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EXHIBIT 4.1(c)
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (the
"Agreement"), dated as of November 6, 2000, by and among (i) Next Generation
Network, Inc., a Delaware corporation (the "Company"), (ii) Capital
Communications CDPQ Inc., a Quebec corporation ("CDPQ"), and each investor which
after the date hereof purchases shares of Series D Preferred Stock and agrees in
writing to be bound by the provisions of this Agreement by executing a joinder
in substantially the form attached hereto as Exhibit A (collectively with CDPQ,
the "Series D Investors"), (iii) Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxxx
(together, the "Founders"), (iv) Xxxxxxx Xxxxx ("Xxxxx"), (v) Nevada Bond
Investment Corp. II, a Nevada corporation ("NBIC"), (vi) 21st Century
Communications Partners, L.P., a Delaware limited partnership, 21st Century
Communications T-E Partners, L.P., a Delaware limited partnership, 21st Century
Communications Foreign Partners, L.P., a Delaware limited partnership
(collectively, "21st Century"), Pulitzer, Inc., Xxxx Xxxxxxx, Xxxxx Xxxxxx,
Xxxxx Xxxxxxx, Xxxxx Xxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Jr., Xxxxxx X.
Xxxxxxxx and Elektra Investments, A.V.V., an Aruban exempted company, Xxxx
Xxxxxxx, Xxxx Xxxxxxx Trust, The Xxxxxx Xxxxxxx Trust, Xxxxx Xxxxxxx Trust, and
Xxxxxx X. Xxxxxxx (collectively, the "Existing Investors") and, (vii) those
holders of the Company's common stock warrants acquired pursuant to a Warrant
Agreement dated February 18, 1998 that are identified on Schedule A attached
hereto (the "Warrant Holders"). The Series D Investors, Founders, Xxxxx, NBIC,
the Existing Investors and the Warrant Holders and their respective Permitted
Transferees (as defined below) are sometimes referred to in this Agreement
individually as a "Stockholder" and collectively as the "Stockholders."
Capitalized terms used but not otherwise defined herein shall have the meaning
set forth in Section 1 hereof.
WHEREAS, CDPQ has purchased shares of the Company's Series D
Convertible Participating Preferred Stock, $1.00 par value per share (the
"Series D Preferred Stock"), pursuant to a Preferred Stock Purchase Agreement,
dated as of the date hereof, by and among the Company and CDPQ (as amended,
restated or modified from time to time, the "Purchase Agreement");
WHEREAS, as of the date hereof, the Series D Preferred Stock
purchased by CDPQ pursuant to the Purchase Agreement entitles CDPQ to receive,
upon the conversion thereof, shares of Common Stock representing approximately
23.4% of the Common Stock Deemed Outstanding, which number of shares is subject
to adjustment as set forth in the provisions of the Company's Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation");
WHEREAS, each of the Stockholders (other than the Series D
Investors) own as of the date hereof either shares of Common Stock or other
equity securities of the Company convertible into or exercisable for shares of
Common Stock;
WHEREAS, the Company and the Stockholders (other than the
Series D Investors) are parties to an Amended and Restated Stockholders
Agreement dated as of January 28, 2000 (the "Existing Stockholders Agreement");
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WHEREAS, the Company and the Stockholders desire to amend and
restate the Existing Stockholders Agreement and enter into this Agreement for
the purposes, among others, of (i) establishing the composition of the board of
directors of the Company (the "Board") and the board of directors of each of its
Subsidiaries, (ii) assuring the continuity in the management and ownership of
the Company and (iii) limiting the manner and terms by which the Stockholder
Shares may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions. As used herein, the following terms shall
have the following meanings:
"Affiliate" shall mean, as to any Person, any other Person
which directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Approved Sale" means a Sale of the Company approved by the
Board and the holders of a majority of the shares of Common Stock Deemed
Outstanding to the extent applicable, pursuant to which all holders of
Stockholder Shares receive with respect thereto (whether in such transaction or,
with respect to an asset sale, upon a subsequent liquidation) the same form and
amount of consideration per share of Common Stock or, if any holders are given
an option as to the form and amount of consideration to be received, all holders
are given the same option.
"Common Stock" means, collectively, (a) the Company's common
stock, $.01 par value per share, (b) any other class of common stock, and (c)
any capital stock of the Company issued or issuable with respect to the
securities referred to in clauses (a) and (b) above whether by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
"Common Stock Deemed Outstanding" means the number of shares
of Common Stock, determined on a fully diluted as converted basis giving effect
to all Common Stock Equivalents and any options, warrants or other rights to
acquire Common Stock or Common Stock Equivalents.
"Common Stock Equivalents" means all outstanding securities
convertible into or exchangeable for Common Stock.
"Existing Investor Stockholders" means the Existing Investors
and their respective Permitted Transferees.
"Fair Market Value" of any security means the average of the
closing prices of such security's sales on all securities exchanges on which
such security may at the time be listed, or, if there
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has been no sales on any such exchange on any day, the average of the highest
bid and lowest asked prices on all such exchanges at the end of such day, or, if
on any day such security is not so listed, the average of the representative bid
and asked prices quoted in the Nasdaq Stock Market System as of 4:00 P.M., New
York time, or, if on any day such security is not quoted in the Nasdaq Stock
Market System, the average of the highest bid and lowest asked prices on such
day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of thirty (30) Business Days consisting of the
Business Day as of which "Fair Market Value" is being determined and the
twenty-nine (29) consecutive Business Days prior to such day. If at any time
such security is not listed on any securities exchange or quoted in the Nasdaq
Stock Market System or the over-the-counter market, the "Fair Market Value"
shall be the fair value thereof determined jointly by the Corporation's Board of
Directors and Series D Stockholders holding at least a majority of the
Stockholder Shares held by Series D Stockholders. If such parties are unable to
reach agreement within a reasonable period of time, such fair value shall be
determined by an independent appraiser experienced in valuing securities jointly
selected by the Corporation's Board of Directors and Series D Stockholders
holding at least a majority of the Stockholder Shares held by Series D
Stockholders. The determination of such appraiser shall be final and binding
upon the parties, and the Corporation shall pay the fees and expenses of such
appraiser.
"Family Group" means, with respect to any natural person,
such person's spouse, siblings and descendants (whether natural or adopted) and
any trust or other entity solely for the benefit of such person and/or such
person's spouse, their respective ancestors and/or descendants.
"Founder Stockholders" means the Founders and their
respective Permitted Transferees.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time, consistently applied
"Independent Third Party" means any Person who, immediately
prior to the contemplated transaction, (a) does not own in excess of 5% of the
Common Stock Deemed Outstanding, (b) is not an Affiliate of any such 5% owner of
the Common Stock Deemed Outstanding, or (c) is not a member of the Family Group
of any such 5% owner of the Common Stock Deemed Outstanding.
"IPO" means the sale in an initial firmly underwritten public
offering registered under the Securities Act and underwritten by a nationally
recognized investment bank selected by the Company of any shares of Common Stock
which are listed on any securities exchange or quoted on the NASDAQ Stock Market
System or the over-the-counter market following such offering.
"Major Stockholders" means each of the Founder Stockholders,
the Series D Stockholders, the NBIC Stockholders, the 21st Century Stockholders
and each other Stockholder and its Permitted Transferees, collectively, which on
or after the date hereof own 5% or more of the Common Stock Deemed Outstanding.
"NBIC Stockholders" means NBIC and its Permitted Transferees.
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"Otis" means Xxxx Elevator Company, a New Jersey corporation.
"Otis Competitor" means any person who, in the sole and
absolute determination of NBIC, is engaged in the business of the manufacture,
sale, installation, repair or service of elevators, escalators, moving walkways,
shuttles or other similar people moving equipment or any Affiliate of such
Person.
"Ownership Ratio" means, as to a Stockholder at the time of
determination, the percentage obtained by dividing the number of Stockholder
Shares owned by such Stockholder at such time by the aggregate number of Common
Stock Deemed Outstanding at such time.
"Permitted Transferees" has the meaning set forth in Section
4(d).
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"Public Sale" means any sale of Stockholder Shares to the
public pursuant to an offering registered under the Securities Act or to the
public effected through a broker, dealer or market maker pursuant to the
provisions of Rule 144 or Rule 144A (if such rule is available) under the
Securities Act (or any similar rule or rules then in effect).
"Qualified Public Offering" means the sale, in a firmly
underwritten public offering registered under the Securities Act and
underwritten by a nationally recognized investment bank selected by the Company
of shares of Common Stock (a) having a per share value (based upon the aggregate
net proceeds received by the Company in such offering, after applicable
underwriting discounts and commissions) that would yield (on an as converted
basis) each holder of Series D Preferred Stock no less than a 100% annualized
internal rate of return (based upon the initial purchase price per share of
Series D Preferred Stock and excluding any dividend payments made on the Series
D Preferred Stock) on such holder's shares of Series D Preferred Stock and (b)
resulting in aggregate net proceeds (after applicable underwriting discounts and
commissions) to the Company of at least $50 million, and which are listed on any
securities exchange or quoted on the Nasdaq Stock Market System or the
over-the-counter market following such offering.
"Sale of the Company" means the sale of the Company and its
Subsidiaries, including in one or more series of related transactions, to an
Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (a) equity securities of the Company constituting
a majority of the common equity of the Company (whether by merger,
consolidation, sale or transfer of any or all of the Company's outstanding
capital stock) or (b) all or substantially all of the Company's assets
determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Series A Preferred Stock" means the Series A Convertible
Preferred Stock, $1.00 par value per share, of the Company.
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"Series D Certificate of Designations" means the Certificate
of Designations designating the rights and preferences of the Series D Preferred
Stock adopted by the Board of Directors and set forth as Exhibit C to the
Purchase Agreement.
"Series D Stockholders" means the Series D Investors and
their respective Permitted Transferees.
"Stockholder Shares" means (a) any Common Stock issued to,
acquired by or issuable to the Stockholders on or after the date hereof and (b)
any equity securities issued or issuable directly or indirectly with respect to
the securities referred to in clause (a) above by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular shares constituting
Stockholder Shares, such shares will cease to be Stockholder Shares when they
have been sold in a Public Sale. For purposes of this Agreement, a Person will
be deemed to be a holder of Stockholder Shares whenever such Person has the
right to acquire directly or indirectly such Stockholder Shares (upon conversion
or exercise, in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected. For avoidance of
doubt, a holder of shares of Series D Preferred Stock shall be deemed to be a
holder of Stockholder Shares.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, limited partnership, association or other business
entity of which (a) if a corporation, a majority of the total voting power of
shares of stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof, or (b) if a
partnership, association or other business entity, a majority of the partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
partnership, association or other business entity gains or losses or shall be or
control the managing director or a general partner of such partnership,
association or other business entity.
"Transaction Documents" means the following agreements, all
of which are dated as of the date hereof, as amended from time to time: this
Agreement, the Purchase Agreement, the Series D Certificate of Designations, the
Amended and Restated Registration Rights Agreement, dated as of the date hereof,
by and among the Company and the parties named therein, and the form of the
Warrants (as defined in the Purchase Agreement) attached as Exhibit E to the
Purchase Agreement.
"21st Century Stockholders" means 21st Century and their
respective Permitted Transferees.
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2. Board of Directors.
(a) Each Stockholder shall vote all voting securities of the
Company over which such Stockholder has voting control, and shall take all other
necessary or desirable actions within such Stockholder's control (whether in
such Stockholder's capacity as a stockholder, director, member of a board
committee or officer of the Company or otherwise, and including, without
limitation, attendance at meetings in Person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), and
the Company shall take all necessary and desirable actions within its control
(including, without limitation, calling special board and stockholder meetings),
so that:
(i) from the date hereof until the Company's next annual
meeting of stockholders after the date hereof, the Board shall be comprised of
eleven (11) directors and following the Company's next annual meeting of
stockholders after the date hereof, the Board shall be comprised of nine (9)
directors;
(ii) the following persons will be elected to the Board:
(A) from the date hereof until the Company's next annual
meeting of stockholders after the date hereof, two (2) individuals
designated by the Series D Stockholders holding at least a majority of
the Stockholder Shares held by Series D Stockholders one (1) of whom
shall initially be J. Xxxxxxx Xxxxxx, and following the Company's next
annual meeting of stockholders after the date hereof, a number of
individuals (provided, that at all times there shall be at least one
(1) individual) proportional to the Ownership Ratio for the Series D
Stockholders designated by the Series D Stockholders holding at least
a majority of the Stockholder Shares held by Series D Stockholders
(the "Series D Directors");
(B) one (1) individual designated by the NBIC Stockholders
(the "NBIC Director"), who shall initially be Xxx Xxxxxxx;
(C) one (1) individual designated by the Existing Investor
Stockholders (the "Existing Investor Director"), who shall initially
be Xxxxxxx Xxxxxxx;
(D) two (2) individuals designated by the Founders, (the
"Management Directors"), who shall initially be Xxxxxx X. Xxxxx and
Xxxxxx X. Xxxxxxxx; and
(E) from the date hereof until the Company's next annual
meeting of stockholders after the date hereof, five (5) individuals
nominated by the Founders who shall be considered independent (which
term shall not include the Founders or any other person who is an
employee, consultant or advisor of or to the Company, except with the
consent of NBIC Stockholders holding at least a majority of the
Stockholder Shares held by NBIC Stockholders and Series D Stockholders
holding at least a majority of the Stockholder Shares held by the
Series D Stockholders) ( the "Independent Directors"), and approved in
writing by either (1) NBIC Stockholders holding at least a majority of
the Stockholder Shares held by NBIC Stockholders and Series D
Stockholders holding at least a majority of the Stockholder Shares
held by the Series D Stockholders, or (2) the holders of at least a
majority
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of the Stockholder Shares, and following the Company's next annual
meeting of stockholders after the date hereof, three (3) Independent
Directors nominated by the Founders and approved by either (1) NBIC
Stockholders holding at least a majority of the Stockholder Shares
held by NBIC Stockholders and Series D Stockholders holding at least a
majority of the Stockholder Shares held by the Series D Stockholders,
or (2) the holders of at least a majority of the Stockholder Shares.
If fewer than all of the Independent Directors are so nominated and
approved, the remaining Independent Directors shall be nominated and
elected in accordance with the applicable provisions of the Company's
Certificate of Incorporation and Bylaws and the Delaware General
Corporations Law;
(iii) at all times, the composition of the board of directors
of each of the Company's Subsidiaries, if any (a "Sub Board"), shall be
determined by the Board;
(iv) any committees of the Board or a Sub Board shall be
created only upon the approval of a majority of the votes cast by the members of
the Board (and shall include the prior written approval of Series D Stockholders
holding at least a majority of the Stockholder Shares held by Series D
Stockholders and the NBIC Stockholders holding at least a majority of the
Stockholder Shares held by NBIC Stockholders; provided, that all such committees
shall include at least one (1) Series D Director and the NBIC Director; provided
further, that there shall be (A) a Compensation Committee of the Board which
shall be comprised of at least three (3) individuals including at least one (1)
Series D Director, until the Company's next annual meeting of stockholders after
the date hereof, Xxxxxxx Xxxxxxx and, at the discretion of NBIC Stockholders
holding at least a majority of the Stockholder Shares held by NBIC Stockholders,
the NBIC Director (provided, that a Founder may serve on the Compensation
Committee) and (B) an Audit Committee of the Board which shall be comprised of
at least three (3) individuals including at least one (1) Series D Director and,
at the discretion of NBIC Stockholders holding at least a majority of the
Stockholder Shares held by NBIC Stockholders, the NBIC Director. All individuals
serving on the Compensation Committee or the Audit Committee shall be
Independent Directors. No changes in the compensation or other remuneration paid
or payable to any Founder shall be made without the approval of the Compensation
Committee. Any deliberation or action taken by the Board or the Compensation
Committee with regard to the compensation of any Founder, including the grant of
any stock options, will be made without the participation of any Founder in the
deliberation or approval process. No employee stock option plan, employee stock
purchase plan, employee restricted stock plan or other employee stock plan shall
be established without being reviewed by the Compensation Committee and approved
by the Board. The Audit Committee shall select (subject to the approval of the
Board) and provide instructions to the Company's auditors;
(v) any director shall be removed from the Board, a Sub Board
or any committee thereof (with or without cause) at the written request of the
Stockholder or Stockholders which have the right to designate such a director
hereunder, but only upon such written request and under no other circumstances
(in each case, determined on the basis of a vote or consent of the relevant
Stockholder(s) referred to in clause (iii) above);
(vi) in the event that any representative designated
hereunder for any reason ceases to serve as a member of the Board or a Sub Board
or any committee thereof during such representative's term of office, the
resulting vacancy on the Board or such Sub Board or committee
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shall be filled by a representative designated by the Stockholder(s) which have
the right to designate the director who ceases to serve for the remainder of the
unexpired term. If any party fails to designate a representative to fill a
directorship pursuant to the terms of this Section 2, the election of an
individual to such directorship shall be accomplished in accordance with the
Company's Bylaws and applicable law. If a Founder dies or his employment with
the Company is terminated as a result of his voluntary resignation, he shall
thereupon lose his right to nominate a Management Director or any Independent
Directors and shall cause such Management Director to resign from the Board. If
neither Founder has the right to nominate any Independent Directors then such
directors shall be nominated and elected in accordance with the applicable
provisions of the Company's Certificate of Incorporation and Bylaws and the
Delaware General Corporations Law.
(b) The Company shall use its best efforts to ensure that
meetings of its Board are held at least once each quarter. The Company shall
permit Series D Stockholders holding at least a majority of Stockholder Shares
held by Series D Stockholders and NBIC to have one representative in addition to
the Series D Directors and the NBIC Director (who need not be the same person
each meeting) attend each meeting of the Board and each meeting of any committee
thereof and to participate in all discussions during each such meeting, subject
to the right of the Board to exclude the representative from any discussions
that the Board determines would result in a material conflict of interest or if
the Series D Directors and the NBIC Director otherwise agree. The Company shall
send to Series D Stockholders holding at least a majority of Stockholder Shares
held by Series D Stockholders and NBIC and their respective designated
representative, if identified to the Company, the notice of the time and place
of such meeting in the same manner and at the same time as it shall send such
notice to directors or committee members, as the case may be. The Company shall
also provide to Series D Stockholders holding at least a majority of Stockholder
Shares held by Series D Stockholders and NBIC and their respective designated
representative, copies of all notices, reports, minutes and consents at the time
and in the manner they are provided to the Board as information that would
result in a material conflict of interest. The Company shall pay the reasonable
travel and out-of-pocket expenses incurred by each director and any
representative authorized hereunder in connection with attending the meetings of
the Board or any Sub Board and any committee thereof.
(c) In the event that any provision of the Company's Bylaws
or Certificate of Incorporation is inconsistent with any provision of this
Section 2, the Stockholders shall take such action as may be necessary to amend
any such provision in the Company's Bylaws or Certificate of Incorporation to
remedy such inconsistency.
(d) The provisions of this Section 2 shall terminate
automatically and be of no further force and effect upon the consummation of a
Qualified Public Offering.
3. Representations and Warranties. Each Stockholder,
severally and not jointly, represents and warrants that (a) effective as of the
date hereof such Stockholder is the record owner of the number of Stockholder
Shares set forth opposite its name on Schedule B attached hereto (assuming the
exercise of all Common Stock Equivalents of the Company), (b) this Agreement has
been duly authorized, executed and delivered by such Stockholder and constitutes
the valid and binding obligation of such Stockholder, enforceable in accordance
with its terms, and (c) other than with respect to the Transaction Documents,
each Stockholder represents that such Stockholder has not granted and is not a
party to any proxy, voting trust or other agreement which is inconsistent with
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or conflicts with the provisions of this Agreement, and no holder of Stockholder
Shares shall grant any proxy or become party to any voting trust or other
agreement which is inconsistent with or conflicts with the provisions of this
Agreement.
4. Restrictions on Transfer by Stockholders/Other Rights.
(a) Prohibited Transfers by Founders. Subject to paragraphs
4(d) and 4(e), unless otherwise approved pursuant to the prior written consent
("Transfer Consent") of NBIC Stockholders and Series D Stockholders owning a
majority of the Stockholder Shares held by the NBIC Stockholders and the Series
D Stockholders, respectively, the Founder Stockholders shall not sell, assign,
transfer, mortgage, pledge, charge, hypothecate, give away, or otherwise dispose
of or encumber, whether voluntarily or by operation of law, and whether for
consideration or no consideration ("Transfer"), any Stockholder Shares until the
earlier of the date (each, a "Special Rights Termination Date") that (i) the
Company consummates a Qualified Public Offering, (ii) is the fifth anniversary
of the date hereof, (iii) the NBIC Stockholders cease to own, in the aggregate,
a number of Stockholder Shares equal to at least 50% of the Stockholder Shares
held by the NBIC Stockholders as of the date hereof (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like) and
(iv) the Series D Stockholders cease to own, in the aggregate, a number of
Stockholder Shares equal to at least 50% of the Stockholder Shares held by the
Series D Stockholders as of the date hereof (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like).
(b) First Offer Rights. Subject to paragraphs 4(a), 4(d) and
4(e), at least thirty (30) days prior to the Transfer (other than with respect
to a Public Sale or an Approved Sale) of any Stockholder Shares by any Major
Stockholder (other than a Warrant Holder but including the Founder Stockholders
following either a Transfer Consent or the Special Rights Termination Date) or
any of its Permitted Transferees (as defined in Section 4(d) below), the Person
making such Transfer (the "Transferring Major Stockholder") shall deliver a
written notice (the "Transfer Notice") to the Company and the other Major
Stockholders (other than the Warrantholders) (the "Non-Selling Major
Stockholders") specifying in reasonable detail the identity of the prospective
transferee(s), the number of Stockholder Shares proposed to be Transferred, the
proposed purchase price (which shall be payable solely in cash) and the other
material terms and conditions of the Transfer. The Company may elect to purchase
all (but not less than all) of such Stockholder Shares to be Transferred, upon
the same terms and conditions as those set forth in the Transfer Notice, by
delivering a written notice of such election to the Transferring Major
Stockholder within fifteen (15) days after the Transfer Notice has been
delivered to the Company. If the Company has not elected to purchase all of the
Stockholder Shares to be Transferred within such period, the Non-Selling Major
Stockholders may elect to purchase all (but not less than all) of the
Stockholder Shares to be Transferred, upon the same terms and conditions as
those set forth in the Transfer Notice, by giving written notice of such
election to the Transferring Major Stockholder within thirty (30) days after the
Transfer Notice has been given to the Company (the "Election Period"). If the
Non-Selling Major Stockholders have in the aggregate elected to purchase more
than the number of Stockholder Shares being offered by the Transferring Major
Stockholder, the Stockholder Shares shall be allocated among the Non-Selling
Major Stockholders electing to purchase shares based upon each such Non-Selling
Major Stockholder's proportionate ownership of all Stockholder Shares owned by
Major Stockholders other than the Transferring Major Stockholder. If neither the
Company nor the Non-Selling Stockholders
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elect to purchase all of the Stockholder Shares specified in the Transfer Notice
and if the terms and conditions of this Section 4(b) have been met, then the
Transferring Major Stockholder may transfer the Stockholder Shares specified in
the Transfer Notice at a price and on terms no more favorable to the
transferee(s) thereof than specified in the Transfer Notice during the thirty
(30) day period immediately following the expiration of the Election Period. Any
Stockholder Shares not transferred within such thirty (30) day period will
continue to be subject to the provisions of this Section 4(a). If the Company or
any of the Non-Selling Major Stockholders have elected to purchase Stockholder
Shares hereunder, the transfer of such shares shall be consummated as soon as
practicable after the delivery of the election notice(s) to the Transferring
Major Stockholder, but in any event within fifteen (15) days after the
expiration of the Election Period. Notwithstanding the foregoing, none of the
Existing Investor Stockholders, the Founder Stockholders, Xxxxx or the Series D
Stockholders shall Transfer any Stockholder Shares held by such Stockholder to
an Xxxx Competitor prior to the date that the NBIC Stockholders cease, in the
aggregate, to own at least 50% of the Stockholder Shares held by the NBIC
Stockholders as of the date hereof.
(c) (i) Tag Along Rights on Transfers by Major Stockholders.
Subject to paragraphs 4(b), 4(d) and 4(e), at least thirty (30) days prior to
any Transfer (other than with respect to a Public Sale, an Approved Sale or a
Transfer to the Company or any Stockholder pursuant to paragraph 4(b)) by any
Major Stockholder (other than a Founder Stockholder) of Stockholder Shares
aggregating more than 5% of the Stockholder Shares held by such Major
Stockholder as of the date hereof, the Transferring Major Stockholder shall
deliver a Transfer Notice to the Company and the Non-Selling Major Stockholders
specifying in reasonable detail the identity of the prospective transferee(s),
the number of Stockholder Shares proposed to be Transferred, the proposed
purchase price (which shall be payable solely in cash) and the other material
terms and conditions of the Transfer (which Transfer Notice may be the same
notice and given at the same time as the Transfer Notice under paragraph 4(b)
above). The Non-Selling Major Stockholders may elect to participate in the
contemplated Transfer by delivering written notice to the Transferring Major
Stockholder within thirty (30) days after delivery of the Transfer Notice. If
any Non-Selling Major Stockholders have elected to participate in such Transfer,
the Transferring Major Stockholder and such Non-Selling Major Stockholders
shall be entitled to sell in the contemplated Transfer, at the same price and on
the same terms, a number of Stockholder Shares equal to the product of (i) the
quotient determined by dividing (A) the number of Stockholder Shares owned by
such Major Stockholder by (B) the aggregate number of Stockholder Shares owned
by the Transferring Major Stockholder and such Non-Selling Major Stockholders
participating in such Transfer, and (ii) the aggregate number of Stockholder
Shares of such class or series to be sold in the proposed Transfer.
(ii) Tag Along Rights on Transfers by Founders. Subject to
paragraphs 4(a), 4(b), 4(d) and 4(e), at least thirty (30) days prior to any
Transfer (other than with respect to a Public Sale, an Approved Sale or a
Transfer to the Company or any Stockholder pursuant to paragraph 4(b) and
following either a Transfer Consent or the Special Rights Termination Date) by a
Founder Stockholder of Stockholder Shares, the Founder Stockholder making such
Transfer (the "Transferring Founder Stockholder") shall deliver a Transfer
Notice to the Company, the Major Stockholders and the Warrant Holders specifying
in reasonable detail the identity of the prospective transferee(s), the number
of Stockholder Shares proposed to be Transferred, the proposed purchase price
(which shall be payable solely in cash) and the other material terms and
conditions of the Transfer (which Transfer Notice may be the same notice and
given at the same time as the Transfer
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Notice under paragraph 4(b) above). The Major Stockholders and the Warrant
Holders may elect to participate in the contemplated Transfer by delivering
written notice to the Transferring Founder Stockholder within thirty (30) days
after delivery of the Transfer Notice. If any Major Stockholders or Warrant
Holders have elected to participate in such Transfer, the Transferring Founder
Stockholder and such Major Stockholders and Warrant Holders shall be entitled to
sell in the contemplated Transfer, at the same price and on the same terms, a
number of Stockholder Shares equal to the product of (i) the quotient determined
by dividing (A) the number of Stockholder Shares owned by such Stockholder by
(B) the aggregate number of Stockholder Shares owned by the Transferring Founder
Stockholder and such Major Stockholders and Warrant Holders participating in
such Transfer, and (ii) the aggregate number of Stockholder Shares of such class
or series to be sold in the proposed Transfer.
(d) Permitted Transfers. The restrictions contained in
paragraphs 4(a), 4(b) and 4(c) shall not apply with respect to any Transfer of
Stockholder Shares by any Stockholder (i) pursuant to applicable laws of descent
and distribution or to any member of such Stockholder's Family Group, (ii) to
its Affiliates, (iii) as approved by the Board, to a financial institution,
pursuant to a mortgage, pledge, charge or other encumbrance on such Stockholder
Shares, under the terms of a bona fide loan made by such financial institution
to the Stockholder, (iv) in the case of any Stockholder holding Stockholder
Shares, pursuant to the Company's stock option plans, pursuant to the Company's
loan program for early exercise options under the terms and conditions of such
stock option plans and (v) in the case of the Founders only, of up to 5% of the
Stockholder Shares held by such Founder on the date hereof to charitable
organizations; provided, that the restrictions contained in Sections 4(a), 4(b)
and 4(c) shall continue to be applicable to such Stockholder Shares after any
such Transfer (other than a Transfer pursuant to subparagraph 4(d)(v) above);
provided further, that the transferees (other than the transferees under
subparagraph 4(d)(v) above) of such Stockholder Shares shall have agreed in
writing to be bound by the provisions of this Agreement which affect the
Stockholder Shares so transferred by executing a joinder in substantially the
form attached hereto as Exhibit A. All transferees permitted under this
paragraph 4(e) are collectively referred to herein as "Permitted Transferees."
(e) Termination of Restrictions. The restrictions set forth
in (i) paragraph 4(b) shall continue with respect to each Stockholder Share
until the earlier of (A) the Transfer of such Stockholder Share in a Public Sale
or an Approved Sale and (B) the consummation of a Qualified Public Offering and
(ii) paragraph 4(c) shall continue with respect to each Stockholder Share until
the Transfer of such Stockholder Share in a Public Sale or an Approved Sale.
5. Stockholder Preemptive Rights.
(a) Subject to subsection (b) below, if the Company issues
any shares of Common Stock or any securities containing options or rights to
acquire any shares of Common Stock or any Common Stock Equivalents, in each case
after the date hereof, other than pursuant to an Exempted Issuance (as defined
below), the Company will offer to sell to each Stockholder (other than the
Founders) a number of such securities ("Offered Shares") so that the Ownership
Ratio for such Stockholder immediately after the issuance of such securities
(and assuming the purchase of such Offered Shares) would be equal to the
Ownership Ratio for such Stockholder immediately prior to such issuance of
securities. The Company shall give each Stockholder (other than the Founders) at
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least thirty (30) days prior written notice of any proposed issuance, which
notice shall disclose in reasonable detail the proposed terms and conditions of
such issuance (the "Issuance Notice"). Each Stockholder (other than the
Founders) will be entitled to purchase such securities at the same price, on the
same terms (including, if more than one type of security is issued, the same
proportionate mix of such securities), and at the same time as the securities
are issued by delivery of irrevocable written notice to the Company of such
election within thirty (30) days after delivery of the Issuance Notice (the
"Election Notice"). If any Stockholder (other than the Founders) has elected to
purchase any Offered Shares, the sale of such shares shall be consummated as
soon as practical (but in any event within fifteen (15) days) after the delivery
of the Election Notice.
(b) For purposes of Section 6(a), an "Exempted Issuance"
means the issuance following the date hereof of any Stockholder Shares for Fair
Market Value at the time of issuance (i) upon conversion of the Series D
Preferred Stock and the Series A Preferred Stock and the exercise of warrants
held by the Warrant Holders, (ii) pursuant to any duly approved option plan or
similar compensation plan for employees, consultants or directors of the
Company, (iii) as a stock dividend or upon any subdivision of shares of Common
Stock, provided that the securities issued pursuant to such stock dividend or
subdivision are limited to additional shares of Common Stock, (iv) for the
acquisition by the Company of another entity or business by merger or such other
transaction as would result in the ownership by the Company of not less than a
majority of the voting power of the other entity or for the purchase of all
assets of an entity or business, (v) pursuant to a Qualified Public Offering,
(vi) as approved by the Board, to any person, including Xxxx or any of its
Affiliates, in consideration of any payment under or with respect to any
licensing, supply, customer, manufacturing or similar commercial agreement with
the Company, or (vii) that is deemed to be exempted in a written instrument
signed by the holders of at least a majority of the Stockholder Shares held by
(A) the NBIC Stockholders, (B) the Series D Stockholders and (C) all
Stockholders.
(c) This Section 5 shall automatically terminate upon the
consummation of a Qualified Public Offering.
6. Consent of Series D Stockholders and NBIC Stockholders
Required.
(a) For so long as (x) the Series D Stockholders own at least
50% of the Stockholder Shares held by the Series D Stockholders as of the date
hereof (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like), without the prior written consent of the Series
D Stockholders owning a majority of the Stockholder Shares held by the Series D
Stockholders, and (y) with respect to subparagraphs (iv), (ix) and (xi) below
only, the NBIC Stockholders own at least 50% of the Stockholder Shares held by
the NBIC Stockholders as of the date hereof (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like), without the prior
written consent of the NBIC Stockholders owning a majority of the Stockholder
Shares held by the NBIC Stockholders, the Company shall not:
(i) become subject to any agreement or instrument which by
its terms would (under any circumstances) restrict the Company's right to comply
with the terms of the Purchase Agreement or any of the Related Documents (as
defined in the Purchase Agreement);
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(ii) use the proceeds from the sale of the Series D Preferred
Stock other than in accordance with Section 8.5 of the Purchase Agreement;
(iii) other than any material transaction pursuant to any
Related Document, enter into any transaction or series of transactions outside
the ordinary course of business consistent with past practices (including with
respect to quantity, quality and frequency) with any stockholder, director,
officer, employee or affiliate;
(iv) other than in connection with a Qualified Public
Offering, authorize, create or issue any equity or equity-related securities
(including any debt securities with equity "kickers"), or any rights or
securities directly or indirectly convertible into or exercisable or
exchangeable for such securities (other than stock options pursuant to the
Company's existing stock option plans); provided, that such consent will not be
unreasonably withheld in connection with an IPO;
(v) directly or indirectly declare or pay any dividends or
make any distributions upon any of its capital stock or other equity securities
(or any securities directly or indirectly convertible into or exercisable or
exchangeable for equity securities) other than the Series D Preferred Stock
pursuant to the terms of the Series D Certificate of Designations;
(vi) merge or consolidate with any Person;
(vii) sell, lease or otherwise dispose of all or
substantially all of the assets of the Company (computed on the basis of book
value, determined in accordance with GAAP consistently applied, or fair market
value, determined by the Board in its reasonable good faith judgment) in any
transaction or series of related transactions (other than sales of inventory in
the ordinary course of business);
(viii) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction (including, without limitation, any
reorganization into a limited liability company, a partnership or any other
non-corporate entity which is treated as a partnership for federal income tax
purposes);
(ix) acquire any interest in any Company or business (whether
by a purchase of assets, purchase of stock, merger or otherwise), enter into any
joint venture or make any investment involving consideration of or in an amount
of $2,000,000 or more;
(x) enter into the ownership, active management or operation
of any business other than the business of the Company as it is carried on as of
the original date of issuance of the Series D Preferred Stock or any logical
extensions thereof or discontinue the business of the Company, whether by
liquidation, dissolution, winding up or otherwise;
(xi) other than as contemplated in the Purchase Agreement,
amend, alter or repeal the Company's Bylaws or Certificate of Incorporation
(including the Series D Certificate of Designations) as to increase the number
of authorized shares of the Common Stock or any series of preferred stock or
materially affect the preferences, special rights or other powers of the Series
D Preferred Stock or the Stockholder Shares;
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(xii) other than as contemplated in this Agreement, change
the composition of or the authorized number of directors constituting the Board;
(xiii) amend or modify any stock option plan or employee
stock ownership plan as in existence as of the date of the Purchase Agreement,
adopt any new stock option plan or employee stock ownership plan or issue any
shares of Common Stock to its employees other than pursuant to the Company's
existing stock option and employee stock ownership plans; or
(xiv) hire or fire Senior Management (as defined in the
Purchase Agreement).
(b) For so long as (i) the Series D Stockholders own at least
50% of the Stockholder Shares held by the Series D Stockholders as of the date
hereof (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like), without the prior written consent of the Series
D Stockholders owning a majority of the Stockholder Shares held by the Series D
Stockholders, and (ii) with respect to subparagraphs (iv), (ix) and (xi) of
Section 6(a) only, the NBIC Stockholders own at least 50% of the Stockholder
Shares held by the NBIC Stockholders as of the date hereof (as adjusted for
stock splits, stock dividends, reorganizations, recapitalizations and the like),
the Company shall not permit any of its Subsidiaries to take any of the actions
set forth in Section 6(a)(i) through (xiv).
(c) The Company covenants that as promptly as practicable
after the date hereof, it shall take all actions to amend the articles of
association, charter or other governing documents of all of its direct or
indirect current and future Subsidiaries (whether U.S. or foreign), to provide
that none of the actions listed in Section 6(a) hereto may be taken by such
Subsidiary without the written consents set forth in Section 6(b).
(d) This Section 6 shall automatically terminate upon the
consummation of a Qualified Public Offering.
7. Affirmative Covenants of the Company. For so long as the
Series D Stockholders own at least 50% of the Stockholder Shares held by the
Series D Stockholders as of the date hereof (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like), without the prior
written consent of the Series D Stockholders owning a majority of the
Stockholder Shares held by the Series D Stockholders the Company shall, and
shall cause each Subsidiary to:
(a) preserve and keep in full force and effect the corporate
existence, rights (charter and statutory), licenses and franchises of the
Company; provided, that the Company shall not be required to preserve any such
right, license or franchise if the Board shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company as
a whole and that the loss thereof is not disadvantageous in any material respect
to the Series D Stockholders;
(b) maintain the books, accounts and records of the Company
in accordance with past custom and practice as used in the preparation of the
Financial Statements except to the extent permitted or required by GAAP;
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(c) keep all of its properties which are of an insurable
nature insured with insurers, believed by the Company in good faith to be
financially sound and responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties;
(d) maintain all material Intellectual Property necessary to
the conduct of its business and own or have a valid license to use all right,
title and interest in and to, such material Intellectual Property;
(e) promptly after the date hereof and in any event not more
than thirty (30) days after the date hereof, acquire and maintain key-man life
insurance policies at commercially reasonable rates with respect to the Founders
with coverage of at least $3,000,000 and naming the Company as beneficiary;
(f) comply with all material legal requirements and material
contractual obligations applicable to the operations and business of the Company
and its Subsidiaries and pay all applicable Taxes (as defined in the Purchase
Agreement) as they become due and payable and report to the Board as to such
compliance and payment at each quarterly meeting of the Board; and
(g) make all commercially reasonable efforts to permit CDPQ
and its Affiliates to provide a combination of senior, subordinated and high
yield debt on market terms.
(h) This Section 7 shall automatically terminate upon the
consummation of a Qualified Public Offering.
8. Company Financial Information.
(a) (i) Annual Financial Statements and Budgets. The Company
shall maintain a standard system of accounting in accordance with GAAP and shall
make and keep books, records and accounts that, in reasonable detail, accurately
and fairly reflect its transactions. Except as provided in paragraph 8(e), the
Company shall deliver to each of the NBIC Stockholders, the Series D
Stockholders and to a representative designated by the Existing Investors:
(ii) as soon as available, and in any event within ninety
(90) days after the end of each fiscal year of the Company commencing with
December 31, 2000, audited consolidated financial statements, including a
consolidated balance sheet, and related statements of operations and cash flows
of the Company as of the end of such year, and the individual audited financial
statements for each of its Subsidiaries as of the end of such year; and
(iii) for the fiscal year 2001, by December 31, 2000 and for
subsequent fiscal years, as soon as available, but in any event within thirty
(30) days prior to the commencement of each new fiscal year, a business plan of
the Company (including an operating and capital budget) and projected financial
statements (including a balance sheet and a statement of changes in financial
position) for the Company (on a consolidated basis) and an operating and capital
budget for each of its Subsidiaries for such fiscal year.
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(b) Quarterly Financial Statements. Except as provided in
paragraph 8(e), the Company shall deliver to each of NBIC, CDPQ and a
representative designated by the Existing Investors:
(i) within forty-five (45) days after the end of each fiscal
quarter, unaudited consolidated financial statements, including a consolidated
balance sheet as of the end of such quarter and related statements of operations
and cash flows for such quarter and the current fiscal year to date, setting
forth in comparative form the figures for the corresponding periods of the
previous fiscal year and the Company's projected financial statements for the
current fiscal year and showing deviations from the budget, and the individual
audited financial statements for each of its Subsidiaries as of the end of such
quarter;
(c) Monthly Financial Statements and Budgets. Except as
provided in paragraph 8(e), the Company shall deliver to each of NBIC, CDPQ and
a representative designated by the Existing Investors:
(i) within thirty (30) days after the end of each month, an
unaudited consolidated statement of operations and cash flows for such month and
the current fiscal year to date and an unaudited consolidated balance sheet as
of the end of each such month, setting forth in comparative form the figures for
the corresponding periods of the previous fiscal year and the Company's
projected financial statements for the current fiscal year and showing
deviations from budget;
(ii) promptly upon receipt, copies of all management letters
from accountants and all certificates prepared by or for the Company as to
compliance, defaults, material adverse changes, material litigation or similar
matters, but only to the extent that the delivery thereof would not result in
the loss of any generally recognizable privilege otherwise applicable thereto
(provided, however, that nothing herein shall preclude disclosure of such
letters and certificates to any members of the Board; and
(iii) upon written request, the Company shall also furnish,
with reasonable promptness, such other information relating to the financial
condition, business prospects or corporate affairs of the Company that any NBIC
Stockholder, Series D Stockholder or Existing Investor may from time to time
reasonably request.
(d) Inspection. Except as provided in paragraph 8(e), the
Company shall permit each of the NBIC Stockholders, Series D Stockholders and
the Existing Investors, or their agents, at their own expense, to visit and
inspect the Company's properties, to examine the Company's books of account and
records, and to discuss the Company's affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by the NBIC
Stockholders, Series D Stockholders and/or Existing Investors.
(e) Confidential Information. The Company shall not be
obligated pursuant to this Agreement to provide any information that it
reasonably considers to be a trade secret or to contain confidential data unless
the NBIC Stockholder, Series D Stockholders and/or Existing Investors shall have
executed and delivered to the Company a confidentiality agreement in a form
reasonably acceptable to the Company.
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(f) This Section 8 shall automatically terminate upon the
consummation of a Qualified Public Offering.
9. Legend. In addition to any legend required by any other
document, each certificate evidencing Stockholder Shares and each certificate
issued in exchange for or upon the transfer of any Stockholder Shares (if such
shares remain Stockholder Shares as defined herein after such transfer) shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"Transfer of the shares represented by this
certificate is restricted by a Second Amended and Restated
Stockholders Agreement, dated as of November 6, 2000, as the
same may be amended, a copy of which is on file at the office
of the Corporation.
"The shares represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
and may not be sold, pledged, hypothecated or otherwise
transferred or offered for sale unless a registration
statement has become and is then effective with respect to
such shares or otherwise in accordance with the provisions of
such Stockholders Agreement."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding prior to the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be
Stockholder Shares.
10. Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Stockholder Shares in violation of any provision of
this Agreement shall be null and void, and the Company shall not record such
Transfer on its books or treat any purported transferee of such Stockholder
Shares as the owner of such shares for any purpose.
11. Transfer of Stockholder Shares.
(a) Stockholder Shares are transferable (i) in a Public Sale
and (ii) by any other legally available means of Transfer; provided, that any
Transfer must also comply with the terms of Section 4 and the other provisions
of this Agreement.
(b) In connection with the Transfer of any Stockholder Shares
other than a Transfer described in clause (i) of paragraph 11(a) above, the
holder thereof shall deliver written notice to the Company describing in
reasonable detail the Transfer or proposed Transfer, together with an opinion of
counsel reasonably acceptable to the Company to the effect that such Transfer of
Stockholder Shares may be effected without registration of such Stockholder
Shares under the Securities Act. In addition, if the holder of the Stockholder
Shares delivers to the Company an opinion of counsel that no subsequent Transfer
of such Stockholder Shares shall require registration under the Securities Act,
the Company shall promptly upon such contemplated Transfer deliver new
certificates for such Stockholder Shares which do not bear the first sentence of
the legend set forth in Section 9 above. If the Company is not required to
deliver new certificates for such Stockholder Shares not bearing such legend,
the holder thereof shall not consummate a Transfer of the same until
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the prospective transferee has confirmed to the Company in writing its agreement
to be bound by the conditions contained in this Section 11 and Section 9 above.
(c) Upon the request of a holder of Stockholder Shares, the
Company shall promptly supply to such Person or its prospective transferees all
information regarding the Company required to be delivered in connection with a
Transfer pursuant to Rule 144A (or any similar rule or rules then in effect) of
the Securities and Exchange Commission.
(d) Upon the request of a holder of Stockholder Shares, the
Company shall remove the legend set forth in Section 9 above from the
certificates for the Stockholder Shares; provided, that such Stockholder Shares
are eligible for sale pursuant to Rule 144 (or any similar rule or rules then in
effect) of the Securities and Exchange Commission.
12. Amendment and Waiver. No modification, amendment or
waiver of any provision of this Agreement shall be effective against the Company
or the Stockholders unless such modification, amendment or waiver is approved in
writing by the Company and each of (a) Series D Stockholders holding at least a
majority of the Stockholder Shares held by the Series D Stockholders, (b) NBIC
Stockholders holding at least a majority of the Stockholder Shares held by the
NBIC Stockholders, (c) Existing Stockholders holding at least a majority of the
Stockholder Shares held by the Existing Stockholders, and (d) Stockholders
holding at least a majority of the Stockholder Shares held by all Stockholders;
provided, that any such modification, amendment or waiver which adversely
affects any Stockholder and is prejudicial to such Stockholder relative to all
of the other Stockholders cannot be effected without the consent of such
Stockholder. Any Stockholder may agree, in a written instrument signed by that
Stockholder, to waive the benefits of any provision of this Agreement applicable
to that Stockholder without requiring the consent of any other party; provided,
that the failure of any party to enforce any of the provisions of this Agreement
shall in no way be construed as a waiver of such provisions and shall not affect
the right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
13. Severability. Whenever possible, each provision of this
Agreement shall 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 invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
14. Entire Agreement. Except as otherwise expressly set forth
herein, this document and the other Transaction Documents embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way (including, without limitation, each of
the Existing Stockholders Agreement and the Letter of Intent executed by the
Company and CDPQ dated as of September 20, 2000).
15. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and
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assigns and the Stockholders and any subsequent holders of Stockholder Shares
and the respective successors and assigns of each of them, so long as they hold
Stockholder Shares (and hold or have received Stockholder Shares in accordance
with the terms hereof).
16. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
17. Remedies. The parties hereto shall be entitled to enforce
their rights under this Agreement specifically to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that the Company or any Stockholder may in its sole discretion
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief (without posting a bond or other security)
in order to enforce or prevent any violation of the provisions of this
Agreement.
18. Notices. All notices, requests, consents and other
communications provided for herein shall be in writing and shall be (i)
delivered in person, (ii) transmitted by telecopy, (iii) sent by first-class,
registered or certified mail, postage prepaid, or (iv) sent by reputable
overnight courier service, fees prepaid, to the recipient at the address or
telecopy number set forth below, or such other address or telecopy number as may
hereafter be designated in writing by such recipient. Notices shall be deemed
given upon personal delivery, seven days following deposit in the mail as set
forth above, upon acknowledgment by the receiving telecopier or one day
following deposit with an overnight courier service.
(i) If to the Company or any Existing Investor:
[C/O] Next Generation Network, Inc.
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, CEO
with a copy to (which shall not constitute notice to the
Company):
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
(ii) If to a Founder, Xxxxx, Existing Investor, or
Warrant Holder, to the address set forth below his,
her or its signature to this Agreement.
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(iii) If to CDPQ:
Capital Communications CDPQ Inc.
Place Mercantile
2001, Avenue XxXxxx College
Xxxxxxxx, Xxxxxx X0X 0X0
Telecopy: (000) 000-0000
Attention: Xxxxxx Ribotti
with a copy to (which shall not constitute notice to the
Purchaser):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
(iv) If to NBIC:
Nevada Bond Investment Corp. II
x/x Xxxxxx Xxxxxxxxxxxx Xxxxxxxxxxx
Xxxxxx Xxxxxxxxxxxx Xxxxxxxx
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
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.
19. GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF DELAWARE
SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
STOCKHOLDERS. ALL OTHER PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OR CHOICE OF LAW OF THE STATE
OF NEW YORK OR ANY OTHER JURISDICTION WHICH WOULD RESULT IN THE APPLICATION OF
THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
20. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
21. Time of the Essence; Computation of Time. Time is of the
essence for each and every provision of this Agreement. Whenever the last day
for the exercise of any privilege or the discharge or any duty hereunder shall
fall upon a Saturday, Sunday, or any date on which banks in New York City, New
York are authorized to be closed, the party having such privilege or duty may
exercise such privilege or discharge such duty on the next succeeding day which
is a regular business day.
22. Waiver of Jury Trial. The parties to this Agreement each
hereby waives, to the fullest extent permitted by law, any right to trial by
jury of any claim, demand, action, or cause
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of action (i) arising under this Agreement or (ii) in any way connected with or
related or incidental to the dealings of the parties hereto in respect of this
Agreement or any of the transactions related hereto, in each case whether now
existing or hereafter arising, and whether in contract, tort, equity, or
otherwise. The parties to this Agreement each hereby agrees and consents that
any such claim, demand, action, or cause of action shall be decided by court
trial without a jury and that the parties to this Agreement may file an original
counterpart of a copy of this Agreement with any court as written evidence of
the consent of the parties hereto to the waiver of their right to trial by jury.
23. Series D Stockholder IPO Preference. The Company and the
Stockholders parties hereto hereby acknowledge and agree that in connection with
an IPO by the Company, the Company will use its best efforts to sell on a pro
rata basis to the Series D Stockholders at the time of such offering that number
of shares of Common Stock being sold in such offering equal to the lesser of (a)
5% of the shares of Common Stock being sold in such offering and (b) the
quotient obtained by dividing $15,000,000 by the offering price per share of
Common Stock in such offering.
* * * * *
-21-
22
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first above written.
NEXT GENERATION NETWORK, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title:
23
INVESTOR SIGNATURE PAGE
CAPITAL COMMUNICATIONS CDPQ INC.
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
By: /s/ Xxxxxx Ribotti
--------------------------------------
Name: Xxxxxx Ribotti
Title: Manager
24
FOUNDERS SIGNATURE PAGE
______________________________
XXXXXX X. XXXXX
______________________________
XXXXXX X. XXXXXXXX
25
XXXXX SIGNATURE PAGE
____________________________________
XXXXXXX XXXXX
Address:
26
NBIC SIGNATURE PAGE
NEVADA BOND INVESTMENT CORP. II
By: ______________________________________
Name:
Title:
27
EXISTING INVESTORS SIGNATURE PAGE
21ST CENTURY COMMUNICATIONS PARTNERS,
L.P.
By: Sandler Investment Partners, L.P.;
General Partner
By: Sandler Capital Management,;
General Partner
By: MIM Media Corp., a General Partner
By: ___________________________________
Name:
Title:
Address:
21ST CENTURY COMMUNICATIONS T-E
PARTNERS, L.P.
By: Sandler Investment Partners, L.P.;
General Partner
By: Sandler Capital Management,;
General Partner
By: MIM Media Corp., a General Partner
By: ___________________________________
Name:
Title:
Address:
28
21ST CENTURY COMMUNICATIONS
FOREIGN PARTNERS, L.P.
By: Sandler Investment Partners, L.P.;
General Partner
By: Sandler Capital Management,;
General Partner
By: MIM Media Corp., a General Partner
By: ___________________________________
Name:
Title:
Address:
PULITZER, INC.
By: ___________________________________
Name:
Title:
Address:
29
EXISTING INVESTORS SIGNATURE PAGE
________________________________________
XXXX XXXXXXX
Address:
________________________________________
XXXXX XXXXXX
Address:
________________________________________
XXXXX XXXXXXX
Address:
_________________________________________
XXXXX XXX
Address:
_________________________________________
XXXXXX XXXXXXX
Address:
_________________________________________
XXXXXXX XXXXXX, JR.
Address:
30
EXISTING INVESTORS SIGNATURE PAGE
_________________________________________
XXXXXX X. XXXXXXXX
Address:
ELECTRA INVESTMENTS, A.V.V.
By: ___________________________________
Name:
Title:
Address:
________________________________________
XXXX X. XXXXXXX
Address:
XXXX XXXXXXX TRUST
By: ___________________________________
Name:
Title:
Address:
THE XXXXXX XXXXXXX TRUST
By: ___________________________________
Name:
Title:
Address:
31
XXXXX XXXXXXX TRUST
By: ___________________________________
Name:
Title:
Address:
________________________________________
XXXXXX X. XXXXXXX
Address:
32
WARRANT HOLDERS SIGNATURE PAGE
NORTH DAKOTA HIGH YIELD
By: ___________________________________
Name:
Title:
Address:
THE XXXX XXXXX USA HIGH YIELD FUND
By: ___________________________________
Name:
Title:
Address:
CHESIL & COMPANY
By: ___________________________________
Name:
Title:
Address:
OKGBD & Co.
By: ___________________________________
Name:
Title:
Address:
33
HARE & COMPANY
By: ___________________________________
Name:
Title:
Address:
CREDIT SUISSE ASSET MANAGEMENT INCOME FUND
By: ___________________________________
Name:
Title:
Address:
CSAM STRATEGIC GLOBAL INCOME FUND INC.
By: ___________________________________
Name:
Title:
Address:
WARBURG PINCUS HIGH YIELD FUND
By: ___________________________________
Name:
Title:
Address:
34
SEI INSTITUTIONAL MANAGED TRUST
By: ___________________________________
Name:
Title:
Address:
OMAHA PUBLIC SCHOOL EMPLOYEE RETIREMENT
SYSTEM
By: ___________________________________
Name:
Title:
Address:
BLAZERHOLD & CO.
By: ___________________________________
Name:
Title:
Address:
THE COMMON FUND
By: ___________________________________
Name:
Title:
Address:
35
EXHIBIT A
FORM OF JOINDER TO
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
JOINDER to the Amended and Restated Stockholders Agreement
(this "Joinder"), dated as of October [__], by and among Next Generation
Network, Inc., a Delaware corporation (the "Company"), and certain stockholders
of the Company (the "Agreement"), is made and entered into as of [_________] by
and between the Company and [__________] (the "Stockholder"). Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Agreement.
WHEREAS, the Stockholder has acquired certain shares of
[________] ("Stockholder Stock"), and the Agreement and the Company requires the
Stockholder, as a holder of Stockholder Stock, to become a party to the
Agreement, and the Stockholder agrees to do so in accordance with the terms
hereof.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Joinder hereby
agree as follows:
1. Agreement to be Bound. The Stockholder hereby agrees that
upon execution of this Joinder, it shall become a party to the Agreement and
shall be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement as though an original party thereto and shall be
deemed a [SERIES D INVESTOR, FOUNDER, ETC. AS APPLICABLE] for all purposes
thereof. In addition, the Stockholder hereby agrees that all Stockholder Stock
held by Stockholder shall be deemed "Stockholder Shares" for all purposes of the
Agreement.
2. Successors and Assigns. Except as otherwise provided
herein, this Joinder shall bind and inure to the benefit of and be enforceable
by the Company and its successors and
36
assigns and Stockholder and any subsequent holders of Stockholder Stock and the
respective successors and assigns of each of them, so long as they hold any
shares of Stockholder Stock.
3. Counterparts. This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
4. Notices. For purposes of Section 16 of the Agreement, all
notices, demands or other communications to the Stockholder shall be directed
to:
[NAME]
[ADDRESS]
[FACSIMILE NUMBER]
[ATTENTION:]
5. GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF DELAWARE
SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
STOCKHOLDERS. ALL OTHER PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OR CHOICE OF LAW OF THE STATE
OF NEW YORK OR ANY OTHER JURISDICTION WHICH WOULD RESULT IN THE APPLICATION OF
THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
6. Descriptive Headings. The descriptive headings of this
Joinder are inserted for convenience only and do not constitute a part of this
Joinder.
* * * * *
37
IN WITNESS WHEREOF, the parties hereto have executed this
Joinder as of the date first above written.
NEXT GENERATION NETWORK, INC.
By:_________________________
Name:
Title:
[HOLDER]
By:_________________________
Name:
Title:
