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STOCKHOLDERS' AGREEMENT
dated as of July 28, 1999
among
CLASSIC COMMUNICATIONS, INC.,
BRERA CLASSIC, LLC,
and
the additional parties named herein.
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TABLE OF CONTENTS
Page
1. Definitions.....................................................................................2
2. Restrictions On Transfer........................................................................9
2.1 General Restrictions.......................................................................9
2.2 Permitted Transfers........................................................................9
2.3 Put Rights................................................................................12
3. Other Transfers................................................................................13
3.1 Sale of the Company; Take-Along Rights....................................................13
3.2 Initial Public Offering...................................................................14
3.3 Involuntary Transfers.....................................................................14
4. Preemptive Purchase Rights.....................................................................15
4.1 Preemptive Rights.........................................................................15
4.2 Notice of Sale............................................................................16
5. Election of Directors and Related Matters......................................................16
5.1 Board Voting..............................................................................16
5.2 Chairmen..................................................................................17
5.3 Removal...................................................................................17
5.4 Vacancy...................................................................................18
5.5 Observer Rights...........................................................................18
5.6 Transaction Fees..........................................................................18
6. Miscellaneous..................................................................................18
6.1 Stock Certificate Legend..................................................................18
6.2 Financial Information.....................................................................20
6.3 Confidentiality...........................................................................22
6.4 Additional Stockholders...................................................................23
6.5 Successors and Assigns....................................................................23
6.6 Specific Performance......................................................................23
6.7 Entire Agreement; Amendment...............................................................23
6.8 Expenses and Attorneys' Fees..............................................................24
6.9 Term......................................................................................24
6.10 Notices..................................................................................24
6.11 Severability.............................................................................25
6.12 Headings.................................................................................25
6.13 Counterparts.............................................................................25
6.14 Representations and Warranties...........................................................26
6.15 Governing Law............................................................................26
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6.16 Consent to Jurisdiction and Service of Process;
Appointment of Agent for Service of Process...........................................26
6.17 Waiver of Jury Trial.....................................................................27
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STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of
July __, 1999, is by and among Classic Communications, Inc., a Delaware
corporation (the "Company"), Brera Classic, LLC, a Delaware limited liability
company ("Brera"), J. Xxxxxxx Xxxxxxx ("Xxxxxxx"), Xxxxxx X. Seach ("Seach") and
Xxxxx X. Xxxxxxxx ("Xxxxxxxx") (Xxxxxxx, Seach and Xxxxxxxx are collectively
known as "Management Stockholders" and individually as a "Management
Stockholder"), BT Capital Partners, Inc., a Delaware corporation ("BT Capital"),
Union Bancal Venture Corporation, a Delaware corporation ("Union Bancal"),
Austin Ventures, L.P., a Delaware limited partnership ("Austin"), Austin
Ventures III-A, L.P., a Delaware limited partnership ("Austin III-A"), Austin
Ventures III-B, L.P., a Delaware limited partnership ("Austin III-B") (Austin,
Austin III-A, and Austin III-B are collectively referred to as "Austin
Ventures"), Texas Growth Fund, a trust fund created by the Constitution of the
State of Texas ("Growth Fund"), and BA SBIC Management, L.L.C., successor in
interest to NationsBanc Capital Corp., a Texas Corporation ("BA SBIC"), (Austin,
Austin III-A, Austin III-B, Union Bancal, Growth Fund, BT Capital, and BA SBIC
are collectively referred to as the "Investors" and individually as an
"Investor") and other Persons who become parties to this Agreement pursuant to
Section 2.2. The parties (other than the Company) and any Person who hereafter
acquires shares of Equity Securities (as defined herein) pursuant to the
provisions of, and subject to the restrictions and rights set forth in, this
Agreement, shall sometimes hereinafter be referred to individually as a
"Stockholder" and collectively as the "Stockholders." Capitalized terms not
otherwise defined herein will have the meanings given them in that certain
Investment Agreement, dated as of May 24, 1999 (the "Investment Agreement), by
and between Brera and the Company.
RECITALS
A. Pursuant to the terms of the Investment Agreement and
simultaneously with the execution of this Agreement, Brera is purchasing from
the Company shares of Common Stock.
B. The execution and delivery of this Agreement by the
parties are conditions to the purchase of the Common Stock by Brera pursuant to
the Investment Agreement.
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C. Prior to the closing of the transactions contemplated by
the Investment Agreement (the "Closing"), the Stockholders (excluding Brera)
constitute the record and beneficial owners of the capital stock and rights to
acquire capital stock of the Company as of the date hereof, as set forth on
Schedule A attached hereto;
D. On the date hereof, the Stockholders and the Company have
entered into a Registration Rights Agreement with respect to the Common Stock
(the "Registration Rights Agreement").
E. This Agreement supercedes each of the following: (i) that
certain Amended Registration Rights Agreement, dated as of October 31, 1995,
among the Company and certain stockholders, and (ii) that certain Amended
Shareholders Agreement, dated as of October 31, 1995, among the Company and
certain stockholders.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and for other good and valuable consideration, the receipt of
and sufficiency of which is hereby acknowledged, the parties hereto hereby agree
that:
AGREEMENT
1. Definitions
When used in this Agreement, the following terms shall have
the meanings specified:
1.1 "Additional Party Signature Page" means a signature page
substantially in the form attached hereto as Exhibit A.
1.2 "Additional Securities" has the meaning set forth in
Section 2.2(b)(ii).
1.3 "Affiliate" as applied to any Person, means any other
Person directly or indirectly controlling, controlled by or under common control
with that Person. The term "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of power to
direct the management and policies of that Person, whether through voting power,
by contract or otherwise.
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1.4 "Agreement" has the meaning set forth in the preamble
hereto.
1.5 "Appraised Value" means the value determined in accordance
with the following procedures. During the Negotiation Period, the Company and
the Stockholder agree to negotiate in good faith to reach agreement upon the
Appraised Value of the Equity Securities or other securities or property at
issue, as of the date of the Valuation Event, which will be the fair market
value of such securities or property, without premium for control or discount
for minority interests, illiquidity, or restrictions on transfer. In the event
that the Company and the Stockholder are unable to agree upon the Appraised
Value of the Equity Securities or such other securities or other property by the
end of the Negotiation Period, then the Appraised Value of the Equity Securities
or such other securities or property will be determined for purposes of this
Agreement by a recognized appraisal or investment banking firm mutually
agreeable to the Stockholder and the Company (the "Appraiser"). If the
Stockholder and the Company cannot agree on an Appraiser within fifteen (15)
days after the end of the Negotiation Period, the Company, on the one hand, and
the Stockholder, on the other hand, will each select an appraiser within
twenty-one (21) days after the end of the Negotiation Period and those two
appraisers will select within twenty-five (25) days after the end of the
Negotiation Period an independent Appraiser to determine the fair market value
of such securities or property, without premium for control or discount for
minority interests, illiquidity, or restrictions on transfer. Such independent
Appraiser will be directed to determine fair market value of such securities or
property as soon as practicable, but in no event later than thirty (30) days
from the date of its selection. The determination by an Appraiser of the fair
market value will be conclusive and binding on the Company and the Stockholder.
Appraised Value of each share of Common Stock at a time when (i) the Company is
not a reporting company under the Exchange Act and (ii) the Common Stock is not
traded in the organized securities markets, will, in all cases, be calculated by
determining the Appraised Value of the entire Company taken as a whole and
dividing that value by the sum of (x) the number of shares of Common Stock then
outstanding plus (y) the number of shares of Common Stock underlying the Common
Stock Equivalents, without premium for control or discount for minority
interests, illiquidity, or restrictions on transfer. In the event the Appraised
Value of the Equity Securities or such other securities or property for any
purpose exceeds the Fair Market Value of such securities or property determined
by the Board of Directors of the Company by an amount in excess of ten percent
(10%) of such Fair Market Value, the costs of the Appraiser will be borne by the
Company; otherwise, the costs of the Appraiser will be borne on a Pro Rata Basis
by the Stockholders demanding the Appraisal. In no event will the Appraised
Value of the Equity Securities be more or less than the per share consideration
received or receivable with respect to the Equity
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Securities or other securities or property of the same class as the Equity
Securities, as the case may be, in connection with a pending transaction
involving a sale, merger, recapitalization, reorganization, consolidation, or
share exchange, dissolution of the Company, sale or transfer of all or a
majority of its assets or revenue or income generating capacity, or similar
transaction. The Appraiser will give due consideration to the prevailing market
prices for the Equity Securities or any other security or property, but the
prevailing market prices for the Equity Securities or any other security or
property will not be dispositive of the Appraised Value thereof.
1.6 "Appraiser" has the meaning set forth in the definition of
Appraised Value.
1.7 "Approved Sale" has the meaning set forth in Section
3.1(a).
1.8 "Authorization Date" has the meaning set forth in Section
2.2(b).
1.9 "beneficial ownership" and "beneficially own" have the
meanings set forth in the Investment Agreement.
1.10 "Xxxxxxx" means J. Xxxxxxx Xxxxxxx.
1.11 "Board" means the Board of Directors of the Company.
1.12 "Brera" means Brera Classic, LLC, a Delaware limited
liability company.
1.13 "Brera Director" has the meaning set forth in Section
5.1(a)(i).
1.14 "Bylaws" means the Bylaws of the Company, as amended or
restated from time to time.
1.15 "Certificate of Incorporation" means the Company's
Amended and Restated Certificate of Incorporation, as amended or restated from
time to time.
1.16 "Class I Director" has the meaning set forth in Section
5.1(b)(i).
1.17 "Class II Director" has the meaning set forth in Section
5.1(b)(ii).
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1.18 "Class III Director" has the meaning set forth in Section
5.1(b)(iii).
1.19 "Closing" has the meaning set forth in the recitals
hereto.
1.20 "Come-Along Notice" has the meaning set forth in Section
2.2(b)(ii).
1.21 "Come-Along Rights" has the meaning set forth in Section
2.2(b)(ii).
1.22 "Come-Along Securities" has the meaning set forth in
Section 2.2(b)(ii).
1.23 "Common Stock" means the Voting Common Stock and
non-voting Common Stock, par value $0.01 per share, of the Company.
1.24 "Common Stock Equivalent" means any option, warrant,
right, or similar security or right exercisable into, exchangeable for, or
convertible to Common Stock.
1.25 "Company" means Classic Communications, Inc., a Delaware
corporation, and its successors and assigns.
1.26 "Current Investor Director" means _________________ for
so long as he serves as a director of the Company pursuant to Section 5.1 or his
replacement selected pursuant to Section 5.4.
1.27 "Electing Stockholder" has the meaning set forth in
Section 2.2(b)(ii).
1.28 "Election Period" has the meaning set forth in Section
2.2(b).
1.29 "Equity Security Equivalent" means any option, warrant,
right, or similar security or right exercisable into, exchangeable for, or
convertible to Equity Securities, including, without limitation, Common Stock
Equivalents.
1.30 "Equity Securities" means any class of capital stock of
the Company and all securities convertible into or rights to purchase capital
stock of the Company, if any, including any warrants and options and any and all
other equity
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securities of the Company or securities convertible into or exchangeable for
such securities or issued as a distribution with respect to or in exchange for
such securities.
1.31 "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
1.32 "Fair Market Value" means:
(a) as to securities regularly traded in the
organized securities markets, the Market Value; and
(b) As to all securities (including the Equity
Securities) not regularly traded in the securities markets and other property,
the fair market value of such securities or property as determined in good faith
by the Board at the time of the transaction (a "Valuation Event") requiring a
determination of Fair Market Value under this Agreement. If a Stockholder and
the Company cannot agree upon the Fair Market Value of the Equity Securities or
other securities or property to be purchased, such Fair Market Value will be
determined as set forth below. For a period of 30 days after the date of a
Valuation Event (the "Negotiation Period"), the Stockholder and the Company
agree to negotiate in good faith to reach agreement upon the Fair Market Value
of the Equity Securities or such other securities or property, as of the date of
the Valuation Event. In the event that the parties are unable to agree upon the
Fair Market Value of the Equity Securities or such other securities or other
property by the end of the Negotiation Period, then the Fair Market Value of the
Equity Securities or such other securities or property will be the Appraised
Value. Notwithstanding any other provisions of this Agreement, the time for any
closing of any transaction as to which Appraised Value is relevant or to which
the foregoing Negotiation Period applies will be extended until the thirtieth
(30th) day following determination of Fair Market Value under this Agreement.
1.33 "Fully Diluted Basis" means all outstanding shares of
Equity Securities plus all shares of Equity Securities issuable upon any the
conversion of any other securities of the Company (including the exercise of any
warrants).
1.34 "GAAP" means United States generally accepted accounting
principles, consistently applied.
1.35 "Individual Stockholder" means each natural Person owning
Equity Securities on the date hereof and such other officers and employees of
the Company that may acquire Equity Securities and become parties to this
Agreement.
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1.36 "Initial Public Offering" means a registered offering of
Common Stock that results in net proceeds to the Company of at least $100
million and listing of the Common Stock on a national securities exchange or
Nasdaq.
1.37 "Investment Agreement" has the meaning set forth in the
preamble hereto.
1.38 "Investor Director" has the meaning set forth in Section
5.1(a)(ii).
1.39 "Investor Majority" has the meaning set forth in Section
5.3.
1.40 "Management Stockholder" or "Management Stockholders" has
the meaning set forth in the preamble hereto.
1.41 "Market Value" as of a certain date means, per share of
common stock:
(a) the average of the last sale prices, regular
way, on the 20 consecutive business days immediately preceding such date or, if
there shall have been no sale on any such day, the average of the closing bid
and asked prices on such date, in each case as officially reported on the
principal national securities exchange on which such common stock is at the time
listed or admitted to trading, or
(b) if such common stock is not then listed or
admitted to trading on any national securities exchange, but is designated as a
national market system security by the NASD, the average of the reported closing
bid and asked prices on such 20 days as shown by the NASD automated quotation
system.
1.42 "NASD" means The National Association of Securities
Dealers, Inc.
1.43 "Nasdaq" means The Nasdaq Stock Market's National Market.
1.44 "Negotiation Period" has the meaning set forth in the
definition of Fair Market Value.
1.45 "Offered Securities" has the meaning set forth in Section
2.2(b).
1.46 "Offered Shares" has the meaning set forth in Section
3.3.
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1.47 "Other Stockholders" has the meaning set forth in Section
2.2(b).
1.48 "Person" means any natural person, corporation, firm,
joint venture, limited liability company, partnership, trust, unincorporated
organization, government or any department or agency of government or any other
entity.
1.49 "Pro Rata Basis" among any specified group of
Stockholders means the proportion of (x) the number of shares of Equity
Securities then owned by, and issuable to (assuming exercise of all Equity
Security Equivalents) an individual Stockholder of such group, to (y) the number
of shares of Equity Securities then owned by, and issuable to (assuming exercise
of all Equity Security Equivalents) all the Stockholders of such group.
1.50 "Representatives" has the meaning set forth in the
Investment Agreement.
1.51 "Sale Notice" has the meaning set forth in Section
2.2(b).
1.52 "Seach" means Xxxxxx X. Seach.
1.53 "SEC" means the Securities and Exchange Commission.
1.54 "Securities Act" means the Securities Act of 1933, as
amended.
1.55 "Stock Incentive Plan" has the meaning set forth in
Section 6.4.
1.56 "Stockholder" or "Stockholders" has the meaning set forth
in the preamble hereto.
1.57 "Subsidiary" has the meaning set forth in the Investment
Agreement.
1.58 "Transfer" has the meaning set forth in Section 2.1.
1.59 "Transfer Notice" has the meaning set forth in Section
2.2(a).
1.60 "Transferring Stockholder" has the meaning set forth in
Section 2.2(b).
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1.61 "Valuation Event" has the meaning set forth in the
definition of Fair Market Value.
2. Restrictions On Transfer
2.1 General Restrictions. Except to the extent otherwise
specifically provided herein and in accordance with the terms and provisions of
this Agreement, no Stockholder will sell, assign, pledge, hypothecate, make
gifts of or in any manner whatsoever dispose of or encumber (any such transfer
or disposition being hereinafter referred to as a "Transfer") any shares of
Equity Securities now owned or hereafter acquired by such Stockholder. Any
purported Transfer in violation of this Agreement shall be null and void and of
no force and effect. No Stockholder may Transfer Equity Securities to any Person
that is a competitor of the Company, unless such Transfer is in connection with
an Approved Sale pursuant to Section 3.1.
2.2 Permitted Transfers. Notwithstanding Section 2.1 of this
Agreement:
(a) Stockholder Transfers. The restrictions
contained in Section 2.1 will not apply with respect to a Transfer of shares of
Equity Securities (i) pursuant to applicable laws of descent and distribution,
(ii) to a wholly-owned Affiliate of an Investor which is not a portfolio company
which engages in any business that competes with any business of the Company at
the time of transfer or (iii) among the Individual Stockholder's family group;
provided that the restrictions contained in Section 2.1 will continue to be
applicable to the Equity Securities after any such Transfer, and the transferees
of such Equity Securities must agree in writing to be bound by the provisions of
this Agreement prior to any such transfer. The Individual Stockholder's "family
group" means the Individual Stockholder's spouse and direct lineal descendants
(whether natural or adopted) and any trust solely for the benefit of the
Individual Stockholder and/or the Individual Stockholder's spouse and/or direct
lineal descendants. At least 30 days prior to making any transfer of Equity
Securities pursuant to this Section 2.2(a), the Individual Stockholder will
deliver a written notice (the "Transfer Notice") to the Company. The Transfer
Notice will disclose in reasonable detail the identity of the prospective
transferee(s) and the terms and conditions of the proposed transfer.
(b) Right of First Offer; Come-Along Rights. Subject
to Section 2.2(c) below, each Stockholder may Transfer any Equity Securities
pursuant to the provisions of this Section 2.2(b). Prior to making any Transfer
pursuant to this
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Section 2.2(b), a Stockholder (the "Transferring Stockholder") shall deliver
written notice (the "Sale Notice") to the Company and the other Stockholders
(the "Other Stockholders"). The Sale Notice shall disclose in reasonable detail
the amount of Equity Securities proposed to be Transferred (the "Offered
Securities") and the terms and conditions of the proposed Transfer. A
Stockholder shall not consummate any Transfer until twenty (20) days after the
Sale Notice has been delivered to the Company and each Other Stockholder (the
"Election Period"), unless the parties to the Transfer have been finally
determined pursuant to this Section 2.2(b) prior to the expiration of the
Election Period. The date of the first to occur of such events is referred to
herein as the "Authorization Date."
(i) Right of First Offer. The Company may elect to
purchase all, but not less than all, of the Offered Securities which are the
subject of the Sale Notice delivered by any Stockholder upon the same terms and
conditions as described in the Sale Notice by delivering a written notice of
such election to such Transferring Stockholder within twenty (20) days after the
Sale Notice has been delivered to the Company. If the Company has not elected to
purchase all of the Offered Securities which are the subject of such Sale
Notice, the Other Stockholders may, in the aggregate, elect to purchase all, but
not less than all, of the Offered Securities which are the subject of such Sale
Notice delivered by any Stockholder upon the same terms and conditions as
described in the Sale Notice by delivering a written notice of such election to
the Transferring Stockholder within twenty (20) days after the Sale Notice has
been delivered to the Other Stockholders. If more than one Other Stockholder
elects to purchase the Offered Securities, the Offered Securities shall be
allocated among the Other Stockholders so electing on a Pro Rata Basis. If
neither the Company nor the Other Stockholders elect to purchase all of the
Offered Securities specified in the Sale Notice, the Transferring Stockholder
will have (y) ninety (90) days after the Authorization Date to draft, execute
and deliver definitive documentation to Transfer such Offered Securities,
subject to the provisions of Section 2.2(b)(ii) below, on terms and conditions
no more favorable to the transferee than those proposed in the Sale Notice and
(z) if such documentation is so drafted, executed and delivered, sixty (60) days
thereafter to consummate the Transfer. Any such Offered Securities not so
Transferred by the Transferring Stockholder during such 150 day period will
again be subject to the provisions of this Section 2.2(b) upon subsequent
Transfer. If the Company or any Other Stockholder has elected to purchase
Offered Securities hereunder, the Transfer of such Offered Securities shall be
consummated as soon as practical after the delivery of the election notice(s) to
the Transferring Stockholder, but in any event within thirty (30) days after the
expiration of the Election Period. The Company or the Other Stockholders shall
pay for such Offered Securities by delivery of a check or wire transfer of funds
in the aggregate
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amount of the purchase price for such Offered Securities. The purchasers of
Offered Securities under this Section 2.2(b)(i) shall be entitled to receive
customary representations and warranties from the Transferring Stockholder
regarding the ownership and title of such Offered Securities. The right of first
offer granted pursuant to this Section 2.2(b)(i) and the requirements of this
Section 2.2(b)(i) shall terminate upon the date of the closing of an Initial
Public Offering, and the Stockholders will have no rights of first offer in
connection with the sale of Equity Securities in such public offering.
(ii) Come-Along Rights. Any Other Stockholder shall
be entitled to participate in any proposed Transfer (other than a Transfer to
the Company) by any Transferring Stockholder pursuant to Section 2.2(b) (a
"Come-Along Right"). Each of the Other Stockholders shall be entitled, within
twenty (20) days of the delivery of the Sale Notice to the Other Stockholders,
to give written notice (the "Come-Along Notice") to the Transferring Stockholder
that such Other Stockholder desires to participate in such proposed Transfer
upon the price, terms and conditions set forth in the Sale Notice or as
otherwise agreed to by such Transferring Stockholder, which Come-Along Notice
shall specify the number of shares of Equity Securities such Other Stockholder
desires to include in such proposed Transfer. If one or more Other Stockholders
elects to exercise its Come-Along Rights by timely delivering a Come-Along
Notice (each, an "Electing Stockholder"), each Electing Stockholder shall be
entitled, subject to the remainder of this Section 2.2(b)(ii), to include in
such proposed Transfer the number of shares of Equity Securities (as to each
Electing Stockholder, the "Come-Along Securities" and, as to all Electing
Stockholders collectively, the "Additional Securities") equal to the lesser of
(A) the maximum amount specified by such Electing Stockholder in its Come-Along
Notice to the Transferring Stockholder and (B) the amount determined by
multiplying the number of shares of Equity Securities owned by such Electing
Stockholder by a fraction, the numerator of which is the number of shares of
Offered Securities, and the denominator of which is the number of shares of
Equity Securities owned by the Transferring Stockholder (assuming exercise of
all convertible securities, options and warrants held by the Transferring
Stockholder. If none of the Other Stockholders gives the Transferring
Stockholder a timely Come-Along Notice with respect to the Transfer proposed in
the Sale Notice, then the Transferring Stockholder will have (y) ninety (90)
days after the Authorization Date to draft, execute and deliver definitive
documentation to Transfer such Offered Securities on terms and conditions no
more favorable to the transferee than those proposed in the Sale Notice and (z)
if such documentation is so drafted, executed and delivered, sixty (60) days
thereafter to consummate the Transfer. Any such Offered Securities not so
Transferred by the Transferring Stockholder during such 150 day period will
again be
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subject to the provisions of this Section 2.2 upon subsequent Transfer. If such
Transferring Stockholder receives a timely Come-Along Notice, then such
Transferring Stockholder shall use all reasonable efforts to obtain the
agreement of the prospective transferee to purchase all, and not less than all,
of the Offered Securities and the Additional Securities, on the terms set forth
above. If the prospective purchaser declines to purchase all of the Offered
Securities and the Additional Securities, each of the Transferring Stockholder
and each Electing Stockholder shall be entitled to Transfer the number of Equity
Securities determined by multiplying (x) the number of shares of Equity
Securities the prospective purchaser is willing to purchase by (y) a fraction,
the numerator of which is (A) in the case of the Transferring Stockholder, the
number of shares of Offered Securities and (B) in the case of an Electing
Stockholder, the number of shares of Come-Along Securities of such Electing
Stockholder, and the denominator of which is the sum of the number of shares of
Offered Securities plus the number of shares of Additional Securities. Each
Electing Stockholder shall be severally obligated to join (on a basis not to
exceed such Electing Stockholder's pro rata share of the proceeds from such sale
as provided hereunder) in any indemnification or other obligations to which a
Transferring Stockholder agrees in connection with such sale (other than any
such obligations that relate specifically to a particular Electing Stockholder,
such as indemnification with respect to representations and warranties given by
an Electing Stockholder regarding such Electing Stockholder's title to and
ownership of Equity Securities, as to which obligations each such Electing
Stockholder shall be solely liable). The Come-Along Right granted pursuant to
this Section 2.2(b)(ii) and the requirements of this Section 2.2(b)(ii) shall
terminate upon the date of the closing of an Initial Public Offering, and the
Stockholders will have no Come-Along Rights in connection with the sale of
Equity Securities in such public offering.
(c) Notwithstanding anything to the contrary
contained in this Agreement, the Management Stockholders shall not transfer any
Equity Securities, other than (i) pursuant to Section 2.2(a) above, (ii) as an
Electing Stockholder pursuant to Section 2.2(b)(ii) above or (iii) pursuant to
Section 3.1 below, until the earlier of (x) three (3) years after the Closing or
(y) six (6) months after an Initial Public Offering.
2.3 Put Rights. Each Stockholder holding warrants to purchase
Common Stock hereby agrees, effective as of the Closing, to forever waive any
right to "put" any Equity Securities or Equity Security Equivalents to the
Company.
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3. Other Transfers
3.1 Sale of the Company; Take-Along Rights.
(a) Notwithstanding Section 2.1 of this Agreement,
if, prior to the closing of an Initial Public Offering, the Board approves the
sale of all or part of the Company to an independent third party (whether by
merger, consolidation, sale of all or substantially all of its assets or sale of
all of the outstanding Equity Securities) (an "Approved Sale"), the Board shall
notify the Stockholders in writing of that election. Upon request by the Board,
each Stockholder will consent to and raise no objections to the Approved Sale,
waive any appraisal or dissenters rights in respect of such Approved Sale, and
take all other actions reasonably necessary or desirable to cause the
consummation of such Approved Sale on the terms proposed by the Board,
including, without limitation, (i) if the Approved Sale is structured as a sale
of stock, each Stockholder will sell all of its Equity Securities and rights to
acquire Equity Securities on the terms and conditions approved by the Board,
(ii) if the Approved Sale is structured as a merger or consolidation, each
Stockholder will vote in favor thereof and will not exercise any dissenters'
rights of appraisal it may have under any applicable law, and (iii) if the
Approved Sale is structured as a sale of all or substantially all of the assets
of the Company, each Stockholder will vote in favor thereof and, if applicable,
will vote in favor of the subsequent dissolution and liquidation of the Company.
Each Stockholder shall be severally obligated to join (on a basis not to exceed
such Stockholder's pro rata share of the proceeds from such Approved Sale) in
any indemnification or other obligations to which the Board agrees in connection
with such Approved Sale (other than any such obligations that relate
specifically to a particular Stockholder, such as indemnification with respect
to representations and warranties given by a Stockholder regarding such
Stockholder's title to and ownership of Equity Securities, as to which
obligations each such Stockholder shall be solely liable).
(b) The obligations of the Stockholders with respect
to an Approved Sale are subject to the satisfaction of the following conditions:
(i) upon the consummation of the Approved Sale, all of the holders of a
particular class or series of Equity Securities shall receive the same form and
amount of consideration per share, or if any Stockholders of a particular type,
class or series of Equity Securities are given an option as to the form and
amount of consideration to be received, all Stockholders of such type, class or
series will be given the same option, and (ii) all Stockholders of then
currently exercisable Equity Security Equivalents will be given an opportunity
to either (A) exercise such rights prior to the consummation of the Approved
Sale and participate in such sale as Stockholders of such Equity Securities or
(B) upon the consummation of the Approved Sale, receive in exchange for such
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rights consideration equal to the amount determined by multiplying (1) the same
amount of consideration per share received by the Stockholders of such type and
class of Equity Securities in connection with the Approved Sale less the
exercise price per share or amount of rights to acquire such Equity Securities
by (2) the number of shares represented by such rights.
(c) If the Company enters into any negotiation or
transaction for which Rule 506 of the Securities Act (or any similar rule then
in effect) may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), each Stockholder
that is not an "accredited investor" (within the meaning of Rule 501(a) of the
Securities Act) will, at the request of the Board, appoint a purchaser
representative (as such term is defined in Rule 501 of the Securities Act)
approved by the Board, and the Company will pay the fees of such purchaser
representative. If any such Stockholder declines to appoint the purchaser
representative approved by the Board, such Stockholder will appoint another
purchaser representative, and such Stockholder will be responsible for the fees
of the purchaser representative so appointed.
(d) Each Stockholder will bear its pro rata share of
the reasonable costs of any sale of Equity Securities pursuant to an Approved
Sale (but only if such Approved Sale is actually consummated) to the extent such
costs are incurred for the benefit of all Stockholders and are not otherwise
paid by the Company or the acquiring party. Costs incurred by or on behalf of a
Stockholder for its sole benefit will not be considered costs of the transaction
hereunder.
3.2 Initial Public Offering. Each Stockholder, at the
Company's expense, will take all actions in connection with the consummation of
an Initial Public Offering as are reasonably requested by the Company or Brera;
provided that no Stockholder will be required to take any action that would
impair its economic interest or rights as stockholder in the Company.
3.3 Involuntary Transfers. Notwithstanding Section 2.1 of this
Agreement:
(a) In the event that any Equity Securities owned by
any Stockholder shall be subject to sale or other transfer by reason of (i)
bankruptcy or insolvency proceedings, whether voluntary or involuntary, or (ii)
distraint, levy, execution or other involuntary transfer, then such Stockholder
shall give the Company written notice thereof promptly upon the occurrence of
such event (and the Company shall promptly send a copy of such notice to each
Stockholder) stating the terms of
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such proposed transfer, the identity of the proposed transferee, the price or
other consideration, if readily determinable, for which the shares of Equity
Securities are proposed to be transferred and the number of shares of Equity
Securities to be transferred (the "Offered Shares"). After its receipt of any
such notice or, failing such receipt, after the Company otherwise obtains actual
knowledge of such a proposed transfer, the Company will have the right to
purchase some or all of the Offered Shares (provided that any Offered Shares not
purchased by the Company may be purchased by the Stockholders pursuant to this
Section 3.3) at the price and on the terms applicable to such proposed transfer,
which right shall be exercised by written notice given by the Company to such
proposed transferor within 90 days following the Company's receipt of such
notice or, failing such receipt, the Company's obtaining actual knowledge of
such proposed transfer.
(b) The closing of the purchase and sale of the
Offered Shares shall be held at the principal office of the Company on a date to
be established by the Company in its notice of election to purchase the Offered
Shares, which in no event shall be less than 10 days nor more than 30 days from
the date of such notice.
(c) If the Company does not elect to purchase all of
the Offered Shares, it shall thereupon give notice of the terms of the proposed
transfer to each of the Stockholders, each of which shall then have, for a
period of 15 days after the receipt of such notice, the right to purchase on a
Pro Rata Basis all of the Offered Shares not purchased by the Company, with a
right of over allotment to purchase Offered Shares not purchased by any other
Stockholders (on a Pro Rata Basis or such other basis as the participating
Stockholders may agree upon) by giving written notice to the Company and the
proposed transferor within such 15-day period. The purchase of Offered Shares by
Stockholders shall be subject to the same procedures and terms as those relating
to the purchase by the Company. In the event that the foregoing rights are not
fully exercised with respect to all of the Offered Shares, the proposed
involuntary transfer referred to in Section 3.3(a) shall be permitted to occur.
If the nature of the event giving rise to such involuntary transfer is such that
no readily determinable consideration is to be paid for the Offered Shares, the
price per share of Equity Securities to be paid by the Company or the
Stockholders, as the case may be, shall be the Fair Market Value on the date of
such transfer.
4. Preemptive Purchase Rights
4.1 Preemptive Rights. Beginning immediately after the
Closing, the Company will not issue or sell any Equity Securities without first
complying with this Section 4 (other than Equity Securities issued pursuant to
(a) an Initial Public
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Offering, (b) warrants and options outstanding on the date hereof or (c) any
employee stock incentive plan for an amount of shares of Common Stock not to
exceed 20% of the outstanding shares of Common Stock as of date hereof less the
shares subject to options granted to Xxxxxxx and Seach pursuant to their
employment agreements with the Company and Classic Cable, Inc., dated the date
hereof (the "Employment Agreements") approved by the Board, provided that new
options granted to Xxxxxxx or Seach, other than pursuant to their Employment
Agreements, will not be exempt from this Section 4). The Company hereby grants
to each Stockholder the preemptive right to purchase, on a Pro Rata Basis, all
or any part of any Equity Securities that the Company may, from time to time,
propose to issue or sell (other than Equity Securities issued pursuant to an
Initial Public Offering or pursuant to warrants and options outstanding on the
date hereof and Equity Securities issued pursuant to any employee stock
incentive plan approved by the Board). Any purchase made by a Stockholder
pursuant to this Section 4.1 shall occur on the same terms and conditions
offered to the proposed transferee(s) of the Equity Securities. The preemptive
right granted pursuant to this Section 4.1 and the requirements of Section 4.2
shall terminate upon the date of the closing of an Initial Public Offering.
4.2 Notice of Sale. As soon as practicable after the Company
determines to issue or sell any Equity Securities, the Company shall notify each
Stockholder of such proposed issuance or sale. The notice shall specify, to the
extent practicable, the purchase price for, and the terms and conditions of, the
sale of such Equity Securities. Each Stockholder shall have fifteen (15) days
from the date it receives such notice to purchase, on a Pro Rata Basis, all or a
portion of its respective amount of the Equity Securities proposed to be issued
by the Company. Thereafter, the Company shall have 150 days to sell such Equity
Securities not elected to be purchased by the Stockholders at the same or higher
price and upon terms substantially similar to those specified in the Company's
notice. In the event the Company has not sold such Equity Securities within the
150 day period, the Company will not thereafter issue or sell any Equity
Securities without first offering such Equity Securities in the manner provided
in this Section 4.
5. Election of Directors and Related Matters.
5.1 Board Voting. Until such time as the Management
Stockholders, Brera and the Investors together own less than 30% of the
outstanding Common Stock on a Fully Diluted Basis, each Stockholder agrees to
take any and all action necessary, including, without limitation, the voting of
all of its Common Stock, the execution of written consents, the calling of
special meetings, the removal of directors, the filling of vacancies in
directorships on the Board, the waiving of notice,
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the attendance of meetings and the amendment of the Certificate of Incorporation
or the Bylaws, so as to:
(a) cause the Board to consist of up to seven (7)
directors composed of the following Persons:
(i) four (4) Persons designated by
Brera (the "Brera Directors"); and
(ii) the chief executive officer of
the Company, initially Xxxxxxx for so long as he is employed by the Company, and
two other individuals selected by the Investor Majority, provided that Seach
shall hold one board seat, for so long as he is employed by the Company, and the
Current Investor Director shall hold the other board seat until the Investor
Majority determines otherwise (the "Investor Directors").
(b) cause the Board to be divided into three classes
as follows:
(i) one class (the "Class I
Directors") to consist of one Brera Director and one Investor Director
(initially, the Current Investor Director) to serve until the first annual
meeting of the Company following the Closing and thereafter for additional terms
of three years;
(ii) one class (the "Class II
Directors") to consist of one Brera Director and one Investor Director
(initially, Seach), to serve until the second annual meeting of the Company
following the Closing and thereafter for additional terms of three years; and
(iii) one class (the "Class III
Directors") to consist of two Brera Directors and one Investor Director
(initially, Xxxxxxx), to serve until the third annual meeting of the Company
following the Closing and thereafter for additional terms of three years.
5.2 Chairmen. Brera will designate the chairman of the Board
and the chairman of each committee of the Board.
5.3 Removal. The removal from the Board (with or without
cause) of any Brera Director or Investor Director shall be in the sole
discretion and at the written direction of Brera or the holders of a majority of
Equity Securities held by the Investors (the "Investor Majority"), respectively,
but only upon such written
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direction and under no other circumstances; provided, that neither Xxxxxxx or
Seach may be removed from the Board without Brera's consent.
5.4 Vacancy. If any Brera Director or Investor Director (other
than the chief executive officer) ceases to serve as a member of the Board
during such representative's term of office, the resulting vacancy on the Board
shall be filled only by Brera or the Investor Majority, as the case may be, but
only upon such written direction and under no other circumstances. If Xxxxxxx or
Seach is terminated or otherwise ceases to be the chief executive officer or
chief financial officer, respectively, of the Company (whether by death,
disability or otherwise), then such person shall be deemed to have resigned from
the Board and (a) in the case of Xxxxxxx, he will be replaced by the new chief
executive officer of the Company and (b) in the case of Seach, he will be
replaced by the Investors consistent with the terms and provisions of this
Section 5.
5.5 Observer Rights. Each of Austin, Growth Fund, BT Capital
and BA SBIC will have, so long as each remains party to this Agreement and
retains, together with its Affiliates, at least 4.0% of the Common Stock, the
rights to (a) receive notices of Board meetings along with the directors and (b)
send one representative to observe Board meetings, provided that the
representative will not have any right to vote at, participate in or disrupt the
meeting, and provided further that by sending a representative to a meeting, the
Stockholder agrees to be bound by all confidentiality and fiduciary duties that
apply to directors at such meetings. The Company will pay the reasonable
out-of-pocket expenses incurred in sending such an observer.
5.6 Transaction Fees. Brera agrees that any transaction fee
payable by the Company to Brera that exceeds 1% of the transaction value for any
such transaction must be approved by the Current Investor Director.
6. Miscellaneous.
6.1 Stock Certificate Legend. A copy of this Agreement shall
be filed with the Secretary of the Company and kept with the records of the
Company. Each certificate representing shares of Equity Securities owned by any
Stockholder shall bear the following legends:
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First Legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS."
Second Legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF AND PROVISIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF MAY
23, 1999, AND A REGISTRATION RIGHTS AGREEMENT, DATED AS OF MAY 23,
1999, (AS SUCH AGREEMENTS MAY BE SUPPLEMENTED, MODIFIED, AMENDED, OR
RESTATED FROM TIME TO TIME, THE "AGREEMENTS") AND MAY NOT BE OFFERED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
(COLLECTIVELY, "TRANSFERRED") UNLESS AND UNTIL SUCH TRANSFER COMPLIES
WITH THE AGREEMENTS, COPIES OF WHICH ARE ON FILE AT THE OFFICES OF THE
COMPANY.
All Stockholders shall be bound by the requirements of such legends to the
extent that such legends are applicable. Upon request of any Stockholder, the
Company shall
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remove the First Legend from the certificate or issue to such Stockholder a
replacement certificate without the First Legend required by this Section 6.1
if, with such request, the Company shall have received an opinion of counsel to
such Stockholder reasonably acceptable to the Company to the effect that such
legend is no longer necessary under the Securities Act. Upon the closing of the
Initial Public Offering, all certificates representing shares of Common Stock
shall be replaced, at the expense of the Company, with certificates not bearing
the Second Legend required by this Section 6.1, and in connection with shares to
be sold pursuant to a registered public offering, the certificates representing
such shares shall be replaced, at the expense of the Company, with certificates
not bearing either of the legends required by this Section 6.1.
6.2 Financial Information . The Company hereby agrees to
provide the following to each Stockholder for so long as such Person owns shares
of Equity Securities:
(a) as soon as practicable after the end of each
fiscal year of the Company, and in any event within 120 days thereafter,
beginning with the fiscal year ending December 31, 1999, consolidated and
consolidating balance sheets of the Company and its subsidiaries, as at the end
of such year, and consolidated and consolidating statements of income and cash
flow of the Company and its subsidiaries, for such fiscal year, prepared in
accordance with GAAP and setting forth in each case in comparative form the
figures for the previous fiscal year together with a comparison of such
statements to the Budget (as defined below) for the most recently added fiscal
year, all in reasonable detail and, in the case of the consolidated statements,
audited and certified by a nationally recognized independent public accounting
firm selected by the Board;
(b) as soon as practicable after the end of each
fiscal quarter of the Company, and in any event within 45 days thereafter,
beginning with the fiscal quarter ending June 30, 1999, consolidated and
consolidating balance sheets of the Company and its subsidiaries, as at the end
of such quarter, and consolidated and consolidating statements of income and
cash flow of the Company and its subsidiaries, for such fiscal quarter, prepared
in accordance with GAAP and setting forth in each case in comparative form the
figures for the corresponding period of the previous fiscal year, together with
a comparison of such statements to the Budget (as defined below), subject to
changes resulting from normal year-end audit adjustments, all in reasonable
detail and certified by an appropriate officer of the Company;
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(c) for as long as such Person holds at least 20% of
the Common Stock on a Fully Diluted Basis and the Company has not completed an
Initial Public Offering, the following information:
(i) as soon as practicable after the
end of each calendar month, and in any event within 30 days thereafter,
beginning with June 30, 1999, consolidated and consolidating balance sheets of
the Company and its subsidiaries, as at the end of such month, and consolidated
and consolidating statements of income and cash flow of the Company and its
subsidiaries for such month and for the current fiscal year to date, prepared
substantially in accordance with GAAP and setting forth in comparative form the
figures for the corresponding periods of the previous fiscal year, together with
a comparison of such statements to the Budget (as defined below), subject to
changes resulting from normal year-end audit adjustments, all in reasonable
detail and certified by an appropriate officer of the Company;
(ii) as soon as practicable after
the end of each calendar month, and in any event within 30 days thereafter,
beginning with June 30, 1999, a statement signed by the chief executive and
chief financial officers of the Company, setting forth in reasonable detail, as
to each cable television system owned or acquired by the Company ant its
subsidiaries from time to time, (A) the number and type of subscribers to such
system as at the end of such month, (B) the range of rates charged to
subscribers during such month, (C) the total miles of activated plant as of the
end of such month, (D) the Company's best estimate of the number of residential
units passed as of the end of such month, (E) the number of subscribers
terminating and adding cable service during such month, and (F) the monthly and
year-to-date revenues, expenses and operating expenses of the Company and its
subsidiaries on a consolidated basis, together with the corresponding figures
for the Company's and its subsidiaries' budgets on a consolidated basis provided
by the Company pursuant to subparagraph (iii) below;
(iii) prior to the commencement of
each fiscal year, an annual business plan, including a budget and financial
projections (including consolidated and consolidating balance sheets of the
Company and its subsidiaries and consolidated and consolidating statements of
income and cash flow of the Company and its subsidiaries), for each month during
such fiscal year, all in reasonable detail together with underlying assumptions
and approved by a majority of the entire Board (the "Budget");
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(iv) promptly upon receipt thereof,
copies of all other reports, if any, submitted to the Company by independent
public accountants in connection with any annual or interim audit of the books
of the Company and its subsidiaries made by such accountants;
(v) a copy of each financial
statement, report or registration statement that the Company or any of its
subsidiaries files with the SEC or any stock exchange;
(vi) promptly upon the Company's
learning thereof, notice of the institution or resolution of any suit or
administrative proceeding that could be reasonably expected to have a material
adverse impact on the condition (financial or otherwise), properties, assets,
operations, results of operations, business or rights of the Company or any of
its subsidiaries; and
(vii) promptly upon the Company's
learning thereof, notice of any event that has had, or could reasonably be
expected to have, a material adverse impact on the condition (financial or
otherwise), properties, assets, operations, results of operations, business or
rights of the Company or any of its subsidiaries, including, without limitation,
the threat of any material litigation or investigation with respect to the
Company or any of its subsidiaries or any material disputes with customers.
6.3 Confidentiality. Each party to this Agreement agrees to
use the same degree of care to keep confidential any information from time to
time supplied to it by or on behalf of the Company which the Company or the
Person acting on its behalf designates in writing at the time of its delivery to
be treated as confidential or actually known by the receiver to be confidential
information as such party uses to keep confidential its own information of a
similar character; provided, however, that the foregoing provisions of this
Section 6.3 shall not apply:
(a) to any information which is or becomes public
knowledge other than by reason of any breach by such party of this Section 6.3
or is or becomes available to such party on a nonconfidential basis from a
source that such party reasonably believes may disclose such information without
violating a confidentiality obligation to the Company;
(b) to the extent a party is required to disclose
the information in question pursuant to any law, statute, rule or regulation or
any order of any court
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or judicial process or pursuant to any direction, request or requirement of any
self-regulating organization or any governmental, fiscal, monetary or other
authority;
(c) to the extent that a party is reasonably
required to disclose the information in question for the protection or
enforcement of any of such party's rights or interests against the Company
(provided that each party hereby agrees that it will use reasonable efforts
promptly to notify the Company of any request for information to which this
clause (c) applies); or
(d) to the prospective transferee in connection with
any contemplated Transfer of any of the shares of Common Stock by such party,
provided such transferee agrees to maintain confidentiality of such information
consistent with the provisions of this Section 6.3.
6.4 Additional Stockholders. Each party hereto (a)
acknowledges that the Company may issue additional shares of Common Stock
pursuant to a stock incentive plan to be approved by the Board for the benefit
of officers and key employees of the Company and its subsidiaries (the "Stock
Incentive Plan") and (b) agrees that any such officer or key employee who is
granted any award under such plan shall, upon execution and delivery of an
Additional Party Signature Page to the Company, be bound by and entitled to the
benefits of this Agreement as though he or she were an original party hereto.
The Company agrees to include as a requirement to participation in the Stock
Incentive Plan that no awards shall be made under such plan to any Person who
does not become a party to this Agreement.
6.5 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns, regardless of whether or not any such successors,
assigns or holders have delivered an undertaking or assumption with respect to
this Agreement. In addition, whether or not any express assignment has been
made, the provisions of this Agreement that are for the benefit of or bind
holders of Equity Securities are also for the benefit of or bind any subsequent
holder of Equity Securities; provided, however, that no third-party transferee
shall derive any rights under this Agreement unless and until such third-party
transferee has executed and delivered to the Company an Additional Party
Signature Page. Any party to, or Person who is subject to, this Agreement that
ceases to own shares of Equity Securities or any interest therein shall cease to
be a party to, or Person who is subject to, this Agreement and thereafter shall
have no rights or obligations hereunder.
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6.6 Specific Performance. Without limiting the rights of each
party to this Agreement to pursue all other legal and equitable rights available
to such party for any other party's failure to perform its obligations under
this Agreement, the parties hereto acknowledge and agree that the remedy at law
for any failure to perform their obligations hereunder would be inadequate and
that each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
6.7 Entire Agreement; Amendment. This Agreement constitutes
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof. Without limiting the generality of the foregoing,
this Agreement supercedes each of the following: (i) that certain Amended
Registration Rights Agreement, dated as of October 31, 1995, among the Company
and certain stockholders, and (ii) that certain Amended Shareholders Agreement,
dated as of October 31, 1995, among the Company and certain stockholders. This
Agreement may be amended, and the performance of any provision hereof may be
waived, only by the written agreement of each of the parties hereto or their
respective successors and assigns for so long as each such successor and assign,
as the case may be, owns at least 5% of the Equity Securities on a Fully Diluted
Basis.
6.8 Expenses and Attorneys' Fees. Except as specifically
provided in this Agreement, the Company shall pay all reasonable fees and
expenses incurred by the Stockholders, including the reasonable fees of their
respective counsel, in connection with the preparation, issuance, maintenance,
reissuance and amendment of this Agreement and the consummation of the
transactions contemplated by this Agreement and the protection or enforcement of
the Stockholders' rights under this Agreement.
6.9 Term. This Agreement, other than Sections 5 and 6, shall
terminate on the date of the closing of an Initial Public Offering pursuant to a
registration statement that was declared effective by the SEC.
6.10 Notices. Any notice provided for in this Agreement must
be in writing and must be either (a) personally delivered, (b) sent by a
recognized overnight courier service, to the recipient at the address below
indicated or (c) by facsimile which is confirmed in writing by sending a copy of
such facsimile to the recipient thereof pursuant to clause (a) or (b) above:
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To the Company: Classic Communications, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: J. Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
With a copy to: Xxxx Xxxxxxxx, Esq.
500 Capital of Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
To Brera: Brera Classic, LLC
c/o Brera Capital Partners, LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Fax: (000) 000-0000
With a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
To Stockholders: at the addresses listed on the signature pages attached hereto.
or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given (x) on the date
such notice is personally delivered, (y) one (1) day after the date such notice
is delivered to the overnight courier service if sent by overnight courier or
(z) with respect to facsimiles,
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on the earlier of one (1) day after the date such facsimile is delivered to the
overnight courier for confirmation or confirmation by telephone to the number
designated herein; provided that in each case notices received after 4:00 p.m.
(local time of the recipient) shall be deemed to have been duly given on the
next business day.
6.11 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
6.12 Headings. The headings and captions contained herein are
for convenience only and shall not control or affect the meaning or construction
of any provision hereof.
6.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original and which
together shall constitute one and the same instrument.
6.14 Representations and Warranties. (a) Each party to this
Agreement represents and warrants to each other party to this Agreement that (i)
all action on the part of such party necessary for the authorization, execution,
delivery and performance of this Agreement has been taken and (ii) this
Agreement is a legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms.
(b) Brera represents that other than the Transaction
Agreements and the Stockholder Voting Agreement, dated as of May 24,1999,
between Brera and each stockholder named therein, as of the date hereof, there
are no other agreements between Brera and (i) either Xxxxxxx or Seach, (ii) the
Company or (iii) with respect to any sale of Brera's interests in the Company,
any third party.
6.15 Governing Law. All questions concerning the validity,
meaning and effect of this Agreement shall be determined in accordance with the
laws of the State of New York applicable to contracts made and to be performed
within the State, without regard to the principles of conflicts of laws except
to the extent necessary to permit this Agreement to be governed by New York law
as set forth above.
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6.16 Consent to Jurisdiction and Service of Process;
Appointment of Agent for Service of Process. EACH PARTY TO THIS AGREEMENT HEREBY
CONSENTS TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND ANY NEW YORK STATE COURT LOCATED IN THE
BOROUGH OF MANHATTAN AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREBY, OR ANY BUSINESS OR OTHER DISPUTES BETWEEN THE PARTIES (WHETHER SUCH
ACTIONS OR PROCEEDINGS ARE BASED IN STATUTE, TORT, CONTRACT OR OTHERWISE), SHALL
BE LITIGATED IN SUCH COURTS. EACH PARTY (A) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF SUCH COURTS FOR SUCH ACTIONS OR PROCEEDINGS, (B) AGREES
THAT IT WILL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION
OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, AND (C) AGREES THAT IT WILL NOT
BRING ANY SUCH ACTION OR PROCEEDING IN ANY COURT OTHER THAN SUCH COURTS. EACH
PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE AND IRREVOCABLE JURISDICTION AND VENUE OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY
AGREE TO BE BOUND BY ANY NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH ACTIONS OR PROCEEDINGS. A COPY OF ANY SERVICE OF PROCESS SERVED UPON
THE PARTIES SHALL BE MAILED BY REGISTERED MAIL TO THE RESPECTIVE PARTY EXCEPT
THAT, UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY
SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY A
PARTY REFUSES TO ACCEPT SERVICE, EACH PARTY AGREES THAT SERVICE UPON THE
APPROPRIATE PARTY BY REGISTERED MAIL SHALL CONSTITUTE SUFFICIENT SERVICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.
6.17 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS
BETWEEN
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THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT
IS BEING ESTABLISHED. EACH PARTY ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON
SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ANY OF THE OTHER
PARTIES. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING
INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED HEREBY. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
ACCORDINGLY, EACH PARTY ACKNOWLEDGES THAT IT HAS WAIVED ITS RIGHT TO XXX OR BE
SUED IN TEXAS AND TO A JURY TRIAL. EACH PARTY HAS DISCUSSED THIS AGREEMENT WITH
ITS COUNSEL AND AGREES TO BE BOUND BY ITS TERMS.
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32
IN WITNESS WHEREOF, the parties have executed this
Stockholders' Agreement as of the day and year first above written.
CLASSIC COMMUNICATIONS, INC.
By:
---------------------------------------------
Name: J. Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
BRERA CLASSIC, LLC
By:
---------------------------------------------
Name: Xxxx X. Xxxx
Title: Authorized Signatory
33
AUSTIN VENTURES, L.P.
By: AV PARTNERS, L.P.
By:
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
AUSTIN VENTURES III-A, L.P.
By: AV PARTNERS III, L.P.
By:
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
AUSTIN VENTURES III-B, L.P.
By: AV PARTNERS III, L.P.
By:
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
BA SBIC MANAGEMENT, L.L.C.,
By: BA Equity Management, L.P.,
Its Sole Member
By: BA Equity Management G.P.
Its General Partner
By:
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxx, III
Title: Member
00
XXXXX XX XXXXXXXX XX XXXXX
GROWTH FUND - 1991 TRUST, AS
TRUSTEE
By: TGF Management Corp.
By:
---------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
BT CAPITAL PARTNERS, INC.
By:
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
UNION BANCAL VENTURE CORPORATION
By:
---------------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.
By:
---------------------------------------------
Name:
Title:
J. XXXXXXX XXXXXXX
By:
---------------------------------------------
35
XXXXXX X. SEACH
By:
---------------------------------------------
XXXXX X. XXXXXXXX
By:
---------------------------------------------
36
SCHEDULE A
37
EXHIBIT A
ADDITIONAL PARTY SIGNATURE PAGE
The undersigned hereby executes the Stockholders' Agreement,
dated as of May 23, 1999, by and among Classic Communications, Inc., a Delaware
corporation, Brera Classic, LLC, a Delaware limited liability company, and the
other signatories listed in the signature pages attached thereto, authorizes
this signature page to be attached to a counterpart of such agreement, and
agrees to be bound by such agreement as if the undersigned had executed such
agreement on the date of its original execution.
-----------------------------------------
Name
-----------------------------------------
Address
-----------------------------------------
Signature
CLASSIC COMMUNICATIONS, INC.
(on behalf of itself and
the Stockholders)
By:
--------------------------------------
Title:
