COMMUNICATIONS INFRASTRUCTURE INVESTMENTS, LLC THIRD AMENDMENT TO VESTING AGREEMENT
Exhibit 10.13
COMMUNICATIONS INFRASTRUCTURE INVESTMENTS, LLC
THIRD AMENDMENT TO VESTING AGREEMENT
THIRD AMENDMENT TO VESTING AGREEMENT
This Third Amendment to
Vesting Agreement (the “Third Amendment”) is effective as of March
19, 2010 and amends that certain Vesting Agreement by and among Communications Infrastructure
Investments, LLC, a Delaware limited liability company (the “Company”), Xxxxxx X. Xxxxxx (the
“Executive”) and the Founder Investors (as defined therein), dated as of December 31, 2007, as has
been amended (the “Vesting Agreement”).
Recitals
Whereas, pursuant to Section 6.7 of the Vesting Agreement, the Vesting Agreement may
be modified or amended at any time and from time to time with the written consent of the
Executive, the Founder Investors and the Company; and
Whereas, the undersigned constitute all of the Executive, the Founder Investors and
the Company.
Now, Therefore, the Vesting Agreement is hereby amended as follows:
1. Section 3.2 (Executive Common Units) of the Vesting Agreement shall be amended to include
the following additional subparagraph:
(c) For the Executive Common Units issued as Class B Common Units on March 19,
2010 (as designated on Schedule A attached hereto) (the “Class B
Executive Common Units”), the Founder Common Investors shall vest into such
Class B Executive Common Units as follows: The Class B Common Units vesting start
date is February 1, 2008 (the “Class B Vesting Start Date”). The issuance
date is March 19, 2010 (the “Issuance Date”). The vesting end date is
February 1, 2012 (the “Vesting End Date”). On March 19, 2011 (the “First
Vesting Date”), one million and two thousand and eighty three (1,002,083) of the
Class B Executive Common Units shall vest and thereafter, on a monthly basis
measured from the First Vesting Date through the Vesting End Date, a number of Class
B Executive Common Units equal to 1/48 of the aggregate number of Class B Executive
Common Units shall vest. The Common Unit Threshold B, as that term is defined in the
LLC Agreement and as it relates to the Class B Executive Common Units hereunder,
shall be $15,000,000.00. Such Class B Executive Common Units shall receive
distributions from the Company pursuant to the LLC Agreement when the aggregate
distributions previously made with respect to Issued Common Units pursuant to the
LLC Agreement are equal to or greater than such Common Unit Threshold B.
2. Schedule A to the Vesting Agreement shall be replaced with the Schedule A
attached hereto, and shall be effective as of the date hereof.
3. Except as set forth in this Third Amendment, the Vesting Agreement shall remain unchanged
and in full force and effect.
4. This Third Amendment may be executed in one or more counterparts and/or by facsimile, each
of which shall be deemed an original and all of which taken together shall constitute one
instrument.
5. This Third Amendment will be governed by and construed according to the laws of the State
of Colorado as such laws are applied to agreements entered into and to be performed entirely within
Colorado between Colorado residents.
6. Capitalized terms not defined herein shall have the meaning given to them in the Vesting
Agreement.
[Remainder of Page Intentionally Blank]
In Witness Whereof, the parties have executed this Third Amendment as of the date
first above written.
| Communications Infrastructure Investments, LLC |
||||
| By: | /s/ Xxxxx X. Beer | |||
| Name: | XXXXX X. BEER | |||
| Title: | GENERAL COUNSEL & SECRETARY | |||
| EXECUTIVE: |
||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxx | ||||
| FOUNDER INVESTORS: Bear Investments, LLLP |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | ||||
| General Partner | ||||
| Bear Equity, LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | ||||
| Manager | ||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxx, individually | ||||
Signature Page
Third Amendment to Vesting Agreement
Third Amendment to Vesting Agreement
Schedule A
Executive Common Units
| Number of | ||||
| Executive | ||||
| Entity | Common Units | |||
Class A Common Units: |
||||
Issued as of December 31, 2007: |
||||
Bear Investments, LLLP |
7,470,834 | |||
Xxxxxx X. Xxxxxx |
2,490,277 | |||
Issued as of March 21, 2008: |
||||
Bear Investments, LLLP |
2,805,555 | |||
Xxxxxx X. Xxxxxx |
2,805,556 | |||
Total Class A Common Units |
15,572,222 | |||
Class B Common Units: |
||||
Issued as of October 20, 2009: |
||||
Bear Investments, LLLP |
0 | |||
Xxxxxx X. Xxxxxx |
2,300,000 | |||
Issued as of March 19, 2010: |
||||
Bear Investments, LLLP |
1,300,000 | |||
Xxxxxx X. Xxxxxx |
0 | |||
Total Class B Common Units |
3,600,000 | |||
Total Executive Common Units |
19,172,222 | |||
COMMUNICATIONS INFRASTRUCTURE INVESTMENTS, LLC
SECOND AMENDMENT TO VESTING AGREEMENT
SECOND AMENDMENT TO VESTING AGREEMENT
This Second Amendment to Vesting Agreement (the “Second Amendment”) is effective as of October
20, 2009 and amends that certain Vesting Agreement by and among Communications Infrastructure
Investments, LLC, a Delaware limited liability company (the “Company”), Xxxxxx X. Xxxxxx (the
“Executive”) and the Founder Investors (as defined therein), dated as of December 31, 2007, as has
been amended (the “Vesting Agreement”).
Recitals
Whereas, pursuant to Section 6.7 of the Vesting Agreement, the Vesting Agreement may
be modified or amended at any time and from time to time with the written consent of the
Executive, the Founder Investors and the Company; and
Whereas, the undersigned constitute all of the Executive, the Founder Investors and
the Company.
Now, Therefore, the Vesting Agreement is hereby amended as follows:
1. Section 3.2 of the Vesting Agreement shall be amended and restated in its entirety to read
as follows:
3.2 Executive Common Units. The Executive Common Units shall vest as follows:
(a) For all Executive Common Units issued on December 31, 2007 and March 21,
2008 (which are designated as Class A Common Units and identified on Schedule
A attached hereto) (the “Class A Executive Common Units”), the Founder
Common Investors, on a pro rata basis and in the aggregate, shall vest into 2.0833%
of the Class A Executive Common Units for each month that has elapsed after the
Vesting Start Date, provided that the Founder Common Investors will cease to vest
into any such Class A Executive Common Units upon the termination of Executive’s
employment with the Company or any of its Subsidiaries. Notwithstanding the
foregoing, in the event the Executive’s employment with the Company or any of its
Subsidiaries is terminated for Cause or if the Executive voluntarily terminates his
employment with the Company or any of its Subsidiaries prior to the first anniversary
of the Vesting Start Date, the Class A Executive Common Units shall be forfeited in
accordance with Section 3.4 of this Agreement.
(b) For all Executive Common Units issued as Class B Common Units (as designated
on Schedule A attached hereto) (the “Class B Executive Common
Units”), the Founder Common Investors shall vest into such Class B Executive
Common Units as follows: The Class B Common Units vesting start date is February 1,
2008 (the “Class B Vesting Start Date”). The issuance date is October 20,
2009 (the “Issuance Date”). The vesting end date is February 1, 2012
(the “Vesting End Date”). On October 20, 2010 (the “First Vesting
Date”), one million five hundred and thirty three thousand and three hundred and
thirty three (1,533,333) of the Class B Executive Common Units shall vest and
thereafter, on a monthly basis measured from the First Vesting Date through the
Vesting End Date, a number of Class B Executive Common Units equal to 1/48 of the
aggregate number of Class B Executive Common Units shall vest. The Common Unit
Threshold B, as that term is defined in the LLC Agreement and as it relates to the
Class B Executive Common Units hereunder, shall be $15,000,000.00. Such Class B
Executive Common Units shall receive distributions from the Company pursuant to the
LLC Agreement when the aggregate distributions previously made with respect to
Issued Common Units pursuant to the LLC Agreement are equal to or greater than such
Common Unit Threshold B.
2. Schedule A to the Vesting Agreement shall be replaced with the Schedule A
attached hereto, and shall be effective as of the date hereof.
3. Except as set forth in this Second Amendment, the Vesting Agreement shall remain unchanged
and in full force and effect.
4. This Second Amendment may be executed in one or more counterparts and/or by facsimile, each
of which shall be deemed an original and all of which taken together shall constitute one
instrument.
5. This Second Amendment will be governed by and construed according to the laws of the State
of Colorado as such laws are applied to agreements entered into and to be performed entirely within
Colorado between Colorado residents.
6. Capitalized terms not defined herein shall have the meaning given to them in the Vesting
Agreement.
[Remainder of Page Intentionally Blank]
In Witness Whereof, the parties have executed this Second Amendment as of the date
first above written.
| Communications Infrastructure Investments, LLC |
||||
| By: | /s/ Xxxxx X. Beer | |||
| Name: | XXXXX X. BEER | |||
| Title: | GENERAL COUNSEL | |||
| EXECUTIVE: |
||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxx | ||||
| FOUNDER INVESTORS: Bear Investments, LLLP |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | ||||
| General Partner | ||||
| Bear Equity, LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | ||||
| Manager | ||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxx, individually | ||||
Signature Page
Second Amendment to Vesting Agreement
Second Amendment to Vesting Agreement
Schedule A
Executive Common Units
| Number of | ||||
| Executive | ||||
| Entity | Common Units | |||
Class A Common Units: |
||||
Issued as of December 31, 2007: |
||||
Bear Investments, LLLP |
7,470,834 | |||
Xxxxxx X. Xxxxxx |
2,490,277 | |||
Issued as of March 21, 2008: |
||||
Bear Investments, LLLP |
2,805,555 | |||
Xxxxxx X. Xxxxxx |
2,805,556 | |||
Total Class A Common Units |
15,572,222 | |||
Class B Common Units: |
||||
Issued as of October 20, 2009: |
||||
Bear Investments, LLLP |
0 | |||
Xxxxxx X. Xxxxxx |
2,300,000 | |||
Total Class B Common Units |
2,300,000 | |||
Total Executive Common Units |
17,872,222 | |||
COMMUNICATIONS INFRASTRUCTURE INVESTMENTS, LLC
AMENDMENT TO VESTING AGREEMENT
AMENDMENT TO VESTING AGREEMENT
This Amendment to Vesting Agreement (the “Amendment”) is effective as of March 21, 2008 and
amends that certain Vesting Agreement by and among Communications Infrastructure Investments, LLC,
a Delaware limited liability company (the “Company”), Xxxxxx X. Xxxxxx (the “Executive”) and the
Founder Investors (as defined therein), dated as of December 31, 2007 (the “Vesting Agreement”).
Recitals
Whereas, pursuant to Section 6.7 of the Vesting Agreement, the Vesting Agreement may
be modified or amended at any time and from time to time with the written consent of the
Executive, the Founder Investors and the Company; and
Whereas, the undersigned constitute all of the Executive, the Founder Investors and
the Company.
Now, Therefore, the Vesting Agreement is hereby amended as follows:
1. Schedule A to the Vesting Agreement shall be replaced with the Schedule A
attached hereto, and shall be effective as of the date hereof.
2. Except as set forth in this Amendment, the Vesting Agreement shall remain
unchanged and in full force and effect.
3. This Amendment may be executed in one or more counterparts and/or by
facsimile, each of which shall be deemed an original and all of which taken together shall
constitute one instrument.
4. This Amendment will be governed by and construed according to the laws of the
State of Colorado as such laws are applied to agreements entered into and to be performed
entirely within Colorado between Colorado residents.
5. Capitalized terms not defined herein shall have the meaning given to them in the
Vesting Agreement.
[Remainder of Page Intentionally Blank]
In Witness Whereof, the parties have executed this Amendment as of the date first
above written.
| Communications Infrastructure Investments, LLC |
||||
| By: | /s/ Xxxxx X. Beer | |||
| Name: | XXXXX X. BEER | |||
| Title: | GENERAL COUNSEL | |||
| EXECUTIVE: |
||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxx | ||||
| FOUNDER INVESTORS: Bear Investments, LLLP |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | ||||
| General Partner | ||||
| Bear Equity, LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | ||||
| Manager | ||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxx, individually | ||||
Signature Page
Amendment to Vesting Agreement
Amendment to Vesting Agreement
Schedule A
Common Units
| Number of | ||||
| Entity | Common Units | |||
Issued as of December 31, 2007: |
||||
Bear Investments, LLLP
|
7,470,834 | |||
Xxxxxx X. Xxxxxx
|
2,490,277 | |||
Issued as of March 21, 2008: |
||||
Bear Investments, LLLP
|
2,805,555 | |||
Xxxxxx X. Xxxxxx
|
2,805,556 | |||
Total Units
|
15,572,222 | |||
VESTING AGREEMENT
This Vesting Agreement (this “Agreement”) is made as of December 31, 2007 between
Communications Infrastructure Investments, LLC, a Delaware limited liability company (the
“Company”); Xxxxxx X. Xxxxxx (the “Executive”); and the Founder Investors (defined
below).
RECITALS
WHEREAS, the Executive desires that the Founder Preferred Investor hold Class A Preferred
Units and the Founder Common Investors hold Common Units of the Company for and on behalf of the
Executive;
WHEREAS, pursuant to Section 4.1(d) of the LLC Agreement, the Company issued 4,000,000
Initial Class A Preferred Units (the “Executive Preferred Units”) to the Founder Preferred
Investor; and
WHEREAS, in connection with the Executive’s employment with the Company or any of its
Subsidiaries, the Company desires to (i) provide for restrictions on the Executive Preferred Units
and (ii) issue to the Founder Common Investors, in accordance with the LLC Agreement, that number
of Common Units as set forth on Schedule A attached hereto (the “Executive Common
Units”) subject to the restrictions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set forth in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement, intending to be legally bound, agree as
follows:
ARTICLE 1
DEFINITIONS
In addition to the other terms defined in this Agreement, the terms below shall have the following
meanings:
“Acquisition” means the Company’s acquisition of a fiber or conduit network, as
contemplated by the Securities Purchase Agreement.
“Aggregate Investment Amount” shall mean the sum of (i) the aggregate cash Capital
Contributions made by the Investor Members pursuant to the terms of the LLC Agreement and (ii) the
value of the Company’s Capital Securities issued as consideration, in whole or in part, of an
Acquisition, excluding any Capital Securities issued as equity incentive compensation.
“Board” means the Board of Managers of the Company.
“Buyer” has the meaning specified in Section 5.1 of this Agreement.
“Capital Contribution” has the meaning set forth in the LLC Agreement.
“Capital Securities” means (a) as to any Person that is a corporation, the authorized
shares of such Person’s capital stock, including all classes of common, preferred, voting and
nonvoting capital stock, and, as to any Person that is not a corporation or an individual, the
ownership or membership interests in such Person, including, without limitation, the right to
share in profits and losses, the right to receive distributions of cash and property, and the
right to receive allocations of items of income, gain, loss, deduction and credit and similar
items from such Person, whether or not such interests include voting or similar rights entitling
the holder thereof to exercise control over such Person, and (b) warrants, options or other
securities, evidences of indebtedness or other obligations of a Person that are, directly or
indirectly, convertible into or exercisable or exchangeable for securities of or other interest in
such Person as described in clause (a) of this definition.
“Cause” shall mean the Executive’s: (i) dishonesty of a material nature with respect
to the Company (including, but not limited to, theft or embezzlement of the Company’s or any of its
Subsidiaries’ funds or assets); (ii) conviction of, or guilty plea or no contest plea, to a felony
charge or any misdemeanor involving moral turpitude, or the entry of a consent decree with any
governmental body; (iii) noncompliance in any material respect with any laws or regulations,
foreign or domestic, affecting the operation of the Company’s or any of its Subsidiaries’ business,
if such noncompliance is likely to have a material adverse effect on the Company or any of its
Subsidiaries; (iv) violation of any express direction or any rule, regulation or policy established
by the Board that is consistent with the terms of this Agreement, which violation, if reasonably
susceptible to cure, is not cured within ten (10) days of written notice thereof from the Board,
and if such violation is likely to have a material adverse effect on the Company or any of its
Subsidiaries; (v) material breach of this Agreement, which breach, if reasonably susceptible to
cure, is not cured within ten (10) days of written notice thereof from the Board or material breach
of the Executive’s fiduciary duties to the Company or any of its Subsidiaries; or (vi) gross
incompetence, gross neglect, or gross misconduct in the performance of the Executive’s duties.
“Executive Common Units” has the meaning specified in the Preamble to this Agreement.
“Executive Preferred Units” has the meaning specified in the Preamble to this
Agreement.
“Executive Units” means, collectively, the Executive Common Units issued hereunder
the Executive Preferred Units issued pursuant to Section 4.1(d) of the LLC Agreement, in each
case, subject to the restrictions set forth herein, whether such Executive Common Units and/or
Executive Preferred Units are Vested Units or Unvested Units.
“Fair Market Value” has the meaning specified in Section 5.2(a) of this Agreement.
“Founder Common Investors” means Bear Investments, LLLP and the Executive.
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“Founder Investors” means collectively, the Founder Common Investors and the Founder
Preferred Investor, and each, a “Founder Investor”.
“Founder Party” has the meaning set forth in Section 8.1 of the
Agreement.
“Founder Preferred Investor” means Bear Equity, LLC.
“Founder Vesting Requirements” means those vesting requirements described in Section
3.1(b) of this Agreement.
“Institutional Investors” means, collectively, Columbia Capital Equity Partners IV
(QP), L.P., Columbia Capital Equity Partners IV (QPCO), L.P., Columbia Capital Employee Investors
IV, L.P., M/C Venture Partners VI, L.P., M/C Venture Investors, LLC, Oak Investment Partners XII,
L.P., Battery Ventures VII, L.P., Battery Investment Partners VII, LLC, Centennial Ventures VII,
L.P. and Centennial Entrepreneurs Fund VII, L.P.
“Investment Performance Vesting Requirements” means those vesting requirements
described in Section 3.1(a) of this Agreement.
“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement,
dated as of May 22, 2007, among the Company and the persons named on Schedule A thereto, as
amended from time to time.
“Noncompetition and Nonsolicitation Agreement” means the Noncompetition and
Nonsolicitation Agreement, dated as of May 22, 2007, between the Company and the Executive.
“Nondisclosure and Developments Agreement” means the Nondisclosure and Developments
Agreement, dated as of May 22, 2007, between the Company and the Executive.
“Person” includes any individual, corporation, association, partnership (general or
limited), joint venture, trust, estate, limited liability company, or other legal entity or
organization.
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of
May 22, 2007, among the Company and the persons listed on Schedule A thereto.
“Related Agreements” means the LLC Agreement, the Registration Rights Agreement, the
Stock Purchase Agreement, the Noncompetition and Nonsolicitation Agreement and the Nondisclosure
and Developments Agreement.
“Sale of the Company” has the meaning set forth in the LLC Agreement.
“Seller” has the meaning specified in Section 5.1 of this Agreement.
“Seller’s Units” has the meaning specified in Section 5.1 of this
Agreement.
-3-
“Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of
May 22, 2007, among the Company and the purchasers named on Schedule 2.1 thereto.
“Subsidiary(ies)” means any Person the majority of the Capital Securities of which,
directly, or indirectly through one or more other Persons, (a) the Company has the right to acquire
or (b) is owned or controlled by the Company. As used in this definition, “control,”
including, its correlative meanings, “controlled by” and “under common control
with,” shall mean possession of power to direct or cause the direction of management or
policies (whether through ownership of Capital Securities or partnership or other ownership
interests, by contract or otherwise).
“Termination Date” means the date the Executive’s employment is terminated, whether
by the Executive or the Company or any of its Subsidiaries.
“Unvested Units” means, at any time, Executive Units that are subject to any vesting,
forfeiture or similar arrangement under this Agreement.
“Vesting Start Date” means October 1, 2006.
“Vested Units” means, at any time, Executive Units that are no longer subject to any
vesting, forfeiture or similar arrangement under this Agreement.
ARTICLE 2
PURCHASE OF EXECUTIVE COMMON
UNITS
2.1 Immediate Issuance. In consideration of the services to be performed by Executive
for the Company or any of its Subsidiaries, the Company hereby issues to the Founder Common
Investors, and the Founder Common Investors hereby accept from the Company, the Executive Common
Units such that Bear Investments, LLLP shall receive seventy-five percent (75%) of the Executive
Common Units and the Executive shall receive twenty-five percent of the Executive Common Units
upon the terms and conditions set forth in this Agreement. The Founder Common Investors shall hold
such Executive Common Units and Founder Preferred Investor shall hold the Executive Preferred
Units, in each case, subject to this Agreement and to the LLC Agreement. In consideration of the
services to be performed by the Executive for the Company, the Company has issued to the Founder
Preferred Investor the Executive Preferred Units pursuant to Section 4.1(d) of the LLC Agreement.
The Executive Common Units are intended to be treated as a profits interest for federal income tax
purposes pursuant to Revenue Procedures 93-27 and 2001-43.
ARTICLE 3
VESTING
-4-
3.1 Executive Preferred Units. The Executive Preferred Units shall vest only to the
extent that both of the vesting requirements set forth in both Sections 3.1 (a) and (b) below are
met.
(a) Investment Performance Vesting Requirements. 0.95238% of the
Executive Preferred Units shall vest upon the date that the Aggregate Investment Amount
reaches twenty million dollars ($20,000,000.00). An additional 0.95238% of the Executive
Preferred Units shall vest for each additional one million dollars ($1,000,000.00) by which
the Aggregate Investment Amount exceeds twenty million dollars ($20,000,000.00).
(b) Founder Vesting Requirements.
| (i) | In the event the Executive’s employment with the Company or any of its Subsidiaries is terminated voluntarily by the Executive: |
| (A) | prior to the 24th month following the Vesting Start Date, all of the Executive Preferred Units shall be forfeited in accordance with Section 3.4 of this Agreement; | ||
| (B) | on or after the 24th month but prior to the 30th month following the Vesting Start Date, the Founder Preferred Investor shall vest into 10% of the Executive Preferred Units; | ||
| (C) | on or after the 30th month but prior to the 36th month following the Vesting Start Date, the Founder Preferred Investor shall vest into 20% of the Executive Preferred Units; | ||
| (D) | on or after the 36th month but prior to the 42nd month following the Vesting Start Date, the Founder Preferred Investor shall vest into 30% of the Executive Preferred Units; | ||
| (E) | on or after the 42nd month but prior to the 48th month following the Vesting Start Date, the Founder Preferred Investor shall vest into 40% of the Executive Preferred Units; or | ||
| (F) | on or after the 48th month following the Vesting Start Date, the Founder Preferred Investor shall vest into 100% of the Executive Preferred Units. |
| (ii) | In the event the Executive’s employment with the Company is terminated by the Company or any of its Subsidiaries for any reason other than for Cause, including by reason of death or disability, the Founder Preferred Investor shall vest into 25% of the Executive Preferred Units as of the Termination Date. If the Termination Date occurs after the first anniversary of the Vesting Start Date, the Founder Preferred Investor shall vest into an additional 2.08333% of the Executive Preferred Units for each month that has elapsed between the first anniversary of the Vesting Start Date and the Termination Date. |
-5-
| (iii) | In the event the Executive’s employment is terminated by the Company or any of its Subsidiaries for Cause, all the Executive Preferred Units shall be forfeited in accordance with Section 3.4 of this Agreement. |
3.2 Executive Common Units. The Founder Common Investors, on a pro rata basis
and in the aggregate, shall vest into 2.0833% of the Executive Common Units for each month
that has elapsed after the Vesting Start Date, provided that the Founder Common Investors will
cease to vest into any Executive Common Units upon the termination of Executive’s
employment with the Company or any of its Subsidiaries. Notwithstanding the foregoing, in the
event the Executive’s employment with the Company or any of its Subsidiaries is terminated for
Cause or if the Executive voluntarily terminates his employment with the Company or any of its
Subsidiaries prior to the first anniversary of the Vesting Start Date, the Executive Common
Units
shall be forfeited in accordance with Section 3.4 of this Agreement.
3.3 Sale of the Company. Notwithstanding anything in this Article 3, upon the
consummation of a Sale of the Company, provided that the Executive is employed by the
Company or any of its Subsidiaries on the date of such Sale of the Company:
(a) which occurs on or prior to the third anniversary of the date of the
Securities Purchase Agreement, if such Sale of the Company results in cumulative cash
distributions (excluding Tax Distributions) or distributions of property other than
cash
(based upon the fair market value of such property determined by the Board after taking
into account appropriate discounts, including without limitation, discounts
attributable to
control, minority interest and illiquidity) to the Institutional Investors in an amount
equal
to at least two times the aggregate Capital Contributions of the Institutional
Investors,
then the Founder Preferred Investor shall vest into 100% of the Executive Preferred
Units;
(b) which occurs after the third anniversary of the date of the Securities
Purchase Agreement, then the Founder Preferred Investor shall vest into that number of
Executive Preferred Units that the Founder Preferred Investor would vest into under the
Investment Performance Vesting Requirements;
(c) the Founder Common Investors shall vest into 100% of the Executive
Common Units.
3.4 Forfeiture Upon Failure to Vest. Any Executive Units which could have vested as
of any vesting date under Sections 3.1, 3.2 or 3.3 of this Agreement, but that do not vest as
of
such vesting date shall thereupon be deemed for all purposes to have been forfeited and to
have
been surrendered to the Company without the need for any payment to the Executive or any
action by the Company or any other Person; provided that any distributions with respect to
such
forfeited Executive Common Units that have been held back shall be treated in accordance with
Section 4.1(b) of the LLC Agreement.
ARTICLE 4
RESTRICTIONS ON TRANSFER OF UNITS
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Except for any Transfers permitted in the LLC Agreement or other agreement entered into in
connection herewith or therewith, the Executive shall not transfer any Executive Units.
ARTICLE 5
REPURCHASE RIGHTS
5.1 Right to Repurchase.
(a) Upon the occurrence of any breach of this Agreement or any Related
Agreement by the Executive, the Founder Common Investors or Founder Preferred Investor
(collectively, the “Founder Parties” and each a “Founder Party”), the Company
or its designees
(collectively, the “Buyer”) shall have the right (in addition to exercising any
rights or remedies
available to the Company at law or in equity against such Founder Party) to purchase from the
Founder Investors and their transferees (collectively, the “Seller”), free and clear
of all liens and
encumbrances other than pledges to secure obligations of the Company or any Subsidiary
(“Liens”), any or all Vested Units held by the Seller (collectively referred to herein
as the
“Seller’s Units”), for a purchase price equal to Fair Market Value (defined below)
(the “Purchase Price”) and in accordance with the terms specified below (the “Repurchase
Rights”).
(b) The Repurchase Rights shall be exercisable at any time by written notice
from the Buyer to the Seller (the “Purchase Notice”).
5.2
Closing of Sale.
(a) In the event that the Repurchase Right is exercised at
the time of a Sale of the Company or other arms length third party transaction involving a
valuation of the assets or securities of the Company and its Subsidiaries, for purposes of this
Agreement, the “Fair Market Value” of each Executive Unit shall mean (i) the total consideration
that would be received by a holder of such Executive Unit in such Sale of the Company or (ii)
deemed price per Executive Unit based upon the valuation of the assets or securities of the Company
and its Subsidiaries in any other arms length third party transaction. In any other cases, for
purposes of this Agreement, “Fair Market Value” of any Executive Unit shall mean the total
consideration that would be received by a holder of such Executive Unit (without any premium or
discount attributable to control, minority interest or lack of liquidity for less than all
Executive Units) upon the sale, as of the date of the Purchase Notice, of all the Company’s issued
and outstanding Capital Securities in a single transaction or series of related transactions to a
buyer willing to pay the highest purchase price that would be received in a sale conducted by a
nationally recognized investment banking firm, which buyer is under no compulsion to buy and the
holders of such equity securities are under no compulsion to sell, all parties having reasonable
knowledge of all relevant facts, with no minority interest discount being applied and no other
discount being applied for any other reason. The Fair Market Value of the Executive Units shall be
that which is negotiated by the Company and the Seller. If the Company and the Seller fail to agree
on the Fair market Value within thirty (30) days of the date of the Purchase Notice, then the
Company and the Seller shall attempt to agree upon an appraiser to determine the Fair Market Value,
which such appraiser shall make such determination within thirty (30) days of the date of such
person’s engagement, and such determination shall govern. If
-7-
the Company and the Seller do not, within such 10 day period, agree as to a single appraiser, or
if the appraiser appointed as provided above fails to determine such Fair Market Value within
thirty (30) days of the date of such person’s engagement, then each of the Company and the Seller,
by notice to the other, shall appoint one appraiser. If either the Company or the Seller shall
fail to appoint such an appraiser within ten (10) days after the lapse of such 10 or 30 day
period, as applicable, then the appraiser appointed by the party that does so appoint an Appraiser
shall make the determination of such Fair Market Value and such determination shall govern. If two
appraisers are appointed and they agree upon such Fair Market Value, their joint determination
shall govern. If said two appraisers fail to reach agreement within thirty (30) days after the
appointment of the last appraiser to be appointed, the two appraisers selected shall promptly
select a nationally recognized investment banking firm to the be the third appraiser. Such third
appraiser shall, within fifteen (15) days following such appraiser’s appointment, select one of
the two other appraisals as constituting Fair Market Value. All decisions of the appraiser(s)
shall be rendered in writing and shall be signed by the appraiser(s). The Fair Market Value
determined as herein provided shall be conclusive, final and binding on the parties and shall be
enforceable in any court having jurisdiction over a proceeding brought
to seek such enforcement.
The cost of the Fair Market Value determination shall be borne by the Company.
(b) The consummation of any purchase and sale of the Seller’s Units under this Section 5.2
shall, unless otherwise agreed in writing by the parties to such transaction, shall occur on the
thirtieth (30th) day following the date of the Fair Market Value is determined, or such earlier
date as Buyer shall specify. The Purchase Price to be paid for the Seller’s Units to be purchased
and sold pursuant to this Section 5 shall be paid in immediately available funds. Upon tender of
payment of the Purchase Price for the Seller’s Units being purchased as provided above, thereupon
and without any further action on the part of any person being necessary, all right, title and
interest in and to the Seller’s Units being purchased shall thereupon pass to the Buyer. Without
limitation of the foregoing, the parties and their transferees shall execute and deliver such
certificates and other documents and take such further action as the Buyer may reasonably request
in order to further evidence the purchase and sale of the Seller’s Units as contemplated hereby.
ARTICLE 6
MISCELLANEOUS
6.1 Tax Issues.
(a) THE ISSUANCE OF THE EXECUTIVE COMMON UNITS TO THE FOUNDER COMMON INVESTORS FOR THE BENEFIT
OF THE EXECUTIVE PURSUANT TO THIS AGREEMENT INVOLVES COMPLEX AND SUBSTANTIAL TAX CONSIDERATIONS,
INCLUDING, WITHOUT LIMITATION, CONSIDERATION OF THE ADVISABILITY OF THE EXECUTIVE MAKING AN
ELECTION UNDER SECTION 83(B) OF THE INTERNAL REVENUE CODE. THE EXECUTIVE HAS CONSULTED EXECUTIVE’S
OWN TAX ADVISOR WITH RESPECT TO THE TRANSACTIONS DESCRIBED IN THIS AGREEMENT. THE COMPANY MAKES NO
WARRANTIES OR REPRESENTATIONS WHATSOEVER TO THE EXECUTIVE OR THE FOUNDER COMMON INVESTORS REGARDING
THE TAX CONSEQUENCES OF THE FOUNDER
-8-
COMMON
INVESTORS’ PURCHASE OF THE EXECUTIVE UNITS OR THIS AGREEMENT.
(b) If the Executive elects, in accordance with Section 83(b) of the Code, to recognize
ordinary income in the year of acquisition of the Executive Common Units, the Company may require
at the time of such election an additional payment for withholding tax purposes based on the
difference, if any, between the purchase price for such Executive Common Units and the fair market
value of such Executive Common Units as of the date of the acquisition of such Executive Common
Units by the Founder Common Investors.
6.2 Employment of the Executive. The Executive acknowledges that he or she is an
employee at will. The Executive agrees that this Agreement does not create an obligation of
the
Company or any of its Subsidiaries or any other Person to employ the Executive, nor does it
give
rise to any right or expectancy with respect thereto.
6.3
Transferees. Each and every permitted transferee or assignee of Executive Units
from each of the Founder Investors shall be bound by and subject to all the terms and
conditions
of this Agreement and the LLC Agreement on the same basis as such Founder Investor is bound.
So long as this Agreement is in effect, no Transfer of any Executive Units shall be effective
unless such Transfer is made pursuant to the terms of the LLC Agreement and the transferee
agrees in writing to be bound by, and subject to, the provisions of this Agreement upon the
same
terms applicable to the transferors and to ensure that such transferees’ transferees shall be
likewise bound.
6.4 Effect of Prohibited Transfer. If any Transfer of Executive Units is made contrary
to the terms of this Agreement or the LLC Agreement, such Transfer shall be null and void. In
addition to any other legal or equitable remedies it may have, the Company may enforce its
rights to specific performance to the extent permitted by law and may exercise such other
equitable remedies then available to it. The Company may refuse for any purpose to recognize
any transferee who receives Executive Units contrary to the provisions of this Agreement or
the
LLC Agreement as a member of the Company.
6.5 Securities Laws Restrictions on Resale; Representations of the Executive and
Founder Investors.
(a) Until registered under the applicable Securities Laws, the Executive Units will be of an
illiquid nature and will be deemed to be “restricted securities” for purposes of the Securities
Laws. Accordingly, such Executive Units must be sold in compliance with the registration
requirements of the applicable Securities Laws or an exemption there from. Unless the Executive
Units have been registered under the applicable Securities Laws, any certificate evidencing any of
the Executive Units shall bear a legend substantially as follows:
THE UNITS HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE OR OTHER JURISDICTION
AND MAY NOT BE OFFERED OR SOLD UNLESS THEY HAVE BEEN REGISTERED UNDER SUCH ACT AND
THE APPLICABLE SECURITIES
-9-
OR BLUE SKY LAWS OF ANY SUCH STATE OR OTHER JURISDICTION OR UNLESS AN EXEMPTION
FROM REGISTRATION IS AVAILABLE, AND THEN ONLY IN COMPLIANCE WITH THE RESTRICTIONS
ON TRANSFER SET FORTH IN THE VESTING AGREEMENT WITH EXECUTIVE AND THE FOUNDER
INVSESTORS AND THE COMPANY’S AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT, A COPY OF WHICH MAY BE OBTAINED FROM THE UNDERSIGNED AT ITS PRINCIPAL
EXECUTIVE OFFICES LISTED ABOVE.
(b) Each of the Executive and the Founder Investors represents that: (i) the Executive Units
are being acquired solely for investment and not with a view to, or for sale in connection with,
any distribution of the Executive Units nor with any present intention of distributing or selling
such Executive Units; (ii) the Founder Investors have made a detailed inquiry concerning the
Company, its business and services, its officers and its personnel; (iii) the officers of the
Company have made available to the Founder Investors, or as a result of the Executive’s position
with the Company, the Founder Investors have access to, any and all information concerning the
Company which the Founder Investors have requested or deems relevant; (iv) each of the Executive
and the Founder Investors has such knowledge and experience in financial and business matters that
the Executive and the Founder Investors are capable of evaluating the merits and risks of
investment in the Executive Units; (v) each of the Executive and the Founder Investors is an
“accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as
amended, and (vi) each of the Executive and the Founder Investors can bear a complete loss of the
value of the Executive Units and is able to bear the economic risk of holding such Executive Units
for an indefinite period.
6.6 Remedies.
(a) The rights and remedies provided by this Agreement are cumulative and
the use of any one right or remedy by any party shall not preclude or waive its right to use
any or
all other remedies. Said rights and remedies are given in addition to any other rights the
parties
may have at law or in equity.
(b) Without limitation of the foregoing, the parties hereto agree that
irreparable harm would occur in the event that any of the agreements and provisions of this
Agreement were not performed fully by the parties hereto in accordance with their specific
terms
or were otherwise breached, and that money damages are an inadequate remedy for breach of the
Agreement because of the difficulty of ascertaining and quantifying the amount of damage that
will be suffered by the parties hereto in the event that this Agreement is not performed in
accordance with its term or is otherwise breached. It is accordingly hereby agreed that the
parties hereto shall be entitled to an injunction or injunctions to restrain, enjoin and
prevent
breaches of this Agreement, such remedy being in addition to and not in lieu of, any other
rights
and remedies to which the other parties are entitled to at law or in equity.
(c) Except where a time period is otherwise specified, no delay on the part of
any party in the exercise of any right, power, privilege or remedy hereunder shall operate as
a
waiver thereof, nor shall any exercise or partial exercise of any such right, power, privilege
or
-10-
remedy preclude any further exercise thereof or the exercise of any right, power, privilege or
remedy.
6.7 Waivers and Amendments. The rights and obligations of the Company and the
rights and obligations of the Executive and/or the Founder Investors under this Agreement may
be waived (either generally or in a particular instance, either retroactively or
prospectively, and
either for a specified period of time or indefinitely) or amended only with the written
consent of
the Executive, the Founder Investors and the Company, as approved by the Board.
6.8 Governing Law. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware (without giving effect to any conflicts
or
choice of law provisions thereof that would cause the application of the domestic substantive
laws of any other jurisdiction).
6.9 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) EACH OF THE PARTIES HERETO CONSENTS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AS
WELL AS TO THE JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE
TAKEN FROM SUCH COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY RELATED AGREEMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
(b) EACH PARTY EXPRESSLY WAIVES ANY AND ALL RIGHTS
TO BRING ANY SUIT, ACTION OR OTHER PROCEEDING IN OR BEFORE ANY COURT
OR TRIBUNAL, OTHER THAN THE COURTS DESCRIBED ABOVE AND COVENANTS
THAT IT SHALL NOT SEEK IN ANY MANNER TO RESOLVE ANY DISPUTE OTHER
THAN AS SET FORTH IN THIS SECTION 6.9 OR TO CHALLENGE OR SET ASIDE ANY
DECISION, AWARD OR JUDGMENT OBTAINED IN ACCORDANCE WITH THE
PROVISIONS HEREOF.
(c) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY
WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE TO VENUE, INCLUDING,
WITHOUT LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH
COURTS. IN ADDITION, EACH OF THE PARTIES CONSENTS TO THE SERVICE OF
PROCESS BY PERSONAL SERVICE OR ANY MANNER IN WHICH NOTICES MAY BE
DELIVERED HEREUNDER IN ACCORDANCE WITH SECTION 6.14 OF THIS
AGREEMENT. EACH OF THE PARTIES HERETO HEREBY VOLUNTARILY AND
IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR
OTHER PROCEEDING BROUGHT IN CONNECTION WITH OR ANY MATTER ARISING
UNDER, OUT OF OR RELATING TO THIS AGREEMENT, THE RELATED
AGREEMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
-11-
6.10 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the permitted
successors,
assigns, heirs, executors and administrators of the parties hereto.
6.11 Adjustments. If there shall be any change in the Capital Securities of the
Company through merger, consolidation, reorganization, recapitalization, equity distribution,
division or multiplication of Units, exchange of Units, or the like (any such event being an
“Adjustment”), all the terms and provisions of this Agreement shall be appropriately
construed to
give proportionate effect to any new, additional, or different Units or securities issued or
exchanged for or in respect of the Executive Units as a result of such Adjustment.
6.12 Entire Agreement. This Agreement constitutes the full and entire understanding
and agreement of the parties with regard to the subjects hereof and supersedes in their
entirety all
other prior agreements, whether oral or written, with respect thereto.
6.13 Notices. All demands, notices, requests, consents and other communications
required or permitted under this Agreement shall be in writing and shall be personally
delivered
or sent by facsimile machine (with a confirmation copy sent by one of the other methods
authorized in this Section), reputable commercial overnight delivery service (including FedEx
and U.S. Postal Service overnight delivery service) or, deposited with the U.S. Postal Service
mailed first class, registered or certified mail, postage prepaid, as set forth below:
If to the Company, addressed to:
Communications Infrastructure Investments, LLC
000 Xxxxxx Xxxxxx, Xxxxx xx
Xxxxxxxxxx, XX 00000
Attention: Board of Managers
000 Xxxxxx Xxxxxx, Xxxxx xx
Xxxxxxxxxx, XX 00000
Attention: Board of Managers
with a copy to:
Xxxxxxx, Xxxxxx & Xxxxxxx, PC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
If to the Executive or the Founder Investors, to the address specified on the Schedule
B hereto.
Notices shall be deemed given upon the earlier to occur of (i) receipt by the party to whom such
notice is directed; (ii) if sent by facsimile machine, on the day (other than a Saturday, Sunday or
legal holiday in the jurisdiction to which such notice is directed) such notice is sent if sent (as
evidenced by the facsimile confirmed receipt) prior to 5:00 p.m. Eastern Time and, if sent after
5:00 p.m. Eastern Time, on the day (other than a Saturday, Sunday or legal holiday in the
jurisdiction to which such notice is directed) after which such notice is sent; (iii) on the first
business day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which such
notice is directed) following the day the same is deposited with the commercial courier if sent by
-12-
commercial overnight delivery service; or (iv) the fifth day (other than a Saturday, Sunday or
legal holiday in the jurisdiction to which such notice is directed) following deposit thereof with
the U.S. Postal Service as aforesaid. Each party, by notice duly given in accordance therewith may
specify a different address for the giving of any notice hereunder.
6.17 No Third Party Beneficiaries. There are no third party beneficiaries of this
Agreement.
6.17 Duration. These restrictions on the Units that are set forth in this Agreement
shall terminate upon the Company’s initial public offering (it being understood that the
termination of restrictions on the Executive Units shall not result in the forfeiture of any
Executive Units either vested or unvested then held by Executive at the time of the Company’s
initial public offering).
6.17 Securities Act Exemption. The Company and the Executive agree that this
Agreement constitutes “a written compensatory benefit plan” or “a written compensation contract”
of the Executive within the meaning of Rule 701 under the U.S. Securities Act of 1933.
6.17 Severability; Titles and Subtitles; Gender; Singular and Plural;
Counterparts.
(a) In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
(b) The titles of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this Agreement.
(c) The use of any gender in this Agreement shall be deemed to include the
other genders, and the use of the singular in this Agreement shall be deemed to include the
plural
(and vice versa), wherever appropriate.
(d) This Agreement may be executed in any number of counterparts, and by
the different parties hereto on separate counterparts hereof, each of which shall be an
original,
and all of which together shall constitute one instrument.
(e) Counterparts of this Agreement (or applicable signature pages hereof) that
are manually signed and delivered by facsimile transmission shall be deemed to constitute
signed
original counterparts hereof and shall bind the parties signing and delivering in such manner.
[Signature page follows]
-13-
IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of
the day and year first written above.
| COMPANY: Communications Infrastructure Investments, LLC |
||||
| By: | /s/ Xxxxx X. Beer | |||
| Name: | XXXXX X. BEER | |||
| Title: | GENERAL COUNSEL | |||
| EXECUTIVE: |
||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| (signature) | ||||
| Xxxxxx X. Xxxxxx | ||||
| FOUNDER INVESTOR Bear Investments, LLLP |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | ||||
| General Partner | ||||
| Bear Equity, LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx | ||||
| Manager | ||||
| /s/ Xxxxxx X. Xxxxxx | ||||
| Xxxxxx X. Xxxxxx, individually | ||||
[Signature Page to Xxxxxx Vesting Agreement]
Schedule A
Common Units
| Entity | Number of Common Units | |||
Issued as of December 31, 2007: |
||||
Bear Investments, LLLP |
7,470,834 | |||
Xxx Xxxxxx |
2,490,277 | |||
Total Units |
9,961,111 | |||
Schedule B
Addresses for Notice Purposes
