Exhibit 10(c)
AMENDED AND RESTATED AGREEMENT
BETWEEN
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
AND
KLT TELECOM INC.
DATED AS OF SEPTEMBER 27, 2000
AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (this "Agreement")
is made as of September 27, 2000, by and between ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇") and KLT Telecom Inc. ("KLT"). Each of
▇▇▇▇▇▇▇▇▇ and KLT is a "Party", and collectively they are the
"Parties".
WITNESSETH:
WHEREAS, the Parties wish to amend and restate the
Agreement between the Parties dated as of August 26, 2000 (the
"Original Agreement") in the manner set forth in this Agreement;
WHEREAS, ▇▇▇▇▇▇▇▇▇ (which term shall include, for this
purpose, trusts for the benefit of ▇▇▇▇▇▇▇▇▇ and his immediate
family) owns 30,000,000 shares of the common stock (the "Shares")
of DTI Holdings, Inc. (the "Company");
WHEREAS, KLT owns shares of the Company which are
convertible into 30,000,000 shares of common stock of the Company
and which have voting rights equivalent to such common stock;
WHEREAS, as a result of their equal voting rights and
pursuant to the Shareholders' Agreement, dated as of March 12,
1997 (the "Shareholders' Agreement") entered into in connection
with the investment by KLT in the Company, KLT and ▇▇▇▇▇▇▇▇▇ have
equal representation on the Board of Directors of the Company;
WHEREAS, on account of differences in their views as to
certain matters affecting the business and operations of the
Company, the Parties consider it advisable, and in the best
interests of the Company, that (i) the current ownership
structure of the Company not continue, and (ii) the disputes
between them be resolved without litigation by executing a mutual
release if the transactions and matters contemplated by this
Agreement are consummated, or to have resolution of such disputes
deferred for six months after the Agreement is terminated in the
event that the transactions contemplated by this Agreement are
not consummated;
WHEREAS, ▇▇▇▇▇▇▇▇▇ wishes to sell and grant an option
to purchase, and KLT desires to purchase and obtain an option to
purchase, the Shares of the Company, and the Parties now wish to
enter into this Agreement for the purpose of setting forth the
terms and conditions relating to such purchase and option; and
WHEREAS, ▇▇▇▇▇▇▇▇▇ and KLT agree to cause the
delegation of the power and authority to KLT's designees listed
on Exhibit A during the Delegation Period (as defined in Section
5.1(a)) under the circumstances described in Section 5.1(a).
NOW, THEREFORE, in consideration of the mutual
covenants and undertakings contained herein, and on the terms and
conditions herein set forth, the Parties hereto agree as follows:
1. EFFECTIVE DATE OF AGREEMENT AND PURCHASE OF INITIAL SHARES
1.1 EFFECTIVE DATE. The Parties agree that, except as otherwise
provided herein, this Agreement became legally binding on the
Parties on September 14, 2000 (the "Effective Date").
1.2 PURCHASE. Subject to the terms and conditions of this
Agreement, ▇▇▇▇▇▇▇▇▇ agrees to sell to KLT, and KLT agrees to
purchase from ▇▇▇▇▇▇▇▇▇, such percentage of the Shares (together
with all and any rights arising therefrom; the "Initial Shares")
as would not, in the opinion of counsel to KLT, cause a Change of
Control (as defined in the Indenture (as defined in Section
2.1(b)), and assuming all rights to purchase stock of the Company
had been fully exercised), but in no event more than ninety
percent (90%) of the Shares, and shall pay, as the aggregate
purchase price of the Initial Shares, an amount equal to
$109,417,747 and all of the additional consideration listed on
Exhibit B (collectively, the "Initial Shares Purchase Price").
1.3 REMAINING SHARES OPTION. If KLT shall acquire the Initial
Shares by midnight on November 20, 2000, New York City time,
▇▇▇▇▇▇▇▇▇ shall grant to KLT an option, in the form attached as
Exhibit 1.3 (the "Remaining Shares Option"), to purchase the
Shares owned by ▇▇▇▇▇▇▇▇▇ other than the Initial Shares (the
"Remaining Shares") for a period of five years thereafter for an
aggregate exercise price in an amount equal to $12,157,528.20,
plus an amount equal to the product of $12,157,528.20 times 15%
per annum, commencing from the Initial Shares Closing Date,
compounded semi-annually and calculated on the basis of a year of
360 days and twelve 30-day months and actual days elapsed in each
month (collectively, the "Remaining Shares Exercise Price").
1.4 ESCROW OF SHARES. The certificates evidencing the Remaining
Shares shall be placed in escrow on the Initial Shares Closing
Date with a mutually acceptable escrow agent and none of such
Shares shall be sold or otherwise disposed of, or transferred,
except pursuant to this Agreement or the exercise of the
Remaining Shares Option, or as permitted by Section 6.4, or until
termination of this Agreement in accordance with its terms.
1.5 INITIAL SHARES CLOSING DATE. The closing of the purchase
and sale of the Initial Shares (the "Initial Shares Closing")
will take place at the offices of KLT at 10:00 a.m., local time,
on November 21, 2000 or at such other date, time and place as the
Parties shall mutually agree (the "Initial Shares Closing Date").
1.6 TRANSACTIONS ON THE INITIAL SHARES CLOSING DATE.
(a) On the Initial Shares Closing Date, ▇▇▇▇▇▇▇▇▇ shall
deliver or cause to be delivered to KLT the following:
(i) the certificates evidencing the Initial Shares, duly
endorsed as being sold and transferred to KLT or its designees,
and all other documents necessary to effect the transfer of
ownership of the Initial Shares on the books of the Company;
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(ii) a certificate signed by ▇▇▇▇▇▇▇▇▇ to the effect that
as of the Initial Shares Closing Date all the conditions under
Sections 2.1. (a), (d), (e) and (f) of this Agreement have been
satisfied or waived and that all representations and warranties of
▇▇▇▇▇▇▇▇▇ in Section 3 herein are true and correct in all
material respects;
(iii) a letter of resignation of ▇▇▇▇▇▇▇▇▇ from all of his
positions as an officer and director of the Company, effective as
of the Initial Shares Closing Date;
(iv) a Mutual Release between the Parties, in the form
attached hereto as Exhibit C, executed by the Parties, with only
such changes from such form as shall be approved by the Parties;
(v) the fully executed Real Property Purchase Agreement
in the form attached hereto as Exhibit D ("Real Property Purchase
Agreement");
(vi) the fully executed Deed (as defined in the Real
Property Purchase Agreement);
(vii) the fully executed Lease Assignment (as defined in
the Real Property Purchase Agreement);
(viii) evidence satisfactory to KLT that the entire principal
and interest on the existing promissory note from ▇▇▇▇▇▇▇▇▇ to
the Company is repaid in full on the Initial Shares Closing Date.
(b) On the Initial Shares Closing Date, KLT shall deliver to
▇▇▇▇▇▇▇▇▇ the following:
(i) Payment of the cash portion of the Initial Shares
Purchase Price and the Property Purchase Price (as defined in the
Real Property Purchase Agreement) by wire transfer of immediately
available funds to an account to be designated by ▇▇▇▇▇▇▇▇▇,
provided that ▇▇▇▇▇▇▇▇▇ shall designate such account not later
than the second Business Day prior to the Initial Shares Closing
Date;
(ii) documents, in form reasonably satisfactory to ▇▇▇▇▇▇▇▇▇
and his counsel, evidencing the consideration described on Exhibit
B hereto; and
(iii) a copy of resolutions duly adopted by the Board of
Directors of KLT and KCPL authorizing the execution, delivery and
performance of this Agreement;
(iv) a certificate signed by an authorized officer of KLT
to the effect that as of the Initial Shares Closing Date all the
conditions under Section 2.2 of this Agreement have been
satisfied or waived and that all
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representations and warranties of KLT in Section 4
herein are true and correct in all material respects;
and
(v) a Mutual Release between ▇▇▇▇▇▇▇▇▇ and KLT, in the
form attached hereto as Exhibit C, executed by KLT on its own
behalf and as a duly authorized representative of KCPL, with only
such changes from such form as shall be approved by the Parties,
accompanied by documents reasonably satisfactory to ▇▇▇▇▇▇▇▇▇ and
his counsel evidencing approval and authorization of such Mutual
Release by KCPL.
All documents for the Initial Shares Closing shall be in
form and substance reasonably satisfactory to counsel for
▇▇▇▇▇▇▇▇▇ and KLT.
2. CONDITIONS TO INITIAL SHARES CLOSING
2.1 CONDITIONS PRECEDENT OF KLT. The obligations of KLT at the
Initial Shares Closing shall be subject to the satisfaction, or
waiver by KLT, at the Initial Shares Closing of each of the
following conditions:
(a) ACCURACY OF ▇▇▇▇▇▇▇▇▇'▇ REPRESENTATIONS AND WARRANTIES AND
PERFORMANCE OF COVENANTS. The representations and warranties of
▇▇▇▇▇▇▇▇▇ contained herein, and in the documents attached hereto,
shall be true and correct in all material respects on and as of
the Initial Shares Closing Date, and ▇▇▇▇▇▇▇▇▇ shall have
performed and observed in all material respects all covenants,
agreements and conditions contained herein, and in the documents
attached hereto, to be performed or observed on or before the
Initial Shares Closing Date by ▇▇▇▇▇▇▇▇▇.
(b) PURCHASE OF NOTES AND WARRANTS. KLT shall have
consummated the purchase, by tender offer, privately negotiated
purchase(s) or open market purchase(s) or a combination of any of the
foregoing, of both (i) at least ninety percent (90%) of the
aggregate principal amount of the 12 1/2% Senior Discount Notes
due 2008 and the 12 1/2% Series B Senior Discount Notes due 2008
(collectively the "Notes") issued pursuant to the Indenture,
dated as of February 23, 1998, between the Company and The Bank
of New York, as trustee (the "Indenture") and (ii) warrants (the
"Warrants"), each initially entitling the holder thereof to
purchase 1.552 shares of common stock of the Company (the
"Warrant Shares") representing in the aggregate at least ninety
percent (90%) of the Warrant Shares, for a cash purchase price or
prices determined in the sole discretion of KLT, and, in the case
of each of (i) and (ii), subject to reasonable terms and
conditions customary in such transactions (the "Minimum Purchase
Condition").
(c) BANK WAIVER. KLT shall have received all waivers,
in form and substance satisfactory to KLT, of covenants and other
provisions in its current credit agreement with Bank One, NA, and
the other lenders thereunder ("Loan Agreement") which are
necessary (i) to permit KLT to carry out the transactions
provided for under this Agreement, (ii) to avoid a default,
breach or violation of any provision of the Loan Agreement as a
result of carrying out the transactions contemplated hereby, or
(iii) to
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avoid causing the acceleration of any payment or other
performance under the Loan Agreement as a result of carrying
out the transactions contemplated hereby.
(d) DELIVERY OF DOCUMENTS. ▇▇▇▇▇▇▇▇▇ shall have delivered
the certificates representing the Initial Shares, duly endorsed, and
all documents required to be delivered at the Initial Shares
Closing to KLT as set forth in Section 1.6(a).
(e) NO THREATENED OR PENDING LITIGATION. On the Initial
Shares Closing Date, no suit, action or other proceeding instituted by a
third party, or any injunction or final judgment relating
thereto, shall be threatened or be pending before any court or
governmental or regulatory official, body or authority which
would prohibit the consummation of the transactions contemplated
hereby or expose KLT or KCPL to any liability in connection
therewith.
(f) NO MATERIAL ADVERSE CHANGE. No event(s) or circumstance(s)
shall occur between the execution of this Agreement and the
Initial Shares Closing that, individually or in the aggregate,
has caused or may be reasonably expected to cause a Material
Adverse Effect (as defined in Section 3.4), except for (i) any
such effect which results from event(s) or circumstance(s) as to
which KLT has actual knowledge prior to the execution of this
Agreement unless the economic effect of such event(s) or
circumstance(s), individually or in the aggregate, on the Company
has changed materially and adversely from that contemplated by
the valuation model used by KLT in determining the Initial Shares
Purchase Price, or (ii) any such event(s) or circumstance(s) that
result from any action taken by KLT's Designees (as defined in
Section 5.1(a)) during the Delegation Period.
(g) FINANCING COMMITMENTS. KLT shall have obtained the
Financing Commitments (as defined in Section 5.3(b)).
2.2 CONDITIONS PRECEDENT OF ▇▇▇▇▇▇▇▇▇. The obligations of
▇▇▇▇▇▇▇▇▇ at the Initial Shares Closing shall be subject to the
satisfaction, or waiver by ▇▇▇▇▇▇▇▇▇, at the Initial Shares
Closing of each of the following conditions:
(a) ACCURACY OF KLT'S REPRESENTATIONS AND WARRANTIES AND
PERFORMANCE OF COVENANTS. The representations and warranties of
KLT contained herein shall be true and correct in all material
respects on and as of the Initial Shares Closing Date, and KLT
shall have performed and observed in all material respects all
covenants, agreements and conditions contained herein to be
performed or observed on or before the Initial Shares Closing
Date by KLT.
(b) PAYMENT. ▇▇▇▇▇▇▇▇▇ shall have received the cash portion
of the Initial Shares Purchase Price and all other items listed in
Section 1.6(b) required to be delivered at the Initial Shares
Closing to ▇▇▇▇▇▇▇▇▇.
(c) NO THREATENED OR PENDING LITIGATION. On the Initial Shares
Closing Date, no suit, action or other proceeding instituted by a
third party, or any
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injunction or final judgment relating thereto, shall be
threatened or be pending before any court or governmental or
regulatory official, body or authority which would prohibit
the consummation of the transactions contemplated hereby or
expose ▇▇▇▇▇▇▇▇▇ to any liability in connection therewith.
(d) FINANCING COMMITMENTS. The condition set forth in
Section 2.1(g) must have been satisfied within 30 days after the
Effective Date.
(e) INITIAL THRESHOLD CONDITION. KLT shall have either
purchased or made binding offers to purchase (subject only to
acceptance by the sellers and satisfaction of the Minimum
Purchase Condition) (i) Notes with an aggregate principal amount
equal to at least forty percent (40%) of the aggregate principal
amount of all of the Notes, and (ii) Warrants representing the
right to purchase at least forty percent (40%) of all of the
Warrant Shares, in each case within 30 days after the Effective
Date (collectively, the "Initial Threshold Condition").
3. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ represents and warrants to KLT that the following
representations and warranties are true and correct as of the
date hereof and will be true and correct as of the Initial Shares
Closing Date. For purposes of this Section 3, the term "Company"
shall mean DTI Holdings, Inc. and its wholly-owned subsidiary
Digital Teleport, Inc.
3.1 CORPORATE EXISTENCE. The Company is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Missouri. The Company has full corporate power
and authority to carry on its business as currently conducted.
3.2 POWER AND AUTHORITY. ▇▇▇▇▇▇▇▇▇ has the power, authority and
capacity to execute and deliver this Agreement and the other
documents contemplated hereby, to consummate the transactions
contemplated hereby and thereby and to perform his obligations
hereunder and thereunder.
3.3 BINDING EFFECT. This Agreement constitutes, and the
Remaining Shares Option will constitute (upon the granting
thereof), a valid and binding obligation of ▇▇▇▇▇▇▇▇▇. This
Agreement is, and the Remaining Shares Option will (upon the
granting thereof) be, enforceable against ▇▇▇▇▇▇▇▇▇ in accordance
with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws affecting the
enforceability of creditors' rights generally or general
principles of equity, regardless to whether enforceability is
considered in a proceeding in equity or at law.
3.4 NO VIOLATIONS OF OBLIGATIONS. Except as indicated on
Schedule 3.4, the delivery of this Agreement by ▇▇▇▇▇▇▇▇▇ does
not, and the delivery of the Remaining Shares Option (upon the
granting thereof) will not, and the consummation by ▇▇▇▇▇▇▇▇▇ of
the agreements and transactions contemplated by this Agreement,
and by the Remaining Shares Option (upon the granting thereof),
will not, (a) (i) conflict with, result in a breach or violate
the
6
articles of incorporation or by-laws of the Company, or (ii) to
the best knowledge of ▇▇▇▇▇▇▇▇▇ after reasonable investigation
("▇▇▇▇▇▇▇▇▇'▇ Best Knowledge"), violate or be contrary to any
permit, concession, grant, franchise, law, rule or regulation, or
any judgment, decree or order of any governmental entity to which
▇▇▇▇▇▇▇▇▇ or Company is a party or to which ▇▇▇▇▇▇▇▇▇ or Company
or any of the property of either of them is subject; or (b) to
▇▇▇▇▇▇▇▇▇'▇ Best Knowledge, except in respect of the Notes or
Warrants referred to in Section 2.1(b) above, conflict with, or
result in a breach or violation of, or accelerate the performance
required by, the terms of any agreement, contract, indenture or
other instrument to which ▇▇▇▇▇▇▇▇▇ or Company is a party or to
which any of the property of either of them is subject, which
breach or violation, individually or in the aggregate, would have
a material and adverse effect on the business, condition
(financial or otherwise), results of operations or prospects of
the Company (a "Material Adverse Effect"), or constitute a
default or loss of any right thereunder or an event which, with
the lapse of time or notice or both, might result in a default or
loss of any right thereunder or the creation of any lien, charge
or encumbrance upon any of the material assets or properties of
▇▇▇▇▇▇▇▇▇ or the Company.
3.5 APPROVALS. The execution and delivery by ▇▇▇▇▇▇▇▇▇ of this
Agreement and the Remaining Shares Option (upon the granting
thereof), and the consummation of the agreements and transactions
contemplated hereby and thereby by ▇▇▇▇▇▇▇▇▇ will not, to
▇▇▇▇▇▇▇▇▇'▇ Best Knowledge, require any consent, approval, order
or authorization of any governmental entity or regulatory
authority, except for any such consent, approval, order or
authorization the absence of which will not have a Material
Adverse Effect.
3.6 THE SHARES.
(a) Subject to the release of the existing lien on a
portion of the Shares created by ▇▇▇▇▇▇▇▇▇ in favor of the Company,
▇▇▇▇▇▇▇▇▇ (or trusts for the benefit of ▇▇▇▇▇▇▇▇▇ and his
immediate family) has, and will transfer to KLT, good, valid and
marketable title to the Initial Shares and the Remaining Shares
as provided herein. Upon consummation of the transactions
contemplated herein, or upon exercise of the Remaining Shares
Option, KLT shall acquire the applicable Shares, free and clear
of any and all liabilities, security interests, claims, liens,
encumbrances, restrictions, pledges, trusts, voting trusts,
shareholder agreements, equity charges, conditional sale or title
retention agreements or burdens of any kind whatsoever other than
those created by or through KLT.
(b) The Shares have been duly authorized and are legally and
validly issued. The Shares are fully paid and nonassessable.
Except as provided in the Shareholders' Agreement and except for
the pledge from ▇▇▇▇▇▇▇▇▇ in favor of the Company pertaining to a
portion of the Shares, there are no options, warrants, conversion
privileges, preemptive rights or other rights outstanding in
respect of any of the Shares.
3.7 COMPLIANCE WITH LAWS. The Company is not in violation in
any material respect of any law or any ordinance or regulation of
any local or foreign governmental entity or authority.
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3.8 TAX MATTERS. Except as indicated on Schedule 3.8 hereto:
(a) The Company timely has filed or caused to be timely filed
with the appropriate governmental entity all material federal,
state, local and foreign income, franchise, excise, payroll,
sales and use, property and withholding tax returns and reports
required to be filed pursuant to any applicable federal, state,
local and foreign tax laws by or on behalf of the Company,
including estimated tax and informational returns ("Tax
Returns"). All Tax Returns are true, correct and complete in all
material respects.
(b) All Taxes (whether or not reflected in Tax Returns as
filed) payable by the Company with respect to all periods reflected on
the Tax Returns have been fully paid, and there are no grounds
for the assertion or assessment of any material additional Taxes
against the Company or its assets with respect to such periods.
All accrued but unpaid Taxes are properly reflected on the books
of the Company.
(c) No Tax Returns are the subject of an audit and there
are no audits of any Tax Returns in process or threatened. There is no
waiver of any statute of limitations in effect with respect to
any Tax Returns.
(d) There are no tax liens, whether imposed by any federal,
state, local or foreign taxing authority, outstanding against any
of the assets, properties or business of the Company.
(e) As used in this Agreement, "Taxes" means all taxes,
charges, fees, levies or other like assessments, including without
limitation income, gross receipts, ad valorem, value added,
premium, excise, real property, personal property, windfall
profit, sales, use, transfer, license, withholding, employment,
payroll and franchise taxes imposed by the United States or any
other nation, state or bilateral or multilateral governmental
authority, any local governmental unit or subdivision thereof, or
any branch, agency or judicial body thereof; and shall include
any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to, or incurred in connection with
any such Taxes or any contest or dispute thereof.
3.9 FINANCIAL STATEMENTS.
(a) The Company has furnished or made available to KLT the
audited annual balance sheet and income statement of the Company
as of June 30, 1999 and the interim unaudited quarterly income
statement of the Company for each of the quarters ended September
30, 1999, December 31, 1999, March 31, 2000 and June 30, 2000 and
the unaudited annual balance sheet of the Company as of June 30,
2000 (together, the "Financial Statements"). The Financial
Statements present fairly, in all material respects, the
financial position, results of operations and cash flows of the
Company at the dates and for the periods indicated, and have been
prepared in accordance with Generally Accepted Accounting
Principles ("GAAP"), subject, as to such interim and unaudited
financial statements, to normal year-end and audit adjustments
and except for the absence of footnotes.
8
(b) To ▇▇▇▇▇▇▇▇▇'▇ Best Knowledge, the Company does not
have any liabilities or obligations (whether accrued, absolute,
contingent, unliquidated or otherwise), except as would not have
a Material Adverse Effect, and except (i) as set forth in the
Financial Statements (including notes thereto) unless any such
liabilities are not required to be set forth therein in
accordance with GAAP, (ii) as set forth on Schedule 3.9, or (iii)
to the extent they arise in the ordinary course of the business
of the Company and are not required to be set forth in a Schedule
hereto, and (iv) Taxes incurred since the date of the Financial
Statements.
3.10 CONTRACTS. ▇▇▇▇▇▇▇▇▇ has listed on Schedule 3.10 all
contracts, agreements or other obligations requiring the payment
by the Company of more than $1 million, except for those
contracts, agreements or other obligations not so listed which
would not have a Material Adverse Effect (as defined in Section
3.4).
3.11 BROKERS AND FINDERS. ▇▇▇▇▇▇▇▇▇ has not engaged any broker
or finder in connection with this Agreement or the transactions
contemplated hereby and no payment of any type is due to any
broker or finder of ▇▇▇▇▇▇▇▇▇ with respect thereto.
3.12 PERSONAL PROPERTY AND EQUIPMENT LOCATED ON PROPERTY. The
Company is, or upon delivery of the Deed, the Company or KLT will
be, the sole owner, and has or will have good, valid and
marketable title to all of the personal property and equipment
located on the Property (as defined in the Real Property Purchase
Agreement attached hereto as Exhibit D), except as set forth on
Schedule 3.12(i) attached hereto, free and clear of any and all
liabilities, security interests, claims, liens, encumbrances,
restrictions, trusts, conditional sale or title retention
agreements or any other agreements or burdens of any kind
whatsoever other than those created by or through KLT, except as
set forth on Schedule 3.12(ii) attached hereto.
3.13 DISCLAIMER OF FURTHER WARRANTIES. ▇▇▇▇▇▇▇▇▇ MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO OR RELATING TO THE ASSETS, LIABILITIES,
OPERATIONS OR ANY OTHER MATTER RELATING TO THE COMPANY. FURTHER,
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ▇▇▇▇▇▇▇▇▇ MAKES
NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO OR RELATING TO THE SHARES, THE COMPANY OR THE
ASSETS, LIABILITIES OR OPERATIONS OF THE COMPANY.
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4. REPRESENTATIONS AND WARRANTIES OF KLT.
KLT represents to ▇▇▇▇▇▇▇▇▇ that the following
representations and warranties are true and correct as of the
date hereof and will be true and correct as of the Initial Shares
Closing Date.
4.1 COMPANY EXISTENCE. KLT is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Missouri .
4.2 AUTHORIZATION. The execution, delivery and performance of
this Agreement have been duly authorized by all appropriate
company action on behalf of KLT and do not contravene KLT's
charter or by-laws, or any other law or regulation applicable to
this transaction or any contractual provision binding upon or
affecting KLT, excepting such matters as are conditions precedent
to the Initial Shares Closing set forth in Section 2.1.
4.3 BINDING EFFECT. Upon occurrence of the Effective Date, this
Agreement will constitute a valid and binding obligation of KLT.
Upon occurrence of the Effective Date, this Agreement will be
enforceable against KLT in accordance with its terms, except to
the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or similar laws affecting the enforceability of
creditors' rights generally or general principles of equity,
regardless to whether enforceability is considered in a
proceeding in equity or at law.
4.4 APPROVALS. The execution and delivery of this Agreement by
KLT and the consummation of the agreements and transactions
contemplated by this Agreement by KLT will not require any
consent, approval, order or authorization of any governmental
entity or regulatory authority.
4.5 INVESTMENT REPRESENTATION. KLT is acquiring the Shares for
its own account, for investment and without any view to resale or
distribution of the Shares or any portion thereof.
4.6 BROKERS AND FINDERS. KLT has not engaged any broker or
finder in connection with this Agreement or the transactions
contemplated hereby and no payment of any type is due to any
broker or finder of KLT with respect thereto.
5. COVENANTS
5.1 COVENANTS OF ▇▇▇▇▇▇▇▇▇.
(a) GRANT AND DELEGATION OF POWER AND AUTHORITY. ▇▇▇▇▇▇▇▇▇
agrees to cause his representatives on the board of directors of
the Company to execute a Statement of Unanimous Consent in the
form attached hereto as Exhibit 5.1(a) which will, subject to
execution by the other members of the board of directors of the
Company, duly adopt resolutions of the board of directors of the
Company, immediately upon satisfaction or waiver of the
conditions set forth in Sections 2.2(d) and 2.2(e), electing the
designees of KLT listed on Exhibit A attached hereto (the "KLT
Designees") to the positions as Executive Vice-Presidents listed
on Exhibit A, for a period commencing on the
10
satisfaction or waiver of such conditions and ending at
midnight, New York City time, on November 13, 2000 (the
"Delegation Period"), which Executive Vice-Presidents shall
have, subject to the limitations set forth below in this
paragraph, the sole and exclusive power and authority during
the Delegation Period to manage, oversee and effectuate the
responsibilities and duties of the Company in connection
with those matters described on attached Exhibit 5.1(a)(1),
which power and authority shall supersede any express or
implied power or authority inherent in the office of
President or Chief Executive Officer of the Company or
otherwise granted by the bylaws or any resolution previously
adopted by the board of directors of the Company to the
President or Chief Executive Officer of the Company;
provided, however, that no major decision shall be made and
no major action shall be taken by one or more of the KLT
Designees unless (i) ▇▇▇▇▇▇▇▇▇ has been informed in advance
of such decision or such action and ▇▇▇▇▇▇▇▇▇ has been given
a reasonable opportunity to provide his input with respect
to such decision or action, or (ii) exigent circumstances
prevail that may be reasonably expected to have a Material
Adverse Effect if such decision or such action is delayed to
provide information to ▇▇▇▇▇▇▇▇▇ or to seek input from
▇▇▇▇▇▇▇▇▇, in which event notice of such decision or action
shall be provided to ▇▇▇▇▇▇▇▇▇ as soon thereafter as is
reasonably practicable. ▇▇▇▇▇▇▇▇▇ further agrees that,
between the Effective Date and the commencement of the
Delegation Period, no major decision shall be made and no
major action shall be taken by ▇▇▇▇▇▇▇▇▇ in connection with
the management and oversight of the Company unless (i) KLT's
Designees have been informed in advance of such decision or
such action and KLT's Designees have been given a reasonable
opportunity to provide input with respect to such decision
or action, or (ii) exigent circumstances prevail that may be
reasonably expected to have a Material Adverse Effect if
such decision or such action is delayed to provide
information to KLT's Designees or to seek input from KLT's
Designees, in which event notice of such decision or action
shall be provided to KLT's Designees as soon thereafter as
is reasonably practicable. Notwithstanding the delegation
provided for in this paragraph, the consent of ▇▇▇▇▇▇▇▇▇'▇
designees on the Board of Directors of the Company shall be
required with respect to the matters contemplated by the
first paragraph of Exhibit 5.1(a)(1). The KLT Designees
shall tender their resignation from their respective
positions as Executive Vice Presidents of the Company
immediately upon the expiration of the Delegation Period,
and the delegation of authority described in this section
and in such Statement of Unanimous Consent shall be of no
further force or effect.
(b) ACCESS TO INFORMATION, INSPECTION RIGHTS AND DISCUSSIONS.
▇▇▇▇▇▇▇▇▇ shall cause the Company to permit KLT after the date of
execution of this Agreement and until the Initial Shares Closing
Date to have reasonable access to and to inspect or cause to be
inspected by KLT's representatives and consultants, during
regular business hours and upon reasonable advance notice, the
assets owned by the Company, to engage in discussions with
customers and suppliers of the Company, to furnish to KLT any
financial and operating data and other information that is
available with respect to the business and assets of the Company,
as KLT shall from time to time reasonably request solely for the
purposes of (i) verifying the accuracy of the representations and
warranties of ▇▇▇▇▇▇▇▇▇ hereunder, (ii) developing a basis for a
short-term and long-term business
11
plan for the Company, (iii) effectuating the power and
authority contemplated by Section 5.1(a), (iv) obtaining the
Financing Commitments, and (v) purchasing or offering to
purchase the Notes and the Warrants. KLT shall at all times
prior to the transfer of the Shares, and in the event of
termination of this Agreement, cause any information so
obtained to be kept confidential and will not use or permit
the use by its representatives of such documents, work
papers and other materials in its business or in any other
manner or for any other purpose except as contemplated
hereby. KLT's obligations under this Section 5.1(b) shall
survive termination or expiration of this Agreement, but
shall terminate on the Initial Shares Closing Date.
5.2 CONFIDENTIALITY AND NON-INTERFERENCE. Each of ▇▇▇▇▇▇▇▇▇
and KLT agrees that, following the date hereof, such Party will not,
directly or indirectly, (i) disclose to any third party any
information concerning the Company, its securities or the matters
contemplated by this Agreement, or (ii) take any action that
would impede, prejudice or otherwise interfere with the ability
of any of the conditions set forth in Section 2.1 of this
Agreement to be satisfied within the time periods contemplated by
Section 6.12; provided, however, that the foregoing provisions of
this Section shall not be deemed to restrict the ability of
either Party to enforce such Party's rights under or in
connection with this Agreement. Neither Party will make any
public announcement or other disclosure of the matters provided
for in this Agreement, except with the prior written consent of
the other Party, unless such Party determines, on the basis of
the advice of its counsel, that such announcement or disclosure
is required by applicable law, in which event the disclosing
Party will give prior written notice to the other Party of the
proposed disclosure, will consult with the other Party and take
into account the other Party's reasonable requests as to the form
and content of the disclosure; provided, however, that the
foregoing restrictions will not limit the ability of KLT to
communicate in any reasonable manner with the Noteholders, the
Warrantholders, the lenders under the Loan Agreement, or the
Financing Sources in order to attempt to satisfy the conditions
set forth in Sections 2.1(a), 2.1(b), 2.1(c) or Section 2.1(g),
to perform the investigation permitted by Section 5.1(b) or to
perform any of its other obligations under this Agreement.
5.3 COVENANTS OF KLT.
(a) ACCESS TO INFORMATION. KLT shall give ▇▇▇▇▇▇▇▇▇ and his
representatives reasonable access during normal business hours to
KLT's books and records, and KLT shall furnish to ▇▇▇▇▇▇▇▇▇ all
such contracts, documents and information as ▇▇▇▇▇▇▇▇▇ may from
time to time reasonably request, solely for the purpose of
verifying KLT's compliance with its warranties, representations,
covenants and undertakings under this Agreement.
(b) FINANCING COMMITMENTS AND LIMIT ON AGGREGATE PURCHASE
PRICE. KLT shall use commercially reasonable efforts to obtain, within
30 days after the Effective Date, from one or more financial
institutions, KCPL, or other credible sources of financing, or a
combination thereof (collectively, the "Financing Sources"), a
commitment letter or letters, or a definitive agreement or
agreements, subject to reasonable and customary qualifications,
terms and conditions (which shall not include conditions relating
to due diligence, financial review or the completion of other
financing
12
or other transactions), evidencing the availability to KLT
of the necessary funds sufficient to meet KLT's financial
obligations in connection with the transactions contemplated
by this Agreement, including the purchase of Notes and
Warrants as provided in Section 2.1(b) at an aggregate
purchase price of up to $225 million (collectively, the
"Financing Commitments"). KLT shall be under no obligation
whatsoever to purchase any Notes or Warrants unless (i) the
aggregate purchase price for both the Notes and the Warrants
does not exceed $225 million, and (ii) all of the conditions
set forth in Section 2.1 of the Agreement have been
satisfied, or waived by KLT, at the Initial Shares Closing.
(c) OPTION ON NOTES AND WARRANT SHARES. If KLT purchases
the Notes and Warrants as contemplated by Section 2.1(b) but does not
purchase the Initial Shares pursuant to this Agreement, ▇▇▇▇▇▇▇▇▇
shall be granted an option by KLT to purchase one half of the
Notes and Warrants so purchased for consideration equal to the
sum of (i) one half of the aggregate purchase price of the Notes
and Warrants, (ii) one half of the commitment fee(s) and interest
expenses incurred in connection with the funds borrowed to
purchase the Notes and Warrants, (iii) one half of the legal,
accounting, advisory, printing and other out-of-pocket expenses
incurred by KLT in connection with the purchase of the Notes and
Warrants, and (iv) interest at the same rate incurred by KLT for
the borrowed funds referenced in (ii) above on the equity capital
used by KLT to purchase the Notes and Warrants and pay the
expenses referenced in (iii) above. The provisions of this
paragraph shall become effective on the date of this Agreement,
and shall remain in effect for a period of two years following
any termination or expiration of the term of this Agreement.
(d) INDEMNIFICATION BY KLT. Subject to the limitations set
forth below, KLT agrees to indemnify ▇▇▇▇▇▇▇▇▇ for fifty percent
(50%) of any damages suffered by the Company to the extent
resulting from any action taken by KLT's Designees during the
Delegation Period unless KLT's Designees acted in good faith and
in a manner they reasonably believed to be in, or not opposed to,
the best interests of the Company. KLT also agrees to indemnify
▇▇▇▇▇▇▇▇▇ for (i) fifty percent (50%) of any damages suffered by
the Company, or (ii) any damages suffered by ▇▇▇▇▇▇▇▇▇, to the
extent that they result from any misstatement of any material
fact by KLT or its representatives relating to its offer(s) to
purchase the Notes and the Warrants or any such misstatement with
respect to the business or financial performance of the Company
that is inconsistent, in any material respect, with the
disclosure made by the Company in (x) any report or filing made
by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, or (y) any press release or other public
statements made by the Company of which KLT has actual knowledge.
Notwithstanding the foregoing, KLT shall have no liability to
▇▇▇▇▇▇▇▇▇ under this paragraph unless and until the aggregate
amount of the damages in question exceed $50,000, at which time
KLT shall be liable for the full amount of damages as provided
above in this paragraph, including the first $50,000.
5.4 OTHER CLAIMS. During the time period between the Effective
Date and the later of six months after the Effective Date or, if
applicable, after the date of termination of this Agreement,
(i) neither Party will institute any legal proceedings or take
other formal actions to
13
assert or pursue any claim against the other Party relating,
directly or indirectly, to the Parties' ownership interests in
the Company or relating to the management of the business of the
Company which is based on the occurrence or continuation of any
events or circumstances which have occurred prior to the
Effective Date, and (ii) the Parties' designees on the Board of
Directors of the Company shall be required to exercise joint
decision making authority with respect to each contractual
commitment in excess of $1 million and each matter requiring a
capital expenditure in excess of $1 million.
6. MISCELLANEOUS
6.1 FURTHER ASSURANCES. Each of the Parties to this Agreement
shall, with reasonable diligence, do all such things and provide
all such reasonable assurances as may be required to consummate
the transactions contemplated hereby, and each Party shall
provide such further documents or instruments required by the
other Party as may be reasonably necessary or desirable to effect
the purpose of this Agreement.
6.2 SURVIVAL OF CERTAIN REPRESENTATIONS. The representations
and warranties made herein by (i) ▇▇▇▇▇▇▇▇▇ in Sections 3.1
(first sentence only), 3.2, 3.3 (first sentence only), 3.4, 3.5,
3.6 and 3.11, and (ii) by KLT in Sections 4.1, 4.2, 4.3 (first
sentence only), 4.4 and 4.6, shall survive (x) for a period of
one year following the Initial Shares Closing Date in respect of
Sections 3.6, 3.11, and 4.6, (y) for a period of six months
following the Initial Shares Closing Date in respect of Sections
3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 4.2, 4.3 and 4.4, and (z) all other
representations and warranties shall expire on the Initial Shares
Closing Date, except that there shall be no time limit on the
survival of the representations and warranties contained in
Section 3.12 of this Agreement, the Deed, the Lease Assignment,
Exhibit B or Appendix I to Exhibit B.
6.3 NOTICES. All notice to any Party hereunder shall be in
writing (including facsimile communication) and shall be given to
such Party at the following address and facsimile number:
14
If to ▇▇▇▇▇▇▇▇▇:
prior to the Initial Shares Closing Date:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
c/o DTI Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
after the Initial Shares Closing Date:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
If to KLT:
KLT Telecom Inc.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: President
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
or in any of the foregoing cases at such other address as such
Party may hereafter specify for such purpose by notice to the
other Party. All such notices and communications shall be deemed
to have been received (a) in case of facsimile transmissions,
when delivered with electronic confirmation of receipt, and (b)
in the case of personal or air courier delivery, on the date of
such receipt.
6.4 ASSIGNMENTS. Without the prior written consent of the other
Party, no Party may assign or transfer its rights or obligations
hereunder, except that ▇▇▇▇▇▇▇▇▇ may, prior to the Initial Shares
Closing Date, transfer the Shares or a portion of the Shares to
one or more trusts for the benefit of ▇▇▇▇▇▇▇▇▇ and his immediate
family, as long as (i) such transfer is subject to the obligation
of ▇▇▇▇▇▇▇▇▇ to transfer the Shares as provided herein or in the
Remaining Shares Option, as the case may be, (ii) each such trust
agrees to be bound by all of the provisions of this Agreement to
the same extent as if it were a party hereto, and (iii) the
nature of such trust and any actions in connection with its
formation would not preclude recovery hereunder against such
trust or the assets held in such trusts. Subject to the
foregoing, this Agreement and various rights and obligations
arising hereunder shall inure to the benefit of and be binding
upon the Parties and their respective successors and assigns.
6.5 ENTIRE AGREEMENT; SEVERABILITY. Except as otherwise
contemplated herein, this Agreement (including the Schedules and
Exhibits hereto) constitutes the entire agreement
15
among the Parties and supersedes all prior agreements and
understandings, both written and oral, among the Parties, with
respect to the subject matter hereof, including, without
limitation, the Original Agreement. This Agreement is not
intended to confer upon any other persons any rights or remedies
hereunder. In the event that any court shall determine that any
provision, or any portion thereof, contained in this Agreement
shall be void or unenforceable in any respect, then such
provision shall be deemed limited to the extent that such
tribunal determines, it is enforceable, and as so limited this
Agreement shall remain in full force and effect. In the event
that such tribunal shall determine any such provision, or parts
thereof, to be wholly invalid, illegal or unenforceable, then the
remaining provisions of this Agreement shall nevertheless remain
in full force and effect.
6.6 AMENDMENTS AND MODIFICATIONS. This Agreement may only be
amended or modified in writing, signed by each of the Parties
hereto.
6.7 EXPENSES. Each of the Parties shall bear their own costs
and expense incurred in connection with the preparation,
negotiation, execution and delivery of this Agreement including,
but not limited to, attorneys' fees.
6.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri,
without regard to the conflict of law principles thereof.
6.9 JURISDICTION; VENUE; SERVICE. Any action or proceeding,
seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any Party
in any court of competent jurisdiction located in St. Louis
County, Missouri, and each of the Parties consents to the
jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection
to venue laid therein. Each Party agrees that service of process
may be made upon it wherever it can be located or by courier
delivery or by mail, with receipt of delivery requested, directed
to its address for notices under the Agreement. This provision
is permissive, not mandatory, and each Party reserves the right
to bring any action, proceeding, or other matter arising directly
or indirectly hereunder against the other Party wherever such
Party might be found or might otherwise be subject to
jurisdiction.
6.10 WAIVER OF CONSEQUENTIAL DAMAGES. To the fullest extent
allowed by law, no Party shall be liable to any other party for
any indirect or consequential damages arising in any way from its
performance under this Agreement.
6.11 COUNTERPARTS. This Agreement may be executed simultaneously
in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one
and the same instrument.
6.12 TERMINATION. This Agreement may be terminated without
further liability or obligation, except for those liabilities and
obligations which expressly survive such termination, as follows:
16
(a) by ▇▇▇▇▇▇▇▇▇ if a material breach of any representation,
warranty or covenant in this Agreement has been committed by KLT
and such breach has not been waived by ▇▇▇▇▇▇▇▇▇;
(b) by KLT if a material breach of any representation,
warranty or covenant in this Agreement has been committed by ▇▇▇▇▇▇▇▇▇
and such breach has not been waived by KLT;
(c) by mutual consent of the Parties;
(d) by ▇▇▇▇▇▇▇▇▇ if the condition set forth in Section
2.1(g) or Section 2.2(e) is not satisfied within 30 days after the
Effective Date;
(e) by ▇▇▇▇▇▇▇▇▇ or KLT if the condition set forth in
Section 2.1(b) has not been satisfied by midnight, New York City
time, on November 20, 2000;
(f) by any Party if the Initial Shares Closing has not
occurred (other than through the failure of the Party seeking to terminate
this Agreement to comply fully with its obligations under this
Agreement) on or before December 1, 2000, or such other later
date as the Parties may agree upon.
6.13 TERMINATION OF SHAREHOLDERS AGREEMENT. As of the Initial
Shares Closing Date, the Shareholders' Agreement shall terminate
and be of no further effect.
IN WITNESS THEREOF, the Parties have executed this
Agreement as of the date first above written.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
KLT TELECOM INC.
By: /s/▇. ▇. ▇▇▇▇▇▇
Name: ▇.▇. ▇▇▇▇▇▇
Title: President
17
