EXHIBIT 10.41
AGREEMENT
dated as of
MARCH 31, 2002
between
CHOICE ONE COMMUNICATIONS INC.
and
THE HOLDERS SET FORTH ON THE SIGNATURE PAGES HERETO
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions...................................................1
ARTICLE 2
ACTIONS TO BE TAKEN
Section 2.01. Actions To Be Taken; Waiver...................................4
ARTICLE 3
WAIVER AND RELATED COVENANTS
Section 3.01. Redemption....................................................5
Section 3.02. Dividends....................................................10
Section 3.03. Termination Of Waiver........................................11
Section 3.04. Tax Treatment................................................11
Section 3.05. Legends......................................................12
Section 3.06. Transfer Of Waiver Shares....................................12
Section 3.07. Issuance Of Post-Closing Warrants............................12
Section 3.08. Amendment Of The Certificate Of Designations.................13
Section 3.09. Registration Rights..........................................13
Section 3.10. Dividend Payment Record Date.................................13
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
Section 4.01. Organization, Corporate Power and Licenses...................13
Section 4.02. Capital Stock and Related Matters............................13
Section 4.03. Authorization; No Breach.....................................14
Section 4.04. Special Committee Approval...................................14
Section 4.05. Governmental Consents........................................14
Section 4.06. Finder's Fees................................................15
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS
Section 5.01. Existence and Powers.........................................15
Section 5.02. Authorization................................................15
Section 5.03. Governmental Authorization...................................15
Section 5.04. Noncontravention.............................................15
Section 5.05. Investment Intent............................................15
Section 5.06. Finder's Fees................................................16
ARTICLE 6
COVENANTS OF THE ISSUER
Section 6.01. Listing and Authorized Stock.................................16
Section 6.02. Shareholder Approval.........................................16
Section 6.03. Issuance Of Common Stock.....................................17
ARTICLE 7
SURVIVAL; INDEMNIFICATION
Section 7.01. Survival.....................................................17
Section 7.02. Indemnification..............................................17
ARTICLE 8
MISCELLANEOUS
Section 8.01. Notices......................................................19
Section 8.02. No Waivers; Amendments.......................................19
Section 8.03. Expenses; Documentary Taxes..................................20
Section 8.04. Termination..................................................20
Section 8.05. Successors and Assigns.......................................21
Section 8.06. Governing Law................................................21
Section 8.07. Jurisdiction.................................................21
Section 8.08. WAIVER OF JURY TRIAL.........................................21
Section 8.09. Counterparts; Effectiveness..................................21
Section 8.10. Entire Agreement.............................................21
Section 8.11. Captions; Certain Definitions................................22
EXHIBITS
Exhibit A - Share and Warrants Information
Exhibit B - Form of Closing Warrants
Exhibit C - Form of Contingent Amount Warrants
Exhibit D - Form of Post-Closing Warrants
Exhibit E - Opinion of Issuer's Counsel
Exhibit F - Opinion of Holders' Counsel
Exhibit G - Certificate of Amendment
ii
AGREEMENT
AGREEMENT dated as of March 31, 2002, between Choice One Communications
Inc., a Delaware corporation (the "ISSUER") and the other persons set forth on
the signature pages hereto (together with their successors and assigns, the
"HOLDERS").
W I T N E S S E T H :
WHEREAS, the Holders are the holders of Series A Senior Cumulative
Preferred Stock, par value $0.01 per share, of the Issuer (the "SERIES A
PREFERRED STOCK"); and
WHEREAS, the Holders and the Issuer desire that the Holders irrevocably
waive certain of their rights with respect to certain shares of the Series A
Preferred Stock (the "SERIES A SHARES"), upon the terms and subject to the
conditions hereinafter set forth, in consideration of certain obligations of the
Issuer set forth below and the issuance of the Closing Warrants (as defined
below), the Contingent Amount Warrants (as defined below) and the obligation to
issue the Post-Closing Warrants (as defined below), in each case upon the terms
and subject to the conditions hereinafter set forth.
NOW THEREFORE, the parties hereto agree as follows:
Article 1
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"ADJUSTED MINIMUM PRICE" means $3.00 per share of Common Stock as such
amount shall be adjusted to take into account any reclassification,
recapitalization, stock dividend, stock split or combination, exchange or
readjustment of the shares of Common Stock or similar event.
"AGREEMENT" means this agreement, as the same may be amended from time
to time.
"BOARD OF DIRECTORS" means the board of directors of the Issuer.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"CERTIFICATE OF AMENDMENT" means the Certificate of Amendment of the
Certificate of Designations in the Form of Exhibit G.
"CERTIFICATE OF DESIGNATIONS" means the Certificate of Designations,
Preferences and Rights of the Series A Preferred Stock, as the same shall be
amended by the Certificate of Amendment.
"CLOSING WARRANTS" means the warrants to purchase shares of Common
Stock having the terms and conditions set forth in the form of warrant attached
as Exhibit B.
"COMMON STOCK" means the common stock of the Issuer, par value $0.01
per share.
"CONTINGENT AMOUNT WARRANTS" means the warrants to purchase the Common
Stock in the form of the warrant attached as Exhibit C.
"DELISTING EVENT" means any date on which the Issuer receives written
notification from the NASD of a determination of delisting from the Nasdaq
National Market with regard to its Common Stock; provided, however, that if at
any time thereafter the NASD revokes any such notification, such Delisting Event
shall be deemed to have terminated; provided, further, that a new Delisting
Event shall occur on any date on which the Issuer shall receive a subsequent
written notification from the NASD of a delisting determination.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"FULLY-DILUTED EQUITY" means, as of the date of determination, all
issued and outstanding shares of Common Stock (assuming conversion of all
securities convertible or exchangeable, directly or indirectly, into Common
Stock, including all rights, warrants and options to subscribe for, purchase or
otherwise acquire Common Stock or such convertible or exchangeable securities at
any time on or after the date of such determination with an exercise price equal
to or less than $9.82 per share of Common Stock).
"ISSUE DATE" means the first date of issuance of shares of Series A
Preferred Stock.
"LIQUIDATION PREFERENCE" is an amount equal to $1,000 per share of
Series A Preferred Stock.
"LISTED SECURITIES" means securities that are listed and traded on the
NYSE, any national securities exchange, the Nasdaq National Market or the Nasdaq
SmallCap Market.
"NASD" means the National Association of Securities Dealers, Inc.
"NON-WAIVER SHARES" means the Series A Shares, other than the Waiver
Shares.
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"NYSE" means the New York Stock Exchange, Inc.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"POST-CLOSING WARRANTS" means the warrants to purchase the Common Stock
in the form of the warrant attached as Exhibit D.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of July 8, 1998 among the Issuer and the holders set forth on the
signature pages thereto, as amended.
"STOCKHOLDERS' CONSENT" means irrevocable written consents approving
this Agreement and the transactions contemplated hereby, including the issuance
of the Warrants and the issuances of Common Stock upon the exercise of the
Warrants or in exchange for the Waiver Shares.
"SUBSIDIARY" means any Person of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by the Issuer.
"TRANSACTION DOCUMENTS" means the documents contemplated by this
Agreement (including the Closing Warrants, the Contingent Amount Warrants and
the Post-Closing Warrants), other than the amendment of the Registration Rights
Agreement described in Section 3.09.
"WARRANTS" means the Closing Warrants, the Contingent Amount Warrants
and the Post-Closing Warrants.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
Additional Dividend 3.02(a)
Appraiser 3.01(b)
Change of Control Amount 3.01(b)
Change of Control Exchange Date 3.01(b)
Change of Control Redemption Date 3.01(b)
Change of Control Securities 3.01(b)
Closing Price 3.01(b)
Code 3.04(a)
Damages 7.02(a)
Exchange Price 3.01(b)
Holders Preamble
Indemnified Person 7.02(a)
Issuer Preamble
NASD Rules 3.02(a)
Offer to Redeem 3.01(b)
SEC 6.02
Series A Preferred Stock Preamble
Series A Shares Preamble
Special Committee 4.04
Successor Securities 3.01(b)
Unissued Shares 3.01(b)
Waiver Shares 2.01
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(c) Any capitalized term used but not defined herein shall have the
meaning ascribed to such term in the Securities Purchase Agreement dated as of
August 1, 2000 among the Holders and the Issuer.
Article 2
ACTIONS TO BE TAKEN
Section 2.01. Actions To Be Taken; Waiver. (a) Upon the terms
and subject to the terms and conditions of this Agreement, the Issuer agrees to
issue to each Holder, and each Holder agrees, severally but not jointly, to
accept from the Issuer, the Closing Warrants, the Contingent Amount Warrants
and, in accordance with Section 3.07, the Post-Closing Warrants, in exchange
for the irrevocable waiver of certain rights of the Holders with respect to
shares of Series A Preferred Stock (the "WAIVER SHARES") in the amounts set
forth opposite such Holder's name on Exhibit A. Upon the date hereof, the Issuer
shall deliver the Stockholders' Consent to the Holders.
(b) As soon as possible after the date hereof, but in no event later
than five (5) Business Days after the date hereof:
(i) the Issuer shall deliver to each Holder a Closing Warrant
with respect to the number of shares of Common Stock set forth opposite
such Holder's name on Exhibit A, duly registered in the name of such
Holder;
(ii) the Issuer shall deliver to each Holder a Contingent Amount
Warrant with respect to the number of shares of Common Stock set forth
opposite such Holder's name on Exhibit A, duly registered in the name
of such Holder;
(iii) the Holders shall provide the certificates representing the
Waiver Shares to the Issuer for purposes of legending thereof in
accordance with Section 3.05, the Issuer shall stamp or otherwise xxxx
certificates representing the Waiver Shares in accordance with Section
3.05 and then shall deliver the certificates representing the Waiver
Shares to the respective holders thereof;
(iv) the Issuer shall deliver to each Holder an opinion of
Xxxxx Peabody LLP, counsel to the Issuer, dated the date hereof,
substantially in the form of Exhibit E hereto;
(v) the Holders shall deliver to the Issuer an opinion of
Xxxxx Xxxx & Xxxxxxxx, special counsel to the Holders, dated the date
hereof, substantially in the form of Exhibit F hereto; and
(vi) the Issuer shall pay the fees and expenses of Xxxxx Xxxx &
Xxxxxxxx, special counsel to the Holders, in connection with the
negotiation, execution and delivery of this Agreement and the
transactions contemplated hereby (which fees and expenses shall not
exceed $70,000).
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Article 3
WAIVER AND RELATED COVENANTS
Section 3.01. Redemption. Paragraph 6 of the Certificate of
Designations shall apply to the Waiver Shares and the holders of Waiver Shares
only on the terms and conditions, and subject to the exceptions set forth in,
this Section 3.01:
(w) Paragraphs 6(a) and 6(d) of the Certificate of
Designations shall apply on the same terms and conditions;
(x) Paragraph 6(b) of the Certificate of Designations shall
apply, subject to the terms and conditions set forth in Section
3.01(b) hereof;
(y) Paragraph 6(c) of the Certificate of Designations shall
not apply by virtue of the waiver set forth in Section 3.01(a)
hereof; and
(z) Paragraphs 6(e) and 6(f) of the Certificate of
Designations shall apply, subject to the terms and conditions
set forth in Section 3.01(e) hereof.
(a) The Holders hereby irrevocably waive, with respect to the
Waiver Shares only, the right to demand that the Issuer redeem such
Waiver Shares on the twelfth anniversary of the Issue Date in
accordance with Section 6(c) of the Certificate of Designations.
(b) (i) Upon the occurrence of a Change of Control (as such
term is defined in the Certificate of Designations), the Holders
hereby irrevocably waive with respect to the Waiver Shares the right
to demand redemption of all or any part of such Holder's Waiver
Shares for a cash redemption price equal to 101% of the Liquidation
Preference, plus accrued and unpaid dividends (if any) to the date of
purchase (the "CHANGE OF CONTROL AMOUNT") in accordance with Section
6(b) of the Certificate of Designations. If the Change of Control
Amount is not paid by the Issuer in cash in accordance with Section
6(b) of the Certificate of Designations, then the obligations with
respect to the redemption of the Change of Control Amount shall be
satisfied by an exchange of such Waiver Shares for Common Stock (or
the securities of any entity into which the Common Stock is converted
or for which it is exchanged in connection with the Change of Control
(such securities, the "SUCCESSOR SECURITIES")), which shares or
securities shall be valued at the Exchange Price as of the Change of
Control Redemption Date (the shares of Common Stock or such shares or
securities, the "CHANGE OF CONTROL SECURITIES"); provided that if the
Successor Securities are not Listed Securities, it shall be a
condition to the consummation of the Change of Control transaction
that on a date at least five (5) Business Days prior to consummation
of such Change of Control transaction (the "CHANGE OF CONTROL
EXCHANGE DATE") all outstanding shares (and fractional shares) of
such Waiver Shares shall, subject to Section 3.01(b)(viii), be
redeemed or exchanged pursuant to the procedures set forth in
paragraph 7 of the Certificate of Designations by delivery to the
Holders, at the Issuer's option, of cash at the cash redemption price
set forth above in this paragraph or Common Stock at the Exchange
Price as of the Change of Control Exchange Date. Notwithstanding the
foregoing the Issuer shall not issue Common Stock representing in the
aggregate more than 19.9% of its outstanding Common Stock in
connection with such exchange, unless shareholder approval of such
issuance has been obtained in accordance with the applicable law.
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(ii) Within 30 days following any Change of Control
(as such term is defined in the Certificate of Designations) where
any Waiver Shares remain outstanding after such Change of Control,
the Issuer shall mail a notice (the "OFFER TO REDEEM") to such Holder
stating: (A) that the Offer to Redeem is being made pursuant to this
Agreement and that, to the extent lawful, all shares of Waiver
Shares tendered will be accepted for redemption; (B) the form
of consideration being offered for such Waiver Shares (including the
portion of the Change of Control Amount, if any, to be satisfied
with the Change of Control Securities); (C) the redemption price;
(D) the redemption date, which shall be no earlier than 30 days nor
later than 40 days from the date such notice is mailed (the "CHANGE
OF CONTROL REDEMPTION DATE"); (E) that any Waiver Shares not tendered
will continue to accrue dividends in accordance with the terms of
the Certificate of Designations and this Agreement; (F) that,
unless the Issuer defaults in the payment of the Change of Control
Amount (including a default in the delivery of any Change of Control
Securities), all Waiver Shares accepted for redemption pursuant to
the Offer to Redeem shall cease to accrue dividends on and after the
Change of Control Redemption Date and all rights of the Holders with
respect to such Waiver Shares shall terminate on and after the
Change of Control Redemption Date; and (G) a description of the
procedures to be followed by such Holder in order to have its Waiver
Shares redeemed and/or exchanged for shares of the Change of Control
Securities.
(iii) On the Change of Control Redemption Date, (A) the
Issuer shall, to the extent lawful, (1) accept for redemption the
Waiver Shares tendered pursuant to the Offer to Redeem and (2)
promptly deliver to each holder of Waiver Shares so accepted the
Change of Control Amount for such shares in cash and/or the Change of
Control Securities and (B) unless the Issuer defaults in the delivery
of the Change of Control Amount in exchange for the Waiver Shares
tendered pursuant to the Offer to Redeem, dividends shall cease to
accrue with respect to the Waiver Shares tendered and all rights of
holders of such tendered shares shall terminate, except for the right
to receive delivery of the Change of Control Amount therefor, on the
Change of Control Redemption Date.
(iv) To accept the Offer to Redeem, the holder of a share of
Waiver Shares shall deliver, prior to the close of business on the
business day prior to the Change of Control Redemption Date, written
notice to the Issuer (or an agent designated by the Issuer for such
purpose) of such holder's acceptance, together with certificates
evidencing the shares of Waiver Shares with respect to which the Offer
to Redeem is being accepted, duly endorsed for transfer in blank.
(v) Certificates representing the Change of Control
Securities shall be issued in the name of the holder tendering the
Waiver Shares or, on such holder's written order, the holder's
transferee. All Change of Control Securities shall upon delivery be
duly and validly issued and fully paid and non-assessable, free of all
liens and charges and not subject to any preemptive rights.
(vi) No fractional interests in Change of Control Securities
shall be issued pursuant to this Section 3.01. In lieu thereof, the
Issuer shall pay a cash adjustment in respect of such fractional
interest in an amount equal to such fractional interest multiplied by
the Exchange Price.
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(vii) In case fewer than all the shares represented by any
certificate for the Waiver Shares are exchanged, a new certificate
shall be issued representing the unexchanged shares of the Waiver
Shares without cost to the holder thereof.
(viii) Notwithstanding anything in this Section 3.01(b) to the
contrary, the Issuer shall not be required to deliver in exchange for
the Waiver Shares otherwise required to be exchanged hereunder shares
of Common Stock in excess of the number of the Unissued Shares. For
purposes hereof, the "UNISSUED SHARES" shall mean the number of shares
of Common Stock authorized for issuance but not issued or reserved for
issuance. Any Waiver Shares that cannot be exchanged as a result of
unavailability of the Unissued Shares shall remain outstanding and the
Issuer shall not be required to redeem them for cash, make an Offer
to Redeem with respect to them or exchange them in accordance
with Section 3.01(b).
(ix) The Issuer shall comply with Rule 14e-1 under the
Exchange Act and any securities laws and regulations to the extent
such laws and regulations are applicable to the repurchase of the
Waiver Shares in connection with a Change of Control.
(x) As used in this Section 3.01, "EXCHANGE PRICE" means
the average of the daily Closing Prices of a share of a Change of
Control Security for the twenty (20) consecutive trading days ending
on the most recent trading day prior to the applicable date of
determination; provided that if on such date the Change of Control
Securities are not Listed Securities or are subject to any
restrictions on transfer under federal or state securities laws, the
Exchange Price shall be deemed to be 75% of the otherwise applicable
Exchange Price. The "CLOSING PRICE" on any day means (A) if shares
of Change of Control Securities then are listed and traded on the
NYSE, the closing price on such day as reported on the NYSE
Consolidated Tape; (B) if shares of Change of Control Securities then
are not listed and traded on the NYSE, the closing price on such day
as reported by the principal national securities exchange on which
shares of Change of Control Securities are listed and traded; (C) if
shares of Change of Control Securities then are not listed and traded
on any such securities exchange, the last reported sale price not
identified as having been reported late, on such day on the Nasdaq
National Market or SmallCap Market; (D) if shares of Change of Control
Securities then are not listed and traded on any national securities
exchange or listed and traded on the Nasdaq National Market or
SmallCap Market, the average of the highest reported bid and lowest
reported asked price not identified as having been reported late, on
such day as reported by Nasdaq; or (E) otherwise, a fair market
value of a share of such Change of Control Security as determined in
good faith by a
majority of the Board of Directors, subject, in the case of clause
(E), to the valuation and arbitration procedures set forth below.
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(xi) If the holders of the Waived Shares (or their
Affiliates) do not have the right (by contract or otherwise) to
designate a majority of the Board of Directors as of the time of such
determination, a majority of the holders of Waiver Shares (acting in
their sole discretion) may disagree with the determination of the
Board of Directors and such holders may send a notice to the Board of
Directors setting forth their determination of the fair market value
of a share of such Change of Control Security. If the Board of
Directors and such holders of Waiver Shares cannot agree on the fair
market value of such Change of Control Security within 30 days of
delivery of such notice by the holders of Waiver Shares, then the fair
market value of such Change of Control Security shall be determined by
an independent investment banking firm of international standing
reasonably acceptable to parties to such disagreement (the
"APPRAISER"). Within 30 days of selection of the Appraiser, such
Appraiser shall determine the fair market value of such Change of
Control Security, which shall either be the fair market value as
originally determined by the Board of Directors or the fair market
value set forth in the notice by the holders of the Waiver Shares,
and shall notify the Board of Directors and the holders of the Waiver
Shares in writing of such determination (specifying the fair market
value as determined by such Appraiser). Such determination by the
Appraiser shall be final, binding and conclusive upon the Issuer and
the holders of Waiver Shares. The fees and expenses of such Appraiser
shall be borne by the party with whose determination of the fair
market value of such Change of Control Security the Appraiser did not
agree with. In the event that such fees and expenses shall be borne
by the holders of Waiver Shares, each such holder shall be
severally liable for its pro rata share of such fees and expenses.
(xii) If the holders of the Waived Shares (or their
Affiliates) have the right (by contract or otherwise) to designate a
majority of the Board of Directors as of the time of such
determination, a majority of the members of the Board of Directors
not Affiliated with such holders, may disagree with the determination
of the Board of Directors and upon such determination, the
non-Affiliated directors taking such action on behalf of the Issuer
shall send a notice to such holders setting forth its determination
of the fair market value of a share of such Change of Control
Security. If the members of the Board of Directors not Affiliated
with such holders and such holders of Waiver Shares cannot agree on
the fair market value of such Change of Control Security within 30
days of delivery of such notice by the members of the Board of
Directors not Affiliated with such holders, then the fair market
value of such Change of Control Security shall be determined by the
Appraiser. Within 30 days of selection of the Appraiser, such
Appraiser shall determine the fair market value of such Change of
Control Security, which shall either be the fair market value as
originally determined by the Board of Directors or the fair market
value set forth in the notice by the members of the Board of
Directors not Affiliated with such holders, and shall notify the
Board of Directors in writing of such determination (specifying the
fair market value as determined by such Appraiser). Such
determination by the Appraiser shall be final, binding and conclusive
upon the Issuer and the holders of the Waiver Shares. The fees and
expenses of such Appraiser shall be borne by the holders of Waiver
Shares if the Appraiser disagreed with the determination of the fair
market value of such Change of Control Security by the Board of
Directors or by the Issuer if the Appraiser disagreed with the
determination of the fair market value of such Change of Control
Security by the members of the Board of Directors not Affiliated with
the holders of the Waiver Shares. In the event that such fees and
expenses shall be borne by the holders of Waiver Shares, each such
holder shall be severally liable for its pro rata share of such fees
and expenses.
8
(c) Prior to the delivery of any securities that the Issuer is
obligated to deliver upon the redemption or exchange of the Waiver
Shares pursuant to this Section 3.01, the Issuer shall comply with all
applicable federal and state laws and regulations which require action
by the Issuer.
(d) The Issuer shall pay any and all issuance, delivery and
transfer taxes in respect of the issuance or delivery of Change of
Control Securities pursuant to this Section 3.01. The Issuer shall
not, however, be required to pay any tax in respect of any transfer
involved in the issuance or delivery of Change of Control Securities
in a name other than that of the Holder of the Waiver Shares so
exchanged, and no such issuance or delivery shall be made unless and
until the Person requesting such issuance or delivery has paid to the
Issuer the amount of any such tax or has established to the Issuer's
satisfaction that such tax has been paid.
(e) The Holders hereby irrevocably waive, with respect to the
Waiver Shares only, any provision of the Certificate of Designations,
including paragraphs 4(d), 4(f)(ii)(a) and (b), 6(e) and 6(f) of the
Certificate of Designations, that would preclude the mandatory
redemption of the Non-Waiver Shares without a pro rata redemption of
the Waiver Shares.
Section 3.02. Dividends.(a) Prior to the termination of the waiver by
the Issuer in accordance with Section 3.03 hereof, and upon the earliest of (i)
the twelfth anniversary of the Issue Date, (ii) any redemption, purchase or
other acquisition by the Issuer or any of its Subsidiaries, directly or
indirectly, of any Non-Waiver Shares, (iii) continuance of a Delisting Event for
more than 30 days or for more than 90 days if the Delisting Event is solely due
to the "minimum bid price" (as such term is used in the Rules of the NASD (the
"NASD Rules")) per share of Common Stock falling below the then applicable
listing standards of the NASD Rules, (iv) the issuance of a "going concern"
qualification by the Issuer's auditors in connection with the Issuer's annual
audited financial statements if the average of the closing price of the Issuer's
Common Stock for the ten trading days after the filing by the Issuer of its
annual report on Form 10-K which includes such financial statements is less than
the Adjusted Minimum Price, (v) May 31, 2002, if by such date the shareholder
approval contemplated by Section 6.02 of this Agreement has not been obtained,
or (vi) the failure of the Issuer to discharge its obligations under Section
3.01(b), then dividends payable on the Series A Shares shall be increased to a
rate which results in a dividend rate on the Waiver Shares equal to twenty
percent (20%) of the Liquidation Preference of the Waiver Shares (it being
understood that, for purposes of the calculation of the increase in the dividend
rate applicable to all of the Series A Shares, the increased dividends paid on
the Non-Waiver Shares are included in the determination of whether the aggregate
dividends on the Waiver Shares would be equal to 20% as if such dividends were
paid to the holders of the Waiver Shares), per annum, compounded quarterly (the
"ADDITIONAL DIVIDEND"); provided that commencing on the earlier of (x) the date
when no Waiver Shares are outstanding and (y) the date that the Issuer elects to
terminate the waiver set forth in Section 3.01 in accordance with Section 3.03
(whether or not such termination is consented to), the right to the Additional
Dividend shall terminate as of such date; and provided further that the
Additional Dividend shall, in addition to the circumstances described in
paragraph 4(b) of the Certificate of Designations, not be payable in cash (and
shall instead be payable in the Series A Shares) if a cash payment of such
Additional Dividend would cause a default under the financial covenants set
forth in the Second Amended and Restated Credit Agreement dated as of August 1,
2000 by and among the Issuer, certain of its subsidiaries, the lenders referred
to therein and First Union Investors, Inc., as is in effect on the date hereof.
9
(b) If either the holders of Non-Waiver Shares request or the
holders of a majority of the outstanding Non-Waiver Shares request that the
Series A Shares receive dividends on Waiver Shares in Waiver Shares, then any
Series A Shares received as dividends on the Waiver Shares during the pendency
of such request shall be deemed Waiver Shares for all purposes hereunder,
including the waivers set forth in this Article 3.
Section 3.03. Termination Of Waiver. The Issuer may, at its option,
at any time terminate the waiver of the rights of the Holders contained herein
with respect to all of the Waiver Shares by giving a notice thereof to the
holders of Series A Shares, and thereupon all obligations of the Issuer set
forth herein with respect to such Waiver Shares shall cease and such Waiver
Shares shall be subject to the provisions of the Certificate of Designations in
all respects; provided that termination shall not be effective if within 30
days of the notice thereof a majority of the outstanding Non-Waiver Shares
refuses to consent thereto but shall become effective thereafter immediately
upon receipt of such consent.
Section 3.04. Tax Treatment. The Issuer and the Holders confirm that
the transactions contemplated by this Agreement constitute a recapitalization
under Section 368(a)(1)(E) of the Internal Revenue Code of 1986 (the "CODE") by
which certain Series A Shares are exchanged for the Waiver Shares and the
Warrants and agree that they will not file any tax returns or take any tax
reporting position that is inconsistent with such treatment. The Holders and the
Issuer agree that this Agreement constitutes a "plan of reorganization" of the
Issuer within the meaning of Code and applicable regulations thereunder with
respect to such recapitalization.
(b) If all or any portion of the Change of Control Amount is
to be satisfied with Change of Control Securities, then this Article 3 shall
constitute a "plan of reorganization" within the meaning of Section 368 of the
Code.
Section 3.05. Legends. In addition to any other legend that may be
required, any certificates representing the Waiver Shares shall bear a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO ADDITIONAL RESTRICTIONS SET FORTH IN AN AGREEMENT,
DATED MARCH 31, 2002, BETWEEN THE ISSUER OF SUCH SECURITIES
(THE "ISSUER") AND THE INITIAL HOLDER OF SUCH SECURITIES
WHICH, AMONG OTHER THINGS, PROVIDES FOR THE WAIVER OF CERTAIN
REDEMPTION RIGHTS TO WHICH THE HOLDER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE WOULD OTHERWISE BE ENTITLED.
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO THE HOLDER
HEREOF A COPY OF THE AGREEMENT UPON SUCH HOLDER'S REQUEST.
Such legend shall be removed upon termination of the waiver by the
Issuer in accordance with Section 3.03 hereof.
Section 3.06. Transfer Of Waiver Shares. Prior to the termination
of the waiver by the Issuer in accordance with Section 3.03 hereof, each Holder
agrees not to sell, assign or transfer any of the Waiver Shares, unless the
transferee agrees in writing to be bound by the terms and conditions of this
Agreement to the same extent as if it were the Holder (including with respect to
the waiver set forth in Article 3 and the transfer restrictions set forth in
this Section 3.06) and any sale, assignment or transfer in violation hereof
shall be void ab initio.
10
Section 3.07. Issuance Of Post-Closing Warrants. On each of (i)
January 1, 2004 and (ii) each anniversary thereof (each such date, a
"POST-CLOSING WARRANTS ISSUANCE DATE"), the Issuer shall issue to each Holder
the Post-Closing Warrant for the number of shares of Common Stock equal to the
product of (x) the percentage set forth opposite such Holder's name on Exhibit
A of the Agreement under the heading "Percentage of Post-Closing Warrant" and
(y) 235,403; provided that the number of shares of Common Stock shall be
adjusted in the same manner as would have been required by Section 8 of the
Post-Closing Warrants if such Section 8 were applicable after the date hereof
until the relevant Post-Closing Warrants Issuance Date. Notwithstanding the
foregoing, no further issuances of the Post-Closing Warrants shall be required
hereunder if, prior to the relevant Post-Closing Warrants Issuance Date (x) no
Waiver Shares are outstanding or (y) the Issuer has elected to terminate the
waiver set forth in Section 3.01 in accordance with Section 3.03 (whether or
not such termination is consented to).
Section 3.08. Amendment Of The Certificate Of Designations. As
promptly as possible after the date hereof, the Issuer shall cause the
Certificate of Amendment to be filed with the Secretary of State of the State of
Delaware so as to provide for the possible increase in dividends on the Series
A Shares contemplated by Section 3.02(a) and the Holders hereby agree to
consent to such amendment.
Section 3.09. Registration Rights. The Issuer and the Holders shall
use their respective reasonable efforts, as promptly as possible after the date
hereof, to amend the Registration Rights Agreement so as to cause (i) the
Warrants to be treated as "Warrant Shares" under (and as defined in) the
Registration Rights Agreement and (ii) any shares of Common Stock deliverable in
connection with any exchange of Waiver Shares to be treated as "Common
Registrable Securities" under (and as defined in) the Registration Rights
Agreement.
Section 3.10. Dividend Payment Record Date. The Holders agree that
with respect to dividends payable to the holders of Series A Preferred Stock on
March 31, 2002, such dividends shall be payable to holders of record of shares
of Series A Preferred Stock as they appear on the stock records of the Issuer at
the close of business on March 28, 2002, notwithstanding the record date
requirements in paragraph 4(a) of the Certificate of Designations.
11
Article 4
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Issuer represents and warrants to each Holder that:
Section 4.01. Organization, Corporate Power and Licenses. The Issuer
is a corporation duly organized, validly existing and in good standing under the
laws of Delaware and is qualified to do business in every jurisdiction in which
its ownership of property or conduct of business requires it to qualify, except
for those jurisdictions where failure to be so qualified or in good standing
could not reasonably be expected to have, individually or in the aggregate, a
material adverse effect upon the Issuer and its Subsidiaries, taken as a whole.
The Issuer possesses all requisite corporate power and authority and all
material licenses, permits and authorizations necessary to own and operate its
properties, to carry on its businesses and to carry out the transactions
contemplated by this Agreement. The copies of the Issuer's charter documents and
bylaws which have been furnished to the Holders reflect all amendments made
thereto at any time prior to the date of this Agreement and are correct and
complete.
Section 4.02. Capital Stock and Related Matters. (a) Immediately upon
the taking of the actions described in Article 2 hereof, the authorized capital
stock of the Issuer shall consist of (1) one hundred fifty million (150,000,000)
shares of Common Stock, of which (a) 40,300,877 shares are issued and
outstanding, (b) 9,638,417 shares are reserved for issuance upon exercise of
warrants and employee stock options, and (2) five million (5,000,000) shares of
preferred stock, of which 251,588 shares of Series A Preferred Stock shall be
issued and outstanding. Except as set forth above, the Issuer shall not have
outstanding any stock or securities, nor any options, warrants or other rights
to acquire capital stock or securities of the Issuer. All of the outstanding
shares of the Issuer's capital stock are validly issued, fully paid and
nonassessable.
(b) The Fully-Diluted Equity as of the date hereof consists of not
more than 47,080,597 shares of Common Stock. (c) The Issuer has not violated any
applicable federal or state securities laws in connection with the offer and
issuance of the Warrants hereunder, and the offer and issuance of the Warrants
hereunder do not require registration under the Securities Act or any applicable
state securities laws.
Section 4.03. Authorization; No Breach. The execution, delivery and
performance of this Agreement and all other Transaction Documents have been duly
authorized by the Issuer. This Agreement and each other Transaction Document
constitutes a legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms. The execution and delivery by
the Issuer of this Agreement and the Transaction Documents and the consummation
of the transactions contemplated hereby and thereby, do not and will not (1)
conflict with or result in a default under or breach of, (2) result in the
creation of any Lien upon the Issuer's or any Subsidiary's capital stock or
assets pursuant to, (3) give any third party the right to modify, terminate or
accelerate any obligation under, or (4) require any authorization, consent,
approval, exemption or other action by or notice to, or filing with, any court
or administrative or governmental body or agency pursuant to, (x) the
certificate of incorporation or bylaws of the Issuer or any Subsidiary, (y) any
law, statute, rule or regulation to which the Issuer or any Subsidiary or any
executive officer of the Issuer is subject, or (z) any agreement, instrument,
order, judgment or decree to which the Issuer or any Subsidiary or any executive
officer of the Issuer is subject.
Section 4.04. Special Committee Approval. On March 28, 2002, a
Special Committee comprised of independent directors of the Board of Directors
(the "SPECIAL COMMITTEE") unanimously (1) determined that it was advisable and
in the best interests of the Issuer to enter into this Agreement and to perform
the transactions contemplated hereby, including the issuance of the Warrants,
(2) approved this Agreement and the transactions contemplated hereby, including
the issuance of the Warrants, and (3) recommended to the Board of Directors
that it approve the amendment and restatement of the Certificate of
Designations.
12
Section 4.05. Governmental Consents. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required, which has not been obtained, in connection with the execution,
delivery and performance by the Issuer of this Agreement or the other
Transaction Documents, the consummation of any of the transactions contemplated
hereby or thereby, or the conduct or operation of the business of the Issuer and
the Subsidiaries.
Section 4.06. Finder's Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of the Issuer or any of its Affiliates which might be entitled to any
fee or commission from any Holder, the Issuer or any of their respective
Affiliates upon consummation of the transactions contemplated by this Agreement.
Article 5
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS
Each Holder, severally as to itself and not jointly, represents and
warrants to the Issuer as follows:
Section 5.01. Existence and Powers. Such Holder is a limited
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and has all necessary powers and all
material governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted.
Section 5.02. Authorization. The execution, delivery and performance
by such Holder of this Agreement and the consummation of the transactions
contemplated hereby are within the powers of such Holder and have been duly
authorized by all necessary action on the part of such Holder. This Agreement
and each other Transaction Document to which such Holder is a party constitutes
a legal, valid and binding agreement of such Holder.
Section 5.03. Governmental Authorization. The execution, delivery and
performance by such Holder of this Agreement and the consummation of the
transactions contemplated hereby require no material action by or in respect of,
or material filing with, any governmental body, agency or official.
Section 5.04. Noncontravention. The execution, delivery and
performance by such Holder of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (1) violate the partnership
agreement of such Holder, (2) violate any material indenture, agreement or
mortgage to which such Holder is a party or by which such Holder is bound, or
(3) violate any applicable material law, statute, rule, regulation, judgment,
injunction, order or decree or require any material consent of any other Person.
Section 5.05. Investment Intent. Such Holder acknowledges that the
Warrants have not been registered under the Securities Act or any state
securities laws and that the issuance of the Warrants contemplated hereby is to
be effected pursuant to an exemption from the registration requirements imposed
by such laws. In this regard, such Holder is receiving the Warrants hereunder
for its own account and not with a view to, or for sale in connection with, any
distribution thereof in violation of the Securities Act. Such Holder is an
"accredited investor" (as defined in Regulation D under the Securities Act), has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks of its investment in such Warrants
and is capable of bearing the economic risks of such investment.
Section 5.06. Finder's Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of such Holder or any of its Affiliates which might be entitled to any
fee or commission from such Holder, the Issuer or any of their respective
Affiliates upon consummation of the transactions contemplated by this Agreement.
13
Article 6
COVENANTS OF THE ISSUER
Section 6.01. Listing and Authorized Stock. (a) The Issuer shall use
its best efforts to secure the listing of all of the shares of Common Stock
issued upon exercise of the Warrants and exchange of the Waiver Shares upon each
national securities exchange and automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance)
and shall maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all of the shares of Common Stock issued upon exercise
of the Warrants and exchange of the Waiver Shares.
(b) At all times, the Issuer shall maintain a sufficient number of
authorized shares of Common Stock to issue Common Stock upon exercise of the
Warrants.
Section 6.02. Shareholder Approval. Promptly after the date hereof,
but in no event later than April 30, 2002, the Issuer shall cause an information
statement meeting the requirements of the Exchange Act and relating to the
shareholder approval of this Agreement and the transactions contemplated hereby,
including without limitation the issuance of the Warrants and the issuances of
Common Stock upon the exercise of the Warrants or in exchange for the Waiver
Shares, to be provided to the holders of its Common Stock in accordance with the
requirements of the Exchange Act. Thereafter, the Issuer shall use its best
efforts to cause the Stockholders' Consent to become effective in accordance
with the Exchange Act. In connection with such shareholder approval, the Issuer
will (1) promptly prepare and file with the Securities and Exchange Commission
(the "SEC"), use its best efforts to have cleared by the SEC and thereafter mail
to its shareholders as promptly as practicable such information statement, and
(2) otherwise comply with all legal requirements applicable to such information
statement. The Issuer shall bear all expenses in connection with the obtaining
of the Stockholders' Consent, including the costs and expenses of the
preparation, filing and distribution of the information statement, and shall
provide the Holders and their counsel a reasonable opportunity to review and
comment upon such information statement prior to the filing thereof with the
SEC.
Section 6.03. Issuance Of Common Stock. Other than (i) shares of
Common Stock outstanding on the date hereof, (ii) any securities convertible or
exchangeable, directly or indirectly, into Common Stock including rights,
warrants and options to subscribe for, purchase or otherwise acquire Common
Stock which securities are outstanding or reserved for on the date hereof, (iii)
any shares of Common Stock reserved for issuance prior to the date hereof under
the plans relating to the compensation of employees, officers and directors of
the Issuer and (iv) shares of Common Stock issuable pursuant to the Warrants to
the extent then exercisable, the Issuer shall not issue or authorize the
issuance of or reserve for issuance any shares of Common Stock or any securities
convertible or exchangeable, directly or indirectly, into Common Stock,
including rights, warrants and options to subscribe for, purchase or otherwise
acquire Common Stock, representing in the aggregate (including upon exercise,
conversion or exchange thereof) in excess of 10,000,000 shares of Common Stock
without the approval of the holders of at least a majority of the outstanding
Waiver Shares.
14
Article 7
SURVIVAL; INDEMNIFICATION
Section 7.01. Survival. The representations and warranties of the
parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith, shall survive the
date hereof until the third anniversary of the date hereof, except that the
representations and warranties contained in Sections 4.01, 4.02 and 4.03 shall
survive indefinitely. Notwithstanding the preceding sentence, any representation
or warranty in respect of which indemnity may be sought under this Agreement
shall survive the time at which it would otherwise terminate pursuant to the
preceding sentence, if notice of the inaccuracy or breach thereof giving rise to
such right of indemnity shall have been given in reasonable detail to the party
against whom such indemnity may be sought prior to such time. The covenants and
agreements of the parties contained in this Agreement shall survive the date
hereof in accordance with their terms or, if no term is specified, indefinitely.
Section 7.02. Indemnification. The Issuer hereby indemnifies each
of the Holders, their general partner and any limited partner of any of the
Holders, any affiliate of the general partner of the Holders and any of their
respective directors, officers, agents and employees and each other person, if
any, controlling the general partner of the Holders or any limited partner of
the Holders or any of their affiliates (an "INDEMNIFIED PERSON") against and
agrees to hold each of them harmless from any and all losses, claims, damages,
costs, liabilities or expenses (or actions, suits or proceedings in respect
thereof), including reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, suit or proceeding
("DAMAGES") incurred or suffered by any Indemnified Person, in each case arising
out of any misrepresentation or breach of warranty, covenant or agreement made
or to be performed by the Issuer pursuant to this Agreement.
(b) In addition to the indemnification obligations set forth above,
the Issuer hereby indemnifies each Indemnified Person against and agrees to
hold each of them harmless from any Damages to which such Indemnified Person may
become subject or which may be incurred or suffered by such Indemnified Person
in connection with or arising from the matters which are the subject of the
transactions contemplated under this Agreement or the Transaction Documents or
the transactions contemplated hereby or thereby and will reimburse any
Indemnified Person for all expenses (including counsel fees) as they are
incurred by any such Indemnified Person in connection with investigating,
preparing or defending any such action or claim pending or threatened, whether
or not such Indemnified Person is a party thereto, other than with respect to
any action or claim arising primarily from (i) any action or claim made by one
or more of the Indemnified Persons against another Indemnified Person or
Indemnified Persons in connection with the transactions contemplated by this
Agreement or (ii) any breach of the representations and warranties of the
Holders set forth in this Agreement. The Issuer shall not be responsible for any
Damages to the extent a court of competent jurisdiction shall have finally
determined that such Damages resulted primarily from such Indemnified Person's
bad faith or gross negligence. If for any reason (other than the limitations in
clauses (i) and (ii) above or the gross negligence or bad faith of any
Indemnified Person referred to above) the foregoing indemnity is unavailable or
insufficient to hold an Indemnified Person harmless, then the Issuer shall
contribute to amounts paid or payable by such Indemnified Person in respect of
such Damages in such proportion as appropriately reflects the relative benefits
received by, and fault of, the Issuer and such Indemnified Person in connection
with the matters as to which such Damages relate and other equitable
considerations.
(c) Each Holder, severally and not jointly, hereby indemnifies the
Issuer against and agrees to hold it harmless from any and all Damages incurred
or suffered by the Issuer arising out of any misrepresentation or breach of
warranty, covenant or agreement made or to be performed by such Holder pursuant
to this Agreement.
15
Article 8
MISCELLANEOUS
Section 8.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given,
if to any Holder, to:
c/o MSDW Capital Partners IV, LLC
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
with a copy
(which shall not constitute notice to any Holder) to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
if to the Issuer, to:
Choice One Communications Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy
(which shall not constitute notice to the Issuer) to:
Xxxxx Peabody LLP
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, III
Facsimile: (000) 000-0000
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a Business Day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
16
Section 8.02. No Waivers; Amendments. (a) No failure or delay on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Notwithstanding the foregoing, the Holders shall not have the right under any
circumstances to rescind their irrevocable waivers of certain rights with
respect to the Waiver Shares set forth in Article 3 and their remedies in
respect of any breach of this Agreement by the Issuer shall not include such
rescision.
(b) Any provision of this Agreement may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by all parties
hereto.
Section 8.03. Expenses; Documentary Taxes. The Issuer shall reimburse
the Holders for all of their respective reasonable out-of-pocket expenses,
including fees and reasonable disbursements of counsel, incurred by the Holders
in connection with the transactions contemplated by this Agreement. The Issuer
shall pay any and all stamp, transfer and other similar taxes payable or
determined to be payable in connection with the execution and delivery of this
Agreement or any of the Transaction Documents.
Section 8.04. Termination. (a) This Agreement may be terminated:
(1) at any time by mutual written agreement of the Issuer
and the Holders; or
(2) by the Issuer or the Holders if there shall be any
law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if consummation
of the transactions contemplated hereby would violate any nonappealable
final order, decree or judgment of any court or governmental body
having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to Section 8.04 shall
give notice of such termination to the other parties.
(b) If this Agreement is terminated as permitted by Section 8.04, such
termination shall be without liability of any party (or any stockholder,
director, officer, employee, agent, consultant or representative of such party)
to the other parties to this Agreement; provided that if such termination shall
result from the (1) willful failure of any party to fulfill a condition to the
performance of the obligations of the other parties, (2) failure to perform a
covenant of this Agreement or (3) breach by any party hereto of any
representation or warranty or agreement contained herein, such party shall be
fully liable for any and all damages incurred or suffered by the other party as
a result of such failure or breach.
Section 8.05. Successors and Assigns. The Issuer may not assign any
of its rights and obligations hereunder without the prior written consent of the
Holders. The Holders may assign their rights and obligations hereunder without
the consent of the Issuer. This Agreement shall be binding upon the Issuer and
the Holders and their respective successors and assigns.
Section 8.06. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York, without regard
to the choice of law rules of such state.
17
Section 8.07. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the United States District Court for the Southern District of New
York or any New York State court sitting in New York City, so long as one of
such courts shall have subject matter jurisdiction over such suit, action or
proceeding, and that any cause of action arising out of this Agreement shall be
deemed to have arisen from a transaction of business in the State of New York,
and each of the parties hereby irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section shall be deemed
effective service of process on such party.
Section 8.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 8.09. Counterparts; Effectiveness. This Agreement may be
executed in any number of counterparts each of which shall be an original with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other parties hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder
Section 8.10. Entire Agreement. This Agreement constitutes the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, written or oral, relating to the subject
matter hereof.
Section 8.11. Captions; Certain Definitions. The captions herein are
included for convenience of reference only and shall be ignored in the
construction or interpretation hereof. All references to "$" or "DOLLARS" shall
be to United States dollars and all references to "DAYS" shall be to calendar
days unless otherwise specified. Whenever the words "INCLUDE," "INCLUDES" or
"INCLUDING" are used in this Agreement, they shall be deemed to be followed by
the words, "without limitation."
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; NEXT PAGE IS SIGNATURE PAGE]
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CHOICE ONE COMMUNICATIONS INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, President and CEO
XXXXXX XXXXXXX XXXX XXXXXX CAPITAL PARTNERS IV, L.P.
By: MSDW Capital Partners IV, LLC,
its general partner
By: MSDW Capital Partners IV, Inc.,
its Member
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
--------------------------------------------
MSDW IV 892 INVESTORS, L.P.
By: MSDW Capital Partners IV, LLC,
its general partner
By: MSDW Capital Partners IV, Inc.,
its Member
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
--------------------------------------------
XXXXXX XXXXXXX XXXX XXXXXX CAPITAL INVESTORS IV, L.P.
By: MSDW Capital Partners IV, LLC,
its general partner
By: MSDW Capital Partners IV, Inc.,
its Member
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
--------------------------------------------
EXHIBIT A
NO. OF
NO. OF NO. OF CONTINGENT PERCENTAGE OF
SERIES A CLOSING AMOUNT POST-CLOSING
HOLDER SHARES WARRANTS WARRANTS WARRANT
Xxxxxx Xxxxxxx
Xxxx Xxxxxx
Capital Partners IV, L.P. 53,938 423,241 634,861 89.8970
MSDW IV 892 Investors, L.P. 4,590 36,014 54,021 7.6495
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Capital Investors IV, L.P. 1,472 11,551 17,327 2.4535
------ ------- ------- --------
Total 60,000 470,806 706,209 100.0000
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