EXHIBIT 10.94
SALE AND PURCHASE AGREEMENT
AMONG
SCANA CORPORATION,
SCANA COMMUNICATIONS, INC.,
AND
ITC HOLDING COMPANY, INC.
Dated as of March 11, 1997
SECURITIES TRANSFERRED PURSUANT HERETO ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
1. DEFINITIONS AND REFERENCES.................................................1
2. SALE AND PURCHASE OF ASSETS................................................2
2.1. Asset Sale..........................................................2
2.2. Purchase Price......................................................2
2.3. No Assumption of Liabilities........................................2
3. ADDITIONAL AGREEMENTS......................................................3
3.1. Initial Xxxx-Xxxxx-Xxxxxx Filing....................................3
3.2. Restated Certificate of Incorporation and Certificate of
Designation........................................................3
3.3. Consents and Approvals..............................................3
3.4. Notice of Developments..............................................4
3.5. Registration Rights.................................................4
3.5.1. Piggyback Registration Right.................................4
3.5.2. ITC Obligations..............................................4
3.5.3. SCANA Holders Obligations....................................5
3.5.4. Indemnification by ITC.......................................5
3.5.5. Indemnification by the SCANA Holders.........................6
3.5.6. Indemnification Procedures...................................6
3.5.7. Contribution in lieu of Indemnification......................7
3.5.8. Limit on Indemnification.....................................8
3.6. Allocation of Purchase Price........................................8
3.7. Transfer Tax........................................................8
3.8. Treatment of Shares as Equity.......................................8
3.9. Resale Restrictions.................................................8
3.10. ITC Stockholders' Meeting..........................................8
3.11. Conduct of Business of ITC.........................................9
3.12. Further Action.....................................................9
3.13. Risk of Loss.......................................................9
3.14. Xxxx-Xxxxx-Xxxxxx Filing Upon Conversion...........................10
3.15. Subordination of Note..............................................10
3.16. Release............................................................10
4. REPRESENTATIONS AND WARRANTIES OF SCANA AND SCANA COMMUNICATIONS...........11
4.1. Organization and Standing...........................................11
4.2. Authorization.......................................................11
4.3. Binding Obligation..................................................11
4.4. Restrictions and Consents...........................................12
4.5. Absence of Violation................................................12
4.6. Assets..............................................................12
4.6.1. Title to the Assets..........................................12
4.6.2. Condition of Tangible Assets.................................12
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4.6.3. Free Transferability.........................................13
4.7. Litigation; Disputes................................................13
4.7.1. No Litigation; Compliance with Law...........................13
4.7.2. No Disputes..................................................13
4.8. Disclosure..........................................................13
4.9. Investment Purpose..................................................13
4.10. Accredited Investor................................................13
4.11. Access to Information..............................................14
4.12. Brokers............................................................14
5. REPRESENTATIONS AND WARRANTIES OF ITC......................................14
5.1. Organization and Standing...........................................14
5.2. Authorization.......................................................14
5.3. Binding Obligation..................................................15
5.4. Restrictions and Consents...........................................15
5.5. Capital Stock.......................................................15
5.6. Absence of Violation................................................16
5.7. Litigation; Disputes................................................16
5.7.1. No Litigation; Compliance with Law...........................16
5.7.2. No Disputes..................................................16
5.8. Disclosure..........................................................16
5.8.1. General......................................................16
5.8.2. Financial Statements.........................................16
5.9. No Undisclosed Liabilities..........................................17
5.10. Conduct in the Ordinary Course.....................................17
5.11. Brokers............................................................17
6. CONDITIONS TO CLOSING......................................................17
6.1. Conditions to Obligations of SCANA and SCANA COMMUNICATIONS.........17
6.1.1. Representations, Warranties, and Covenants...................17
6.1.2. No Proceeding or Litigation..................................18
6.1.3. Resolutions of ITC...........................................18
6.1.4. Legal Opinion................................................18
6.1.5. Consents and Approvals.......................................18
6.1.6. ITC Stockholder Approval.....................................19
6.1.7. Elimination of Guaranty Agreement............................19
6.1.8. No Material Adverse Effect...................................19
6.2. Conditions to Obligations of ITC....................................19
6.2.1. Representations, Warranties, and Covenants...................19
6.2.2. No Proceeding or Litigation..................................20
6.2.3. Resolutions of SCANA COMMUNICATIONS..........................20
6.2.4. Legal Opinion................................................20
6.2.5. Consents and Approvals.......................................20
6.2.6. ITC Stockholder Approval.....................................20
6.2.7. Elimination of Guaranty Agreement............................21
6.2.8. No Material Adverse Effect...................................21
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7. SURVIVAL; INDEMNIFICATION..................................................21
7.1. Survival of Representations and Warranties..........................21
7.2. Indemnification.....................................................21
7.2.1. Indemnification by SCANA and SCANA COMMUNICATIONS............21
7.2.2. Indemnification by ITC.......................................22
7.2.3. Contribution.................................................22
7.2.4. Conditions of Indemnification................................22
7.2.5. Limitations on Indemnification...............................23
8. TERMINATION AND WAIVER.....................................................23
8.1. Termination.........................................................23
8.2. Effect of Termination...............................................24
8.3. Waiver..............................................................24
9. MISCELLANEOUS..............................................................25
9.1. Expenses............................................................25
9.2. Notices.............................................................25
9.3. Public Announcements................................................26
9.4. Headings............................................................26
9.5. Severability........................................................26
9.6. Entire Agreement....................................................27
9.7. Assignment..........................................................27
9.8. No Third Party Beneficiaries........................................27
9.9. Amendment...........................................................27
9.10. Governing Law......................................................27
9.11. Counterparts.......................................................27
9.12. Specific Performance...............................................27
EXHIBITS
Exhibit Number Section Number Exhibit
Exhibit 1 1 Definitions
Exhibit 2 2.1; 2.3 Assets
Exhibit 3 2.2(a); 3.2 Restated Certificate of Incorporation and
Preferred Stock Certificate of Designation
Exhibit 4 2.2(b) Promissory Note
Exhibit 5 3.6 Allocation of Purchase Price
Exhibit 6 3.15 Subordination Agreement
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SALE AND PURCHASE AGREEMENT
THIS SALE AND PURCHASE AGREEMENT is entered into as of March 11, 1997
by and among SCANA Corporation, a South Carolina corporation ("SCANA"), SCANA
COMMUNICATIONS, INC., A SOUTH CAROLINA CORPORATION AND WHOLLY OWNED SUBSIDIARY
OF SCANA ("SCANA COMMUNICATIONS"), AND ITC HOLDING COMPANY, INC., A DELAWARE
CORPORATION ("ITC").
WHEREAS, SCANA COMMUNICATIONS OWNS, HOLDS, AND USES CERTAIN TANGIBLE
AND INTANGIBLE ASSETS AND RIGHTS; AND
WHEREAS, SCANA COMMUNICATIONS DESIRES TO SELL CERTAIN OF SUCH ASSETS
TO ITC, AND ITC DESIRES TO PURCHASE SUCH ASSETS (INCLUDING, AMONG OTHER THINGS,
SCANA COMMUNICATIONS' 64% PARTNERSHIP INTEREST IN GULF STATES FIBERNET, A
GEORGIA GENERAL PARTNERSHIP ("GULF STATES")), FROM SCANA COMMUNICATIONS, ALL IN
ACCORDANCE WITH AND SUBJECT TO THE TERMS AND CONDITIONS HEREINAFTER SET FORTH;
AND
WHEREAS, GULFSTATES TRANSMISSION SYSTEMS, INC. ("GULFSTATES
TRANSMISSIONS"), A WHOLLY OWNED SUBSIDIARY OF ITC, OWNS THE REMAINING
OUTSTANDING PARTNERSHIP INTERESTS IN GULF STATES, AND THE PARTIES CONTEMPLATE
THAT, AFTER THE CONSUMMATION OF THE SALE AND PURCHASE OF ASSETS CONTEMPLATED
HEREBY, ITC SHALL CONTRIBUTE THE GULF STATES PARTNERSHIP INTEREST IT ACQUIRES
PURSUANT HERETO TO GULFSTATES TRANSMISSIONS AND THAT, AS A CONSEQUENCE THEREOF,
THE GULF STATES PARTNERSHIP SHALL DISSOLVE BY OPERATION OF LAW AND ALL OF ITS
ASSETS AND OPERATIONS SHALL BECOME ASSETS AND OPERATIONS OF GULFSTATES
TRANSMISSIONS;
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING AND OF THE MUTUAL
COVENANTS AND AGREEMENTS HEREINAFTER SET FORTH, THE PARTIES HERETO HEREBY AGREE
AS FOLLOWS:
1. DEFINITIONS AND REFERENCES.
Unless the context otherwise requires, the capitalized terms used
herein shall have the respective meanings specified in Exhibit 1 for all
purposes hereof (such definitions to be equally applicable to both the singular
and plural forms of the terms defined). All references to clauses, Sections,
Exhibits and Schedules are to clauses and Sections of, and Exhibits and
Schedules to, this Agreement.
2. SALE AND PURCHASE OF ASSETS.
2.1. Asset Sale.
In reliance upon the representations, warranties, covenants and
agreements contained herein, and subject to the terms and conditions hereof, at
the Closing SCANA COMMUNICATIONS shall sell, assign, transfer, convey and
deliver to ITC, and ITC shall purchase from SCANA COMMUNICATIONS, the tangible
and intangible assets specified on Exhibit 2 hereto (the "Assets").
2.2. Purchase Price.
For and in consideration of the conveyances and assignment described
herein, ITC agrees to pay to SCANA COMMUNICATIONS, and SCANA COMMUNICATIONS
agrees to accept from ITC, the purchase price (the "Purchase Price") specified
in this Section 2.2, which shall be allocated among the Assets in accordance
with Section 3.6. The Purchase Price shall consist of the consideration
specified in, and shall be payable as set forth below in, Sections 2.2(a), (b),
and (c):
(a) at the Closing ITC shall issue and deliver to SCANA COMMUNICATIONS
stock certificates evidencing Five Hundred Eighty-eight Thousand, Four Hundred
Eleven (588,411) shares (the "Shares") of a new series of convertible preferred
stock of ITC designated Series A Convertible Preferred Stock (the "Preferred
Stock"), par value $0.01 per share, the terms of which Preferred Stock are set
forth in Exhibit 3 hereto; and
(b) at the Closing, ITC shall deliver to SCANA COMMUNICATIONS a
promissory note (the "Note") in the principal amount of Nine Million, Nine
Hundred Sixty-four Thousand, Ninety-one Dollars ($9,964,091.00), substantially
in the form set forth in Exhibit 4 hereto; and
(c) no later than April 30, 1998, ITC shall deliver to SCANA
COMMUNICATIONS stock certificates evidencing that number of shares, rounded to
the nearest whole share (the "Additional Shares"), of Preferred Stock that in
aggregate value (valued on a per-share basis for this purpose at the Current
Market Price per share of ITC's Common Stock) is equal to 35.7% of the product
of (a) 64%, multiplied times (b)(i) six (6), multiplied times (ii) the amount
(if any) by which (A) the earnings before interest, taxes, depreciation and
amortization (as each such term is defined by U.S. GAAP) of the assets and
operations of Gulf States as of the Closing (regardless of whether such assets
and operations, or any portion thereof, continue to be held by Gulf States for
the applicable period) for the fiscal year ended December 31, 1997 exceeds (B)
Eleven Million, Two Hundred Sixty-five Thousand, Six Hundred Ninety-six Dollars
($11,265,696.00) (the "Earn Out").
2.3. No Assumption of Liabilities.
ITC shall not assume or be deemed to assume any debts, Liabilities or
obligations of SCANA or SCANA COMMUNICATIONS other than such Liabilities or
obligations as
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SCANA COMMUNICATIONS may have as a general partner of Gulf States (other than
those incurred by SCANA COMMUNICATIONS as a general partner of Gulf States
without the knowledge of Gulf States Transmission Systems, Inc., a wholly owned
subsidiary of ITC and the managing partner of Gulf States), which liabilities
and obligations shall at Closing be expressly assumed by ITC, and such
liabilities and obligations as ITC is assuming pursuant to the terms of this
Agreement under the contracts comprising a part of the Assets described in
Exhibit 2.
3. ADDITIONAL AGREEMENTS.
ITC, SCANA, and SCANA COMMUNICATIONS hereby covenant and agree with
each other as follows:
3.1. Initial Xxxx-Xxxxx-Xxxxxx Filing.
As promptly as practicable following the execution of this Agreement,
SCANA, SCANA COMMUNICATIONS, and ITC shall complete any filing that may be
required pursuant to Xxxx-Xxxxx-Xxxxxx in connection with the sale and purchase
contemplated hereby, or such parties shall mutually agree that no such filing is
required. SCANA, SCANA COMMUNICATIONS, and ITC shall diligently take, or fully
cooperate in the taking of, all necessary and proper steps, and provide any
additional information reasonably requested in order to comply with the
requirements of such Act. ITC shall pay any filing fee required pursuant to
Xxxx-Xxxxx-Xxxxxx in connection with the sale and purchase contemplated hereby.
3.2. Restated Certificate of Incorporation and Certificate of Designation.
ITC covenants and agrees that, as promptly as practicable after the
stockholder approval referred to in Section 3.10 is obtained and, in any event,
prior to the Closing, ITC will file the Restated Certificate of Incorporation
and Certificate of Designation, substantially in the forms set forth in Exhibit
3 with the Secretary of State of the State of Delaware in accordance with the
Delaware General Corporation Law.
3.3. Consents and Approvals.
ITC, SCANA, and SCANA COMMUNICATIONS shall take, and each shall cause
each of its respective Subsidiaries to take, all measures reasonably necessary
or advisable to secure any consents, authorizations, and approvals of
Governmental Authorities and of private persons or entities with respect to the
transactions contemplated by this Agreement, and to the performance of all other
obligations of such parties hereunder, as may be required by any applicable Law
of the United States or any of country, state or other jurisdiction or by any
agreement of any kind whatsoever to which ITC, SCANA, or SCANA COMMUNICATIONS is
a party or by which ITC, SCANA, or SCANA COMMUNICATIONS is bound.
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3.4. Notice of Developments.
(a) Prior to the Closing, SCANA COMMUNICATIONS shall promptly notify
ITC in writing of any events, circumstances, facts and occurrences arising
subsequent to the date of this Agreement that could reasonably be expected to
result in any breach of a representation or warranty or covenant of SCANA
COMMUNICATIONS in this Agreement or that could reasonably be expected to have
the effect of making any representation or warranty of SCANA or SCANA
COMMUNICATIONS in this Agreement untrue or incorrect in any respect.
(b) Prior to the Closing, ITC shall promptly notify SCANA and SCANA
COMMUNICATIONS in writing of (i) any events, circumstances, facts and
occurrences arising subsequent to the date of this Agreement that could
reasonably be expected to result in any breach of a representation or warranty
or covenant of ITC in this Agreement or that could reasonably be expected to
have the effect of making any representation or warranty of ITC in this
Agreement untrue or incorrect in any respect, and (ii) all other developments
material to ITC and its subsidiaries, taken as a whole, affecting the assets,
Liabilities, business, financial condition, operations, results of operations or
prospects of ITC and its subsidiaries, taken as a whole.
3.5. Registration Rights.
3.5.1. Piggyback Registration Right.
At any time after the Closing, if ITC 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 Securities and
Exchange Commission)) or (ii) for the account of any holders of its securities
(including pursuant to a demand registration), then ITC shall give written
notice of such proposed filing to all SCANA Holders (as defined below) as soon
as practicable (but in any event not less than five business days before the
anticipated filing date), and such notice shall offer the SCANA Holders the
opportunity to register such number of Shares or Additional Shares
(collectively, "Securities") as the SCANA Holders request. Such registration
shall be on the same terms and conditions as the registration of ITC's or such
other 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 ITC 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 SCANA Holders shall be reduced, pro rata on the basis of the
number of Securities requested to be included by each such SCANA Holder, prior
to any reduction in the number of Securities originally requested by them;
provided, however, that ITC must provide prompt written notice of such written
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opinion to the SCANA Holders participating in such registration. For purposes
of this Section 3.5, "SCANA Holder" shall mean SCANA COMMUNICATIONS, SCANA AND
ANY WHOLLY OWNED SUBSIDIARY OF SCANA, SO LONG AS SUCH ENTITY IS A HOLDER OF
SECURITIES.
3.5.2. ITC Obligations.
In connection with any offering of shares of Securities registered
pursuant to this Section 3.5, ITC (i) shall furnish to the participating SCANA
Holders such number of copies of
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any prospectus (including any preliminary prospectus) as they may reasonably
request in order to effect the offering and sale of the Securities to be offered
and sold, but only while ITC 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 such
SCANA Holders shall reasonably request; provided, however, that ITC shall not be
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obligated to qualify as a foreign corporation to do business under the laws of
any jurisdiction which it shall not then be qualified or to file any general
consent service of process in any jurisdiction in which such a consent has not
been previously filed. If applicable, ITC shall enter into an underwriting
agreement with a managing underwriter or underwriters selected by SCANA Holders
holding 70% of the Securities requested to be included in such registration
(which underwriter or underwriters are reasonably satisfactory to ITC)
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
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underwriters shall agree to use their best efforts to ensure that the offering
results in a distribution of the Securities sold in accordance with the terms of
this Agreement. In connection with any offering of Securities registered
pursuant to this Section 3.5, ITC shall (x) furnish to the underwriter, at ITC's
expense, unlegended certificates representing ownership of the Securities being
sold in such denominations as reasonably requested and (y) instruct any transfer
agent and registrar of the Securities to release any stop transfer orders with
respect to such Securities. Upon any registration becoming effective pursuant
to this Section 3.5, ITC 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 Securities; provided, however, that such period need
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not exceed three months.
3.5.3. SCANA Holders Obligations.
The SCANA Holders participating in such registration shall pay all
underwriting discounts and commissions related to shares of Securities being
sold by such SCANA Holders and the fees and disbursements of counsel and other
advisors to such SCANA Holders. All other fees and expenses in connection with
the Piggyback Registration, including, without limitation, all registration and
filing fees, all fees and expenses of complying with securities or "blue sky"
laws, fees and disbursements of ITC'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 ITC.
3.5.4. Indemnification by ITC.
In the case of any offering registered pursuant to this Section 3.5,
ITC agrees to indemnify and hold each SCANA Holder, 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 each SCANA Holder, 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, or actions shall
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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 Securities, 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 ITC shall have filed with the Securities and Exchange 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 ITC shall have filed with the Securities and Exchange
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
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in this Section 3.5.4 shall not apply to such losses, claims, damages,
liabilities or actions which shall arise from the sale of Securities by any
SCANA Holder 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 made in reliance upon and in
conformity with information furnished in writing to ITC by such SCANA Holder 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.
3.5.5. Indemnification by the SCANA Holders.
In the case of each offering registered pursuant to this Section 3.5,
each SCANA Holder and each underwriter participating therein shall agree, in the
same manner and to the same extent as set forth in Section 3.5.4, severally to
indemnify and hold harmless ITC and each person, if any, who controls ITC within
the meaning of Section 15 of the Securities Act, and the directors and officers
of ITC, and in the case of each such underwriter, each such SCANA Holder, each
person, if any, who controls each such SCANA Holder within the meaning of the
Securities Act and the directors, officers and partners of each such SCANA
Holder, with respect to any untrue statement or alleged untrue statement of a
material fact contained in the 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) 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 if such statement or omission shall have
been made in reliance upon and in conformity with information furnished in
writing to ITC by such SCANA Holder 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.
3.5.6. Indemnification Procedures.
Each party indemnified under Section 3.5.4 or 3.5.5 shall, promptly
after receipt of notice of the commencement of any action against such
indemnified party in respect of which
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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 Section
3.5.4 or 3.5.5, 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 Section 3.5.4 or 3.5.5 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
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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 parry 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.
3.5.7. Contribution in lieu of Indemnification.
If the indemnification provided for under Section 3.5.4 or 3.5.5 shall
for any reason be held by a court to be unavailable to an indemnified party
under Section 3.5.4 or 3.5.5 hereof in respect of any loss, claim, damage or
liability, or any action in respect thereof then each applicable indemnifying
party, in lieu of the amount paid or payable under Section 3.5.4 or 3.5.5 to
such indemnified party, shall have a joint and several obligation to contribute
to the amount paid or payable by such indemnified party as a result of such
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and such indemnified party, on the other hand, 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 ITC, on the one hand, and the
SCANA Holders, on the other hand, 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 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.
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3.5.8. Limit 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 3.5.4 or 3.5.5 shall be an amount equal to the Purchase Price.
3.6. Allocation of Purchase Price.
SCANA, SCANA COMMUNICATIONS and ITC each represent, warrant, covenant,
and agree with each other that the Purchase Price shall be allocated among the
Assets as set forth in Exhibit 5 hereto. SCANA, SCANA COMMUNICATIONS and ITC
agree, pursuant to Section 1060 of the Code, that the Purchase Price shall be
allocated in accordance with this Section 3.6, and that all income tax returns
and reports shall be filed consistent with such allocation.
3.7. Transfer Tax.
SCANA COMMUNICATIONS shall take all action necessary or appropriate to
provide for the payment of applicable state sales, transfer, or use taxes in
connection with the transactions contemplated by this Agreement.
3.8. Treatment of Shares as Equity.
ITC covenants and agrees that it will treat the Shares and any
Additional 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.
3.9. Resale Restrictions.
SCANA COMMUNICATIONS acknowledges that the Shares and any Additional
Shares, and the shares of Common Stock into which such Shares and Additional
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 or Additional Shares unless and
until they are 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.
3.10. ITC Stockholders' Meeting.
ITC shall call and hold a meeting of its stockholders as promptly as
practicable after the execution of this Agreement to consider and vote upon (i)
a proposal to increase the authorized number of shares of Common Stock, and (ii)
a proposal to authorize the Preferred Stock and to approve the issuance and
terms of the Shares and the Additional Shares. The Board of Directors of ITC
shall recommend approval of such matters, and ITC shall take all lawful action
to solicit such approval.
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3.11. Conduct of Business of ITC.
ITC shall not, prior to the Closing, take or permit to be taken any
action (i) that would result in an adjustment to the Conversion Price (as
defined in the Certificate of Designation) pursuant to Section 6.4 of the
Certificate of Designation if the Shares or Additional Shares were issued and
outstanding at the time of such action; or (ii) in respect of which holders of
Shares would be entitled to vote pursuant to Section 6.4 of the Certificate of
Designation if the Shares were outstanding at the time of such action.
3.12. 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.
3.13. Risk of Loss.
The risk of loss or damage by fire or other casualty or cause to the
Assets until the Closing Date shall be upon SCANA COMMUNICATIONS. In the event
of such loss or damage prior to the Closing Date, SCANA COMMUNICATIONS shall
have the option either (i) to take commercially reasonable prompt steps to
restore, replace, or repair the damaged Assets to their previous condition at
SCANA COMMUNICATIONS' sole cost and expense or (ii) to decline to take such
steps. In either case SCANA COMMUNICATIONS shall give prompt written notice of
its election to ITC. In the event that SCANA COMMUNICATIONS provides notice to
ITC of its intent not to cause the damaged Assets to be restored, replaced or
repaired, then, ITC shall, at ITC's option, either:
(a) proceed with the Closing and receive at Closing, any third party
insurance proceeds to which SCANA COMMUNICATIONS otherwise would be entitled
with respect to such loss or damage; or
(b) terminate this Agreement by written notice to SCANA
COMMUNICATIONS, whereupon no party to this Agreement shall have any liability to
any other party to this Agreement, and this Agreement in its entirety, except
for the provisions set forth in Section 9.1 (which shall survive such
termination), shall be deemed null, void, and of no further force and effect.
In the event SCANA COMMUNICATIONS elects to cause the damaged Assets to be
restored, replaced or repaired in accordance with this Section 3.13, and such
loss or damage shall not be restored, replaced or repaired as of the Closing
Date, ITC shall at its option either (i) defer the Closing Date until such
restorations, replacements or repairs are made or terminate this Agreement by
written notice to SCANA COMMUNICATIONS, whereupon no party to this Agreement
shall have any liability to any other party to this Agreement, and this
Agreement in
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its entirety, except for the provisions set forth in Section 9.1 (which shall
survive such termination), shall be deemed null, void, and of no further force
and effect.
3.14. Xxxx-Xxxxx-Xxxxxx Filing Upon Conversion.
Each party hereto agrees to make any appropriate filing that may be
required pursuant to Xxxx-Xxxxx-Xxxxxx with respect to the conversion of the
Shares and/or any Additional Shares at such times as SCANA COMMUNICATIONS may
reasonably request and to supply as promptly as practicable to the appropriate
governmental authorities any additional information that may be requested
pursuant to the Xxxx-Xxxxx-Xxxxxx, and SCANA COMMUNICATIONS shall pay all filing
fees that may be required pursuant thereto.
3.15. Subordination of Note
Each party hereto agrees that the Note shall be subordinated in right
of payment and otherwise, to the extent and in the manner provided in the
Subordination Agreement, substantially in the form set forth in Exhibit 6 (the
"Subordination Agreement"), to the payment in full of all of ITC's obligations
under the Credit Agreement dated January 29, 1996 by and among ITC and certain
subsidiaries of ITC, as borrowers, First Union National Bank of North Carolina,
as Administrative Agent, CoBank, ACB, as Documentation Agent, and the Lenders
identified therein, together with all amendments and other modifications, if
any, from time to time made thereto (the "Credit Agreement") and under the Loan
Documents (as defined in the Credit Agreement).
3.16. Release
ITC agrees to use its commercially reasonable best efforts to obtain,
prior to the Closing, the release (the "Release"), in a form reasonably
satisfactory to SCANA COMMUNICATIONS, of SCANA COMMUNICATIONS from that certain
Revised and Restated Fiber Optic Facilities and Services Agreement dated June 9,
1995 by and among MPX Systems, Inc. (now known as SCANA Communications, Inc.)
and Southern Development and Investment Group, Inc., on behalf of and as agent
for Alabama Power Company, Georgia Power Company, Gulf Power Company,
Mississippi Power Company, Savannah Electric and Power Company, Southern
Electric Generating Company and Southern Company Services, Inc. (the "SES
Agreement"), which Release shall be effective as of the time of the Closing. In
the event that ITC fails to obtain the Release as described in the preceding
sentence, ITC shall indemnify and hold harmless SCANA COMMUNICATIONS for any and
all Losses actually suffered or incurred by SCANA COMMUNICATIONS to the extent
any such Loss is asserted against, results from, is imposed upon or is incurred
by SCANA COMMUNICATIONS, directly or indirectly, pursuant to or in connection
with the SES Agreement with respect to the period from and after the time of the
Closing.
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4. REPRESENTATIONS AND WARRANTIES OF SCANA AND SCANA COMMUNICATIONS.
SCANA and SCANA COMMUNICATIONS jointly and severally represent and
warrant to ITC as follows (SCANA and SCANA COMMUNICATIONS acknowledging that
disclosure with respect to a Section of this Agreement contained in an Exhibit
or Schedule attached hereto shall require a specific reference in such Exhibit
or Schedule to the Section of this Agreement to which each such disclosure
applies, and no disclosure to be deemed to apply with respect to any Section to
which a specific reference is not so made):
4.1. Organization and Standing.
Each of SCANA and SCANA COMMUNICATIONS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Carolina, and each such corporation has the full and unrestricted
corporate power and authority to own, operate, lease and otherwise to hold the
Assets, to execute, deliver, and perform this Agreement, and to carry out the
transactions contemplated hereby. Each of SCANA and SCANA COMMUNICATIONS is
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 where
failure to be so licensed or qualified would not have a Material Adverse Effect
with respect to SCANA and its Subsidiaries (taken as a whole), SCANA
COMMUNICATIONS, OR THE ASSETS.
4.2. Authorization.
The execution, delivery and performance by SCANA and SCANA
COMMUNICATIONS of this Agreement, the fulfillment of and compliance with the
respective terms and provisions hereof, and the consummation by SCANA and SCANA
COMMUNICATIONS of the transactions contemplated hereby, do not and will not,
except as set forth in Exhibit 4.2: (a) violate, conflict with, or result in
the breach of any provision of the articles of incorporation or by-laws (or
similar organizational documents) of such corporation; (b) violate or conflict
with (or cause an event that could have a Material Adverse Effect as a result
of) any Law or Governmental Order having applicability to SCANA or SCANA
COMMUNICATIONS or any of the Assets which violation or conflict may have a
Material Adverse Effect on SCANA and its Subsidiaries (taken as a whole), SCANA
COMMUNICATIONS OR ANY OF THE ASSETS; (C) CONFLICT WITH, RESULT IN ANY BREACH OF,
OR CONSTITUTE A DEFAULT UNDER, ANY MATERIAL AGREEMENT TO WHICH SCANA OR SCANA
COMMUNICATIONS IS A PARTY OR BY WHICH IT OR ANY OF THE ASSETS MAY BE BOUND; OR
(D) RESULT IN OR REQUIRE THE CREATION OR IMPOSITION OF OR RESULT IN THE
ACCELERATION OF ANY INDEBTEDNESS, OR OF ANY ENCUMBRANCE OF ANY NATURE UPON, OR
WITH RESPECT TO, SCANA, SCANA COMMUNICATIONS, OR ANY OF THE ASSETS.
4.3. Binding Obligation.
This Agreement has been duly executed and delivered by each of SCANA
and SCANA COMMUNICATIONS, and (assuming due authorization, execution, and
delivery by
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ITC) this Agreement constitutes a valid and binding obligation of each of SCANA
and SCANA COMMUNICATIONS, enforceable against each of SCANA and SCANA
COMMUNICATIONS in accordance with its terms.
4.4. Restrictions and Consents.
Except as set forth on Schedule 4.4, there are no agreements, Laws or
other restrictions of any kind to which SCANA or SCANA COMMUNICATIONS or any
Asset is party or subject that would prevent or restrict, or require consent of
a third party with respect to, the execution, delivery, or performance of this
Agreement or result in any penalty, forfeiture, agreement termination, or
restriction on business operations of ITC, SCANA, or SCANA COMMUNICATIONS as a
result of the execution, delivery, or performance of this Agreement.
4.5. Absence of Violation.
Neither SCANA nor SCANA COMMUNICATIONS is in violation of or default
under, nor has either such corporation breached in any material respect, any
material term or provision of its articles of incorporation or by-laws or any
agreement or restriction to which such corporation is a party or by which such
corporation or any Asset is bound or affected, except as set forth in Exhibit
4.5. Each of SCANA and SCANA COMMUNICATIONS has complied and is in compliance
in all material respects with all applicable Laws and Governmental Orders,
except as set forth in Exhibit 4.5.
4.6. Assets.
4.6.1. Title to the Assets.
Except as set forth on Schedule 4.6.1, SCANA COMMUNICATIONS is the
sole and exclusive legal and equitable owner of, and has, good, marketable, and
insurable (at standard rates) title to, the Assets free and clear of any
Encumbrances. Pursuant to this Agreement, ITC is acquiring good, marketable
and, as to those Assets title to which is commonly insurable, insurable (at
standard rates) title to, and all right, title and interest in, the Assets, free
and clear of all Encumbrances, except as set forth on Schedule 4.6.1.
4.6.2. Condition of Tangible Assets.
The tangible Assets are in good operating condition and repair
(reasonable wear and tear excepted), to the best knowledge and belief of SCANA
and SCANA COMMUNICATIONS are free of defects, latent or patent, and are, to the
best knowledge and belief of SCANA and SCANA COMMUNICATIONS, suitable, adequate
and fit for the uses for which they are intended or are being used.
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4.6.3. Free Transferability.
Except as set forth in Schedule 4.6.3, all of the Assets being sold
hereunder are transferable by SCANA COMMUNICATIONS by SCANA COMMUNICATIONS' sole
act and deed, and no consent (other than valid consents that have already been
obtained) on the part of any other person is necessary to validate, or otherwise
with respect to, the transfer to ITC.
4.7. Litigation; Disputes.
4.7.1. No Litigation; Compliance with Law.
Except as set forth on Schedule 4.7.1, there are no actions, suits,
claims, arbitrations, proceedings or investigations pending, threatened or
reasonably anticipated against, affecting or involving SCANA, SCANA
COMMUNICATIONS, any of the Assets, or the transactions contemplated by this
Agreement, at law or in equity, or before or by any court, arbitrator or
governmental authority, domestic or foreign. Neither SCANA nor SCANA
COMMUNICATIONS is operating under, subject to, or in default with respect to any
order, award, writ, injunction, decree, or judgment of any court, arbitrator, or
governmental authority which may adversely affect in any material respect the
transactions contemplated by this Agreement, the Assets or ITC's use or
operation of the Assets.
4.7.2. No Disputes.
Neither SCANA nor SCANA COMMUNICATIONS knows of any actual or alleged
basis for, nor does either such corporation reasonably anticipate, and neither
such corporation is currently involved in, any dispute that might reasonably be
expected to affect adversely in any material respect any of the Assets or the
transactions contemplated by this Agreement.
4.8. Disclosure.
Neither SCANA nor SCANA COMMUNICATIONS is aware of any facts
pertaining to SCANA, SCANA COMMUNICATIONS, or any of the Assets that could have
a Material Adverse Effect with respect to the Assets or the transactions
contemplated by this Agreement and that have not been disclosed to ITC (in this
Agreement or otherwise).
4.9. Investment Purpose.
SCANA COMMUNICATIONS is acquiring the Shares and any Additional Shares
solely for the purpose of investment and not with a view to, or for offer or
sale in connection with, any distribution thereof.
4.10. Accredited Investor.
SCANA COMMUNICATIONS is an "accredited investor" within the meaning of
Rule 501 under the Securities Act.
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4.11. Access to Information.
SCANA and SCANA COMMUNICATIONS hereby acknowledge that they have had
the opportunity to ask questions of the officers of ITC concerning ITC and an
investment in the Shares and Additional Shares. ITC has made available to SCANA
and SCANA COMMUNICATIONS all documents that SCANA and SCANA COMMUNICATIONS have
requested and has provided answers to all of such questions. SCANA and SCANA
COMMUNICATIONS understand and acknowledge that ITC cannot provide assurances
with respect to any projections or predictions as to the future business or
financial performance of ITC or any of its Subsidiaries.
4.12. 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
SCANA or SCANA COMMUNICATIONS.
5. REPRESENTATIONS AND WARRANTIES OF ITC.
ITC hereby represents and warrants to SCANA and SCANA COMMUNICATIONS
as follows (ITC acknowledging that disclosure with respect to a Section of this
Agreement contained in an Exhibit or Schedule attached hereto shall require a
specific reference in such Exhibit or Schedule to the Section of this Agreement
to which each such disclosure applies, and no disclosure to be deemed to apply
with respect to any Section to which a specific reference is not so made):
5.1. Organization and Standing.
ITC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the full and
unrestricted corporate power and authority to own, operate, lease, and otherwise
to hold its assets, to execute, deliver, and perform this Agreement, and to
carry out the transactions contemplated hereby. ITC is 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 where failure to be so licensed or qualified
would not have a Material Adverse Effect with respect to ITC and its
Subsidiaries (taken as a whole).
5.2. Authorization.
The execution, delivery and performance by ITC of this Agreement, the
fulfillment of and compliance with the respective terms and provisions hereof,
and the consummation by ITC of the transactions contemplated hereby, do not and
will not: (a) violate, conflict with, or result in the breach of any provision
of the certificate of incorporation or by-laws (or similar organizational
documents) of ITC; (b) violate or conflict with (or cause an event that could
have a Material Adverse Effect as a result of) any Law or Governmental Order
having applicability to ITC or any of its assets which violation or conflict may
have a Material Adverse
-14-
Effect on ITC and its Subsidiaries (taken as a whole); or (c) conflict with,
result in any breach of, or constitute a default under, any agreement to which
ITC is a party or by which it or any of the Assets may be bound.
5.3. Binding Obligation.
This Agreement has been duly executed and delivered by ITC, and
(assuming due authorization, execution, and delivery by SCANA and SCANA
COMMUNICATIONS) this Agreement constitutes a valid and binding obligation of
ITC, enforceable against ITC in accordance with its terms.
5.4. Restrictions and Consents.
Except as set forth on Schedule 5, there are no agreements, Laws, or
other restrictions of any kind to which ITC is party or subject that would
prevent or restrict, or require consent of a third party with respect to, the
execution, delivery, or performance of this Agreement or result in any penalty,
forfeiture, agreement termination, or restriction on business operations of ITC,
SCANA, or SCANA COMMUNICATIONS as a result of the execution, delivery, or
performance of this Agreement.
5.5. Capital Stock.
The authorized capital stock of ITC consists of 10,000,000 shares of
Common Stock. By the Closing Date, ITC will increase its authorized capital
stock to consist of 15,000,000 shares of Common Stock and 3,000,000 shares of
Preferred Stock. As of the date hereof, (i) 8,469,326.30 shares of Common Stock
are issued and outstanding, all of which are validly issued, fully paid, and
nonassessable, and (ii) no shares of Preferred Stock are issued and outstanding.
None of the issued and outstanding shares of Common Stock were issued in
violation of any preemptive rights. Except as disclosed in Schedule 5, there
are no options, warrants, convertible securities or other rights, agreements,
arrangements, or commitments of any character to which ITC is a party relating
to the issuance or sale of capital stock of ITC or obligating ITC to issue or
sell any shares of capital stock of, or any other equity interest in, ITC.
Except as disclosed in Schedule 5, there are no outstanding contractual
obligations of ITC to repurchase, redeem, or otherwise acquire any shares of
Common Stock. Upon issuance of the Shares and any Additional Shares to SCANA
COMMUNICATIONS and payment therefor pursuant to this Agreement and the
Certificate of Designation, the Shares and Additional Shares will be validly
issued, fully paid and nonassessable and free of preemptive rights. By the
Closing Date, at least 1,000,000 shares of Common Stock will be duly authorized
and reserved for issuance upon conversion of the Shares and Additional Shares,
and, upon such issuance in accordance with the terms of this Agreement and the
Certificate of Designation, such shares of Common Stock 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 and any Additional Shares and registration thereof in the name of
SCANA COMMUNICATIONS in the stock records of ITC, SCANA COMMUNICATIONS will own
the Shares and any such Additional Shares free and clear of all Encumbrances,
other than
-15-
Encumbrances resulting from any action, or failure to take action, by SCANA or
SCANA COMMUNICATIONS.
5.6. Absence of Violation.
ITC is not in violation of or default under, nor has it breached in
any material respect, any material term or provision of its certificate of
incorporation or by-laws or any agreement or restriction to which ITC is a party
or by which ITC is bound or affected. ITC has complied and is in compliance in
all material respects with all applicable Laws and Governmental Orders.
5.7. Litigation; Disputes.
5.7.1. No Litigation; Compliance with Law.
Except as disclosed in Schedule 5, there are no actions, suits,
claims, arbitrations, proceedings, or investigations pending, threatened, or
reasonably anticipated against, affecting, or involving ITC or the transactions
contemplated by this Agreement, at law or in equity, or before or by any court,
arbitrator, or governmental authority, domestic or foreign. ITC is not
operating under, subject to or in default with respect to any order, award,
writ, injunction, decree, or judgment of any court, arbitrator or governmental
authority which may adversely affect in any material respect the transactions
contemplated by this Agreement or any of its assets.
5.7.2. No Disputes.
ITC does not know of any actual or alleged basis for, does not
reasonably anticipate, and is not currently involved in, any dispute that might
reasonably be expected to affect adversely in any material respect any of its
assets or the transactions contemplated by this Agreement.
5.8. Disclosure.
5.8.1. General.
ITC is not aware of any facts pertaining to ITC or any of its Assets
that could have a Material Adverse Effect with respect to ITC and its
Subsidiaries (taken as a whole) or the transactions contemplated by this
Agreement and that have not been disclosed to SCANA COMMUNICATIONS (in this
Agreement or otherwise).
5.8.2. Financial Statements.
The financial statements (including, in each case, any notes thereto)
as of December 31, 1996 delivered to SCANA and SCANA COMMUNICATIONS 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,
-16-
results of operations and cash flows of ITC 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 expected, individually or in the
aggregate, to be material in amount).
5.9. No Undisclosed Liabilities.
There are no Liabilities of ITC or any consolidated Subsidiary
thereof, other than Liabilities (i) as disclosed in Schedule 5, (ii) not
required to be reflected in a consolidated balance sheet of ITC and its
Subsidiaries or in the notes thereto prepared in accordance with U.S. GAAP, or
(iii) incurred since December 31, 1996 in the ordinary course of business and
which, individually and in the aggregate, are not material to ITC and its
Subsidiaries (taken as a whole).
5.10. Conduct in the Ordinary Course.
Since December 31, 1996, except as disclosed in Schedule 5 or as
contemplated by this Agreement, the businesses of ITC and its Subsidiaries have
been conducted in the ordinary course, and ITC has not suffered any Material
Adverse Effect.
5.11. 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
ITC.
6. CONDITIONS TO CLOSING.
6.1. Conditions to Obligations of SCANA and SCANA COMMUNICATIONS.
The obligations of SCANA and SCANA COMMUNICATIONS to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
(or waiver by SCANA and SCANA COMMUNICATIONS, in their sole discretion), at or
prior to the Closing, of each of the following conditions:
6.1.1. Representations, Warranties, and Covenants.
The representations and warranties of ITC 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 6.1.1 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 ITC at or before
-17-
the Closing shall have been complied with in all material respects, and SCANA
and SCANA COMMUNICATIONS shall have received a certificate from ITC to such
effect signed by a duly authorized officer thereof.
6.1.2. No Proceeding or Litigation.
No Action shall have been commenced by or before any Governmental
Authority against SCANA, SCANA COMMUNICATIONS, or ITC, seeking to restrain or
materially and adversely alter the transactions contemplated by this Agreement
that, in the reasonable good faith determination of SCANA and SCANA
COMMUNICATIONS, is likely to render it impossible or unlawful to consummate such
transactions; provided, however, that the provisions of this Section 6.1.2 shall
not apply if either SCANA or SCANA COMMUNICATIONS has directly or indirectly
solicited or encouraged any such Action.
6.1.3. Resolutions of ITC.
SCANA and SCANA COMMUNICATIONS shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of ITC, of
the resolutions duly and validly adopted by the Board of Directors of ITC
evidencing its authorization, if required by law, of the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
6.1.4. Legal Opinion.
SCANA and SCANA COMMUNICATIONS shall have received from Xxxxxxxxx X.
Xxxxxxxx, Vice President and General Counsel of ITC, a legal opinion, addressed
to SCANA and SCANA COMMUNICATIONS and dated the Closing Date, in form and
substance reasonably satisfactory to SCANA and SCANA COMMUNICATIONS, as to (i)
the due authorization, execution, and delivery by ITC of this Agreement, (ii)
the Shares being duly authorized, validly issued, fully paid and nonassessable,
free and clear of preemptive rights and, to her knowledge, free and clear of
adverse claims, and (iii) the incorporation and valid existence of ITC under the
laws of Delaware.
6.1.5. Consents and Approvals.
ITC, SCANA, and SCANA COMMUNICATIONS shall have received, each in
form and substance reasonably satisfactory to SCANA and SCANA COMMUNICATIONS,
all authorizations, consents, orders, and approvals of all Governmental
Authorities and officials and all third party consents necessary or desirable
for the consummation of the transactions contemplated by this Agreement, and
SCANA Communications shall have been released (or shall be released effective as
of the time of the Closing) from its obligations under (i) the Network Operating
Agreement among Gulf States, Trinet, Inc., Xxxx Communications, Inc. and MPX
Systems, Inc. (now known as SCANA Communications, Inc.), (ii) the
Telecommunications System Capacity Agreement dated as of July 25, 1995 among MPX
Systems, Inc., Gulf States Transmission Systems, Inc. and Gulf States, (iii) the
Agreement for
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Provision of Fiber Optic Services and Facilities effective as of April 21, 1996
between SouthernNet, Inc. and MPX Systems, Inc., as amended and (iv) the
Interconnect Agreement effective as of May 13, 1994 between MCI
Telecommunications Corporation and MPX Systems, Inc.
6.1.6. ITC Stockholder Approval.
The stockholders of ITC shall have approved (i) the increase in the
authorized number of shares of Common Stock, and (ii) the authorization of the
Preferred Stock and the issuance and terms of the Shares and the Additional
Shares.
6.1.7. Elimination of Guaranty Agreement.
ITC and Gulf States shall have refinanced or eliminated the Gulf
States credit facility so that the Guaranty Agreement, dated as of July 25, 1995
from SCANA to NationsBank, N.A. (Carolinas) and SCANA to Gulf States, the
Guaranty Agreements dated as of June 25, 1995 from SCANA Communications to Gulf
States and the Pledge and Security Agreement dated as of July 25, 1995 from
SCANA Communications to NationsBank, N.A. (Carolinas) shall have terminated (or
shall terminate effective as of the time of the Closing).
6.1.8. No Material Adverse Effect.
No event or events shall have occurred since the date of this
Agreement that, individually or in the aggregate, have, or reasonably would be
expected to have, a Material Adverse Effect with respect to ITC and its
Subsidiaries (taken as a whole).
6.2. Conditions to Obligations of ITC.
The obligations of ITC to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction (or waiver by ITC, in its
sole discretion), at or prior to the Closing, of each of the following
conditions:
6.2.1. Representations, Warranties, and Covenants.
The representations and warranties of each of SCANA and SCANA
COMMUNICATIONS 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 in all material respects 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 6.2.1 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 SCANA and/or SCANA
COMMUNICATIONS at or before the Closing shall have been complied with in all
material
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respects, and ITC shall have received a certificate from each of SCANA
and SCANA COMMUNICATIONS to such effect signed by a duly authorized officer
thereof.
6.2.2. No Proceeding or Litigation.
No Action shall have been commenced by or before any Governmental
Authority against SCANA, SCANA COMMUNICATIONS, or ITC, seeking to restrain or
materially and adversely alter the transactions contemplated by this Agreement
that, in the reasonable good faith determination of ITC, is likely to render it
impossible or unlawful to consummate such transactions; provided, however, that
the provisions of this Section 6.2.2 shall not apply if ITC has directly or
indirectly solicited or encouraged any such Action.
6.2.3. Resolutions of SCANA COMMUNICATIONS.
ITC shall have received true and complete copies, certified by the
Secretary or an Assistant Secretary of each of SCANA and SCANA COMMUNICATIONS,
of the resolutions duly and validly adopted by the Board of Directors of each of
SCANA and SCANA COMMUNICATIONS evidencing such Board's authorization, if
required by law, of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
6.2.4. Legal Opinion.
ITC shall have received from XxXxxx Law Firm, P.A., counsel to SCANA
and SCANA COMMUNICATIONS, a legal opinion, addressed to ITC and dated the
Closing Date, in form and substance reasonably satisfactory to ITC, as to (i)
the due authorization, execution, and delivery by SCANA and SCANA COMMUNICATIONS
of this Agreement and (ii) the incorporation and valid existence of SCANA and
SCANA COMMUNICATIONS under the laws of South Carolina.
6.2.5. Consents and Approvals.
ITC, SCANA, and SCANA COMMUNICATIONS shall have received, each in
form and substance reasonably satisfactory to ITC, all authorizations, consents,
orders, and approvals of all Governmental Authorities and officials and all
third party consents necessary or desirable for the consummation of the
transactions contemplated by this Agreement.
6.2.6. ITC Stockholder Approval.
The stockholders of ITC shall have approved (i) the increase in the
authorized number of shares of Common Stock, and (ii) the authorization of the
Preferred Stock and the issuance and terms of the Shares and the Additional
Shares.
-20-
6.2.7. Elimination of Guaranty Agreement.
ITC and Gulf States shall have refinanced or eliminated the Gulf
States credit facility so that the Guaranty Agreement, dated as of July 25,
1995, pursuant to which SCANA has guaranteed the obligations of SCANA
COMMUNICATIONS UNDER ITS TELECOMMUNICATIONS SYSTEM CAPACITY AGREEMENT (WHICH
AGREEMENT ALSO IS DATED AS OF JULY 25, 1995) SHALL HAVE TERMINATED (OR SHALL
TERMINATE EFFECTIVE AS OF THE TIME OF THE CLOSING).
6.2.8. No Material Adverse Effect.
No event or events shall have occurred since the date of this
Agreement that, individually or in the aggregate, have, or reasonably would be
expected to have, a Material Adverse Effect with respect to SCANA, SCANA
COMMUNICATIONS, or the Assets.
7. SURVIVAL; INDEMNIFICATION.
7.1. Survival of Representations and Warranties.
(a) The representations and warranties of SCANA and SCANA
COMMUNICATIONS contained in this Agreement (including the Exhibits and Schedules
hereto) shall survive the Closing until the second anniversary of the Closing
Date. Neither the period of survival nor the liability of SCANA or SCANA
COMMUNICATIONS with respect to such representations and warranties shall be
reduced by any investigation made at any time by or on behalf of ITC. If written
notice of a claim has been given prior to the expiration of the applicable
representations and warranties by ITC to SCANA and/or SCANA COMMUNICATIONS, 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 ITC contained in this
Agreement (including the Exhibits and Schedules hereto) shall survive the
Closing until the second anniversary of the Closing Date. Neither the period of
survival nor the liability of ITC with respect to ITC's representations and
warranties shall be reduced by any investigation made at any time by or on
behalf of SCANA or SCANA COMMUNICATIONS. If written notice of a claim has been
given prior to the expiration of the applicable representations and warranties
by SCANA or SCANA COMMUNICATIONS to ITC, then the relevant representations and
warranties shall survive as to such claim, until such claim has been finally
resolved.
7.2. Indemnification.
7.2.1. Indemnification by SCANA and SCANA COMMUNICATIONS.
ITC, its successors and assigns, and the stockholders, officers,
directors, employees, Affiliates and agents of ITC and its successors and
assigns shall be indemnified and held harmless by SCANA and SCANA COMMUNICATIONS
for any and all Liabilities, losses, damages, claims, costs and expenses,
interest, awards, judgments, and penalties (including, without limitation,
attorneys' and consultants' fees and expenses) actually suffered or incurred
-21-
by them (including, without limitation, any Action brought or otherwise
initiated by any of them), (hereinafter, individually, a "Loss" and,
collectively "Losses"), arising out of or resulting from (i) the breach of any
representation or warranty made by SCANA or SCANA COMMUNICATIONS contained in
the Agreement, or (ii) the breach of any covenant or agreement by SCANA or SCANA
COMMUNICATIONS contained in the Agreement.
7.2.2. Indemnification by ITC.
SCANA and SCANA COMMUNICATIONS, and their respective successors and
assigns, and the stockholders, officers, directors, employees, Affiliates and
agents of SCANA, SCANA COMMUNICATIONS, and their respective successors and
assigns shall be indemnified and held harmless by ITC for any and all Losses
actually suffered or incurred by them, arising out of or resulting from (i) the
breach of any representation or warranty made by ITC contained in the Agreement,
or (ii) the breach of any covenant or agreement by ITC contained in the
Agreement.
7.2.3. Contribution.
To the extent that the undertakings set forth in this Section 7.2 may
be unenforceable, each party, 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 other party or parties, as
applicable.
7.2.4. Conditions of Indemnification.
(a) An indemnified party shall give the party from whom
indemnification is sought notice of any matter that 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
Section 7.2 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 Section 7.2.
(b) The obligations and Liabilities of an indemnifying party under
this Section 7.2 with respect to Losses arising from claims of any third party
that are subject to the indemnification provided for in this Section 7.2 ("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
Section 7.2 except to the extent the indemnifying party is materially prejudiced
by such failure and shall not relieve the indemnifying
-22-
party from any other obligation or Liability that it may have to any indemnified
party otherwise than under this Section 7.2. If the indemnifying party
acknowledges in writing its obligation to 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 reasonable 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.
7.2.5. Limitations on Indemnification.
Notwithstanding anything to the contrary contained in this Agreement,
the maximum amount of indemnifiable Losses that may be recovered from an
indemnifying party arising out of or resulting from the causes enumerated in
this Section 7.2 shall be an amount equal to the Purchase Price.
8. TERMINATION AND WAIVER.
8.1. Termination.
This Agreement may be terminated at any time prior to the Closing:
(a) by ITC 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 with respect to SCANA and its Subsidiaries (taken as a whole),
SCANA COMMUNICATIONS, or the Assets; (ii) any representation or warranty of
SCANA or SCANA COMMUNICATIONS contained in this Agreement shall not have been
true and correct in all material respects when made; (iii) SCANA or SCANA
COMMUNICATIONS 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
-23-
(iv) SCANA or SCANA COMMUNICATIONS makes a general assignment for the benefit
of creditors, or any proceeding shall be instituted by or against SCANA or SCANA
COMMUNICATIONS seeking to adjudicate any of the 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
(b) by SCANA or SCANA COMMUNICATIONS, 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 with respect to ITC and its Subsidiaries
(taken as a whole); (ii) any representation or warranty of ITC contained in this
Agreement shall not have been true and correct in all material respects when
made; (iii) ITC 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) ITC makes a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against ITC seeking to adjudicate any of
the 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 SCANA, SCANA COMMUNICATIONS, or ITC if the Closing shall not
have occurred on or prior to June 30, 1997; or
(d) by SCANA, SCANA COMMUNICATIONS, or ITC 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 SCANA, SCANA COMMUNICATIONS and
ITC.
8.2. Effect of Termination.
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 any party hereto, except that nothing herein shall relieve either
party from liability for any breach of this Agreement.
8.3. Waiver.
Either party to this Agreement may (a) extend the time for the
performance of any of the obligations or other acts of any other party, (b)
waive any inaccuracies in the representations and warranties of any other party
contained herein or in any document delivered by any other party pursuant
hereto, or (c) waive compliance with any of the agreements or conditions of any
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 subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition, of
-24-
this Agreement. The failure of any party to assert any of its rights hereunder
shall not constitute a waiver of any of such rights.
9. MISCELLANEOUS.
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.
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):
if to ITC:
----------
ITC Holding Company, Inc.
0000 X. X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopy: 706/643-5067
Attention: Xxxxxxx X. Xxxxx, III
President
with a copy (which shall not constitute notice) to:
ITC Holding Company, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopy: 703/619-9720
Attention: Xxxxxxxxx X. Xxxxxxxx
Vice President and General Counsel
if to SCANA or SCANA COMMUNICATIONS:
------------------------------------
-25-
SCANA Corporation
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: 803/748-3336
Attention: Xxxxx Xxxxx
with a copy (which shall not constitute notice) to:
SCANA Corporation
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: 803/748-3336
Attention: X. X. Xxxxxx, XX
9.3. Public Announcements.
No party to this Agreement shall make, or cause to be made, a 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 press release or public announcement; provided, however, that
with respect to any disclosure required by Law or by a listing agreement with
Nasdaq or any national securities exchange to which ITC, SCANA, or SCANA
COMMUNICATIONS 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.
9.4. Headings.
The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
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.
-26-
9.6. Entire Agreement.
This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and undertakings, both written and oral, among ITC, SCANA, and SCANA
COMMUNICATIONS with respect to the subject matter hereof.
9.7. Assignment.
This Agreement may not be assigned by operation of Law or otherwise
without the express written consent of SCANA, SCANA COMMUNICATIONS and ITC
(which consent may be granted or withheld in the sole discretion of SCANA, SCANA
COMMUNICATIONS or ITC).
9.8. No Third Party Beneficiaries.
Except for the provisions of Section 3.5 (relating to piggyback
registration rights) and Section 7 (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.
9.9. Amendment.
This Agreement may not be amended or modified except (a) by an
instrument in writing signed by, or on behalf of, SCANA, SCANA COMMUNICATIONS
and ITC, or (b) by a waiver in accordance with Section 8.3.
9.10. Governing Law.
This Agreement shall be governed by the laws of the State of South
Carolina (excluding the choice of law provisions thereof).
9.11. 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.
9.12. Specific Performance.
The parties hereto agree that irreparable damage would occur in the
event that any provision of this Agreement was not performed in accordance with
the terms 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.
- 27 -
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or has caused this Agreement to be duly executed and delivered in its
name on its behalf, all as of the day and year first above written.
SCANA:
-----
SCANA CORPORATION
By: /s/ K. B. Xxxxx
----------------------------------------------
Name: K. B. Xxxxx
--------------------------------------------
Title: Vice President and Chief Financial Officer
-------------------------------------------
SCANA COMMUNICATIONS:
--------------------
SCANA COMMUNICATIONS, INC.
By: /s/ K. B. Xxxxx
----------------------------------------------
Name: K. B. Xxxxx
--------------------------------------------
Title: Vice President and Chief Financial Officer
-------------------------------------------
ITC:
---
ITC HOLDING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx, III
-------------------------------------
Name: Xxxxxxx X. Xxxxx, III
-----------------------------------
Title: President
----------------------------------
- 28 -
EXHIBIT 1
DEFINITIONS
"Action" means any claim, action, suit, arbitration, inquiry,
------
proceeding, or investigation by or before any Governmental Authority.
"Additional Shares" shall have the meaning specified in Section 2.2(c)
-----------------
of the Agreement.
"Affiliate" means, with respect to any 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" shall mean this Sale and Purchase Agreement among SCANA
---------
Corporation, SCANA COMMUNICATIONS, Inc., and ITC Holding Company, Inc.,
including all Schedules and Exhibits hereto.
"Assets" shall have the meaning specified in Section 2.1 of the
------
Agreement.
"Certificate of Designation" means the ITC Holding Company, Inc.
--------------------------
Certificate of Designation setting forth the terms of the Preferred Stock,
substantially in the form of Exhibit 3 to the Agreement.
"Closing" means the closing of the transactions contemplated by the
-------
Agreement.
"Closing Date" means the date on which the Closing takes place.
------------
"Common Stock" means the Common Stock of ITC Holding Company, Inc.
------------
"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 Price" shall mean, as of a particular date, the average
--------------------
of the high bid and low asked prices per share of ITC's 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 ITC's Common Stock is principally traded or authorized to be quoted, or,
if ITC's Common Stock is not so traded or authorized to be quoted on any such
exchange or inter-dealer quotation system, then
-1-
the price per share of ITC's Common Stock most recently designated by the Board
of Directors as the "fair market value" thereof for purposes of granting
incentive stock options.
"Earn Out" shall have the meaning specified in Section 2.2(c) of the
--------
Agreement.
"Encumbrances" mean any mortgage, pledge, lien, claim, security
------------
interest, agreement, restriction, defect in title, easement, encumbrance, or
charge.
"Governmental Authority" means any agency, board, bureau, court,
----------------------
commission, department, instrumentality or administration of the United States
government, any state government, or any local or other governmental body in a
state, territory, or possession of the United States or the District of
Columbia.
"Governmental Order" means any order, writ, judgment, injunction,
------------------
decree, stipulation, determination, or award entered by or with any Governmental
Authority.
"Gulf States" means Gulf States FiberNet, a Georgia general partnership
-----------
"Gulfstates Transmissions" means Gulfstates Transmission Systems,
------------------------
Inc., a Delaware corporation.
"Xxxx-Xxxxx-Xxxxxx" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
-----------------
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"ITC" means ITC Holding Company, Inc., a Delaware corporation.
---
"Laws" means all foreign, federal, state and local statutes, laws,
----
ordinances, regulations, rules, orders, determinations, writs, injunctions,
awards (including, without limitation, awards of any arbitrator), judgments and
decrees applicable to the specified persons or entities and to the businesses
and assets thereof (including, without limitation, Laws relating to the sale,
leasing, ownership or management of real property; employment practices, terms
and conditions, and wages and hours; building standards, land use and zoning;
safety, health and fire prevention; and environmental protection, including,
without limitation, environmental laws).
"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, Governmental Order, Action, contract, agreement, arrangement,
commitment, or undertaking.
"Loss" shall have the meaning specified in Section 7.2.1 of the
----
Agreement.
"Material Adverse Effect" means any circumstance, change in, or effect
-----------------------
on the specified company (together with any Subsidiaries thereof) that,
individually or in the aggregate with any other circumstances, changes therein,
or effects thereon: (a) is, or would reasonably be expected to be, materially
adverse to the business, operations, assets
-2-
or Liabilities, prospects, results of operations, or financial condition of such
company (together with any Subsidiaries thereof), taken as a whole, or (b) would
reasonably be expected to materially adversely affect the ability of such
company, together with any Subsidiaries thereof (taken as a whole), to operate
or conduct the business(es) thereof in the manner in which it is (they are)
currently operated or conducted or contemplated to be operated or conducted.
"Note" shall have the meaning specified in Section 2.2 of the Agreement
----
"Person" means any individual, partnership, limited liability company,
------
firm, corporation, association, trust, 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 Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Piggyback Registration" shall have the meaning specified in Section
----------------------
3.5.1 of the Agreement.
"Preferred Stock" shall have the meaning specified in Section 2.2(a)
---------------
of the Agreement.
"Purchase Price" shall have the meaning specified in Section 2.2 of
--------------
the Agreement.
"Release" shall have the meaning specified in Section 3.16 of the
-------
Agreement.
"Restated Certificate of Incorporation" means the ITC Holding Company,
-------------------------------------
Inc. Restated Certificate of Incorporation, substantially in the form of Exhibit
3 to the Agreement.
"SCANA" means SCANA Corporation, a South Carolina corporation.
-----
"SCANA COMMUNICATIONS" means SCANA COMMUNICATIONS, Inc., a South
--------------------
Carolina corporation.
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Securities" shall have the meaning specified in Section 3.5.1 of the
----------
Agreement.
"Shares" shall have the meaning specified in Section 2.2(a) of the
------
Agreement.
"Subsidiary" means an entity of which at least a majority of either the
----------
outstanding equity interests or the outstanding voting securities, are owned,
directly or indirectly, by another corporation or other entity.
"Third Party Claims" shall have the meaning specified in Section
------------------
7.2.4(b) of the Agreement.
-3-
"U.S. GAAP" means the United States generally accepted accounting
---------
principles and practices as in effect from time to time and applied consistently
throughout the periods involved.
-4-
EXHIBIT 2
ASSETS
- 5 -
EXHIBIT 5
PURCHASE PRICE ALLOCATION
Summary of Purchase Price
ITC Holding Company Preferred Equity $17,946,529
Purchase Money Note $ 9,964,091
Earn Out ?
Total Purchase Price $27,910,620 + Earn Out
-----------
Purchase Price Allocation
GSFN Partnership Interest $16,960,100 + Earn Out
Georgia Fiber Assets $10,950,520
-----------
Total Purchase Price $27,910,620 + Earn Out
-----------
- 6 -
