Exhibit 7.04
LOCK-UP AGREEMENT
June 19, 0000
Xxxxx Xxxxxx Networks, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
FiberTower Corporation
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to that certain Agreement and Plan of Merger, dated
as of May 14, 2006 (the "Merger Agreement"), by and among First Avenue Networks,
Inc., a Delaware corporation ("First Avenue"), Xxxxxx Acquisition Corporation, a
Delaware corporation and a direct and wholly-owned subsidiary of First Avenue
("Merger Sub"), and FiberTower Corporation, a Delaware corporation
("FiberTower"), which provides for, among other things, (i) the merger of Merger
Sub with and into FiberTower, with FiberTower continuing as the surviving
corporation (the "Merger") and (ii) the conversion of all issued and outstanding
shares of capital stock of FiberTower into the right to receive shares of common
stock, par value $0.001 per share, of First Avenue (the "First Avenue Common
Shares") and cash payment in lieu of fractional shares. Terms not otherwise
defined herein shall have the respective meanings ascribed to them in the Merger
Agreement.
The undersigned understands that the execution of this lock-up
agreement (this "Lock-Up Agreement") is a condition to the closing of the
transactions contemplated by the Merger Agreement (the "Closing"). The
undersigned further understands that as a condition to the willingness of First
Avenue and FiberTower to enter into the Merger Agreement, First Avenue and
FiberTower have requested that the undersigned agree to be bound and the
undersigned hereby agrees to be bound, effective as of the Effective Time, by
the terms as follows:
1. Without prior written consent and waiver, the
undersigned will not, during the period commencing on the date of the
Closing (the "Closing Date") and ending on the earlier of (i) the first
anniversary of the Closing Date and (ii) the closing of a debt or
equity financing with proceeds to First Avenue of at least $100,000,000
and the expiration of the duration of any lock-up requested by the
underwriters, placement agents or investors in such financing (the
"Lock-Up Period"), for each three month period beginning on the Closing
and on each of the three, six and nine month anniversaries of the
Closing (each, a "Quarterly Period") (a) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase,
lend or otherwise transfer or dispose of, directly or indirectly, an
aggregate number of First Avenue Common Shares or any securities
convertible into or exercisable or exchangeable for First Avenue Common
Shares held by the undersigned as a result of the Merger that exceed
[___] times [to be determined based upon the respective fully diluted
share holdings in First Avenue as of the Closing Date of the holders
listed on Schedule 4.25 of the First Avenue Disclosure Letter dated as
of the date of the Merger Agreement, so that each such holder is
allocated its pro rata portion of 3 times the average weekly trading
volume] the average weekly trading volume of First Avenue Common Shares
for the four calendar weeks preceding the commencement of a Quarterly
Period (the "Sale Volume Restriction"), or (b) enter into any swap or
other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of First Avenue Common Shares
held by the undersigned as a result of the Merger that exceed the Sale
Volume Restriction, whether any such transaction described in clause
(a) or (b) above is to be settled by delivery of First Avenue Common
Shares or such other securities, in cash or otherwise.
2. The undersigned may transfer his/her/its First Avenue
Common Shares during the Lock-Up Period (i) as a bona fide gift or
gifts, (ii) to an immediate family member of the undersigned or to any
trust for the direct or indirect benefit of the undersigned or an
immediate family member of the undersigned, or (iii) to an Affiliate of
the undersigned; provided, in each case, that any such transferee
agrees to be bound in writing by the terms of this Lock-Up Agreement
prior to such transfer. For purposes of this Lock-up Agreement,
"immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin.
3. Notwithstanding Paragraphs 1 and 2, without prior
written consent and waiver, the undersigned may not transfer any First
Avenue Common Shares during the Lock-Up Period on any day when the
trading price of First Avenue Common Shares is less than $6.00 per
share (as adjusted for any stock split, subdivision, reverse stock
split, stock dividend or stock distribution, recapitalization, or
reclassification of First Avenue Common Shares).
4. Notwithstanding Paragraphs 1 and 2, the Sale Volume
Restriction shall not apply:
(i) to private sales of First Avenue Common
Shares not effected through The Nasdaq National Market, any
stock exchange or other securities market by the undersigned;
provided, that, the private purchaser agrees to be bound in
writing by the terms of this Lock-Up Agreement prior to such
private sale, with such restriction to the volume of sales by
such private purchaser being equal to the Sale Volume
Restriction multiplied by the percentage of the total First
Avenue Common Shares held by the undersigned immediately prior
to such sale that are sold by the undersigned to the private
purchaser in the private sale, and the restriction to the
volume of sales by the undersigned shall be reduced by such
amount;
(ii) at any time during a trading day when the
trading price of the First Avenue Common Shares exceeds $12.00
per share (as adjusted for any stock split, subdivision,
reverse stock split, stock dividend or stock distribution,
recapitalization, or reclassification of First Avenue Common
Shares); provided, however, that in the event the trading
price per First Avenue Common Share subsequently decreases
below $12.00 (as so adjusted) per share, all shares sold above
$12.00 per share (as so adjusted) in that Quarterly Period
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shall be included in calculating the number of additional
First Avenue Common Shares, if any, that may be sold pursuant
to Paragraph 1 in such Quarterly Period; and
(iii) to 18.5% of the First Avenue Common Shares
(calculated pursuant to Section 5 below) held by the
undersigned as of the Closing Date sold in transactions made
during the last 90 days prior to the first anniversary of the
Closing Date.
5. For purposes of this Lock-Up Agreement, First Avenue
Common Shares held by the undersigned as a result of the Merger shall
consist of (i) all First Avenue Common Shares held by the undersigned
and (ii) all shares of First Avenue Common Shares issuable upon
conversion, exercise or exchange of any securities convertible into or
exercisable or exchangeable for First Avenue Common Shares held by or
issued to the undersigned immediately prior to the Effective Time with
respect to which the undersigned has dispositive control.
6. The undersigned agrees and consents to the entry of
stop-transfer instructions with First Avenue's transfer agent and
registrar against the transfer of the undersigned's First Avenue Common
Shares except in compliance with the foregoing restrictions.
7. First Avenue and FiberTower hereby agree that no
consent or waiver shall be granted with respect to the transfer of any
securities that are subject to any lock-up in connection with the
Merger unless the undersigned is: (i) provided with reasonable notice
of such consent or waiver, and (ii) entitled to transfer a
corresponding percentage of First Avenue Common Shares held by the
undersigned as a result of the Merger (or any securities issuable upon
conversion, exercise or exchange of such securities) granted to the
recipient of such waiver or consent.
8. Any notice or other communication required or
permitted to be delivered under this Lock-Up Agreement shall be in
writing and shall be deemed properly delivered, given and received when
delivered (by hand, by registered mail, by courier or express delivery
service or by facsimile confirmation) to the address or facsimile
number set forth beneath the name of such party below (or to such other
address or facsimile number as such party shall have specified in a
written notice given to the other party):
If to First Avenue:
First Avenue Networks, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
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If to FiberTower:
FiberTower Corporation
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx Xxxxx
If to the undersigned:
At the address or facsimile number set forth below
the undersigned's signature on the signature page
hereof.
9. The parties hereto acknowledge that First Avenue and
FiberTower will be irreparably harmed and that there will be no
adequate remedy at law for a violation of any of the covenants or
agreements of the undersigned set forth herein. Therefore, it is agreed
that, in addition to any other remedies that may be available to First
Avenue or FiberTower upon any such violation of this Lock-Up Agreement,
First Avenue and FiberTower shall have the right to enforce such
covenants and agreements by specific performance, injunctive relief or
by any other means available to First Avenue and FiberTower at law or
in equity, and the undersigned hereby waives any and all defenses that
could exist in his/her/its favor in connection with such enforcement
and waives any requirement for the security or posting of any bond in
connection with such enforcement.
10. In the event that any action, suit or other
proceeding is instituted concerning or arising out of this Lock-Up
Agreement or any transaction contemplated hereunder for a violation of
this Lock-Up Agreement, the prevailing party shall recover all of such
party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
11. This Lock-Up Agreement constitutes and contains the
entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations
between the parties respecting the subject matter hereof. In the event
of any conflict between this Lock-Up Agreement and the Merger
Agreement, the terms of this Lock-Up Agreement shall control.
12. This Lock-Up Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware
without regard to conflicts of law principles.
13. The provisions of this Lock-Up Agreement shall inure
to the benefit of, and shall be binding upon, the successors and
permitted assigns of the parties hereto.
14. This Lock-Up Agreement shall not be modified or
amended, or any right waived or any obligations excused except by a
written agreement signed by all parties.
15. If one or more provisions of this Lock-Up Agreement
are held to be unenforceable under applicable law, then such
provision(s) shall be excluded from this Lock-Up Agreement and the
remainder of this Lock-Up Agreement shall be interpreted as if such
provision(s) were so excluded and shall be enforceable in accordance
with its terms.
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16. This Lock-Up Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one instrument. Delivery of an executed
counterpart of this Lock-Up Agreement by facsimile shall be effective
to the fullest extent permitted by applicable law.
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IN WITNESS WHEREOF, the undersigned executes this Lock-Up Agreement as
of the date first above written.
Very truly yours,
ENTERASPEN LIMITED
By: Aspen Advisors LLC, its attorney-in-fact
By: /s/ XXXXX XXXXX
-------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Member
Address: 000 Xxxx 00xx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
ACKNOWLEDGED AND AGREED TO BY:
-----------------------------
FIRST AVENUE NETWORKS, INC.
By: /s/ XXXXXX X. XXXXX
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
FIBERTOWER CORPORATION
By: /s/ XXXXX XXXXX
----------------------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
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