[CONFORMED AS EXECUTED]
Exhibit 10.10
AMENDED AND RESTATED PREFERRED STOCK ISSUANCE
AND CAPITAL CONTRIBUTION AGREEMENT
AMENDED AND RESTATED PREFERRED STOCK ISSUANCE AND CAPITAL
CONTRIBUTION AGREEMENT (this "Agreement"), dated as of October 20, 1999, as
amended and restated as of March 27, 2000, and as further amended and restated
as of November 9, 2000, among Fairpoint Communications, Inc. (formerly known as
MJD Communications, Inc.), a Delaware corporation ("Parent") and First Union
National Bank, as Administrative Agent (the "Administrative Agent") for (and as
representative on behalf of) the Lenders (as defined below).
W I T N E S S E T H:
WHEREAS, Parent desires that the Lenders and the Administrative
Agent enter into an Amended and Restated Credit Agreement dated as of October
20, 1999, as amended and restated as of March 27, 2000, and as further amended
and restated as of November 9, 2000 (as amended, restated, supplemented or
modified from time to time in accordance with the terms thereof, the "Credit
Agreement") among FairPoint Communications Solutions Corp. (the "Borrower"), the
lenders named therein (together with their respective successors and assigns,
the "Lenders"), First Union Securities, Inc. and Banc of America Securities LLC,
as Co-Arrangers and Co-Book Managers, Bank of America, N.A., as Syndication
Agent, Bankers Trust Company, as Documentation Agent, and the Administrative
Agent;
WHEREAS, upon certain Events of Default under the Credit Agreement,
but subject to certain conditions, Parent shall have the obligation to issue
shares of its preferred stock to the Lenders, subject to certain cure rights as
provided below; and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the Lenders' obligation to make Loans (as defined in the Credit
Agreement).
NOW, THEREFORE, IT IS AGREED:
SECTION 1. DEFINED TERMS
1.1 Defined Terms. All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Credit Agreement. For purposes of this Agreement, the following
terms shall have the meanings herein specified unless the context requires
otherwise. Defined terms in this Agreement shall include in the singular number
the plural and in the plural the singular.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
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"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Agent's Notice" shall have the meaning provided in Section 2.2
hereof.
"Agreement" shall mean this Amended and Restated Preferred Stock
Issuance and Capital Contribution Agreement, as the same may be from time to
time further modified, amended, amended and restated and/or supplemented.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Capital Contribution Amount" shall have the meaning provided in
Section 2.1(c) hereof.
"Closing Date" shall have the meaning provided in Section 3.2
hereof.
"Commission" shall mean, at any time, the Securities and Exchange
Commission or any other federal agency then administering the Act and other
Federal securities laws.
"Consolidated Capital Expenditures Covenant" shall have the meaning
provided in Section 2.1(c) hereof.
"Consolidated Capital Expenditures Default" shall have the meaning
provided in Section 2.1(c) hereof.
"Consolidated Debt Covenant" shall have the meaning provided in
Section 2.1(c) hereof.
"Consolidated Debt Default" shall have the meaning provided in
Section 2.1(c) hereof.
"Consolidated Senior Debt Covenant" shall have the meaning provided
in Section 2.1(c) hereof.
"Consolidated Senior Debt Default" shall have the meaning provided
in Section 2.1(c) hereof.
"Credit Agreement" shall have the meaning provided in the recitals
to this Agreement.
"Damages" shall have the meaning provided in Section 3.7 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Lenders" shall have the meaning provided in the recitals to this
Agreement.
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"Notice Date" shall have the meaning provided in Section 2.1(a)
hereof.
"Parent" shall have the meaning provided in the first paragraph of
this Agreement.
"Parent Investment" shall have the meaning provided in Section
2.1(a) hereof.
"Parent Preferred Stock Conversion" shall have the meaning provided
in Section 3.1 hereof.
"Purchasers" shall have the meaning provided in Section 3.1 hereof.
"Senior Subordinated Notes" shall mean the Senior Subordinated Notes
of Parent due 2008 and the Senior Subordinated Notes of Parent due 2010.
"Specified Event of Default" shall have the meaning provided in
Section 2.1(c) hereof.
SECTION 2.
2.1 Preferred Stock Conversion; Parent Investment; . (a) Subject to
Section 2.1(b) hereof, if a Specified Event of Default exists, as evidenced in
the Officers' Certificate required to be delivered pursuant to Section 8.01(e)
of the Credit Agreement, Parent shall provide notice to the Lenders that such
Lenders may exercise a Parent Preferred Stock Conversion pursuant to (and to the
extent permitted by) Section 5.02(k) of the Credit Agreement and this Agreement;
provided that Parent shall have the option, at its sole discretion, to purchase
for cash (each, a "Parent Investment"), not later than the thirtieth Business
Day after the date such Officers' Certificate has been or should have been
delivered pursuant to the Credit Agreement (such earlier date, the "Notice
Date"), additional shares of common stock of the Borrower (or, at Parent's
option, increase its equity account in the Borrower in lieu of receiving
additional shares) for an aggregate cash purchase price equal to the Capital
Contribution Amount in order to cure such Specified Event of Default (subject to
the limitation on the right to cure set forth in the final paragraph of Section
10 of the Credit Agreement). If Parent makes a Parent Investment, the Lenders
shall not have the right to exercise a Parent Preferred Stock Conversion in
respect of such Specified Event of Default. Parent shall not have any obligation
under this Agreement to make or cause to be made any investment in the Borrower.
(b) Notwithstanding any provision herein to the contrary, Parent (i)
shall not make any Parent Investment pursuant to Section 2.1(a) of this
Agreement in an amount that is greater than (A) the amount, if any, permitted to
be contributed by Parent pursuant to the Parent Credit Agreement and (B) the
amount, if any, permitted to be contributed by Parent pursuant to the indentures
governing the Senior Subordinated Notes. Parent agrees that it shall not (i)
enter into any amendment, modification or supplement to the Parent Credit
Agreement or the Senior Subordinated Notes to the extent that the direct or
intended effect of such amendment, modification or supplement is to prohibit or
limit Parent's ability to make any Parent Investment and (ii) enter into any
agreement which would prohibit Parent from making any Parent Investment.
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(c) As used herein, (A) a "Specified Event of Default" means the
failure of the Borrower to comply with (i) the Consolidated Capital Expenditures
covenant (the "Consolidated Capital Expenditures Covenant") contained in Section
9.05 of the Credit Agreement (the "Consolidated Capital Expenditures Default"),
(ii) the Consolidated Senior Debt to Capitalization covenant (the "Consolidated
Senior Debt Covenant") contained in Section 9.13 of the Credit Agreement (the
"Consolidated Senior Debt Default") or (iii) the Consolidated Debt to
Capitalization covenant (the "Consolidated Debt Covenant") contained in Section
9.14 of the Credit Agreement (the "Consolidated Debt Default"), in each case as
such covenant (and the definitions used therein) are in effect from time to
time; and (B) the "Capital Contribution Amount" shall mean (i) in the case of
the Consolidated Capital Expenditure Default, an amount equal to the
Consolidated Capital Expenditures made by the Borrower and its Subsidiaries in
excess of the amount permitted by the Consolidated Capital Expenditures Covenant
and (ii) in the case of the Consolidated Senior Debt Default or the Consolidated
Debt Default, as the case may be, the amount which, when applied to increase the
cash of the Borrower in connection with the calculation of the Consolidated
Senior Debt Covenant or the Consolidated Debt Covenant, as the case may be, will
cause the Borrower to have been in compliance with such covenant during the
testing period for which the Borrower failed to be in compliance.
2.2. Agent's Notice. If for any reason the Borrower shall fail to
deliver the Conversion/Contribution Certificate (as defined in the Credit
Agreement) to Parent as required pursuant to Section 5.02(l) of the Credit
Agreement, the Administrative Agent shall have the right to deliver any such
notice or certificate (an "Agent's Notice") which, if applicable, shall demand
that Parent provide the option to make the Parent Preferred Stock Conversion
(subject to the right to make an Parent Investment as described herein), in each
case in accordance herewith.
SECTION 3. PURCHASE OF PREFERRED STOCK.
3.1 Issuance of Preferred Stock. Subject to the terms and conditions
hereinafter set forth, and in accordance with (and to the extent permitted by)
Section 5.02(k) of the Credit Agreement, each Lender (each a "Purchaser," and
collectively, the "Purchasers") shall have the option to convert all or a
portion of such Lender's outstanding Loans (and accrued and unpaid interest and
Fees thereon) into Parent Preferred Stock (each such conversion, a "Parent
Preferred Stock Conversion").
3.2 Time and Place of the Closing. Each Parent Preferred Stock
Conversion shall take place on a closing date (each a "Closing Date") at such
place and time that the prospective Purchaser and Parent shall mutually agree
upon, which, in any event, shall be no later than the date which is 10 Business
Days after the respective Purchaser has given Parent notice of its exercise of
its option to effect a Parent Preferred Stock Conversion.
3.3 Representations and Warranties of Parent. In order to induce the
Purchasers to purchase the Parent Preferred Stock, Parent represents and
warrants to each Purchaser that:
(a) Authority, Binding Effect. Parent has the full power and
authority to enter into each Parent Preferred Stock Conversion and to incur and
perform the obligations in
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connection therewith, all of which have been duly authorized by all necessary
corporate action. Each Parent Preferred Stock Conversion will not violate any
provision of any applicable law known to be applicable to it or the Articles of
Incorporation or the By-Laws of Parent or any material agreement or instrument
by which it is bound, and will not result in the creation of any material
encumbrance or charge upon any of its assets. Each Parent Preferred Stock
Conversion will constitute a valid and legally binding obligation of Parent,
enforceable against Parent in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
similar laws and judicial decisions of general applicability relating to or
affecting creditors rights and to general principles of equity.
(b) Good Standing. Parent is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.
(c) Shares Fully Paid, Non-Assessable. The Parent Preferred Stock,
when issued and delivered, will be validly issued, fully paid and
non-assessable.
(d) No Proceedings. There is no action, proceeding or investigation
pending or, to the knowledge of Parent, threatened in writing, nor is there any
basis, to its knowledge, for any action, proceeding or investigation, against it
or any of its properties or assets which could reasonably be expected to have a
material adverse effect on the business operations, financial condition or
results of operations of Parent as a whole, or the ability of Parent to perform
its obligations in connection with the Parent Preferred Stock Conversion.
(e) Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of Parent is, or will be, entitled to any commission or
broker's or finder's fees from Parent, or from any person controlling,
controlled by or under common control with Parent, in connection with the Parent
Preferred Stock Conversion.
3.4 Representations and Warranties of Purchaser. In order to induce
Parent to issue the Parent Preferred Stock, each Purchaser (as to itself only)
represents and warrants to Parent that:
(a) Purchase for Investment. Each Purchaser will acquire Parent
Preferred Stock for its own account for investment and not with a view toward
any resale or distribution thereof.
(b) Securities Laws. Each Purchaser understands that Parent
Preferred Stock has not been registered under the Act or under any state
securities laws and may not be sold or transferred unless it is subsequently
registered under the Act and any applicable state or other securities laws, or
unless exemptions from registration under such laws are available.
(c) Knowledge. Each Purchaser represents that it is experienced in
investment matters, fully understands the transactions contemplated by a Parent
Preferred Stock Conversion, has the knowledge and experience in financial
matters as to be capable of evaluating the merits and risks of its investment
and has the financial ability and resources to bear the economic risks of its
investment.
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(d) Accredited Investor. Each Purchaser is an "accredited investor"
as defined in Rule 501(a) under the Act.
(e) Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of any Purchaser is, or will be, entitled to any commission or
broker's or finder's fees from such Purchaser, or from anyone controlling,
controlled by or under common control with such Purchaser, in connection with a
Parent Preferred Stock Conversion.
3.5 Conditions to the Obligations of each Purchaser. The obligation
of each Purchaser to purchase Parent Preferred Stock pursuant to a Parent
Preferred Stock Conversion is subject to the satisfaction of, or the waiver by
each Purchaser of, the following conditions at or prior to the respective
Closing Date for such Parent Preferred Stock Conversion:
(a) Representations and Warranties. The representations and
warranties of Parent contained in Section 3.3 hereof shall be true and correct
in all material respects on and as of the respective Closing Date for such
Parent Preferred Stock Conversion.
(b) Agreements, Conditions and Covenants. Parent shall have
performed or complied in all material respects with all agreements, conditions
and covenants required in connection with the respective Parent Preferred Stock
Conversion to be performed or complied with by it on or before the respective
Closing Date for such Parent Preferred Stock Conversion.
(c) Share Certificate. Such Purchaser shall have received on the
respective Closing Date certificates evidencing the Parent Preferred Stock, duly
completed and executed by Parent in the name of such Purchaser and, if required,
with the requisite share transfer tax stamps duly affixed.
(d) Articles and Bylaws of Parent. Such Purchaser shall have
received copies of the Articles of Incorporation and Bylaws of Parent as they
exist on the respective Closing Date.
(e) Opinions of Counsel. Parent shall have furnished the Purchaser
on the date on which the first share of Parent Preferred Stock is originally
issued an opinion of counsel, dated the Closing Date for such Parent Preferred
Stock Conversion, in form and substance reasonably satisfactory to such
Purchaser.
(f) No Litigation Threatened. No action or proceedings shall have
been instituted or, threatened before a court or other government body or by any
public authority to restrain or prohibit the Parent Preferred Stock Conversion
to occur on such Closing Date.
(g) Certificate of Designation. Parent shall deliver to such
Purchaser evidence that the Certificate of Designation of Parent shall have been
duly filed with the Secretary of State of Delaware and shall be in full force
and effect.
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3.6 Conditions to the Obligations of Parent. The obligation of
Parent to issue and sell the Parent Preferred Stock on any Closing Date is
subject to the satisfaction of, or the waiver by Parent of, the following
conditions at or prior to such Closing Date:
(a) Representations and Warranties. The representations and
warranties of the respective Purchaser contained in Section 3.4 hereof shall be
true and correct in all material respects on and as of the respective Closing
Date for such Parent Preferred Stock Conversion.
(b) Agreements, Conditions and Covenants. Such Purchaser shall have
performed or complied in all material respects with all agreements, conditions
and covenants in connection with the Parent Preferred Stock Conversion to occur
on such Closing Date to be performed or complied with by it on or before such
Closing Date.
(c) No Litigation Threatened. No action or proceedings shall have
been instituted or, threatened before a court or other government body or by any
public authority to restrain or prohibit the Parent Preferred Stock Conversion
to occur on such Closing Date.
(d) The Trigger Event. A Trigger Event shall have occurred and any
Lender exercising its Conversion Option shall have provided Parent ten Business
Days' notice requesting such Conversion.
3.7 Indemnification. Parent agrees to indemnify and hold each
Purchaser and its officers, directors, employees, affiliates and agents, and any
successors thereto (and any officers, directors, employees, affiliates and
agents of such successors) harmless from any liability, damage, deficiency,
demand, claim, suit, action, or cause of action, fine, penalty, loss, cost,
expense, including without limitation, reasonable attorney fees (collectively,
"Damages") incurred or suffered as a result of or in connection with the
enforcement of Parent's obligations with respect to any of the terms, conditions
or agreements to be performed (or required to be performed) by it pursuant to
the terms of this Agreement, including without limitation, any Damages incurred
or suffered as a result of, or in connection with, or arising out of, the
failure of any representation or warranty made by Parent in connection with an
Parent Preferred Stock Conversion or as otherwise provided herein. The foregoing
shall be in addition to, and in no way limit or impair the rights of any Lender
to enforce Parent's obligations hereunder or seek damages or equitable relief in
connection with any failure or assessed failure of Parent to perform its
obligations hereunder. Notwithstanding anything in this Agreement, in no event
shall Parent be obligated under this Agreement to indemnify any Lender for such
Lender's failure to comply with Regulation Y.
3.8 Rule 144A. Except at such times that Parent is a reporting
company under Section 13 or 15(d) of the Exchange Act, Parent shall, upon the
written request of any holder of Parent Preferred Stock, provide, subject to
customary confidentiality arrangements, to any such holder and to any
prospective institutional transferee of Parent Preferred Stock designated by
such holder, such financial and other information as is available to Parent or
can be obtained by Parent and as such holder may reasonably determine is
required to permit a transfer of such Parent Preferred Stock to comply with the
requirements of Rule 144A promulgated under the Act.
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3.9 Common Stock Parent will not issue to the holders of common
stock of Parent on or after the Restatement Effective Date (as defined in the
Credit Agreement) (i) any class of common stock or any debt securities which (in
either case) are convertible into any class of preferred stock of Parent at any
time and (ii) any class of preferred stock other than preferred stock for fair
market value.
SECTION 4. MISCELLANEOUS.
4.1 Representations and Warranties. In order to induce the Lenders
to enter into the Credit Agreement and the making of each Credit Event provided
for therein, Parent represents and warrants to the Administrative Agent and the
Lenders as follows:
(i) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has full
power, authority and legal right to own its property and assets, and to
transact the business in which it is engaged; and
(ii) it has the full corporate power, authority and legal right to
execute, deliver and perform each of its obligations under this Agreement
and has taken all necessary corporate actions to authorize the execution,
delivery and performance of each of its obligations under this Agreement
and this Agreement constitutes the legal, valid and binding obligation of
Parent, enforceable against Parent in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws relating to or effecting creditors'
rights generally or by equitable principles relating to enforceability.
4.2 No Guarantee of Indebtedness. Neither this Agreement, nor
anything herein contained, nor any obligation performed or to be performed
pursuant hereto by Parent shall be construed or deemed to constitute, a direct
or indirect guarantee by Parent to any person or entity of the payment of the
interest, principal or premium of any indebtedness, liability or obligation
whatsoever of the Borrower or any Subsidiary of the Borrower, including, without
limitation, the Loans.
4.3 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing and
mailed, faxed, sent by a nationally recognized express courier or delivered by
hand, if to Parent, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (with a copy to Paul, Hastings, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, Tower 42, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇); if to any Lender or the Administrative Agent in the manner
specified in the Credit Agreement; or, at such other address as shall be
designated by any party in a written notice to the other parties hereto as
provided in this Section 4.3. All such notices and communications shall be
effective at the earliest to occur of receipt, three business days after deposit
in the United States mail, one Business Day after delivery to a nationally
recognized express courier, and telephone confirmation of receipt of fax
communication; provided, however, that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
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4.4 No Waiver, Remedies Cumulative. No failure or delay on the part
of any of the Lenders or the Administrative Agent in exercising any right, power
or privilege hereunder and no course of dealing between Parent or the Borrower,
on the one hand, and any of the Lenders or the Administrative Agent, on the
other, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power, or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which any of the Lenders or the
Administrative Agent would otherwise have. No notice to or demand on Parent in
any case shall entitle Parent to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any of
the Lenders or the Administrative Agent to any other or further action in any
circumstances without notice or demand.
4.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all of
which shall together constitute one and the same instrument.
4.6 Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
4.7 Amendment or Waiver. Neither this Agreement nor any of the terms
hereof may be amended, modified, supplemented, waived, discharged or terminated
unless such amendment, modification, supplement, waiver, discharge or
termination is in writing signed by Parent and the Administrative Agent (with
the consent of the Required Lenders). Any waiver or consent shall be effective
only in the specific instance or for the specific purpose for which it was
given.
4.8 Governing Law and Jurisdiction. This Agreement, and the rights
and obligations of the parties hereunder, shall be construed in accordance with
and governed by the law of the State of New York. Any legal action or proceeding
with respect to this Agreement may be brought in the courts of the State of New
York or of the United States for the Southern District of New York and, by
execution and delivery of this Agreement, irrevocably accepts for itself and in
respect of its property, unconditionally, the jurisdiction of the aforesaid
courts with respect to any such action or proceeding.
4.9 Successors and Assigns. This Agreement shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon each of Parent and the successors and assigns thereof, and shall
inure to the benefit of the Administrative Agent and the Lenders, and their
respective successors and assigns, notwithstanding that from time to time during
the term of the Credit Agreement there may be no obligations outstanding. Parent
acknowledges and agrees that this Agreement is made for the benefit of the
Administrative Agent and the Lenders and that the Administrative Agent and/or
the Lenders may enforce all of the obligations of Parent hereunder directly
against Parent. Parent may not assign any of its rights or
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obligations hereunder without the consent of the Required Lenders. Prior to any
Parent Preferred Stock Conversion by a Lender, this Agreement and the rights of
such Lender hereunder shall only be assignable by such Lender, to an assignee of
such Lender under the Credit Agreement.
4.10 Survival. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement and the making
of the Loans.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this agreement to be duly executed and delivered as of the date
first above written.
FAIRPOINT COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President of Finance and
Treasurer
FIRST UNION NATIONAL BANK, as
Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
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