Exhibit 4.2
EXECUTION COPY
[Avaya Inc. Letterhead]
October 26, 2003
CommScope, Inc.
0000 XxxxXxxxx Xxxxx XX
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
CommScope, Inc. ("CommScope") has agreed to (i) issue up to
3,490,000 shares of its common stock, par value $0.01 per share ("CommScope
Common Stock"), to Avaya Inc. ("Avaya"), and (ii) make an $18,000,000
Convertible Subordinated Promissory Note in favor of Avaya (the "Note") on
the terms set forth in Exhibit H to the Asset Purchase Agreement (as
defined below), convertible into that number of shares of CommScope Common
Stock as provided therein (the "Conversion Shares"), in each case, pursuant
to that certain Asset Purchase Agreement among CommScope, SS Holdings, LLC
and Avaya dated as of the date hereof (the "Asset Purchase Agreement").
This letter agreement (the "Agreement") sets forth the parties
understanding regarding certain matters relating to Avaya's ownership of
CommScope Common Stock. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Asset Purchase
Agreement.
Section 1. (a) During the period commencing on the date hereof and
ending on the third anniversary of this Agreement (the "Standstill
Period"), without the prior written consent of CommScope, Avaya shall not,
and Avaya shall cause Avaya's Affiliates not to, directly or indirectly,
alone or in concert with others:
(i) acquire, offer or propose to acquire or agree to acquire, whether
by purchase, tender or exchange offer, through the acquisition of control
of another person, by joining a partnership, limited partnership, syndicate
or other 13D Group or otherwise, Beneficial Ownership of any Voting
Securities, Derivative Securities or any other securities of CommScope or
any rights to acquire (whether currently, upon lapse of time, following the
satisfaction of any conditions, upon the occurrence of any event or any
combination of the foregoing) any Voting Securities, other than (a) the
Voting Securities issued to Avaya pursuant to the Asset Purchase Agreement,
(b) the Note, (c) the Conversion Shares or (d) the acquisition of Voting
Securities, Derivative Securities or any other securities of CommScope or
any rights to acquire any Voting Securities as a result of any stock split,
stock dividends or other distributions, recapitalizations or offerings made
available by CommScope to holders of Voting Securities generally;
(ii) initiate or propose any merger, business combination,
restructuring, recapitalization or similar transaction involving CommScope
or any of its Subsidiaries or the sale or other disposition outside the
ordinary course of business of any portion of the assets of CommScope or
any of its Subsidiaries other than as contemplated by the Asset Purchase
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Agreement;
(iii) deposit any Voting Securities in a voting trust or subject any
Voting Securities to any arrangement or agreement with respect to the
voting of such Voting Securities;
(iv) seek election to, seek to place a representative on, or seek the
removal of any member of, or a change in the size or composition of, the
board of directors of CommScope (the "Board");
(v) engage in any "solicitation" (within the meaning of Rule 14a-1
under the Exchange Act) of proxies or consents (whether or not relating to
the election or removal of directors) with respect to CommScope, or become
a "participant" in any "election contest" (within the meaning of Rule
14a-11 under the Exchange Act);
(vi) call or seek to have called any meeting of the stockholders of
CommScope;
(vii) initiate, propose or otherwise solicit stockholders for the
approval of any stockholder proposal (as described in Rule 14a-8 under the
Exchange Act or otherwise) with respect to CommScope;
(viii) form, join or in any way participate in a 13D Group with
respect to any Voting Securities other than a 13D Group consisting solely
of Avaya and its Subsidiaries;
(ix) otherwise act, alone or in concert with others, to seek control
or influence the management, the Board or the policies of CommScope in a
manner designed or having the deliberate effect of circumventing the
restrictions otherwise imposed under this Section 1(a);
(x) disclose or publicly announce any intention, plan or arrangement
inconsistent with the foregoing; or
(xi) advise, assist or encourage or finance any other persons with the
purpose, in whole or in part, of accomplishing any of the foregoing
activities.
(b) Notwithstanding the foregoing, the provisions of Section 1(a)
shall cease to apply if: (i) CommScope enters into a definitive agreement
contemplating a Change in Control Transaction or consummates a Change in
Control Transaction; (ii) the Board publicly announces its intention to
solicit or publicly solicits any proposal or publicly approves, accepts,
authorizes or recommends to stockholders of CommScope their approval of or
the conveyance of shares pursuant to a Change in Control Transaction; or
(iii) in connection with a bona fide tender or exchange offer made by any
Person or 13D Group, other than a 13D Group consisting solely of Avaya and
its Subsidiaries, the Board determines or resolves to, or announces its
intention to, or is ordered or directed by any Governmental Entity to,
redeem or modify (to render inapplicable thereto) the Rights or the Rights
Agreement (or a substantially similar agreement) or the Rights or the
Rights Agreement (or a substantially similar agreement) does not, for any
other reason, apply to such tender or exchange offer.
(c) Avaya agrees to, and shall cause Avaya's Affiliates to,
require any permitted successor, assignee, or transferee of the Note to be
bound by the terms of this
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Agreement.
Section 2. Definitions. As used in this Letter Agreement, the
following terms shall have the following meanings.
"Affiliate" of any Person means any Person that controls, is
controlled by, or is under common control with such Person. As used herein,
the term "control" (including the terms "controlling", "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
a Person, whether through ownership of voting securities or other interests,
by contract or otherwise.
"Beneficially Own" with respect to any securities means having
"beneficial ownership" of such securities (as determined pursuant to Rule
13d-3 under the Exchange Act, as amended, without limitation by the 60-day
provision in paragraph (d)(1)(i) thereof). The terms "Beneficial Ownership"
and "Beneficial Owner" have correlative meanings.
"Change in Control" means, with respect to any specified company,
the occurrence of any of the following events:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of more than 50% of either (A) the then outstanding shares of common
stock (the "Outstanding Stock") of such company or (B) the combined voting
power of the then outstanding voting securities entitled to vote generally
in the election of directors or managers (the "Outstanding Voting
Securities") of such company; provided that, for purposes of this clause
(i), any acquisition of Outstanding Stock or Outstanding Voting Securities
by such company shall not constitute a Change in Control of such company;
(ii) individuals who, as of the date hereof, constitute the board
of directors (the "Incumbent Board") of such company cease for any reason
to constitute at least 50% of the board of directors of such company;
provided that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by such company's
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a individual, entity or group (as
defined above) other than the board of directors of such company) shall be
considered a member of the Incumbent Board;
(iii) consummation by such company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
its assets or the acquisition of assets or stock of another corporation (a
"Business Combination"), in each case, unless, following such Business
Combination, all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Stock and
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, 50% or more of the then
Outstanding Stock and the combined voting power of the then Outstanding
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Voting Securities, as the case may be, of the corporation or other entity
resulting from such Business Combination; or
(iv) approval by the stockholders of such company of a complete
liquidation or dissolution of such company.
"Change in Control Transaction" means a transaction which, if
consummated, would result in a Change in Control of CommScope.
"Derivative Securities" means any subscriptions, options,
conversion rights, warrants, phantom stock rights or other agreements,
securities or commitments of any kind obligating CommScope to issue, grant,
deliver or sell, or cause to be issued, granted, delivered or sold (i) any
Voting Securities of CommScope, (ii) any securities convertible into or
exchangeable for any Voting Securities of CommScope, or (iii) any
obligations measured by the price or value of any shares of capital stock
of CommScope.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.
"Governmental Entity" means any legislative, executive or judicial
unit of any governmental entity (federal, state, local, foreign or
supranational) or any department, commission, board, agency, bureau,
official or other regulatory, administrative or judicial authority thereof.
"Person" means any individual, corporation, limited liability
company, association, partnership, trust or other entity or organization,
including any Governmental Entity.
"Rights means the Rights as defined in the Rights Agreement.
"Rights Agreement" means that certain Rights Agreement, dated June
12, 1997, between CommScope and ChaseMellon Shareholder Services, L.L.C.
"Subsidiary" of any Person means any corporation or other legal
entity of which such Person, either alone or through or together with any
other Subsidiary owns directly or indirectly more than 50% of the stock or
other equity interests, the holders of which are generally entitled to vote
for the election of members of the board of directors or other governing
body of such corporation or other legal entity.
"13D Group" shall mean any group of Persons who, with respect to
those acquiring, holding, voting or disposing of Voting Securities would,
assuming ownership of the requisite percentage thereof, be required under
Section 13(d) of the Exchange Act and the rules and regulations thereunder
to file a statement on Schedule 13D with the Securities and Exchange
Commission as a "person" within the meaning of Section 13(d)(3) of the
Exchange Act, or who would be considered a "person" for purposes of Section
13(g)(3) of the Exchange Act.
"Voting Securities" means the shares of CommScope Common Stock and
any other securities of CommScope entitled to vote generally for the
election of directors, and any
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securities (other than employee stock options) which are convertible into,
or exercisable or exchangeable for, Voting Securities.
Section 3. Notwithstanding anything to the contrary herein, this
Agreement shall automatically terminate without any action by the parties
hereto upon the termination of the Asset Purchase Agreement in accordance
with its terms, and shall thereafter be of no further force or effect.
By each party's signature below, each party accepts the terms of this
Agreement and agrees to be bound by the obligations set forth herein.
AVAYA INC.
By:/s/ Xxxxx X. XxXxxxx
--------------------------------
Name: Xxxxx X. XxXxxxx
Title: Chief Financial Officer
AGREED AND ACCEPTED:
COMMSCOPE, INC.
By:/s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman and Chief Executive Officer
