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Warrants to Purchase Shares of Common Stock

 

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Title:

Warrants to Purchase Shares of Common Stock

Entities:

e.spire Communications Inc.; First Union National Bank; Goldman Sachs Credit Partners LP; Honeywell International Inc.; Huff William R ; Bank of New York; Davis Polk & Wardwell

Date:

2000

Size:

Preview shows 9KB of 105KB total

Price:

$42

ID:

#2099971

 

 

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                  e.spire COMMUNICATIONS, INC.Units consisting of

Series A Convertible Preferred Stock
and
Warrants to Purchase Shares of Common Stock

PURCHASE AGREEMENT
March 1, 2000
To: The Huff Alternative Income Fund, L.P.
1776 On The Green
67 Park Place
Morristown, New Jersey 07960


Ladies and Gentlemen:

e.spire COMMUNICATIONS, INC. (the "Company"), a
Delaware corporation, hereby confirms its agreement with THE HUFF
ALTERNATIVE INCOME FUND, L.P. (the "Purchaser"), a Delaware
limited partnership, as set forth below.
1. The Securities. Subject to the terms and
conditions herein contained, the Company hereby agrees to issue
and sell to the Purchaser and the Purchaser hereby agrees to
purchase from the Company up to an aggregate of 100,000 Units
(hereinafter defined) at a price of $1,000 per Unit (or $792.29
per share of Preferred Stock (hereinafter defined) and $207.71
per Warrant (hereinafter defined)) for an aggregate purchase
price of $100 million. Each Unit shall consist of one (1) share
of Series A Convertible Preferred Stock of the Company par value
$1.00 per share (collectively, the "Preferred Stock"), each share
of which Preferred Stock is initially convertible into 126.42225
shares of the common stock, par value $.01 per share (the "Common
Stock") of the Company at a conversion price of $7.91 per share,
subject to adjustment as provided in the Transaction Documents
(hereinafter defined) and one (1) Warrant in the form attached as
Exhibit A hereto (collectively, the "Warrants," and, together
with the Preferred Stock, the "Units"), each of which Warrants is
initially exercisable to purchase 44.1 shares (the "Warrant
Shares") of the Common Stock at an exercise price of $9.89 per
share, subject to adjustment as provided in Section 6(d) and as
provided in the Warrant Agreement (hereinafter defined). The
Preferred Stock shall upon issuance have the rights and
preferences set forth in the Certificate of Designation
("Certificate of Designation") attached hereto as Exhibit B. The
Units, the Preferred Stock and the Warrants are herein
collectively referred to as the "Securities."
The Securities will be offered and sold to the
Purchaser without being registered under the Securities Act of
1933, as amended (the "Act"), in reliance upon one or more
exemptions therefrom.
The Purchaser and the direct and indirect transferees
of the Securities will be entitled to the benefits of (i) the
Registration Rights Agreement substantially in the form attached
hereto as Exhibit C (the "Registration Rights Agreement"), among
the Company, the Purchaser and the other signatories thereto,
which will require the Company, among other things, to file with
the Securities and Exchange Commission (the "Commission") a shelf
registration statement (the "Registration Statement") pursuant to
Rule 415 under the Act relating to the resale of the Preferred
Stock and shares of Common Stock issuable in connection with the
conversion thereof (collectively, the "Conversion Shares" and,
together with the Warrant Shares and the Additional Warrant
Shares (hereinafter defined), the "Additional Securities") and to
use its reasonable best efforts to cause such registration
statement to be declared and remain effective in accordance
therewith and (ii) the Warrant Agreement among the Company, the
Purchaser and other signatories thereto substantially in the form
attached hereto as Exhibit D (the "Warrant Agreement") which will
require the Company, among other things, to file with the
Commission a registration statement (the "Warrant Registration
Statement") pursuant to Rule 415 under the Securities Act
relating to the resale of the Warrants and Warrant Shares and to
use its reasonable best efforts to cause such registration
statement to be declared and remain effective in accordance
therewith.

This purchase agreement (the "Agreement"), the
Certificate of Designation, the Warrant Agreement and related
Warrants and the Registration Rights Agreement are herein
collectively referred to as the "Transaction Documents."
2. Representations and Warranties. The Company
represents and warrants to and agrees with the Purchaser that:

(a) Since January 1, 1999 and to the date of this
Agreement, the Company has filed with the Commission, a Proxy
Statement on Schedule 14A with respect to the Company's 1999
Annual Meeting of Stockholders, the Company's Annual Report on
Form 10-K for the year ended December 31, 1998, the Company's
Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, June 30 and September 30, 1999, respectively, and the
Company's Current Reports on Form 8-K dated February 22, 1999,
July 8, 1999, October 28, 1999, November 1, 1999, December 3,
1999 and February 1, 2000 (including all exhibits to any of such
documents) (collectively the "SEC Reports"), which constitute all
reports, schedules, forms, statements and other documents
required to be filed with the Commission during such period by
the Company. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations of the Commission promulgated
thereunder applicable to the SEC Reports, and none of the SEC
Reports as of such dates contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein, in light of the circumstances under which they
were made, not misleading. Except to the extent that any SEC
Report has been revised or superseded by a later filed SEC
Report, none of the SEC Reports contains any untrue statement of
a material fact or omits to state any 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 consolidated financial statements of
the Company included in the SEC Reports comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the Commission with respect
thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited
consolidated quarterly statements, as permitted by Form 10-Q of
the Commission) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and
fairly present in all materials respects the consolidated
financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended
(subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments).

(b) The Company owns all the issued and outstanding capital
stock or other equity interests of each of its direct and
indirect subsidiaries (the "Subsidiaries"). Each of the Company
and the Subsidiaries is duly incorporated or organized, validly
existing and in good standing as a corporation or a limited
liability company, as the case may be, under the laws of its
jurisdiction of incorporation or organization, with all requisite
corporate or limited liability company power and authority to own
or lease its properties and conduct its business as now

 

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