SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "AGREEMENT"), dated as of December
31, 1998, by and among WorldPort Communications, Inc., a Delaware corporation
(the "CORPORATION"), The Heico Companies, LLC (the "INVESTOR") and Maroon Bells
Capital Partners, Inc. ("MBCP"), Xxxx X. Xxxxx ("XXXXX"), Xxxxxxx X. Xxxxxxx
("XXXXXXX") and Xxxxxxxx X. Xxxxxxxxx ("XXXXXXXXX").
RECITALS
A. The Investor has agreed to purchase shares of Series C Convertible
Preferred Stock of the Corporation pursuant to that certain Series C Preferred
Stock Purchase Agreement dated of even date herewith (as amended, modified,
supplemented or restated from time to time, to the "PURCHASE AGREEMENT")
provided that the parties hereto enter into this Agreement.
B. The Investor will not purchase the Series C Preferred Shares unless
it can protect its investment by obtaining the voting and other rights contained
herein.
C. The Corporation and the MBCP Group deem it desirable to enter into
this Agreement in order to induce the Investor to purchase the Series C
Preferred Shares.
AGREEMENTS
In consideration of the recitals and the mutual promises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. DEFINITIONS. As used in this Agreement:
"AFFILIATE" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. The term "control" (including, with correlative meanings, the terms
"controlling," "controlled by," and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of 50% or more of the
voting power (or in the case of a Person which is not a corporation, 50% or more
of the ownership interest, beneficial or otherwise) of such Person, or the
ability to otherwise direct or cause the direction of the management and
policies of that Person, whether through voting power, by contract or otherwise.
A Person will not be deemed to be an Affiliate of any other Person solely
because such Person was designated by that Person to be elected a director of
the Corporation pursuant to SECTION 3 hereof. For purposes of this paragraph,
"voting power" of any Person means the total number of votes which may be cast
by the holders of the total number of outstanding shares of stock of any class
or classes of such Person in any election of directors of such Person. All of
the Corporation's Executive Officers and directors and any Family Member of any
Executive Officer or director, and any Affiliate of such Executive Officer,
director or individual, shall be deemed to be Affiliates of the Corporation for
purposes of this Agreement.
"ANDERLIT" means Anderlit Ltd.
"ANDERLIT PROXY" means that certain proxy pursuant to which
Xxxx Xxxxx is given the right to vote all 746,269 of Anderlit's shares of Series
B Preferred Stock.
"BT LOAN" means the loans made to WorldPort International,
Inc. ("WPI") pursuant to the Credit Agreement.
"CERTIFICATE OF DESIGNATIONS" means the Corporation's
Certificate of Designations, Preferences and Rights of Series C Convertible
Preferred Stock.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Common Stock of the Corporation,
$.0001 par value per share.
"CREDIT AGREEMENT" means that certain Credit Agreement dated
June 23, 1998 by and among the Corporation, WPI, Bankers Trust Company, as
Administrative Agent and the financial institutions party thereto as lenders.
"DISCHARGED" means the payment in full, discharge or
satisfaction of the BT Loan; PROVIDED that a refinancing of the BT Loan with any
Indebtedness that does not constitute a Qualified Refinancing Loan shall not be
considered a Discharge of the BT Loan.
"EXECUTIVE OFFICERS" means, with respect to any corporation,
its executive officers as that term is defined in Rule 3b-7 of the regulations
promulgated under the Exchange Act.
"FAMILY MEMBER" means an individual's spouse, parents,
children, siblings, mothers-in-law, fathers-in-law, sons-in-law,
daughters-in-law, brothers-in-law and sisters-in-law.
"GAAP" means generally accepted accounting principles,
consistently applied.
"HOLDER" means any holder (or deemed holder) of Preferred
Shares who is a party to this Agreement or is a successor or assign or
subsequent holder contemplated by SECTION 10 hereof.
"INDEBTEDNESS" of any Person shall mean the principal of,
premium, if any, and unpaid interest on (a) indebtedness for money borrowed from
others; (b) indebtedness guaranteed, directly or indirectly, in any manner by
such Person, or in effect guaranteed, directly or indirectly, in any manner by
such Person through an agreement, contingent or otherwise, to supply funds to,
or in any other manner invest in, the debtor, or to purchase indebtedness, or to
purchase and pay for property if not delivered or pay for services if not
performed, primarily for the purpose of enabling the debtor to make payment of
the indebtedness or to assure the owners of the indebtedness against loss; (c)
all indebtedness secured by any mortgage, lien, pledge, charge or other
encumbrance upon property owned by such Person, even though such Person has not
in any manner become liable for the payment of such indebtedness; (d) all
indebtedness of such Person created or arising under any conditional sale, lease
(intended primarily as a financing device) or other title retention or security
agreement with respect to property acquired by such Person even though the
rights and remedies of the seller, lessor or lender under such agreement or
lease in the event of default may be limited to repossession or sale of such
property; and (e) renewals, extensions and refunding of any such indebtedness.
"INVESTOR DIRECTORS" means the members of the board of
directors of the Corporation and each Subsidiary who are designated solely by
the holders of the Series C Preferred Shares.
"MBCP GROUP" means MBCP, Xxxxx, Xxxxxxx and Xxxxxxxxx.
MANAGEMENT GROUP" means the MBCP Group, all Executive Officers
and directors of the Corporation or any Subsidiary, all consultants to the
Corporation or any Subsidiary, and any Person who has an employment agreement or
arrangement with the Corporation or any Subsidiary that cannot be terminated at
will by the Corporation or the Subsidiary (without such termination constituting
a breach or violation of contract or otherwise being unlawful).
"PERSON" means a natural person, a partnership, a corporation,
an association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a governmental
entity or any department, agency or political subdivision thereof.
"PREFERRED SHARES" means the Series B Preferred Shares and the
Series C Preferred Shares.
"QUALIFIED REFINANCING LOAN" means a loan to the Corporation,
the maturity date of which is more than two (2) years from the date the loan
proceeds are advanced and the proceeds of which are used to repay the BT Loan
(or a prior refinancing of the BT Loan).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERIES B PREFERRED SHARES" means those shares of Series B
Convertible Preferred Stock of the Corporation, $.0001 par value per share.
"SERIES C PREFERRED SHARES" means those shares of Series C
Convertible Preferred Stock of the Corporation, $.0001 par value per share, of
the Corporation duly issued and outstanding on the date hereof.
"SUBSIDIARY" means any corporation, partnership, association
or other business entity of which securities or other ownership interests
representing more than fifty percent (50%) of the ordinary voting power or
equity are, at the time as of which such determination is being made, owned or
controlled by the Corporation or by the Corporation and one or more Subsidiaries
of the Corporation.
2. VOTING AGREEMENTS.
(a) Each member of the MBCP Group agrees that, without the
prior written consent of the Investor, he or it shall not vote, or give his or
its consent with respect to, his or its Series B Preferred Shares (or any Series
B Preferred Shares with respect to which he or it controls the vote, including
but not limited to the shares that Xxxxx is entitled to vote pursuant to the
Anderlit Proxy), in favor of any of the following:
(i) Any proposed financings or refinancings by the
Corporation or any Subsidiary, including but not limited to financing through
the issuance of indebtedness, reimbursement obligations with respect to letters
of credit, bankers' acceptances and surety bonds, any obligation evidenced by a
note, bond, debenture or similar instrument, and any indebtedness secured by a
lien or security interest in any property of the Corporation or any Subsidiary
(collectively "DEBT FINANCINGS");
(ii) Any proposed financing by the issuance or sale
of equity interests (or any security or interest that is convertible into or
exchangeable for equity interests) in the Corporation or any Subsidiary ("EQUITY
FINANCINGS") (collectively Debt Financings and Equity Financings are referred to
as "FINANCINGS");
(iii) Any hiring or firing of, or change in the
compensation or benefits payable to,
any of the Management Group; and
(iv) Any acquisition of any debt or equity interest
in, investment in, loan to, sale or other disposition of any debt or equity
interest in, or joint venture or partnership arrangement with the Corporation,
any Subsidiary or any other Person, but only to the extent that the
Corporation's (or Subsidiary's) interest in such transaction has a value of at
least $100,000.
(b) Each of the MBCP Group agrees to take all action necessary
in his or its capacity as a stockholder, including, without limitation, the
voting of the Series B Preferred Shares which he or it owns or with respect to
which he or it controls the vote, as directed by the Investor with respect to
the following matters:
(i) The termination of the employment of the chief
executive officer of the Corporation; provided, however, that the provisions of
this clause (i) shall terminate if and when the BT Loan has been Discharged; and
(ii) Any Financing or any disposition of any
Subsidiary or of any property of the Corporation or any property of a Subsidiary
proposed by the Investor or any Investor Director, the proceeds of which will be
used, directly or indirectly, to repay the BT Loan, or any refinancing thereof
(other than a Qualified Refinancing Loan); provided, however, that the
provisions of this clause (ii) shall terminate on the ninetieth (90th) day after
the final maturity date (including all extensions) of the BT Loan if an
Investor's Bridge Transaction (as defined in Section 2(c) below) has not been
completed on or before such date.
(c) The Investor will give written notice (the "TRANSACTION
NOTICE") to the Corporation setting forth the terms of any transaction proposed
by the Investor or an Investor Director pursuant to SECTION 2(B)(II) (an
"INVESTOR'S BRIDGE TRANSACTION"). The MBCP Group shall not be bound by SECTION
2(B)(II) if, and only if, the Corporation arranges, on a timely basis, for an
alternate financing transaction (the "ALTERNATE BRIDGE TRANSACTION") on terms
that are substantially equivalent to, or more favorable to the Corporation than,
the Investor's Bridge Transaction. In order for the MBCP Group to avoid
compliance with Section 2(b)(ii), within five (5) business days after the
Transaction Notice, the Corporation must obtain a bona fide, written commitment
(a "COMMITMENT LETTER") for the Alternate Bridge Transaction, which provides for
funding within thirty-five (35) days after the date of the Transaction Notice.
The Commitment Letter must be subject to no conditions other than those to which
the Investor's Bridge Transaction is subject. If the Corporation or the MBCP
Group delivers such a Commitment Letter to the Investor, the Investor shall have
five (5) business days from the date of its receipt thereof to determine whether
the Alternate Bridge Transaction is on substantially equivalent or better terms
as the Investor's Bridge Transaction. If the Investor determines that the
Alternate Bridge Transaction is not on substantially equivalent or better terms
as the Investor's Bridge Transaction, then the Investor will send written notice
thereof (a "DETERMINATION NOTICE") to the Corporation within such five-day
period. If the Investor fails to send a Determination Notice within such
five-day period, the Investor shall be deemed to have agreed that the Alternate
Bridge Transaction is on substantially equivalent or better terms than the
Investor's Bridge Transaction. Following delivery of a timely Determination
Notice, the parties shall attempt to determine whether the Alternate Bridge
Transaction is on substantially equivalent or better terms as the Investor's
Bridge Transaction (the "DETERMINATION"). If the parties are unable to do so
within three (3) days after delivery of the Determination Notice, within the
next three (3) business days, the parties will select a mutually acceptable
investment banker who shall make the Determination or, if the parties are unable
to agree on an investment banker, the Corporation shall choose an investment
banker, the Investor shall choose an investment banker and the parties shall
direct the two investment bankers to promptly select a third investment banker,
who shall make the Determination. The Determination of the investment banker
selected in accordance with this paragraph shall be final and binding on the
parties. The fees and expenses of the investment banker shall be paid by the
Corporation. If the parties or an investment banker makes a Determination that
the Alternate Bridge Transaction was on substantially equivalent or better terms
as the Investor's Bridge Transaction, but the Alternate Bridge Transaction does
not close within thirty-five (35) days after the Transaction Notice, then the
Alternate Bridge Transaction shall be conclusively presumed NOT to be on
substantially equivalent or better terms as the Investor's Bridge Transaction
and the Corporation and the MBCP Group will be bound by SECTION 2(B)(II) with
respect to the proposed Investor's Bridge Transaction.
(d) Each of the MBCP Group shall execute and deliver to the Investor an
Irrevocable Proxy in the form attached hereto as EXHIBIT A. Each of the MBCP
Group agrees that the Irrevocable Proxy is coupled with an interest in the
voting agreements set forth herein.
(e) The Corporation agrees that, if and to the extent that the
Corporation is or becomes entitled to exercise the voting rights associated with
any Series B Preferred Shares owned by any of the MBCP Group (including but not
limited to any voting rights that the Corporation may exercise pursuant to the
pledge agreements between the Corporation and Xxxxx and the Corporation and
Xxxxxxx), the Corporation will be bound by the voting agreements contained in
this Section 2.
3. BOARD OF DIRECTORS.
(a) The Corporation shall take all necessary and desirable
actions within its control (including, without limitation, calling special board
and stockholder meetings), and each of the Holders agrees to take all action
necessary in his capacity as a stockholder, including, without limitation, the
voting of his, her or its Series B Preferred Shares of the Corporation, the
execution of written consents, the calling of special meetings, attendance at
meetings in person or by proxy, the removal of directors, the filling of
vacancies on the Board of Directors, the waiving of notice and the attending of
meetings, so that:
(i) the authorized number of directors on the
Corporation's board of directors (the "BOARD") shall be established at
eight (8) directors, four (4) of whom shall be designated by the
Investor, who shall initially be Xxxxxxx X. Xxxxxxx, Xx., Xxxxxxx
Xxxxxxx, Xxxxx Xxxxxxx Xxxxxxxx and Xxxxx Xxxx;
(ii) the Investor shall have the right to designate
one-half of the board of directors of each of the Corporation's
Subsidiaries (a "SUB BOARD");
(iii) the removal from the Board or a Sub Board of
the Investor Directors shall be only upon the request of the Investor;
and
(iv) in the event that any Investor Director for any
reason ceases to serve as a member of the Board or a Sub Board during
his term of office, the resulting vacancy on the Board or the Sub Board
shall be filled by the Investor.
(b) The Corporation shall pay all out-of-pocket expenses
incurred by each director in connection with attending regular and special
meetings of the Board, any Sub Board and any committee thereof.
(c) At any election of members of the Board or any Sub Board,
the initial Investor Directors identified in SECTION 3(A) above or initially
designated to serve on a Sub Board shall continue to be the designated Investor
Directors unless and until the Investor designates a different representative.
(d) In order to ensure that the Corporation will implement the
acts that the Investor has the right to direct pursuant to SECTION 2(B)(II)
hereof, the resignations of Xxxxx and Xxxxxxx (the "RESIGNING DIRECTORS") as
directors of the Corporation have been executed and delivered to the Investor.
If the BT Loan is not Discharged at or before its maturity date and the Board or
a Sub Board fails or refuses to adopt or approve an Investor's Bridge
Transaction that has been recommended or approved by all of the Investor
Directors, and such failure or refusal is other than as a result of a proposed
Alternate Bridge Transaction that is on substantially equivalent or better terms
as the Investor's Bridge Transaction (as determined in accordance with Section
2(c) hereof), then the Investor may at any time thereafter tender the
resignations to the Corporation, upon which the resignations shall become
effective. If directors are appointed to fill the resulting vacancies, the
Investor shall have the sole and exclusive right to designate and appoint the
new directors (the "REPLACEMENT DIRECTORS") to fill the vacancies, and such
directors will be considered Investor Directors. Following the Corporation's
approval and consummation of the Investor's Bridge Transaction or a Discharge of
the BT Loan, the Investor will take all appropriate actions reasonably requested
by the Corporation to obtain the resignation of the Replacement Directors and to
re-appoint the Resigning Directors to the Corporation's board of directors.
4. DISPOSITION OF PREFERRED SHARES.
(a) No Holder of Series B Preferred Shares will transfer,
sell, convey, exchange or otherwise dispose of (herein referred to as a
"disposition" or "to dispose") such Series B Preferred Shares, except (i) in a
registered public offering under the Securities Act or in a public sale pursuant
to Rule 144 promulgated by the Commission under the Securities Act, (ii) with
the prior written consent of the Investor, (iii) in connection with the
conversion of the Series B Preferred Shares to shares of Common Stock, or (iv)
in compliance with SECTION 5 of this Agreement.
(b) No Holder of Series C Preferred Shares will dispose of
such Series C Preferred Shares, except (i) in a registered public offering under
the Securities Act or in a public sale pursuant to Rule 144 promulgated by the
Commission under the Securities Act, (ii) with the prior written consent of the
Holders of a majority of the Series B Preferred Shares held by the MBCP Group,
(iii) in connection with the conversion of the Series C Preferred Shares to
shares of Common Stock, or (iv) in compliance with SECTION 5 of this Agreement.
5. PERMITTED TRANSFERS. Any Holder of Preferred Shares may transfer
such Preferred Shares, without complying with SECTION 4, to Permitted
Transferees; provided, however, that a Permitted Transferee of a Holder of
Series B Preferred Shares must consent in a writing delivered to the Corporation
to become a member of the MBCP Group and to be bound by the terms of this
Agreement as a member of the MBCP Group. With respect to any Holder of Preferred
Shares, "PERMITTED TRANSFEREES" means another member of the MBCP Group, the
spouse or lineal descendants of such Holder, any trust for the benefit of such
Holder or the benefit of the spouse or lineal descendants of such Holder, any
Affiliate of such Holder, and the personal representative of such Holder upon
such Holder's death for purposes of administration of such Holder's estate or
upon such Holder's incompetency for purposes of the protection and management of
the assets of such Holder.
6. LEGEND.
(a) The Corporation will stamp or imprint each certificate or
other instrument representing Preferred Shares now owned or hereafter acquired
by the Holders, throughout the term of this Agreement, with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN PROVISIONS, INCLUDING, AMONG OTHERS, RESTRICTIONS ON
VOTING AND TRANSFERS SET FORTH IN A CERTAIN SHAREHOLDER
AGREEMENT DATED AS OF DECEMBER 31, 1998, A COPY OF WHICH IS
AVAILABLE AT THE OFFICE OF THIS COPORATION."
(b) The Corporation will stamp or imprint each certificate or
other instrument representing Series B Preferred Stock now owned or hereafter
acquired by any of the MBCP Group, throughout the term of this Agreement, with a
legend in substantially the following form:
"THE VOTING RIGHTS ASSOCIATED WITH THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO AN IRREVOCABLE PROXY DATED
AS OF DECEMBER 31, 1998, A COPY OF WHICH IS AVAILABLE AT THE
OFFICE OF THIS CORPORATION."
7. REMEDIES. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction for specific performance
or injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
8. NOTICES. Any notices desired, required or permitted to be given
hereunder shall be delivered personally or mailed, certified or registered mail,
return receipt requested, or delivered by overnight courier service, to the
following addresses, or such other addresses as shall be given by notice
delivered hereunder, and shall be deemed to have been given upon delivery, if
delivered personally, three business days after mailing, if mailed, or one
business day after delivery to the overnight courier service, if delivered by
overnight courier service:
If to the Corporation, to:
WorldPort Communications, Inc.
0000 Xxxxxxx Xxxxx Xxxx.
Xxxxxxx, XX 00000
Attn.: Chairman
If to the MBCP Group, to the addresses set forth on the stock record
books of the Corporation.
If to the Investor, to:
The Heico Companies, LLC
00 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxxxx, Xx.
9. AMENDMENTS AND WAIVERS. The provisions of this Agreement may be
amended only upon the written agreement of each of the parties to this
Agreement. Any waiver, permit, consent or approval of any kind or character on
the part of any Holders of any provision or condition of this Agreement must be
made in writing and shall be effective only to the extent specifically set forth
in writing.
10. SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors of the parties hereto, and each
transferee of all or any portion of the Preferred Shares held by the parties
hereto, whether so expressed or not, provided such transferee acquired the
Preferred Shares in compliance with Section 4 hereof. In addition, whether or
not any express assignment has been made, the provisions of this Agreement which
are for the benefit of the Investor or any other Holders of Series C Preferred
Shares are (except for the provisions contained in SECTION 8 above) also for the
benefit of, and enforceable by, subsequent Holders of Series C Preferred Shares,
provided such Holder is a successor of the Investor or such Holder acquired the
Series C Preferred Shares in compliance with Section 4 hereof.
11. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
12. GOVERNING LAW. All questions concerning the construction, validity
and interpretation of, and the performance of the obligations imposed by, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts made and wholly to be performed in
that state.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an
original, and such counterparts together will constitute one instrument.
14. TERMINATION OF THIS AGREEMENT. This Agreement shall terminate upon
the date on which fewer than 30% of the Series C Preferred Shares remain
outstanding.
IN WITNESS WHEREOF, this Shareholder Agreement was executed and
delivered on the date first set forth above.
The Heico Companies, LLC WorldPort Communications, Inc.
By: By:
Its: Its:
Xxxxxxxx X. Xxxxxxxxx Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
