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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 15, 1999
WORLDPORT COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-25015 84-1127336
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1825 Barrett Lakes Blvd., Suite 100, Kennesaw, Georgia 30144
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(Address of principal executive office) (Zip code)
Registrant's telephone number including area code: (770) 792-8735
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(Former name or former address, if changed since last report)
Exhibit Index on Page __
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ITEM 5. OTHER EVENTS.
On July 15, 1999, The Heico Companies, LLC ("Heico"), completed an
additional $15.0 million equity investment in WorldPort Communications, Inc.
("WorldPort") through (i) the exercise of Heico's option (the "Series C Option")
to purchase 283,206 additional shares of the Company's Series C Convertible
Preferred Stock (the "Series C Stock") for an aggregate purchase price of $10.0
million and (ii) the purchase of 141,603 shares of the Company's newly-created
Series E Convertible Preferred Stock (the "Series E Stock") for an aggregate
purchase price of $5.0 million. In connection with this investment, WorldPort
granted Heico an option (the "Series F Option") to purchase 424,809 shares of
the Company's newly-created Series F Convertible Preferred Stock (the "Series F
Stock") for an aggregate purchase price of $15.0 million.
The Series C Option was granted to Heico pursuant to a Series C
Preferred Stock Purchase Agreement, dated as of December 31, 1998 (the "Series C
Purchase Agreement"), between WorldPort and Heico. As a result of Heico's
exercise of the Series C Option, Heico now owns 1,416,030 shares of Series C
Stock, representing all of the issued and outstanding shares of Series C Stock.
Heico is entitled to 40 votes per share of Series C Stock and is entitled to
vote on all matters submitted to a vote of the stockholders of WorldPort, voting
together with the holders of WorldPort's common stock (the "Common Stock") as a
single class. At Heico's option, it may convert the Series C Stock into Common
Stock at a conversion price of $3.25 per share of Common Stock (i.e., 10.865
shares of Common Stock for each share of Series C Stock). The number of shares
of Common Stock into which the Series C Stock is convertible is subject to
adjustment in certain circumstances, such as stock splits, stock dividends and
recapitalizations. Heico also has certain additional rights with respect to
these shares, including certain demand and piggyback registration rights.
The 141,603 shares of Series E Stock were purchased by Heico pursuant
to a Series E Preferred Stock Purchase Agreement, dated as of July 15, 1999,
between WorldPort and Heico. Such shares represent all of the issued and
outstanding shares of Series E Stock. With respect to the Series E Stock, Heico
is entitled to that number of votes as is equal to the number of shares of
Common Stock into which the Series E Stock could be converted and is entitled to
vote on all matters submitted to a vote of the stockholders of WorldPort, voting
together with the holders of Common Stock as a single class. At Heico's option,
it may convert the Series E Stock into Common Stock at a conversion price of
$3.25 per share of Common Stock (i.e., 10.865 shares of Common Stock for each
share of Series E Stock). The number of shares of Common Stock into which the
Series E Stock is convertible is subject to adjustment in certain circumstances,
such as stock splits, stock dividends and recapitalizations.
Heico was granted the Series F Option pursuant to an Option Agreement,
dated as of July 15, 1999, between WorldPort and Heico. The Series F Option is
exercisable for a three year period from the date of grant. Upon the purchase of
Series F Stock, Heico will be entitled to that number of votes as is equal to
the number of shares of Common Stock into which the Series F Stock could be
converted and will be entitled to vote on all matters submitted to a vote of the
stockholders of
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WorldPort, voting together with the holders of Common Stock as a single class.
At Heico's option, following its purchase of the Series F Stock it may convert
the Series F Stock into Common Stock at a conversion price of $4.00 per share of
Common Stock (i.e., 8.8275 shares of Common Stock for each share of Series F
Stock). The number of shares of Common Stock into which the Series F Stock is
convertible is subject to adjustment in certain circumstances, such as stock
splits, stock dividends and recapitalizations.
WorldPort intends to use the proceeds from this $15.0 million equity
investment for working capital and other general corporate purposes. This
investment satisfied the conditions for the extension of the maturity date of
WorldPort's bridge loan facility to August 18, 1999.
As a result of this additional equity investment, Heico owns directly
approximately 40% of WorldPort's outstanding votes (41.5% if the Series F Option
was exercised in full). By virtue of a Shareholder Agreement, dated as of
December 31, 1998, among Heico, WorldPort and certain stockholders of WorldPort,
Heico currently controls, with respect to certain matters, including
acquisitions, incurrence of debt and the issuance or sale of equity securities,
additional shares of capital stock of the Company representing approximately 31%
of WorldPort's outstanding votes after this investment.
For a complete description of the terms of the transactions described
above, see the Series C Preferred Stock Purchase Agreement, the Shareholder
Agreement (and amendments thereto), the Registration Rights Agreement, the
Series E Preferred Stock Purchase Agreement, the Option Agreement, the
Certificate of Designations, Preferences and Rights of the Series C Convertible
Preferred Stock, the Certificate of Designations, Preferences and Rights of the
Series E Convertible Preferred Stock, and the Certificate of Designations,
Preferences and Rights of the Series F Convertible Preferred Stock which are
attached hereto as exhibits (or incorporated by reference).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
c) Exhibits
Exhibit No. Description
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2.1 Series C Preferred Stock Purchase Agreement, dated
December 31, 1998, by and between The Heico
Companies, LLC and WorldPort Communications, Inc.
(incorporated by reference to Exhibit 2.1 to
WorldPort's Current Report on Form 8-K, dated
December 31, 1998)
2.2 Shareholder Agreement, dated December 31, 1998, by
and among The Heico Companies, LLC, WorldPort
Communications, Inc., Paul A. Moore, Phillip S.
Magiera, Theodore H. Swindells and Maroon Bells
Capital Partners, Inc. (incorporated by reference to
Exhibit 2.2 to WorldPort's Current Report on Form
8-K, dated December 31, 1998)
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2.2(a) Amendment to Shareholder Agreement, dated January 25,
1999, by and among The Heico Companies, LLC,
WorldPort Communications, Inc., Paul A. Moore,
Phillip S. Magiera, Theodore H. Swindells and Maroon
Bells Capital Partners, Inc. (incorporated by
reference to Exhibit 2.2 to WorldPort's Current
Report on Form 8-K, dated January 25, 1999)
2.3 Registration Rights Agreement, dated December 31,
1998, by and between The Heico Companies, LLC and
WorldPort Communications, Inc. (incorporated by
reference to Exhibit 2.3 to WorldPort's Current
Report on Form 8-K, dated December 31, 1998)
2.4 Series E Preferred Stock Purchase Agreement, dated
July 15, 1999, by and between The Heico Companies,
LLC and WorldPort Communications, Inc.
2.5 Option Agreement, dated July 15, 1999, by and between
The Heico Companies, LLC and WorldPort
Communications, Inc.
4.1 Certificate of Designations, Preferences and Rights
of Series C Convertible Preferred Stock of WorldPort
Communications, Inc. (incorporated by reference to
Exhibit 4.1 to WorldPort's Current Report on Form
8-K, dated December 31, 1998)
4.2 Certificate of Designations, Preferences and Rights
of Series E Convertible Preferred Stock of WorldPort
Communications, Inc.
4.3 Certificate of Designations, Preferences and Rights
of Series F Convertible Preferred Stock of WorldPort
Communications, Inc.
99.1 Press Release dated July 15, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WORLDPORT COMMUNICATIONS, INC.
By:/s/ Carl Grivner
---------------------------------
Name: Carl Grivner
Title: Chairman, President and Chief Executive Officer
Dated: August 10, 1999
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EXHIBIT INDEX
Exhibit No. Description Page No.
2.1 Series C Preferred Stock Purchase Agreement, dated December
31, 1998, by and between The Heico Companies, LLC and
WorldPort Communications, Inc. (incorporated by reference to
Exhibit 2.1 to WorldPort's Current Report on Form 8-K, dated
December 31, 1998)
2.2 Shareholder Agreement, dated December 31, 1998, by and among
The Heico Companies, LLC, WorldPort Communications, Inc., Paul
A. Moore, Phillip S. Magiera, Theodore H. Swindells and Maroon
Bells Capital Partners, Inc. (incorporated by reference to
Exhibit 2.2 to WorldPort's Current Report on Form 8-K, dated
December 31, 1998)
2.2(a) Amendment to Shareholder Agreement, dated January 25, 1999, by
and among The Heico Companies, LLC, WorldPort Communications,
Inc., Paul A. Moore, Phillip S. Magiera, Theodore H. Swindells
and Maroon Bells Capital Partners, Inc. (incorporated by
reference to Exhibit 2.2 to WorldPort's Current Report on Form
8-K, dated January 25, 1999)
2.3 Registration Rights Agreement, dated December 31, 1998, by and
between The Heico Companies, LLC and WorldPort Communications,
Inc. (incorporated by reference to Exhibit 2.3 to WorldPort's
Current Report on Form 8-K, dated December 31, 1998)
2.4 Series E Preferred Stock Purchase Agreement, dated July 15,
1999, by and between The Heico Companies, LLC and WorldPort
Communications, Inc.
2.5 Option Agreement, dated July 15, 1999, by and between The
Heico Companies, LLC and WorldPort Communications, Inc.
4.1 Certificate of Designations, Preferences and Rights of Series
C Convertible Preferred Stock of WorldPort Communications,
Inc. (incorporated by reference to Exhibit 4.1 to WorldPort's
Current Report on Form 8-K, dated December 31, 1998)
4.2 Certificate of Designations, Preferences and Rights of
Series E
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Convertible Preferred Stock of WorldPort Communications, Inc.
4.3 Certificate of Designations, Preferences and Rights of
Series F Convertible Preferred Stock of WorldPort
Communications, Inc.
99.1 Press Release dated July 15, 1999
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EXHIBIT 2.4
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES E PREFERRED STOCK PURCHASE AGREEMENT is dated as of July
15, 1999, by and between WORLDPORT COMMUNICATIONS, INC., a Delaware corporation
(the "Company"), and THE HEICO COMPANIES, LLC (the "Shareholder").
WHEREAS, the Shareholder desires to purchase from the Company, and the
Company desires to issue and sell to the Shareholder, 141,603 shares of Series E
Convertible Preferred Stock, par value $0.0001 per share (the "Series E
Preferred Stock"), of the Company.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
SECTION 1
SUBSCRIPTION FOR SHARES
Section 1.1 Subscription Agreement. Subject to the terms and conditions
of this Agreement, the Shareholder hereby irrevocably subscribes for 141,603
shares of Series E Preferred Stock (the "Shares"), at a price of $35.31 per
share payable in cash on the date hereof. The Shares shall be subject to the
terms and conditions of a Voting Restrictions Agreement between the Company and
the Shareholder (the "Voting Restrictions Agreement"), if and when such
agreement is executed and delivered by the parties thereto.
Section 1.2 Delivery of Certificates. Upon receipt of the aggregate
purchase price for the Shares, the Company shall deliver to the Shareholder a
duly executed certificate representing the Shares registered in its name and
imprinted with the legends referred to in Section 3.4.
SECTION 2
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
The Company represents and warrants to, and agrees with, the
Shareholder as follows:
Section 2.1 Organization And Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Company has the requisite legal and corporate power to
own all the properties owned by it, and to conduct its business as presently
being and as proposed to be conducted by it.
Section 2.2 Corporate Power. The Company has all requisite legal and
corporate power to enter into this Agreement, to issue and sell the Shares and
the shares of common stock, par value $0.0001 per share (the "Common Stock"), of
the Company issuable upon conversion of the Shares and to carry out and perform
its obligations under the terms of this Agreement.
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Section 2.3 Authorization. All corporate action on the part of the
Company necessary for the authorization, execution, delivery and performance by
the Company of this Agreement and the consummation of the transactions
contemplated hereby, and for the authorization, issuance and delivery of the
Shares, has been taken. This Agreement has been duly executed and delivered and
is the legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.
Section 2.4 Validity of Shares. The Shares, when issued, sold and
delivered in accordance with the terms of this Agreement, will be duly and
validly issued, fully paid and non-assessable, will be free and clear of all
liens, charges, claims and encumbrances and will not be subject to any
preemptive rights (other than any created by the Shareholder). The Common Stock
issuable upon conversion of the Shares has been duly and validly reserved and,
upon issuance in accordance with the conversion provisions of the Shares, will
be duly and validly issued, fully paid, non-assessable and free and clear of all
liens, charges, claims and encumbrances (other than any created by the
Shareholder).
Section 2.5 Capitalization. As of June 30, 1999, the Company's
authorized capital stock consisted of 65,000,000 shares of Common Stock and
10,000,000 shares of Preferred Stock, of which (i) 750,000 shares have been
designated Series A Preferred Stock, (ii) 3,000,000 shares have been designated
Series B Convertible Preferred Stock, and (iii) 1,450,000 shares have been
designated Series C Convertible Preferred Stock. As of June 30, 1999, the only
shares of capital stock of the Company issued and outstanding, reserved for
issuance or committed to be issued were:
(a) 25,427,140 fully paid and non-assessable shares of Common
Stock, duly issued and outstanding;
(b) 81,944 fully paid and non-assessable shares of Series A
Preferred Stock, duly issued and outstanding;
(c) 1,535,648 fully paid and non-assessable shares of Series B
Convertible Preferred Stock, duly issued and outstanding;
(d) 1,132,824 fully paid and non-assessable shares of Series C
Convertible Preferred Stock, duly issued and outstanding;
(e) 283,206 shares of Series C Convertible Preferred Stock
reserved for issuance upon exercise of an option held by the Shareholder (the
"Series C Option");
(f) shares of non-participating preferred stock of the Company
having an aggregate liquidation value of $1,029,994 and convertible into Common
Stock at $3.25 per share
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which the Company was committed to issue under that certain Termination
Agreement, dated as of December 31, 1998, between the Company and Maroon Bells
Capital Partners, Inc. (including the shares of Common Stock issuable upon
conversion thereof);
(g) 81,944 shares of Common Stock reserved for issuance upon
conversion of the Series A Preferred Stock;
(h) 6,142,592 shares of Common Stock reserved for issuance
upon conversion of the Series B Convertible Preferred Stock;
(i) 15,385,166 shares of Common Stock reserved for issuance
upon conversion of the Series C Convertible Preferred Stock (including those
shares of Series C Convertible Preferred Stock issuable upon exercise of the
Series C Option); and
(j) 11,628,430 shares of Common Stock reserved for issuance
upon exercise of outstanding options and warrants.
Except as set forth in this Section 2.5, as of June 30, 1999, there were no
outstanding securities of the Company which are convertible into or exchangeable
for any shares of the Company's capital stock or contain any capital
appreciation or profit participation features, there was no existing contract,
option, warrant, call or other commitment or right of any character granted or
issued by the Company calling for or relating to the issuance or transfer of
shares of capital stock or any other securities of the Company and there were no
stock appreciation rights or phantom stock plans.
Section 2.6 Consents. Subject in part to the truth and accuracy of the
representations of the Shareholder set forth in this Agreement, and except as
disclosed in the Disclosure Schedule attached hereto, all consents, approvals,
qualifications, orders or authorizations of, or filings with, any governmental
authority, including state securities or Blue Sky offices, required prior to the
sale of the Shares pursuant to this Agreement, the consummation of the
transactions contemplated by this Agreement, the consummation of the transaction
contemplated by the Option Agreement dated as of the date hereof between the
Company and the Shareholder, and the Voting Restrictions Agreement
(collectively, the "Related Agreements"), the conversion of the Shares, and the
issuance of the Common Stock issuable upon conversion of the Shares have been
obtained or made.
Section 2.7 Offering. Subject in part to the truth and accuracy of the
representations of the Shareholder set forth in this Agreement, the offer, sale
and issuance of the Shares and the issuance of the Common Stock issuable upon
conversion of the Shares as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the securities laws of the State of Illinois.
Section 2.8 No Violation. The execution and delivery of this Agreement
and the Related Agreements, the consummation of the transactions provided for
herein and therein or contemplated hereby and thereby, and the fulfillment by
the Company of the terms hereof or thereof, will not (a)
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conflict with or result in a breach of any provision of the certificate of
incorporation or by-laws (or other organizational documents) of the Company, (b)
except as set forth in Disclosure Schedule attached hereto, to the Company's
knowledge, result in a material default or material breach, give rise to any
right of termination, cancellation or acceleration, or require any consent,
approval, authorization or permit of, or filing or notification to, any
governmental authority, any court or tribunal or any other person, company or
entity under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, loan, factoring arrangement, license, agreement, lease or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company, any subsidiary or any of their assets may be
bound or (c) violate any law, judgment, order, writ, injunction, decree,
statute, rule or regulation of any court, administrative agency, bureau, board,
commission, office, authority, department or other governmental entity
applicable to the Company, any subsidiary or any of their assets.
SECTION 3
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
SHAREHOLDER
The Shareholder represents and warrants to, and agrees with, the
Company as follows:
Section 3.1 Organization, Good Standing And Qualification. The
Shareholder is a limited liability company duly organized, validly existing and
in good standing under the laws of the state of its organization and has all
requisite power and authority to carry on its business as now conducted and as
proposed to be conducted.
Section 3.2 Authority. The Shareholder has full legal right, power and
authority, without the consent of any other person, company or entity, to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby. All actions required to be taken by the Shareholder to
authorize the execution, delivery and performance of this Agreement and all
transactions contemplated hereby have been duly and properly taken.
Section 3.3 Validity. This Agreement has been duly executed and
delivered by the Shareholder and is the lawful, valid and legally binding
obligation of the Shareholder, enforceable in accordance with its terms, except
as the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the enforcement of creditors rights
generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
Section 3.4 Investment Representations.
(a) The Shareholder acknowledges that the Shares have not been
registered under the Securities Act, or the securities laws of any state or
regulatory body and are being offered and sold in reliance upon exemptions from
the requisite requirements of the Securities Act and such laws and may not be
transferred or resold without registration under such laws unless an exemption
is
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available. The certificate for the Shares to be received by the Shareholder
pursuant to this Agreement will be imprinted with legends in substantially the
following forms (the imprinting of the second legend being subject to the
execution of the Voting Restrictions Agreement):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO A REGISTRATION STATEMENT WITH
RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT
AND UNDER ANY APPLICABLE STATE SECURITIES LAWS UNLESS, IN THE
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
STATE SECURITIES LAWS IS AVAILABLE."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN PROVISIONS, INCLUDING, AMONG OTHERS, RESTRICTIONS ON
VOTING AND TRANSFERS, SET FORTH IN A CERTAIN VOTING
RESTRICTIONS AGREEMENT DATED AS OF ________ ___, 1999, A COPY
OF WHICH IS AVAILABLE AT THE OFFICE OF THE COMPANY."
(b) The Shareholder is acquiring the Shares for investment and
not with a view to the resale or distribution thereof.
(c) The Shareholder is an "accredited investor" (as that term
is defined in Rule 501 of Regulation D promulgated under the Securities Act), is
sophisticated in financial matters and is familiar with the business of the
Company so that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests. The
Shareholder has had the opportunity to investigate on its own the Company's
business, management and financial affairs and has had the opportunity to review
the Company's operations and facilities and to ask questions and obtain whatever
other information concerning the Company as the Shareholder has deemed relevant
in making its investment decision.
SECTION 4
MISCELLANEOUS
Section 4.1 Fees and Expenses. The Company will bear all of its own
expenses in connection with the preparation, negotiation and execution of this
Agreement, the Related Agreements and a Voting Agreement to be entered into
among the Shareholder, Paul A. Moore, Phillip S. Magiera and Anderlit Limited,
B.V. (the "Voting Agreement"), and the transactions contemplated hereby and
thereby, and will also reimburse the Shareholder for, or pay, any reasonable,
documented expenses it incurs (including, without limitation, the legal fees and
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disbursements of counsel, which currently is Much Shelist Freed Denenberg Ament
& Rubenstein, P.C.) in connection with the preparation, execution and
negotiation of this Agreement, the Related Agreements and the Voting Agreement,
and the transactions contemplated hereby and thereby. The Company will also pay,
or reimburse the Shareholder for, all fees and expenses (including attorney's
fees and expenses) incurred by the Shareholder or any holder of the Shares
arising out of or in connection with any breach of any representation, warranty
or covenant by the Company, or the enforcement or preservation of any rights of
the Shareholder, under this Agreement, the Related Agreements and the
Certificate of Incorporation of the Company.
Section 4.2 Survival of Representations and Warranties;
Indemnification.
(a) All representations and warranties contained herein or
made in writing by any party in connection herewith will survive the execution
and delivery of this Agreement.
(b) In consideration of the Shareholder's execution and
delivery of this Agreement and acquisition of the Shares hereunder and in
addition to all of the Company's other obligations under this Agreement, the
Company shall defend, protect, indemnify and hold harmless the Shareholder and
each other holder of Shares and/or shares of Common Stock issuable upon
conversion of the Shares and all of their officers, directors, members,
managers, employees and agents (collectively, the "Shareholder Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities, obligations and damages, and expenses in
connection therewith (irrespective of whether any such Shareholder Indemnitee is
a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (collectively, the
"Shareholder Indemnified Liabilities"), incurred by the Shareholder Indemnitees
or any of them as a result of, or arising out of, or relating to (i) any
finder's or brokerage fees not disclosed by the Company, or (ii) any material
breach of, or inaccuracy of, any representation, warranty or covenant of the
Company contained in this Agreement or in that certain Series C Preferred Stock
Purchase Agreement, dated as of December 31, 1998, between the Company and the
Shareholder (the "Series C Purchase Agreement"). Prior to the termination of the
covenants of the Company contained in Articles VI and Articles VII of the Series
C Purchase Agreement, the Company and the Shareholder agree to execute and
deliver an amendment to this Agreement providing for the incorporation herein of
such covenants (other than those set forth in Sections 7.10 and Sections 7.12
through 7.17 of the Series C Purchase Agreement) on substantially the same terms
and conditions.
(c) In consideration of the Company's execution and delivery
of this Agreement and sale of the Shares hereunder and in addition to all of the
Shareholder's other obligations under this Agreement, the Shareholder shall
defend, protect, indemnify and hold harmless the Company and all of its
officers, directors, shareholders, employees and agents (collectively, the
"Company Indemnitees") from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities, obligations and
damages, and expenses in connection therewith (irrespective of whether any such
Company Indemnitee is a party to the action for which indemnification hereunder
is sought), and including reasonable attorneys' fees and disbursements
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(collectively, the "Company Indemnified Liabilities"), incurred by the Company
Indemnitees or any of them as a result of, or arising out of, or relating to (i)
any finder's or brokerage fees not disclosed by such Shareholder, or (ii) any
material breach of, or inaccuracy of, any representation, warranty or covenant
of such Shareholder contained in this Agreement.
Section 4.3 Successors And Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind the respective successors and
inure to the benefit of the respective permitted assigns of the parties hereto,
whether so expressed or not.
Section 4.4 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.
Section 4.5 Notices. Any notice, demand, request, waiver, or other
communication under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if personally served or sent by
telecopy, on the business day after notice is delivered to a courier or mailed
by express mail if sent by courier delivery service or express mail for next day
delivery and on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:
IF TO THE COMPANY, TO:
WorldPort Communications, Inc.
1825 Barrett Lakes Blvd.
Atlanta, Georgia 30144
Fax: (770) 792-0676
Attention: President
IF TO THE SHAREHOLDER, TO:
The Heico Companies, LLC
70 West Madison Street
Suite 5600
Chicago, IL 60602
Fax: (312) 419-9417
Attention: Michael E. Heisley, Sr.
Section 4.6 Governing Law And Forum. This Agreement shall be construed
in accordance with, and governed by, the laws of the State of Illinois as
applied to contracts made and to be performed entirely in the State of Illinois
without regard to principles of conflicts of law, except to the extent that the
corporate laws of the State of Delaware are mandatorily applicable. Each of the
parties hereto hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of any
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court of Cook County, Illinois or any federal court sitting in the Northern
District of Illinois for purposes of any suit, action or other proceeding
arising out of this Agreement (and agrees not to commence any action, suit or
proceedings relating hereto except in such courts). Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement, which is
brought by or against it, in the courts of Cook County, Illinois or any federal
court sitting in the Northern District of Illinois and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
THE COMPANY AND THE SHAREHOLDER HEREBY EXPRESSLY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER,
OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED AGREEMENT OR
UNDER OR IN CONNECTION WITH ANY AMENDMENT, INSTRUMENT, DOCUMENT, OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH, AND AGREE THAT ANY SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY. THE TERMS AND PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
Section 4.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
Section 4.8 Entire Agreement. This Agreement (together with the
Disclosure Schedule attached hereto) contains the entire understanding of the
parties with respect to their respective subject matter and all prior
negotiations, discussions, commitments and understandings heretofore had between
them with respect thereto are merged herein and therein.
Page 15 of 36
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed on
the date first set forth above.
WORLDPORT COMMUNICATIONS, INC.
By: /s/ Carl Grivner
-------------------------------------
Name: Carl Grivner
Title: Chairman, President and Chief
Executive Officer
THE HEICO COMPANIES, LLC
By: /s/ Stanley Meadows
-------------------------------------
Name: Stanley Meadows
Title: Assistant Secretary
Page 16 of 36
<PAGE>
DISCLOSURE SCHEDULE
(a) Any approvals required under that certain Credit Agreement
dated June 23, 1998 by and among the Company, Worldport International Inc.,
Bankers Trust Company, as Administrative Agent and the financial institutions
party thereto, which approvals have been obtained
(b) Notification of the issuance of the Shares and the shares
of capital stock issuable upon exercise of the Option Agreement (and the Common
Stock issuable upon conversion of the Shares and the shares of capital stock
issuable upon exercise of the Option Agreement) in accordance with Nasdaq
requirements
(c) Stockholder approval of the issuance of the Shares and the
shares of capital stock issuable upon exercise of the Option Agreement (and the
Common Stock issuable upon conversion of the Shares and the shares of capital
stock issuable upon exercise of the Option Agreement) in accordance with Nasdaq
requirements
Page 17 of 36
<PAGE>
EXHIBIT 2.5
OPTION AGREEMENT
This OPTION AGREEMENT ("Agreement") is made and entered into
as of July 15, 1999 by and between WorldPort Communications, Inc., a Delaware
corporation (the "Company"), and The Heico Companies, LLC (the "Grantee").
1. Grant of Option. The Company does hereby grant to the Grantee an
option (the "Option") to purchase up to 424,809 shares (the "Shares") of Series
F Convertible Preferred Stock of the Company, $.0001 per value per share (the
"Series F Preferred Stock"), at an exercise price of $35.31 per share for an
aggregate exercise price of up to $15,000,000. The Certificate of Designations,
Preferences and Rights of the Series F Preferred Stock is attached hereto as
Exhibit A. The Shares shall be subject to that certain Voting Restrictions
Agreement between the Company and the Grantee dated as of the date hereof.
2. Term of the Option. The Option (to the extent not earlier exercised
or forfeited) will expire three (3) years from the date hereof (the "Expiration
Date").
3. Manner of Exercise.
a. The Grantee may exercise this Option by giving
written notice thereof to the Company at any time, or
from time to time, on or before the Expiration Date.
b. The closing (the "Closing") of any such exercise of
the Option and purchase and sale of Shares will be
held within ten (10) days after the date of the
Grantee's written notice. At the Closing, the Company
will deliver to the Grantee a certificate, duly
executed and registered in the name of the Grantee or
the Grantee's nominee, for the number of Shares being
purchased, and the Grantee shall pay the purchase
price of the Shares by wire transfer of funds to an
account designated by the Company. The Company agrees
that the Shares will be free and clear of any liens,
claims, charges or encumbrances whatsoever (other
than those created by the Grantee) and will be duly
and validly issued, fully paid and non-assessable.
4. Reservation of Series F Preferred Stock and Common Stock. The
Company shall at all times through the Expiration Date reserve and keep
available, free from pre-emptive rights and out of its aggregate authorized but
unissued shares of Series F Preferred Stock, the number of Shares deliverable
upon exercise of the Option. The Company shall at all times through the
conversion of the Shares reserve and keep available, free from pre-emptive
rights and out of its aggregate authorized but unissued shares of common stock,
the number of shares of its common stock deliverable upon conversion of the
Shares.
Page 18 of 36
<PAGE>
5. Investment Representations of the Grantee. (a) The Grantee
acknowledges that the Shares have not been, nor will be, registered under the
Securities Act of 1933, as amended (the "Securities Act"), or the securities
laws of any state or regulatory body and are being offering and sold in reliance
upon exemptions from the requisite requirements of the Securities Act and such
laws and may not be transferred or resold without registration under such laws
unless an exemption is available. Each certificate for Shares received by the
Grantee upon exercise of the Option will be imprinted with legends in
substantially the following forms:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO
SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAWS UNLESS, IN
THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY, AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND STATE SECURITIES LAWS IS
AVAILABLE."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN PROVISIONS, INCLUDING, AMONG
OTHERS, RESTRICTIONS ON VOTING AND TRANSFERS, SET
FORTH IN A CERTAIN VOTING RESTRICTIONS AGREEMENT
DATED AS OF JULY ___, 1999, A COPY OF WHICH IS
AVAILABLE AT THE OFFICE OF THE COMPANY."
(b) The Grantee represents and warrants to the Company that it
is acquiring the Option (and will acquire the Shares) for investment purposes
and not with a view to the resale or distribution thereof.
(c) The Grantee represents and warrants to the Company that it
is an "accredited investor" (as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act), is sophisticated in financial matters and
is familiar with the business of the Company so that it is capable of evaluating
the merits and risks of its investment in the Company and has the capacity to
protect its own interests. The Grantee has had the opportunity to investigate
the Company's business, management and financial affairs and has had the
opportunity to review the Company's operations and facilities and to ask
questions and obtain whatever other information concerning the Company as the
Grantee has deemed relevant.
6. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each
Page 19 of 36
<PAGE>
of which shall be an original, but all of which together shall constitute one
and the same agreement.
7. GOVERNING LAW; JURISDICTION. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of Illinois as applied
to contracts made and to be performed entirely in the State of Illinois without
regard to principles of conflicts of law, except to the extent that the
corporate laws of the State of Delaware are mandatorily applicable. Each of the
parties hereto hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of any court of the Cook County, Illinois or any federal court
sitting in the Northern District of Illinois for purposes of any suit, action or
other proceeding arising out of this Agreement (and agrees not to commence any
action, suit or proceedings relating hereto except in such courts). Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any action, suit or proceeding arising out of this
Agreement, which is brought by or against it, in the courts of Cook County,
Illinois or any federal court sitting in the Northern District of Illinois and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
8. Binding Effect: Benefits. This Agreement shall inure to the benefit
of and shall be binding upon the parties hereto and their respective successors
and permitted assigns. Nothing in this Agreement, expressed or implied, is
intended to or shall confer on any person other than the parties hereto and
their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
9. Notices. Any notice, demand, request, waiver, or other communication
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if personally served or sent by telecopy, on the
business day after notice is delivered to a courier or mailed by express mail if
sent by courier delivery service or express mail for next day delivery and on
the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered, return receipt requested, postage
prepaid and addressed as follows:
If to the Company to:
WorldPort Communications, Inc.
1825 Barrett Lakes Blvd.
Atlanta, Georgia 30144
Fax: (770) 792-0676
Attention: President
If to the Grantee, to:
The Heico Companies, LLC
70 West Madison Street, Suite 5600
Chicago, Illinois 60602
Page 20 of 36
<PAGE>
Fax: (312) 419-9417
Attention: Michael E. Heisley, Sr.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
WORLDPORT COMMUNICATIONS, INC.
By: /s/ Carl Grivner
--------------------------------------
Name: Carl Grivner
Title: Chairman, President and Chief
Executive Officer
THE HEICO COMPANIES, LLC
By: /s/ Stanley Meadows
--------------------------------------
Name: Stanley Meadows
Title: Assistant Secretary
Page 21 of 36
<PAGE>
EXHIBIT 4.2
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES E CONVERTIBLE PREFERRED STOCK
OF
WORLDPORT COMMUNICATIONS, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
WorldPort Communications, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 103 thereof, and
pursuant to Section 151 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation") and under the provisions of Section 151 of the
General Corporation Law of the State of Delaware, on July 12, 1999, the Board of
Directors adopted the following resolution creating a series of preferred stock,
$0.0001 par value per share ("Preferred Stock"), designated as Series E
Convertible Preferred Stock:
"RESOLVED that, pursuant to the authority vested in
the Board of Directors of the Corporation in accordance with
the provisions of the Corporation's Certificate of
Incorporation, a series of Preferred Stock of the Corporation
be, and it hereby is, authorized and created, and that the
designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other
special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as
follows:
Section 1. Designation: Series, Amount and Ranking.
The shares of the series of Preferred Stock established hereby
shall be designated "Series E Convertible Preferred Stock"
(such shares being hereafter called the "Series E Preferred
Stock"), and the number of shares constituting such series
shall be 145,000 which shares shall have a par value of
$0.0001 per share and a stated value of $35.31 per share (the
"Stated Value"). The Series E Preferred Stock shall rank on a
parity with the shares of Series A Preferred Stock, Series B
Convertible Preferred Stock, the Series C Convertible
Preferred Stock and the Series D Convertible Preferred Stock
and prior to the Corporation's Common Stock, as to the payment
of dividends and distribution of assets upon liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary.
Section 2. Dividends and Distributions.
(a) The Corporation shall not declare or pay
or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the
purchase, redemption or other retirement of any Series B
Convertible Preferred Stock or any class of stock or series
thereof of the Corporation ranking, as to dividends or as to
Page 22 of 36
<PAGE>
distributions in the event of a liquidation, dissolution or
winding up of the Corporation, junior to the Series E
Preferred Stock, including the Corporation's Common Stock,
(collectively, "Junior Stock") unless, prior to the payment of
such dividends or other payments the Corporation first
declares and pays a dividend equal to 7% of the Stated Value
(the "Series E Preferred Dividends") to the holders of shares
of the Series E Preferred Stock. Notwithstanding anything to
the contrary contained herein, the foregoing shall not apply
to (i) any dividend payable solely in any shares of any Junior
Stock; or (ii) the acquisition of shares of any Junior Stock
either (A) pursuant to any employee incentive or benefit plan
or arrangement (including any employment agreement) of the
Corporation or of any subsidiary of the Corporation heretofore
or hereafter adopted or (B) in exchange solely for shares of
any other Junior Stock. The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire
any shares of capital stock of the Corporation unless the
Corporation could, pursuant to this paragraph, purchase such
shares at such time and in such manner.
(b) Series E Preferred Dividends shall be
paid in cash on or prior to the date dividends are paid on the
corporation's Junior Stock (the "Dividend Payment Date"). The
Series E Preferred Dividends are not cumulative and no
interest shall accrue with respect to the Series E Preferred
Stock.
(c) Series E Preferred Dividends shall be
payable to holders of record as they appear on the books of
the Corporation or any transfer agent on a Series E Dividend
Payment Date.
(d) No Series E Dividends shall be declared
or paid or set apart for payment unless dividends have been or
contemporaneously are declared or paid or set apart for
payment on the Series A Preferred Stock, Series B Convertible
Preferred Stock, the Series C Convertible Preferred Stock, the
Series D Convertible Preferred Stock or any other series of
stock ranking on a parity with the Series E Preferred Stock as
to dividends (collectively, "Parity Stock").
Section 3. Voting Rights.
(a) Each holder of record of Series E
Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the stockholders of the corporation,
voting together with the holders of Common Stock as a single
class. Each holder of record of each share of Series E
Preferred Stock shall be entitled to that number of votes as
is equal to the number of shares of Common Stock into which
such share of Series E Preferred Stock could be converted on
the record date for determining the stockholders entitled to
vote.
(b) At all times during which at least 33%
of the Series E Preferred Stock issued by the Corporation is
outstanding, the Corporation will not, without the approval of
holders of at least a majority of the shares of Series E
Preferred Stock then outstanding, voting together as a class,
(A) issue any securities which will, with respect to dividend
rights or rights on liquidation, winding up and dissolution,
rank senior to the Series E Preferred Stock, or any obligation
or security convertible into or evidencing the right to
purchase any securities senior to the Series E Preferred
Stock; (B) alter, amend or repeal any
Page 23 of 36
<PAGE>
provision of the Certificate of Incorporation of the
Corporation (including any such alteration, amendment or
repeal effected by any merger or consolidation), if such
amendment, alteration or repeal would alter or change the
powers, preferences or special rights with respect to the
shares of Series E Preferred Stock in a manner adverse to the
holders thereof; or (C) alter, amend or modify this Section 3.
Section 4. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation, dissolution, or
winding up of the Corporation, whether voluntary or
involuntary (a "Liquidation"), before any distribution or
payment shall be made to the holders of any Junior Stock, the
holders of Series E Preferred Stock shall be entitled to be
paid out of the assets of the Corporation an amount per share
of Series E Preferred Stock equal to the sum of $35.31 plus
all declared but unpaid Series E Preferred Dividends and any
Series E Preferred Dividends required to be declared pursuant
to Section 2(a) above as a result of the Liquidation (the
"Liquidation Preference"). After the payment of the full
Liquidation Preference, the holders of the Series E Preferred
Stock shall not be entitled to any further participation in
any distribution of assets of the Corporation.
(b) Neither the merger or consolidation of
the Corporation with or into any other corporation, nor the
merger or consolidation of any other corporation with or into
the Corporation, nor the sale, lease, exchange or other
transfer of all of or any portion of the assets of the
Corporation, shall be deemed to be a Liquidation for purposes
of this Section 4.
(c) If upon any Liquidation the Liquidation
Preference is not paid in full to all holders of Series E
Preferred Stock, the holders of Series E Preferred Stock shall
share ratably in any such distribution with all holders of
Parity Stock, in proportion to the full distributable amounts
to which holders of all such parity shares are entitled upon
such distribution of assets.
Section 5. Conversion.
(a) Optional Conversion. Subject to and in
compliance with the provisions of this Section 5, any shares
of Series E Preferred Stock may, at the option of the holder
and without any payment of consideration, be converted at any
time into fully-paid and nonassessable shares of Common Stock.
In the event that a holder of Series E
Preferred Stock desires to convert its Series E Preferred
Stock into shares of Common Stock, such holder shall surrender
the certificate or certificates therefor, duly endorsed, at
the office of the Corporation or any transfer agent for the
Series E Preferred Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert
the same. Such notice shall state the number of shares of
Series E Preferred Stock being converted. Thereupon, the
Corporation shall promptly issue and deliver at such office to
such holder a certificate or certificates for the number of
shares of Common Stock to which such holder is entitled and
shall promptly pay in cash or, to the extent sufficient funds
are not then legally available therefor, in Common Stock (at
the Common Stock's fair market value determined by the Board
of Directors as of the date of such conversion), any declared
but unpaid Series E
Page 24 of 36
<PAGE>
Preferred Dividends on the shares of Series E Preferred Stock
being converted. Such conversion shall be deemed to have been
made at the close of business on the date of such surrender of
the certificates representing the shares of Series E Preferred
Stock to be converted, and the person entitled to receive the
shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder of such shares
of Common Stock on such date.
(b) Mandatory Conversion. Upon the
conversion of at least 70% of the Series E Preferred Stock
originally issued by the Corporation, each outstanding share
of Series E Preferred Stock shall, without any action on the
part of the Corporation or the holders of Series E Preferred
Stock, be automatically converted into shares of Common Stock.
All such outstanding shares of Series E Preferred Stock shall
be deemed converted effective upon the date on which at least
70% of the originally issued Series E Preferred Stock is
converted, and thereafter each certificate for Series E
Preferred Stock outstanding shall be deemed to represent the
number of shares of Common Stock into which it has been
converted. Nevertheless, each holder of Series E Preferred
Stock shall thereafter surrender its certificates for shares
of Series E Preferred Stock for conversion in accordance with
Section 5(a) above.
(c) Conversion Rate. The number of shares of
Common Stock to which a holder of Series E Preferred Stock
shall be entitled upon conversion (whether optional or
mandatory) shall be the product obtained by multiplying the
"Series E Preferred Stock Conversion Rate" then in effect by
the number of shares of Series E Preferred Stock being
converted. The conversion rate in effect at any time for
conversion of the Series E Preferred Stock (the "Series E
Preferred Stock Conversion Rate") shall be the quotient
obtained by dividing $35.31 by the "Series E Preferred Stock
Conversion Price."
(d) Conversion Price. The conversion price
(the "Series E Preferred Stock Conversion Price") for the
Series E Preferred Stock shall initially be $3.25. The Series
E Preferred Stock Conversion Price shall be adjusted from time
to time in accordance with this Section 5. All references to
the Series E Preferred Stock Conversion Price herein shall
mean such conversion price as so adjusted from time to time.
(e) Series E Preferred Stock No Longer
Outstanding. Upon conversion of shares of Series E Preferred
Stock, such shares shall no longer be deemed to be outstanding
and all rights of the holders thereof as Series E Preferred
Stockholders of the Corporation shall cease.
(f) Adjustments for Stock Splits and
Dividends. In the event the Corporation shall, at any time or
from time to time while any of the shares of Series E
Preferred Stock are outstanding, (i) pay a dividend or make a
distribution with respect to Common Stock in shares of Common
Stock, (ii) subdivide or split its outstanding shares of
Common Stock into a larger number of shares, or (iii) combine
its outstanding shares of Common Stock into a smaller number
of shares, in each case whether by reclassification of shares,
recapitalization of the Corporation or otherwise, the Series E
Preferred Stock Conversion Price in effect immediately prior
thereto shall be adjusted by multiplying the Series E
Preferred Stock Conversion Price by a fraction, the numerator
of which is the
Page 25 of 36
<PAGE>
number of shares of Common Stock outstanding immediately
before such event, and the denominator of which is the number
of shares of Common Stock outstanding immediately after such
event. Such adjustment shall become effective at the opening
of business on the Business Day next following the record date
for determination of stockholders entitled to receive such
dividend or distribution in the case of a dividend or
distribution, and shall become effective immediately after the
effective date in case of a subdivision, split, combination or
reclassification; and any shares of Common Stock issuable in
payment of a dividend shall be deemed to have been issued
immediately prior to the close of business on the record date
for such dividend.
(g) Adjustments for Merger, etc. If there
shall occur a merger or consolidation of the Corporation with
or into another entity, any merger or consolidation of another
entity into the Corporation (other than a merger or
consolidation that does not result in any conversion, exchange
or cancellation of outstanding shares of Common Stock), any
sale or transfer of all or substantially all of the assets of
the Corporation or any compulsory share exchange, that results
in the conversion or exchange of the Common Stock into, or the
right to receive, other securities or other property (whether
of the Corporation or any other entity), then the Series E
Preferred Stock will thereafter no longer be convertible into
shares of Common Stock, but instead will be convertible into
the kind and amount of securities or other property which the
holder of such shares of Series E Preferred Stock would have
owned immediately after such merger, consolidation, sale or
share exchange if such shares of Series E Preferred Stock had
been converted into shares of Common Stock immediately before
the effective time of such merger, consolidation, sale or
share exchange. If this paragraph (g) applies, then no
adjustment in respect of the same merger, consolidation, sale
or share exchange shall be made pursuant to the other
provisions of this Section. In the event that at any time, as
a result of an adjustment made pursuant to this paragraph (g),
the Series E Preferred Stock shall become subject to
conversion into any securities other than shares of Common
Stock, thereafter the number of such other securities so
issuable upon conversion of the shares of Series E Preferred
Stock shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions contained in this Section 5.
(h) Fractional Shares. No fractional shares
of Common Stock shall be issued upon conversion of Series E
Preferred Stock. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of Series E Preferred Stock by a holder thereof shall be
aggregated for purposes of determining whether the conversion
would result in the issuance of any fractional share. If,
after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the
Corporation shall, in lieu of issuing any fractional share,
pay cash equal to the product of such fraction multiplied by
the Common Stock's Fair Market Value on the date of
conversion. For purposes of this Section 5(h), the Fair Market
Value of the Common Stock shall be equal to the average
closing sales price of a share of the Company's Common Stock
on the Nasdaq SmallCap Market (or such other national
securities exchange or automated quotation system on which the
Common Stock is then listed or quoted) for the 10 consecutive
trading days immediately preceding the date of conversion.
(i) Reservation of Stock Issuable Upon
Conversion. The Corporation
Page 26 of 36
<PAGE>
shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the shares of the
Series E Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series E Preferred
Stock. If at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Series E
Preferred Stock, the Corporation 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 purpose.
(j) Payment of Taxes. The Corporation will
pay all taxes (other than taxes based upon income) and other
governmental charges that may be imposed with respect to the
issue or delivery of shares of Common Stock upon conversion of
shares of Series E Preferred Stock, excluding any tax or other
charge imposed in connection with any transfer involved in the
issue and delivery of shares of Common Stock in a name other
than that in which the shares of Series E Preferred Stock so
converted were registered.
Section 6. Notices.
Any notice required by the provisions hereof
shall be in writing and shall be deemed effectively given: (i)
upon personal delivery to the party to be notified, (ii) when
sent by confirmed telex or facsimile, (iii) five (5) days
after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) one (1) day after
deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of
receipt. All notices shall be addressed to the Corporation at
its principle office and to each holder of record at the
address of such holder appearing on the books of the
Corporation.
* * *
IN WITNESS WHEREOF, WorldPort Communications, Inc. has caused
this Certificate of Designations, Preferences and Rights to be duly executed by
its President and attested by its Assistant Secretary, this 13th day of July,
1999.
WORLDPORT COMMUNICATIONS, INC.
By: /s/ Carl Grivner
--------------------------------------
Carl Grivner, President
ATTEST:
/s/ Donald Featherstone
--------------------------------------
Donald Featherstone, Assistant Secretary
Page 27 of 36
<PAGE>
EXHIBIT 4.3
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES F CONVERTIBLE PREFERRED STOCK
OF
WORLDPORT COMMUNICATIONS, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
WorldPort Communications, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 103 thereof, and
pursuant to Section 151 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation") and under the provisions of Section 151 of the
General Corporation Law of the State of Delaware, on July 12, 1999, the Board of
Directors adopted the following resolution creating a series of preferred stock,
$0.0001 par value per share ("Preferred Stock"), designated as Series F
Convertible Preferred Stock:
"RESOLVED that, pursuant to the authority vested in
the Board of Directors of the Corporation in accordance with
the provisions of the Corporation's Certificate of
Incorporation, a series of Preferred Stock of the Corporation
be, and it hereby is, authorized and created, and that the
designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other
special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as
follows:
Section 1. Designation: Series, Amount and Ranking.
The shares of the series of Preferred Stock established hereby
shall be designated "Series F Convertible Preferred Stock"
(such shares being hereafter called the "Series F Preferred
Stock"), and the number of shares constituting such series
shall be 425,000 which shares shall have a par value of
$0.0001 per share and a stated value of $35.31 per share (the
"Stated Value"). The Series F Preferred Stock shall rank on a
parity with the shares of Series A Preferred Stock, Series B
Convertible Preferred Stock, the Series C Convertible
Preferred Stock, the Series D Convertible Preferred Stock and
the Series E Convertible Preferred Stock and prior to the
Corporation's Common Stock, as to the payment of dividends and
distribution of assets upon liquidation, dissolution or
winding up of the Corporation, whether voluntary or
involuntary.
Section 2. Dividends and Distributions.
Page 28 of 36
<PAGE>
(a) The Corporation shall not declare or pay
or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the
purchase, redemption or other retirement of any Series B
Convertible Preferred Stock or any class of stock or series
thereof of the Corporation ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or
winding up of the Corporation, junior to the Series F
Preferred Stock, including the Corporation's Common Stock,
(collectively, "Junior Stock") unless, prior to the payment of
such dividends or other payments the Corporation first
declares and pays a dividend equal to 7% of the Stated Value
(the "Series F Preferred Dividends") to the holders of shares
of the Series F Preferred Stock. Notwithstanding anything to
the contrary contained herein, the foregoing shall not apply
to (i) any dividend payable solely in any shares of any Junior
Stock; or (ii) the acquisition of shares of any Junior Stock
either (A) pursuant to any employee incentive or benefit plan
or arrangement (including any employment agreement) of the
Corporation or of any subsidiary of the Corporation heretofore
or hereafter adopted or (B) in exchange solely for shares of
any other Junior Stock. The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire
any shares of capital stock of the Corporation unless the
Corporation could, pursuant to this paragraph, purchase such
shares at such time and in such manner.
(b) Series F Preferred Dividends shall be
paid in cash on or prior to the date dividends are paid on the
corporation's Junior Stock (the "Dividend Payment Date"). The
Series F Preferred Dividends are not cumulative and no
interest shall accrue with respect to the Series F Preferred
Stock.
(c) Series F Preferred Dividends shall be
payable to holders of record as they appear on the books of
the Corporation or any transfer agent on a Series F Dividend
Payment Date.
(d) No Series F Dividends shall be declared
or paid or set apart for payment unless dividends have been or
contemporaneously are declared or paid or set apart for
payment on the Series A Preferred Stock, Series B Convertible
Preferred Stock, the Series C Convertible Preferred Stock, the
Series D Convertible Preferred Stock, the Series E Convertible
Preferred Stock or any other series of stock ranking on a
parity with the Series F Preferred Stock as to dividends
(collectively, "Parity Stock").
Section 3. Voting Rights.
(a) Each holder of record of Series F
Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the stockholders of the corporation,
voting together with the holders of Common Stock as a single
class. Each holder of record of each share of Series F
Preferred Stock shall be entitled to
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that number of votes as is equal to the number of shares of
Common Stock into which such share of Series F Preferred Stock
could be converted on the record date for determining the
stockholders entitled to vote.
(b) At all times during which at least 33%
of the Series F Preferred Stock issued by the Corporation is
outstanding, the Corporation will not, without the approval of
holders of at least a majority of the shares of Series F
Preferred Stock then outstanding, voting together as a class,
(A) issue any securities which will, with respect to dividend
rights or rights on liquidation, winding up and dissolution,
rank senior to the Series F Preferred Stock, or any obligation
or security convertible into or evidencing the right to
purchase any securities senior to the Series F Preferred
Stock; (B) alter, amend or repeal any provision of the
Certificate of Incorporation of the Corporation (including any
such alteration, amendment or repeal effected by any merger or
consolidation), if such amendment, alteration or repeal would
alter or change the powers, preferences or special rights with
respect to the shares of Series F Preferred Stock in a manner
adverse to the holders thereof; or (C) alter, amend or modify
this Section 3.
Section 4. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation, dissolution, or
winding up of the Corporation, whether voluntary or
involuntary (a "Liquidation"), before any distribution or
payment shall be made to the holders of any Junior Stock, the
holders of Series F Preferred Stock shall be entitled to be
paid out of the assets of the Corporation an amount per share
of Series F Preferred Stock equal to the sum of $35.31 plus
all declared but unpaid Series F Preferred Dividends and any
Series F Preferred Dividends required to be declared pursuant
to Section 2(a) above as a result of the Liquidation (the
"Liquidation Preference"). After the payment of the full
Liquidation Preference, the holders of the Series F Preferred
Stock shall not be entitled to any further participation in
any distribution of assets of the Corporation.
(b) Neither the merger or consolidation of
the Corporation with or into any other corporation, nor the
merger or consolidation of any other corporation with or into
the Corporation, nor the sale, lease, exchange or other
transfer of all of or any portion of the assets of the
Corporation, shall be deemed to be a Liquidation for purposes
of this Section 4.
(c) If upon any Liquidation the Liquidation
Preference is not paid in full to all holders of Series F
Preferred Stock, the holders of Series F Preferred Stock shall
share ratably in any such distribution with all holders of
Parity Stock, in proportion to the full distributable amounts
to which holders of all such parity shares are entitled upon
such distribution of assets.
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<PAGE>
Section 5. Conversion.
(a) Optional Conversion. Subject to and in
compliance with the provisions of this Section 5, any shares
of Series F Preferred Stock may, at the option of the holder
and without any payment of consideration, be converted at any
time into fully-paid and nonassessable shares of Common Stock.
In the event that a holder of Series F
Preferred Stock desires to convert its Series F Preferred
Stock into shares of Common Stock, such holder shall surrender
the certificate or certificates therefor, duly endorsed, at
the office of the Corporation or any transfer agent for the
Series F Preferred Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert
the same. Such notice shall state the number of shares of
Series F Preferred Stock being converted. Thereupon, the
Corporation shall promptly issue and deliver at such office to
such holder a certificate or certificates for the number of
shares of Common Stock to which such holder is entitled and
shall promptly pay in cash or, to the extent sufficient funds
are not then legally available therefor, in Common Stock (at
the Common Stock's fair market value determined by the Board
of Directors as of the date of such conversion), any declared
but unpaid Series F Preferred Dividends on the shares of
Series F Preferred Stock being converted. Such conversion
shall be deemed to have been made at the close of business on
the date of such surrender of the certificates representing
the shares of Series F Preferred Stock to be converted, and
the person entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all
purposes as the record holder of such shares of Common Stock
on such date.
(b) Mandatory Conversion. Upon the
conversion of at least 70% of the Series F Preferred Stock
originally issued by the Corporation, each outstanding share
of Series F Preferred Stock shall, without any action on the
part of the Corporation or the holders of Series F Preferred
Stock, be automatically converted into shares of Common Stock.
All such outstanding shares of Series F Preferred Stock shall
be deemed converted effective upon the date on which at least
70% of the originally issued Series F Preferred Stock is
converted, and thereafter each certificate for Series F
Preferred Stock outstanding shall be deemed to represent the
number of shares of Common Stock into which it has been
converted. Nevertheless, each holder of Series F Preferred
Stock shall thereafter surrender its certificates for shares
of Series F Preferred Stock for conversion in accordance with
Section 5(a) above.
(c) Conversion Rate. The number of shares of
Common Stock to which a holder of Series F Preferred Stock
shall be entitled upon conversion (whether optional or
mandatory) shall be the product obtained by multiplying the
"Series F Preferred Stock Conversion Rate" then in effect by
the number of shares of Series F Preferred Stock being
converted. The conversion rate in effect at any time for
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<PAGE>
conversion of the Series F Preferred Stock (the "Series F
Preferred Stock Conversion Rate") shall be the quotient
obtained by dividing $35.31 by the "Series F Preferred Stock
Conversion Price."
(d) Conversion Price. The conversion price
(the "Series F Preferred Stock Conversion Price") for the
Series F Preferred Stock shall initially be $4.00. The Series
F Preferred Stock Conversion Price shall be adjusted from time
to time in accordance with this Section 5. All references to
the Series F Preferred Stock Conversion Price herein shall
mean such conversion price as so adjusted from time to time.
(e) Series F Preferred Stock No Longer
Outstanding. Upon conversion of shares of Series F Preferred
Stock, such shares shall no longer be deemed to be outstanding
and all rights of the holders thereof as Series F Preferred
Stockholders of the Corporation shall cease.
(f) Adjustments for Stock Splits and
Dividends. In the event the Corporation shall, at any time or
from time to time while any of the shares of Series F
Preferred Stock are outstanding, (i) pay a dividend or make a
distribution with respect to Common Stock in shares of Common
Stock, (ii) subdivide or split its outstanding shares of
Common Stock into a larger number of shares, or (iii) combine
its outstanding shares of Common Stock into a smaller number
of shares, in each case whether by reclassification of shares,
recapitalization of the Corporation or otherwise, the Series F
Preferred Stock Conversion Price in effect immediately prior
thereto shall be adjusted by multiplying the Series F
Preferred Stock Conversion Price by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately before such event, and the denominator of which is
the number of shares of Common Stock outstanding immediately
after such event. Such adjustment shall become effective at
the opening of business on the Business Day next following the
record date for determination of stockholders entitled to
receive such dividend or distribution in the case of a
dividend or distribution, and shall become effective
immediately after the effective date in case of a subdivision,
split, combination or reclassification; and any shares of
Common Stock issuable in payment of a dividend shall be deemed
to have been issued immediately prior to the close of business
on the record date for such dividend.
(g) Adjustments for Merger, etc. If there
shall occur a merger or consolidation of the Corporation with
or into another entity, any merger or consolidation of another
entity into the Corporation (other than a merger or
consolidation that does not result in any conversion, exchange
or cancellation of outstanding shares of Common Stock), any
sale or transfer of all or substantially all of the assets of
the Corporation or any compulsory share exchange, that results
in the conversion or exchange of the Common Stock into, or the
right to receive, other
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<PAGE>
securities or other property (whether of the Corporation or
any other entity), then the Series F Preferred Stock will
thereafter no longer be convertible into shares of Common
Stock, but instead will be convertible into the kind and
amount of securities or other property which the holder of
such shares of Series F Preferred Stock would have owned
immediately after such merger, consolidation, sale or share
exchange if such shares of Series F Preferred Stock had been
converted into shares of Common Stock immediately before the
effective time of such merger, consolidation, sale or share
exchange. If this paragraph (g) applies, then no adjustment in
respect of the same merger, consolidation, sale or share
exchange shall be made pursuant to the other provisions of
this Section. In the event that at any time, as a result of an
adjustment made pursuant to this paragraph (g), the Series F
Preferred Stock shall become subject to conversion into any
securities other than shares of Common Stock, thereafter the
number of such other securities so issuable upon conversion of
the shares of Series F Preferred Stock shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions contained
in this Section 5.
(h) Fractional Shares. No fractional shares
of Common Stock shall be issued upon conversion of Series F
Preferred Stock. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of Series F Preferred Stock by a holder thereof shall be
aggregated for purposes of determining whether the conversion
would result in the issuance of any fractional share. If,
after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the
Corporation shall, in lieu of issuing any fractional share,
pay cash equal to the product of such fraction multiplied by
the Common Stock's Fair Market Value on the date of
conversion. For purposes of this Section 5(h), the Fair Market
Value of the Common Stock shall be equal to the average
closing sales price of a share of the Company's Common Stock
on the Nasdaq SmallCap Market (or such other national
securities exchange or automated quotation system on which the
Common Stock is then listed or quoted) for the 10 consecutive
trading days immediately preceding the date of conversion.
(i) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve and
keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series F Preferred Stock, such
number of its shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding
shares of the Series F Preferred Stock. If at any time the
number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all then
outstanding shares of the Series F Preferred Stock, the
Corporation 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 purpose.
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<PAGE>
(j) Payment of Taxes. The Corporation will
pay all taxes (other than taxes based upon income) and other
governmental charges that may be imposed with respect to the
issue or delivery of shares of Common Stock upon conversion of
shares of Series F Preferred Stock, excluding any tax or other
charge imposed in connection with any transfer involved in the
issue and delivery of shares of Common Stock in a name other
than that in which the shares of Series F Preferred Stock so
converted were registered.
Section 6. Notices.
Any notice required by the provisions hereof
shall be in writing and shall be deemed effectively given: (i)
upon personal delivery to the party to be notified, (ii) when
sent by confirmed telex or facsimile, (iii) five (5) days
after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) one (1) day after
deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of
receipt. All notices shall be addressed to the Corporation at
its principle office and to each holder of record at the
address of such holder appearing on the books of the
Corporation.
* * *
IN WITNESS WHEREOF, WorldPort Communications, Inc. has caused
this Certificate of Designations, Preferences and Rights to be duly executed by
its President and attested by its Assistant Secretary, this 13th day of July,
1999.
WORLDPORT COMMUNICATIONS, INC.
By: /s/ Carl Grivner
-------------------------------------
Carl Grivner, President
ATTEST:
/s/ Donald Featherstone
----------------------------------------
Donald Featherstone, Assistant Secretary
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<PAGE>
EXHIBIT 99.1
For more information contact:
Shara Johnston, Corporate Relations Manager
WorldPort Communications, Inc.
(770) 792-5800
[email protected]
(July 15, 1999) - ATLANTA, Georgia -- WorldPort Communications, Inc.
(NASDAQ: WRDP) today announced The Heico Companies, LLC has made an additional
$15.0 million equity investment in WorldPort through the exercise of an option
granted by WorldPort to Heico in January 1999 to purchase 283,206 shares of
Series C Convertible Preferred Stock and the purchase of 141,603 shares of
Series E Convertible Preferred Stock. Heico also received an option to acquire a
new Series F Convertible Preferred Stock of the Company for an additional $15.0
million. This investment satisfies the conditions for the extension of the
maturity date of WorldPort's bridge loan facility to August 18, 1999.
The Series C Stock and Series E Stock is convertible into 10.865 shares
of Common Stock per share. Upon issuance, the Series F Stock will be convertible
at a conversion price of $4.00 per share of Common Stock, or 8.8275 shares of
Common Stock per share.
The Series C Preferred Stock carries 40 votes per share. The Series E
and Series F Stock entitle the holder to vote on an as converted basis. As a
result of the additional equity investment made today, Heico holds directly
approximately 40% of the outstanding votes (41.5% if the Series F Stock were
purchased). By virtue of a Shareholder Agreement among Heico, WorldPort and
certain stockholders of WorldPort, Heico currently controls, with respect to
certain matters, including acquisitions, incurrence of debt and the issuance or
sale of equity securities, additional shares of capital stock of the Company
representing approximately 31% of WorldPort's outstanding votes after the
investment completed today.
Proceeds from the equity investment will be utilized for working
capital and other general corporate purposes.
WorldPort had no comment on the public announcements of the filing of
shareholder class action lawsuits against the Company, as it has not received or
reviewed any such filings.
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About WorldPort Communications
WorldPort Communications, Inc., headquartered in Atlanta, Georgia
(USA), provides international telecommunications and Internet services primarily
to ISPs, long distance carriers, medium and large corporate customers in Europe
and North America. WorldPort offers domestic and international voice, data,
video, Internet and other telecommunication services over a network of
terrestrial and undersea cables, switches, and other network equipment and
through interconnection agreements with major carriers in Europe and North
America. For more information, please visit the WorldPort web site at
www.wrdp.com.
This press release contains certain forward-looking statements which
can sometimes be identified by the use of forward-looking words such as "may,"
"will," "anticipate", "plan," "estimate," "expect" or "intend." These statements
are subject to known and unknown risks, uncertainties and other factors,
including, but not limited to, the Company's limited operating history, history
of operating losses, substantial indebtedness and substantial capital
requirements, that could cause actual results to differ materially from those
contemplated by the statements. The Company does not undertake to publicly
update or revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied therein
will not be realized. Additional information on risk factors that could
potentially affect the Company's financial results may be found in the Company's
public filings with the Securities and Exchange Commission. Certain of such
filings may be accessed through the Securities and Exchange Commission's web
site, http://www.sec.gov.
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