other
documents required to be filed by it under the HSR Act concerning the
transactions
PAGE 23
contemplated hereby and (b) use all commercially reasonable efforts to promptly
comply with or cause to be complied with any requests by the United States
Federal Trade Commission or the Antitrust Division of the United States
Department of Justice for additional information concerning such transactions in
each case so that the waiting period applicable to this Agreement and the
transactions contemplated hereby under the HSR Act shall expire as soon as
practicable after the execution and delivery of this Agreement. Each Purchaser
agrees to request, and to cooperate with the Company in requesting, early
termination of any applicable waiting period under the HSR Act.
6.4 Consents and Approvals.
Each Purchaser (a) shall use all commercially reasonable efforts to obtain
all necessary consents, waivers, authorizations and approvals of all
Governmental Authorities other than as expressly set forth in Section 6.3
regarding the HSR Act, and of all other Persons required in connection with the
execution, delivery and performance by such Purchaser of this Agreement or the
consummation of the Transactions and (b) shall diligently assist and cooperate
with the Company in preparing and filing all documents required to be submitted
by the Company to any Governmental Authority in connection with such
Transactions (which assistance and cooperation shall include, without
limitation, timely furnishing to the Company all information concerning such
Purchaser that counsel to the Company reasonably determines is required to be
included in such documents or would be helpful in obtaining any such required
consent, waiver, authorization or approval). Nothing herein shall be construed
to require a Purchaser or any of its Affiliates to divest or otherwise rearrange
the composition of any assets or agree to any conditions or requirements which
are, or are reasonably likely to be, materially adverse or burdensome to such
Purchaser or its Affiliates, as applicable.
6.5 Restrictions on Transfer.
No Purchaser shall sell, assign, transfer, pledge, hypothecate, deposit in
a voting trust or otherwise dispose of any portion of the Securities (any such
disposition, a "Securities Transfer"), other than (a) to a Permitted Transferee
of such Purchaser that has agreed in writing (each, a "Permitted Transferee
Agreement") to be bound by the terms and provisions of this Section 6.5 to the
same extent that the transferring Purchaser would be bound if it beneficially
owned the Securities transferred to such Permitted Transferee or (b)(i) in any
transaction in compliance with Rule 144 under the Securities Act or any
successor rule or regulation, (ii) in a transaction exempt from the registration
requirements of the Securities Act or (iii) pursuant to a registration
statement. Each Purchaser shall promptly notify the Company of any Securities
Transfer to a Permitted Transferee of such Purchaser, which notification shall
include a Permitted Transferee Agreement executed by each Permitted Transferee
of such Purchaser to whom any Securities have been transferred.
6.6 Standstill.
(a) Prior to the fifth anniversary of the Closing Date, no Liberty
Holder shall purchase any shares of Common Stock (or securities convertible into
or exchangeable for shares of Common Stock), other than from the Company, if
after giving effect thereto and to the shares of Common Stock that the Liberty
Holders would have the right to acquire on or prior to the fifth
PAGE 24
anniversary of the Closing Date upon conversion or exercise of securities
acquired by such Holders on the Closing Date, the Liberty Holders, taken as a
whole, would beneficially own more than 37% of the outstanding shares of Common
Stock (assuming that all shares of Common Stock that would be issuable upon the
conversion, on the fifth anniversary of the Closing Date, of all shares of
Series A Preferred Stock issued on the Closing Date are outstanding, but
otherwise calculated in accordance with Rule 13d-3(d)(1)(i) promulgated under
the Exchange Act). In no event will any Liberty Holder be deemed to be in
violation of the foregoing provision at any time that the aggregate voting power
of the outstanding voting securities of the Company owned by the Liberty
Holders, taken as a whole, does not exceed 25.1% of the aggregate voting power
of all outstanding voting securities of the Company.
(b) Prior to the fifth anniversary of the Closing Date, no HMTF Holder
shall purchase any shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock), other than from the Company, if after
giving effect thereto and to the shares of Common Stock that the HMTF Holders
would have the right to acquire on or prior to the fifth anniversary of the
Closing Date upon conversion or exercise of securities acquired by such Holders
on the Closing Date, the HMTF Holders, taken as a whole, would beneficially own
more than 17.5% of the outstanding shares of Common Stock (assuming that all
shares of Common Stock that would be issuable upon the conversion, on the fifth
anniversary of the Closing Date, of all shares of Series A Preferred Stock
issued on the Closing Date are outstanding, but otherwise calculated in
accordance with Rule 13d-3(d)(1)(i) promulgated under the Exchange Act).
(c) Prior to the fifth anniversary of the Closing Date, no Gleacher
Holder shall purchase any shares of Common Stock (or securities convertible into
or exchangeable for shares of Common Stock), other than from the Company, if
after giving effect thereto and to the shares of Common Stock that the Gleacher
Holders would have the right to acquire on or prior to the fifth anniversary of
the Closing Date upon conversion or exercise of securities acquired by such
Holders on the Closing Date, the Gleacher Holders, taken as a whole, would
beneficially own more than 3% of the outstanding shares of Common Stock
(assuming that all shares of Common Stock that would be issuable upon the
conversion, on the fifth anniversary of the Closing Date, of all shares of
Series A Preferred Stock issued on the Closing Date are outstanding, but
otherwise calculated in accordance with Rule 13d-3(d)(1)(i) promulgated under
the Exchange Act).
ARTICLE VII
CONDITIONS PRECEDENT TO CLOSING
7.1 Conditions to the Company's Obligations.
The obligations of the Company with respect to a Purchaser hereunder
required to be performed on the Closing Date shall be subject to the
satisfaction or waiver, at or prior to the Closing, of the following conditions:
(a) The representations and warranties of such Purchaser contained in
this Agreement shall have been true and correct when made and, in addition,
shall be repeated and
PAGE 25
true and correct in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date.
(b) Such Purchaser shall have performed in all material respects all
obligations and agreements, and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with by such
Purchaser at or prior to the Closing Date.
(c) Any applicable waiting period under the HSR Act with respect to the
purchase by such Purchaser shall have expired or been terminated.
(d) The Company shall have obtained all necessary consents, waivers,
authorizations and approvals of all Governmental Authorities and of all other
Persons required in connection with the execution, delivery and performance of
the Equity Documents or the consummation of the Issuance, such waivers to be
satisfactory in form and substance to the Company.
(e) Such Purchaser shall have entered into the Registration Rights
Agreement.
(f) The Shares to be purchased at the Closing shall be issued for an
aggregate amount of no less than $600,000,000.00.
7.2 Conditions to Each Purchaser's Obligations.
The obligations of a Purchaser hereunder required to be performed on the
Closing Date shall be subject to the satisfaction or waiver, at or prior to the
Closing, of the following conditions:
(a) The representations and warranties of the Company contained in this
Agreement (i) shall have been true and correct when made and (ii) shall be (A)
in the case of representations and warranties that are qualified as to
materiality or Material Adverse Effect, true and correct and (B) in all other
cases, true and correct in all material respects, in the case of clauses (A) and
(B), as of the Closing Date with the same force and effect as though made on and
as of the Closing Date.
(b) The Company shall have performed in all material respects all of
its obligations and agreements and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with at or
prior to the Closing Date.
(c) The Company shall have entered into the Registration Rights
Agreement.
(d) The Company shall have filed the Certificate of Designation with
the Secretary of State of the State of Delaware.
(e) Any applicable waiting period under the HSR Act with respect to the
purchase by such Purchaser shall have expired or been terminated and no
litigation arising therefrom shall have been commenced and remain outstanding.
PAGE 26
(f) The Company shall have delivered to such Purchaser a certificate
executed on its behalf by a duly authorized representative, dated the Closing
Date, to the effect that each of the conditions specified in paragraph (a)
through (e) of this Section 7.2 has been satisfied.
(g) No provision of any Applicable Law, injunction, order or decree of
any Governmental Entity shall be in effect which has the effect of making the
Transactions illegal or shall otherwise restrain or prohibit the consummation of
the Transactions.
(h) Such Purchaser shall have received an opinion of (i) H. ▇▇▇ ▇▇▇▇▇▇,
General Counsel of the Company and (ii) ▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP,
special counsel to the Company, in each case dated the Closing Date, and
addressed to such Purchaser, covering the matters set forth in Exhibit D, in
form and substance reasonably acceptable to the Purchaser.
(i) Such Purchaser shall have received certificates representing the
Securities purchased by such Purchaser concurrently with the Company's receipt
of the Purchase Price for such Securities.
(j) There shall not have occurred (i) any event, circumstance,
condition, fact, effect or other matter which has had or could reasonably be
expected to have a material adverse effect (x) on the business, assets,
financial condition, prospects, or results of operations of the Company and its
Subsidiaries taken as a whole or (y) on the ability of the Company and its
Subsidiaries to perform on a timely basis any material obligation under this
Agreement or the other Equity Documents or to consummate the Issuance
contemplated hereby; or (ii) any material disruption of or material adverse
change in financial, banking or capital market conditions.
(k) The Share Exchange Agreement shall be in full force and effect and
there shall not have been any amendment or waiver of any of its material terms
or conditions.
(l) The Company shall have delivered duly executed copies of the
Management Rights Agreements to the HMTF Funds.
(m) The Company shall have made all filings with, given all notices to,
and received all approvals from, all Governmental Authorities (including,
without limitation, the Federal Communications Commission and state public
utility commissions) required in connection with the consummation of the
Transactions, unless the failure to make such filings, give such notices or
receive such approvals would not, individually or in the aggregate, have a
Material Adverse Effect or a material adverse effect on the ability of the
Company to consummate the Transactions.
ARTICLE VIII
MISCELLANEOUS
8.1 Survival; Indemnification.
(a) All representations, warranties, covenants and agreements contained
in this Agreement shall survive the Closing for 18 months (except (i) covenants
and agreements that are required to be performed after the Closing Date
(including without limitation the covenants and
PAGE 27
agreements contained in Sections 5.1(b), 5.2, 5.8, 5.9, 5.11, 5.12, 5.13, 5.14,
5.15, 5.16, 5.17, 6.5 and 6.6) and (ii) Sections 3.12 and 3.13 and the last
sentence of Section 3.2(a), which shall survive indefinitely). Notwithstanding
the foregoing, with respect to claims asserted pursuant to this Section 8.1
before the expiration of the applicable representation, warranty, covenant or
agreement, such claims shall survive until the date they are finally adjudicated
or otherwise resolved.
(b) The Company agrees to indemnify and hold harmless each Purchaser
and each Purchaser Affiliate (each an "Indemnified Person"), from and against
(and to reimburse each indemnified person as the same are incurred) any and all
losses (including, but not limited to, impairment of the value of the Shares and
Warrants as of the date such loss first becomes known, but excluding
consequential damages), claims, damages, liabilities, costs and expenses
(collectively, "Losses") to which any Indemnified Person may become subject or
which any Indemnified Person may incur based upon, arising out of, or in
connection with (i) a breach of any representation, warranty or covenant of this
Agreement by the Company or (ii) any claim, litigation, investigation or
proceeding brought by or on behalf of any Person other than the Company relating
to the Issuance, and to reimburse each Indemnified Person upon demand for any
reasonable legal or other reasonable out of pocket expenses incurred in
connection with investigating or defending any of the foregoing, provided the
maximum amount indemnifiable to each Purchaser (and its successors or assigns)
under clause (i) shall not exceed the purchase price of the Securities purchased
by such Purchaser.
(c) If a Person entitled to indemnity hereunder (an "Indemnified
Party") asserts that the Company (the "Indemnifying Party") has become obligated
to the Indemnified Party pursuant to Section 8.1(b), or if any suit, action,
investigation, claim or proceeding is begun, made or instituted as a result of
which the Indemnifying Party may become obligated to the Indemnified Party
hereunder, the Indemnified Party shall notify the Indemnifying Party promptly
and shall cooperate with the Indemnifying Party, at the Indemnifying Party's
expense, to the extent reasonably necessary for the resolution of such claim or
in the defense of such suit, action or proceedings, including making available
any information, documents and things in the possession of the Indemnified
Party. Notwithstanding the foregoing notice requirement, the right to
indemnification hereunder shall not be affected by any failure to give, or delay
in giving, notice unless, and only to the extent that, the rights and remedies
of the Indemnifying Party shall have been materially prejudiced as a result of
such failure or delay.
(d) In fulfilling its obligations under this Section 8.1, after the
Indemnifying Party has provided each Indemnified Party with a written notice of
its acceptance of liability under this Section 8.1, as between such Indemnified
Party and the Indemnifying Party, the Indemnifying Party shall have the right to
investigate, defend, settle or otherwise handle, with the aforesaid cooperation,
any claim, suit, action or proceeding brought by a third party in such manner as
the Indemnifying Party may in its sole discretion reasonably deem appropriate;
provided, that (i) counsel retained by the Indemnifying Party is reasonably
satisfactory to the Indemnified Party and (ii) the Indemnifying Party will not
consent to any settlement or entry of judgment imposing any obligations on any
other party hereto other than financial obligations for which such party will be
indemnified hereunder, unless such party has consented in writing to such
settlement or judgment (which consent may be given or withheld in its sole
discretion) and (iii) the Indemnifying Party will not consent to any settlement
or entry of judgment unless, in connection
PAGE 28
therewith, the Indemnifying Party obtains a full and unconditional release of
the Indemnified Party from all liability with respect to such suit, action,
investigation claim or proceeding. Notwithstanding the Indemnifying Party's
election to assume the defense or investigation of such claim, action or
proceeding, the Indemnified Party shall have the right to employ separate
counsel and to participate in the defense or investigation of such claim, action
or proceeding, which participation shall be at the expense of the Indemnifying
Party, if (i) on the advice of counsel to the Indemnified Party use of counsel
of the Indemnifying Party's choice could reasonably be expected to give rise to
a material conflict of interest, (ii) the Indemnifying Party shall not have
employed counsel reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party within a reasonable time after notice of the assertion of
any such claim or institution of any such action or proceeding, (iii) if the
Indemnifying Party shall authorize the Indemnified Party to employ separate
counsel at the Indemnifying Party's expense or (iv) such action shall seek
relief other than monetary damages against the Indemnified Party.
(e) The Company and the Purchasers agree that any payment of Losses
made hereunder will be treated by the parties on their tax returns as an
adjustment to the Purchase Price. If, notwithstanding such treatment by the
parties, a final determination (which shall include the form 870-AD or successor
form) with respect to the Indemnified Party or any of its Affiliates causes any
such payment not to be treated as an adjustment to Purchase Price, then the
Indemnifying Party shall indemnify the Indemnified Party for any taxes payable
by the Indemnified Party or any subsidiary by reason of the receipt of such
payment (including any payments under this Section 8.1(e)), determined at an
assumed marginal tax rate equal to the highest marginal tax rate then in effect
for corporate taxpayers in the relevant jurisdiction.
8.2 Notices.
All notices, demands, requests, consents, approvals or other communications
(collectively, "Notices") required or permitted to be given hereunder or which
are given with respect to this Agreement shall be in writing and shall be
personally served, delivered by reputable air courier service with charges
prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile. Notice otherwise sent as provided herein shall be deemed
given on the next business day following delivery of such notice to a reputable
air courier service.
PAGE 29
To the Company:
ICG Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: H. ▇▇▇ ▇▇▇▇▇▇, Executive Vice President,
General Counsel and Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To the Purchasers:
(as to matters relating to the HMTF Purchasers)
To the appropriate member of the HMTF Group
c/o Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated
1325 Avenue of the Americas
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PAGE 30
with a copy to:
Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
1325 Avenue of the Americas (▇▇▇▇ ▇▇▇▇▇)
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(as to matters relating to Liberty)
To:
Liberty Media Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Liberty Media Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇ ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PAGE 31
(as to matters relating to the Gleacher Purchaser)
To:
Gleacher & Co.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
8.3 Governing Law.
This Agreement shall be governed by, interpreted under, and construed in
accordance with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.4 Termination.
(a) This Agreement may be terminated as between the Company and any
Purchaser (i) at any time prior to the Closing Date by mutual written agreement
of the Company and such Purchaser, (ii) if the Closing shall not have occurred
on or prior to May 31, 2000 either the Company or such Purchaser, at any time
after May 31, 2000, provided that the right to terminate this Agreement under
this Section 8.4(a)(ii) shall not be available to any party whose failure to
fulfill any obligation under this Agreement was the cause of or resulted in the
failure of the Closing to occur on or before such date, (iii) if any
Governmental Authority 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, by either the Company or
such Purchaser, (iv) if either the Company or such Purchaser shall have breached
any of its material obligations under this Agreement, by the non-breaching
party, or (v) if an event described in Section 7.2(j) shall have occurred, by
such Purchaser. Any party desiring to terminate this Agreement pursuant to
clauses 8.4(a)(ii), (iii), (iv) or (v) shall promptly give notice of such
termination to the other party.
(b) If this Agreement is terminated as between the Company and a
Purchaser, as permitted by Section 8.4(a), such termination shall be without
liability of any party (or any stockholder, director, officer, partner,
employee, agent, consultant or representative of such party) to any other party
to this Agreement; provided that if such termination shall result from the
willful (a) failure of any party to fulfill a condition to the performance of
the obligations of the other party, (b) failure to perform a covenant of this
Agreement or (c) breach by any party hereto of any representation or warranty
contained herein, such failing or breaching party shall be fully liable for any
and all losses (excluding consequential damages) incurred or suffered by the
other party as a result of such failure or breach. The provisions of Sections
8.1(b)-(d), 8.2, 8.3, this Section 8.4, Sections 8.5, 8.8, 8.10, 8.11, 8.12,
8.13, 8.14, 8.16, 8.17, 8.18 and 8.20 shall survive any termination hereof
pursuant to Section 8.4(a).
PAGE 32
8.5 Entire Agreement.
As between the Company and each Purchaser, this Agreement and the other
Equity Documents (including all agreements entered into pursuant hereto and
thereto and all certificates and instruments delivered pursuant hereto and
thereto) constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
parties, whether oral or written, with respect to the subject matter hereof.
8.6 Modifications and Amendments.
No amendment, modification or termination of this Agreement as between the
Company and a Purchaser shall be binding unless executed in writing by the
Company and such Purchaser intending to be bound thereby.
8.7 Waivers and Extensions.
Any party to this Agreement may waive any condition, right, breach or
default that such party has the right to waive, provided that such waiver will
not be effective against the waiving party unless it is in writing, is signed by
such party, and specifically refers to this Agreement. Waivers may be made in
advance or after the right waived has arisen or the breach or default waived has
occurred. Any waiver may be conditional. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
8.8 Titles and Headings.
Titles and headings of sections of this Agreement are for convenience only
and shall not affect the construction of any provision of this Agreement.
8.9 Exhibits and Schedules.
Each of the exhibits and schedules referred to herein and attached hereto
is an integral part of this Agreement and is incorporated herein by reference.
8.10 Expenses.
All costs and expenses incurred in connection with this Agreement shall be
paid by the party incurring such cost or expense; provided, however, that the
Company shall pay the filing fees in respect of any filings pursuant to the HSR
Act.
8.11 Press Releases and Public Announcements.
All public announcements or disclosures relating to the Issuance or this
Agreement shall be made only if mutually agreed upon by the Company and the
Purchasers, except to the extent such disclosure is, in the opinion of counsel,
required by law or by regulation of any applicable
PAGE 33
national stock exchange or Commission recognized trading market; provided that
(a) any such required disclosure shall only be made, to the extent consistent
with law and regulation of any applicable national stock exchange or Commission
recognized trading market, after consultation with each Purchaser and the
Company and (b) no such announcement or disclosure (except as required by law or
by regulation of any applicable national stock exchange or Commission recognized
trading market) shall identify any Purchaser without such Purchaser's prior
consent.
8.12 Assignment; No Third Party Beneficiaries.
This Agreement and the rights, duties and obligations hereunder may not be
assigned or delegated by the Company without the prior written consent of the
Purchasers, and may not assigned or delegated by any Purchaser without the
Company's prior written consent except that each Purchaser may assign any or all
of its rights and obligations under this Agreement to any one or more of its
Affiliates. Any assignment or delegation of rights, duties or obligations
hereunder made by the Company without the prior written consent of the
Purchasers, shall be void and of no effect. This Agreement and the provisions
hereof shall be binding upon and shall inure to the benefit of each of the
parties and their respective successors and permitted assigns. This Agreement is
not intended to confer any rights or benefits on any Persons other than the
parties hereto, except as expressly set forth in Section 5.2, Section 8.1, this
Section 8.12 or Section 8.20.
8.13 Severability.
This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity
or enforceability of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
8.14 Counterparts.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
8.15 Further Assurances.
As between the Company and a Purchaser, each party hereto, upon the request
of any other party hereto, shall do all such further acts and execute,
acknowledge and deliver all such further instruments and documents as may be
necessary or desirable to carry out the transactions contemplated by this
Agreement, including, in the case of the Company, such acts, instruments and
documents as may be necessary or desirable to convey and transfer to each
Purchaser the Shares and Warrants to be purchased by it hereunder.
8.16 Remedies Cumulative.
The remedies provided herein shall be cumulative and shall not preclude the
assertion by any party hereto of any other rights or the seeking of any remedies
against the other party hereto.
PAGE 34
8.17 Several Liability of the Purchasers.
Nothing in this Agreement (including, without limitation, Article VI) shall
be construed to impose on any Purchaser any liability for any action or failure
to act of any other Purchaser, including any breach of this Agreement by any
such other Purchaser.
8.18 No Duty to Other Purchasers.
Each Purchaser confirms with each other Purchaser that such Purchaser has
conducted its own due diligence in connection with its investment in the
Securities and the other Purchasers may therefore have information different
from, or additional to, the information possessed by such Purchaser. In
addition, although certain of such other Purchasers (the "Supplying Purchasers")
may have shared information received by them (including information contained in
third party reports prepared for such other Purchasers) with such Purchaser, no
representation or warranty is being made with respect to such information by any
Supplying Purchaser or any such third party. Nothing in this Section 8.18 is
meant to limit any duty, obligation or liability the Company may have to any
Purchaser under this Agreement or otherwise.
8.19 Specific Performance.
The parties hereto agree that the remedy at law for any breach of this
Agreement may be inadequate, and that as between the Company and a Purchaser any
party by whom this Agreement is enforceable shall be entitled to specific
performance in addition to any other appropriate relief or remedy. Such party
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement as between the Company and a
Purchaser, or prevent any violation hereof, and, to the extent permitted by
applicable as between the Company and a Purchaser law, each party waives any
objection to the imposition of such relief.
8.20 No Purchaser Affiliate Liability.
No Purchaser Affiliate shall have any liability or obligation of any nature
whatsoever in connection with or under this Agreement or the transactions
contemplated hereby, and the Company hereby waives and releases all claims of
any such liability and obligation, it being understood that no such Person or
entity (other than Purchaser) shall be liable for or in respect of Purchaser's
obligations under this Agreement or with respect to the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ICG COMMUNICATIONS, INC.
By:/s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
HMTF BRIDGE ICG, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
LIBERTY MEDIA CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
GLEACHER/ICG INVESTORS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
SCHEDULE I
Purchaser. . . . . . . . . Number of Shares Number of Warrants Purchase Price
HMTF Bridge ICG, LLC . . . 230,000 3,066,667 $ 230,000,000
Liberty Media Corporation. 500,000 6,666,667 $ 500,000,000
Gleacher/ICG Investors LLC 20,000 266,666 $ 20,000,000
EXHIBIT A
FORM OF WARRANT
EXHIBIT B
CERTIFICATE OF DESIGNATION
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT D
FORM OF LEGAL OPINION
EXHIBIT E
FORM OF MANAGEMENT RIGHTS AGREEMENT