ANNEX III
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STOCKHOLDERS' AGREEMENT
among
KIN NETWORK, INC.
and its
STOCKHOLDERS
Dated as of _______ __, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
Certain Definitions.........................................................................1
ARTICLE II
Management Arrangements.....................................................................8
Section 2.1. Conduct of Business...................................................8
Section 2.2. Articles of Incorporation; No Conflict with Agreement................10
Section 2.3. Registration of Common Stock.........................................11
Section 2.4. Access to Information................................................11
ARTICLE III
Corporate Governance.......................................................................11
Section 3.1. Board of Directors...................................................11
Section 3.2. Removal..............................................................12
Section 3.3. Vacancies............................................................13
Section 3.4. Covenant to Vote.....................................................13
ARTICLE IV
Transfers of Securities....................................................................13
Section 4.1. Restrictions on Transfer.............................................13
Section 4.2. Exceptions to Restrictions...........................................14
Section 4.3. No Transfer to Competitors...........................................14
Section 4.4. Endorsement of Certificates..........................................14
Section 4.5. Improper Transfer....................................................15
ARTICLE V
Purchase Rights............................................................................15
Section 5.1. Transfers by a Stockholder...........................................15
Section 5.2. Transfer of Offered Securities to Third Parties......................16
Section 5.3. Purchase of Offered Securities.......................................17
Section 5.4. Waiting Period with Respect to Subsequent Transfers..................17
Section 5.5. Change in Control Option.............................................17
Section 5.6. Right of First Refusal for New Securities............................18
Section 5.7. Legally Binding Obligation; Power of Attorney; Personal Rights.
.................................................................................19
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Section 5.8. Right to Join in Sale................................................19
ARTICLE VI
Registration Rights........................................................................20
Section 6.1. Demand Registrations.................................................20
Section 6.2. Piggyback Registrations..............................................22
Section 6.3. Registration Procedures..............................................24
Section 6.4. Indemnification......................................................27
Section 6.5. Contribution.........................................................29
Section 6.6. Rule 144.............................................................30
ARTICLE VII
Termination................................................................................30
Section 7.1. Certain Terminations.................................................31
ARTICLE VIII
Miscellaneous..............................................................................31
Section 8.1. Successors and Assigns...............................................31
Section 8.2. Amendment and Modification; Waiver of Compliance.....................31
Section 8.3. Notices..............................................................32
Section 8.4. Entire Agreement; Governing Law......................................32
Section 8.5. Injunctive Relief....................................................33
Section 8.6. Inspection...........................................................33
Section 8.7. Headings.............................................................33
Section 8.8. Recapitalizations, Exchanges, Etc., Affecting the Securities.........33
Section 8.9. Counterparts.........................................................33
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STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of ________ __, 1997, among KIN
Network, Inc., a Kansas corporation (together with its successors and assigns,
the "Company"), Advanced Communications Group, Inc., a Delaware corporation
("ACG"), and Liberty Cellular, Inc., a Kansas corporation ("Liberty") ("ACG"
and "Liberty", collectively, together with their respective successors and
assigns, the "Stockholders").
W I T N E S S E T H:
WHEREAS, the Company, as of the date hereof, is authorized by its
Articles of Incorporation, as amended (a true and correct copy of which, as in
effect on the date hereof, has been delivered to each Stockholder), to issue
capital stock consisting of 10,000,000 shares of its Common Stock, no par value
per share (the "Common Stock");
WHEREAS, on the date hereof (i) an aggregate of 412,221 shares of
Common Stock are owned of record and beneficially by the Stockholders; and (ii)
no other shares of Common Stock, or warrants, options, rights or other
securities exercisable for or convertible into Common Stock are issued or
outstanding;
WHEREAS, the parties hereto deem it in their best interests and in the
best interests of the Company to provide consistent and uniform management for
the Company and desire to enter into this Agreement in order to effectuate that
purpose and to set forth their respective rights and obligations in connection
with their investment in the Company; and
WHEREAS, the parties hereto also desire to restrict the sale,
assignment, transfer, encumbrance or other disposition of the shares of Common
Stock, including issued and outstanding shares of Common Stock as well as
shares of Common Stock that may be issued hereafter, and to provide for certain
rights and obligations in respect thereto as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
following respective meanings:
AFFILIATE shall mean with respect to any Person, (a) any Person which
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person or (b) any Person
who is a director or executive officer (i) of such Person, (ii) of any
Subsidiary of such Person, or (iii) of any Person described in the foregoing
clause (a). For purposes of this definition, "control" of a Person shall mean
the power, direct or indirect, (i) to vote or direct the voting of 50% or more
of the outstanding shares of voting Capital Stock of such Person, or (ii) to
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.
AGREEMENT shall mean this Agreement as in effect on the date hereof
and as hereafter from time to time amended, modified or supplemented in
accordance with the terms hereof.
APPRAISED VALUE shall mean the fair market value per share of Common
Stock determined by agreement between the Board of Directors and a Stockholder
or, if such agreement is not obtained within 30 days after the relevant
determination date, by a qualified investment bank selected by 75% of the
members of the Board of Directors. For purposes of determining Appraised Value,
the fair market value of the Common Stock shall equal the price per share of
Common Stock that could be obtained in an open (non-forced) sale of all of the
outstanding Common Stock, with ample time for marketing and closing and
assigning equal value to each share of Common Stock. The cost of any investment
bank will be borne by the Company and any such investment bank will be given
full access to the books, records, properties and employees of the Company and
its Subsidiaries.
ARTICLES OF INCORPORATION is defined in the Recitals. Such term shall
also include the Articles of Incorporation as hereafter from time to time
amended in accordance with the terms thereof and of this Agreement.
BOARD OF DIRECTORS shall mean the Board of Directors of the Company as
from time to time hereafter constituted.
BY-LAWS shall mean the By-Laws of the Company as in effect on the date
hereof and as hereafter amended in accordance with the terms hereof and
thereof.
CAPITAL STOCK shall mean, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents (however
designated) of such Person's capital stock or equity capital, including,
without limitation, shares of preferred or preference stock, general and
limited partnership interests, and any rights, warrants or options exercisable
for or convertible into such capital stock or equity capital.
CHANGE IN CONTROL shall mean the occurrence with respect to any
Stockholder of any of the following events:
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(a) a report on Schedule 13D is filed with the Commission
pursuant to Section 13(d) of the Exchange Act, disclosing that any
Person, entity or group (within the meaning of Section 13(d) or 14(d)
of the Exchange Act), other than such Stockholder (or one of its
subsidiaries) or any employee benefit plan sponsored by such
Stockholder (or one of its subsidiaries), is the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 20 percent or more of the combined
voting power of the then-outstanding securities of such Stockholder;
(b) a report is filed by such Stockholder disclosing a
response to either Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, or to Item 1 of Form 8-K
promulgated under the Exchange Act, or to any similar reporting
requirement hereafter promulgated by the Commission;
(c) any Person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than such
Stockholder (or one of its subsidiaries) or any employee benefit plan
sponsored by such Stockholder (or one of its subsidiaries), shall
purchase securities pursuant to a tender offer or exchange offer to
acquire any securities for cash, securities or any other
consideration, provided that after consummation of the offer, the
Person, entity or group in question is the beneficial owner (as such
term is defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of 20 percent or more of the combined voting
power of the then-outstanding securities of such Stockholder;
(d) the stockholders of such Stockholder shall approve:
(i) any merger, consolidation, or
reorganization of such Stockholder;
(A) in which such Stockholder is not the
continuing or surviving corporation,
(B) pursuant to which shares of outstanding
voting securities of such Stockholder would be
converted into cash, securities or other property,
(C) with a corporation which prior to such
merger, consolidation, or reorganization owned 20
percent or more of the combined voting power of the
then-outstanding securities of the Company, or
(D) in which such Stockholder will not
survive as an independent, publicly-owned
corporation in the event that such Stockholder was a
publicly-owned corporation prior to such merger,
consolidation or reorganization;
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(ii) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all
or substantially all the assets of such Stockholder, or
(iii) any liquidation or dissolution of such
Stockholder;
(e) the stockholders of such Stockholder shall approve a
merger, consolidation, reorganization, recapitalization, exchange
offer, purchase of assets or other transaction after the consummation
of which any Person, entity or group (as defined in accordance with
Section 13(d) or 14(d) of the Exchange Act) would own beneficially in
excess of 50% of the combined voting power of the then-outstanding
securities of the Company;
(f) the occurrence of the distribution of any rights to the
stockholders of such Stockholder pursuant to any stockholders' rights
plan that may be adopted by such Stockholder in the future; or
(g) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board
of Directors of such Stockholder cease for any reason to constitute a
majority of such board, unless the election or nomination for election
by such Stockholder's stockholders of each new director during any
such two-year period was approved by the vote of two-thirds of the
directors then still in office who were directors at the beginning of
such two-year period.
COMMON STOCK is defined in the Recitals.
COMMISSION shall mean the Securities and Exchange Commission and any
successor commission or agency having similar powers.
COMPANY is defined in the preamble.
COMPANY SECURITIES shall have the meaning specified in Section
6.1(g).
CONSOLIDATED TOTAL CAPITALIZATION shall mean consolidated total
stockholders' equity plus consolidated total long-term debt of the Company and
its Subsidiaries, all as determined in accordance with GAAP.
DISPOSING STOCKHOLDER shall have the meaning specified in Section
5.8(a).
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EXCHANGE ACT shall mean, as of any date, the Securities Exchange Act
of 1934, as amended, or any similar Federal statute then in effect, and a
reference to a particular section thereof shall include a reference to the
comparable section, if any, of such similar Federal statute.
FIRST OFFER PRICE shall have the meaning specified in Section 5.1 (a).
FIRST OFFER TERMS shall have the meaning specified in Section 5.1 (a).
FULLY DILUTED COMMON STOCK at any time shall mean all shares of Common
Stock then issued and outstanding plus all shares of Common Stock issuable upon
the exercise of any warrants, options or rights to acquire Common Stock which
are then outstanding, regardless of whether such warrants, options, other
rights are at the time exercisable.
GAAP shall mean generally accepted accounting principles from time to
time in effect in the United States.
HOLDER REQUEST shall have the meaning specified in Section 6.1 (a).
MANAGEMENT AGREEMENT shall mean the Management Agreement dated as of
January 1, 1997 between XXXX, X.X., a Kansas limited liability company, and the
Company, as amended.
MATERIAL SUBSIDIARY shall mean a Subsidiary of the Company that owns
"substantial assets" (as defined in Section 2.1(b)(iii)).
NASD shall mean the National Association of Securities Dealers, Inc.,
or any successor regulatory body exercising similar functions.
NEW SECURITIES shall have the meaning specified in Section 5.6(b).
NOTICE OF EXERCISE shall have the meaning specified in Section
5.1(b).
NOTICE OF INTENTION shall have the meaning specified in Section
5.1(a).
OFFERED SECURITIES shall have the meaning specified in Section
5.1(a).
PARENT shall mean, with respect to any Person, any other Person of
which such Person is a direct or indirect Subsidiary.
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PERMITTED TRANSFEREE shall mean, with respect to any Stockholder,
those Persons to whom transfers of Securities are permitted to be made by such
Stockholder pursuant to Subsection (b) of Section 4.2 hereof.
PERSON shall mean an individual or a corporation, association,
partnership, joint venture, organization, business, individual, trust, or any
other entity or organization.
PRIME RATE shall mean the lesser of (a) the reference interest rate
announced from time to time by ______________ at its principal banking office
in _______, ______ County, ________ on loans to such bank's most creditworthy
customers or (b) 10% per annum.
PROPOSED PURCHASER shall have the meaning specified in Section 5.8(b).
PUBLIC OFFERING shall mean a public offering and sale of equity
securities of the Company pursuant to an effective registration statement on
Form S-1 under the Securities Act.
PURCHASE OFFER shall have the meaning specified in Section 5.8(b).
QUALIFIED PUBLIC OFFERING shall mean a Public Offering of Common
Stock, at the conclusion of which the aggregate number of issued and
outstanding shares of Common Stock that have been sold to the public pursuant
to one or more effective registration statements under the Securities Act is
equal to at least 20% of the Fully Diluted Common Stock after giving effect to
such sale and the listing of the Common Stock on the New York Stock Exchange,
American Stock Exchange, Nasdaq Stock Market or the National Association of
Securities Dealers, Inc. Automated Quotation System.
REGISTRABLE SECURITIES shall mean the following:
(a) all shares of Common Stock outstanding on the date hereof
or issuable under warrants or options outstanding on the date hereof;
and
(b) any shares of Common Stock issued or issuable by the
Company in respect of any shares of Common Stock referred to in the
foregoing clause (a) by way of a pay-in-kind dividend, stock dividend
or stock split or in connection with a combination or subdivision of
shares, reclassification, recapitalization, merger, consolidation or
other reorganization of the Company.
As to any particular Registrable Securities that have been issued,
such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of under such registration statement, (ii) they shall have been
distributed to the public
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pursuant to Rule 144, (iii) they shall have been otherwise transferred or
disposed of, and new certificates therefor not bearing a legend restricting
further transfer shall have been delivered by the Company, and subsequent
transfer or disposition of them shall not require their registration or
qualification under the Securities Act or any similar state law then in force,
or (iv) they shall have ceased to be outstanding.
REGISTRATION EXPENSES shall mean any and all out-of-pocket expenses
incident to the Company's performance of or compliance with Article VI hereof,
including, without limitation, all Commission, stock exchange or NASD
registration and filing fees, all fees and expenses of complying with
securities and blue sky laws (including the reasonable fees and disbursements
of underwriters' counsel in connection with blue sky qualifications and NASD
filings), all fees and expenses of the transfer agent and registrar for the
Registrable Securities, all printing expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants, including
the expenses of any special audits and/or "cold comfort" letters required by or
incident to such performance and compliance, and the reasonable fees and
disbursements of one firm of counsel (other than house counsel) retained by the
holders of a majority of the Registrable Securities included in the offering to
represent such holders in the offering, but excluding underwriting discounts
and commissions and applicable transfer and documentary stamp taxes, if any,
which shall be borne by the seller of the securities in all cases.
RELATED ENTITY shall mean, with respect to any Person, (a) any direct
or indirect Subsidiary of such Person, (b) any Parent of such Person or (c) any
Person which has the same Parent as such Person.
SALE PROPOSAL shall have the meaning specified in Section 5.1 (a).
SECURITIES shall mean the Stock.
SECURITIES ACT shall mean, as of any date, the Securities Act of 1933,
as amended, or any similar Federal statute then in effect, and in reference to
a particular section thereof shall include a reference to the comparable
section, if any, of any such similar Federal statute.
SELLING STOCKHOLDER shall have the meaning specified in Section
5.1(a).
SIGNIFICANT TRANSACTION shall have the meaning specified in Section
2.1(b).
STOCK with respect to any Person shall mean Capital Stock of such
Person of any class or classes, the holders of which are ordinarily (and not
only upon the happening of a contingency) entitled to vote for the election of
members of the board of directors (or Persons performing similar functions) of
such Person, including, without limitation, the Common Stock.
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STOCKHOLDER shall mean (i) any Stockholder and (ii) any Permitted
Transferee of Stockholder, or of any other Permitted Transferee, who becomes a
party to or bound by the provisions of this Agreement in accordance with the
terms hereof.
STOCK RIGHTS shall mean at any time any and all warrants, options and
other rights outstanding at such time to purchase or otherwise acquire Common
Stock of the Company of any class, whether or not such warrants, options or
rights are exercisable at such time. At the date of this Agreement, the Company
has no issued and outstanding Stock Rights.
SUBJECT STOCKHOLDER shall have the meaning specified in Section 5.5.
SUBSIDIARY shall mean as to any Person a corporation or partnership of
which a majority of the outstanding shares of voting Capital Stock are at the
time owned, directly or indirectly through one or more intermediaries, or both,
by such Person. At the date of this Agreement the Company has no Subsidiaries.
THIRD PARTY shall mean, as to any Stockholder, any person other than a
Permitted Transferee of such Stockholder.
UNDERWRITTEN OFFERING shall have the meaning specified in Section 6.1
(g).
ARTICLE II
MANAGEMENT ARRANGEMENTS
SECTION 2.1. CONDUCT OF BUSINESS.
(a) The parties hereto confirm that it is their intention that the
business and affairs of the Company and its Subsidiaries shall be managed by
its Board of Directors in the best interests of the Company and its
Subsidiaries taken as a whole. In furtherance of the foregoing, each of the
parties hereto agrees that, after the date hereof, except in the case of
transactions expressly contemplated by this Agreement, neither the Company nor
any of its Subsidiaries will enter into any written or oral contract, agreement
or other arrangement to engage in business or enter into any transaction, or
will engage in business or enter into any transaction, with any Stockholder or
any Affiliate of a Stockholder (other than the Company and its Subsidiaries)
unless the terms and provisions of such contract, agreement or other
arrangement or the terms on which such business or transaction is conducted, as
the case may be, are fair to the Company or such Subsidiary and are
substantially equivalent to terms that would have been obtained in an
arm's-length relationship. The provisions of this Section 2.1 (a) shall be
deemed satisfied if the relevant transaction (i) has been approved by 75% of
the members of the Board of Directors voting on such matter, excluding any
director designees of the Stockholder who (or whose Affiliate has) an interest
in the transaction and such
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interest was disclosed to the Board of Directors prior to such approval and
other directors abstaining from such vote or (ii) is a commercial transaction
entered into in the ordinary course of business by the Company or its
Subsidiary and such transaction has been negotiated on arm's length terms
between the operating management or employees of the Company or its Subsidiary
and the other party to the transaction.
(b) Notwithstanding the fact that no vote may be required, or that a
lesser percentage vote may be specified, by law, by the Articles of
Incorporation or By-Laws, by any agreement with any national securities
exchange or otherwise, except as hereinafter provided in this paragraph (b) or
otherwise in this Agreement, the Company and the Stockholders shall not take or
permit any of the following actions (individually, a "Significant Transaction")
unless otherwise authorized by a vote of at least 75% of the members of the
entire Board of Directors:
(i) Any merger or consolidation involving the Company or any
Subsidiary of the Company (other than transactions involving the
merger or consolidation of a wholly-owned Subsidiary of the Company
into the Company or with or into another wholly-owned Subsidiary of
the Company), if such merger or consolidation would involve the
Company or one or more Subsidiaries that in the aggregate own (or,
following such transaction, would own) "substantial assets" under
subparagraph (iii) below.
(ii) Any sale, lease, exchange, transfer or other
disposition, directly or indirectly, in a single transaction or series
of related transactions, of all or substantially all, or a substantial
part, of the assets of the Company or any of its Subsidiaries, or of
any of the outstanding capital stock of any Subsidiary of the Company,
to or with any Person other than to or with the Company or a
wholly-owned Subsidiary of the Company. The term "substantial part"
means assets having a gross fair market value which exceeds 20% of the
Consolidated Total Capitalization of the Company and its Subsidiaries,
as reflected on the consolidated balance sheet of the Company and its
Subsidiaries as at the end of the last full fiscal quarter prior to
the date such determination is made.
(iii) Any purchase, lease, exchange or other acquisition of
assets (including securities) by the Company or any Subsidiary of the
Company, in a single transaction or a series of related transactions,
if such assets constitute or would constitute substantial assets. The
term "substantial assets" means assets having a gross fair market
value which, or assets to be acquired for consideration which, exceeds
20% of the Consolidated Total Capitalization of the Company and its
Subsidiaries, as reflected on the consolidated balance sheet of the
Company and its Subsidiaries as at the end of the last full fiscal
quarter prior to the date such determination is made.
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(iv) Any increase or reduction of the number of shares of any
class of the Company's authorized Capital Stock or the creation of any
additional class of Capital Stock of the Company, or the issuance or
sale of shares of Capital Stock of the Company or any of its
Subsidiaries (or warrants, options or rights to acquire shares of
Capital Stock or securities convertible into or exchangeable for
Capital Stock or any type of debt instrument which has equity
features), except the issuance or sale of shares of Capital Stock of a
wholly-owned Subsidiary of the Company to the Company or to another
wholly-owned Subsidiary of the Company.
(v) Any amendment to or modification or repeal of any
provision of the Articles of Incorporation or By-Laws of the Company.
(vi) Any amendment to or modification or repeal of any
provision of, or the termination of, the Management Agreement.
(vii) The dissolution of the Company; the adoption of a plan
of liquidation of the Company or any Subsidiary of the Company holding
"substantial assets" (as defined in subparagraph (iii) above); any
action by the Company or any Subsidiary of the Company to commence any
suit, case proceeding or other action (A) under any existing or future
law of any jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or making a general assignment for the
benefit of its creditors.
(viii) Any redemption, offer to purchase made by the Company
or any of its Subsidiaries or other acquisition of Stock or Stock
Rights of the Company.
SECTION 2.2. ARTICLES OF INCORPORATION; NO CONFLICT WITH AGREEMENT.
(a) Each Stockholder hereby acknowledges receipt of a copy of the
Articles of Incorporation as in effect on the date hereof. The provisions of
the Articles of Incorporation are hereby approved by, and made a part of this
Agreement among, the parties hereto.
(b) Each Stockholder shall vote its shares of Stock, and shall take
all other actions necessary or appropriate, to ensure that the Articles of
Incorporation and By-Laws of the Company do not, at any time, conflict with the
provisions of this Agreement.
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SECTION 2.3. REGISTRATION OF COMMON STOCK. In the event of a Public
Offering of Common Stock, each Stockholder shall, at a meeting convened for the
purpose of amending the Articles of Incorporation, vote to increase the number
of issued and outstanding shares of Common Stock, whether by stock split, stock
dividend or otherwise, or change in its par value or increase the authorized
number of shares of stock, as recommended by 75% of the members of the entire
Board of Directors.
SECTION 2.4. ACCESS TO INFORMATION. The Company will permit each
Stockholder and its representatives at its expense to visit and inspect all
properties, books and records of the Company and its Subsidiaries and to
discuss the affairs, finances and accounts of the Company with the principal
officers of the Company, its attorneys and auditors, all at such reasonable
times and as often as may reasonably be requested in order to enable each
Stockholder to reasonably monitor its investment in the Company. All
information obtained by each Stockholder will be kept confidential and used
only for purposes related to his investment in the Company.
ARTICLE III
CORPORATE GOVERNANCE
SECTION 3.1. BOARD OF DIRECTORS.
(a) The Stockholders and the Company hereby agree that at all times
after the Closing Date, the Board of Directors of the Company and the board of
directors (or comparable governance body of any partnership) of each Material
Subsidiary, shall consist entirely of the members described in this Section 3.1
(a). On the Closing Date and from time to time thereafter, the Stockholders
shall take all such actions as may be necessary or appropriate to cause the
persons described below to be elected or re-elected as the members of the Board
of Directors and to be maintained in such positions at all times:
(i) four persons designated by ACG; and
(ii) five persons designated by Liberty.
(b) Each Stockholder hereby agrees to vote all shares of Stock owned
or held of record by such Stockholder, at each annual or special meeting of
Stockholders of the Company at which directors of the Company are to be
elected, in favor of, or to take all actions by written consent in lieu of any
such meeting as are necessary to cause, the election or re-election as members
of the Board of Directors of those individuals described in Section 3.1 (a),
and to otherwise effect the intent of the provisions of Section 3.1 (a).
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(c) Each committee of the Board of Directors and, unless otherwise
agreed by ACG and Liberty, each board of directors (or comparable governance
body of any partnership) of each Material Subsidiary shall include a number of
directors designated by each Stockholder (rounded to the nearest whole number,
but in no event less than one such director) equivalent to the proportion of
directors designated by each Stockholder then serving on the whole Board of
Directors or the whole board of directors of such Material Subsidiary, as
applicable.
(d) The Board of Directors and, unless otherwise agreed by ACG and
Liberty, the board of directors of each Material Subsidiary shall follow the
following procedures:
(i) Meetings. Meetings of the applicable board of directors
may be held at any time upon the call of at least two directors, by
oral, telephonic, telegraphic or facsimile notice duly given or sent
at least one day, or by written notice sent by express mail at least
three days, before the meeting to each director. Reasonable efforts
shall be made to ensure that each director actually receives timely
notice of any meeting. An annual meeting of the Board of Directors
shall be held without notice immediately following the annual meeting
of stockholders of the Company.
(ii) Agenda. A reasonably detailed agenda shall be supplied
to each director reasonably in advance of each meeting of the
applicable board of directors, together with other appropriate
documentation with respect to agenda items calling for board action,
to inform adequately directors regarding matters to come before the
board. Any director wishing to place a matter on the agenda for any
meeting of the applicable board of directors may do so by
communicating with the Chairman of the Board sufficiently in advance
of the meeting of the applicable board of directors so as to permit
timely dissemination to all directors of information with respect to
the agenda items.
SECTION 3.2. REMOVAL. If a director designated and elected pursuant to
Section 3.1,
(i) has been designated pursuant to Section 3.1(a)(i) and,
during such director's term as director, ACG requests by written
notice to the other Stockholders that such director be removed; or
(ii) has been designated pursuant to Section 3.1 (a)(ii) and,
during such director's term as director, Liberty requests by written
notice to the other Stockholders that such director be removed;
then in each case such director shall be removed upon the affirmative vote of
the holders of a majority of the outstanding shares of Stock, and each
Stockholder hereby agrees promptly to vote
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all shares of Stock owned or held of record by it and to take all such other
actions as may be necessary or appropriate to effect such removal in accordance
with such request.
SECTION 3.3. VACANCIES. In the event that a vacancy is created on the
Board of Directors at any time by the death, disability, retirement,
resignation or removal of any director or for any other reason there shall
exist or occur any vacancy on the Board of Directors, each Stockholder hereby
agrees to take such actions as will result in the election or appointment as a
director of an individual designated or elected to fill such vacancy and serve
as a director by the Stockholders that had designated or elected (pursuant to
Section 3.1) the director whose death, disability, retirement, resignation or
removal resulted in such vacancy on the Board of Directors (in the manner set
forth in Section 3.1).
SECTION 3.4. COVENANT TO VOTE. Each Stockholder hereby agrees to take
all actions necessary to call, or cause the Company and the appropriate
officers and directors of the Company to call, a special or annual meeting of
Stockholders of the Company and to vote all shares of Stock owned or held of
record by such Stockholder at any such meeting and at any other annual or
special meeting of stockholders in favor of, or take all actions by written
consent in lieu of any such meeting as may be necessary to cause, the election
as members of the Board of Directors of those individuals so designated in
accordance with, and to otherwise effect the intent of, this Article III. In
addition, each Stockholder agrees to vote the shares of Stock owned by such
Stockholder upon any other matter arising under this Agreement submitted to a
vote of the stockholders in such a manner as to implement the terms of this
Agreement.
ARTICLE IV
TRANSFERS OF SECURITIES
SECTION 4.1. RESTRICTIONS ON TRANSFER. Each Stockholder agrees that it
will not, directly or indirectly, offer, sell, transfer, assign or otherwise
dispose of (or make any exchange, gift, assignment or pledge of) (collectively,
for purposes of Articles IV and V hereof only, a "transfer") any of its shares
of Stock or Stock Rights, except as provided in Section 4.2 or in accordance
with Article V or other than in connection with an exercise of any Stock Right
in accordance with its terms. In addition to the other restrictions noted in
this Article IV, each Stockholder agrees that it will not, directly or
indirectly, offer, sell, transfer, assign or otherwise dispose of any of its
Securities except as permitted under the Securities Act and other applicable
securities laws.
SECTION 4.2. EXCEPTIONS TO RESTRICTIONS. The provisions of Section 4.1
(and Article V except as noted below) shall not apply to any of the following
transfers:
(a) Pursuant to a Public Offering;
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(b) Pursuant to a merger of the Company; and
(c) Pursuant to Sections 5.1, 5.2, 5.3, 5.5 and 5.8.
The provisions of this Agreement shall be applied to the shares of
Stock and Stock Rights owned by any Permitted Transferee of a Stockholder in
the same manner and to the same extent as though such Stock or Stock Rights
were owned by such Stockholder.
SECTION 4.3. NO TRANSFER TO COMPETITORS. Notwithstanding any provision
of this Agreement to the contrary, no Stockholder shall transfer any Stock or
Stock Rights to a Person (a) that is an individual or (b) that the Board of
Directors has determined in good faith competes with the Company in any
material respect, without the prior written consent of 75% of the members of
the entire Board of Directors of the Company.
SECTION 4.4. ENDORSEMENT OF CERTIFICATES.
(a) In addition to any other legend which the Company may reasonably
deem advisable under the Securities Act and applicable state securities laws,
the certificates representing all shares of Stock and all Stock Rights subject
to this Agreement shall be endorsed at all times during the term of this
Agreement as follows:
THIS [CERTIFICATE / WARRANT / OPTION] IS SUBJECT TO, AND IS
TRANSFERABLE ONLY UPON COMPLIANCE WITH, THE PROVISIONS OF A STOCKHOLDERS
AGREEMENT DATED AS OF _______ __, 1997, AMONG THE COMPANY, ADVANCED
COMMUNICATIONS GROUP, INC. AND LIBERTY CELLULAR, INC., A COPY OF THE ABOVE
REFERENCED AGREEMENT WILL BE FURNISHED BY THE COMPANY WITHOUT CHARGE UPON
WRITTEN REQUEST BY ANY STOCKHOLDER TO THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS OR REGISTERED OFFICE.
(b) Except as otherwise expressly provided in this Agreement, all
certificates representing shares of Stock and all certificates or other
instruments representing Stock Rights now or hereafter issued to or acquired by
any of the Stockholders or their successors hereto shall bear the legend set
forth above and such shares of Stock and Stock Rights shall be subject to the
applicable provisions of this Agreement. The obligations of each party hereto
shall be binding upon each transferee to whom shares of Stock or Stock Rights
are transferred by any party hereto (including, without limitation, any Third
Party to whom shares are transferred pursuant to Article V), except in the case
of transfers pursuant to Subsection (b) or (c) of Section 4.2. Prior to
consummation of any transfer, except for transfers pursuant to Subsection (b)
or (c) of Section 4.2, such party shall cause the transferee to execute an
agreement in form and substance reasonably satisfactory to the other parties
hereto, providing that such transferee shall fully comply with the terms of
this Agreement. Prompt
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notice shall be given to the Company by the transferor of any transfer (whether
or not to a Permitted Transferee) of any of its Stock or Stock Rights.
SECTION 4.5. IMPROPER TRANSFER. Any attempt to transfer or encumber
any shares of Stock or any Stock Rights not in accordance with this Agreement
shall be null and void and neither the issuer of such Securities nor any
transfer agent of such Securities shall give any effect to such attempted
transfer or encumbrance in its stock records.
ARTICLE V
PURCHASE RIGHTS
SECTION 5.1. TRANSFERS BY A STOCKHOLDER.
(a) Except for sales of Securities pursuant to the provisions of
Article VI hereof, transfers permitted by clauses (a) and (b) of Section 4.2
and the provisions of Sections 5.5 and 5.8, if at any time any Stockholder
shall desire to sell any Securities owned by it (such Stockholder desiring to
sell Securities being referred to herein as a "Selling Stockholder"), then such
Selling Stockholder shall deliver written notice of its desire to sell
Securities (a "Notice of Intention"), accompanied by a copy of a proposal
relating to such sale (the "Sale Proposal"), to each of the other Stockholders
and to the Company, setting forth such Selling Stockholder's desire to make
such sale (which shall be for cash only), identifying the Securities proposed
to be transferred and stating the number of shares of Stock proposed to be
transferred or the number of shares covered by Stock Rights proposed to be
transferred (the "Offered Securities"), the cash price or prices per applicable
Security at which such Selling Stockholder proposes to sell the Offered
Securities (the "First Offer Price") and the other terms applicable thereto
(the "First Offer Terms").
(b) Upon receipt of the Notice of Intention, the Company and the other
Stockholders shall then have the right to purchase at the First Offer Price and
on the other terms specified in the Sale Proposal all or, subject to Section
5.1(d), any portion of the Offered Securities in the following order of
priority: the Company shall have the first right to purchase the Offered
Securities, and thereafter,the other Stockholders shall have the right to
purchase the Offered Securities pro rata on the basis of the respective numbers
of shares of Fully Diluted Common Stock owned by them or represented by Stock
Rights owned by them (or in such other proportion as such Stockholders may
unanimously agree). The rights of the Stockholders and the Company pursuant to
this Section 5.1 (b) shall be exercisable by the delivery of notice to the
Selling Stockholder (each a "Notice of Exercise"), within 30 calendar days from
the date of delivery of the Notice of Intention. The Notice of Exercise shall
state the total numbers of shares of Stock or Stock Rights such Stockholder (or
the Company) is willing to purchase without regard to whether or not other
Stockholders purchase any shares of the Offered Securities. A copy of such
Notice of Exercise shall also be delivered by each Stockholder to the Company
and each other Stockholder. The rights of the Stockholders and the Company
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pursuant to this Section 5.1(b) shall terminate if unexercised 30 calendar
days after the date of delivery of the Notice of Intention.
(c) In the event that the Company or any Stockholder exercises its
rights to purchase any or all of the Offered Securities in accordance with
Section 5.1 (b), then the Selling Stockholder must sell Offered Securities to
the Company or such Stockholder (as the case may be) within 30 calendar days
from the date of the delivery of the last Notice of Exercise received by the
Selling Stockholder.
(d) Notwithstanding the foregoing provisions of this Section 5.1,
unless the Selling Stockholder shall have consented to the purchase of less
than all of the Offered Securities, neither the Company nor any Stockholder may
purchase any Offered Securities unless all of the Offered Securities are to be
purchased.
(e) For purposes of this Article V, if the Company or any Stockholder
shall fail to give notice of its election to exercise an option hereunder
within the specified time period, then the Company or such Stockholder (as the
case may be) will be deemed to have waived its rights with respect thereto on
the day after the last day of such period.
SECTION 5.2. TRANSFER OF OFFERED SECURITIES TO THIRD PARTIES. Subject
to compliance with Section 5.8, if all notices required to be given pursuant to
Section 5.1 have been duly given and the Stockholders and the Company determine
not to exercise their respective options to purchase the Offered Securities or
determine to exercise their respective options to purchase less than all of the
Offered Securities without receiving the consent of the Selling Stockholder as
required by Section 5.1(d) and the Selling Stockholder does not desire to sell
less than all the Offered Securities, then the Selling Stockholder shall have
the right, for a period of 120 calendar days from the earlier of (i) the
expiration of the applicable option period pursuant to Section 5.1 with respect
to such Sale Proposal or (ii) the date on which such Selling Stockholder
receives notice from other Stockholders and the Company that they will not
exercise in whole or in part the options granted pursuant to Section 5.1, to
sell to any Third Party the Offered Securities remaining unsold at a price not
less than the First Offer Price and on terms substantially the same as the
other First Offer Terms.
SECTION 5.3. PURCHASE OF OFFERED SECURITIES.
(a) The consummation of any purchase and sale pursuant to Section 5.1
shall take place on such date, not later than 30 calendar days after the
expiration of the applicable option period pursuant to Section 5.1 with respect
to such option, as the Selling Stockholder shall select.
(b) Prior to the consummation of any sale pursuant to Section 5.1 or
5.2, the Selling Stockholder shall comply with Section 4.4(b) hereof. Upon the
consummation of any such purchase and sale, the Selling Stockholder shall
deliver certificates and/or other instruments evidencing the
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Offered Securities sold duly endorsed, or accompanied by written instruments of
transfer in form satisfactory to the purchaser duly executed, by the Selling
Stockholder, free and clear of any liens, against delivery of the purchase
price constituting the First Offer Price payable in the manner specified in
Section 5.1 (a). Shares of Stock or Stock Rights sold pursuant to this Section
5.3 shall remain subject to all of the provisions of this Agreement in the
hands of the transferee thereof, and prior to the completion of such sale such
transferee shall agree in a writing in form and substance reasonably
satisfactory to the Company to be bound and shall become bound by the terms of
this Agreement.
SECTION 5.4. WAITING PERIOD WITH RESPECT TO SUBSEQUENT TRANSFERS. In
the event that the Company and the Stockholders do not exercise their options
to purchase the Offered Securities, and the Selling Stockholder shall not have
sold the Offered Securities to a Third Party for any reason before the
expiration, as applicable, of the 120-day period described in Section 5.2, then
such Selling Stockholder shall not give another Notice of Intention pursuant to
Section 5.1 for a period of 180 calendar days after the last day of such
120-day period.
SECTION 5.5. CHANGE IN CONTROL OPTION. Each Stockholder (which term,
for purpose of this Section 5.5, shall include all Permitted Transferees
thereof as the context may require) shall be subject to the purchase and sale
obligations set forth in this Section 5.5 in the event that it undergoes a
Change in Control. If any Stockholder undergoes a Change in Control ("Subject
Stockholder"), the remaining Stockholders shall have the option to purchase, on
a pro rata basis (based upon the number of shares of Fully Diluted Common Stock
owned by each such Stockholder), all the Subject Stockholder's shares of Stock,
and the Subject Stockholder shall be obligated to sell such shares of Stock to
the other Stockholders. The price per share at which such Stock shall be
purchased shall be the Appraised Value. Such option must be exercised, and the
shares of Stock purchased, within 60 days after the date on which the Change in
Control occurs. To the extent not exercised within that time period, the option
will expire and be of no further force and effect. The purchase price for each
share of Stock purchased pursuant to this Section 5.5 shall be payable in cash.
SECTION 5.6. RIGHT OF FIRST REFUSAL FOR NEW SECURITIES.
(a) The Company hereby grants to the Stockholders a pro rata right of
first refusal to purchase shares of any New Securities (as defined below) which
the Company may, from time to time, propose to sell and issue. Such right of
first refusal shall allow each Stockholder to purchase a pro rata portion of
the shares of Stock or Stock Rights or other securities, as may be included in
the New Securities proposed to be issued. Such pro rata portions shall be
determined by reference to the aggregate number of shares of Fully Diluted
Common Stock held by each Stockholder before the proposed issuance of New
Securities. In the event a Stockholder does not purchase any or all of its pro
rata portion of New Securities, the remaining Stockholders shall have the right
to purchase their respective pro rata portions of such unpurchased New
Securities until all of the New Securities
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are purchased or until no other Stockholder desire to purchase any more New
Securities; provided, that all such remaining Stockholders purchasing Stock or
Stock Rights, as the case may be, hereunder shall have held Stock or Stock
Rights, respectively, before the issuance of the New Securities. The right of
first refusal granted hereunder shall terminate if, unexercised within thirty
(30) days after receipt of the notice described in Section 5.6(c) below.
(b) "New Securities" shall mean any authorized but unissued shares,
and any treasury shares, of Capital Stock (including Common Stock) of the
Company and all rights, options or warrants to purchase Capital Stock
(including, without limitation, Stock Rights), and securities of any type
whatsoever that are, or may become, convertible into Capital Stock; provided,
however. that the term "New Securities" does not include (i) shares of Common
Stock issued upon the exercise of Stock Rights or other rights to acquire Stock
that are issued after the date hereof in a transaction in which the
Stockholders have the right to purchase their respective pro rata portions of
the relevant Stock Rights or other rights pursuant to Section 5.6(a) hereof, in
each such case in accordance with the terms thereof; (ii) securities issued
pursuant to the acquisition of another corporation or other entity by the
Company by merger, purchase of all or substantially all of the assets or other
reorganization; (iii) shares of Stock issued in connection with any stock
split, stock dividend or recapitalization of the Company; and (iv) any
borrowings, direct or indirect, from financial institutions or other Persons by
the Company, whether or not presently authorized, including any type of loan or
payment evidenced by any type of debt instrument, provided such borrowings do
not have equity features, including warrants, options or other rights to
purchase Capital Stock, and are not convertible into or exchangeable for
Capital Stock of the Company; and (vi) shares and options to purchase shares of
Common Stock issued to employees, officers or directors of the Company pursuant
to any stock incentive plan, provided that the aggregate number of shares of
Common Stock issued pursuant to the stock incentive plans approved by at least
75% of the members of the entire Board of Directors.
(c) In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Stockholder written notice of its intention,
describing the number of shares of Stock and/or Stock Rights or other
securities it intends to issue as New Securities, the purchase price therefor
(which shall be payable solely in cash) and the terms upon which the Company
proposes to issue the same. Each Stockholder shall have 30 days from the date
such notice is given to determine whether to purchase all or any portion of the
Stockholder's pro rata share of such New Securities for the purchase price and
upon the terms specified in the Company's notice by giving written notice to
the Company and stating therein the quantity of New Securities to be purchased.
(d) The obligations of the Company under this Section 5.6 shall
terminate immediately prior to any Public Offering pursuant to a firm
commitment underwriting.
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SECTION 5.7. LEGALLY BINDING OBLIGATION; POWER OF ATTORNEY; PERSONAL
RIGHTS. Subject to Section 5.1 (a), the making of an offer, the giving or
failing to give notice within the stated period, the acceptance of an offer or
the making of a decision or election, in each case as provided in Sections 5.1,
5.6 or 5.8, shall create a legally binding obligation to buy or sell, as the
case may be, the subject Securities as provided in such Sections 5.1, 5,2, 5.3,
5.5, 5.6 or 5.8 respectively.
SECTION 5.8. RIGHT TO JOIN IN SALE.
(a) If any Stockholder or group of Stockholders proposes to sell,
dispose of or otherwise transfer in any single or related series of
transactions any Securities representing more than 10% of the Fully Diluted
Common Stock (each a "Disposing Stockholder") other than to the Company or the
Stockholders pursuant to Section 5.1 hereof, such Disposing Stockholder shall
refrain from effecting, other than to a Permitted Transferee, such transaction
unless, prior to the consummation thereof, each other Stockholder shall have
been afforded the opportunity to join in such sale on a pro rata basis, as
hereinafter provided.
(b) Prior to consummation of any proposed sale, disposition or
transfer of the Securities described in Section 5.8(a), the Disposing
Stockholder shall cause the person or group that proposes to acquire such
shares (the "Proposed Purchaser") to offer (the "Purchase Offer") in writing to
each other Stockholder to purchase shares of Stock and/or Stock Rights owned by
such Stockholder which are the same type, class or series proposed to be sold
by the Disposing Stockholders, such that sum of the number of shares of such
Stock so offered to be purchased and the number of shares of Stock then
represented by the Stock Rights so offered to be purchased from such
Stockholder shall be equal to the product obtained by multiplying the total
number of shares of the same type, class or series of Stock or other Securities
being sold by the Disposing Stockholder then owned by such Stockholder by a
fraction, the numerator of which is the aggregate number of shares of each
type, class or series of Stock or other Securities proposed to be purchased by
the Proposed Purchaser from the Disposing Stockholder or Stockholders and the
denominator of which is the aggregate number of outstanding shares of each
type, class or series of Stock or other Securities that are owned by the
Disposing Stockholder or Stockholders. Such purchase shall be made at the price
per share and on such other terms and conditions as the Proposed Purchaser has
offered to purchase each type, class or series of Stock or other Securities, as
the case may be, to be sold by the Disposing Stockholder or Stockholders. Each
Stockholder shall have 20 days from the date of receipt of the Purchase Offer
in which to accept such Purchase Offer, and the closing of such purchase shall
occur within 30 days after such acceptance or at such other time as such
Stockholder and the Proposed Purchaser may agree. The number of shares of Stock
and/or Stock Rights, as the case may be, to be sold to the Proposed Purchaser
by the Disposing Stockholder or Stockholders shall be reduced by the aggregate
number of shares of Stock and/or Stock Rights, as the case may be, purchased by
the Proposed Purchaser from the other Stockholders pursuant to the acceptance
by them of Purchase Offers in accordance with the provisions of this Section
5.8(b). In the event that a sale or other transfer subject
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to this Section 5.8 is to be made to a Proposed Purchaser who is not a
Stockholder, the Disposing Stockholder shall notify the Proposed Purchaser
that the sale or other transfer is subject to this Section 5.8 and shall
ensure that no sale or other transfer is consummated without the Proposed
Purchaser first complying with this Section 5.8. It shall be the responsibility
of each Disposing Stockholder to determine whether any transaction to which it
is a party is subject to this Section 5.8.
ARTICLE VI
REGISTRATION RIGHTS
SECTION 6.1. DEMAND REGISTRATIONS.
(a) At any time after the Company's first Public Offering, any
Stockholder may request in writing that the Company effect the registration
under the Securities Act of all or part of its Registrable Securities,
specifying in the request the number and types of Registrable Securities to be
registered by each such holder and the intended method of disposition thereof
(such notice is hereinafter referred to as a "Holder Request"). Upon receipt of
such Holder Request, the Company will promptly give written notice of such
requested registration to all other holders of Registrable Securities, which
other holders shall have the right, subject to the provisions of Section 6.1(h)
hereof, to include the Registrable Securities held by them in such registration
and thereupon the Company will, as expeditiously as possible, use its best
efforts to effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register pursuant to the Holder's Request; and
(ii) all other Registrable Securities which the Company has
been requested to register by any other holder thereof by written
request given to the Company within 30 calendar days after the giving
of such written notice by the Company,
all to the extent necessary to permit the disposition of the Registrable
Securities so to be registered pursuant to an Underwritten Offering; provided,
however, that the Company shall not be obligated to file a registration
statement pursuant to any Holder Request under this Section 6.1 (a):
(1) Unless the Company shall have received requests for such
registration with respect to at least 10% of the Fully Diluted Common
Stock;
(2) Other than a registration statement on Form S-3 or a
similar short form registration statement, within a period of 12
months after the effective date of any other registration statement
relating to any registration request under this Section 6.1 (a) that
was not effected on Form S-3 (or any similar short form); or
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(3) Within the six month period immediately following the
effective date of a registration previously effected by the Company
pursuant to this Section 6.1.
(b) Notwithstanding the foregoing provisions of Section 6.1 (a), the
Company shall not be obligated to file more than two registration statements
pursuant to this Section 6.1.
(c) If the Company proposes to effect a registration requested
pursuant to this Section 6.1 by the filing of a registration statement on Form
S-3 (or any similar short-form registration statement), the Company will comply
with any request by the managing underwriter to effect such registration on
another permitted form if such managing underwriter advises the Company that,
in its opinion, the use of another form of registration statement is of
material importance to the success of such proposed offering.
(d) A registration requested pursuant to Section 6.1 (a) will not be
deemed to have been effected unless it has become effective; provided, that, if
after it has become effective, the offering of Registrable Securities pursuant
to such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court,
such registration will be deemed not to have been effected.
(e) The Company will pay all Registration Expenses in connection with
each of the registrations of Registrable Securities effected by it pursuant to
this Section 6.1.
(f) The Board of Directors of the Company shall have the right to
select the investment banker (or investment bankers) that shall manage the
proposed offering (collectively, the "managing underwriter").
(g) Whenever a requested registration pursuant to this Section 6.1
involves a firm commitment underwriting (an "Underwritten Offering"), the only
shares that may be included in such Offering are (i) Registrable Securities,
and (ii) securities of the Company which are not Registrable Securities
("Company Securities").
(h) If a registration pursuant to this Section 6.1 involves an
Underwritten Offering and the managing underwriter shall advise the Company
that, in its judgment, the number of shares proposed to be included in such
Offering should be limited due to market conditions, then the Company will
promptly so advise each holder of Registrable Securities that has requested
registration, and the Company Securities, if any, shall first be excluded from
such Offering to the extent necessary to meet such limitation; and if further
exclusions are necessary to meet such limitation, the shares shall be excluded
pro rata until such limitation has been met.
SECTION 6.2. PIGGYBACK REGISTRATIONS.
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(a) If the Company at any time after its first Public Offering
proposes to register any of its equity or debt securities under the Securities
Act (other than a registration on Form S-4 or S-8 or any successor or similar
forms thereto and other than pursuant to a registration under Section 6.1),
whether or not for sale for its own account, on a form and in a manner that
would permit registration of Registrable Securities for sale to the public
under the Securities Act, it will give written notice to all the holders of
Registrable Securities promptly of its intention to do so, describing such
securities and specifying the form and manner and the other relevant facts
involved in such proposed registration (including, without limitation; (x)
whether or not such registration will be in connection with an underwritten
offering of Registrable Securities and, if so, the identity of the managing
underwriter and whether such offering will be pursuant to a "best efforts" or
"firm commitment" underwriting and (y) the price (net of any underwriting
commissions, discounts and the like) at which the Registrable Securities are
reasonably expected to be sold) if such disclosure is acceptable to the
managing underwriter. Upon the written request of any such holder delivered to
the Company within 30 calendar days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such holder and the intended method of disposition thereof), the Company will
use best efforts to effect the registration under the Securities Act of all of
the Registrable Securities that the Company has been so requested to register;
provided however, that:
(i) If, at any time after giving such written notice of its
intention to register any securities and prior to the effective date
of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to
register such securities, the Company may, at its election, give
written notice of such determination to each holder of Registrable
Securities who made a request as hereinabove provided and thereupon
the Company shall be relieved of its obligation to register any
Registerable Securities in connection with such registration (but not
from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights, of the holders
of the Registrable Securities to request that such registration be
effected as a registration under Section 6.1 to the extent the Company
is then obligated to file a registration statement pursuant to that
section.
(ii) If such registration involves an Underwritten Offering,
all holders of Registrable Securities requesting some or all of their
Registrable Securities to be included in the Company's registration
must sell that portion of their Registrable Securities to the
underwriters selected by the Company on the same terms and conditions
as apply to the Company.
No registration effected under this Section 6.2 shall relieve the Company of
its obligation to effect the registrations provided for in Section 6.1.
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(b) The Company shall not be obligated to effect any registration of
Registrable Securities under this Section 6.2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange
offers, dividend reinvestment plans or stock option or other employee benefit
plans.
(c) The Registration Expenses incurred in connection with each
registration of Registrable Securities requested pursuant to this Section 6.2
shall be paid by the Company.
(d) If a registration pursuant to this Section 6.2 involves an
Underwritten Offering and the managing underwriter advises the Company that, in
its opinion, the number of securities proposed to be included in such
registration should be limited due to market conditions, then the Company will
include in such registration (i) first, the securities the Company proposes to
sell, and (ii) second, the number of shares of Common Stock requested to be
included in such registration that, in the opinion of such managing
underwriter, can be sold, such amount to be allocated pro rata among all such
requesting holders on the basis of the class of securities and the relative
number of shares of Registrable Securities, as the case may be, each such
holder has requested to be included in such registration.
(e) In connection with any Underwritten Offering with respect to which
holders of Registrable Securities shall have requested registration pursuant to
this Section 6.2, the Board of Directors of the Company shall have the right to
select the managing underwriter with respect to the offering.
SECTION 6.3. REGISTRATION PROCEDURES.
(a) If and whenever the Company is required to use its best efforts to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in Section 6.1 or 6.2, the Company will, as
expeditiously as possible:
(i) Prepare and, in any event within 60 calendar days after
the end of the period within which requests for registration may be
given to the Company, file with the Commission a registration
statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become and remain
effective, provided that the Company may discontinue any registration
of its securities that is being effected pursuant to Section 6.2 at
any time prior to the effective date of the registration statement
relating thereto.
(ii) Prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to such
registration statement and the prospectus
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used in connection therewith as may be necessary to keep such
registration statement effective for a period as may be requested by
the Stockholders holding a majority of the Registrable Securities not
exceeding nine months and to comply with the provisions of the
Securities Act with respect to the disposition of all Securities
covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement; provided,
that before filing a registration statement or prospectus relating to
the sale of Registrable Securities, or any amendments or supplements
thereto, the Company will furnish to counsel to each holder of
Registrable Securities covered by such registration statement or
prospectus, copies of all documents proposed to be filed, which
documents will be subject to the review of such counsel, and the
Company will give reasonable consideration in good faith to any
comments of such counsel.
(iii) Furnish to each holder of Registrable Securities
covered by the registration statement and to each underwriter, if any,
of such Registrable Securities, such number of copies of a preliminary
prospectus and prospectus for delivery in conformity with the
requirements of the Securities Act, and such other documents, as such
Person may reasonably request, in order to facilitate the public sale
or other disposition of the Registrable Securities.
(iv) Use its best efforts to register or qualify such
Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions as each
seller shall reasonably request, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition of the Registrable Securities
owned by such seller, in such jurisdictions, except that the Company
shall not for any such purpose be required (1) to qualify to do
business as a foreign corporation in any jurisdiction where, but for
the requirements of this Section 6.3(a)(iv), it is not then so
qualified, or (2) to subject itself to taxation in any such
jurisdiction, or (3) to take any action which would subject it to
general or unlimited service of process in any such jurisdiction where
it is not then so subject.
(v) Use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities.
(vi) Immediately notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 6.3(a)(ii), if the
Company becomes aware that the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state
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any material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the
circumstances then existing, and, at the request of any such seller,
deliver a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, each prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing.
(vii) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and make generally
available to its security holders, in each case as soon as
practicable, but not later than 45 calendar days after the close of
the period covered thereby (90 calendar days in case the period
covered corresponds to a fiscal year of the Company), an earnings
statement of the Company which will satisfy the provisions of Section
11 (a) of the Securities Act.
(viii) Use its best efforts in cooperation with the
underwriters to list such Registrable Securities on each securities
exchange as they may reasonably designate.
(ix) In the event the offering is an Underwritten Offering,
use its best efforts to obtain a "cold comfort" letter from the
independent public accountants for the Company in customary form and
covering such matters of the type customarily covered by such letters.
(x) Execute and deliver all instruments and documents
(including in an Underwritten Offering an underwriting agreement in
customary form) and take such other actions and obtain such
certificates and opinions as the Stockholders holding a majority of
the Registerable Securities may reasonably request in order to effect
an underwritten public offering of such Registrable Securities.
(xi) Make available for inspection by the seller of such
Registrable Securities covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant
to such registration statement and by any attorney, accountant or
other agent retained by any such seller or any such underwriter, all
pertinent financial and other records, pertinent corporate documents
and properties of the Company, and cause all of the Company's
officers, directors and employees to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement.
(xii) Obtain for delivery to the underwriter or agent an
opinion or opinions from counsel for the Company in customary form and
in form and scope reasonably satisfactory to such underwriter or agent
and their counsel.
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(b) Each holder of Registrable Securities will, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 6.3(a)(vi), forthwith discontinue disposition of the Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 6.3(a)(vi).
(c) If a registration pursuant to Section 6.1 or 6.2 involves an
Underwritten Offering, each holder of Registerable Securities agrees, whether
or not such holder's Registrable Securities are included in such registration,
not to effect any public sale or distribution, including any sale pursuant
to Rule 144 under the Securities Act, of any Registrable Securities, or of any
security convertible into or exchangeable or exercisable for any Registrable
Securities (other than as part of such Underwritten Offering), without the
consent of the managing underwriter, during a period commencing seven calendar
days before and ending 180 calendar days (or such lesser number as the managing
underwriter shall designate) after the effective date of such registration.
SECTION 6.4. INDEMNIFICATION.
(a) In the event of any registration of any securities of the Company
under the Securities Act pursuant to Section 6.1 or 6.2, the Company will, and
it hereby agrees to, indemnify and hold harmless, to the extent permitted by
law, each seller of any Registrable Securities covered by such registration
statement, each Affiliate of such seller and their respective directors,
officers, employees and agents or general and limited partners (and directors,
officers, employees and agents thereof) and, if such seller is a portfolio or
investment fund, its investment advisors or agents, each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act, as follows:
(i) against any and all loss, liability, claim, damage or
expense whatsoever arising out of or based upon an untrue statement or
alleged untrue statement of a material fact contained in any
registration statement (or any amendment or supplement thereto),
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or arising out of an untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
or prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
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whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense reasonably incurred by them
in connection with investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or mission to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director,
officer, employee, agent, general or limited partner, investment advisor or
agent, underwriter or controlling Person and shall survive the transfer of such
securities by such Seller.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 6.1 or 6.2, that the Company shall have received an undertaking
reasonably satisfactory to it from the prospective seller of such Registrable
Securities or any underwriter, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 6.4(a)) the Company with
respect to any statement or alleged statement in or omission or alleged
omission from such registration statement, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement, if such statement
or alleged statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such seller or underwriter specifically stating that it is for use in
the preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling Person and shall survive
the transfer of such securities by such seller. In that event, the obligations
of the Company and such sellers pursuant to this Section 6.4 are to be several
and not joint; provided, however, that, with respect to each claim pursuant to
this Section, the Company shall be liable for the full amount of such claim,
and each such seller's liability under this Section 6.4 shall be limited to an
amount equal to the net proceeds (after deducting the underwriting discount and
expenses) received by such seller from the sale of Registrable Securities held
by such seller pursuant to this Agreement.
(c) Promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding involving a
claim referred to in this Section 6.4, such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying party, give written
notice to such indemnifying party of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the
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indemnifying party of its obligations under this Section 6.4, except to the
extent (not including any such notice of an underwriter) that the indemnifying
party is materially prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim (in which case the
indemnifying party shall not be liable for the fees and expenses of more than
one firm of counsel selected by holders of a majority of the Registerable
Securities included in the offering or more than one firm of counsel for the
underwriters in connection with any one action or separate but similar or
related actions), the indemnifying party will be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
for any legal or other expenses subsequently incurred by such indemnifying
party in connection with the defense thereof, provided that the indemnifying
party will not agree to any settlement without the prior consent of the
indemnified party (which consent shall not be unreasonably withheld) unless
such settlement requires no more than a monetary payment for which the
indemnifying party agrees to indemnify the indemnified party and includes a
full, unconditional and complete release of the indemnified party; provided,
however, that the indemnified party shall be entitled to take control of the
defense of any claim as to which, in the reasonable judgment of the
indemnifying party's counsel, representation of both the indemnifying party and
the indemnified party would be inappropriate under the applicable standards of
professional conduct due to actual or potential differing interests between
them. In the event that the indemnifying party does not assume the defense of a
claim pursuant to this Section 6.4(c), the indemnified party will have the
right to defend such claim by all appropriate proceedings, and will have
control of such defense and proceedings, and the indemnified party shall have
the right to agree to any settlement without the prior consent of the
indemnifying party. Each indemnified party shall, and shall cause its legal
counsel to, provide reasonable cooperation to the indemnifying party and its
legal counsel in connection with its assuming the defense of any claim,
including the furnishing of the indemnifying party with all papers served in
such proceeding. In the event that an indemnifying party assumes the defense of
an action under this Section 6.4(c), then such indemnifying party shall,
subject to the provisions of this Section 6.4, indemnify and hold harmless the
indemnified party from any and all losses, claims, damages or liabilities by
reason of such settlement or judgment.
(d) The Company and each seller of Registerable Securities shall
provide for the foregoing indemnity (with appropriate modifications) in any
underwriting agreement with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority.
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SECTION 6.5. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances under which the indemnity contemplated by Section
6.4 is for any reason not available or insufficient for any reason to hold
harmless an indemnified party in respect of any losses, claims, damages or
liabilities referred to therein, the parties required to indemnify by the terms
thereof shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company, any seller of Registrable Securities and one or more of the
underwriters, except to the extent that contribution is not permitted under
Section 11 (f) of the Securities Act. In determining the amounts which the
respective parties shall contribute, there shall be considered the relative
benefits received by each party from the offering of the Registrable Securities
by taking into account the portion of the proceeds of the offering realized by
each, and the relative fault of each party by taking into account the parties'
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
statement or omission and any other equitable considerations appropriate under
the circumstances. The Company and each Person selling securities agree with
each other that no seller of Registrable Securities shall be required to
contribute any amount in excess of the amount such seller would have been
required to pay to an indemnified party if the indemnity under Section 6.4(b)
were available. The Company and each such seller agree with each other and the
underwriters of the Registerable Securities, if requested by such underwriters,
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the underwriters were
treated as one entity for such purpose) or for the underwriters' portion of
such contribution to exceed the percentage that the underwriting discount bears
to the initial public offering price of the Registrable Securities. For
purposes of this Section 6.5, each Person, if any, who controls an underwriter
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as such underwriter, and each director and each officer
of the Company who signed the registration statement, and each Person, if any,
who controls the Company or a seller of Registrable Securities within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company or a seller of Registrable Securities, as the case
may be.
SECTION 6.6. RULE 144. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company covenants that it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder (or, if the Company is not required to
file such reports, it will, upon the request of any holder of Registrable
Securities, make publicly available other information) , and it will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
shares of Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of
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Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
ARTICLE VII
TERMINATION
SECTION 7.1. CERTAIN TERMINATIONS.
(a) Except to the extent specifically provided elsewhere in this
Agreement, the provisions of Articles II, III, IV and V shall terminate on the
date on which any of the following events first occurs: (i) a Qualified Public
Offering, or (ii) the tenth anniversary of the date of this Agreement.
(b) Notwithstanding the foregoing, this Agreement shall in any event
terminate with respect to any Stockholder when such Stockholder no longer owns
any shares of Common Stock or Stock Rights.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS. Except as provided in Section 4.2
and as otherwise provided herein, all of the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors and assigns of the parties hereto. No
Stockholder may assign any of its rights hereunder to any Person other than a
transferee that has complied with the requirements of Sections 4.2 and 5.3 (if
applicable) as provided therein in all respects. The Company may not assign any
of its rights hereunder to any Person other than an Affiliate of the Company.
If any transferee of any Stockholder shall acquire any shares of Stock or Stock
Rights, in any manner, whether by operation of law or otherwise, such Stock or
Stock Rights shall be held, subject to all of the terms of this Agreement, and
by taking and holding such Securities such Person shall be entitled to receive
the benefits of and be conclusively deemed to have agreed to be bound by and to
comply with all of the terms and provisions of this Agreement.
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SECTION 8.2. AMENDMENT AND MODIFICATION; WAIVER OF COMPLIANCE.
(a) This Agreement may be amended only by a written instrument duly
executed by the Stockholders and all Permitted Transferees. In the event of the
amendment or modification of this Agreement in accordance with its terms, the
Stockholders shall cause the Board of Directors of the Company to meet within
30 calendar days following such amendment or modification or as soon thereafter
as is practicable for the purpose of adopting any amendment to the Articles of
Incorporation and By-Laws of the Company that may be required as a result of
such amendment or modification to this Agreement, and, if required, proposing
such amendments to the Stockholders entitled to vote thereon, and the
Stockholders agree to vote in favor of such amendments.
(b) Except as otherwise provided in this Agreement, any failure of any
of the parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
(c) In the event of any conflict between the provisions of this
Agreement and the provisions of any other agreement, the provisions of this
Agreement shall govern and prevail, except as otherwise provided herein.
SECTION 8.3. NOTICES. Any notice, request, claim, demand, document and
other communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by
telex or telecopy (with such telex or telecopy confirmed promptly in writing
sent by first class mail), or first class mail, or other similar means of
communication, as follows:
(i) If to the Company, addressed to its principal executive
offices to the attention of its Secretary; and
(ii) If to a Stockholder, to the address of such Stockholder
set forth in the stock records of the Company, or to such
other address as any party shall have specified by notice
given to the other parties in the manner specified above; and
All such communications shall be deemed to have been given or made
when so delivered by hand or sent by telex (answer back received) or telecopy,
or if mailed, five business days after being so mailed.
SECTION 8.4. ENTIRE AGREEMENT; GOVERNING LAW.
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(a) This Agreement and the other writings referred to herein or
delivered pursuant hereto which form a part hereof contain the entire agreement
among the parties hereto with respect to the subject transactions contemplated
hereby and supersede all prior oral and written agreements and memoranda and
undertakings among the parties hereto with regard to this subject matter. The
Company represents to the Stockholders that the rights granted to the holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted or obligations accepted under any other agreement (including the
Articles of Incorporation) to which the Company is a party.
(b) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF KANSAS (WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW THEREOF THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN KANSAS).
SECTION 8.5. INJUNCTIVE RELIEF. The Stockholders acknowledge and agree
that a violation of any of the terms of this Agreement will cause the
Stockholders irreparable injury for which adequate remedy at law is not
available. Therefore, the Stockholders agree that each Stockholder shall be
entitled to an injunction, restraining order or other equitable relief from any
court of competent jurisdiction, restraining any Stockholder from committing
any violations of the provisions of this Agreement.
SECTION 8.6. INSPECTION. For so long as this Agreement shall be in
effect, this Agreement shall be made available for inspection by any
Stockholder at the principal executive offices of the Company.
SECTION 8.7. HEADINGS. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 8.8. RECAPITALIZATIONS, EXCHANGES, ETC., AFFECTING THE
SECURITIES.
(a) The provisions of this Agreement shall apply to the full extent
set forth herein with respect to the Stock and the Stock Rights, and to any and
all equity or debt securities of the Company, or any successors or assigns of
the Company (whether by merger, consolidation, sale of assets, or otherwise)
which may be issued in respect of, in exchange for, or in substitution of, such
equity or debt securities and shall be appropriately adjusted for any stock
dividends, splits, reverse splits, combinations, reclassifications,
recapitalizations, reorganizations and the like occurring after the date
hereof.
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SECTION 8.9. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
COMPANY:
KIN NETWORK, INC.
BY:
------------------------------------
E. XXXXXX XXXXXXX
PRESIDENT
STOCKHOLDERS:
ADVANCED COMMUNICATIONS
GROUP, INC.
BY:
------------------------------------
XXX X. XXXXXXXXX
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
LIBERTY CELLULAR, INC.
BY:
------------------------------------
E. XXXXXX XXXXXXX
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PRESIDENT AND CHIEF EXECUTIVE
OFFICER
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