THE CLOSING OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
(THE "CLOSING"), INCLUDING THE EXCHANGE OF THE SERIES B-2 PREFERRED STOCK FOR
SERIES C PREFERRED STOCK AND THE ISSUANCE OF THE AVISTA COMMON STOCK SHALL OCCUR
SIMULTANEOUSLY WITH THE EARLIER TO OCCUR OF THE CONSUMMATION OF THE ACQUISITION
OR THE PUBLIC OFFERING.
THE CLOSING SHALL OCCUR AT THE OFFICES OF HAYNES AND
BOONE, ONE HOUSTON CENTER, 1221 MCKINNEY STREET, SUITE 2100, HOUSTON, TEXAS
77002, AT 10:00 A.M. LOCAL TIME, SIMULTANEOUS WITH THE CLOSING OF THE [PEGASUS
TRANSACTION].
THE DATE UPON WHICH THE CLOSING OCCURS SHALL BE REFERRED TO
HEREIN AS THE "CLOSING DATE".
(B)
AT THE CLOSING, THE COMPANY SHALL DELIVER TO AVISTA DULY ENDORSED
CERTIFICATES REPRESENTING A NUMBERED SHARES OF SERIES C PREFERRED STOCK EQUAL TO
THE NUMBERED SHARES OF SERIES B-2 PREFERRED STOCK OWNED BY AVISTA, PLUS ACCRUED
BUT UNPAID DIVIDENDS DIVIDED BY $250, AND THE AVISTA COMMON STOCK IN
CONSIDERATION FOR THE EXCHANGE.
AT THE CLOSING, AVISTA SHALL DELIVER TO THE
CORPORATION CERTIFICATES REPRESENTING ALL OF THE SHARES OF SERIES B-2 PREFERRED
STOCK OWNED BY IT, DULY ENDORSED OR WITH STOCK POWERS DULY ENDORSED BY IT IN
BLANK.
(C)
AT THE CLOSING, THE CORPORATION SHALL PAY THE CONSENT FEES TO THE
HOLDERS
(OR, IN THE CASE OF AVISTA, AVISTA CAPITAL HOLDINGS, L.P.) IN THE
PROPORTIONS SPECIFIED ON SCHEDULE 3 IN CONSIDERATION FOR THE AMENDMENTS TO THE
SERIES B-1 PREFERRED STOCK REFLECTED IN THE AMENDMENT.
(D)
THE CERTIFICATES REPRESENTING THE AVISTA COMMON STOCK AND THE
SERIES C PREFERRED STOCK SHALL SET FORTH IN A PROMINENT PLACE THE FOLLOWING
LEGEND:
THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, (II) SUCH SECURITIES ARE SOLD PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (III) THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY THE
SECURITIES.
4.
WAIVER AND CONSENT.
(A)
EACH OF THE HOLDERS HEREBY WAIVES ANY AND ALL PREEMPTIVE RIGHTS IT
HAS UNDER SECTION (H) OF THE CERTIFICATE OF DESIGNATION WITH RESPECT TO THE
SHARES OF COMMON STOCK TO BE ISSUED IN CONNECTION (I) WITH THE ACQUISITION AND
(II) THIS AGREEMENT.
(B)
EACH OF THE HOLDERS HEREBY CONSENTS TO THE INCREASE IN THE NUMBER
OF MEMBERS OF THE BOARD OF DIRECTORS OF THE CORPORATION FROM SEVEN (7) TO NINE
(9) IN CONNECTION WITH THE ACQUISITION.
(C)
EACH OF THE HOLDERS HEREBY CONSENTS TO THE FORMATION OF A DELAWARE
CORPORATION ("HOLDINGS") AS A WHOLLY OWNED SUBSIDIARY OF THE COMPANY AND THE
CONTRIBUTION TO
3
HOLDINGS OF THE CAPITAL STOCK OF THE SUBSIDIARIES OF THE COMPANY DIRECTLY OWNED
BY THE COMPANY.
(D)
EACH OF THE HOLDERS HEREBY AGREES TO TAKE ALL ACTION WITHIN ITS
POWER (INCLUDING,