Exhibit 10.28
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT ("Agreement"), dated as of April 5,
2002, by and among Madison River Telephone Company, LLC ("MRTC"),
Coastal Communications, Inc. ("CCI"), Xxxxxx X. Xxxxxx ("X. Xxxxxx"),
G. Xxxxx Xxxxxx ("G Xxxxxx") and The Xxxxxxx X. Xxxxxx Life Trust (the
"Trust," and together with X. Xxxxxx and X. Xxxxxx, the "Xxxxxx
Shareholders").
WHEREAS, the Xxxxxx Shareholders are presently the
beneficial owners of all of the Series A Stock and Series B Stock of
CCI;
WHEREAS, the parties hereto desire to effect the
transactions contemplated hereby upon the terms set forth herein;
NOW THEREFORE, in consideration of the premises, the mutual
promises of the parties hereto and the mutual benefits to be gained by
the performance thereof, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, MRTC, for its
successors and permitted assigns, and the Xxxxxx Shareholders, for
themselves, their heirs, personal representatives and permitted
assigns, hereby agree as follows:
Section 1. MRTC's Representations and Warranties.
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MRTC represents and warrants to each of the Xxxxxx
Shareholders as follows:
(a) Authority. MRTC has the power and authority to
execute, deliver and carry out the terms and provisions of this
Agreement and to consummate the transactions contemplated hereby, and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement.
(b) Enforceability. This Agreement has been duly
executed and delivered by MRTC, and, assuming due and legal, valid
authorization, execution and delivery hereof by each of the Xxxxxx
Shareholders, constitutes a legal, valid and binding obligation of
MRTC, enforceable against MRTC in accordance with its terms.
(c) Madison River LTD Funding Corp. Consent.
Pursuant to Section 3.01 of that certain Shareholders Agreement (the
"Shareholders Agreement"), dated as of March 30, 2000, by and among the
Xxxxxx Shareholders, CCI and Madison River LTD Funding Corp. ("MR
Funding"), MR Funding has consented to the transfers of Series A Stock
and Series B Stock of CCI by the Xxxxxx Shareholders as contemplated by
this Agreement. MR Funding has also waived the rights, if any, granted
to MR Funding pursuant to Section 4.01 of the Shareholders Agreement as
such rights would apply to the transactions contemplated by this
Agreement, but for the application of such waiver.
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Section 2. X. Xxxxxx'x Representations and Warranties.
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X. Xxxxxx represents and warrants to MRTC as follows:
(a) Authority. Assuming the accuracy of the
representations and warranties set forth in Section 1(c) herein, X.
Xxxxxx has the legal capacity and the power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby.
(b) Enforceability. This Agreement has been duly
executed and delivered by X. Xxxxxx, and, assuming due and valid
authorization, execution and delivery hereof by MRTC, constitutes a
legal, valid and binding agreement of X. Xxxxxx, enforceable against X.
Xxxxxx in accordance with its terms.
(c) Representation of Ownership. X. Xxxxxx
beneficially owns 100 shares of Series A Stock and 100 shares of Series
B Stock of CCI free and clear of any liens and encumbrances, other than
encumbrances imposed by the Shareholders Agreement. Immediately after
giving effect to the Closing (as defined below), MRTC will acquire 100
shares of Series B Stock and 40 shares of Series A Stock of CCI from X.
Xxxxxx free and clear of all encumbrances and X. Xxxxxx will not own
any interest or have any rights in CCI except for 50 shares of Series A
Stock.
Section 3. X. Xxxxxx'x Representations and Warranties.
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X. Xxxxxx represents and warrants to MRTC as follows:
(a) Authority. Assuming the accuracy of the
representations and warranties set forth in Section 1(c) herein, X.
Xxxxxx has the legal capacity and the power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby.
(b) Enforceability. This Agreement has been duly
executed and delivered by X. Xxxxxx, and, assuming due and valid
authorization, execution and delivery hereof by MRTC, constitutes a
legal, valid and binding agreement of X. Xxxxxx, enforceable against X.
Xxxxxx in accordance with its terms.
(c) Representation of Ownership. X. Xxxxxx
beneficially owns 100 shares of Series A Stock and 100 shares of Series
B Stock of CCI free and clear of any liens and encumbrances, other than
encumbrances imposed by the Shareholders Agreement. Immediately after
giving effect to the Closing, MRTC will acquire 100 shares of Series B
Stock and 40 shares of Series A Stock of CCI from X. Xxxxxx free and
clear of all encumbrances and X. Xxxxxx will not own any interest or
have any rights in CCI except for 50 shares of Series A Stock.
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Section 4. The Trust's Representations and Warranties.
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The Trust represents and warrants to MRTC as follows:
(a) Authority. Assuming the accuracy of the
representations and warranties set forth in Section 1(c) herein, the
Trust has the power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement.
(b) Enforceability. This Agreement has been duly
executed and delivered by the Trust, and, assuming due and valid
authorization, execution and delivery hereof by MRTC, constitutes a
legal, valid and binding agreement of the Trust, enforceable against
the Trust in accordance with its terms.
(c) Representation of Ownership. The Trust
beneficially owns 100 shares of Series A Stock and 100 shares of Series
B Stock of CCI free and clear of any liens and encumbrances, other than
encumbrances imposed by the Shareholders Agreement. Immediately after
giving effect to the Closing, MRTC will acquire 100 shares of Series B
Stock and 40 shares of Series A Stock of CCI from the Trust free and
clear of all encumbrances and the Trust will not own any interest or
have any rights in CCI except for 50 shares of Series A Stock.
Section 5. Exchange. At the Closing, subject to the terms
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and conditions set forth herein:
(a) X. Xxxxxx shall exchange all of his shares of
Series B Stock and 40 shares of Series A Stock of CCI for (i) Term Note
No. 1 issued by MRTC ("Term Note No. 1") in the principal amount of
$6,666,666.67 (a form of which is attached as Exhibit A hereto) and
(ii) 6 million newly issued Class A Member Units in MRTC issued at $1
per unit;
(b) X. Xxxxxx shall exchange all of his shares of
Series B Stock and 40 shares of Series A Stock of CCI for (i) Term Note
No. 2 issued by MRTC ("Term Note No. 2") in the principal amount of
$6,666,666.67 (a form of which is attached as Exhibit B hereto) and
(ii) 6 million newly issued Class A Member Units in MRTC issued at $1
per unit;
(c) The Trust shall exchange all of its shares of
Series B Stock and 40 shares of Series A Stock of CCI for (i) Term Note
No. 3 issued by MRTC ("Term Note No. 3") in the principal amount of
$6,666,666.67 (a form of which is attached as Exhibit C hereto) and
(ii) 6 million newly issued Class A Member Units in MRTC issued at $1
per unit;
(d) MRTC and the Xxxxxx Shareholders shall effect the
issuance of the Class A Member Units as provided in subsections (a),
(b) and (c) above by executing a Joinder to the Amended and Restated
Limited Liability Company Agreement of MRTC, as amended (the "MRTC
Operating Agreement") and the related transaction agreements,
substantially in the form of Exhibit D hereto (the "MRTC Operating
Agreement Joinder").
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Section 6. Redemption. At the Closing, subject to the terms
and conditions set forth herein, CCI shall redeem 10 shares of Series A
Stock from each of the Xxxxxx Shareholders at a redemption price of
$33,333.33 per share of Series A Stock.
Section 7. Shareholder Agreement Amendment. At the Closing,
subject to the terms and conditions set forth herein, MRTC, CCI and the
Xxxxxx Shareholders hereby agree to amend the Shareholders Agreement as
provided in the form attached as Exhibit E hereto (the "Shareholders
Agreement Amendment").
Section 8. Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the
offices of Xxxxxxxxxx Xxxxxxxx in Atlanta, Georgia on April 10, 2002,
or at such time and place as MRTC and the Xxxxxx Shareholders shall
agree prior to the Closing (the date of the Closing being referred to
as the "Closing Date").
Section 9. Conditions to Closing.
(a) MRTC's and CCI's obligation to consummate the
transactions contemplated hereby at the Closing is subject to
satisfaction of the following conditions:
(i) the representations and warranties
of the Xxxxxx Shareholders shall be and remain at and as of
the Closing Date true and correct and MRTC shall have
received a certificate of each of the Xxxxxx Shareholders
to the foregoing effect;
(ii) receipt by MRTC of certificates
representing all of the Series B Stock and 120 shares of
Series A Stock of CCI from the Xxxxxx Shareholders;
(iii) receipt by CCI of certificates
representing 30 shares of Series A Stock of CCI from the
Xxxxxx Shareholders;
(iv) receipt by MRTC of the MRTC
Operating Agreement Joinder duly executed by each of the
Xxxxxx Shareholders;
(v) receipt by MRTC of the Shareholders
Agreement Amendment duly executed by each of the Xxxxxx
Shareholders; and
(vi) receipt by MRTC of a receipt in form
and substance reasonably satisfactory to MRTC of acceptance
by each of the Xxxxxx Shareholders of the items set forth
in Sections 9(b)(ii), (iv) and (vi).
(b) The Xxxxxx Shareholders' obligation to consummate
the transactions contemplated hereby at the Closing is subject to
satisfaction of the following conditions:
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(i) the representations and warranties
of MRTC shall be and remain at and as of the Closing Date
true and correct and the Xxxxxx Shareholders shall have
received a certificate of the Chief Executive Officer or a
Vice President of MRTC to the foregoing effect;
(ii) receipt by the Xxxxxx Shareholders
of Term Note Xx. 0, Xxxx Xxxx Xx. 0 xxx Xxxx Note No. 3
duly issued by MRTC;
(iii) receipt by the Xxxxxx Shareholders
of the MRTC Operating Agreement Joinder duly executed by
MRTC;
(iv) receipt by each of the Xxxxxx
Shareholders of certificates or other documents reasonably
satisfactory to the Xxxxxx Shareholders evidencing 6
million newly issued Class A Member Units in MRTC issued at
$1 per unit;
(v) receipt by each of the Xxxxxx
Shareholders of $333,333.33;
(vi) receipt by the Xxxxxx Shareholders
of the Shareholders Agreement Amendment duly executed by
MRTC, CCI and MR Funding; and
(vii) receipt by the Xxxxxx Shareholders
of an opinion, dated as of the Closing Date, from counsel
to MRTC addressing the matters set forth in Exhibit F.
Section 10. Release of Claims.
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(a) Upon the execution of this Agreement by all the
parties hereto, the Xxxxxx Shareholders, on their behalf and on behalf
of their respective affiliates, associates, personal representatives,
representatives, executors, heirs, administrators, successors, assigns,
spouses, partners, beneficiaries, employees, attorneys, advisors, and
agents (the "Xxxxxx Shareholders Releasing Parties"), for good and
sufficient consideration, the receipt of which is acknowledged, release
absolutely and forever discharge MRTC, CCI, MR Funding and each of
their respective predecessors, successors, assigns, parents, members,
subsidiaries, divisions, and affiliated companies, and each of their
respective former, current and future officers, directors, owners,
managers, employees, partners, associates, representatives,
shareholders, attorneys, advisors, and agents, and each of them (the
"MRTC Released Parties"), from any and all actual or possible claims,
charges, damages, demands, debts, liabilities, losses, accounts,
reckonings, obligations, suits, actions and causes of action of every
kind and nature whatsoever, including but not limited to those arising
under contract, statute or common law, whether or not known or
suspected at this time, (collectively, "Claims") which the Xxxxxx
Shareholders Releasing Parties have, or ever had, owned or held, or
hereafter can, shall or may have against the MRTC Released Parties,
based upon, arising out of, related to, or by reason of any cause,
occurrence, event, act, fact, circumstance, thing, statement or
omission occurring before the date of this Agreement relating to,
arising from or in connection with this Agreement, the Shareholders
Agreement and the transactions contemplated hereby and thereby.
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(b) Upon the execution of this Agreement by all the
parties hereto, MRTC, on its behalf and on behalf of its respective
affiliates, associates, members, personal representatives,
representatives, executors, heirs, administrators, successors, assigns,
spouses, partners, beneficiaries, employees, attorneys, advisors, and
agents (the "MRTC Releasing Parties"), for good and sufficient
consideration, the receipt of which is acknowledged, release absolutely
and forever discharge each of the Xxxxxx Shareholders and each of their
respective successors, assigns, representatives, attorneys, advisors,
and agents, and each of them (the "Xxxxxx Shareholders Released
Parties"), from any and all Claims which the MRTC Releasing Parties
have, or ever had, owned or held, or hereafter can, shall or may have
against the Xxxxxx Shareholders Released Parties, based upon, arising
out of, related to, or by reason of any cause, occurrence, event, act,
fact, circumstance, thing, statement or omission occurring before the
date of this Agreement relating to, arising from or in connection with
this Agreement, the Shareholders Agreement and the transactions
contemplated hereby and thereby.
Section 11. Stock Purchase Agreement Amendment. Effective
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upon the closing of the transactions contemplated by this Agreement,
the parties hereto agree to amend and restate the first sentence of
Section 8(h) of the Stock Purchase Agreement as follows:
The indemnification obligation of the Sellers shall not exceed
Twenty-One Million Dollars ($21,000,000) plus the Sellers' member
interests in Madison River Telephone Company, LLC.
Section 12. Miscellaneous Provisions.
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(a) Fees and Expenses. Each party hereto agrees to
bear its own fees and expenses relating to each of the matters referred
to, contemplated by or the subject of this Agreement.
(b) Amendment and Modification. This Agreement may
be amended, modified and supplemented only by written agreement of the
Xxxxxx Shareholders and MRTC.
(c) Notices. All notices, requests, demands and
other communications required or permitted shall be made in writing by
hand-delivery, telecopier (with written confirmation) or air courier
guaranteeing overnight delivery:
(i) If to the Xxxxxx Shareholders, to:
Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
with a copy to:
Xxxx X. Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxxxx
000 X. Xx. Xxxxxx Xxxxxx
P.O. Box 9147
Xxxxxxxx, XX 00000
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and G. Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxx, Esq.
Lane & Xxxxx, PC
000 "X" Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
and The Xxxxxxx X. Xxxxxx Life Trust
c/o Xx. X. Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
x/x Xxxxxx X. Xxxxxxxxx, Xx., Xxx.
Xxxxxxxxx, Xxxxx & Xxxxxxxxx, P.C.
000 Xxxxx Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
c/o Xxxxx X. Xxxxxx, CPA
Golden Associates
000 X. Xxxxxxxxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
or to such other persons or addresses as the Xxxxxx Shareholders shall
reasonably furnish to MRTC;
(ii) If to MRTC, to:
Madison River Telephone Company, LLC
000 Xxxxx Xxxxx Xxxxxx
XX Xxx 000
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
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with a copies to:
Madison River Telephone Company, LLC
000 Xxxxx Xxxxx Xxxxxx
XX Xxx 000
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopier: (000) 000-0000
or to such other persons or addresses as MRTC shall reasonably furnish
to the Xxxxxx Shareholders in writing.
All such notices, requests, demands and other
communications shall be deemed to have been duly given; at the time
delivered by hand, if personally delivered; when receipt acknowledged,
if telecopied; and on the next business day, if timely delivered to an
air courier guaranteeing overnight delivery.
(d) Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such a 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 shall fail to be in effect only to the extent of such
prohibition or invalidity, without invalidating the remainder of this
Agreement or of any such provision.
(e) Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns,
but except as otherwise provided for or permitted herein neither this
Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any party hereto without the prior written consent
of the other party.
(f) Governing Law. This Agreement and the legal
relations among the parties hereto shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to
its conflicts of law doctrine.
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(g) Jurisdiction and Venue. WITHOUT LIMITING THE
RIGHT OF EACH OF MRTC AND THE XXXXXX SHAREHOLDERS TO BRING ANY ACTION
OR PROCEEDING AGAINST THE OTHER PARTY OR AGAINST PROPERTY OF THE OTHER
PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT (AN "ACTION") IN THE
COURTS OF OTHER JURISDICTIONS, EACH OF MRTC AND THE XXXXXX SHAREHOLDERS
HEREBY IRREVOCABLY SUBMIT TO AND ACCEPT THE NONEXCLUSIVE JURISDICTION
OF ANY FEDERAL COURT SITTING IN THE STATE OF GEORGIA, AND EACH OF MRTC
AND THE XXXXXX SHAREHOLDERS HEREBY IRREVOCABLY AGREE THAT ANY ACTION
MAY BE HEARD AND DETERMINED IN SUCH FEDERAL COURT. EACH OF MRTC AND
THE XXXXXX SHAREHOLDERS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
THAT IT MAY EFFECTIVELY DO SO, ANY DEFENSE OR OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY DEFENSE OR OBJECTION TO VENUE BASED ON THE
GROUNDS OF FORUM NONCONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE MAINTENANCE OF ANY ACTION IN ANY SUCH JURISDICTION. EACH OF MRTC
AND THE XXXXXX SHAREHOLDERS HEREBY IRREVOCABLY AGREE THAT THE SUMMONS
AND COMPLAINT OR ANY OTHER PROCESS IN ANY ACTION IN ANY JURISDICTION
MAY BE SERVED BY MAILING (USING CERTIFIED OR REGISTERED MAIL, POSTAGE
PREPAID) TO THE NOTICE ADDRESS FOR SUCH PARTY SPECIFIED ABOVE OR BY
HAND DELIVERY TO A PERSON OF SUITABLE AGE AND DISCRETION AT SUCH
ADDRESS. SUCH SERVICE WILL BE COMPLETE ON THE DATE SUCH PROCESS IS SO
MAILED OR DELIVERED, AND SUCH PARTY WILL HAVE THIRTY DAYS FROM SUCH
COMPLETION OF SERVICE IN WHICH TO RESPOND IN THE MANNER PERMITTED BY
LAW. EACH OF MRTC AND THE XXXXXX SHAREHOLDERS MAY ALSO BE SERVED IN
ANY OTHER MANNER PERMITTED BY LAW, IN WHICH EVENT SUCH PARTY'S TIME TO
RESPOND SHALL BE THE TIME PROVIDED BY LAW.
(h) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and
the same instrument.
(i) Headings. The headings of the Sections of this
Agreement are inserted for convenience only and shall not constitute a
part hereof or affect in any way the meaning or interpretation of this
Agreement.
(j) Entire Agreement. This Agreement sets forth the
entire agreement and understanding of the parties hereto in respect of
the subject matter contained herein, and supersedes all prior
agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, relating to the
subject matter hereof.
(k) Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by a party of any covenants
or agreements contained in this Agreement will cause the other party to
sustain injury for which it would not have an adequate remedy at law
for money damages. Therefore each of the parties hereto agrees that in
the event of any such breach, the aggrieved party shall be entitled to
the remedy of specific performance of such covenants and agreements and
preliminary and permanent injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in
equity, and the parties hereto further agree to waive any requirement
for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief.
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(l) Third Parties. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any
person or corporation, other than the parties hereto and their
successors or assigns, any rights or remedies under or by reason of
this Agreement; provided, however, it is specifically agreed that each
of the MRTC Released Parties are deemed to be direct third party
beneficiaries of Section 10 of this Agreement and each of them shall be
entitled to the benefits of, and be permitted to enforce, the
provisions of Section 10 as if they were a party to this Agreement.
IN WITNESS WHEREOF, MRTC, CCI and the Xxxxxx Shareholders
have executed this Agreement effective as of the date and year first
above written.
MADISON RIVER TELEPHONE COMPANY, LLC
By: J. XXXXXXX XXXXXXXXXXX
---------------------------------
Name: J. Xxxxxxx Xxxxxxxxxxx
---------------------------------
Title: Chief Executive Officer
---------------------------------
COASTAL COMMUNICATIONS, INC.
By: J. XXXXXXX XXXXXXXXXXX
---------------------------------
Name: J. Xxxxxxx Xxxxxxxxxxx
---------------------------------
Title: Chief Executive Officer
---------------------------------
XXXXXX X. XXXXXX (SEAL)
---------------------------------------
Xxxxxx X. Xxxxxx
G. XXXXX XXXXXX (SEAL)
---------------------------------------
G. Xxxxx Xxxxxx
THE XXXXXXX X. XXXXXX LIFE TRUST
By: XXXXXX X. XXXXXX
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Co-Trustee for Xxxxxxx X. Xxxxxx
By: G. XXXXX XXXXXX
------------------------------------
Co-Trustee for Xxxxxxx X. Xxxxxx
By: XXXXXX XXXXXXXXX, XX.
------------------------------------
Co-Trustee for Xxxxxxx X. Xxxxxx
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IN WITNESS WHEREOF, the undersigned is a signatory to this
Agreement as of the date and year first above written solely for
purposes of the covenant set forth in Section 11 of this Agreement.
COASTAL UTILITIES, INC.
By: J. XXXXXXX XXXXXXXXXXX
---------------------------------
Name: J. Xxxxxxx Xxxxxxxxxxx
---------------------------------
Title: Chief Executive Officer
---------------------------------
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