EXECUTION COPY
XXXXXX COMMUNICATIONS CORPORATION
AMENDED AND RESTATED STOCKHOLDER AND
INVESTOR RIGHTS AGREEMENT
dated as of September 17 , 1999
AMENDED AND RESTATED STOCKHOLDER AND INVESTOR RIGHTS AGREEMENT
AMENDED AND RESTATED STOCKHOLDER AND INVESTOR RIGHTS AGREEMENT, dated as
of September 17, 1999 (this "Agreement"), by and among the investors listed
on Schedule I (individually, each a "Cash Equity Investor" and, collectively,
with any of its Affiliated Successors, the "Cash Equity Investors") and
Xxxxxx Communications Corporation, an Oklahoma corporation (the "Company").
Each of the foregoing Persons, together with all other Persons who, in
connection with a Transfer (as hereinafter defined) are required to become a
party to this Agreement (other than the Company) are sometimes referred to
herein, individually, as a "Stockholder" and, collectively, as the
"Stockholders."
RECITALS
WHEREAS:
(A) The Company and certain of its stockholders originally entered into
this Agreement on December 23, 1998 following the termination of the earlier
Stockholder Agreement of the Company, dated as of February 26, 1997, in order
to provide for the management of the Company and to impose certain
restrictions with respect to the sale, transfer or other disposition of
Common Stock and Preferred Stock on the terms and conditions hereinafter set
forth; and
(B) The Company, together with the other parties thereto have agreed to
amend and restate the Stockholder and Investor Rights Agreement and AT&T
Wireless Services, Inc. wishes to become a party hereto as of the date
hereof; and
(C) The authorized capital stock of the Company consists of: (a)
1,500,000 shares of common stock, par value $0.001 per share ("Common
Stock"), consisting of (i) 1,438,000 shares of Class A Common Stock ("Class
A Common Stock"), of which 491,954 shares are issued and outstanding, (ii)
31,000 shares of Class B Common Stock ("Class B Common Stock"), of which
28,560 shares are subject to options which have been granted but not
exercised, and (iii) 31,000 shares of Class C Common Stock ("Class C Common
Stock"), of which 4,226 shares are subject to options which have been granted
but not exercised; and (b) 3,500,000 shares of preferred stock, par value
$1.00 per share ("Preferred Stock"), consisting of (i) 734,000 shares
designated 12 1/4% Senior Exchangeable Preferred Stock, Mandatorily
Redeemable 2008, of which 278,872 shares are issued and outstanding,
including PIK dividends thereon through July 15, 1999 (the "Senior PIK
Preferred"), (ii) 450,000 shares designated Class A 5% Non-Cumulative,
Non-Voting, Non-Convertible Preferred Stock ("Class A Preferred Stock"), of
which 314,286 shares are issued and outstanding, (iii) 90,000 shares
designated Class D Convertible Preferred Stock ("Class D Preferred Stock"),
of which 75,093.7 shares are issued and outstanding, (iv) 517,000 shares
designated Class E Preferred Stock ("Class E Preferred Stock"), of which zero
shares are issued and outstanding, and (v) 500,000
shares designated 13 1/4% Senior Exchangeable Preferred Stock Mandatory
Redeemable 2009 of which 175,402 shares are issued and outstanding, including
PIK dividends thereon through August 1, 1999 (the "Exchangeable PIK Preferred
Stock") and with the remaining shares of preferred stock left undesignated;
and
(D) Each Stockholder is the registered owner of the respective shares
of Common Stock and Preferred Stock set forth opposite its name on Schedule
II.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
I. ARTICLE
DEFINITIONS
A. CERTAIN DEFINED TERMS. As used herein, the following terms
have the following meanings (unless indicated otherwise, all Section and
Article references are to Sections and Articles in this Agreement, and all
Schedule and Exhibit references are to Schedules and Exhibits to this
Agreement):
"AAA RULES" shall have the meaning set forth in Section 14.9.
"ADVICE" shall have the meaning set forth in Section 5(d)(xvii).
"AFFILIATE" shall have the meaning given such term in Rule 501(b) under
the Securities Act, provided, that, (i) Logix Communications will not be
deemed to be part of the Company or an Affiliate of the Company for purposes
of this Agreement, including for purposes of giving rise to Conflicts from
and after the Logix Communications, Spin-Off or an initial public offering of
Logix Communications stock or tracking stock, and (ii) prior to the Logix
Communications Spin-Off or an initial public offering of Logix Communications
stock or tracking stock Logix Communications will not be deemed to be part of
the Company or an Affiliate of the Company for purposes of giving rise to
Conflicts unless the Logix Communications Spin-Off or an initial public
offering of Logix Communications stock or tracking stock does not occur by
the second anniversary of the Amendment and Restatement Date, in which case,
effective as of such second anniversary, this clause (ii) will have no
further effect.
"AFFILIATED SUCCESSOR" shall mean, with respect to any Person, an
Affiliate thereof that is a transferee or a successor in interest to any or
all of such Person's Company Stock and that is required to become a party to
this Agreement in accordance with the terms hereof; PROVIDED, HOWEVER, that,
for purposes of Section 4, with respect to any Cash Equity Investor,
"Affiliated Successor" shall also include partners, limited partners or
members of a Cash Equity Investor that are transferees of Preferred Stock or
Common
Stock pursuant to distributions in accordance with the partnership agreement
or operating agreement of such Cash Equity Investor.
"AMENDMENT AND RESTATEMENT DATE" shall mean September __, 1999.
"APPRAISAL PROCEDURE" means the following procedure for determining the
Market Price, for the purpose of valuing the Logix Communications Common
Stock pursuant to Section 6.4 or the Class A Common Stock pursuant to a
Conflict Put Notice pursuant to Section 12.2(c), in the event that the shares
of Class A Common Stock are not listed or admitted for trading on any
national securities exchange and are not quoted on NASDAQ or any similar
service:
(1) The Company and the holders of a majority of the
outstanding shares of stock being appraised, or any investment bank appointed
by them, shall each determine, and attempt to mutually agree upon, the Market
Price.
(1) In the event that the parties fail to agree on the Market
Price or to mutually agree on an investment bank within 30 days then two
independent accounting or investment banking firms of nationally recognized
standing (each, an "Appraiser"), one chosen by the Company and one by the
holders of a majority of the outstanding shares of stock being appraised,
shall each determine and attempt to mutually agree upon, the Market Price.
Each party shall deliver a notice to the other appointing its Appraiser
within 15 days after the expiration of the 30-day period referred to in the
prior sentence. If either the Company or such holders fail to appoint an
Appraiser within such 15-day period, the Market Price shall be determined by
the Appraiser that has been so appointed.
(1) If within 30 days after appointment of the two Appraisers
they are unable to agree upon the Market Price, an independent accounting or
investment banking firm of nationally recognized standing shall within 10
days thereafter be chosen to serve as a third Appraiser by the mutual consent
of such first two Appraisers. The determination of the Market Price by the
third Appraiser so appointed and chosen shall be made within 30 days after
the selection of such third Appraiser.
(1) If three Appraisers shall be appointed and the
determination of one Appraiser is disparate from the middle determination by
more than twice the amount by which the other determination is disparate from
the middle determination, then the determination of such Appraiser shall be
excluded, the remaining two determinations shall be averaged, and such
average shall be binding and conclusive on the Company and such holders;
otherwise the average of all three determinations shall be binding and
conclusive on the Company and such holders.
(1) In connection with any appraisal conducted pursuant to
this Appraisal Procedure, the Appraisers shall adhere to the guidelines
provided in the definition of "Market Price" set forth below, including the
proviso thereto.
(1) The fees and expenses of each Appraiser shall be borne
one-half by the Company and one-half by such holders.
"ARBITRATION NOTICE" shall have the meaning set forth in Section 14.9.
"AT&T" shall mean AT&T Wireless Services, Inc., a Delaware corporation.
"AT&T COMPANY STOCK" shall have the meaning set forth in Section 14.1.
"AT&T COMPETITIVE CONFLICT" shall mean that the aggregate number of POPs
in the AT&T Overlap Territory exceeds the lesser of 2,000,000 or 10% of all
POPs in the Company Territory, after giving effect to the particular
acquisition or transaction giving rise to such Conflict.
"AT&T OVERLAP TERRITORY" shall mean any AT&T Territory (excluding AT&T
Territory as of the Amendment and Restatement Date) that also constitutes
Company Territory as of the date AT&T or an Affiliate of AT&T (i) commences
Offering CMRS Service in such Company Territory or (ii) enters into a binding
agreement to acquire, manage or control a Person that is Offering CMRS
Service in such Company Territory.
"AT&T REGULATORY CONFLICT" shall mean a Regulatory Conflict that arises
solely as a result of actions taken or activities commenced by AT&T and its
Affiliates after the Amendment and Restatement Date.
"AT&T TERRITORY" shall mean, as of any date, any geographic area in
which AT&T or any Affiliate of AT&T is Offering CMRS Service, together with
any geographic area in which any other Person is Offering CMRS Service if, as
of the applicable date, AT&T or an Affiliate of AT&T has entered into a
binding agreement to acquire, manage or control such Person or such Person's
business of Offering CMRS Service in such area.
"AVAILABLE CASH" shall have the meaning given to such term in the
Subordinated Put Note.
"BENEFICIALLY OWN" shall have the meaning set forth in Rule 13d-3 of
the Exchange Act.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the Company,
as duly constituted in accordance with this Agreement, or any committee
thereof duly constituted in accordance with this Agreement, the by-laws and
applicable law and duly authorized to make the relevant determination or take
the relevant action. To the extent that the Board of Directors (or any
committee thereof) is required under this Agreement to authorize or approve,
or make a determination in respect of a transaction between the Company, on
the one hand, and a Stockholder, and/or a Stockholder's Affiliates, on the
other hand, the
Board of Directors shall be deemed to exclude such Stockholder, any of its
Affiliates, and any of the directors, officers, employees, agents or
representatives of such Stockholder and/or its Affiliates, who are members of
the Board of Directors.
"BTA" shall mean a geographic area established by the Rand XxXxxxx 1992
Commercial Atlas & Marketing Guide, 123rd Edition, as modified by the FCC to
form the initial geographic area of license for the C, D, E and F blocks of
broadband PCS spectrum as defined in Section 24.202 of the FCC's rules.
"CALL NOTICE" shall have the meaning set forth in Section 13.2.
"CASH EQUITY INVESTORS" shall have the meaning set forth in the preamble.
"CELLULAR SYSTEM" shall mean a mobile communication system constructed
and operated in a MSA or a RSA (or any successor territorial designations or
subdivision thereof authorized by the FCC) exclusively using frequencies in
the 800 MHz band, or portions thereof, pursuant to a License therefor issued
by the FCC.
"CELLULAR TERRITORY" shall mean the cellular geographic service area in
an MSA or RSA in which the Company or its Subsidiaries has been granted a
licence to operate a Cellular System by the FCC.
"CERTIFICATES OF DESIGNATION" shall mean collectively the Certificates
of Designation of the Company in respect of each class of Preferred Stock,
substantially in the forms of Exhibits B-1 through B-3 hereto.
"CHANGE OF CONTROL" shall mean (i) prior to an IPO, any transaction as a
result of which Xxxxxxx Xxxxxx and his Affiliates, directly or indirectly,
cease to control 50.1% of the Company's Voting Securities, (ii) following an
IPO, any transaction as a result of which Xxxxxxx Xxxxxx and his Affiliates,
directly or indirectly, cease to control 35% of the Company's Voting
Securities, or (iii) the sale of all or substantially all of the Company's
stock, business or assets (including through a merger or otherwise),
PROVIDED, HOWEVER, that a Change of Control will not be deemed to occur in
connection with and solely as a result of (x) the sale or redemption by the
Xxxxxx Partnership of up to $25.0 million in aggregate principal amount of
capital stock of the Company, together with any accrued and unpaid dividends
thereon, in one transaction or a series of transactions in accordance with
Section 4.2(e), (y) an IPO, and (z) the Logix Communications Spin-Off.
"CHANGE OF LAW" shall mean a change in a Law applicable to the Company,
AT&T and/or any of their respective Affiliates or their respective
businesses, properties or assets which is adopted or occurs after the
Amendment and Restatement Date.
"CLASS A COMMON STOCK" shall have the meaning given such term in recital
(C) hereto.
"CLASS A PREFERRED STOCK" shall have the meaning set forth in recital
(C) hereto.
"CLASS B COMMON STOCK" shall have the meaning given such term in recital
(C) hereto.
"CLASS B PREFERRED STOCK" shall mean the Class B Convertible Preferred
Stock of the Company, which has been redeemed as of the date of this
Agreement.
"CLASS C COMMON STOCK" shall have the meaning set forth in recital (C)
hereto, which is designed to track the financial performance of the Wireless
Subsidiaries.
"CLASS C PREFERRED STOCK" shall mean the Class C 8% Cumulative,
Non-Voting, Non-Convertible, Preferred Stock of the Company, which has been
redeemed as of the date of this Agreement.
"CLASS D PREFERRED STOCK" shall have the meaning set forth in recital
(C) hereto.
"CLASS E PREFERRED STOCK" shall have the meaning set forth in recital
(C) hereto.
"CLAWBACK EXERCISE PRICE" shall have the meaning given such term in
Article 11.
"CLOSING PRICE" shall mean, with respect to each share of any class or
series of capital stock for any day, (i) the last reported sale price regular
way or, in case no such sale takes place on such day, the average of the
closing bid and asked prices regular way, in either case as reported on the
principal national securities exchange on which such class or series of
capital stock is listed or admitted for trading or (ii) if such class or
series of capital stock is not listed or admitted for trading on any national
securities exchange, the last reported sale price or, in case no such sale
takes place on such day, the average of the highest reported bid and the
lowest reported asked quotation for such class or series of capital stock, in
either case as reported on NASDAQ or a similar service if NASDAQ is no longer
reporting such information.
"CMRS" shall mean a Commercial Mobile Radio Service regulated under Part
20 of the FCC rules as of the date of this Agreement.
"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"COMMON STOCK" shall collectively mean the Class A Common Stock, the
Class B Common Stock and the Class C Common Stock.
"COMPANY" shall have the meaning set forth in the preamble.
"COMPANY STOCK" shall mean the Preferred Stock and the Common Stock.
"COMPANY COMPETITIVE CONFLICT" shall mean that the aggregate number of
POPs in the Company Overlap Territory exceeds the lesser of 2,000,000 or 10%
of all POPs in the Company Territory, after giving effect to the particular
acquisition or transaction giving rise to such Conflict.
"COMPANY OVERLAP TERRITORY" shall mean any Company Territory (other than
Company Territory as of the Amendment and Restatement Date) that constitutes
AT&T Territory as of the date the Company or an Affiliate of the Company (i)
commences Offering CMRS Service in such AT&T Territory or (ii) enters into a
binding agreement to acquire, manage or control a Person that is Offering
CMRS Service in such AT&T Territory.
"COMPANY REGULATORY CONFLICT" shall mean a Regulatory Conflict that
arises solely as a result of actions taken or activities commenced by the
Company and its Affiliates after the Amendment and Restatement Date.
"COMPANY TERRITORY" shall mean, as of any date, any geographic area in
which the Company or any Affiliate of the Company is Offering CMRS Service,
together with any geographic area in which any other Person is Offering CMRS
Service if, as of the applicable date, the Company or an Affiliate of the
Company has entered into a binding agreement to acquire, manage or control
such Person or such Person's business of Offering CMRS Service in such area.
"CONFIDENTIAL INFORMATION" shall have the meaning assigned to such term
in Section 6.3(a).
"CONFLICT" shall mean an AT&T Competitive Conflict, a Company
Competitive Conflict or a Regulatory Conflict.
"CONFLICT NON-VOTING NOTICE" shall have the meaning set forth in Section
12.2(b).
"CONFLICT NOTICE" shall have the meaning set forth in Section 12.2(a).
"CONFLICT PUT NOTICE" shall have the meaning set forth in Section 12.2(b).
"CONSOLIDATED LEVERAGE RATIO" shall be calculated in accordance with the
Senior Notes Indenture regardless of whether or not the Senior Notes
Indenture is still in effect.
"CREDIT AGREEMENTS" shall mean (i) the Credit Agreement, dated as of
March 25, 1998, among First Union National Bank (as successor by merger to
CoreStates Bank, N.A.) as Administrative Agent, Xxxxxx Operating Company, as
Borrower, the Company, as Guarantor, and the Company Subsidiaries party
thereto, as amended on December 23, 1998, (ii) the Revolving Credit
Agreement, dated as of March 25, 1998, among Xxxxxx Cellular Operations
Company as Borrower, and NationsBank, N.A. (as successor by merger to
NationsBank of Texas, N.A.), as Administrative Agent, (iii) the 364-Day
Revolving Credit and Term Loan Agreement, dated as of March 25, 1998, between
Xxxxxx Cellular Operations Company, as Borrower, and NationsBank, N.A. (as
successor by merger to NationsBank of Texas, N.A.), as Administrative Agent,
(iv) the Credit Agreement, dated December 23, 1998, between Sygnet Wireless,
Inc., (as successor by merger to Xxxxxx/Sygnet Operating Company), as
Borrower and NationsBank N.A., as Administrative Agent and (v) the Term Loan
Agreement, dated as of December 23, 1998, among Xxxxxx Tower Company and
NationsBank, N.A.
"CREDIT DOCUMENTS" shall mean, collectively, the Credit Agreements and
all documents and instruments evidencing or securing or guarantying
indebtedness thereunder.
"DISPUTE" shall have the meaning set forth in Section 14.9.
"XXXXXX PARTNERSHIP" shall mean Xxxxxx XX Limited Partnership, an
Oklahoma limited partnership.
"XXXXXX/SYGNET" shall mean Xxxxxx/Sygnet Communications Company, an
Oklahoma corporation.
"XXXXXX/SYGNET NOTE DOCUMENTS" shall mean, collectively, the
Xxxxxx/Sygnet Note Indenture, the Xxxxxx/Sygnet Note Purchase Agreement, the
Xxxxxx/Sygnet Notes and the Xxxxxx/Sygnet Note Registration Rights Agreement.
"XXXXXX/SYGNET NOTE INDENTURE" shall mean the Indenture, dated December
23, 1998, among Xxxxxx/Sygnet and United States Trust Company of New York, as
trustee thereunder, in respect of the Xxxxxx/Sygnet Notes.
"XXXXXX/SYGNET NOTE PURCHASE AGREEMENT" shall mean the Purchase
Agreement, dated as of December 16, 1998, among Xxxxxx/Sygnet and NationsBanc
Xxxxxxxxxx Securities LLC.
"XXXXXX/SYGNET NOTE REGISTRATION RIGHTS AGREEMENT" shall mean the
Registration Rights Agreement, dated December 23, 1998, among Xxxxxx/Sygnet
and NationsBanc Xxxxxxxxxx Securities LLC.
"XXXXXX/SYGNET NOTES" shall mean the $200 million in aggregate principal
amount of 12 1/4% Senior Notes due 2008 issued by Xxxxxx/Sygnet pursuant to
the Xxxxxx/Sygnet Note Indenture.
"EQUITY SECURITIES" shall mean, with respect to any Person, any shares
of stock of, or partnership interest or other ownership or beneficial
interest in, such Person, in each case outstanding at any time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" means any trade or business, whether or not
incorporated, that, together with the Company, would be deemed to be a
"single employer" within the meaning of Section 4001(b) of ERISA.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXCHANGEABLE PIK PREFERRED STOCK" shall have the meaning set forth in
recital (C) hereto.
"FCC" shall mean the Federal Communications Commission or similar
regulatory authority established in replacement thereof.
"FCC CONFLICT" shall mean any of the following: (i) the FCC Order being
withdrawn, reversed, superseded or otherwise ceasing to be in full force and
effect, including without limitation as a result of a Change of Law or an
application of existing law, or (ii) the commencement of the 90-day cure
period (as such period may be modified) set forth in the FCC Order.
"FCC CONFLICT NOTICE" has the meaning set forth in Section 14.1(a).
"FCC CONFLICT PUT NOTICE" shall have the meaning set forth in Section
14.1.
"FCC ORDER" shall mean the waiver of 47 CFR Section 22.942 granted to
the Company and AT&T by the Chief of the Commercial Wireless Division,
Wireless Telecommunications Bureau, DA 99-1475 (released July 29, 1999).
"FCC PUT" shall have the meaning set forth in Section 14.1.
"FINANCING AGREEMENTS" shall mean, collectively, the Senior Note Documents,
the Xxxxxx/Sygnet Notes Documents, the Credit Documents, the Senior PIK
Preferred Stock Certificate of Designation, the Exchangeable PIK Preferred
Stock Certificate of Designation, the Investment and Transaction Agreement
and, as appropriate, all documents, instruments and agreements evidencing or
securing the foregoing and any amendments or refinancings permitted by
Section 12.6. This definition shall not be construed in accordance with the
final sentence of Section 1.2.
"FLEET BUYOUT STOCK" shall mean collectively the 17,412 shares of Class
A Common Stock purchased by JWC, the 22,459 shares of Class A Common Stock
purchased by the Company, the 17,412 shares of Class A Common Stock purchased
by the Xxxxxx Partnership and the 20,886 shares of Class A Common Stock
purchased by Xxxxxx Operating Company directly, in each case from Fleet
Equity on December 23, 1998 pursuant to the terms of the Stock Purchase
Agreement among Fleet Equity and each such purchaser.
"FLEET EQUITY" shall mean collectively Fleet Venture Resources, Inc.,
Fleet Equity Partners VI, L.P. and Xxxxxxx Plaza Partners together with their
respective Affiliates.
"FORMER SHAREHOLDERS' AGREEMENT" shall mean the Shareholders' Agreement
of the Company, dated as of February 26, 1996, among the Company and the
shareholders named therein, and which has been terminated, effective as of
December 23, 1998.
"FULLY DILUTED BASIS" shall mean with respect to any Equity Securities
issued by any Person, without duplication, (a) all shares or units of, or
interests in, such Equity Securities outstanding at the time of
determination, and (b) all convertible securities, or other rights to acquire
such Equity Securities, whether or not exercisable or convertible at the time
of such determination.
"GAAP" means U.S. generally accepted accounting principles, consistently
applied.
"GOVERNMENTAL AUTHORITY" shall mean a Federal, state or local court,
legislature, governmental agency (including, without limitation, the United
States Department of Justice), commission or regulatory or administrative
authority or instrumentality.
"GUARANTEED PENSION PLAN" shall mean any employee pension benefit plan
within the meaning of Section 3(2) of ERISA maintained or contributed to by
the Company or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA,
other than a Multiemployer Plan.
"INDEBTEDNESS" means any indebtedness (including, without limitation,
Senior Indebtedness), whether or not contingent, in respect of borrowed money
or evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing the
deferred and unpaid balance of the purchase price of any property (including
pursuant to capital leases), and any financial hedging obligations, if and to
the extent such indebtedness (other than a financial hedging obligation)
would appear as a liability upon a balance sheet of such person prepared on a
consolidated basis in accordance with generally accepted accounting
principles, other than a trade payable or accrued expense, and also includes,
the guarantee of items that would be included within this definition.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(e)(v).
"INDEMNIFIED STOCKHOLDER" shall have the meaning set forth in Section
5(e)(i).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(e)(v).
"INVESTMENT AND TRANSACTION AGREEMENT" shall mean the Investment and
Transaction Agreement, dated as of December 23, 1998, among the Company and
the Purchasers named therein, as amended by this Agreement.
"IPO" shall mean an initial public offering of Class A Common Stock
pursuant to an effective Registration Statement under the Securities Act, the
aggregate gross proceeds from such public offering equals or exceeds $50.0
million (or, where the context expressly provides otherwise in this
Agreement, such other amount as is expressly stated).
"IPO DATE" shall mean the first date on which an IPO occurs.
"JWC" AND "JWC GROUP STOCKHOLDERS" each mean X.X. Childs Equity Partners
II, L.P., a Delaware limited partnership, and its affiliated funds and
co-investors listed on Schedule I hereto.
"JWC COMMON STOCK" shall mean the 17,412 shares of Class A Common Stock
purchased by JWC from Fleet Equity pursuant to the Fleet Purchase Agreement,
dated December 23, 1998, among Fleet Equity and the purchasers named therein.
The term JWC Common Stock, for purposes of this Agreement, shall include the
shares of Class A Common Stock purchased by AT&T from JWC pursuant to the
Stock Purchase Agreement.
"JWC SELLDOWN" shall mean the sale by JWC of up to $33.3 million of its
initial investment in Company Stock including, without limitation, Company
Stock sold to AT&T, pursuant to the Stock Purchase Agreement and Section 5.14
of the Investment and Transaction Agreement.
"LAW" shall mean applicable common law and any statute, ordinance, code
or other law, rule, permit, permit condition, regulation, order, decree,
technical or other standard, requirement or procedure enacted, adopted,
promulgated, applied or followed by any Governmental Authority.
"LICENSE" shall mean a license, permit, certificate of authority,
waiver, approval, certificate of public convenience and necessity,
registration or other authorization, consent or clearance to construct or
operate a facility, including any emissions, discharges or releases
therefrom, or to transact an activity or business, to construct a tower or to
use an asset or process, in each case issued or granted by a Governmental
Authority.
"LIENS" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest, right of first refusal or right of others
therein or encumbrance of any nature whatsoever in respect of such asset.
"LIQUIDATION PREFERENCE" shall mean, with respect to each share of
Preferred Stock, the liquidation preference therefore, calculated in
accordance with the Certificate of Designation for the relevant class of
Preferred Stock.
"LIQUIDITY EVENT" shall mean any of the following events, the occurrence
of the IPO Date, the sale of all or substantially all of the Company Stock or
the Company's business and assets (including through a merger or otherwise),
the substantial recapitalization of the Company or any other event which
provides substantial financial liquidity to the Company's Stockholders in
respect of their investment in the Company.
"LOGIX COMMUNICATIONS" shall mean Logix Communications Enterprises, Inc.
an Oklahoma corporation.
"LOGIX COMMUNICATIONS COMMON STOCK" shall mean Common Stock, par value
$1.00 per share, of Logix Communications.
"LOGIX COMMUNICATIONS 1998 STOCK OPTION PLAN" shall mean the Logix
Communications 1998 Stock Option Plan.
"LOGIX COMMUNICATIONS SPIN-OFF" shall mean the consummation of the
proposed spin-off by the Company of the business of Logix Communications.
"MAJOR TELECOM COMPETITOR" shall mean any of (i) MCI/Worldcom Corp.,
Sprint Corporation, Xxxx Atlantic Corporation, GTE Corporation, LCI
International Inc., British Telecommunications plc, Cable & Wireless plc,
Deutsche Telecom, Telecom Italia SpA, France Telecom, Stentor companies,
Omnipoint Corporation, AirTouch Communications, Inc., and Telecommunicaciones
de Mexico or (ii) any other Person that derives over $2 billion of revenue
per annum (based on the most recently available data for the immediately
preceding year) from the provision or sale of telecommunications services, as
of the date of measurement.
"MARKET PRICE" shall mean, with respect to each share of any class or
series of capital stock for any day, (i) the average of the daily Closing
Prices for the ten consecutive trading days commencing 15 days before the day
in question or (ii) if on such date the shares of such class or series of
capital stock are not listed or admitted for trading on any national
securities exchange and are not quoted on NASDAQ or any similar service, the
cash amount that a willing buyer would pay a willing seller (neither acting
under compulsion) in an arm's-length transaction without time constraints per
share of such class or series of capital stock as of such date, viewing the
Company on a going concern basis, determined in accordance with the Appraisal
Procedure; PROVIDED that, in determining such cash amount, the following
shall be ignored: (i) any contract or legal limitation in respect of the
stock, including transfer, voting and other rights, (ii) the "minority
interest" or "control" status of the stock, (iii) any illiquidity arising by
contract in respect of the stock and any voting rights or control rights
amongst the stockholders, and (iv) any other contract rights or restrictions,
including those set forth herein.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect in the
business, assets, properties (tangible and intangible), operations, condition
(financial or otherwise), liabilities or prospects of the Company and the
Subsidiaries, taken as a whole, whether or not in the ordinary course of
business, whether separately or in the aggregate with other occurrences or
developments, and whether insured against or not or any event, circumstances
or conditions which reasonably may have such a material adverse effect.
"MSA" means a Metropolitan Statistical Area, comprised of one or more
counties in the Unites States, as listed in Public Notice Report No.
CL-92-40, "Common Carrier Public Mobile Services Information, Cellular
MSA/RSA Markets and Counties," dated January 24, 1992. DA 92-109.
"MTA" shall mean a geographic area established by the Rand XxXxxxx 1992
Commercial Atlas & Marketing Guide, 123rd Edition, as modified by the FCC to
form the initial geographic area of license for the A and B blocks of
broadband PCS spectrum as defined in Section 24.202 of the FCC's rules.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ" shall mean the National Association of Securities Dealers'
Automated Quotation System.
"NEW COMPANY STOCK OPTION PLAN" shall mean the Xxxxxx Communications
Corporation 1996 Stock Option Plan, adopted on February 6, 1997, as amended
by Amendment No. 1 thereto, dated December 21, 1998.
"NEW SECURITIES" shall have the meaning set forth in Section 4.7(b).
"OFFERING CMRS SERVICES" means the offering of CMRS Services to the
public utilizing radio facilities licensed to the offeror by the FCC OR in
which the offeror is advertising the availability of, and directly or through
franchise arrangements operating, retail outlets for the offering of the
offeror's or its Affiliate's CMRS Services.
"OVERLAP TERRITORY" shall mean the aggregate of AT&T Overlap Territory
and Company Overlap Territory.
"PCS SYSTEM" shall mean a mobile communication system constructed and
operated in a BTA or a MTA (or any successor territorial designations or
subdivision thereof authorized by the FCC) exclusively using the 1850 MHZ to
1910 MHZ and 1930 MHZ to 1990 MHZ frequencies, or portions thereof, pursuant
to a License therefor issued by the FCC.
"PCS TERRITORY" shall mean an MTA or BTA in which the Company or any of
its Subsidiaries has been granted a license to operate a PCS System by the
FCC.
"PERSON" shall mean an individual, corporation, partnership, limited
liability company, association, joint stock company, Governmental Authority,
business trust or other legal entity.
"POPS" shall mean, with respect to any distinct geographic area, the
residents of such area based on the most recent publication by Equifax
Marketing Decision Systems, Inc.
"PREFERRED STOCK" shall mean collectively, the Senior PIK Preferred
Stock, the Exchangeable PIK Preferred Stock, the Class A Preferred Stock, the
Class D Preferred Stock and the Class E Preferred Stock.
"PREFERRED STOCK PUT RIGHT" shall have the meaning given such term in
Section 12.1.
"PROHIBITED TRANSFEREE" shall mean any Person (other than AT&T and its
Affiliates) that is one of the five largest providers of wireless
telecommunications services (based on revenue derived from the provision of
such wireless telecommunications services during the most recent fiscal year
for which such information is available) in any PCS Territory or Cellular
Territory or any entity which is controlled by any such Person; or a Person
(other than the Company and AT&T and its Affiliates) who derives a material
portion of its business by providing wireless telecommunications services in
any PCS Territory or Cellular Territory.
"PROSPECTUS" shall have the meaning set forth in Section 5(d)(i).
"PUT RIGHT" shall mean a Preferred Stock Put Right or the right of AT&T
to require the Company to repurchase Company Stock held by it pursuant to
Section 12.2(c), as the context requires.
"QUALIFIED HOLDER" shall mean any Stockholder or group of Stockholders
that Beneficially Owns shares of Common Stock reasonably expected to, upon
sale, result in aggregate gross proceeds of at least $50.0 million.
"REGISTRABLE SECURITIES" shall mean (a) the Common Stock now owned or
hereafter acquired by any Stockholder or issuable upon conversion of any
Equity Security or exchange of Common Stock, and (b) all Common Stock issued
or issuable upon conversion, exchange or exercise of any Equity Security
which is issued pursuant to a stock split, stock dividend or other similar
distribution or event with respect to Common Stock but with respect to any
Common Stock, only until such time as such Common Stock (i) has been
effectively registered under the Securities Act and disposed of in accordance
with the Registration Statement covering it, (ii) has been sold to the public
pursuant to Rule 144 (or any similar provision then in force), (iii) shall
otherwise have been transferred, a new certificate evidencing such Common
Stock without a legend restricting further transfer shall have been delivered
by the Company, and subsequent
public distribution of such Common Stock shall neither require registration
under the Securities Act nor qualification (or any similar filing) under any
state securities or "blue sky" law then in effect, or (iv) shall have ceased
to be issued and outstanding.
"REGISTRATION" shall have the meaning set forth in Section 5(d).
"REGISTRATION EXPENSES" shall have the meaning set forth in Section 5(g).
"REGISTRATION STATEMENT" shall have the meaning set forth in Section
5(d)(i).
"REGULATORY CONFLICT" shall mean the existence or occurrence of any of
the following conditions: (a) either AT&T or the Company or any of their
respective Affiliates own an attributable interest in both Cellular Systems
authorized to serve a Cellular Territory which violates any FCC rule or
regulation prohibiting such overlapping interests; OR (b) either AT&T, the
Company or any of their respective Affiliates holds an attributable interest
in more licensed broadband PCS, cellular, and SMR spectrum regulated as CMRS
than is permitted under any FCC spectrum cap regulation prohibiting such
interest; OR (c) either AT&T or the Company or any of their respective
Affiliates holds any other attributable interest or interests which violates
any rule or regulation of the FCC, for example, prohibitions on the ownership
of certain interests in the telephone company and cable television company
serving the same market; provided, that, in any case, a Regulatory Conflict
will not be deemed to exist if such Regulatory Conflict would not exist but
for a Change of Law.
"RELATED AGREEMENTS" shall mean the Investment and Transaction
Agreement, the Stock Purchase Agreement, the Certificates of Designation for
each of the Class D Preferred Stock, the Class E Preferred Stock, the New
Company Stock Option Plan, and the Logix Communications 1998 Stock Option
Plan and the Investor Questionnaires.
"RELEVANT PERCENTAGE INTEREST" shall have the meaning given such term in
Section 3.4.
"REPRESENTATIVES" shall have the meaning set forth in Section 6.3(a).
"RESTATED BY-LAWS" shall mean the Amended and Restated By-Laws of the
Company in the form of Exhibit C.
"RESTATED CERTIFICATE" shall mean the Amended and Restated Certificate
of Incorporation of the Company, in the form of Exhibit A.
"RSA" means a Rural Statistical Area, comprised of one or more counties
in the United States, as listed in Public Notice Report No. CL-92-40, "Common
Carrier Public Mobile Services Information, Cellular MSA/RSA Markets and
Counties," dated January 24, 1992, DA 92-109.
"RULE 144" shall mean Rule 144 promulgated under the Securities Act (or
any similar rule as may be in effect from time to time).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING STOCKHOLDER" shall have the meaning set forth in Section 4.2(a).
"SENIOR INDEBTEDNESS" shall mean the principal, interest on, premium, if
any, fees (including, without limitation, any attorneys', commitment, agency,
facility, structuring, restructuring or other fee), costs, expenses,
indemnities, and other amounts due on or in connection with the Financing
Agreements and any refinancings or replacements of the foregoing prior to the
date of issuance of any Subordinated Put Note, in accordance with Section
12.6 hereof or from the date of issuance of any Subordinated Put Note, in
accordance with the terms of such Subordinated Put Note, in each case whether
or not with new lenders, now or hereafter incurred, any documents executed
under or in connection therewith, and any amendments, modifications,
deferrals, renewals of the Financing Agreements prior to the date of issuance
of any Subordinated Put Note, in accordance with Section 12.6, or from the
date of issuance of any Subordinated Put Note, in accordance with the terms
of such Subordinated Put Note, any amounts owed in respect of any
Indebtedness incurred in refinancing, replacing or refunding the foregoing
prior to the date of issuance of any Subordinated Put Note, in accordance
with Section 12.6 or from the date of issuance of any Subordinated Put Note,
in accordance with the terms of such Subordinated Put Note, in each case
whether or not with new lenders, unless the terms of such Indebtedness
expressly provide that such Indebtedness is not Senior Indebtedness with
respect to any Subordinated Put Note.
"SENIOR NOTE DOCUMENTS" shall mean, collectively, the Senior Note
Indenture, the Senior Notes and the Senior Notes Escrow and Security
Agreement.
"SENIOR NOTE INDENTURE" shall mean the Indenture, dated as of February
28, 1997, among the Company and United States Trust Company of New York, as
Trustee thereunder, in respect of the Senior Notes.
"SENIOR NOTES" shall mean the 11 3/4% Senior Notes due 2007 issued by
the Company pursuant to the Senior Note Indenture.
"SENIOR NOTES ESCROW AND SECURITY AGREEMENT" shall mean the Escrow and
Security Agreement, dated February 28, 1997, among, the Company and the
placement agents, party thereto, and United States Trust Company of New York,
as Trustee thereunder.
"SENIOR PIK PREFERRED STOCK" shall have the meaning set forth in recital
(C) hereto.
"SENIOR PIK PREFERRED STOCK CERTIFICATE OF DESIGNATION" shall mean the
Certificate of Designation in respect of the Senior PIK Preferred Stock.
"STOCKHOLDER" shall have the meaning set forth in the preamble.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated as
of April 13, 1999, among the Company, JWC and AT&T.
"SUBORDINATED PUT NOTE" shall mean any Negotiable Junior Subordinated
Unsecured Note of the Company, substantially in the form of Exhibit D, issued
in accordance with the terms of this Agreement in connection with the
exercise of Put Rights.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a
partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time owned
or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
partnership, association, or other business entity if such Person or Persons
shall be allocated a majority of partnership, association or other business
entity gains or losses or shall be or control the managing general partner of
such partnership, association or other business entity.
"SYGNET ACQUISITION" shall mean the acquisition by the Company's wholly
owned subsidiary, Xxxxxx/Sygnet, of all of the outstanding capital stock of
Sygnet Wireless, Inc., an Ohio corporation, pursuant to the Sygnet Merger
Agreement dated July 28, 1998, as amended, between Xxxxxx/Sygnet Operating
Company and Sygnet Wireless, Inc.
"SYGNET MERGER AGREEMENT" shall mean the Agreement and Plan of Merger,
dated as of July 28, 1998, between Xxxxxx/Sygnet Operating Company and Sygnet
Wireless, Inc.
"TAG-ALONG EVENT" shall have the meaning set forth in Section 4.2(a).
"TAG-ALONG EVENT PURCHASER" shall have the meaning set forth in Section
4.2(a).
"TAG-ALONG NOTICE" shall have the meaning set forth in Section 4.2(a).
"TAG-ALONG STOCK" shall have the meaning set forth in Section 4.2(a).
"TAXES" means with respect to any Person a net income, gross income,
gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, transfer,
occupation, premium, property or
windfall profit tax, custom duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest and
any penalty, addition to tax or additional amount imposed by any jurisdiction
or other taxing authority (domestic or foreign) on such Person.
"TERRITORY" shall mean, collectively, all of the PCS Territories and
all of the Cellular Territories.
"TRANSFER" shall have the meaning set forth in Section 4.1(a).
"VOTING SECURITIES" shall mean equity securities of a Person having the
right to vote generally in the election of the directors of such Person.
"WIRELESS SUBSIDIARIES" shall mean collectively DCC PCS Inc., Western
Financial Services, Inc., Xxxxxx Cellular Operations Company, DOC Cellular
Subsidiary Company, Xxxxxx Tower Company, Xxxxxx/Sygnet Communications
Company and their respective Subsidiaries and Xxxxxx Operating Company.
A. OTHER DEFINITIONAL PROVISIONS. Each definition or pronoun
herein shall be deemed to refer to the singular, plural, masculine, feminine
or neuter as the context requires. Words such as "herein," "hereinafter,"
"hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless
the context otherwise requires. References to a document or agreement shall
be to such document or agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
I. ARTICLE
STOCKHOLDER APPROVAL
A. ORGANIZATIONAL DOCUMENTS. The Stockholders consent to the
amendment of the By-Laws and their replacement by the Restated By-Laws and
adopt and approve the Restated By-Laws.
A. APPROVAL OF STOCK OPTION PLANS. The Stockholders approve and
adopt the New Company Stock Option Plan and the Logix Communications 1998
Stock Option Plan and consent to the issuance of stock options and common
stock in accordance with the terms thereof and to the consummation of the
other transactions contemplated thereby.
A. LOGIX COMMUNICATIONS SPIN-OFF. The Stockholders hereby
approve and consent to the consummation of the Logix Communications Spin-Off
provided that such Logix Communications Spin-Off occurs within 12 months of
the receipt by the Company of (A) either (i) a private letter ruling by the
Internal Revenue Service with respect to the Logix Communications Spin-Off
under the currently pending
application therefor by the Company or (ii) an opinion from a nationally
recognized law firm or accounting firm, acceptable in form and substance to
the Board of Directors, that the Logix Communications Spin-Off will not
result in the recognition of income, gain or loss for the Company or its
Stockholders for US federal tax purposes and (B) all necessary creditor,
noteholder and other third party approvals, consents and waivers shall have
been obtained or waived. In addition, if the alternative referred to in
(A)(ii) above is pursued, the Company will, as a pre-condition of the Logix
Communications Spin-Off, obtain insurance coverage in respect of any
tax-related risks or liabilities arising if the Logix Communications Spin-Off
is a taxable event for the Company and/or its stockholders, and such
insurance policy, including its terms and coverage, will be approved by the
Board of Directors of the Company. The Stockholders acknowledge that the
holders of Class D Preferred Stock will participate in the Logix
Communications Spin-Off on a pro rata basis according to their percentage
ownership of Common Stock on a Fully Diluted Basis at the time of the Logix
Communications Spin-Off (assuming for this purpose that all options issued
under the Logix Communications 1998 Stock Option Plan have been exercised).
The JWC Common Stock shall participate in the Logix Communications Spin-Off
on the same terms as all other shares of Class A Common Stock.
I. ARTICLE
MANAGEMENT OF THE COMPANY
a) BOARD OF DIRECTORS. The Board of Directors shall, subject
to the other provisions hereof, consist of seven (7) directors; PROVIDED,
HOWEVER, that the number of directors constituting the Board of Directors
shall be reduced in the circumstances set forth in this Section 3.1. Each of
the Stockholders hereby agrees that it will vote all of the shares of its
Common Stock and Preferred Stock (to the extent entitled to vote) owned or
held of record by it (whether now owned or hereafter acquired), in person or
by proxy, to cause the election of directors and thereafter the continuation
in office of such directors as follows:
(1) one director selected by JWC, in its sole discretion, so
long as it Beneficially Owns at least 35% of the Class D Preferred Stock (or
the Class A Common Stock or Class E Preferred Stock acquired upon conversion
thereof) it holds as of the Amendment and Restatement Date;
(1) one director selected by AT&T, in its sole discretion, so
long as it Beneficially Owns at least 50% of the Class D Preferred Stock (or
the Class A Common Stock or Class E Preferred Stock acquired upon conversion
thereof) it holds as of the Amendment and Restatement Date, subject to
section 3.1(b);
(1) four directors selected by the Xxxxxx Partnership, in its
sole discretion; and
(1) one director jointly selected by JWC, AT&T (in the event its
designee is a member of the current Board of Directors) and the Xxxxxx
Partnership, subject to Section 3.1(b). In the event that AT&T shall have
relinquished, and shall continue to relinquish, its right to designate a
director under Section 3.1(a)(ii) in accordance with Section 3.1(b), then the
director jointly selected by JWC and the Xxxxxx Partnership pursuant to this
Section 3.1(a)(iv) shall be reasonably acceptable to AT&T, which consent
shall not be unreasonably withheld.
Each of JWC and AT&T (in the event its designee is a member of the
current Board of Directors) shall have the right to, so long as they hold
their respective Relevant Percentage Interest, designate one director for the
Board of Directors of each Subsidiary of the Company.
If, for any reason, any director to be designated pursuant to
clause (iv) hereof is not designated within 45 days of the time when such
designation right arises, then (x) such director will be jointly selected by
JWC and AT&T (in the event its designee is a member of the current Board of
Directors), and (y) if any such director is not designated pursuant to clause
(x) within 90 days of such time, then such director will be selected by the
Xxxxxx Partnership. In the event that any Class D Preferred Stock is
converted into Class A Common Stock and Class E Preferred Stock in accordance
with the terms thereof, the rights of the holders of such Preferred Stock to
vote to appoint directors in accordance with the terms hereof shall survive
such conversion.
Any nomination or designation of directors and the acceptance
thereof pursuant to Section 3.1 shall be evidenced in writing.
a) If, for any reason, AT&T's director selected pursuant to
clause (a)(ii) above resigns or AT&T determines that it no longer desires to
have director designation rights, including as a result of a Conflict and the
related provisions herein, then AT&T may, at its option, relinquish such
director designation rights, in which case, an additional director will be
designated pursuant to Section 3.1(a)(iv) above and AT&T will be entitled to
observer rights as provided in Section 3.1(d) below, PROVIDED, that if AT&T
subsequently determines to reinstate such director designation rights, it may
do so by notifying the parties hereto, in which case, such observer rights
will terminate, AT&T's director designation rights in Section 3.1(a)(ii) will
be reinstated, and the additional director designated pursuant to this
Section 3.1(b) and 3.1(a)(iv) will concurrently resign or be removed.
a) The Stockholders acknowledge the rights of the holders of
Senior PIK Preferred Stock to designate an additional 2 directors and the
right of the holders of Exchangeable PIK Preferred Stock to designate an
additional 2 directors, in the event that the triggering events described in
paragraph (iii) of the Senior PIK Preferred Stock Certificate of Designation
and paragraph (iii) of the Sygnet PIK Preferred Stock Certificate of
Designation, respectively occur.
a) If AT&T relinquishes its director designation rights pursuant
to Section 3.1(b), then AT&T will be entitled to designate an observer in
addition to its observer appointed under Section 3.4, who will be entitled to
attend all meetings of the Board of Directors and receive the same notice and
information provided to members of the Board of Directors. The Company will
reimburse the observer appointed pursuant to this Section in connection with
such person's role as observer for the reasonable and documented out-of-pocket
expenses and costs (including travel expenses), incurred by such observer in
connection with the performance of his service as an observer of the Board of
Directors.
A. REMOVAL; FILLING OF VACANCIES. Except as set forth in Section
3.1, each Stockholder agrees it will not vote any shares of Company Stock
Beneficially Owned by such Stockholder, and shall not permit any Affiliated
Successor of such Stockholder holding any Company Stock, to vote for the removal
without cause of any director designated by any other Stockholder in accordance
with Section 3.1. Any Stockholder or group of Stockholders who has the right to
designate any member(s) of the Board of Directors shall have the right to
replace any member(s) so designated by it (whether or not such member is removed
from the Board of Directors with or without cause or ceases to be a member of
the Board of Directors by reason of death, disability or for any other reason)
upon written notice to the other Stockholders, the Company and the members of
the Board of Directors which notice shall set forth the name of the member(s)
being replaced and the name of the new member(s). Each of the Stockholders
agrees to vote, and to cause its Affiliated Successors to vote, its shares of
Preferred Stock and Common Stock, or shall otherwise take any action as is
necessary to cause the election of any successor director designated by any
Stockholder pursuant to this Section 3.2.
A. DIRECTORS. In accordance with the Oklahoma General Corporation
Law and pursuant to the provisions of Section 3.1 of this Agreement, the
Stockholders hereby consent to the election of and do hereby elect in accordance
with Section 3.1 hereof the persons designated in Schedule III hereto as
directors of the Company. Such persons shall hold office until their successors
are duly elected and qualified, except as otherwise provided in this Agreement,
the Restated Certificate or the Restated By-Laws.
A. COMPENSATION AND REIMBURSEMENT. The members of the Board of
Directors (other than the director selected pursuant to Section 3.1(a)(iv))
shall not be compensated for their services as a director or as a member of any
committee of the Board of Directors. For so long as JWC Beneficially Owns at
least 35% and AT&T Beneficially Owns at least 50%, respectively, of the number
of shares of Class D Preferred Stock (or any Class A Common Stock or Class E
Preferred Stock into which it may have been converted) which JWC or AT&T, as the
case may be, owns as of the Amendment and Restatement Date (the "Relevant
Percentage Interests"), JWC and AT&T shall each have the right to have an
observer present at all meetings of the Board of Directors and any committees
thereof (in addition to any directors appointed pursuant
to Sections 3.1(a)(i) and (ii) above). The Company will reimburse the
observers appointed pursuant to this Section and each member of the Board of
Directors for the reasonable and documented out-of-pocket expenses and costs
(including travel expenses) incurred by such observers or such directors in
connection with the performance by each such person of his service as an
observer or as a director or as a member of any committee of the Board of
Directors.
A. BUSINESS OF THE COMPANY. The business and affairs of the
Company shall be conducted by the officers of the Company under the
supervision of the Board of Directors. The Board of Directors of the Company
shall meet at least once per fiscal quarter. The Board of Directors of Logix
Communications shall meet at least once in every two month period.
A. REQUIRED VOTES. All actions of the Board of Directors of the
Company shall require the vote of at least a majority of the entire Board of
Directors, unless otherwise required by Law, the Restated Certificate, the
Restated By-Laws or this Agreement.
A. TRANSACTIONS BETWEEN THE COMPANY AND THE STOCKHOLDERS OR THEIR
AFFILIATES. Any transaction or series of transactions outside the ordinary
course of business and agreements or transactions entered into from time to
time and involving, in any 12-month period, in the aggregate, more than $1.0
million, between the Company or its Subsidiaries, on the one-hand, and its
Stockholders or Affiliates, or any of them, on the other hand, must be
approved by any two of the directors selected in clauses (i), (ii) and (iv)
of Section 3.1(a), PROVIDED that no such approval will be required in
connection with (A) this Agreement, the Investment and Transaction Agreement,
the New Company Stock Option Plan and the Logix Communications 1998 Stock
Option Plan, any Financing Agreement to be entered into simultaneously
herewith, (B) the Logix Communications Spin-Off, (C) the Stock Purchase
Agreement, (D) the proposed arms-length development and lease by the Company
and its Subsidiaries of space in an office building in which the Xxxxxx
family has an ownership interest (E) the AT&T Operating Agreement and any
other transactions between Xxxxxx and/or its Subsidiaries on the one hand and
AT&T and/or its Affiliates on the other; and (F) the put transactions
pursuant to Section 14.1 PROVIDED, HOWEVER, that in the event that the
director in Section 3.1(a)(iv) above has been selected by the Xxxxxx
Partnership without the approval of JWC and AT&T, then the consent of the
director designated by JWC in Section 3.1(a)(i) and the director designated
by AT&T in Section 3.1(a)(ii) shall be required to approve a transaction of
the type described in this Section 3.7.
A. BOARD COMMITTEES. If a committee of the Board of Directors is
established, the directors selected pursuant to Section 3.1(a)(i) and (ii)
shall each be entitled to be a member of such committee, and if AT&T shall
relinquish its director designation rights, AT&T shall be entitled to
observer rights in respect of such committee.
A. OTHER ACTIONS. The Company shall not, and shall not permit any
of its Subsidiaries to, take any of the following actions without the prior
approval of a majority of directors of the Board of Directors of the Company:
(i) register securities under the Securities Act or grant registration
rights; (ii) change the size of the Board of Directors; (iii) change the
Company's independent public accountants; (iv) amend this Agreement, subject
to Section 14.3; (v) adversely amend or alter any preferences, rights or
powers of the Class D Preferred Stock, whether such rights be set forth in
the Restated Certificate or Restated Bylaws or in any other agreement; (vi)
redeem, repurchase or pay any dividends on any stock that is junior to, or on
a parity with, the Class D Preferred Stock, except for repurchases of
management, employee or consultant stock or stock options pursuant to
contractual rights which do not exceed $500,000 in any fiscal year of the
Company or $1,500,000 in the aggregate; (vii) issue or authorize any shares
of capital stock of the Company having a preference over, or being on parity
with, the Class D Preferred Stock, including the issuance of additional
shares of Class D Preferred Stock, subject to Section 6.5, PROVIDED, that the
Company may issue and authorize shares of capital stock in connection with
(x) public or private (which provides for registration within one year of
issuance)/144A preferred stock financing in connection with future
acquisitions and capital projects and the financing thereof, and (y) the
Logix Communications Spin-Off; or (viii) merge or consolidate with or into
another Person, or sell all or substantially all of its assets or liquidate
its assets or business. Nothing in this Section 3.9 is intended to imply
that by virtue of the approval of the Board of Directors pursuant to this
Section 3.9 the Company can take any action (including any action requiring
separate or additional approval by the Stockholders herein) that it is
otherwise prohibited from taking.
I. ARTICLE
TRANSFERS OF SHARES
A. GENERAL.
a) Each Cash Equity Investor (other than Xxxxxx Partnership)
agrees that at all times prior to, the earliest of (A) the IPO Date (B)
December 23, 2003 or (C) a Change of Control, it shall not, directly or
indirectly, transfer, sell, assign, pledge, or tender or otherwise grant or
create a Lien in or upon, give, or otherwise voluntarily or involuntarily
(including transfers by testamentary or intestate succession) dispose of by
operation of law, offer or otherwise (any such action being referred to
herein as a "Transfer") any of the shares of Company Stock Beneficially Owned
by such Stockholder as of the date hereof or which may hereafter be acquired
by such Stockholder, except that the following Transfers of shares of
Preferred Stock and Common Stock by a Cash Equity Investor are permitted:
(i) to an Affiliate or an Affiliated Successor (notwithstanding anything else
to the contrary in this Article 4), (ii) to family members and trusts and
partnerships which are Affiliates thereof, (iii) to another Stockholder, (iv)
in connection with a public sale in accordance with Rule 144, (v) by JWC
under the JWC Selldown or the Stock Purchase Agreement, (vi) by AT&T to the
Xxxxxx Partnership pursuant to Section 14.1, and (vii) to any other Person
after complying with Section 4.2, if applicable, PROVIDED, that in the case
of clauses (i), (ii), (iii), (v), and (vii) each such transferee shall
execute a counterpart of and become a party to this Agreement and shall agree
in a writing in form and substance reasonably satisfactory to the Company to
be bound and becomes bound by the terms of this Agreement. Nothing in this
Agreement shall prohibit a bona fide pledge of Company Stock by co-investors
in the JWC Group (other than JWC) to a bank or financial institution.
a) Notwithstanding anything to the contrary contained in this
Article 4, JWC Common Stock shall not be subject to Section 4.1, PROVIDED
that any transferee of such shares shall execute a counterpart of and become
party to this Agreement and shall agree in a writing in form and substance
satisfactory to the Company to be bound and becomes bound by the terms of
this Agreement. Fleet Buyout Stock shall be subject to the provisions of
Section 4.2 and 4.5 of this Agreement.
A. TAG-ALONG RIGHTS.
a) Subject to Sections 4.2(e) and 4.3(c), no Stockholder
("Selling Stockholder") shall, directly or indirectly, Transfer, in any
single transaction or series or related transactions to one or more Persons
who are not Affiliated Successors of such Stockholder (each such Person a
"Tag-Along Event Purchaser") shares of Preferred Stock or Common Stock
(collectively, "Tag-Along Stock") constituting 5% or more of such
Stockholder's total investment in the Company on a Fully Diluted Basis (a
"Tag-Along Event"), unless the terms and conditions of such sale to such
Tag-Along Event Purchaser shall include an offer to each Stockholder
(including the Selling Stockholder) to Transfer to such Tag-Along Event
Purchasers up to that number of shares determined as follows:
(i) subject to Section 4.3(c), each JWC Group Stockholder and
AT&T shall have the right to Transfer to such Tag-Along Event Purchaser up
to that number of shares of Tag-Along Stock then Beneficially Owned by such
JWC Group Stockholder (without duplication) or AT&T, respectively, as are
equal in value to (x) the aggregate value of the shares of Tag-Along Stock
that such Tag-Along Event Purchaser has offered to purchase (the "Total
Tag-Along Value"), times (y) a fraction, the numerator of which is the
value of the shares of Class A Common Stock and Class E Preferred Stock
(valued at its Liquidation Preference) at that time Beneficially Owned
(without duplication) by such JWC Group Stockholder or AT&T, as the case
may be, and the denominator of which is the value of all then outstanding
Class A Common Stock (the aggregate value of all of the shares of Tag-Along
Stock that may be purchased from the JWC Group Stockholders and AT&T is
hereinafter referred to as the "JWC/AT&T Group Value", and the Total
Tag-Along Value minus the JWC/AT&T Group Value is hereinafter referred to
as the "Remaining Value");
(ii) subject to Section 4.3(c), each Stockholder that is not a
JWC Group Stockholder or AT&T (together with the Selling Stockholders, the
"Remaining Offerees") shall have the right to Transfer to such Tag-Along
Event Purchaser up to that number of shares of Tag-Along Stock then
Beneficially Owned by such Remaining Offeree (without duplication) as are
equal in value to (x) the Remaining Value, times (y) a fraction, the
numerator of which is the value of shares of Class A Common Stock and Class
E Preferred Stock (other than such stock held by Xxxxxx Partnership)
(valued at its Liquidation Preference) at that time Beneficially Owned
(without duplication) by such Remaining Offeree, and the denominator of
which is the value of all then outstanding Class A Common Stock.
If the Selling Stockholders receive a bona fide offer from a Tag-Along
Event Purchaser to purchase shares of Tag-Along Stock in circumstances in
which would result in a Tag-Along Event, and which offer such Selling
Stockholders wish to accept, the Selling Stockholders shall then cause the
Tag-Along Event Purchaser's offer to be
reduced to writing (which writing shall include an offer to purchase shares
of Tag-Along Stock from each Stockholder according to the terms and
conditions set forth in this Section 4.2) and the Selling Stockholders shall
send written notice of the Tag-Along Event Purchaser's offer (the "Tag-Along
Notice") to each Stockholder, which Tag-Along Notice shall specify (i) the
names of the Selling Stockholders, (ii) the names and addresses of the
proposed acquiring Person, (iii) the amount of shares proposed to be
Transferred and the price, form of consideration and other terms and
conditions of such Transfer (including, if in a series of related
transactions, such information with respect to shares of Tag-Along Stock
theretofore Transferred), (iv) that the acquiring Person has been informed of
the rights provided for in this Section 4.2 and has agreed to purchase shares
of Tag-Along Stock in accordance with the terms hereof, (v) the date by which
each other Selling Stockholder may exercise its respective rights contained
in this Section 4.2, which date shall not be less than thirty (30) days after
the giving of the Tag-Along Notice and (vi) whether the provisions of Section
4.3(c) are applicable to such Tag-Along Event. The Tag-Along Notice shall be
accompanied by a true and correct copy of the Tag-Along Event Purchaser's
offer. At any time within thirty (30) days after receipt of the Tag-Along
Notice, each Stockholder may accept the offer included in the Tag-Along
Notice for up to such number of shares of Tag-Along Stock as is determined in
accordance with this Section 4.2, by furnishing written notice of such
acceptance to each Selling Stockholder, and delivering, to an escrow agent
(which shall be a bank or a law or accounting firm designated by the
Company), on behalf of the Selling Stockholders, the certificate or
certificates representing the shares of Tag-Along Stock to be sold pursuant
to such offer by each Stockholder, duly endorsed in blank, together with a
limited power-of-attorney authorizing the escrow agent, on behalf of the
Stockholder, to sell the shares to be sold pursuant to the terms of such
Tag-Along Event Purchaser's offer.
If any Stockholder desires to sell less than its proportionate amount of
shares of Tag-Along Stock that it is entitled to sell pursuant to this
Section 4.2, then each of the other Stockholders shall have the right to sell
to the Tag-Along Event Purchaser an additional amount of shares of Tag-Along
Stock as shall be calculated in accordance with the allocations and
procedures set forth in the immediately preceding paragraph. Such process
shall be repeated in series until all of the remaining Stockholders agree to
sell their remaining proportionate number of shares of Tag-Along Stock.
Schedule IV sets forth an illustrative example for this Section 4.2(a),
PROVIDED, HOWEVER, that in the event of any conflict between such
illustration and this Section 4.2, Section 4.2 shall govern.
a) The purchase from each Tag-Along Event Offeree pursuant to
this Section 4.2 shall be on the same terms and conditions, including the
price per share received by the Selling Stockholders and stated in the
Tag-Along Notice provided to each Stockholder. In the event that the
Tag-Along Stock is Common Stock, all Stockholders shall be required, as a
condition of participating in such transaction (in cases where the Preferred
Stock is convertible into Common Stock), to convert the required amount of
its
Preferred Stock into Common Stock and Transfer Common Stock to the Tag-Along
Event Purchaser.
a) Simultaneously with the consummation of the sale of the shares
of Tag-Along Stock to the Tag-Along Event Purchaser pursuant to the Tag-Along
Event Purchaser's offer, the Selling Stockholders shall notify each Stockholder
and shall cause the Tag-Along Event Purchaser to remit to each Stockholder the
total sales price of the shares of Tag-Along Stock held by each Stockholder sold
pursuant thereto and shall furnish such other evidence of the completion and
time of completion of such sale and the terms thereof as may be reasonably
requested by each Stockholder.
a) If within thirty (30) days after receipt of the Tag-Along
Notice, a Stockholder has not accepted the offer contained in the Tag-Along
Notice, such Stockholder shall be deemed to have waived any and all rights with
respect to the sale described in the Tag-Along Notice (but not with respect to
any subsequent sale, to the extent this Section 4.2 is applicable to such
subsequent sale) and the Selling Stockholders shall have sixty (60) days from
the initial delivery of the last Tag-Along Notice in which to sell not more than
the number of shares of Tag-Along Stock described in the Tag-Along Notice, on
terms not more favorable to the Selling Stockholders than were set forth in the
Tag-Along Notice; PROVIDED, HOWEVER, that if such purchase is subject to the
consent of the FCC or any public service or public utilities commission, the
purchase of such shares shall be closed on the first business day after all such
consents shall have been obtained by Final Order.
a) Without limiting Section 4.1(a), Section 4.2 will not apply to
(i) Transfers of Company Stock made after the IPO Date in a public offering in
accordance with Section 5 or pursuant to Rule 144, (ii) subject to Section
6.12.8, the sale or redemption of up to $25.0 million in aggregate principal
amount by the Xxxxxx Partnership of Company Stock, together with any dividends
thereon, in one transaction or a series of transactions; (iii) any transfer
pursuant to Section 4.1(a)(i), (ii), (iii), (v) or (vi) hereof (and similar
Transfers of Fleet Buyout Stock); and (v) transfers by any JWC Group Stockholder
or AT&T after the earliest to occur of (A) the IPO Date, (B) December 23, 2003
or (C) a Change of Control.
A. ADDITIONAL CONDITIONS TO PERMITTED TRANSFERS.
a) As a condition to any Transfer to an Affiliated Successor
permitted pursuant to Section 4.1, or any Transfer pursuant to Section 4.2, each
transferee that is not a party hereto shall, prior to such Transfer, agree in
writing to be bound by all of the provisions of this Agreement applicable to the
Stockholders (and shall thereby become a Stockholder for all purposes of this
Agreement). Any Transfer without compliance with such provisions of this
Agreement shall be null and void and such transferee shall have no rights as a
Stockholder of the Company.
a) Notwithstanding anything to the contrary contained in this
Agreement (other than the next sentence) each Stockholder agrees that it will
not effect a Transfer of shares of Company Stock to a Prohibited Transferee.
In the event that the Xxxxxx Partnership Transfers any Preferred Stock or
Common Stock to a Prohibited Transferee, JWC and AT&T shall equally be
entitled to transfer such securities to such Person pursuant to Section 4.2.
It shall be deemed a breach of this Section 4.3(b) by a Stockholder
Beneficially Owning more than 10% of the Common Stock outstanding if any
Prohibited Transferee shall acquire, directly or indirectly, in a private
sale Beneficial Ownership of more than 33% of any class of equity securities
or equity interest in, such Stockholder and the Xxxxxx Partnership shall not
have Transferred any shares of Company Stock to such Prohibited Transferee.
a) Notwithstanding anything to the contrary contained in this
Agreement, the Xxxxxx Partnership shall not, nor shall it permit any of its
Affiliates (other than the Company) to, sell any shares of Company Stock to a
Major Telecom Competitor, unless such Major Telecom Competitor makes an
irrevocable offer to AT&T and its Affiliates to purchase from them, at the
same price and otherwise on the same terms and conditions as the sale to such
Major Telecom Competitor by the Xxxxxx Partnership or such Affiliate, up to
all of the shares of Company Stock Beneficially Owned by AT&T and its
Affiliates. At any time within 14 days after receipt by AT&T of the
Tag-Along Notice with respect to such sale, AT&T may accept such offer and,
to the extent AT&T and its Affiliates elect to accept such offer,
concurrently with the consummation of any such sale by the Xxxxxx Partnership
or such Affiliate, the sale of all of AT&T's shares of Tag-Along Stock in
respect of which it accepted such offer shall be consummated. The provisions
of this Section 4.3(c) shall not apply to any transferees or assigns of AT&T.
A. STOP-TRANSFER. The Company agrees not to effect any Transfer
of shares of Company Stock by any Stockholder whose proposed Transfer is
subject to Section 4.2 until it has received evidence reasonably satisfactory
to it that the rights provided to any other Stockholders pursuant to such
Section, if applicable to such Transfer, have been complied with and
satisfied in all respects. No Transfer of any shares of Preferred Stock
and/or Common Stock shall be made except in compliance with all applicable
securities laws. Any Transfer made in violation of this Agreement shall be
null and void.
A. DRAG ALONG RIGHTS. If at any time the Board of Directors
shall approve the sale or exchange (in a business combination or otherwise)
by Stockholders of Common Stock and Class D Preferred Stock and Class E
Preferred Stock of the Company in a bona fide arm's-length transaction to a
third party pursuant to an agreement that (i) treats equally, on an
"as-if-converted basis," the value of all holders of Common Stock, Class D
Preferred Stock and Class E Preferred Stock, except as provided in the
Restated Certificate of Incorporation, (ii) is approved by the Board of
Directors as fair to all Stockholders, and (iii) which shall have been
approved by Stockholders holding 50.1% of the outstanding Common Stock of the
Company on an as-if-converted basis, then, upon
the written request of the Company, each Stockholder shall be obligated to,
and shall, if so requested by such third party, (a) sell, transfer and
deliver or cause to be sold, transferred and delivered to such third party,
shares of Common Stock and Preferred Stock owned by such Stockholder, and (b)
if Stockholder approval of the transaction is required, vote his, her or its
shares of Company Stock in favor thereof. Notwithstanding the previous
sentence, a Cash Equity Investor may not be obligated to sell any shares of
Class D Preferred Stock or Class E Preferred Stock unless it receives as
consideration for such shares at least their Liquidation Preference and it
may not be obligated to sell any shares of Common Stock unless all of the
shares of Class D Preferred Stock or Class E Preferred Stock then held by
such Cash Equity Investors are to be sold for cash in such transaction.
A. REDEMPTION RIGHTS. Subject to the terms of the Financing
Agreements and not giving rise to either a default or an event of default
thereunder, the Class D Preferred Stock (or Class E Preferred Stock) will be
redeemed within 90 days following the vote of holders of a majority of the
outstanding shares of the Class D Preferred Stock (or Class E Preferred Stock
as the case may be), at any time (a) after twelve years from the date of this
Agreement or (b) upon the completion of an IPO by the Company of Common
Stock. Upon redemption of Class D Preferred Stock, the holders of Class D
Preferred Stock so redeemed will receive a cash payment equivalent to the
then current Liquidation Preference per share plus the number of shares of
Class A Common Stock such holders would have received had they converted such
Class D Preferred Stock into shares of Class E Preferred Stock and Class A
Common Stock immediately prior to such redemption.
A. RIGHT OF FIRST REFUSAL FOR NEW SECURITIES; CAPITAL RAISING.
a) The Company hereby grants to each of JWC and AT&T, on the
same terms and conditions, a right of first refusal, to the extent necessary
to maintain their ownership in the Company on a Fully Diluted Basis, to
purchase shares of any New Securities (as defined below) which the Company
may, from time to time, propose to issue and sell to private equity investors
(and not through a public offering or a private placement (which provides for
registration within one year of issuance)/Rule 144A offering, which, together
with any supplemental or additional offerings, results in gross proceeds in
excess of $50.0 million). Such right of first refusal shall allow each of JWC
and AT&T to purchase a pro rata portion necessary to maintain such ownership
on a Fully Diluted Basis of the New Securities proposed to be issued,
determined with reference to the aggregate number of outstanding shares of
Common Stock (on an as-if-converted basis) held by JWC and AT&T as the case
may be, before the proposed issuance of New Securities. The right of first
refusal granted hereunder may be exercised by either of JWC or AT&T as to
themselves and shall terminate if unexercised within 30 calendar days after
receipt of notice from the Company to the Cash Equity Investors.
a) "New Securities" shall mean any authorized but unissued
shares, and any treasury shares, of preferred stock or common stock of the
Company and all
rights, options or warrants to purchase common stock, and securities of any
type whatsoever that are, or may become, convertible into common stock;
PROVIDED, HOWEVER, that the term "New Securities" does not include (i) shares
of Common Stock or stock options issued to officers, employees, directors,
consultants of the Company or others in connection with their services
pursuant to a plan or plans approved by the Board of Directors; (ii)
securities issued upon conversion of shares of Class D Preferred Stock to
Class A Common Stock and Class E Preferred Stock; (iii) securities issued by
the Company pursuant to the acquisition of another corporation by the Company
by merger, purchase of all or substantially all of the assets or other
reorganization whereby the Company shall become the owner of more than 50% of
the voting power of such corporation; (iv) shares of Common Stock issued in
connection with any stock split or stock dividend of the Company; (v) capital
stock (including warrants, options or other rights to purchase capital stock,
or that are convertible into or exchangeable for capital stock of the
Company) issued directly in connection with any borrowings or the incurrence
of any indebtedness by the Company or its Subsidiaries in connection with
acquisitions or capital projects; (vi) shares of Class A Common Stock issued
pursuant to any IPO in excess of $50.0 million (taken together with any
supplemental or additional offerings) or Rule 144A promulgated thereunder
which provide for registration of such Capital Stock within one year of their
issuance; or (vii) shares issuable upon exercise of the Sygnet PIK Preferred
Stock Warrants.
a) If the Company or any Subsidiary in the future proposes to
raise private equity capital it shall provide JWC with the terms of such
proposal prior to approaching other potential investors and shall grant JWC
the initial opportunity to make any such investment, PROVIDED that nothing
herein shall require the Company to enter into any agreement or sale with the
Company as to such private equity capital on terms less favorable than the
prevailing market terms and rates offered to comparable companies to the
Company. If JWC determines to provide such private equity capital, then JWC
will make available to AT&T its pro rata portion thereof, determined by
reference to their respective holdings of Company Stock on a Fully Diluted
Basis in the Company at the Amendment and Restatement Date, on similar terms
and conditions as provided by JWC.
I. ARTICLE
REGISTRATION RIGHTS
The Company will not grant registration rights for Company capital stock to
a Person other than the Cash Equity Investors on terms pari passu with or senior
to or more favorable than those granted to the Cash Equity Investors.
a) DEMAND REGISTRATION RIGHTS.
(1) RIGHT TO DEMAND REGISTRATION. At any time following 180
days after the IPO Date (or such longer period as may be reasonably required
by the managing
underwriters of the Company's IPO) and (A) the Xxxxxx Partnership shall have
the right to make one written request, and (B) JWC shall have the right to
make two written requests, and (C) AT&T shall have the right to make one
written request (each, a "Demanding Stockholder" and, collectively, the
"Demanding Stockholders") to the Company for registration with the
Commission, under and in accordance with the provisions of the Securities
Act, of all or part of their Registrable Securities pursuant to an
underwritten offering (a "Demand Registration"), which request shall specify
the number of Registrable Securities proposed to be sold in the offering;
PROVIDED, HOWEVER, that (x) the Company need not effect a Demand Registration
unless the sale of the Registrable Securities proposed to be sold by the
Demanding Stockholder shall reasonably be expected to result in aggregate
gross proceeds of at least $25.0 million, and (y) if the Board of Directors
determines that a Demand Registration would interfere with any pending or
contemplated material acquisition, disposition, financing or other material
transaction, the Company may defer a Demand Registration (including by
withdrawing any Registration Statement filed in connection with a Demand
Registration); so long as that the aggregate of all such deferrals shall not
exceed ninety (90) days in any 360-day period. A Demand Registration shall
not be deemed a Demand Registration hereunder until such Demand Registration
has been declared effective by the Commission (without interference by any
stop order, injunction or other order or requirement of the Commission or
other governmental agency, for any reason), and maintained continuously
effective for a period of at least six (6) months or such shorter period when
all Registrable Securities included therein have been sold in accordance with
such Demand Registration. A Demanding Stockholder may make a written request
for a Demand Registration in accordance with the foregoing in respect of
Company Stock that it intends to convert into shares of Common Stock upon the
effectiveness of the Registration Statement prepared in connection with such
demand, and the Company shall fulfill its obligations under this Article 5 in
a manner that permits such Demanding Stockholder to exercise its conversion
rights in respect of such Company Stock and substantially contemporaneously
sell the shares of Common Stock issuable upon such conversion under such
Registration Statement.
In addition to the rights set forth above, each of the Demanding
Stockholders shall have the right to demand that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3) for an
offering of Registrable Securities in which at least $15.0 million of gross
proceeds are reasonably expected therefrom, PROVIDED that the Company is not
obligated to participate in any "road-show" or exceptional marketing,
diligence or other efforts in connection with such offering. This additional
demand registration may be a one year "shelf-registration." The procedures
and limitations for effecting the registration of the Registrable Securities
on Form S-3 (or any successor form to Form S-3), including the procedure used
for any underwriting limitation, shall be as set forth in this Article 5.
Within ten (10) days after receipt of the request for a Demand
Registration, the Company will send written notice (the "Demand Notice") of
such Registration request and its intention to comply therewith to all
Stockholders who are holders of Registrable
Securities and, subject to Section 5(a)(ii), the Company will include in such
Demand Registration all Registrable Securities of such Stockholders with
respect to which the Company has received written requests for inclusion
therein within twenty (20) days after the last date such Demand Notice was
deemed to have been given pursuant to Section 14.1.
(1) PRIORITY ON REGISTRATION. If the managing underwriter or
underwriters advise the Company and the holders of the Registrable Securities
to be registered in writing that in its or their opinion the number of
Registrable Securities proposed to be sold in any Registration (including,
without limitation, a Piggyback Registration) and any other securities of the
Company requested or proposed to be included in such Registration exceeds the
number that can be sold in such offering without (A) creating a substantial
risk that the proceeds or price per share that will be derived from such
Registration will be materially reduced or that the number of Registrable
Securities to be registered is too large a number to be reasonably sold, or
(B) materially and adversely affecting such Registration in any other
respect, the Company will (x) include in such Registration the aggregate
number of Registrable Securities recommended by the managing underwriter (the
number of Registrable Securities to be registered for each Stockholder to be
reduced FIRSTLY, against the Xxxxxx Partnership, SECONDLY, against the other
Stockholders (other than JWC and AT&T) and LASTLY, against JWC and AT&T; in
each case PRO RATA based on the amount of Registrable Securities of the
Stockholders in the applicable class requested to be included in such
Registration), and (y) not allow any securities other than Registrable
Securities to be included in such Registration unless all Registrable
Securities requested to be included shall have been included therein, and
then only to the extent recommended by the managing underwriter or determined
by the Company after consultation with an investment banker of nationally
recognized standing (notification of which number shall be given by the
Company to the holders of Registrable Securities).
(1) SELECTION OF UNDERWRITERS. The offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. The Demanding Stockholder that initiated such Demand
Registration will select a managing underwriter or underwriters of recognized
national standing to administer the offering, which managing underwriter or
underwriters shall be reasonably acceptable to the Company.
a) PIGGYBACK REGISTRATION RIGHTS.
RIGHT TO PIGGYBACK. If the Company proposes to register any shares of
Common Stock (or securities convertible into or exchangeable for Common Stock)
with the Commission under the Securities Act (other than a Registration on Form
S-4 or Form S-8, or any successor forms), and the Registration form to be used
may be used for the Registration of the Registrable Securities (a "Piggyback
Registration"), the Company will give written notice (a "Piggyback Notice") to
all Stockholders, at least thirty (30) days prior to the anticipated filing
date, of its intention to effect such a Registration, which notice will specify
the proposed offering price (if determined at that time), the kind and number of
securities proposed to be registered, the distribution arrangements and will,
subject to Section 5(a)(ii), include in such Piggyback Registration all
Registrable Securities with respect to which the Company has received written
requests (which requests have not been withdrawn) for inclusion therein within
twenty (20) days after the last date such Piggyback Notice was deemed to have
been given pursuant to Section 15.1. If at any time after giving the Piggyback
Notice and prior to the effective date of the Registration Statement filed in
connection with such Registration, the Company determines for any reason not to
register or to delay Registration, the Company may, at its election, give
written notice of such determination to each holder of Registrable Securities
that has requested inclusion of Registrable Securities in such Registration and
(A) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
Registration, and (B) in the case of a determination to delay registering, shall
be permitted to delay registering any Registrable Securities for the same period
as the delay in registering such other securities.
No Stockholder may obtain a Piggyback Registration on a Demand
Registration initiated by JWC or AT&T except that each of AT&T and JWC may
Piggyback on the Demand Registrations of the other; PROVIDED that, in such
circumstances, any reduction requested by the managing underwriter(s) in such
registration in the number of Registrable Securities to be registered shall
first be applied to the party seeking to Piggyback on the Demand Registration.
a) SELECTION OF UNDERWRITERS. Except as set forth in Section
5.1(a)(iii), the Company (by action of the Board of Directors) will select the
managing underwriter or underwriters to administer offerings of its capital
stock, which managing underwriter or underwriters will be of nationally
recognized standing.
a) REGISTRATION PROCEDURES. With respect to any Demand
Registration or Piggyback Registration (each, a "Registration"), the Company
shall, subject to Sections 5(a)(i) and (5)(a)(ii) and Section 5(b)(i), as
expeditiously as practicable:
(1) prepare and file with the Commission, as promptly as
reasonably practicable (but in no event more than forty-five (45) days) after
the receipt of the
Registration requests under Sections 5(a) or 5(b), a registration statement
or registration statements (each, a "Registration Statement") relating to the
applicable Registration on any appropriate form under the Securities Act,
which form shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution thereof;
cooperate and assist in any filings required to be made with the NASD; and
use its reasonable best efforts to cause such Registration Statement to
become and (to the extent provided herein) remain effective; PROVIDED,
HOWEVER, that before filing a Registration Statement or prospectus related
thereto (a "Prospectus") or any amendments or supplements thereto, the
Company shall furnish to the holders of the Registrable Securities covered by
such Registration Statement and the underwriters, if any, copies of all such
documents proposed to be filed, which documents will be subject to the
reasonable review of such holders and underwriters and their respective
counsel, and the Company shall not file any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto to which the
holders of a majority of the Registrable Securities covered by such
Registration Statement or the underwriters, if any, shall reasonably object;
(1) prepare and file with the Commission such amendments and
supplements to the Registration Statement as may be necessary to keep each
Registration Statement effective for six (6) months (nine (9) months in the case
of any shelf registration requested by a Qualified Holder pursuant to this
Section 5) or such shorter period that will terminate when all Registrable
Securities covered by such Registration Statement have been sold; cause each
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to the
Prospectus;
(1) promptly notify the selling holders of Registrable
Securities and the managing underwriters, if any (and, if requested by any such
Person or entity, confirm such advice in writing), (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective; (B) of any request by the Commission for amendments
or supplements to the Registration Statement or the Prospectus or for additional
information; (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; (D) if at any time the representations and
warranties of the Company contemplated by subsection (xiv) of this subsection
(d) below cease to be true and correct; (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and (F) of the happening of any event which makes any statement made in
the Registration Statement, the
Prospectus or any document incorporated therein by reference untrue or which
requires the making of any changes in the Registration Statement, the
Prospectus or any document incorporated therein by reference in order to make
the statements therein not misleading;
(1) use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of (I) the Registration Statement, or
(II) the qualification of the Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction at the earliest possible time;
(1) if requested by the managing underwriter or underwriters
or a holder of Registrable Securities being sold in connection with an
underwritten offering, promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters and the
holders of a majority of the Registrable Securities being sold agree should be
included therein relating to the plan of distribution with respect to such
Registrable Securities, including, without limitation, information with respect
to the number of Registrable Securities being sold to such underwriters, the
purchase price being paid therefor by such underwriters and any other terms of
the underwritten (or best efforts underwritten) offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(1) furnish to each selling holder of Registrable Securities
and each managing underwriter, without charge, at least one signed copy of the
Registration Statement and any amendment thereto, including financial statements
and schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(1) deliver to each selling holder of Registrable Securities
and the underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such selling holder of Registrable Securities underwriters may reasonably
request in order to facilitate the public sale or other disposition of the
securities owned by such selling holder;
(1) prior to any public offering of Registrable Securities,
use its reasonable best efforts to register or qualify or cooperate with the
selling holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the Registration or qualification of such
Registrable Securities for offer and sale under the securities or "blue sky"
laws of such jurisdictions in the United States as any seller or underwriter
reasonably requests in writing, use its reasonable best efforts to obtain all
appropriate registrations, permits and consents required in connection
therewith, and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; PROVIDED, HOWEVER, that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to
take any action that would subject it to taxation or general service of
process in any such jurisdiction where it is not then so subject;
(1) cooperate with the selling holders of Registrable
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends and to be in such denominations
and registered in such names as the managing underwriters may request at least
two (2) business days prior to any sale of Registrable Securities to the
underwriters;
(1) use its reasonable best efforts to cooperate with any
selling holder to cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary to
enable the seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities;
(1) upon the occurrence of any event contemplated by
subsection (iii)(F) above, promptly prepare a supplement or post-effective
amendment to the Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, the Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading;
(1) cause all Registrable Securities covered by any
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed, or, if not so listed, cause
such Registrable Securities to be authorized for trading on the NASDAQ National
Market System if any similar securities issued by the Company are then so
authorized, if requested by the holders of a majority of such Registrable
Securities or the managing underwriters, if any;
(1) not later than the effective date of the applicable
Registration, provide a CUSIP number for all Registrable Securities;
(1) enter into such customary agreements (including in the
case of a Demand Registration that is an underwritten offering, an underwriting
agreement in customary form) and take all such other actions reasonably required
in connection therewith in order to expedite or facilitate the disposition of
such Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into and whether or not the Registration is an
underwritten Registration, (A) make such representations and warranties to the
holders of such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters in
primary underwritten offerings; (B) use reasonable best efforts to obtain
opinions of counsel to the Company and updates thereof (which opinions of
counsel shall
be in form, scope and substance reasonably satisfactory to the managing
underwriters, if any, and to the holders of a majority of the Registrable
Securities being sold), addressed to each selling holder and the
underwriters, if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such holders and underwriters; (C) use reasonable
best efforts to obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the selling
holders of Registrable Securities and the underwriters, if any, such letters
to be in customary form and covering matters of the type customarily covered
in "cold comfort" letters by underwriters in connection with primary
underwritten offerings; and (D) deliver such documents and certificates as
may be reasonably requested by the holders of a majority of the Registrable
Securities being sold and the managing underwriters, if any, to evidence
compliance with subsection (xi) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by
the Company. All the above in this Section 5(d)(xiv) shall be done at each
closing under each underwriting or similar agreement or as and to the extent
required thereunder;
(1) make available for inspection by a representative of each
Demanding Stockholder or selling holder, any underwriter participating in any
disposition pursuant to such Registration, and any attorney or accountant
retained by the sellers or underwriter, copies or extracts of all financial and
other records, pertinent corporate documents and properties of the Company as
shall be reasonably necessary, in the opinion of the holders' or underwriter's
counsel, to enable them to fulfill their due diligence responsibilities; and
cause the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney or
accountant in connection with such Registration Statement; PROVIDED, HOWEVER,
that the Company shall not be required to comply with this paragraph (xv) unless
such Person executes confidentiality agreements whereby such person agrees that
any records, information or documents that are designated by the Company in
writing as confidential shall be kept confidential by such Persons and used only
in connection with the proposed Registration unless disclosure of such records,
information or documents is required by court or administrative order or any
regulatory body having jurisdiction; and each seller of Registrable Securities
agrees that it will, upon learning that disclosure of such records, information
or documents is sought in a court of competent jurisdiction or by a governmental
agency, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of any records,
information or documents deemed confidential; PROVIDED FURTHER, HOWEVER,
notwithstanding any designation of confidentiality by the Company, confidential
information shall not include information which (i) becomes generally available
to the public other than as a result of a disclosure by or on behalf of any such
Person, or (ii) becomes available to any such Person on a non-confidential basis
from a source other than the Company or its advisors, PROVIDED that such source
is not to such Person's knowledge bound by a confidentiality agreement with or
other obligations of secrecy to the Company or another party with respect to
such information;
(1) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders, earnings statements satisfying the provisions
of Section 11(a) of the Securities Act, no later than forty-five (45) days after
the end of any twelve (12)-month period (or ninety (90) days, if such period is
a fiscal year) (A) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm or best efforts
underwritten offering, or (B) if not sold to underwriters in such an offering,
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the Registration Statement, which statements shall
cover said twelve (12)-month periods; and
(1) promptly prior to the filing of any document that is to be
incorporated by reference into any Registration Statement or Prospectus (after
initial filing of the Registration Statement), provide copies of such document
to counsel to the selling holders of Registrable Securities and to the managing
underwriters, if any, make the Company's executive officers and other
representatives available for discussion of such document and make such changes
in such document prior to the filing thereof as counsel for such selling holders
or underwriters may reasonably request.
The Company may require each seller of Registrable Securities as to
which any Registration is being effected to furnish to the Company such
information regarding the proposed distribution of such securities as the
Company may from time to time reasonably request in writing. Each holder of
Registrable Securities agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 5(d)(xi), such holder shall forthwith
discontinue disposition of Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
5(d)(xi), or until it is advised in writing (the "Advice") by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus; and, if so directed by the Company, such holder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such seller's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event the
Company gives any such notice, the time periods regarding the maintenance of the
effectiveness of any Registration Statement in Section 5(d)(ii) shall be
extended by the number of days during the period from and including the date of
the receipt of such notice pursuant to Section 5(d)(iii)(F) hereof to and
including the date when each seller of Registrable Securities covered by such
Registration Statement shall have received the copies of the supplemented or
amended prospectuses contemplated by Section 5(d)(xi) or the Advice.
a) INDEMNIFICATION.
(1) In the event of the Registration or qualification of any
Registrable Securities under the Securities Act or any other applicable
securities laws pursuant to the provisions of this Section 5, the Company agrees
to indemnify and hold harmless each Stockholder thereby offering such
Registrable Securities for sale (an "Indemnified Stockholder"), underwriter,
broker or dealer, if any, of such Registrable Securities, and each other person,
if any, who controls any such Indemnified Stockholder, underwriter, broker or
dealer within the meaning of the Securities Act or any other applicable
securities laws, from and against any and all losses, claims, damages, expenses
or liabilities (or actions in respect thereof), joint or several, to which such
Indemnified Stockholder, underwriter, broker or dealer or controlling person may
become subject under the Securities Act or any other applicable federal or state
securities laws or otherwise, insofar as such losses, claims, damages, expenses
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement under which such Registrable Securities were
registered or qualified under the Securities Act or any other applicable
securities laws, any preliminary prospectus or final prospectus relating to such
Registrable Securities, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation by the Company of any rule or regulation under
the Securities Act or any other applicable federal or state securities laws
applicable to the Company or relating to any action or inaction required by the
Company in connection with any such Registration or qualification, and will
reimburse each such Indemnified Stockholder, underwriter, broker or dealer and
each such controlling person for any legal or other expenses reasonably incurred
by such Indemnified Stockholder, underwriter, broker or dealer or controlling
person in connection with investigating or defending any such loss, claim,
damage, expense, liability or action; PROVIDED, HOWEVER, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
expense or liability arises out of or is based upon an untrue statement or
omission contained in such Registration Statement, such preliminary prospectus,
such final prospectus or such amendment or supplement thereto, made in reliance
upon and in conformity with written information furnished to the Company by such
Indemnified Stockholder, underwriter, broker, dealer or controlling person
specifically and expressly for use in the preparation thereof or by the failure
of such Indemnified Stockholder, underwriter, broker or dealer, or controlling
person to deliver a copy of the Registration Statement, such preliminary
prospectus, such final prospectus or such amendment or supplement thereto after
the Company has furnished such party with a sufficient number of copies of the
same and such party failed to deliver or otherwise provide a copy of the final
prospectus to the person asserting an untrue statement or omission or alleged
untrue statement or omission at or prior to the written confirmation of the sale
of securities to such person, if such statement or omission was in fact
corrected in such final prospectus.
(1) In the case of an underwritten offering in which the
Registration Statement covers Registrable Securities, the Company agrees to
enter into an underwriting agreement in customary form and substance with such
underwriters and to indemnify the underwriters, their officers and directors, if
any, and each person, if any, who controls such underwriters within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act, to the
same extent as provided in the preceding paragraph with respect to the
indemnification of the holders of Registrable Securities; PROVIDED, HOWEVER, the
Company shall not be required to indemnify any such underwriter, or any officer
or director of such underwriter or any person who controls such underwriter
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act, to the extent that the loss, claim, damage, expense or liability
(or actions in respect thereof) for which indemnification is sought results from
such underwriter's failure to deliver or otherwise provide a copy of the final
prospectus to the person asserting an untrue statement or omission or alleged
untrue statement or omission at or prior to the written confirmation of the sale
of securities to such person, if such statement or omission was in fact
corrected in such final prospectus.
(1) In the event of the Registration or qualification of any
Registrable Securities of the Stockholders under the Securities Act or any other
applicable federal or state securities laws for sale pursuant to the provisions
hereof, each Indemnified Stockholder agrees severally, and not jointly, to
indemnify and hold harmless the Company, each person who controls the Company
within the meaning of the Securities Act, and each officer and director of the
Company from and against any losses, claims, damages, expenses or liabilities
(or actions in respect thereof), joint or several, to which the Company, such
controlling person or any such officer or director may become subject under the
Securities Act or any other applicable securities laws or otherwise, insofar as
such losses, claims, damages, expenses or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of any material
fact contained in any Registration Statement under which such Registrable
Securities were registered or qualified under the Securities Act or any other
applicable securities laws, any preliminary prospectus or final prospectus
relating to such Registrable Securities, or any amendment or supplement thereto,
or arise out of or are based upon an untrue statement therein or the omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, which untrue statement or omission was
made therein in reliance upon and in conformity with written information
furnished to the Company by such Indemnified Stockholder specifically and
expressly for use in connection with the preparation thereof, and will reimburse
the Company, such controlling person and each such officer or director for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, expense, liability or
action; PROVIDED, HOWEVER, an Indemnified Stockholder's liability under this
Section 5(e)(iii) shall not exceed the net proceeds received by such Indemnified
Stockholder with respect to the sale of any Registrable Securities.
(1) In the case of an underwritten offering of Registrable
Securities, each holder of a Registrable Security included in a Registration
Statement shall agree to enter into an underwriting agreement in customary form
and substance with such underwriters, and to indemnify such underwriters, their
officers and directors, if any, and each person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act, to the same extent as provided in the preceding
paragraph with respect to indemnification by such holder of the Company, but
subject to the same limitation as provided in Section 5(e)(ii) with respect to
indemnification by the Company of such underwriters, officers, directors and
control persons.
(1) Promptly after receipt by a person entitled to indemnification
under this Section 5(e) (an "Indemnified Party") of notice of the commencement
of any action or claim relating to any Registration Statement filed under this
Section 5 as to which indemnity may be sought hereunder, such Indemnified Party
will, if a claim for indemnification hereunder in respect thereof is to be made
against any other party hereto (an "Indemnifying Party"), give written notice to
each such Indemnifying Party of the commencement of such action or claim, but
the omission to so notify each such Indemnifying Party will not relieve any such
Indemnifying Party from any liability which it may have to any Indemnified Party
otherwise than pursuant to the provisions of this Section 5(e) and shall also
not relieve any such Indemnifying Party of its obligations under this Section
5(e) except to the extent that any such Indemnifying Party is actually
prejudiced thereby. In case any such action is brought against an Indemnified
Party, and such Indemnified Party notifies an Indemnifying Party of the
commencement thereof, such Indemnifying Party will be entitled (at its own
expense) to participate in and, to the extent that it may wish, jointly with any
other Indemnifying Party similarly notified, to assume the defense, with counsel
reasonably satisfactory to such Indemnified Party, of such action and/or to
settle such action 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 Indemnified Party in connection
with the defense thereof, other than the reasonable cost of investigation;
PROVIDED, HOWEVER, that no Indemnifying Party shall consent to the entry of any
judgment or enter into any settlement agreement without the prior written
consent of the Indemnified Party unless such Indemnified Party is fully released
and discharged from any such liability, and no Indemnified Party shall consent
to the entry of any judgment or enter into any settlement of any such action the
defense of which has been assumed by an Indemnifying Party without the consent
of each Indemnifying Party. Notwithstanding the foregoing, the Indemnified Party
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (a) the employment of such counsel shall have been authorized in writing
by the Indemnifying Party in connection with the defense of such suit, action,
claim or proceeding; (b) the Indemnifying Party shall not have employed counsel
(reasonably satisfactory to the Indemnified Party) to take charge of the defense
of such action, suit, claim or proceeding; or (c) such Indemnified Party shall
have reasonably concluded, based upon the advice of
counsel, that there may be defenses available to it which are different from
or additional to those available to the Indemnifying Party which, if the
Indemnifying Party and the Indemnified Party were to be represented by the
same counsel, could result in a conflict of interest for such counsel or
materially prejudice the prosecution of the defenses available to such
Indemnified Party. If any of the events specified in clause (a), (b) or (c)
of the preceding sentence shall have occurred or shall otherwise be
applicable, then the fees and expenses of one counsel or firm of counsel
selected by a majority in interest of the Indemnified Parties (and reasonably
acceptable to the Indemnifying Party) shall be borne by the Indemnifying
Party. If, in any such case, the Indemnified Party employs separate counsel,
the Indemnifying Party shall not have the right to direct the defense of such
action, sut, claim or proceeding on behalf of the Indemnified Party and the
Indemnified Party shall assume such defense and/or settle such action;
PROVIDED, HOWEVER, that an Indemnifying Party shall not be liable for the
settlement of any action, suit, claim or proceeding effected without its
prior written consent, which consent shall not be unreasonably withheld.
The provisions of this Section 5(e) shall be in addition to any
liability which any party may have to any other party and shall survive any
termination of this Agreement.
a) CONTRIBUTION. If for any reason the indemnification provided
for in Section 5(e)(i) or 5(e)(iii) is unavailable to an Indemnified Party as
contemplated therein, then the Indemnifying Party, in lieu of indemnification
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage, expense or liability (or action in respect
thereof) in such proportion as is appropriate to reflect not only the relative
benefits received by the Indemnified Party and the Indemnifying Party, but also
the relative fault of the Indemnified Party and the Indemnifying Party, as well
as any other relevant equitable considerations, PROVIDED that no Stockholder
shall be required to contribute in an amount greater than the net proceeds
received by such Stockholder with respect to the sale of any Registrable
Securities less all amounts already contributed by such Stockholder with respect
to such claims, including amounts paid for any legal or other fees or expenses
incurred by such Stockholder. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of any such
fraudulent misrepresentation. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
a) REGISTRATION EXPENSES. Except as hereinafter provided, all
expenses incident to the Company's performance of or compliance with this
Section 5 will be borne by the Company, including, without limitation, all
Registration and filing
fees under the Securities Act and the Exchange Act, the fees and expenses of
the counsel and accountants for the Company (including the expenses of any
"cold comfort" letters and special audits required by or incident to the
performance of such persons), all other costs and expenses of the Company
incident to the preparation, printing and filing under the Securities Act of
the Registration Statement (and all amendments and supplements thereto), and
furnishing copies thereof and of the Prospectus included therein, all
out-of-pocket expenses of underwriters customarily paid for by issuers to the
extent provided for in any underwriting agreement, the costs and expenses
incurred by the Company in connection with the qualification of the
Registrable Securities under the state securities or "blue sky" laws of
various jurisdictions, the costs and expenses associated with filings
required to be made with the NASD, the costs and expenses of listing the
Registrable Securities for trading on a national securities exchange or
authorizing them for trading on NASDAQ and all other costs and expenses
incurred by the Company in connection with any Registration hereunder. In
addition, the Company shall pay or reimburse the sellers of Registrable
Securities the reasonable fees and expenses of one law firm to such sellers
incurred in connection with a registration (collectively, with the expenses
referred to in the immediately preceding sentence, the "Registration
Expenses"). Except as provided in the immediately preceding sentence, each
Stockholder shall bear the costs and expenses of any underwriters' discounts
and commissions, brokerage fees or transfer taxes relating to the Registrable
Securities sold by such Stockholder and the fees and expenses of any
attorneys, accountants or other representatives retained by the Stockholder.
a) PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Stockholder
may participate in any underwritten Registration hereunder unless such
Stockholder (i) agrees to sell its Registrable Securities on the basis provided
in any customary and reasonable underwriting arrangements approved by the
persons entitled hereunder to select the underwriter, and (ii) accurately
completes in a timely manner and executes all questionnaires, powers of
attorney, underwriting agreements, indemnities and other documents customarily
required under the terms of such underwriting arrangements.
b) HOLDBACK AGREEMENTS.
(1) Each holder of Registrable Securities whose securities are
included in a Registration Statement agrees not to effect any sale, transfer or
other disposition of Company Stock or any securities convertible into Company
Stock or other interest in the Company, including through any hedging or
derivative transaction or to effect any distribution of the issue being
registered or a similar security of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144 or Rule 144A under the Securities Act, during the fifteen
(15) days prior to, and during the one hundred eighty (180) day period (or such
longer period as reasonably requested by the managing underwriter or
underwriters in the case of an underwritten public offering) beginning on, the
effective date of such Registration Statement (except as part of such
Registration), if and to the extent requested by the managing underwriter or
underwriters in an underwritten public offering.
(1) The Company agrees not to effect any public sale or
distribution of the issue being registered or a similar security of the Company,
or any securities convertible into or exchangeable or exercisable for such
securities (other than any such sale or distribution of such securities in
connection with any merger or consolidation by the Company or any Subsidiary or
the acquisition by the Company or any Subsidiary of the capital stock or
substantially all of the assets of any other Person), during the fifteen (15)
days prior to, and during the ninety (90)-day period beginning on, the effective
date of each Demand Registration.
(1) PUBLIC INFORMATION REPORTING. The Company hereby covenants
and agrees to and with the Stockholders that at all times following the IPO Date
it shall provide and file such financial and other information concerning the
Company as may from time to time be required by the Commission and any other
governmental authority having jurisdiction, so as to comply with all reporting
requirements under the Exchange Act, and shall, upon request, state in writing
that it has complied with all such requirements, and further agrees that, for so
long as (following the IPO Date) the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company shall comply in all respects with
paragraph (c)(2) of Rule 144.
(1) 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 Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements. Upon the request of a holder of
Registrable Securities, the Company covenants and agrees to provide the
information required by Rule 144A(d)(4) under the Securities Act.
I. ARTICLE
ADDITIONAL RIGHTS AND COVENANTS
A. WHOLLY-OWNED SUBSIDIARIES. All of the Company's Subsidiaries
shall be direct or indirect wholly owned Subsidiaries of the Company, and the
Company shall not, and shall not permit any Subsidiary to, sell or issue,
transfer, encumber or otherwise dispose of any shares of capital stock of any of
the Company's Subsidiaries to any Person other than the Company and its direct
or indirect wholly owned Subsidiaries, except for a pledge of any such shares in
connection with the incurrence of indebtedness.
A. AMENDMENTS OF THE RESTATED CERTIFICATE AND BY-LAWS. Prior to the
IPO Date, the Company shall not authorize or adopt any amendment, modification
or repeal of any provision of the Restated Certificate or the Restated By-Laws,
unless such amendment is consistent with the terms of this Agreement, and the
Restated Certificate and has been approved by a majority of directors of the
Board of Directors.
A. CONFIDENTIALITY.
a) Each party shall, and shall cause each of its Affiliates, and
its and their respective stockholders, members, managers, directors, officers,
employees and agents (collectively, "Representatives") to, keep secret and
retain in strictest confidence any and all information relating to the Company
or any other party that is either a trade secret or material, non-public
information or is designated in writing by the party providing such information
or the Company as confidential (other than, in each case, such information as is
otherwise or becomes publicly available (other than in violation of this
Agreement or other applicable confidentiality agreements among the parties), or
has been or is independently developed or obtained from a person in a manner not
in violation of this Agreement or, to its knowledge, any other confidentiality
agreement) ("Confidential Information") and shall not disclose such information,
and shall cause its Representatives not to disclose such information, to anyone
except such Affiliates, Representatives or any other Person that agrees in
writing to keep in confidence all such information in accordance with the terms
of this Section 6.3. Each party agrees to use such information received from
another party or the Company only in connection with its ownership interest in
the Company but not for any other purpose. All such information furnished
pursuant to this Agreement shall be returned promptly to the party to whom it
belongs upon request by such party.
b) To the fullest extent permitted by law, if a party or any of
its Affiliates or Representatives breaches, or threatens to commit a breach of,
this Section 6.3, the party whose Confidential Information shall be disclosed,
or threatened to be disclosed, shall have the right and remedy to have this
Section 6.3 specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that money damages will not provide an adequate remedy
to such party. Nothing in this Section 6.3 shall be
construed to limit the right of any party to collect money damages in the
event of breach of this Section 6.3.
a) Anything else in this Agreement notwithstanding, each party
shall have the right to disclose any information, including Confidential
Information of the other party or such other party's Affiliates, in any filing
with any regulatory agency, court or other authority or any disclosure to a
trustee of public debt of a party to the extent that the disclosing party
determines in good faith that it is required by Law, regulation or the terms of
such debt to do so; PROVIDED, HOWEVER, that any such disclosure shall be as
limited in scope as possible and shall be made only after giving the other party
as much notice as practicable of such required disclosure and an opportunity to
contest such disclosure if possible.
A. SALE OF LOGIX COMMUNICATIONS STOCK. If JWC or AT&T proposes to
sell any number of shares of Logix Communications Common Stock which sale would
result in a reduction in the ownership interest of JWC or AT&T in Logix
Communications below 35% of the JWC or AT&T Logix Communications ownership
interest, as the case may be, on the Logix Communications Spin-Off (calculated
with reference only to shares of Logix Communications issued with respect to the
Class D Preferred Stock (or any Class A Common Stock or other capital stock
issued with respect thereto other than the JWC Common Stock held as of the
Amendment and Restatement Date), JWC or AT&T, as the case may be, shall give 10
Business Days' written notice thereof to the Company (the "Section 6.4 Notice
Period") and during such Section 6.4 Notice Period the Company may elect to
purchase such Logix Communications Common Stock at a price which is the Market
Price thereof. In the event the Company elects to purchase such Logix
Communications Common Stock, it shall have 30 days (or such longer period as may
be necessary under the Appraisal Procedure) from the date of receipt of the
written notice from JWC or AT&T, as the case may be, in which to purchase such
Logix Communications Common Stock. This purchase right shall terminate upon the
earliest to occur of (i) the consummation by Logix Communication of an initial
public offering of its common stock with aggregate gross proceeds of at least
$50 million, (ii) December 23, 2003, (iii) the exercise by the Stockholders of
the call right pursuant to the terms of Article 11, or (iv) the expiration of
the call right pursuant to the terms of Article 11.
A. CLASS PROTECTION. The Company shall not, without first obtaining
consent or approval of the holders of at least a majority of the holders of each
affected class of Company Stock (including each of JWC and AT&T, if they are
holders of such class of Company Stock), voting as a separate class: (i)
adversely amend or alter any preferences, rights or powers of any such class of
Company Stock; or (ii) redeem, repurchase or pay any dividends on any junior
stock or parity stock, except for repurchases of stock or stock options issued
to management, employees or consultants which do not exceed $500,000 in any
fiscal year of the Company or in any event $1,500,000 in the aggregate.
a) NEW SECURITIES. Subject to the terms of the Class D Preferred
Stock Certificate of Designation, any Common Stock (other than JWC Common Stock)
and any Logix Communications Common Stock issued to holders of Class D Preferred
Stock shall receive anti-dilution protection, as determined reasonably in good
faith by the Board of Directors to protect the holders thereof in connection
with (i) dilution from the issuance or the exercise of warrants issued in
connection with the Sygnet Acquisition, (ii) any dilution relating to options
then issued or committed as of the Closing Date under the New Company Stock
Option Plan, (iii) any dilution resulting from the issuance of options with
respect to an aggregate maximum of 5% of the Logix Communications Stock, and
(iv) the redemption of all shares of Class B Preferred Stock and Class C
Preferred Stock pursuant to the terms of the Investment and Transaction
Agreement.
a) Without the prior written consent of JWC (except where any such
issuance would not have a dilutive effect on JWC's Beneficial Ownership interest
in either the Common Stock (including Common Stock issuable upon conversion of
Class D Preferred Stock) or the Logix Communications Common Stock, or both) (as
determined reasonably and in good faith by the Board of Directors) the Company
shall not (i) issue any options pursuant to the New Company Stock Option Plan
other than such options as are committed on the Closing Date, or (ii) issue
options with respect to more than 5% in the aggregate of Logix Communications
Common Stock.
a) LOGIX COMMUNICATIONS SPIN-OFF. Upon the consummation of the
Logix Communications Spin-Off, the holders of Class D Preferred Stock and the
holders of Class E Preferred Stock (including Common Stock issuable upon
conversion of Class D Preferred Stock) shall immediately receive their PRO RATA
share, calculated on a Fully Diluted Basis, of such number of shares of Class A
Common Stock equal to the value of the 4,454 options to purchase shares of Class
C Common Stock outstanding on the Closing Date (the "Wireless Options"), as
determined reasonably and in good faith by the Board of Directors (the "Wireless
Option Value Shares").
a) In the event that the Logix Communications Spin-Off is not
consummated, the holders of Class D Preferred Stock and the holders of Class E
Preferred Stock will receive, immediately prior to the consummation of a
Liquidity Event, Wireless Option Value Shares plus their PRO RATA share,
calculated on a Fully-Diluted Basis as determined reasonably, and in good faith
by the Board of Directors, of Class A Common Stock equal to the value of Logix
Communications stock options that are issued (up to a maximum of 5% of Logix
Communications Common Stock).
a) An example of the implementation and intent of this Section 6.7 is
set forth on Exhibit E hereto.
A. REGULATION M. In the event of any IPO, the Cash Equity
Investors shall not sell, transfer or otherwise dispose any Company Stock or
purchase Company Stock or securities convertible into Company Stock or any
interests in the Company, or
otherwise engage in any transaction that would involve a prohibited market
manipulation, whether under Regulation M under the Securities Act, or
otherwise.
a) POOLING OF INTERESTS. In the event that the Company is sold in
a transaction involving a "pooling of interests" transaction, for a period of
not more than 90 days following consummation of such transaction, no Stockholder
shall sell, transfer or otherwise dispose of any Company Stock, securities
convertible into Company Stock or any other interest in the Company, if any such
sale, transfer or other disposition would limit or deny the applicability of the
treatment of such pooling of interests.
a) In the event of the Logix Communications Spin-Off, the Company shall
enter into a stockholders agreement with the stockholders of Logix
Communications, substantially similar to this Agreement except that there shall
be no transfer restrictions analogous to Section 4.1
A. OTHER TAX MATTERS. JWC and AT&T intend that (i) pay in kind
dividends on the Class D Preferred Stock when paid and (ii) any constructive
distribution on the Class D Preferred Stock when deemed paid, will not be
includible in JWC's or AT&T's gross income for Federal, state or local tax
purposes. Accordingly, unless the Company reasonably concludes in good faith
that it cannot make or file any tax return that is consistent with the
Purchaser's intention in the preceding sentence, the Company shall not make or
file any tax return that is inconsistent with such intention. In the event the
Company concludes it is required to file any tax return that is inconsistent
with the Purchaser's intention in the preceding sentence, the Company will
notify JWC and AT&T at least 60 days before filing such return and will attempt,
through discussions with the holders and their representatives, to reach mutual
agreement on such filing requirement.
A. CLASS A PREFERRED STOCK TRANSFER RESTRICTION. In the event that
any share of Class D Preferred Stock or Class E Preferred Stock is at any time
outstanding and held by JWC or AT&T, (A) the Class A Preferred Stock held by
Xxxxxx Operating Company as of December 23, 1998 shall not be transferred,
directly or indirectly, to any Person; PROVIDED, HOWEVER, that such shares of
Class A Preferred Stock may be transferred at any time (i) by Xxxxxx Operating
Company to any wholly owned Subsidiary of the Company and (ii) by any
wholly-owned Subsidiary of the Company to any other wholly-owned Subsidiary
of the Company, and (B) such shares of Class A Preferred Stock must be owned
by a wholly-owned Subsidiary of the Company.
A. ADDITIONAL COVENANTS. The Company covenants to AT&T and JWC that
so long as AT&T Beneficially Owns at least 50% or JWC owns at least 35% of the
Class D Preferred Stock (or Class E Preferred Stock or Class A Common Stock
received upon conversion thereof) each respectively holds as of the Amended and
Restated Date, the Company will comply, and the Company will cause each of the
Subsidiaries to comply, with the following provisions unless otherwise consented
to in writing by each of AT&T (except in the case of Sections 6.12.9, 6.12.10
and 6.12.12,
where the consent of AT&T or any director designated by AT&T shall not be
required) and JWC so long as they continue to own the percentage amounts of
their respective investments stated herein.
1. RECORDS AND ACCOUNTS. Each of the Company and the Subsidiaries
will keep true and accurate records and books of account in which full, true and
correct entries will be made in accordance with GAAP and in all other respects
consistent with industry practices.
1. EXISTENCE; RELATED SECURITIES; MAINTENANCE OF PROPERTIES. Each
of the Company and the Subsidiaries will preserve and keep in full force and
effect and in good standing its corporate or partnership existence, as the case
may be, rights and franchises except for any combination or merger with and
into the Company or a Subsidiary or where the failure to do so would not have a
Material Adverse Effect.
1. INSURANCE. Each of the Company and the Subsidiaries will
maintain with financially sound and reputable insurance companies, funds or
underwriters insurance of the kinds, covering the risks and in the relative
proportionate amounts usually carried by reasonable and prudent companies
conducting businesses similar to that of the Company and the Subsidiaries,
except where the failure to do so would not have a Material Adverse Effect.
1. TAXES. Each of the Company and the Subsidiaries will pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all Taxes, assessments and other governmental charges imposed upon it
and its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials or
supplies, which if unpaid might by law become a Lien upon any of their
properties and would have a Material Adverse Effect; PROVIDED, HOWEVER, that any
such Tax, assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Company or the applicable Subsidiary shall have set aside
on its books adequate reserves with respect thereto; and PROVIDED, FURTHER, that
the Company and the applicable Subsidiary will pay or cause to be paid all such
Taxes, assessments, charges, levies or claims forthwith upon the commencement of
foreclosure on any Lien which may have attached as security therefor.
1. INSPECTION OF PROPERTIES AND BOOKS. Each of the Company and the
Subsidiaries shall permit each of AT&T or JWC, or any of their designated
representatives, at the Company's cost, to visit and inspect any of its
properties, to examine its books of account (and to make copies thereof and
extracts therefrom), and, upon reasonable notice, to discuss its affairs,
finances and accounts with, and to be advised as to the same by, officers or
partners of such Persons, all at such times and intervals during normal business
hours and after reasonable notice as AT&T or JWC may reasonably request,
PROVIDED, that in no event shall any such visit, inspection,
examination, discussion or advice interfere in any material respect in the
business or other operations of the Company or any of its employees,
representatives or officers.
1. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS. Each of
the Company and the Subsidiaries will comply in all material respects with (a)
all FCC laws and regulations, all Oklahoma Corporations Commission laws and
regulations and all other material laws and regulations wherever its business is
conducted, (b) the provisions of its Restated Certificate and Restated Bylaws,
(c) all other material agreements and instruments by which it or any of its
properties may be bound (including, without limitation, the Related Agreements
and the agreements, documents and instruments executed and delivered by it in
connection with the Financing Agreements), (d) all applicable decrees, orders
and judgments, and (e) all required FCC and Oklahoma Corporations Commission
approvals, permits and licenses and all other material approvals, permits and
licenses, if, in the case of clauses (a), (c) and (e), the failure to comply
would have a Material Adverse Effect.
1. EMPLOYEE BENEFIT PLANS. Neither the Company nor any ERISA
Affiliate will:
a) engage in any "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code;
a) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
such deficiency is or may be waived;
a) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could result
in the imposition of a lien or encumbrance on the assets of the Company or any
of the Subsidiaries pursuant to Section 302(f) or Section 4068 of ERISA; or
a) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities,
if, in each such case, such action or failure would have a Material Adverse
Effect.
The Company will (i) promptly upon filing the same with the Department of Labor
or Internal Revenue Service, furnish to each of the Purchasers a copy of the
most recent actuarial statement required to be submitted under Section 103(d) of
ERISA and Annual Report, Form 5500, with all required attachments, in respect of
each Guaranteed Pension Plan, and (ii) promptly upon receipt or dispatch,
furnish to each Purchaser any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under Sections 302, 4041,
4042, 4043, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer
Plan, under Section 4041A, 4202, 4219, 4242 or 4245 of ERISA.
1. DISTRIBUTIONS. The Company shall not make any distribution
except (a) repurchases of management, employee or consultant stock and options
pursuant to contractual rights, PROVIDED, that no such repurchases shall exceed
$500,000 in any fiscal year or in any event $1,500,000 in the aggregate (other
than stock and options owned, directly or indirectly, by members of the Xxxxxx
family unless approved by two of the three directors selected in clauses (i),
(ii) or (iv) of Section 3.1(a) of this Agreement), (b) the sale or redemption of
up to $25.0 million in aggregate principal amount now held by Xxxxxx Partnership
of Company securities, plus any accrued and unpaid dividends thereon, in one
transaction or a series of transactions; PROVIDED that no financing or
refinancing by the Company in connection with any such redemption or sale may
have an interest rate in excess of 14% per annum (the "Rate Cap"); and PROVIDED,
FURTHER, that after the first anniversary of the date hereof, the Rate Cap will
not apply to any financing or refinancing to the extent that the Company has met
or exceeded its EBITDA projections as set forth in the budget attached as
Exhibit D to the Investment and Transaction Agreement, for the previous four
fiscal quarters, (c) required distributions in respect of Senior PIK Preferred
Stock, (d) distributions provided by the Restated Certificate, (e) distributions
required or permitted by this Agreement, including the put and call provisions
therein, and (f) the Logix Communications Spin-Off.
1. MERGER, CONSOLIDATION, SALE OF ASSETS OR OTHER DISPOSITIONS.
Neither the Company nor any Subsidiary will become a party to any merger or
consolidation, or sell, lease, sublease or otherwise transfer or dispose of any
shares of or other equity interests in a Subsidiary or any substantial portion
of its assets, rights and licenses to any Person, or turn over the management
of, or enter into any management contract with respect to, any of its assets,
properties, rights or licenses, whether directly or indirectly or in a single
transaction or a series of related transactions, without the approval by a vote
of 50.1% of the Board of Directors, or, in the case of any such transaction
involving 10% or more of the Company's consolidated assets or consolidated POPs
as of the end of the most recently completed fiscal quarter, the unanimous
approval by the Company Board of Directors (excluding any directors designated
pursuant to Sections 3.1(a)(ii) and 3.1(a)(iv)), PROVIDED, that the foregoing
will not apply to (a) any pledges, Liens or security interests in connection
with Company financing or the Sygnet Acquisition, (b) any merger, consolidation,
sale, lease, sublease, transfer or disposition solely among or involving the
Company and/or its Subsidiaries, (c) the Logix Communications Spin-Off, (d)
management stock options and incentives approved by the Company's Board of
Directors, and (e) transactions in the ordinary course of business.
1. SALE AND LEASEBACK OF PROPERTY. Neither the Company nor any
Subsidiary will enter into any arrangement, directly or indirectly, with any
Person whereby it shall sell or transfer any property, whether real, personal or
a combination thereof, used or useful in its business, whether now owned or
hereinafter acquired, and thereafter rent or lease such property, without the
approval by a vote of 50.1% of the
Board of Directors, or, in the case of any such transaction involving 10% or
more of the Company's consolidated assets or consolidated POPs as of the end
of the most recently completed fiscal quarter, the unanimous approval by the
Company Board of Directors (excluding any directors designated pursuant to
Sections 3.1(a)(ii) and 3.1(a)(iv)), PROVIDED that no such approval shall be
required in connection with the sale and leaseback by the Company or any
Subsidiary of cellular towers owned by Sygnet Communications, Inc. prior to
its acquisition by the Company
1. INVESTMENTS. The Company will not, and will not permit any
Subsidiary to, have outstanding or acquire or commit itself to acquire or hold
any investment except investments in: (a) marketable direct obligations issued
or guaranteed by the United States of America which mature within one year from
the date of acquisition thereof or which are subject to a repurchase agreement,
exercisable within 90 days from the date of acquisition of such agreement, with
any commercial bank or trust company incorporated under the laws of the United
States of America or any State thereof or the District of Columbia, (b)
commercial paper maturing within one year from the date of acquisition thereof
and having, at the date of acquisition thereof, the highest rating obtainable
from Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings Services,
Inc., (c) bankers' acceptances eligible for rediscount under Federal Reserve
Board requirements accepted by any commercial bank or trust company referred to
in clause (a) hereof, (d) certificates of deposit maturing within one year from
the date of acquisition thereof issued by any commercial bank or trust company
referred to in clause (a) hereof and having capital and surplus of at least
$500,000,000, (e) certificates of deposit issued by banks organized under the
laws of any other jurisdiction, each having combined capital and surplus of not
less than $500,000,000, (f) investments by the Company and each Subsidiary
existing on the date of this Agreement, (g) investments by the Company and its
Subsidiaries in the Company or in Subsidiaries of the Company, (h) investments
up to $25,000,000 in aggregate, and (i) investments permitted by the Company's
Financing Agreements.
1. MERGER, CONSOLIDATION OR OTHER ACQUISITIONS. Neither the Company
nor any Subsidiary shall directly or indirectly, by operation of law or
otherwise, merge with, consolidate with, acquire all or substantially all of the
assets or capital stock of, or otherwise combine with, any Person without the
approval of 50.1% of the Board of Directors, or, in the case of any such
transaction involving 10% or more of the Company's consolidated assets or
consolidated POPs as of the end of the most recently completed fiscal quarter,
the unanimous approval of the Company Board of Directors (excluding any
directors designated pursuant to Sections 3.1(a)(ii) and 3.1(a)(iv)), PROVIDED,
that the foregoing will not apply to (a) any merger, consolidation or
acquisition solely among or involving the Company and/or its Subsidiaries, (b)
capital expenditures or capital projects approved by the Board of Directors, and
(c) transactions in the ordinary course of business.
A. INFORMATION COVENANTS. The Company hereby agrees that so long as
any shares of the Preferred Stock or any shares of the Common Stock are held by
either
AT&T or JWC, it will comply with, and it will cause each Subsidiary to comply
with, the following provisions:
a) ANNUAL STATEMENTS. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company, the Company
will deliver to each of AT&T and JWC, audited consolidated and unaudited
consolidating balance sheets and statements of income and retained earnings and
of cash flows of the Company audited by Xxxxxx Xxxxxxxx, L.L.P. or any other
public accounting firm selected by the Company and reasonably acceptable to AT&T
and JWC, showing the financial condition of the Company as of the close of such
fiscal year and the results of the Company's operations during such fiscal year,
all on a consolidated basis.
a) Each of the financial statements delivered pursuant to this
SECTION 6.13.1 shall be certified without qualification by the applicable
accounting firm to have been prepared in accordance with GAAP consistently
applied.
1. QUARTERLY STATEMENTS. Within forty-five (45) days after the end
of each quarter, the Company will deliver to each of AT&T and JWC consolidated
and consolidating unaudited balance sheets and statements of income and retained
earnings and of cash flows of the Company as of the end of each such quarter and
for the period of the then current fiscal year to the end of such month, and
presenting on a comparative basis the corresponding figures for such period in
the preceding fiscal year and the then current Budget (as defined below), in
each case by region, certified by the Chief Financial Officer of the Company to
be true and correct and to have been prepared in accordance with GAAP subject to
normal year-end adjustments described in reasonable detail.
a) BUDGETS AND OTHER REPORTS. The Company will deliver to each of
AT&T and JWC, prior to the commencement of each fiscal year project spending and
capital budgets for the succeeding fiscal year, projected monthly statements of
income and cash flow for such fiscal year (the "Budget"), projected quarterly
balance sheets for such fiscal year and as soon as practical after preparation
thereof, complete and correct copies of all quarterly (if any) or annual
budgetary analyses or forecasts of the Company and the Subsidiaries in the form
customarily prepared by management for its own internal use or the use of the
Company. The Company, AT&T and JWC shall once each calendar year, conduct an
annual off-site meeting to review the Company's projections and business plans
with respect to such fiscal year.
a) The Company shall also furnish to each of AT&T and JWC
(i) within five (5) days of the Company's receipt thereof, copies of all
management letters of the Company's accountants; (ii) within five (5) days of
the Company's receipt thereof, notice with respect to any material pending or
threatened litigation to which the Company or any Subsidiary is or may become a
party; (iii) within five (5) days of the Company's receipt thereof, notice of
any default or event of default with respect to any material agreement to which
the Company or any Subsidiary is a party; (iv) within five (5) days of the
filing thereof, copies of all material filings made by or on behalf of the
Company or
any Subsidiary with any governmental regulatory agency; and (v) such other
information as either AT&T or JWC may reasonably request from time to time.
a) Within thirty (30) days after the end of each calendar month,
the Company will deliver to each of AT&T and JWC monthly and year-to-date
summaries, in a form and to the same extent prepared by the Company management
on a consolidated basis broken down for each market in which the Company or any
Subsidiary operates any System compared on a monthly and year-to-date basis to
the Company's Budget, of the following: (a) number of POPs, (b) number of
subscribers, (c) gross activations, (d) net activations, (e) deactivations (and
setting forth the reason therefor), (f) acquisition cost per gross activation,
(g) average monthly revenue per subscriber, (h) total number of roaming minutes,
(i) total roaming revenue and (j) any other reasonable information which either
AT&T or JWC may request from time to time.
I. ARTICLE
EXCLUSIVITY
A. EXCLUSIVITY. Prior to the earlier of December 23, 2003 or the
date on which the relevant Cash Equity Investor Beneficially Owns less than 50%
of the Common Stock it Beneficially Owns as of the Amendment and Restatement
Date on an "as-if converted" basis, none of the Stockholders or their respective
Affiliates will provide or resell, or act as the agent for any Person offering,
within the Territory, mobile wireless telecommunications services that compete
with those provided by the Company using wireless technologies and frequencies
licensed by the FCC without the Company's prior written consent. Nothing in this
Article 7 shall (i) prohibit JWC or its Affiliates from providing such services
in any part of the Territory in which the Company did not provide such services
at the time that JWC or its Affiliates initially began providing them or (ii)
restrict the ability of limited partners of any of JWC or its Affiliates to
invest in Persons engaged, directly or indirectly, in the mobile wireless
telecommunications industry. Anything to the contrary herein, the terms of this
Section 7.1 shall not apply to AT&T and its Affiliates (but nothing in this
proviso shall relieve AT&T's assigns and transferees that are not Affiliates of
AT&T from the operation of this Section 7.1).
I. ARTICLE
AFTER-ACQUIRED SHARES; RECAPITALIZATION; INVESTMENT AND TRANSACTION AGREEMENT
A. AFTER ACQUIRED SHARES; RECAPITALIZATION; INVESTMENT AND
TRANSACTION AGREEMENT.
a) Except as expressly set forth herein, all of the provisions
of this Agreement shall apply to all of the shares of Company Stock now owned
or hereafter issued or transferred to a Stockholder or to his, her or its
Affiliated Successors as a consequence of any additional issuance,
conversion, purchase, exchange or reclassification of shares of Company
Stock, corporate reorganization, or any other form of recapitalization, or
consolidation, or merger, or share split, or share dividend, or which are
acquired by a Stockholder or its Affiliated Successors in any other manner.
a) Whenever the number of outstanding shares of Company Stock
is changed by reason of a stock dividend or a subdivision or combination of
shares effected by a reclassification of shares, each specified number of
shares referred to in this Agreement shall be adjusted accordingly.
A. AMENDMENT OF RESTATED CERTIFICATE. Whenever the number of
shares of authorized Common Stock is not sufficient in order to issue shares
of Common Stock upon conversion of Class D Preferred Stock in accordance with
the Restated Certificate and the Certificates of Designation, (i) the Company
shall promptly amend the Restated Certificate in order to authorize a
sufficient number of shares of Common Stock, and (ii) each Stockholder agrees
to vote its shares of Preferred Stock and Common Stock in favor of such
amendment.
A. INVESTMENT AND TRANSACTION AGREEMENT. Each of the parties to
the Investment and Transaction Agreement hereby amend such Agreement by
terminating and deleting Articles V and VI thereof and all sections therein.
I. ARTICLE
SHARE CERTIFICATES
a) RESTRICTIVE ENDORSEMENTS; REPLACEMENT CERTIFICATES. Each
certificate representing the shares of Company Stock now or hereafter held by
a Stockholder (including any such certificate delivered upon conversion of
the Preferred Stock) or delivered in substitution or exchange for any of the
foregoing certificates shall be stamped with legends in substantially the
following form:
The shares represented by this Certificate have been acquired for
investment and have not been registered under the Securities Act of
1933, as amended (the "Act"), or under any state securities or "Blue
Sky" laws. Said securities may not be sold, transferred, assigned,
pledged, hypothecated or otherwise disposed of, unless and until
registered under the Act and the rules and regulations thereunder and
all applicable state securities or "Blue Sky" laws or exempted
therefrom under the Act and all applicable state securities or "Blue
Sky" laws.
The shares represented by this Certificate are also subject to a
Stockholder and Investor Rights Agreement, a copy of which is on file
at the offices of the Company and will be furnished by the Company to
the holder hereof upon written request. Such Stockholder and Investor
Rights Agreement provides, among other things, for the granting of
certain restrictions on the sale, transfer, pledge hypothecation or
other disposition of the shares represented by this Certificate, and
that under certain circumstances, the holder hereof may be required to
sell the shares represented by this Certificate. By acceptance of
this Certificate, each holder hereof agrees to be bound by the
provisions of such Stockholder and Investor Rights Agreement. The
Company reserves the rights to refuse to transfer the shares
represented by this Certificate unless and until the conditions to
transfer set forth in such Stockholder and Investor Rights Agreement
have been fulfilled.
Each Stockholder agrees that he, she or it will deliver all certificates
for shares of Company Stock owned by him, her or it to the Company for the
purpose of affixing such legends thereto.
a) Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any certificate
representing shares of Company Stock subject to this Agreement and of a bond
or other indemnity reasonably satisfactory to the Company, and upon
reimbursement to the Company of all reasonable expenses incident thereto, and
upon surrender of such certificate, if mutilated, the Company will make and
deliver a new certificate of like tenor in lieu of such lost, stolen,
destroyed or mutilated certificate.
I. ARTICLE
EQUITABLE RELIEF
A. EQUITABLE RELIEF. The parties hereto agree and declare that
legal remedies may be inadequate to enforce the provisions of this Agreement
and that, in addition to being entitled to exercise all of the rights
provided herein or in the Restated Certificate or granted by law, including
recovery of damages, equitable relief, including specific performance and
injunctive relief, may be used to enforce the provisions of this Agreement.
I. ARTICLE
STOCKHOLDER CALL RIGHT
A. STOCKHOLDER CALL RIGHT. The Xxxxxx Partnership and the other
Stockholders (other than JWC, JWC Group Stockholders and AT&T) (including
optionholders under the New Company Stock Option Plan at closing under the
Investment and Transaction Agreement) and their respective assignees will
have the right to call on a pro rata basis from the holders thereof up to 35%
of the Class D Preferred Stock held as of the Amendment and Restatement Date
(and/or Class A Common Stock, Class E Preferred Stock, Logix Communications
Stock or other capital stock, issued upon conversion, exchange, as a
distribution or otherwise in respect of the Class D Preferred Stock and the
Class E Preferred Stock, other than the JWC Common Stock) on a Fully Diluted
basis, together, in each case, with all accrued and unpaid dividends thereon
(collectively, the "Equity Investor Package") at (i) a price payable by wire
transfer of immediately available funds to an account designated by the
relevant Stockholder or the JWC Representative, in the case of the JWC Group
Stockholders (other than AT&T), equal to 35% times the following valuations
(each, the "Clawback Exercise Price"), (A) at any time prior to the
twenty-fourth month anniversary of the date of issuance of the Class D
Preferred Stock at a valuation which is equal to three times the original
purchase of the Class D Preferred Stock, and (B) at any time following the
twenty-fourth month anniversary of the date of issuance of such shares and
prior to the sixtieth-month anniversary thereof, at a valuation which is
equal to an amount equal to the sum of (x) three times the original purchase
price of the Class D Preferred Stock, plus (y) one times such original
purchase price multiplied by a fraction, the numerator of which is the number
of quarterly periods elapsed after such twenty-fourth month anniversary of
their date of issuance (measured from the commencement of such twenty-fifth
month anniversary), up to 12 quarterly periods, and the denominator of which
is 12. Schedule V set forth an illustrative example for this Article 11,
PROVIDED, HOWEVER, that in the case of any conflict between such illustration
and this Article 11, this Article 11 shall govern. In the event of a sale or
sales by JWC or AT&T of any portion of the final 35% of their respective
investment in Logix Communications Common Stock as of the date of the Logix
Communications Spin-off (calculated with reference only to shares of Logix
Communications issued with respect to the Class D Preferred Stock (or any
Class A Common Stock or other capital stock issued in respect thereto other
than the JWC Common Stock) held as of the Amendment and Restatement Date),
then the Clawback Exercise Price with respect to such selling stockholder's
Company Stock shall, if applicable, be reduced by the aggregate amount of the
net proceeds of such sales, PROVIDED that proceeds received by JWC or AT&T,
as the case may be, from the exercise by the Company of its purchase right
under Section 6.4 shall not so reduce the Clawback Exercise Price.
This call right may only be exercised in respect of the entire part of
the Equity Investor Package subject thereto and the initial determination
whether to exercise this call
right will be made by the Xxxxxx Partnership on behalf of all the
Stockholders, PROVIDED that after such determination, each Stockholder will
make its own determination whether to consummate the call right. This call
right shall terminate upon the earlier of the occurrence of (A) the IPO Date,
(B) the fifth anniversary of issuance of the Class D Preferred Stock, (C) a
Change of Control or (D) the exercise in full of this call right, PROVIDED,
that this call right may be exercised in connection and concurrently with an
IPO and the proceeds resulting from such public offering may be applied by
the Company in payment of the Clawback Exercise Price. Except pursuant to
Sections 4.2, 4.5 and Article 12 of this Agreement, each Cash Equity Investor
will agree not to sell or transfer the securities included in their Equity
Investor Package (excluding Logix Communications Common Stock) until the call
right expires if, after such sale or transfer, such Cash Equity Investor
would hold less than 35% of (x) the Class D Preferred Stock it held as of the
Amendment and Restatement Date, (y) any class of securities issued in respect
of the Class D Preferred Stock (other than Logix Communication Stock), or (z)
each class of securities included in the Equity Investor Package (excluding
Logix Communications Common Stock).
I. ARTICLE
PUT RIGHTS
A. CLASS D AND CLASS E PREFERRED STOCK PUT RIGHT. At any time
after the earliest to occur of (i) December 23, 2005, (ii) a Change of
Control, or (iii) the consummation of an IPO, each of JWC and AT&T shall have
the right to sell all of the Class D Preferred Stock or Class E Preferred
Stock held by such party to the Company (the "Preferred Stock Put Right") and
the Company shall have the obligation to purchase the shares as to which the
Preferred Stock Put Rights are exercised. Subject to Section 12.3, the
Company shall, within 120 days of the exercise by JWC or AT&T of its
Preferred Stock Put Right (or immediately in the case of a Change of Control)
pay (A) in the case of a put of Class D Preferred Stock a cash amount per
share equal to the then current Liquidation Preference thereon plus the
number of shares of Class A Common Stock that the holder of such Class D
Preferred Stock would have received upon conversion immediately prior to such
put and (B) in the case of Class E Preferred Stock a cash amount per share
held by such Stockholder equal to its Liquidation Preference.
Notwithstanding the foregoing, the Company shall not redeem any shares
pursuant to this Section 12.1 unless such redemption is made pro-rata amongst
all the parties who have exercised their Preferred Stock Put Rights pursuant
to this Section 12.1 on the date of any redemption. The closing of any
redemption pursuant to this Section 12.1 shall take place at the Company's
offices or at such reasonable other location as the Company may notify the
other parties in writing. Notwithstanding anything in this section to the
contrary, neither AT&T nor JWC shall be bound to transfer its Preferred Stock
upon the exercise by the other party of its Preferred Stock Put Right and in
the event that AT&T or JWC elects not to so transfer its Preferred Stock,
such party shall retain the right to exercise the Preferred Stock Put Right
with respect to its Preferred Stock. In the event that AT&T or JWC exercises
its Preferred Stock Put Right and the other party does not elect to exercise
its Preferred Stock Put Right within 20 days of such exercise, then such
other party may not exercise its Preferred Stock Put Right until 120 days
following such initial exercise.
a) CONFLICT EVENTS. (i) Either AT&T or the Company may give
notice (a "Conflict Notice") to the other parties hereto, if it becomes aware
of the existence of a Conflict or enters into an agreement that would give
rise to a Conflict, or reasonably believes that a Conflict is likely to occur
as a result of pending transactions or other proposed actions, which notice
shall describe the Conflict in reasonable detail.
(ii) In the event that a party gives a Conflict Notice, the Company and
AT&T shall use their commercially reasonable best efforts to determine
whether a Conflict exists (or will exist after giving effect to pending
transactions or other proposed actions) and, if so, will use their
commercially reasonable efforts to agree in principle, within 60 days of
receipt of such Conflict Notice by the recipient thereof, as to a course of
action (including a framework of time within which to execute binding
definitive agreements or to consummate and complete the transaction
contemplated by such agreements) to cure such
Conflict to the reasonable satisfaction of each of the Company and AT&T (an
"Agreement in Principle"). In the event the parties fail to (x) agree in
principle as to such course of action within such 60-day period, or (y)
execute such binding definitive agreements or consummate and complete the
transactions contemplated by such binding definitive agreements, in each case
in accordance with the Agreement in Principle then the provisions of Section
12.2(b) shall be applicable.
a) In the event that a Conflict Notice is given with respect to
either a Competitive Conflict or a Regulatory Conflict, and the provisions of
Section 12.2(b) are applicable pursuant to Section 12.2(a), then:
(i) In the case of the occurrence (without the prior written
consent of AT&T) of a Company Competitive Conflict or a Company Regulatory
Conflict, AT&T shall have the right to send a notice (a "Conflict Put
Notice") to the other parties hereto, which notice triggers the terms of
Section 12.2(c).
(ii) In the case of the occurrence (without the prior written
consent of the Company) of an AT&T Competitive Conflict or an AT&T Regulatory
Conflict, the Company shall have the right to send a notice (a "Conflict
Non-Voting Notice") to AT&T, which notice triggers the terms of Section
12.2(d).
(iii) In the case of a Conflict (other than an FCC Conflict)
resulting solely from a Change of Law, then the parties agree to address such
Conflict and the remedies appropriate to resolve such conflict in good faith
and a reasonable manner, at the time such Conflict occurs.
a) If AT&T sends a Conflict Put Notice in accordance with Section
12.2(b)(i), the Company shall have the obligation to purchase all of the
shares of Company Stock (other than any stock of Logix Communications from
and after the Logix Communications Spin-Off) then held by AT&T or its
Affiliates. Subject to Section 12.3, the purchase price therefor shall be
payable in cash and shall equal: (i) in the case of Class D Preferred Stock,
an amount per share equal to the then-current Liquidation Preference thereof,
plus the Market Price of the number of shares of Class A Common Stock that
would have been received upon conversion thereof on the date of the purchase;
(ii) in the case of Class E Preferred Stock, an amount per share equal to the
then current Liquidation Preference thereof; and (iii) in the case of any
other class of Common Stock, an amount per share equal to the Market Price
thereof. The closing of any purchase pursuant to this Section 12.2(c) shall
take place within 120 business days after the date of the Conflict Put Notice
(or such longer period as may be necessary under the Appraisal Procedure) at
the Company's offices or such other location or time as to which AT&T and the
Company agree.
a) If the Company sends a Conflict Non-Voting Notice to AT&T in
accordance with Section 12.2(b)(ii) or AT&T sends a Conflict Non-Voting
Notice, in its sole discretion at any time, then (i) AT&T shall cause the
director designated by it
pursuant to Section 3.1(a)(ii) to resign (or the parties shall cause the
removal of such director) from the Company's Board of Directors, within 10
business days of the date of the Conflict Non-Voting Notice and AT&T will
relinquish its director designation right in accordance with Section 3.1(b),
(ii) the parties shall negotiate in good faith, and promptly implement, steps
appropriate to eliminate the voting rights of any Company Stock then owned by
AT&T or its Affiliates (E.G., by AT&T exchanging its shares of Class D
Preferred Stock for an equal number of shares of a new class of preferred
stock having no voting rights and convertible into common stock having no
voting rights, except in each case to the extent required by law, or AT&T
agreeing to vote all of its shares in the same proportion as all other shares
of Company Stock are voted) and, to the extent necessary to eliminate a
Regulatory Conflict, to eliminate any consent, approval, veto or similar
rights AT&T enjoys pursuant to the terms of this Agreement and (iii) the
parties will otherwise proceed reasonably and in good faith to resolve the
circumstances giving rise to the Conflict Non-Voting Notice; PROVIDED that
and except as set forth in this Agreement no party shall be required to agree
to any change, modification or supplement that adversely affects such party
in any material respect, and nothing in this Agreement shall be construed to
require any party to agree to divest or hold separate any of its assets or
otherwise take or commit to take any action that limits its freedom of action
in any material respect with respect to any of its businesses, product lines
or assets. Notwithstanding the foregoing, if a Conflict Non-Voting Notice
shall be sent, and AT&T shall subsequently Transfer any Company Stock, then
the voting rights of such Company Stock to be transferred shall be
immediately reinstated and the transferee shall be transferred Company Stock
with full voting rights. The parties hereby acknowledge and agree that any
procedures effected pursuant to this Section 12.2(d) shall remain in effect
until the Conflict giving rise to the Conflict Non-Voting Notice no longer
exists.
a) The parties agree that Section 12.2(b) will be inapplicable to
any Regulatory Conflict existing on the date hereof, and that the parties
will proceed in good faith to resolve or cure such Conflicts; AT&T further
agrees that it will not exercise its right to select a director pursuant to
Section 3.1(a)(ii) until each of the Company and AT&T are satisfied that no
Regulatory Conflict exists as of the date hereof or any such Regulatory
Conflict has been cured or the appropriate Governmental Authorities have
furnished a waiver with respect thereto.
a) Notwithstanding anything in this Agreement to the contrary
(including, without limitation, Section 12.2(a)) AT&T shall have 30 days from
the date of receipt of a Conflict Notice within which to either confirm or
deny that a Conflict may exist upon consummation of the transactions referred
to in the Conflict Notice. If AT&T either fails to respond to such Conflict
Notice or informs the Company that no Conflict may exist upon consummation of
the transactions referred to in the Conflict Notice and the parties
subsequently learn that a Conflict did in fact arise, AT&T shall be precluded
from asserting its rights under Section 12.2(b)(i) in respect of such
Conflict.
a) Nothing in this Agreement shall be construed to require AT&T or
any of its Subsidiaries to take any action, including without limitation
divesting any of their
respective properties or other assets, other than in respect of shares of
Company Stock Beneficially Owned by them or their rights under this Agreement
or other rights arising from ownership of such Company Stock or agreements
with the Company.
a) The Company may deliver a notice to AT&T requesting that AT&T
confirm or deny that a Conflict exists, or may exist upon completion of a
transaction or transactions that have been publicly announced by AT&T, (i) at
any time the Company reasonably believes that AT&T has engaged in a
transaction or transactions that may create a Conflict, and (ii) once during
any calendar year (without regard to any notices given pursuant to clause (i)
of this sentence). Such notice shall include a list of the Licenses held by
the Company and its Subsidiaries. AT&T shall respond to such notice within
15 days stating whether or not it is aware, to the best of its knowledge,
that a Conflict exists. Any such notice or information given by AT&T will be
deemed to be Confidential Information subject to Section 6.3 of this
Agreement.
A. PAYMENT; RESTRICTIONS ON PAYMENT. Upon the surrender of the
certificate or certificates evidencing the shares of stock to be repurchased
by the Company pursuant to the Put Rights in Section 12.1 or 12.2(c), the
repurchase price in respect of such shares shall be paid to the order of the
Person whose name appears on such certificate or certificates in cash by wire
transfer of immediately available funds, PROVIDED, that if there is no
Available Cash under the Financing Agreements and consistent with the
limitations set forth in Section 12.4, the Company shall arrange additional
credit facilities or borrowing availability to obtain cash to meet its
obligations upon the exercise of the Put Right. If the Company cannot,
within the time periods stated in Sections 12.1 and 12.2(c), obtain cash to
meet its obligations upon the exercise of the Put Right, then the Company
shall issue to the Cash Equity Investor exercising the Put Right a
Subordinated Put Note, dated as of the date of exercise of the Put Right,
which shall rank senior to each class of Preferred Stock existing on the date
hereof other than the Senior PIK Preferred Stock and the Sygnet PIK
Preferred Stock. Each surrendered certificate shall be canceled and/or
retired. In the event that a Cash Equity Investor receives a Subordinated Put
Note, such Cash Equity Investors shall be entitled to all of the rights of
the holders of Class D Preferred Stock hereunder as if such Cash Equity
Investors were holders of Class D Preferred Stock until the Subordinated Put
Notes are paid in full. In the event that Subordinated Put Notes are issued,
all such Subordinated Put Notes will rank pari passu and shall share pro rata
in any Available Cash, PROVIDED, HOWEVER, that in the event that any
Subordinated Put Note shall have matured, such Subordinated Put Note shall
rank senior to any Subordinated Put Note which has not yet matured.
A. RESTRICTIONS ON PAYMENTS BY THE COMPANY. Notwithstanding
anything to the contrary contained in this Agreement, the payment of cash
upon exercise of a Put Right and pursuant to any Subordinated Put Notes
pursuant to this Article shall be subject to (i) applicable restrictions
contained in any applicable law, including the availability of adequate
capital and surplus for corporate law purposes and (ii) restrictions
contained in the Financing Agreements each as refinanced or amended and in
effect from time to time
in accordance with Section 12.6, and restrictions contained in any Senior
Indebtedness. If any such restrictions or unavailability prohibit the
repurchase of Securities or other capital stock of the Company hereunder
which the Company is otherwise entitled or required to make, the Company
shall make such repurchases as soon as it is permitted to do so under such
restrictions.
A. PAYMENT OF CASH. Notwithstanding anything else in this
Article 12 to the contrary (including Sections 12.3 and 12.4), in the event
of a Change of Control, and in each case in which Stockholders receive cash,
cash equivalents or marketable securities for the sale or transfer of the
Company's Voting Securities, then the holders of the Class D Preferred Stock
and Class E Preferred Stock shall be paid cash upon exercise of a Put Right
and shall not be issued Subordinated Put Notes in lieu of cash.
A. FINANCING AGREEMENTS; INDEBTEDNESS. The Class D Preferred
Stock and Class E Preferred Stock, including any redemptions (except as set
forth below), puts and calls and any Subordinated Put Notes issued pursuant
to such puts, are subject to the terms and restrictions contained in the
Financing Agreements. The Company will be permitted to refinance or replace
(whether or not with new lenders) any Financing Agreement and/or incur
additional indebtedness in connection with acquisitions and capital projects
at any time prior to the issuance of any Subordinated Put Note issued in
connection with a Put Right, so long as the Company has used commercially
reasonable efforts to negotiate standard covenant flexibility with regard to
permitting payment of the Put Right and such refinancing, replacement or
additional indebtedness (i) is not more restrictive with respect to the
Preferred Stock than the Financing Agreements and (ii) specifically permits
the payment of amounts owing by the Company upon exercise of such Preferred
Stock Put Right or to the holder of any such Subordinated Put Note if after
giving pro forma effect to any such payment, the Consolidated Leverage Ratio
would be less than 8 to 1. Following the issuance of any Subordinated Put
Note issued in connection with a Put Right, the Company may not undertake any
refinancing or replacement (but shall be free to obtain waivers from the
holders of existing indebtedness) or incur additional financing indebtedness
in excess of $1,000,000, in the aggregate, without the prior written consent
of the holder of such Subordinated Put Note. Nothing herein shall limit the
right of the Company to incur indebtedness in order to discharge all amounts
owing under any such outstanding Subordinated Put Notes. No refinancing
replacement or additional financing indebtedness shall adversely affect, and
shall be expressly subordinate to, the redemption rights of the Class D
Preferred Stock and Class E Preferred Stock set forth in the Certificates of
Designation of the Class D Preferred Stock and Class E Preferred Sock. The
Cash Equity Investors shall deliver acknowledgments of the foregoing to the
Company's creditors under the Financing Agreements upon the request of the
Company.
I. ARTICLE
COMPANY CALL RIGHT
A. COMPANY RIGHT TO CALL AGAINST CASH EQUITY INVESTORS. On or
immediately prior to an IPO, the Company or its assignees shall have the
right to purchase on a pro rata basis from the holders thereof all or any
portion of the outstanding shares of Class D Preferred Stock held by a Cash
Equity Investor and upon the exercise of such right, each Cash Equity
Investor shall have the obligation to sell such shares of Class D Preferred
Stock held by such Cash Equity Investor to the Company. The call purchase
price for each share of Class D Preferred Stock shall be the Liquidation
Preference thereof plus the number of shares of Class A Common Stock that
would have been received by the holder of such Class D Preferred Stock had
such Class D Preferred Stock been converted immediately prior to the exercise
of the call. Notwithstanding anything herein to the contrary, a holder of
Class D Preferred Stock may upon receiving a Call Notice (as defined below)
elect to convert his Class D Preferred Stock into Class E Preferred Stock and
Class A Common Stock, in which event the Company's right pursuant to this
Article 13 will apply to such Class E Preferred Stock. The call purchase
price of any such Class E Preferred Stock shall be the Liquidation Preference
thereof.
A. PROCEDURE. The Company may exercise the Call Rights by
providing to the Cash Equity Investors a written notice (a "Call Notice")
that the Company will repurchase the shares of Company Stock described in
Section 13.1. The Company shall within thirty (30) days after the
determination of the relevant call price, and the notification of the Cash
Equity Investors and in any event no later than the receipt by the Company of
the proceeds of the IPO, redeem the shares held by the Stockholders to whom
the Company provided a Call Notice by paying to such Stockholders an amount
for each share held by such Stockholder equal to the relevant call price by
wire transfer of immediately available funds. The closing of the repurchase
of the shares pursuant to this Article 13 shall take place at the office of
the Company, or at such other reasonable location, as it shall notify the
relevant party to whom the Call Notice was sent.
A. PAYMENT. Upon the surrender of the certificate or
certificates evidencing the shares of Class D Preferred Stock or Class E
Preferred Stock to be repurchased by the Company pursuant to this Article 13,
the applicable call price in respect of such shares shall be paid by wire
transfer of immediately available funds to the order of the Person whose name
appears on such certificate or certificates in cash in immediately available
funds (which shall include any accrued and unpaid dividends to the date of
repurchase of such shares of Class D Preferred Stock or Class E Preferred
Stock). Each surrendered certificate evidencing the shares of Class D
Preferred Stock or Class E Preferred Stock being repurchased shall be
canceled and/or retired.
I. ARTICLE
MISCELLANEOUS
a) FCC REGULATORY COMPLIANCE PUT. In the event either AT&T
or the Company believe an FCC Conflict exists, AT&T or the Company may give
notice (an "FCC CONFLICT NOTICE") to the other parties hereto. In the event
that a party gives an FCC Conflict Notice, the Company and AT&T shall use
their commercially reasonable best efforts to determine whether an FCC
Conflict exists and, if so, will use their commercially reasonable best
efforts to agree in principle, within 75 days of receipt of such FCC Conflict
Notice by the recipient thereof, to agree to a course of action (including a
framework of time within which to execute binding definitive agreements or to
consummate and complete the transaction contemplated by such agreements) to
cure such FCC Conflict to the reasonable satisfaction of each of the Company
and AT&T. In the event the parties fail to (x) agree in principle as to such
course of action within such 75-day period, or (y) execute such binding
definitive agreements or consummate and complete the transactions
contemplated by such binding definitive agreements, in each case in
accordance with the agreement in principle, then the provisions of Section
14.1(b) shall be applicable.
a) In the event that a FCC Conflict Notice is given and the
provisions of this Section 14.1(b) are applicable pursuant to Section
14.1(a), then AT&T shall have the right to send a notice (an "FCC CONFLICT
PUT NOTICE") to the Xxxxxx Partnership, which notice triggers the terms of
Section 14.1(c).
a) If AT&T sends an FCC Conflict Put Notice in accordance with
Section 14.1(b), the Xxxxxx Partnership shall have the obligation to purchase
(the "FCC PUT") all of the shares of Company Stock purchased by AT&T pursuant
to the Stock Purchase Agreement and then held by AT&T or its Affiliates (the
"AT&T COMPANY STOCK"). The purchase price therefor shall be payable in cash
and shall equal an amount per share equal to the original purchase price of
such shares as set forth in the Stock Purchase Agreement, plus accrued and
unpaid dividends thereon, if any, plus, solely with respect to the Common
Stock funded by AT&T, AT&T's carrying costs on such amount calculated at an
annual rate of 9% through the date of closing of any purchase pursuant to
this Section 14.1(c) (FCC PUT CLOSING"). The FCC Put Closing shall take
place within 120 days (or such earlier date (if any) as is required to comply
with applicable law) after the date of the FCC Conflict Put Notice at the
Company's offices or such other location or time as to which AT&T and the
Xxxxxx Partnership agree.
a) In the event that Xxxxxx Partnership acquires AT&T Company Stock
pursuant to this Section 14.1 then (i) all rights and interests associated
with such AT&T Company Stock under this Agreement will cease as to such AT&T
Company Stock, and such AT&T Company Stock, for purposes of this Agreement,
will no longer to be deemed to be AT&T Company Stock in the hands of Xxxxxx
Partnership, and (ii) all
rights granted to AT&T and its Affiliates pursuant to this Agreement
including, without limitation under Article III and Article IV shall
terminate upon the closing of the FCC Put and AT&T shall cease to have any
interest in the AT&T Company Stock.
a) In the event that a Regulatory Conflict would also qualify an FCC
Conflict, the provisions of this Article 14 shall apply.
a) JWC GROUP STOCKHOLDER REPRESENTATIVE. Each JWC Group
Stockholder hereby designates and irrevocably appoints Xxxx X. Xxxxxxxx, as
his attorney-in-fact with full power of substitution (the "JWC Group
Stockholder Representative"), to serve as the representative of each such JWC
Group Stockholder to (i) perform all such acts as are required, authorized or
contemplated by this Agreement to be performed by such JWC Group Stockholder
(other than AT&T) and (ii) exercise such rights, power and authority as are
incidental to this Agreement and hereby acknowledges that the JWC Group
Stockholder Representative shall be the only person authorized to take any
action so required, authorized or contemplated by this Agreement by each such
person. Any such actions taken, exercises of rights, power or authority and
any decision or determination made by the JWC Group Stockholder
Representative consistent therewith, shall be absolutely and irrevocably
binding on each JWC Group Stockholder (other than AT&T) as if such JWC Group
Stockholder (other than AT&T) personally had taken such action, exercised
such rights, power or authority or made such decision or determination in
such Stockholder's individual capacity. Each such JWC Group Stockholder
(other than AT&T) further acknowledges that the foregoing appointment and
designation shall be deemed to be coupled with an interest and shall survive
the death or incapacity of such JWC Group Stockholder (other than AT&T). The
other parties hereto are and will be entitled to rely on any action taken or
any notice given by the JWC Group Stockholder Representative and are and will
be entitled and authorized to give notices only to the JWC Group Stockholder
Representative for any notice contemplated by this Agreement to be given to
any such person. A successor to the JWC Group Stockholder Representative may
be chosen by a majority in interest of the JWC Group Stockholders (other than
AT&T), PROVIDED that notice thereof is given by the new JWC Group Stockholder
Representative to the Company.
b) The JWC Group Stockholder Representative shall not be liable
to the JWC Group Stockholders for the performance of any act or the failure
to act under or in connection with this Agreement so long as he acted or
failed to act in good faith in what he believed to be the scope of his
authority and for a purpose which he believed to be in the best interests of
the JWC Group Stockholders (other than AT&T). Each of the JWC Group
Stockholders (other than AT&T) will indemnify the JWC Group Stockholder
Representative, from and against any loss, liability, damage, deficiency,
cost and expense (including without limitation reasonable expenses of
investigation and reasonable attorney's fees incurred in connection with any
claim, suit or proceeding brought against him) incurred or sustained by him
as a result of his individual acts or omissions in connection with this
Agreement, so long as he acted or failed to act in good faith.
A. NOTICES. All notices or other communications hereunder shall
be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by facsimile transmission, or by
registered or certified mail (return receipt requested), postage prepaid,
with an acknowledgment of receipt signed by the addressee or an authorized
representative thereof, addressed as follows (or to such other address for a
party as shall be specified by like notice; PROVIDED that notice of a change
of address shall be effective only upon receipt thereof:
If to JWC, to:
X. X. Childs Associates, L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxx-Xxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxxxx
If to AT&T, to:
AT&T Wireless Services, Inc.
0000 000xx Xxx., X.X.
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
With a copy to:
AT&T Wireless Services, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Attention: General Counsel
With a copy to:
Xxxxxxxx Xxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
If to the Company, to it:
Xxxxxx Communications Corporation
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, President
With a copy to the Company at the same address to:
Attention: Xxx Xxxxxx, Senior Corporate Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With a further copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
A. ENTIRE AGREEMENT; AMENDMENT; CONSENTS.
a) This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, among the parties
or any of them with respect to the subject matter hereof, including, without
limitation, the Former Shareholders' Agreement.
a) No change or modification of this Agreement shall be valid,
binding or enforceable unless the same shall be in writing and signed by the
Company, the Xxxxxx Partnership, the holders of a majority of the shares of
each class of Common Stock and Preferred Stock and each of JWC and AT&T so
long as they hold their
respective Relevant Percentage Interests; PROVIDED, HOWEVER, that in the
event any party hereto shall cease to own any shares of Company Stock such
party hereto shall cease to be a party to this Agreement and the rights and
obligations of such party hereunder shall terminate.
a) Whenever in this Agreement the consent or approval of a
Stockholder is required, except as expressly provided herein, such consent or
approval may be given or withheld in the sole and absolute discretion of each
Stockholder.
A. TERM.
a) This Agreement shall terminate upon the earliest to occur of
any of the following events and PROVIDED that no Subordinated Put Notes are
outstanding:
(1) The consent in writing of all of the parties hereto; or
(1) December 23, 2010; or
(1) One Stockholder shall Beneficially Own all of the
Common Stock.
a) In the event that JWC shall Beneficially Own less than 35%
of shares of Common Stock or Class E Preferred Stock received from conversion
of the original Class D Preferred Stock investment (in each case on an
"as-if-converted" basis) Beneficially Owned by JWC on the Amendment and
Restatement Date, the provisions of Section 3.1(a)(i) shall terminate. In
the event the provisions of Section 3.1(a)(i) are terminated pursuant to this
Section 14.3(b), the director designated by JWC pursuant to Section
3.1(a)(i), shall resign (or the other directors or Stockholders shall remove
such director from the Board of Directors) and the remaining directors shall
take such action so that the number of directors constituting the entire
Board of Directors is accordingly reduced.
a) In the event that AT&T shall Beneficially Own less than 50%
of shares of Common Stock or Class E Preferred Stock received from conversion
of the original Class D Preferred Stock investment (in each case on an
"as-if-converted" basis) Beneficially Owned by AT&T on the Amendment and
Restatement Date, the provisions of Section 3.1(a)(ii) shall terminate. In
the event the provisions of Section 3.1(a)(ii) are terminated pursuant to
this Section 14.3(c), the director designated by AT&T pursuant to Section
3.1(a)(ii), shall resign (or the other directors or Stockholders shall remove
such director from the Board of Directors) and the remaining directors shall
take such action so that the number of directors constituting the entire
Board of Directors is accordingly reduced.
Notwithstanding anything in this Agreement to the contrary, the
holder of any Subordinated Put Note shall be entitled to all of the rights
and benefits of the Cash Equity Investors hereunder and under the Certificate
of Designations for the Class D Preferred Stock and the Investment and
Transaction Agreement, as if such holder still held the shares of Class D
Preferred Stock for which such Subordinated Put Note was issued until such
Subordinated Put Note has been paid in full.
A. SURVIVAL. Nothing contained in this Section 14.6 shall impair
any rights or obligations of any party hereto arising prior to the time of
the termination of this Agreement, or which may arise by an event causing the
termination of this Agreement. The provisions of Article 5 shall survive any
termination of this Agreement and shall continue in full force and effect
until December 23, 2018. The provisions of Section 6.3 and Section 14 shall
survive the termination of this Agreement.
A. WAIVER. No failure or delay on the part of any Stockholder in
exercising any right, power or privilege hereunder, nor any course of dealing
between the Company and any Stockholder shall operate as a waiver thereof nor
shall any single or partial exercise of any right, power or privilege
hereunder preclude the simultaneous or later exercise of any other right,
power or privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights and remedies which any Stockholder
would otherwise have. No notice to or demand on the Company in any case shall
entitle the Company to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Stockholders
or any of them to take any other or further action in any circumstances
without notice or demand.
B. OBLIGATIONS SEVERAL. The obligations of each Stockholder
under this Agreement shall be several with respect to each such Stockholder.
A. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the law of the State of New York without reference to the
conflicts of law principles thereof.
A. DISPUTE RESOLUTION; WAIVER OF JURY TRIAL.
a) The parties shall use and strictly adhere to the following
dispute resolution processes, except as otherwise expressly provided in this
Section 14.10, to resolve any and all disputes, controversies or claims,
whether based on contract, tort, statute, fraud, misrepresentation or any
other legal or equitable theory (hereinafter, "Dispute(s)"), arising out of
or relating to this Agreement (and any prior agreement this Agreement
supersedes), including without limitation, its making, termination,
non-renewal, its alleged breach and the subject matter of this Agreement
(E.G., products or services furnished hereunder or those related to those
furnished):
a) The parties shall first attempt to settle each Dispute
through good faith negotiations. The aggrieved party shall initiate such
negotiations by giving the other party(ies) written notice of the existence
and nature of the Dispute. The other party(ies)
shall in a writing to the aggrieved party acknowledge such notice of Dispute
within ten (10) business days. Such acknowledgment may also set forth any
Dispute that the acknowledging party desires to have resolved in accordance
with this Section.
a) Thereafter, if any Dispute is not resolved by the parties
through negotiation within thirty (30) calendar days of the date of the
notice of acknowledgment, either party may terminate informal negotiations
with respect to that Dispute and have the right, by delivery of written
notice thereof (the "Arbitration Notice") to the other party, to submit the
matter to be finally settled by arbitration in accordance with the Commercial
Arbitration Rules then in effect of the American Arbitration Association, as
modified herein (the "AAA Rules"). The place of arbitration shall be
Oklahoma City, Oklahoma. All matters so submitted to arbitration shall be
settled by three arbitrators. The disputing party and the Company shall each
designate one arbitrator within 20 days of the delivery of the Arbitration
Notice. If either the disputing party or the Company fails so to timely
designate an arbitrator, the matter shall be resolved by the one arbitrator
timely designated. The disputing party and the Company shall cause the
designated arbitrators to mutually agree upon and to designate a third
arbitrator, PROVIDED, HOWEVER, that failing such agreement within 45 days of
delivery of the Arbitration Notice, the third arbitrator shall be appointed
in accordance with the AAA Rules. The disputing party and the Company, shall
be responsible for the payment of the fees and expenses of their respectively
designated arbitrators and shall bear equally the fees and expenses of the
third arbitrator. The disputing party and the Company, shall cause the
arbitrators to decide the matter to be arbitrated pursuant hereto within 60
days after the appointment of the last arbitrator. The arbitral tribunal is
not empowered to award damages in excess of compensatory damages and each
party hereby irrevocably waives any right to recover punitive, exemplary or
similar damages with respect to any Dispute. The final decision of the
majority of the arbitrators shall be furnished to the disputing party and the
Company and each of the Stockholders in writing and shall constitute a
conclusive determination of the matter in question, binding upon JWC, the
Company and the Stockholders and shall not be contested by any of them. Such
decision may be used in a court of law only for the purpose of seeking
enforcement of the arbitrators' award. Any arbitration proceeding, decision
or award rendered hereunder and the validity, effect and interpretation of
this arbitration agreement shall be governed by the Federal Arbitration Act,
9 U.S.C. Sections 1-16, and judgment upon any award may be entered in any
court of competent jurisdiction.
a) The Company and each of the Stockholders hereby irrevocably
consents to the exclusive jurisdiction of the state or federal courts in the
State of New York, and all state or federal courts competent to hear appeals
therefrom, over any actions which may be commenced against any of them under
or in connection with this Agreement. The Company and each Stockholder hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which any of them may now or hereafter have to the laying of venue
of any such dispute brought in such court or any defense of inconvenient
forum for the maintenance of such dispute in the Xxxxxxxx Xxxxxxxx xx Xxx
Xxxx xxx Xxx Xxxx Xxxxxx. The Company and each Stockholder hereby
agree that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
The Company and each Stockholder hereby consent to process being served by
any party to this Agreement in any actions by the transmittal of a copy
thereof in accordance with the provisions of Section 14.3.
a) EACH OF THE PARTIES HERETO, AFTER CONSULTING WITH COUNSEL
WAIVE THEIR RIGHTS, IF ANY, TO JURY TRIAL IN RESPECT TO ANY DISPUTE OR CLAIMS
BETWEEN OR AMONG THE PARTIES TO THIS AGREEMENT RELATING TO OR IN RESPECT OF
THIS AGREEMENT, ITS NEGOTIATION, EXECUTION, PERFORMANCE, SUBJECT MATTER, OR
ANY COURSE OF CONDUCT OR DEALING OR ACTIONS UNDER OR IN RESPECT OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION ANY CLAIM UNDER THE SECURITIES ACT,
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, ANY OTHER STATE OR FEDERAL
LAW RELATING TO SECURITIES OR FRAUD OR BOTH, THE RACKETEER INFLUENCED AND
CORRUPT ORGANIZATIONS ACT, AS AMENDED, OR FEDERAL OR STATE COMMON LAW.
A. BENEFIT AND BINDING EFFECT; SEVERABILITY. This Agreement
shall be binding upon and shall inure to the benefit of the Company, its
successors and assigns, and each of the Stockholders and their respective
executors, administrators and personal representatives and heirs and
permitted assigns. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy
or any listing requirement applicable to the Common Stock, all other terms
and provisions of this Agreement shall nevertheless remain in full force and
effect. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto affected by such
determination in any material respect shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as possible in an acceptable manner in order that the provisions hereof are
given effect as originally contemplated to the greatest extent possible.
A. AMENDMENT OF BY-LAWS. The Stockholders agree that the terms
of this Agreement shall supersede any inconsistent provision that is
contained in the Restated By-Laws and, to the extent required by Oklahoma law
or the Restated By-Laws, this Agreement shall be deemed to constitute a
written action taken by the Stockholders of the Company and shall be deemed
an amendment of the Restated By-Laws.
A. FCC AND REGULATORY APPROVALS. Notwithstanding anything
contained in this Agreement to the contrary, no transaction or action
contemplated herein shall be consummated and no interests or rights
transferred, converted or exchanged prior to receiving FCC approvals with
respect thereto to the extent such FCC approvals are necessary.
A. EXPENSES. All attorneys' fees incurred by the Stockholders in
connection with this Agreement (including, without limitation, in the
preparation of notices (and responses thereto) and consents) shall be borne
by the Stockholder(s) incurring such fees.
A. ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to
recover reasonable attorneys' fees in addition to any other available remedy.
A. HEADINGS. The captions in this Agreement are for convenience
only and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
A. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed or consent this
Agreement to be executed by its duly authorized officers as of the date first
written above.
COMPANY:
XXXXXX COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
CASH EQUITY INVESTORS:
XXXXXX XX LIMITED PARTNERSHIP
By: RLD, Inc., its General Partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
XXXXXX OPERATING COMPANY
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Executive Officer
X.X. CHILDS EQUITY PARTNERS II, L.P.
By: X.X. Childs Advisors II, L.P.,
its general partner
By: X.X. Childs Associates, L.P.,
its general partner
By: X.X. Childs Associates, Inc.,
its general partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
/s/ Xxxx X. Xxxxxxxx
---------------------------------------
Xxxx X. Xxxxxxxx, as agent and attorney-in-fact
for the JWC Group Stockholders under Purchaser
Appointment of Agent and Power of Attorney
and not in his individual capacity
AT&T WIRELESS SERVICES, INC.
By:
Name:
Title:
Schedule I
CASH EQUITY INVESTORS:
Xxxxxx XX Limited Partnership
c/x Xxxxxx Communications Corporation
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Attention: Senior Corporate Counsel
Xxxxxx Operating Company
c/x Xxxxxx Communications Corporation
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Attention: Senior Corporate Counsel
X.X. Childs Equity Partners II, L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxx-Xxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Attention: Xxxx Xxxxxxxx
JWC Group Stockholders:
(See attached sheet)
AT&T Wireless Services, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Attention: General Counsel
Schedule II
CAPITALIZATION
Schedule III
NEW DIRECTORS
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
[AT&T Designee]
----------------------
* Subject to Section 3.1(d).
TABLE OF CONTENTS
Section Page
1.1 Certain Defined Terms 2
ARTICLE 1. Definitions
1.1 Certain Defined Terms 2
1.2 Other Definitional Provisions 18
ARTICLE 2. Stockholder Approval
2.1 Organizational Documents 18
2.2 Approval of Stock Option Plans 18
2.3 Logix Communications Spin-Off 18
ARTICLE 3. Management of the Company
3.1 Board of Directors 19
3.2 Removal; Filling of Vacancies 20
3.3 Directors 21
3.4 Compensation and Reimbursement 21
3.5 Business of the Company 21
3.6 Required Votes 21
3.7 Transactions between the Company and the Stockholders or their Affiliates 21
3.8 Board Committees 22
3.9 Other Actions 22
ARTICLE 4. Transfers of Shares
4.1 General 23
4.2 Tag-Along Rights 23
4.3 Additional Conditions to Permitted Transfers 26
4.4 Stop-Transfer 27
4.5 Drag Along Rights 27
4.6 Redemption Rights 27
4.7 Right of First Refusal for New Securities; Capital Raising 28
ARTICLE 5. Registration Rights
(a) Demand Registration Rights 29
(b) Piggyback Registration Rights 31
(c) Selection of Underwriters 31
(d) Registration Procedures 32
TABLE OF CONTENTS
(continued)
Section Page
(e) Indemnification 36
(f) Contribution 40
(g) Registration Expenses 40
(h) Participation in Underwritten Registrations 41
(i) Holdback Agreements 41
(j) Public Information Reporting 41
ARTICLE 6. Additional Rights and Covenants
6.1 Wholly-Owned Subsidiaries 42
6.2 Amendments of the Restated Certificate and By-Laws 42
6.3 Confidentiality 42
6.4 Sale of Logix Communications Stock 43
6.5 Class Protection 43
6.6 New Securities 44
6.7 Logix Communications Spin-Off 44
6.8 Regulation M 45
6.9 (a) Pooling of Interests 45
6.10 Other Tax Matters 45
6.11 Class A Preferred Stock Transfer Restriction 45
6.12 Additional Covenants 45
6.12.1 Records and Accounts 46
6.12.2 Existence; Related Securities; Maintenance of Properties 46
6.12.3 Insurance 46
6.12.4 Taxes 46
6.12.5 Inspection of Properties and Books 46
6.12.6 Compliance with Laws, Contracts, Licenses and Permits 47
6.12.7 Employee Benefit Plans 47
6.12.8 Distributions 48
6.12.9 Merger, Consolidation, Sale of Assets or Other Dispositions 48
6.12.10 Sale and Leaseback of Property 48
6.12.11 Investments 49
6.12.12 Merger, Consolidation or Other Acquisitions 49
6.13 Information Covenants 49
6.13.1 Annual Statements 49
6.13.2 Quarterly Statements 50
6.13.3 Budgets and Other Reports 50
ARTICLE 7. Exclusivity
7.1 Exclusivity 51
TABLE OF CONTENTS
(continued)
Section Page
ARTICLE 8.
After-Acquired Shares; Recapitalization; Investment and Transaction Agreement
8.1 After Acquired Shares; Recapitalization; Investment and
Transaction Agreement 51
8.2 Amendment of Restated Certificate 52
8.3 Investment and Transaction Agreement 52
ARTICLE 9. Share Certificates
9.1 Restrictive Endorsements; Replacement Certificates 52
ARTICLE 10. Equitable Relief
10.1 Equitable Relief 53
ARTICLE 11. Stockholder Call Right
11.1 Stockholder Call Right 53
ARTICLE 12. Put Rights
12.1 Class D and Class E Preferred Stock Put Right 54
12.2 Conflict Events 55
12.3 Payment; Restrictions on Payment 58
12.4 Restrictions on Payments by the Company 58
12.5 Payment of Cash 58
12.6 Financing Agreements; Indebtedness 58
ARTICLE 13. Company Call Right
13.1 Company Right to Call Against Cash Equity Investors 59
13.2 Procedure 59
13.3 Payment 60
ARTICLE 14. Miscellaneous
14.1 FCC Regulatory Compliance Put 60
14.2 JWC Group Stockholder Representative 61
14.3 Notices 62
14.4 Entire Agreement; Amendment; Consents 64
14.5 Term 64
14.6 Survival 65
TABLE OF CONTENTS
(continued)
Section Page
14.7 Waiver 65
14.8 Obligations Several 65
14.9 Governing Law 66
14.10 Dispute Resolution; Waiver of Jury Trial 66
14.11 Benefit and Binding Effect; Severability 67
14.12 Amendment of By-Laws 68
14.13 FCC and Regulatory Approvals 68
14.14 Expenses 68
14.15 Attorneys' Fees 68
14.16 Headings 68
14.17 Counterparts 68
SCHEDULES
Schedule I -- Cash Equity Investors
Schedule II -- Capitalization
Schedule III -- New Directors
EXHIBITS
Exhibit A -- Form of Restated Certificate
Exhibit B-1 -- Form of Class A Preferred Stock Certificate of
Designation
Exhibit B-2 -- Form of Class D Preferred Stock Certificate of
Designation
Exhibit B-3 -- Form of Class E Preferred Stock Certificate of
Designation
Exhibit C -- Form of Restated By-Laws
Exhibit D -- Form of Subordinated Put Note
Exhibit E -- Logix Spin-Off Dilution Protection Example
