certain agreements including the Restructuring Agreements.

 

NOW, THEREFORE, in consideration of the premises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties agree as follows:

 

Article I.
DEFINITIONS

 

Section 1.01          Definitions.   The following terms, as used herein, have the following meanings:“ Applicable Law ” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.

 

“ Cash Consideration ” means an amount equal to $6,413,147.21

 

“ Cash Consideration Portion ” means, with respect to each Noteholder, the amount of cash payable to such Noteholder as set forth opposite such Noteholder’s name in Exhibit A .

 

“ Code ” shall have the same meaning as set forth in the Whitebox Loan Agreement.

 

“ Common Stock ” means the Company’s Common Stock as defined in the Certificate of Incorporation, in effect as of the date hereof.

 

“ Contract ” means any contract, agreement, arrangement or understanding, whether written or oral and whether express or implied.

 

“ Daily Regular Interest Amount ” means, with respect to each Noteholder, the amount set forth opposite such Noteholder’s name in Exhibit A .

 

“ Denomination Cash Amount ” means, with respect to each Noteholder, the cash amount payable to such Noteholder at the Closing as set forth opposite such Noteholder’s name on Exhibit A under the title “Denomination Cash Amount” .

 

“ ERISA ” shall have the same meaning as set forth in the Whitebox Loan Agreement.

 

“ GAAP ” means United States generally accepted accounting principles and practices as in effect on the date hereof.

 

“ Global Security ” shall have the meaning assigned to it in the New Indenture.

 

“ Governmental Authority ” means any transnational, domestic or foreign federal, state or local, governmental authority, department, court, agency or official, including any political subdivision thereof.

 

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“ Guarantor ” shall have the meaning set forth in the New Indenture.

 

“ Law ” means any statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or order of any Governmental Authority.

 

“ Lien ” shall have the meaning assigned to it in the New Indenture.

 

“ Losses ” means any losses, damages, liabilities, claims, interest, awards, judgments, penalties, costs and expenses (including reasonable attorneys’ fees, costs and other out-of-pocket expenses incurred in investigating, preparing or defending the foregoing).

 

“ Majority Note holders ” means Noteholders holding, in the aggregate, at least $87,800,000 of the principal amount of the Exchanged Notes.

 

“ Material Adverse Effect ” means a material adverse effect upon any of the conditions (financial or otherwise), business, assets or results of operations of the Company and its Subsidiaries taken as a whole or the ability of the Company to perform any of its obligations under this Agreement; provided, however, that Material Adverse Effect shall exclude any effect resulting or arising from (a) any change in any Applicable Law, (b) any change in economic conditions, (c) any change that is generally applicable to the industries in which the Company or any of its Subsidiaries operates, (d) any national or international political event or occurrence, including acts of war or terrorism, (e) the announcement of this Agreement and the consummation of the transactions contemplated hereby, provided that, with respect to clauses (a), (b), (c) and (d), the impact of such effect is not disproportionately adverse to the Company and its Subsidiaries taken as a whole.

 

“ New Common Stock ” means the shares of Common Stock to be issued to Noteholders under the terms hereunder.

 

“ New Common Stock Amount ” means 174,493,231shares of New Common Stock.

 

“ New Common Stock Consideration ” means, with respect to each Noteholder, the amount of New Common Stock to be issued to such Noteholder as specified opposite such Noteholder’s name in Exhibit C-1 .

 

“ New Convertible Notes ” means the 8% Convertible Second Lien Debentures due 2014, issued by the Company pursuant to the New Indenture.

 

“ New Convertible Notes Consideration ” means, with respect to each Noteholder, the principal amount of New Convertible Notes to be issued to such Noteholder as specified opposite such Noteholder’s name on Exhibit C-2 .

 

“ New Indenture ” means the Indenture governing the New Convertible Notes.

 

“ Non-Participating Notes Amount ” means $3,586,852.80

 

“ New Securities ” means the New Common Stock, New Convertible Notes and the Preferred Stock.

 

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“ Other Transactions ” means the transactions specifically described in the Restructuring Agreements, other than those contemplated by this Agreement.

 

“ Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.

 

“ Plan ” shall have the same meaning as set forth in the Whitebox Loan Agreement.

 

“ Preferred Stock ” means the Series B Participating Non-Cumulative Convertible Preferred Stock of the Company having the rights and preferences set forth in the Certificate of Designations attached hereto as Exhibit B .

 

“ Preferred Stock Consideration ” means, with respect to each Noteholder listed on Exhibit C-3 , the amount of shares of Preferred Stock set forth opposite such Noteholder’s name in Exhibit C-3 .

 

“ Real Estate Lease ” means leases, including ground leases and space leases, pursuant to which the Company or any of its Subsidiaries leases or subleases any real property.

 

“ Regular Interest Payment ” means, with respect to each Noteholder, an amount equal to the product of (i) such Noteholder’s Daily Regular Interest Amount times the number of days from October 16, 2009 (inclusive) through the date hereof (inclusive).

 

“ Reportable Event ” shall have the same meaning as set forth in the Whitebox Loan Agreement.

 

“ Restructuring Agreements ” means the New Indenture, the Second Lien Security Documents (as defined in the New Indenture), and the Intercreditor Agreement (as defined in the New Indenture).

 

“ Rights Agreement ” means the Rights Agreement between the Company and EquiServe Trust Company, N.A., as Rights Agent, dated as of March 3, 2003 as amended, supplemented or restated thereafter).

 

“ Second Lien Security Documents ” shall have the meaning assigned to such term in the Indenture.

 

“ Securities Act ” means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations thereunder as the same shall be in effect at the time.

 

“ Senior Lender ” shall mean the Agent and the lenders under the Whitebox Loan Agreement.

 

“ Senior Lender Paydown Amount ” shall mean an amount equal $5,000,050.00, which amount includes the prepayment fee associated with a $5,000,000 paydown under the amounts due under the Whitebox Loan Agreement.

 

“ Subsidiary ” means, with respect to any Person, any other Person controlled by such

 

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first Person, directly or indirectly, through one or more intermediaries.

 

“ Whitebox Loan Agreement ” means that certain Loan Agreement dated as of August 23, 2007 by and among Whitebox VSC, Ltd, a limited partnership organized under the law of the British Virgin Islands, as agent thereunder (the “ Agent ”), the Company and certain lenders signatory thereto from time to time.

 

“ Total Cash Consideration ” means, with respect to each Noteholder, such Noteholder’s

 

(i)                                      Cash Consideration Portion;

 

(ii)                                   Regular Interest Payment; and

 

(iii)                                Denomination Cash Amount.

 

“ Transfer Agent ” means Computershare Investor Services.

 

“ Trustee ” shall have the meanings assigned to it in the Indenture and the New Indenture.

 

Each of the following terms is defined in the Section set forth opposite such term:

 

Term		Section
Agreement		Preamble
Balance Sheet		4.23
Board		5.03(f)
Bylaws		4.06
Certificate of Incorporation		4.06
Company		Preamble
Core Representation		7.04(a)
Closing		2.02
Closing Date		2.02
Disclosure Schedule		Article IV
DTC		2.03
Exchange		2.01(b)
Exchange Act		4.05(a)
Exchanged Notes		Recitals
Forbearance Agreement		Recitals
Indenture		Recitals
Initial Forbearance Agreement		Recitals
Intellectual Property		4.16
Litigation		4.07
Material Agreements		4.14
New Indenture		1.01
Notes		Recitals
Noteholder(s)		Preamble
Noteholder Indemnified Party		7.04(b)

 

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Original Repurchase Price		Recitals
SEC		Article IV
SEC Reports		Article IV
Trust Indenture Act		4.05(f)
Underlying Shares		6.04

 

Section 1.02          Other Definitional and Interpretative Provisions .  The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified.  All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import.  “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule.  References to any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  References to “law,” “laws” or to a particular statute or law shall be deemed also to include any and all Applicable Law.

 

Article II.
EXCHANGE

 

Section 2.01                             Exchange.

 

(a)           Upon the terms and subject to the conditions of this Agreement, and in express reliance upon such terms and conditions and the representations, warranties and covenants of this Agreement, at the closing (the “ Closing ”) of the Exchange, each Noteholder shall be deemed to have exchanged the Exchanged Notes and the Company shall issue the New Securities and pay the Cash Consideration to the Noteholders (the “ Exchange ”) as follows:

 

(iv)          to each Noteholder, its New Common Stock Consideration;

 

(v)                                  to each Noteholder, its New Convertible Notes Consideration;

 

(vi)                               to each Noteholder listed on Exhibit C-3 , its Preferred Stock Consideration; and

 

(vii)                            to each Noteholder, its Total Cash Consideration. .

 

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(b)           The failure of any Person to perform the actions contemplated by this Agreement (including the failure to deliver any New Securities to the Noteholders in accordance with the terms hereof) shall not impair the rights and obligations of any party under this Agreement, and notwithstanding any such failure, except as specifically set forth in this Agreement, the parties shall endeavor in good faith to consummate the Exchange upon terms as close as practicable to those set forth herein.

 

Section 2.02          Closing .  The Exchange shall take place at a closing (the “ Closing ”), and the Restructuring Agreements shall be released from escrow, to be held at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, NY 10166, at 10:00 a.m., on the first Business Day following the satisfaction or, to the extent permitted by Applicable Law, waiver of all conditions to the obligations of the parties set forth in Article V (other than such conditions as may, by their terms, only be satisfied at the Closing or on the Closing Date), or at such other place or at such other time or on such other date as the Company and the Noteholders mutually may agree in writing.  The day on which the Closing takes place is referred to as the “ Closing Date. ”

 

Section 2.03          Delivery of the New Convertible Notes .  On or prior to the Closing Date, the Company shall deliver to the Trustee a signed Global Security, and the Company and the Noteholders shall deliver to the Trustee a written notice in the form attached hereto as Exhibit G instructing the Trustee to execute the New Indenture and to take such action as may be required to distribute the New Convertible Notes through the facilities of the Depository Trust Company (“ DTC ”) as set forth in Section 2.01 hereof.

 

Section 2.04          Delivery of the New Common Stock .  At the Closing, the Company shall deliver to each of the Noteholders evidence from the DTC that the New Common Stock Consideration to which such Noteholder is entitled in accordance with Section 2.01 has been transferred from the Company’s respective accounts at DTC to the accounts of such Noteholder or its DTC participant in accordance with the terms hereof.

 

Section 2.05          Delivery of the Preferred Stock .  At the Closing, the Company shall deliver to all Noteholders entitled to receive Preferred Stock Consideration, certificates evidencing the amount of shares of Preferred Stock to which such Noteholders are entitled.

 

Article III.
REPRESENTATIONS AND WARRANTIES OF THE
NOTEHOLDER

 

Each Noteholder, separately solely as to itself, and not jointly and severally, represents and warrants to the Company as of the date hereof and as of the Closing Date, that:

 

Section 3.01          Existence .  The Noteholder is duly organized and validly existing under the laws of its jurisdiction of organization.

 

Section 3.02          Authorization .  The execution, delivery and performance by the Noteholder of this Agreement and the consummation of the transactions contemplated hereby are within the Noteholder’s powers and have been duly authorized by all necessary action on the part of the Noteholder.  This Agreement constitutes a valid and binding agreement of the Noteholder.

 

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Section 3.03          Governmental Authorization .  The execution, delivery and performance by the Noteholder of this Agreement and the consummation of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority, by the Noteholder.

 

Section 3.04          Noncontravention .  The execution, delivery and performance by the Noteholder of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the organizational documents of the Noteholder or any Applicable Law binding upon the Noteholder, or (ii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of the Noteholder under any provision of any agreement or other instrument binding upon the Noteholder.

 

Section 3.05          Ownership of Exchanged Notes .  The Noteholder is the beneficial owner of the Exchanged Notes described on Exhibit A opposite such Noteholder’s name.

 

Article IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Noteholder, as of the date hereof, and as of the Closing Date, that, subject in each case to any information set forth in the appropriate section of the disclosure schedule of the Company accompanying this Agreement and made a part hereof (the “ Disclosure Schedule ”), and the disclosure of any item in reasonable detail in the Company’s  reports on the following forms filed with the Securities and Exchange Commission (the “ SEC ”) since January 1, 2008 (the “ SEC Reports ”) (other than cautionary or hypothetical disclosures in any “Risk Factors” or any other similar sections that are predictive or forward-looking in nature): the Company’s Annual Report on form 10-K, the Company’s Quarterly Reports on form 10-Q and the Company’s Current Reports on form 8-K, which shall constitute disclosure or, as applicable, exclusion of that item for the Disclosure Schedule where the relevance of that item as an exception to (or a disclosure for the purposes of) the applicable representations and warranties and covenants is reasonably apparent to a third person who is not familiar with the Company.

 

Section 4.01          Corporate Existence; Good Standing .  The Company, and each of its Subsidiaries, is a corporation duly incorporated, validly existing and in good standing under the laws of the incorporation and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted.  The Company, and each of its Subsidiaries, is duly qualified or licensed 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 or licensing necessary, except where the failure to be so qualified or licensed would not have a Material Adverse Effect.

 

Section 4.02          Corporate Authorization .  The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby: (i) are within the corporate powers of the Company, (ii) have been duly authorized by all necessary action on the part of the Company and (iii) as of the Closing will not violate any other agreement to which the Company is a party or its assets bound, which violation could reasonably

 

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be expected to result in a Material Adverse Effect.  This Agreement, the Restructuring Agreements and the New Convertible Notes, each constitute a valid and binding agreement or obligation of the Company, enforceable against the Company in accordance with their terms.

 

Section 4.03          Governmental Authorization .  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority is required on the part of the Company to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, this Agreement, except for any necessary filing or recordation of or with respect to any of the New Securities.  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority is required on the part of any Subsidiary to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, the New Securities to which it is a party, except for any necessary filing or recordation of or with respect to any of the Restructuring Agreements.

 

Section 4.04          Noncontravention .  The execution, delivery and performance by the Company of this Agreement will not (a) violate any provision of any Applicable Law, (b) violate or contravene any provision of the Certificate of Incorporation or bylaws of the Company, or (c) result in a breach of or constitute a default under any indenture, loan or credit agreement or any other agreement, lease or instrument to which the Company is a party or by which it or any of its properties may be bound or result in the creation of any Lien thereunder.  The execution, delivery and performance by each Subsidiary of the Restructuring Agreement to which it is a party will not (a) violate any provision of any Applicable Law, (b) violate or contravene any provision of the organizational documents of such Subsidiary, or (c) result in a breach of or constitute a default under any indenture, loan or credit agreement or any other agreement, lease or instrument to which such Subsidiary is a party or by which it or any of its properties may be bound or result in the creation of any Lien thereunder.  Except as set forth in Section 4.04 of the Disclosure Schedule, neither the Company nor any Subsidiary is in default under or in violation of any such Applicable Law or any such indenture, loan or credit agreement or other agreement, lease or instrument in any case in which the consequences of such default or violation could reasonably be expected to constitute a Material Adverse Effect.

 

Section 4.05                             Capitalization; Issuance; Registration Exemption.

 

(a)           The authorized capital stock of the Company is 500,000,000 shares designated as Common Stock, of which 230,905,580 are issued and outstanding immediately prior to the Closing.  Section 4.05 of the Disclosure Schedule sets forth a complete and accurate option capitalization table identifying the number of warrants and options to acquire capital stock of the Company and the exercise price thereof.  There are no accrued but unpaid dividends or other distributions payable on the capital stock of the Company.  All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and were not issued in violation of, and are not subject to, any preemptive or similar rights.  The Company has not issued any preferred stock.  The Company has not issued Common Stock, options, restricted stock or securities convertible into or exchangeable for Common Stock since October 1, 2009 through the date hereof.  As of the Closing Date, assuming immediate conversion of the Preferred Stock, the New Common Stock and the shares of

 

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Common Stock issuable upon conversion of the Preferred Stock, will in the aggregate constitute approximately 51.99% of the then issued and outstanding shares of Common Stock.

 

(b)           At the time of Closing, Company will have sufficient shares of unreserved and unrestricted Common Stock to allow the issuance of the New Common Stock, and the conversion of the Preferred Stock.

 

(c)           Upon issuance in accordance with the terms hereof, the New Common Stock and the Preferred Stock will (i) have been duly authorized by all necessary corporate action, (ii) be validly issued and outstanding, fully paid and non-assessable, free of restrictions on transfer; and each Noteholder shall receive good, valid and marketable title to their respective shares of New Common Stock and Preferred Stock, if any, delivered to such Noteholder hereunder, free and clear of any Lien.

 

(d)           Upon issuance in accordance with the terms hereof and authenticated by the Trustee, the New Convertible Notes will be (i) valid and binding obligations of the Company, enforceable in accordance with their respective terms, (ii) entitled to the benefits of the New Indenture, and (iii) free of restrictions on transfer; and each Noteholder shall receive good, valid and marketable title to their respective New Convertible Notes delivered to such Noteholder hereunder, free and clear of any Lien.

 

(e)           The shares of common stock issuable upon conversion of the Preferred Stock (the “ Underlying Shares” ) have been duly authorized for issuance by all necessary corporate action, and upon the issuance of the Underlying Shares upon conversion of the Preferred Stock will be validly issued and outstanding, fully paid and non-assessable, free of restrictions on transfer; and each converting holder shall receive good, valid and marketable title to their respective amount of Underlying Shares delivered to such converting holder, free and clear of any Lien.

 

(f)            Upon obtaining stockholder approval of an amendment to the Company’s certificate of incorporation to authorize additional shares of common stock, the shares of common stock issuable upon conversion of the New Convertible Notes will have been duly authorized for issuance by all necessary corporate action, and upon the issuance of such shares upon conversion of the New Convertible Notes will be validly issued and outstanding, fully paid and non-assessable, free of restrictions on transfer; and each converting holder shall receive good, valid and marketable title to their respective amount of such shares delivered to such converting holder, free and clear of any Lien.

 

(g)           The exchange of the Exchanged Notes for the New Securities and the issuance of the New Common Stock, the Preferred Stock and the New Convertible Notes will not trigger any preemptive rights or any other similar rights of any party to purchase or receive shares of capital stock or rights with respect thereof.  The Company has amended the Rights Agreement as of the date hereof so that the entry into this Agreement and the transactions contemplated hereby do not trigger any rights under the Rights Agreement and so that the Rights Agreement will terminate as of the Closing Date (the “ Rights Agreement Amendment” ).

 

(h)           The exchange of the Exchanged Notes for the New Securities is being consummated pursuant to Sections 3(a)(9) and Rule 149 of the Securities Act.  The Company has not engaged in any general solicitation or engaged or agreed to compensate any broker or agent to solicit any exchanges of securities contemplated by this Agreement.  None of the Company, its Subsidiaries,

 

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any of their affiliates, and any person acting on 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 any of the New Securities under the Securities Act or cause the exchange contemplated hereunder to be integrated with prior offerings by the Company for purposes of Securities Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated.  None of the Company, its subsidiaries, their affiliates and any person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of any of the New Securities under the Securities Act or cause the exchange of the New Securities to be integrated with other offerings.

 

(i)             The Company has taken all necessary action to comply in all material respects with the requirements of the Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”), in connection with the New Indenture and to ensure that the New Convertible Notes will be DTC eligible.

 

(j)             The Company is current in