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EXHIBIT 10.21
VELOCOM INC.
SERIES B PREFERRED STOCK
PURCHASE AGREEMENT
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TABLE OF CONTENTS
1. Agreement To Sell And Purchase.................................................................................1
1.1 Authorization of Shares ..................................................................................1
1.2 Sale and Purchase ........................................................................................1
2. Closing, Delivery And Payment..................................................................................1
2.1 Initial Closing ..........................................................................................1
2.2 Subsequent Closing .......................................................................................1
2.3 Certificates; Payment ....................................................................................2
3. Representations And Warranties Of The Company..................................................................2
3.1 Organization and Standing. ...............................................................................2
3.2 Capitalization of the Company ............................................................................2
3.3 Authority ................................................................................................3
3.4 Consents and Approvals ...................................................................................3
3.5 Compliance with Laws .....................................................................................3
3.6 Trademarks, Patents, Trade Names, etc ....................................................................4
3.7 Actions Pending ..........................................................................................4
3.8 Contracts ................................................................................................5
3.9 Investments in United States Real Property Interests .....................................................5
3.10 Unrelated Business Taxable Income .......................................................................5
3.11 Not a Qualified Small Business ..........................................................................6
3.12 Subsidiaries ............................................................................................6
3.13 Capitalization of the Company's Subsidiaries ............................................................6
3.14 Share Ownership .........................................................................................6
3.15 Financial Statements ....................................................................................6
3.16 Material Changes ........................................................................................7
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3.17 Title ...................................................................................................7
3.18 Licenses ................................................................................................7
3.19 Insurance ...............................................................................................8
3.20 Liabilities .............................................................................................8
3.21 Taxes ...................................................................................................8
3.22 Collective Bargaining Agreements, Employment Agreements and Employee Relations ..........................8
3.23 Employee Benefits .......................................................................................9
3.24 Recordkeeping Compliance ................................................................................9
3.25 Condition of the Companies; Operation of Business in the Ordinary Course ................................9
3.26 Y2K Compliance ..........................................................................................9
3.27 Broker's Fees. .........................................................................................10
3.28 Foreign Corrupt Practices Act ..........................................................................10
3.29 Offering ...............................................................................................10
4. Representations And Warranties Of The Purchasers..............................................................10
4.1 Requisite Power and Authority ...........................................................................10
4.2 Investment Representations ..............................................................................11
4.3 Broker's Fees ...........................................................................................12
5. Conditions Precedent To Purchasers' Obligations...............................................................12
6. Additional Closings...........................................................................................13
7. Use of Proceeds...............................................................................................13
8. Miscellaneous.................................................................................................13
8.1 Governing Law ...........................................................................................13
8.2 Survival ................................................................................................13
8.3 Successors and Assigns ..................................................................................13
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8.4 Entire Agreement; Amendment and Waiver ..................................................................13
8.5 Specific Enforcement ....................................................................................14
8.6 Severability ............................................................................................14
8.7 Notices .................................................................................................14
8.8 Counterparts ............................................................................................14
8.9 Future Financings .......................................................................................14
8.10 Expense Reimbursement ..................................................................................15
9. Certain Definitions...........................................................................................15
EXHIBITS:
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Exhibit A Schedule of Purchasers A-1
Exhibit B Form of Amended and Restated Certificate of Incorporation B-1
Exhibit C Form of Second Amended and Restated Investors Agreement C-1
Exhibit D Form of Legal Opinion D-1
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VELOCOM INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Series B Preferred Stock Purchase Agreement (this "Agreement") is
entered into as of December 6, 1999, by and among VELOCOM INC., a Delaware
corporation (the "Company"), and each of those persons and entities, severally
and not jointly, whose names are set forth on the Schedule of Purchasers
attached hereto as Exhibit A (collectively the "Purchasers" and individually a
"Purchaser").
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE
1.1 Authorization of Shares. On or prior to the Initial Closing (as
defined in Section 2 below), the Company shall have authorized the sale and
issuance to the Purchasers of shares of its Series B Preferred Stock (the
"Shares") having the rights, preferences, privileges and restrictions set forth
in the Amended and Restated Certificate of Incorporation of the Company,
attached hereto as Exhibit B (the "Certificate of Incorporation").
1.2 Sale and Purchase. Subject to the terms and conditions hereof, the
Company hereby agrees to issue and sell to each Purchaser and each Purchaser
severally and not jointly agrees to purchase from the Company, up to the
aggregate number of Shares set forth opposite such Purchaser's name on Exhibit A
(the "Purchaser Share Limit"), at a purchase price of Six Dollars ($6.00) per
Share, at the Initial Closing and the Subsequent Closing (as defined in Section
2 below) as more fully set forth on Exhibit A.
2. CLOSING, DELIVERY AND PAYMENT
2.1 Initial Closing. The initial closing of the sale and purchase of
the Shares under this Agreement (the "Initial Closing") shall take place at 9:00
a.m. on December 6, 1999, at the offices of Holland & Xxxx LLP, 000 Xxxxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 or at such other time or place as the
Company and the Purchasers may mutually agree (such date is hereinafter referred
to as the "Initial Closing Date"). The total number of Shares to be purchased by
all Purchasers in the Initial Closing shall be seven million six hundred
fifty-seven thousand seventy-three (7,657,073), as set forth on Exhibit A.
2.2 Subsequent Closing. A subsequent closing of the sale and purchase
of the Shares under this Agreement (the "Subsequent Closing") shall take place
at 9:00 a.m. on December 31, 1999, at the offices of Holland & Xxxx LLP, 000
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000, or at such other time or place
as the Company and the
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Purchasers may mutually agree (such date is hereinafter referred to as the
"Subsequent Closing Date"). The total number of Shares to be purchased by all
Purchasers in the Subsequent Closing shall be sixteen million two hundred
seventy-one thousand one hundred thirteen (16,271,113), as set forth on
Exhibit A.
2.3 Certificates; Payment. Each of the Initial Closing and the
Subsequent Closing are referred to herein individually as a "Closing," and
collectively they are referred to herein as the "Closings." At each Closing,
subject to the terms and conditions hereof, the Company shall deliver to the
Purchasers certificates representing the number of Shares to be purchased at
each such Closing by each Purchaser, against payment of the purchase price
therefor by certified check or wire transfer of immediately available funds.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except for the representations and warranties of the Company set forth
in Sections 3.13 and 3.14, all representations and warranties made by the
Company pursuant to this Section 3 regarding the Brazilian Companies and the
Acquired Subsidiaries shall be made to the knowledge of the Company. The Company
hereby represents and warrants to each Purchaser as of the date hereof, as
follows:
3.1 Organization and Standing. Each of the Companies is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Companies has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its
businesses as presently conducted and as presently proposed to be conducted.
Each of the Companies is qualified to do business in each jurisdiction where the
failure to be so qualified would result in a material adverse effect on the
business, operations, assets, prospects or condition (financial or otherwise) of
any of the Companies (a "Material Adverse Effect").
3.2 Capitalization of the Company. The authorized capital stock of the
Company, immediately prior to the Initial Closing Date, shall consist of (a) one
hundred six million six hundred sixty-six thousand, six hundred sixty-seven
(106,666,667) shares of Common Stock, eleven million two hundred eighty-three
thousand eight hundred twenty-six (11,283,826) of which are issued and
outstanding as of the Initial Closing Date, and (b) seventy two million six
hundred sixty-six thousand six hundred sixty-seven (72,666,667) shares of
Preferred Stock, of which (i) thirty-one million (31,000,000) are designated as
Series A Preferred Stock, thirty million seven hundred six thousand three
hundred thirty-three (30,706,333) of which are issued and outstanding as of the
Initial Closing Date, and (ii) forty one million six hundred sixty-six thousand
six hundred sixty-seven (41,666,667) are designated as Series B Preferred Stock,
of which none is issued and outstanding as of the Initial Closing Date. All
issued and outstanding shares of the Company's Common Stock and Series A
Preferred Stock have been duly authorized, validly issued and are fully paid and
non-assessable. Except for the three million seven hundred ninety-eight thousand
five hundred forty-four (3,798,544) options outstanding immediately prior to the
Initial Closing Date, there are
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no options, warrants or other rights to purchase from the Company any of its
equity securities that are outstanding as of the Initial Closing Date.
3.3 Authority.
(a) The Company has full power, right and authority to execute
the Transaction Documents and to perform all of its obligations hereunder and
thereunder. The execution and delivery of the Transaction Documents by the
Company has been, and consummation by the Company of the transactions
contemplated thereby has been, duly authorized by all necessary action of the
Company. The Transaction Documents have been duly and validly executed and
delivered by the Company and constitute the legal, valid, binding and
enforceable obligation of the Company subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other similar
Laws affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). The execution, delivery and performance by the
Company of the Transaction Documents and the consummation of the transactions
contemplated thereby will not (i) conflict with or violate any Contracts or
Permits to which the Companies are a party or bound and, in particular, will not
cause prepayment of any banking or other indebtedness of any of the Companies
and will not otherwise give any other Person the right to accelerate,
renegotiate or terminate or receive any payment and will not constitute a
default, event of default or an event which with the passage of time or lack of
notice, or both, would constitute a default or event of default under such
Contract, (ii) conflict with or violate any provision of any applicable Legal
Requirement to which any Company is subject, (iii) conflict with or violate any
Judgment applicable to any of the Companies, or (iv) conflict with, or result in
a breach or default under, any term or condition of the constituent documents of
the Companies.
(b) When issued in compliance with the provisions of this
Agreement and paid for by each Purchaser, the Shares and, when issued upon
conversion of the Shares, the Common Stock so issuable, will be validly issued,
fully paid and nonassessable and will not have been issued in violation of any
preemptive rights. The Shares will have the benefit of the terms and provisions
of the Certificate of Incorporation.
3.4 Consents and Approvals. Except as set forth on Schedule 3.4, no
consent, license, approval, waiver, expiration of waiting period or
authorization of, or registration or declaration with, any governmental
authority, agency, bureau or commission, or any other Person (a "Consent"), is
required to be obtained or made by the Company, in connection with its
execution, delivery, performance of the Transaction Documents and enforceability
of its respective obligations under the Transaction Documents and the
transactions contemplated thereby.
3.5 Compliance with Laws.
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(a) Except as set forth on Schedule 3.5(a), each of the
Companies has been in compliance in all material respects with all (i)
Environmental Laws, (ii) applicable telecommunications Laws, and (iii) material
Legal Requirements. None of the Companies has received (A) any citations,
notices of violations, complaints, consent orders (or amendments to or
modifications of such orders), compliance schedules or other similar enforcement
orders, or (B) any written notice in any form, including inspection reports,
from any governmental entity or any other Person which in any case would
indicate that there was not then or is not currently such compliance with all
such Legal Requirements.
(b) Schedule 3.5(b) sets forth an accurate and complete list
of all material Permits which are used or held by each of the Companies in
connection with the operation of its business. The Company represents that (i)
all material Permits of each of the Companies are in full force and effect, (ii)
any applications for renewal of any material Permit due prior to the Closing
have been, or will be, timely filed prior to the Closing, (iii) no proceeding or
other legal action to modify, suspend, revoke, withdraw, terminate or otherwise
limit any such material Permit is pending or, to the knowledge of the Company,
threatened, and (iv) each of the Companies has made all payments required to be
made under all material Permits, including, without limitation, in respect of
any Licenses.
3.6 Trademarks, Patents, Trade Names, etc.
(a) Schedule 3.6 contains a listing of all patents, know-how,
trademarks, trade names, service marks, service names, copyrights and other
intellectual or proprietary property used in the conduct of each of the
Companies' businesses (the "Patent and Trademark Rights"). Except as set forth
on Schedule 3.6, none of the Companies has received any notice from any other
Person challenging the right of any of them to use any such Patent and Trademark
Rights owned or used by or licensed to each of the Companies. The Company has no
knowledge that any Patent and Trademark Right is being infringed upon or
appropriated by others, and none is subject to any outstanding Judgment
affecting the scope of the free and unrestricted use by any of the Companies or
is used contrary to the provisions of any licensing or other agreement. The
Company has no knowledge that there are any geographic restrictions on the use
by any of the Companies of the Patent and Trademark Rights.
(b) The Companies have not entered into any agreement or
arrangement for the provision or acquisition of any Patent and Trademark Rights.
3.7 Actions Pending. There is no suit, action, claim, arbitration or
similar proceeding or investigation pending or, to the Company's knowledge,
threatened against any of the Companies (i) which, if adversely resolved, would
be reasonably likely to have a Material Adverse Effect, (ii) with respect to
which there is a reasonable likelihood of a determination which would prevent
the Company from consummating the transactions contemplated by
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the Transaction Documents. None of the Companies is a party to or is bound by
any Judgment of any governmental authority, arbitrator or any other Person. None
of the Companies has compromised, settled or lost any arbitration or judicial or
administrative proceeding.
3.8 Contracts.
(a) Schedule 3.8 contains an accurate and complete list of all
Contracts to which any of the Companies is a party or by which any of such
Companies' assets or properties are bound or affected and which (i) involve the
obligation (including contingent obligations) to pay by or to any of such
Companies amounts in excess of US$100,000 in the aggregate in respect of the
Company and the Subsidiaries and amounts in excess of US$1,000,000 in the
aggregate in respect of the Brazilian Companies, (ii) are Contracts with any
stockholder or member or any Affiliate of any stockholder or member, (iii) are
Contracts with governmental entities, or (iv) were not entered into in the
ordinary course of business of any of such Companies.
(b) All Contracts are valid, binding and enforceable by each
of the respective Companies in accordance with their respective terms and none
of such Companies is in default in any material respect under any of such
Contracts nor, to the knowledge of the Company, is there any basis for any valid
claim of default or violation under any Contract. To the knowledge of the
Company, no other party to any of such Contracts is in default in any material
respect thereunder nor does there exist any event or condition, which upon the
giving of notice or the lapse of time or both, would (i) constitute a default in
any material respect or event of default thereunder or (ii) entitle any other
party thereto to terminate such Contract.
(c) None of the Companies is a party to any Contract
containing an undertaking on its part not to compete in any business, industry
or geographical area except as set forth in the Licenses.
3.9 Investments in United States Real Property Interests. The Company's
capital stock does not, and the Company shall use its reasonable commercial
efforts to ensure that its capital stock will not, constitute a United States
real property interest as that term is defined in Section 897(c)(1)(A)(ii) of
the Internal Revenue Code of 1986, as amended (the "Code"). The preceding
representation is based on a determination by the Company that the Company is
not and has not been a United States real property holding corporation (as that
term is defined in Section 897(c)(2) of the Code) ("USRPHC") during the five (5)
year period preceding the date of this Agreement. From time to time, upon the
request of any Purchaser, the Company shall make a determination as to its
status as a USRPHC. If at any time in the future the Company should become a
United States real property holding corporation, the Company shall, as promptly
as possible, notify each Purchaser of such change in status.
3.10 Unrelated Business Taxable Income. The Company shall use its
reasonable commercial efforts to ensure that any gross income derived by a
Purchaser
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from the Company shall be in the form of dividends, interest, capital
gains and losses from the disposition of property, and rents and royalties, but
only such rents and royalties as are excluded pursuant to Code Sections
512(b)(2) and 512(b)(3), respectively, in calculating unrelated business taxable
income and only such dividends, interest, capital gains and losses, and rents
and royalties that are not included under Section 512(b)(4) of the Code in
calculating unrelated business taxable income.
3.11 Not a Qualified Small Business. The Company does not qualify as a
"Qualified Small Business" as defined in Section 1202(d) of the Code.
3.12 Subsidiaries. Schedule 3.12 sets forth the current ownership
structure of the Company and its Subsidiaries.
3.13 Capitalization of the Company's Subsidiaries Schedule 3.13 sets
forth the outstanding capital of each of the Companies (other than the Company),
the number of their authorized and issued shares or equity interests and their
nominal value. All of the shares or equity interests of the Companies (other
than the Company) have been duly authorized, validly issued and are fully paid
and non-assessable. The Companies (other than the Company) have no other shares
or equity interests of any kind authorized or outstanding, no outstanding
securities convertible into or exchangeable for or carrying the right to acquire
any equity security of any of the Companies (other than the Company) and no
outstanding options, warrants or other agreements or commitments under which any
of the Companies (other than the Company) are obligated to issue any additional
shares or equity interests. None of the shares of the Companies (other than the
Company) is subject to any Encumbrances except as set forth on Schedule 3.13.
3.14 Share Ownership.
(a) Schedule 3.14(a) sets forth a true and correct list of the
stockholders of the Company, the number of shares owned by the stockholders of
the Company and the percentage ownership represented by each such stockholding.
(b) Schedule 3.14(b) sets forth a true and complete list of
(i) all stockholders agreements, limited liability company agreements or other
agreements in respect of or relating to the equity interests in the Companies to
which the Company or any of its Subsidiaries is a party, and (ii) all Contracts
relating to the purchase, sale, transfer or other disposition of any securities
or equity interests of any of the Companies to which the Company or any of its
Subsidiaries is a party.
3.15 Financial Statements. The Company has delivered to each Purchaser
unaudited balance sheets and the related unaudited income statement and retained
earnings statements for the periods set forth therein of (x) the Company at
December 31, 1998 and September 30, 1999, (y) MegaTel do Brasil S.A., Telelatina
Management Company, Smartel S.A., Formus S.A. and Telelatina S.A. at June 30,
1999 and (z) Xxxxxx X.X. at May 31, 1999 (the items referred to in (x), (y) and
(z) are referred to herein collectively as the "Financial Statements"). Except
as may be otherwise noted
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therein, the Financial Statements present fairly, in all material respects in
accordance with generally accepted accounting principles then in effect, the
financial position of each of the Companies as of the date set forth therein and
the results of operations of each of such Companies for the periods set forth
therein, except that the Financial Statements (i) do not have all footnotes
required by generally accepted accounting principles and (ii) are subject to
normal, year-end adjustments.
3.16 Material Changes. Except as set forth in the Financial Statements,
since the date of the latest respective Financial Statements (i) there have been
no changes in the business, operations, assets or liabilities of any of the
respective Companies which, individually or in the aggregate, has had or would
be reasonably likely to have, a Material Adverse Effect; (ii) none of such
Companies has made or declared any dividend or declared, made or paid any other
distribution in respect of its capital stock; (iii) none of such Companies has
suffered any casualty which resulted in damage, destruction or loss (whether or
not covered by insurance); and (iv) none of such Companies has suffered any
strike or other work stoppage.
3.17 Title. Each of the Companies has (i) with respect to real property
which is leased and used by it in its business, valid and subsisting leasehold
interests and (ii) with respect to the owned or leased personal property and
assets used by it in its business, good title or valid leasehold interests, in
each instance, free and clear of any Encumbrances, except Permitted Encumbrances
or any Encumbrances reflected on the Financial Statements.
3.18 Licenses.
(a) Schedule 3.18(a) sets forth a complete list of all of the
telecommunications licenses held by the Companies (the "Licenses"). Each of the
Licenses listed in Schedule 3.18(a) was duly authorized, granted and delivered
by the appropriate governmental entity or an instrumentality thereof to such of
the Companies identified in Schedule 3.18(a) as holding such License and
recorded with the appropriate government entity in accordance with all
applicable Legal Requirements. Each of the Licenses is held by such of the
Companies identified in Schedule 3.18(a) as holding such License, free and clear
of any Encumbrance or other attachments and duties of any kind except as set
forth in the relevant License. There are no restrictions or limitations on the
use of the rights granted by the Licenses except for those expressly set forth
in each of the Permits, Licenses and applicable Law.
(b) Since the award of the Licenses, each of the Companies
holding a License has complied in all material respects with the terms and
conditions of the License held by it (including any required build-out deadlines
and notice or filing obligations) and has made all necessary payments required
to be made thereunder. None of the transactions contemplated hereby will result
or has resulted in the termination or revocation of any License.
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3.19 Insurance. Each of the Companies has in place adequate and
appropriate insurance policies, given its industry and its current stage of
development. None of the Companies has been notified of any cancellation of or
any refusal of any insurance coverage relating to its operations by any
insurance carrier to which it has applied for insurance since its formation.
Each of the Companies is in compliance in all material respects with such
insurance policies and has paid all outstanding premiums when and as due. There
is no pending claim under any insurance policy to which any of the Companies is
an insured or beneficiary or any fact or circumstance reasonably likely to give
rise to such a claim.
3.20 Liabilities. Except as set forth in the Financial Statements, on
Schedule 3.20, or in the Licenses or Contracts, none of the Companies has
incurred any outstanding material obligation, debt or liability, fixed or
contingent ("Liabilities") to any Person.
3.21 Taxes.
(a) The Companies have filed all federal, state, departmental,
municipal and foreign Tax returns required by law to be filed by them other than
such filings, the failure of which to have been made, would not reasonably be
likely to have a Material Adverse Effect. Except as set forth on the Financial
Statements, and except for taxes the failure of which to pay would not
reasonably be likely to have a Material Adverse Effect, each of the Companies
has paid all such taxes that have already become due and payable. The provisions
shown on the Financial Statements are adequate to reflect any material amount of
unpaid Taxes of the Companies due or to become due with respect to fiscal
periods ended on or before the date of the Financial Statements. As of the date
hereof, there is no claim or assessment pending against the Company or, to the
Company's knowledge, any of the other Companies, based on a failure to pay Taxes
and no basis exists for any such claim.
(b) The Company is not aware of and, to the Company's
knowledge, there are no circumstances which, either by passage of time or
issuance of an assessment binding on any of the Companies to pay any Tax or
contribution, may give rise to any type of dispute with any Tax authority in
relation to any Tax obligation or liability.
3.22 Collective Bargaining Agreements, Employment Agreements and
Employee Relations.
(a) Except as set forth on Schedule 3.22(a), none of the
Companies has in effect any collective bargaining agreement or employment
agreement which is not terminable at will in accordance with the laws of the
jurisdictions in which it operates. Except as set forth on Schedule 3.22(a),
there are no disputes currently subject to any grievance procedure, arbitration
or litigation under such collective bargaining agreements or employment
agreements nor is there any default under any such agreements, by any of the
Companies or to the knowledge of the Company, any other party thereto.
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(b) Schedule 3.22(b) sets forth all employees and directors of
the Company and their remuneration rates, applicable benefits and the applicable
term of their employment.
3.23 Employee Benefits.
(a) Except as set forth on Schedule 3.23(a), the Companies do
not maintain or contribute to or have any liability with respect to (i) any
incentive, bonus, commission or deferred compensation or severance or
termination pay plan, agreement or arrangement for the benefit of employees
employed by it or any director, (ii) any pension, profit-sharing, stock
purchase, stock option, group life insurance, hospitalization insurance,
disability, retirement or any other employee benefit plan, agreement or
arrangement, for the benefit of employees employed by it or any director or
(iii) any fringe benefit plan, agreement or arrangement for the benefit of
employees employed by it or any director (the items referred to in (i), (ii),
and (iii) above are hereinafter referred to collectively as, the "Plans" and
individually as a "Plan").
(b) There are no scheduled or agreed-upon future increases of
benefit levels for employees employed by any of the Companies, and no increases
in benefits have (i) been proposed by any of the Companies for the benefit of
its employees or any director, (ii) been made the subject of representation or
similar communication by any of the Companies to their employees or directors or
(iii) to the knowledge of the Company, been requested or demanded by employees
employed by any of the Companies under circumstances which make it reasonable to
expect that such increase will be granted.
(c) Each of the Companies has made all requisite pension and
other governmental and/or social security contributions on its own behalf and on
behalf of its employees and is in compliance in all material respects with all
labor and social security obligations pursuant to the applicable Laws and Legal
Requirements.
3.24 Recordkeeping Compliance. Except as set forth on Schedule 3.24,
each of the Companies has maintained its books and records and accounts in
accordance with all applicable Legal Requirements, and all corporate and other
documents required to be submitted to relevant federal, state, departmental and
municipal authorities by each of such Companies have been duly and punctually
submitted and have been true and correct in all material respects.
3.25 Condition of the Companies; Operation of Business in the Ordinary
Course. All of the material equipment, buildings and other assets of each of the
Companies used in connection with the operation of its businesses are in good,
workmanlike condition and fit for use for its intended purpose, ordinary wear
and tear excepted.
3.26 Y2K Compliance. Each of the Companies has taken steps to verify
from vendors that, in and following the Year 2000, (i) its computer systems and
(ii) equipment containing embedded microchips (including systems and equipment
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supplied by others or with which the systems of such Company interface) will
function properly. The cost to each of the Companies of the reasonably
foreseeable consequences of Year 2000 to the respective Company resulting from
the failure of its systems cannot be reasonably expected to have a Material
Adverse Effect.
3.27 Broker's Fees. Except for any fees owed to Xxxxxx Brothers,
Xxxxxxxxx Lufkin & Xxxxxxxx and TD Securities, for which the Purchasers have no
liability, the Company has not employed any broker, finder, consultant or
intermediary in connection with the transactions contemplated by the Transaction
Documents that would be entitled to a broker's, finder's or similar fee or
commission in connection therewith.
3.28 Foreign Corrupt Practices Act. The Company represents that (i) it
has not taken any action which is or could be deemed to be a violation of the
Foreign Corrupt Practices Act in respect of any of the Companies; (ii) it is not
aware of any action or conduct which could be deemed to be a violation of the
Foreign Corrupt Practices Act in respect of any of the Companies and (iii) none
of its managers, officers, directors, employees, stockholders, members, agents
or representatives has offered, given, paid, authorized the payment of, or
promised, directly or indirectly, any money, gift, promise or other thing of
value to any Foreign Official (or to any other Person while knowing it will be
offered, given or promised to a Foreign Official) for any purpose including, by
way of example but not limitation, influencing any act or decision of such
Person acting in their official capacity, inducing such Person to do or omit to
do any action in violation of their lawful duty, inducing such Person to use
their influence with the government of the Republic of Argentina, the Republic
of Peru, the Republic of Colombia, the Republic of Venezuela, the Republic of
Uruguay, the Republic of Chile, or the Federative Republic of Brazil or any
instrumentality thereof to affect or influence any act or decision of such
government or instrumentality, in order to assist any of the Companies or their
stockholders or members to obtain or retain business for or with, or in
directing business to, any Person.
3.29 Offering. Subject to the accuracy of the Purchasers'
representations in Section 4 hereof, the offer, sale and issuance of the Shares,
and of any Common Stock into which the Shares are convertible (the "Conversion
Shares") constitute transactions exempt from the registration requirements of
Section 5 of the Securities Act of 1933, as amended (the "Securities Act").
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally and not jointly hereby represents and warrants
to the Company, as of the date hereof, as follows:
4.1 Requisite Power and Authority. Such Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out its provisions. All actions on such
Purchaser's part required for the lawful execution and delivery of this
Agreement have been or will be effectively taken prior to the Initial Closing.
10
15
4.2 Investment Representations. Such Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act. Such Purchaser also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon the Purchaser's representations contained in this Agreement.
(a) Purchaser Bears Economic Risk. Such Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company and
has the capacity to protect its own interests. Such Purchaser must bear the
economic risk of this investment indefinitely unless the Shares (or the
Conversion Shares) are registered pursuant to the Securities Act, or an
exemption from registration is available. Such Purchaser understands that the
Company has no present intention of registering the Shares, the Conversion
Shares or any shares of its Common Stock. Such Purchaser also understands that
there is no assurance that any exemption from registration under the Securities
Act will be available and that, even if available, such exemption may not allow
such Purchaser to transfer all or any portion of the Shares or the Conversion
Shares under the circumstances, in the amounts or at the times such Purchaser
might propose.
(b) Acquisition for Own Account. Such Purchaser is acquiring
the Shares and the Conversion Shares for its own account for investment only,
and not with a view towards their distribution in violation of applicable
securities laws.
(c) Purchaser Can Protect Its Interest. Such Purchaser
represents that, by reason of its or of its management's business or financial
experience, such Purchaser has the capacity to protect its own interests in
connection with the transactions contemplated in this Agreement. Further, such
Purchaser is aware of no publication of any advertisement in connection with the
transactions contemplated by the Agreement.
(d) Accredited Investor. Such Purchaser represents that it is
an accredited investor within the meaning of Regulation D under the Securities
Act.
(e) Company Information. Such Purchaser has had an opportunity
to discuss the Company's business, management and financial affairs with
directors, officers and management of the Company. Such Purchaser has also had
the opportunity to ask questions of, and receive answers from, the Company and
its management regarding the terms and conditions of this investment.
(f) Rule 144. Such Purchaser acknowledges and agrees that the
Shares and the Conversion Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Such Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the
11
16
resale occurring not less than one year after a party has purchased and paid for
the security to be sold, the sale being through an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended) and the number of
shares being sold during any three-month period not exceeding specified
limitations.
4.3 Broker's Fees. None of the Purchasers has employed any broker,
finder, consultant or intermediary in connection with the transactions
contemplated by the Transaction Documents that would be entitled to a broker's
finder's or similar fee or commission in connection therewith.
5. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATIONS
The obligation of each Purchaser to purchase and pay for the Shares to
be delivered to it at any Closing shall be subject to the satisfaction of the
following conditions as of each Closing Date:
(A) the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of such Closing
Date;
(B) with respect to the Initial Closing only, concurrent with
the Initial Closing, the Company and the Purchasers shall have entered into the
Second Amended and Restated Investors Agreement in the form attached hereto as
Exhibit C;
(C) each Purchaser shall have received from Holland & Xxxx
LLP, counsel for the Company, an opinion in substantially the form attached
hereto as Exhibit D, dated the date of each Closing;
(D) any applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, (the "HSR Act") with respect to
such Purchaser's acquisition of Shares in such Closing, shall have expired or
otherwise been terminated;
(E) the Certificate of Incorporation shall have been filed
with the Delaware Secretary of State;
(F) with respect to the Initial Closing only, the Company
shall have provided to Centennial Fund V, L.P. and Centennial Fund VI, L.P. a
certification of the direct and indirect holdings of securities of the Company
by certain persons designated by Centennial Fund V, L.P. and Centennial Fund VI,
L.P.;
(G) with respect to Telecom Partners III, L.P.'s obligation to
purchase Shares in the Subsequent Closing, Telecom Partners III, L.P. shall have
closed on at least US$200 million of funding by the Subsequent Closing Date; and
(H) with respect to the obligations of Centennial Fund VI,
L.P., Centennial Entrepreneurs Fund VI, L.P. and Centennial Holdings I, LLC to
purchase an
12
17
aggregate of US$8.36 million of the Shares they have committed to purchase in
the Subsequent Closing, Centennial Fund VI, L.P. shall have received the
requisite approval of such investments by its limited partners.
6. ADDITIONAL CLOSINGS
In the event that the Company agrees to sell additional Shares in one
or more closings other than the Initial Closing or the Subsequent Closing (the
"Additional Closings"), the Company and the Purchasers hereby agree that the
Purchasers shall benefit from any provisions in the documents relating to such
Additional Closings that are more favorable to the purchasers in such Additional
Closings than comparable provisions in the Transaction Documents. In such event,
the Company and the Purchasers hereby agree to take all reasonable actions
required to amend the Transaction Documents in order to make appropriate
adjustments to reflect such favorable provisions and to facilitate the
consummation of such Additional Closings.
7. USE OF PROCEEDS
The Company shall use the proceeds from the sale of the Shares to
finance its commitments to the Brazilian Companies and the Subsidiaries, to fund
general corporate purposes including development activities, and to cover fees
and expenses related to the sale of the Shares.
8. MISCELLANEOUS
8.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Colorado as such laws are applied to agreements between
Colorado residents entered into and performed entirely in Colorado, except that
the General Corporation Law of the State of Delaware shall govern as to matters
of corporate law.
8.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
8.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
8.4 Entire Agreement; Amendment and Waiver. This Agreement, the
Exhibits, Schedules and the other documents expressly delivered pursuant hereto,
including the Second Amended and Restated Investors Agreement, supersede any
other agreement, whether written or oral, that may have been made or entered
into by the parties hereto (including, without limitation, the Equity Investment
Agreement dated
13
18
October 21, 1999 by and among the Company and certain of the Purchasers)
relating to the matters contemplated hereby and constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof, and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein. Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated except by a written instrument signed
by the Company and the holders of a majority of the Shares held by the
Purchasers, and any such amendment, waiver, discharge or termination shall be
binding on all Purchasers.
8.5 Specific Enforcement. Any Purchaser shall be entitled to specific
enforcement of its rights under this Agreement. The parties acknowledge that
money damages would be an inadequate remedy for its breach of this Agreement and
consent to an action for specific performance or other injunctive relief in the
event of any such breach.
8.6 Severability. Unless otherwise expressly provided herein, a
Purchaser's rights hereunder are several rights, not rights jointly held with
any of the other Purchasers. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
8.7 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified; (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one (1) day after deposit
with a nationally recognized overnight courier, special next day delivery, with
verification of receipt. All communications shall be sent to the Company at 0000
Xxxxx Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention: Vice
President - Strategic and Legal Affairs, with a copy to Holland & Xxxx LLP, 000
00xx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000, Attention: Xxxx X. Xxxx, and to a
Purchaser at the address set forth on Exhibit A attached hereto or at such other
address as the Company or Purchaser may designate by ten (10) days advance
written notice to the other parties hereto.
8.8 Counterparts; Facsimile. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. This Agreement may be executed and
delivered by facsimile.
8.9 Future Financings. Nothing contained in this Agreement or any
Purchaser's prior dealings with the Company shall be deemed to constitute a
commitment on the part of any Purchaser to participate in any future financings
by the Company.
14
19
8.10 Expense Reimbursement. The Company hereby agrees to reimburse the
Purchasers for the fees and expenses of Xxxxxx Godward LLP in connection with
the Initial Closing (not to exceed $20,000), and for the reasonable fees and
expenses of Cooley Godward LLP incurred in connection with the Subsequent
Closing, and for any filing fees and other expenses of any Purchaser in
connection with any filing required under the HSR Act as a result of the
transactions contemplated by this Agreement.
9. CERTAIN DEFINITIONS.
"Acquired Subsidiaries" means Smartel S.A., PCN Investments S.A.,
Interloop Americas Inc., Telelatina S.A., Formus S.A., Telelatina Management
Company, Formus Communications Latin America LLC, Formus Communications
Argentina LLC, Formus Communications Bolivia LLC, Formus Communications Colombia
LLC, Formus Communications Peru LLC, Formus Communications Venezuela LLC, Formus
S.A., Formus Bolivia S.A., Formus Comunicaciones de Chile Limitada, Formus
Colombia S.A. E.S.P., Formus Peru S.A. and Telecomunicaciones Interactivas de
Venezuela C.A..
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person; for purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of an entity, whether through the
ownership of voting securities, by contract or otherwise.
"Brazilian Companies" shall mean Xxxxxx X.X., Xxxxxx Holding S.A.,
Vesper Sao Paulo Holding S.A. and MegaTel do Brasil S.A., each of which is a
sociedade anonima formed under the Laws of the Federative Republic of Brazil.
"Companies" shall mean the Company, the Brazilian Companies and the
Subsidiaries (including the Acquired Subsidiaries).
"Contracts" shall mean any and all written contracts, agreements,
obligations, franchises, warranties, guaranties, undertakings, commitments,
understandings, arrangements, leases, licenses, registrations, easements,
rights-of-way, mortgages, bonds, notes and other instruments and obligations and
interests therein or rights thereunder, excluding any Permits, in each case
which are material to the business of any of the Companies, as the case may be.
"Encumbrances" shall mean any mortgage, imperfection of title, lien,
pledge, option, security interest, claim, charge or other encumbrance of any
kind whatsoever.
"Environmental Laws" shall mean any Laws or Legal Requirements relating
to human health and safety, pollution, protection or cleanup of the environment
(including, but not limited to, ambient air, surface water, groundwater, land
surface or subsurface strata and flora or fauna) and such other Laws or Legal
Requirements relating to the release, containment, removal, remediation,
response, cleanup or abatement of any sort of chemical or hazardous substance.
15
20
"Foreign Corrupt Practices Act" shall mean the Foreign Corrupt
Practices Act of the United States of America (15 U.S.C.A. Section 78dd) and any
successor statute or legislation.
"Foreign Official" means (i) an officer or employee of the government
of the Republic of Argentina, the Republic of Peru, the Republic of Colombia,
the Republic of Venezuela, the Republic of Uruguay, the Republic of Chile or the
Federative Republic of Brazil or any political subdivision, department, agency
or instrumentality thereof; (ii) a Person acting in an official capacity for or
on behalf of any such government or department, agency or instrumentality; (iii)
a member or official of a political party in the Republic of Argentina, the
Republic of Peru, the Republic of Colombia, the Republic of Venezuela, the
Republic of Uruguay, the Republic of Chile or the Federative Republic of Brazil;
(iv) a candidate for political office in the Republic of Argentina, the Republic
of Peru, the Republic of Colombia, the Republic of Venezuela, the Republic of
Uruguay, the Republic of Chile or the Federative Republic of Brazil or (v) any
other meanings or interpretations given to the term under the Foreign Corrupt
Practices Act as it applies to any of the Companies.
"Judgments" shall mean any and all judgments, orders, directives,
rulings, decisions, injunctions, decrees or awards of any federal, state,
municipal, departmental or foreign court, arbitrator or administrative or
governmental authority, bureau or agency.
"Laws" shall mean all laws (whether statutory or otherwise), rules and
regulations of all governmental, judicial, legislative, executive,
administrative or regulatory authorities (federal, state, municipal,
departmental, foreign or otherwise).
"Legal Requirements" shall mean any and all applicable (i) Permits,
(ii) Laws, (iii) Judgments, and (iv) contracts with any federal, state,
municipal or departmental or foreign court, arbitrator or administrative or
governmental authority, bureau or agency relating to compliance with matters
described in (ii) and (iii) above.
"Liabilities" shall have the meaning set forth in Section 3.20 of this
Agreement.
"Licenses" shall have the meaning set forth in Section 3.18 of this
Agreement.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1 of this Agreement.
"Permits" shall mean any and all permits, authorizations, approvals,
registrations, waivers, variances and licenses (i) under any (x) Laws or (y)
Judgments with any federal, state, municipal or departmental court, arbitrator
or administrative or governmental authority, bureau or agency relating to
compliance with the matters described in (x) above or (ii) granted by any
federal, state, municipal or departmental administrative or governmental
authority, bureau or agency (whether domestic or foreign).
16
21
"Permitted Encumbrances" shall mean undetermined or inchoate liens
arising or potentially arising under statutory provisions which have not at the
time been filed and of which written notice has not been served pursuant to Laws
or which relate to obligations not overdue or delinquent, minor imperfections in
title, if any, not material in nature and which, individually and in the
aggregate, do not materially interfere with or affect the conduct of the
Companies' businesses.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other similar
entity or any government or political subdivision or any agency, department or
instrumentality thereof.
"Subsidiaries" or "Subsidiary" shall mean any subsidiary of the Company
over which the Company exercises control. For purposes of this definition,
"control" shall mean the direct or indirect ownership by the Company of at least
50.1% of the voting securities of such subsidiary.
"Tax" and "Taxes" shall mean (i) all taxes, assessments, levies,
imports, duties, license fees, registration fees or other similar governmental
charges including, without limitation, income taxes, franchise taxes, transfer
taxes or fees, value added taxes, sales taxes, excise taxes, ad valorem taxes,
withholding taxes, minimum taxes and social security or other employee-related
taxes and (ii) any interest, penalties or additions to tax imposed on a tax
described in clause (i) hereof imposed by any federal, state, municipal,
departmental or foreign governmental agency or political subdivision.
"Transaction Documents" shall mean this Stock Purchase Agreement and
the Second Amended and Restated Investors Agreement.
17
22
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
COMPANY:
VELOCOM INC.
By:
--------------------------------------
Name:
Title:
PURCHASERS:
TELECOM PARTNERS II, L.P.
By: Telecom Management II, L.L.C.,
Its General Partner
By:
--------------------------------------
Name:
Title:
TELECOM MANAGEMENT III, L.L.C.
(on behalf of Telecom Partners III, L.P. to
be formed hereafter)
By:
--------------------------------------
Name:
Title:
CENTENNIAL FUND V, L.P.
By: Centennial Holdings V, L.P.
Its General Partner
By:
--------------------------------------
Name:
Title: General Partner
18
23
CENTENNIAL FUND VI, L.P.
By: Centennial Holdings VI, LLC
Its General Partner
By:
--------------------------------------
Name:
Title: Managing Principal
CENTENNIAL ENTREPRENEURS FUND VI, L.P.
By: Centennial Holdings VI, LLC
Its General Partner
By:
--------------------------------------
Name:
Title: Managing Principal
CENTENNIAL HOLDINGS I, LLC
By:
--------------------------------------
Name:
Title:
CENTENNIAL STRATEGIC PARTNERS VI, L.P.
By: CSP VI Management, LLC
Its General Partner
By: Centennial Holdings VI, LLC
Its: Managing Member
By:
--------------------------------------
Name:
Title: Managing Principal
CRESCENDO WORLD FUND, L.L.C.
By:
--------------------------------------
Name:
Title:
19
24
EAGLE VENTURES WF, L.L.C.
By:
--------------------------------------
Name:
Title:
CRESCENDO III, L.P.
By:
--------------------------------------
Name:
Title:
CRESCENDO III, GbR
By:
--------------------------------------
Name:
Title:
CRESCENDO III EXECUTIVE FUND, L.P.
By:
--------------------------------------
Name:
Title:
SLI WIRELESS S.A.
By:
--------------------------------------
Name:
Title:
20
25
FORMUS COMMUNICATIONS-LATIN AMERICA
HOLDINGS, LLC
By: Formus International, Inc.
Its: Manager
By:
--------------------------------------
Name:
Title:
XXXXX CAPITAL MANAGEMENT, LLC
By:
--------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL, L.P.
By:
--------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL VENTURES, L.P.
By:
--------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL INTERNATIONAL
By:
--------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL, INC.
By:
--------------------------------------
Name:
Title:
21
26
MELLON VENTURES II, L.P.
By: MVMA II, L.P., a Delaware Limited
Partnership
Its: General Partner
By: MVMA, Inc., a Delaware
Corporation
Its: General Partner
By:
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
-------------------------------------------
Xxxxxxx Xxxxxxxxx
-------------------------------------------
Xxxx X. Xxxxxx
-------------------------------------------
Xxxxxx XxXxxxxx
-------------------------------------------
Xxxxxxx Xxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxx
-------------------------------------------
Xxxxx X. Xxxxx
22
27
-------------------------------------------
Xxxxxxx X. Xxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx
23
28
SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
INITIAL CLOSING SUBSEQUENT CLOSING
--------------- ------------------
NUMBER OF AGGREGATE PURCHASE NUMBER OF AGGREGATE PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE
1. Telecom Partners II, L.P. 833,333 $ 4,999,998 -- --
0000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
2. Telecom Partners III, L.P. -- -- 6,666,667 $ 40,000,002
0000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
3. Centennial Fund V, L.P. 250,000 1,500,000 250,000 1,500,000
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
4. Centennial Fund VI, L.P. 1,309,809 7,858,854 1,190,191 7,141,146
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
5. Centennial Entrepreneurs 32,745 196,470 29,755 178,530
Fund VI, L.P.
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
6. Centennial Holdings I, LLC 36,506 219,036 34,114 204,684
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
A-1
29
INITIAL CLOSING SUBSEQUENT CLOSING
--------------- ------------------
NUMBER OF AGGREGATE PURCHASE NUMBER OF AGGREGATE PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE
7. Centennial Strategic Partners -- -- 125,000 750,000
VI, L.P.
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
8. Crescendo World Fund, L.L.C. 106,033 636,198 212,067 1,272,402
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
9. Eagle Ventures WF, LLC 5,079 30,474 10,155 60,930
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
10. Crescendo III, L.P. 633,333 3,799,998 1,746,897 10,481,382
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
11. Crescendo III, GbR 13,059 78,354 36,019 216,114
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
12. Crescendo III Executive Fund, L.P. 18,810 112,860 51,883 311,298
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
13. SLI Wireless S.A. 1,500,000 9,000,000 3,333,333 19,999,998
Xxxxxxxx 000, Xxxx 00
Xxxxxx Xxxxx, 0000
Xxxxxxxxx
Phone: 5411-4316-9961
Fax: 5411-4313-7934
A-2
30
INITIAL CLOSING SUBSEQUENT CLOSING
--------------- ------------------
NUMBER OF AGGREGATE PURCHASE NUMBER OF AGGREGATE PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE
14. Formus Communications- 933,333 5,599,998 933,333 5,599,998
Latin America Holdings, LLC
000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx 000X
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
15. Xxxxx Capital Management, LLC 41,667 250,002 41,667 250,002
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
16. Xxxx Xxxxx Capital, L.P. 25,850 155,100 25,850 155,100
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
17. Xxxx Xxxxx Capital Ventures, L.P. 21,900 131,400 21,900 131,400
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
18. Xxxx Xxxxx Capital International 16,900 101,400 16,900 101,400
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
19. Xxxx Xxxxx Capital, Inc. 2,050 12,300 2,050 12,300
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
20. Mellon Ventures II, L.P. 1,666,667 10,000,002 1,666,667 10,000,002
000 X. Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Phone:
Fax: 000-000-0000
X-0
00
XXXXXXX XXXXXXX SUBSEQUENT CLOSING
--------------- ------------------
NUMBER OF AGGREGATE PURCHASE NUMBER OF AGGREGATE PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE
21. Xxxxxxx Xxxxxxxxx 125,000 750,000 125,000 750,000
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
22. Xxxx X. Xxxxxx 41,667 250,002 41,667 250,002
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
23. Xxxxxx XxXxxxxx 12,500 75,000 12,500 75,000
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
24. Xxxxxxx Xxxxxx 8,333 49,998 8,333 49,998
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
25. Xxxxx X. Xxxxxxx 8,333 49,998 8,333 49,998
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
26. Xxxxx X. Xxxxx 8,333 49,998 8,333 49,998
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
27. Xxxxxxx X. Xxxxxx 3,333 19,998 3,333 19,998
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
28. Xxxxxxx X. Xxxxxxx 2,500 15,000 2,500 15,000
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
TOTAL 7,657,073 $ 45,942,438 16,271,113 $ 97,626,678
----------- ------------ ------------ ------------
A-4
32
SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT B
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
VELOCOM INC.
(Pursuant to Section 242 and Section 245)
VELOCOM INC., originally filed in the state of Delaware as WLL
International, Inc., hereby certifies as follows:
1. The name of the corporation is VELOCOM INC. (the "Corporation"). The
date of filing of its original Certificate of Incorporation with the Secretary
of State of the State of Delaware was April 29, 1998.
2. This Amended & Restated Certificate of Incorporation restates and
further amends the original Certificate of Incorporation and the various
amendments and certificates thereto.
3. This Amended & Restated Certificate of Incorporation has been duly
adopted in accordance with Section 242 and Section 245 of the Delaware General
Corporation Law.
ARTICLE ONE.
The name of this corporation is VELOCOM INC.
ARTICLE TWO.
The address of the Corporation's registered office in the State of
Delaware is 0000 Xxxxxx Xxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx, Xxxxxxxx
00000. The name of its registered agent at such address is Corporation Service
Company.
ARTICLE THREE.
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR.
Section 4.1 AUTHORIZED CAPITAL.
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(a) The Corporation shall be authorized to issue two classes of
stock to be designated respectively "Common Stock" and "Preferred Stock." The
aggregate number of shares which the Corporation shall have the authority to
issue is one hundred eighty-three million three hundred thirty-three thousand
three hundred thirty-four (183,333,334); the total number of shares of Common
Stock shall be one hundred six million six hundred sixty-six thousand six
hundred sixty-seven (106,666,667), with a par value of $.0001 per share, and the
total number of shares of Preferred Stock shall be seventy-six million six
hundred sixty-six thousand six hundred sixty-seven (76,666,667), with a par
value of $.0001 per share. Such Preferred Shares may be issued in series.
(B) Subject to the voting requirements set forth in Section
4.2(b)(ii), the Corporation's Board of Directors shall have the authority,
without stockholder action, to determine the preferences, limitations and
relative rights of any Preferred Stock (whether in a series or as a class),
including without limitation the following: (i) the designation of any series of
Preferred Stock; (ii) unlimited, special, conditional, or limited voting rights,
or no right to vote; except that no condition, limitation, or prohibition on
voting shall eliminate any right to vote provided by the Delaware General
Corporation Law; (iii) redemption rights; (iv) conversion rights, (v)
distribution or dividend rights, including the determination of whether such
rights are cumulative, non-cumulative or partially cumulative, and (vi)
preference rights over any other class or series of shares with respect to
distributions, including dividends and distributions upon the dissolution of the
Corporation.
Section 4.2 DESIGNATION OF PREFERRED STOCK
Thirty one million (31,000,000) of the authorized shares of Preferred
Stock are hereby designated as "Series A Preferred Stock" (the "Series A
Preferred"), and forty-one million six hundred sixty-six thousand six hundred
sixty-seven (41,666,667) of the authorized shares of Preferred Stock are hereby
designated as "Series B Preferred Stock" (the "Series B Preferred"). The Series
A Preferred and the Series B Preferred are hereinafter collectively referred to
as the "Series Preferred." The rights, preferences, privileges, restrictions and
other matters relating to the Series Preferred are as follows:
(a) DIVIDEND RIGHTS.
(i) Declared Dividends. Holders of the Series Preferred, in
preference to the holders of Common Stock and any other stock of the Corporation
that is not by its terms expressly senior in right of payment to the Series
Preferred (collectively, "Junior Stock"), shall be entitled to receive
dividends, when and as declared by the Board of Directors, but only out of funds
that are legally available therefor. In the event that the Corporation declares
or pays any dividends upon the Common Stock (whether payable in cash, securities
or other property) other than dividends payable solely in shares of Common
Stock, the Corporation shall also declare and pay to the holders of the Series
Preferred at the same time that it declares and pays
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such dividends to the holders of the Common Stock, the dividends which would
have been declared and paid with respect to the Common Stock issuable upon
conversion of the Series Preferred had all of the outstanding Series Preferred
been converted immediately prior to the record date for such dividend, or if no
record date is fixed, the date as of which the record holders of Common Stock
entitled to such dividends are to be determined.
(ii) Preference. So long as any of the Series Preferred
remains outstanding, without the prior written consent of the holders of
sixty-six and two-thirds percent (66 2/3%) of the outstanding shares of the
Series Preferred (the "Required Holders"), the Corporation shall not, nor shall
it permit any Subsidiary to, redeem, purchase or otherwise acquire directly or
indirectly any Junior Stock, nor shall the Corporation directly or indirectly
pay or declare any dividend or make any distribution upon any Junior Stock. The
provisions of this Section 4.2(a)(ii) shall not, however, apply to (i) the
acquisition of shares of any Junior Stock in exchange for shares of any other
Junior Stock, (ii) the payment of cash dividends on the Common Stock to the
extent that equivalent dividends are paid on the Series Preferred as provided
above, or (iii) any repurchase of any Reserved Employee Stock from former
employees, directors or consultants in connection with termination of employment
or service as a director or consultant that is approved by the Corporation's
Board of Directors.
(b) VOTING RIGHTS.
(i) Generally. Except as otherwise provided herein or as
required by law, the Series Preferred shall vote with the shares of the Common
Stock of the Corporation (and not as a separate class) at any annual or special
meeting of stockholders of the Corporation, and may act by written consent in
the same manner as the Common Stock, in either case upon the following basis:
each holder of shares of the Series Preferred shall be entitled to such number
of votes as shall be equal to the whole number of shares of Common Stock into
which such holder's aggregate number of shares of the Series Preferred are
convertible (pursuant to Section 4.2(e) below) immediately after the close of
business on the record date fixed for such meeting or the effective date of such
written consent.
(ii) Class Vote Requirement. Without the affirmative vote of
the Required Holders, the Corporation shall not (i) create, issue or authorize
the issuance of any additional Preferred Stock or create or authorize any new
class or series of the Company's capital stock, (ii) amend the Corporation's
Certificate of Incorporation or bylaws, (iii) engage in any merger,
consolidation, recapitalization, liquidation or sale or purchase of substantial
assets outside the ordinary course of business, (iv) engage in any business
other than the business of the Corporation, described in the Company's most
recent annual business plan approved by the Board of Directors of the
Corporation and activities incidental thereto, (v) increase the amount of
Reserved Employee Stock above twelve percent (12%) of the Company's Common Stock
Deemed Outstanding, or (vi) engage in any transaction with an affiliate of the
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Corporation that is not approved by a majority of the Corporation's
disinterested directors.
(c) LIQUIDATION RIGHTS.
(i) Liquidation Value. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, before any
distribution or payment shall be made to the holders of any Junior Stock or
Common Stock, (i) first, the holders of the Series B Preferred shall be entitled
to be paid out of the assets of the Corporation an amount with respect to each
share of the Series B Preferred equal to the sum of (A) the Original Series B
Issue Price (as defined below) plus (B) all declared but unpaid dividends
thereon (the "Series B Liquidation Value") and (ii) second, the holders of the
Series A Preferred shall be entitled to be paid out of the assets of the
Corporation an amount with respect to each share of the Series A Preferred equal
to the sum of (A) the Original Series A Issue Price (as defined below), plus (B)
all declared but unpaid dividends thereon (the "Series A Liquidation Value").
The "Original Series A Issue Price" shall be Three Dollars ($3.00) per share, as
appropriately adjusted for any future stock splits, stock combinations, stock
dividends or similar transactions affecting the Series A Preferred. The
"Original Series B Issue Price" shall be Six Dollars ($6.00) per share, as
appropriately adjusted for any future stock splits, stock combinations, stock
dividends or similar transactions affecting the Series B Preferred.
(ii) Participation. After the payment of the full liquidation
preference of the Series Preferred as set forth in Section 4.2(c)(i) above, the
remaining assets of the Corporation legally available for distribution, if any,
shall be distributed to the holders of Junior Stock entitled to a preference
over the Common Stock and, thereafter, to the holders of Common Stock. The
holders of the Series Preferred shall be entitled to participate in
distributions to holders of the Common Stock such that, giving effect to all
distributions pursuant to Section 4.2(c)(i), the holders of the Series Preferred
receive aggregate distributions equal to the greater of (A) the Series A
Liquidation Value (in the case of the Series A Preferred) or the Series B
Liquidation Value (in the case of the Series B Preferred), or (B) the amounts
that such holders would have received if the Series Preferred had been converted
into Common Stock immediately prior to such liquidation, dissolution or winding
up of the Corporation.
(iii) Liquidation Events. At the option of the Required
Holders, the following events shall be considered a liquidation for purposes of
Section 4.2(c).
(A) any merger, consolidation, business combination,
reorganization or recapitalization of the Corporation in which the stockholders
of the Corporation immediately prior to such transaction own capital stock
representing less than fifty percent (50%) of the Corporation's voting power in
electing the board of directors immediately after such transaction, or any
transaction or series of related transactions in which capital stock
representing in excess of fifty percent (50%) of the
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Corporation's voting power in electing the board of directors is transferred (an
"Acquisition"); or
(B) a sale, lease or other disposition of all or
substantially all of the assets of the Corporation (an "Asset Transfer").
(iv) Proportionate Payments. If, upon any liquidation,
dissolution or winding up, the assets of the Corporation shall be insufficient
to make payment in full to all holders of the Series Preferred, then such assets
shall be distributed first, among the holders of the Series B Preferred at the
time outstanding, ratably in proportion to the full amounts to which they would
otherwise be entitled and second, any remaining assets shall be distributed
among the holders of the Series A Preferred at the time outstanding, ratably in
proportion to the full amounts to which they would otherwise be entitled.
(d) REDEMPTION RIGHTS.
(i) Scheduled Redemptions. The Corporation shall redeem
thirty three and one-third percent (33%) of the then-outstanding shares of
each of the Series A Preferred and the Series B Preferred on January 26, 2005,
shall redeem fifty percent (50%) of the then-outstanding shares of each of the
Series A Preferred and the Series B Preferred on January 26, 2006 and shall
redeem all remaining shares of the Series A Preferred and the Series B Preferred
on January 26, 2007 (the "Scheduled Redemption Dates"), at a price per share
equal to the Series A Liquidation Value or the Series B Liquidation Value,
respectively.
(ii) Redemption Payments. For each share of the Series
Preferred which is to be redeemed hereunder, the Corporation shall be obligated
on the Scheduled Redemption Date to pay to the holder thereof (upon surrender by
such holder at the Corporation's principal office of the certificate
representing such share) an amount in cash equal to the Series A Liquidation
Value or the Series B Liquidation Value, as applicable. If the funds of the
Corporation legally available for redemption of the Series Preferred on any
Scheduled Redemption Date are insufficient to redeem the total number of shares
to be redeemed on such date, those funds which are legally available shall be
used to redeem the maximum possible number of shares pro rata among the holders
of the Series Preferred to be redeemed based upon the aggregate Liquidation
Value of such shares of the Series Preferred held by each such holder. At any
time thereafter when additional funds of the Corporation are legally available
for the redemption of the Series Preferred, such funds shall immediately be used
to redeem the balance of the shares which the Corporation has become obligated
to redeem on any Scheduled Redemption Date but which it has not redeemed.
(iii) Notice of Redemption. Except as otherwise provided
herein, the Corporation shall mail written notice of each redemption of the
Series Preferred to each record holder thereof not more than 60 nor less than 30
days prior to the Scheduled Redemption Date. The holders of the Series Preferred
to be redeemed
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shall in any event have the right to convert any or all of their shares into
Common Stock at any time prior to the close of business on the Scheduled
Redemption Date. In case fewer than the total number of shares represented by
any certificate are redeemed, a new certificate representing the number of
unredeemed shares shall be issued to the holder thereof without cost to such
holder within five business days after surrender of the certificate representing
the redeemed shares.
(iv) Determination of the Number of Shares to be Redeemed.
(A) The number of shares of the Series A Preferred to be
redeemed from each holder thereof in redemptions hereunder shall be the number
of shares determined by multiplying the total number of shares of the Series A
Preferred to be redeemed by a fraction, the numerator of which shall be the
total number of shares of the Series A Preferred then held by such holder and
the denominator of which shall be the total number of shares of the Series A
Preferred then outstanding.
(B) The number of shares of the Series B Preferred to be
redeemed from each holder thereof in redemptions hereunder shall be the number
of shares determined by multiplying the total number of shares of the Series B
Preferred to be redeemed by a fraction, the numerator of which shall be the
total number of shares of the Series B Preferred then held by such holder and
the denominator of which shall be the total number of shares of the Series B
Preferred then outstanding.
(v) Other Redemptions or Acquisitions. The Corporation shall
not, nor shall it permit any Subsidiary to, redeem or otherwise acquire any
shares of the Series Preferred, except as expressly authorized herein or
pursuant to a purchase offer made pro rata to all holders of the Series
Preferred on the basis of the aggregate Liquidation Value of the shares of the
Series Preferred owned by each such holder.
(e) CONVERSION RIGHTS.
The holders of the Series Preferred shall have the following rights
with respect to the conversion of the Series Preferred into shares of Common
Stock:
(i) Optional Conversion. Subject to and in compliance with
the provisions of this Section 4.2(e), any shares of the Series Preferred may,
at the option of the holder, be converted at any time into fully-paid and
nonassessable shares of Common Stock. The number of shares of Common Stock to
which a holder of the Series A Preferred shall be entitled upon conversion shall
be the product obtained by multiplying the "Series A Conversion Rate" then in
effect (determined as provided in Section 4.2(e)(ii)) by the number of shares of
the Series A Preferred being converted. The number of shares of Common Stock to
which a holder of the Series B Preferred shall be entitled upon conversion shall
be the product obtained by multiplying the "Series B Conversion Rate" then in
effect (determined as provided in Section 4.2(e)(ii)) by the number of shares of
the Series B Preferred being converted.
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(ii) Series Conversion Rate. The conversion rate in effect at
any time for conversion of the Series A Preferred (the "Series A Conversion
Rate") shall be the quotient obtained by dividing the Series A Liquidation Value
by the "Series A Conversion Price" calculated as provided in Section
4.2(e)(iii). The conversion rate in effect at any time for conversion of the
Series B Preferred (the "Series B Conversion Rate") shall be the quotient
obtained by dividing the Series B Liquidation Value by the "Series B Conversion
Price" calculated as provided in Section 4.2(e)(iii).
(iii) Conversion Price. The conversion price for the Series A
Preferred (the "Series A Conversion Price") shall initially be the Original
Series A Issue Price (i.e., $3.00). Such initial Series A Conversion Price shall
be adjusted from time to time in accordance with this Section 4.2(e). If and
whenever on or after the first date of issuance of any shares of Series A
Preferred (the "Original Series A Issue Date") the Corporation issues or sells,
or in accordance with this Section 4.2(e)(iii) is deemed to have issued or sold,
any shares of its Common Stock (other than pursuant to a Permitted Issuance) for
a consideration per share less than the Series A Conversion Price in effect
immediately prior to the time of such issue or sale, then immediately upon such
issue or sale or deemed issue or sale the Series A Conversion Price shall be
reduced to the amount determined by dividing (a) the sum of (1) the product
derived by multiplying the Series A Conversion Price in effect immediately prior
to such issue or sale by the number of shares of Common Stock Deemed Outstanding
immediately prior to such issue or sale, plus (2) the consideration, if any,
received or deemed to have been received by the Corporation upon such issue or
sale, by (b) the number of shares of Common Stock Deemed Outstanding immediately
after such issue or sale. All references to the Series A Conversion Price herein
shall mean the Series A Conversion Price as so adjusted.
The conversion price for the Series B Preferred (the "Series B
Conversion Price") shall initially be the Original Series B Issue Price (i.e.,
$6.00). Such initial Series B Conversion Price shall be adjusted from time to
time in accordance with this Section 4.2(e). If and whenever on or after the
first date of issuance of any shares of Series B Preferred (the "Original Series
B Issue Date") the Corporation issues or sells, or in accordance with this
Section 4.2(e)(iii) is deemed to have issued or sold, any shares of its Common
Stock (other than pursuant to a Permitted Issuance) for a consideration per
share less than the Series B Conversion Price in effect immediately prior to the
time of such issue or sale, then immediately upon such issue or sale or deemed
issue or sale the Series B Conversion Price shall be reduced to the amount
determined by dividing (a) the sum of (1) the product derived by multiplying the
Series B Conversion Price in effect immediately prior to such issue or sale by
the number of shares of Common Stock Deemed Outstanding immediately prior to
such issue or sale, plus (2) the consideration, if any, received or deemed to
have been received by the Corporation upon such issue or sale, by (b) the number
of shares of Common Stock Deemed Outstanding immediately after such issue or
sale. All references to the Series B Conversion Price herein shall mean the
Series B Conversion Price as so adjusted.
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For purposes of determining the adjusted Series A Conversion Price
and/or the adjusted Series B Conversion Price, the following shall be
applicable:
(A) Issuance of Rights or Options. Except for Permitted
Issuances, if the Corporation in any manner grants or sells any Options and the
price per share for which Common Stock is issuable upon the exercise of such
Options, or upon conversion or exchange of any Convertible Securities issuable
upon exercise of such Options, is less than the Series A Conversion Price and/or
the Series B Conversion Price, as the case may be, in effect immediately prior
to the time of the granting or sale of such Options, then the total maximum
number of shares of Common Stock issuable upon the exercise of such Options or
upon conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to have
been issued and sold by the Corporation at the time of the granting or sale of
such Options for such price per share. For purposes of this paragraph, the
"price per share for which Common Stock is issuable" shall be determined by
dividing (1) the total amount, if any, received or receivable by the Corporation
as consideration for the granting or sale of such Options, plus the minimum
aggregate amount of additional consideration payable to the Corporation upon
exercise of all such Options, plus in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the issuance or sale of
such Convertible Securities and the conversion or exchange thereof, by (2) the
total maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options. No further adjustment of
the Series A Conversion Price and/or the Series B Conversion Price shall be made
when Convertible Securities are actually issued upon the exercise of such
Options or when Common Stock is actually issued upon the exercise of such
Options or the conversion or exchange of such Convertible Securities.
(B) Issuance of Convertible Securities. If the
Corporation in any manner issues or sells any Convertible Securities and the
price per share for which Common Stock is issuable upon conversion or exchange
thereof is less than the Series A Conversion Price and/or the Series B
Conversion Price, as the case may be, in effect immediately prior to the time of
such issue or sale, then the maximum number of shares of Common Stock issuable
upon conversion or exchange of such Convertible Securities shall be deemed to
have been issued and sold by the Corporation at the time of the issuance or sale
of such Convertible Securities for such price per share. For the purposes of
this paragraph, the "price per share for which Common Stock is issuable" shall
be determined by dividing (1) the total amount received or receivable by the
Corporation as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Corporation upon the conversion or exchange thereof, by (2)
the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment of the
Series A Conversion Price and/or the Series B Conversion Price, as the case may
be, shall be made when Common Stock
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is actually issued upon the conversion or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible Securities is made
upon exercise of any Options for which adjustments of the Series A Conversion
Price and/or the Series B Conversion Price had been or are to be made pursuant
to other provisions of this Section 4.2(e), no further adjustment of the Series
A Conversion Price and/or the Series B Conversion Price shall be made by reason
of such issue or sale.
(C) Change in Option Price or Conversion Rate. If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock changes at any time, the Series A Conversion Price
and/or the Series B Conversion Price, as the case may be, in effect at the time
of such change shall be immediately adjusted to the Series A Conversion Price
and/or the Series B Conversion Price which would have been in effect at such
time had such Options or Convertible Securities still outstanding provided for
such changed purchase price, additional consideration or conversion rate, as the
case may be, at the time initially granted, issued or sold.
(D) Treatment of Expired Options and Unexercised
Convertible Securities. Upon the expiration of any Option or the termination of
any right to convert or exchange any Convertible Security without the exercise
of any such Option or right, the Series A Conversion Price and/or the Series B
Conversion Price then in effect hereunder shall be adjusted immediately to the
Series A Conversion Price and/or the Series B Conversion Price which would have
been in effect at the time of such expiration or termination had such Option or
Convertible Security, to the extent outstanding immediately prior to such
expiration or termination, never been issued.
(E) Calculation of Consideration Received. If any Common
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Corporation therefor (net of discounts,
commissions and related expenses). If any Common Stock, Option or Convertible
Security is issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Corporation shall be the fair
value of such consideration. If any Common Stock, Option or Convertible Security
is issued to the owners of the non-surviving entity in connection with any
merger in which the Corporation is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Option or Convertible Security, as the case may be. The fair
value of any consideration other than cash and securities shall be determined
jointly by the Corporation and the Required Holders. If such parties are unable
to reach agreement within a reasonable period of time, the fair value of such
consideration shall be determined by an independent appraiser experienced in
valuing such type of consideration jointly selected by the Corporation and the
Required Holders. The
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determination of such appraiser shall be final and binding upon the parties, and
the fees and expenses of such appraiser shall be borne by the Corporation.
(F) Integrated Transactions. In case any Option is
issued in connection with the issue or sale of other securities of the
Corporation, together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
shall be deemed to have been issued for a consideration of $.01.
(G) Treasury Shares. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Corporation or any Subsidiary, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock.
(iv) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time effect a subdivision of the
outstanding Common Stock, the Series A Conversion Price and the Series B
Conversion Price in effect immediately before that subdivision shall be
proportionately decreased. Conversely, if the Corporation shall at any time or
from time to time combine the outstanding shares of Common Stock into a smaller
number of shares, the Series A Conversion Price and the Series B Conversion
Price in effect immediately before the combination shall be proportionately
increased. Any adjustment under this Section 4.2(e)(iv) shall become effective
at the close of business on the date the subdivision or combination becomes
effective.
(v) Adjustment for Common Stock Dividends and Distributions.
If the Corporation at any time or from time to time makes, or fixes a record
date for the determination of holders of Common Stock entitled to receive, a
divided or other distribution payable in additional shares of Common Stock, in
each such event the Series A Conversion Price and the Series B Conversion Price
that is then in effect shall be decreased as of the time of such issuance or, in
the event such record date is fixed, as of the close of business on such record
date, by multiplying each of the Series A Conversion Price and the Series B
Conversion Price then in effect by a fraction (1) the numerator of which is the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date, and
(2) the denominator of which is the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution; provided, however, that if
such record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the Series A
Conversion Price and the Series B Conversion Price shall be recomputed
accordingly as of the close of business on such record date and thereafter the
Series A Conversion Price and the Series B Conversion Price shall be adjusted
pursuant to this Section 4.2(e)(v) to reflect the actual payment of such
dividend or distribution.
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(vi) Adjustments for Other Dividends and Distributions. If
the Corporation at any time or from time to time makes, or fixes a record date
for the determination of holders of Common Stock entitled to receive, a dividend
or other distribution payable in securities of the Corporation other than shares
of Common Stock, in each such event provision shall be made so that the holders
of the Series Preferred shall receive upon conversion thereof, in addition to
the number of shares of Common Stock receivable thereupon, the amount of other
securities of the Corporation which they would have received had their Series
Preferred been converted into Common Stock on the date of such event and had
they thereafter, during the period from the date of such event to and including
the conversion date, retained such securities receivable by them as aforesaid
during such period, subject to all other adjustments called for during such
period under this Section 4.2(e) with respect to the rights of the holders of
the Series Preferred or with respect to such other securities by their terms.
(vii) Adjustment for Reclassification, Exchange and
Substitution. If at any time or from time to time the Common Stock issuable upon
the conversion of the Series Preferred is changed into the same or a different
number of shares of any class or classes of stock, whether by recapitalization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend or a reorganization, merger, consolidation or sale of assets
provided for elsewhere in this Section 4.2), in any such event each holder of
the Series Preferred shall have the right thereafter to convert such stock into
the kind and amount of stock and other securities and property receivable in
connection with such recapitalization, reclassification or other change by
holders of the maximum number of shares of Common Stock into which such shares
of the Series Preferred could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustments
as provided herein or with respect to such other securities or property by the
terms thereof.
(viii) Reorganizations, Mergers, Consolidations or Sales of
Assets. If at any time or from time to time there is a capital reorganization of
the Common Stock (other than a recapitalization, subdivision, combination,
reclassification, exchange or substitution of shares provided for elsewhere in
this Section 4.2), as a part of such capital reorganization, provision shall be
made so that the holders of the Series Preferred shall thereafter be entitled to
receive upon conversion of the Series Preferred the number of shares of stock or
other securities or property of the Corporation to which a holder of the maximum
number of shares of Common Stock deliverable upon conversion would have been
entitled in connection with such capital reorganization, subject to adjustment
in respect of such stock or securities by the terms thereof. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 4.2(e) with respect to the rights of the holders of the Series
Preferred after the capital reorganization to the end that the provisions of
this Section 4.2 (including adjustment of the Series A Conversion Price and the
Series B Conversion Price then in effect and the number of shares of Common
Stock issuable upon conversion of the Series Preferred) shall be applicable
after that event and be as nearly equivalent as practicable.
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(ix) Certificate of Adjustment. In each case of an adjustment
or readjustment of the Series A Conversion Price and/or the Series B Conversion
Price for the number of shares of Common Stock or other securities issuable upon
conversion of the Series Preferred, the Corporation, at its expense, shall
compute such adjustment or readjustment in accordance with the provisions hereof
and prepare a certificate showing such adjustment or readjustment, and shall
mail such certificate, by first class mail, postage prepaid, to each registered
holder of the Series Preferred at the holder's address as shown in the
Corporation's books. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (1) the consideration received
or deemed to be received by the Corporation for any additional shares of Common
Stock issued or sold or deemed to have been issued or sold, (2) the Series A
Conversion Price and/or the Series B Conversion Price at the time in effect, (3)
the number of additional shares of Common Stock issued or sold or deemed to have
been issued or sold, and (4) the type and amount, if any, of other property
which at the time would be received upon conversion of the Series Preferred.
(x) Notices of Record Date. Upon (i) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any Acquisition (as defined in Section
4.2(c)(iii)(A)) or other capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation with or into any other
corporation, any Asset Transfer (as defined in Section 4.2(c)(iii)(B)), or any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the Corporation shall mail to each holder of the Series Preferred
at least twenty (20) days prior to the record date specified therein a notice
specifying (1) the date on which any such record is to be taken for the purpose
of such dividend or distribution and a description of such dividend or
distribution, (2) the date on which any such Acquisition, reorganization,
reclassification, transfer, consolidation, merger, Asset Transfer, dissolution,
liquidation or winding up is expected to become effective, and (3) the date, if
any, that is to be fixed for determining the holders of record of Common Stock
(or other securities) that shall be entitled to exchange their shares of Common
Stock (or other securities) for securities or other property deliverable upon
such Acquisition, reorganization, reclassification, transfer, consolidation,
merger, Asset Transfer, dissolution, liquidation or winding up.
(xi) Automatic Conversion. Each share of the Series Preferred
shall automatically be converted into shares of Common Stock, based on the
then-effective Series A Conversion Price and/or the Series B Conversion Price,
as the case may be, immediately upon the closing of a firmly underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the Corporation in which (i) the per share price to the public is at
least $15.00 per share (as adjusted for stock splits, recapitalizations and the
like), and (ii) the gross cash proceeds to the
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Corporation (prior to expenses and underwriting commissions) are at least
$50,000,000. Upon such automatic conversion, all declared but unpaid dividends,
if any, shall be paid in accordance with Section 4.2(a).
(xii) Mechanics of Conversion.
(A) Optional Conversion. Each holder of the Series
Preferred who desires to convert the same into shares of Common Stock pursuant
to this Section 4.2(e) shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or any transfer agent for the
Series Preferred, and shall give written notice to the Corporation at such
office that such holder elects to convert the same. Such notice shall state the
number of shares of the Series Preferred being converted. Thereupon, the
Corporation shall promptly issue and deliver at such office to such holder a
certificate or certificates for the number of shares of Common Stock to which
such holder is entitled and shall promptly pay in cash or, to the extent
sufficient funds are not then legally available therefor, in Common Stock (at
the Common Stock's fair market value determined by the Board of Directors as of
the date of such conversion), any declared but unpaid dividends on the shares of
the Series Preferred being converted. Such conversion shall be deemed to have
been made at the close of business on the date of such surrender of the
certificate representing the shares of the Series Preferred to be converted, and
the person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.
(B) Automatic Conversion. Upon the occurrence of the
event specified in Section 4.2(e)(xi) above, the outstanding shares of the
Series Preferred shall be converted into Common Stock automatically without any
further action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent; provided, however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless the certificates evidencing such shares of the Series Preferred are
either delivered to the Corporation or its transfer agent as provided below, or
the holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. Upon surrender by any holder of the
certificates formerly representing shares of the Series Preferred at the office
of the Corporation or any transfer agent for the Series Preferred, there shall
be issued and delivered to such holder promptly at such office and in its name
as shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
the Series Preferred surrendered were convertible on the date on which such
automatic conversion occurred, and the Corporation shall promptly pay in cash
or, at the option of the Corporation, Common Stock (at the Common Stock's fair
market value determined by the Board as of the date of such conversion) or, at
the option of the Corporation, a combination of both, all declared but unpaid
dividends on
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the shares of the Series Preferred being converted. Until surrendered as
provided above, each certificate formerly representing shares of the Series
Preferred shall be deemed for all corporate purposes to represent the number of
shares of Common Stock resulting from such automatic conversion.
(xiii) Fractional Shares. No fractional shares of Common
Stock shall be issued upon conversion of the Series Preferred. All shares of
Common Stock (including fractions thereof) issuable upon conversion of more than
one share of the Series Preferred by a holder thereof shall be aggregated for
purposes of determination whether the conversion would result in the issuance of
any fractional share. If, after the aforementioned aggregation, the conversion
would result in the issuance of any fractional share, the Corporation shall, in
lieu of issuing any fractional share, pay cash equal to the product of such
fraction multiplied by the Common Stock's fair market value (as determined by
the Board) on the date of conversion.
(f) CERTAIN DEFINITIONS.
"COMMON STOCK" means the Common Stock, par value $.0001 per share, of
the Corporation.
"COMMON STOCK DEEMED OUTSTANDING" means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus (a) the number
of shares of Common Stock which would be issued upon exercise of all of the
Corporation's outstanding Options and (b) the number of shares of Common Stock
which would be issued upon conversion or exchange of all of the Corporation's
outstanding Convertible Securities (including Convertible Securities issuable
upon exercise of Options).
"CONVERTIBLE SECURITIES" means any stock or securities directly or
indirectly convertible into or exchangeable for Common Stock.
"OPTIONS" means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.
"PERMITTED ISSUANCE" means any issuance of Reserved Employee Stock.
"RESERVED EMPLOYEE STOCK" means the shares of Common Stock issuable to
employees, directors or consultants of the Corporation and its Subsidiaries
pursuant to options granted under the VeloCom Inc. Amended and Restated 1998
Stock Option Plan.
"SUBSIDIARY" means any corporation of which more than 50% of the shares
of outstanding capital stock possessing the voting power (under ordinary
circumstances) in electing the board of directors are, at the time as of which
any determination is being made, owned by the Corporation either directly or
indirectly through Subsidiaries.
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(a) AMENDMENT AND WAIVER.
No amendment, modification or waiver of any of the terms or provisions
of the Series Preferred shall be binding or effective without the prior written
consent of the Required Holders and no change in the terms hereof may be
accomplished by merger or consolidation of the Corporation with another
corporation or entity unless the Corporation has obtained the prior written
consent of the Required Holders; provided, however, that no such action shall
adversely alter or change any of the rights, preferences, or privileges of the
Series A Preferred without the prior written consent of the holders of at least
75% of the Series A Preferred then outstanding; and provided, further, than no
such action shall adversely alter or change any of the rights, preferences or
privileges of the Series B Preferred without the prior written consent of at
least 75% of the Series B Preferred then outstanding. Any amendment,
modification or waiver of any of the terms or provisions of the Series Preferred
by the Required Holders (or such higher vote as may be required), whether
prospective or retroactively effective, shall be binding upon all holders of the
Series Preferred.
(h) GENERAL PROVISIONS.
(i) Registration of Transfer. The Corporation shall keep at
its principal office a register for the registration of the Series Preferred.
Upon the surrender of any certificate representing the Series Preferred at such
place, the Corporation shall, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares represented by the surrendered certificate. Each such new
certificate shall be registered in such name and shall represent such number of
shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate.
(ii) Replacement. Upon receipt of evidence reasonably
satisfactory to the Corporation (an affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing shares of the Series Preferred, and in the case of
any such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Corporation (provided, however, that if the holder is a
financial institution or other institutional investor its own agreement shall be
satisfactory), or in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
(iii) Reservation of Common Stock Issuable Upon Conversion.
The Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series Preferred, such number of
its shares of Common Stock as shall
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from time to time be sufficient to effect the conversion of all outstanding
shares of the Series Preferred. If at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then-outstanding shares of the Series Preferred, the Corporation shall
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
(iv) Notices. Any notice required by the provisions of this
Amended and Restated Certificate of Incorporation shall be in writing and shall
be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (iii)
five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All notices to stockholders shall be addressed
to each holder of record at the address of such holder appearing on the books of
the Corporation.
(v) Payment of Taxes. The Corporation shall pay all taxes
(other than taxes based upon income) and other governmental charges that may be
imposed with respect to the issue or delivery of shares of Common Stock upon
conversion of shares of the Series Preferred, excluding any tax or other charge
imposed in connection with any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the shares of the
Series Preferred so converted were registered.
(vi) No Dilution or Impairment. The Corporation shall not
amend its Certificate of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, for the purpose of avoiding or seeking
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation.
(vii) No Reissuance of the Series Preferred. No share or
shares of the Series Preferred acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be reissued.
ARTICLE FIVE.
The Corporation is to have perpetual existence.
ARTICLE SIX.
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors of the Corporation is expressly authorized to
make, alter or repeal the Bylaws of the Corporation.
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ARTICLE SEVEN.
The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed by, or in the
manner provided in, the Bylaws of the Corporation.
ARTICLE EIGHT.
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws of the Corporation may provide. The books of the
Corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the Bylaws of the Corporation.
Election of directors need not be by written ballot unless the Bylaws of the
Corporation so provide.
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ARTICLE NINE.
The Corporation shall indemnify, to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law, as amended from time to
time, all persons who it may indemnify pursuant thereto. The personal liability
of a director of the Corporation to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director shall be limited to
the fullest extent permitted by the Delaware General Corporation Law, as it now
exists or may hereafter be amended. Any repeal or modification of this paragraph
by the stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
ARTICLE TEN.
The Corporation expressly elects not to be governed by Section 203 of
the Delaware General Corporation Law.
ARTICLE ELEVEN.
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation in the manner now or hereafter prescribed herein and by the laws
of the State of Delaware, and all rights conferred upon stockholders herein are
granted subject to this reservation.
IN WITNESS WHEREOF, the Corporation has caused this Amended & Restated
Certificate of Incorporation to be signed and executed in its corporate name by
Xxxxx X. Xxxxxxx, its President and Chief Executive Officer, and attested to by
Xxxxxxx X. Xxxxx, its Assistant Secretary, and its Corporate Seal to be affixed
on this 3rd day of December, 1999.
VELOCOM INC.
By:
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
Attest:
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Secretary
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SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT C
FORM OF SECOND AMENDED AND RESTATED INVESTORS AGREEMENT
C-1
51
VELOCOM INC.
SECOND AMENDED AND RESTATED INVESTORS AGREEMENT
DECEMBER 6, 1999
52
TABLE OF CONTENTS
PAGE
----
Article I Certain Definitions.....................................................................................1
Article II Registration Rights....................................................................................6
2.1 Demand Registrations ....................................................................................6
2.2 Piggyback Registrations .................................................................................7
2.3 Expenses of Registration ................................................................................8
2.4 Registration Procedures .................................................................................8
2.5 Indemnification ........................................................................................10
2.6 Other Obligations ......................................................................................12
2.7 Termination of Registration Rights .....................................................................12
Article III Restrictions On Transfer Of Stock....................................................................13
3.1 Restrictions on Transfer of Management Stock ...........................................................13
3.2 Right of First Negotiation .............................................................................14
3.3 Tag-Along Rights .......................................................................................15
Article IV Covenants Of The Company..............................................................................17
4.1 Basic Financial Information ............................................................................17
4.2 Additional Information Rights ..........................................................................17
4.3 Prompt Payment of Taxes, Etc ...........................................................................18
4.4 Maintenance of Properties and Leases ...................................................................18
4.5 Insurance...............................................................................................18
4.6 Accounts and Records ...................................................................................18
4.7 Independent Accountants ................................................................................19
4.8 Compliance with Laws ...................................................................................19
4.9 Maintenance of Corporate Existence, Etc ................................................................19
4.10 Limited Preemptive Rights .............................................................................19
4.11 Additional Investor Rights ............................................................................20
Article V Corporate Governance...................................................................................21
5.1 Board of Directors .....................................................................................21
5.2 Meetings of the Board ..................................................................................23
5.3 Committees..............................................................................................23
5.4 Reimbursement of Expenses ..............................................................................23
5.5 Certain Approvals ......................................................................................23
Article VI Miscellaneous.........................................................................................23
6.1 Governing Law ..........................................................................................23
6.2 Successors and Assigns .................................................................................23
6.3 Entire Agreement; Amendment and Waiver .................................................................23
6.4 Specific Enforcement ...................................................................................24
6.5 Severability ...........................................................................................24
6.6 Notices, Etc ...........................................................................................24
6.7 Counterparts; Facsimile ................................................................................24
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6.8 Delays or Omissions ....................................................................................24
6.9 Termination ............................................................................................25
ii
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SECOND AMENDED AND RESTATED INVESTORS AGREEMENT
This Second Amended and Restated Investors Agreement (this "Agreement")
is dated as of December 6, 1999, by and among (i) VeloCom Inc. a Delaware
corporation (the "Company"), (ii) the holders of the Company's Series B
Preferred Stock, Series A Preferred Stock and/or Common Stock identified as
"Investors" on the signature page (the "Investors") and (iii) the other holders
of the Company's Series B Preferred Stock, Series A Preferred Stock and/or
Common Stock, including Management Holders (as defined below) identified as
"Other Holders" on the signature page (the "Other Holders"). The Investors and
the Other Holders are referred to collectively as the "Stockholders."
In consideration of the mutual promises and covenants set forth herein,
the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person; for purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of an entity, whether through the
ownership of voting securities, by contract or otherwise. A follow-on fund of an
Investor shall be deemed to be an Affiliate of such Investor.
"AGREEMENT" shall have the meaning set forth in the Introductory
Paragraph of this Agreement.
"CENTENNIAL ENTITIES" shall have the meaning set forth in Section
5.1(a)(ii)(C) of this Agreement.
"CENTENNIAL ENTITIES DIRECTOR" shall have the meaning set forth in
Section 5.1(a)(ii)(C) of this Agreement.
"CLOSING" shall have the meaning set forth in Section 5.1(a) of this
Agreement.
"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean the Company's Common Stock, $.0001 par value
per share.
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"COMPANY" shall have the meaning set forth in the Introductory
Paragraph of this Agreement.
"COMPANY NEGOTIATION PERIOD" shall have the meaning set forth in
Section 3.2(b) of this Agreement.
"CRESCENDO ENTITIES" shall have the meaning set forth in Section
5.1(a)(ii)(D) of this Agreement.
"CRESCENDO ENTITIES DIRECTOR" shall have the meaning set forth in
Section 5.1(a)(ii)(D) of this Agreement.
"DEMAND REGISTRATION" shall have the meaning set forth in Section
2.1(a) of this Agreement.
"EQUITY SECURITIES" shall have the meaning set forth in Section 4.10(a)
of this Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 (or any
similar successor federal statute), as amended, and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
"FLOOR PRICE" shall have the meaning set forth in Section 3.2(d) of
this Agreement.
"FORMUS DIRECTOR" shall have the meaning set forth in Section
5.1(a)(ii)(F) of this Agreement.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 2.5(c)
of this Agreement.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 2.5(c)
of this Agreement.
"INITIATING HOLDERS" shall mean holders of Registrable Securities
representing not less than thirty-three percent (33%) of the then-outstanding
Registrable Securities.
"INVESTORS" shall have the meaning set forth in the Introductory
Paragraph of this Agreement.
"INVESTOR STOCK" shall mean (i) shares of Common Stock owned by the
Investors or any transferee thereof; (ii) shares of Common Stock issued or
issuable upon the conversion or exercise of any stock (including, without
limitation, the Series A Preferred Stock and Series B Preferred Stock) warrants,
options or other securities of the Company owned by the Investors or any
transferee thereof; and (iii) any shares of Common Stock issued as a dividend or
other distribution with respect to or in exchange for or in replacement of the
shares referenced in (i) and (ii) above.
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56
"INVESTORS PRO RATA NUMBER OF SHARES" shall have the meaning set forth
in Section 3.1 of this Agreement.
"LONG FORM REGISTRATION" shall have the meaning set forth in Section
2.11(a) of this Agreement.
"MANAGEMENT DIRECTORS" shall have the meaning set forth in Section
5.1(a)(ii)(A) of this Agreement.
"MANAGEMENT HOLDERS" shall mean members of the Company's management
that hold shares of Common Stock, Series A Preferred Stock or Series B Preferred
Stock and are parties to this Agreement or have agreed to be bound by the
provisions of this Agreement. As of the date hereof, the Management Holders are
as set forth on Schedule I.
"MANAGEMENT STOCK" shall mean (i) shares of Common Stock owned by the
Management Holders or any Permitted Transferee thereof; (ii) shares of Common
Stock issued or issuable upon the conversion or exercise of any options or other
securities of the Company owned by the Management Holders; and (iii) any shares
of Common Stock issued as a dividend or other distribution with respect to or in
exchange for or in replacement of the shares referenced in (i) and (ii) above.
"NEGOTIATION PERIOD" shall have the meaning set forth in Section 3.2(c)
of this Agreement.
"OFFER" shall have the meaning set forth in Section 3.3(b) of this
Agreement.
"OFFEREES" shall have the meaning set forth in Section 3.2(a) of this
Agreement.
"OFFER NOTICE" shall have the meaning set forth in Section 3.2(a) of
this Agreement.
"OTHER HOLDERS" shall have the meaning set forth in the Introductory
Paragraph of this Agreement.
"OTHER STOCK" shall mean (i) shares of Common Stock owned by the Other
Holders (including, without limitation, shares of Management Stock held by any
Management Holder or any Permitted Transferee thereof); (ii) shares of Common
Stock issued or issuable upon the conversion or exercise of any options or other
securities of the Company owned by the Other Holders (including, without
limitation, any Management Holder); and (iii) any shares of Common Stock issued
as a dividend or other distribution with respect to or in exchange for or in
replacement of the shares referenced in (i) and (ii) above.
"OUTSIDE DIRECTOR" shall have the meaning set forth in Section
5.1(a)(ii)(G) of this Agreement.
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57
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other similar
entity or any government or political subdivision or agency, department or
instrumentality thereof.
"PERMITTED TRANSFEREE" shall mean with respect to a Management Holder,
a member of such Management Holder's immediate family, a trust established for
the benefit of members of such Management Holder's immediate family, or a
transferee of such Management Holder by will or the laws of intestate
succession.
"PIGGYBACK REGISTRATION" shall have the meaning set forth in Section
2.2(a) of this Agreement.
"QUALIFIED HOLDER" shall have the meaning set forth in Section 4.2(a)
of this Agreement.
"QUALIFIED PUBLIC OFFERING" shall mean an underwritten public offering
of Common Stock resulting in proceeds to the Company of not less than
$50,000,000 (prior to expenses and underwriting commissions) and at an offering
price per share of at least $15.00 per share (as adjusted for stock splits,
recapitalizations and the like).
"REGISTRABLE SECURITIES" shall mean the Investor Stock and the Other
Stock; provided, however, that Registrable Securities shall not include any
shares of Investor Stock or Other Stock that have previously been registered
under the Securities Act or that have otherwise been sold to the public in an
open-market transaction under Rule 144.
The terms "REGISTERS," "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
"REGISTRATION EXPENSES" shall mean all expenses incurred in effecting
any registration pursuant to this Agreement, including without limitation all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
expenses of any regular or special audits incident to or required by any such
registration, and the fees and expenses of one counsel for the selling holders
of Registrable Securities, but excluding Selling Expenses.
"RULE 144" shall mean Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
"SALE NOTICE" shall have the meaning set forth in Section 3.1(a) of
this Agreement.
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58
"SECURITIES ACT" shall mean the Securities Act of 1933 (or any similar
successor federal statute), as amended, and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
"SELLING INVESTOR" shall have the meaning set forth in Section 3.2(a)
of this Agreement.
"SERIES A PREFERRED STOCK" shall mean the Company's Series A Preferred
Stock, $.0001 par value per share.
"SERIES B PREFERRED STOCK" shall mean the Company's Series B Preferred
Stock, $.0001 par value per share.
"SHARES" shall mean the shares of Series A Preferred Stock, Series B
Preferred Stock and Common Stock which, for purposes of any calculation under
this Agreement, shall be calculated after giving effect to the conversion of
Series A Preferred Stock and Series B Preferred Stock into Common Stock.
"SHORT FORM REGISTRATION" shall have the meaning set forth in Section
2.1(a) of this Agreement.
"SLI DIRECTORS" shall have the meaning set forth in Section
5.1(a)(ii)(E) of this Agreement.
"STOCK" shall mean Investor Stock and Other Stock.
"STOCKHOLDERS" shall have the meaning set forth in the Introductory
Paragraph of this Agreement.
"SUBJECT INVESTOR" shall have the meaning set forth in Section 3.3 of
this Agreement.
"SUBSIDIARY" means any subsidiary of the Company over which the Company
exercises control. For purposes of this definition, "control" shall mean the
direct or indirect ownership by the Company of at least 50.1% of the voting
securities of such subsidiary.
"TAG ALONG SHARES" shall have the meaning set forth in Section 3.3 of
this Agreement.
"TELECOM DIRECTORS" shall have the meaning set forth in Section
5.1(a)(ii)(B) of this Agreement.
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"THIRD PARTY" shall have the meaning set forth in Section 3.1(a) of
this Agreement.
"THIRD-PARTY OFFER" shall have the meaning set forth in Section 3.1(a)
of this Agreement.
"UNAFFILIATED DIRECTORS" shall have the meaning set forth in Section
3.2 of this Agreement.
ARTICLE II
REGISTRATION RIGHTS
2.1 DEMAND REGISTRATIONS.
(a) REQUEST FOR REGISTRATION. At any time or times after
January 26, 2002 or at any time following the effective date of the first
registration statement filed by the Company under the Securities Act in respect
of its Common Stock, the Initiating Holders may require that the Company effect
a registration under the Securities Act four times utilizing a registration on
Form S-1 or any similar form (a "Long Form Registration") and as many times as
requested by the Initiating Holders utilizing a Form S-3 or any similar form, if
available (a "Short Form Registration") (each a "Demand Registration"). Upon
receipt of written notice of such demand, the Company shall promptly give
written notice of the proposed registration to all other holders of Registrable
Securities and shall include in such registration all Registrable Securities
specified in such demand, together with all Registrable Securities of any other
holder of Registrable Securities joining in such demand as are specified in a
written request received by the Company within twenty (20) days after delivery
of the Company's notice.
(b) DEFERRAL OF DEMAND REGISTRATION. The Company shall file a
registration statement with respect to each Demand Registration requested
pursuant to Section 2.1(a) as soon as practicable after receipt of the demand of
the Initiating Holders; provided, however, that if in the good faith judgment of
the Board of Directors of the Company, such registration would be seriously
detrimental to the Company in that such registration would interfere with a
proposed primary registration of securities by the Company or any other material
corporate transaction and the Board of Directors concludes, as a result, that it
is advisable to defer the filing of such registration statement at such time (as
evidenced by an appropriate resolution of the Board), then the Company shall
have the right to defer such filing for the period during which such
registration would be seriously detrimental; provided further, however, that (i)
the Company may not defer the filing for a period of more than one hundred
eighty (180) days after receipt of the demand of the Initiating Holders, (ii)
the Company shall not exercise its right to defer a Demand Registration more
than once, and (iii) if the Company undertakes a primary registration following
an exercise of its deferral right, the holders of Registrable Securities shall
have "piggyback" rights under Section 2.2
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hereof with respect to not less than one-third (1/3) of the number of shares of
Common Stock to be sold in such offering.
(c) UNDERWRITING. If the Initiating Holders intend to
distribute the Registrable Securities covered by a Demand Registration by means
of an underwritten offering, they shall so advise the Company as a part of their
demand made pursuant to Section 2.1 and the Company shall include such
information in its written notice to holders of Registrable Securities. The
Initiating Holders shall have the right to select investment banker(s) of a
recognized national reputation to administer the offering, subject to the
approval of the Company's Board of Directors, such approval not to be
unreasonably withheld or delayed. The right of any holder of Registrable
Securities to participate in an underwritten Demand Registration shall be
conditioned upon such holder's participation in such underwriting in accordance
with the terms and conditions thereof, and the Company and such holders shall
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected by the Investors and approved by the
Company's Board of Directors.
(d) PRIORITIES. The holders of Registrable Securities shall
have absolute priority over any other securities included in a Demand
Registration. If other securities are included in any Demand Registration that
is not an underwritten offering, all Registrable Securities included in such
offering shall be sold prior to the sale of any of such other securities. If
other securities are included in any Demand Registration that is an underwritten
offering, and the managing underwriter for such offering advises the Company
that in its opinion the amount of securities to be included exceeds the amount
of securities which can be sold in such offering without adversely affecting the
marketability thereof, the Company shall include in such registration all
Registrable Securities requested to be included therein prior to the inclusion
of any other securities. If the number of Registrable Securities requested to be
included in such registration exceeds the amount of securities which in the
opinion of such underwriter can be sold without adversely affecting the
marketability of such offering, such Registrable Securities shall be included
pro rata among the holders thereof based on the percentage of the outstanding
Common Stock held by each such Stockholder (assuming the conversion of the
Series A Preferred Stock and Series B Preferred Stock and the exercise of all
options, warrants and similar rights held by such Stockholder).
2.2 PIGGYBACK REGISTRATIONS.
(a) REQUEST FOR INCLUSION. If the Company shall determine to
register any of its securities for its own account or for the account of other
security holders of the Company on any registration form (other than Form S-4 or
S-8) which permits the inclusion of Registrable Securities (a "Piggyback
Registration"), the Company shall promptly give each holder of Registrable
Securities written notice thereof and, subject to Section 2.2(c), shall include
in such registration all the Registrable Securities requested to be included
therein pursuant to the written requests of holders of Registrable Securities
received within twenty (20) days after delivery of the Company's written notice
to such holders.
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(b) UNDERWRITING. If the Piggyback Registration relates to an
underwritten public offering, the Company shall so advise the holders of
Registrable Securities as a part of the written notice given pursuant to Section
2.2(a). In such event, the right of any holder of Registrable Securities to
participate in such registration shall be conditioned upon such holder's
participation in such underwriting in accordance with the terms and conditions
thereof. All holders of Registrable Securities proposing to distribute their
securities through such underwriting shall (together with the Company) enter
into an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
(c) PRIORITIES. If such proposed Piggyback Registration is an
underwritten offering and the managing underwriter for such offering advises the
Company that the securities requested to be included therein exceeds the amount
of securities that can be sold in such offering, except as provided in Section
2.1(b), the priority for including securities in such offering shall be: (i)
first, any securities to be sold by the Company in such offering, (ii) second,
any Registrable Securities, and if necessary, the number of shares to be
included by a holder of Registrable Securities in such registration shall be
reduced pro rata on the basis of the percentage of the outstanding Common Stock
held by such Stockholder (assuming the conversion of the Series A Preferred
Stock and Series B Preferred Stock and the exercise of all options, warrants and
similar rights held by such Stockholder), and (iii) third, all securities
proposed to be included by other holders exercising similar registration rights.
2.3 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with up to two Long-Form Registrations and all Short-Form and
Piggyback Registrations shall be borne by the Company; provided, however, that
no registration shall count as one of the Company-paid Long Form Registrations
unless the holders of Registrable Securities are able to register and sell at
least 90% of the Registrable Securities requested to be included. All Selling
Expenses relating to Registrable Securities included in any Demand Registration
or Piggyback Registration shall be borne by the holders of such securities pro
rata on the basis of the number of shares sold by them.
2.4 REGISTRATION PROCEDURES. In the case of each registration effected
by the Company pursuant to this Article II, the Company shall keep each holder
of Registrable Securities advised in writing as to the initiation of such
registration and as to the completion thereof. At its expense, the Company shall
use its best efforts to:
(a) cause such registration to be declared effective by the
Commission and, in the case of a Demand Registration, keep such registration
effective for a period of one hundred eighty (180) days or until the holders of
Registrable Securities included therein have completed the distribution
described in the registration statement relating thereto, whichever first
occurs;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with
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such registration statement (including post-effective amendments) as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement;
(c) obtain appropriate qualifications of the securities
covered by such registration statement under state securities or "blue sky" laws
in such jurisdictions as may be requested by the holders of Registrable
Securities; provided, however, that the Company shall not be required to file a
general consent to service of process in any jurisdiction in which it is not
otherwise subject to service in order to obtain any such qualification;
(d) furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the prospectus, as
a holder of Registrable Securities from time to time may reasonably request;
(e) notify each holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing and, at the request of any such holder, prepare and
furnish to such holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;
(f) cause all Registrable Securities covered by such
registration to be listed on each securities exchange or inter-dealer quotation
system on which similar securities issued by the Company are then listed;
(g) provide a transfer agent and registrar for all Registrable
Securities covered by such registration and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;
(h) otherwise comply with all applicable rules and regulations
of the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least 12
months, but not more than 18 months, beginning with the first month after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act; and
(i) in connection with any underwritten Demand Registration,
the Company shall enter into an underwriting agreement reasonably satisfactory
to the
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Initiating Holders containing customary underwriting provisions, including
indemnification and contribution provisions.
2.5 INDEMNIFICATION.
(a) The Company shall indemnify each holder of Registrable
Securities, each of such holders' officers, directors, partners, agents,
employees and representatives, and each person controlling such holder within
the meaning of Section 15 of the Securities Act, with respect to each
registration, qualification or compliance effected pursuant to this Article II,
against all expenses, claims, losses, damages and liabilities (or actions,
proceedings or settlements in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and shall
reimburse each such indemnified person for any legal and any other expenses
reasonably incurred in connection with investigating and defending or settling
any such claim, loss, damage, liability or action; provided, however, that the
Company shall not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
such holder of Registrable Securities and stated to be specifically for use
therein. It is agreed that the indemnity agreement contained in this Section
2.5(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company.
(b) Each holder of Registrable Securities included in any
registration effected pursuant to this Article II shall indemnify the Company,
each of its directors, officers, agents, employees and representatives, and each
person who controls the Company within the meaning of Section 15 of the
Securities Act, each other such holder of Registrable Securities and each of
their officers, directors and partners, agents, employees and representatives,
and each person controlling such holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse such indemnified persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case, to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in strict
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conformity with written information furnished to the Company by such holder of
Registrable Securities; provided, however, that (x) no holder of Registrable
Securities shall be liable hereunder for any amounts in excess of the net
proceeds received by such holder pursuant to such registration, and (y) the
obligations of such holder of Registrable Securities hereunder shall not apply
to amounts paid in settlement of any such claims, losses, damages or liabilities
(or actions in respect thereof) if such settlement is effected without the
consent of such holder.
(c) Each party entitled to indemnification under this Section
2.5 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense; and provided further,
however, that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 2.5 to the extent such failure is not prejudicial. No Indemnifying Party
in the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include an unconditional release of such Indemnified
Party from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(d) If the indemnification provided for in this Section 2.5 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, however, that no holder of Registrable
Securities shall be liable hereunder for any amounts in excess of the net
proceeds received by such holder pursuant to such registration.
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(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in an underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
2.6 OTHER OBLIGATIONS. With a view to making available the benefits of
certain rules and regulations of the Commission which may effectuate the
registration of Registrable Securities or permit the sale of Registrable
Securities to the public without registration, the Company agrees to:
(a) after its initial registration under the Securities Act,
exercise reasonable efforts to cause the Company to be eligible to utilize Form
S-3 (or any similar form) for the registration of Registrable Securities;
(b) at such time as any Registrable Securities are eligible
for transfer under Rule 144(k), upon the request of the holder of such
Registrable Securities, remove any restrictive legend from the certificates
evidencing such securities at no cost to such holder;
(c) make and keep available public information as defined in
Rule 144 under the Securities Act at all times from and after ninety (90) days
following its initial registration under the Securities Act;
(d) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act at any time after it has become subject to such reporting
requirements; and
(e) furnish any holder of Registrable Securities upon request
a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 (at any time from and after ninety (90) days following
the effective date of the first registration statement filed by the Company for
an offering of its securities to the general public), and of the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents as a holder of Registrable
Securities may reasonably request in availing itself of any rule or regulation
of the Commission (including Rule 144A) allowing a holder of Registrable
Securities to sell any such securities without registration.
2.7 TERMINATION OF REGISTRATION RIGHTS. The right of any holder of
Registrable Securities to request inclusion of Registrable Securities in any
registration pursuant to this Article II shall terminate when (i) all
Registrable Securities beneficially owned by such holder of Registrable
Securities may immediately be sold under Rule 144(k), and (ii) the Company's
Common Stock is listed on a national securities exchange or traded in The Nasdaq
Stock Market; provided, however, that the provisions of this Section 2.7 shall
not apply to any holder of Registrable Securities representing more than five
percent (5%) of the Company's then-outstanding Common Stock.
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ARTICLE III
RESTRICTIONS ON TRANSFER OF STOCK
3.1 RESTRICTIONS ON TRANSFER OF MANAGEMENT STOCK.
(a) No shares of Management Stock or any interest therein may
be transferred other than in compliance with the provisions of this Section 3.1.
If at any time a Management Holder receives a bona fide offer from any person (a
"Third Party") to purchase shares of Stock held by such Management Holder (a
"Third-Party Offer") which such Management Holder wishes to accept, such
Management Holder shall cause such Third-Party Offer to be reduced to writing
and shall notify the Company and each holder of Investor Stock of such
Management Holder's desire to accept the Third-Party Offer. The Management
Stockholder's notice (the "Sale Notice") shall contain an irrevocable offer to
sell such Stock to the Company and/or the Investors at a purchase price equal to
the price contained in, and on the same terms and conditions of, the Third-Party
Offer and shall be accompanied by a copy of the Third-Party Offer (which shall
identify the offeror); provided, however, the Company and the Investors may pay
cash to the selling Management Holder equal in amount to the fair market value
of any non-cash consideration offered by the Third Party in the Third-Party
Offer. At any time within 10 business days after the date of receipt by the
Company of the Sale Notice, the Company shall have the right to purchase the
Stock covered by the Third-Party Offer at the same price and on the same terms
and conditions as the Third-Party Offer. If, at the end of such 10-business day
period, the Company has not elected to purchase all Stock covered by such
Third-Party Notice, the Management Holder shall provide the Sale Notice to the
Investors along with a statement as to the number of shares to be purchased by
the Company (if any). Within 10 business days after receipt by the Investors of
such Sale Notice, each Investor, by providing notice to the Management Holder,
shall have the right to purchase that portion of the shares equal to the
Investors Pro Rata Number of Shares (as defined below) at the same price and on
the same terms and conditions as the Third-Party Offer. In the event any
Investor does not exercise its right to purchase its respective Investors Pro
Rata Number of Shares, the other Investors shall have the right to purchase such
shares, and the purchase of such shares shall be allocated among the
participating Investors pro rata in proportion to the Investor Stock held by
such Investors, or in such other proportions as the participating Investors may
agree upon. To the extent the Investors have not notified the selling Management
Holder in writing of a desire to purchase all of the Stock as set forth herein,
the selling Management Holder may within 90 days thereafter sell the remaining
Management Stock covered by the Third-Party Offer to the Third Party on the
terms set forth in the original Third-Party Offer. Any Management Stock covered
by the Third Party Offer that is not so transferred during such 90-day period
shall again be subject to this Section 3.1. The Company may assign its rights to
purchase Management Stock pursuant to this Section 3.1 to one or more third
parties subject only to compliance with applicable securities laws; provided,
however, that the Company shall offer to assign such rights to the Investors pro
rata prior to offering such rights to other persons. An Investor may assign its
rights to purchase Management Stock pursuant to this Section 3.1 to any of its
Affiliates subject only to compliance with applicable securities laws. For
purposes of
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this Section 3.1, the "Investors Pro Rata Number of Shares" shall be equal to
that number of shares of Common Stock derived by multiplying the total number of
shares to be purchased by the Third Party as set forth in the Sale Notice by a
fraction, the numerator of which is the total number of shares of Common Stock
beneficially owned by such participating holder of Investor Stock and the
denominator of which is the total number of shares beneficially owned by all
holders of Investor Stock, in each case, determined on an as converted basis.
(b) The restrictions set forth in this Section 3.1 shall not
apply to transfers of Management Stock to a Permitted Transferee of the
transferring Management Holder; provided, however, that such Permitted
Transferee shall agree in writing to be bound by such restrictions in connection
with subsequent transfers.
3.2 RIGHT OF FIRST NEGOTIATION.
(a) TRANSFER NOTICE. Any Investor (the "Selling Investor")
that either (i) receives an offer to sell all or part of the Shares held by it
that it wishes to accept or (ii) wishes to transfer all or part of the Shares
held by it (in each case, the "Offered Shares") shall deliver a notice (the
"Offer Notice") to that effect to the Company and to each of the other Investors
and Other Holders (the "Offerees"), which Offer Notice shall state the number of
Offered Shares it wishes to sell and the price at which it wishes to sell them.
(b) COMPANY NEGOTIATION PERIOD. Upon receipt by the Company of
the Offer Notice, the Company shall have the exclusive right to negotiate with
the Selling Investor for a period of 15 days from the receipt of the Offer
Notice (the "Company Negotiation Period"). If the Selling Investor and the
Company agree upon the terms of sale for all or a portion of the Offered Shares
prior to the end of the Company Negotiation Period, such parties shall enter
into definitive documentation to effect such transfer as contemplated by Section
3.2(e) of this Agreement. All offers made by the Selling Investor to the Company
shall be delivered to the Company and to all Offerees in writing.
(c) INVESTOR NEGOTIATION PERIOD. If the Company elects not to
enter into negotiations with the Selling Investor in respect of the Offered
Shares or if the Company Negotiation Period has expired without an agreement
between the Selling Investor and the Company, then the Selling Investor and the
Offerees shall have a period of thirty (30) days (the "Negotiation Period") from
the earlier of (i) the date the Company provides written notice of its election
not to enter into negotiations with the Selling Investor or (ii) the expiration
of the Company Negotiation Period, to reach an agreement on the terms of sale
for the Offered Shares. Upon receipt of the Offer Notice, the Offerees shall
promptly consult with each other prior to responding to the Offer Notice. If the
Selling Investor and one or more Offerees agree upon the terms of sale for all
or a portion of the Offered Shares prior to the end of the Negotiation Period,
such parties shall enter into definitive documentation to effect such transfer
as contemplated by Section 3.2(e). All offers made by the Selling Investor to
any Offeree shall be
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delivered to all Offerees in writing. If two or more Offerees so elect to
purchase the Offered Shares, unless the Offerees otherwise agree, the purchase
of the Offered Shares by such electing Offerees shall be pro rata among such
Offerees based on their relative ownership percentage of Stock. The Selling
Investor will not be obligated to sell any Offered Shares to the Company and/or
any Offerees unless the Company and/or the Offerees, as the case may be, agree
to purchase all of the Offered Shares.
(d) SALE. If, at the end of the Negotiation Period, the
Selling Investor has not reached an agreement with either the Company or with
one or more Offerees to transfer all of the Offered Shares, or if the transfer
is not completed within the period specified in Section 3.2(e), the Selling
Investor shall have a period of one hundred and twenty (120) days following the
expiration of the Negotiation Period in which to transfer the Offered Shares not
otherwise sold to one or more Offerees to a third party at a price greater than
or equal to (i) the lowest price at which the Selling Investor has agreed to
sell any Offered Shares to the Company or any Offeree pursuant to Section 3.2(b)
or (c), or (ii) if no price was agreed to, the last price offered by the Selling
Investor to the Company or any Offeree during the Company Negotiation Period or
the Negotiation Period, as the case may be, (the "Floor Price"). If the Selling
Investor desires to transfer all or part of such remaining Offered Shares to a
third party at a price less than the Floor Price, it may do so if it reoffers
the Offered Shares to the Company and the Offerees pursuant to the provisions of
this Section 3.2. The Selling Investor shall provide each Offeree with written
proof that any sale to a third party was made in compliance with this Section
3.2.
(e) TRANSFER PROCEDURES. If the Company and/or the Offerees
and the Selling Investor have reached agreement with respect to the transfer of
the Offered Shares, the Company and/or the Offerees and the Selling Investor
shall, as promptly as practicable, but in no event later than thirty (30) days
from the date of termination of the Company Negotiation Period or the
Negotiation Period, as the case may be, prepare and enter into the documentation
necessary to provide for such transfer (including, if necessary, any
modifications or amendment to this Agreement).
(f) EXCEPTION FOR TRANSFERS TO AFFILIATES. The restrictions in
this Section 3.2 shall not apply to transfers of Investor Stock by any Investor
to an Affiliate of the transferring Investor, which may be accomplished without
the consent of any other party to this Agreement. Notwithstanding the foregoing,
the transferring Investor shall give advance written notice to the Company of
such transfer, and any such Affiliate transferee of the transferring Investor
shall agree in writing to be bound by the restrictions of, and shall be given
all rights of an Investor under, this Agreement.
3.3 TAG-ALONG RIGHTS.
(a) Without prejudice to the provisions of Section 3.2, no
Investor or group of Investors desiring to transfer 50% or more of the Shares in
any transaction or series of related transactions (the "Subject Investors")
shall accept an offer to transfer such Shares unless such Investors shall have
received an Offer (as defined below) from
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a proposed transferee which includes an offer to purchase the Tag-Along Shares
held by the other Investors or Other Holders, on the same terms and conditions
as have been extended to the Subject Investors. For purposes of this Agreement,
"Tag-Along Shares" shall mean the number of Shares obtained by multiplying the
number of Shares held by the other Investors or Other Holders as of the date of
the Transfer Notice by a fraction, the numerator of which is the number of
Shares proposed to be transferred by the Subject Investors, and the denominator
of which is the total number of Shares held by the Subject Investors. A Transfer
Notice must be given by the Subject Investors to the other Investors or Other
Holders and the Company at least forty-five (45) days in advance of the proposed
transfer which: (i) sets forth the number of Shares that such Subject Investors
propose to transfer; (ii) specifies the consideration to be received by the
Subject Investors in exchange for such Shares; (iii) identifies the name and
address of the proposed transferee; (iv) indicates the date on which the
proposed transfer is to occur; and (v) includes a copy of the offer (and any
related correspondence reasonably necessary to understand and evaluate such
offer) (the "Offer"). Each of the other Investors or Other Holders may accept
the offer to purchase included in the Offer for the Tag-Along Shares by
providing written notice of its acceptance of such offer to the Company, the
proposed transferee and the Subject Investors, on or prior to the twentieth
(20th) day after the delivery the Transfer Notice. If, within twenty (20) days
after the receipt of the Transfer Notice, the other Investors or Other Holders
have not accepted the offer to purchase included in the Offer, such Investors
and Other Holders shall be deemed to have waived any and all tag-along rights
with respect to the sale or other disposition of the Shares of the Subject
Investors described in the Transfer Notice.
(b) If the prospective transferee limits its Offer to a
specified number of Shares, and if the number of Shares that the Subject
Investors propose to sell together with the number of Tag-Along Shares that the
other Investors and Other Holders propose to sell exceeds such number, then the
number of Shares and Tag-Along Shares to be sold by the Subject Investors, other
Investors and Other Holders will be reduced ratably in proportion to the number
of Shares and Tag-Along Shares proposed to be sold so that the aggregate number
of Shares and Tag-Along Shares does not exceed the limit set by the prospective
transferee.
(c) In the event that an Investor or Other Holder does not
accept the offer from a proposed transferee as specified in Section 3.3(a), the
proposed transferee shall purchase from the Subject Investors the number of
Shares set forth in the Transfer Notice, plus the relevant number of Shares of
the other Investors or Other Holders (if any) who have accepted such offer. In
the event that an Investor or Other Holder accepts the offer from such proposed
transferee, the proposed transferee shall purchase from the Subject Investors
the number of Shares set forth in the Transfer Notice and from such other
Investors and Other Holders, their Tag-Along Shares.
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ARTICLE IV
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees, so long as any Registrable
Securities are outstanding, as follows:
4.1 BASIC FINANCIAL INFORMATION. The Company shall furnish the
following reports to each holder of Registrable Securities:
(a) As soon as practicable after the end of each fiscal year
of the Company and, in any event within ninety (90) days thereafter, (i) a
consolidated balance sheet of the Company and its Subsidiaries, if any, as of
the end of such fiscal year, (ii) consolidated statements of income and cash
flow of the Company and its Subsidiaries, if any, for such year, prepared in
accordance with United States generally accepted accounting principles
consistently applied and setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and audited by
independent public accountants of recognized national standing selected by the
Company, and (iii) a fully-diluted capitalization table of the Company.
(b) As soon as practicable after the end of each quarterly
accounting period in each fiscal year of the Company and, in any event within
forty-five (45) days thereafter, (i) a consolidated balance sheet of the Company
and its Subsidiaries, if any, as of the end of each such quarterly period, (ii)
an unaudited consolidated statement of income and cash flow of the Company and
its Subsidiaries, if any, for such period and for the current fiscal year to
date, prepared in accordance with United States generally accepted accounting
principles consistently applied and setting forth in comparative form the
figures for the corresponding periods of the previous fiscal year, subject to
changes resulting from normal year-end audit adjustments, all in reasonable
detail and certified by the chief financial officer of the Company (or the chief
accounting officer if no chief financial officer is in place), except that such
statements need not contain the notes required by generally accepted accounting
principles, and (iii) a fully-diluted capitalization table of the Company.
4.2 ADDITIONAL INFORMATION RIGHTS.
(a) The Company shall deliver the reports described below in
this Section 4.2(b) to each holder of Registrable Securities owning at least two
and one-half percent (2.5%) of the Company's then outstanding Common Stock
(calculated on a fully diluted basis after giving effect to the conversion of
all securities convertible into Common Stock and the exercise of all issued and
outstanding stock options) (a "Qualified Holder"):
(i) Annually (prior to the commencement of each
fiscal year of the Company) the operating budget and updated five year strategic
plan of the Company, in such manner and form as approved by the Board of
Directors of the Company.
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(ii) Concurrently with delivery thereof, copies of
all reports and other written material submitted to the Board of Directors.
(b) Each Qualified Holder shall have full access during normal
business hours and on reasonable notice to the Company to the books, records,
properties and personnel of the Company.
(c) Each Qualified Holder hereby agrees to hold in confidence
and trust and not to misuse or disclose any confidential information provided
pursuant to this Section 4.2; provided, however, that an Investor shall not be
prohibited from using any such information for the purpose of generating and
delivering portfolio valuation information to its investors and as required to
comply with applicable state and federal securities laws and regulations.
4.3 PROMPT PAYMENT OF TAXES, ETC. The Company shall promptly pay and
discharge, or cause to be paid and discharged, when due and payable, all lawful
taxes, assessments and governmental charges or levies imposed upon the income,
profits, property or business of the Company or any Subsidiary; provided,
however, that any such tax, assessment, charge or levy need not be paid if the
validity thereof shall currently be contested in good faith by appropriate
proceedings and if the Company or such Subsidiary shall have set aside on its
books adequate reserves with respect thereto; and, provided further, however,
that the Company shall pay, and shall cause its Subsidiaries to pay, all such
taxes, assessments, charges or levies forthwith upon the commencement of
proceedings to foreclose any lien which may have attached as security therefore.
The Company shall promptly pay or cause to be paid when due, in conformance with
customary trade terms, all other obligations incident to the operations of the
Company or its Subsidiaries, as the case may be.
4.4 MAINTENANCE OF PROPERTIES AND LEASES. The Company shall keep its
properties and those of its Subsidiaries, if any, in good repair, working order
and condition, reasonable wear and tear excepted, and from time to time make all
needful and proper repairs, renewals, replacements, additions and improvements
thereto; and the Company and its Subsidiaries shall at all times comply with
each material provision of all leases and licenses to which any of them is a
party or under which any of them occupies property if the breach of such
provision might have a material and adverse effect on the condition, financial
or otherwise, or operations of the Company or such Subsidiaries.
4.5 INSURANCE. The Company shall keep its assets and those of its
Subsidiaries which are of an insurable character insured by financially sound
and reputable insurers against loss or damage by fire, explosion and other risks
customarily insured against by companies in the Company's line of business, and
the Company shall maintain, with financially sound and reputable insurers,
insurance against other hazards and risks and liability to persons and property
to the extent and in the manner customary for companies in similar businesses
similarly situated.
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4.6 ACCOUNTS AND RECORDS. The Company and its Subsidiaries shall keep
true records and books of account in which full, true and correct entries shall
be made of all dealings or transactions in relation to their respective
businesses and affairs in accordance with generally accepted accounting
principles applied on a consistent basis.
4.7 INDEPENDENT ACCOUNTANTS. The Company shall retain a "Big Five"
national accounting firm as its independent public accountants who shall certify
the Company's financial statements at the end of each fiscal year. In the event
the services of the independent public accountants so selected are terminated,
the Company shall promptly thereafter notify the holders of Investor Stock and
shall request the firm of independent public accountants whose services are
terminated to deliver to the Investors a letter from such firm setting forth the
reasons for the termination of their services. In the event of such termination,
the Company shall promptly thereafter engage another "Big Five" national
accounting firm as its independent public accountants. In its notice to the
holders of Investor Stock, the Company shall state whether the change of
accounts was recommended or approved by the Board of Directors of the Company or
any committee thereof.
4.8 COMPLIANCE WITH LAWS. The Company and all its Subsidiaries shall
duly observe and comply with all applicable laws and valid requirements of
governmental authorities relating to the conduct of their businesses or to their
properties or assets.
4.9 MAINTENANCE OF CORPORATE EXISTENCE, ETC. The Company shall maintain
in full force and effect its corporate existence and shall cause all of its
Subsidiaries, the existence of which is deemed by the Company as necessary to
conduct its business, to maintain in full force and effect their respective
corporate existence. The Company and its Subsidiaries shall maintain in full
force and effect all rights and franchises and all licenses and other rights in
or to use patents, processes, licenses, trademarks, trade names or copyrights
owned or possessed by them and deemed by the Company or such Subsidiary to be
necessary to the conduct of their business.
4.10 LIMITED PREEMPTIVE RIGHTS.
(a) Except for the issuance of Common Stock or any securities
containing options or rights to acquire any shares of Common Stock ("Equity
Securities") (i) to the Company's employees pursuant to the Company's employee
stock option plan, (ii) upon the conversion of the Series A Preferred Stock and
Series B Preferred Stock, (iii) pursuant to a public offering registered under
the Securities Act, (iv) pursuant to a merger, consolidation, acquisition or
similar business combination approved by the Company's Board of Directors, (v)
in connection with any stock split, stock dividend, or recapitalization, (vi) to
a lender or equipment lessor in connection with any loan or lease financing
transaction, (vii) in connection with strategic transactions involving the
Company and other entities, the primary purpose of which is other than to raise
funds for the Company (including (A) joint ventures, manufacturing, marketing or
distribution arrangements or (B) technology transfer or development
arrangements; provided, however, that such strategic transactions and the
issuance of
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shares therein, have been approved by the Company's Board of Directors) or
(viii) issuances of Common Stock to the Company's employees approved by the
Company's Board of Directors, if the Company authorizes the issuance or sale of
any Equity Securities (other than as a dividend on the outstanding Common
Stock), the Company shall first offer to sell to each of the holders of Stock
its "pro rata portion" of 80% of such Equity Securities. A holder's "pro rata
portion" shall equal the quotient determined by dividing (1) the number of
shares of Stock held by each such holder by the (2) sum of the total number of
shares of Stock held by all holders of Stock. Each holder of Stock shall be
entitled to purchase such Equity Securities at the most favorable price and on
the most favorable terms as such Equity Securities are to be offered to any
other Persons. The purchase price for all Equity Securities offered to the
holders of the Stock shall be payable in cash.
(b) In order to exercise its purchase rights hereunder, a
holder of Stock must within 15 days after receipt of written notice from the
Company describing in reasonable detail the Equity Securities being offered, the
purchase price thereof, the payment terms and such holder's percentage allotment
deliver a written notice to the Company describing its election hereunder. If
all of the Equity Securities offered to the holders of Common Stock are not
fully subscribed by such holders, the remaining Equity Securities shall be
reoffered by the Company to the holders purchasing their full allotment upon the
terms set forth in this Section 4.10, except that such holders must exercise
their purchase rights within two days after receipt of such reoffer.
(c) Upon the expiration of the offering periods described
above, the Company shall be entitled to sell such Equity Securities which the
holders of Stock have not elected to purchase during the 90 days following such
expiration on terms and conditions no more favorable to the purchasers thereof
than those offered to such holders. Any Equity Securities offered or sold by the
Company after such 90-day period must be reoffered to the holders of Stock
pursuant to the terms of this paragraph.
(d) Telecom Partners II, L.P. may assign its purchase rights
pursuant to this Section 4.10 to Telecom Partners III, L.P. subject only to
compliance with applicable securities laws.
4.11 ADDITIONAL INVESTOR RIGHTS. The Investors that are investment
funds or investment partnerships shall, in addition to the aforementioned
rights, have further rights as required for the purpose of qualifying the
Investors' ownership of Stock as a "venture capital investment" for purposes of
the United States Department of Labor "plan assets" regulations, 29 C.F.R.
Section 2510.3-101 including, without limitation (a) the right to consult with
and advise management of the Company on significant business issues including
management's proposed annual operating plans, (b) the right to inspect the
Company's facilities and books and records at reasonable times and at reasonable
intervals and (c) the right to request information about the Company; provided
that access to highly confidential proprietary information and facilities need
not be provided. The rights set forth in this Section 4.11 may be exercised by
an Affiliate of any Investor acting on behalf of such Investor.
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ARTICLE V
CORPORATE GOVERNANCE
5.1 BOARD OF DIRECTORS.
(a) Concurrently with the Closing and at all times thereafter,
each Stockholder agrees to vote all securities of the Company over which such
Stockholder has voting control and to take all other necessary or desirable
actions within its control (whether as a stockholder, director or officer of the
Company or otherwise, and including without limitation attendance at meetings in
person or by proxy for purposes of obtaining a quorum and execution of written
consents in lieu of meetings), and the Company shall take all necessary and
desirable actions within its control (including, without limitation, calling
special board and stockholder meetings), so that:
(i) the Company shall have a Board of Directors
comprising no more than twelve (12) members;
(ii) subject to subsection (iii) below, the following
persons shall be elected to the Board of Directors:
(A) Three representatives designated by the
holders of a majority of the outstanding Management Stock (the "Management
Directors"); provided, however, that, until the next annual meeting of the
Company's stockholders, Xxxxxxx Xxxxxx, Xxxxx X. Xxxxxxx and Xxxxxxx Xxxxxxxxx
shall serve as the Management Directors;
(B) One representative designated by Telecom
Partners II, L.P. and one representative designated by Telecom Partners III,
L.P. (together, "Telecom Partners," and such representatives, the "Telecom
Directors"); provided, however, that, until the next annual meeting of the
Company's stockholders, Xxxxxxx X. Xxxxxx shall be the representative of Telecom
Partners II, L.P. and Xxxxxxx X. Xxxxxxx shall serve as the representative of
Telecom Partners III, L.P.;
(C) One representative designated jointly by
Centennial Fund V, L.P. and Centennial Fund VI, L.P. (together, the "Centennial
Entities," and such representative, the "Centennial Entities Director");
provided, however, that, until the next annual meeting of the Company's
stockholders, Xxxxxx X. Xxxxxxxx shall serve as the Centennial Entities
Director;
(D) One representative designated jointly by
Crescendo World Fund, L.L.C., Eagle Ventures WF, L.L.C., Crescendo III, GbR,
Crescendo III Executive Fund, L.P. and Crescendo III, L.P. (together, the
"Crescendo Entities," and such representative, the "Crescendo Entities
Director"); provided, however, that, until the next annual meeting of the
Company's stockholders, Xxxxxxx Xxxxxx shall serve as the Crescendo Entities
Director;
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(E) Two representatives designated by SLI
Wireless S.A. (the "SLI Directors"); provided, however, that until the next
annual meeting of the Company's stockholders, Xxxxxxxxx Xxxxxxxx and Xxxx
Xxxxxxxx Xxxxxx shall serve as the SLI Directors;
(F) One representative designated by Formus
Communications, Inc. (the "Formus Director"); provided, however, that until the
next annual meeting of the Company's stockholders, Xxxxxxx X. Xxxxxx shall serve
as the Formus Director;
(G) Two directors (the "Outside Directors")
approved by a Nominating Committee of the Board of Directors consisting of one
of the Telecom Directors, one of the SLI Directors, the Centennial Entities
Director, the Crescendo Entities Director and one of the Management Directors;
provided, however, that, until the next annual meeting of the Company's
stockholders, Xxxxxx X. XxXxxxxx and Xxxx X. Xxxxxx shall serve as the Outside
Directors;
(iii) the director appointment provisions set forth
in subsection (ii)(B), (C), (D), (E) and (F) shall only be effective, with
respect to each particular Investor, so long as such Investor entitled to
appoint a director owns an aggregate of five percent (5%) or more of the
Company's then outstanding Common Stock (calculated on a fully diluted basis
after giving effect to the conversion of all securities convertible into Common
Stock and the exercise of all issued and outstanding stock options). In the
event this ownership threshold is not satisfied by any of such Investors, such
particular Investor's appointment provisions shall be exercised by the Company;
(iv) in the event that any director for any reason
ceases to serve as a member of the Board during his term of office, the
resulting vacancy on the Board shall be filled by a majority vote of the
Stockholders entitled to elect such director as provided in this Section 5.1;
(v) if the Stockholders fail within sixty (60) days
of a directorship being vacated to designate a representative to fill such
directorship pursuant to the terms of this Section 5.1, the election of such
director shall be accomplished in accordance with the Company's certificate of
incorporation and bylaws and applicable law; and
(vi) any Investor who is entitled to appoint a
director pursuant to this Section 5.1 (and Taquari Participacoes S.A. and Mellon
Ventures II, L.P.) shall be entitled to have an observer present at any meeting
of the Board of Directors of the Company in the event such Investor is no longer
entitled to appoint a director to the Board of Directors of the Company.
(b) To the extent that any provision of the Company's
certificate of incorporation or bylaws is inconsistent with the provisions of
this Agreement, the
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Stockholders agree to take all actions necessary to effect such amendments to
the certificate of incorporation or bylaws as may be necessary and appropriate
to give full effect to the provisions of this Agreement.
5.2 MEETINGS OF THE BOARD. The Board of Directors shall meet at least
six times each calendar year in accordance with an agreed-upon schedule.
5.3 COMMITTEES. Promptly after the Closing, the Board of Directors
shall establish audit, nominating and compensation committees and shall delegate
to such committees those duties and powers as are customarily performed by
committees of such type. The audit committee shall not include any of the
Management Directors.
5.4 REIMBURSEMENT OF EXPENSES. The reasonable travel expenses of each
director incurred in attending or observing Board or committee meetings shall be
reimbursed by the Company.
5.5 CERTAIN APPROVALS. Without the approval of the holders of a
majority of the Investor Stock, which shall not be unreasonably withheld, the
Company shall not (i) engage any underwriter or placement agent for any public
or private offering of securities other than an investment banking firm of
recognized national reputation, (ii) issue any stock or options to employees of
the Company that are not subject to vesting and/or buy-back restrictions, or
(iii) waive or accelerate any vesting or buy-back restrictions with respect to
Management Stock.
ARTICLE VI
MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Colorado as such laws are applied to agreements between
Colorado residents entered into and performed entirely in Colorado, except that
the General Corporation Law of the State of Delaware shall govern as to matters
of corporate law.
6.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
6.3 ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement supersedes
any other agreement, whether written or oral, that may have been made or entered
into by the parties hereto relating to the matters contemplated hereby and
constitutes the full and entire understanding and agreement between the parties
with regard to the subject hereof, and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein. In particular, the
execution of this Agreement shall terminate all prior stockholders agreements
and registration rights agreements, or any similar agreement to the foregoing,
among any Investor or Other Holder and the Company. Neither this Agreement nor
any term hereof may be amended, waived,
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discharged or terminated except by a written instrument signed by the Company
and the holders of two-thirds of the outstanding Stock, and any such amendment,
waiver, discharge or termination shall be binding on all the Stockholders.
Notwithstanding the foregoing, in the event that any such amendment would have a
disproportionate effect on the Series A Preferred Stock and the Series B
Preferred Stock, such amendment must be approved by the holders of two-thirds of
the Stock that is Series A Preferred Stock, and also by the holders of
two-thirds of the Stock that is Series B Preferred Stock. In addition,
additional Management Holders may be added as parties to this Agreement by the
execution of a Joinder Agreement executed solely by the Company and the new
Management Holders.
6.4 SPECIFIC ENFORCEMENT. Any holder of Stock shall be entitled to
specific enforcement of its rights under this Agreement. The parties acknowledge
that money damages would be an inadequate remedy for a breach of this Agreement
and consent to an action for specific performance or other injunctive relief in
the event of any such breach. The Company shall reimburse the holders of Stock
for all reasonable expenses incurred in securing the relief provided by this
Section 6.4.
6.5 SEVERABILITY. Unless otherwise expressly provided herein, a
Stockholder's rights hereunder are several rights, not rights jointly held with
any of the other Stockholders. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given:
(i) upon personal delivery to the party to be notified, (ii) when sent by
confirmed telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (iii) five (5) days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (iv) one (1) day after deposit with a nationally recognized
overnight courier, special next day delivery, with verification of receipt. All
communications shall be sent to the Company at 0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, XX 00000, Attention: VP Strategic and Legal Affairs, with
a copy to Holland & Xxxx LLP, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX
00000, Attention: Xxxx X. Xxxx, and to a Stockholder at the address reflected in
the Company's stock ledger or at such other address as such Stockholder shall
have furnished to the Company in writing.
6.7 COUNTERPARTS; FACSIMILE. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. This Agreement may be executed and
delivered by facsimile.
6.8 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any Stockholder under this Agreement shall impair
any such right, power or remedy of such Stockholder nor shall it be construed to
be a waiver of any
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such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Stockholder of any breach or default under this
Agreement or any waiver on the part of any Stockholder of any provisions or
conditions of this Agreement must be made in writing and shall be effective only
to the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any Stockholder, shall be
cumulative and not alternative.
6.9 TERMINATION. The provisions of this Agreement (other than Article
II hereof) shall terminate (i) upon consummation of a Qualified Public Offering,
(ii) upon consummation of the sale of all of the capital stock of the Company or
(iii) on the effective date and immediately prior to: (a) the closing of any
agreement for a merger or consolidation of the Company with another entity;
provided that there shall be no termination of this Agreement if the persons and
entities who were the stockholders of the Company immediately before such merger
or consolidation continue to own, directly or indirectly, shares of the
corporation resulting from such merger or consolidation having more than 70% of
the total number of votes that may be cast for the election of directors of such
corporation, in substantially the same proportion as their ownership of the
voting securities of the Company outstanding immediately before such merger or
consolidation; or (b) the closing of any sale, exchange or other disposition of
all or substantially all of the Company's assets; or (c) a dissolution or
liquidation of the Company's assets. The provisions of Article II shall
terminate on the eighth anniversary of the date hereof.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Second
Amended and Restated Investors Agreement effective as of the day and year first
above written.
COMPANY:
VELOCOM INC.
--------------------------------------------
Name:
Title:
INVESTORS:
TELECOM PARTNERS II, L.P.
BY: TELECOM MANAGEMENT II, L.L.C.
ITS: GENERAL PARTNER
By:
-----------------------------------------
Name:
Title:
TELECOM MANAGEMENT III, L.L.C. (ON
BEHALF OF TELECOM PARTNERS III, L.P. TO BE
FORMED HEREAFTER)
By:
-----------------------------------------
Name:
Title:
CENTENNIAL FUND V, L.P.
BY: CENTENNIAL HOLDINGS V, L.P.
ITS: GENERAL PARTNER
By:
-----------------------------------------
Name:
Title:
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CENTENNIAL ENTREPRENEURS FUND V, L.P.
BY: CENTENNIAL HOLDINGS V, L.P.
ITS: GENERAL PARTNER
By:
-----------------------------------------
Name:
Title:
CENTENNIAL FUND VI, L.P.
BY: CENTENNIAL HOLDINGS VI, LLC
ITS: GENERAL PARTNER
By:
-----------------------------------------
Name:
Title: Managing Principal
CENTENNIAL ENTREPRENEURS FUND VI, L.P.
BY: CENTENNIAL HOLDINGS VI, LLC
ITS: GENERAL PARTNER
By:
-----------------------------------------
Name:
Title: Managing Principal
CENTENNIAL HOLDINGS I, LLC
By:
-----------------------------------------
Name:
Title:
CENTENNIAL STRATEGIC PARTNERS FUND VI, L.P.
BY: CSP VI MANAGEMENT, LLC
ITS: GENERAL PARTNER
BY: CENTENNIAL HOLDINGS VI, LLC
ITS: MANAGING MEMBER
By:
-----------------------------------------
Name:
Title: Managing Principal
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CRESCENDO WORLD FUND, LLC
BY: CRESCENDO VENTURES WORLD FUND, LLC
ITS: GENERAL PARTNER
By:
-----------------------------------------
Name:
Title:
CRESCENDO III, L.P.
BY: CRESCENDO VENTURES III, LLC
ITS: GENERAL PARTNER
By:
-----------------------------------------
Name:
Title:
EAGLE VENTURES WF, LLC
By:
-----------------------------------------
Name:
Title:
CRESCENDO III, GBR
By:
-----------------------------------------
Name:
Title:
CRESCENDO III EXECUTIVE FUND, L.P.
By:
-----------------------------------------
Name:
Title:
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SLI WIRELESS S.A.
By:
-----------------------------------------
Name:
Title:
FORMUS COMMUNICATIONS-LATIN AMERICA HOLDINGS, LLC
BY: FORMUS INTERNATIONAL, INC.
ITS: MANAGER
By:
-----------------------------------------
Name:
Title:
XXXXX CAPITAL MANAGEMENT, LLC
By:
-----------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL, L.P.
By:
-----------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL VENTURES, L.P.
By:
-----------------------------------------
Name:
Title:
XXXX XXXXX INTERNATIONAL
By:
-----------------------------------------
Name:
Title:
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XXXX XXXXX CAPITAL, INC.
By:
-----------------------------------------
Name:
Title:
MELLON VENTURES II, L.P.
By: MVMA II, L.P., a Delaware Limited Partnership
Its: General Partner
By: MVMA, Inc., a Delaware Corporation
Its: General Partner
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
TAQUARI PARTICIPACOES S.A.
By:
-----------------------------------------
Name:
Title:
BLACK CORAL ENTERPRISES, INC.
By:
-----------------------------------------
Name:
Title:
OTHER HOLDERS:
--------------------------------------------
Xxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
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--------------------------------------------
Xxxxxxx Xxxxxx
--------------------------------------------
R. Xxxxxx House
--------------------------------------------
Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxx X. Xxxxx
--------------------------------------------
Xxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx Xxxxxx
--------------------------------------------
Xxxxxx XxXxxxxx
--------------------------------------------
C. Xxxxx Xxxxx
--------------------------------------------
Xxxxxxxx Xxxx
--------------------------------------------
Xxxxxxx Xxxxxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxxxx
--------------------------------------------
Xxxxx Xxxxxxxx
REINCO CORP.
By:
-----------------------------------------
Name:
Title:
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SCHEDULE I
MANAGEMENT HOLDERS
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxxx
R. Xxxxxx House
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxxxxx
Reinco Corp. (Xxxx Xxxxx)
86
SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT D
FORM OF LEGAL OPINION
D-1
87
EXHIBIT D
FORM OF LEGAL OPINION
We are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, with full corporate power
and authority to own, lease and operate its properties and to conduct its
business. The Company is qualified to do business and in good standing in each
jurisdiction in the United States where the failure to be so qualified would
result in a material adverse effect on the business, operations, assets,
prospects or condition (financial or otherwise) of the Company (a "Material
Adverse Effect").
2. The Company's authorized capital stock consists of (a) one hundred six
million six hundred sixty-six thousand, six hundred sixty-seven (106,666,667)
shares of Common Stock, of which eleven million two hundred eighty-three
thousand eight hundred twenty-six (11,283,826) shares were issued and
outstanding as of the Initial Closing Date, and (b) seventy two million six
hundred sixty-six thousand six hundred sixty-seven (72,666,667) shares of
Preferred Stock of which (i) thirty-one million (31,000,000) shares have been
designated as Series A Preferred Stock, thirty million seven hundred six
thousand three hundred thirty-three (30,706,333) of which were issued and
outstanding as of the Initial Closing Date, and (ii) forty-one million six
hundred sixty-six thousand six hundred sixty-seven (41,666,667) shares have been
designated as Series B Preferred Stock, none of which is outstanding prior to
the Initial Closing Date. To our knowledge, except for the three million seven
hundred ninety-eight thousand five hundred forty-four (3,798,544) options
outstanding immediately prior to the Initial Closing Date, except for the
conversion privileges of the Series A Preferred Stock and Series B Preferred
Stock and except as disclosed in the Agreements or the exhibits or schedules
attached thereto, there are no options, warrants, conversion privileges,
preemptive rights, rights of first refusal or other rights to purchase from the
Company any of its equity securities that are outstanding as of the Initial
Closing Date.
3. All the shares of capital stock of the Company outstanding prior to the
Initial Closing Date have been duly authorized, validly issued and are fully
paid and nonassessable. The rights, preferences and privileges of the Series B
Preferred Stock are as stated in the Certificate of Incorporation.
4. To our knowledge, Schedule 3.12 to the Purchase Agreement sets forth the
current ownership structure of the Company and its Subsidiaries.
5. Each of the Agreements has been duly authorized, validly executed and
delivered by the Company and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
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rights to indemnity under Section 2.5 of the Investors Agreement may be limited
by applicable laws and public policy and except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors' rights, and subject to general equity
principles and to limitations on availability of equitable relief, including
specific performance.
6. The issuance, sale and delivery of the Series B Preferred Stock has been
duly authorized by the Company and, upon delivery to the Purchasers against
payment therefor in accordance with the Purchase Agreement and the terms of the
Series B Preferred Stock, the shares of Series B Preferred Stock will be validly
issued, fully paid and nonassessable.
7. The shares of Common Stock to be issued upon conversion of the Series B
Preferred Stock have been duly authorized and reserved for issuance by the
Company and, when issued and delivered upon conversion of the Series B Preferred
Stock in accordance with the Certificate of Incorporation, such shares of Common
Stock will have been validly issued and will be fully paid and nonassessable.
8. The execution of the Agreements by the Company, the compliance by the
Company with the terms thereof, and the offer and sale of the Series B Preferred
Stock pursuant to the Purchase Agreement (a) do not and will not violate any
provision of the Company's Certificate of Incorporation or Bylaws, and (b) do
not violate or contravene (i) the laws of the State of Colorado, the General
Corporation Law of the State of Delaware or any Federal law of the United States
of America applicable to the Company or (ii) any order, writ, judgment,
injunction, decree, determination or award which has been entered against the
Company and of which we have knowledge, the default, violation or contravention
of which would materially and adversely affect the Company, its assets,
financial condition or operations.
9. All consents, approvals, authorizations or orders of, and filings,
registrations, and qualifications with, any regulatory authority or governmental
body in the United States required for the consummation by the Company of the
transactions contemplated by the Purchase Agreement have been made or obtained,
except for any filings required under federal or state securities laws, and
except for any filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
10. To our knowledge, there is no suit, action, claim, arbitration or
similar proceeding or investigation pending or threatened against the Company or
against the Company's business or assets which, if adversely resolved, would be
reasonably likely to have a Material Adverse Effect.
11. Subject to the accuracy of the Purchasers' representations in Section 4
of the Purchase Agreement and assuming all required filings are made under
federal and state securities laws, the offer, sale and issuance of the Series B
Preferred Stock pursuant to the Purchase Agreement constitutes a transaction
exempt from the
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registration requirements of Section 5 of the Securities Act of 1933, as amended
(the "Securities Act") and from the securities registration requirements of the
Colorado securities laws. In addition, subject to the accuracy of the
Purchasers' representations in Section 4 of the Purchase Agreement, assuming
such securities are not being exchanged in a case under title 11 of the United
States Code, and assuming no commission or other remuneration is paid or given
directly or indirectly for soliciting such exchange, the issuance of the Common
Stock issuable upon conversion of the Series B Preferred Stock would also
constitute a transaction exempt from the registration requirements of Section 5
of the Securities Act and from the securities registration requirements of the
Colorado securities laws.
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VELOCOM INC.
AMENDMENT NO. 1 TO SERIES B PREFERRED STOCK
PURCHASE AGREEMENT
This Amendment No. 1 (this "Amendment No. 1") to the Series B Preferred
Stock Purchase Agreement is entered into as of December 31, 1999, by and among
VeloCom Inc., a Delaware corporation (the "Company") and each of the parties
listed on the signature page hereto. The holders of the Company's Series B
Preferred Stock listed on the Schedule of Purchasers attached hereto as Exhibit
A are collectively referred to as the "Purchasers" and individually, as a
"Purchaser".
RECITALS
WHEREAS, the Company entered into the Series B Preferred Stock Purchase
Agreement dated as of December 6, 1999 (the "Purchase Agreement") with the
purchasers listed in Exhibit A to such Purchase Agreement in which the parties
to the Purchase Agreement purchased from the Company shares of the Company's
Series B Preferred Stock (the "Series B Preferred");
WHEREAS, the Purchase Agreement needs to be amended to reflect that the
shares purchased by Xxxxx X. Xxxxx pursuant to that Purchase Agreement are
actually purchased by Xxxxx X. Xxxxx and Xxxxx X. Xxxxx; that the shares
purchased by Xxxxxxx Xxxxxxxxx pursuant to that Purchase Agreement are instead
purchased by Communications Capital Partners, Inc.; and that the shares
purchased by Xxxxx Capital Management, LLC are actually purchased by Xxxxx
Capital, L.P.
WHEREAS, Section 6 of the Purchase Agreement provides that in the event
that the Company agrees to sell shares of Series B Preferred Stock other than
the Shares to be sold pursuant to the Purchase Agreement, the Purchasers shall
benefit from any provisions that are more favorable to the purchasers in such
additional closings than comparable provisions in the Purchase Agreement.
WHEREAS, the Company has entered into a Follow-On Series B/B-1
Preferred Stock Purchase Agreement dated as of December 20, 1999 (the "Follow-On
Purchase Agreement"), and pursuant to Section 6 of the Purchase Agreement,
desires to enter into this Amendment No. 1 to reflect the favorable provisions
contained in the Follow-On Purchase Agreement.
AGREEMENT
In consideration of the mutual agreements, covenants and considerations
contained herein, the parties hereto agree as follows:
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1. GENERAL
1.1 All references to the Certificate of Incorporation shall mean the Second
Amended and Restated Certificate of Incorporation of the Company, a copy of
which is attached hereto as Exhibit B.
1.2 All references to the Investors Agreement shall mean the Third Amended and
Restated Investors Agreement dated January 7, 2000, a copy of which is attached
hereto as Exhibit D.
1.3 The disclosure schedules attached to the Purchase Agreement are hereby
updated and replaced with the Revised Schedules attached to this Amendment No.
1.
1.4 All other capitalized terms used herein without definition shall have the
meanings given to them in the Purchase Agreement.
2. AGREEMENT TO SELL AND PURCHASE
Sections 1.1 and 1.2 of the Purchase Agreement are deleted in their
entirety and replaced with the following:
"1.1 AUTHORIZATION OF SHARES.
On or prior to the Initial Closing (as defined in Section 2
below), the Company shall have authorized the sale and
issuance to the Purchasers of shares of its Series B Preferred
Stock (the "Shares"). The Shares shall have the rights,
preferences, privileges and restrictions set forth in the
Second Amended and Restated Certificate of Incorporation of
the Company, a copy of which is attached hereto as Exhibit B
(the "Certificate of Incorporation").
"1.2 SALE AND PURCHASE. Subject to the terms and conditions
hereof, the Company hereby agrees to issue and sell to each
Purchaser and each Purchaser severally and not jointly agrees
to purchase from the Company, the aggregate number of Shares
set forth opposite such Purchaser's name on Exhibit A (the
"Purchaser Share Limit"), at a purchase price of six dollars
($6.00) per Share, at the Initial Closing, Second Closing and
the Subsequent Closings (all as defined in Section 2 below) as
more fully set forth on Exhibit A. The parties hereto
acknowledge and agree that the Initial Closing took place on
December 6, 1999, and that the Company has already received
the purchase price for the Shares indicated on Exhibit A to be
purchased in the Initial Closing."
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3. CLOSING, DELIVERY AND PAYMENT
3.1 Section 2.2 and Section 2.3 of the Purchase Agreement are deleted in their
entirety and replaced with the following Sections 2.2, 2.3, 2.4 and 2.5:
"2.2 SECOND CLOSING. A second closing of the sale and purchase
of the Shares under this Agreement (the "Second Closing")
shall take place at 9:00 a.m. on January 7, 2000, at the
offices of Holland & Xxxx LLP, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, XX 00000 or at such other time or place as the
Company and the Purchasers may mutually agree (such date is
hereinafter referred to as the "Second Closing Date"). The
total number of Shares to be purchased by all Purchasers
pursuant to this Agreement in the Second Closing shall be four
million eight hundred ninety thousand three hundred fifty four
(4,890,354), as set forth on Exhibit A.
2.3 SUBSEQUENT CLOSINGS. Subject to satisfaction of the
conditions to closing set forth in Section 5, two subsequent
closings of the sale and purchase of the Shares under this
Agreement (together, the "Subsequent Closings") shall take
place, the first at 9:00 a.m. on June 30, 2000 (the "Third
Closing") and the second at 9:00 a.m. on September 29, 2000
(the "Final Closing"), at the offices of Holland & Xxxx LLP,
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000, or at
such other time or place as the Company and the Purchasers may
mutually agree (such dates are hereinafter referred to
together as the "Subsequent Closing Dates"). Notwithstanding
the foregoing, the Company's Board of Directors (the "Board of
Directors"), in its sole discretion, may accelerate either of
the Subsequent Closing Dates at any time upon at least 5
business days advance written notice to the Purchasers,
although the Company will use commercially reasonable efforts
to attempt to provide at least 10 business days advance
written notice of any such accelerated Subsequent Closing
Date. The total number of Shares to be purchased by all
Purchasers pursuant to this Agreement in the Third Closing is
five million eight hundred thirty six thousand two hundred
nineteen (5,836,219) and the total number of Shares to be
purchased by all Purchasers pursuant to this Agreement in the
Final Closing is five million eight hundred thirty six
thousand two hundred seven (5,836,207), as set forth on
Exhibit A. Each Purchaser shall have the right to purchase the
Shares which could have been purchased in any Subsequent
Closing at the price set forth in Section 1.2 above at any
time in its sole discretion prior to a liquidity event or for
any other reason.
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2.4 CERTIFICATES; PAYMENT. Each of the Initial Closing, the
Second Closing, the Third Closing and the Final Closing is
referred to herein individually as a "Closing," and
collectively they are referred to herein as the "Closings."
Each of the Initial Closing Date, the Second Closing Date and
the Subsequent Closing Dates is referred to herein
individually as a "Closing Date," and collectively they are
referred to herein as the "Closing Dates." On each Closing
Date, the Company shall deliver to each Purchaser a
certificate (or certificates in denominations reasonably
designated by Purchaser) representing all of the Shares
purchased by such Purchaser at such Closing.
2.5 ABSOLUTE COMMITMENT. Each Purchaser acknowledges and
agrees that its obligation to purchase a number of Shares in
all Closings equal to its Purchaser Share Limit constitutes an
absolute, irrevocable and unconditional obligation, and shall
not be subject to counterclaim, set-off, deduction or defense,
or to abatement, suspension, deferment, diminution or
reduction for any reason whatsoever (other than the failure to
satisfy the closing conditions set forth in Sections 5.2 and
5.3 below). By way of amplification, and not in limitation of
the foregoing, each Purchaser further acknowledges and agrees
to fulfill its obligations regardless of any claims it may
have against the Company, any other Purchaser or Person
(whether or not related to the transactions contemplated
hereby) and regardless of the existence or non-existence of
any facts or circumstances (whether or not such facts and
circumstances existed on the date hereof or any of the Closing
Dates or were then known by it)."
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 Section 3.1 is amended by adding the following sentence to the end of the
paragraph:
"The copies of the Company's and each Subsidiaries' charter
documents and by-laws or other constituent documents which
have been furnished to the Purchasers reflect all amendments
made thereto at any time prior to the date of this Amendment
No. 1 and are correct and complete."
4.2 Section 3.2 is deleted in its entirety and replaced with the following:
"3.2 CAPITALIZATION OF THE COMPANY. The authorized capital
stock of the Company, immediately prior to the Second Closing
Date, shall consist of (a) one hundred eight million six
hundred thirty four thousand four hundred twenty one
(108,634,421) shares of Common Stock, of which (i) one hundred
six million six hundred sixty six thousand six hundred sixty
seven (106,666,667) will be designated as
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Voting Common Stock, eleven million two hundred eighty three
thousand eight hundred twenty six (11,283,826) of which will
be issued and outstanding immediately prior to the Second
Closing Date, and (ii) one million nine hundred sixty seven
thousand seven hundred fifty four (1,967,754) will be
designated as Non-Voting Common Stock, none of which will be
issued and outstanding immediately prior to the Second Closing
Date, and (b) seventy eight million six hundred thirty four
thousand four hundred twenty one (78,634,421) shares of
Preferred Stock, of which (i) thirty-one million (31,000,000)
will be designated as Series A Preferred Stock, thirty million
seven hundred six thousand three hundred thirty-three
(30,706,333) of which will be issued and outstanding
immediately prior to the Second Closing Date, (ii) forty one
million six hundred sixty six thousand six hundred sixty seven
(41,666,667) will be designated as Series B Preferred Stock,
of which seven million six hundred fifty-seven thousand
seventy-three (7,657,073) will be issued and outstanding
immediately prior to the Second Closing Date, and an
additional thirty four million nine thousand five hundred
ninety three (34,009,593) shares of which will have been
committed to be sold by the Company immediately prior to the
Second Closing Date and (iii) one million nine hundred sixty
seven thousand seven hundred fifty four (1,967,754) will be
designated as Series B-1 Preferred Stock, of which no shares
will be issued and outstanding immediately prior to the Second
Closing Date, but all of which will have been committed to be
sold by the Company immediately prior to the Second Closing
Date. All issued and outstanding shares of the Company's
Common Stock, Series A Preferred Stock and Series B/B-1
Preferred Stock have been duly authorized, validly issued and
are fully paid and non-assessable. Except for the three
million seven hundred ninety-eight thousand five hundred
forty-four (3,798,544) options outstanding immediately prior
to the Second Closing Date, except for the conversion
privilege of the Series A Preferred Stock, Series B Preferred
Stock and Series B-1 Preferred Stock, except as disclosed in
the Follow-On Series B/B-1 Preferred Stock Purchase Agreement
dated as of December 20, 1999 among the Company and the
Purchasers listed on the Schedule of Purchasers attached
thereto, and except as disclosed in this Agreement on the
exhibits or schedules attached hereto, there will be no
options, warrants or other rights to purchase from the Company
any of its equity securities that are outstanding immediately
prior to the Second Closing Date. The Company will not have in
place any stock appreciation rights or phantom stock plans
immediately prior to the Second Closing Date. A chart showing
the accurate and complete capitalization of the Company
immediately prior to and immediately after the Second Closing
Date is attached hereto as Exhibit C."
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4.3 Section 3.4 is deleted in its entirety and replaced with the following:
"3.4 CONSENTS AND APPROVALS. Except as set forth on Schedule
3.4, no consent, license, approval, waiver, expiration of
waiting period or authorization of, or registration or
declaration with, any municipal, local, state, federal,
domestic or foreign governmental authority, agency, bureau or
commission, or any other Person (a "Consent"), is required to
be obtained or made by the Companies, in connection with its
execution, delivery, and performance of the Transaction
Documents and enforceability of its respective obligations
under the Transaction Documents and the transactions
contemplated thereby."
4.4 Section 3.5(a) is amended by deleting the first portion of the first
sentence and replacing it with the following:
"(a) Except as set forth on Schedule 3.5(a), each of the
Companies has been and is currently in compliance in all
material respects with all . . ."
4.5 Section 3.18(b) is deleted in its entirety and replaced with the following:
"(b) Since the award of the Licenses, each of the Companies
holding a License has complied in all material respects with
the terms and conditions of the License held by it and with
the applicable telecommunications Laws (including any required
build-out deadlines and notice or filing obligations) and has
made all necessary payments required to be made thereunder.
None of the transactions contemplated hereby will result or
has resulted in the termination, modification, suspension or
revocation of any License."
4.6 Section 3.21(a) is deleted in its entirety and replaced with the following:
"(a) The Companies have filed all federal, state,
departmental, municipal and foreign Tax returns required by
law to be filed by them other than such filings, the failure
of which to have been made, would not reasonably be likely to
result in the imposition of significant penalties on any of
the Companies. Except as set forth on the Financial
Statements, and except for taxes the failure of which to pay
would not reasonably be likely to result in the imposition of
significant penalties on any of the Companies, each of the
Companies has paid all such taxes that have already become due
and payable. The provisions shown on the Financial Statements
are adequate to reflect any material amount of unpaid Taxes of
the Companies due or to become due with respect to fiscal
periods ended on or before the date of the Financial
Statements. As of the date hereof, there is no claim or
assessment pending against the Company or, to the
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Company's knowledge, any of the other Companies, based on a
failure to pay Taxes and no basis exists for any such claim."
4.6 Section 3.26 is deleted in its entirety and replaced with the following:
"3.26 Y2K COMPLIANCE. Each of the Companies has taken steps to
verify from vendors that on and following January 1, 2000, (i)
its computer systems and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others
or with which the systems of such Company interface) will
function properly. The cost to each of the Companies of the
reasonably foreseeable consequences of the Year 2000 to the
respective company resulting from the failure of its systems
cannot be reasonably expected to have a Material Adverse
Effect. Each of the Companies has complied with the Year 2000
requirements, if any, established by the corresponding
authorities."
4.7 Section 3.28 is deleted in its entirety and replaced with the following:
"3.28 FOREIGN CORRUPT PRACTICES ACT. The Company represents
that (i) it has not taken any action which is or could be
deemed to be a violation of the Foreign Corrupt Practices Act
in respect of any of the Companies; (ii) it is not aware of
any action or conduct which could be deemed to be a violation
of the Foreign Corrupt Practices Act in respect of any of the
Companies and (iii) none of its managers, officers, directors,
employees, stockholders, members, agents or representatives
has offered, given, paid, authorized the payment of, or
promised, directly or indirectly, any money, gift, promise or
other thing of value to any Foreign Official (or to any other
Person while knowing it will be offered, given or promised to
a Foreign Official) for any purpose including, by way of
example but not limitation, influencing any act or decision of
such Person acting in their official capacity, inducing such
Person to do or omit to do any action in violation of their
lawful duty, inducing such Person to use their influence with
the government of the Republic of Argentina, the Republic of
Peru, the Republic of Colombia, the Republic of Venezuela, the
Republic of Uruguay, the Republic of Chile, the Federative
Republic of Brazil or any other government or any
instrumentality thereof to affect or influence any act or
decision of such government or instrumentality, in order to
assist any of the Companies or their stockholders or members
to obtain or retain business for or with, or in directing
business to, any Person."
4.8 Section 3.29 is amended by adding the following to the end of the paragraph:
"and state Blue Sky laws."
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4.9 Section 3 is amended by adding the following paragraph:
"3.30 SPECTRUM ALLOCATION. The spectrum allocation held by or
available for use by each of the Companies is reasonably
sufficient to enable such of the Companies to satisfy its
current business plan as presented to the Purchasers except
where the failure to have such allocation will not have a
Material Adverse Effect on such of the Companies; provided
that in respect of the Brazilian Companies, in the event any
such Brazilian Company needs additional spectrum to satisfy
its current business plan objectives, the Company reasonably
believes that such spectrum should be available from ANATEL so
long as such Brazilian Company has complied with its existing
license obligations."
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
5.1 Section 4.2 (c) is amended by deleting the last sentence of that subsection
(c) beginning "Further, such Purchaser . . . ."
6. CONDITIONS TO ADDITIONAL OBLIGATIONS AT EACH SUBSEQUENT CLOSING.
6.1 Section 5 of the Purchase Agreement is amended by titling the existing
section "5.1 Conditions to Initial Closing" and adding the following new
Sections 5.2 and 5.3:
"5.2 CONDITIONS TO SECOND CLOSING. The obligation of each
Purchaser to purchase and pay for the Shares to be delivered
to it at the Second Closing shall be subject to the
satisfaction of the following conditions as of the Second
Closing Date:
(A) the representations and warranties of the Company
contained in the Purchase Agreement as amended by Amendment
No. 1 shall be true and correct on and as of the Second
Closing Date (a certificate stating such representations and
warranties are true and correct shall be delivered by the
Company to the Purchasers on the Second Closing Date);
(B) concurrent with the Second Closing, the Company and the
Purchasers shall have entered into the Third Amended and
Restated Investors Agreement in the form attached hereto as
Exhibit D;
(C) each Purchaser shall have received from Holland & Xxxx
LLP, counsel for the Company, an opinion in substantially the
form attached hereto as Exhibit E, dated as of the Second
Closing Date;
(D) any applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, (the "HSR
Act")
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with respect to such Purchaser's acquisition of Shares in the
Second Closing, shall have expired or otherwise been
terminated; and
(E) the Certificate of Incorporation shall have been filed
with the Delaware Secretary of State."
"5.3 CONDITIONS TO SUBSEQUENT CLOSINGS. The obligation of each
Purchaser to purchase and pay for the Shares to be delivered
to it at any Subsequent Closing shall be subject to the
satisfaction of the following conditions as of such Subsequent
Closing Date:
(A) any applicable waiting periods under the HSR Act with
respect to such Purchaser's acquisition of Shares in the
Subsequent Closing, shall have expired or otherwise been
terminated."
7. ADDITIONAL PROVISIONS
7.1 The Purchase Agreement is further amended by adding a new Section 10 as
follows:
"10. CONSEQUENCES UPON DEFAULT.
If any Purchaser fails to pay to the Company on any Subsequent
Closing Date the full purchase price for the Shares to be
purchased by such Purchaser in such Closing, as set forth in
Exhibit A (a "Default", and the amount of such defaulted
purchase price, the "Defaulted Commitment"), then such
Purchaser shall be subject to all of the consequences set
forth in this Section 10 (such Purchaser is referred to as a
"Defaulting Purchaser").
10.1 SPECIFIC PERFORMANCE. The Company shall be entitled to
specific performance of each Purchaser's obligation to
purchase the Shares in each Closing set forth opposite such
Purchaser's name on Exhibit A and the Company's right to
receive the full amount of the purchase price for those
Shares. Each Purchaser acknowledges that money damages would
be an inadequate remedy for any Default or other breach of its
obligations under this Agreement and consents to an action for
specific performance or other injunctive relief in the event
of any Default or other breach of this Agreement by such
Purchaser.
10.2 BOARD REPRESENTATIVE(S). Immediately upon the occurrence
of a Default, the representative(s) appointed by the
Defaulting Purchaser to the Board of Directors, if any, (the
"Board Representative(s)") in accordance with Section 5.1 of
the Investor's Agreement, shall resign effective immediately
and the Defaulting Purchaser shall forfeit its right to
designate any representative(s) to fill such vacancy(ies) or
to appoint any other representative(s) to the
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Board of Directors. If the Default continues uncured for a
period exceeding 10 days after the Default, the Defaulting
Purchaser shall also lose its right to have an observer
present at any meeting of the Board of Directors, as provided
in Section 5.1(a)(vi) of the Investors Agreement or at any
meeting of the board of directors or other governing body of
any subsidiary of the Company. If the Defaulting Purchaser
cures its Default within the 10-day period following such
Default by making payment to the Company of (i) the Defaulted
Commitment, (ii) the Premium (as that term is defined below)
and (iii) the Liquidated Damages (as that term is defined
below) (such actions collectively are referred to herein as a
"Cure" for a Default), the Defaulting Purchaser shall regain
its right to designate such Board Representative(s) and to
have observers present at such meetings of the Board of
Directors of the Company and its subsidiaries.
10.3 IRREVOCABLE PROXY.
(a) Each Purchaser hereby irrevocably appoints the Company as
its attorney-in-fact and proxy of such Purchaser, with full
power of substitution, to be immediately effective without any
action on the part of such Purchaser or the holder thereof on
each occurrence and during the continuance of a Default
(unless the Default is Cured):
(i) to attend any meeting (whether annual or special) of the
Company at which the vote of the holders of the Series B/B-1
Preferred Stock is permitted or required, including any
adjournment or postponement of any such meetings;
(ii) to vote the Shares owned by such Purchaser on any matter
permitted or required to be voted upon by the holders of
Series B/B-1 Preferred Stock under the Certificate of
Incorporation or the Investors Agreement, including the right
to designate or remove any representative to the Board of
Directors; and
(iii) to execute and deliver one or more consents in writing
pursuant to any action by the Company's stockholders proposed
to be taken by unanimous written consent under any applicable
law in lieu of voting at any such meeting or adjournment
thereof.
(b) Each Purchaser affirms that this proxy and power of
attorney is issued in order to facilitate the transactions
contemplated by this Agreement and the Investors Agreement and
as such is coupled with an interest and is irrevocable. This
proxy will terminate upon each Purchaser's satisfying in full
its obligations hereunder.
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(c) Each Purchaser agrees that prior to the full funding of
the purchase price of the Shares comprising such Purchaser's
Purchaser Share Limit, it will not sell, transfer, or
otherwise dispose of or cause to be disposed of any Shares
owned by such Purchaser unless such Purchaser or transferee
agrees in writing prior to the sale, transfer or other
disposition to be bound by and subject to the provisions
contained in this Section 10.3.
(d) All authority conferred or agreed to be conferred in this
Section 10.3 shall survive the death, dissolution, liquidation
or incapacity of each Purchaser and any obligation of such
Purchaser shall be binding upon the heirs, personal
representatives, successors and assigns of such Purchaser. No
Purchaser will give any subsequent proxy with respect to such
Shares owned by the Purchaser that purports to grant authority
within the scope of the authority conferred in this Section
10.3.
10.4 PREMIUM. In the event a Defaulting Purchaser elects to
Cure its Default, such Defaulting Purchaser shall pay to the
Company within the 10-day Cure period a premium equal to 25%
of the Defaulted Commitment due in respect of such Shares (the
"Premium"). This amount shall be in addition to the Defaulted
Commitment and the Liquidated Damages provided for below.
10.5 LIQUIDATED DAMAGES. Immediately upon the occurrence of a
Default, the Defaulting Purchaser shall pay to the Company a
sum equal to 50% of the Defaulted Commitment as liquidated
damages (the "Liquidated Damages"). Each Purchaser agrees that
this amount is reasonable in light of the fact that damages
resulting from a Default would be difficult to determine
because the Company would be required to invest significant
time and resources in order to find another purchaser or
source of funding to replace the Defaulted Commitment by such
Defaulting Purchaser. Each Purchaser also acknowledges that
this amount is not a penalty.
10.6 CONVERSION RIGHTS. If a Defaulting Purchaser does not
Cure such Default within the 10-day cure period, the
conversion price for the Shares owned by such Defaulting
Purchaser shall be adjusted as provided in the Certificate of
Incorporation."
7.2 The Purchase Agreement is further amended by adding a new Section 11 as
follows:
"11. VESPER BOARD OBSERVATION RIGHTS
The Company shall use its best efforts to permit one
representative of the holders of the Company's Series B/B-1
Preferred Stock to attend board meetings of Vesper Holding
S.A. and Vesper Sao Paulo
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Holding S.A. as an observer. The observer for the initial
12-month period following the Initial Closing Date shall be
designated by BankAmerica Investment Corporation and
thereafter by the vote of two of the three largest holders of
Series B/B-1 Preferred Stock."
8. MISCELLANEOUS
8.1 Section 8.4 is deleted in its entirety and replaced with the following:
"8.4 ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement,
the Exhibits, Schedules and the other documents expressly
delivered pursuant hereto, including the Investors Agreement,
supersede any other agreement, whether written or oral, that
may have been made or entered into by the parties hereto
(including, without limitation, the Equity Investment
Agreement dated October 21, 1999 by and among the Company and
certain of the Purchasers) relating to the matters
contemplated hereby and constitute the full and entire
understanding and agreement between the parties with regard to
the subjects hereof, and no party shall be liable or bound to
any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth
herein and therein. Neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated except by a
written instrument signed by the Company and the holders of a
majority of the Shares held by the Purchasers, and any such
amendment, waiver, discharge or termination shall be binding
on all Purchasers, except that if such amendment, waiver,
discharge or termination creates an obligation by any
Purchaser, or if it adversely affects a particular Purchaser
in a manner different from the other Purchasers, the consent
of the affected Purchaser shall be required."
8.2 Section 8.9 is deleted in its entirety and replaced with the following:
"8.9 FUTURE FINANCINGS; PURCHASER OBLIGATIONS. Nothing
contained in this Agreement or any Purchaser's prior dealings
with the Company shall be deemed to constitute a commitment on
the part of any Purchaser to participate in any future
financings by the Company. In connection with any merger
involving the Company, the indemnification obligations of each
Purchaser (if any) shall be several and not joint, and shall
in no event exceed the amount of consideration to be received
by such Purchaser in the merger."
8.3 Section 8.10 is amended by deleting the reference to "Subsequent Closing"
and replacing it with "Subsequent Closings."
8.4 The Purchase Agreement is amended by adding the following Section 8.11:
12
102
"8.11 UNDERSTANDING AMONG THE PURCHASERS. The determination of
each Purchaser to purchase shares of Series B Preferred Stock
pursuant to this Agreement has been made by such Purchaser
independent of any other Purchaser and independent of any
statements or opinions as to the advisability of such purchase
or as to the properties, business, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries
which may have been made or given to such Purchaser by any
other Purchaser or by any agent or employee of any other
Purchaser. Each Purchaser acknowledges and agrees that no
other Purchaser shall be responsible in any way or held liable
or accountable to any extent for any information, documents,
materials, analysis, projections, plans or other data (or
compilations thereof) relating to the Company or the
transactions contemplated hereby (collectively, "Investment
Data") provided to such Purchaser by any other Purchaser, and
each Purchaser agrees to hold harmless and not make any claims
against any other Purchaser with respect to any Investment
Data provided to such Purchaser by such other Purchaser."
9. DEFINITIONS
9.1 The definition of "Foreign Official" is deleted in its entirety and replaced
with the following definition:
"Foreign Official" means (i) an officer or employee of any
government other than the U.S. including but not limited to
the Republic of Argentina, the Republic of Peru, the Republic
of Colombia, the Republic of Venezuela, the Republic of
Uruguay, the Republic of Chile or the Federative Republic of
Brazil or any political subdivision, department, agency or
instrumentality thereof; (ii) a Person acting in an official
capacity for or on behalf of any such government or
department, agency or instrumentality; (iii) a member or
official of a political party in the Republic of Argentina,
the Republic of Peru, the Republic of Colombia, the Republic
of Venezuela, the Republic of Uruguay, the Republic of Chile
or the Federative Republic of Brazil; (iv) a candidate for
political office in the Republic of Argentina, the Republic of
Peru, the Republic of Colombia, the Republic of Venezuela, the
Republic of Uruguay, the Republic of Chile or the Federative
Republic of Brazil or (v) any other meanings or
interpretations given to the term under the Foreign Corrupt
Practices Act as it applies to any of the Companies.
9.2 The definition of "Investors Agreement" is deleted in its entirety and
replaced with the following definition:
"Investors Agreement" shall mean the Third Amended and
Restated Investors Agreement dated as of the Second Closing
Date, among the
13
103
Company, the Purchasers and certain other stockholders of the
Company, a copy of which is attached hereto as Exhibit D.
9.3 The following definition of "Purchaser Share Limit" is inserted:
"Purchaser Share Limit" shall have the meaning set forth in
Section 1.2 of this Agreement.
9.4 The definition of "Subsidiary" is deleted in its entirety and replaced with
the following:
"Subsidiaries" or "Subsidiary" shall mean any subsidiary of
the Company over which the Company exercises control. For
purposes of this definition, "control" shall mean the direct
or indirect ownership by the Company of 50% or more of the
voting securities of such subsidiary.
9.5 The definition of "Transaction Documents" is deleted in its entirety and
replaced with the following:
"Transaction Documents" shall mean this Stock Purchase
Agreement, as amended, and the Third Amended and Restated
Investors Agreement."
10. GOVERNING LAW.
This Amendment No. 1 shall be governed in all respects by the laws of
the State of Colorado as such laws are applied to agreements between Colorado
residents entered into and performed entirely in Colorado, except that the
General Corporation Law of the State of Delaware shall govern as to matters of
corporate law.
11. SUCCESSORS AND ASSIGNS.
Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto.
12. COUNTERPARTS; FACSIMILE.
This Amendment No. 1 may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument. This Amendment No. 1 may be executed and delivered by facsimile.
13. OTHER TERMS AND CONDITIONS.
All other terms and conditions of the Purchase Agreement shall remain
in full force and effect.
14
104
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
1 to the Series B Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
COMPANY:
VELOCOM INC.
By:
------------------------------------
Name:
Title:
TELECOM PARTNERS II, L.P.
By: Telecom Management II, L.L.C.,
Its General Partner
By:
------------------------------------
Name:
Title:
TELECOM PARTNERS III, L.P.
By: Telecom Management III, L.L.C.,
Its General Partner
By:
------------------------------------
Name:
Title:
CENTENNIAL FUND V, L.P.
By: Centennial Holdings V, L.P.
Its General Partner
By:
------------------------------------
Name:
Title: General Partner
15
105
CENTENNIAL FUND VI, L.P.
By: Centennial Holdings VI, LLC
Its General Partner
By:
------------------------------------
Name:
Title: Managing Principal
CENTENNIAL ENTREPRENEURS FUND VI, L.P.
By: Centennial Holdings VI, LLC
Its General Partner
By:
------------------------------------
Name:
Title: Managing Principal
CENTENNIAL HOLDINGS I, LLC
By:
------------------------------------
Name:
Title:
CENTENNIAL STRATEGIC PARTNERS VI, L.P.
By: CSP VI Management, LLC
Its General Partner
By: Centennial Holdings VI, LLC
Its: Managing Member
By:
------------------------------------
Name:
Title: Managing Principal
CRESCENDO WORLD FUND, L.L.C.
By:
------------------------------------
Name:
Title:
16
000
XXXXX XXXXXXXX XX, L.L.C.
By:
------------------------------------
Name:
Title:
CRESCENDO III, L.P.
By:
------------------------------------
Name:
Title:
CRESCENDO III, GbR
By:
------------------------------------
Name:
Title:
CRESCENDO III EXECUTIVE FUND, L.P.
By:
------------------------------------
Name:
Title:
SLI WIRELESS S.A.
By:
------------------------------------
Name:
Title:
FORMUS COMMUNICATIONS-LATIN AMERICA
HOLDINGS, LLC
By: Formus International, Inc.
Its: Manager
By:
------------------------------------
Name:
Title:
17
107
XXXXX CAPITAL, L.P.
By: Xxxxx Capital Management, LLC,
Its General Partner
By:
------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL, L.P.
By:
------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL VENTURES, L.P.
By:
------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL INTERNATIONAL
By:
------------------------------------
Name:
Title:
XXXX XXXXX CAPITAL, INC.
By:
------------------------------------
Name:
Title:
18
108
MELLON VENTURES II, L.P.
By: MVMA II, L.P., a Delaware
Limited Partnership
Its: General Partner
By: MVMA, Inc., a Delaware
Corporation
Its: General Partner
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
----------------------------------------
Xxxxxxx Xxxxxxxxx
COMMUNICATIONS CAPITAL PARTNERS, INC.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
----------------------------------------
Xxxx X. Xxxxxx
----------------------------------------
Xxxxxx XxXxxxxx
----------------------------------------
Xxxxxxx Xxxxxx
19
109
----------------------------------------
Xxxxx X. Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxx
----------------------------------------
Xxxxx X. Xxxxx and Xxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
20
110
AMENDMENT NO. 1 TO SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
SUBSEQUENT CLOSINGS
INITIAL CLOSING SECOND CLOSING THIRD CLOSING FINAL CLOSING
---------------------- ---------------------- ---------------------- ----------------------
NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE
OF PURCHASE OF PURCHASE OF PURCHASE OF PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
---------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
1. Telecom Partners II, L.P. 833,333 $ 4,999,998 -- -- -- -- -- --
0000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
2. Telecom Partners III, L.P. -- -- 3,333,333 $19,999,998 1,666,667 $10,000,002 1,666,667 $10,000,002
0000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
3. Centennial Fund V, L.P. 250,000 $ 1,500,000 -- -- 125,000 $ 750,000 125,000 $ 750,000
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
A-1
111
SUBSEQUENT CLOSINGS
INITIAL CLOSING SECOND CLOSING THIRD CLOSING FINAL CLOSING
---------------------- ---------------------- ---------------------- ----------------------
NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE
OF PURCHASE OF PURCHASE OF PURCHASE OF PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
---------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
4. Centennial Fund VI, L.P. 1,309,809 $ 7,858,854 -- -- 595,096 $ 3,570,576 595,095 $ 3,570,570
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
5. Centennial Entrepreneurs 32,745 $ 196,470 -- -- 14,878 $ 89,268 14,877 $ 89,262
Fund VI, L.P.
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
6. Centennial Holdings I, LLC 36,506 $ 219,036 -- -- 17,057 $ 102,342 17,057 $ 102,342
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
7. Centennial Strategic -- -- -- -- 62,500 $ 375,000 62,500 $ 375,000
Partners VI, L.P.
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
8. Crescendo World Fund, L.L.C. 106,033 $ 636,198 53,017 $ 318,102 79,525 $ 477,150 79,525 $ 477,150
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
A-2
112
SUBSEQUENT CLOSINGS
INITIAL CLOSING SECOND CLOSING THIRD CLOSING FINAL CLOSING
---------------------- ---------------------- ---------------------- ----------------------
NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE
OF PURCHASE OF PURCHASE OF PURCHASE OF PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
---------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
9. Eagle Ventures WF, LLC 5,079 $ 30,474 2,538 $ 15,228 3,809 $ 22,854 3,808 $ 22,848
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
10. Crescendo III, L.P. 633,333 $ 3,799,998 556,782 $ 3,340,692 595,058 $ 3,570,348 595,057 $ 3,570,342
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
11. Crescendo III, GbR 13,059 $ 78,354 11,480 $ 68,880 12,270 $ 73,620 12,269 $ 73,614
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
12. Crescendo III Executive 18,810 $ 112,860 16,537 $ 99,222 17,673 $ 106,038 17,673 $ 106,038
Fund, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
A-3
113
SUBSEQUENT CLOSINGS
INITIAL CLOSING SECOND CLOSING THIRD CLOSING FINAL CLOSING
---------------------- ---------------------- ---------------------- ----------------------
NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE
OF PURCHASE OF PURCHASE OF PURCHASE OF PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
---------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
13. SLI Wireless S.A. 1,500,000 $ 9,000,000 916,667 $ 5,500,002 1,208,333 $ 7,249,998 1,208,333 $ 7,249,998
Xxxxxxxx 000, Xxxx 00
Xxxxxx Xxxxx, 0000
Xxxxxxxxx
Phone: 5411-4316-9961
Fax: 5411-4313-7934
14. Formus Communications- 933,333 $ 5,599,998 -- -- 466,667 $ 2,800,002 466,666 $ 2,799,996
Latin America Holdings, LLC
000 Xxxxx Xxxxxxxx Xxxx
Xxxxx 000X
Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
15. Xxxxx Capital, L.P. 41,667 $ 250,002 -- -- 20,834 $ 125,004 20,833 $ 124,998
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
16. Xxxx Xxxxx Capital, L.P. 25,850 $ 155,100 -- -- 12,925 $ 77,550 12,925 $ 77,550
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
A-4
114
SUBSEQUENT CLOSINGS
INITIAL CLOSING SECOND CLOSING THIRD CLOSING FINAL CLOSING
---------------------- ---------------------- ---------------------- ----------------------
NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE
OF PURCHASE OF PURCHASE OF PURCHASE OF PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
---------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
17. Xxxx Xxxxx Capital 21,900 $ 131,400 -- -- 10,950 $ 65,700 10,950 $ 65,700
Ventures, L.P.
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
18. Xxxx Xxxxx Capital 16,900 $ 101,400 -- -- 8,450 $ 50,700 8,450 $ 50,700
International
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
19. Xxxx Xxxxx Capital, Inc. 2,050 $ 12,300 -- -- 1,025 $ 6,150 1,025 $ 6,150
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
20. Mellon Ventures II, L.P. 1,666,667 $10,000,002 -- -- 833,334 $ 5,000,004 833,333 $ 4,999,998
000 X. Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Phone:
Fax: 000-000-0000
A-5
115
SUBSEQUENT CLOSINGS
INITIAL CLOSING SECOND CLOSING THIRD CLOSING FINAL CLOSING
---------------------- ---------------------- ---------------------- ----------------------
NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE
OF PURCHASE OF PURCHASE OF PURCHASE OF PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
---------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
21. Communications Capital 125,000 $ 750,000 -- -- 62,500 $ 375,000 62,500 $ 375,000
Partners, Inc.
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
22. Xxxx X. Xxxxxx 41,667 $ 250,002 -- -- -- -- -- --
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
23. Xxxxxx XxXxxxxx 12,500 $ 75,000 -- -- 6,250 $ 37,500 6,250 $ 37,500
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
24. Xxxxxxx Xxxxxx 8,333 $ 49,998 -- -- 4,167 $ 25,002 4,166 $ 24,996
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
A-6
116
SUBSEQUENT CLOSINGS
INITIAL CLOSING SECOND CLOSING THIRD CLOSING FINAL CLOSING
---------------------- ---------------------- ---------------------- ----------------------
NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE NUMBER AGGREGATE
OF PURCHASE OF PURCHASE OF PURCHASE OF PURCHASE
NAME AND ADDRESS SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
---------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
25. Xxxxx X. Xxxxxxx 8,333 $ 49,998 -- -- 4,167 $ 25,002 4,166 $ 24,996
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
26. Xxxxx X. Xxxxx and Xxxxx X. 8,333 $ 49,998 -- -- 4,167 $ 25,002 4,166 $ 24,996
Rowan
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
27. Xxxxxxx X. Xxxxxx 3,333 $ 19,998 -- -- 1,667 $ 10,002 1,666 $ 9,996
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
28. Xxxxxxx X. Xxxxxxx 2,500 $ 15,000 -- -- 1,250 $ 7,500 1,250 $ 7,500
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000 Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
TOTAL 7,657,073 $45,942,438 4,890,354 $29,342,124 5,836,219 $35,017,314 5,836,207 $35,017,242
--------- ----------- --------- ----------- --------- ----------- --------- -----------
A-7
117
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
VELOCOM INC.
(Pursuant to Section 242 and Section 245)
VELOCOM INC., originally filed in the state of Delaware as WLL
International, Inc., hereby certifies as follows:
1. The name of the corporation is VELOCOM INC. (the "Corporation"). The
date of filing of its original Certificate of Incorporation with the Secretary
of State of the State of Delaware was April 29, 1998, and the Amended and
Restated Certificate of Incorporation was filed with the Delaware Secretary of
State on December 3, 1999.
2. This Second Amended & Restated Certificate of Incorporation restates and
amends the original Certificate of Incorporation, the Amended and Restated
Certificate of Incorporation and all amendments and certificates thereto.
3. This Second Amended & Restated Certificate of Incorporation (the
"Certificate of Incorporation") has been duly adopted in accordance with Section
242 and Section 245 of the Delaware General Corporation Law.
ARTICLE ONE.
The name of this corporation is VELOCOM INC.
ARTICLE TWO.
The address of the Corporation's registered office in the State of Delaware
is 0000 Xxxxxx Xxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx, Xxxxxxxx 00000.
The name of its registered agent at such address is Corporation Service Company.
ARTICLE THREE.
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR.
Section 4.1 AUTHORIZED CAPITAL.
(a) The Corporation shall be authorized to issue two classes of stock
to be designated respectively "Common Stock" and "Preferred Stock." The
aggregate number of shares which the Corporation shall have the authority to
issue is one hundred eighty seven million two hundred sixty eight thousand eight
hundred forty two (187,268,842); the total number of shares of Common Stock
shall be one hundred eight
118
million six hundred thirty four thousand four hundred twenty one (108,634,421),
with a par value of $.0001 per share, and the total number of shares of
Preferred Stock shall be seventy eight million six hundred thirty four thousand
four hundred twenty one (78,634,421), with a par value of $.0001 per share. Such
Preferred Stock may be issued in series.
(b) Subject to the voting requirements set forth in Section
4.2(b)(iii), the Corporation's board of directors shall have the authority,
without stockholder action, to determine the preferences, limitations and
relative rights of any Preferred Stock (whether in a series or as a class),
including without limitation the following: (i) the designation of any series of
Preferred Stock; (ii) unlimited, special, conditional, or limited voting rights,
or no right to vote; except that no condition, limitation, or prohibition on
voting shall eliminate any right to vote provided by the Delaware General
Corporation Law; (iii) redemption rights; (iv) conversion rights, (v)
distribution or dividend rights, including the determination of whether such
rights are cumulative, non-cumulative or partially cumulative, and (vi)
preference rights over any other class or series of shares with respect to
distributions, including dividends and distributions upon the dissolution of the
Corporation.
(c) Common Stock shall be divided into one hundred six million six
hundred sixty six thousand six hundred sixty seven (106,666,667) shares of
voting common stock (the "Voting Common Stock") and one million nine hundred
sixty seven thousand seven hundred fifty four (1,967,754) shares of non-voting
Common Stock (the "Non-Voting Common Stock, and together, the "Common Stock").
Except as otherwise required by law, the Non-Voting Common Stock shall not be
entitled to vote on any matter on which the Stockholders of the Corporation
shall be entitled to vote; and shares of Non-Voting Common Stock shall not be
included in determining the number of shares voting or entitled to vote on any
such matters. Except for the difference in voting rights, both the Voting Common
Stock and the Non-Voting Common stock shall be identical in their rights.
Section 4.2 DESIGNATION OF PREFERRED STOCK.
Thirty one million (31,000,000) of the authorized shares of Preferred Stock
are hereby designated as "Series A Preferred Stock" (the "Series A Preferred"),
forty one million six hundred sixty six thousand six hundred sixty seven
(41,666,667) of the authorized shares of Preferred Stock are hereby designated
as "Series B Preferred Stock" (the "Series B Preferred") and one million nine
hundred sixty seven thousand seven hundred fifty four (1,967,754) of the
authorized shares of Preferred Stock are hereby designated as "Series B-1
Preferred Stock" (the "Series B-1 Preferred," and together with the Series B
Preferred, the "Series B/B-1 Preferred"). Except for the differences in voting
and conversion rights set forth herein, both the Series B Preferred and the
Series B-1 Preferred shall be identical in their rights. The Series A Preferred
and the Series B/B-1 Preferred are hereinafter collectively referred to as the
"Series Preferred." The rights, preferences, privileges, restrictions and other
matters relating to the Series Preferred are as follows:
2
119
(a) DIVIDEND RIGHTS.
(i) Declared Dividends. Holders of the Series Preferred, in
preference to the holders of Common Stock and any other stock of the Corporation
that is not by its terms expressly senior in right of payment to the Series
Preferred (collectively, "Junior Stock"), shall be entitled to receive
dividends, when and as declared by the board of directors, but only out of funds
that are legally available therefor. In addition, in the event that the
Corporation declares or pays any dividends upon the Common Stock (whether
payable in cash, securities or other property) other than dividends payable
solely in shares of Common Stock, the Corporation shall also declare and pay to
the holders of the Series Preferred at the same time that it declares and pays
such dividends to the holders of the Common Stock, the dividends which would
have been declared and paid with respect to the Common Stock issuable upon
conversion of the Series Preferred had all of the outstanding Series Preferred
been converted immediately prior to the record date for such dividend, or if no
record date is fixed, the date as of which the record holders of Common Stock
entitled to such dividends are to be determined. The Corporation shall not
declare dividends on one Series of Preferred Stock and not on each other Series
of Preferred Stock.
(ii) Preference. So long as any of the Series Preferred remains
outstanding, without the prior written consent of the holders of sixty-six and
two-thirds percent (66 2/3%) of the outstanding shares of the Series Preferred
(the "Required Holders"), the Corporation shall not, nor shall it permit any
Subsidiary to, redeem, purchase or otherwise acquire directly or indirectly any
Junior Stock, nor shall the Corporation directly or indirectly pay or declare
any dividend or make any distribution upon any Junior Stock. The provisions of
this Section 4.2(a)(ii) shall not, however, apply to (i) the acquisition of
shares of any Junior Stock in exchange for shares of any other Junior Stock,
(ii) the payment of cash dividends on the Common Stock to the extent that
equivalent dividends are paid on the Series Preferred as provided above, or
(iii) any repurchase of any Reserved Employee Stock from former employees,
directors or consultants in connection with termination of employment or service
as a director or consultant that is approved by the Corporation's board of
directors.
(b) VOTING RIGHTS.
(i) Generally. Except as otherwise provided herein or as required
by law, the Series Preferred shall vote with the shares of the Common Stock of
the Corporation (and not as a separate class) at any annual or special meeting
of stockholders of the Corporation, and may act by written consent in the same
manner as the Common Stock, in either case upon the following basis: each holder
of shares of the Series Preferred shall be entitled to such number of votes as
shall be equal to the whole number of shares of Common Stock into which such
holder's aggregate number of shares of the Series Preferred are convertible
(pursuant to Section 4.2(e) below) immediately after the close of business on
the record date fixed for such meeting or the effective date of such written
consent.
3
120
(ii) Except as specifically set forth in this Article Four, or as
otherwise required by law, each outstanding share of Series B-1 Preferred shall
not be entitled to vote on any matter on which the stockholders of the
Corporation shall be entitled to vote; and shares of Series B-1 Preferred shall
not be included in determining the number of shares voting or entitled to vote
on any such matters.
(iii) Class Vote Requirement. Without the affirmative vote of the
Required Holders, the Corporation shall not (i) create, issue or authorize the
issuance of any additional Common Stock or Preferred Stock or create or
authorize any new class or series of the Corporation's capital stock (except for
issuances of Reserved Employee Stock, issuances upon conversion of Preferred
Stock, and issuances in connection with strategic transactions involving the
Corporation and the non-affiliates of the Corporation approved by the
Corporation's board of directors, the primary purpose of which is other than to
raise funds for the Corporation (including (1) joint ventures, manufacturing,
marketing or distribution arrangements or (2) technology transfer or development
arrangements)); (ii) amend this Certificate of Incorporation or the
Corporation's Bylaws; (iii) engage in (1) any merger, consolidation, business
combination, recapitalization, or reorganization in which (A) the stockholders
of the Corporation immediately prior to such transaction own capital stock
representing less than seventy percent (70%) of the surviving company's voting
power in the election of directors immediately after such transaction or (B) the
stockholders of the Corporation immediately prior to such transaction do not own
substantially the same proportion of capital stock of the surviving company
after the transaction as they owned of the Corporation immediately prior to the
transaction (a "Disproportionate Change"); provided, however, that any change in
a stockholder's ownership percentage of less than ten percentage points shall
not be deemed to be a Disproportionate Change, (2) a liquidation or sale of
substantially all of the assets by the Corporation or any of its subsidiaries
outside the ordinary course of business, or (3) a purchase of substantial assets
by the Corporation or any of its subsidiaries outside the ordinary course of
business; (iv) engage in any business other than telecommunications and
multimedia communications services, including but not limited to data, voice or
video transmission, cable, IP telephony, MMDS, Internet access or any other
telecommunications service using wireless, wireline, fiber, LMDS or broadband
access or any other technology, and also including any Internet content
business; (v) increase the amount of Reserved Employee Stock above twelve
percent (12%) of the Corporation's Common Stock Deemed Outstanding; or (vi)
engage in any transaction with an affiliate of the Corporation, except for
transactions involving wholly-owned subsidiaries, that is not approved by a
majority of the Corporation's disinterested directors.
(c) LIQUIDATION RIGHTS.
(i) Liquidation Value. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, before any
distribution or payment shall be made to the holders of any Junior Stock or
Common Stock, (i) first, the holders of the Series B/B-1 Preferred shall be
entitled to be paid out of the assets of the Corporation an amount with respect
to each share of the Series B/B-1 Preferred
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equal to the sum of (A) the Original Series B/B-1 Issue Price (as defined below)
plus (B) all declared but unpaid dividends thereon (the "Series B/B-1
Liquidation Value") and (ii) second, after the payment of the full liquidation
preference of the Series B/B-1 Preferred, the holders of the Series A Preferred
shall be entitled to be paid out of the assets of the Corporation an amount with
respect to each share of the Series A Preferred equal to the sum of (A) the
Original Series A Issue Price (as defined below), plus (B) all declared but
unpaid dividends thereon (the "Series A Liquidation Value"). The "Original
Series A Issue Price" shall be Three Dollars ($3.00) per share, as appropriately
adjusted for any future stock splits, stock combinations, stock dividends or
similar transactions affecting the Series A Preferred. The "Original Series
B/B-1 Issue Price" shall be Six Dollars ($6.00) per share, as appropriately
adjusted for any future stock splits, stock combinations, stock dividends or
similar transactions affecting the Series B/B-1 Preferred.
(ii) Participation. After the payment of the full liquidation
preference of the Series Preferred as set forth in Section 4.2(c)(i) above, the
remaining assets of the Corporation legally available for distribution, if any,
shall be distributed to the holders of Junior Stock entitled to a preference
over the Common Stock and, thereafter, to the holders of Common Stock. The
holders of the Series Preferred shall be entitled to participate in
distributions to holders of the Common Stock such that, giving effect to all
distributions pursuant to Section 4.2(c)(i), the holders of the Series Preferred
receive aggregate distributions equal to the greater of (A) the Series A
Liquidation Value (in the case of the Series A Preferred) or the Series B/B-1
Liquidation Value (in the case of the Series B/B-1 Preferred), or (B) the
amounts that such holders would have received if the Series Preferred had been
converted into Common Stock immediately prior to such liquidation, dissolution
or winding up of the Corporation.
(iii) Liquidation Events. At the option of the Required Holders,
the following events shall be considered a liquidation for purposes of Section
4.2(c).
(A) any (1) merger, consolidation, business combination,
reorganization or recapitalization of the Corporation that involves a
Disproportionate Change; provided, however, that any change in a stockholder's
ownership percentage of less than ten percentage points shall not be deemed to
be a Disproportionate Change; or (2) transaction or series of related
transactions in which capital stock representing in excess of thirty percent
(30%) of the Corporation's voting power in electing the board of directors is
transferred (an "Acquisition"); or
(B) a sale, lease or other disposition of all or
substantially all of the assets of the Corporation (an "Asset Transfer").
(iv) Proportionate Payments. If, upon any liquidation, dissolution
or winding up, the assets of the Corporation shall be insufficient to make
payment in full to all holders of the Series Preferred, then such assets shall
be distributed first, among the holders of the Series B/B-1 Preferred at the
time outstanding, ratably in proportion to the full amounts to which they would
otherwise be
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entitled and second, any remaining assets shall be distributed among the holders
of the Series A Preferred at the time outstanding, ratably in proportion to the
full amounts to which they would otherwise be entitled.
(d) REDEMPTION RIGHTS.
(i) Scheduled Redemptions. Unless a holder of Series Preferred
elects otherwise in accordance with Section 4.2(d)(iii) below, on January 26,
2005, the Corporation shall redeem thirty three and one-third percent (33 1/3%)
of the then-outstanding shares of each of the Series A Preferred and the Series
B/B-1 Preferred held by such holder; on January 26, 2006, the Corporation shall
redeem fifty percent (50%) of the then-outstanding shares of each of the Series
A Preferred and the Series B/B-1 Preferred held by such holder; and shall redeem
all remaining shares of the Series A Preferred and the Series B/B-1 Preferred
held by such holder on January 26, 2007 (the "Scheduled Redemption Dates"), at a
price per share equal to the Series A Liquidation Value or the Series B/B-1
Liquidation Value, respectively.
(ii) Redemption Payments. For each share of the Series Preferred
which is to be redeemed hereunder, the Corporation shall be obligated on the
Scheduled Redemption Date to pay to the holder thereof (upon surrender by such
holder at the Corporation's principal office of the certificate representing
such share) an amount in cash equal to the Series A Liquidation Value or the
Series B/B-1 Liquidation Value, as applicable. If the funds of the Corporation
legally available for redemption of the Series Preferred on any Scheduled
Redemption Date are insufficient to redeem the total number of shares to be
redeemed on such date, those funds which are legally available shall be used to
redeem the maximum possible number of shares pro rata among the holders of the
Series Preferred to be redeemed based upon the aggregate Liquidation Value of
such shares of the Series Preferred held by each such holder. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of the Series Preferred, such funds shall immediately be used to
redeem the balance of the shares which the Corporation has become obligated to
redeem on any Scheduled Redemption Date but which it has not redeemed.
(iii) Notice of Redemption. Except as otherwise provided herein,
the Corporation shall mail written notice of each redemption of the Series
Preferred to each record holder thereof not more than 60 nor less than 30 days
prior to the Scheduled Redemption Date (the "Corporation's Notice"). Any holder
of the Series Preferred may elect not to participate in the redemption on any
Scheduled Redemption Date by providing written notice to the Corporation of its
election not to have its shares of Preferred Stock redeemed within 10 days after
receipt of the Corporation's Notice. The holders of the Series Preferred to be
redeemed shall in any event have the right to convert any or all of their shares
into Common Stock at any time prior to the close of business on any Scheduled
Redemption Date. In case fewer than the total number of shares represented by
any certificate are redeemed, a new certificate representing the number of
unredeemed shares shall be issued to the holder thereof without cost to such
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holder within five business days after surrender of the certificate representing
the redeemed shares.
(iv) Other Redemptions or Acquisitions. The Corporation shall not,
nor shall it permit any Subsidiary to, redeem or otherwise acquire any shares of
the Series Preferred, except as expressly authorized herein or pursuant to a
purchase offer made pro rata to all holders of the Series Preferred on the basis
of the aggregate Liquidation Value of the shares of the Series Preferred owned
by each such holder. If the assets of the Corporation shall be insufficient to
make payment in full to all holders whose shares of Series Preferred are being
redeemed or otherwise acquired, such assets shall be used first to redeem shares
of Series B/B-1 Preferred, ratably in proportion to the redemption price for the
shares that such holders otherwise would have been entitled to redeem, and
second, any remaining assets shall be used to redeem shares of Series A
Preferred, ratably in proportion to the redemption price for the shares that
such holders otherwise would have been entitled to redeem.
(e) CONVERSION RIGHTS - CONVERSION OF SERIES PREFERRED INTO COMMON
STOCK.
The holders of the Series Preferred shall have the following rights with
respect to the conversion of the Series Preferred into shares of Common Stock:
(i) Optional Conversion into Common Stock. Subject to and in
compliance with the provisions of this Section 4.2(e), any shares of the Series
Preferred may, at the option of the holder, be converted at any time into
fully-paid and nonassessable shares of Common Stock (either Voting Common Stock,
in the case of Series A Preferred or Series B Preferred, or Non-Voting Common
Stock, in the case of Series B-1 Preferred). The number of shares of Common
Stock to which a holder of the Series A Preferred shall be entitled upon
conversion shall be the product obtained by multiplying the "Series A Conversion
Rate" then in effect (determined as provided in Section 4.2(e)(ii)) by the
number of shares of the Series A Preferred being converted. The number of shares
of Common Stock to which a holder of the Series B/B-1 Preferred shall be
entitled upon conversion shall be the product obtained by multiplying the
"Series B/B-1 Conversion Rate" then in effect (determined as provided in Section
4.2(e)(ii)) by the number of shares of the Series B/B-1 Preferred being
converted.
(ii) Series Conversion Rate. The conversion rate in effect at any
time for conversion of the Series A Preferred (the "Series A Conversion Rate")
shall be the quotient obtained by dividing the Series A Liquidation Value by the
"Series A Conversion Price" calculated as provided in Section 4.2(e)(iii). The
conversion rate in effect at any time for conversion of the Series B/B-1
Preferred (the "Series B/B-1 Conversion Rate") shall be the quotient obtained by
dividing the Series B/B-1 Liquidation Value by the "Series B/B-1 Conversion
Price" calculated as provided in Section 4.2(e)(iii).
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(iii) Conversion Price. The conversion price for the Series A
Preferred (the "Series A Conversion Price") shall initially be the Original
Series A Issue Price (i.e., $3.00). Such initial Series A Conversion Price shall
be adjusted from time to time in accordance with this Section 4.2(e). If and
whenever on or after the first date of issuance of any shares of Series A
Preferred (the "Original Series A Issue Date") the Corporation issues or sells,
or in accordance with this Section 4.2(e)(iii) is deemed to have issued or sold,
any shares of its Common Stock (other than pursuant to a Permitted Issuance) for
a consideration per share less than the Series A Conversion Price in effect
immediately prior to the time of such issue or sale, then immediately upon such
issue or sale or deemed issue or sale the Series A Conversion Price shall be
reduced to the amount determined by dividing (a) the sum of (1) the product
derived by multiplying the Series A Conversion Price in effect immediately prior
to such issue or sale by the number of shares of Common Stock Deemed Outstanding
immediately prior to such issue or sale, plus (2) the consideration, if any,
received or deemed to have been received by the Corporation upon such issue or
sale, by (b) the number of shares of Common Stock Deemed Outstanding immediately
after such issue or sale. All references to the Series A Conversion Price herein
shall mean the Series A Conversion Price as so adjusted.
The conversion price for the Series B/B-1 Preferred (the "Series B/B-1
Conversion Price") shall initially be the Original Series B/B-1 Issue Price
(i.e., $6.00). Such initial Series B/B-1 Conversion Price shall be adjusted from
time to time in accordance with this Section 4.2(e). Except with respect to
Defaulting Purchasers (as defined in Section 4.2 (e)(ix) below) for whom the
Series B/B-1 Conversion Price shall be as set forth in Section 4.2(e)(ix) below,
if and whenever on or after the first date of issuance of any shares of Series
B/B-1 Preferred (the "Original Series B/B-1 Issue Date") the Corporation issues
or sells, or in accordance with this Section 4.2(e)(iii) is deemed to have
issued or sold, any shares of its Common Stock (other than pursuant to a
Permitted Issuance) for a consideration per share less than the Series B/B-1
Conversion Price in effect immediately prior to the time of such issue or sale,
then immediately upon such issue or sale or deemed issue or sale the Series
B/B-1 Conversion Price shall be reduced to the amount determined by dividing (a)
the sum of (1) the product derived by multiplying the Series B/B-1 Conversion
Price in effect immediately prior to such issue or sale by the number of shares
of Common Stock Deemed Outstanding immediately prior to such issue or sale, plus
(2) the consideration, if any, received or deemed to have been received by the
Corporation upon such issue or sale, by (b) the number of shares of Common Stock
Deemed Outstanding immediately after such issue or sale. All references to the
Series B/B-1 Conversion Price herein shall mean the Series B/B-1 Conversion
Price as adjusted pursuant to this Section 4.2(e)(iii) and Section 4.2 (e)(ix)
below.
For purposes of determining the adjusted Series A Conversion Price for any
holder of Series Preferred and/or the adjusted Series B/B-1 Conversion Price for
any holder of Series Preferred except for a Defaulting Purchaser, the following
shall be applicable:
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(A) Issuance of Rights or Options. Except for Permitted
Issuances, if the Corporation in any manner grants or sells any Options and the
price per share for which Common Stock is issuable upon the exercise of such
Options, or upon conversion or exchange of any Convertible Securities issuable
upon exercise of such Options, is less than the Series A Conversion Price and/or
the Series B/B-1 Conversion Price, as the case may be, in effect immediately
prior to the time of the granting or sale of such Options, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued and sold by the Corporation at the time of the
granting or sale of such Options for such price per share. For purposes of this
paragraph, the "price per share for which Common Stock is issuable" shall be
determined by dividing (1) the total amount, if any, received or receivable by
the Corporation as consideration for the granting or sale of such Options, plus
the minimum aggregate amount of additional consideration payable to the
Corporation upon exercise of all such Options, plus in the case of such Options
which relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Corporation upon the issuance
or sale of such Convertible Securities and the conversion or exchange thereof,
by (2) the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options. No further
adjustment of the Series A Conversion Price and/or the Series B/B-1 Conversion
Price shall be made when Convertible Securities are actually issued upon the
exercise of such Options or when Common Stock is actually issued upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
(B) Issuance of Convertible Securities. If the Corporation
in any manner issues or sells any Convertible Securities and the price per share
for which Common Stock is issuable upon conversion or exchange thereof is less
than the Series A Conversion Price and/or the Series B/B-1 Conversion Price, as
the case may be, in effect immediately prior to the time of such issue or sale,
then the maximum number of shares of Common Stock issuable upon conversion or
exchange of such Convertible Securities shall be deemed to have been issued and
sold by the Corporation at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this paragraph, the
"price per share for which Common Stock is issuable" shall be determined by
dividing (1) the total amount received or receivable by the Corporation as
consideration for the issue or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Corporation upon the conversion or exchange thereof, by (2) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment of the Series A Conversion
Price and/or the Series B/B-1 Conversion Price, as the case may be, shall be
made when Common Stock is actually issued upon the conversion or exchange of
such Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustments of the
Series A Conversion Price and/or
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the Series B/B-1 Conversion Price had been or are to be made pursuant to
other provisions of this Section 4.2(e), no further adjustment of the Series A
Conversion Price and/or the Series B/B-1 Conversion Price shall be made by
reason of such issue or sale.
(C) Change in Option Price or Conversion Rate. If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock changes at any time, the Series A Conversion Price
and/or the Series B/B-1 Conversion Price, as the case may be, in effect at the
time of such change shall be immediately adjusted to the Series A Conversion
Price and/or the Series B/B-1 Conversion Price which would have been in effect
at such time had such Options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or conversion
rate, as the case may be, at the time initially granted, issued or sold.
(D) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Series A Conversion Price and/or the Series B/B-1
Conversion Price then in effect hereunder shall be adjusted immediately to the
Series A Conversion Price and/or the Series B/B-1 Conversion Price which would
have been in effect at the time of such expiration or termination had such
Option or Convertible Security, to the extent outstanding immediately prior to
such expiration or termination, never been issued.
(E) Calculation of Consideration Received. If any Common
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Corporation therefor (net of discounts,
commissions and related expenses). If any Common Stock, Option or Convertible
Security is issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Corporation shall be the fair
value of such consideration. If any Common Stock, Option or Convertible Security
is issued to the owners of the non-surviving entity in connection with any
merger in which the Corporation is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Option or Convertible Security, as the case may be. The fair
value of any consideration other than cash and securities shall be determined
jointly by the Corporation and the Required Holders. If such parties are unable
to reach agreement within a reasonable period of time, the fair value of such
consideration shall be determined by an independent appraiser experienced in
valuing such type of consideration jointly selected by the Corporation and the
Required Holders. The determination of such appraiser shall be final and binding
upon the parties, and the fees and expenses of such appraiser shall be borne by
the Corporation.
(F) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Corporation,
together
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comprising one integrated transaction in which no specific consideration is
allocated to such Option by the parties thereto, the Option shall be deemed to
have been issued for a consideration of $.01.
(G) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or any Subsidiary, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock.
(iv) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time effect a subdivision of the
outstanding Common Stock, the Series A Conversion Price and the Series B/B-1
Conversion Price in effect immediately before that subdivision shall be
proportionately decreased. Conversely, if the Corporation shall at any time or
from time to time combine the outstanding shares of Common Stock into a smaller
number of shares, the Series A Conversion Price and the Series B/B-1 Conversion
Price in effect immediately before the combination shall be proportionately
increased. Any adjustment under this Section 4.2(e)(iv) shall become effective
at the close of business on the date the subdivision or combination becomes
effective.
(v) Adjustment for Common Stock Dividends and Distributions. If
the Corporation at any time or from time to time makes, or fixes a record date
for the determination of holders of Common Stock entitled to receive, a divided
or other distribution payable in additional shares of Common Stock, in each such
event the Series A Conversion Price and the Series B/B-1 Conversion Price that
is then in effect shall be decreased as of the time of such issuance or, in the
event such record date is fixed, as of the close of business on such record
date, by multiplying each of the Series A Conversion Price and the Series B/B-1
Conversion Price then in effect by a fraction (1) the numerator of which is the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date, and
(2) the denominator of which is the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution; provided, however, that if
such record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the Series A
Conversion Price and the Series B/B-1 Conversion Price shall be recomputed
accordingly as of the close of business on such record date and thereafter the
Series A Conversion Price and the Series B/B-1 Conversion Price shall be
adjusted pursuant to this Section 4.2(e)(v) to reflect the actual payment of
such dividend or distribution.
(vi) Adjustments for Other Dividends and Distributions. If the
Corporation at any time or from time to time makes, or fixes a record date for
the determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation other than shares of
Common Stock, in each such event provision shall be made so that the holders of
the Series Preferred
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shall receive upon conversion thereof, in addition to the number of shares of
Common Stock receivable thereupon, the amount of other securities of the
Corporation which they would have received had their Series Preferred been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period, subject to all other adjustments called for during such period under
this Section 4.2(e) with respect to the rights of the holders of the Series
Preferred or with respect to such other securities by their terms.
(vii) Adjustment for Reclassification, Exchange and Substitution.
If at any time or from time to time the Common Stock issuable upon the
conversion of the Series Preferred is changed into the same or a different
number of shares of any class or classes of stock, whether by recapitalization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend or a reorganization, merger, consolidation or sale of assets
provided for elsewhere in this Section 4.2), in any such event each holder of
the Series Preferred shall have the right thereafter to convert such stock into
the kind and amount of stock and other securities and property receivable in
connection with such recapitalization, reclassification or other change by
holders of the maximum number of shares of Common Stock into which such shares
of the Series Preferred could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustments
as provided herein or with respect to such other securities or property by the
terms thereof.
(viii) Reorganizations, Mergers, Consolidations or Sales of Assets.
If at any time or from time to time there is a capital reorganization of the
Common Stock (other than a recapitalization, subdivision, combination,
reclassification, exchange or substitution of shares provided for elsewhere in
this Section 4.2), as a part of such capital reorganization, provision shall be
made so that the holders of the Series Preferred shall thereafter be entitled to
receive upon conversion of the Series Preferred the number of shares of stock or
other securities or property of the Corporation to which a holder of the maximum
number of shares of Common Stock deliverable upon conversion would have been
entitled in connection with such capital reorganization, subject to adjustment
in respect of such stock or securities by the terms thereof. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 4.2(e) with respect to the rights of the holders of the Series
Preferred after the capital reorganization to the end that the provisions of
this Section 4.2 (including adjustment of the Series A Conversion Price and the
Series B/B-1 Conversion Price then in effect and the number of shares of Common
Stock issuable upon conversion of the Series Preferred) shall be applicable
after that event and be as nearly equivalent as practicable.
(ix) Adjustment upon Default under Stock Purchase Agreements. With
respect to the shares of Series B/B-1 Preferred owned by a Defaulting Purchaser
who has not Cured such Default within a 10-day cure period, (as such terms are
defined in Amendment No. 1 to Series B Preferred Stock Purchase Agreement dated
as of December 31, 1999, and in Article 3 of the Follow-On Series B/B-1
Preferred
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Stock Purchase Agreement dated December 20, 1999, in each case among the
Corporation and certain purchasers of the Corporation's Series B/B-1 Preferred
(collectively, the "Stock Purchase Agreements")), immediately upon the
expiration of such 10-day cure period, the Series B/B-1 Conversion Price for
such shares in effect immediately prior to such Default shall be increased to an
amount equal to two (2) times the Original Series B/B-1 Issue Price. Once the
Series B/B-1 Conversion Price for such shares of Series B/B-1 Preferred held by
the Defaulting Purchaser is adjusted in accordance with this Section 4.2(e)(ix),
it shall no longer be subject to any other adjustment provided in Section
4.2(e)(iii) of this Certificate of Incorporation. This Section 4.2(e)(ix) shall
not affect the Series B/B-1 Conversion Price for any holder of Series B/B-1
Preferred other than the Defaulting Purchaser, shall not affect the Series A
Conversion Price for shares of Series A Preferred held by the Defaulting
Purchaser, and shall not affect the Series B/B-1 Liquidation Value for any
holder of Series B/B-1 Preferred.
(x) Certificate of Adjustment. In each case of an adjustment or
readjustment of the Series A Conversion Price and/or the Series B/B-1 Conversion
Price for the number of shares of Common Stock or other securities issuable upon
conversion of the Series Preferred, the Corporation, at its expense, shall
compute such adjustment or readjustment in accordance with the provisions hereof
and prepare a certificate showing such adjustment or readjustment, and shall
mail such certificate, by first class mail, postage prepaid, to each registered
holder of the Series Preferred at the holder's address as shown in the
Corporation's books. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (1) the consideration received
or deemed to be received by the Corporation for any additional shares of Common
Stock issued or sold or deemed to have been issued or sold, (2) the Series A
Conversion Price and/or the Series B/B-1 Conversion Price at the time in effect,
(3) the number of additional shares of Common Stock issued or sold or deemed to
have been issued or sold, and (4) the type and amount, if any, of other property
which at the time would be received upon conversion of the Series Preferred.
(xi) Notices of Record Date. Upon (i) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any Acquisition (as defined in Section
4.2(c)(iii)(A)) or other capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation with or into any other
corporation, any Asset Transfer (as defined in Section 4.2(c)(iii)(B)), or any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the Corporation shall mail to each holder of the Series Preferred
at least twenty (20) days prior to the record date specified therein a notice
specifying (1) the date on which any such record is to be taken for the purpose
of such dividend or distribution and a description of such dividend or
distribution, (2) the date on which any such Acquisition, reorganization,
reclassification, transfer, consolidation, merger, Asset Transfer, dissolution,
liquidation or winding up is expected to become effective, and (3) the date,
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if any, that is to be fixed for determining the holders of record of Common
Stock (or other securities) that shall be entitled to exchange their shares of
Common Stock (or other securities) for securities or other property deliverable
upon such Acquisition, reorganization, reclassification, transfer,
consolidation, merger, Asset Transfer, dissolution, liquidation or winding up.
(xii) Automatic Conversion into Common Stock. Each share of the
Series Preferred shall automatically be converted into shares of Common Stock
(Voting Common Stock in the case of Series A Preferred and Series B Preferred,
and Non-Voting Common Stock in the case of Series B-1 Preferred), based on the
then-effective Series A Conversion Price and/or the Series B/B-1 Conversion
Price, as the case may be, immediately upon the closing of a firmly underwritten
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, covering the offer and sale of Common Stock
for the account of the Corporation in which (i) the per share price to the
public is at least $15.00 per share (as adjusted for stock splits,
recapitalizations and the like), and (ii) the gross cash proceeds to the
Corporation (prior to expenses and underwriting commissions) are at least
$50,000,000. Upon such automatic conversion, all declared but unpaid dividends,
if any, shall be paid in accordance with Section 4.2(a).
(xiii) Mechanics of Conversion.
(A) Optional Conversion. Each holder of the Series Preferred
who desires to convert the same into shares of Common Stock pursuant to this
Section 4.2(e) shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or any transfer agent for the Series
Preferred, and shall give written notice to the Corporation at such office that
such holder elects to convert the same. Such notice shall state the number of
shares of the Series Preferred being converted. Thereupon, the Corporation shall
promptly issue and deliver at such office to such holder a certificate or
certificates for the number of shares of Common Stock to which such holder is
entitled and shall promptly pay in cash or, to the extent sufficient funds are
not then legally available therefor, in Common Stock (at the Common Stock's fair
market value determined by the Corporation's board of directors as of the date
of such conversion), any declared but unpaid dividends on the shares of the
Series Preferred being converted. Such conversion shall be deemed to have been
made at the close of business on the date of such surrender of the certificate
representing the shares of the Series Preferred to be converted, and the person
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such shares of Common
Stock on such date.
(B) Automatic Conversion. Upon the occurrence of the event
specified in Section 4.2(e)(xii) above, the outstanding shares of the Series
Preferred shall be converted into Common Stock (Voting Common Stock in the case
of Series A Preferred and Series B Preferred, and Non-Voting Common Stock in the
case of Series B-1 Preferred) automatically without any further action by the
holders of such shares and whether or not the certificates representing such
shares are surrendered to the
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Corporation or its transfer agent; provided, however, that the Corporation shall
not be obligated to issue certificates evidencing the shares of Common Stock
issuable upon such conversion unless the certificates evidencing such shares of
the Series Preferred are either delivered to the Corporation or its transfer
agent as provided below, or the holder notifies the Corporation or its transfer
agent that such certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection with such certificates. Upon surrender by any
holder of the certificates formerly representing shares of the Series Preferred
at the office of the Corporation or any transfer agent for the Series Preferred,
there shall be issued and delivered to such holder promptly at such office and
in its name as shown on such surrendered certificate or certificates, a
certificate or certificates for the number of shares of Common Stock into which
the shares of the Series Preferred surrendered were convertible on the date on
which such automatic conversion occurred, and the Corporation shall promptly pay
in cash or, at the option of the Corporation, Common Stock (at the Common
Stock's fair market value determined by the Corporation's board of directors as
of the date of such conversion) or, at the option of the Corporation, a
combination of both, all declared but unpaid dividends on the shares of the
Series Preferred being converted. Until surrendered as provided above, each
certificate formerly representing shares of the Series Preferred shall be deemed
for all corporate purposes to represent the number of shares of Common Stock
resulting from such automatic conversion.
(xiv) Fractional Shares. No fractional shares of Common Stock shall
be issued upon conversion of the Series Preferred. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
the Series Preferred by a holder thereof shall be aggregated for purposes of
determination whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the Corporation shall, in lieu
of issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Common Stock's fair market value (as determined by the
Corporation's board of directors) on the date of conversion.
(f) CONVERSION RIGHTS - CONVERSION OF SERIES B PREFERRED INTO SERIES
B-1 PREFERRED OR VICE-VERSA.
The holders of Series B/B-1 Preferred shall have the following rights with
respect to the conversion of Series B Preferred into Series B-1 Preferred or
vice-versa:
(i) Conversion of Series B Preferred into Series B-1 Preferred.
At any Regulated Holder's request at any time (whether in connection with any
action by the Corporation referred to in Section 4.2(f)(ii)(B) or otherwise),
such Regulated Holder shall have the right, upon the occurrence or possible
occurrence of a Regulatory Problem, to convert any number of shares of Series B
Preferred then held by such Regulated Holder into an equal number of shares of
Series B-1 Preferred.
(ii) Conversion of Series B-1 Preferred into Series B Preferred.
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(A) In connection with the occurrence (or the expected
occurrence as described in Section 4.2(f)(ii)(C) below) of any Conversion Event,
each holder of Series B-1 Preferred shall be entitled to convert into an equal
number of Series B Preferred all of such holder's Series B-1 Preferred being (or
expected to be) distributed, disposed of or sold in connection with such
Conversion Event.
(B) A "Conversion Event" shall mean (i) any public offering
or public sale of securities of the Corporation (including a public offering
registered under the Securities Act and a public sale pursuant to Rule 144 of
the Securities Exchange Commission or any similar rule then in force), (ii) any
sale of securities of the Corporation to a person or group of persons (within
the meaning of the U.S. Securities Exchange Act of 1934, as amended (the "1934
Act")) if, after such sale, such person or group of persons in the aggregate
would own or control securities which possess in the aggregate the ordinary
power to elect a majority of the Corporation's board of directors (provided that
such sale has been approved by the Corporation's board of directors or a
committee thereof), (iii) any sale of securities of the Corporation to a person
or group of persons (within the meaning of the 0000 Xxx) if, after such sale,
such person or group of persons in the aggregate would own or control securities
of the Corporation (excluding any Series B-1 Preferred being converted and
disposed of in connection with such Conversion Event) which possesses in the
aggregate the ordinary power to elect a majority of the Corporation's board of
directors, (iv) any sale of securities of the Corporation to a person or group
of persons (within the meaning of the 0000 Xxx) if, after such sale, such person
or group of persons would not, in the aggregate, own, control or have the right
to acquire more than two percent (2%) of the outstanding securities of any class
of voting securities of the Corporation, and (v) a merger, consolidation or
similar transaction involving the Corporation if, after such transaction, a
person or group of persons (within the meaning of the 0000 Xxx) in the aggregate
would own or control securities which possess in the aggregate the ordinary
voting power to elect a majority of the surviving company's directors (provided
that the transaction has been approved by the Corporation's board of directors
or a committee thereof).
(C) Each Regulated Holder holding Series B-1 Preferred shall
be entitled to convert Series B-1 Preferred in connection with any Conversion
Event if such Regulated Holder reasonably believes that such Conversion Event
shall be consummated, and a written request for conversion from any Regulated
Holder holding Series B-1 Preferred to the Corporation shall obligate the
Corporation to effect such conversion in a timely manner so as to enable each
such Regulated Holder to participate in such Conversion Event. The Corporation
shall not cancel the Series B-1 Preferred so converted before the tenth day
following such Conversion Event and shall reserve such Series B-1 Preferred
until such tenth day for reissuance in compliance with the next sentence. If any
Series B-1 Preferred are converted into Series B Preferred in connection with a
Conversion Event and such Series B Preferred are not actually distributed,
disposed of or sold pursuant to such Conversion Event, such Series B Preferred
shall be promptly converted back into the same number of Series X-0 Xxxxxxxxx.
00
000
(X) If at any time the Bank Holding Company Act and the
rules and regulations thereunder (the "BHCA Rules") are amended to allow a
holder of Series B-1 Preferred to convert to Series B Preferred, then upon any
Regulated Holder's request, such Regulated Holder shall have the right to
convert shares of Series B-1 Preferred into an equal number of shares of Series
B Preferred to the extent permissible at such time under the BHCA Rules (as
determined by such holder in its sole discretion).
(iii) Conversion Procedure.
(A) Unless otherwise provided in connection with any
conversion, each conversion of Series B-1 Preferred or Series B Preferred, into
Series B Preferred or Series B-1 Preferred, as the case may be, shall be
effected by the surrender of the certificate or certificates representing the
shares to be converted at the principal office of the Corporation at any time
during normal business hours, together with a written notice by the holder of
such shares stating that such holder desires to convert the shares, or a stated
number of the shares, represented by such certificate or certificates into
shares of the other class (and such statement shall obligate the Corporation to
issue such shares). Unless otherwise provided in connection with any conversion,
each conversion shall be deemed to have been effected as of the close of
business on the date on which such certificate or certificates have been
surrendered and such notice has been received, and at such time the rights of
the holder of the converted Series B-1 Preferred and Series B Preferred, as the
case may be, as such holder shall cease and the person or persons in whose name
or names the certificate or certificates for shares of Series B Preferred or
Series B-1 Preferred are to be issued upon such conversion shall be deemed to
have become the holder or holders of record of the Series B Preferred and the
Series B-1 Preferred represented thereby.
(B) Promptly after the surrender of certificates and the
receipt of written notice, the Corporation shall issue and deliver in accordance
with the surrendering holder's instructions (i) the certificate or certificates
for the Series B Preferred and the Series B-1 Preferred issuable upon such
conversion and (ii) a certificate representing any Series B-1 Preferred and
Series B Preferred which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion but which were
not converted.
(C) The issuance of certificates for Series B-1 Preferred or
Series B Preferred upon conversion of Series B Preferred or Series B-1
Preferred, respectively, shall be made without charge to the holders of such
shares for any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of
Series B Preferred and Series B-1 Preferred, as the case may be.
(D) The Corporation has duly authorized, solely for the
purpose of issuance upon the conversion of the Series B-1 Preferred and Series B
Preferred, respectively, such number of Series B Preferred and Series B-1
Preferred, as
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the case may be issuable upon the conversion of all outstanding Series B-1
Preferred and Series B Preferred, as the case may be. All shares which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to ensure that all such shares may be
so issued without violation of any applicable law or governmental regulation or
any requirements of any domestic securities exchange upon which shares may be
listed (except for official notice of issuance which shall be immediately
transmitted by the Corporation upon issuance).
(E) The Corporation shall not close its books against the
transfer of Series B-1 Preferred and Series B Preferred in any manner which
would interfere with the timely conversion of any Series B-1 Preferred or Series
B Preferred. The Corporation shall assist and cooperate with any holder of
Series B-1 Preferred and Series B Preferred required to make any governmental
filings or obtain any governmental approval prior to or in connection with any
conversion of Series B-1 Preferred and Series B Preferred hereunder (including,
without limitation, making any filings required to be made by the Corporation).
(F) If the Corporation in any manner subdivides or combines
the outstanding Series B-1 Preferred or Series B Preferred, the outstanding
shares of the other class shall be proportionately subdivided or combined in a
similar manner.
(g) CONVERSION RIGHTS - CONVERSION OF NON-VOTING COMMON STOCK INTO
VOTING COMMON STOCK AND VICE-VERSA.
The holders of Common Stock shall have the following rights with respect to
the conversion of Voting Common Stock into Non-Voting Common Stock or
vice-versa:
(i) Conversion of Voting Common Stock into Non-Voting Common
Stock. At any Regulated Holder's request at any time (whether in connection with
any action by the Corporation referred to in Section 4.2(f)(ii)(B) above or
otherwise), such Regulated Holder shall have the right, upon the occurrence or
possible occurrence of a Regulatory Problem, to convert any number of shares of
Voting Common Stock then held by such Regulated Holder into an equal number of
shares of Non-Voting Common Stock.
(ii) Conversion of Non-Voting Common Stock into Voting Common
Stock.
(A) In connection with the occurrence (or the expected
occurrence as described in Section 4.2(g)(ii)(B) below) of any Conversion Event,
each holder of Non-Voting Common Stock shall be entitled to convert into an
equal number of Voting Common Stock all of such holder's Non-Voting Common Stock
being (or expected to be) distributed, disposed of or sold in connection with
such Conversion Event.
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135
(B) Each Regulated Holder holding Non-Voting Common Stock
shall be entitled to convert Non-Voting Common Stock in connection with any
Conversion Event if such Regulated Holder reasonably believes that such
Conversion Event shall be consummated, and a written request for conversion from
any Regulated Holder holding Non-Voting Common Stock to the Corporation shall
obligate the Corporation to effect such conversion in a timely manner so as to
enable each such Regulated Holder to participate in such Conversion Event. The
Corporation shall not cancel the Non-Voting Common Stock so converted before the
tenth day following such Conversion Event and shall reserve such Non-Voting
Common Stock until such tenth day for reissuance in compliance with the next
sentence. If any Non-Voting Common Stock are converted into Voting Common Stock
in connection with a Conversion Event and such Voting Common Stock are not
actually distributed, disposed of or sold pursuant to such Conversion Event,
such Voting Common Stock shall be promptly converted back into the same number
of Non-Voting Common Stock.
(C) If at any time the BHCA Rules are amended to allow a
holder of Non-Voting Common Stock to convert to Voting Common Stock, then upon
any Regulated Holder's request, such Regulated Holder shall have the right to
convert shares of Non-Voting Common Stock into an equal number of shares of
Voting Common Stock to the extent permissible at such time under the BHCA Rules
(as determined by such holder in its sole discretion).
(iii) Conversion Procedure.
(A) Unless otherwise provided in connection with any
conversion, each conversion of Non-Voting Common Stock or Voting Common Stock,
into Voting Common Stock or Non-Voting Common Stock, as the case may be, shall
be effected by the surrender of the certificate or certificates representing the
shares to be converted at the principal office of the Corporation at any time
during normal business hours, together with a written notice by the holder of
such shares stating that such holder desires to convert the shares, or a stated
number of the shares, represented by such certificate or certificates into
shares of the other class (and such statement shall obligate the Corporation to
issue such shares). Unless otherwise provided in connection with any conversion,
each conversion shall be deemed to have been effected as of the close of
business on the date on which such certificate or certificates have been
surrendered and such notice has been received, and at such time the rights of
the holder of the converted Non-Voting Common Stock and Voting Common Stock, as
the case may be, as such holder shall cease and the person or persons in whose
name or names the certificate or certificates for shares of Voting Common Stock
or Non-Voting Common Stock are to be issued upon such conversion shall be deemed
to have become the holder or holders of record of the Voting Common Stock and
the Non-Voting Common Stock represented thereby.
(B) Promptly after the surrender of certificates and the
receipt of written notice, the Corporation shall issue and deliver in accordance
with the surrendering holder's instructions (i) the certificate or certificates
for the Voting
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Common Stock and the Non-Voting Common Stock issuable upon such conversion and
(ii) a certificate representing any Non-Voting Common Stock and Voting Common
Stock which were represented by the certificate or certificates delivered to the
Corporation in connection with such conversion but which were not converted.
(C) The issuance of certificates for Non-Voting Common Stock
or Voting Common Stock upon conversion of Voting Common Stock or Non-Voting
Common Stock, respectively, shall be made without charge to the holders of such
shares for any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of
Voting Common Stock and Non-Voting Common Stock, as the case may be.
(D) The Corporation has duly authorized, solely for the
purpose of issuance upon the conversion of the Non-Voting Common Stock and
Voting Common Stock, respectively, such number of Voting Common Stock and
Non-Voting Common Stock, as the case may be issuable upon the conversion of all
outstanding Non-Voting Common Stock and Voting Common Stock, as the case may be.
All shares which are so issuable shall, when issued, be duly and validly issued,
fully paid and nonassessable and free from all taxes, liens and charges. The
Corporation shall take all such actions as may be necessary to ensure that all
such shares may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares may be listed (except for official notice of issuance which
shall be immediately transmitted by the Corporation upon issuance).
(E) The Corporation shall not close its books against the
transfer of Non-Voting Common Stock and Voting Common Stock in any manner which
would interfere with the timely conversion of any Non-Voting Common Stock or
Voting Common Stock. The Corporation shall assist and cooperate with any holder
of Non-Voting Common Stock and Voting Common Stock required to make any
governmental filings or obtain any governmental approval prior to or in
connection with any conversion of Non-Voting Common Stock and Voting Common
Stock hereunder (including, without limitation, making any filings required to
be made by the Corporation).
(F) If the Corporation in any manner subdivides or combines
the outstanding Non-Voting Common Stock or Voting Common Stock, the outstanding
shares of the other class shall be proportionately subdivided or combined in a
similar manner.
(h) CERTAIN DEFINITIONS.
"COMMON STOCK" means the Voting Common Stock and Non-Voting Common Stock,
par value $.0001 per share, of the Corporation.
"COMMON STOCK DEEMED OUTSTANDING" means, at any given time, the number of
shares of Common Stock actually outstanding at such time, plus (a) the number of
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137
shares of Common Stock which would be issued upon exercise of all of the
Corporation's outstanding Options and (b) the number of shares of Common Stock
which would be issued upon conversion or exchange of all of the Corporation's
outstanding Convertible Securities (including Convertible Securities issuable
upon exercise of Options).
"CONVERTIBLE SECURITIES" means any stock or securities directly or
indirectly convertible into or exchangeable for Common Stock.
"OPTIONS" means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.
"PERMITTED ISSUANCE" means any issuance of Reserved Employee Stock.
"REGULATED HOLDER" means any holder of Preferred Stock or Common Stock who
is regulated under the BHCA Rules.
"REGULATORY PROBLEM" means any transaction, circumstance or situation
whereby (i) any Regulated Holder and its affiliates would own, control or have
power over a greater quantity of securities of any kind issued by the
Corporation or any other entity than are permitted under any requirement of any
governmental authority, or would cause such Regulated Holder or any of its
affiliates to not be able to hold an investment in or provide financing to the
Corporation in compliance with any applicable requirement of any governmental
authority, or (ii) it has been asserted by any governmental regulatory agency
(or any Regulated Holder believes that there is a risk of such assertion) that
such Regulated Holder and its affiliates are not entitled to hold the shares
held by such Regulated Holder and its affiliate or exercise any significant
right with respect to the shares held by such person or provide financing to the
Corporation in compliance with any applicable requirement of any governmental
authority.
"RESERVED EMPLOYEE STOCK" means the shares of Common Stock issuable to
employees, directors or consultants of the Corporation and its Subsidiaries
pursuant to options granted under the VeloCom Inc. Amended and Restated 1998
Stock Option Plan, which amount shall in no event exceed twelve percent (12%) of
the Corporation's Common Stock Deemed Outstanding.
"SUBSIDIARY" means any corporation of which 50% or more of the shares of
outstanding capital stock possessing the voting power (under ordinary
circumstances) in electing the board of directors are, at the time as of which
any determination is being made, owned by the Corporation either directly or
indirectly through Subsidiaries.
(i) AMENDMENT AND WAIVER.
No amendment, modification or waiver of any of the terms or provisions of
the Series Preferred shall be binding or effective without the prior written
consent of the Required Holders and no change in the terms hereof may be
accomplished by merger or consolidation of the Corporation with another
corporation or entity unless the Corporation
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has obtained the prior written consent of the Required Holders; provided,
however, that no such action shall adversely alter or change any of the rights,
preferences, or privileges of the Series A Preferred without the prior written
consent of the holders of at least 75% of the Series A Preferred then
outstanding; and provided, further, than no such action shall adversely alter or
change any of the rights, preferences or privileges of the Series B/B-1
Preferred without the prior written consent of at least 75% of the Series B/B-1
Preferred then outstanding. Any amendment, modification or waiver of any of the
terms or provisions of the Series Preferred by the Required Holders (or such
higher vote as may be required), whether prospective or retroactively effective,
shall be binding upon all holders of the Series Preferred.
(j) GENERAL PROVISIONS.
(i) Registration of Transfer. The Corporation shall keep at its
principal office a register for the registration of the Series Preferred. Upon
the surrender of any certificate representing the Series Preferred at such
place, the Corporation shall, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares represented by the surrendered certificate. Each such new
certificate shall be registered in such name and shall represent such number of
shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate.
(ii) Replacement. Upon receipt of evidence reasonably satisfactory
to the Corporation (an affidavit of the registered holder shall be satisfactory)
of the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing shares of the Series Preferred, and in the case of any
such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Corporation (provided, however, that if the holder is a
financial institution or other institutional investor its own agreement shall be
satisfactory), or in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
(iii) Reservation of Common Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series Preferred, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Series Preferred. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then-outstanding shares of the Series Preferred, the
Corporation shall take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
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(iv) Notices. Any notice required by the provisions of this
Amended and Restated Certificate of Incorporation shall be in writing and shall
be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (iii)
five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All notices to stockholders shall be addressed
to each holder of record at the address of such holder appearing on the books of
the Corporation.
(v) Payment of Taxes. The Corporation shall pay all taxes (other
than taxes based upon income) and other governmental charges that may be imposed
with respect to the issue or delivery of shares of Common Stock upon conversion
of shares of the Series Preferred, excluding any tax or other charge imposed in
connection with any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of the Series
Preferred so converted were registered.
(vi) No Dilution or Impairment. The Corporation shall not amend
its Certificate of Incorporation or participate in any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, for the purpose of avoiding or seeking to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation.
(vii) No Reissuance of the Series Preferred. No share or shares of
the Series Preferred acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued.
ARTICLE FIVE.
The Corporation is to have perpetual existence.
ARTICLE SIX.
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the Corporation is expressly authorized to make, alter
or repeal the Bylaws of the Corporation.
ARTICLE SEVEN.
The management of the business and the conduct of the affairs of the
Corporation shall be vested in its board of directors. The number of directors
which shall constitute the whole board of directors shall be fixed by, or in the
manner provided in, the Bylaws of the Corporation.
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ARTICLE EIGHT.
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws of the Corporation may provide. The books of the
Corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated from
time to time by the board of directors or in the Bylaws of the Corporation.
Election of directors need not be by written ballot unless the Bylaws of the
Corporation so provide.
ARTICLE NINE.
The Corporation shall indemnify, to the fullest extent permitted by Section
145 of the Delaware General Corporation Law, as amended from time to time, all
persons who it may indemnify pursuant thereto. The personal liability of a
director of the Corporation to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director shall be limited to the
fullest extent permitted by the Delaware General Corporation Law, as it now
exists or may hereafter be amended. Any repeal or modification of this paragraph
by the stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
ARTICLE TEN.
The Corporation expressly elects not to be governed by Section 203 of the
Delaware General Corporation Law.
ARTICLE ELEVEN.
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Amended and Restated Certificate of Incorporation in
the manner now or hereafter prescribed herein and by the laws of the State of
Delaware, and all rights conferred upon stockholders herein are granted subject
to this reservation.
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IN WITNESS WHEREOF, the Corporation has caused this Second Amended &
Restated Certificate of Incorporation to be signed and executed in its corporate
name by Xxxxx X. Xxxxxxx, its President and Chief Executive Officer, and
attested to by Xxxxxxx X. Xxxxx, its Assistant Secretary, and its Corporate Seal
to be affixed on this ___ day of January, 2000.
VELOCOM INC.
By:
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
Attest:
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Secretary
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AMENDMENT NO. 1 TO SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT C
CAPITALIZATION CHART
C-1
143
VeloCom Inc.
Capitalization Table
December 27, 1999
Current Capitalization Funding 12/6/99
------------------------------------------------------------- -------------------------
Number of Shares Total Fully Funding Shares
------------------------------------ Investment Diluted ----------- ----------
Common Preferred Total $000's Own % $45,942 $6.00
------------------------------------------------------------- -------------------------
INVESTMENT FUNDS
Telecom Partners II, L.P. 1,500,000 5,605,775 7,105,775 $ 18,317,325 15.52% $ 4,999,998 833,333
Telecom Partners III, L.P. 0 0 0 $ -- 0.00% $ -- --
---------- ---------- ----------- ------------- ------ ----------- ----------
Total Telecom Partners 1,500,000 5,605,775 7,105,775 18,317,325 15.52% $ 4,999,998 833,333
Centennial Fund V, L.P. 932,600 4,186,631 5,119,231 $ 13,492,493 11.18% $ 1,500,000 250,000
Centennial Fund VI, L.P. 0 0 0 $ -- 0.00% $ 7,858,854 1,309,809
Centennial Entrepreneurs Fund V, L.P. 28,940 129,918 158,858 $ 418,694 0.35% $ -- --
Centennial Entrepreneurs Fund VI, L.P. -- -- -- $ -- 0.00% $ 196,470 32,745
Centennial Strategic Partners Fund
VI, L.P. -- -- -- $ -- 0.00% $ -- --
Centennial Holdings I, L.L.C. 38,460 172,655 211,115 $ 558,425 0.46% $ 219,036 36,506
---------- ---------- ----------- ------------- ------ ----------- ----------
Total Centennial Funds 1,000,000 4,489,204 5,489,204 14,467,612 11.99% $ 9,774,360 1,629,060
Eagle Ventures WF, L.L.C.(Crescendo) 22,850 57,460 80,310 $ 195,230 0.18% $ 30,074 5,079
Crescendo III, GbP. 0 0 0 $ -- 0.00% $ 78,354 13,059
Crescendo III Executive Fund, LP 0 0 0 $ -- 0.00% $ 112,860 18,810
Crescendo World Fund, L.L.C. 477,150 1,199,883 1,677,033 $ 4,076,799 3.66% $ 636,198 106,033
Crescendo III, L.P. 0 3,514,683 3,514,683 $ 10,544,049 7.88% $ 3,799,998 633,333
---------- ---------- ----------- ------------- ------ ----------- ----------
Total Crescendo Ventures 500,000 4,772,026 5,272,026 14,816,078 11.51% $ 4,657,884 776,314
SLI Wireless S.A. 4,330,709 7,840,000 12,170,709 $ 34,520,001 26.58% $ 9,000,000 1,500,000
Formus Common - LA Holdings, LLC 1,574,803 7,866,333 9,441,136 $ 27,598,999 20.62% $ 5,599,998 933,333
Taquari Participatoes S.A. 1,035,054 0 1,035,064 $ 2,629,063 2.28% $ -- --
Black Coral Enterprises Inc. (Taquari) 638,164 0 638,164 $ 1,620,937 1.39% $ -- --
---------- ---------- ----------- ------------- ------ ----------- ----------
Total Taquari 1,673,220 0 1,673,228 4,249,999 3.65% $ -- --
---------- ---------- ----------- ------------- ------ ----------- ----------
TOTAL INVESTMENT FUNDS 10,578,740 30,573,338 $41,152,078 $ 113,970,014 89.87% $34,032,240 5,672,040
NEW INVESTORS:
Xxxxx Capital Management -- -- -- $ -- 0% $ 250,002 41,667
Xxxx Xxxxx Capital, L.P. -- -- -- $ -- 0% $ 155,100 25,050
Xxxx Xxxxx Capital Ventures, L.P. -- -- -- $ -- 0% $ 131,400 21,900
Xxxx Xxxxx Capital International -- -- -- $ -- 0% $ 101,400 16,900
Xxxx Xxxxx Capital, Inc. -- -- -- $ -- 0% $ 12,300 2,050
Mellon Ventures II, L.P. -- -- -- $ -- 0% $10,000,002 1,666,667
Bank of America -- -- -- $ -- 0% $ -- --
Xxxxxxxx Xxxxxxxxxxxx -- -- -- $ -- 0% $ -- --
Chestnut Hill VeloCom, LLC -- -- -- $ -- 0% $ -- --
Dolphin Communications Fund, LP -- -- -- $ -- 0% $ -- --
Dolphin Communications Parallel
Fund, LP -- -- -- $ -- 0% $ -- --
First Union -- -- -- $ -- 0% $ -- --
Toronto Dominion Investments,
Inc. -- -- -- $ -- 0% $ -- --
CRI Media Partners, LP -- -- -- $ -- 0% $ -- --
CRI Media Partners II, LP -- -- -- $ -- 0% $ -- --
Northwood Ventures LLC -- -- -- $ -- 0% $ -- --
Aleks Aermovic -- -- -- $ -- 0% $ -- --
Orkin R Xxxxxxxx -- -- -- $ -- 0% $ -- --
Ravi Mhattre -- -- -- $ -- 0% $ -- --
TD Securities (USA), Inc. -- -- -- $ -- 0% $ -- --
---------- ---------- ----------- ------------- ------ ----------- ----------
SUBTOTAL: NEW INVESTORS -- -- -- $ -- -- $10,650,204 1,775,034
MANAGEMENT & DIRECTORS
Xxxx X. Xxxxxx 100,000 37,531 137,531 $ 212,593 0.30% $ 250,002 41,667
Xxxxxxxx Xxxxxx 100,000 37,531 137,531 $ 212,593 0.30% $ 49,998 8,333
Xxxxx X. Xxxxxxx 118,615 18,615 137,230 $ 242,940 0.30% $ 49,998 8,333
Xxxxx Xxxxx 83,333 0 83,333 $ 249,999 0.18% $ 49,998 8,333
Xxxxxx XxXxxxxx 50,000 18,766 68,766 $ 106,298 0.15% $ 75,000 12,500
Comm Capital Ptns Inc/ Xxxxxx
Xxxxxxxxx 50,000 0 50,000 $ 150,000 0.11% $ 750,000 125,000
Xxxxxxx X. Xxxxxx 25,000 9,383 34,383 $ 53,149 0.08% $ 19,998 3,333
R. Xxxxxx House 25,000 9,307 34,307 $ 84,171 0.07% $ -- --
Reinco (Xxxx Xxxxx) 25,000 0 25,000 $ 56,250 0.05% $ -- --
Xxxxxxx Xxxxx 25,000 0 25,000 $ 75,000 0.05% $ -- --
Xxxx Xxxxxxx 25,000 0 25,000 $ 56,250 0.05% $ 15,000 2,500
Xxxxx Tomzuka 25,000 0 25,000 $ 75,000 0.05% $ -- --
---------- ---------- ----------- ------------- ------ ----------- ----------
TOTAL MANAGEMENT & DIRECTORS 651,946 131,133 783,081 $ 1,574,243 1.71% $ 1,259,994 209,999
---------- ---------- ----------- ------------- ------ ----------- ----------
TOTAL FUNDS AND MANAGEMENT 11,230,688 30,704,471 41,935,159 $ 115,544,257 91.58% $45,942,438 7,657,073
TOTAL OTHER SHAREHOLDERS 53,138 1,862 55,000 $ 149,414 0.12% $ -- --
---------- ---------- ----------- ------------- ------ ----------- ----------
TOTAL SHARES OUTSTANDING 11,283,826 30,706,333 41,990,159 $ 115,693.671 91.70% $45,942,438 7,657,073
STOCK OPTIONS 3,798,544 -- 8.30% $ -- 7,609,205
----------- ------------- ------ ----------- ----------
FULLY DILUTED SHARES OUTSTANDING 45,788,703 $ 115,693,671 100.00% $45,942,438 15,266,278
Implied Valuation Current
per share Pre-Money Round
$6.00 $ 274,732 $ 91.598
a) 948.913 of these shares represent voting series B preferred stock, which will
represent 4.9159% of the total outstanding shares of voting series B preferred
stock immediately following the January 7, 2000 funding.
144
VeloCom Inc.
Capitalization Table
December 27, 1999 (continued)
To Be Funded 01/07/00 Funded 6/30/00
-------------------------------- ---------------------------------
Funding Shares Funding Shares
-------------------------------- ---------------------------------
$ 6.00 $ 6.00
$82,058 $61,000
-------------------------------- ---------------------------------
INVESTMENT FUNDS
Telecom Partners II, L.P. $ -- -- $ -- --
Telecom Partners III, L.P. $19,999,998 3,333,333 $10,000,002 1,666,667
----------- ----------
Total Telecom Partners $19,999,998 3,333,333 $10,000,002 1,666,667
Centennial Fund V, L.P. $ -- -- $ 750,000 125,000
Centennial Fund VI, L.P. $ -- -- $ 3,570,576 595,096
Centennial Entrepreneurs Fund V, L.P. $ -- -- $ -- --
Centennial Entrepreneurs Fund VI, L.P. $ -- -- $ 89,265 14,878
Centennial Strategic Partners Fund
VI, L.P. $ -- -- $ 375,000 62,500
Centennial Holdings I, L.L.C $ -- -- $ 102,342 17,057
----------- ----------
Total Centennial Funds $ -- -- $ 4,867,186 814,531
Eagle Ventures WF, L.L.C.(Crescendo) $ 15,228 2,538 $ 22,654 3,809
Crescendo III, GbP. $ 68,880 11,480 $ 73,620 12,270
Crescendo III Executive Fund, LP $ 99,222 16,537 $ 106,038 17,673
Crescendo World Fund, L.L.C $ 318,102 53,017 $ 477,150 79,525
Crescendo III, L.P. $ 3,340,692 556,782 $ 3,570,348 595,058
----------- ----------- ----------- ----------
Total Crescendo Ventures $ 3,642,124 640,354 $ 4,250,010 708,335
SLI Wireless S.A $ 5,500,002 916,667 $ 7,249,998 1,208,333
Formus Common - LA Holdings, LLC $ -- -- $ 2,800,002 466,667
Taquari Participatoes S.A $ -- -- $ -- --
Black Coral Enterprises Inc. (Taquari) $ -- -- $ -- --
----------- ----------- ----------
Total Taquari $ -- -- $ -- --
----------- -----------
TOTAL INVESTMENT FUNDS $29,342,124 4,890,354 $29,187,198 4,864,533
NEW INVESTORS:
Xxxxx Capital Management $ -- -- $ 125,004 20,834
Xxxx Xxxxx Capital, L.P. $ -- -- $ 77,550 12,925
Xxxx Xxxxx Capital Ventures, L.P. $ -- -- $ 65,700 10,950
Xxxx Xxxxx Capital International $ -- -- $ 50,700 8,450
Xxxx Xxxxx Capital, Inc. $ -- -- $ 6,150 1,025
Mellon Ventures II, L.P. $ -- -- $ 5,000,004 833,334
Bank of America $17,500,002 2,918,667 $ 8,749,998 1,458,333
Xxxxxxxx Xxxxxxxxxxxx $ 7,500,000 1,250,000 $ 3,750,000 625,000
Chestnut Hill VeloCom, LLC $10,350,000 1,725,000 $ 5,175,000 862,500
Dolphin Communications Fund, LP $ 1,758,840 293,140 $ 879,420 146,570
Dolphin Communications Parallel
Fund, LP $ 741,162 123,527 $ 370,578 61,763
First Union $ 9,572,934 1,595,489 $ 4,786,470 797,745
Toronto Dominion Investments, Inc. $ 3,499,992 583,333 $ 1,750,002 291,667
CRI Media Partners, LP $ 79,995 13,333 $ 40,002 6,667
CRI Media Partners II, LP $ 319,998 53,333 $ 160,002 28,667
Northwood Ventures LLC $ 750,000 125,000 $ 375,000 62,500
Aleks Aermovic $ 49,998 8,333 $ 25,002 4,167
Orkin R Xxxxxxxx $ 30,000 5,000 $ 15,000 2,500
Ravi Mhattre $ 37,500 6,250 $ 18,750 3,125
TD Securities (USA), Inc. $ 150,000 25,000 $ 75,000 12,500
$ -- -- $ -- --
----------- ----------- ----------- ----------
SUBTOTAL: NEW INVESTORS $52,340,430 8,723,405 $31,495,332 5,249,222
MANAGEMENT & DIRECTORS
Xxxx X. Xxxxxx $ -- -- $ -- --
Xxxxxxxx Xxxxxx $ -- -- $ 25,002 4,167
Xxxxx X. Xxxxxxx $ -- -- $ 25,002 4,167
Xxxxx Xxxxx $ -- -- $ 25,002 4,167
Xxxxxx XxXxxxxx $ -- -- $ 37,500 6,250
Comm Capital Ptns Inc/ Barney $ -- -- $ 375,000 62,500
Xxxxxxxxx
Xxxxxxx X. Xxxxxx $ -- -- $ 10,002 1,667
R. Xxxxxx House $ -- -- $ -- --
Reinco (Xxxx Xxxxx) $ -- -- $ -- --
Xxxxxxx Xxxxx $ -- -- $ -- --
Xxxx Xxxxxxx $ -- -- $ 7,500 1,250
Xxxxx Tomazuka $ -- -- $ -- --
----------- ----------- -----------
TOTAL MANAGEMENT & DIRECTORS $ -- -- $ 505,008 84,168
----------- ----------- ----------- -----------
TOTAL FUNDS AND MANAGEMENT $81,682,554 13,613,759 $61,187,538 10,197,923
TOTAL OTHER SHAREHOLDERS $ -- -- $ -- --
----------- ----------- -----------
TOTAL SHARES OUTSTANDING $81,682,554 13,613,759 $61,187,538 10,197,923
----------- -----------
STOCK OPTIONS $ -- -- $ -- --
----------- ----------- ----------- -----------
FULLY DILUTED SHARES OUTSTANDING 81,682,554 13,613,758 $61,187,538 10,197,923
Implied Valuation Current Current
Round Round
$ 81,683 $ 61,188
a) 948.913 of these shares represent voting series B preferred stock, which will
represent 4.9159% of the total outstanding shares of voting series B preferred
stock immediately following the January 7, 2000 funding.
2
145
VeloCom Inc.
Capitalization Table
December 27, 1999 (continued)
To Be Funded 9/30/00 Total Current Round
-------------------------------- ----------------------------------
Funding Shares Funding Shares
-------------------------------- ----------------------------------
$ 6.00 $ 6.00
$61,000 $250,000
-------------------------------- ----------------------------------
INVESTMENT FUNDS
Telecom Partners II, L.P. $ -- -- $ 4,999,998 833,333
Telecom Partners III, L.P. $ 10,000,002 1,666,667 $ 40,000,002 6,656,667
------------ ---------- ------------ ----------
Total Telecom Partners $ 10,000,002 1,666,667 $ 45,000,000 7,500,000
Centennial Fund V, L.P. $ 750,000 125,000 $ 3,000,000 500,000
Centennial Fund VI, L.P. $ 3,570,570 595,095 $ 15,000,000 2,500,000
Centennial Entrepreneurs Fund V, L.P. $ -- -- $ -- --
Centennial Entrepreneurs Fund VI, L.P. $ 89,262 14,877 $ 375,000 62,500
Centennial Strategic Partners Fund
VI, L.P. $ 375,000 62,500 $ 750,000 125,000
Centennial Holdings I, L.L.C. $ 102,342 17,057 $ 423,720 70,620
------------ ---------- ------------ ----------
Total Centennial Funds $ 4,887,174 814,529 $ 19,548,720 3,258,120
Eagle Ventures WF, L.L.C.(Crescendo) $ 22,848 3,808 $ 91,404 15,234
Crescendo III, GbP $ 73,614 12,269 $ 294,468 49,078
Crescendo III Executive Fund, LP $ 106,038 17,673 $ 424,158 70,693
Crescendo World Fund, L.L.C. $ 477,150 79,525 $ 1,908,600 318,100
Crescendo III, L.P. $ 3,570,342 595,057 $ 14,281,380 2,380,230
------------ ---------- ------------ ----------
Total Crescendo Ventures $ 4,249,992 708,332 $ 17,000,010 2,833,335
SLI Wireless S.A $ 7,249,998 1,208,333 $ 28,999,998 4,833,333
Formus Common - LA Holdings, LLC $ 2,799,996 466,666 $ 11,199,996 1,886,666
Taquari Participatoes S.A $ -- -- $ -- --
Black Coral Enterprises Inc. (Taquari) $ -- -- $ -- --
------------ ---------- ------------ ----------
Total Taquari $ -- -- $ -- --
------------ ---------- ------------ ----------
TOTAL INVESTMENT FUNDS $ 29,187,162 4,884,527 $121,748,724 20,291,454
NEW INVESTORS:
Xxxxx Capital Management $ 124,998 20,833 $ 500,004 83,334
Xxxx Xxxxx Capital, L.P. $ 77,550 12,925 $ 310,200 51,700
Xxxx Xxxxx Capital Ventures, L.P. $ 65,700 10,950 $ 262,800 43,800
Xxxx Xxxxx Capital International $ 50,700 8,450 $ 202,800 33,800
Xxxx Xxxxx Capital, Inc. $ 6,150 1,025 $ 24,600 4,100
Mellon Ventures II, L.P. $ 4,999,998 833,333 $ 20,000,004 3,333,334
Bank of America $ 8,749,998 1,458,333 $ 34,999,996 5,833,333
Xxxxxxxx Xxxxxxxxxxxx $ 3,750,000 625,000 $ 15,000,000 2,500,000
Chestnut Hill VeloCom, LLC $ 5,175,000 862,500 $ 20,700,000 3,450,000
Dolphin Communications Fund, LP $ 879,420 146,570 $ 3,517,680 586,280
Dolphin Communications Parallel
Fund, LP $ 370,578 61,763 $ 1,462,318 247,053
First Union $ 4,786,470 797,745 $ 19,145,874 3,190,979
Toronto Dominion Investments, Inc. $ 1,750,002 291,667 $ 7,000,002 1,166,667
CRI Media Partners, LP $ 40,002 6,667 $ 160,002 26,667
CRI Media Partners II, LP $ 160,002 26,667 $ 640,002 106,667
Northwood Ventures LLC $ 375,000 62,500 $ 1,500,000 250,000
Aleks Aermovic $ 25,002 4,167 $ 100,002 16,667
Orkin R Xxxxxxxx $ 15,000 2,500 $ 60,000 10,000
Ravi Mhattre $ 18,750 3,125 $ 75,000 12,500
TD Securities (USA), Inc. $ 75,000 12,500 $ 300,000 50,000
$ -- -- $ -- --
------------ ---------- ------------ ----------
SUBTOTAL: NEW INVESTORS $ 31,495,320 5,249,220 $125,981,286 20,995,881
MANAGEMENT & DIRECTORS
Xxxx X. Xxxxxx $ -- -- $ 250,002 41,667
Xxxxxxxx Xxxxxx $ 24,995 4,166 $ 99,996 16,666
Xxxxx X. Xxxxxxx $ 24,995 4,166 $ 99,996 16,666
Xxxxx Xxxxx $ 24,995 4,166 $ 99,996 16,666
Xxxxxx XxXxxxxx $ 37,500 6,250 $ 150,000 25,000
Comm Capital Ptns Inc/ Xxxxxx
Xxxxxxxxx $ 375,000 82,500 $ 1,500,000 250,000
Xxxxxxx X. Xxxxxx $ 9,996 1,666 $ 39,996 6,666
R. Xxxxxx House $ -- -- $ -- --
Reinco (Xxxx Xxxxx) $ -- -- $ -- --
Xxxxxxx Xxxxx $ -- -- $ -- --
Xxxx Xxxxxxx $ 7,500 1,250 $ 30,000 5,000
Xxxxx Tomazuka $ -- -- $ -- --
------------ ---------- ------------ ----------
TOTAL MANAGEMENT & DIRECTORS $ 504,984 84,164 $ 2,289,986 378,331
------------ ---------- ------------ ----------
TOTAL FUNDS AND MANAGEMENT $ 61,187,466 10,197,911 $249,999,996 41,666,666
TOTAL OTHER SHAREHOLDERS $ -- -- $ -- --
------------ ---------- ------------ ----------
TOTAL SHARES OUTSTANDING $ 61,187,466 10,197,911 $249,999,996 41,666,666
STOCK OPTIONS $ -- -- $ -- 7,609,205
------------ ---------- ------------ ----------
FULLY DILUTED SHARES OUTSTANDING $ 61,187,466 10,197,911 $249,999,996 49,275,871
Implied Valuation Current Current
Round Round
$ 61,187 $ 295,855
a) 948.913 of these shares represent voting series B preferred stock, which will
represent 4.9159% of the total outstanding shares of voting series of voting
series B preferred stock immediately following the January 7, 2000 funding.
3
146
VeloCom Inc.
Capitalization Table
December 27, 1999 (continued)
Pro Forma
---------------------------------------------------------------------------------------
Total Investment Avg. Investment Number of Shares Fully Diluted Own %
per share
---------------------------------------------------------------------------------------
INVESTMENT FUNDS
Telecom Partners II, L.P. $ 23,317,323 $ 2.94 7,939,108 8.35%
Telecom Partners III, L.P. $ 40,000,002 $ 6.00 6,666,667 7.01%
------------ -------------- ---------- ------
Total Telecom Partners $ 63,317,325 $ 4.34 14,605,775 15.36%
Centennial Fund V, L.P. $ 16,492,493 $ 2.94 5,619,231 5.91%
Centennial Fund VI, L.P. $ 15,000,000 $ 6.00 2,500,000 2.63%
Centennial Entrepreneurs Fund V, L.P. $ 418,694 $ 2.64 158,858 0.17%
Centennial Entrepreneurs Fund VI, L.P. $ 375,000 $ 6.00 62,500 0.07%
Centennial Strategic Partners Fund
VI, L.P. $ 750,000 $ 6.00 125,000 0.13%
Centennial Holdings I, L.L.C. $ 980,145 $ 3.48 281,735 0.30%
------------ -------------- ---------- ------
Total Centennial Funds $ 34,016,332 $ 3.89 8,747,324 9.20%
Eagle Ventures WF, L.L.C.(Crescendo) $ 286,634 $ 3.00 95,544 0.10%
Crescendo III, GbP. $ 294,468 $ 6.00 49,078 0.05%
Crescendo III Executive Fund, LP $ 424,158 $ 6.00 70,693 0.07%
Crescendo World Fund, L.L.C. $ 5,985,399 $ 3.00 1,995,133 2.10%
Crescendo III, L.P. $ 24,825,429 $ 4.21 5,894,913 6.20%
------------ -------------- ---------- ------
Total Crescendo Ventures $ 31,816,088 $ 3.93 8,105,361 8.53%
SLI Wireless S.A. $ 63,519,999 $ 3.74 17,004,042 17.89%
Formus Common - LA Holdings, LLC $ 38,798,995 $ 3.43 11,307,802 11.89%
Taquari Participatoes S.A. $ 2,629,063 $ 2.54 1,035,064 1.09%
Black Coral Enterprises Inc. (Taquari) $ 1,620,937 $ 2.54 638,164 0.67%
------------ -------------- ---------- ------
Total Taquari $ 4,249,999 $ 2.54 1,673,228 1.76%
TOTAL INVESTMENT FUNDS $235,718,738 $ 3.84 81,443,532 64.63%
NEW INVESTORS:
Xxxxx Capital Management $ 500,004 $ 6.00 83,334 0.09%
Xxxx Xxxxx Capital, L.P. $ 310,200 $ 6.00 51,700 0.05%
Xxxx Xxxxx Capital Ventures, L.P. $ 262,800 $ 6.00 43,800 0.05%
Xxxx Xxxxx Capital International $ 202,800 $ 6.00 33,800 0.04%
Xxxx Xxxxx Capital, Inc. $ 24,800 $ 6.00 4,100 0.00%
Mellon Ventures II, L.P. $ 20,000,004 $ 6.00 3,333,334 3.51%
Bank of America $ 34,999,998 $ 6.00 5,833,333 6.14%
Xxxxxxxx Xxxxxxxxxxxx $ 15,000,000 $ 6.00 2,500,000 2.63%
Chestnut Hill VeloCom, LLC $ 20,700,000 $ 6.00 3,450,000 3.63%
Dolphin Communications Fund, LP $ 3,517,680 $ 6.00 586,280 0.62%
Dolphin Communications Parallel
Fund, LP $ 1,482,318 $ 6.00 247,053 0.26%
First Union $ 19,145,874 $ 6.00 3,190,979 3.36%
Toronto Dominion Investments, Inc. $ 7,000,002 $ 6.00 1,165,667 1.23%
CRI Media Partners, LP $ 160,002 $ 6.00 26,667 0.03%
CRI Media Partners II, LP $ 640,002 $ 6.00 106,667 0.11%
Northwood Ventures LLC $ 1,500,000 $ 6.00 250,000 0.26%
Aleks Aermovic $ 100,002 $ 6.00 16,667 0.02%
Orkin R Xxxxxxxx $ 60,000 $ 6.00 10,000 0.01%
Ravi Mhattre $ 75,000 $ 6.00 12,500 0.01%
TD Securities (USA), Inc. $ 300,000 $ 6.00 50,000 0.05%
$ -- $ 6.00 0 0.00%
------------ -------------- ---------- ------
SUBTOTAL: NEW INVESTORS $125,981,286 $ 6.00 20,996,881 22.09%
MANAGEMENT & DIRECTORS
Xxxx X. Xxxxxx $ 462,595 $ 2.58 179,198 0.19%
Xxxxxxxx Xxxxxx $ 312,589 $ 2.03 154,197 0.16%
Xxxxx X. Xxxxxxx $ 342,936 $ 2.23 153,896 0.16%
Xxxxx Xxxxx $ 349,995 $ 3.50 99,999 0.11%
Xxxxxx XxXxxxxx $ 256,298 $ 2.73 93,766 0.10%
Comm Capital Ptns Inc/ Xxxxxx
Xxxxxxxxx $ 1,650,000 $ 5.50 300,000 0.32%
Xxxxxxx X. Xxxxxx $ 93,145 $ 2.27 41,049 0.04%
R. Xxxxxx House $ 84,171 $ 2.45 34,307 0.04%
Reinco (Xxxx Xxxxx) $ 56,250 $ 2.25 25,000 0.03%
Xxxxxxx Xxxxx $ 75,000 $ 3.00 25,000 0.03%
Xxxx Xxxxxxx $ 86,250 $ 2.88 30,000 0.03%
Xxxxx Tomzuka $ 75,000 $ 3.00 25,000 0.03%
------------ -------------- ---------- ------
TOTAL MANAGEMENT & DIRECTORS $ 3,844,229 $ 3.31 1,161,412 1.22%
TOTAL FUNDS AND MANAGEMENT $365,544,253 $ 4.37 83,601,825 87.94%
TOTAL OTHER SHAREHOLDERS $ 149,414 $ 2.72 55,000 0.06%
-------------- ---------- ------
TOTAL SHARES OUTSTANDING $365,693,667 $ 4.37 83,656,825 88.00%
STOCK OPTIONS $ -- $ 11,407,749 12.00%
-------------- ---------- ------
FULLY DILUTED SHARES OUTSTANDING $365,693,667 $ 3.85 95,064,574 100.00%
Implied Valuation Post-Money
$ 570,387
a) 948.913 of these shares represent voting series B preferred stock, which will
represent 4.9159% of the total outstanding shares of voting series of voting
series B preferred stock immediately following the January 7, 2000 funding.
4
147
EXHIBIT D
FORM OF THIRD AMENDED AND RESTATED INVESTORS AGREEMENT
FILED AS EXHIBIT 4.1 TO THE REGISTRATION STATEMENT
D-1
148
AMENDMENT NO. 1 TO SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT E
FORM OF LEGAL OPINION
E-1
149
EXHIBIT E
FORM OF LEGAL OPINION
We are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, with full corporate power
and authority to own, lease and operate its properties and to conduct its
business. The Company is qualified to do business and in good standing in each
jurisdiction in the United States where the failure to be so qualified would
result in a material adverse effect on the business, operations, assets,
prospects or condition (financial or otherwise) of the Company (a "Material
Adverse Effect").
2. The authorized capital stock of the Company, immediately prior to the
Second Closing Date, shall consist of (a) one hundred eight million six hundred
thirty four thousand four hundred twenty one (108,634,421) shares of Common
Stock, of which (i) one hundred six million six hundred sixty six thousand six
hundred sixty seven (106,666,667) will be designated as Voting Common Stock,
eleven million two hundred eighty three thousand eight hundred twenty six
(11,283,826) of which will be issued and outstanding immediately prior to the
Second Closing Date, and (ii) one million nine hundred sixty seven thousand
seven hundred fifty four (1,967,754) will be designated as Non-Voting Common
Stock, none of which will be issued and outstanding immediately prior to the
Second Closing Date, and (b) seventy eight million six hundred thirty four
thousand four hundred twenty one (78,634,421) shares of Preferred Stock, of
which (i) thirty one million (31,000,000) will be designated as Series A
Preferred Stock, thirty million seven hundred six thousand three hundred thirty
three (30,706,333) of which will be issued and outstanding immediately prior to
the Second Closing Date, (ii) forty one million six hundred sixty six thousand
six hundred sixty seven (41,666,667) will be designated as Series B Preferred
Stock, of which seven million six hundred fifty seven thousand seventy-three
(7,657,073) will be issued and outstanding immediately prior to the Second
Closing Date, and an additional thirty four million nine thousand five hundred
ninety three (34,009,593) shares of which will have been committed to be sold by
the Company immediately prior to the Second Closing Date and (iii) one million
nine hundred sixty seven thousand seven hundred fifty four (1,967,754) will be
designated as Series B-1 Preferred Stock, of which no shares will be issued and
outstanding immediately prior to the Second Closing Date, but all of which will
have been committed to be sold by the Company immediately prior to the Second
Closing Date. To our knowledge, except for the three million seven hundred
ninety eight thousand five hundred forty four (3,798,544) options outstanding
immediately prior to the Second Closing Date, except for the conversion
privileges of the Series A Preferred Stock, Series B Preferred Stock and Series
B-1 Preferred Stock, except as disclosed in the Follow-On Series B/B-1 Preferred
Stock Purchase Agreement dated as of December 20, 1999 among the Company and the
1
150
Purchasers listed on the schedule of purchasers attached thereto, and except as
disclosed in the Agreements or the exhibits or schedules attached thereto, there
are no options, warrants, conversion privileges, preemptive rights, rights of
first refusal or other rights to purchase from the Company any of its equity
securities that are outstanding immediately prior to the Second Closing Date.
3. All the shares of capital stock of the Company outstanding prior to the
Second Closing Date have been duly authorized, validly issued and are fully paid
and nonassessable. The rights, preferences and privileges of the Series B
Preferred Stock are as stated in the Certificate of Incorporation.
4. To our knowledge, Schedule 3.12 to the Purchase Agreement sets forth the
current ownership structure of the Company and its Subsidiaries.
5. Each of the Agreements has been duly authorized, validly executed and
delivered by the Company and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity under Section 2.5 of the Investors Agreement may be limited by
applicable laws and public policy and except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors' rights, and subject to general equity
principles and to limitations on availability of equitable relief, including
specific performance.
6. The issuance, sale and delivery of the Series B Preferred Stock has been
duly authorized by the Company and, upon delivery to the Purchasers against
payment therefor in accordance with the Purchase Agreement and the terms of the
Series B Preferred Stock, the shares of Series B Preferred Stock will be validly
issued, fully paid and nonassessable.
7. The shares of Common Stock to be issued upon conversion of the Series B
Preferred Stock have been duly authorized and reserved for issuance by the
Company and, when issued and delivered upon conversion of the Series B Preferred
Stock in accordance with the Certificate of Incorporation, such shares of Common
Stock will have been validly issued and will be fully paid and nonassessable.
8. The execution of the Agreements by the Company, the compliance by the
Company with the terms thereof, and the offer and sale of the Series B Preferred
Stock pursuant to the Purchase Agreement (a) do not and will not violate any
provision of the Company's Certificate of Incorporation or Bylaws, and (b) do
not violate or contravene (i) the laws of the State of Colorado, the General
Corporation Law of the State of Delaware or any Federal law of the United States
of America applicable to the Company or (ii) any order, writ, judgment,
injunction, decree, determination or award which has been entered against the
Company and of which we have knowledge, the default, violation or contravention
of which would materially and adversely affect the Company, its assets,
financial condition or operations.
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9. All consents, approvals, authorizations or orders of, and filings,
registrations, and qualifications with, any regulatory authority or governmental
body in the United States required for the consummation by the Company of the
transactions contemplated by the Purchase Agreement have been made or obtained,
except for any filings required under federal or state securities laws, and
except for any filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
10. To our knowledge, there is no suit, action, claim, arbitration or
similar proceeding or investigation pending or threatened against the Company or
against the Company's business or assets which, if adversely resolved, would be
reasonably likely to have a Material Adverse Effect.
11. Subject to the accuracy of the Purchasers' representations in Section 4
of the Purchase Agreement and assuming all required filings are made under
federal and state securities laws, the offer, sale and issuance of the Series B
Preferred Stock pursuant to the Purchase Agreement constitutes a transaction
exempt from the registration requirements of Section 5 of the Securities Act of
1933, as amended (the "Securities Act") and from the securities registration
requirements of the Colorado securities laws. In addition, subject to the
accuracy of the Purchasers' representations in Section 4 of the Purchase
Agreement, assuming such securities are not being exchanged in a case under
title 11 of the United States Code, and assuming no commission or other
remuneration is paid or given directly or indirectly for soliciting such
exchange, the issuance of the Common Stock issuable upon conversion of the
Series B Preferred Stock would also constitute a transaction exempt from the
registration requirements of Section 5 of the Securities Act and from the
securities registration requirements of the Colorado securities laws.
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REVISED SCHEDULES TO
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
153
REVISED SCHEDULES TO SERIES B STOCK PURCHASE AGREEMENT
Argentina LLC Formus Communications - Argentina LLC
Xxxx Canada Xxxx Canada International
Bolivia LLC Formus Communications - Bolivia LLC
Brasil Holdings VeloCom Cayman Brasil Holdings (formerly WLL Cayman
S.P. Company)
Centennial Centennial Fund V, Centennial Entrepreneurs Fund
and Centennial Holdings
Centennial Entrepreneurs Fund Centennial Entrepreneurs Fund V, L.P.
Centennial Fund V Centennial Fund V, L.P.
Centennial Holdings Centennial Holdings I, LLC
Chile Holdings VeloCom Cayman Chile Holdings
Chile LLC Formus Communications - Chile LLC
Colombia Holdings VeloCom Cayman Colombia Holdings
Colombia LLC Formus Communications - Colombia LLC
Crescendo Eagle Ventures, Crescendo World Fund and Crescendo
III
Crescendo III Crescendo III, L.P.
Crescendo World Fund Crescendo World Fund, LLC
Eagle Ventures Eagle Ventures WF, LLC
Formus Formus Communications Inc.
Formus Argentina Formus X.X.
Xxxxxx Bolivia Formus Bolivia X.X.
Xxxxxx Chile Formus Comunicaciones de Chile Limitada
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Formus Colombia Formus Colombia S.A. E.S.P.
Xxxxxx XX Xxxxxx Communications - Latin America LLC
Formus Peru Formus Peru X.X.
Xxxxxx Venezuela Telecomunicaciones Interactivas de Venezuela C.A.
Interloop BVI Interloop Americas Inc.
Interloop Colombia Interloop S.A. Nacional de Telecomunicaciones E.S.P.
MegaTel Vesper Sao Paulo S.A. (formerly MegaTel do Brasil
S.A.)
PCN PCN Investment S.A.
Peru LLC Formus Communications - Peru LLC
Qualcomm XXXXXXXX Xxxxxxxxxxxx
Qualcomm Brasil QUALCOMM do Brasil S.A.
SLI SLI Wireless S.A.
Smartel Smartel S.A.
Taquari Taquari Participacoes S.A.
Telecom Telecom Partners II, L.P.
Telelatina Telelatina S.A.
TMC Telelatina Management Company LLC
VeloCom VeloCom Inc. (also referred to as the "Company")
VeloCom Argentina VeloCom SRL
VeloCom Brasil VeloCom do Brasil Ltda. (formerly WLL Brasil
Holdings, Ltda.)
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VeloCom Chile WLL International Chile Ltda.
Venezuela LLC Formus Communications - Venezuela LLC
Xxxxxx Xxxxxx (formerly Mirror S.A. and/or Canbra
Telefonica, S.A.)
Vesper Cayman Vesper Cayman
Vesper Sao Paulo Cayman Vesper Sao Paulo Cayman, Ltd.
Vesper Holding Vesper Holding S.A. (formerly Mirror Holding S.A.
and/or Canbra Holding S.A.)
Vesper Sao Paulo Holding Vesper Sao Paulo Holding S.A. (formerly MegaTel
Holding S.A.)
WLL Argentina WLL Argentina SRL
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INDEX OF SCHEDULES
3.4 Consents and Approvals
3.5(a) Compliance With Laws
3.5(b) Material Permits
3.6 Patent and Trademark Rights
3.8 Contracts
3.12 Subsidiaries
3.13 Capitalization of Subsidiaries
3.14(a) Share Ownership of Company
3.14(b) Agreements Relating to Equity Interests in Companies
3.18(a) Licenses
3.20 Liabilities
3.22(a) Collective Bargaining Agreements or Employment Agreements Not Terminable at Will
3.22(b) Employees and Directors of the Company
3.23(a) Employee Benefit Plans
3.24 Recordkeeping Compliance
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SCHEDULE 3.4
CONSENTS AND APPROVALS
VELOCOM
Filing of Form D with the United States Securities and Exchange
Commission and applicable state securities authorities will be required
post-Closing.
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SCHEDULE 3.5(a)
COMPLIANCE WITH LAWS
VELOCOM CHILE
VeloCom Chile (a non-operating company with no assets) has not filed
certain monthly tax reports with Chilean tax authorities. The Company
is in the process of making such filings.
INTERLOOP COLOMBIA
Interloop Colombia has not made certain payments in respect of its
license obligations, the result of which could be a loss of this
entity's license. In addition, the buildout requirements in respect of
this license have not been fully complied with. Interloop Colombia has
also not complied with all legal requirements relating to its financial
statements.
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SCHEDULE 3.5(b)
MATERIAL PERMITS
VESPER HOLDING
Vesper Holding was registered with Brazilian Federal tax authorities
under registration No. 02.763.387/0001-6.
VESPER SAO PAULO HOLDING
Vesper Sao Paulo Holding was registered with Brazilian Federal tax
authorities under registration No. 03.008. 468/0001-10.
VESPER
1. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Local, Que Entre Si Celebram A Agencia Nacional de Telecomunicacoes -
ANATEL e Vesper.
2. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Longa Distancia Nacional de Ambito Intra-Regional, Que Entre Si
Celebram A Agencia Nacional de Telecomunicacoes - ANATEL e Vesper.
3. Vesper was registered with Brazilian Federal and State tax
authorities under registrations No. 02.730.101/0001-4 and 85297791,
respectively.
4. License for Packet Switched Network Services issued by Anatel on
September 23, 1999.
5. License for Circuit Switched Network Services issued by Anatel on
September 23, 1999.
6. License for Dedicated Line Services issued by Anatel on September
23, 1999.
7. License for Special Services of Audio and Video Signal
Retransmission issued by Anatel on September 23, 1999.
8. License for Network Transport issued by Anatel on September 23,
1999.
MEGATEL
1. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Local, Que Entre Si Celebram A Agencia Nacional de Telecomunicacoes -
ANATEL e MegaTel.
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2. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Longa Distancia Nacional de Ambito Intra-Regional, Que Entre Si
Celebram A Agencia Nacional de Telecomunicacoes - ANATEL e MegaTel.
3. MegaTel was registered with Brazilian Federal and State tax
authorities under registrations No. 02.629.188/0001-6 and
115.322.817.110, respectively.
4. License for Packet Switched Network Services issued by Anatel on
September 23, 1999.
5. License for Circuit Switched Network Services issued by Anatel on
September 23, 1999.
6. License for Dedicated Line Services issued by Anatel on September
23, 1999.
7. License for Special Services of Audio and Video Signal issued by
Anatel on September 23, 1999.
8. License for Retransmission issued by Anatel on September 23, 1999.
9. Liceneca para transporte de dados - ANATEL ("data transport license"
under analysis regarding all possible applications)
TELELATINA
1. By Resolution 2617SC/97 issued by the Secretary of Communications on
September 4, 1997, Telelatina was granted a license to provide Value
Added Services, Data Transmission Services and Videoconferencing
services nationwide.
2. By Resolution 3064SC/97, issued by the Secretary of Communications
on October 15, 1997, Telelatina was granted an authorization to use,
the frequency bandwidth from 3,450 MHz to 3,475 MHz. and from 3,550
MHz. to 3,575 MHz. The use of these frequencies is governed by
Resolution 2879SC/97 as amended by 869SC/98.
3. Telelatina has obtained the National Communications Commission's
authorization to install and operate two microwave links, and is in the
process of obtaining authorization for various other microwave links.
4. Telelatina has filed a petition with the National Communications
Commission to obtain authorization to install eight cells within the
City of Buenos Aires.
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SMARTEL
1. By Resolution 1130SC/98 issued by the Secretary of Communications on
May 7, 1998, Smartel was granted a license to provide Value Added
Services, Data Transmission Services, Broadcasting signals carriage
services and Videoconferencing services.
2. By Resolution 1247SC/98, issued by the Secretary of Communications
on May 22, 1998, Smartel was granted an authorization to use, for the
AMBA (which area comprises the City of Buenos Aires and certain
locations nearby), Xxxxxxx, Cordoba and Xxxxxxx the frequency bandwidth
from 26,850 GHz to 27,350 GHz. and from 31,075 GHz. to 31,150 GHz. The
use of these frequencies is governed by Resolution 869SC/98, as
amended.
FORMUS ARGENTINA
Bands: E Band which totals 575 MHz and consists of the following
frequencies: 25.85 to 26.35 GHz and 29.175 to 29.25 GHz (awarded
November 1998). This spectrum assignment may initially be used only in
the following cities: AMBA (Area Multiple Buenos Aires), La Plata and
Cordoba. Services: Data transmission, value added and videoconferencing
(awarded September and November 1998).
FORMUS COLOMBIA
Bands: 300 MHz at 38 GHz; channels 13, 14, 17 (awarded November 1998).
The license fees for the 38 GHz spectrum license has been increased
from approximately US$222,000 to approximately US$534,000. This
increase is effective for the year 2000 payment due January 2000.
Services: Local carrier and value added (awarded August 1998 and May
1999)
FORMUS PERU
Bands: 400 MHz at 38 GHz; channels 1-4 (awarded May 1999).
Services: Local carrier and value added (awarded April 1999).
INTERLOOP COLOMBIA
1. License to provide Basic Commuted Telephone Services in Colombia.
Such license was granted by Resolution 4262 issued on 9/23/97, expiring
on 12/23/2007, the scope of this license shall be for the territory of
Santa Fe de Bogota, DC (Departamento de Curdinamarca), Cali
(Departamento de Xxxxx del Cauca), Medellin (Departamento de
Antioquia), Barranquilla (Departamento de Atlantico), Bucaramanga
(Departamento de Santander), Cartagena (Departamento xx Xxxxxxx), Santa
Xxxxx (Departamento de Xxxxxxxxx), Pereira (Departamento
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de Risaralda), Cucuta (Departamento del Norte de Santander) y
Villavicencio (Departamento del Meta).
2. License to provide Telematics and Value Added Services, and the
constitution of an Associate Value Added Service Network, which was
granted by Resolution 4472 issued on 10/10/97 expiring on 10/10/2007.
3. Interloop Colombia was authorized to use the radioelectric spectrum
as per Resolution 5195 issued on 29/12/97. By Resolution 106 of 1999,
Interloop was authorized to use exclusively bands 23 y 3.4 GHz within
the cities where it had been awarded with a license until 9/22/2007.
ODECAR S.A.
1. Odecar S.A. was assigned, on December 14, 1999, per Resolution No.
404.99 of the Direccion Nacional de Comunicaciones of Uruguay, the
radioelectric sub-blocks 24.600 GHz - 24.850 GHz in Montevideo and
25,100 GHz - 25.350 GHZ, 25.600 GHZ - 25.850 GHz and 26.100 GHz -
26.350 GHz in Xxxxxxxxx for use in providing commercial data
transmission service.
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SCHEDULE 3.6
PATENT AND TRADEMARK RIGHTS
VELOCOM
1. Applications for trademark for "VELOCOM" and "VESPER" have been
filed in:
Argentina
Bolivia
Brazil (VeloCom only)
Colombia
Chile
Mexico
Paraguay
Peru
Uruguay
Venezuela
United States of America
All applications are pending.
2. Applications for trademark for "VELOCOMM" have been filed in:
Argentina
Brazil
Colombia
Chile
Mexico
Peru
Uruguay
Venezuela
United States of America
All applications have been abandoned or will be abandoned.
3. The domain name "VELOCOM" has been secured by the Company.
VESPER
1. Applications for the following trademarks have been filed in Brazil:
"XXXXXXX"
"ATIMO"
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"VESPER"
All applications are pending.
TMC
1. Trademark application for:
Application No. 2.210.763 filed on March 29, 1999 to cover all
services in International Class 38. This application has
encountered an opposition by Radio Mitre S.A. on the basis of
the trademark "XXXXXX LATINA," Registration No. 1.675.177 in
International Class 38.
2. Trademark application for:
Application No. 2.210.764 filed on March 29, 1999 to cover all
services in International Class 38.
3. Trademark application for:
Application No. 2.210.765 filed on March 29, 1999 to cover all
services in International Class 38.
4. Trademark application for "TMC": Application No. 2.210.766 filed on
March 29, 1999 to cover all services in International Class 38. This
application has encountered an opposition by T.M.C. Learreta y Xxxxxxx
X.X., Xxxxxxx, Xxxxxxxx Xxxx / Learreta, Xxxxxxxx, on the basis of
their trademark "TMC COMPUTACION", Registrations Nos. 1.661.729 granted
on March 23, 1998 covering all services in International Class 42, and
1.666.293 granted on April 24, 1998 covering all goods in International
Class 9.
TELELATINA
1. Trademark application for "LATINWAY": international class No. 38
(minutes 2,173,040) filed on September 2, 1998, and published in the
Trademark Bulletin on October 28, 1998. This application has
encountered an opposition by Miniphone S.A. based on its trademark
"LATINNET (COMUNICACIONES
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PERSONALES LATINOAMERICANAS)" Registration No. 1.576.565 of
international class 38.
2. Trademark application for "LATINCOM": international class No. 38
(minutes 2,173,041) filed on September 2, 1998, and published in the
Trademark Bulletin on October 28, 1998. This application has
encountered an opposition by Miniphone S.A. based on its trademark
"LATINNET (COMUNICACIONES PERSONALES LATINOAMERICANAS)" Registration
No. 1.576.565 of international class 38.
3. Trademark application for "LATINLINK": international class No. 38
(minutes 2,173,038) filed on September 2, 1998, and published in the
Trademark Bulletin on October 28, 1998. This application has
encountered an opposition by Miniphone S.A. based on its trademark
"LATINNET (COMUNICACIONES PERSONALES LATINO-AMERICANAS)" Registration
No. 1.576.565 of international class 38.
4. Trademark application for "LATINDATA", international class No. 38
(minutes 2,173,039) filed on September 2, 1998, and published in the
Trademark Bulletin on October 28, 1998. This application has
encountered an opposition by Miniphone S.A. based on its trademark
"LATINNET (COMUNICACIONES PERSONALES LATINOAMERICANAS)" Registration
No. 1.576.565 of international class 38.
5. Trademark application for "TELELATINA" and logo:
Application No. 2.198.589 filed on January 20, 1999 to cover all
services in International Class 38. This application has encountered an
opposition by Radio Mitre S.A. on the basis of their trademark "XXXXXX
LATINA", Registration No. 1.675.177, in International Class 38.
6. Please note that according to the Trademarks Office database
FEDERACION DE COOP. DE TELECOMUNICACIONES DE LA REP. ARG. LTDA owns the
trademark application of "TELELATINA", Application No. 2.091.831, filed
on July 14, 1997, to cover all services in Int. Class 38.
7. Trademark application for "ICONWEB": application No. 2.210.176,
filed by Xx. Xxxxxx Xxxxx de Dios on March 25, 1999, to cover all
services in International Class 38. This application did not encounter
oppositions by third parties. This application trademark is in process
of being assigned by Xx. Xxxxxx Xxxxx de Dios in favor of Telelatina
8. Trademark application for "WIDENET": application No. 2.210.177,
filed by Xx. Xxxxxx Xxxxx de Dios on March 25, 1999, to cover all
services in International Class 38. This application did not encounter
oppositions by third
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parties. This application trademark is in process of being assigned by
Xx. Xxxxxx Xxxxx de Dios in favor of Telelatina.
9. Trademark application for "XXXXXXX.XXX": application No. 2.217.827,
filed by Xx. Xxxxxx Xxxxx de Dios on May 6, 1999, to cover all services
in International Class 38. This application has been published in the
Trademark Bulletin for opposition purposes. The term to oppose this
trademark expires on August 27, 1999. Please note that the following
applications have not yet been published for opposition purposes. This
application trademark is in process of being assigned by Xx. Xxxxxx
Xxxxx de Dios in favor of Telelatina.
10. Trademark application for "W": application No. 2.222.712, filed by
Xx. Xxxxxx Xxxxx de Dios on June 4, 1999, to cover all services in
International Class 38. This application trademark is in process of
being assigned by Xx. Xxxxxx Xxxxx de Dios in favor of Telelatina.
11. Trademark application for "WIDENET W": application No. 2.223.045,
filed by Xx. Xxxxxx Xxxxx de Dios on June 7, 1999, to cover all
services in International Class 38. This application trademark is in
process of being assigned by Xx. Xxxxxx Xxxxx de Dios in favor of
Telelatina.
12. Trademark application for "WIDENET": application No. 2.223.046,
filed by Xx. Xxxxxx Xxxxx de Dios on June 7, 1999, to cover all
services in International Class 38. This application trademark is in
process of being assigned by Xx. Xxxxxx Xxxxx de Dios in favor of
Telelatina.
13. Trademark application for "I": application No. 2.230.853, filed by
Xx. Xxxxxx Xxxxx de Dios on July 26, 1999, to cover all services in
International Class 38. This application trademark is in process of
being assigned by Xx. Xxxxxx Xxxxx de Dios in favor of Telelatina.
SMARTEL
1. Trademark application for "SMARTEL": Application No. 2.196.692,
filed on January 8, 1999, to cover all goods in International Class 9.
This application has encountered oppositions by: a) TELEFONICA DE
ARGENTINA S.A., on the basis of "SMART-NET", Application No. 2.113.255,
filed on November 7, 1997, to cover all services in International Class
38; b) STARTEL S.A., on the basis of "STARTEL", Registration No.
1.574.537, granted on September 7, 1995, covering all goods in
International Class 9, and on the basis of their corporate name
STARTEL; and c) DATCO S.A., on the basis of "SMARTTIME", Registration
No. 1.608.708, granted on July 29, 1996 to cover all goods in
International Class 9.
2. Trademark application for "SMARTEL": Application No. 2.196.693,
filed on January 8, 1999, to cover all services in International Class
38. This application
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encountered oppositions by: a) TELEFONICA DE ARGENTINA S.A., on the
basis of "SMART-NET", Application No. 2.113.255, filed on November 7,
1997 to cover all services in International Class 38; and b) STARTEL
S.A., on the basis of "STARTEL S.A. SERVICIOS ARGENTINOS DE
TELECOMUNICACIONES", Registration No. 1.574.520, granted on September
7, 1995 covering all services in International Class 38, and on the
basis of their corporate name STARTEL.
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SCHEDULE 3.8
CONTRACTS
VELOCOM
1. Equity Subscription Agreement dated as of June 30, 1998 between the
Company, Telecom Partners, Centennial Fund V, Centennial Entrepreneurs
Fund, Centennial Holdings I, IAI World Fund, L.L.C., Eagle Ventures,
Xxxx X. Xxxxxx, Xxxxxx XxXxxxxx and Xxx Xxxxx, as amended by the First
Amendment to the Seed Round Agreement dated January 6, 1999, and the
Second Amendment to the Seed Round Agreement dated May 21, 1999.
2. Letter Agreement dated as of December 4, 1998 between the Company,
Telecom, Centennial, Crescendo World Fund, Eagle Ventures, Xxxx X.
Xxxxxx, Xxxxxx XxXxxxxx, Xxx Xxxxx, Xxxxx X. Xxxxxxx and Xxxx Xxxxxx.
3. Irrevocable Equity Contribution Agreement dated December 7, 1998 by
and among the Company, Telecom, Crescendo World Fund and Centennial.
4. Security Agreement dated December 8, 1998 by and among Telecom,
Centennial Fund V and Crescendo World Fund.
5. Letter Agreement dated December 8, 1998 by and among Telecom,
Centennial Fund V and Crescendo World Fund.
6. Control Agreement dated December 8, 1998 by and among Crescendo
World Fund, Centennial Fund V, Telecom, BankBoston, N.A. and Boston
1784 Funds.
7. Equity Subscription Agreements between the Company and each of
Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx, R. Xxxxxx House, REINCO Corp., Xxxxxxx
X. Xxxxx, C. Xxxxx Xxxxx, Xxxxxxx Xxxxxxxxxx, North River Ventures,
Inc. Pension Plan, Xxxxxxx XxXxxxxxx, Xxxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxx
Xxxxx, Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxx.
8. Joinder Agreements between the Company and each of R. Xxxxxx House,
REINCO Corp., Xxxxxxx Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxxx Xxxx, Xxxx
Xxxxxxx and Xxxxx Xxxxx.
9. Series A Preferred Stock Purchase Agreement dated as of January 26,
1999 between the Company, Telecom, Centennial and Crescendo.
10. Pro Rata Letter Agreements dated as of March 31, 1999 between the
Company and each of Telecom, Centennial, Crescendo, REINCO Corp., C.
Xxxxx Xxxxx, R. Xxxxxx House, Xxxxxxx Xxxxxx, Xxxxx X. Xxxxxxx, Xxxxxx
XxXxxxxx, Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx.
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11. Second Irrevocable Equity Contribution Agreement dated as of April
16, 1999 between the Company, Telecom, Crescendo, Centennial, Xxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxxx XxXxxxxx, C. Xxxxx
Xxxxx, R. Xxxxxx House and Xxxxxxx Xxxxxx.
12. Second Series A Preferred Stock Purchase Agreement dated as of May
7, 1999 between the Company, Telecom, Crescendo, Centennial, Xxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxxx XxXxxxxx, C. Xxxxx
Xxxxx, R. Xxxxxx House and Xxxxxxx Xxxxxx.
13. Employment Letters between the Company and each of Xxxxx Xxxxxxx,
Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxx
Xxxxx, Xxxxxxxx Xxxxxxxx, R. Xxxxxx House, Xxxx Xxxxx, Xxxxxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxx, Diego Xxxxxxxxx, Xxxxxxxxx
("Xxxxxx") Xxxxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxxxx, Xxxxxxx Xxxxxxxxx,
Xxxx Xxxxx, Xxxxx Xxxxxx, and Xxxxx Xxxxxx.
14. Stock Option Agreements between the Company and each of Xxxxx
Xxxxxxx (10/1/98), Xxxxx Xxxxxxx (10/1/98), Xxxxx Xxxxxxx (5/21/99),
Xxxxxxx Xxxxxx (10/1/98), Xxxxxxx Xxxxxx (5/21/99), Xxxxxxxx Xxxx
(4/12/99), Xxxxxxxx Xxxx (5/21/99), Xxxxxxxx Xxxx (5/21/99), Xxxxx
Xxxxx (7/12/99); Xxxxx Xxxxx (7/12/99), Xxxx Xxxxx (12/7/98), Xxxx
Xxxxx (5/21/99), Xxxx Xxxxx (5/21/99), Xxxxxxx Xxxxx (7/16/99), Xxxxxxx
Xxxxx (7/16/99), Xxxx Xxxxxx (12/7/98), Xxxx Xxxxxx (5/21/99), Xxxx
Xxxxxx (5/21/99), R. Xxxxxx House (1/4/99), R. Xxxxxx House (5/21/99),
R. Xxxxxx House (5/21/99), Xxxxxxx Xxxxxxx (3/15/99), Xxxxxxx Xxxxxxx
(5/21/99), Xxxxx Xxxxxxx (6/7/99), Xxxxxxxx Xxxxxxxx (4/1/99), Xxxxx
Xxxxxx (10/5/98), Xxxxx Xxxxxx (12/7/98), Xxxxx Xxxxxx (5/21/99), Xxxxx
Xxxxx (5/21/99), Xxxx Xxxxx (3/8/99), Xxxx Xxxxx (5/21/99), Xxxx
Xxxxxxx (5/3/99), Xxxx Xxxxxxx (5/21/99), Xxxx Xxxxxxx (5/21/99),
Xxxxxxx Xxxxxxxxx (7/11/99), Xxxxx Xxxxxx (6/1/99), Xxxxx Xxxxxx
(6/1/99), Xxxx Xxxxxx (9/17/98), Xxxx Xxxxxx (5/21/99), Xxxxxxx
Xxxxxxxxx (6/18/99), Xxxxx Xxxxxxxxx (8/1/99), Xxxxxxx Xxxxxx (8/1/99),
Xxxxx Xxxxxxxx (10/1/99), Xxxxx Xxxxxxxx (10/1/99), Xxxx Xxxxxxxx
Xxxxxx (10/1/99), Xxx XxXxxxxx (5/21/99), Xxx XxXxxxxx (9/17/98), Xxxxx
Xxxxxxxx (5/21/99), Xxxxx Xxxxxx (7/16/99).
15. Engagement Letter dated March 11, 1999 by and between the Company
and Xxxxxx Brothers.
16. Engagement Letter dated March 15, 1999 by and between the Company
and TD Securities (USA) Inc.
17. Engagement Letter dated March 15, 1999 by and between the Company
and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation.
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18. Engagement Letter dated July 12, 1999 by and between the Company
and Xxxxxx & Xxxxxxxxx LLC as amended.
19. Oral Agreement between the Company and Straight Marketing to
provide marketing and consulting services.
20. Multiparty Non-Disclosure Agreement, between Qualcomm Brasil, the
Company and Qualcomm, dated November 4, 1998.
21. Joint Bidding Agreement, between the Company and Qualcomm Brasil,
dated November 9, 1998.
22. Memorandum of Understanding between the Company, Xxxx Canada,
Taquari, and Qualcomm Brasil, dated December 8, 1998.
23. Option Agreement between the Company, Xxxx Canada, Taquari, SLI,
BID S.A. and Qualcomm Brasil, dated January 15, 1999.
24. Multiparty Non-Disclosure Agreement, between Qualcomm Brasil, Xxxx
Canada, the Company, Taquari, SLI and BID S.A., dated January 20, 1999.
25. Memorandum of Understanding, between the Company, Xxxx Canada, SLI
and Qualcomm Brasil, dated March 15, 1999.
26. Letter of Agreement, between the Company, Xxxx Canada, SLI and
Qualcomm Brasil, dated May 4, 1999.
27. Second Letter of Agreement, between the Company, Xxxx Canada, SLI
and Qualcomm Brasil, dated May 26, 1999.
28. Purchase Agreement by and among Formus, Formus International, Inc.
and the Company dated as of August 20, 1999.
29. Subscription Agreement between Formus and the Company dated August
20, 1999.
30. Consolidation Agreement by and among SLI, Sociedad Latinoamericana
S.A., Brasil Holdings and the Company dated as of August 20, 1999.
31. Subscription Agreement between SLI and the Company dated August 20,
1999.
32. Purchase Agreement between Taquari and the Company dated as of
August 20, 1999.
33. Subscription Agreement between Taquari and the Company dated August
20, 1999.
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34. Amended and Restated Investors Agreement dated as of September 27,
1999 between the Company and its principal stockholders.
35. Purchase Agreement between the Company and PCN do Brasil S.A. dated
as of September 27, 1999.
36. Purchase Agreement between the Company and Inepar S.A. dated as of
September 27, 1999.
37. Pledge Agreement dated September 27, 1999 between the Company and
PCN do Brasil S.A.
38. Escrow Agreement dated September 27, 1999 between the Company, PCN
do Brasil S.A. and Bank Boston S.A.
39. Letter Agreement dated August 23, 1999 between the Company and SLI
in respect of the bid for Region II in Brazil.
40. Joint Bidding Agreement dated August 25, 1999 between the Company,
Xxxx Canada and Qualcomm in respect of the bid for Region II in Brazil.
41. Consent and Agreement dated September 22, 1999 between the Company
and its affiliates, SLI and its affiliates, Qualcomm and its
affiliates, Taquari and its affiliates and Xxxx Canada and its
affiliates.
42. Equity Investment Agreement dated October 21, 1999 between the
Company and certain of its stockholders.
43. Affiliate Agreement made as of November 9, 1998 between Telecom
Management II LLC and the Company (Lease Agreement relating to the
Company's premises at 0000 Xxxxx Xxxxxxxx Xxxxx Circle).
44. Capital Contribution Agreement executed by the Company and Brasil
Holdings dated December 13, 1999 in favor of ABN Amro as agent for
certain lenders.
45. Additional Capital Contribution Agreement executed by the Company
and Brasil Holdings dated December 13, 1999 in favor of ABN Amro as
agent for certain lenders.
46. Two Support Obligations dated December 13, 1999, to be executed by
the Company in respect of the Capital Contribution Agreement and
Additional Capital Contribution Agreement referred to in items numbered
45 and 46 above.
47. Side Letter dated December 13, 1999 to be executed by the Company
VeloCom Brasil and Brasil Holdings in respect of the Additional Capital
Contribution Agreement referred to in item 46 above.
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48. Commitment Letter dated as of August 10, 1999 from Nortel Networks
Corporation, Northern Telecom do Brasil Comercio e Servicos Ltda. and
Northern Telecom do Brasil Industria e Comercio Ltda. to Xxxx Canada
International (Brazil Telecom 1) Limited, SLI, Qualcomm Brasil,
Taquari, VeloCom Brasil, Vesper, Xxxx Canada, VeloCom, Qualcomm, Rio
Purus Participacoes Ltda., CFL Participacoes Ltda., Xxxxxx Xxxxxxxx and
Xxxxxxxxx Xxxxxxxx.
49. Letter Agreement dated August 10, 1999 by and among Nortel Networks
Corporation, Northern Telecom do Brasil Comercio e Servicos Ltda. and
Northern Telecom do Brasil Industria e Comercio Ltda., Xxxx Canada
International (Brazil Telecom 1) Limited, SLI, Qualcomm Brasil,
Taquari, VeloCom Brasil, Vesper, Xxxx Canada, VeloCom, Qualcomm, Rio
Purus Participacoes Ltda., CFL Participacoes Ltda., Xxxxxx Xxxxxxxx and
Xxxxxxxxx Xxxxxxxx.
50. Technical Assistance Agreement between the Company and Formus
International dated September 27, 1999.
51. Management Rights Agreement dated October 28, 1999 between the
Company and Crescendo III.
52. Assignment and Assumption Agreement between Formus International
Inc. and the Company dated September 27, 1999 in connection with a
certain Uruguay LMDS development project.
53. Consulting Agreement dated October 22, 1999, by and between
Xxxxxxxxx Xxxxx and the Company.
54. Loan Agreement dated as of November 19, 1999 among the Company, as
borrower, and Telecom Partners II, L.P., Crescendo World Fund, L.L.C.,
Eagle Ventures WF, LLC, Crescendo III, L.P., Crescendo III, GbR,
Crescendo III Executive Fund, L.P., Centennial Fund V., L.P.,
Centennial Holdings I, LLC, SLI Wireless S.A., Formus Communications -
Latin America Holdings, LLC.
55. Term sheet between BankAmerica International Investment Corporation
and the Company dated December 1, 1999.
56. Purchase Agreement dated December 6, 1999 between the Company and
the investors listed therein.
57. Second Amended and Restated Investors Agreement between the Company
and the stockholders listed therein.
58. Memorandum of Understanding between the Company, Ejemil S.A.,
Odecar S.A., Xx. Xxxxx Xxxxxxx Xxxxxxx and El Pais S.A. dated November
29, 1999.
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59. Letter of Intent between the Company, Xxxx Canada International,
BRHS S.A. and Xxxxxxx Xxxx Xxxxxxx xx Xxxxxx dated December 21, 1999.
60. Escrow Agreement between the Company, Xxxx Canada International,
BRHS S.A. and Xxxxxxx Xxxx Xxxxxxx xx Xxxxxx and State Street Bank and
Trust Company dated December 21, 1999.
61. Amended and Restated Shareholders Agreement (Vesper Holding) dated
as of December 16, 1999 between the Company, Vesper Holding, Brasil
Holding, Xxxx Canada International and Qualcomm, and their affiliates.
62. Amended and Restated Shareholders Agreement (Vesper Sao Paulo
Holding) dated as of December 23, 1999 between the Company, Brasil
Holdings, Vesper Sao Paulo Holding, Xxxx Canada International and
Qualcomm, and their affiliates.
63. Shareholder Pledge Agreement in respect of the Nortel/Ericsson
Financing dated December 16, 0000 xxxxxxx Xxxx Xxxxxx International,
the Company, Qualcomm, BCI Brazil, Brasil Holdings, Qualcomm Brasil and
the Collateral Agent.
64. Sponsor Support Agreement (Lucent) dated December 27, 0000 xxxxxxx
Xxxxxx, Xxxx Xxxxxx International, Qualcomm, Brasil Holdings, the
Company and their affiliates.
65. Substitute Financing Letter dated December 27, 0000, xxxxxxx Xxxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxx, Xxxx Xxxxxx International, Qualcomm, Brasil
Holdings, the Company and their affiliates.
66. Marketing Assistance Letter dated December 27, 0000 xxxxxxx Xxxxxx,
Xxxx Xxxxxx International, Qualcomm, Brasil Holdings, Vesper Sao Paulo
Holding, the Company and their Affiliates.
67. Memorandum of Understanding dated December 21, 1999 between the
Company and Xxxxxxxx Xxxxxxxxxxxx.
VELOCOM BRASIL
1. Commitment Letter dated as of August 10, 1999 from Nortel Networks
Corporation, Northern Telecom do Brasil Comercio e Servicos Ltda. and
Northern Telecom do Brasil Industria e Comercio Ltda. to Xxxx Canada
International (Brazil Telecom 1) Limited, SLI, Qualcomm Brasil,
Taquari, VeloCom Brasil, Vesper, Xxxx Canada, VeloCom, Qualcomm, Rio
Purus Participacoes Ltda., CFL Participacoes Ltda., Xxxxxx Xxxxxxxx and
Xxxxxxxxx Xxxxxxxx.
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2. Letter Agreement dated August 10, 1999 by and among Nortel Networks
Corporation, Northern Telecom do Brasil Comercio e Servicos Ltda. and
Northern Telecom do Brasil Industria e Comercio Ltda., Xxxx Canada
International (Brazil Telecom 1) Limited, SLI, Qualcomm Brasil,
Taquari, VeloCom Brasil, Vesper, Xxxx Canada, VeloCom, Qualcomm, Rio
Purus Participacoes Ltda., CFL Participacoes Ltda., Xxxxxx Xxxxxxxx and
Xxxxxxxxx Xxxxxxxx.
3. Shareholders Agreement between Taquari, SLI, Qualcomm Brasil, Xxxx
Canada, VeloCom Brasil and Vesper, dated February 4, 1999.
4. Option Agreement between Xxxx Canada and VeloCom Brasil, dated
February 4, 1999.
5. Agreement between VeloCom Brasil and Qualcomm Brasil, dated February
4, 1999, concerning Option Agreement.
6. Shareholders Agreement between Taquari, SLI, Qualcomm Brasil, Xxxx
Canada, VeloCom Brasil and Vesper Holding, dated February 4, 1999.
BRASIL HOLDINGS
1. Shareholders Agreement between SLI, Qualcomm Brasil, Xxxx Canada
International (MegaTel) Limited, Brasil Holdings and Vesper Sao Paulo
Holding dated as of July 30, 1999.
2. Option Agreement dated as of July 30, 1999 by and between Xxxx
Canada International (MegaTel) Limited and Brasil Holdings.
3. Capital Contribution Agreement to be executed by Brasil Holdings
dated December 13, 1999 in favor of ABN Amro as agent for certain
lenders.
4. Additional Capital Contribution Agreement to be executed by Brasil
Holdings dated December 13, 1999 in favor of ABN Amro as agent for
certain lenders.
5. Side Letter dated December 13, 1999 to be executed by the Company
and Brasil Holding in respect of the Additional Capital Contribution
referred to above.
6. Amended and Restated Shareholders Agreement (Vesper Holding) dated
as of December 16, 1999 between the Company, Vesper Holding, Brasil
Holdings, Xxxx Canada International and Qualcomm, and their affiliates.
7. Amended and Restated Shareholders Agreement (Vesper Sao Paulo
Holding) dated as of December 23, 1999 between the Company, Brasil
Holdings,
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000
Xxxxxx Xxx Xxxxx Xxxxxxx, Xxxx Xxxxxx International, Qualcomm and their
affiliates.
8. Shareholder Pledge Agreement in respect of the Nortel/Ericsson
Financing dated December 16, 0000 xxxxxxx Xxxx Xxxxxx International,
the Company, Qualcomm, BCI Brasil, Brasil Holdings, Qualcomm Brasil and
the Collateral Agent.
9. Substitute Financing Side Letter, dated December 27, 1999, among
Qualcomm, the Company, BCI, the Lenders and the Agents.
VESPER HOLDING
1. Shareholders Agreement between Taquari, SLI, Qualcomm Brasil, Xxxx
Canada, VeloCom Brasil and Vesper Holding, dated February 4, 1999.
2. Common Terms Agreement to be executed between Vesper, Vesper
Holding, ABN Amro and the lenders thereto dated December 13, 1999.
3. Amended and Restated Shareholders Agreement dated as of December 16,
1999 between the Company, Vesper Holding, Xxxx Canada, Brasil Holding,
Qualcomm, and their affiliates.
4. Capital Contribution Agreement dated December 13, 1999 between
Vesper Holding and the Collateral Agent (Nortel/Ericsson financing).
5. Stock Pledge Agreement in respect of stock of Vesper dated December
16, 1999 between Vesper Holding, and the Collateral Agent and related
powers of attorney.
6. Guaranty executed by Vesper Holding in respect of Vesper dated
December 16, 1999.
7. Shareholder Pledge Agreement and related filings dated December 16,
1999 executed by Vesper Holding.
VESPER SAO PAULO HOLDING
1. Shareholders Agreement between SLI, Qualcomm Brasil, Xxxx Canada
International (MegaTel) Limited, Brasil Holdings and Vesper Sao Paulo
Holding dated as of July 30, 1999.
2. Amended and Restated Shareholders Agreement between Qualcomm Brasil,
Xxxx Canada, Brasil Holdings, the Company, Vesper Sao Paulo Holding and
their affiliates dated as of December 23, 1999.
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3. Sponsor Support Agreement dated December 27, 1999 in respect of
Lucent financing.
4. Lucent Credit Agreement dated December 27, 1999 between Vesper Sao
Paulo Holding, Vesper Sao Paulo, and Lucent.
5. Common Agreement dated December 27, 1999 between Vesper Sao Paulo
Holding, Vesper Sao Paulo, Lucent and the Collateral Agent.
6. Pledge and Related Security Agreements in respect of the Lucent
financing referred to above.
VESPER
1. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Local, Que Entre Si Celebram A Agencia Nacional de Telecomunicacoes -
ANATEL e Canbra Telefonica S.A.
2. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Longa Distancia Nacional de Ambito Intra-Regional, Que Entre Si
Celebram A Agencia Nacional de Telecomunicacoes - ANATEL e Canbra
Telefonica S.A.
3. The following described lease agreements:
(i) LOCATION: Rooms 801, 802, 803 and 806 of the 8th
floor with right to use 06 (six) vacancies at the
garage - numbers 56, 57, 58, 59, 60 and 64 which
correspond to the floors mentioned, at the building
located at 3131, President Xxxxxx Avenue, Cidade
Nova, Rio de Janeiro.
TERM: 60 (sixty) months with right to renew for an
additional 60 (sixty) months.
AMOUNT: The monthly rent is R$42.787,00 (forty-two
thousand and seven hundred and eighty seven reais).
RENEWAL: May 6, 2004.
(ii) LOCATION: 24th and 25th floors of the building
located at 000, Xxxxx Avenue, Rio de Janeiro with
right to use 36 (thirty-six) vacancies at the garage.
TERM: 60 (sixty) months with right to renew for an
additional 60 (sixty) months.
AMOUNT: The monthly rent is R$66.000,00 (sixty-six
thousand reais).
RENEWAL: March 10, 2004.
(iii) LOCATION: 21st floor of the building located at 000,
Xxxxx Avenue, Rio de Janeiro with right to use 18
(eighteen) vacancies at the garage.
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TERM: 12 (twelve) months with right to renew for an
additional 12 (twelve) months.
AMOUNT: The monthly rent is R$33.000,00 (thirty-three
thousand reais).
RENEWAL: June 6, 2000.
(iv) LOCATION: 22nd floor of the building located at 000,
Xxxxx Avenue, Rio de Janeiro with right to use 18
(eighteen) vacancies at the garage.
TERM: 12 (twelve) months with right to renew for an
additional 48 (forty-eight) months.
AMOUNT: The monthly rent is R$33.000,00 (thirty-three
thousand reais).
RENEWAL: June 20, 2000.
(v) LOCATION: 23rd floor of the building located at 000,
Xxxxx Avenue, Rio de Janeiro with right to use 18
(eighteen) vacancies at the garage.
TERM: 60 (sixty) months with right to renew for an
additional 60 (sixty) months.
AMOUNT: The monthly rent is R$33.000,00 (thirty-three
thousand reais).
RENEWAL: May 13, 2004.
(vi) LOCATION: 00, Xxx Xxxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxx, Espirito Santo.
TERM: 60 (sixty) months with right to renew for an
additional 60 (sixty) months.
AMOUNT: The monthly rent is R$18.000,00 (eighteen
thousand reais).
RENEWAL: June 10, 2004.
4. Technical Services Agreement between Xxxx Canada and Vesper dated
May 27, 1999.
5. Secondment Agreement dated as of May 27, 1999 between Vesper and
Xxxx Canada.
6. Technical Services Agreement dated as of May 27, 1999 between Vesper
and Xxxx Canada.
7. Contrato de Interconexao de Redes de Telecomunicacoes Entre a
Embratel (Empresa Brasileira de Telecomunicacoes S.A.) x x Xxxxxx.
8. Contrato de Interconexao de Redes de Telecomunicacoes Entre a Xxxxxx
x x Concessionarios do STFC - Regiao 1 (Tele Norte Leste).
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9. Program Agreement established between the State of Rio de Janeiro
and Vesper dated July 13, 1999.
10. Memorandum of Understanding between Vesper and BCP S.A. dated May
21, 1999.
11. Memorandum of Understanding between CGI Telecom International Inc.
and Vesper, dated as of June 23, 1999, and respective amendment dated
October 15, 1999.
12. Deed of a promise of purchase and sale of land in the city of Macae
entered between Vesper and Rocinio Xxxxxxxx Xxxxxxx dated July 30,
1999.
13. Deed of a promise of purchase and sale of a building in the city of
Belem entered between Vesper and Xxxxxx Xxxx Xxxxxxxx Xxxxxxxx and
Xxxxxxx Xxxxxxxx Neto dated July 19, 1999.
14. Equipment Supply Agreement between Ericsson Inc. and Vesper dated
August 4, 1999.
15. Commitment Letter dated as of August 10, 1999 from Nortel Networks
Corporation, Northern Telecom do Brasil Comercio e Servicos Ltda. and
Northern Telecom do Brasil Industria e Comercio Ltda. to Xxxx Canada
International (Brazil Telecom 1) Limited, SLI, Qualcomm Brasil,
Taquari, VeloCom Brasil, Vesper, Xxxx Canada, VeloCom, Qualcomm, Rio
Purus Participacoes Ltda., CFL Participacoes Ltda., Samuel Liberman and
Guillermo Liberman.
16. Letter Agreement dated August 10, 1999 by and among Nortel Networks
Corporation, Northern Telecom do Brasil Comercio e Servicos Ltda. and
Northern Telecom do Brasil Industria e Comercio Ltda., Bell Canada
International (Brazil Telecom 1) Limited, SLI, Qualcomm Brasil,
Taquari, VeloCom Brasil, Vesper, Bell Canada International Inc.,
Velocom, Qualcomm, Rio Purus Participacoes Ltda., CFL Participacoes
Ltda., Samuel Liberman and Guillermo Liberman.
17. Summary of Indicative Terms and Conditions dated August 4, 1999
proposed by Nortel Networks Corporation.
18. Contrato de Locacao de Area e Compartilhamento de Infra-Estructura
entre a Empresa Brasileira de Telecomunicacoes S.A. -EMBRATEL e a
Vesper
19. Contrato de Locacao de Sistema de Telecomunicacoes entre a Light
Telecom Ltda. e a Vesper
20. Commitment Letter between Ericsson, Qualcomm and Vesper dated
August 4, 1999.
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21. Contract for Services between Vesper and Netstream Telecom Ltda.
dated as of August 15, 1999.
22. Instrument for the Construction of Call Center between Vesper and
Engineering S.A. Servicios Tecnicos dated August 27, 1999.
23. Interconnection Agreement between Vesper and Intelig
Telecomunicaciones.
24. Senior Secured Note Purchase Agreements each dated December 13,
1999 between Vesper and Nortel Networks Corporation, Qualcomm/Ericsson,
Harris Corporation and ABN Amro, as agent and related loan
documentation.
25. Common Terms Agreement dated December 13, 1999 between Vesper,
Vesper Holding, ABN Amro and the lenders thereto dated December 1999.
26. Technical Assistance Agreement between VeloCom and Vesper to be
effective as of November 30, 1999.
27. Equipment Supply and Services Agreement dated July 9, 1999 between
Vesper, Nortel Networks Corporation, Northern Telecom do Brasil
Industria e Comerico Ltda. and Northern Telecom do Brasil Comerico e
Servicios Ltda.
28. License for Packet Switched Network Services issued by Anatel on
September 23, 1999.
29. License for Circuit Switched Network Services issued by Anatel on
September 23, 1999.
30. License for Dedicated Line Services issued by Anatel on September
23, 1999.
31. License for Special Services of Audio and Video Signal issued by
Anatel on September 23, 1999.
32. License for Retransmission issued by Anatel on September 23, 1999.
33. Fiber Contract between Vesper and Energedes dated August 12, 1999.
34. Switch Site Lease Contract between Vesper and Embratel.
35. Fiber Contract between Vesper and Metrored dated September 3, 1999.
36. Colocation Agreement between Vesper and North Brazil Telecom dated
October 1999.
37. Memorandum of Understanding between Vesper and NQT for fiber.
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38. Memorandum of Understanding between Vesper and Barramas for dark
fiber and ducts.
39. Memorandum of Understanding between Vesper and Escelsa for fiber.
40. Satellite Agreement between Vesper and Embratel dated September 3,
1999.
41. Mobile Interconnection Agreements with Telefonica, ATL, TIW, NBT,
Maxitel, BSE and TIM.
42. Local Backbone Agreement between Vesper and Escelsa dated October
20, 1999.
43. Local and Long Distance Backbone Agreements between Vesper and NQT
dated October 20, 1999.
44. Equipment Supply and Services Agreement between Vesper and NEC do
Brasil for Macapu and Boa Vista.
45. Equipment Supply and Services Agreement with Priority Call
Management for Prepaid and Voice Mail Solution.
46. CPE Equipment Supply Letter of Intent with Motorola.
47. Consulting Services Agreement with Spectralliance LLC.
48. CPE Equipment Supply Letter of Intent with LG Information
Communications.
49. Fiber Lease Contract with NQT.
50. Capital Contribution Agreement dated December 13, 1999 between
Vesper Holdings, Vesper, Bell Canada, Qualcomm, Brasil Holdings, and
the Collateral Agent.
51. Global Notes executed by Vesper in favor of Nortel,
Qualcomm/Ericsson and Harris Corporation dated December 13, 1999.
52. Exchange Debt Agreement between Vesper, Nortel, Qualcomm, Ericsson
and Harris Corporation dated December 16, 1999.
53. Equipment Pledge Agreement dated December 16, 1999 executed by
Vesper in favor of the Collateral Agent and various related powers of
attorney.
54. Receivables Pledge Agreement dated December 16, 1999 between Vesper
and the Collateral Agent and related powers of attorney.
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55. Eight Deposit Account Agreements dated December 16, 1999 executed
by Vesper in favor of the Collateral Agent.
56. Contracts Pledge Agreement dated December 16, 1999 executed by
Vesper in favor of the Collateral Agent and related power of attorney.
57. Cash Collateral Pledge Agreement dated December 16, 1999 between
Vesper and the Collateral Agent.
58. Proceeds Account Pledge Agreement dated December 16, 1999 between
Vesper and the Collateral Agent.
59. Mortgages executed by Vesper in connection with Nortel/Qualcomm/
Ericsson/Harris Corporation financing.
60. Fee letters executed by Vesper in connection with financings dated
December 13, 1999.
61. Paying Agency Agreement dated December 13, 1999 between Vesper and
Chase Manhattan Bank.
62. Equipment Supply Agreement dated December 6, 1999 between Vesper
and Motorola do Brasil.
63. Financing Commitment letter between Vesper and Motorola do Brasil.
MEGATEL
1. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Local, Que Entre Si Celebram A Agencia Nacional de Telecomunicacoes -
ANATEL e MegaTel.
2. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Longa Distancia Nacional de Ambito Intra-Regional, Que Entre Si
Celebram A Agencia Nacional de Telecomunicacoes - ANATEL e MegaTel.
3. The following described lease agreements:
(i) LOCATION: 11th floor, parts A and B of the building
Villa-Lobos, with right to use 36 (thirty-six)
vacancies at the garage of the mentioned building
which is located at Nacoes Unidas Avenue number
4.777, at Sao Paulo, State of Sao Paulo, Brazil.
TERM: 60 (sixty) months with right to renew for an
additional 60 (sixty) months.
AMOUNT: R$37.159,00
RENEWAL: 06/30/2.004
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(ii) LOCATION: 10th floor, part B of the building
mentioned above with right to have 18 (eighteen)
vacancies at the garage of the same building, located
at the same address.
TERM: 60 (sixty) months with right to renew for an
additional 60 (sixty) months.
AMOUNT: R$18.579,00
RENEWAL: 06/30/2.004
(iii) LOCATION: 12th floor, parts A and B of the building
mentioned above with right to have 36 (thirty-six)
vacancies at the garage of the same building, located
at the same address.
TERM: 60 (sixty) months with right to renew for an
additional 60 (sixty) months.
AMOUNT: R$92.897,50
RENEWAL: 06/30/2.004
4. Know-how Transfer and Technical Services Agreement between Bell
Canada and MegaTel dated as of July 30, 1999.
5. Agreement between IBM Brasil Leasing Arrendamento Mercantil S.A. and
MegaTel dated July 21, 1999.
6. Letter of Understanding dated as of July 30, 1999 between MegaTel
and Bell Canada.
7. Secondment Agreement dated as of July 30, 1999 between Bell Canada
and MegaTel.
8. Technical Services Agreement dated as of July 30, 1999 between Bell
Canada and MegaTel.
9. Equipment Supply Agreement dated September 27, 1999 between MegaTel
and Lucent.
10. Commitment Letter between Lucent Technologies Network Systems do
Brasil Ltda. and MegaTel dated September 27, 1999.
11. Interconnection Agreement between MegaTel and Bonari dated August
15, 1999.
12. Interconnection Agreement between MegaTel and Embratel dated August
10, 1999.
13. Agreement between MegaTel and Netstream S.A. regarding use of
fiber.
14. License for Packet Switched Network Services issued by Anatel on
September 23, 1999.
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15. License for Circuit Switched Network Services issued by Anatel on
September 23, 1999.
16. License for Dedicated Line Services issued by Anatel on September
23, 1999.
17. License for Special Services of Audio and Video Signal issued by
Anatel on September 23, 1999.
18. License for Retransmission issued by Anatel on September 23, 1999.
19. Interconnection Agreement between MegaTel and Telesp dated August
20, 1999.
20. Fiber Agreement between MegaTel and Eletropaulo.
21. Agreement between MegaTel and SAP.
22. Contrato de Arrendamento Mercantil com a IBM Brasil Leasing
Arrendamento Mercantil S.A. para o arrendamento mercantil de
equipamentos de informatica e telecomunicacoes, dentre outros com IBM
Brasil - Industria, Maquinas e Servicos Ltda. e Northern Telecom do
Brasil Comercio e Servicos Ltda. ("leasing agreement with IBL for IT
and Telecom/call center equipment, includes IBM and other IT vendors as
well as Nortel").
23. Contrato de fornecimento de equipamentos e servicos de
telecomunicacoes com a Lucent Technologies Network Systems do Brasil
Ltda. e outros. ("supply agreement with Lucent Technologies").
24. Compromisso de compra e venda dos imoveis ("switch buildings
purchase commitments" - the purchase agreements will b probably signed
by a finance company which will lease the buildings to us for a 15 year
term, still under negotiation) 1. Lapa -Rua Heitor Penteado, n(0)
2.200, Perdizes - Sao Paulo; 2. Jabaquara - Rua Mauro, n(0)s 382 e 384,
Saude - Sao Paulo; 3. Osasco - Rua Paulo Licio Rizzo, n(0)s 66 e 96,
Vila Osasco - Osasco; 4. Paraiso - Rua Conselheiro Ramalho, n(0) s 778
e 768 - Bela Vista - Sao Paulo; 5. Sao Bernardo -Avenida Piraporinha ,
n(0) 125, Piraporinha - Sao Bernardo do Campo; 6. Campinas - Marechal
Rondon.
25. Licenca para transporte de dados - ANATEL ("data transport license"
- under analysis by regulatory regarding all possible applications)
26. Credit Agreement dated December 27, 1999 between Megatel, Vesper
Sao Paulo Cayman, the lenders thereto and the administrative agent.
27. Common Agreement dated December 27, 1999 between Megatel, Vesper
Sao Paulo Holding, Lucent and the Collateral Agent.
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28. Pledge and Security Agreements and other collateral documents
executed in connection with the Lucent financing referred to above.
29. Equipment Supply Agreement dated December 1999 between Megatel and
Motorola do Brasil.
30. Interconnection Agreement, dated August 5, 1999, between Intelig
(Bonari Holding) and Megatel.
31. Interconnection Agreement, dated August 20, 1999, between Embratel
and Megatel.
32. Interconnection Agreement, dated August 20, 1999, between
Telefonica and Megatel.
33. Interconnection Agreement, dated August 20, 1999, between Compania
Telefonica da Borda do Campo and Megatel.
34. Interconnection Agreement, dated November 16, 1999, between BCP and
Megatel.
35. Interconnection Agreement, dated November 26, 1999, between Tess
and Megatel.
36. Lease Agreement, dated August 20, 1999, between Megatel and IBM.
37. Lease Agreement, dated August 20, 1999, between Megatel and IBM.
38. Lease Agreement, dated August 20, 1999, between Megatel and IBM.
39. Know-How Transfer and Technical Services Agreement, dated December
27, 1999, between BCI and Megatel.
40. Credit Agreement dated as of December 27, 1999, among Vesper Sao
Paulo Holdings, Megatel, Vesper Cayman Sao Paulo, the Lenders
thereunder and Societe Generale, New York Branch, as Administrative
Agent.
41. Paying Agency Agreement dated as of December 27, 1999, among the
Japanese Paying Agent, Megatel and Vesper Cayman Sao Paulo.
42. Share Pledge Agreement, dated December 27, 1999, by and among
Vesper Holdings, Qualcomm do Brasil S.A., Vesper Cayman Sao Paulo, and
the Lenders.
43. Secondment Agreement, dated December 27, 1999 between BCI and
Megatel.
44. Substitute Financing Side Letter, dated December 27, 1999, among
Qualcomm, the Company, BCI, the Lenders and the Agents.
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45. Technical Services Agreement dated July 30, 1999, between BCI and
Vesper, as amended by Amendment No. 1, dated December 23, 1999, between
the same parties.
46. Telecom and Eletropaulo Rental Agreement, dated October 22, 1999,
by and among Megatel, Eletropaulo Telecomunicacoes Ltda. and
Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A.
47. Loan Guarantee, dated as of December 27, 1999, made by Megatel in
favor of the Collateral Agent.
48. Fee letter dated December 27, 1999, between Megatel and Lucent.
TMC
1. Limited Liability Company Agreement: dated as of February 11, 1999,
among SLI, PCN, Argentina LLC, and TMC.
2. Agreement for Lease of Telecommunications Network dated as of
January 11, 1999, between Smartel and TMC.
3. Agreement for Lease of Telecommunications Network dated as of
January 11, 1999 between Formus Argentina and TMC.
4. Agreement for Lease of Telecommunications Network dated as of
January 11, 1999 between Telelatina and TMC.
5. Management Agreement dated as of February 11, 1999 between Smartel
and TMC.
6. Management Agreement dated as of February 11, 1999 between
Telelatina and TMC.
7. Management Agreement dated as of February 11, 1999 between Formus
Argentina and TMC.
8. Sales And Assignment Agreement dated as of February 11, 1999 between
Telelatina and TMC.
9. Trial Agreement, effective as of August 10, 1998 among Lucent
Technologies World Services Inc., Lucent Technologies S.A Argentina and
Telelatina. Assigned in favor of TMC on March 11, 1999.
10. Purchase and Sale Agreement (Products, Software And Services),
among Lucent Technologies World Services Inc., Lucent Technologies S.A
Argentina and Telelatina executed on February 20, 1999, February 23,
1999 and February 26, 1999, respectively. Assigned in favor of TMC on
March 11, 1999.
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11. Lease Agreement with Option to Purchase between Lucent Technologies
Sociedad Anonima and TMC, dated as of June 25, 1999.
12. Lease Agreement with Option to Purchase between Lucent Technologies
Sociedad Anonima and TMC, dated as of June 25, 1999.
13. Purchase Order between Lucent Technologies World Services Inc.,
Lucent Technologies S.A Argentina and TMC dated as of July 8, 1999.
14. Services Contract, dated February 25, 1999 between IMPSAT S.A and
TMC.
15. Services Contract, dated April 21,1999 between Codner & Co.
Personas y Organizaciones S.R.L and TMC.
16. Lease Contract, dated March 12, 1999 between Eduardo Manuel Stigol
(Lessor) and Rigoberto Almeida Costa (Lessee). Property Location: Godoy
Cruz 3046, Apartment 23 "Golf".
17. Lease Contract, dated March 17, 1999 between Jorge Eduardo Taquini
(Lessor) and TMC (Lessee). Property Location: Sinclair 3158, Apartment
9B.
18. Lease Contract, dated March 17, 1999 between Gerardo Adrian
Blachman (Lessor) and TMC (Lessee). Property Location: Mendoza 1925,
4th Floor.
19. Lease Contract, dated March 26, 1999 between Forobra S.A (Lessor)
and TMC (Lessee). Property Location: Av. San Martin 638/40.
20. Lease Contract, dated March 10, 1999 between Financiera Buenos
Aires S.A(Lessor) and TMC (Lessee). Property Location: Maipu 255, 19th
Floor, with three (3) fixed parking spaces.
21. Gratuitous Assignment Of Lease Contract, dated March 10, 1999 among
Telelatina (Assignor), TMC (Assignee) and Financiera Buenos Aires S.A
(Lessor). Property Location: Maipu 255, 20th Floor, three (3) fixed
parking spaces and space on the terrace for installation of
telecommunication equipment (as gratuitous commodatum).
22. Lease Contract, dated July 5, 1999 between Consorcio de
Propietarios de La Calle Ugarteche 2871/73/75/77 (Lessor) and TMC
(Lessee). Property Location: Ugarteche 2873; space on the terrace of
the building for the installation of telecommunication equipment.
23. Lease Contract, dated June 9, 1999 between Consorcio De
Propietarios Avenida De Los Incas numero 3310 esquina calle CONDE
numeros 1586 y 1594 Capital Federal (Lessor) and TMC (Lessee). Property
Location: Av. de los Incas
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187
3310; space on the terrace of the building for the installation of
telecommunication equipment.
24. Lease Contract, dated June 18, 1999 between COCABA S.R.L (Lessor)
and TMC (Lessee). Property Location: Arcos 3433; space on the terrace
of the building for the installation of telecommunication equipment.
25. Lease Contract, dated June 18, 1999 between Consorcio de
Propietarios de La Calle ARCOS 2419 (Lessor) and TMC (Lessee). Property
Location: Arcos 2419; space on the terrace of the building for the
installation of telecommunication equipment.
26. Lease Contract, dated June 25, 1999 between Consorcio de
Propietarios Del Edificio de La Calle Chile1342/44 (Lessor) and TMC
(Lessee). Property Location: Chile 1342/44; space on the terrace of the
building for the installation of telecommunication equipment.
27. Lease Contract, dated June 30, 1999 between Consorcio de
Propietarios de La Calle Honduras 5597 (Lessor) and TMC (Lessee).
Property Location: Honduras 5597; space on the terrace of the building
for the installation of telecommunication equipment.
28. Lease Contract, dated June 30, 1999 between Consorcio de
Propietrios de La Calle Medrano 1670 (Lessor) and TMC (Lessee).
Property Location: Medrano 1670; space on the terrace of the building
for the installation of telecommunication equipment.
29. Lease Contract, dated June 18, 1999 between Consorcio de
Propietarios Edificio Galeria Jardin (Lessor) and TMC (Lessee).
Property Location: Florida 537/71; space on the terrace of the building
for the installation of telecommunication equipment.
30. Electric Supply Contract, dated May 11, 1999 between Edesur S.A and
TMC.
31. Service Contract, dated May 17, 1999 between TMC and Tamabru S.A
32. Lease Contract, dated July 15, 1999 between Consorcio de
Propietarios Del Edificio Ubicado En La Calle Teniente General Juan D.
Peron 1457 (Lessor) and TMC, Sucursal Argentina (Lessee). Property
Location: Teniente General Juan D. Peron 1457, Buenos Aires, space on
the terrace of the building for the installation of telecommunication
equipment.
33. Lease Contract, dated July 8, 1999 between Demaria Construcciones
S.A. (Lessor) and TMC, Sucursal Argentina (Lessee); Property Location:
Demaria
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4721, Buenos Aires; space on the terrace of the building for the
installation of telecommunication equipment.
34. Service Order, subscribed between Metrored and TMC, dated as of
June 15, 1999.
35. Service Order, subscribed between Metrored and TMC, dated as of
June 22, 1999.
36. Purchase Order, subscribed by TMC to Idabour Construcciones, dated
as of June 15, 1999.
37. Subscription and Redemption of Mutual Funds, dated July 16, 1999
between Citibank N.A. and TMC.
38. Maintenance Service Contract, dated as of July 1,1999 between TMC
and Lucent Technologies S.A. Argentina.
39. Lease Contract, dated July 23, 1999 between Consorcio de
propietarios Ramon Freire 3005 (Lessor) and TMC, Sucursal Argentina
(Lessee); Property Location: Ramon Freire 3005, Buenos Aires; space on
the terrace of the building for the installation of telecommunication
equipment.
40. Lease Contract, dated July 25, 1999 between Consorcio de
propietarios Olleros 2344 (Lessor) and TMC, Sucursal Argentina
(Lessee); Property Location: Olleros 2344, Buenos Aires; space on the
terrace of the building for the installation of telecommunication
equipment.
41. Lease Contract, dated August 20, 1999 between Consorcio de
Propietarios de Larrea 785 and TMC. Property Location: Larrea 785;
space on the terrace of the building for the installation of
telecommunications equipment.
42. Lease Contract, dated September 13, 1999 between Asoc. Civil y
Mutual Circular Militar and TMC. Property Location: Santa Fe 760, space
on the terrace of the building for the installation of
telecommunications equipment.
43. Lease Contract, dated October 8, 1999 between Consorcio de
Propietarios de Av. Gral. Las Heras 2263 and TMC. Property location:
Heras 2263; space on the terrace of the building for the installation
of telecommunications equipment.
44. Lease Contract, dated September 10, 1999 between Prefectura Naval
Argentina and TMC. Property Location: Edificio Guardacostas; space on
the terrace of the building for the installation of telecommunications
equipment.
45. Lease Contract, dated September 6, 1999 between Consorcio de
Propietarios de Maure 3149/51 and TMC. Property Location: Maure
3149/51;
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space on the terrace of the building for the installation of
telecommunications equipment.
46. Services Contract, dated March 23, 1999 between El Sitio and TMC.
47. Letter of Intent dated July 28, 1999, between TMC and Transistemas
S.A.
48. Purchase Order dated July 8, 1999 between TMC and Lucent
Technologies S.A. Argentina and Lucent Technologies World Services Inc.
in respect of $10,739,987 of equipment.
TELELATINA
1. Memorandum Of Understanding "Memorandum de Entendimiento" dated
July, 1998 between Telelatina and Datacoop S.A
2. Management Agreement, as of February 11, 1999 between Telelatina and
TMC.
3. Agreement for Lease of Telecommunications Network, as of January 11,
1999 between Telelatina and TMC.
4. Lease Contract, dated June 24, 1998 between Consorcio de
Propietarios del Edificio Ubicado en La Calle Dorrego 2699 (Lessor) and
TMC (Lessee). Property Location: Dorrego 2699.
5. Infrastructure Sharing Agreement, as of February 11, 1999 among
Telelatina, Smartel and Formus Argentina.
6. Agreement for the Rendering of Services, as of May 31, 1999 between
Telelatina and Gire S.A.
7. Sales and Assignment Agreement, as of February 11, 1999 between
Telelatina and TMC.
SMARTEL
1. Infrastructure Sharing Agreement, as of February 11, 1999 among
Telelatina, Smartel and Formus Argentina.
2. Agreement For Lease of Telecommunications Network, as of January 11,
1999, between Smartel and TMC.
3. Management Agreement, as of February 11, 1999 between Smartel and
TMC.
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190
FORMUS ARGENTINA
1. Management Agreement dated as of February 11, 1999 by and among
Formus Argentina and TMC.
2. Agreement for Lease of Telecommunications Network dated as of
January 11, 1999 by and among Formus Argentina and TMC.
3. Infrastructure Sharing Agreement dated as of February 11, 1999 by
and among Telelatina, Formus Argentina and Smartel.
FORMUS CHILE
Foreign Investment Contract with Chile.
FORMUS COLOMBIA
1. Purchase order to Wireless Inc. for $125,000 to purchase six 38 GHz
links.
2. Purchase Order Agreement between Formus Colombia and Tess dated
October 1999.
ARGENTINA LLC
Limited Liability Company Agreement dated as of February 11, 1999,
among SLI, PCN, Argentina LLC, and TMC.
COLOMBIA LLC
Consulting Agreement dated January 27, 1998 by Jacobson & Associates,
Inc. and Colombia LLC.
VESPER CAYMAN
1. Purchase Fee Letters dated December 13, 1999 between Vesper Cayman
and ABN Amro.
VESPER SAO PAULO CAYMAN LTDA.
1. Common Terms Agreement, Credit Agreement and various pledge and
security documents executed in connection with the Lucent vendor
financing.
EJEMIL S.A. AND ODECAR S.A.
1. Memorandum of Understanding between the Company, Ejemil S.A., Odecar
S.A., Mr. Diego Beltran Storace and El Pais S.A. dated November 29,
1999.
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191
SCHEDULE 3.12
SUBSIDIARIES
[CHART]
1
192
SCHEDULE 3.13
CAPITALIZATION OF SUBSIDIARIES
VELOCOM BRASIL
Velocom Brasil has an authorized and issued capital of R$23,377,392.00
divided into 23,377,392 quotas of par value R$1.00 each. In connection
with the restructuring of this entity, its capital is being reduced.
BRASIL HOLDINGS
Brasil Holdings has an authorized capital of US$50,000 divided into
50,000 shares of par value $1.00 each, of which 2 shares are issued and
outstanding in the name of VeloCom.
VESPER HOLDING
Vesper Holding has an authorized and issued capital of R$184,445,760
divided into 536,000 ordinary shares with no par value and 536,000
preferred shares with no par value.
VESPER SAO PAULO HOLDING
Vesper Sao Paulo Holding has an authorized and issued capital of
R$119,119,000 divided into 119,000 ordinary shares with no par value
and 119,000 preferred shares with no par value.
VESPER
Vesper has an authorized and issued capital of R$77,033,010 divided
into 431,171 ordinary shares with no par value.
VESPER CAYMAN
Vesper Cayman has an authorized and issued capital of US$1.00 divided
into 1 share.
MEGATEL
MegaTel has an authorized and issued capital of R$69,913,000 divided
into 70,813 ordinary shares with no par value.
VESPER SAO PAULO CAYMAN LTD.
Vesper Sao Paulo Cayman has an authorized and issued capital of US$1.00
divided into 1 share.
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193
ENCUMBRANCES
The shares of Vesper, Vesper Holding, Vesper Sao Paulo Holding and
MegaTel are subject to the terms of the respective shareholders agreements,
constituent documents and Licenses. The shares of Vesper and MegaTel will be
pledged to certain lenders pursuant to the terms of the vendor financing
arrangements currently being negotiated as described in the Schedules to this
Agreement.
TMC
Capital contributions of US$15,963,953 have been made to TMC. The
number of shares authorized and issued is 1,000.
TELELATINA
1. Telelatina has an authorized and issued capital of A$1,000,000
divided into 1,000,000 shares with a par value of A$1.00 per share.
There is also an irrevocable capital contribution of A$2,242,326
recorded on the books of this company.
2. Sales And Assignment Agreement, as of February 11, 1999 between
Telelatina and TMC.
VELOCOM ARGENTINA
VeloCom Argentina has an authorized and issued capital of A$3,000
divided into 3,000 quotas of par value A$1.00 each.
WLL ARGENTINA
WLL Argentina has an authorized and issued capital of A$2,000 divided
into 200 quotas of par value A$10.00 each.
SMARTEL
Smartel has an authorized and issued capital of A$20,000 divided into
20,000 shares with a par value of A$1.00 per share. There is also an
irrevocable capital contribution of A$2,000,000 recorded on the books
of the Company which has not yet been funded.
PCN
PCN has an authorized and issued capital of US$100,000, divided into
100,000 shares with a par value of US$1.00 per share. There is also an
irrevocable capital contribution of US$4,767,238.86 recorded on the
books of this company.
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194
VELOCOM CHILE
VeloCom Chile has an authorized and issued capital of CH$910,455
divided into 910,455 quotas.
EJEMIL S.A.
Ejemil S.A. has nominal capital.
ODECAR S.A.
Odecar S.A. has nominal capital.
CHILE HOLDINGS
Chile Holdings has an authorized capital of US$50,000 divided into
50,000 shares of par value US$1.00 each, of which 2 shares are issued
and outstanding in the name of VeloCom.
COLOMBIA HOLDINGS
Colombia Holdings has an authorized capital of US$50,000 divided into
50,000 shares of par value US$1.00 each, of which 2 shares are issued
and outstanding in the name of VeloCom.
FORMUS ARGENTINA
Formus Argentina has an authorized and issued capital of A$12,000
divided into 12,000 ordinary shares with a par value of A$1.00.
FORMUS BOLIVIA
Formus Bolivia has an authorized and issued capital of Bs$10,000,000
divided into 200 shares or Bs$20,000,000 with a par value of
Bs$100,000.
FORMUS CHILE
Formus Chile has an authorized and issued capital of CH$455,000,455
divided into unlimited equity interest with no par value.
FORMUS COLOMBIA
Formus Colombia has an authorized and issued capital of C$800,522,200
divided into 8,005,222 shares with a par value of C$100.
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195
FORMUS LA
Formus LA has one membership interest outstanding which was issued for
US$100.
FORMUS PERU
Formus Peru has an authorized and issued capital of NS$2,700 divided
into 2,700 unlimited equity interest with no par value.
FORMUS VENEZUELA
Formus Venezuela has an authorized and issued capital of B$4,000,000
divided into 2,000 shares with a par value of B$10,000.
ARGENTINA LLC
Argentina LLC has one membership interest outstanding which was issued
for US$100.
BOLIVIA LLC
Bolivia LLC has one membership interest outstanding which was issued
for US$100.
CHILE LLC
Chile LLC has one membership interest outstanding which was issued for
US$100.
COLOMBIA LLC
Colombia LLC has one membership interest outstanding which was issued
for US$100.
PERU LLC
Peru LLC has one membership interest outstanding which was issued for
US$100.
VENEZUELA LLC
Venezuela LLC has one membership interest outstanding which was issued
for US$100.
INTERLOOP BVI
Interloop BVI has an authorized and issued capital of US$ 3,400,000
divided into 3,400,000 shares with a par value of $1.00 per share.
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196
INTERLOOP COLOMBIA
Interloop Colombia has an authorized and issued capital of CP$
2,397,950,000 divided into 2,397,950 shares with a par value of CP$1.00
per share.
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197
SCHEDULE 3.14(a)
SHARE OWNERSHIP OF COMPANY
VELOCOM CAPITAL STRUCTURE - 12/6/99
SERIES A TOTAL SERIES SERIES B
NAME COMMON TOTAL COMMON PREFERRED A PREFERRED PREFERRED
---- ------ ------------ --------- ----------- ---------
Telecom Partners II, L.P. 200,000 855,556
1,300,000 2,811,111
1,500,000 1,939,108 5,605,775 833,333
Centennial Fund V, L.P. 932,600 652,820
2,144,980
1,388,831 250,000
Centennial Fund VI, L.P. - - 1,309,809
Centennial Entrepreneurs Fund 28,940 20,260
V L.P.
66,560
43,098
Centennial Entrepreneurs Fund - - 32,745
VI, L.P.
Centennial Holdings I, L.L.C. 38,460 26,920
88,460
1,000,000 57,275 4,489,204 36,506
Crescendo World Fund, L.L.C. 477,150 742,234
457,649 106,033
Crescendo III, L.P. - 2,555,555
959,128 633,333
TOTAL SERIES B FULLY DILUTED
NAME PREFERRED OPTIONS OWNERSHIP % OWNERSHIP
---- -------------- ------- ------------- -----------
Telecom Partners II, L.P.
833,333 7,939,108 0.1485
Centennial Fund V, L.P. - -
- -
- -
Centennial Fund VI, L.P.
Centennial Entrepreneurs Fund - -
V L.P.
- -
- -
Centennial Entrepreneurs Fund
VI, L.P.
Centennial Holdings I, L.L.C. - -
- -
1,629,060 7,118,264 0.1332
Crescendo World Fund, L.L.C. - - -
- -
Crescendo III, L.P. - -
- -
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VELOCOM CAPITAL STRUCTURE - 12/6/99
SERIES A TOTAL SERIES SERIES B
NAME COMMON TOTAL COMMON PREFERRED A PREFERRED PREFERRED
---- ------ ------------ --------- ----------- ---------
Eagle Ventures WF, L.L.C. 22,850 35,544
21,916 5,079
Crescendo III, GbR -- -- 13,059
Crescendo III Executive Fund, -- 500,000 -- 4,772,026 18,810
L.P.
SLI Wireless S.A. 4,330,709 4,330,709 7,840,000 7,840,000 1,500,000
Formus Communications - Latin 1,574,803 1,574,803 7,866,333 7,866,333 933,333
America Holdings, LLC
Janco Capital Management, LLC -- -- 41,667
Brad Peery Capital, L.P. -- -- 25,850
Brad Peery Capital Ventures, -- -- 21,900
L.P.
Brad Peery Capital -- -- 16,900
International
Brad Peery Capital, Inc. -- -- 2,050
Mellon Ventures II, L.P. -- -- 1,666,667
Taquari Participacoes S.A. 1,035,064 1,035,064 -- -- --
TOTAL SERIES B FULLY DILUTED
NAME PREFERRED OPTIONS OWNERSHIP % OWNERSHIP
---- -------------- ------- ------------- -----------
Eagle Ventures WF, L.L.C. -- --
--
Crescendo III, GbR
Crescendo III Executive Fund, 776,314 6,048,340 0.1132
L.P.
SLI Wireless S.A. 1,500,000 13,670,709 0.2558
Formus Communications - Latin 933,333 10,374,469 0.1941
America Holdings, LLC
Janco Capital Management, LLC 41,667 41,667 0.0008
Brad Peery Capital, L.P. --
Brad Peery Capital Ventures, --
L.P.
Brad Peery Capital --
International
Brad Peery Capital, Inc. 66,700 66,700 0.0012
Mellon Ventures II, L.P. 1,666,667 1,666,667 0.0312
Taquari Participacoes S.A. 1,035,064 0.0194
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VELOCOM CAPITAL STRUCTURE - 12/6/99
SERIES A TOTAL SERIES SERIES B
NAME COMMON TOTAL COMMON PREFERRED A PREFERRED PREFERRED
---- ------ ------------ --------- ----------- ---------
Black Coral Enterprises Inc. 638,164 638,164 -- -- --
C. Xxxxx Xxxxx 5,000 1,862 -- --
14,805 19,805 1,862 --
Xxxx Xxxxx 1,666 1,666 -- -- --
Xxxxxxx XxXxxxxxx 1,667 1,667 -- -- --
North River Ventures, Inc. 5,000 5,000 -- --
Pension Plan --
Xxxxxxx Xxxxxxxxxx 24,000 24,000 -- -- --
Xxxxxxxx Xxxx 1,000 1,000 -- -- --
DIRECTORS, EMPLOYEES AND -- 651,948 -- 131,133 209,999
OPTIONS
-------------- --------------- ---------
TOTAL 11,283,826 30,706,333
TOTAL SERIES B FULLY DILUTED
NAME PREFERRED OPTIONS OWNERSHIP % OWNERSHIP
---- -------------- ------- ------------- -----------
Black Coral Enterprises Inc. 638,164 0.0119
C. Xxxxx Xxxxx --
21,667 0.0004
Xxxx Xxxxx -- 1,666 0.0000
Xxxxxxx XxXxxxxxx -- 1,667 0.0000
North River Ventures, Inc. -- 5,000 0.0001
Pension Plan
Xxxxxxx Xxxxxxxxxx -- 24,000 0.0004
Xxxxxxxx Xxxx -- 1,000 0.0000
-- --
DIRECTORS, EMPLOYEES AND 209,999 3,798,544 4,791,624 0.0897
OPTIONS
--
--
------------- --------- ---------- -------
TOTAL 7,657,073 3,798,544 53,445,776 1.0000
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SCHEDULE 3.14(b)
AGREEMENTS RELATING TO EQUITY INTERESTS IN COMPANIES
VELOCOM
1. Option Agreement dated as of January 15, 1999 among the Company,
Xxxx Canada International Inc., Taquari, SLI, Qualcomm, and BID S.A.
2. Subscription Agreement between Formus and the Company dated August
20, 1999.
3. Subscription Agreement between SLI and the Company dated August 20,
1999.
4. Subscription Agreement between Taquari and the Company dated August
20, 1999.
5. Amended and Restated Investors Agreement dated as of September 27,
1999 between the Company and its principal stockholders.
6. Consent and Agreement dated September 22, 1999 between BCI, SLI,
Qualcomm, Vicunha and the Company.
7. Equity Subscription Agreements between the Company and each of
Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx, R. Xxxxxx House, REINCO Corp., Xxxxxxx
X. Xxxxx, C. Xxxxx Xxxxx, Xxxxxxx Xxxxxxxxxx, North River Ventures,
Inc. Pension Plan, Xxxxxxx XxXxxxxxx, Xxxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxx
Xxxxx, Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxx and Xxxxx
Xxxxxxxx.
8. Joinder Agreements between the Company and each of R. Xxxxxx House,
REINCO Corp., Xxxxxxx Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxxx Xxxx, Xxxxx
Xxxxxxxx, Xxxx Xxxxxxx and Xxxxx Xxxxx.
9. Series A Preferred Stock Purchase Agreement dated as of January 26,
1999 between the Company, Telecom, Centennial and Crescendo.
10. Second Series A Preferred Stock Purchase Agreement dated as of May
7, 1999 between the Company, Telecom, Crescendo, Centennial, Xxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxxx XxXxxxxx, C. Xxxxx
Xxxxx, R. Xxxxxx House and Xxxxxxx Xxxxxx.
11. Employment Letters between the Company and each of Xxxxx Xxxxxxx,
Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxx
Xxxxx, Xxxxxxxx Xxxxxxxx, R. Xxxxxx House, Xxxx Xxxxx, Xxxxxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxxx
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201
Kauser, Endy, Xxxx Xxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxx
Xxxxxxx, Xxxx Xxxxxxxx, and Xxxxxxx Xxxxxxxxx.
12. Stock Option Agreements between the Company and each of Xxxxx
Xxxxxxx (10/1/98), Xxxxx Xxxxxxx (10/1/98), Xxxxx Xxxxxxx (5/21/99),
Xxxxxxx Xxxxxx (10/1/98), Xxxxxxx Xxxxxx (5/21/99), Xxxxxxxx Xxxx
(4/12/99), Xxxxxxxx Xxxx (5/21/99), Xxxxxxxx Xxxx (5/21/99), Xxxxx
Xxxxx (7/12/99); Xxxxx Xxxxx (7/12/99), Xxxx Xxxxx (12/7/98), Xxxx
Xxxxx (5/21/99), Xxxx Xxxxx (5/21/99), Xxxxxxx Xxxxx (7/16/99), Xxxxxxx
Xxxxx (7/16/99), Xxxx Xxxxxx (12/7/98), Xxxx Xxxxxx (5/21/99), Xxxx
Xxxxxx (5/21/99), R. Xxxxxx House (1/4/99), R. Xxxxxx House (5/21/99),
R. Xxxxxx House (5/21/99), Xxxxxxx Xxxxxxx (3/15/99), Xxxxxxx Xxxxxxx
(5/21/99), Xxxxx Xxxxxxx (6/7/99), Xxxxxxxx Xxxxxxxx (4/1/99), Xxxxx
Xxxxxx (10/5/98), Xxxxx Xxxxxx (12/7/98), Xxxxx Xxxxxx (12/7/98), Xxxxx
Xxxxxx (5/21/99), Xxxxx Xxxxx (5/21/99), Xxxx Xxxxx (3/8/99), Xxxx
Xxxxx (5/21/99), Xxxx Xxxxxxx (5/3/99), Xxxx Xxxxxxx (5/21/99), Xxxx
Xxxxxxx (5/21/99), Xxxxxxx Xxxxxxxxx (7/11/99), Xxxxx Xxxxxx (6/1/99),
Xxxxx Xxxxxx (6/1/99), Xxxx Xxxxxx (9/17/98), Xxxx Xxxxxx (5/21/99) and
Xxxxxxx Xxxxxxxxx (6/18/99), Xxxxx Xxxxxxxx (10/1/99), Xxxxx Xxxxxxxxx
(8/1/99), Xxxxxxx Xxxxxx (8/1/99), Xxxx Xxxxxxxx Xxxxxx (10/1/99) and
Xxxxx Xxxxxxxx (10/1/99).
13. Equity Investment Agreement dated October 21, 1999 between the
Company and certain of its stockholders.
14. Purchase Agreement dated December 6, 1999 between the Company and
the investors set forth therein.
VELOCOM BRASIL
1. Option Agreement dated as of February 4, 1999 by and between Xxxx
Canada International (Brazil Telecom I) Limited and VeloCom Brasil.
2. Agreement dated as of February 4, 1999 by and between VeloCom Brasil
and QUALCOMM do Brasil S.A.
3. Shareholder Agreement between Taquari, SLI, Qualcomm, Xxxx Canada
International (Brazil Telecom I) Limited, VeloCom Brasil and Vesper
Holding, dated February 4, 1999.
BRASIL HOLDINGS
1. Option Agreement dated as of July 30, 1999 by and between Xxxx
Canada International (MegaTel) Limited and Brasil Holdings.
2. Shareholder Agreement between SLI, QUALCOMM, Xxxx Canada
International (MegaTel) Limited, Brasil Holdings and Vesper Sao Paulo
Holding dated July 30, 1999.
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3. Amended and Restated Shareholders Agreement dated as of December 23,
1999 between the shareholders of Vesper Sao Paulo Holding.
4. Amended and Restated Shareholders Agreement dated as of December 23,
1999 between the shareholders of Vesper Holding.
VESPER HOLDING
1. Shareholder Agreement between Taquari Participacoes S.A.
("Taquari"), SLI Wireless S.A. ("SLI"), QUALCOMM do Brasil S.A.
("QUALCOMM"), Xxxx Canada International (Brazil Telecom I) Limited,
VeloCom Brasil and Vesper Holding, dated February 4, 1999.
2. Amended and Restated Shareholder Agreement dated as of December 23,
1999 between the shareholders of Vesper Holding.
VESPER SAO PAULO HOLDING
1. Shareholder Agreement between SLI, QUALCOMM, Xxxx Canada
International (MegaTel) Limited, Brasil Holdings and Vesper Sao Paulo
Holding dated July 30, 1999.
2. Amended and Restated Shareholders Agreement dated as of December 23,
1999 between the shareholders of Vesper Sao Paulo Holdings.
ARGENTINA LLC
Oral agreement with Xxxxxxx Xxxxxxxxx for 1% of Formus Argentina LLC's
interest in TMC at such time that a liquidity event occurs.
COLOMBIA LLC
Consulting Agreement between Colombia LLC and Xxxxxxxx Consulting dated
January 27, 1999.
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SCHEDULE 3.18(a)
LICENSES
VESPER
1. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Local, Que Entre Si Celebram A Agencia Nacional de Telecomunicacoes -
ANATEL e Vesper.)
2. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Longa Distancia Nacional de Ambito Intra-Regional, Que Entre Si
Celebram A Agencia Nacional de Telecomunicacoes - ANATEL e Vesper.
3. License for Packet Switched Network Services issued by Anatel on
September 23, 1999.
4. License for Circuit Switched Network Services issued by Anatel on
September 23, 1999.
5. License for Dedicated Line Services issued by Anatel on September
23, 1999.
6. License for Special Services of Audio and Video Signal issued by
Anatel on September 23, 1999.
7. License for Retransmission issued by Anatel on September 23, 1999.
Vesper may experience certain delays in meeting its build out obligations under
its licenses. The Company does not believe that the impact of these delays will
be material but there could be resulting fines due to such delays.
MEGATEL
1. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Local, Que Entre Si Celebram A Agencia Nacional de Telecomunicacoes -
ANATEL e MegaTel.
2. Termo de Autorizacao do Servico Telefonico Fixo Comutado, Modalidade
Longa Distancia Nacional de Ambito Intra-Regional, Que Entre Si
Celebram A Agencia Nacional de Telecomunicacoes - ANATEL e MegaTel.
3. Licenca para transporte de dados - ANATEL ("data transport license"
- under analysis regarding all possible applications).
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MegaTel may experience certain delays in meeting its build out obligations under
its licenses. The Company does not believe that the impact of these delays will
be material but there could be resulting fines due to such delays.
TELELATINA
1. By Resolution 2617SC/97 issued by the Secretary of Communications on
September 4, 1997, Telelatina was granted a license to provide Value
Added Services, Data Transmission Services and Videoconferencing
services nationwide.
2. By Resolution 3064SC/97, issued by the Secretary of Communications
on October 15, 1997, Telelatina was granted an authorization to use the
frequency bandwidth from 3,450 Mhz to 3,475 Mhz. and from 3,550 Mhz. to
3,575 Mhz. The use of these frequencies is governed by Resolution
2879SC/97 as amended by 869SC/98.
Telelatina has applied for modifications to the build out schedule under its
licenses due to the fact that certain of the equipment to be used by it is still
in the testing phase. The Company expects that each of these requests for
modification will be granted.
SMARTEL
1. By Resolution 1130SC/98 issued by the Secretary of Communications on
May 7, 1998, Smartel was granted a license to provide Value Added
Services, Data Transmission Services, Broadcasting signals carriage
services and Videoconferencing services.
2. By Resolution 1247SC/98, issued by the Secretary of Communications
on May 22, 1998, Smartel was granted an authorization to use on a
precarious basis, for the AMBA (which area comprises the City of Buenos
Aires and certain locations nearby), Xxxxxxx, Cordoba and Xxxxxxx the
frequency bandwidth from 26,850 Ghz to 27,350 Ghz. and from 31,075 Ghz.
to 31,150 Ghz. The use of these frequencies is governed by Resolution
869SC/98, as amended.
Smartel has applied for modifications to the build out schedule under its
licenses due to the fact that certain of the equipment to be used by it is still
in the testing phase. The Company expects that each of these requests for
modification will be granted.
FORMUS ARGENTINA
Bands: E Band which totals 575 MHz and consists of the following
frequencies: 25.85 to 26.35 GHz and 29.175 to 29.25 GHz (awarded
November 1998). This spectrum assignment may initially be used only in
the following cities: AMBA (Area Multiple Buenos Aires), La Plata and
Cordoba.
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Services: Data transmission, value added and videoconferencing (awarded
September and November 1998).
Formus Argentina has applied for modifications to the build out schedule under
its licenses due to the fact that certain of the equipment to be used by it is
still in the testing phase. The Company expects that each of these requests for
modification will be granted.
FORMUS COLOMBIA
Bands: 300 MHz at 38 GHz; channels 13, 14, 17 (awarded November 1998).
The license fees for the 38 GHz spectrum license has been increased
from approximately US$222,000 to approximately US$534,000. This
increase is effective for the year 2000 payment due January 2000.
Services: Local carrier and value added (awarded August 1998 and May
1999)
Formus Colombia may be slightly delayed in connection with its implementation
deadline of the end of November 1999. The Company believes that any delay will
be slight and will not have a material adverse effect on its license.
FORMUS PERU
Bands: 400 MHz at 38 GHz; channels 1-4 (awarded May 1999).
Services: Local carrier and value added (awarded April 1999).
INTERLOOP COLOMBIA
1. License to provide Basic Commuted Telephone Service in Colombia.
Such license was granted by Resolution 4262 issued on 9/23/97, expiring
on 12/23/2007, the scope of this license shall be for the territory of
Santa Fe de Bogota, DC (Departamento de Curdinamarca), Cali
(Departamento de Xxxxx del Cauca), Medellin (Departamento de
Antioquia), Barranquilla (Departamento de Atlantico), Bucaramanga
(Departamento de Santander), Cartagena (Departamento xx Xxxxxxx), Santa
Xxxxx (Departamento de Xxxxxxxxx), Pereira (Departamento de Risaralda),
Cucuta (Departamento del Norte de Santander) y Villavicencio
(Departamento del Meta);
2. License to provide Value Added Services, Telematics services, and
the constitution of an Associate Value Added Services Network, which
was granted by Resolucion 4472 issued on 10/10/97 expiring on
10/10/2007.
3. Interloop Colombia was authorized to use the radioelectric spectrum
as per Resolution 5195 issued on 29/12/97. By Resolution 106 of 1999,
Interloop was authorized to use exclusively bands 23 y 3.4 Ghz within
the cities where it had been awarded with a License until 9/22/2007.
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Interloop Colombia is not in compliance with certain of its build out
obligations and may face fines or revocation of its license.
ODECAR S.A.
Odecar S.A. was assigned, on December 14, 1999, per Resolution No. 404.99 of the
Direccion Nacional de Comunicaciones of Uruguay, the radioelectric sub-blocks
24.600 GHz - 24.850 GHz in Montevideo and 25,100 GHz - 25.350 GHZ, 25.600 GHZ -
25.850 GHz and 26.100 GHz - 26.350 GHz in Xxxxxxxxx for use in providing
commercial data transmission service.
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SCHEDULE 3.20
LIABILITIES
PLEASE SEE SCHEDULE 3.18 FOR POTENTIAL LIABILITIES
UNDER CERTAIN LICENSES HELD BY THE COMPANIES.
THE COMPANY
1. The Company has posted a US$1 million guarantee in respect of a
license bid in Uruguay which will be replaced by a US$300,000
performance bond.
VELOCOM BRASIL
Guarantee for three months of rent payments by VeloCom Brasil of
Xxxxxxx Xxxxxxxxx'x residential lease in Sao Paulo, Brazil.
VESPER
1. Liabilities under cell site and switch site leases entered into by
Vesper.
2. Vesper has guaranteed the residential leases of the following
employees of Vesper:
(a) Xxxxxxx Xxxxxx
(b) Xxxx Xxxxxx
(c) Xxxxxx Xxxxxxxx
(d) Xxx Xxxxxxxx
(e) Xxxx Xxxxxx
(f) Xxxxxx Xxxxxxx
(g) Xxxxxxx Xxxxx
(h) Xxxxxxxxx Xxxxx Filho
(i) Xxxx Xxxxxxxxxx
(j) Xxxxxxx Xxxxxxx
(k) Xxxxxxx Xxxxxxxx
(l) Xxxxxx del Sol
(m) Xxxxxxxxx Xxxxxxx
(n) Yuan Ringuetti
3. Capitalized Leases pursuant to that certain Leasing Agreement with
IBM Brasil Leasing Arrendamento Mercantil S.A. in the total amount of
$1,800,000.
4. Debt incurred pursuant to that certain loan facility agreement
between Xxxxxx X.X. and Nortel dated as of October 25, 1999.
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5. Debt incurred pursuant to note purchase agreements dated December
16, 1999 between Xxxxxx X.X. and Ericsson Telecomunicacoes S.A., Nortel
and Xxxxxx Corporation Networks.
6. Debt incurred pursuant to Motorola CPE Supply Agreement and related
vendor financing.
VESPER HOLDINGS
1. Guaranty of Indebtedness of Vesper set forth in number 6 above.
MEGATEL
1. Liabilities under cell site and switch site leases entered into by
MegaTel.
2. MegaTel has guaranteed the residential leases of the following
employees of MegaTel:
(a) Xxxxxx Xxxxxx
(b) Xxxxx Xxxxxxx
(c) Xxxxxx L'Esperance
(d) Xxxxxx Page
(e) Xxxxxxx Xxxxx
(f) Xxxxxxxx Xxxxxxxx
(g) Xxxxx Xxxxxxxxxx
(h) Xxxx Xxxxxxxxxxx
(i) Xxxxx Xxxxxxx
(j) Xxxxxxxx Xxxx
(k) Xxxxxx Maillaux
(l) Xxxxx Xxxx
(m) Xxxxx Xxxx
3. Bridge loan facility by Lucent to MegaTel under the Equipment Supply
Agreement dated September 27, 1999.
4. Debt Pursuant to Credit Agreement dated December 27, 1999.
5. Debt incurred pursuant to Motorola CPE Supply Agreement and related
vendor financing.
VESPER SAO PAULO HOLDING
1. Guaranty of Indebtedness of Megatel set forth in number 4 above.
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TMC
1. Pursuant to the Lease Contract, dated March 12, 1999 between Xxxxxxx
Xxxxxx Stigol (Lessor) and Xxxxxxxxx Xxxxxxx Costa (Lessee). Guarantee
for three months of rent payments by TMC of Xx. Xxxxx'x residential
lease in Buenos Aires, Argentina.
2. Liabilities under cell site and switch site leases entered into by
TMC.
VELOCOM ARGENTINA
1. VeloCom Argentina has agreed to pay the residential lease for Xxxxx
Xxxxxxx.
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SCHEDULE 3.22(a)
COLLECTIVE BARGAINING AGREEMENTS
OR EMPLOYMENT AGREEMENTS NOT TERMINABLE AT WILL
VESPER
As of the date hereof, there exists no agreement between Vesper and any
union. However, Vesper will need to enter into a collective beginning
agreement with the union of telecommunication workers.
MEGATEL
As of the date hereof, there exists no agreement between MegaTel and
any union. However, MegaTel will need to enter into a collective
beginning agreement with the union of telecommunication workers.
TMC
1. Collective Bargaining Agreements: TMC is not currently making
payments according to any collective bargaining agreement, but there is
a risk that certain of its employees be deemed to be included under the
following collective bargaining agreements:
(i) Collective Bargaining Agreement for Commercial
Employees ("CBACE") Nbr. 130/7.
(ii) FOEESITRA (Federacion de Obreros, Especialistas y
Empleados de los Servicios e Industria de las
Telecomunicaciones de la Republica Argentina).
(iii) Traveling Salesman Collective Bargaining Agreement
for traveling salesmen, Nbr. 308/75.
No dispute, arbitration, litigation or breach exists under any
collective bargaining agreement.
2. TMC Employment Agreements which are not terminable at will without
making severance payments:
NAME OF THE EMPLOYEE:
XXXXXXX Xxxx Xxxx
XXXX Xxxxxx Xxxxxx
XXXX Xxxxx Xxxxx
XXXXXXX Xxxxxxx X.
BLAUZWIRN XXXXXXX Xxxxx Xxxxxxx
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NAME OF THE EMPLOYEE:
XXXXXX Xxxxxx
XXXXX Xxxxxxx Xxxx
XXXXXXXX XXXXXXX Xxxx Xxxxxx
XXXXXXX XXXXXX Xxxxxxxxx
XXXXXXXX Xxxxxxx
CHOROVICZ Xxxxxx
XXXXXXXX Xxxxxxx Xxxxxx
XXXXXXXX Xxxxxx
CONTSOMANOLAKY Xxxxxxxxx
XXXXXXXXX Xxxxxxxxx
XXXXXX Xxxxxxxx Xxxxxx
XX XXXXX Xxxxxxx
XXXXXX Xxxxxx Xxxxxxx
XXXXXXX Xxxx Xxxx
XXXXXXXXX Xxxxx Xxxx
XXXXXXXXX Xxxxxx
XXXXXXXX Xxxx Xxxxxxx
XXXXXXX GALLINEA Xxxxx
XXXXXX Xxxx
XXXXXX Xxxxxxx
XXXXXXX Xxxxxxxxxxx
XXXXXX Xxxxxxxx Xxxxxxx
XXXXXX Xxxxxxxx Xxxxx
XXXXXX Xxxxxx
XXXXXXXX Xxxxxx Xxxxxxx
XXXXXXX Xxxxx Xxxx
XXXXXXXXX Xxxxxxxx
XXXXXXX Xxxx Xxxxxx
XXXXXXXX Xxxxxx Xxxxxxx
XXXXXXX Xxxxxxx Xxxxxxx
L`XXXXX Xxxxxx Xxxxxx
XXXXXX Xxxxx
XXXXX Xxxxx Xxxxx
XXXXXX Xxxxx Xxxxxx
XXXXXX Xxxxxxx Xxxxxxx
XXXXXX XXXXXX Xxxxxxx
XXXXXX Xxxxxxx Xxxxxxxxx
XXXX Roman Xxxxx
XXXXX FREYTAZ Xxxxxx
XXXXX Xxxxxxx Xxxxxxx
XXXXXXXX Xxxxxx Xxxxx
NUGUER Karina
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NAME OF THE EMPLOYEE:
XXXXXXX Xxxx Xxxxx
XXXXXXX Xxxxxxx Xxxxxx
XXXXX Xxxxx Xxxxxx
XXXXX Xxxxxxx
XXXXXXX Xxxxx
XXXXX Xxxxxxx
XXXXX Xxxxxx
XXXX Xxxxx Xxxxxxxxx
SAINT - XXXX Xxxxx Xxxxxx
XXXXX GRABOLO Xxxxxxx
XXXXX Xxxxxxx
XXXXXX Xxxxxxxxx
XXXXXXX Xxxxxxxx Xxxxxxx
XXXXXX Xxxxx Xxxxx
XXXXXXXX Xxxxxxx
XXXXXXXX Xxxxxxx Xxxxxxxx
XXXXXXX Diego
XXXXXX Xxxxxxxxx
XXXXX Xxxxxxx Xxxxxx
XXXXXXXXX Xxxx Xxxxx
VELOCOM ARGENTINA
VeloCom Argentina employment agreements which are not terminable at
will without making severance payments:
1. Xxxxxxx Xxxxx
2. Xxx Guiqou
In addition, this entity is responsible for social security "OSDE"
benefits for these employees.
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SCHEDULE 3.22(b)
EMPLOYEES AND DIRECTORS OF THE COMPANY
TERM OF
EMPLOYEE POSITION SALARY BENEFITS EMPLOYMENT*
-------- -------- ------ -------- -----------
Xxxx Xxxxxx Chairman - Non-Employee $ 12,000.00 $ 3,600.00 At Will
Xxxxx Xxxxxxx President & CEO $ 300,000.00 $ 90,000.00 At Will
Xxxx Xxxxxx Chief Technology Officer $ 120,000.00 $ 36,000.00 At Will
Xxxxx Xxxxx Chief Financial Officer $ 225,000.00 $ 52,500.00 At Will
Xxxx Xxxxx Chief Development Officer $ 200,000.00 $ 60,000.00 At Will
Xxxxxxx Xxxxx VP Legal & Strategic Affairs $ 250,000.00 $ 75,000.00 At Will
Xxxx Xxxxxx VP Finance $ 150,000.00 $ 45,000.00 At Will
Xxxxxx House VP Operations $ 150,000.00 $ 45,000.00 At Will
Xxxx Xxxxxxx VP - Info Technology $ 110,000.00 $ 33,000.00 At Will
Xxxxx Xxxxxxxx VP - Internet Strategy & Bus. Dev. $ 200,000.00 $ 60,000.00 At Will
Xxxx Xxxxxxx VP - IP Services $ 110,000.00 $ 33,000.00 At Will
Xxx Xxxxx VP - Marketing Strategy/Communications $ 175,000.00 $ 51,000.00 At Will
Xxxxx Xxxxxxx Financial Analyst $ 65,000.00 $ 19,500.00 At Will
Xxxxx Xxxxxxxx Controller $ 90,000.00 $ 27,000.00 At Will
Xxxxx X. Xxxxxx Executive Assistant $ 45,000.00 $ 13,500.00 At Will
MIS Manager $ 35,000.00 $ 10,500.00 At Will
Xxxx Xxxxx Administrative Assistant $ 33,000.00 $ 9,900.00 At Will
Xxxxx Xxxxxx Administrative Assistant $ 40,000.00 $ 12,000.00 At Will
Receptionist/Admin Assist $ 29,000.00 $ 9,000.00 At Will
Xxxx Xxxxxxx VP Southern Cone $ 225,000.00 $ 67,500.00 At Will
Xxxxx Xxxxxxxxx VP Brazil $ 250,000.00 $ 75,000.00 At Will
Xxxxx Xxxxxxxxx Brazil CFO $ 150,000.00 $ 45,000.00 At Will
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Xxxxx Xxxxxx Xxxx-Xxxxxx Sm Markets $ 150,000.00 $ 45,000.00 At Will
Xxxxxx Xxxxxxxxx Board Member - Non Employee $ 12,000.00 $ --
Xxx XxXxxxxx Board Member - Non Employee $ 12,000.00 $ --
Xxxxx Xxxxxxxxx Director of Transition Management $ 120,000.00 $ --
Xxxx Xxxxxxxxx Director of Implementation and $ 110,000.00 $ 33,000.00
Deployment
through Brazil and Argentina:
Xxxxxxxxx Xxxxxxx Senior Project Manager $ 97,750.00 $ 29,000.00
Xxx Xxxxxx Argentina Admin $ 35,000.00 $ 10,500.00 At Will
Xxxxxxxx Xxxxxxx Secretary $ 29,750.00 $ 3,000.00 At Will
Xxxxx Xxxxxxx Secretary $ 25,000.00 $ 18,000.00 At Will
Xxxxxxx Xxxxx Argentine Engineer $ 65,000.00 $ 19,500.00 At Will
Xxxxxxx xx Xxxxxx Operations Manager $ 125,000.00 $ 36,000.00 At Will
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SCHEDULE 3.23(a)
EMPLOYEE BENEFIT PLANS
VELOCOM
1. VeloCom Stock Option Plan.
2. VeloCom Death and Disability Plan.
3. Vision Care Plan.
4. Humana Medical PPO Plan.
5. Reliant Life Insurance Plan.
6. Delta Dental Plan.
XXXXXX
Xxxxxx executive compensation package.
MEGATEL
MegaTel executive compensation package.
TMC
1. Insurance policy No. 1996 of Generali Argentina Compania de Seguros
Patrimoniales regarding labor risk of employees.
2. Tickets for buying at restaurants "Ticket Restaurant" ($ 10 per
employee for each working day) and Tickets for buying other goods
"Ticket Canasta" ($150 per employee, per month).
3. Social security "OSDE", "Docthos", "OSECAC" and Accion Social de
Empresarios for employees.
4. Difference of price of social security (Argentine pesos 35 per
month) in favor of Xxxxxx Xxxxxxx Xxxxxx.
5. Other benefits arising out of the labor agreements entered into by:
(i) Xxxxxxxxx Xxxxxxx Costa, TMC and Xxxxx Xxxxxxx Gallinea, and (ii)
Xxxxxxx Xxxxx.
6. TMC has agreed to institute a phantom stock option plan for senior
management by year end. This stock option plan is subject to the
approval of the Company's board of directors.
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SCHEDULE 3.24
RECORDKEEPING COMPLIANCE
VELOCOM CHILE
VeloCom Chile has not filed certain monthly tax reports with Chilean
tax authorities. The Company is in the process of making such filings.
FORMUS ARGENTINA
Certain tax documents are in the process of being filed.
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