EXHIBIT (d)(iii)
SHAREHOLDERS' AGREEMENT
This SHAREHOLDERS' AGREEMENT is dated as of January 10, 2002, among
U.S. RealTel, Inc., a Delaware corporation ("Parent"), Cypress Merger Sub, Inc.,
a Delaware corporation and a wholly owned subsidiary of Parent ("Purchaser"),
and certain stockholders of Cypress Communications, Inc., a Delaware corporation
(the "Company"), who are listed on and execute the signature pages attached
hereto (each a "Stockholder" and, collectively, the "Stockholders"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
them in the Merger Agreement (as defined below).
R E C I T A L S
WHEREAS, Parent, Purchaser and the Company propose to enter into an
Agreement and Plan of Merger (as the same may be amended or supplemented, the
"Merger Agreement") providing for, among other things: (i) the making of a cash
tender offer (as such offer may be amended from time to time as permitted under
the Merger Agreement, the "Offer") by Purchaser for all the outstanding shares
(the "Shares") of common stock, par value $.001 per share, of the Company (the
"Common Stock") and (ii) the merger of Purchaser with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in the Merger
Agreement;
WHEREAS, each Stockholder is the record owner of the number of shares
of Common Stock set forth on his, her or its signature page attached hereto, or
has been granted voting and investment power by the holder or holders thereof
with respect to such Shares (such shares of Common Stock, being collectively
referred to herein as the "Subject Shares" of such Stockholder);
WHEREAS, collectively the Subject Shares of the Stockholders represent
11% of the Shares; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that each Stockholder enter into
this Agreement.
AGREEMENTS
NOW, THEREFORE, to induce Parent and Purchaser to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. Grant of Option to Purchaser.
(a) Each Stockholder, severally, and not jointly, hereby
grants to Purchaser an irrevocable option to purchase all, but not less than
all, of such Stockholders' Subject Shares prior to the termination of the Merger
Agreement in accordance with its terms, on the terms and subject to the
conditions set forth herein (collectively, with respect to all the Stockholders'
Subject Shares, the "Purchaser Option"), which Purchaser Option shall attach to
each Stockholder's Subject Shares and be binding upon any person or entity to
which legal or beneficial ownership of such Shares shall pass, whether by
operation of law or otherwise, including without limitation such Stockholder's
heirs, guardians, administrators or successors or as a result of any divorce.
(b) The Purchase Option (i) shall become exercisable, in
whole but not in part, for all Subject Shares (less any such Shares which
Purchaser has accepted for payment or paid for in the Offer) immediately after
the expiration of the Offer (or, if for any reasons later, immediately after the
expiration of the period, including any extensions thereof, during which Shares
tendered pursuant to the Offer may by the terms of the Offer be accepted or
rejected pursuant to an extension of the Offer in accordance with Section 1.1(b)
of the Merger Agreement ("Extended Offer Period")) if, but only if, Purchaser
has accepted for payment all Shares tendered and not withdrawn in the Offer and
(ii) shall remain exercisable for a period until the first to occur of (a) the
date that is five (5) business days prior to the Closing or (b) the expiration
of one hundred twenty (120) days after the first such date on which the Purchase
Option becomes exercisable pursuant to clause (i) of this sentence. If the
Purchase Option does not become exercisable due to (a) the termination or
withdrawal of the Offer prior to its initial expiration date (or the expiration
of an Extended Offer Period) or (b) the failure of Purchaser to accept for
payment all Shares tendered and not withdrawn in the Offer, it shall be deemed
to have expired. If Purchaser wishes to exercise the Purchaser Option, Purchaser
shall send a written notice to each Stockholder of its election to exercise the
Purchaser Option, at any time prior to the expiration thereof, which exercise
shall be subject to the fulfillment of the conditions specified in Section 1(e)
hereof. The place and date of the closing of the Purchaser Option ("Purchaser
Option Closing") shall be the same as the Closing and the time of the Purchaser
Option Closing shall be immediately prior to the Closing.
(c) At the Purchaser Option Closing each Stockholder
shall deliver to Purchaser all of such Stockholder's Subject Shares by delivery
of a certificate or certificates evidencing such Shares duly endorsed to
Purchaser or accompanied by stock powers duly executed in favor of Purchaser,
with all necessary stock transfer stamps affixed.
(d) At the Purchaser Option Closing, Purchaser shall pay
to the Stockholders, by wire transfer in immediately available funds to the
account of each such Stockholder specified in writing no more than one business
day prior to the Purchaser Option Closing, an amount equal to the product of the
Offer Price times the number of shares purchased pursuant to the exercise of the
Purchaser Option.
(e) At the time the Purchaser Option is exercised and at
the time of the Purchaser Option Closing, no court, arbitrator, or governmental
body or agency or official shall have issued any order, decree or ruling (which
has not been stayed or suspended pending appeal) and there shall not be any
effective statute, rule or regulation, restraining, enjoining or prohibiting the
consummation of the purchase and sale of the Shares pursuant to the exercise of
the Purchaser Option.
(f) Purchaser and Parent hereby represent, warrant and
agree with each Stockholder as follows:
(i) Any Subject Shares purchased pursuant to the
Purchaser Option ("Purchased Option Shares") will be purchased
for investment for the account of Purchaser and without the
intent of participating directly or indirectly in a
distribution of such securities in violation of applicable
securities laws.
(ii) Purchaser and Parent acknowledge and agree
that the Subject Shares will or may constitute "restricted
securities" under the federal securities laws and will or may
be sold or transferred in reliance upon exemption(s) from
registration contained in the Securities Act of 1933 or rules
and regulations promulgated thereunder (the "Securities Act"),
that such Shares will or may also be sold in reliance upon the
exemptions from registration contained in the securities laws
of the State of Delaware or other jurisdictions to the extent
applicable (the "State Acts"), and that the transfer of such
Shares may be restricted or limited as a condition to the
availability of such exemptions. Purchaser and
2
Parent further acknowledge and agree that (i) any Purchased
Option Shares may be offered for sale, sold or transferred by
Purchaser only if there is a registration statement under the
Securities Act in effect with respect to such securities and
pursuant to registration under any applicable State Acts
covering such Shares; or in the absence of such registration,
only in compliance with applicable exemptions from
registration under the Securities Act or under any applicable
State Acts, (ii) the certificates evidencing any Purchased
Option Shares delivered hereunder may include restrictive
legends as deemed necessary by the Company or the Stockholder
transferring the same to comply with federal and state
securities laws and (iii) Purchaser and Parent have obtained
and prior to any exercise of the Purchaser Option will have
obtained from the Company all such information of or relating
to the Company and its Shares as they deem necessary or
appropriate, have made and will prior to any such exercise
will have made their own inquiry and analysis with respect
thereto, and, except as expressly set forth in Section 4
hereof, no Stockholder makes any representation or warranty of
any kind or nature to Parent or Purchaser with respect to the
Company or any Purchased Option Shares.
(iii) Purchaser and Parent are each an "accredited
investor" within the meaning of Regulation D promulgated under
the Securities Act.
2. Agreement to Tender.
(a) Each Stockholder hereby agrees severally (and not
jointly) to accept the Offer with respect to all of the Subject Shares of the
Stockholder and to tender (or cause the record owner of such Shares to tender)
all of his, her or its Subject Shares into the Offer. Such tender shall be made
within 10 business days following the date of commencement of the Offer and
shall not be withdrawn for so long as this Agreement remains in effect. Subject
to Section 10 below, the obligation of any Stockholder to tender and not
withdraw his, her or its Subject Shares is conditioned only upon lawful
commencement of the Offer in accordance with the Merger Agreement and otherwise
is unconditional.
(b) Notwithstanding the foregoing, no Stockholder shall
be required to tender his, her or its Subject Shares, to not withdraw his, her
or its Subject Shares or otherwise to sell his, her or its Subject Shares in
accordance with the terms of this Agreement in the event that, without the prior
written consent of such Stockholder, any of the following has occurred: (i) a
decrease in the Offer Price or change in the form of consideration payable in
the Offer, (ii) a decrease in the number of Shares sought in the Offer, (iii) an
amendment or waiver of the Minimum Condition that reduces the Minimum Condition
to below a majority of the Shares on a fully diluted basis (after giving effect
to the conversion or exercise of all outstanding options, warrants and other
rights and securities exercisable or convertible into Shares, whether or not
exercised or converted at the time of determination), (iv) the imposition of
additional conditions to the Offer or amendment to any condition to the Offer
that is adverse in any material respect to the holders of the Shares, (v) an
amendment of any other term of the Offer in any manner adverse in any material
respect to the holders of Shares or (vi) an extension of the expiration date of
the Offer which requires the consent of the Company under the Merger Agreement.
(c) Purchaser shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement such amounts
as may be required to be deducted and withheld with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended, or under any
provision of state, local or foreign tax law.
(d) Each of the Stockholders hereby permits Parent and
Purchaser to publish and disclose in the Offer Documents his, her or its
identity and ownership of Subject Shares and the nature of his, her or its
commitments, arrangements and understandings under this Agreement.
3
3. Representations and Warranties of Each Stockholder. Each
Stockholder hereby, severally and not jointly, represents and warrants to Parent
and Purchaser as of the date hereof, in respect of himself, herself or itself as
follows:
(a) Authority. Such Stockholder has all requisite power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by such Stockholder, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary action on the
part of such Stockholder. This Agreement has been duly executed and delivered by
such Stockholder and, assuming due authorization, execution and delivery by
Parent and Purchaser, constitutes a valid and binding obligation of such
Stockholder enforceable against such Stockholder in accordance with its terms,
subject to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium, or similar law affecting creditors' rights generally and subject, as
to enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(b) No Conflicts. Except for (i) the applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the Securities Act of 1933, as amended (the "Securities Act") and (ii)
the applicable requirements of state securities laws, takeover laws or Blue Sky
laws, the execution and delivery of this Agreement do not, and the consummation
by such Stockholder of the transactions contemplated hereby and compliance with
the terms hereof by such Stockholder will not, (A) conflict with, or result in
any violation of, or default (with or without notice or lapse of time or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any lien upon any of the properties or
assets of such Stockholder under any provision of, any trust agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement, or
instrument, applicable to such Stockholder or to the property or assets of such
Stockholder or (B) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to such Stockholder or any of the properties or assets of
such Stockholder, including the Subject Shares, except for such conflicts,
violations, breaches, defaults or other occurrences which, individually or the
aggregate, have not had and would not reasonably be expected to prevent or
materially delay the ability of the Stockholder to perform its obligations under
this Agreement (a "Stockholder Material Adverse Effect").
(c) No Consents. The execution and delivery of this
Agreement by such Stockholder does not, and neither the performance of this
Agreement by such Stockholder nor the consummation of the transactions
contemplated hereby by such Stockholder will, require any consent, approval,
authorization, order or permit of, or filing with or notification to, any
federal, state, local or foreign government or any court of competent
jurisdiction, or other governmental, administrative or regulatory authority,
commission or agency, domestic or foreign (each a "Governmental Entity"), except
for (i) the applicable requirements of the Exchange Act and the Securities Act,
(ii) the applicable requirements of state securities laws, takeover laws or Blue
Sky laws, and (iii) such other consents, approvals, authorizations or permits,
filings or notifications, not obtained or made prior to the date hereof, the
failure of which to be obtained or made have not had and would not reasonably be
expected to have, individually or in the aggregate, a Stockholder Material
Adverse Effect. If such Stockholder is married and the Subject Shares of such
Stockholder constitute community property or otherwise require spousal or other
approval to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and, assuming due authorization,
execution and delivery by Parent and Purchaser and the Stockholder, constitutes
a valid and binding agreement of, such Stockholder's spouse enforceable against
such spouse in accordance with its terms, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium, or similar law
affecting creditors' rights generally and subject, as to enforceability, to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). No trust of
which such Stockholder is a trustee requires
4
the consent of any beneficiary to the execution and delivery of this Agreement
or to be the consummation of the transactions contemplated hereby.
(d) The Subject Shares. Such Stockholder is the record
and beneficial owner of, or is the trustee that is the record holder of, and
whose beneficiaries are the beneficial owners of, and has good and valid title
to, or has been granted voting and investment power by the holder or holders
thereof with respect to, the Subject Shares set forth on his, her or its
signature page attached hereto, free and clear of any claims, liens,
encumbrances, security interests, options, charges and restrictions of any kind
(other than restrictions pursuant to this agreement or applicable securities
laws or such claims, liens, encumbrances, security interests, options, charges
and restrictions otherwise disclosed on such Stockholder's signature page
hereto). Except as otherwise set forth on his, her or its signature page
attached hereto, such Stockholder has or has been granted the sole right to vote
such Subject Shares.
(e) No Brokers. There is no investment banker, broker,
finder or other intermediary (other than legal and accounting advisors) which
have been retained by or is authorized to act on behalf of a Stockholder who
might be entitled to any fee or commission from the Stockholder or any of his,
her or its affiliates (which for purposes of this Agreement shall not include
the Company) upon consummation of the transactions contemplated by this
Agreement.
4. Representations and Warranties of Parent and Purchaser. Parent
and Purchaser hereby, jointly and severally, represent and warrant to each of
the Stockholders as of the date hereof as follows:
(a) Authority. Parent and Purchaser have all necessary
power and authority to execute and deliver the Merger Agreement and this
Agreement and to consummate the transactions contemplated thereby and hereby.
The execution and delivery of the Merger Agreement and this Agreement by each of
Parent and Purchaser, and the consummation of the transactions contemplated
thereby and hereby, have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of each of Parent and Purchaser
are necessary to authorize this Agreement, the Merger Agreement or to consummate
the transactions contemplated hereby or thereby (other than with respect to the
Merger, the filing of the appropriate merger documents with the Secretary of
State of the State of Delaware as required by the Delaware General Corporation
Law ("DGCL")). The Merger Agreement and this Agreement each has been duly and
validly executed and delivered by Parent and Purchaser and approved by Parent as
the sole stockholder of Purchaser, and, assuming due authorization, execution
and delivery by the Company and each Stockholder, respectively, constitutes a
legal, valid and binding obligation of Parent and Purchaser enforceable against
Parent and Purchaser in accordance with its terms, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium, or similar law
affecting creditors' rights generally and subject, as to enforceability, to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) No Conflicts. The execution and delivery of the
Merger Agreement and this Agreement by Parent and Purchaser do not, and the
consummation of the Offer, the Merger and the other Transactions (including this
Agreement) and compliance with the terms thereof and hereof will not, (i)
conflict with or violate the certificate of incorporation or by-laws or
equivalent organizational documents of Parent or Purchaser, (ii) conflict with
or violate any law, rule, regulation, order, judgment or decree applicable to
Parent or any subsidiary of Parent (each, a "Parent Subsidiary") or by which any
property or asset of Parent or any Parent Subsidiary is bound or affected or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, result in the
loss of a material benefit under or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Parent or any Parent Subsidiary
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
5
license, permit, franchise or other instrument or obligation to which Parent or
any Parent Subsidiary is a party or by which Parent or any Parent Subsidiary or
any property or asset of Parent or any Parent Subsidiary is bound or affected,
except for (A) the applicable requirements of the Exchange Act and the
Securities Act, (B) the applicable requirements of state securities laws,
takeover laws or Blue Sky laws and (C) in the case of clauses (ii) and (iii)
above, except for any such conflicts, violations, breaches, defaults or other
occurrences which, individually or in the aggregate, have not had and would not
reasonably be expected to prevent or materially delay the ability of the
Purchaser or Parent to perform their obligations under this Agreement (a "Parent
Material Adverse Effect").
(c) No Consents. The execution and delivery of the Merger
Agreement and this Agreement by Parent and Purchaser do not, and neither the
performance of the Merger Agreement and this Agreement by Parent and Purchaser
nor the consummation of the Transactions by the Company will, require any
consent, approval, authorization, order or permit of, or filing with or
notification to, any Governmental Entity, except for (i) applicable requirements
of the Exchange Act and the Securities Act, (ii) filing of appropriate merger
documents with the Secretary of State of the State of Delaware as required by
the DGCL, (iii) the applicable requirements of state securities laws, takeover
laws or Blue Sky laws and (iv) such other consents, approvals, authorizations or
permits, filings or notifications, not obtained or made prior to consummation of
the transactions contemplated hereby, the failure of which to be obtained or
made would not prevent or delay consummation of the transactions contemplated
hereby, or otherwise prevent Parent or Purchaser from performing its obligations
under the Merger Agreement or this Agreement in any material respect, and which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Parent Material Adverse Effect.
(d) No Brokers. There is no investment banker, broker,
finder or other intermediary (other than legal and accounting advisors) which
have been retained by or is authorized to act on behalf of Parent or any of its
subsidiaries (or any director or officer thereof) who might be entitled to any
fee or commission from Parent, Purchaser or any of their respective assignees
upon consummation of the transactions contemplated by this Agreement.
5. Covenants of Each Stockholder. Each Stockholder hereby,
severally and not jointly, covenants and agrees as follows:
(a) At any meeting of stockholders of the Company called
to vote upon the Merger and the Merger Agreement or at any adjournment thereof
or in any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger and the Merger
Agreement is sought, in each case after such time as Purchaser has purchased the
Subject Shares of each Stockholder hereunder, and only if the record date for
any such vote precedes the date of the sale of such Subject Shares to Purchaser,
each Stockholder shall vote (or cause to be voted) the Subject Shares of such
Stockholder, including by executing a written consent solicitation if requested
by Parent or Purchaser, in respect of which such Stockholder then has or
exercises voting control in favor of the Merger, the adoption by the Company of
the Merger Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement.
(b) At any meeting of stockholders of the Company or at
any adjournment thereof or in any other circumstances upon which such
Stockholder's votes, consents or other approvals are sought, such Stockholder
shall vote (or cause to be voted) the Subject Shares of such Stockholder in
respect of which such Stockholder then has or exercises voting control against
(i) any merger agreement or merger (other than the Merger Agreement and the
Merger), consolidation, business combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of or
by the Company (in each case except as contemplated by the Merger Agreement,
including by the Interim Business Plan) or any other Acquisition Proposal and
(ii) any amendment of the Company's certificate of
6
incorporation or by-laws or other proposal or transaction involving the Company
or any of its subsidiaries, which amendment or other proposal or transaction
would be reasonably likely to impede, frustrate, prevent, delay or nullify the
Offer, the Merger, the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement or change in any manner the voting rights
of any class of common stock or other voting securities of the Company. The
Stockholder further agrees not to commit or agree to take any action or enter
into any agreement inconsistent with the foregoing.
(c) Such Stockholder shall not (i) sell, transfer, give,
pledge, assign or otherwise dispose of (including by gift) (collectively,
"Transfer"), or consent to any Transfer of, any or all of the Subject Shares of
such Stockholder or any interest therein or enter into any contract, option or
other arrangement (including any profit sharing arrangement) with respect to the
Transfer of, the Subject Shares to any person other than Parent, Purchaser or
another permitted purchaser pursuant to the terms of the Merger Agreement or
otherwise to Purchaser in accordance with Sections 1 or 2 (other than any
Transfer pursuant to the laws of descent or distribution) or (ii) enter into any
other voting arrangement, whether by proxy, voting agreement, voting trust,
power-of-attorney or otherwise, with respect to the Subject Shares. Such
Stockholder shall not commit or agree to take any of the foregoing actions.
(d) Such Stockholder hereby consents to and approves the
actions taken by the Board of Directors of the Company in approving the Merger
Agreement, the Merger and the other transactions contemplated by the Merger
Agreement for purposes of ensuring that any restrictions on business
combinations set forth in the DGCL and applicable to the Company and/or in the
Bylaws of the Company do not, and will not, apply to this Agreement, the Merger
Agreement or the transactions contemplated thereby. Such Stockholder hereby
waives, and agrees not to exercise or assert, any appraisal rights under the
DGCL in connection with the Merger.
6. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably and severally
grants to, and appoints, Parent and Purchaser and Xxxxxxx XxXxxxx and Xxxx
XxXxxx, or any of them, in their respective capacities as officers of Purchaser,
and any individual who shall hereafter succeed to any such office of Purchaser,
and each of them individually, such Stockholder's proxy and attorney-in-fact
(with full power of substitution), for and in the name, place and stead of such
Stockholder, to vote such Stockholder's Subject Shares, or grant a consent or
approval in respect of such Subject Shares, in each case solely as and to the
extent set forth in Section 5(a) and 5(b) hereof; provided, however, that
without limiting the foregoing, no person acting as proxy and attorney-in-fact
thereunder shall have the right (and such proxy shall not confer the right) to
vote or act against the Merger, or to vote or act to reduce the Offer Price or
otherwise modify or amend the Merger Agreement to reduce the rights or benefits
of the Company or any stockholders of the Company (including each Stockholder)
under the Offer or the Merger Agreement or to reduce the obligations of Parent
or Purchaser thereunder.
(b) Each Stockholder severally represents that any
proxies heretofore given in respect of such Stockholder's Subject Shares are not
irrevocable or if irrevocable, that the valid consent to the revocation of such
proxies from the party or parties to whom such proxies were heretofore granted
will be obtained, and that any such proxies are hereby revoked to the extent
necessary to effect the transactions contemplated by Sections 1, 2, 5 and 6
hereof. Each Stockholder understands and acknowledges that Parent and Purchaser
are entering into the Merger Agreement in reliance upon such Stockholder's
execution and delivery of this Agreement.
(c) Each Stockholder hereby affirms that the irrevocable
proxy set forth in this Section 6 is given in connection with the execution of
the Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the obligations of such Stockholder under Section 5(a) and
7
5(b) hereof. Such Stockholder hereby further affirms that the irrevocable proxy
is coupled with an interest and may under no circumstances be revoked. Such
irrevocable proxy is executed and intended to be irrevocable in accordance with
the DGCL. Such irrevocable proxy shall be valid until the earlier to occur of
(i) eleven months from the date hereof and (ii) the termination of this
Agreement pursuant to Section 10. Notwithstanding anything in this Agreement to
the contrary, the proxy granted pursuant to this Section 6 shall irrevocably
cease and shall be of no further force or effect upon (i) any material breach by
Parent or Purchaser of their obligations under Section 1.1 of the Merger
Agreement or (ii) any material violation by Parent or Purchaser of any of the
terms of this Agreement.
7. Further Assurances. Upon the terms and subject to the
conditions set forth in this Agreement, each of Parent and Purchaser agrees to
comply with its obligations under the Merger Agreement and each of the parties
agrees to use all reasonable best efforts to consummate and make effective the
other transactions contemplated by this Agreement. The foregoing provisions of
this Section shall not, however, prohibit an individual Stockholder, or any
partner, stockholder, officer, director, employee, affiliate or Representative
of a Stockholder that is a legal entity, who is a director or officer of the
Company from performing his or her legally required fiduciary duties as a
director or officer of the Company as permitted or required under the Merger
Agreement. Parent shall cause Purchaser to consummate the transactions
contemplated hereby on the terms and subject to the conditions set forth in this
Agreement.
8. Certain Events. Each Stockholder agrees that all of the
Stockholder's obligations hereunder shall be binding upon any person or entity
to which legal or beneficial ownership of such Subject Shares shall pass,
whether by operation of law or otherwise, including such Stockholder's
administrators or successors. In the event of any stock split, stock dividend,
merger, reorganization, recapitalization or other change in the capital
structure of the Company affecting the Common Stock or the acquisition of
additional shares of Common Stock or other securities of the Company by any
Stockholder in respect to the Subject Shares, the number of Subject Shares
listed on the Stockholders' signature page and the purchase price for the
Subject Shares pursuant to the Purchase Option shall be adjusted appropriately.
This Agreement and the obligations hereunder shall attach to any additional
shares of Common Stock or other securities of the Company issued to or acquired
by such Stockholder in respect to the Subject Shares.
9. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that (i)
Purchaser may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to any U.S. subsidiary of Parent that may be
substituted for Purchaser in accordance with the terms of the Merger Agreement
so long as such subsidiary assumes all obligations of Purchaser and Purchaser
remains liable for all such obligations, and (ii) Parent may assign, in its sole
discretion, any and all of its rights, interests and obligations hereunder to
any direct or indirect wholly-owned subsidiary of Parent that assumes all of
Parent's obligations hereunder, provided that Parent will remain liable for its
obligations hereunder. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
10. Termination. This Agreement shall terminate automatically and
without further action of any party, upon the earliest to occur of (i) the
termination of the Merger Agreement in accordance with the terms of the Merger
Agreement, (ii) the consummation of the Merger, (iii) the consummation of the
exercise of the Purchase Option, or (iv) the acceptance for payment of all the
Subject Shares pursuant to the Offer. In addition, this Agreement may be
terminated by any Stockholder with respect to such Stockholder if Parent or
Purchaser shall have failed to comply in any material respect with its
obligations under Section 1.1 of the Merger Agreement. Notwithstanding the
foregoing, Sections 9, 10, 11, 12, 13,
8
14 and 15 hereof shall survive any termination of this Agreement. No termination
of this Agreement shall relieve any party from liability for breach of this
Agreement or failure by such party to perform its obligations hereunder.
11. Effectiveness. This Agreement shall be effective upon the
execution of the Merger Agreement by all parties thereto.
12. Several Obligations. Notwithstanding any other provision
hereof, each Stockholder's obligations hereunder are several, and not joint and
several. Upon execution hereof by Parent, Purchaser and any Stockholder, this
Agreement shall be binding upon and inure to the benefit of Parent, Purchaser
and each such Stockholder, regardless of the failure of any other party listed
on the signature page hereto to execute this Agreement.
13. General Provisions.
(a) Amendments. This Agreement may not be amended except
by an instrument in writing signed by each of the parties hereto.
(b) Notice. All notices, requests and other
communications to any party hereunder shall be in writing, including facsimile,
or similar writing, and shall be deemed given if delivered to Parent and
Purchaser at the address or telecopier number set forth in Section 9.3 of the
Merger Agreement and to the Stockholder at its address or telecopier number set
forth on Schedule A attached hereto (or at such other address or telecopier
number for a party as shall be specified by like notice). Each such notice,
request or other communication shall be effective (i) if given by facsimile and
received at or prior to 5:00 p.m. local time on a business day, upon
confirmation of receipt, and if given by facsimile and received at any other
time, upon the next business day or (ii) if given by any other means, when
delivered at the address specified in this Section 13(b).
(c) Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
(d) Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when two or more of the counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that each party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior representations,
warranties, negotiations, agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and (ii) is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION
AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
9
(g) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
(h) Survival of Representations, Warranties and
Covenants. The representations and warranties contained herein shall not survive
the Effective Time. Unless otherwise provided for herein, the covenants and
agreements contained herein shall not survive the Effective Time or the
termination of this Agreement.
14. Confidentiality; Public Announcements. Each Stockholder
recognizes that successful consummation of the transactions contemplated by this
Agreement (including the Offer and the Merger) may be dependent upon
confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof each Stockholder hereby agrees not
to issue any press release or make any other public statement or disclose or
discuss such matters with anyone not a party to this Agreement (other than such
Stockholder's, partners, shareholders, investors, officers, directors,
employees, affiliates and Representatives, if any, and the Company and its
officers, directors, employees and Representatives, in each case who are aware
of or need to be consulted with respect to such matters) without the prior
written consent of Parent and the Company, except for filings required pursuant
to the Exchange Act and the rules and regulations thereunder or as required by
law or by obligations pursuant to any listing agreement with any national
securities exchange or national securities quotation system, in which case the
party making such release will use reasonable efforts to obtain comments from
the other party before issuance of such release or statement.
15. Stockholder Capacity. No person executing this Agreement who
is or becomes during the term hereof a director or officer of the Company makes
any agreement or understanding herein in his or her capacity as such director or
officer. Each Stockholder signs solely in his, her or its capacity as the record
holder and beneficial owner of such Stockholder's Subject Shares, or as a
representative granted voting and investment power by the holder or holders
thereof with respect to such Subject Shares, and nothing herein shall limit or
affect any actions taken by such Stockholder or any partner, stockholder,
investor, officer, director, employee, affiliate or Representative of such
Stockholder in such Stockholder's or such person's capacity as an officer or
director of the Company. This Section 15 shall survive termination of this
Agreement. For further certainty, nothing contained in this Agreement shall
affect any Stockholder's rights, titles, interests, powers or privileges with
respect to any Shares held beneficially or of record by such Stockholder except
that number of such Shares constituting such Stockholder's Subject Shares, and
it is acknowledged that one or all of the Stockholders own Shares in addition to
their Subject Shares.
10
IN WITNESS WHEREOF, Parent, Purchaser and each Stockholder listed on
the attached signature pages have caused this Agreement to be duly executed and
delivered as of the date first written above.
U.S. REALTEL, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer
CYPRESS MERGER SUB, INC.
By: /s/ Xxxxxxx X. XxXxxxx
-------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President
[Signatures of Stockholders on following pages]
11
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
CENTENNIAL FUND V, L.P.
By: Centennial Holdings V, L.P.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
Its: General Partner
Number of Subject Shares owned as of
January 10, 2002 and subject to the
Stockholders' Agreement:
232,660 shares of Common Stock
Notice Address:
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx X. Xxxxxx, General Counsel
Centennial Ventures
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
CENTENNIAL ENTREPRENEURS FUND V, L.P.
By: Centennial Holdings V, L.P.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
Its: General Partner
Number of Subject Shares owned as of
January 10, 2002 and subject to the
Stockholders' Agreement:
5,870 shares of Common Stock
Notice Address:
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx X. Xxxxxx, General Counsel
Centennial Ventures
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
CENTENNIAL HOLDINGS I, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Its: Managing Director
Number of Subject Shares owned as of
January 10, 2002 and subject to the
Stockholders' Agreement:
2,773 shares of Common Stock
Notice Address:
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx X. Xxxxxx, General Counsel
Centennial Ventures
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
W. XXXXX XXXXXX
/s/ W. Xxxxx Xxxxxx
----------------------------------------
Number of Subject Shares owned as of
January 10, 2002 and subject to the
Stockholders' Agreement:
28,865 shares of Common Stock
Notice Address:
0000 Xxxxxxx Xxxxxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
With a copy to:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
R. XXXXXXX XXXXX
/s/ R. Xxxxxxx Xxxxx
----------------------------------------
Number of Subject Shares owned as of
January 10, 2002 and subject to the
Stockholders' Agreement:
19,944 shares of Common Stock
Notice Address:
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
With a copy to:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
ALTA COMMUNICATIONS VI, L.P.
By: Altal Communications VI Management
Partners, L.P.
Its: General Partner
By: /s/ Xxxxxx XxXxxxxx
---------------------------------
Xxxxxx XxXxxxxx
Its: General Partner
Number of Subject Shares owned as of
January 10, 2002 and subject to the
Stockholders' Agreement:
169,642 shares of Common Stock
Notice Address:
------------------------------------
------------------------------------
------------------------------------
With a copy to:
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
NASSAU CAPITAL PARTNERS III, L.P.
By: Nassau Capital, L.L.C.
Its: General Partner
By: /s/ Xxxxxxx X. Hack
---------------------------------
Xxxxxxx X. Hack
Its: Member
Number of Subject Shares owned as of
January 10, 2002 and subject to the
Stockholders' Agreement:
82,081 shares of Common Stock
Notice Address:
Nassau Capital L.L.C.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
With a copy to:
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
