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EXHIBIT 10.5
RCH HOLDINGS, INC.
SUBSCRIPTION AGREEMENT
FOR FLORIDA RESIDENTS ONLY:
WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN THE STATE OF FLORIDA, ANY SALE
IN THE STATE OF FLORIDA IS VOIDABLE BY THE PURCHASER IN SUCH SALE EITHER WITHIN
THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO
THE ISSUER, AN AGENT OF THE ISSUER OR AN ESCROW AGENT OR WITHIN THREE DAYS
AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER,
WHICHEVER OCCURS LATER.
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SOUTH CAROLINA RESIDENTS ONLY:
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER ONE OR MORE
SECURITIES ACTS.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSIONER OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ADEQUACY OR DETERMINED THE ADEQUACY OF THESE DOCUMENTS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
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Name of Subscriber
SUBSCRIPTION AGREEMENT
RCH Holdings, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxx
Gentlemen:
1. SUBSCRIPTION. The undersigned (the "Subscriber"), intending to
be legally bound, hereby irrevocably subscribes for and agrees to purchase,
subject to the terms and conditions set forth below, the number of shares (the
"Company Shares") of common stock, no par value per share ("Company Common
Stock"), of RCH Holdings, Inc., a Texas corporation ("RCH Holdings"), specified
on the signature page hereof. The Subscriber's subscription for the Company
Shares is being made in connection with the reorganization and recapitalization
of RCH Holdings (the "Reorganization and Recapitalization"), pursuant to which
all of the shareholders of RCH Holdings, including the Subscriber (assuming the
Subscriber purchases the Shares), will become stockholders of Allied Riser
Communications Holdings, Inc., a Delaware corporation and successor-in-interest
to substantially all of the assets and liabilities of RCH Holdings ("ARC
Holdings"). Such reorganization and recapitalization is more fully described in
the Proxy Statement attached as Appendix A (the "Proxy Statement").
If the Subscriber is already a holder of Company Common Stock and is
not subscribing for shares of Company Common Stock hereby, the Subscriber's
execution of this Subscription Agreement is being provided for the benefit of
the Company and ARC Holdings in connection with the Reorganization and
Recapitalization.
In connection with the Reorganization and Recapitalization,
shareholders of RCH Holdings will become stockholders of ARC Holdings and as
such will be required to enter into a stockholders' agreement (the
"Stockholders' Agreement"), a copy of which is attached as Appendix B.
The Subscriber hereby tenders to RCH Holdings the following:
(a) a fully completed and executed copy of this Subscription
Agreement (this "Agreement");
(b) a fully executed copy of the Stockholders' Agreement; and
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(c) payment in full (by personal or cashier's check, payable to
the order of RCH Holdings, Inc.) for the Company Shares,
which payment (the "Funds") shall be in an amount equal to
$.0001 multiplied by the number of Company Shares set forth
on the signature page hereof, rounded up to the nearest $.01.
Tender of a fully completed and executed copy of this Subscription Agreement,
the executed Stockholders' Agreement and the Funds shall be by delivery of the
same to the Company at the address shown above.
The Subscriber acknowledges that RCH Holdings reserves the right, in
its sole and absolute discretion, to reject this subscription, in whole or in
part, for any reason. If this subscription is rejected, this Agreement and the
Stockholders' Agreement shall, with respect to the Subscriber, be null and void
and all Funds paid by the Subscriber shall be returned by RCH Holdings as soon
as practicable. The Subscriber`s signature hereon constitutes an irrevocable
subscription to purchase the Company Shares specified on the signature page.
Upon the acceptance of this Agreement by RCH Holdings, a fully executed copy of
this Agreement, together with a fully executed copy of the Stockholders'
Agreement (without attachments) will be furnished to the Subscriber.
2. REORGANIZATION AND RECAPITALIZATION. As part of the
Reorganization and Recapitalization, RCH Holdings will sell substantially all
of its assets, and assign substantially all of its liabilities, to ARC Holdings
and receive, as consideration therefor, an aggregate of approximately
50,191,806 shares of common stock, $.0001 value per share, of ARC Holdings (the
"Purchase Shares"). As soon as practicable after such sale, RCH Holdings will
be dissolved and the Purchase Shares will be distributed to shareholders of RCH
Holdings in complete liquidation of RCH Holdings. As a result of the
Reorganization and Recapitalization, the shareholders of RCH Holdings,
including the Subscriber, will receive Purchase Shares and, therefore, become
stockholders of ARC Holdings. In connection with the Reorganization and
Recapitalization, stockholders of ARC Holdings will be required to enter into
the Stockholders' Agreement. The Reorganization and Recapitalization is more
fully described in the Proxy Statement. As used herein, the term "Company"
shall refer to RCH Holdings and its successors in interest under the
Reorganization and Recapitalization, including without limitation, ARC
Holdings.
THE SUBSCRIBER IS URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY
AND ALL REFERENCES TO THE REORGANIZATION AND RECAPITALIZATION IN THIS AGREEMENT
ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PROXY STATEMENT.
3. ACKNOWLEDGMENT OF INVESTMENT RISKS. The Subscriber
acknowledges that, if the Reorganization and Recapitalization is consummated,
the Subscriber will receive Purchase Shares in respect of the Company Shares
owned by the Subscriber. As a result, the Subscriber must not only evaluate the
risks attendant to an investment in the Company Shares but also the risks
related to an investment in the Purchase Shares. The Subscriber further
acknowledges that the various representations and warranties of the Subscriber
herein are a material inducement to ARC Holdings to consummate the
Reorganization and Recapitalization and that, but for such representations and
warranties, ARC Holdings might not consummate the Reorganization and
Recapitalization.
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In light of the foregoing, the Subscriber hereby acknowledges that an
investment in the Company Shares and the Purchase Shares received in respect of
such Company Shares (collectively, the "Shares") involves certain significant
risks. Each prospective investor acknowledges that there is a substantial risk
that the Subscriber will lose all or a portion of his or her investment and
should be financially capable of bearing the risk of such investment for an
indefinite period of time.
4. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER. The
Subscriber acknowledges, warrants and represents to the Company as follows:
(a) The Subscriber has received, has thoroughly read, is
familiar with and understands the contents of the Proxy Statement of
RCH Holdings, a copy of which is enclosed herewith as Appendix A
(together with all exhibits and attachments, the "Proxy Statement")
concerning the Reorganization and Recapitalization, RCH Holdings and
ARC Holdings, and the risks associated with the Shares.
(b) The Subscriber has received, has thoroughly read, is
familiar with and understands the contents of the Stockholders'
Agreement including, without limitation, the restrictions on transfer
of the Shares and the drag-along rights relating to the Shares
contained therein.
(c) The Subscriber has no need for liquidity in his or her
investment in the Shares and is able to bear the risk of that
investment for an indefinite period. The Subscriber understands that
there presently is no public market for the Shares and none is
anticipated to develop in the foreseeable future. The Subscriber's
present financial condition is such that the Subscriber is under no
present or contemplated future need to dispose of any portion of the
Shares subscribed for hereby to satisfy any existing or contemplated
undertaking, need or indebtedness. The Subscriber's overall commitment
to investments which are not readily marketable is not
disproportionate to his or her net worth and the investment in the
Company will not cause such overall commitment to become excessive.
The Subscriber's investment in the Shares does not exceed 20% of the
Subscriber's net worth (or, if applicable, the joint net worth of the
Subscriber and the Subscriber's spouse).
(d) The Shares have not been registered under the Securities
Act, or any state securities act other than those state securities
acts that the Company believes require registration of the Shares
thereunder, and are being sold on the basis of exemptions from
registration under the Securities Act and applicable state securities
acts, except those state securities acts that require registration of
the Shares thereunder. Reliance on such exemptions, where applicable,
is predicated in part on the accuracy of the Subscriber's
representations and warranties set forth herein. The Subscriber
acknowledges and hereby agrees that the Shares will not be
transferable under any circumstances unless the Subscriber either
registers his or her Shares in accordance with federal and state
securities laws or finds and complies with an exemption under such
laws. Accordingly, the Subscriber hereby acknowledges that there can
be no assurance that the Subscriber will be able to liquidate his
investment in the Company. The Subscriber understands that the Company
is under no obligation to register the Shares under the Securities Act
or to comply with any applicable
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exemption under the Securities Act on behalf of the Subscriber with
respect to any resale of the Shares and that the Subscriber will not
be able to avail himself of the provisions of Rule 144 promulgated
under the Securities Act with respect to the resale of the Shares
until the Shares have been beneficially owned by the Subscriber for a
period of at least one (1) year from date of purchase. The Subscriber
further understands that any certificates evidencing the Company
Shares will bear a legend referring to the foregoing transfer
restrictions.
The Subscriber also understands that certificates evidencing the Purchase
Shares received in respect of the Company Shares will bear the legends required
by the Stockholders' Agreement, in addition to the legends required by
applicable law.
In evaluating the merits and risks of an investment in the Company,
the Subscriber has had the opportunity to seek the advice of his or her legal
and financial advisors, has availed himself or herself of that right to the
extent deemed appropriate, and has not relied on the advice of the Company or
the Company's legal and financial counsel.
The Shares are being acquired solely for the Subscriber's own account,
for investment purposes only, and are not being purchased with a view to or for
the resale, distribution, subdivision or fractionalization thereof; and the
Subscriber has no present plans to enter into any contract, undertaking,
agreement or arrangement for such resale, distribution, subdivision or
fractionalization. In order to induce the Company to issue and sell to the
undersigned the Shares subscribed for hereby, the parties hereto agree that the
Company will have no obligation to recognize the ownership, beneficial or
otherwise, of the Shares by anyone other than the Subscriber. The Subscriber is
not taking and will not take or cause to be taken any action that would cause
the Subscriber to be deemed an "underwriter" within the meaning of Section
2(11) of the Securities Act.
There are substantial risk factors pertaining to an investment in the
Company. The Subscriber acknowledges that he or she has read the information
set forth above regarding certain of such risks and is familiar with the nature
and scope of all such risks, including, without limitation, risks arising from
the fact that the Company is an entity with limited operating history and
financial resources; and the Subscriber is fully able to bear the economic
risks of such investment for an indefinite period, and can afford a complete
loss thereof.
The Subscriber has been given the opportunity to (X) ask questions of
and receive answers from the Company and its designated representatives
concerning the terms and conditions of the offering, the Company and the
business and financial condition of the Company and (Y) obtain any additional
information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to assist the Subscriber in evaluating the
advisability of an investment in the Company and verifying the accuracy of
information furnished in the Proxy Statement. The Subscriber further represents
and warrants that, prior to signing this Agreement, he or she has asked such
questions, received such answers and obtained such information as he or she has
deemed necessary or advisable to evaluate the merits and risks of an investment
in the Company. The Subscriber is not relying on any oral representation made
by any other person as to the Company or its operations, financial condition or
prospects.
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The Subscriber understands that no federal, state or other
governmental authority has made any recommendation, findings or determination
relating to the merits of an investment in the Company.
The address of the Subscriber set forth on the signature page hereof
is a true and correct residence address, and the Subscriber is a bona fide
resident and domiciliary of such state or jurisdiction and has no present
intention of becoming a resident of any other state or jurisdiction.
The foregoing representations and warranties of the Subscriber are complete,
true and accurate as of the date hereof and shall survive delivery of the Funds
to the Company for all purposes. If in any respect any of such representations
and warranties shall not be true and accurate following delivery of the Funds
but prior to the sale of the Shares, the Subscriber shall give prompt written
notice of such fact to the Company, specifying which representations and
warranties are not true and accurate and the reasons therefor.
5. STOCK PURCHASE RIGHTS. In consideration for the Subscriber's
purchase of the Shares, ARC Holdings hereby grants to the Subscriber the
following rights to purchase shares of common stock, $.0001 par value per
share, of ARC Holdings:
(a) Protection Against Dilution.
(i) The Subscriber will have the right to purchase
additional shares of common stock, $.0001 par value per share
of ARC Holdings (the "ARC Holdings Common Stock"), for a cash
purchase price of $.0001 per share, upon the issuance by ARC
Holdings to non-employees of additional ARC Holdings Common
Stock exclusively for cash (including ARC Holdings Common
Stock issued upon conversion of convertible debt) in a
transaction other than a Qualifying Public Offering (as
defined in the Certificate of Incorporation of ARC Holdings,
attached as Appendix D to the Proxy Statement) such that
following any such additional issuance, each such individual
will be entitled to own the same percentage of ARC Holdings
Common Stock (excluding any conversion of ARC Holdings
Preferred Stock (as defined in the Stockholders' Agreement))
that he or she held immediately prior to such additional
issuance, without giving effect to the conversion of the ARC
Holdings Preferred Stock.
(ii) All of such purchase rights will terminate upon
the earlier to occur of (A) three years from the closing of
the Reorganization and Recapitalization, or (B) the
completion of cash equity investments in ARC Holdings, or its
successors or any other joint venture or other entity through
which all or a portion of the ARC Holdings business is
conducted, of $60 million in the aggregate (including the
capital to be invested by the investors upon their purchase
of ARC Holdings Preferred Stock in connection with the
Reorganization and Recapitalization; or (C) immediately prior
to a Qualifying Public Offering. In addition, if the
Subscriber is, as of the date of this Subscription Agreement,
an Employee Subscriber (as defined below), such Subscriber's
purchase right will terminate at such time as such
Subscriber's
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employment is terminated, for any reason, with RCH Holdings,
ARC Holdings or Allied Riser Communications, Inc., a Delaware
corporation and wholly owned subsidiary of ARC Holdings ("New
ARC"), or any other affiliate of ARC Holdings (RCH Holdings,
ARC Holdings, New ARC and any such affiliate who employs the
Subscriber are collectively referred to herein as the
"Employer") or by any third party who furnishes employees to
Employer.
(b) Restricted Shares and Vesting.
(i) With respect to a Subscriber who is, as of the
date of this Agreement, an employee of Employer, or who
serves in the capacity of an employee of the Employer,
whether employed directly by the Employer or by a third party
who furnishes employees to Employer, ("Employee Subscriber"),
the Shares owned by such Employee Subscriber (including
shares of ARC Holdings Common Stock hereafter acquired by
Subscriber pursuant to this Section 5) shall be restricted,
non-transferable and subject to repurchase by the Company
(the "Restricted Shares") until vested in accordance with
this subsection 5(b). The Employee Subscriber shall not be
entitled to vote with respect to any of such unvested
Restricted Shares. The Shares shall vest in accordance with
Exhibit A hereto.
(ii) If the Employee Subscriber voluntarily
terminates his or her employment with Employer, or is
terminated by the Employer for any reason, or by reason of
the death, disability, injury or illness of the Employee
Subscriber, then the Subscriber shall be entitled to retain
all Restricted Shares in which the Subscriber has vested. In
such event, pursuant to this Agreement and without further
action by the Employee Subscriber, the Company shall have the
right to repurchase all unvested Restricted Shares upon
payment to the Employee Subscriber of an amount equal to the
product of $.0001 multiplied by the number of unvested
Restricted Shares. The purchase price payable by the Company
pursuant to the preceding sentence shall be subject to
appropriate adjustment upon the occurrence of stock split,
stock dividend, recapitalization, merger or other similar
capital transaction.
(iii) In the event of a Qualifying Public Offering
or a business combination of ARC Holdings prior to vesting of
all unvested Restricted Shares notwithstanding the vesting
schedule set forth on Exhibit A hereof, all of the unvested
Restricted Shares shall immediately vest and the Company's
right of repurchase shall terminate. For purposes of this
Agreement, a "business combination" shall mean a sale to an
unaffiliated third party of at least a majority of the
outstanding shares of ARC Holdings Common Stock, a sale or
transfer to an unaffiliated third party of the power to elect
a majority of the members of the Board of Directors of
Employer, a sale to an unaffiliated third party of
substantially all of the assets of Employer, a merger or
other consolidation with an unaffiliated third party
following which the ability to elect a majority of the
members of the Board of Directors of Employer or a majority
of the voting power of the surviving corporation is not held
by the Financial Sponsors (as defined in the Stockholders'
Agreement).
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(c) Right to Purchase Reserved Management Shares.
The Subscriber hereby acknowledges that ARC Holdings
has reserved up to 11,950,000 shares of its ARC Holdings
Common Stock for issuance to certain specified future members
of senior management of ARC Holdings (the "Reserved
Management Shares"). If all of such Reserved Management
Shares are not issued to the members of management, for whom
such shares have been reserved, upon the earlier of (i) three
years from the closing of the Reorganization and
Recapitalization or (ii) immediately prior to consummation of
a Qualifying Public Offering, then each holder of ARC
Holdings Common Stock (other than the Investors (as defined
in the Proxy Statement)) shall be entitled to purchase, on a
pro rata basis, for a price of $.0001 per share, unissued
Reserved Management Shares in an amount and to the extent
that such stockholder would have been permitted to purchase
shares of ARC Holdings Common Stock had such shares been
issued to such stockholder upon consummation of the
Reorganization and Recapitalization.
The Subscriber understands that, if the Subscriber
is an Employee Subscriber, any shares of ARC Holdings Common
Stock purchased by such Employee Subscriber pursuant to this
Section 5(c) ("Allocated Reserved Shares") in respect of
unvested shares of ARC Holdings Common Stock already owned by
such Employee Subscriber shall also be unvested, and shall
vest at the same time as, and proportionate to, the vesting
of shares of ARC Holdings Common Stock already owned by such
Employee Subscriber in respect of which such Allocated
Reserved Shares were purchased.
6. COVENANTS IN RESPECT OF EMPLOYMENT. If the Subscriber is an
Employee Subscriber, he or she agrees that, in consideration for the issuance
of the shares to the Employee Subscriber, he or she will observe and perform
the covenants set forth on Exhibit B hereto to the same extent as if fully set
out herein (the "Employment Covenants").
(a) In connection with agreeing to perform the Employment
Covenants, the Employee Subscriber acknowledges and understands that
during the course of his or her employment, he or she will become
familiar with and/or create or develop certain confidential
information of the Employer which is exceptionally valuable to the
Employer and vital to the success of the Employer's business; and the
Employer acknowledges that the Employer would terminate or prohibit
Employee Subscriber's access to the Customers, employees and
Confidential Information (as each term is defined in the Employment
Covenants) of the Employer or its affiliates in the absence of the
restrictions and protections contained in the Employment Covenants;
and Employee Subscriber and the Employer desire to protect such
business and Confidential Information from disclosure to third parties
or its use to the detriment of the Employer; and the Employee
Subscriber acknowledges the reasonableness and necessity of the
restrictions contained in the Employment Covenants and is willing to
undertake such covenants.
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(b) In the event that the Employee Subscriber breaches any of
the terms contained in the Employment Covenants, the Employee
Subscriber stipulates that such breach will result in immediate and
irreparable harm to the business and goodwill of the Employer and that
damages, if any, and remedies at law for such breach would be
inadequate. The Employee Subscriber hereby agrees that the Employer
shall therefore be entitled to apply for and receive from any court of
competent jurisdiction an injunction to restrain any violation of the
Employment Covenants (without the requirement of posting a bond) and
for such further relief as the court may deem just and proper, and the
Employee Subscriber shall, in addition, pay to the Employer, following
judgment or other final determination by such court, the Employer's
costs and expenses in enforcing such terms (including court costs and
reasonable attorneys' fees).
(c) The obligations, duties and liabilities of the Employee
Subscriber pursuant to the Employment Covenants are continuing,
absolute and unconditional and shall remain in full force and effect
as provided herein. If (i) the Employee Subscriber's employment is
terminated and (ii) the Employee Subscriber is receiving severance
benefits, and (iii) the Employee Subscriber violates the Employment
Covenants, the Employee Subscriber agrees that he or she shall forfeit
all rights to any unpaid portion of the severance benefits. The
Employer may also exercise any additional remedies available to it
whether at law or in equity, upon any such violation.
(d) If any restriction or limitation in the Employment
Covenants is deemed to be unenforceable, onerous, unduly restrictive
or unreasonable as to scope, activity, territory or duration, by a
court of competent jurisdiction, it shall not be stricken in its
entirety and held totally void and unenforceable, but shall be deemed
rewritten to the minimum extent possible in order to limit any
restriction or limitation or other term to the minimum extent
necessary in order to effectuate the intent of the parties and shall
remain enforceable to the maximum extent permissible within reasonable
bounds in order to effect such lesser restriction as such court shall
deem reasonable. If any phrase, clause or provision of the Employment
Covenants is declared invalid or unenforceable by a court of competent
jurisdiction, and such phrase, clause or revision is not capable of
being rewritten pursuant to the foregoing sentence, then such phrase,
clause or provision shall be deemed severed from the Employment
Covenants, but will not affect any other provisions of the Employment
Covenants, which shall otherwise remain in full force and effect.
(e) If the Employee Subscriber enters into an employment
agreement with Employer that contains provisions comparable to those
contained in the Employment Covenants, the provisions of this Section
6 shall control unless such employment agreement specifically
provides, by reference to this Section 6, that it supersedes this
Section 6.
7. ASSIGNMENT. The Subscriber shall not assign or transfer this
Agreement, and hereby further agrees and acknowledges that any transfer of the
Shares to be acquired by the Subscriber pursuant to the terms hereof shall be
made only in accordance with the transfer restrictions described in this
Agreement and the Stockholders' Agreement and any other restrictions under
applicable federal and state securities laws.
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8. INDEMNIFICATION. The Subscriber understands and acknowledges
that the sale of the Shares to the Subscriber will be based upon the
representations and warranties set forth herein and in other instruments and
documents relating to the Subscriber's subscription for the Shares, and the
Subscriber hereby agrees to indemnify, hold harmless and defend the Company,
its successors, and current and future investors and affiliates thereof (other
than the Subscriber), together with each officer, director, employee and
attorney of any such party from and against any and all loss, damage, liability
or expense, including costs and reasonable attorneys' fees, to which they may
be put or which they may incur by reason of, or in connection with, any
misrepresentation made by the Subscriber herein or elsewhere, any breach by the
Subscriber of the representations or warranties set forth herein or elsewhere,
or the failure by the Subscriber to fulfill any of his or her covenants or
agreements set forth herein or elsewhere or arising out of the sale or
distribution of any of the Shares by the Subscriber in violation of the
Securities Act or any other applicable securities or "Blue Sky" laws.
9. CONFIDENTIALITY. The Subscriber understands and acknowledges
that this Agreement, the Proxy Statement and the Stockholders' Agreement are
confidential, and hereby represents and warrants to the Company that the
Subscriber will not reproduce or distribute them, in whole or in part, nor
divulge any of their contents, to any person other than his or her legal, tax,
accounting or other advisors, if any, without the prior written consent of the
Company.
10. NO WAIVER. Notwithstanding any of the representations,
warranties, acknowledgments or agreements made herein by the Subscriber, the
Subscriber does not thereby or in any other manner waive any rights granted to
him under applicable federal or state securities laws.
11. NOTICES. Any notices or other communications required or
permitted hereby shall be made in writing and shall be deemed sufficiently
given if sent by registered or certified mail, postage prepaid, return receipt
requested, (i) to the Subscriber, at the residence address set forth on the
signature page hereof, and (ii) to the Company, at 000 X. Xxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxx 00000, Attn: Xxxx X. Xxxxxxx.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and to the successors or
assigns of the Company and to the personal and legal representatives, heirs,
guardians and successors of the Subscriber.
13. SPOUSES. By executing this Agreement, the spouse of the
undersigned Subscriber, if applicable, who is a natural person agrees to be
bound in all respects by the terms of this Agreement to the same extent as the
Subscriber. Such spouse further agrees that should such spouse predecease the
Subscriber or should such spouse become divorced from such Subscriber, any of
the Shares which such spouse may own or in which such spouse may have any
interest shall remain subject to all of the restrictions and to all of the
rights of the Subscriber contained in this Agreement.
14. APPLICABLE LAW. NOTWITHSTANDING THE PLACE WHERE THIS
AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY
AGREE THAT ALL OF THE TERMS AND PROVISIONS HEREOF SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE
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LAWS OF THE STATE OF DELAWARE, EXCLUSIVE OF ITS CONFLICTS OF LAWS RULES,
APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED THEREIN.
15. ACCEPTANCE BY THE COMPANY. This Agreement may be accepted or
rejected by the Company, in its sole and absolute discretion, in whole or in
part. Acceptance by the Company shall be effected by counterpart execution of
this Agreement by an authorized signatory thereof.
16. EXECUTION BY ARC HOLDINGS. If this Agreement is accepted by
the Company, ARC Holdings shall execute this Agreement for the limited purposes
set forth in Section 5.
17. WAIVER OF JURY TRIAL. To the extent permitted by applicable
law, the Subscriber hereby irrevocably, knowingly, voluntarily and
intentionally waives all right of trial by jury in any litigation, action,
proceeding or counterclaim based hereon or arising out of, under or in
connection with this Agreement.
18. ACKNOWLEDGMENTS WITH RESPECT TO PROXY STATEMENT. The
Subscriber hereby acknowledges that:
(a) Notwithstanding anything to the contrary contained in the
Proxy Statement, the rights of the Subscriber to purchase additional shares of
ARC Holdings Common Stock as described in Section 5 hereof shall commence and
expire as provided in Section 5, and that any conflicting or contradictory
descriptions contained in the Proxy Statement are incorrect and superseded by
the terms of this Agreement.
(b) In the Section of the Proxy Statement entitled "Dilution" (on
page 34 of the enclosed Proxy Statement), it was erroneously stated that "Non
Employee RCH Shareholders will be diluted by the Stock Issuance, pursuant to
which the Employee and Management Group members will purchase an aggregate of
46,570,308 newly issued shares of RCH Common Stock for nominal consideration."
The Subscriber understands that, in fact, management, current and former
employees and non-employee shareholders of the Company will purchase these
46,570,308 shares and that a correct statement as to the identity of the
purchasers of these shares is contained in the cover letter accompanying the
Proxy Statement, on page 1 thereof and the tabular information presented under
the caption "Dilution" on page 34.
(c) By executing this Agreement and delivering it to the Company,
the Subscriber consents to the consummation of the Reorganization and
Recapitalization on the terms set forth in the Proxy Statement, subject to the
corrections noted above, ratifies and confirms any consent previously delivered
to the Company pertaining to the Reorganization and Recapitalization and
further acknowledges that the consummation of the Reorganization and
Recapitalization on the terms set forth in the Proxy Statement, subject to the
corrections noted above, is substantially the same as the Reorganization and
Recapitalization described in the Proxy Statement, prior to the making of such
corrections.
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SIGNATURE PAGE
EXECUTED this day of November, 1998 at
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-------------------------------------------.
Number of
Company Shares:
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Price per
Company Share: $
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Total Purchase Price $
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Subscriber's Address: -------------------------------------------
(Signature of Subscriber)
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---------------------------------- (Printed Name of Subscriber)
Social Security No.:
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Subscriber's Spouse's Address: -------------------------------------------
(If different from Subscriber's (Signature of Subscriber's Spouse)
Address)
----------------------------------
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(Printed Name of Subscriber's Spouse)
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Social Security No.:
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APPROVED AND ACCEPTED AS
OF NOVEMBER , 1998:
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RCH HOLDINGS, INC.
By:
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Xxxx X. Xxxxxxx
Its: Chief Financial Officer
ALLIED RISER COMMUNICATIONS HOLDINGS, INC.
By:
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Xxxx X. Xxxxxxx
Its: Chief Financial Officer
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