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OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") is made as of January 31, 1996,
by and between XXXXXX FIBER PROPERTIES, INC., a Delaware corporation (the
"Company"), and XXXXXX X. XXXXXX POL (the "Shareholder").
RECITALS
A. Pursuant to the Agreement and Plan of Merger, dated January 17,
1996, by and among the Company, Xxxxxx Fiber Communications of Michigan, Inc.,
a Michigan corporation, the Shareholder and City Signal, Inc., a Michigan
corporation (the "Merger Agreement"), the Shareholder is to receive certain
shares of the voting common stock of the Company, par value $0.01 per share
("BFP Voting Common Stock"), in payment of the Merger Consideration under the
Merger Agreement (the "Shares").
B. The Shareholder wishes to have the option to sell the Shares to
the Company, and the Company is willing to grant such an option to the
Shareholder, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein and in the Merger Agreement, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. DEFINED TERMS. Capitalized terms not otherwise defined herein
shall have the meanings assigned to such terms in the Merger Agreement.
2. OPTION TO SELL.
(a) On the earlier of (i) the first anniversary of the Closing Date
under the Merger Agreement (the "Anniversary Date"), or (ii) the date of the
closing (the "IPO Closing Date") of a firm commitment underwritten initial
public offering of BFP Voting Common Stock pursuant to a registration statement
which is filed under the Securities Act of 1933, as amended (the "Securities
Act"), the Shareholder shall have the option to sell to the Company, and the
Company shall have the obligation, upon the exercise of such option, to buy
from the Shareholder all or any part of the Shares, at a price of $12.50 per
share; provided, however, that with respect to any such Shares which are part
of the Holdback at the time of the purchase of such Shares, the Company shall
deliver the purchase price for such Shares to the Escrow Agent to be held under
the terms of the Holdback Escrow Agreement.
(b) Notwithstanding the provisions of paragraph (a) above, if the
provisions of the Company's Amended and Restated Registration Rights Agreement,
dated as June 15, 1995, shall not have been amended, modified or supplemented,
to permit the granting to the Shareholder of the demand registration rights
described on Attachment A hereto on or prior to the earlier of the Anniversary
Date or the IPO Closing Date, the Shareholder may exercise the option granted
hereunder at any time thereafter which is prior to the earlier of (i) the date
on which such registration rights are granted or (ii) February 1, 1998.
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3. EXERCISE OF OPTION ON FIRST ANNIVERSARY OF CLOSING.
(a) The Shareholders may exercise the option set forth in Section
2(a)(i) above by delivering to the Company, not less than 60 days prior to the
Anniversary Date, written notice of the Shareholder's irrevocable election to
exercise such option.
(b) If the Shareholder gives such notice, then on the Anniversary Date
(or if such date is not a business day on which banks are open in St. Louis,
Missouri, then on the next succeeding such business day), the Shareholder shall
deliver to the Company certificates representing the Shares, together with a
stock power duly executed by the Shareholder, and the Company shall pay to the
Shareholder, by wire transfer or certified or cashier's check, an amount equal
to $12.50 per share times the number of the Shares.
4. EXERCISE OF OPTION ON INITIAL PUBLIC OFFERING.
(a) If, prior to the Anniversary Date, the Company proposes to register
any of the BFP Voting Common Stock for a firm commitment underwritten initial
public offering thereof under the Securities Act (such registration, if not
withdrawn or abandoned being herein called the "IPO Registration"), the Company
will give written notice to the Shareholder of such proposal not later than 20
days prior to the anticipated filing date of the IPO Registration. The
Shareholder may exercise the option set forth in Section 2(a)(ii) above by
delivering to the Company, within 15 days after the date on which the Company
shall have given written notice of the IPO Registration to the Shareholder,
written notice of the Shareholder's irrevocable election to exercise such
option.
(b) If the Shareholder gives such notice, and a closing occurs for the
offering under the IPO Registration, then on the date of such closing the
Shareholder shall deliver to the Company certificates representing the Shares,
together with a stock power duly executed by the Shareholder, and the Company
shall pay to the Shareholder, by wire transfer or certified or cashier's check,
an amount equal to $12.50 per share times the number of Shares.
5. EXERCISE OF OPTION ON EXTENSION.
(a) The Shareholder may exercise the option set forth in Section 2(b)
above by delivering to the Company, prior to the earlier of (i) the date on
which the registration rights described in Attachment A hereto are granted or
(ii) February 1, 1998, written notice of the Shareholder's irrevocable election
to exercise such option.
(b) If the Shareholders gives such notice, then not less than five nor
more than 10 days thereafter the Shareholder shall deliver to the Company
certificates representing the Shares, together with a stock power duly executed
by the Shareholder, and the Company shall pay to the Shareholder, by wire
transfer or certified or cashier's check, an amount equal to $12.50 per share
times the number of Shares.
6. SECURITY INTEREST. In order to secure the payment obligation of the
Company to the Shareholder hereunder, the Company hereby grants to the
Shareholder a security interest in
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the assets of the Company listed on Attachment A hereto, such security interest
to be subject and subordinate to any rights and security interests held by
others in such assets and the creation of such security interest shall be
conditioned upon the prior receipt by the Company of all consents required
therefor from the holders of such other rights and security interests.
7. TERMINATION. This Agreement shall terminate upon the earlier to
occur of: (i) the termination of the Merger Agreement as provided in Section 9.1
thereof, or (ii) the Anniversary Date.
8. ASSIGNMENT; BINDING AGREEMENT. Neither this Agreement nor any
rights or obligations of the parties may be assigned by either party without the
prior written consent of the other party. This Agreement shall be binding upon
and shall inure to the benefit of the parties and to their respective successors
and permitted assigns.
9. ENTIRE AGREEMENT AND MODIFICATION. This Agreement and the Merger
Agreement constitute the entire agreement between the parties. No changes of,
modifications of, or additions to this Agreement shall be valid unless the same
shall be in writing and signed by both of the parties.
10. NOTICES. All notices, requests, demands, and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given and made upon being delivered either by courier
or fax delivery to the party for whom it is intended, provided that a copy
thereof is deposited, postage prepaid, certified or registered mail, return
receipt requested, in the United States mail, bearing the address shown in this
Section for, or such other address as may be designated in writing hereafter by,
such party:
(i) If to the Company: Xxxxxx Fibers Properties, Inc.
000 Xxxxx Xxxx Xxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Vice Chairman and Chief Executive
Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxx Xxxx LLP
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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(ii) If to the Shareholder: Xxxxxx X. XxxxxxXxx
0000 Xxx Xxxxxxxxxx Xxxxx XX
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx Xxxxxx
Miller, Johnson, Xxxxx & Xxxxxxxxx
000 Xxxxxx Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
11. SEVERABILITY. If any provision of this Agreement shall be
determined to be contrary to law and unenforceable by any court of law, the
remaining provisions shall be severable and enforceable in accordance with
their terms to the fullest extent permitted by applicable law.
12. COUNTERPARTS. This Agreement may be executed in one or more
identical counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
13. HEADINGS; INTERPRETATION. The article and section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of the Agreement. All parties
hereto have participated substantially in the negotiation and drafting of this
Agreement and each party hereby disclaims any defense or assertion in any
litigation or arbitration that any ambiguity herein should be construed against
the draftsman.
14. GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted in accordance with the substantive laws of the State
of Missouri without reference to its principles of choice of law.
IN WITNESS WHEREOF, the parties hereto have executed this Option
Agreement as of the day and year first above written.
XXXXXX FIBER PROPERTIES, INC.
By: Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Vice Chairman and Chief Executive Officer
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XXXXXX X. XXXXXXXXX
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(ii) If to the Shareholder: Xxxxxx X. XxxxxxXxx
0000 Xxx Xxxxxxxxxx Xxxxx XX
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx Xxxxxx
Miller, Johnson, Xxxxx & Xxxxxxxxx
000 Xxxxxx Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
11. SEVERABILITY. If any provision of this Agreement shall be
determined to be contrary to law and unenforceable by any court of law, the
remaining provisions shall be severable and enforceable in accordance with
their terms to the fullest extent permitted by applicable law.
12. COUNTERPARTS. This Agreement may be executed in one or more
identical counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
13. HEADINGS; INTERPRETATION. The article and section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of the Agreement. All parties
hereto have participated substantially in the negotiation and drafting of this
Agreement and each party hereby disclaims any defense or assertion in any
litigation or arbitration that any ambiguity herein should be construed against
the draftsman.
14. GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted in accordance with the substantive laws of the State
of Missouri without reference to its principles of choice of law.
IN WITNESS WHEREOF, the parties hereto have executed this Option
Agreement as of the day and year first above written.
XXXXXX FIBER PROPERTIES, INC.
By:
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Xxxxx X. Xxxxx
Vice Chairman and Chief Executive Officer
Xxxxxx X. XxxxxxXxx
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XXXXXX X. XXXXXXXXX
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ATTACHMENT A
DEMAND REGISTRATION RIGHTS
Subject to the limitations on Demand Registrations contained in Section
2 of the Company's Amended and Restated Registration Rights Agreement, dated as
of June 15, 1995, the Shareholder may at any time after the earlier to occur of
(A) January 31, 1997, or (B) the IPO Closing Date, give the Company a written
request for a demand registration of all or any part of (but not less than
20%) of his Shares on the terms provided in such Registration Rights Agreement.
The Registration Expenses of such demand registration shall be borne by
the Company as provided in Section 7 of such Registration Rights Agreement.
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