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EXHIBIT 10(rr)
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STOCK PURCHASE AGREEMENT
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BETWEEN
INTERCEL, INC.
AND
THE ▇▇▇▇ ALTERNATIVE
INCOME FUND, L.P.
DATED AS OF MARCH 14, 1997
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TABLES OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.1 Purchase and Sale of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.5 Closing Deliveries by the Seller . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.6 Closing Deliveries by the Purchaser . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.7 Closing Deliveries by the Escrow Agent . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.1 Organization, Authority and Qualification of the Seller . . . . . . . . . . . . . 8
SECTION 3.2 Capitalization of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.5 Governmental Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.6 Seller SEC Documents; Financial Statements . . . . . . . . . . . . . . . . . . . 10
SECTION 3.7 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.8 Conduct in the Ordinary Course: Absence of Certain
Changes, Events and Conditions . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.11 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.13 Private Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.14 FCC Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.15 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.1 Organization and Authority of the Purchaser . . . . . . . . . . . . . . . . . . . 12
SECTION 4.2 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.3 Governmental Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.5 Investment Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.6 Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.7 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.1 Filing of Certificate of Designation . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2 Treatment of Shares as Equity . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.3 Regulatory and Other Authorizations: Notices and
Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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SECTION 5.4 Notice of Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.5 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.6 Resale Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Registration of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.9 Certain Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.10 Conduct of Business of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.11 Further Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VI CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.1 Conditions to Obligations of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.2 Conditions to Obligations of the Purchaser . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.3 Limits on Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VIII TERMINATION AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.3 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9.3 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.8 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9.9 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9.10 Management Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9.11 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.14 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
EXHIBITS
Exhibit 2.4 Form of Escrow Agreement
ANNEXES
ANNEX I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
ANNEX II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
ANNEX III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
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THIS STOCK PURCHASE AGREEMENT, dated as of March 14, 1997, is entered
into between INTERCEL, INC., a Delaware corporation (the "Seller"), and THE
▇▇▇▇ ALTERNATIVE INCOME FUND, L.P., a Delaware limited partnership (the
"Purchaser").
WITNESSETH:
WHEREAS, the Seller wishes to issue and to sell to the Purchaser, and the
Purchaser wishes to purchase from the Seller, 50,000 shares (the "Shares") of a
new series of convertible preferred stock of the Seller designated Series C
Convertible Preferred Stock, par value $0.01 per share (the "Preferred Stock"),
upon the terms and subject to the conditions set forth herein; and
WHEREAS, the terms of the Preferred Stock are set forth in the form of
Certificate of Designation attached as Annex I hereto (the "Certificate of
Designation");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Purchaser and the Seller
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Acquisition Documents" has the meaning specified in Section 7.1.
"Action" means any claim, action, suit, arbitration, inquiry, proceeding
or investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.
"Agreement" or "this Agreement" means this Stock Purchase Agreement,
dated as of March 14, 1997, between the Seller and the Purchaser (including the
Annexes hereto, the Exhibits hereto and the Disclosure Schedule) and all
amendments hereto made in accordance with the provisions of Section 9.9.
"Approvals" has the meaning specified in Section 3.5.
"Assets" means the properties, assets (including, without limitation,
Licenses) and contract rights used or intended to be used in the conduct of
Business or otherwise owned, leased or used by the Seller or any Subsidiary or,
with respect to contract rights, to which the Seller or any Subsidiary is a
party or is bound.
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"Beneficially Own" with respect to any securities and "Beneficial
Ownership" mean having beneficial ownership as determined pursuant to Rule
13d-3 under the Exchange Act including having beneficial ownership pursuant to
any agreement, arrangement or understanding, whether or not in writing.
"Business" means the business of the Seller and the Subsidiaries as
currently conducted and contemplated as of the date hereof by the Seller to be
conducted (as described in the Debt Offering Memorandum or contemplated by this
Agreement); provided, however, that the Business of Seller shall not be deemed
to include or refer to the business of providing cellular telephone and related
services as conducted by Unity Cellular Systems, Inc., a Maine corporation and
a subsidiary of the Seller, and Northern Maine Cellular Partnership, a Maine
general partnership and a majority-owned subsidiary of Unity Cellular Systems,
Inc.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"Certificate of Designation" has the meaning specified in the recitals to
this Agreement.
"Closing" has the meaning specified in Section 2.3.
"Closing Date" has the meaning specified in Section 2.3.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.01 per share, of the
Seller.
"Control" (including the terms "controlled by" and "under common control
with"), with respect to the relationship between or among two or more Persons,
means the possession, directly or indirectly or as trustee or executor, of the
power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without limitation, the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of
such Person.
"Current Market Value" means, as of a particular date, the average of the
closing high bid and low asked prices per share of Common Stock in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or
such other exchange or inter-dealer quotation system on which the Common Stock
is then principally traded or authorized to be quoted.
"Debt Offering Memorandum" means the draft (as of March 13, 1997) of the
Confidential Offering Memorandum (subject to completion, revision and amendment
pursuant to the agreement of the Seller and the placement agents thereunder)
relating to the proposed issuance by the Seller of High Yield Debt instruments
for aggregate gross proceeds of not less than $100 million.
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"Disclosed by Seller" with respect to information concerning any event,
fact or circumstance, includes information contained in the Seller's SEC
Reports, annual and other reports furnished by Seller to its stockholders as a
group, and press releases of the Seller disseminated to (i) the Dow ▇▇▇▇▇ News
Service, or (ii) the National Association of Securities Dealers, Inc. Automated
Quotation System or other national securities exchange ("Press Releases"), as
well as information disclosed directly to Purchaser by Seller in this
Agreement, the Debt Offering Memorandum, the 1996 Financial Statements, or in
writing and attached hereto or delivered pursuant to Section 6.2 hereof. The
Press Releases issued by Seller since September 30, 1996 are attached hereto in
the Disclosure Schedule.
"Disclosure Schedule" means the Disclosure Schedule attached hereto,
dated as of the date hereof, and forming a part of this Agreement.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which is (i) maintained by, or for employees
of, the Seller, any of its Subsidiaries or any ERISA Affiliate or (ii) has at
any time within the preceding six years been maintained by, or for the employee
of, the Seller, any of its Subsidiaries or any current or former ERISA
Affiliate.
"Encumbrance" means any security interest, pledge, mortgage, lien,
charge, encumbrance, adverse claim, preferential arrangement or restriction of
any kind, including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.
"Environmental Actions" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, proceeding, judgment,
letter or other communication from or to any Governmental Authority, or any
other Person involving or alleging violations of Environmental Laws or Releases
of Hazardous Materials from (i) any assets, properties or businesses of the
Seller or any of its Subsidiaries (or its or their corporate predecessors);
(ii) from adjoining properties or businesses; or (iii) from or onto any
facilities which received Hazardous Materials generated by the Seller or any of
its Subsidiaries (or its or their corporate predecessors).
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq., as amended; the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq;, as amended; the
Clean Air Act, 42 U.S.C. 7401 et seq., as amended; the Clean Water Act, 33
U.S.C. 1251 et seq., as amended; the Occupational Safety and Health Act, 29
U.S.C. 655 et seq., and any other Governmental Authority's laws, statutes,
regulations, rules or ordinances imposing liability or establishing standards
of conduct or emission for protection or safety of the environment or
concerning public or occupational health.
"ERISA" means the federal Employee Retirement Income Security Act of
1974, any successor statute of similar import, and the rules and regulations
thereunder, collectively and as from time to time amended and in effect.
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"ERISA Affiliate," as applied to the Seller or any of its Subsidiaries,
means any Person who is a member of a group which is under common control with
the Seller or any of its Subsidiaries, or who together with the Seller or any
of its Subsidiaries is treated as a single employer within the meaning of
Section 414(b) and (c) of the Internal Revenue Code of 1986, as amended.
"Escrow Agent" has the meaning specified in the Escrow Agreement.
"Escrow Agreement" has the meaning specified in Section 2.4.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Executive Officer" has the meaning set forth in Rule 405 of Regulation C
adopted by the Commission under the Securities Act without regard to whether
any party to this Agreement is a registrant as used in Rule 405.
"FCC" means the United States Federal Communications Commission.
"FCC Licenses" means all licenses granted by the FCC to the Seller for
and related to the provisions of personal communications services and cellular
services in connection with the Seller's Business.
"Governmental Authority" means any United States federal, state or local
or any foreign government, governmental, regulatory or administrative
authority, agency, department, board, investigative body or commission or any
court, tribunal, or judicial or arbitral body or other tribunal.
"Governmental Order" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"Hazardous Materials" means (a) any element, compound, chemical or other
material (in whatever form or state) that is defined, listed or otherwise
classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous
substance, extremely hazardous substance or chemical, hazardous waste, special
waste, or solid waste under any Environmental Law; (b) petroleum and its
refined products and by-products; (c) polychlorinated biphenyls; (d) any
substance exhibiting a hazardous waste characteristic including but not limited
to corrosivity, ignitability, toxicity or reactivity as well as any radioactive
or explosive materials and materials otherwise damaging to the environment; and
(e) any raw materials, building components, including but not limited to
asbestos-containing materials, and manufactured products containing any of the
materials or substances described in (a) through (d).
"High Yield Debt" means the issue of high yield debt instruments proposed
to be sold by the Seller pursuant to the Debt Offering Memorandum.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
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"IRS" means the Internal Revenue Service or any successor thereto.
"Knowledge" of a party with respect to such party's representation or
warranty concerning any event, fact or circumstance means the current actual
knowledge of that party's Executive Officers of information which, after
reasonable consideration by such Executive Officers, would be recognized by
reasonable persons of similar experience in such positions as relevant to the
representation or warranty qualified by the words "to the knowledge" of a
party, "known to" a party or a similar phrase. Knowledge does not include
information not within such current actual knowledge that might be revealed if
the party's files were searched or if any other investigation were made.
"Law" means any United States federal, state, local or foreign statute,
law, ordinance, regulation, rule, code, order, other requirement or rule of
law, including, without limitation, any requirement or rule of law of the FCC.
"Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising under
any Law, Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking.
"Licenses" means all FCC Licenses and all other licenses, permits
(including construction permits), consents, approvals and other authority
issued by any Governmental Authority in connection with the legal and proper
operation of the Seller's Business.
"Loss" has the meaning specified in Section 7.2.
"Material Adverse Effect" means any circumstance, change in, or effect on
the Business, the Seller or any Subsidiary that, individually or in the
aggregate with any other circumstances, changes in, or effects on, the
Business, the Seller or any Subsidiary: (a) is, or would reasonably be expected
to be, materially adverse to the Business, operations, Assets or Liabilities,
prospects, results of operations or financial condition of the Seller and the
Subsidiaries, taken as a whole, or (b) would reasonably be expected to
materially adversely affect the ability of the Seller and the Subsidiaries to
operate or conduct the Business in the manner in which it is currently operated
or conducted or contemplated to be operated or conducted by the Seller and the
Subsidiaries.
"Person" means any individual, partnership, limited liability company,
firm, corporation, association, trust, joint venture, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Exchange Act.
"Preferred Stock" has the meaning specified in the recitals to this
Agreement.
"Purchase Price" has the meaning specified in Section 2.2.
"Purchaser" has the meaning specified in the preamble to this Agreement.
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"Reference Balance Sheet" means the audited consolidated balance sheet
(including the related notes and schedules thereto) of the Seller, dated as of
December 31, 1996, a copy of which the Seller has provided to the Purchaser
prior to the execution of this Agreement.
"Reference Balance Sheet Date" means December 31, 1996.
"Related Agreements" has the meaning specified in Annex III attached
hereto.
"Release" means any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing (including
the abandonment or discarding of barrels, containers or other closed
receptacles containing Hazardous Materials) of Hazardous Materials into the
environment.
"Sale" has the meaning specified in Section 5.9(b).
"SEC Reports" has the meaning specified in Section 3.6(a).
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Seller" has the meaning specified in the preamble to this Agreement.
"Series D Preferred Stock Purchase Agreement" means that certain Stock
Purchase Agreement of even date herewith between the Seller and SCANA
Communications, Inc., a South Carolina corporation, as purchaser thereunder,
with respect to the sale and purchase of 50,000 shares of Seller's Series D
Preferred Stock ("Series D Preferred Stock"), together with all attachments,
annexes and exhibits thereto, all documents and agreements executed in
connection therewith, and all amendments, supplements and modifications
thereof.
"Shares" has the meaning specified in the recitals to this Agreement.
"Subsidiaries" means any and all Persons controlled by the Seller
directly or indirectly through one or more intermediaries; provided, however,
that the term "Subsidiaries" shall not include either Unity Cellular Systems,
Inc. or Northern Maine Cellular Partnership.
"Tax" or "Taxes" means any and all taxes, fees, levies, assessments,
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature
of excise, withholding, ad valorem, stamp, transfer, value added, or gains
taxes; license, registration and documentation fees; and customs duties,
tariffs, and similar charges.
"Third Party Claims" has the meaning specified in Section 7.2(b).
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"U.S. GAAP" means United States generally accepted accounting principles
and practices as in effect from time to time and applied consistently
throughout the periods involved.
"1996 Financial Statements" has the meaning specified in Section 3.2(b).
ARTICLE II
PURCHASE AND SALE
SECTION 2.1 Purchase and Sale of the Shares. Upon the terms and
subject to the conditions of this Agreement, at the Closing, the Seller shall
sell to the Purchaser, and the Purchaser shall purchase from the Seller, the
Shares.
SECTION 2.2 Purchase Price. The aggregate purchase price for the
Shares shall be $22,500,000.00 (the "Purchase Price"), representing a purchase
price of $450.00 per Share.
SECTION 2.3 Closing. Upon the terms and subject to the conditions
of this Agreement, the issuance, sale and purchase of the Shares contemplated
by this Agreement shall take place at a closing (the "Closing") to be held at
10:00 A.M. local time on a date and at a location mutually agreed to by the
parties upon the satisfaction or waiver of all conditions to the obligations of
the parties set forth in Article VI, or at such other place or at such other
time or on such other date as the Seller and the Purchaser may mutually agree
upon in writing (the day on which the Closing takes place being the "Closing
Date").
SECTION 2.4 Escrow. On or before the Closing Date, the Seller,
the Purchaser and the Escrow Agent shall enter into an Escrow Agreement with
the Escrow Agent substantially in the form of Exhibit 2.4 (the "Escrow
Agreement"). In accordance with the terms of the Escrow Agreement, on or
before the Closing Date, the Purchaser shall deposit with the Escrow Agent the
Purchase Price, to be managed and paid out by the Escrow Agent in accordance
with the terms of the Escrow Agreement, and the Seller shall deposit with the
Escrow Agent a stock certificate(s) evidencing the Shares, to be held and
delivered by the Escrow Agent in accordance with the terms and provisions of
the Escrow Agreement.
SECTION 2.5 Closing Deliveries by the Seller. At the Closing, the
Seller shall execute and deliver or cause to be delivered to the Purchaser this
Agreement, the Escrow Agreement and the opinions, certificates and other
documents required to be delivered pursuant to Section 6.2, and shall deliver
the stock certificate(s) evidencing the Shares to the Escrow Agent in
accordance with the Escrow Agreement.
SECTION 2.6 Closing Deliveries by the Purchaser. At the Closing,
the Purchaser shall execute and deliver or cause to be delivered to the Seller
this Agreement, the Escrow Agreement and the opinions, certificates and other
documents required to be delivered pursuant to Section 6.1, and shall deliver
the Purchase Price monies to the Escrow Agent in accordance with the Escrow
Agreement.
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SECTION 2.7 Closing Deliveries by the Escrow Agent. At or before
the Closing, the Escrow Agent shall execute and deliver to the Seller and the
Purchaser the Escrow Agreement and shall accept and hold the Purchase Price
monies and stock certificate(s) evidencing the Shares pursuant thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this Agreement, the
Seller hereby represents and warrants to the Purchaser as set forth in Annex
III hereto (which is incorporated herein by reference) and as follows:
SECTION 3.1 Organization, Authority and Qualification of the
Seller. The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all necessary
power and authority to enter into this Agreement and the Escrow Agreement, to
carry out its obligations hereunder and thereunder, to consummate the
transactions contemplated hereby and thereby and to conduct its Business,
except where the failure to be so qualified or in good standing would not have
a Material Adverse Effect. The Seller is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its Business makes such licensing or
qualification necessary, except as would not have a Material Adverse Effect.
The execution and delivery of this Agreement and the Escrow Agreement by the
Seller, the performance by the Seller of its obligations hereunder and
thereunder and the consummation by the Seller of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the
Preferred Stock in accordance with the terms of this Agreement and the
Certificate of Designation, have been duly authorized by all requisite action
on the part of the Seller. This Agreement and the Escrow Agreement have been
duly executed and delivered by the Seller, and (assuming due authorization,
execution and delivery by the Purchaser) this Agreement and the Escrow
Agreement constitute the legal, valid and binding obligations of the Seller
enforceable against the Seller in accordance with their respective terms.
SECTION 3.2 Capitalization of the Seller. (a) The authorized
capital stock of the Seller consists of 55,000,000 shares of Common Stock and
1,000,000 shares of preferred stock, par value $0.01 per share. As of March
10, 1997, (i) 26,864,511 shares of Common Stock are issued and outstanding, all
of which are validly issued, fully paid and nonassessable and (ii) 200,000
shares of preferred stock are issued and outstanding (not including the
Preferred Stock and the Series D Preferred Stock). None of the issued and
outstanding shares of Common Stock or preferred stock was issued in violation
of any preemptive rights. Except as disclosed in Schedule 3.2 of the
Disclosure Schedule, there are no options, warrants, convertible securities or
other rights, agreements, arrangements or commitments of any character to which
the Seller is a party relating to the issuance or sale of capital stock of the
Seller or obligating the Seller to issue or sell any shares of capital stock
of, or any other equity interest in, the Seller or its Subsidiaries. Except as
disclosed in Schedule 3.2 of the Disclosure Schedule, there are no outstanding
contractual obligations of the Seller to repurchase, redeem or otherwise
acquire any shares of Common Stock or shares of capital stock of its
Subsidiaries. Upon issuance of the Shares to the Purchaser at the Closing and
payment therefor pursuant to this Agreement and the
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Certificate of Designation, the Shares will be validly issued, fully paid and
nonassessable and free of preemptive rights. By the Closing Date, the shares
of Common Stock issuable upon conversion of the Shares will be duly authorized
and reserved for issuance upon such conversion and, upon issuance of such
shares in accordance with the Certificate of Designation, will be validly
issued, fully paid and nonassessable and free of preemptive rights. Upon
consummation of the transactions contemplated by this Agreement, including the
issuance of the Shares, registration of the Shares in the name of the Purchaser
in the stock records of the Seller and delivery of the Shares as provided in
the Escrow Agreement, the Purchaser will own the Shares free and clear of all
Encumbrances, other than Encumbrances resulting from any action, or failure to
take action, by the Purchaser.
(b) The outstanding indebtedness of Seller as of December
31, 1996 is accurately reflected (subject to normal and recurring adjustments
and other revisions which were not and are not reasonably expected to be
material in amount) in the Seller's balance sheet at December 31, 1996
contained in the Seller's unaudited draft annual consolidated financial
statements and the notes thereto for the year ended December 31, 1996 (the
"1996 Financial Statements").
SECTION 3.3 Subsidiaries. Each Subsidiary: (i) is duly organized
and validly existing under the laws of its jurisdiction of organization; (ii)
has all necessary power and authority to own, operate or lease the properties
and assets owned, operated or leased by such Subsidiary and to carry on its
business as it has been and is currently conducted by such Subsidiary; and
(iii) is duly licensed or qualified to do business and is in good standing in
each jurisdiction in which the properties owned or leased by it or the
operation of its business makes such licensing or qualification necessary or
desirable, except where the failure to be so duly licensed or qualified would
not have a Material Adverse Effect. Each Subsidiary is wholly owned, directly
or indirectly, by the Seller.
SECTION 3.4 No Conflict. Assuming that all Approvals described in
Section 3.5 have been obtained and all filings and notifications listed in
Schedule 3.5 of the Disclosure Schedule have been made, the execution, delivery
and performance of this Agreement and the Escrow Agreement by the Seller, and
the issuance of the Shares and the performance of the Seller's obligations in
accordance with the Certificate of Designation, do not and will not, as of the
Closing Date: (i) violate, conflict with or result in the breach of any
provision of the certificate of incorporation or by-laws (or similar
organizational documents) of the Seller or any Subsidiary; (ii) conflict with
or violate (or cause an event which could have a Material Adverse Effect as a
result of) any Law or Governmental Order applicable to the Seller, any
Subsidiary or any of their respective assets, properties or businesses; or
(iii) except as set forth in Schedule 3.4(iii) of the Disclosure Schedule,
conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result
in the creation of any Encumbrance on any of the Shares or on any of the assets
or properties of the Seller or any Subsidiary pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Seller or any
Subsidiary is a party or by which any of the Shares or any of such assets or
properties is bound or affected.
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SECTION 3.5 Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement and the Escrow Agreement by the
Seller do not and will not require any consent, approval, authorization or
other order of, action by, filing with or notification to any Governmental
Authority (collectively, the "Approvals"), except: (i) as described in Schedule
3.5 of the Disclosure Schedule; (ii) as may be required pursuant to the
notification requirements of the HSR Act; (iii) the filing with the Secretary
of State of the State of Delaware of the Certificate of Designation
contemplated by Section 5.1; and (iv) any filings required to effect any
registration pursuant to Section 5.5. Subject to the foregoing exceptions, the
Seller shall obtain the foregoing Approvals on or before the Closing Date.
SECTION 3.6 Seller SEC Documents; Financial Statements. (a) The
Seller has filed all forms, reports and documents required to be filed by it
with the Commission, and has heretofore made available to the Purchaser, in the
form filed with the Commission (excluding any exhibits thereto), (A) its Annual
Report on Form 10-K for the fiscal year ended December 31, 1995, (B) its
Quarterly Reports on Form 10-Q for the periods ended March 31, 1996, June 30,
1996, and September 30, 1996, (C) all proxy statements relating to the Seller's
meetings of stockholders (whether annual or special) held since December 31,
1995, (D) the Seller's Prospectus dated April 16, 1996 and the related
Registration Statement on Form S-1 with respect to the offering by Seller of
certain debt obligations which mature in 2006, and (E) its Current Reports on
Form 8-K dated after December 31, 1995 (the forms, reports and other documents
referred to in clauses (A), (B), (C), (D) and (E) above being referred to
herein, collectively, as the "SEC Reports").
(b) Except as set forth on Schedule 3.6 of the Disclosure
Schedule, the SEC Reports and any other forms, reports and other documents
filed by the Seller with the Commission as of the date of this Agreement: (i)
were prepared in all material respects in accordance with the requirements of
the Securities Act and the Exchange Act, as the case may be, and the rules and
regulations thereunder; and (ii) did not at the time they were filed contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
(c) The financial statements (including, in each case, any
notes thereto) contained in the SEC Reports were prepared in accordance with
U.S. GAAP applied on a consistent basis throughout the periods indicated
(except as may be indicated in the notes thereto) and each fairly presented the
financial position, results of operations and cash flows of the Seller and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not reasonably expected, individually or in the aggregate, to be material in
amount).
(d) Since December 31, 1996 there has not been any change,
occurrence or circumstance in the Business, results of operations or financial
condition of the Seller or any Subsidiary having, individually or in the
aggregate, a Material Adverse Effect, other than changes, occurrences and
circumstances referred to in any subsequently filed SEC Reports or otherwise
Disclosed by Seller.
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SECTION 3.7 No Undisclosed Liabilities. There are no Liabilities
of the Seller or any Subsidiary, other than Liabilities: (i) disclosed in
Schedule 3.7 of the Disclosure Schedule; (ii) reflected in the SEC Reports or
the 1996 Financial Statements or otherwise Disclosed by Seller; (iii) not
required to be reflected in a consolidated balance sheet of the Seller and its
Subsidiaries or in the notes thereto prepared in accordance with U.S. GAAP; or
(iv) incurred since the Reference Balance Sheet Date in the ordinary course of
business and which do not have a Material Adverse Effect.
SECTION 3.8 Conduct in the Ordinary Course: Absence of Certain
Changes, Events and Conditions. Since the Reference Balance Sheet Date, except
as Disclosed by Seller in any subsequently filed SEC Reports or Press Releases,
as reflected in the 1996 Financial Statements or as contemplated by this
Agreement, the Business of the Seller and the Subsidiaries has been conducted
in the ordinary course and the Seller has not suffered any Material Adverse
Effect.
SECTION 3.9 Litigation. Except as set forth in the SEC Reports,
as reflected in the 1996 Financial Statements, as disclosed in Schedule 3.9 of
the Disclosure Schedule or otherwise Disclosed by Seller, there are no Actions
by or against the Seller or any Subsidiary (or by or against any Affiliate
thereof and relating to the Business, the Seller or any Subsidiary), or
affecting any of the Assets, pending before any Governmental Authority (or, to
the knowledge of the Seller, threatened to be brought by or before any
Governmental Authority) that has, has had or could reasonably be expected to
have a Material Adverse Effect or could reasonably be expected to affect the
legality, validity or enforceability of this Agreement or the Escrow Agreement
or the consummation of the transactions contemplated hereby or thereby. None
of the Seller, the Subsidiaries nor any of the Assets is subject to any
Governmental Order (nor, to the knowledge of the Seller, are there any such
Governmental Orders threatened to be imposed by any Governmental Authority)
which has, has had or could have a Material Adverse Effect.
SECTION 3.10 Compliance with Laws. The Seller and the Subsidiaries
have each conducted and continue to conduct the Business in all material
respects in accordance with all Laws and Governmental Orders applicable to the
Seller or any Subsidiary or any of the Assets or the Business, and neither the
Seller nor any Subsidiary is in material violation of any such Law or
Governmental Order.
SECTION 3.11 Full Disclosure. The Seller is not aware of any facts
pertaining to the Seller, any Subsidiary or the Business which could reasonably
be expected to have a Material Adverse Effect and which have not been disclosed
in this Agreement, the Disclosure Schedule, the SEC Reports or otherwise
Disclosed by Seller.
SECTION 3.12 Delivery of Certain Documents. The Seller has
delivered to the Purchaser a true and complete copy of the most recent drafts
of the 1996 Financial Statements, the Debt Offering Memorandum and all Related
Agreements.
SECTION 3.13 Private Placement. Assuming the accuracy of the
representations and warranties of the Purchaser contained in Sections 4.5 and
4.6, the offer and sale of the
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Shares to the Purchaser pursuant to this Agreement is exempt from registration
under the Securities Act.
SECTION 3.14 FCC Regulations. After giving effect to the issuance
of Shares to the Purchaser, the ownership of capital stock of the Seller by
aliens or their representatives or by a foreign government or representative
thereof or by any corporation organized under the laws of a foreign country
does not exceed the limitations set forth in rules and regulations of the FCC.
SECTION 3.15 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Seller to enter into this Agreement, the
Purchaser hereby represents and warrants to the Seller as follows:
SECTION 4.1 Organization and Authority of the Purchaser. The
Purchaser is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all necessary power
and authority to enter into this Agreement and the Escrow Agreement, to carry
out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Escrow Agreement by the Purchaser, the performance by the Purchaser of
its obligations hereunder and thereunder and the consummation by the Purchaser
of the transactions contemplated hereby and thereby have been duly authorized
by all requisite action on the part of the Purchaser. This Agreement and the
Escrow Agreement have been duly executed and delivered by the Purchaser, and
(assuming due authorization, execution and delivery by the Seller) this
Agreement and the Escrow Agreement constitute the legal, valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with their respective terms.
SECTION 4.2 No Conflict. Except as disclosed by the Purchaser to
the Seller in writing prior to Closing, assuming compliance with the
notification requirements of the HSR Act and the making and obtaining of all
filings, notifications, consents, approvals, authorizations and other actions
referred to in Section 4.3, and except as may result from any facts or
circumstances relating solely to the Seller, the execution, delivery and
performance of this Agreement and the Escrow Agreement by the Purchaser do not
and will not, as of the date hereof and as of the Closing Date: (i) violate,
conflict with or result in the breach of any provision of the Limited
Partnership Agreement of the Purchaser; (ii) conflict with or violate any Law
or Governmental Order applicable to the Purchaser; or (iii) conflict with, or
result
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in any breach of, constitute a default (or event which with the giving of
notice or lapse or time; or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation, or cancellation of, or result in the
creation of any Encumbrance on any of the assets or properties of the Purchaser
pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or arrangement to
which the Purchaser is a party or by which any of such assets or properties are
bound or affected, which in any such case would have a material adverse effect
on the ability of the Purchaser to consummate the transactions contemplated by
this Agreement or the Escrow Agreement.
SECTION 4.3 Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement and the Escrow Agreement by the
Purchaser do not and will not require any Approvals, except pursuant to the
notification requirements of the HSR Act and the filing requirements of
Sections 13 and 16(a) of the Exchange Act. The Purchaser shall obtain or
comply with such Approval requirements in a timely manner.
SECTION 4.4 Litigation. There are no Actions by or against the
Purchaser, pending before any Governmental Authority (or, to the knowledge of
the Purchaser, threatened to be brought by or before any Governmental
Authority) that could reasonably be expected to affect the legality, validity
or enforceability of this Agreement or the Escrow Agreement or the consummation
of the transactions contemplated hereby or thereby. The Purchaser is not
subject to any Governmental Order (nor, to the knowledge of the Purchaser, are
there any such Governmental Orders threatened to be imposed by any Governmental
Authority), which could reasonably be expected to materially adversely affect
the legality, validity or enforceability of this Agreement or the Escrow
Agreement or the consummation of the transactions contemplated hereby or
thereby.
SECTION 4.5 Investment Purpose. The Purchaser is acquiring the
Shares and the shares of Common Stock to be issued upon conversion for its own
account solely for the purpose of investment and not with a view to, or for
offer or sale in connection with, any distribution thereof.
SECTION 4.6 Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 under the Securities Act.
SECTION 4.7 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 Filing of Certificate of Designation. The Seller
covenants and agrees that at or prior to the Closing, the Seller will file the
Certificate of Designation with the Secretary of State of the State of Delaware
in accordance with the Delaware General Corporation Law and cause the
Certificate of Designation to be effective thereunder.
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SECTION 5.2 Treatment of Shares as Equity. The Seller covenants
and agrees that it will treat the Shares as equity, and not as debt, for
accounting and tax purposes and further covenants and agrees that it will not
take any action or position that is inconsistent with such treatment.
SECTION 5.3 Regulatory and Other Authorizations: Notices and
Consents. (a) The Seller and the Purchaser shall use all reasonable efforts
to obtain all Approvals of all Governmental Authorities that may be or become
necessary for each of them to obtain for their execution and delivery of, and
the performance of their respective obligations pursuant to, this Agreement and
the Escrow Agreement. Each party hereto agrees to make an appropriate filing
pursuant to the HSR Act, if required, with respect to the conversion of the
Shares at such times as the Purchaser may request and to supply as promptly as
practicable to the appropriate Governmental Authorities any additional
information and documentary material that may be requested pursuant to the HSR
Act.
(b) The Seller shall or shall cause the Subsidiaries to
give promptly such notices to third parties and use its or their reasonable
efforts to obtain such third party consents as are necessary in connection with
the transactions contemplated by this Agreement.
(c) The Purchaser shall cooperate and use all reasonable
efforts to assist the Seller in giving such notices and obtaining such
consents; provided, however, that the Purchaser shall have no obligation to
give any guarantee or other consideration of any nature in connection with any
such notice or consent or to consent to any change in the terms of any
agreement or arrangement which the Purchaser in its sole and absolute
discretion may deem adverse to the interests of the Purchaser.
SECTION 5.4 Notice of Developments. (a) Prior to the Closing,
the Seller shall promptly notify the Purchaser in writing of: (i) all events,
circumstances, facts and occurrences arising subsequent to the date of this
Agreement which could reasonably be expected to result in any breach of a
representation or warranty or covenant of the Seller in this Agreement or which
could reasonably be expected to have the effect of making any representation or
warranty of the Seller in this Agreement untrue or incorrect in any respect;
and (ii) all other developments material to the Seller and the Subsidiaries,
taken as a whole, affecting the Assets, Liabilities, business, financial
condition, operations, results of operations or prospects of the Seller, any
Subsidiary or the Business.
(b) Prior to the Closing, the Purchaser shall promptly
notify the Seller in writing of all events, circumstances, facts and
occurrences arising subsequent to the date of this Agreement which could
reasonably be expected to result in any breach of a representation or warranty
or covenant of the Purchaser in this Agreement or which could reasonably be
expected to have the effect of making any representation or warranty of the
Purchaser in this Agreement untrue or incorrect in any respect.
SECTION 5.5 Registration Rights. Effective at the Closing, the
Purchaser and the Seller shall each have the rights and obligations set forth
in Annex II, which is incorporated by reference herein.
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SECTION 5.6 Resale Restrictions. (a) The Purchaser acknowledges
that the Shares and the shares of Common Stock into which the Shares are
convertible have not been registered under the Securities Act or any state
securities law, and hereby agrees not to offer, sell or otherwise transfer,
pledge or hypothecate such shares unless and until registered under the
Securities Act and any applicable state securities law or unless such offer,
sale, transfer, pledge or hypothecation is exempt from registration or is
otherwise in compliance with the Securities Act and such laws.
(b) During the period ending one year after the Closing
Date, the Purchaser shall not, without the prior written consent of the Seller:
(i) offer, pledge, sell or otherwise transfer or dispose of, directly or
indirectly, any Shares or any shares of Common Stock into which any of such
Shares may be converted; or (ii) enter into any swap or similar agreement that
transfers, in whole or in part, any of the economic consequences of ownership
of such Shares or any shares of Common Stock into which such Shares may be
converted, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Shares or such other securities, in cash or
otherwise, other than a pledge, grant of security interest or other encumbrance
effected in a bona fide transaction with an unrelated and unaffiliated pledgee;
provided, however, that the Purchaser may at any time enter into any such
transaction described in clause (i) or (ii) above with an Affiliate of the
Purchaser.
SECTION 5.7 Registration of Shares. The Seller shall, upon
issuance of the Shares and prior to the delivery of stock certificates
evidencing the Shares pursuant to Section 2.5, register the Shares in the name
of the Purchaser in the stock records of the Seller.
SECTION 5.8 Delivery of Certain Documents. The Seller shall
deliver to the Purchaser true and correct copies of this Agreement and the
Related Agreements, the Escrow Agreement and all exhibits, schedules, annexes
and agreements related hereto and thereto, as soon as practicable following the
execution and delivery hereof by the parties hereto and thereto.
SECTION 5.9 Certain Information. (a) For a period of at least
two years from the date of this Agreement, the Seller shall file all reports
and other information required to be filed by Section 13 or 15(d) under the
Exchange Act, as the case may be, as shall be necessary in order that the
conditions to the availability of Rule 144 (as amended or to be amended) under
the Securities Act in connection with any Sale of shares of Common Stock by the
Purchaser shall be met. For so long as the Seller is required to file reports
and other information pursuant to Section 13 or 15(d) of the Exchange Act and
this Section 5.9(a), unless the Purchaser no longer holds any Shares or shares
of Common Stock, the Seller shall provide the Purchaser with a paper copy of
each such report and other information at or about the same time as filed with
the Commission.
(b) For purposes of this Agreement, "Sale" means any sale,
assignment, transfer, distribution or other disposition of shares of Common
Stock or of a participation therein, whether voluntarily or by operation of
law.
SECTION 5.10 Conduct of Business of the Seller. Prior to the
Closing, the Seller agrees (except to the extent that the Purchaser shall
otherwise consent in writing) as follows:
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(a) Dividends: Changes in Stock. The Seller shall not
take or permit to be taken any action that would result in an adjustment to the
Conversion Price (as defined in the Certificate of Designation) pursuant to
Section (7)(d) of the Certificate of Designation if the Shares were issued and
outstanding at the time of such action.
(b) Certain Matters. The Seller shall not take or permit
to be taken any action in respect of which holders of Shares would be entitled
to vote pursuant to Section (9) of the Certificate of Designation if the Shares
were outstanding at the time of such action.
SECTION 5.11 Further Action. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action,
do or cause to be done all things necessary, proper or advisable under
applicable Law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and consummate and
make effective the transactions contemplated by this Agreement.
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.1 Conditions to Obligations of the Seller. The
obligations of the Seller to execute this Agreement and perform its obligations
hereunder shall be subject to the satisfaction (or waiver by the Seller, at its
sole discretion), at or prior to the Closing, of each of the following
conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Purchaser contained in this Agreement
shall have been true and correct in all material respects when made and shall
be true and correct in all material respects as of the Closing, with the same
force and effect as if made as of the Closing, other than such representations
and warranties as are made as of another date, which shall be true and correct
as of such date (provided, however, that if any portion of any representation
or warranty is already qualified by materiality, for purposes of determining
whether this Section 6.1(a) has been satisfied with respect to such portion of
such representation or warranty, such portion of such representation or
warranty as so qualified must be true and correct in all respects), and the
covenants and agreements contained in this Agreement to be complied with by the
Purchaser at or before the Closing shall have been complied with in all
material respects, and the Seller shall have received a certificate from the
Purchaser to such effect signed by a duly authorized officer thereof;
(b) No Proceeding or Litigation. No Action shall have
been commenced by or before any Governmental Authority against either the
Seller or the Purchaser seeking to restrain or materially and adversely alter
the transactions contemplated by this Agreement which, in the reasonable, good
faith determination of the Seller, is likely to render it impossible or
unlawful to consummate such transactions; provided, however, that the
provisions of this Section 6.1(b) shall not apply if the Seller has directly or
indirectly solicited or encouraged any such Action;
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(c) Partnership Certificate. The Seller shall have
received a true and complete certificate of the general partner of the
Purchaser confirming that it has the authority under the Purchaser's
partnership agreement to execute and deliver this Agreement and the Escrow
Agreement on behalf of the Purchaser and to consummate the transactions
contemplated hereby and thereby;
(d) Incumbency Certificate of the Purchaser. The Seller
shall have received a certificate of the general partner of the Purchaser
certifying the names and signatures of the representatives of the Purchaser
authorized to sign this Agreement and the other documents to be delivered
hereunder;
(e) Legal Opinion. The Seller shall have received from
Proskauer ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the Purchaser, a legal
opinion, addressed to the Seller and dated the Closing Date, the form and
substance of which shall be substantially as set forth in Exhibit 6.1(e)
attached hereto, as to: (i) the due authorization, execution and delivery by
the Purchaser of this Agreement and the Escrow Agreement; and (ii) the
enforceability against the Purchaser of this Agreement and the Escrow
Agreement;
(f) Consents and Approvals. The Seller shall have received
(or received evidence of), each in form and substance reasonably satisfactory
to the Seller, all Approvals and all third party consents necessary or
desirable for the consummation of the transactions contemplated by this
Agreement which the Purchaser has the obligation to obtain; and
(g) Closing of Related Transactions. Closing of the
transactions contemplated by the Series D Stock Purchase Agreement shall have
occurred or shall occur simultaneously with the Closing.
SECTION 6.2 Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to execute this Agreement and perform its
obligations hereunder shall be subject to the satisfaction (or waiver by the
Purchaser, at its sole discretion), at or prior to the Closing, of each of the
following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Seller contained in this Agreement
(including those set forth in Annex III hereto) shall have been true and
correct in all material respects when made and shall be true and correct in all
material respects as of the Closing with the same force and effect as if made
as of the Closing, other than such representations and warranties as are made
as of another date, which shall be true and correct as of such date (provided,
however, that if any portion of any representation or warranty is already
qualified by materiality, for purposes of determining whether this Section
6.2(a) has been satisfied with respect to such portion of such representation
or warranty, such portion of such representation or warranty as so qualified
must be true and correct in all respects), and the covenants and agreements
contained in this Agreement to be complied with by the Seller at or before the
Closing shall have been complied with in all material respects, and the
Purchaser shall have received a certificate of the Seller to such effect signed
by a duly authorized officer thereof.
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(b) No Proceeding or Litigation. No Action shall have
been commenced by or before any Governmental Authority against either the
Seller or the Purchaser, seeking to restrain or materially and adversely alter
the transactions contemplated by this Agreement which, in the reasonable, good
faith determination of the Purchaser, is likely to render it impossible or
unlawful to consummate such transactions or which could have a Material Adverse
Effect; provided, however, that the provisions of this Section 6.2(b) shall not
apply if the Purchaser has directly or indirectly solicited or encouraged any
such Action;
(c) Resolutions of the Seller. The Purchaser shall have
received a true and complete copy, certified by the Secretary or an Assistant
Secretary of the Seller, of the resolutions duly and validly adopted by the
Board of Directors of the Seller and, to the extent that such authorization is
necessary, the shareholders of the Seller evidencing their authorization of the
execution and delivery of this Agreement, the issuance and terms of the Shares
including, without limitation, the convertibility thereof into shares of Common
Stock, and the consummation of the transactions contemplated hereby;
(d) Incumbency Certificate of the Seller. The Purchaser
shall have received a certificate of the Secretary or an Assistant Secretary of
the Seller certifying the names and signatures of the officers of the Seller
authorized to sign this Agreement and the other documents to be delivered
hereunder;
(e) Legal Opinion. The Purchaser shall have received from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, L.L.P., counsel to the Seller, a legal
opinion, addressed to the Purchaser and dated the Closing Date, the form and
substance of which shall be substantially as set forth in Exhibit 6.2(e)
attached hereto, as to: (i) the due authorization by all necessary corporate
action, execution and delivery by the Seller of this Agreement and the Escrow
Agreement; (ii) the enforceability against the Seller of this Agreement and the
Escrow Agreement; (iii) the validity of the Shares and the due authorization of
the shares of Common Stock into which the Shares may be converted; and (iv) the
good standing of the Seller and each Subsidiary under the laws of their
respective State(s) of incorporation or organization, and related matters;
(f) FCC Opinion. The Purchaser shall have received from
Kurtis & Associates, L.P., special counsel to the Seller, a legal opinion,
addressed to the Purchaser and dated the Closing Date, the form and substance
of which shall be substantially as set forth in Exhibit 6.2(f) attached hereto,
as to certain matters relating to the FCC Licenses.
(g) Consents and Approvals. The Purchaser shall have
received (or received evidence of), each in form and substance reasonably
satisfactory to the Purchaser, all Approvals and all third party consents
necessary or desirable for the consummation of the transactions contemplated by
this Agreement which the Seller has the obligation to obtain;
(h) Closing of Related Transactions. Closing of the
transactions contemplated by the Series D Stock Purchase Agreement shall have
occurred or shall occur simultaneously with the Closing;
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(i) Organizational Documents. The Purchaser shall have
received a copy of: (i) the certificate of incorporation, as amended, of the
Seller, and the Certificates of Designations with respect to the Preferred
Stock and the Series D Preferred Stock, certified by the Secretary of State of
the State of Delaware, as of a date not earlier than five Business Days prior
to the Closing Date and accompanied by a certificate of the Secretary or
Assistant Secretary of the Seller, dated as of the Closing Date, stating that
no amendments have been made to such certificate of incorporation since such
date; and (ii) the by-laws of the Seller, certified by the Secretary or
Assistant Secretary of the Seller;
(j) Good Standing. The Purchaser shall have received a
good standing certificate for the Seller from the Secretary of State of the
State of Delaware, dated as of a date not earlier than five Business Days prior
to the Closing Date and accompanied by a bring-down certificate dated within
twenty-four hours of the Closing Date; and
(k) No Material Adverse Effect. No event or events shall
have occurred which, individually or in the aggregate, have, or could have, a
Material Adverse Effect.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Survival of Representations and Warranties. (a) The
representations and warranties of the Seller to Purchaser contained in this
Agreement (including Annex III hereto) and in the Exhibits to this Agreement
and the Disclosure Schedule (collectively, the "Acquisition Documents"), shall
survive the Closing until the later of the second anniversary of the Closing
Date or the conversion of the Preferred Stock into Common Stock. Neither the
period of survival nor the liability of the Seller with respect to the Seller's
representations and warranties shall be reduced by any investigation made at
any time by or on behalf of the Purchaser. If written notice of a claim has
been given prior to the expiration of the applicable representations and
warranties by the Purchaser to the Seller, then the relevant representations
and warranties shall survive as to such claim, until such claim has been
finally resolved.
(b) The representations and warranties of the Purchaser
contained in the Acquisition Documents shall survive the Closing until the
later of the second anniversary of the Closing Date or the conversion of the
Preferred Stock into Common Stock. Neither the period of survival nor the
liability of the Purchaser with respect to the Purchaser's representations and
warranties shall be reduced by any investigation made at any time by or on
behalf of the Seller. If written notice of a claim has been given prior to the
expiration of the applicable representations and warranties by the Seller to
the Purchaser, then the relevant representations and warranties shall survive
as to such claim, until such claim has been finally resolved.
SECTION 7.2 Indemnification. (a)((i) The Purchaser, its
successors and assigns, and the stockholders, officers, directors, employees,
Affiliates and agents of the Purchaser and its successors and assigns shall be
indemnified and held harmless by the Seller for any and all Liabilities,
losses, damages, claims, costs and expenses, interest, awards, judgments and
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penalties (including, without limitation, attorneys' and consultants' fees and
expenses) actually suffered or incurred by them (including, without limitation,
any Action brought or otherwise initiated by any of them) (hereinafter a
"Loss"), arising out of or resulting from:
(A) the breach of any representation or
warranty made by the Seller contained in the Acquisition
Documents; or
(B) the breach of any covenant or
agreement by the Seller contained in the Acquisition
Documents.
(ii) The Seller, its successors and assigns, and
the stockholders, officers, directors, employees, Affiliates and agents of the
Seller and its successors and assigns shall be indemnified and held harmless by
the Purchaser for any and all Losses actually suffered or incurred by them,
arising out of or resulting from:
(A) the breach of any representation or
warranty made by the Purchaser in the Acquisition Documents;
or
(B) the breach of any covenant or
agreement by the Purchaser contained in the Acquisition
Documents.
To the extent that the Seller's or the Purchaser's undertakings set forth in
this Section 7.2 may be unenforceable, the Seller or the Purchaser, as the case
may be, shall contribute the maximum amount that it is permitted to contribute
under applicable law to the payment and satisfaction of all Losses incurred by
the Purchaser or the Seller, as the case may be.
(b) An indemnified party shall give the party from whom
indemnification is sought notice of any matter which an indemnified party has
determined has given or could give rise to a right of indemnification under
this Agreement, within 60 days of such determination, stating the amount of the
Loss, if known, and method of computation thereof, and containing a reference
to the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises; provided, however, that the failure to
provide such notice shall not release the indemnifying party from any of its
obligations under this Article VII except to the extent the indemnifying party
is materially prejudiced by such failure and shall not relieve the indemnifying
party from any other obligation or Liability that it may have to any
indemnified party otherwise than under this Article VII. The obligations and
Liabilities of an indemnifying party under this Article VII with respect to
Losses arising from claims of any third party which are subject to the
indemnification provided for in this Article VII ("Third Party Claims") shall
be governed by and contingent upon the following additional terms and
conditions: If an indemnified party shall receive notice of any Third Party
Claim, the indemnified party shall give the indemnifying party notice of such
Third Party Claim within 30 days of the receipt by the indemnified party of
such notice; provided, however, that the failure to provide such notice shall
not release the indemnifying party from any of its obligations under this
Article VII except to the extent the indemnifying party is materially
prejudiced by such failure and shall not relieve the indemnifying party from
any other obligation or Liability that it may have to any indemnified party
otherwise than under this Article VII. If the indemnifying party acknowledges
in writing its obligation to
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indemnify the indemnified party hereunder against any Losses that may result
from such Third Party Claim, then the indemnifying party shall be entitled to
assume and control the defense of such Third Party Claim at its expense and
through counsel of its choice if it gives notice of its intention to do so to
the indemnified party within five days of the receipt of such notice from the
indemnified party; provided, however, that if there exists or is reasonably
likely to exist a conflict of interest that would make it inappropriate in the
judgment of the indemnified party, in its sole and absolute discretion, for the
same counsel to represent both the indemnified party and the indemnifying
party, then the indemnified party shall be entitled to retain its own counsel,
in each jurisdiction for which the indemnified party determines counsel is
required, at the expense of the indemnifying party. In the event the
indemnifying party exercises the right to undertake any such defense against
any such Third Party Claim as provided above, the indemnified party shall
cooperate with the indemnifying party in such defense and make available to the
indemnifying party, at the indemnifying party's expense, all witnesses,
pertinent records, materials and information in the indemnified party's
possession or under the indemnified party's control relating thereto as is
reasonably required by the indemnifying party. Similarly, in the event the
indemnified party is, directly or indirectly, conducting the defense against
any such Third Party Claim, the indemnifying party shall cooperate with the
indemnified party in such defense and make available to the indemnified party,
at the indemnifying party's expense, all such witnesses, pertinent records,
materials and information in the indemnifying party's possession or under the
indemnifying party's control relating thereto as is reasonably required by the
indemnified party. No such Third Party Claim may be settled by the
indemnifying party or the indemnified party without the prior written consent
of the other.
SECTION 7.3 Limits on Indemnification. Notwithstanding anything
to the contrary contained in this Agreement, the maximum amount of
indemnifiable Losses which may be recovered from an indemnifying party arising
out of or resulting from the causes enumerated in Section 7.2 shall be an
amount equal to the Purchase Price.
ARTICLE VIII
TERMINATION AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated as
follows:
(a) by the Purchaser if, between the date hereof and the
time scheduled for the Closing: (i) an event or condition occurs that has
resulted in a Material Adverse Effect; (ii) any representation or warranty of
the Seller contained in this Agreement shall not have been true and correct in
all material respects when made or as of the Closing Date; (iii) the Seller
shall not have complied in all material respects with any covenant or agreement
to be complied with by it and contained in this Agreement; or (iv) the Seller
or any Subsidiary makes a general assignment for the benefit of creditors, or
any proceeding shall be instituted by or against the Seller or any Subsidiary
seeking to adjudicate any of them a bankrupt or insolvent, or seeking
liquidation, winding up or reorganization, arrangement, adjustment, protection,
relief or composition of its debts under any Law relating to bankruptcy,
insolvency or reorganization; or
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(b) by the Seller if, between the date hereof and the time
scheduled for the Closing: (i) any representation or warranty of the
Purchaser contained in this Agreement shall not have been true and correct in
all material respects when made or as of the Closing Date; (ii) the Purchaser
shall not have complied in all material respects with any covenant or agreement
to be complied with by it and contained in this Agreement; or (iii) the
Purchaser makes a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against the Purchaser seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up or
reorganization, arrangement, adjustment, protection, relief or composition of
its debts under any Law relating to bankruptcy, insolvency or reorganization;
or
(c) by the Purchaser if the closing of the offering of debt
contemplated by the Debt Offering Memorandum and the receipt by Seller of a
minimum of $100 million in gross proceeds therefrom shall not have occurred
on or prior to April 30, 1997; provided, however, that the Purchaser must
notify the Seller in writing within five Business Days of notice from the
Seller of the failure of such closing contemplated by the Debt Offering
Memorandum to occur of Purchaser's election to proceed (in which case,
Purchaser agrees to waive any conditions to Closing and breaking escrow which
are not then met due to the failure of such closing under the Debt Offering
Memorandum) or to terminate this Agreement or else this Agreement automatically
shall be deemed to be terminated; or
(d) by either the Purchaser or the Seller in the event that any
Governmental Authority shall have issued an order, decree or ruling or taken
any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and nonappealable; or
(e) by the mutual written consent of the Seller and the Purchaser.
SECTION 8.2 Effect of Termination.
(a) In the event of termination of this Agreement as provided in
Section 8.1, this Agreement shall forthwith become void and there shall be no
liability on the part of either party hereto except that nothing herein shall
relieve either party from liability for any breach of this Agreement occurring
prior to termination.
(b) In the event of termination of this Agreement as provided in
Section 8.1, the Escrow Agent shall, pursuant to the provisions of the Escrow
Agreement, return the Purchase Price to the Purchaser and shall return the
certificate(s) evidencing the Shares to the Seller.
SECTION 8.3 Waiver. Either party to this Agreement may: (i)
extend the time for the performance of any of the obligations or other acts of
the other party; (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered by
the other party pursuant hereto; or (iii) waive compliance with any of the
agreements or conditions of the other party contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any
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subsequent breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of
any of such rights.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs and expenses, whether or not the
Closing shall have occurred; provided however, that the Seller shall reimburse
the Purchaser for the fees and disbursements of Purchaser's counsel actually
incurred in connection with this Agreement and the transactions contemplated
hereby up to an aggregate of $30,000.
SECTION 9.2 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.2):
(a) if to the Seller:
InterCel, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) if to the Purchaser:
The ▇▇▇▇ Alternative Income Fund, L.P.
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Partner
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with a copy (which shall not constitute notice) to:
Proskauer ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
SECTION 9.3 Public Announcements. No party to this Agreement shall
make, or cause to be made, any press release or public announcement or
otherwise communicate with any news media in respect of this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party (which shall not be unreasonably withheld or delayed), and the parties
shall cooperate as to the timing and contents of any such press release or
public announcement; provided, however, that with respect to any disclosure
required by law or by a listing agreement with the National Association of
Securities Dealers, Inc. Automated Quotation System National Market System or
any national securities exchange to which the Purchaser or the Seller is a
party, the party required to make such disclosure shall use its best efforts to
consult with the other party as to the timing and contents of such disclosure
and to obtain such consent prior to the time such disclosure is required to be
made.
SECTION 9.4 Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the or interpretation of this Agreement.
SECTION 9.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
SECTION 9.6 Entire Agreement. This Agreement and the Escrow
Agreement constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between the Seller and the Purchaser with
respect to the subject matter hereof and thereof.
SECTION 9.7 Assignment. This Agreement may not be assigned by
operation of Law or otherwise without the express written consent of the Seller
and the Purchaser (which consent may be granted or withheld in the sole
discretion of the Seller or the Purchaser); provided, however, that the
Purchaser may, without the consent of the Seller, assign this Agreement prior
to the Closing to a Person who controls, is controlled by or is under common
control with the Purchaser, but no such assignment shall relieve the Purchaser
of any of its obligations under this Agreement.
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SECTION 9.8 No Third Party Beneficiaries. Except for the
provisions of Article VII relating to indemnified parties, this Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and their
successors and permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
SECTION 9.9 Amendment. This Agreement may not be amended or
modified except: (i) by an instrument in writing signed by, or on behalf of,
the Seller and the Purchaser; or (ii) by a waiver in accordance with Section
8.3.
SECTION 9.10 Management Rights For so long as the Purchaser holds
Common Stock or Shares convertible into Common Stock which, in the aggregate,
have a Current Market Value of $15 million, the Purchaser shall have the
following rights:
(a) Attendance at Meetings. The Purchaser shall have the right to
receive notice of, and have one of its representatives (the "Observer") attend
all meetings of Seller's board of directors (the "Board") and all meetings of
committees of the Board on a non-voting basis. The Purchaser shall receive all
materials distributed to the Board and committees of the Board at the same time
as the materials are distributed to the Board and committees. If any director
of the Seller who is also a director or Executive Officer of a Person that has
a class of Securities registered with the Commission or on a national exchange
or is otherwise subject to the reporting requirements of the Exchange Act,
requests that the Purchaser's representative not be allowed to remain present
during any portion of any meeting of the Board or any committee thereof due to
the material non-public information about such Person which is to be discussed
or disclosed at such meeting, the Purchaser agrees that its representative
shall not be entitled to attend such portion(s) of such meeting(s) and shall
comply with any such request from such director of the Board.
(b) Consultation Right. The Purchaser shall have the right to
regularly consult with Seller's Board and executive and financial management
with respect to Seller's Business and to make proposals with respect to such
Business. The parties agree that the Board and executive and financial
management are under no obligation to take any action with respect to the
proposals and other advice given by the Purchaser; however, Seller agrees to
direct its executive and financial management and the Board to take such
proposals and advice seriously and give due consideration thereto.
(c) Books and Records. The Purchaser shall have the right, upon
reasonable notice and at reasonable times during business hours, to inspect,
and Seller shall keep and make available to the Purchaser at Seller's principal
office all of the following:
(i) Copies of Seller's Federal, state and local income tax
or information returns (including any schedules and exhibits thereto) and
reports, if any, with respect to the six most recent fiscal years (or, if
shorter, since the commencement of Seller's Business), or for such longer
period required by any waivers extending periods of limitation to assess any
such Taxes;
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(ii) The audited financial statements of Seller for the six
most recent fiscal years (or, if shorter, since the commencement of Seller's
Business), or for such longer period required by any waivers extending periods
of limitation to assess any Federal, state or local Taxes; and
(iii) Seller's books and records for the six most recent
fiscal years (or, if shorter, since the commencement of Seller's Business), or
for such longer period required by any waivers extending periods of limitation
to assess any Federal, state or local Taxes.
SECTION 9.11 Confidentiality.
(a) The Purchaser acknowledges that the relationship set forth in
Section 9.10 above places the Observer and the Purchaser in a position to learn
confidential information, both written and oral, about the Seller's business
operations, financial condition, assets and affairs, including but not limited
to copies of unaudited financial statements of the Seller, negotiations between
the Seller and third parties and other information which is highly sensitive in
nature. All information, data, reports, discussions, prospects, compilations,
financial plans, negotiations, prospects, memoranda and other materials (in any
form) received by or communicated to the Observer directly or indirectly by
Seller pursuant to Section 9.10 above (collectively "Confidential
Information"), shall be treated as strictly confidential by the Purchaser in
accordance with the terms and provisions of Section 9.11(b) through (f) below.
The term "Confidential Information," however, does not include information
that: (i) is filed with the Commission and which is not subject to a pending
request for confidential treatment made to the Commission or any other
Governmental Authority; (ii) becomes generally available to the public other
than as a result of an improper disclosure by the Purchaser or its
representatives and employees; (iii) was available to the Purchaser or its
representatives (provided the Purchaser, its representatives and employees have
no knowledge that such information was obtained, directly or indirectly, from a
source that was bound by a confidentiality agreement with or other obligation
of secrecy to the Seller or its representatives); (iv) becomes available to the
Purchaser or its representatives and employees, directly or indirectly, from a
source other than the Seller or its representatives and employees, provided
that such source is not known by the Purchaser, its representatives or
employees to be bound by a confidentiality agreement with or other obligation
of secrecy to the Seller or its representatives and Affiliates; or (v) a
director of the Board is under no obligation or duty to keep confidential.
(b) For a period of two years from the date the Purchaser receives
such information, the Purchaser agrees to keep all Confidential Information to
itself and not to use, reveal, transfer, market, publish, divulge or otherwise
disclose to any Person, directly or indirectly, any Confidential Information
without the express written consent of the Seller (which consent may be
withheld in the sole discretion of Seller). The Purchaser agrees that the
Purchaser will not, without the Seller's prior written consent (which consent
may be withheld in the sole discretion of Seller), make or permit to be made
any copies, abstracts or summaries of the Confidential Information, except as
necessary to assist the Purchaser in exercising its rights under Section 9.10
above. The Purchaser also agrees that, promptly upon demand, after the
Purchaser ceases to have the right to an Observer under Section 9.10 above, the
Purchaser will return to the Seller or destroy all written or tangible
Confidential Information received by the Purchaser or its
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representative and employees (without retaining any copies thereof) and shall
destroy all notes, reports and other materials prepared by or for the Purchaser
based in whole or in part on Confidential Information received by the
Purchaser. The Purchaser agrees to execute any additional confidentiality
agreement required by the Seller in connection with any Confidential
Information on substantially the same terms as the Seller has agreed to be
bound with respect to such Confidential Information. The Purchaser agrees not
to use for any purpose any portion of the Confidential Information except to
exercise its rights pursuant to Section 9.10 above and not to use the
Confidential Information in any way which is detrimental to the Seller.
(c) It is each party's responsibility to ensure that its officers,
directors, investment advisors, attorneys, employees, partners, affiliates and
other representatives who are given access to the Confidential Information will
be bound by and will conduct themselves in accordance with the terms of this
Section 9.11. Neither the Seller nor its Affiliates nor their representatives
make (or shall be deemed to have made) any representation or warranty as to the
accuracy or completeness of any Confidential Information (except as may be
specifically provided elsewhere in this Agreement). Neither the Seller nor its
Affiliates nor their representatives will have any liability to the Purchaser,
its employees, agents or representatives resulting from the use of the
Confidential Information by the Purchaser or its permitted employees, agents or
representatives (except as may be specifically provided in this Agreement).
(d) The Purchaser acknowledges that it is aware, and that it will
advise its officers, directors, partners, advisors, attorneys, employees and
other representatives who become informed of any Confidential Information, that
the securities laws of the United States and various states prohibit any Person
who has received material nonpublic information with respect to an issuer from
trading in any securities of such issuer or from communicating such information
to any other Person under circumstances in which it is reasonably foreseeable
that such other Person may trade in any such securities. Without in any way
limiting the obligations of the Purchaser pursuant to the provisions of this
Agreement (other than this Section 9.11(d)) and applicable law, this Section
9.11(d), by itself, shall not give rise to an additional cause of action by the
Seller against the Purchaser which is not available to the Seller pursuant to
other terms and provisions of this Agreement or applicable law.
(e) In the event that the Purchaser is requested or required (by
oral questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process) in any judicial or
administrative proceeding or is otherwise required by Law to disclose any
Confidential Information, the Purchaser will give the Seller prompt notice of
such request or requirement so that the Seller may seek an appropriate
protective order or other relief. It is further agreed that if, in the absence
of a protective order or the receipt of a waiver hereunder, the Purchaser is
nonetheless, in the considered and reasoned opinion of its counsel required by
Law, to disclose Confidential Information, the Purchaser may disclose such
Confidential Information as required by Law, without liability hereunder;
provided, however, that the Purchaser gives the Seller written notice of the
Confidential Information to be disclosed as far in advance of its disclosure as
is practicable and that the Purchaser use commercially reasonable efforts to
obtain assurances that confidential treatment will be accorded to such
Confidential Information; and, further provided, the Purchaser will furnish
only that portion of the Confidential Information which is legally required.
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(f) The Seller acknowledges that the Purchaser and its
representatives review, and will continue to review, other potential
investments in the securities of issuers other than Seller (including, without
limitation, investments in other entities which may conduct a business of or
similar to that conducted by the Seller). This Agreement does not limit or
prohibit the Purchaser's ability to participate or invest, directly or
indirectly, in any such other securities. The Purchaser acknowledges and
agrees that, notwithstanding any other term or provision of this Agreement to
the contrary, upon any breach by the Purchaser or its employees, agents or
representatives of any of the terms or provisions of this Agreement, in
addition to all of its other rights and remedies hereunder and under applicable
law, the Seller shall be entitled to immediately revoke the rights of the
Purchaser under Section 9.10 above. This Section 9.11 shall survive the
Closing and any termination of this Agreement.
SECTION 9.12 Governing Law. This Agreement shall be governed by
the laws of the State of New York.
SECTION 9.13 Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 9.14 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the term hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
(SIGNATURES BEGIN ON NEXT PAGE)
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
INTERCEL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Excutive
Officer
THE ▇▇▇▇ ALTERNATIVE
INCOME FUND, L.P.
By: WRH PARTNERS, L.L.C., GENERAL PARTNER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
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ANNEX I
CERTIFICATE OF THE DESIGNATIONS, POWERS, PREFERENCES AND RELATIVE
PARTICIPATING OR OTHER RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF
SERIES C CONVERTIBLE PREFERRED STOCK
($0.01 Par Value)
OF
INTERCEL, INC.
--------------------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------------------
INTERCEL, INC., a Delaware corporation (the "Corporation"),
does hereby certify that the following resolutions were duly adopted by the
Board of Directors of the Corporation pursuant to authority conferred upon the
Board of Directors by Article FOURTH of the Certificate of Incorporation of the
Corporation, which authorizes the issuance of up to 1,000,000 shares of
preferred stock, at a meeting or by consent of the Board of Directors duly held
or obtained on March ___, 1997:
RESOLVED, that the issue of a series of preferred stock, $0.01 par value,
of the Corporation is hereby authorized and the designation, powers,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, in addition to those set
forth in the Certificate of Incorporation of the Corporation, are hereby fixed
as follows:
Section (1) Number of Shares and Designation. 50,000 shares of the
preferred stock, $0.01 par value, of the Corporation are hereby constituted as
a series of the preferred stock designated as Series C Convertible Preferred
Stock (the "Series C Preferred Stock"). Without the consent of the then
current holders of shares of Series C Preferred Stock as provided for herein,
the number of shares of Series C Preferred Stock may not be increased and may
not be decreased below the number of then currently outstanding shares of
Series C Preferred Stock.
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Section (2) Definitions. For purposes of the Series C Preferred
Stock, the following terms shall have the meanings indicated:
"Board of Directors" shall mean the board of directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Series C
Preferred Stock.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
"Common Stock" shall mean the Common Stock of the Corporation,
par value $0.01 per share.
"Conversion Price" shall mean the conversion price per share
of Common Stock into which the Series C Preferred Stock is convertible,
as such Conversion Price may be adjusted pursuant to Section (7). The
initial Conversion Price shall be $12.75 (equivalent to the rate of
approximately 35.29412 shares of Common Stock for each share of Series C
Preferred Stock), which initial conversion price was established pursuant
to a letter dated March 5, 1997 from the Corporation to initial holder of
the Series C Preferred Stock.
"Current Market Price" shall mean, as of a particular date,
the average of the closing high bid and low asked prices per share of
Common Stock in the over-the-counter market, as reported by the NASDAQ
Stock Market or such other system then in use, or such other exchange or
inter-dealer quotation system on which the Common Stock is principally
traded or authorized to be quoted.
"Issue Date" shall mean the first date on which shares of
Series C Preferred Stock are issued.
"NASDAQ Stock Market" shall mean the National Market System of
the National Association of Securities Dealers, Inc. Automated Quotation
System.
"Person" shall mean any individual, firm, partnership, joint
venture corporation, association or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Securities" shall have the meaning set forth in paragraph
(d)(iii) of Section (7).
"Series A Preferred Stock" shall mean the series of preferred
stock, $0.01 par value, of the Corporation designated as Series A
Convertible Preferred Stock.
"Series B Preferred Stock" shall mean the series of preferred
stock, $0.01 par value, of the Corporation designated as Series B
Convertible Preferred Stock.
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"Series D Preferred Stock" shall mean the series of preferred
stock, $0.01 par value, of the Corporation designated as Series D
Convertible Preferred Stock.
"Subsidiaries" shall mean any and all corporations,
partnerships, limited liability companies, joint ventures, associations
and other entities controlled by the Corporation directly or indirectly
through one or more intermediaries.
"Trading Day" means a day on which the NASDAQ Stock Market, or
such other exchange or inter-dealer quotation system on which the Common
Stock is principally traded or authorized to be quoted, is open for the
transaction of business.
"Transaction" shall have the meaning set forth in paragraph
(e) of Section (7).
"Transfer Agent" means such agent or agents of the Corporation
as may be designated by the Board of Directors of the Corporation as the
transfer agent for the Series C Preferred Stock.
Section (3) Dividends. (a) The holders of shares of the Series C
Preferred Stock shall be entitled to receive, when and if declared by the Board
of Directors out of funds legally available therefor, dividends in an amount
per share of Series C Preferred Stock equal to the dividends payable on the
number of shares of Common Stock into which one share of Series C Preferred
Stock is then convertible, determined as of the date fixed for determining
holders of shares of Common Stock entitled to receive such dividends. Each
such dividend shall be payable in arrears to the holders of record of shares of
the Series C Preferred Stock, as they appear on the stock records of the
Corporation at the close of business on such record dates, not more than 60
days preceding the payment dates thereof, as shall be fixed by the Board of
Directors.
(b) Except as provided in Section 5(a), holders of shares
of Series C Preferred Stock called for redemption on a redemption date between
a dividend payment record date and the dividend payment date shall not be
entitled to receive the dividend payable on such dividend payment date.
(c) So long as any shares of the Series C Preferred Stock
are outstanding, no dividends shall be declared or paid or set apart for
payment on any class or series of stock of the Corporation ranking, as to
dividends, junior to or on a parity with the Series C Preferred Stock, for any
period, unless dividends declared and paid on the Common Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Series C Preferred Stock
in accordance with paragraph (a) of this Section (3).
(d) So long as any shares of the Series C Preferred Stock
are outstanding, no shares ranking junior to or on a parity with the Series C
Preferred Stock shall be redeemed or purchased by the Corporation or any
Subsidiary, except in accordance with Section (5) hereof and the corresponding
sections of the Certificates of Designations for the Series A Preferred Stock,
the Series B Preferred Stock and the Series D Preferred Stock, and the
provisions of the Certificate of Incorporation of the Corporation.
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Section (4) Liquidation Preference. (a) In the event of
any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, before any payment or distribution of the assets of
the Corporation (whether capital or surplus) shall be made to or set apart for
the holders of Common Stock or any other series or class or classes of stock of
the Corporation ranking junior to the Series C Preferred Stock, upon
liquidation, dissolution or winding up, the holders of the shares of Series C
Preferred Stock shall be entitled to receive $450.00 per share plus an amount
equal to all dividends declared and unpaid thereon to the date of final
distribution to such holders; in addition, such holders shall also be entitled
to share ratably with the holders of the shares of Common Stock as provided in
paragraph (b) of this Section (4). If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock and any other shares of stock ranking, as to liquidation, dissolution or
winding up, on a parity with the Series C Preferred Stock, shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments in respect thereof, then such assets, or the proceeds thereof, shall
be distributed among the holders of shares of Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and any
such other stock ratably in accordance with the respective amounts which would
be payable on such shares of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock and any such other
stock if all amounts payable thereon were paid in full. For the purposes of
this Section (4), (i) a consolidation or merger of the Corporation with one or
more entities, (ii) a sale or transfer of all or substantially all of the
Corporation's assets or (iii) a statutory share exchange shall not be deemed to
be a liquidation, dissolution or winding up, voluntary or involuntary;
provided, however, that any subsequent distribution, liquidation, dissolution
or winding up of the Corporation shall remain subject to this Section (4).
(b) Subject to the rights of the holders of shares of any
series or class or classes of stock ranking on a parity with or prior to Series
C Preferred Stock, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of
Series C Preferred Stock, as provided in paragraph (a) of this Section (4),
holders of shares of Series C Preferred Stock shall be entitled to share
ratably with holders of shares of Common Stock and any other class or series
entitled to participate with the Common Stock in the event of liquidation,
dissolution or winding up, in any and all assets remaining to be paid or
distributed, such that distributions shall be made in respect of each share of
Series C Preferred Stock in an amount equal to the distributions made in
respect of the number of shares of Common Stock into which such share of Series
C Preferred Stock is then convertible.
Section (5) Redemption at the Option of the Corporation. (a)
Series C Preferred Stock may not be redeemed by the Corporation prior to the
fifth anniversary of the Issue Date. After the fifth anniversary of the Issue
Date, the Corporation, at its option, may redeem the shares of Series C
Preferred Stock, in whole or in part, for an aggregate redemption price of
$450.00 per share plus an amount per share equal to declared and unpaid
dividends, if any, to the date fixed for redemption, out of funds legally
available therefor, at any time or from time to time, subject to the notice
provisions and provisions for partial redemption described below; provided,
however, that the Corporation must redeem the shares of Series A Preferred
Stock, the shares of Series B Preferred Stock,
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the shares of Series C Preferred Stock and the shares of Series D Preferred
Stock on a pro rata basis.
(b) In the event the Corporation shall desire to redeem
shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock, notice of such redemption shall
be given by first class mail, postage prepaid, mailed not less than 20 nor more
than 60 days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on the
stock records of the Corporation, which notice shall be unconditional and
irrevocable. Each such notice shall state: (1) the redemption date; (2) the
number of shares of Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock and Series D Preferred Stock, to be redeemed and, if less
than all the shares held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (3) the redemption price; (4) the place
or places where certificates for such shares are to be surrendered for payment
of the redemption price; (5) the then current Conversion Price; and (6) that
the Corporation is not then in default of any material loan document, indenture
or other borrowing the consequences of which have a Material Adverse Effect.
Notice having been mailed as aforesaid, from and after the redemption date
(unless default shall be made by the Corporation in providing money for the
prompt payment of the redemption price), (i) the shares of the Series C
Preferred Stock so called for redemption and not converted prior to 5:00 p.m.
New York, New York time, on the redemption date shall no longer be deemed to be
outstanding, and (ii) all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the redemption
price without interest thereon after the redemption date) shall cease. If the
Corporation fails to provide money for the payment of the redemption price
within 30 days after the redemption date, the redemption price shall accrue
interest at the rate of 15% per annum.
Upon surrender in accordance with said notice of the certificates for any
such shares so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the applicable redemption price aforesaid.
If fewer than all the outstanding shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are to
be redeemed, shares to be redeemed shall be selected pro rata (as nearly as may
be) by the Corporation from outstanding shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
not previously called for redemption. If fewer than all the shares represented
by any certificate are redeemed, a new certificate shall be issued representing
the unredeemed shares without cost to the holder thereof.
Section (6) Shares to be Retired. All shares of Series C
Preferred Stock purchased or redeemed by the Corporation or converted shall be
retired and canceled and shall be restored to the status of authorized but
unissued shares of preferred stock, without designation as to series.
Section (7) Conversion. Holders of shares of Series C Preferred
Stock shall have the right to convert all or a portion of such shares into
shares of Common Stock as follows:
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(a) Subject to and upon compliance with the provisions of
this Section (7), a holder of shares of Series C Preferred Stock shall have the
right, at his, her or its option, at any time after the eighteen month
anniversary of the Issue Date, to convert such shares, in whole or in part,
into the number of fully paid and nonassessable shares of Common Stock
(calculated as to each conversion to the nearest 1/100th of a share) obtained
by dividing the aggregate liquidation preference of such shares by the
Conversion Price and by surrender of such shares so to be converted by the
holder thereof, such surrender to be made in the manner provided in paragraph
(b) of this Section (7); provided, however, that the right to convert shares
called for redemption pursuant to Section (5) shall terminate at the close of
business on the date fixed for such redemption, unless the Corporation shall
default in making prompt payment of the amount payable upon such redemption.
Any share of Series C Preferred Stock may be converted, at the request of its
holder, in part into Common Stock. If a part of a share of Series C Preferred
Stock is converted, then the Corporation will convert such share into the
requested shares of Common Stock (subject to paragraph (c) of this Section (7))
and issue a fractional share of Series C Preferred Stock evidencing the
remaining interest of such holder.
(b) In order to exercise the conversion right, the holder
of each share of Series C Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent or, if no Transfer
Agent has been appointed by the Corporation, at the principal office of the
Corporation, accompanied by written notice to the Corporation that the holder
thereof elects to convert its shares of Series C Preferred Stock or a specified
portion thereof. Unless the shares issuable on conversion are to be issued in
the same name as the name in which such share of Series C Preferred Stock is
registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder or such holder's duly authorized attorney and an amount
sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
Holders of shares of Series C Preferred Stock at the close of business on
a dividend payment record date shall be entitled to receive the dividend
payable on such shares (except that holders of shares called for redemption on
a redemption date between such record date and the dividend payment date shall
not be entitled to receive such dividend on such dividend payment date) on the
corresponding dividend payment date notwithstanding the conversion thereof
following such dividend payment record date and prior to such dividend payment
date.
As promptly as practicable after the surrender of certificates for shares
of Series C Preferred Stock as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on his, her or its written order, (i)
a certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions
of this Section (7), (ii) if less than the full number of shares of Series C
Preferred Stock evidenced by the surrendered certificates is being converted, a
new certificate or certificates, of like tenor, for the number of shares
evidenced by such surrendered certificates less the number of shares being
converted, and (iii) any fractional interest in respect of a share of Common
Stock arising upon such conversion shall be settled as provided in paragraph
(c) of this Section (7).
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Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for shares of
Series C Preferred Stock shall have been surrendered and such notice received
by the Corporation as aforesaid, and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date
and such conversion shall be at the Conversion Price in effect at such time on
such date, unless the stock transfer books of the Corporation shall be closed
on that date, in which event such person or persons shall be deemed to have
become such holder or holders of record at the close of business on the next
succeeding day on which such stock transfer books are open, but such conversion
shall be at the Conversion Price in effect on the date upon which such shares
shall have been surrendered and such notice received by the Corporation. All
shares of Common Stock delivered upon conversion of the Series C Preferred
Stock shall upon delivery be duly and validly issued and fully paid and
nonassessable.
(c) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the Series C
Preferred Stock. Instead of any fractional interest in a share of Common Stock
which would otherwise be deliverable upon the conversion of a share of Series C
Preferred Stock, the Corporation shall pay to the holder of such share an
amount in cash (computed to the nearest cent) equal to such fraction of a share
multiplied by the Current Market Price of one share of Common Stock on the
Trading Day immediately preceding the date of conversion. If more than one
share shall be surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series C Preferred
Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to
time as follows:
(i) In case the Corporation shall after the Issue
Date (A) pay a dividend or make a distribution on its Common Stock in
shares of its Common Stock, (B) subdivide its outstanding Common Stock
into a greater number of shares, (C) combine its outstanding Common Stock
into a smaller number of shares or (D) issue any shares of capital stock
by reclassification of its Common Stock, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the holder of any
share of Series C Preferred Stock thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock of the
Corporation which such holder would have owned or have been entitled to
receive after the happening of any of the events described above had such
share of Series C Preferred Stock been converted immediately prior to the
happening of such event or the record date therefor, whichever is
earlier. An adjustment made pursuant to this subparagraph (i) shall
become effective immediately after the close of business on the record
date in the case of a dividend or distribution (except as provided in
paragraph (h) below) and shall become effective immediately after the
close of business on the record date in the case of a subdivision,
combination or reclassification.
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(ii) In case the Corporation shall issue after the
Issue Date (a) options, warrants or other rights to all holders of Common
Stock as a class entitling them (for a period expiring within 180 days
after the record date mentioned below) to subscribe for or purchase
Common Stock at a price per share less than the Conversion Price at the
record date for the determination of shareholders entitled to receive
such options, warrants or other rights or (b) shares of Common Stock or
securities exercisable for (including options, warrants or other rights
other than those referred to in clause (a) above and subparagraph (iii)
below) or exchangeable or convertible into shares of Common Stock at a
price per share (or having an exercise, exchange or conversion price per
share) less than the then current Conversion Price (other than securities
issued in a transaction in which a pro rata share of such securities have
been reserved by the Corporation for distribution to the holders of
Series C Preferred Stock upon conversion), then in each such case the
Conversion Price in effect immediately prior thereto shall be adjusted to
equal the price determined by multiplying (I) the Conversion Price in
effect immediately prior to the date of issuance of such options,
warrants or other rights or shares of Common Stock (or securities
exercisable for or exchangeable or convertible into shares of Common
Stock) by (II) a fraction, the numerator of which shall be the sum of (A)
the number of shares of Common Stock outstanding on the date of issuance
of such options, warrants or other rights or shares of Common Stock (or
securities exercisable for or exchangeable or convertible into shares of
Common Stock) (without giving effect to any such issuance) and (B), in
the case of (a) above, the number of shares which the aggregate proceeds
from the exercise of such options, warrants or other rights for Common
Stock or, in the case of (b) above, the number of shares which the
aggregate consideration receivable by the Corporation for the total
number of shares of Common Stock (or securities exercisable for or
exchangeable or convertible into shares of Common Stock) so issued would
purchase at the Conversion Price in effect immediately prior to the date
of issuance, and the denominator of which shall be the sum of (A) the
number of shares of Common Stock outstanding on the date of such options,
warrants or other rights or shares of Common Stock (or securities
exercisable for or exchangeable or convertible into Common Stock)
(without giving effect to any such issuance) and (B), in the case of
clause (a) above, the number of additional shares of Common Stock offered
for subscription or purchase or, in the case of clause (b) above, the
number of shares of Common Stock so issued or into which the exercisable,
exchangeable or convertible securities may be exercised, exchanged or
converted. Such adjustment shall be made successively whenever any such
options, warrants or other rights or shares of Common Stock (or
securities exercisable for or exchangeable or convertible into Common
Stock) are issued, and shall become effective immediately after such
record date or, in the case of the issuance of Common Stock, after the
date of issuance thereof (or in the case of securities exercisable for or
exchangeable or convertible into shares of Common Stock, the date on
which holders may first exercise, exchange or convert the same in
accordance with the respective terms thereof). In determining whether
any options, warrants or other rights entitle the holders of Common Stock
to subscribe for or purchase shares of Common Stock at less than the
Conversion Price in effect immediately prior to the date of such
issuance, and in determining the aggregate offering price of shares of
Common Stock (or securities exercisable for or exchangeable or
convertible into shares of Common Stock), there shall be taken into
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account any net consideration received or receivable by the Corporation
upon issuance and upon exercise of such options, warrants or other rights
or upon issuance of shares of Common Stock (or securities exercisable for
or exchangeable or convertible into shares of Common Stock), the value of
such consideration, if other than cash, to be determined by the Board of
Directors in good faith or, if higher, the aggregate exercise, exchange
or conversion price set forth in such exercisable, exchangeable or
convertible securities. The aggregate consideration received by the
Corporation in connection with the issuance of shares of Common Stock or
of options, warrants or other rights or securities exercisable for or
exchangeable or convertible into shares of Common Stock shall be deemed
to be equal to the sum of the aggregate net offering price of all such
securities plus the minimum aggregate amount, if any, payable upon the
exercise of such options, warrants or other rights and conversion of any
such exercisable, exchangeable or convertible securities into shares of
Common Stock.
(iii) In case the Corporation shall distribute to
all holders of its Common Stock as a class any shares of capital stock of
the Corporation (other than Common Stock) or evidences of its
indebtedness or assets (other than a regular cash dividend that the Board
of Directors determines, in good faith, can be maintained by the
Corporation for at least four consecutive periods covering not less than
one year and that the Board of Directors intends to maintain for at least
four consecutive periods covering not less than one year, out of profits
or surplus) or options, warrants or other rights to subscribe for or
purchase any of its securities (excluding those referred to in
subparagraph (ii)(a) above) (any of the foregoing being hereinafter in
this subparagraph (iii) called the "Securities"), then in each such case,
unless the Corporation elects to reserve shares or other units of such
Securities for distribution to the holders of the Series C Preferred
Stock upon the conversion of the shares of Series C Preferred Stock so
that any such holder converting shares of Series C Preferred Stock will
receive upon such conversion, in addition to the shares of the Common
Stock to which such holder is entitled, the amount and kind of such
Securities which such holder would have received if such holder had,
immediately prior to the record date for the distribution of the
Securities, converted his or her shares of Series C Preferred Stock into
Common Stock (such election to be based upon a determination by the Board
of Directors that such reservation will not materially adversely affect
the interests of any holder of Series C Preferred Stock in any such
reserved Securities), the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying (I) the Conversion
Price in effect immediately prior to the date of such distribution by
(II) a fraction, the numerator of which shall be the Current Market Price
per share of the Common Stock on the record date mentioned below less the
fair market value (as determined by the Board of Directors, whose
determination shall, if made in good faith, be conclusive) of the portion
of the capital stock or assets or evidences of indebtedness so
distributed or of such rights or warrants applicable to one share of
Common Stock, and the denominator of which shall be the Current Market
Price per share of the Common Stock. Such adjustment shall become
effective immediately, except as provided in paragraph (h) below, after
the record date for the determination of stockholders entitled to receive
such distribution.
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(iv) No adjustment in the Conversion Price shall
be required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments
which by reason of this subparagraph (iv) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment; and provided further that any adjustment shall be required
and made in accordance with the provisions of this Section (7) (other
than this subparagraph (iv)) not later than such time as may be required
in order to preserve the tax-free nature of a distribution to the holders
of shares of Common Stock. All calculations under this Section (7) shall
be made to the nearest cent (with $.005 being rounded upward) or to the
nearest 1/100 of a share (with .005 of a share being rounded upward), as
the case may be. Anything in this paragraph (d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in
addition to those required by this paragraph (d), as it in its discretion
shall determine to be advisable in order that any stock dividends,
subdivision of shares, distribution of rights or warrants to purchase
stock or securities, or a distribution of other assets (other than cash
dividends) hereafter made by the Corporation to its stockholders shall
not be taxable.
(v) No adjustment in the Conversion Price shall
be required in the event of any dividend, distribution or issuance to
holders of shares of Common Stock pursuant to subparagraph (i), (ii) or
(iii) above if holders of shares of Series C Preferred Stock have
received the same dividend, distribution or issuance in accordance with
Section (3).
(e) In case the Corporation shall be a party to any
transaction (including without limitation a merger, consolidation, sale of all
or substantially all of the Corporation's assets or recapitalization of the
Common Stock and excluding any transaction as to which paragraph (d)(i) of this
Section (7) applies) (each of the foregoing being referred to as a
"Transaction"), in each case as a result of which shares of Common Stock shall
be converted into the right to receive stock, securities or other property
(including cash or any combination thereof), each share of Series C Preferred
Stock which is not converted into the right to receive stock, securities or
other property in connection with such Transaction shall thereafter be
convertible into the kind and amount of shares of stock and other securities
and property receivable (including cash) upon the consummation of such
Transaction by a holder of that number of shares or fraction thereof of Common
Stock into which one share of Series C Preferred Stock was convertible
immediately prior to such Transaction. The Corporation shall use reasonable
efforts to deliver notice of any Transaction to the holders of Series C
Preferred Stock at least 20 days prior to the earlier of the consummation or
the record date therefor; provided, however, that any unintentional failure by
the Corporation to deliver such required notice shall not impair or affect the
validity or provisions of any such Transaction; and provided, further, that any
failure by the Corporation to deliver such required notice shall toll the time
period in which the holders of Series C Preferred Stock may convert their
shares as aforementioned until such notice is delivered by the Corporation.
The Corporation shall not be a party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this paragraph (e) and
it shall not consent or agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor or purchasing
entity, as the
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case may be, for the benefit of the holders of the Series C Preferred Stock
which will contain provisions enabling the holders of the Series C Preferred
Stock which remains outstanding after such Transaction to convert into the
consideration received by holders of Common Stock at the Conversion Price
immediately after such Transaction. The provisions of this paragraph (e) shall
similarly apply to successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or
any other distribution) on the Common Stock (other than a regular cash
dividend that the Board of Directors determines can be maintained by the
Corporation for at least four consecutive periods covering at least one
year and that the Board of Directors intends to maintain for at least
four consecutive periods covering at least one year out of profits or
surplus); or
(ii) the Corporation shall authorize the granting
to the holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of any class or any other rights or warrants; or
(iii) there shall be any reclassification of the
Common Stock (other than an event to which paragraph (d)(i) of this
Section (7) applies) or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required, or the sale or transfer of all or substantially
all of the assets of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of shares of the Series C Preferred Stock at
their addresses as shown on the stock records of the Corporation, as promptly
as possible, but at least 15 days prior to the applicable date specified in
clauses (A) and (B) below, a notice stating (A) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution or
rights or warrants are to be determined or (B) the date on which such
reclassification, consolidation, merger, sale or transfer is expected, that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale or transfer. Failure to give
such notice or any defect therein shall not affect the legality or validity of
the proceedings described in this Section (7).
(g) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the
calculation of such adjusted Conversion Price and the date on which such
adjustment becomes effective and shall promptly mail such notice of such
adjustment of the Conversion Price to the holder of each share of Series C
Preferred Stock at his, her or its last address as shown on the stock records
of the Corporation.
(h) In any case in which paragraph (d) of this Section (7)
provides that an adjustment shall become effective immediately after a record
date for an event, the Corporation
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may defer until the occurrence of such event (A) issuing to the holder of any
share of Series C Preferred Stock converted after such record date and before
the occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event over
and above the Common Stock issuable upon such conversion before giving effect
to such adjustment and (B) paying to such holder any amount in cash in lieu of
any fraction pursuant to paragraph (c) of this Section (7).
(i) For purposes of this Section (7), the number of shares
of Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation.
(j) If any action or transaction would require adjustment
of the Conversion Price pursuant to more than one paragraph of this Section
(7), only one adjustment shall be made and such adjustment shall be the amount
of adjustment which has the highest absolute value.
(k) In case the Corporation shall take any action
affecting the Common Stock other than action described in this Section (7),
which in the opinion of the Board of Directors would materially adversely
affect the conversion rights of the holders of the shares of Series C Preferred
Stock, the Conversion Price for the Series C Preferred Stock may be adjusted,
to the extent permitted by law, in such manner, if any, and at such time, as
the Board of Directors may determine to be equitable in the circumstances.
(l) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate
of its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its, or both, for the purpose of effecting conversion of
the Series C Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series C Preferred
Stock not theretofore converted. For purposes of this paragraph (1), the
number of shares of Common Stock which shall be deliverable upon the conversion
of all outstanding shares of Series C Preferred Stock shall be computed as if
at the time of computation all such outstanding shares were held by a single
holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value of the shares of Common Stock
deliverable upon conversion of the Series C Preferred Stock, the Corporation
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue fully
paid and nonassessable shares of Common Stock at such adjusted Conversion
Price.
The Corporation shall use all reasonable efforts to list the shares of
Common Stock required to be delivered upon conversion of the Series C Preferred
Stock prior to such delivery, on the NASDAQ Stock Market or such other exchange
or interdealer quotation system on which the Common Stock is principally traded
or authorized to be quoted.
Prior to the delivery of any securities which the Corporation shall be
obligated to deliver upon conversion of the Series C Preferred Stock, the
Corporation shall use all reasonable efforts to comply with all federal and
state laws and regulations thereunder requiring the registration
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of such securities with, or any approval of or consent to the delivery thereof
by, any governmental authority, and any such conversion or delivery shall be
subject to any applicable requirements of law or regulation.
(m) The Corporation shall pay any and all documentary
stamp or similar issue or transfer taxes or fees payable in respect of the
issue or delivery of shares of Common Stock on conversion of the Series C
Preferred Stock pursuant hereto imposed by any Governmental Authority
(including without limitation, any fee in respect of an HSR Act filing);
provided, however, that the Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issue or
delivery of shares of Common Stock in a name other than that of the holder of
the Series C Preferred Stock to be converted and no such issue or delivery
shall be made unless and until the person requesting such issue or delivery has
paid to the Corporation the amount of any such tax or has established, to the
reasonable satisfaction of the Corporation, that such tax has been paid.
Section (8) Ranking. Any class or classes of stock of the
Corporation shall be deemed to rank:
(i) prior to the Series C Preferred Stock, as to
dividends or as to distribution of assets upon liquidation, dissolution
or winding up, if the holders of such class shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority
to the holders of Series C Preferred Stock;
(ii) on a parity with the Series C Preferred
Stock, (A) as to dividends, if such stock shall be Series A Preferred
Stock, Series B Preferred Stock, Series D Preferred Stock or Common Stock
or if the holders of such class of stock and the Series C Preferred Stock
shall be entitled to the receipt of dividends in proportion to their
respective amounts of declared and unpaid dividends per share, without
preference or priority one over the other, or (B) as to distribution of
assets upon liquidation, dissolution or winding up, whether or not the
redemption or liquidation prices per share thereof be different from
those of the Series C Preferred Stock, if such stock shall be Series A
Preferred Stock, Series B Preferred Stock or Series D Preferred Stock or
if the holders of such class of stock and the Series C Preferred Stock
shall be entitled to the receipt of amounts distributable upon
liquidation, dissolution or winding up in proportion to their respective
amounts of liquidation prices, without preference or priority one over
the other; and
(iii) junior to the Series C Preferred Stock, (A) as
to dividends, if the holders of Series C Preferred Stock shall be
entitled to the receipt of dividends in preference or priority to the
holders of shares of such stock, or (B) as to distribution of assets upon
liquidation, dissolution or winding up, if such stock shall be Common
Stock or if the holders of Series C Preferred Stock shall be entitled to
receipt of amounts distributable upon liquidation, dissolution or winding
up in preference or priority to the holders of shares of such stock.
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Section (9) Voting.
(a) Except as herein provided or as otherwise from time to
time required by law, holders of Series C Preferred Stock shall have no voting
rights.
(b) So long as any shares of the Series C Preferred Stock
remain outstanding, the consent of the holders of at least two-thirds of the
shares of Series C Preferred Stock outstanding at the time given in person or
by proxy, either in writing or at any special or annual meeting, shall be
necessary to permit, effect or validate any one or more of the following:
(i) The authorization, creation or issuance, or
any increase in the authorized or issued amount, of any class or series
of stock ranking prior to, or convertible, exercisable or exchangeable
into any class or series of stock ranking prior to, the Series C
Preferred Stock as to dividends or the distribution of assets upon
liquidation, dissolution or winding up;
(ii) The increase in the authorized or issued
amount of Series C Preferred Stock; or
(iii) The amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions of the
Certificate of Incorporation of the Corporation (including any of the
provisions hereof) which would affect any right, preference or voting
power of Series C Preferred Stock or of the holders thereof, provided,
however, that any increase in the amount of authorized preferred stock or
the creation and issuance of other series of preferred stock, or any
increase in the amount of authorized shares of such series or of any
other series of preferred stock, in each case ranking on a parity with or
junior to the Series C Preferred Stock with respect to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to affect such rights, preferences or
voting powers.
The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Series C Preferred Stock shall
have been redeemed or sufficient funds shall have been deposited in trust to
effect such redemption, scheduled to be consummated within 30 days after such
time.
Section (10) Record Holders. The Corporation and the Transfer
Agent may deem and treat the record holder of any shares of Series C Preferred
Stock as the true and lawful owner thereof for all purposes, and neither the
Corporation nor the Transfer Agent shall be affected by any notice to the
contrary.
[Signatures begin on next page]
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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
made under the seal of the Corporation and signed by [ ], its [ ],
and attested by [ ] its [ ], this [ ] day of [ ],
1997.
INTERCEL, INC.
By
-------------------------------------
Its:
-----------------------------------
(Corporate Seal)
Attest:
By
--------------------------------
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ANNEX II
REGISTRATION RIGHTS
(a) The Purchaser shall have the right at any time after the
Closing to make three requests, one of which may be a Shelf Request (as defined
in paragraph (b) hereof), of the Seller in writing for registration under the
Securities Act of shares of Common Stock into which Shares have been converted
or are to be converted prior to the closing of the offering pursuant to such
registration (the "Securities"): with respect to the first of any such request
to register under the Securities Act at least $10 million in market value of
Securities Beneficially Owned by the Purchaser (the shares subject to any such
request hereunder being referred to as the "Subject Stock"), and with each
subsequent such request being at least 6 months following the completion of the
prior offering pursuant to a registration statement with respect to the Subject
Stock which was effective until the earlier of the completion of such offering
or three months. The Seller shall use all reasonable efforts to cause the
Subject Stock to be registered under the Securities Act as soon as reasonably
practicable after receipt of a request so as to permit promptly the sale
thereof, and in connection therewith, the Seller shall prepare and file, on
such appropriate form as the Seller in its discretion shall determine, a
registration statement under the Securities Act to effect such registration.
The Seller shall use all reasonable efforts to list all Subject Stock covered
by such registration statement on any national securities exchange on which the
Common Stock is then listed or to list such Subject Stock on the National
Association of Securities Dealers, Inc. Automated Quotation System or National
Market System. The Purchaser hereby undertakes to provide all such information
and materials and take all such action as may be required in order to permit
the Seller to comply with all applicable requirements of the Commission and to
obtain any desired acceleration of the effective date of such registration
statement. Any registration statement filed at the Purchaser's request
hereunder will not count as a requested registration unless effectiveness is
maintained until the earlier of completion of the offering or three months
(other than in the case of a Shelf Registration, in which case effectiveness
must be maintained for an aggregate of six months or until completion of the
offering, whichever occurs first). Notwithstanding the foregoing, the Seller
(i) shall not be obligated to cause any special audit to be undertaken in
connection with any such registration (provided that this provision shall not
relieve the Seller of its obligation to obtain any required consents with
respect to financial statements in prior periods) and (ii) shall be entitled to
postpone for a reasonable period (not to exceed 90 days) of time the filing of
any registration statement otherwise required to be prepared and filed by the
Seller if the Seller is, at such time, either (A) conducting, or proposing to
file with the Commission within 90 days a registration statement with respect
to, an underwritten public offering for the account of the Seller of equity
securities (or securities convertible into equity securities) or is subject to
a contractual obligation not to engage in a public offering and is advised in
writing by its managing underwriter or underwriters (with a copy to the
Purchaser) that such offering would in its or their opinion be adversely
affected by the registration so requested or (B) subject to an existing
contractual obligation to its underwriters not to engage in a public offering.
Notwithstanding any other provision of this Annex II, the Seller may postpone
action under this Annex II for as long as it reasonably deems necessary (but no
longer than 90 days) if the Seller determines, in its
49
reasonable discretion, that effecting the registration at such time might (i)
adversely affect a pending or contemplated financing, acquisition, disposition
of assets or stock, merger or other significant transaction, or (ii) require
the Seller to make public disclosure of information the public disclosure of
which at such time the Seller in good faith believes could have a significant
adverse effect upon the Seller.
No securities, other than Purchaser's, may be registered on a
registration statement requested by the Purchaser pursuant to the first
paragraph of paragraph (a) of this Annex II without the Purchaser's express
written consent, unless the amount of such securities is subject to reduction
prior to any reduction in the number of securities originally requested by the
Purchaser in the event the lead underwriter of the related offering believes
that the success of such offering would be materially and adversely affected by
inclusion of all the securities requested to be included therein.
At any time after the Closing, if the Seller proposes to file a
registration statement under the Securities Act with respect to an offering of
its equity securities (i) for its own account (other than a registration
statement on Form S-4 or S-8 or any substitute form that may be adopted by the
Commission) or (ii) for the account of any holders of its securities (including
pursuant to a demand registration), then the Seller shall give written notice
of such proposed filing to the Purchaser as soon as practicable (but in any
event not less than 10 Business Days before the anticipated filing date), and
such notice shall offer the Purchaser the opportunity to register such number
of shares of Securities as the Purchaser requests. If the Purchaser wishes to
register securities of the same class or series as the Seller or such holder,
such registration shall be on the same terms and conditions as the registration
of the Seller's or such holders' securities (a "Piggyback Registration").
Notwithstanding anything contained herein, if the lead underwriter of an
offering involving a Piggyback Registration delivers a written opinion to the
Seller that the success of such offering would be materially and adversely
affected by inclusion of all the securities requested to be included, then the
number of securities to be registered by the Purchaser shall be reduced prior
to any reduction in the number of securities originally requested to be
registered pursuant to clauses (i) and (ii) of the first sentence of this
paragraph; provided, however, that the Seller must provide prompt written
notice of such written opinion to the Purchaser. The Purchaser shall have the
right at any time to convert its request for a Piggyback Registration into a
requested registration pursuant to the first paragraph of paragraph (a) of this
Annex II.
(b) Upon the request of the Purchaser (the "Shelf Request"), the
Seller shall:
(i) as promptly as reasonably practicable, prepare and
file pursuant to SEC Rule 415 on Form S-3 or such other form as Seller in its
discretion shall determine with the SEC, and thereafter shall use all
reasonable efforts to cause to be declared effective as promptly as reasonably
practicable, a Shelf Registration Statement relating to the offer and sale of
the Shares by the Purchaser from time to time in accordance with the methods of
distribution elected by the Purchaser and set forth in the Shelf Registration
Statement;
(ii) use all reasonable efforts to keep the Shelf
Registration Statement effective in order to permit the prospectus forming part
thereof to be useable by the Purchaser for an
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aggregate period of six months, or for such shorter period that will terminate
when all Shares covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement or cease to be outstanding; and
(iii) notwithstanding any other provisions hereof, use all
reasonable efforts to ensure that (A) any Shelf Registration Statement and any
amendments thereto and any prospectus forming part thereof and any supplement
thereof complies in all material respects with the Securities Act and the rules
and regulation thereunder, (B) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (C) any prospectus
forming part of any Shelf Registration Statement, and any supplement to such
prospectus (as amended or supplemented from time to time), does not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements, in light of the circumstances under which they
were made, not misleading.
(c) In connection with any offering of shares of Subject Stock
registered pursuant to this Annex II, the Seller (i) shall furnish to the
Purchaser such number of copies of any prospectus (including any preliminary
prospectus) as it may reasonably request in order to effect the offering and
sale of the Subject Stock to be offered and sold, but only while the Seller
shall be required under the provisions hereof to cause the registration
statement to remain current and (ii) take such action as shall be necessary to
qualify the shares covered by such registration statement under such "blue sky"
or other state securities laws for offer and sale as the Purchaser shall
reasonably request; provided, however, that the Seller shall not be obligated
to qualify as a foreign corporation to do business under the laws of any
jurisdiction in which it shall not then be qualified or to file any general
consent to service of process in any jurisdiction in which such a consent has
not been previously filed. If applicable, the Seller shall enter into an
underwriting agreement with a managing underwriter or underwriters selected by
the Purchaser (reasonably satisfactory to the Seller) containing
representations, warranties, indemnities and agreements then customarily
included by an issuer in underwriting agreements with respect to secondary
distributions; provided, however, that such underwriter or underwriters shall
agree to use their best efforts to ensure that the offering results in a
distribution of the Subject Stock sold in accordance with the terms of this
Agreement. In connection with any offering of Subject Stock registered
pursuant to this Annex II, the Seller shall (x) furnish to the underwriter, at
the Seller's expense, unlegended certificates representing ownership of the
Subject Stock being sold in such denominations as reasonably requested and (y)
instruct any transfer agent and registrar of the Subject Stock to release any
stop transfer orders with respect to such Subject Stock. If Purchaser enters
into an underwriting agreement with respect to the Subject Stock, Purchaser's
representations, warranties and indemnities contained therein shall be made
severally rather than jointly with the Company or any other selling stockholder
and shall be limited to (i) Purchaser's ownership of the Subject Stock, (ii)
Purchaser's authority to enter into the underwriting agreement and related
matters, and (iii) any information provided by Purchaser for inclusion in the
registration statement. Upon any registration becoming effective pursuant to
this Annex II (other than a Shelf Registration Statement), the Seller shall use
all reasonable efforts to keep such registration statement current for such
period as shall be required for the disposition of all of said Subject Stock;
provided, however, that such period need not exceed three months.
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(d) The Purchaser shall pay all underwriting discounts and
commissions related to shares of Subject Stock being sold by the Purchaser and
the fees and disbursements of counsel and other advisors to the Purchaser. All
other fees and expenses in connection with the first requested registration
pursuant to the first paragraph of paragraph (a) (which may be the Shelf
Request, if any) of this Annex II, including, without limitation, all
registration and filing fees, all fees and expenses of complying with
securities or "blue sky" laws, fees and disbursements of the Seller's counsel
and accountants (including the expenses of "cold comfort" letters required by
or incident to such performance and compliance) and any fees and disbursements
of underwriters customarily paid by issuers in secondary offerings, shall be
paid by the Seller, and all such other fees and expenses in connection with the
second and third requested registration pursuant to this Annex II shall be
borne equally by the Purchaser and the Seller; provided, however, that in the
event the Purchaser fails to convert Shares into Common Stock prior to any such
offering, such that such offering is not able to be completed, the Purchaser
shall pay all such other fees and expenses.
(e) In the case of any offering registered pursuant to this Annex
II, the Seller agrees to indemnify and hold the Purchaser, each underwriter of
Securities under such registration and each person who controls any of the
foregoing within the meaning of Section 15 of the Securities Act and the
directors and officers of the Purchaser, harmless against any and all losses,
claims, damages, liabilities or action to which they or any of them may become
subject under the Securities Act or any other statute or common law or
otherwise, and to reimburse them for any legal or other expenses reasonably
incurred by them in connection with investigating any claims and defending any
actions, insofar as any such losses, claims, damages, liabilities or actions
shall arise out of or shall be based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the registration statement
relating to the sale of such Subject Stock, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus (as
amended or supplemented if the Seller shall have filed with the Commission any
amendment thereof or supplement thereto), if used prior to the effective date
of such registration statement, or contained in the prospectus (as amended or
supplemented if the Seller shall have filed with the Commission any amendment
thereof or supplement thereto), or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the indemnification agreement contained in this
paragraph (e) shall not apply to such losses, claims, damages, liabilities or
actions which shall arise from the sale of Subject Stock by the Purchaser if
such losses, claims, damages, liabilities or actions shall arise out of or
shall be based upon any such untrue statement or alleged untrue statement, or
any such omission or alleged omission, (x) made in reliance upon and in
conformity with information furnished in writing to the Seller by the Purchaser
or any such underwriter specifically for use in connection with the preparation
of the registration statement or any preliminary prospectus or prospectus
contained in the registration statement or any such amendment thereof or
supplement thereto or (y) made in any preliminary prospectus, and the
prospectus contained in the registration statement in the form filed by the
Seller with the Commission pursuant to Rule 424(b) under the Securities Act
shall have corrected such statement
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or omission and a copy of such prospectus shall not have been sent or given to
such person at or prior to the confirmation of such sale to him.
(f) In the case of each offering registered pursuant to this Annex
II, the Purchaser and each underwriter participating therein shall agree, in
the same manner and to the same extent as set forth in paragraph (e) of this
Annex II, severally to indemnify and hold harmless the Seller and each person,
if any, who controls the Seller within the meaning of Section 15 of the
Securities Act, and the directors and officers of the Seller, and in the case
of each such underwriter, the Purchaser, each person, if any, who controls the
Purchaser within the meaning of the Securities Act and the directors, officers
and partners of the Purchaser, with respect to any statement in or omission
from such registration statement or any preliminary prospectus (as amended or
as supplemented, if amended or supplemented as aforesaid) or prospectus
contained in such registration statement (as amended or as supplemented, if
amended or supplemented as aforesaid), if such statement or omission shall have
been made in reliance upon and in conformity with information furnished in
writing to the Seller by the Purchaser or such underwriter specifically for use
in connection with the preparation of such registration statement or any
preliminary prospectus or prospectus contained in such registration statement
or any such amendment thereof or supplement thereto.
(g) Each party indemnified under paragraph (e) or (f) of this
Annex II shall, promptly after receipt of notice of the commencement of any
action against such indemnified party in respect of which indemnity may be
sought hereunder, notify the indemnifying party in writing of the commencement
thereof. The omission of any indemnified party to so notify an indemnifying
party of any such action shall not relieve the indemnifying party from any
liability in respect of such action which it may have to such indemnified party
on account of the indemnity agreement contained in paragraph (e) or (f) of this
Annex II, unless the indemnifying party was prejudiced by such omission, and in
no event shall relieve the indemnifying party from any other liability which it
may have to such indemnified party. In case any such action shall be brought
against any indemnified party and it shall notify an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it may desire, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under paragraph (e) or (f) of this Annex II for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, other than reasonable costs of
investigation; provided, however, that if there exists or is reasonably likely
to exist a conflict of interest that would make it inappropriate in the
judgment of the indemnified party, in its sole and absolute discretion, for the
same counsel to represent both the indemnified party and the indemnifying
party, then the indemnified party shall be entitled to retain its own counsel,
in each jurisdiction for which the indemnified party determines counsel is
required, at the expense of the indemnifying party. No such third party claim
may be settled by the indemnifying party or the indemnified party without the
prior written consent of the other, which consent shall not be unreasonably
withheld.
(h) If the indemnification provided for under paragraph (e) or (f)
shall for any reason be held by a court to be unavailable to an indemnified
party under paragraph (e) or (f) hereof
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in respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under paragraph (e) or (f)
hereof, the indemnified party and the indemnifying party under paragraph (e) or
(f) hereof shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating the same), (i) in such proportion as is
appropriate to reflect the relative fault of the Seller and the prospective
seller of Securities covered by the registration statement which resulted in
such loss, claim, damage or liability, or action in respect thereof, with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Seller and such
prospective seller from the offering of the securities covered by such
registration statement. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11 (f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be unreasonably
withheld.
(i) Notwithstanding anything to the contrary contained in this
Agreement, the maximum amount of indemnifiable losses which may be recovered
from an indemnifying party arising out of or resulting from the causes
enumerated in paragraph (e) or (f) shall be an amount equal to the Purchase
Price.
(j) Capitalized terms not defined in this Annex shall have the
meanings set forth in the Agreement.
(k) Any successor to the Seller (whether by merger, consolidation,
sale of assets, assignment or otherwise) shall expressly assume in writing the
Seller's obligations hereunder.
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EXHIBIT 10(rr)
ANNEX III
ADDITIONAL REPRESENTATIONS
AND WARRANTIES OF SELLER
As an inducement to the Purchaser to enter into this Agreement, the
Seller hereby represents and warrants, to the knowledge of Seller and except as
otherwise Disclosed by Seller, as follows:
1. Intellectual Property. Each of the Seller and its Subsidiaries has
or has the right to use all franchises, patents, patent applications, patent
licenses, patent rights, trademarks, trademark rights, trade names, trade name
rights, copyrights, licenses, permits, authorizations and other intellectual
property rights as are necessary for the Business as currently conducted,
except to the extent that the failure to have any of them would not have a
Material Adverse Effect. All of the foregoing are in full force and effect, and
each of the Seller and its Subsidiaries is in compliance with the foregoing
without any conflict with the rights of others which could have a Material
Adverse Effect.
2. Title to Assets; Leases. Prior to, upon and immediately after the
Closing, each of the Seller and its Subsidiaries owns or has the right to use
all of the Assets necessary for the Business as currently conducted, the
absence of which would have a Material Adverse Effect. Prior to, upon and
immediately after the Closing, each of the Seller and its Subsidiaries enjoys
peaceful and undisturbed possession of all leases of real property on which
facilities operated by it are situated and all leases of other Property used in
its Business, and all such leases are valid and in full force and effect, in
each case the absence of which would have a Material Adverse Effect.
3. Related Agreements. The Purchaser has heretofore or simultaneously
herewith been furnished with complete and correct copies of the agreements set
forth on the Disclosure Schedule and all appendices, schedules, exhibits and
other attachments thereto, including, without limitation, the Series D Stock
Purchase Agreement between the Seller and SCANA Communications, Inc. relating
to Series D Convertible Preferred Stock (collectively, together with the
Transaction Documents other than this Agreement and the Escrow Agreement, the
"Related Agreements"). Assuming due execution and delivery thereof by all
parties thereto, each of the Related Agreements creates a legally binding
obligation of each party thereto, enforceable against such parties in
accordance with the respective terms and provisions thereof. This Agreement,
the Escrow Agreement, the Debt Offering Memorandum and the Related Agreements
are the only material agreements relating to the High Yield Debt, the financing
thereof and the transactions contemplated hereby to which the Seller or any
Subsidiary is a party. "Transaction Documents" means this Agreement (including
the Annexes), the Escrow Agreement, the Certificate of Designation.
4. Environmental Protection. Except as would not have a Material
Adverse Effect, (i) the operations of the Seller and each of its Subsidiaries
are in compliance with Environmental Laws; (ii) there has been no Release at
any of the properties presently or
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formerly owned or operated by the Seller or any of its Subsidiaries or any
disposal or treatment facility which received Hazardous Materials generated by
the Seller or any of its Subsidiaries or any of its or their predecessor(s) in
interest; (iii) no Environmental Actions have been asserted against the Seller
or any of its Subsidiaries or any of its or their predecessor(s) in interest
nor does the Seller or any of its Subsidiaries have knowledge or notice of any
threatened or pending Environmental Action; and (iv) no Environmental Actions
have been asserted against any facilities that may have received Hazardous
Materials generated by the Seller or any of its Subsidiaries or any of its or
their predecessor(s) in interest.
5. Withholding; Union Contracts, Labor Relations. Each of the Seller
and its Subsidiaries has withheld all amounts required by law or agreement to
be withheld by it from the wages, salaries, benefits and other payments to or
for the benefit of its employees, and is not liable for any arrears of wages or
any taxes or penalties for failure to comply with any of the foregoing except
where the failure to withhold would not have a Material Adverse Effect. Neither
the Seller nor any of its Subsidiaries is a party to any employment agreement,
arrangement or understanding other than as disclosed on the Disclosure
Schedule. There are no, and there have never been any, collective bargaining
agreements covering any of the employees of the Seller or any of its
Subsidiaries. Except as disclosed on the Disclosure Schedule, none of the
Seller, any Subsidiary thereof or any employee of the Seller or any Subsidiary
thereof is subject to any employment agreement or non-competition agreement
with any former employer or any other Person which agreement would have a
Material Adverse Effect due to (i) any information which the Seller or any
Subsidiary thereof would be prohibited from using under the terms of such
agreements or (ii) any legal considerations relating to unfair competition,
trade secrets or proprietary information.
6. Business; Property and Licenses.
(a) Business and Property. Neither the Seller nor any of its
Subsidiaries engages in or currently proposes to engage in any business or
activity unrelated to the Business, other than the direct or indirect ownership
of the capital stock of or other interests in the Seller's Subsidiaries, Unity
Cellular Systems, Inc. and Northern Maine Cellular Partnership.
(b) Licenses. There is set forth in the Disclosure Schedule a
description of all FCC Licenses which, as of the Closing, will be held by the
Seller or any of its Subsidiaries and indicating which such Person holds each
such FCC License. Except to the extent it would not have a Material Adverse
Effect: (i) all of such FCC Licenses are in full force and effect and have been
duly issued in the name of, or validly assigned to, the Seller or one of its
Subsidiaries and no default or breach exists thereunder; (ii) no event has
occurred with respect to the FCC Licenses that permits, or after giving notice,
lapse of time or both would permit, revocation or termination of such FCC
Licenses or would result in any material impairment of the rights of the holder
thereof; and (iii) all such FCC Licenses are in effect for the usual FCC
License terms and are unimpaired by any condition or other restriction imposed
by the FCC or other Governmental Authority (other than restrictions and
conditions generally applicable to licenses of the same or similar type or
class).
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Except to the extent it would not have a Material Adverse Effect: (i)
all applications necessary for renewal or extension of the FCC Licenses have
been timely filed in accordance with the requirements of the FCC or other
Governmental Authority issuing such FCC Licenses; (ii) the Seller has not been
informed that any of the FCC Licenses will not be renewed in the ordinary
course; and (iii) no allegations, complaints, charges, investigations, renewal
or revocation hearings, or other proceedings have been threatened or initiated
in any forum, nor has any Governmental Authority (including, but not limited
to, the FCC) proposed, announced, used, or adopted any amendment, modification,
or change to any law or regulation, with respect to or impacting upon such FCC
Licenses.
(c) Other Licenses and Approvals. Except to the extent it would not
have a Material Adverse Effect, each of the Seller and its Subsidiaries has or
has the right to use all Licenses and Approvals that are necessary for the
Seller and its Subsidiaries to carry on the Business as currently conducted.
(d) Operation and Maintenance of Equipment. No Person owning or
operating any equipment and other tangible personal property in connection with
the operation of the Business has used, operated or maintained the same in a
manner which now or hereafter could result in the cancellation or termination
of the right of the Seller or any Subsidiary to use or make use of the same
which could result in a Material Adverse Effect. All of the material equipment
and other tangible personal property which will be owned by the Seller or any
Subsidiary upon the Closing is in good operating condition and repair (subject
to normal wear and tear) and has been used, operated and maintained in
compliance with all material applicable laws, rules and regulations, including,
without limitation, any Licenses and Environmental Laws the failure of
compliance with which could result in a Material Adverse Effect.
7. FCC Matters. Except to the extent it would not have a Material
Adverse Effect, each of the Seller and its Subsidiaries: (i) is in compliance
with the provisions of the Communications Act as implemented, interpreted, and
applied by the FCC; (ii) is in compliance with FCC requirements and
restrictions relating to FCC License ownership, and will continue to be in such
compliance immediately following the Closing; (iii) has duly and timely filed
all reports and other filings which are required to be filed by it under the
Communications Act or any other applicable law, rule or regulation of any
Governmental Authority; and (iv) is in compliance with all such laws, rules and
regulations, the noncompliance with which would have a Material Adverse Effect
on the continuation of any License held by the Seller or any of its
Subsidiaries. Except to the extent it would not have a Material Adverse Effect,
all information provided by or on behalf of the Seller or any Subsidiary in any
filing with the FCC was, at the time of filing, true, complete and correct in
all material respects when made, and the FCC has been notified of any
substantial or significant changes in such information as may be required in
accordance with applicable laws, rules and regulations.
8. Representations and Warranties under Related Agreements. All
representations and warranties made by the Seller or any of its Subsidiaries in
any of the Related Agreements or in the certificates delivered in connection
therewith are true and
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correct in all material respects as of the date hereof with the same force and
effect as though made on and as of the date hereof, except to the extent that
any of such representations and warranties relate expressly to an earlier date
or may have been affected by the consummation of the transactions contemplated
and permitted or required by this Agreement and the Related Agreements. All
representations and warranties made in the Related Agreements by or on behalf
of any party thereto other than the Seller or any of its Subsidiaries are true
and correct in all material respects as of the date hereof with the same force
and effect as though made on and as of the date hereof, except to the extent
that any of such representations and warranties related expressly to an earlier
date or may have been affected by the consummation of the transactions
contemplated and permitted or required by this Agreement and the Related
Agreements, which representations and warranties were true in all material
respects as of such earlier date or without giving effect to the consummation
of such transactions, as the case may be.
9. Tax Returns. Except to the extent it would not have a Material
Adverse Effect: (i) each of Seller and its Subsidiaries has filed all federal,
state, local and other tax returns which are required to be filed by it within
the period required for such filings and any extensions granted therefor and
within the period that the same may be filed without interest or penalties;
(ii) each such Person has paid, or made adequate provision for the payment of,
all taxes (if any), including any interest and penalties thereon, which have or
may become due and payable pursuant to any of the said returns or pursuant to
any matters raised by audits or for other reasons known to it; and (iii) each
such Person has made adequate provision for all current taxes. No audit by any
Governmental Authority of the federal, state, local or other tax returns, forms
or information statements of the Seller or any of its Subsidiaries with respect
to such taxes is currently in progress or overtly threatened.
10. ERISA.
(a) No Other Plans. None of the Seller, any of its Subsidiaries or
any ERISA Affiliate maintains or contributes to, or has any obligation under,
any Employee Benefit Plans other than those identified on the Disclosure
Schedule.
(b) ERISA and Code Compliance and Liability. Each of the Seller, its
Subsidiaries and each ERISA Affiliate is in compliance with all applicable
provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans except where failure to
comply would not result in a material liability to any such Person and except
for any required amendments for which the remedial amendment period as defined
in Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan
that is intended to be qualified under Section 401(a) of the Code has been
determined by the IRS to be so qualified, and each trust related to such plan
has been determined to be exempt under Section 501(a) of the Code, the absence
of which determination could have a Material Adverse Effect. No material
liability, whether the form of a funding liability, tax liability, or
otherwise, has been incurred by the Seller, any of its Subsidiaries or any
ERISA Affiliate which remains unsatisfied with respect to any Employee Benefit
Plan or any Multiemployer Plan.
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(c) ERISA Litigation. No material proceeding, claim, lawsuit and/or
investigation is existing or overtly threatened concerning or involving any (i)
employee welfare benefit plan (as defined in Section 3(10) of ERISA) currently
maintained or contributed to by the Seller, any of its Subsidiaries or any
ERISA Affiliate, (ii) Pension Plan or (iii) Multiemployer Plan, the outcome of
which could have a Material Adverse Effect.
(d) Termination Event. Except to the extent it would not have a
Material Adverse Effect, no Termination Event has occurred or is reasonably
expected to occur. "Termination Event" means (i) a "Reportable Event" described
in Section 4043 of ERISA; (ii) the withdrawal of the Seller, and of its
Subsidiaries or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) OR
4068(f) of ERISA; (iii) the termination of a Pension Plan, the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; (iv) the institution of
proceedings to terminate, or the appointment of a trustee with respect to, any
Pension Plan by the PBGC; (v) any other event or condition which would
constitute grounds under Section 4042(a) of the ERISA for the termination of,
or the appointment of a trustee to administer, any Pension Plan, (vi) the
partial or complete withdrawal of the Seller, any of its Subsidiaries or any
ERISA Affiliate from a Multiemployer Plan; (vii) the imposition of a Lien
pursuant to Section 412 of the Code or Section 302 or ERISA; (viii) any event
or condition which results in the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA; or (ix) any event or
condition which results in the termination of a Multiemployer Plan under
Section 40141A or ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
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