EXHIBIT 4.22
ABLE TELCOM HOLDING CORP.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT ("AGREEMENT") dated as
of February 4, 2000 between Able Telcom Holding Corp., a Florida corporation
(the "COMPANY"), and each person or entity listed as an investor on SCHEDULE I
to this Agreement (each, individually, an "INVESTOR" and, collectively, the
"INVESTORS").
W I T N E S S E T H:
WHEREAS, the Company desires to sell and issue to the Investors, and
the Investors wish to purchase from the Company, an aggregate of 5,000 shares of
Series C Convertible Preferred Stock (the "SERIES C PREFERRED Stock"), having a
par value per share equal to $0.10, at an aggregate price of $15,000,000, having
the rights and privileges set forth in the Articles of Amendment setting forth
the terms of the Series C Convertible Preferred Stock of the Company ("ARTICLES
OF AMENDMENT") in the form of EXHIBIT 1.1A attached hereto, on the terms and
conditions set forth herein; and
WHEREAS, the Series C Preferred Stock will be convertible into shares
("COMMON SHARES") of common stock, $0.001 par value per share, of the Company
("COMMON STOCK"), pursuant to the terms of the Articles of Amendment, and the
Investors will have registration rights with respect to such Common Shares and
the Warrant Shares (as defined herein) pursuant to the terms of that certain
Registration Rights Agreement to be entered into between the Company and the
Investors substantially in the form of EXHIBIT 4.2(F) hereto ("REGISTRATION
RIGHTS Agreement"); and
WHEREAS, to induce the Investors to purchase the Series C Preferred
Stock, the Company has agreed to issue to the Investors warrants exercisable for
200,000 shares of Common Stock, in the form attached as EXHIBIT 1.1B
(individually, a "WARRANT," and collectively, the "WARRANTS");
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF SERIES C PREFERRED STOCK AND WARRANTS
Section 1.1
(a) ISSUANCE OF SERIES C PREFERRED STOCK AND WARRANTS. Upon
the following terms and conditions, the Company shall issue and sell to each
Investor, and each Investor severally shall purchase from the Company, an
aggregate of 5,000 shares of Series C Preferred Stock, the number of shares of
Series C Preferred Stock and the number of Warrants indicated next to such
Investor's name on SCHEDULE I attached hereto.
(b) PURCHASE PRICE. The aggregate purchase price for the
Series C Preferred Stock listed on SCHEDULE I (the "PURCHASE PRICE") shall be
$15,000,000 (Fifteen Million U.S. Dollars), or $3,000 (3,000 U.S. Dollars) per
share. Each Investor shall pay the aggregate purchase price listed opposite such
Investor's name on the List of Investors attached as SCHEDULE I hereto.
(c) WARRANTS. The Company shall, on the Closing Date, issue to
the Investors five-year Warrants to purchase in the aggregate 200,000 shares of
Common Stock, which will have an exercise price equal to 115% of the Initial
Conversion Price (as defined in the Articles of Amendment).
(d) THE CLOSING.
(i) The closing of the purchase and sale of
the Series C Preferred Stock and the Warrants (the "CLOSING"),
shall take place at the offices of Xxxxxx & Xxxxxx, 000 00xx
Xxxxxx X.X., Xxxxxxxxxx, X.X. ("INVESTORS' COUNSEL"), at 10:00
a.m., local time on the later of the following: (A) the date
on which the last of the conditions set forth in Article IV
hereof to be fulfilled and applicable to the Closing shall be
fulfilled or waived in accordance herewith, or (B) such other
time and place and/or on such other date as the Investors and
the Company may agree. The date on which the Closing occurs is
referred to herein as the "CLOSING DATE".
(ii) On the Closing Date, the Company shall
deliver to each Investor (A) a certificate or certificates
(with the number of such certificates requested by such
Investor) representing the shares of Series C Preferred Stock
purchased hereunder by such Investor at the Closing registered
in the name of the Investor or its nominee and (B) the
Warrants registered in the name of such Investor or its
nominee in such denominations as reasonably requested by such
Investor, and such Investor shall deliver to the Company the
Purchase Price for the shares of Series C Preferred Stock
purchased by such Investor hereunder by wire transfer in
immediately available funds to an account designated in
writing by the Company. The delivery of payment by such
Investor of the Purchase Price applicable to it as set forth
in this paragraph shall constitute a payment delivered to the
Company in satisfaction of such Investor's obligation to pay
the Purchase Price hereunder. In addition, each of the Company
and each Investor shall deliver all documents, instruments and
writings required to be delivered by such party pursuant to
this Agreement at or prior to the applicable Closing.
Section 1.2 DEFINITIONS. Each of the following terms is defined in the
Section opposite such term:
DEFINED TERM SECTION
------------ -------
ACT 2.1(f)
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ADDITIONAL CLOSING 5.2(b)
ADDITIONAL CLOSING DATE 5.2(b)
AGREEMENT Preamble
APPROVED MARKETS 2.1(d)
ARTICLES OF AMENDMENT Preamble
BEST EFFORTS 3.10
BY-LAWS 2.1(c)
CHARTER 2.1(c)
CLOSING 1.1(d)(i)
CLOSING DATE 1.1(d)(i)
COMMON SHARES Preamble
COMMON STOCK Preamble
COMPANY Preamble
COMPANY PERMITS 2.1(t)
COMPUTER SYSTEM 2.1(ff)
CONVERSION DATE 3.2(a)
CONVERSION NOTICE 3.14
CONVERSION PRICE 3.9
EFFECTIVE REGISTRATION 3.1
EXCHANGE ACT 2.1(f)
EXCHANGE AGREEMENT 4.1(d)
INITIAL CONVERSION PRICE 1.1(c)
INTELLECTUAL PROPERTY 2.1(n)
INTERFERING EVENT 3.1
INVESTOR Preamble
INVESTORS' COUNSEL 1.1(d)(i)
LIQUIDATION VALUE 3.14
MATERIAL ADVERSE EFFECT 2.1(a)
NASD 2.1(d)
OFFER 3.18
PREFERRED STOCK 2.1(c)
PURCHASE PRICE 1.1(b)
REGISTRATION DEADLINE 5.1
REGISTRATION RIGHTS AGREEMENT Preamble
REGISTRATION STATEMENT 2.1(f)
SEC 2.1(f)
SEC DOCUMENTS 2.1(f)
SERIES C PREFERRED STOCK Preamble
SHAREHOLDER APPROVAL 3.14
TRADING DAYS 3.2(a)
TRADING PRICE 3.14
TRANSACTION DOCUMENT 2.1(b)
WARRANT Preamble
WARRANT SHARES 2.1(d)
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to each of the
Investors as of the date hereof and on each Closing Date:
(a) ORGANIZATION AND QUALIFICATION; MATERIAL ADVERSE EFFECT.
The Company is a corporation duly incorporated and existing in good standing
under the laws of the State of Florida and has the requisite corporate power to
own its properties and to carry on its business as now being conducted. The
Company does not have any direct or indirect subsidiaries other than the
subsidiaries listed on EXHIBIT 2.1(A) attached hereto. Except where specifically
indicated to the contrary, all references in this Agreement to subsidiaries
shall be deemed to refer to all direct and indirect subsidiaries of the Company.
The Company and each subsidiary is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary other than those in which the failure so to qualify would not have a
Material Adverse Effect. "MATERIAL ADVERSE EFFECT" means (i) any adverse effect
on the business, operations, properties, prospects, or financial condition of
the entity with respect to which such term is used and its subsidiaries or other
entities controlled by such entity, taken as a whole and which is (either alone
or together with all other adverse effects) material to such entity and its
subsidiaries or other entities controlled by such entity taken as a whole, and
(ii) any condition or situation, whether or not a materially adverse effect,
which would prohibit or otherwise adversely interfere with or affect the ability
of any party to this Agreement to enter into or perform its obligations under,
or to consummate the transactions contemplated by, this Agreement, the
Registration Rights Agreement, the Articles of Amendment or the Warrants or any
other agreement or document contemplated hereby or thereby.
(b) AUTHORIZATION; ENFORCEMENT. (i) The Company has all
requisite corporate power and authority to enter into and perform this
Agreement, the Articles of Amendment, the Warrants and the Registration Rights
Agreement (this Agreement, the Articles of Amendment, the Warrants and the
Registration Rights Agreement being, individually, a "TRANSACTION DOCUMENT" and,
collectively, the "TRANSACTION DOCUMENTS") and to consummate the transaction
contemplated thereby and to issue the Series C Preferred Stock and Warrants in
accordance with the terms hereof and thereof, and has duly filed with the
Secretary of State of the State of Florida the Articles of Amendment, (ii) the
execution and delivery of each Transaction Document by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including the issuance of the Series C Preferred Stock, the Warrants, the Common
Shares and the Warrant Shares have been duly authorized by all necessary
corporate action, and no further consent or authorization of the Company or its
Board of Directors (or any committee or subcommittee thereof) or stockholders is
required, (iii) this Agreement has been, and on the Closing Date, the Warrants,
the Articles of Amendment and the Registration Rights Agreement will be, duly
executed and delivered by the Company, and (iv) this Agreement constitutes, and
upon execution, issuance and delivery thereof each of the Transaction Documents
shall constitute,
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valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of creditors'
rights and remedies or by other equitable principles of general application.
(c) CAPITALIZATION. The authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock and 1,000,000 shares of
convertible redeemable preferred stock, par value $0.10 per share (the
"PREFERRED STOCK"); as of February 4, 2000, there are 15,300,000 shares of
Common Stock issued and outstanding and no shares of Preferred Stock issued and
outstanding; and 5,831,705 shares of Common Stock and no shares of Preferred
Stock are reserved for issuance to persons other than the Investors. All of the
outstanding shares of the Company's Common Stock and Preferred Stock have been
validly authorized and issued and are fully paid and nonassessable. No shares of
capital stock are entitled to preemptive rights; and there are as of the date
hereof outstanding options for 4,690,000 shares of Common Stock and outstanding
warrants for 779,505 shares of Common Stock (excluding the Warrants). Any shares
of Preferred Stock issued or to be issued will be junior in all respects to the
Series C Preferred Stock. Except as set forth on SCHEDULE 2(C), there are no
other scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights exchangeable for or convertible
into, any shares of capital stock of the Company, or contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of capital stock of the Company or options, warrants,
scrip, rights to subscribe to, or commitments to purchase or acquire, any
shares, or securities or rights convertible or exchangeable into shares, of
capital stock of the Company. Attached hereto as EXHIBIT 2.1(C)(I) is a true and
correct copy of the Company's Certificate of Incorporation (the "CHARTER"), as
in effect on the date hereof, and attached hereto as EXHIBIT 2.1(C)(II) is a
true and correct copy of the Company's By-Laws (the "BY-LAWS"), as in effect on
the date hereof.
(d) ISSUANCE OF COMMON SHARES. The Common Shares and the
shares of Common Stock issuable upon the exercise of the Warrants (the "WARRANT
SHARES") are duly authorized and reserved for issuance and, upon such conversion
in accordance with the Articles of Amendment and/or exercise in accordance with
the Warrants, such Common Shares and Warrant Shares will be validly issued,
fully paid and non-assessable, free and clear of any and all taxes, liens,
claims and encumbrances, and entitled to be traded on the Nasdaq National Market
or the American Stock Exchange or the New York Stock Exchange (collectively with
the Nasdaq National Market, the "APPROVED MARKETS"), and the holders of such
Common Shares and Warrant Shares shall be entitled to all rights and preferences
accorded to a holder of Common Stock. The outstanding shares of Common Stock are
currently listed on the Nasdaq National Market, and the Company has not received
any notice (written or oral) from the Nasdaq National Market (or any other
Approved Market where the Common Stock is currently listed) indicating that
delisting of the Common Stock is under consideration.
(e) NO CONFLICTS. The execution, delivery and performance by
the Company of each of the Transaction Documents, including the issuance of the
Series C
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Preferred Stock and the Warrants, the conversion of the Series C Preferred Stock
into the Common Shares and the exercise of the Warrants into the Warrant Shares,
the reservation of the Common Shares and Warrant Shares and the consummation by
the Company of the transactions contemplated hereby and thereby do not and will
not (i) result in a violation of the Company's Charter or By-Laws or (ii)
violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent,
patent license or instrument to which the Company or any of its subsidiaries is
a party, or (iii) result in a violation of any federal, state, local or foreign
law, rule, regulation, order, judgment or decree (including Federal and state
securities laws and regulations) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected. The business of the Company and its direct
and indirect subsidiaries is not being conducted in violation of, and is in
compliance with, all applicable laws, ordinances and regulations of any
governmental entity or the Company's Charter or By-Laws. Except for filings or
registrations pursuant to applicable Federal, state or foreign securities laws
that are expressly contemplated by the transactions contemplated herein and in
the Registration Rights Agreement, the Company is not required under Federal,
state, local or foreign law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it (x) to execute, deliver or perform any of
its obligations under this Agreement, the Registration Rights Agreement, the
Articles of Amendment or the Warrants, (y) to issue and sell the Series C
Preferred Stock and the Warrants in accordance with the terms hereof, to issue
the Common Shares upon conversion of the Series C Preferred Stock or to issue
the Warrant Shares on exercise of the Warrants or (z) for the registration
provisions provided in the Registration Rights Agreement.
(f) SEC DOCUMENTS; NO NON-PUBLIC INFORMATION; FINANCIAL
STATEMENTS. The Common Stock of the Company is registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
and, except as set forth on SCHEDULE 2.1(F), the Company is in full compliance
with and has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Securities and Exchange Commission ("SEC")
pursuant to the reporting requirements of the Exchange Act, including material
filed pursuant to Section 13(a) or 15(d), in addition to one or more
registration statements and amendments thereto heretofore filed by the Company
with the SEC (all of the foregoing including all filings, exhibits, financial
statements, schedules and documents incorporated by reference therein being
referred to herein as the "SEC DOCUMENTS"). The Company has not directly or
indirectly provided to the Investors any material non-public information or any
information which, according to applicable law, rule or regulation, should have
been disclosed publicly by the Company but which has not been so disclosed.
Except as set forth on SCHEDULE 2.1(F), as of their respective dates, the SEC
Documents complied (and as of its effective date, the Registration Statement (as
defined in the Registration Rights Agreement) will comply) in all material
respects with the requirements of the Exchange Act (or, in the case of such
Registration Statement, the Securities Act of 1933, as amended (the "ACT")) and
the rules and regulations of the SEC promulgated thereunder and other federal,
state and local laws, rules and regulations applicable to such SEC Documents (or
such Registration Statement), and none of the SEC
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Documents contained (and, as of its effective date, such Registration Statement
will not contain) any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The SEC Documents contain (and, as of its effective date, such
Registration Statement will contain) all material information concerning the
Company, and no event or circumstance has occurred which would require the
Company to disclose such event or circumstance in order to make the statements
in the SEC Documents not misleading on the date hereof or on the Closing Date
but which has not been so disclosed (assuming for this purpose that the
Company's reports filed under the Exchange Act are being incorporated into an
effective Registration Statement filed by the Company under the Act). The
financial statements of the Company included (or to be included) in the SEC
Documents (or the Registration Statement) comply (or will comply) as to form and
substance in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC or other applicable rules and
regulations with respect thereto. Such financial statements have been (or will
be) prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements) and fairly present
(or will fairly present) in all material respects the financial position of the
Company as of the dates thereof and the results of operations and cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
(g) PRINCIPAL EXCHANGE/MARKET. The principal market on which
the Common Stock is currently traded is the Nasdaq National Market.
(h) NO MATERIAL ADVERSE CHANGE. Except as declared in the SEC
Documents, since October 31, 1998, no Material Adverse Effect has occurred or
exists with respect to the Company or any of its subsidiaries, and no event or
circumstance has occurred that with notice or the passage of time or both is
reasonably likely to result in a Material Adverse Effect with respect to the
Company or any of its subsidiaries.
(i) NO UNDISCLOSED LIABILITIES. The Company and its
subsidiaries have no liabilities or obligations not disclosed in the SEC
Documents, other than those liabilities incurred in the ordinary course of the
Company's or its subsidiaries' respective businesses since October 31, 1998,
which liabilities, individually or in the aggregate, do not or would not have a
Material Adverse Effect on the Company or any of its direct or indirect
subsidiaries.
(j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. No event or
circumstance has occurred or exists with respect to the Company or its direct or
indirect subsidiaries or their respective businesses, properties, prospects,
operations or financial condition, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.
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(k) NO GENERAL SOLICITATION. Neither the Company, nor any of
its affiliates, or, to its knowledge, any person acting on its or their behalf,
has engaged in or conducted any form of general solicitation or general
advertising (within the meaning of Regulation D under the Act) with respect to
or in connection with the offer or sale of the Series C Preferred Stock, the
Warrants, the Common Shares or the Warrant Shares.
(l) NO INTEGRATED OFFERING. Neither the Company, nor any of
its affiliates, nor, to its knowledge, any person acting on its or their behalf,
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of the Series C Preferred Stock, the Warrants, the Common Shares or
Warrant Shares under the Act.
The issuance of the Series C Preferred Stock, Warrants, Common
Shares or Warrant Shares to the Investors will not be integrated with any other
past or currently contemplated issuance of the Company's securities which
requires stockholder approval under the rules of the Nasdaq National Market.
(m) [INTENTIONALLY OMITTED]
(n) INTELLECTUAL PROPERTY. The Company (and/or its
wholly-owned subsidiaries) owns or has licenses to use certain patents,
copyrights and trademarks ("INTELLECTUAL PROPERTY") associated with its
business. The Company and its subsidiaries have all Intellectual Property rights
which are needed to conduct the business of the Company and its subsidiaries as
it is now being conducted or as proposed to be conducted as disclosed in the SEC
Documents. Neither the Company nor any of its subsidiaries has any reason to
believe that the Intellectual Property rights which it owns are invalid or
unenforceable or that the use of such Intellectual Property by the Company or
its subsidiaries infringes upon or conflicts with any right of any third party,
and neither the Company nor any of its subsidiaries has received notice of any
such infringement or conflict. Neither the Company nor any of its subsidiaries
has knowledge of any infringement of its Intellectual Property by any third
party.
(o) NO LITIGATION. Except as set forth in SCHEDULE 2.1(O) and
in the SEC Documents, no litigation, arbitration, proceeding or claim (including
those for unpaid taxes) against the Company or any of its subsidiaries is
pending or, to the Company's knowledge, threatened, and no other event has
occurred, which if determined adversely could singly or in the aggregate
reasonably be expected to have a Material Adverse Effect on the Company or could
reasonably be expected singly or in the aggregate to materially and adversely
affect the transactions contemplated hereby. The legal proceedings described in
the SEC Documents will not have such an effect on the transactions contemplated
hereby, and will not have a Material Adverse Effect.
(p) BROKERS. The Company has taken no action which would give
rise to any claim by any person for brokerage commissions, finder's fees or
similar payments by any Investor relating to this Agreement or the transactions
contemplated hereby.
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(q) ACKNOWLEDGEMENT OF DILUTION. The Company understands and
acknowledges that the number of shares of Common Stock constituting Common
Shares or Warrant Shares may increase substantially in certain circumstances,
including the circumstance where the trading price of the Common Stock declines
which may have a dilutive effect on the Common Stock. Subject to Section 3.14,
the Company acknowledges that its obligation to issue Common Shares upon
conversion of the Series C Preferred Stock and Warrant Shares upon exercise of
the Warrants is absolute and unconditional, regardless of the dilution that such
issuance may have on other shareholders of the Company.
(r) OTHER INVESTORS. Except as set forth on EXHIBIT 2.1(R),
there are no outstanding securities issued by the Company that are entitled to
registration rights under the Act. Except as set forth in EXHIBIT 2.1(R), there
are no outstanding securities issued by the Company that are directly or
indirectly convertible into, exercisable into, or exchangeable for, shares of
Common Stock of the Company that have anti-dilution, preemptive or similar
rights that would be affected or triggered by the issuance of the Series C
Preferred Stock, the Common Shares, the Warrant Shares or the Warrants.
(s) CERTAIN TRANSACTIONS. Except as disclosed in the SEC
Documents, none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company or any of its subsidiaries
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
(t) PERMITS; COMPLIANCE. Each of the Company and each of its
subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its properties and to
carry on its business as it is now being conducted (collectively, the "COMPANY
PERMITS"). There is no action or proceeding pending or, to the knowledge of the
Company, threatened regarding suspension or cancellation of any of the Company
Permits, except with respect to such Company Permits the failure of which to
possess, or the cancellation or suspension of which, would not, individually or
in the aggregate, have a Material Adverse Effect on the Company. Neither the
Company nor any of its subsidiaries is in material conflict with, or in material
default or material violation of, any of the Company Permits. Since October 31,
1998, neither the Company nor any of its subsidiaries has received any
notification with respect to possible material conflicts, material defaults or
material violations of applicable laws.
(u) INSURANCE. The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its direct and
indirect subsidiaries are engaged. Neither the Company nor any such subsidiary
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
9
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.
(v) INTERNAL ACCOUNTING CONTROLS. The Company and each of its
subsidiaries maintains a system of internal accounting controls sufficient, in
the judgment of the Company's board of directors, to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(w) SHAREHOLDER RIGHTS PLAN. None of the acquisition of the
Preferred Shares, Warrants, Common Shares or Warrant Shares, nor the deemed
beneficial ownership of shares of Common Stock prior to, or the acquisition of
such shares pursuant to, the conversion of the Preferred Shares or the exercise
of the Warrants will, in any event or under any circumstance, trigger the poison
pill provisions of any stockholders' rights agreement or any similar agreements
currently in effect or to be adopted, or a substantially similar occurrence
under any agreement or plan.
(x) ENVIRONMENTAL MATTERS. Except as otherwise disclosed in
the SEC Documents, the Company and each of its subsidiaries is in compliance in
all material respects with all applicable state and federal environmental laws,
and no event or condition has occurred that may interfere with the compliance by
the Company or any of its subsidiaries with any environmental law or that may
give rise to any liability under any environmental law that, individually or in
the aggregate, would have a Material Adverse Effect.
(y) SOLVENCY.
(i) The Company's fair saleable value of its
assets exceeds the amount that will be required to be paid on
or in respect of the Company's existing debts and other
liabilities (including contingent liabilities) as they mature.
(ii) The Company's assets do not constitute
unreasonably small capital to carry out its business as now
conducted and as proposed to be conducted including the
Company's capital needs taking into account the particular
capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability
thereof.
(iii) The Company does not intend to incur
debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be
payable on or in respect of its debt). The cash flow together
with the proceeds received from the liquidation of the
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Company's assets after taking into account all anticipated
uses of the cash will at all times be sufficient to pay all
amounts on or in respect of its debt when such amounts are
required to be paid.
(iv) The Company does not intend, and does
not believe, that final judgments against the Company in
actions for money damages will be rendered at a time when, or
in an amount such that, the Company will be unable to satisfy
any such judgments promptly in accordance with their terms the
Company's cash flow, after taking into account all other
anticipated uses of the cash (including the payments on or in
respect of debt referred to in paragraph (iii) above), will at
all times be sufficient to pay all such judgments promptly in
accordance with their terms.
(v) Neither the Company nor any of its
subsidiaries is subject to any bankruptcy, insolvency or
similar proceeding.
(z) TAXES. All federal, state, city and other tax returns,
reports and declarations required to be filed by or on behalf of the Company or
any of its subsidiaries have been filed and such returns are complete and
accurate and disclose all taxes (whether based upon income, operations,
purchases, sales, payroll, licenses, compensation, business, capital, properties
or assets or otherwise) required to be paid in the periods covered thereby.
Copies of all such returns have been provided to the Investors. All taxes shown
on such returns and any deficiency assessments, penalties and interest have been
paid. All taxes required to be withheld by or on behalf of the Company in
connection with amounts paid or owing to any employees, independent contractor,
creditor or other party have been withheld, and such withheld taxes have either
been duly and timely paid to the proper governmental authorities or set aside
and reserved in accounts for such purposes (including, but not limited to any
tax required by Chapter 201 of Title XIV of the Florida Code).
(aa) TITLE TO PROPERTIES; ENCUMBRANCES. Except as set forth on
SCHEDULE 2.1(AA), there are no material real property, leaseholds, or other
interests therein owned by the Company not reflected in the Company's financial
statements included in the Company's Annual Report on Form 10-K for the year
ended October 31, 1998. The Company owns (with good and marketable title in the
case of real property) all the properties and assets (whether real, personal, or
mixed and whether tangible or intangible) that it purports to own. Except as set
forth on SCHEDULE 2.1(AA), all material properties and assets are free and clear
of all encumbrances and are not, in the case of real property, subject to any
rights of way, building use restrictions, exceptions, variances, reservations or
limitations of any nature, except with respect to all such properties and
assets, (i) mortgages or security interests securing specified liabilities or
obligations, with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists, (ii) liens for
current taxes not yet due, and (iii) with respect to real property, (A) minor
imperfections of title, if any, none of which is substantial in amount,
materially detracts from the value, or impairs the use, of the property subject
thereto, or impairs the operations the Company or any of its subsidiaries, and
(B) zoning laws and other land use restrictions that do not impair the present
or anticipated use of the property subject thereto. All buildings, plans, and
structures owned by the Company or any of its subsidiaries lie wholly
11
within the boundaries of the real property owned by the Company or such
subsidiaries, and do not encroach upon the property of, or otherwise conflict
with the property rights of, any other person.
(bb) NO VIOLATION OF CREDITOR COVENANTS. Except as set forth
on SCHEDULE 2.1(BB) or unless waivers in writing have been obtained with respect
thereto, no event of default has occurred and is continuing (or event which with
lapse of time or notice of both would constitute such an event) under any of the
revolving credit facilities or other financing arrangements of the Company or
any of its subsidiaries.
(cc) EFFECTIVENESS OF SEC FILINGS. The SEC has not issued any
stop order or other order suspending the effectiveness of any registration
involving the Company or any of its subsidiaries.
(dd) ACKNOWLEDGMENT REGARDING INVESTORS' PURCHASE OF
SECURITIES. The Company acknowledges and agrees that the Investors are acting
solely in the capacity of arm's length purchasers with respect to this Agreement
and the transactions contemplated hereby. The Company further acknowledges that
no Investor is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any statement made by any Investor or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Investors' purchase of the Securities. The Company further
represents to each Investor that the Company's decision to enter into this
Agreement has been based solely on the independent evaluation of the Company and
its representatives.
(ee) FOREIGN CORRUPT PRACTICES. Neither the Company, nor any
of its subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of his
actions for, or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.
(ff) YEAR 2000 COMPLIANCE. The Company's computer systems
(both hardware and software) and telephone systems used in connection with the
Business (collectively the "COMPUTER SYSTEM") are in good working order. The
Company reasonably believes that its Computer System (i) shall accurately input,
process and output all date and time data, from years in the same century or in
different centuries, including by yielding correct results in arithmetic
operations, comparisons and sorting of date and time data and in leap year
calculations, and (ii) will not abnormally cease to operate, return an error
message or otherwise fail due to date- or time-related processing or due to the
then-current date being before, on or after January 1, 2000 or any other date.
12
Section 2.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each of
the Investors, severally (as to itself) and not jointly, hereby makes the
following representations and warranties to the Company as of the date hereof
and on the Closing Date:
(a) AUTHORIZATION; ENFORCEMENT. (i) Such Investor has the
requisite power and authority to enter into and perform this Agreement and the
Registration Rights Agreement and to purchase the Series C Preferred Stock being
sold hereunder and to acquire the Warrants, (ii) the execution and delivery of
this Agreement and the Registration Rights Agreement by such Investor and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate or partnership action, and (iii) this
Agreement constitutes, and upon execution, issuance and delivery thereof the
Registration Rights Agreement will constitute, valid and binding obligations of
such Investor enforceable against such Investor in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application.
(b) NO CONFLICTS. The execution, delivery and performance by
such Investor of this Agreement and the Registration Rights Agreement, the
performance by such Investor under the terms of the Articles of Amendment and
Warrants, and the consummation by such Investor of the transactions contemplated
hereby and thereby do note and will not result in a violation of such Investor's
organizational documents.
(c) INVESTMENT REPRESENTATION. Such Investor is purchasing the
Series C Preferred Stock and the Warrants for its own account and not with a
view to distribution thereof in violation of any securities laws. Such Investor
has no present intention to sell the Series C Preferred Stock, Warrants, Common
Shares or Warrant Shares in violation of Federal or state securities laws and
such Investor has no present arrangement (whether or not legally binding) to
sell the Series C Preferred Stock, Warrants, Common Shares or Warrant Shares to
or through any person or entity; PROVIDED, HOWEVER, that by making the
representations herein, such Investor does not agree to hold the Series C
Preferred Stock, Warrants, Common Shares or Warrant Shares for any minimum or
other specific term and reserves the right to dispose of the Series C Preferred
Stock, Warrants, Common Shares or Warrant Shares at any time in accordance with
Federal and state securities laws applicable to such disposition.
(d) ACCREDITED INVESTOR. Such Investor is an "accredited
investor" as defined in Rule 501 of Regulation D promulgated under the Act. Such
Investor has such knowledge and experience in financial and business matters in
general and investments in particular that it is able to evaluate the merits and
risks of an investment in the Series C Preferred Stock and the Warrants and to
protect its own interests in connection with such investment. In addition (but
without limiting the effect of the Company's representations and warranties
contained herein), such Investor has received such information as it considers
necessary or appropriate for deciding whether to purchase the Series C Preferred
Stock and the Warrants pursuant hereto.
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(e) RULE 144. Such Investor understands that there is no
public trading market for the Series C Preferred Stock or the Warrants, that
none is expected to develop, and that the Series C Preferred Stock and the
Warrants must be held indefinitely unless such Series C Preferred Stock or
Warrants are converted or exercised, as the case may be, and the Common Shares
or Warrant Shares, as the case may be, are registered under the Act or an
exemption from registration is available. Such Investor has been advised or is
aware of the provisions of Rule 144 promulgated under the Act.
(f) BROKERS. Such Investor has taken no action which would
give rise to any claim by any person for brokerage commissions, finder's fees or
similar payments by the Company relating to this Agreement or the transactions
contemplated hereby.
(G) NOT AN AFFILIATE. Such Investor is not an officer,
director or "affiliate" (as defined in Rule 405 of the Act) of the Company.
(h) RELIANCE BY THE COMPANY. Such Investor understands that
the Series C Preferred Stock and Warrants are being offered and sold in reliance
on a transactional exemption from the registration requirements of Federal and
state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of such Investor set forth herein in order to determine the
applicability of such exemptions and the suitability of such Investor to acquire
the Series C Preferred Stock and Warrants.
ARTICLE III
COVENANTS
Section 3.1 REGISTRATION AND LISTING; EFFECTIVE REGISTRATION. Until
such time as no Series C Preferred Stock or Warrants are outstanding, the
Company will cause the Common Stock to continue at all times to be registered
under Section 12(g) of the Exchange Act, will comply in all respects with its
reporting and filing obligations under the Exchange Act, and will not take any
action or file any document (whether or not permitted by the Exchange Act or the
rules thereunder) to terminate or suspend such reporting and filing obligations.
Until such time as no Series C Preferred Stock or Warrants are outstanding, the
Company shall continue the listing or trading of the Common Stock on the Nasdaq
National Market or one of the other Approved Markets and shall comply in all
respects with the Company's reporting, filing and other obligations under the
bylaws or rules of the Nasdaq National Market or such other Approved Market on
which the Common Stock is listed and the National Association of Securities
Dealers ("NASD"). The Company shall cause the Common Shares and the Warrant
Shares to be listed on the Nasdaq National Market (or, if the Common Stock is
listed on another of the Approved Markets, on such other Approved Market) no
later than the registration of the Common Shares or the Warrant Shares under the
Act, and at all times shall continue such listing(s) on one of the Approved
Markets on which the Common Stock is listed. As used herein and in the
Registration Rights Agreement, the Articles of Amendment and the Warrants, the
term "EFFECTIVE REGISTRATION" shall mean that (a) all registration obligations
of the Company pursuant to the Registration Rights Agreement have been
satisfied, (b) such registration is not subject to any
14
suspension or stop order, (c) the prospectus for each of the Common Shares
issuable upon conversion of the Series C Preferred Stock and the Warrant Shares
issuable upon exercise of the Warrants is current, (d) such Common Shares and
Warrant Shares are listed for trading on one of the Approved Markets and such
trading has not been suspended for any reason, (e) none of the Company or any
direct or indirect subsidiary of the Company is subject to any bankruptcy,
insolvency or similar proceeding, and (f) no Interfering Event (as defined in
Section 2(b) of the Registration Rights Agreement) exists.
Section 3.2 SERIES C PREFERRED STOCK ON CONVERSION AND WARRANTS ON
EXERCISE.
(a) Upon any conversion by an Investor (or then holder of
Series C Preferred Stock) of the Series C Preferred Stock pursuant to the terms
thereof, the Company shall issue and deliver to such Investor (or holder) within
three (3) Trading Days (as defined in the Articles of Amendment) of the
Conversion Date (as defined in the Articles of Amendment) a new certificate or
certificates for the number of shares of Series C Preferred Stock which such
Investor (or holder) has not yet elected to convert but which are evidenced in
part by the certificate(s) submitted to the Company in connection with such
conversion (with the number of and denomination of such new certificate(s)
designated by such Investor or holder).
(b) Upon any partial exercise by an Investor (or then holder
of the Warrants) of the Warrants, the Company shall issue and deliver to such
Investor (or holder) within three (3) days of the date on which such Warrants
are exercised, a new Warrant or Warrants representing the number of adjusted
Warrant Shares, in accordance with the terms of Section 2 of the Warrants.
Section 3.3 REPLACEMENT CERTIFICATES AND WARRANTS.
(a) The certificate(s) representing the shares of Series C
Preferred Stock held by any Investor (or then holder) may be exchanged by such
Investor (or such holder) at any time and from time to time for certificates
with different denominations representing an equal aggregate number of shares of
Series C Preferred Stock, as requested by such Investor (or such holder) upon
surrendering the same. No service charge will be made for such registration or
transfer or exchange.
(b) The Warrants will be exchangeable at the option of any
Investor (or then holder of the Warrants) at the office of the Company for other
Warrants of different denominations entitling such Investor (or the holder
thereof) to purchase in the aggregate the same number of Warrant Shares as are
purchasable under such Warrants. No service charge will be made for such
transfer or exchange.
Section 3.4 EXPENSES. The Company shall pay in immediately available
funds, at the Closing and promptly upon receipt of any further invoices relating
to same, all reasonable due diligence fees and expenses and attorneys' fees and
expenses of the Investors' Counsel incurred by the Investors in connection with
the preparation, negotiation, execution and delivery of this Agreement, the
Registration Rights Agreement, the Articles of Amendment, the Warrants and the
related agreements and documents and the transactions
15
contemplated hereunder and thereunder; PROVIDED, HOWEVER, that the Company shall
have no obligation under this Section 3.4 to make any payments in excess of
$50,000. At Closing, the Company shall pay the amount due for such fees and
expenses (which may include fees and expenses estimated to be incurred for
completion of the transaction including post-closing matters). In the event such
amount is ultimately less than the actual fees and expenses, the Company shall
promptly pay such deficiency upon receipt of an invoice regarding same.
Section 3.5 SECURITIES COMPLIANCE. The Company shall notify the SEC and
the Nasdaq National Market, in accordance with their requirements, of the
transactions contemplated by this Agreement, the Articles of Amendment, the
Registration Rights Agreement and the Warrants, and shall take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation for the legal and valid issuance of the Series C
Preferred Stock hereunder, the Common Shares issuable upon conversion thereof,
the Warrants and the Warrant Shares issuable upon exercise of the Warrants.
Section 3.6 DIVIDENDS OR DISTRIBUTIONS. So long as at least 20% of the
shares of Series C Preferred Stock or Warrants issued on the Closing Date remain
outstanding, the Company agrees that it shall not (a) declare or pay any
dividends or make any distributions to any holder or holders of Common Stock, or
(b) purchase or otherwise acquire for value, directly or indirectly, any Common
Stock or other equity security of the Company.
Section 3.7 NOTICES. The Company agrees to provide all holders of
Series C Preferred Stock and Warrants with copies of all notices and
information, including without limitation notices and proxy statements in
connection with any meetings, that are provided to the holders of shares of
Common Stock, contemporaneously with the delivery of such notices or information
to such Common Stock holders and within one (1) day after release, copies of all
press releases issued by the Company or any of its subsidiaries.
Section 3.8 USE OF PROCEEDS. The Company agrees that the proceeds
received by the Company from the sale of the Series C Preferred Stock hereunder
shall be used for paying holders of the Company's Series B Preferred Stock and
for general working capital purposes.
Section 3.9 ADJUSTMENTS. Except for the transactions set forth on
SCHEDULE 3.9, if at any time within twelve (12) months from the Closing Date the
Company sells or issues Common Stock (or other equity securities or rights
exercisable or exchangeable for, or convertible into, Common Stock or such other
equity securities including debt with an equity component) at an effective or
maximum sale price less than the then applicable Conversion Price (as defined in
the Articles of Amendment and as adjusted pursuant to the terms thereof), then
the Conversion Price will be adjusted in accordance with Section 3(c)(i) of the
Articles of Amendment.
Section 3.10 RESERVATION OF STOCK ISSUABLE UPON CONVERSION OF SERIES C
PREFERRED STOCK AND UPON EXERCISE OF THE WARRANTS. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the
16
purpose of effecting the conversion of the Series C Preferred Stock and the
exercise of the Warrants, free of preemptive rights, such number of its shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding Series C Preferred Stock and the full exercise of
the Warrants, and, if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all the then
outstanding Series C Preferred Stock and the full exercise of the Warrants, the
Company will take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purposes, including
without limitation engaging in Best Efforts (as defined in the Articles of
Amendment) to obtain the requisite shareholder approval. Without in any way
limiting the foregoing, the Company agrees to reserve and at all times keep
available solely for purposes of conversion of the Series C Preferred Stock and
the exercise of the Warrants such number of authorized but unissued shares of
Common Stock PROVIDED that the number of the shares of Common Stock so reserved
shall at no time be less than the number of shares of Common Stock for which the
shares of Series C Preferred Stock are at any time convertible, assuming a
Conversion Price of $4.00, and 105% of the aggregate shares issuable on exercise
of the Warrants, which numbers may be reduced by the number of Common Shares or
Warrant Shares actually delivered pursuant to conversion of the Series C
Preferred Stock or exercise of the Warrants and shall be appropriately adjusted
for any stock split, reverse split, stock dividend or reclassification of the
Common Stock. If the Company falls below the reserves specified in the
immediately preceding sentence and does not cure such non-compliance within
thirty (30) days of its start, then the Investors will be entitled to the
discount adjustments specified in Section 2(b)(i) of the Registration Rights
Agreement. If at any time the number of authorized but unissued shares of Common
Stock is not sufficient to effect the conversion of all the then outstanding
shares of Series C Preferred Stock or the full exercise of the Warrants, the
Investors shall be entitled to, INTER ALIA, the premium price redemption rights
provided in the Registration Rights Agreement.
Section 3.11 BEST EFFORTS. The parties shall use their Best Efforts to
satisfy timely each of the conditions described in Article IV of this Agreement.
Section 3.12 FORM D; BLUE SKY LAWS. The Company agrees to file a Form D
with respect to the Series C Preferred Stock, Warrants, Common Shares and
Warrant Shares, as required under Regulation D, and to provide a copy thereof to
each Investor promptly after such filing. The Company shall, on or before each
Closing Date, take such action as the Company shall have reasonably determined
is necessary to qualify the Series C Preferred Stock, Warrants, Common Shares
and Warrant Shares for sale to the Investors at the applicable Closing pursuant
to this Agreement under applicable securities or "blue sky" laws of the states
of the United States (or to obtain an exemption from such qualification), and
shall provide evidence of any such action so taken to each Investor on or prior
to the Closing Date.
Section 3.13 NO SENIOR INDEBTEDNESS; LIMITATION ON ISSUANCE OF EQUITY.
(a) Until ninety (90) days after the Registration Statement
has been declared effective by the SEC and the Common Shares are subject to
Effective Registration,
17
neither the Company nor any of its subsidiaries will issue any equity securities
or instruments or rights convertible into or exchangeable or exercisable for any
equity securities except pursuant to presently outstanding convertible
securities and The Able Telcom Holding Corp. 1995 Stock Option Plan, as amended,
other options to employees of the Company and its subsidiaries, or under the
transactions set forth on SCHEDULE 3.13.
(b) For a period of twelve (12) months following the Closing,
except as consented to in writing by the Investors, the Company shall not issue
or grant (i) any convertible securities the terms of which do not provide for a
fixed rate of conversion throughout the term of the security or (ii) any option,
warrant or other right to purchase securities of the Company whose exercise is
contingent upon, or whose price is determined with respect to, the market price
for the Common Stock; PROVIDED, HOWEVER, that the twelve month period shall be
extended one day for each day that there is not Effective Registration.
Section 3.14 DELISTING; BEST EFFORTS. If required, the Company will use
its Best Efforts to obtain promptly shareholder approval pursuant to Rule
4460(i) of Nasdaq Stock Market Marketplace Rules (or otherwise obtain Nasdaq
Stock Market approval) authorizing the issuance of all Common Shares and Warrant
Shares issuable upon the conversion of any shares of Series C Preferred Stock or
the exercise of any Warrants ("SHAREHOLDER APPROVAL"), including by calling a
special meeting of such shareholders within ten (10) days, and holding such
meeting forty-five (45) days of the date of any such attempted conversion or, if
the Trading Price (as defined in the Articles of Amendment) has decreased by
more than 20% over the preceding thirty (30) days, then forty-five (45) days
shall be increased to sixty (60) days) and having the Company's Board of
Directors recommend such approval in a proxy statement. Without limiting the
foregoing, the Company shall, in any event, use its Best Efforts obtain such
Shareholder Approval no later than the Company's next annual meeting of
shareholders following the Closing Date. If a conversion of any shares of Series
C Preferred Stock in whole or in part for Common Shares by an Investor could
result in the Company being delisted from the Nasdaq National Market for issuing
in excess of 20% of its outstanding Common Stock to the Investors without the
Shareholder Approval, then the Company, upon the Investor's request, must redeem
any and all Series C Preferred Stock covered by the applicable Conversion Notice
(as defined in the Articles of Amendment) and any and all Series C Preferred
Stock that would, if a Conversion Notice for all shares of Series C Preferred
Stock were then delivered, result in the Company being subject to such
delisting, at a price equal to 120% of the Liquidation Value (as defined in the
Articles of Amendment).
Section 3.15 REGISTRATION RIGHTS. The Company shall file and use its
Best Efforts to cause to become effective, as promptly as possible, a
registration statement on Form S-3 under the Act (or in the event that the
Company becomes ineligible to use such form, such other form as the Company is
eligible to use under the Act) covering the resale of the Common Shares and the
Warrant Shares issuable upon the conversion of the shares of Series C Preferred
Stock and the exercise of the Warrants, respectively, and shall take all action
necessary to qualify the Common Shares and the Warrant Shares under all
applicable state securities laws, all in accordance with the Registration Rights
Agreement to be entered into by the Company and the Investors at the Closing.
18
Section 3.16 LEGENDS. Upon effectiveness of the Registration Statement,
as amended from time to time, the Common Shares and the Warrant Shares and
certificates evidencing the same shall at all times be free of legends (except
as otherwise provided herein or in the Articles of Amendment, Warrants,
Registration Rights Agreement), "stop transfers", "stock transfer restrictions"
or other restrictions.
Section 3.17 CORPORATE EXISTENCE. The Company will take all reasonable
steps necessary to preserve and continue the corporate existence and solvency of
the Company. So long as an Investor beneficially owns any Series C Preferred
Stock, the Company shall maintain its corporate existence and shall not sell all
or substantially all of the Company's assets, except in the event of a merger or
consolidation or sale of all or substantially all of the Company's assets, where
the surviving or successor entity in such transaction (a) assumes the Company's
obligations hereunder and under the agreements and instruments entered into in
connection herewith and (b) is a publicly traded corporation whose Common Stock
is listed for trading on an Approved Market.
Section 3.18 RIGHT OF FIRST REFUSAL. Except for the transactions set
forth on SCHEDULE 3.18 and as contemplated by this Agreement, the Company shall
not, on or prior to the date which is 12 months following the Closing Date,
offer, sell, contract or otherwise issue or deliver any securities in a private
placement or other transaction (other than in connection with an employee stock
purchase or similar plan or an acquisition of another company), unless such
offer, sale, contract, issuance or delivery is first offered to the Investors.
The Company shall make such offer by providing the Investors with written notice
of the Company's intention to enter into the such a transaction together with a
term sheet containing the economic terms and significant provisions thereof and
any other information reasonably requested by the Investors (the "OFFER"). Such
Offer shall be given with respect to each such transaction contemplated by the
Company. Each Investor shall have twenty (20) Trading Days from receipt of the
Offer to deliver a written notice to the Company that such Investor wishes to
accept the Offer in whole or in part (subject to satisfactory due diligence and
reasonably acceptable definitive documentation) for the private placement. If an
Investor rejects the Offer or fails to respond within such twenty (20) Trading
Day period, then the Company shall be permitted to complete such private
placement without such Investor on terms and conditions substantially the same
as those contained in the Offer. If any private placement is contemplated on
terms and conditions not substantially the same as those contained in the Offer,
then such private placement shall be deemed a new private placement and the
Investors shall again be entitled to receive an Offer for such private placement
on such new terms and conditions (and/or with such new definitive documentation
if applicable). If an Investor accepts the Offer but fails to close the private
placement within thirty (30) Trading Days of acceptance of the Offer for any
reason other than (a) any breach by the Company of its obligations hereunder or
thereunder, (b) any delay by the Company or reasonable delay by such Investor in
connection with execution of definitive documentation, (c) failure of the
parties to reasonably agree on definitive documentation, or (d) reasonable
dissatisfaction by such Investor with their due diligence examination, the Offer
to such Investor shall terminate and such Investor shall not be entitled to
receive any Offer in any future private placement.
19
Section 3.19 DUE DILIGENCE. From the date hereof through the Additional
Closing Date, the Company shall provide each Investor with reasonable access to
the information and/or persons necessary for such Investor to conduct its
financial, accounting, operational and legal due diligence in a manner
satisfactory to such Investor in its sole discretion.
ARTICLE IV
CONDITIONS TO CLOSINGS
Section 4.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO
SELL THE SERIES C PREFERRED STOCK. The obligation hereunder of the Company to
issue and/or sell the Series C Preferred Stock to the Investors at the Closing
(unless otherwise specified) is subject to the satisfaction, at or before the
Closing, of each of the applicable conditions set forth below. These conditions
are for the Company's sole benefit and may be waived by the Company at any time
in its sole discretion.
(a) ACCURACY OF THE INVESTORS' REPRESENTATIONS AND WARRANTIES.
The representations and warranties of each Investor will be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties as of an
earlier date, which will be true and correct in all material respects as of such
date).
(b) PERFORMANCE BY THE INVESTORS. Each and every Investor
shall have performed all agreements and covenants and satisfied all conditions
required to be performed or satisfied by it at or prior to the Closing.
(c) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Registration Rights Agreement or the
Articles of Amendment or the Warrants.
(d) EXCHANGE AGREEMENT. The execution and delivery of the
Exchange Agreement (as defined in the Registration Rights Agreement) by each
party thereto and the consummation of the transactions contemplated thereunder.
Section 4.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTORS TO
PURCHASE THE SERIES C PREFERRED STOCK. The obligation hereunder of each Investor
to acquire and pay for the Series C Preferred Stock at the Closing (unless
otherwise specified) is subject to the satisfaction, at or before the Closing,
of each of the applicable conditions set forth below. These conditions are for
each Investor's benefit and may be waived by each Investor at any time in its
sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time
20
(except for representations and warranties as of an earlier date, which shall be
true and correct in all material respects as of such date).
(b) PERFORMANCE BY THE COMPANY. The Company shall have
performed all agreements and covenants and satisfied all conditions required to
be performed or satisfied by the Company at or prior to the Closing.
(c) NASDAQ NATIONAL MARKET. From the date hereof to the
Closing Date, trading in the Company's Common Stock shall not have been
suspended by the SEC, the Nasdaq National Market (or other Approved Market) or
the NASD, and trading in securities generally as reported by the Nasdaq National
Market (or other Approved Market) shall not have been suspended or limited or
minimum prices shall not have been established on securities whose trades are
reported by the Nasdaq National Market, and the Common Stock shall not have been
delisted from the Nasdaq National Market (or any other Approved Market where
they are currently listed).
(d) NO INJUNCTION. No statute, rule, regulation, executive,
judicial or administrative order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority
of competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Registration Rights Agreement
or the Articles of Amendment or the Warrants.
(e) OPINION OF COUNSEL. At the Closing, the Investors shall
have received an opinion of counsel to the Company in the form attached hereto
as EXHIBIT 4.2(E) and such other opinions, certificates and documents as the
Investors or their counsel shall reasonably require incident to the Closing.
(f) REGISTRATION RIGHTS AGREEMENT. The Company and the
Investors shall have executed and delivered the Registration Rights Agreement in
the form and substance of EXHIBIT 4.2(F) attached hereto.
(g) ADVERSE CHANGES. Since July 31, 1999, the date through
which the most recent report of the Company on Form 10-Q has been prepared and
filed with the SEC, a copy of which is included in the SEC Documents, no event
shall have occurred which had or is likely to have, in the reasonable judgment
of the Investors, a Material Adverse Effect on the Company or any of its direct
or indirect subsidiaries, except as otherwise reflected in other SEC Documents
filed or press releases issued as of a date subsequent to July 31, 1999.
(h) OFFICER'S CERTIFICATE. The Company shall have delivered to
the Investors a certificate in form and substance satisfactory to the Investors
and the Investors' Counsel, executed by an officer of the Company, certifying as
to satisfaction of closing conditions, incumbency of signing officers, and the
true, correct and complete nature of the Charter, By-Laws, good standing of and
authorizing resolutions of the Company.
(i) SERIES C PREFERRED STOCK AND WARRANTS. The Investors shall
have received certificates representing the shares of Series C Preferred Stock
and the Warrants in the form and substance of EXHIBIT 1.1B hereto.
21
(j) DUE DILIGENCE. Each Investor shall have completed its
financial, accounting, operational and legal due diligence in a manner
satisfactory to such Investor in its sole discretion.
(k) CONSENTS. The Company shall have received and delivered to
the Investors (i) the consent of all applicable lenders, to the extent required,
to the issuance of the Series C Preferred Stock and (ii) the waiver of any and
all pending events of default (or pending events which with the lapse of time or
notice or both would constitute an event of default) thereunder.
(l) EXCHANGE AGREEMENT. The execution and delivery of the
Exchange Agreement by each party thereto and the consummation of the
transactions contemplated thereunder.
ARTICLE V
ADDITIONAL PURCHASES
Section 5.1. OPTIONS FOR ADDITIONAL PREFERRED SHARES.
During the period from the Closing Date to (but excluding) the 240th
day following the Closing Date, the Investors shall have the right (but not the
obligation), upon written notice to the Company, to purchase additional
Preferred Shares for an aggregate purchase price of $15,000,000 (Fifteen Million
U.S. Dollars), at a price per share equal to the price per share set forth in
Section 1.1(b), having the rights, designations and preferences set forth in the
Articles of Amendment (as then in effect, including, without limitation, the
Conversion Price), and having the benefits of the Registration Rights Agreement
and this Agreement; PROVIDED, HOWEVER, that such 240-day period shall be
extended by 1.5 days for each day after Registration Deadline (as defined in the
Registration Rights Agreement) that there is not Effective Registration.
Section 5.2. NOTICES; ADDITIONAL CLOSING DATE.
(a) Any notice referred to in Section 5.1 shall be given by
facsimile and by overnight courier to the Company.
(b) The closing of the purchase and sale of additional shares
of Series C Preferred Stock pursuant to Section 5.1 shall take place at the
offices of counsel to the Investors at 10:00 a.m., local time (the "ADDITIONAL
CLOSING") on the date on which the last of the conditions set forth in this
Article V shall be fulfilled or waived in accordance herewith, or such other
time and place and/or on such other date as the Investors and the Company may
agree. The date and time at which the Additional Closing occurs is referred to
herein as the "ADDITIONAL CLOSING DATE."
(c) On the Additional Closing Date, the Company shall deliver
to each Investor (i) a certificate or certificates (with the number of an
denomination of such certificates requested by such Investor) representing the
shares of Series C Preferred
22
Stock purchased at the Additional Closing by such Investor registered in the
name of the Investor or its nominee.
(d) The purchase price for any shares of Series C Preferred
Stock issued incident to a notice pursuant to this Section shall be paid by each
Investor, severally in proportion to such Investor's then holdings, by wire
transfer of immediately available federal funds to such account as the Company
shall specify in writing to such Investor, or, at such Investor's election, to
an account of an agent designated by such Investor.
Section 5.3 CONDITIONS OF THE COMPANY TO THE ADDITIONAL CLOSING. The
obligation of the Company to issue the shares of Series C Preferred Stock to the
Investors at the Additional Closing is subject to the satisfaction, at the
Additional Closing Date, of the conditions set forth in Section 4.1 as of such
Additional Closing Date as if made as of such Additional Closing Date.
Section 5.4 CONDITIONS OF EACH INVESTOR TO THE ADDITIONAL CLOSING. The
obligations of each Investor with respect to the Additional Closing to acquire
and pay for the shares of Series C Preferred Stock are subject to the
satisfaction, at the Additional Closing Date, of each of the conditions set
forth in each paragraph of Section 4.2, except paragraphs (f) and (j), as of the
Additional Closing Date as if made as of the Additional Closing Date and to the
additional conditions set forth below:
(a) There are not, and have not been in any of the preceding
thirty (30) Trading Days any Interfering Event; and
(b) The Company is not then in material breach of any of the
Transaction Documents.
ARTICLE VI
LEGEND AND STOCK
Section 6.1. The Company will issue one or more certificates
representing the shares of Series C Preferred Stock and the Warrants in the name
of the applicable Investor and in such denominations to be specified by such
Investor prior to (or from time to time subsequent to) Closing. Each certificate
representing the Series C Preferred Stock and the Warrants initially shall be
stamped or otherwise imprinted with a legend substantially in the following
form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY
23
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM SUCH REGISTRATION REQUIREMENTS.
The Company agrees to reissue the shares of Series C Preferred Stock
and the Warrants without the legend set forth above at such time as (a) the
holder thereof is permitted to dispose of such Series C Preferred Stock and/or
Warrants and Common Stock issuable upon conversion or exercise thereof pursuant
to Rule 144(k) under the Act, or (b) such shares of Series C Preferred Stock
and/or Warrants are sold to a purchaser or purchasers who (in the opinion of
counsel to the seller or such purchaser(s), in form and substance customary for
opinions of counsel in similar transactions) are able to dispose of such shares
publicly without registration under the Act.
Prior to the Registration Statement being declared effective, any
Common Shares issued pursuant to conversion of the Series C Preferred Stock or
Warrant Shares issued upon exercise of the Warrants shall bear a legend in the
same form as the legend indicated above. Upon such Registration Statement
becoming effective, the Company agrees to promptly, but no later than three (3)
Trading Days thereafter, issue new certificates representing such Common Shares
and Warrant Shares without such legend. Any Common Shares issued pursuant to
conversion of the Series C Preferred Stock and any Warrant Shares issued upon
exercise of the Warrants after the Registration Statement has become effective
shall be free and clear of any legends, transfer restrictions and stop orders.
Notwithstanding the removal of such legend, each Investor agrees to sell the
Common Shares and Warrant Shares represented by the new certificates in
accordance with the applicable prospectus delivery requirements (if copies of a
current prospectus are provided to such Investor by the Company), if any, or in
accordance with an exception from the registration requirements of the Act.
Nothing herein shall limit the right of any holder to pledge these
securities pursuant to a bona fide margin account or lending arrangement.
ARTICLE VII
TERMINATION
Section 7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated at any time prior to the Closing by the unanimous written consent of
the Company and each of the Investors.
Section 7.2 OTHER TERMINATION. This Agreement may be terminated by
action of the Board of Directors of the Company or by any of the Investors at
any time if the Closing shall not have been consummated by the fifth Trading Day
following the date of this Agreement; PROVIDED, HOWEVER, that the party (or
parties) prepared to close shall retain its (or their) right to xxx for any
breach by the other party (or parties).
24
ARTICLE VIII
MISCELLANEOUS
Section 8.1 STAMP TAXES. The Company shall pay all stamp and other
taxes and duties levied in connection with the issuance of the Series C
Preferred Stock and the Warrants pursuant hereto, the Common Shares issued upon
conversion of the Series C Preferred Stock and the Warrant Shares issued upon
exercise of the Warrants.
Section 8.2 SPECIFIC PERFORMANCE; CONSENT TO JURISDICTION; JURY TRIAL.
(a) The Company and the Investors acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
(b) THE COMPANY AND EACH OF THE INVESTORS (I) HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT, THE NEW YORK STATE COURTS AND OTHER COURTS OF THE UNITED STATES SITTING
IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES, AND AGREES
NOT TO ASSERT IN ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
COMPANY AND EACH OF THE INVESTORS CONSENTS TO PROCESS BEING SERVED IN ANY SUCH
SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF TO SUCH PARTY AT THE
ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
(c) THE COMPANY AND EACH OF THE INVESTORS HEREBY WAIVE ALL
RIGHTS TO A TRIAL BY JURY.
Section 8.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with
the Registration Rights Agreement, the Warrants, the Articles of Amendment and
the agreements and documents executed in connection herewith and therewith,
contains the entire understanding of the parties with respect to the matters
covered hereby and thereby and, except as specifically set forth herein or
therein, neither the Company nor any Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. In the event of
a conflict or inconsistency between this Agreement and any term of the Articles
of Amendment, the Articles of Amendment shall prevail. No provision of this
Agreement may be waived or amended other than by a written instrument signed by
the party against whom enforcement of any such amendment or waiver is sought.
25
Section 8.4 NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing by mail, facsimile or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
Able Telcom Holding Corp.
0000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxx, President and Chief
Executive Officer
Facsimile: (000) 000-0000
with copies to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxxxxx
Facsimile: (000) 000-0000
to the Investors:
The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with copies to:
Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attention: X. Xxxxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
Section 8.5 INDEMNITY. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees but
excluding consequential damages) incurred as a result of such parties' breach of
any representation, warranty, covenant or agreement in this Agreement.
26
Section 8.6 WAIVERS. No waiver by any party of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
Section 8.7 HEADINGS. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 8.8 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The parties hereto may amend
this Agreement without notice to or the consent of any third party. The Company
may not assign this Agreement or any rights or obligations hereunder without the
prior written consent of all Investors (which consent may be withheld for any
reason in their sole discretion), except that the Company may assign this
Agreement in connection with the sale of all or substantially all of its assets,
PROVIDED that the Company is not released from any of its obligations hereunder,
such assignee assumes all obligations of the Company hereunder, and appropriate
adjustment of the provisions contained in this Agreement, the Registration
Rights Agreement, the Articles of Amendment and the Warrants is made, in form
and substance satisfactory to the Investors, to place the Investors in the same
position as they would have been but for such assignment, in accordance with the
terms of the Articles of Amendment and the Warrants. Any Investor may assign
this Agreement (in whole or in part) or any rights or obligations hereunder
without the consent of the Company in connection with any sale or transfer of
shares of the Series C Preferred Stock or Warrants held by such Investor,
PROVIDED that such Investor may not assign this Agreement prior to the Closing
Date without the Company's prior written consent except to an affiliate or
affiliates of such Investor.
Section 8.9 NO THIRD PARTY BENEFICIARIES. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
Section 8.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS EXECUTED AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE
AND, WHERE APPLICABLE, FEDERAL LAW..
Section 8.11 SURVIVAL. The representations and warranties and the
agreements and covenants of the Company and each Investor contained herein shall
survive the Closing. If any provision of this Agreement becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision,
PROVIDED that no such severability shall be effective if it were to materially
change the economic benefit of this Agreement to any party.
27
Section 8.12 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
Section 8.13 PUBLICITY. The Company agrees that it will not disclose,
and will not include in any public announcement, the name of any Investor
without such Investor's consent, unless and until such disclosure is required by
law or applicable regulation, and then only to the extent of such requirement.
The Company agrees that it will deliver a copy of any public announcement
regarding the matters covered by this Agreement, the Registration Rights
Agreement, the Articles of Amendment or the Warrants or any agreement and
document executed herewith and therewith to each Investor and any public
announcement including the name of an Investor to such Investor, reasonably in
advance of the release of such announcements. The Company will provide the
Investor the opportunity to review and comment on any press release announcing
consummation of the Closing or any other press release describing or referring
to the transactions contemplated hereby.
Section 8.14 SEVERABILITY. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warranties, agreements, acts or omissions of
any other Investor, and that any rights granted to Investors hereunder shall be
enforceable by each Investor hereunder.
Section 8.15 LIKE TREATMENT OF HOLDERS; REDEMPTION. Neither the Company
nor any of its affiliates shall, directly or indirectly, pay or cause to be paid
any consideration (immediate or contingent), whether by way of interest, fee,
payment for the redemption or conversion of the shares of Series C Preferred
Stock or exercise of the Warrants, or otherwise, to any holder of Series C
Preferred Stock or the Warrants, for or as an inducement to, or in connection
with the solicitation of, any consent, waiver or amendment of any terms or
provisions of the Articles of Amendment or this Agreement or the Registration
Rights Agreement or the Warrants, unless such consideration is required to be
paid to all holders of Series C Preferred Stock and Warrants bound by such
consent, waiver or amendment whether or not such holders so consent, waive or
agree to amend and whether or not such holders tender their shares of Series C
Preferred Stock or Warrants for redemption, conversion or exercise. The Company
shall not, directly or indirectly, redeem any shares of the Series C Preferred
Stock unless such offer of redemption is made PRO RATA to all holders of Series
C Preferred Stock on identical terms.
Section 8.16 NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
Section 8.17 FORCE MAJEURE. The Company shall not be liable for any
default or delay in the performance of its obligations under this Agreement if
and only to the extent such delay or default is caused by Force Majeure;
PROVIDED, HOWEVER, that no event of Force Majeure shall excuse any such default
or delay for longer than an aggregate of thirty (30) days in any calendar year.
28
[SIGNATURE PAGES FOLLOW]
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ABLE TELCOM HOLDING CORP.
By: ________________________________
Name:
Title:
INVESTORS:
HALIFAX FUND, L.P.
By: The Palladin Group, L.P., as
Investment Manager
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
THE GLENEAGLES FUND COMPANY
By: The Palladin Group, L.P., as
Investment Manager
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
30
PALLADIN OVERSEAS FUND LIMITED
By: The Palladin Group, L.P., as
Investment Manager
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
PALLADIN PARTNERS I, L.P.
By: Palladin Asset Management, LLC,
as Investment Manager
By: ________________________________
Name:
Title:
LANCER SECURITIES (CAYMAN) LIMITED
By: ________________________________
The Palladin Group, L.P., as
Investment Manager
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
PGEP III, LLC
By: The Palladin Group, L.P., as
Investment Manager
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
31
QUATTRO FUND LIMITED
By: Quattro Investors LP
By: ________________________________
Name: Xxxxxx Xxxxxx
Title: Principal
[SIGNATURE PAGES TO ABLE TELCOM HOLDING CORP.
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT]
32
EXHIBITS AND SCHEDULES
Schedule I List of Investors
Schedule 2(c) Certain Rights to Capital Stock of the Company
Schedule 2.1(f) Company Non-Compliance with SEC Rules
Schedule 2.1(o) Litigation
Schedule 2.1(aa) Certain Property Encumbrances
Schedule 2.1(bb) Certain Events of Default
Schedule 3.9 Permitted Transactions
Schedule 3.13 Permitted Stock Option Transactions
Schedule 3.18 Permitted Convertible Security Transactions
Exhibit 1.1A Form of Articles of Amendment
Exhibit 1.1B Form of Warrant
Exhibit 2.1(a) List of Subsidiaries
Exhibit 2.1(c)(i) Certificate of Incorporation of the Company
Exhibit 2.1(c)(ii) By-Laws of the Company
Exhibit 2.1(r) Outstanding Securities Subject to Registration Rights, etc.
Exhibit 4.2(e) Opinion of Company Counsel
Exhibit 4.2(f) Registration Rights Agreement
33
EXHIBIT I
NUMBER OF SHARES OF NUMBER RESTRICTED
SERIES C OF OWNERSHIP
INVESTOR PREFERRED STOCK WARRANTS PURCHASE PRICE PERCENTAGE
-------- --------------- -------- -------------- ----------
Halifax Fund, L.P. 3,334 1 $10,000,000 4.99%
The Gleneagles Fund Company 333 1 $1,000,000 4.99%
Palladin Overseas Fund Limited 333 1 $1,000,000 4.99%
Palladin Partners I, L.P. 250 1 $750,000 4.99%
Lancer Securities (Cayman) Limited 333 1 $1,000,000 4.99%
PGEP III, LLC 250 1 $750,000 4.99%
Quattro Fund Limited 167 1 $500,000 4.99%
TOTAL
100% 5,000 7 $15,000,000 4.99%
34
SCHEDULE 2(C)
CERTAIN RIGHTS TO CAPITAL STOCK OF THE COMPANY
Shares Underlying Employee Options 2,690,000
WorldCom Option 2,000,000
WorldCom Equity Award 300,000
Shares Underlying RoseGlen Warrants 370,000
Shares Underlying Xxxxxxx Warrants 409,505
Shares Underlying Series A Preferred Warrants 62,200
----------
5,831,705
==========
35
SCHEDULE 2.1(F)
COMPANY NON-COMPLIANCE WITH SEC RULES
The Company is compliant, as at this date, with all SEC Rules.
The Company may be required to file amendments to previously filed 10-Q's, 10-K
and the Company may be required to file an amendment to its previously filed
8-K.
36
SCHEDULE 2.1(O)
LITIGATION
------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF LITIGATION COUNSEL RANGE OF POTENTIAL GAIN (LOSS), IF DETERMINABLE
------------------------------------------------------------------------------------------------------------------------------
PROBABLE REASONABLY POSSIBLE REMOTE
------------------------------------------------------------------------------------------------------------------------------
1. XXXXXXX XXXXXXX V. ABLE - This Xxxxxx, Xxxxxxxx & - 25,000.00 -
litigation is pending in Fort Xxxxxxxxxx, PA
Lauderdale, Florida and arises
out of a handwritten
contractual agreement between
Xx. Xxxxxxx and a former
executive of Able. Xx. Xxxxxxx
seeks contract damages in the
amount of $250,000.00,
including stock options. Able
denies any liability as the
actions of the former executive
in entering into such a
contract were beyond his
power, a limitation well known
by the Plaintiff. Company
management believes that its
exposure will not exceed
$25,000; however, the ultimate
resolution of this matter is
currently not determinable.
------------------------------------------------------------------------------------------------------------------------------
2. SIRIT TECHNOLOGIES V. ABLE - On Paul, Hastings, - - -
May 21, 1998, Xxxxx Xxxxxxxx & Xxxxxx,
Technologies, Inc. ("Sirit") LLP
field a lawsuit in the Unites
States District Court for the
Southern District of Florida,
against the Able Telcom Holding
Corp. ("Able" or the "Company")
and Xxxxxx X. Xxxxxxxx
("Davidson"), who has since
become a member of the Company's
Board of Directors. Sirit asserts
claims against the Company for
tortuous interference, fraudulent
inducement, negligent
misrepresentation and breach of
contract in connection with the
Company's agreement to purchase
the network construction and
transportation systems business
of MFS Network Technologies, Inc.
("MFSNT") from WorldCom, Inc.
("WorldCom") and seeks injunction
relief and compensatory damages
in excess of $100.0 million.
Company management believes the
plaintiff's case is baseless and
will ultimately be resolved in
favor of the Company.
------------------------------------------------------------------------------------------------------------------------------
3. SAFETY PRODUCTS V. DIAL - This no counsel - $10,000 -
action arises out of a claim for
Goods Sold and Delivered pending
in Polk County, Florida.
Defendant is seeking payment for
$10,346. Dial has not yet
responded to the allegations.
Company management continues to
evaluate the facts of this case,
the result of which are currently
not determinable.
------------------------------------------------------------------------------------------------------------------------------
4. T.A.M.E. V. GEC - This suit, Xxxxxx, Xxxxxxxx & - - -
pending in the Western District Xxxxxxxxxx, PA
of Texas, claims breach of
contract against GEC for
terminating an assumed contract
with T.A.M.E., a minority
(female) owned corporation.
T.A.M.E. claims contract damages
in the amount of $250,000.00,
punitive damages for
Discrimination of $1,000,000.00
and Defamation damages of an
additional $1,000,000.00. GEC
------------------------------------------------------------------------------------------------------------------------------
37
------------------------------------------------------------------------------------------------------------------------------
has not yet answered the
allegations as it first must seek
a stay of the proceedings in
order to demand Arbitration.
Company management believes the
plaintiff's case is baseless and
will ultimately be resolved in
favor of the Company.
------------------------------------------------------------------------------------------------------------------------------
5. FLI-LINE TOOL V. GEC - This Xxxxxx, Xxxxxxxx & - $100,000 -
suit, pending in the Western Xxxxxxxxxx, PA
District of Texas, claims
breach of contract against GEC
for terminating a construction
contract and is seeking damages
of $216,470. GEC claims that
no contract existed. Company
management continues to
evaluate the facts of this
case, the result of which are
currently not determinable.
Trial in February 2000.
------------------------------------------------------------------------------------------------------------------------------
6. DIAL X. XXXX AND QUICK - Dial Xxxxxx & XxXxxxxx - - -
filed suit in Xxxx County,
Florida for sums due and unpaid
under a lump sum construction
contract dated June 24, 1997.
Xxxx & Quick has counterclaimed
alleging breach of contract by
Dial for failure to properly
perform the contract or to remedy
any deficiencies in their work.
Company management believes the
plaintiff's case is baseless and
will ultimately be resolved in
favor of the Company.
------------------------------------------------------------------------------------------------------------------------------
7. ALPHATECH V. MFS - Alleged - - -
breach of contract, arising out
of an alleged failure to adhere
to the terms of certain Teaming
Agreements relating to two
projects, E-470 and the New
Jersey Consortium. Alphatech is
claiming damages of approximately
$15 million . Company management
continues to evaluate the facts
of this case, the result of which
are currently not determinable.
This case is subject to the
"contingent consideration"
provisions of the MFSNT
acquisition agreements, and
together with all such claims is
reserved at $5.0 million.
------------------------------------------------------------------------------------------------------------------------------
8. US PUBLIC TECHNOLOGIES V. MFS - Xxxxxxx, Xxxxx & - - -
Alleged breach of contract, Xxxxxxxxx, LLP
arising out of an alleged
failure to adhere to the terms
of a Teaming Agreement relating
to the New Jersey Consortium
project. USPT's claim is set
out in six counts. They are
claiming damages of not less
than $8.5 million in respect of
each count. Company management
continues to evaluate the facts
of this case, the result of
which are currently not
determinable. This case is
subject to the "contingent
consideration" provisions of
the MFSNT acquisition
agreements, and together with
all such claims is reserved at
$5.0 million.
------------------------------------------------------------------------------------------------------------------------------
9. XXXX XXXXX V. MFS - Alleged Xxxxxx, Xxxxxxxx & - 50,000.00 -
wrongful termination of Xxxxxxxxxx, PA
employment contract and
defamation. Judgment (for Xxxx
Xxxxx) by default is being
appealed. Defendant seeks
remaining amounts, including
stock options, due under his
employment or approximately
$180,000. Company management
continues to evaluate the facts
of this case, the result of
which are
------------------------------------------------------------------------------------------------------------------------------
38
------------------------------------------------------------------------------------------------------------------------------
currently not determinable.
------------------------------------------------------------------------------------------------------------------------------
10. SHIPPING FINANCIAL, ET AL. V. Paul, Hastings, - - -
ABLE, XXXXXX ET AL. - Class Xxxxxxxx & Xxxxxx,
action suit claiming securities LLP
fraud based upon stock
fluctuation from $21+ to
$1.75. Company management
continues to evaluate the facts
of this case, the result of
which are currently not
determinable. However, Company
management believes there is
sufficient insurance coverage
to satisfy any judgment.
------------------------------------------------------------------------------------------------------------------------------
11. BAYPORT PIPELINE, INC. V. MFS Jenkens & Xxxxxxxxx - - -
NETWORK TECHNOLOGIES, INC. -
This is an arbitration
proceeding under the
construction industry rules.
Bayport alleges fraud, breach of
contract, quantum meruit, and
something called delay and
hindrance. Bayport seeks
approximately five and one half
million dollars in damages,
including approximately one
million dollars which MFS holds
as retainage. MFS is
counterclaiming against Bayport
for approximately one million
dollars alleging faulty
workmanship, bad faith, and
breach of contract. A hearing is
scheduled for late November, but
this date could change. Company
management continues to evaluate
the facts of this case, the
result of which are currently not
determinable. The Company has
reserved for all potential
damages through the job and/or
purchase accounting.
------------------------------------------------------------------------------------------------------------------------------
12. TAB ELECTRIC, INC. X. XXXXXXXX Xxxx X. Xxxxx and - - -
ALASKA, INC., MFS NETWORK Associates
TECHNOLOGIES AND FIREMAN'S FUND
INSURANCE COMPANY - Tab Electric
has sued MFSNT, Xxxxxxxx and
Fireman's for approximately one
million dollars in connection
with alleged negligence, breach
of contract and other assorted
claims. Tab's claims against MFS
are based on negligence
(negligent supervision) and quasi
contract (MFS was enriched by
Tab's extra work). Trial is set
for April 17, 2000. There is an
ongoing dispute as to whether
WorldCom's insurer should pick up
the defense costs and ultimate
liability for this claim. Company
management continues to evaluate
the facts of this case, the
result of which are currently not
determinable. This case is
subject to the "contingent
consideration" provisions of the
MFSNT acquisition agreements, and
together with all such claims is
reserved at $5.0 million.
Additionally, the Company has
reserved for all potential
damages through the job and/or
purchase accounting.
------------------------------------------------------------------------------------------------------------------------------
13. XXXXXXXX V. MFS NETWORK Xxxx X. Xxxxx and - - -
TECHNOLOGIES - This is a Associates
separate arbitration proceeding
wherein Xxxxxxxx makes a claim
for approximately three
million, two hundred thousand
dollars for alleged extra work
outside of the original
contract. An arbitrator has
only recently been appointed
and discovery is just
------------------------------------------------------------------------------------------------------------------------------
39
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beginning. The arbitration
hearing will not be until late
2000, at the earliest. Company
management continues to evaluate
the facts of this case, the
result of which are currently not
determinable. This case is
subject to the "contingent
consideration" provisions of the
MFSNT acquisition agreements, and
together with all such claims is
reserved at $5.0 million.
Additionally, the Company has
reserved for all potential
damages through the job and/or
purchase accounting.
------------------------------------------------------------------------------------------------------------------------------
14. ALLSTATE V. MFS NETWORK no counsel - - -
TECHNOLOGIES - Subrogation matter
that has been turned over to our
insurance company with no
deductible.
------------------------------------------------------------------------------------------------------------------------------
15. XXXX XXXXXX V. ABLE - Former Xxxxxx, Xxxxxxxx & - $10,000 -
employee suing for breach of Xxxxxxxxxx, PA
oral contract. Company
believes case has no merit.
------------------------------------------------------------------------------------------------------------------------------
16. XXXXXXX V. MARS - $350,000 - -
Indemnification under agreement
with Mars. Plaintiff is suing
Mars for personal injury.
Plaintiff was formerly an Able
employee. Case has been mediated
unsuccessfully. Due for trial
March 2000.
------------------------------------------------------------------------------------------------------------------------------
17. CENTRAL LOCATING SERVICE V. Xxxxxx, Xxxxxxxx & - $20,000 -
Dial - Monies due under Xxxxxxxxxx, PA
contract Dial has valid
counterclaim for poor services.
------------------------------------------------------------------------------------------------------------------------------
18. XXXXXX XXXXXXXXX V. DIAL - Hurley, Rogner, $35,000 - -
Workers' Compensation claim. Xxxxxx, Xxx &
Waranch, P.A.
------------------------------------------------------------------------------------------------------------------------------
19. XXXXX V. ABLE - EEOC action no counsel - - -
against Able. Former employee
claims age discrimination.
Company believes there is zero
likelihood of Plaintiff
prevailing.
------------------------------------------------------------------------------------------------------------------------------
20. XXX XXXXX XXXXXXXXX V. ABLE - Paul, Hastings, - - -
Suit by Shareholder that may Xxxxxxxx & Xxxxxx,
become class certified. LLP
Company believes suit has no
merit.
------------------------------------------------------------------------------------------------------------------------------
21. XXXXXX AND XXXX XXXXXXXXX V. no counsel - - -
X.X. XXXXXXX - motor vehicle
accident, fully insured
------------------------------------------------------------------------------------------------------------------------------
22. XXXXX XXXXX X. XXXXXXX & GEC - Xxxxxxxx & Xxxxxxxx - - -
GEC should RECEIVE $30,000 on
countersuit for property damage.
------------------------------------------------------------------------------------------------------------------------------
23. XXXXXXX XXXXXXXX V. AT&P - Debbeld, Xxxxxxx & - - -
Workers' Compensation, it Sage, P.A.
appears that the Company has
paid out full deductible. Any
further exposure would be that
of the insurance company.
------------------------------------------------------------------------------------------------------------------------------
24. GAINESVILLE REGIONAL UTILITIES no counsel $50,000 - -
V. DIAL - contract/negligence
action. The Company has a
$50,000 deductible.
------------------------------------------------------------------------------------------------------------------------------
25. XXXX X. XXXXXX TIRE - Workers' Cannon, Meyer von - - $100,000
Compensation case against Bremen & Xxxx
Xxxxxx Tire, small likelihood of
recovery.
------------------------------------------------------------------------------------------------------------------------------
26. XXXXX, KETCHEV - claim for Xxxxxxx, Xxxxx & - - -
legal services as 3rd party. Xxxxxxxxx, LLP
Able has denied claim. It
appears that statue has run.
$0.00 factor.
------------------------------------------------------------------------------------------------------------------------------
27. XXXXX X. XXXXXX & DIAL - Xxxxx X. Xxxxxx, - - -
Automobile negligence case. It Esq.
appears the Company has full
coverage.
------------------------------------------------------------------------------------------------------------------------------
28. XXXXXXX V. MFS NETWORK Lester, Schwab, - - -
TECHNOLOGIES - slip and fall Katy & Xxxxx
case, fully insured.
------------------------------------------------------------------------------------------------------------------------------
29. XXXXXX X. XXXX - sexual - - -
harassment case, because of
timing it appears that
Plaintiff has gone away.
------------------------------------------------------------------------------------------------------------------------------
40
------------------------------------------------------------------------------------------------------------------------------
30. OXFORD X. XXXXXXXX & MFS Paul, Hastings, - - -
NETWORK TECHNOLOGIES - "right Xxxxxxxx & Xxxxxx,
of ways" case, has far reaching LLP
negative potential for
Xxxxxxxx/WorldCom. It appears
that Able, as a subcontractor
has no exposure.
------------------------------------------------------------------------------------------------------------------------------
31. XXXXXXXX XXXXXXXX X. XXXX - Xxxxx, Hood & - $10,000 -
motor vehicle accident, full Xxxxxxx
insurance coverage less the
deductible.
------------------------------------------------------------------------------------------------------------------------------
32. XXXXXXX XXXXX V. H.C. XXXXXXX - Xxxxxx & Rushmer - $5,000 -
motor vehicle accident.
------------------------------------------------------------------------------------------------------------------------------
33. PYSCA V. MFS NETWORK Xxxxxxx, Xxxxx & - - -
TECHNOLOGIES - breach of Xxxxxxxxx, LLP
contract, no idea of range of
potential.
------------------------------------------------------------------------------------------------------------------------------
34. XXXX XXXXX V. MFS NETWORK Xxxxxxxx X. Xxxxx - $25,000 -
TECHNOLOGIES - motor vehicle
accident in California, $1
million policy with $25,000
deductible.
------------------------------------------------------------------------------------------------------------------------------
35. SOUTHWEST GAS CORP. V. MFS - - -
NETWORK TECHNOLOGIES - gas line
hit and damaged during boring.
Gas leaked into a building
resulting in an explosion. Able's
subcontractor has tendered a
defense through their carrier /
unknown potential.
------------------------------------------------------------------------------------------------------------------------------
36. J'XXX XXXXX V. WORLDCOM - case - - -
against WorldCom
(pre-acquisition) by employee
for breach of employment
contract. To date we have not
been brought into the case.
Records have been subpoenaed and
subpoenas have been complied
with. It would appear that the
Company has no exposure in this
case.
------------------------------------------------------------------------------------------------------------------------------
37. SPITZ V. MFS - Subrogation $5,740 - -
matter.
------------------------------------------------------------------------------------------------------------------------------
38. THORNTON V. AT&P - Slip & fall - - -
case. It appears that Able has
full insurance coverage. The
case originally filed against
Florida Power, Able is brought
in under rights of
indemnification.
------------------------------------------------------------------------------------------------------------------------------
39. WHAT-A-BORE V. DIAL - contract Monts & Xxxx, LLP - - -
case. Dial paid the monies
being sought directly to the
town of Xxxxxxxx, FL at the
request/demand of Xxxxxxxx.
What-a-Bore, as our
subcontractor, had damage water
and sewer lines. Counsel believes
that Able can "set off" payments
to the town against Plaintiff's
claim which will basically cause
a wash.
------------------------------------------------------------------------------------------------------------------------------
40. XXXXXXXXX XXXXXXX V. TSCI - Luks, Koleos & $40,000 - -
motor vehicle accident for Xxxxxxxxxxx
which it appears the Company is
clearly liable, insurance
coverage with CNA is $1
million. It would appear the
Company stands exposed for
between $25,000 - $40,000
including legal fees.
------------------------------------------------------------------------------------------------------------------------------
41. GASH ELECTRIC V. MFS NETWORK Xxxxxxx, Xxxxx & - - -
TECHNOLOGIES Xxxxxxxxx, LLP
------------------------------------------------------------------------------------------------------------------------------
42. XXXXXXX XXXXXX X. XXXX - - - $20,000
personal injury liability case
in which the Company seriously
questions liability. Worst
case scenario should settle for
much less than the $50,000
deductible. To date the
Company has denied liability
and has turned the case over to
the insurance carrier.
------------------------------------------------------------------------------------------------------------------------------
43. WISCONSIN CENTRAL V. MFS Fraser, Stryker, - - -
NETWORK TECHNOLOGIES - We have Vaughn, Meusey,
little
------------------------------------------------------------------------------------------------------------------------------
41
------------------------------------------------------------------------------------------------------------------------------
information on this case other Xxxxx, Xxxxx &
than it is being handled Bloch, P.C.
through Xxxx Xxxxx'x office in
Omaha.
------------------------------------------------------------------------------------------------------------------------------
44. XXXXXX XXXXX V. ABLE - XxXxxxxxxxxxx, $20,000 - -
Workers' Compensation case, Duffy, Coonrod,
$100,000 deductible. Xxxx & Xxxxxx, P.A.
------------------------------------------------------------------------------------------------------------------------------
45. XXXXXXXX XXXX V. MFS NETWORK Donohue, Sabo, - - -
TECHNOLOGIES - wrongful death Xxxxxx &
occurring February 4, 1998 in a Xxxxxxxxx, P.C.
negligence case. This matter
should be covered under
WorldCom policies which total
$2 million.
------------------------------------------------------------------------------------------------------------------------------
46. XXXXXX XXXX V. GEC - negligence - - -
action with a claim of a backed
up sewer into a house and a cut
finger leading to infection.
Turned case over to the insurance
company. The company has full
coverage and will probably not
even have to pay the deductible
in this matter.
------------------------------------------------------------------------------------------------------------------------------
47. XXXX XXXXXXX V. MFS - motor
vehicle accident with negligence
claim originally served upon
WorldCom in October 1999 and sent
to the Company by certified mail
on January 10, 2000. Forwarded to
Allied on January 14, 2000. It is
for an injury that happened on
June 29, 1998. The Company is
waiting for word from Xxxxx
Xxxxxx.
------------------------------------------------------------------------------------------------------------------------------
TOTAL 500,740.00 255,000.00 120,000.00
------------------------------------------------------------------------------------------------------------------------------
42
SCHEDULE 2.1(AA)
CERTAIN PROPERTY ENCUMBRANCES
All property is encumbered under a security agreement for a $35 million credit
facility outstanding to NationsBank.
43
SCHEDULE 2.1(BB)
CERTAIN EVENTS OF DEFAULT
The Company has been informed that certain events of default may exist under the
credit facility shown in Schedule 2.1(aa).
44
SCHEDULE 3.9
PERMITTED TRANSACTIONS
1. Transactions between the Company and (i) MCI WorldCom, Inc. and
WorldCom Network Services, Inc.; (ii) Triarc Companies, Inc.; or (iii)
Foothill Capital Corporation, and/or Messrs. Xxxxx, May and Packer, or
any affiliate of any of them.
2. Strategic investments in the Company or a subsidiary by an industry
joint venture partner, industry supplier, or a customer thereof.
3. A public or private secondary offering with net proceeds to the Company
of at least $20 million.
45
SCHEDULE 3.13
PERMITTED STOCK OPTION TRANSACTIONS
1. Transactions between the Company and (i) MCI WorldCom, Inc. and
WorldCom Network Services, Inc.; (ii) Triarc Companies, Inc.; or (iii)
Foothill Capital Corporation, and/or Messrs. Xxxxx, May and Packer, or
any affiliate of any of them.
2. Strategic investments in the Company or a subsidiary by an industry
joint venture partner, industry supplier, or a customer thereof.
3. A public or private secondary offering with net proceeds to the Company
of at least $20 million.
46
SCHEDULE 3.18
PERMITTED CONVERTIBLE SECURITY TRANSACTIONS
1. Transactions between the Company and (i) MCI WorldCom, Inc. and
WorldCom Network Services, Inc.; (ii) Triarc Companies, Inc.; or (iii)
Foothill Capital Corporation, and/or Messrs. Xxxxx, May and Packer, or
any affiliate of any of them.
2. Strategic investments in the Company or a subsidiary by an industry
joint venture partner, industry supplier, or a customer thereof.
3. A public or private secondary offering with net proceeds to the Company
of at least $20 million.
47
EXHIBIT 1.1A
FORM OF ARTICLES OF AMENDMENT
48
EXHIBIT 1.1B
FORM OF WARRANT
49
EXHIBIT 2.1(A)
LIST OF SUBSIDIARIES
Able ICP, Inc. (100%)
Able Telcom, C.A. (80%)
Able Telcom Do Brasil, LTDA (99.9%)
Able Telcom International, Inc. (100%)
Able Wireless, Inc. (100%)
Able Telecommunications & Power, Inc. (100%)
Georgia Electric Company (100%)
MFS Network Technologies, Inc. (100%)
MFS Network Technologies of D.C., Inc. (100%)
MFS Transportation Systems, Inc. (100%)
MFS TransTech, Inc. (80%)
Xxxxxx Management Corp. (100%)
Transportation Safety Contractors, Inc. (100%)
Southern Aluminum & Steel Corp. (100%)
Specialty Electronics Systems, Inc. (100%)
50
EXHIBIT 2.1(C)(I)
CERTIFICATE OF INCORPORATION OF THE COMPANY
51
EXHIBIT 2.1(C)(II)
BY-LAWS OF THE COMPANY
52
EXHIBIT 2.1(R)
OUTSTANDING SECURITIES SUBJECT TO REGISTRATION RIGHTS, ETC.
Xxxxxx Xxxxxxxx 118,286 shares
Shares underlying Series B Preferred Warrants 370,000
Shares underlying Xxxxxxx Warrants 409,505
Shares underlying Series A 62,200
53
EXHIBIT 4.2(E)
OPINION OF COMPANY COUNSEL
54
EXHIBIT 4.2(F)
REGISTRATION RIGHTS AGREEMENT
55
