EXHIBIT 10.9
Amendment No. 6
to
Transaction Agreement
This Amendment No. 6 ("Amendment") to the Transaction Agreement dated as of
July 8, 1998, as amended by Amendment No. 1 dated as of December 18, 1998, by
Amendment No. 2 dated as of February 18, 1999, by Amendment No. 3 dated as of
May 14, 1999, by Amendment No. 4 dated as of June 30, 1999 and by Amendment No.
5 dated as of June 30, 1999 (the "Original Agreement"), is made as of November
18, 1999, among Choice One Communications Inc. (the "Corporation"), Choice One
Communications L.L.C. (the "LLC") and the persons listed on the signature pages
hereto.
WHEREAS, the parties desire to amend the Original Agreement to provide for
certain governance arrangements to be effective in connection with the initial
Public Offering;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Amendment to Section 5.03 of the Original Agreement .
Effective upon the consummation of the initial Public Offering, Section 5.03 of
the Original Agreement shall hereby be amended and restated as follows:
"SECTION 5.03. Corporate Governance. (a) Board Size. The initial size of
the Board shall be [number] directors. The Board size may be changed by action
of the Board but will not at any time be less than the total number of directors
designated (or entitled to be designated) pursuant to Section 5.03(b) at such
time.
(b) Composition of the Board. The following will be designated as
directors to the Board:
(i) MSCP may designate (w) a majority of the Board so long as MSCP and
its Affiliates hold at least 75% of the MSCP Equity, (x) [1/3] of the Board
so long as MSCP and its Affiliates hold less than 75% but at least 50% of
the MSCP Equity; (y) 2 directors so long as MSCP and its Affiliates hold
less than 50% but at least 25% of the MSCP Equity and (z) one
representative so long as MSCP and its Affiliates hold less than 25% but at
least 10% of the MSCP Equity; with respect to the foregoing representatives
so entitled to be designated, so long as more than one representative is
entitled to be designated by MSCP, Xxxxxx Xxxxxxx Capital Partners III,
L.P. may designate one representative (as long as it owns outstanding
Common Stock), and Xxxxxx Xxxxxxx Xxxx Xxxxxx Capital Partners IV, L.P.
may designate one representative (as long as it
owns outstanding Common Stock); all other designations of such
representatives will be by the general partner of either Xxxxxx Xxxxxxx
Capital Partners III, L.P. or Xxxxxx Xxxxxxx Xxxx Xxxxxx Capital Partners
IV, L.P.;
(ii) Xxxxxxxx Partners III, L.P. may designate one director so long as
Fleet and its Affiliates hold at least 50% of the Fleet Equity;
(iii) Xxxxxx-Xxxxxx may designate one director so long as Xxxxxx-
Xxxxxx and its Affiliates hold at least 75% of the Xxxxxx-Xxxxxx Equity;
and
(iv) the Corporation's chief executive officer shall be designated as
a director.
Each of MSCP, Fleet and Xxxxxx-Xxxxxx is referred to as an "Investor".
(c) Outside Directors. Within three months after the consummation of the
initial Public Offering, the Board shall fill at least one of the vacancies on
the Board with an individual who is neither an officer or employee of the
Corporation nor an "Affiliate" or an "Associate" (as those terms are used within
the meaning of Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act) of such an officer or employee or of any Investor (such
an individual, an "Outside Director"). There will at all times be at least one
Outside Director, who will be designated by the Board.
(d) Quorum; Board Action. The required quorum for Board action shall be the
presence at a Board meeting of at least four directors; provided that (i) so
long as MSCP has the right to designate a director on the Board, a quorum must
include at least one director designated by MSCP and (ii) so long as either
Fleet or Xxxxxx-Xxxxxx has the right to designate a director on the Board, a
quorum must include at least one director designated by either Fleet or Xxxxxx-
Xxxxxx.
All action of the Board shall require the affirmative vote of at least a
majority of the directors at a duly convened meeting of the Board at which a
quorum is present or the unanimous written consent of the Board; provided that,
in the event there is a vacancy on the Board and an individual has been
nominated to fill such vacancy, the first order of business shall be to fill
such vacancy
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(e) Subsidiary Boards. The composition of the board of directors of each
of the Corporation's Subsidiaries (a "Sub Board") shall be the same as that of
the Board.
(f) Executive Committee. The Board shall create and maintain an executive
committee (the "Executive Committee"), membership of which will be constituted
as follows: (i) one Director may be designated by MSCP, (ii) the Corporation's
chief executive officer will be a member, (iii) Fleet may designate the Director
designated by Fleet pursuant to 5.03(b)(ii), and (iv) Xxxxxx-Xxxxxx may
designate the Director designated by Xxxxxx-Xxxxxx pursuant to 5.03(b)(iii);
provided that an Investor will lose its right to have its designee on the
Executive Committee as soon as it is not entitled to any designee on the Board.
Executive Committee membership will otherwise be as designated by the Board.
The Executive Committee shall (x) act as a liaison between the Board, on the one
hand, and executive management, on the other hand, and (y) exercise such powers
as shall be delegated to it from time to time by the Board. Each member of the
Executive Committee shall have one vote.
(g) Pricing Committee. The Board shall create and maintain a committee
(the "Pricing Committee"), membership of which will be constituted as follows:
(i) one Director may be designated by MSCP, (ii) the Corporation's chief
executive officer will be a member, (iii) Fleet may designate the Director
designated by Fleet pursuant to 5.03(b)(ii), and (iv) Xxxxxx-Xxxxxx may
designate the Director designated by Xxxxxx-Xxxxxx pursuant to 5.03(b)(iii);
provided that an Investor will lose its right to have its designee on the
Pricing Committee as soon as it is not entitled to any designee on the Board.
Pricing Committee membership will otherwise be as designated by the Board. The
Pricing Committee (A) shall negotiate the pricing and other terms applicable to
the engagement of an Affiliate of MSCP as a financial advisor to the Corporation
or as lead manager or lead arranger for any underwritten offering or capital
markets activities (x) for the account of the Corporation or (y) in which MSCP
does not participate, which terms will be customary for a transaction of that
nature, (B) will have the authority in all such cases to select and engage one
or more co-managers or co-arrangers for any such underwritten offering or
capital markets activities and may negotiate the terms of such engagement and
(C) shall exercise such others powers as shall be delegated to it from time to
time by the Board. Notwithstanding the foregoing, MSCP's designee shall abstain
from voting on matters referred to in clause (A) of the previous sentence (but
will be entitled to participate in discussions and deliberations, and will be
consulted in good faith, thereon). Each member of the Pricing Committee shall
have one vote.
(h) Other Committees. Committees of the Board or a Sub Board (other than
the Executive Committee and the Pricing Committee) shall be created only upon
the approval of a majority of the members of the entire Board or the
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applicable entire Sub Board, in each case assuming there were no vacancies and
provided that action is taken at a meeting at which a quorum exists, and the
composition of each such committee (if any) shall be proportionately equivalent
to that of the Board to the extent practicable. It is understood and agreed,
however, that no Director who is an officer of the Corporation may serve on the
audit committee or any compensation committee or other similar committee
established by the Board.
(i) Removal. Any director may be removed from the Board or a Sub Board or
committee, (i) with or without cause, at the written request of the holder or
holders entitled to designate such person to be a director, (ii) at the Board's
request, as soon as the director in question is no longer entitled to be
designated pursuant to Section 5.03(b) (but if the applicable holder is entitled
to more than one designee, such holder may select the designee(s) to be
removed); or (iii) with cause at the request of any Investor, and, subject to
Section 141(k) of the Delaware General Corporation Law, under no other
circumstances; provided that if any Director who is an officer of the
Corporation ceases to be an employee of the Corporation and its Subsidiaries for
any reason, the individual shall be removed as a member of the Board and each
Sub Board and committee promptly after his employment ceases.
(j) Vacancies. In the event any director ceases to serve as a member of
the Board or a Sub Board during his or her term of office, whether pursuant to
Section 5.03(i) above or otherwise, or for any other reason there are at any
time fewer representatives serving on the Board than are entitled to be
designated by an Investor, the resulting vacancy on the Board or the Sub Board
may be filled at any time (i) by a representative designated by the holder or
holders entitled to designate such vacant Board seats or (ii) if no holder is
entitled to designate a representative to fill such vacancy at such time, then
by the Board as constituted immediately prior to such time.
(k) Agreement to Implement the Foregoing. Each party hereto agrees that it
will vote its shares or execute consents, as the case may be, and each party
hereto (including the Corporation) shall take all other necessary action
(including nominating such designees, calling an annual or special meeting of
shareholders, or causing its designee(s) to resign, as applicable) in order to
ensure that the composition of the Board is as set forth in this Section 5.03
and otherwise to give effect to the provisions of this Section 5.03. Each party
shall vote its shares, and shall take all other actions necessary, to ensure
that the Corporation's Certificate of Incorporation and Bylaws facilitate and do
not at any time conflict with any provision of this Agreement. The obligations
imposed on any Investor to give effect to the provisions set forth in this
Section 5.03 shall terminate as to such Investor when such Investor's right to
designate a director is terminated, after
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which time such Investor's consent shall not be needed to any amendment or
waiver of this Section 5.03."
SECTION 2. Amendment to Section 5.05. Section 5.05 of the Original
Agreement is hereby amended and restated as follows:
"Section 5.05. Termination. The rights and requirements under Sections
5.01 and 5.02 shall terminate upon the earlier to occur of (i) consummation of
the initial Public Offering approved under Section 5.02 of the LLC Agreement and
(ii) the closing of a Sale of the Corporation. The provisions of Section 5.03
shall terminate upon the closing of a Sale of the Corporation. The provisions of
Section 5.04 shall survive the termination of the other provisions of this
Article 5."
SECTION 3. Other Defined Terms. Capitalized terms used in this Amendment
and not otherwise defined have the meanings ascribed to them in the Original
Agreement.
SECTION 4. Effect of Amendment; Governing Law. The amendment to Section
5.03 of the Original Agreement effected by Section 1 hereof shall be not
effective until consummation of the initial Public Offering. Except as amended
hereby, the Original Agreement shall remain unchanged. The Original Agreement,
as amended hereby, shall remain in full force and effect. This Amendment shall
be governed by, and construed under, the laws of the State of Delaware, all
rights and remedies being governed by said laws, without regard to conflict of
laws principles.
SECTION 5. Counterparts. This Amendment may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
CHOICE ONE COMMUNICATIONS INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: President and Chief Executive Officer
-----------------------------
CHOICE ONE COMMUNICATIONS L.L.C.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Its: Authorized Person
----------------------------
MANAGEMENT MEMBERS
/s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx, as a Management
Member and as Chief Executive Officer
of Choice One Communications, Inc.
/s/ Xxx Xxxxxx-Xxx
-----------------------------
Xxx Xxxxxx-Xxx
/s/ Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx
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/s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx
-----------------------------
Xxxxxxxxx Xxxxx
/s/ Xxxxxx Xxxxxxx
-----------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxxx Xxxxxx
-----------------------------
Xxxxxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxx
-----------------------------
Xxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------
Xxxxxxx Xxxxxxxxx
/s/ Xxxxxx X. Xxxx
-----------------------------
Xxxxxx X. Xxxx
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/s/ Xxxxxxx X'Xxxxxx
-----------------------------
Xxxxxxx X'Xxxxxx
/s/ Xxxxxx Xxxxxxx
-----------------------------
Xxxxxx Xxxxxxx
/s/ Xxx Xxxxxxx
-----------------------------
Xxx Xxxxxxx
INVESTOR MEMBERS
XXXXXX XXXXXXX CAPITAL PARTNERS III, L.P.
By: MSCP III, L.P., its general partner
By: Xxxxxx Xxxxxxx Capital Partners III, Inc.,
its general partner
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------
Its: Principal
----------------------------
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Its: Managing Director
----------------------------
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MSCP III 892 INVESTORS, L.P.
By: MSCP III, L.P., its general partner
By: Xxxxxx Xxxxxxx Capital Partners III, Inc.,
its general partner
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------
Its: Principal
----------------------------
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Its: Managing Director
----------------------------
XXXXXX XXXXXXX CAPITAL INVESTORS, L.P.
By: MSCP III, L.P., its general partner
By: Xxxxxx Xxxxxxx Capital Partners III, Inc.,
its general partner
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------
Its: Principal
----------------------------
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Its: Managing Director
----------------------------
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XXXXXX XXXXXXX XXXX XXXXXX
CAPITAL PARTNERS IV, L.P.
By: MSDW Capital Partners IV, LLC, its
general partner
By: MSDW Capital Partners IV, Inc., its
general partner
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------
Its: Principal
----------------------------
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Its: Managing Director
----------------------------
MSDW IV 892 INVESTORS, L.P.
By: MSDW Capital Partners IV, LLC, its general partner
By: Xxxxxx Xxxxxxx Capital Partners IV, Inc.,
its general partner
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------
Its: Principal
----------------------------
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Its: Managing Director
----------------------------
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XXXXXXXX PARTNERS III, L.0.
By: Silverado III, L.P., its General Partner
By: Silverado III, Corp., its General Partner
By: /s/ Xxxxxx X. Xxx Xxxxx
--------------------------------
Xxxxxx X. Xxx Xxxxx
Chairman & CEO
XXXXXXX PLAZA PARTNERS
By: /s/ Xxxxxx X. Xxx Xxxxx
--------------------------------
Xxxxxx X. Xxx Xxxxx
Managing General Partner
FLEET VENTURE RESOURCES, INC.
By: /s/ Xxxxxx X. Xxx Xxxxx
--------------------------------
Xxxxxx X. Xxx Xxxxx
Chairman & CEO
FLEET EQUITY PARTNERS VI, L.P.
By: /s/ Xxxxxx X. Xxx Xxxxx
--------------------------------
Fleet Growth Resources II, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxx Xxxxx
--------------------------------
Xxxxxx X. Xxx Xxxxx
Chairman & CEO
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XXXXXX-XXXXXX MEDIA PARTNERS, L.P.
By: Xxxxxx-Xxxxxx Media, L.L.C. its general partner
By: /s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
Chief Executive Officer
FIRST UNION CAPITAL PARTNERS, INC.
By:
----------------------------------
Its:
----------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
By:
----------------------------------
Its:
----------------------------------
CARAVELLE INVESTMENT FUND, L.L.C.
By: Caravelle Advisors, L.L.C., as
Investment Manager
By:
----------------------------------
Its:
----------------------------------
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XXXXX X. XXXXXXX
By:
----------------------------------
Xxxxx X. Xxxxxxx
R. XXXXXX SILVER
By:
----------------------------------
R. Xxxxxx Silver
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