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Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
AMONG
AT&T CORP.,
KIRI INC.,
FRANTIS, INC.
AND
FIRSTCOM CORPORATION
DATED AS OF NOVEMBER 1, 1999
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TABLE OF CONTENTS
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ARTICLE I THE MERGER............................................................ 2
1.1. The Merger.................................................. 2
1.2. Closing..................................................... 2
1.3. Effective Time of the Merger................................ 2
1.4. Certificate of Incorporation and By-Laws.................... 2
1.5. Directors; Officers......................................... 2
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES........................................ 2
2.1. Effect on Capital Stock..................................... 2
2.2. Delivery of Certificates.................................... 3
2.3. Company Stock Options....................................... 5
ARTICLE III REPRESENTATIONS AND WARRANTIES...................................... 6
3.1. Representations and Warranties of the Company............... 6
3.2. Representations and Warranties of Parent.................... 16
ARTICLE IV COVENANTS............................................................ 19
4.1. No Solicitation............................................. 19
4.2. Conduct of Business......................................... 20
4.3. Filings; Other Action....................................... 24
4.4. Access to Information; Pre-Closing Review................... 24
4.5. Publicity................................................... 25
4.6. Further Action.............................................. 25
4.7. Insurance; Indemnity........................................ 26
4.8. Shareholder Approval; Preparation of Proxy Statement........ 26
4.9. Certain Tax Matters......................................... 27
4.10. Senior Notes................................................ 27
4.11. Ancillary Agreements........................................ 28
4.12. Netstream Purchase Price Adjustment......................... 28
4.13. Conduct of Business of RV and Netstream..................... 28
4.14. RV Public Shares............................................ 30
4.15. Credit Facility............................................. 30
ARTICLE V CONDITIONS............................................................ 30
5.1. Conditions to Each Party's Obligations...................... 30
Additional Conditions to Obligations of Parent, RV and
5.2. Merger Sub.................................................. 31
5.3 Additional Conditions to Obligations of the Company......... 32
ARTICLE VI TERMINATION.......................................................... 33
6.1. Termination................................................. 33
6.2. Effect of Termination....................................... 34
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ARTICLE VII GENERAL PROVISIONS.................................................. 34
7.1. Nonsurvival of Representations and Warranties............... 34
7.2. Amendment................................................... 34
7.3. Extension; Waiver........................................... 34
7.4. Notices..................................................... 35
7.5. Assignment; Binding Effect.................................. 35
7.6. Entire Agreement............................................ 35
7.7. Fees and Expenses........................................... 35
7.8. Governing Law............................................... 36
7.9. Headings.................................................... 36
7.10. Interpretation.............................................. 36
7.11. Investigations.............................................. 36
7.12. Severability................................................ 36
7.13. Enforcement of Agreement.................................... 37
7.14. Counterparts................................................ 37
Schedule A Definitions
Exhibit A Certificate of Incorporation and By-Laws of RV and of Merger Sub
Exhibit B Form of RV Board Policy
Exhibit C-1 Forms of Amended and Restated Certificate of Incorporation of RV
Exhibit C-2 Form of Amended and Restated By-Laws of RV
Exhibit D Form of Service Xxxx License Agreement
Exhibit E Form of RV Agreement
Exhibit F Terms of Credit Facility
Exhibit G Form of Certificate of Designation
Annex A Representation Letters
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AGREEMENT AND PLAN OF MERGER, dated as of November 1, 1999 ("Agreement"),
among AT&T Corp., a New York corporation ("Parent"), Kiri Inc., a Delaware
corporation ("RV"), Frantis, Inc., a Delaware corporation and wholly-owned
subsidiary of RV ("Merger Sub"), and FirstCom Corporation, a Texas corporation
(the "Company"). Certain capitalized terms used herein are defined in Schedule A
attached hereto.
RECITALS
A. Each of Parent, RV, Merger Sub and the Company desire to enter into the
business combination transaction described herein, in which the Company would
merge with and into Merger Sub (the "Merger").
B. The Boards of Directors of Parent and the respective Boards of Directors
or shareholders (as the case may be) of each of RV and Merger Sub have duly
adopted resolutions approving the transactions contemplated hereby.
C. The Board of Directors of the Company, acting on the recommendation of a
special committee of independent directors, has approved this Agreement and the
Merger, has determined by unanimous resolution that the Merger is in the best
interests of the Company and its shareholders and intends to recommend to the
shareholders of the Company that they vote to approve the Merger.
D. Concurrently with the execution of this Agreement and as a condition and
inducement to Parent's willingness to enter into this Agreement, certain
shareholders of the Company have entered into a voting agreement, dated as of
the date hereof (the "Voting Agreement"), among Parent and the several
shareholders named therein, providing, among other things, that such
shareholders will vote in favor of the Merger.
E. JAMTIS, Inc., a Delaware corporation ("Jamtis"), and an indirect
wholly-owned subsidiary of Parent, has entered into agreements (the "Netstream
Acquisition Agreements") to acquire quotas (the "Netstream Shares") representing
100% of the outstanding equity interest in Netstream Telecom Ltda., a Brazilian
company ("Netstream").
F. Parent intends to cause Jamtis to merge with a wholly-owned subsidiary
of RV, such that, following such merger, (i) Jamtis will be a direct
wholly-owned subsidiary of RV, and (ii) Netstream will be an indirect
wholly-owned subsidiary of RV.
G. Pursuant to the Netstream Acquisition Agreements, Promon Tecnologia
S.A., a Brazilian corporation (sociedade anonima) (together with its affiliates,
"Promon") has agreed to purchase, prior to the Closing a 10% interest in the
capital of RV, in the form of RV Class A Shares.
H. Each of Parent, RV, Merger Sub and the Company intend that the Merger
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
I. Each of Parent, RV, Merger Sub and the Company intend that, immediately
following the Effective Time, on a fully-diluted basis, (i) the former
shareholders of the Company will own, collectively, approximately 34% of the
shares of common stock of RV, in the form of RV Class A Common Stock or RV
Preferred Stock, as the case may be, (ii) Promon will own, directly or
indirectly, approximately 6% of the shares of common stock of RV, in the form of
RV Class A Common Stock, and (iii) Parent will own, directly or indirectly,
approximately 60% of the shares of common stock of RV, in the form of RV Class B
Common Stock (as defined herein).
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NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. On the terms and subject to the conditions set forth in
this Agreement, and in accordance with applicable state corporation laws, the
Company shall be merged with and into Merger Sub at the Effective Time (as
defined in Section 1.3 below). Upon the Effective Time, the separate existence
of the Company shall cease, and Merger Sub shall continue as the surviving
corporation (the "Surviving Corporation").
1.2. Closing. Unless this Agreement shall have been terminated pursuant to
Section 6.1, and subject to the satisfaction or waiver of the conditions set
forth in Article V, the closing of the Merger (the "Closing") shall take place
as promptly as practicable (and in any event within two business days) following
satisfaction or waiver of the conditions set forth in Article V (the "Closing
Date"), at the offices of Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, unless another date or place is agreed to in writing by the parties
hereto.
1.3. Effective Time of the Merger. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article V, the Surviving
Corporation shall file a certificate of merger (the "Certificate of Merger")
executed in accordance with the relevant provisions of the Delaware General
Corporation Law ("DGCL"). The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware, or at such other time thereafter as is provided in the Certificate of
Merger (the "Effective Time").
1.4. Certificate of Incorporation and By-Laws. The Articles of
Incorporation and By-Laws of Merger Sub as in effect immediately prior to the
Effective Time shall be the Articles of Incorporation and By-Laws of the
Surviving Corporation following the Merger, until amended in accordance with the
DGCL.
1.5. Directors; Officers. (a) The directors of Merger Sub at the Effective
Time shall be the initial directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
(b) The officers of Merger Sub at the Effective Time shall be the officers
of the Surviving Corporation, until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the case
may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1. Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any further act or deed on the part of Parent, RV, Merger
Sub, the Company or any holder of any of the following securities:
(a) Common Stock of the Company. Each issued and outstanding share of
common stock, par value $0.001 per share, of the Company (together with any
rights appurtenant thereto, "Company Common Stock") shall be converted into
the right to receive one fully paid and non-
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assessable share of Class A common stock, par value $0.01 per share, of RV
("RV Class A Common Stock").
(b) Preferred Stock of the Company. Each issued and outstanding share
of Series A convertible preferred stock, par value $0.001 per share, of the
Company ("Preferred Stock") shall be converted into the right to receive
one fully paid and non-assessable share of Series A convertible preferred
stock, par value $0.001 per share, of RV ("RV Preferred Stock").
2.2. Delivery of Certificates. (a) Exchange Agent; Exchange Fund. As of
the Effective Time, Parent and the Company shall cause to be deposited, with a
bank or trust company designated by Parent (and reasonably acceptable to the
Company) (the "Exchange Agent"), for exchange in accordance with this Article
II, through the Exchange Agent, for the benefit of the holders of shares of
Company Common Stock, certificates representing the shares of RV Class A Common
Stock issuable pursuant to Section 2.1 in exchange for issued and outstanding
shares of Company Common Stock. All of such deposited certificates representing
shares of RV Class A Common Stock, collectively, together with any dividends or
distributions with respect thereto, are referred to hereinafter as the "Exchange
Fund."
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall instruct the Exchange Agent to mail to each holder
of record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock
(collectively, the "Certificates"), (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent and shall be in form and have such other provisions as Parent and
the Company may reasonably specify) and (ii) instructions to effect the
surrender of the Certificates in exchange for certificates representing shares
of RV Class A Common Stock. Upon surrender of one or more Certificates for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, and such other customary or other reasonable documents as may be
required pursuant to such instructions, the holder of such Certificates shall be
entitled to receive in exchange therefor a certificate representing that number
of whole shares of RV Class A Common Stock which such holder has the right to
receive in respect of the Certificates surrendered by such holder pursuant to
the provisions of this Article II, and the Certificates so surrendered shall
forthwith be cancelled. In the event of transfer of ownership of Company Common
Stock which is not registered in the transfer of records of the Company, a
certificate representing the proper number of shares of RV Class A Common Stock
may be issued to a transferee if the Certificate representing such Company
Common Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any time
after the Effective Time to present only the right to receive upon such
surrender a certificate representing shares of RV Class A Common Stock, and cash
in lieu of any fractional shares of RV Class A Common Stock as contemplated by
this Section 2.2.
(c) Distributions with Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the Effective Time with respect to RV Class
A Common Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of RV Class A
Common Stock represented thereby, and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 2.2(e) until the
holder of such Certificate shall have duly surrendered such Certificate in
accordance with Section 2.2(b). Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the holder
of the certificates representing whole shares of RV Class A Common Stock issued
in exchange therefor, without interest, (i) at the time of such surrender or as
promptly thereafter as practicable, the amount of any cash payable with respect
to a fractional share of RV Class A Common Stock to
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which such holder is entitled pursuant to Section 2.2(e) and the amount of
dividends or other distributions, if any, with a record date after the Effective
Time theretofore paid with respect to such whole shares of RV Class A Common
Stock, and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole shares of RV Class A Common Stock.
(d) No Further Ownership Rights in Company Common Stock. All shares of RV
Class A Common Stock issued upon conversion of shares of Company Common Stock in
accordance with the terms hereof (including any cash paid pursuant to Section
2.2(c) or 2.2(e)) shall be deemed to have been issued in full satisfaction of
all rights pertaining to such shares of Company Common Stock, and there shall be
no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this Article II.
(e) Treatment of Fractional Shares. (i) No certificates or scrip
representing fractional shares of RV Class A Common Stock shall be issued upon
the surrender for exchange of Certificates, and such fractional interests will
not entitle the owner thereof to vote or to any rights of a stockholder of the
Surviving Corporation.
(ii) As promptly as practicable following the Effective Time, the Exchange
Agent will determine the excess of (x) the aggregate number of shares of RV
Class A Common Stock delivered to the Exchange Agent over (y) the aggregate
number of whole shares of RV Class A Common Stock to be distributed in
connection with the Merger (such excess being referred to herein as the "Excess
Shares"). Following the Effective Time, Parent and RV will cause the Exchange
Agent, on behalf of the former stockholders of the Company, to sell the Excess
Shares at then-prevailing prices on the securities exchange on which they are
listed in the manner provided in clause (iii) of this Section.
(iii) The sale of the Excess Shares by the Exchange Agent will be executed
through one or more member firms and will be executed in round lots to the
extent practicable. The Exchange Agent will use reasonable efforts to complete
the sale of the Excess Shares as promptly following the Effective Time, as, in
its sole judgment, is practicable consistent with obtaining the best execution
of such sales in light of prevailing market conditions. Until the net proceeds
of such sale or sales have been distributed to the former stockholders of the
Company, the Exchange Agent will hold such proceeds in trust for such holders
(the "Excess Shares Trust"). All commissions, transfer taxes and other
out-of-pocket transaction costs incurred in connection with such sale of Excess
Shares shall be paid by RV. The Exchange Agent will determine the portion of the
Excess Shares Trust to which each holder of Company Common Stock, is entitled,
if any, by multiplying the amount of the aggregate proceeds comprising the
Excess Shares Trust by a fraction, the numerator of which is the amount of the
fractional share interest to which such holder of Company Common Stock is
entitled (after taking into account all such shares held at the Effective Time
by such holder) and the denominator of which is the aggregate amount of
fractional share interests to which all holders of Company Common Stock are
entitled pursuant to the Merger are entitled pursuant to the Merger provided,
that no holder of Company Common Stock will be entitled to receive cash in an
amount equal to or greater than the value of one full share of RV Class A Common
Stock.
(iv) As soon as practicable after the determination of the amount of cash,
if any, to be paid to holders of Company Common Stock with respect to fractional
share interests, the Exchange Agent will make available such amounts to such
holders.
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(f) Termination of Exchange Fund. Any portion of the Exchange Fund that
remains undistributed to the stockholders of the Company for six months after
the Effective Time shall be delivered to RV upon demand, and any stockholders of
the Company who have not theretofore complied with this Article II shall
thereafter look only to RV for payment of their claim for RV Class A Common
Stock, any cash in lieu of fractional shares of RV Class A Common Stock and any
dividends or distributions with respect to RV Class A Common Stock.
(g) No Liability. None of Parent, RV and the Surviving Corporation shall be
liable to any holder of shares of Company Common Stock or RV Class A Common
Stock, as the case may be, for such shares (or dividends or distributions with
respect thereto) or cash from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(h) Withholding Rights. RV or the Exchange Agent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Company Common Stock such amounts as the
Surviving Corporation or the Exchange Agent is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision of
state, local or foreign tax law, or any court order. To the extent that amounts
are so withheld by RV or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of Company Common Stock in respect of which such deduction and
withholding was made by RV or the Exchange Agent.
2.3. Company Stock Options. (a) Each option (each, a "Company Stock
Option" and collectively, the "Company Stock Options") to purchase shares of
Company Common Stock granted under the Company's long-term incentive plans and
directors stock option plans or pursuant to the authority of the Board of
Directors of the Company that is outstanding immediately prior to the Closing
Date shall be deemed to constitute an option to acquire one share of RV Class A
Common Stock (each, an "Assumed Award"), provided that any fractional share of
RV Class A Common Stock resulting from an aggregation of all of the shares of a
holder subject to Company Stock Options shall be rounded to the nearest whole
share, and provided, further, that, for any Company Stock Option to which
Section 421 of the Code applies by reason of its qualification under any of
Sections 422 through 424 of the Code, the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise of
such option shall be determined in order to comply with Section 424 of the Code.
Each such Assumed Award, to the extent permissible under Section 424(a) of the
Code, shall thereafter be exercisable until the end of the period during which
the Company Stock Option was exercisable and shall otherwise have terms no less
favorable to the holder thereof than the original Company Stock Option.
(b) RV shall take such actions as are necessary for the assumption of
Company Stock Options pursuant to this Section 2.3, including the reservation,
issuance and listing of RV Class A Common Stock as is necessary to effectuate
the transactions contemplated by this Section 2.3. RV shall prepare and file
with the SEC a registration statement on an appropriate form, or a
post-effective amendment to a registration statement previously filed under the
Securities Act (as defined herein), with respect to the shares of RV Class A
Common Stock subject to the Assumed Awards and, where applicable, shall use its
reasonable best efforts to have such registration statement declared effective
by Closing Date and to maintain the effectiveness of such Assumed Awards (and to
maintain the current status of the prospectus contained therein) for so long as
such Assumed Awards remain outstanding. With respect to those individuals, if
any, who, subsequent to the Closing, will be subject to the reporting
requirements under Section 16(a) of the Exchange Act, where applicable, RV shall
use its reasonable efforts to administer Company Stock Options assumed pursuant
to this Section 2.3 in a manner that complies with Rule 16b-3 promulgated under
the Exchange Act (as defined herein).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Company. The Company hereby
represents and warrants to Parent, RV and Merger Sub as of the date hereof and
as of the Closing Date as follows:
(a) Existence; Good Standing; Corporate Authority. Each of the Company
and its Subsidiaries is (i) a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation
and (ii) duly licensed or qualified to do business as a foreign corporation
and is in good standing under the laws of any other state of the United
States or (to the extent the concepts of "qualified to do business" and
"good standing" exist) any other jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its
business makes such licensure, qualification or good standing necessary,
except where the failure to be so in good standing or to be so licensed or
qualified, individually or in the aggregate, would not have a material
adverse effect on (x) the business, operations, results of operations,
assets or financial condition of the Company or any Subsidiary, or (y) the
ability of the Company to perform its obligations under this Agreement or
any Ancillary Agreement (any of the foregoing events or circumstances being
referred to herein as a "Material Adverse Effect"). Each of the Company and
its Subsidiaries has the requisite corporate power and authority to own,
operate and lease its properties and assets and carry on its business as
now conducted and proposed to be conducted as discussed in the Company
Reports (as defined below). The Company has delivered to Parent true and
correct copies of the Certificate of Incorporation and By-Laws of the
Company and of the comparable organizational documents of each Subsidiary
of the Company, each of which is in full force and effect.
(b) Authorization, Validity and Effect of Agreements. The Company has
the requisite corporate power and authority to execute and deliver this
Agreement and the Ancillary Agreements to which it is a party, to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by the Company
of this Agreement and such Ancillary Agreements, the performance of its
obligations hereunder and thereunder and the consummation by the Company of
the transactions contemplated hereby and thereby have been duly and validly
authorized by the Board of Directors of the Company, and no other action on
the part of the Company or any shareholder thereof is necessary to
authorize the execution and delivery by the Company of this Agreement or
such Ancillary Agreements, to perform the obligations hereunder or
thereunder or to consummate the transactions contemplated hereby or thereby
(other than the approval of this Agreement and the Merger by the holders of
a majority of the shares of Company Common Stock). The Board of Directors
of the Company, acting on the recommendation of a duly constituted special
committee of independent directors, has duly adopted resolutions
determining that the Merger is advisable and the terms of this Agreement
and the Merger are fair to, and in the best interests of, the Company and
the Company's shareholders. This Agreement has been, and upon execution as
contemplated herein, each Ancillary Agreement to which the Company is a
party, will have been, duly and validly executed and delivered by the
Company, and (assuming due execution and delivery of this Agreement and
each of such Ancillary Agreements by each other party hereto and thereto)
constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(c) Compliance with Laws. Except as set forth on Schedule 3.1(c) of
the Disclosure Letter, neither the Company nor any of its Subsidiaries is
in violation of any foreign, federal, state or local law, statute,
ordinance, rule, regulation, order, judgment, ruling or decree ("Laws") of
any foreign, federal, state or local judicial, legislative, executive,
administrative or regulatory
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body or authority or any court, arbitration, board or tribunal (each such
entity, a "Governmental Entity") applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, except for
violations which, individually or in the aggregate, would not have a
Material Adverse Effect.
(d) Capitalization of the Company. (i) As of the date hereof, the
authorized capital stock of the Company consists of 50,000,000 shares of
Company Common Stock and 10,000,000 shares of Preferred Stock and (A)
24,376,556 shares of Company Common Stock are issued and outstanding, (B)
1,313,086 shares of Preferred Stock are issued and outstanding, (C) options
to purchase an aggregate of 10,578,500 shares of Company Common Stock are
outstanding (the "Options"), 10,578,500 shares of Company Common Stock are
reserved for issuance upon the exercise of outstanding Options and 300,000
shares are reserved for future grants under all stock option or other
incentive plans or arrangements of the Company (the "Company Stock Plans"),
and there are no stock appreciation rights or limited stock appreciation
rights or other equity-related rights or awards outstanding other than the
Options, (D) warrants to purchase 5,758,771 shares of Company Common Stock
are outstanding (the "Warrants"), and 5,758,771 shares are reserved for
issuance upon the exercise of the Warrants, and (E) no shares of Company
Common Stock or Preferred Stock are held by the Company's Subsidiaries or
in treasury. Except for the Warrants, the Options and the shares of
Preferred Stock outstanding, the Company has no outstanding bonds,
debentures, notes or other obligations, instruments or securities entitling
the holders thereof to vote (or which are convertible into or exercisable
for securities having the right to vote) with the shareholders of the
Company on any matter. Schedule 3.1(d) of the Disclosure Letter sets forth
for each Option and Warrant outstanding as of the date hereof, (I) its
exercise price, (II) its expiration date, (III) the first date upon which
it becomes exercisable, and (IV) the number of shares of Company Common
Stock (or other securities) for which it is exercisable.
(ii) Except as set forth on Schedule 3.1(d)(ii), of the Disclosure
Letter, since June 30, 1999 the Company has not (A) issued any shares of
its capital stock, (B) granted any options or warrants to purchase any
shares of its capital stock or (C) split, combined or reclassified any
shares of its capital stock. All issued and outstanding shares of Company
Common Stock and Preferred Stock are duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights.
(iii) Except for the Options, the Warrants, the outstanding shares of
Preferred Stock and the rights (the "Company Rights") distributed to
holders of Company Common Stock pursuant to the Rights Agreement, dated as
of April 1, 1998 (in the form attached as Exhibit 2.1 to the SEC Form 8-A
filed by the Company on April 3, 1998), between the Company and American
Stock Transfer & Trust Company (the "Rights Agreement"), and except as set
forth in this Section 3.1(d) or in Schedule 3.1(d) of the Disclosure
Letter, there are no other shares of capital stock of the Company, no
securities of the Company convertible into or exchangeable for shares of
capital stock or voting securities of the Company, and no existing options,
warrants, calls, subscriptions, convertible securities, or other rights,
agreements or commitments which obligate the Company or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock of, or
equity interests in, the Company or any of its Subsidiaries. Except as set
forth in the certificate of designation relating to the outstanding shares
of Preferred Stock, there are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company and, other than outstanding Options,
there are no awards outstanding under any Company Stock Plans or any other
outstanding stock-related awards. There are no voting agreements, voting
trusts or other agreements or understandings to which the Company or any of
its Subsidiaries is a party (or, to
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the knowledge of the Company, to which any two or more shareholders are
parties, other than the Voting Agreement) with respect to the voting of
capital stock of the Company or any of its Subsidiaries.
(e) Subsidiaries. Schedule 3.1(e) of the Disclosure Letter sets forth
for each Subsidiary of the Company: (i) its name and jurisdiction of
incorporation or organization; (ii) its authorized capital stock or share
or equity capital; (iii) the number of issued and outstanding shares of
capital stock or equity capital; and (iv) the legal and beneficial owner or
owners of such shares. Except as set forth on Schedule 3.1(e) of the
Disclosure Letter, each of the outstanding shares of capital stock or other
equity interest of each of the Company's Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable, and is owned, directly or
indirectly, by the Company free and clear of all liens, pledges, security
interests, claims or other encumbrances (collectively, "Encumbrances").
Except for interests in the Company's Subsidiaries or as set forth on
Schedule 3.1(e) of the Disclosure Letter, neither the Company nor any of
its Subsidiaries owns directly or indirectly any interest or investment
(whether equity or debt) in any corporation, firm, partnership, limited
liability company, joint venture, business, association, trust, business
trust or other entity (each individually, along with any natural person and
any Government Entity, a "Person").
(f) No Violation; Consents. (i) Except as set forth on Schedule 3.1(f)
of the Disclosure Letter, neither the execution, delivery or performance by
the Company of this Agreement or any of the Ancillary Agreements nor the
consummation by the Company of the transactions contemplated hereby or
thereby will: (A) violate, conflict with or result in a breach of any
provisions of the Certificate of Incorporation or By-Laws (or comparable
organizational documents) of the Company or any of its Subsidiaries; (B)
violate, conflict with, result in a breach of any provision of, constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, result in the termination or in a right of
termination of, accelerate the performance required by or benefit
obtainable under, result in the triggering of any payment or other
obligations pursuant to, result in the creation of any Encumbrance upon any
of the properties or assets of the Company or any of its Subsidiaries
under, or result in there being declared void, voidable, subject to
withdrawal, or without further binding effect, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust or any
license, franchise, Permit, lease, contract, plan, agreement or other
instrument, commitment or obligation to which the Company or any of its
Subsidiaries is a party, by which the Company or any of its Subsidiaries or
any of their respective properties is bound, or under which the Company or
any of its Subsidiaries or any of their respective properties is entitled
to a benefit (each of the foregoing, to the extent the same have any
continuing force or effect, a "Contract" and collectively, "Contracts"),
except for any of the foregoing matters which, individually or in the
aggregate, would not have a Material Adverse Effect or prevent or
materially delay the consummation of the transactions contemplated hereby
(a "Material Delaying Effect"); or (C) violate any Laws applicable to the
Company, any of its Subsidiaries or any of their respective assets or
properties, except for violations which, individually or in the aggregate,
would not have a Material Adverse Effect.
(ii) Except as set forth on Schedule 3.1(f) of the Disclosure Letter,
and other than the filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), the Securities Exchange Act of
1934, as amended (together with the rules and regulations promulgated
thereunder, the "Exchange Act"), the Securities Act of 1933, as amended
(with respect to the Registration Statement) or filings in connection with
the maintenance of qualification to do business in other jurisdictions (the
filings disclosed in the Disclosure Letter relating to this clause (ii),
the other filings referred to in this clause (ii) and
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the Other Antitrust Filings and Consents required or permitted to be made
or obtained, collectively, the "Regulatory Filings"), neither the
execution, delivery or performance by the Company of this Agreement or any
of the Ancillary Agreements nor the consummation by the Company of the
transactions contemplated hereby or thereby will require any consent,
approval or authorization of, or declaration, filing or registration with,
(A) any Governmental Entity, including any such consent, approval,
authorization, declaration, filing or registration under any Laws of any
foreign jurisdiction relating to antitrust matters or competition ("Foreign
Antitrust Laws"), (B) any other Law of any foreign jurisdiction, or (C) any
other Person, except for those consents, approvals, authorizations,
declarations, filings or registrations the failure of which to obtain or
make, individually or in the aggregate, would not have a Material Adverse
Effect or a Material Delaying Effect.
(g) Company Reports; Absence of Undisclosed Liabilities. (i) Each
registration statement, report (including annual and quarterly reports),
proxy statement or information statement (as defined under the Exchange
Act) and all attachments and exhibits thereto prepared by the Company or
relating to its securities or properties since January 1, 1997, each in the
form (including all exhibits and amendments thereto) filed with the
Securities and Exchange Commission (the "SEC") (collectively, as amended or
restated, the "Company Reports"), as of their respective dates (or the
respective dates of the latest amendments thereto or restatements thereof),
(A) complied as to form in all material respects with the applicable
requirements of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act") and the Exchange Act and (B)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading. Each of the consolidated balance sheets included
in or incorporated by reference in the Company Reports fairly presented the
financial position of the entity or entities to which it relates as of its
date, and each of the consolidated statements of results of operations and
consolidated statements of cash flows included in or incorporated by
reference in the Company Reports fairly presented the results of operations
or cash flows, as the case may be, of the entity or entities to which it
relates for the periods set forth therein, in each case in accordance with
United States generally accepted accounting principles consistently applied
during the periods involved.
(ii) Except as set forth on Schedule 3.1(g) of the Disclosure Letter,
neither the Company nor any of its Subsidiaries has any liabilities or
obligations, whether liquidated, accrued, contingent or otherwise, except
(x) liabilities and obligations in the respective amounts reflected or
reserved against in the consolidated balance sheet of the Company and its
Subsidiaries as of June 30, 1999 included in the Company Reports and (y)
liabilities and obligations incurred in the ordinary course of business
since that date which individually or in the aggregate would not have a
Material Adverse Effect.
(h) Rights Agreement; Absence of Affiliated Shareholder. (i) The
Company has duly amended the Rights Agreement to provide that none of the
approval, execution or delivery of this Agreement or the consummation of
the Merger will cause (x) the Company Rights to become exercisable under
the Rights Agreement, (y) Parent or Merger Sub (or any of their respective
affiliates), to be deemed an "Acquiring Person" (as defined in the Rights
Agreement), or (z) result in the occurrence of a "Distribution Date" or
"Triggering Event" (as defined, respectively, in the Rights Agreement).
(ii) No shareholder of the Company is or, at any time during the
three-year period preceding the date hereof or the Effective Time, has
been, an "affiliated shareholder" of the Company as such term is defined in
Part Thirteen of the Texas Business Corporation Act.
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(i) Litigation. Except as disclosed in the Company Reports, there are
no claims, actions, suits, proceedings, arbitrations, investigations or
audits (collectively, "Litigation") by a third party (including a
Governmental Entity) pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries, other than those
which, individually or in the aggregate, would not have a Material Adverse
Effect. Except as disclosed in the Company Reports, no Governmental Entity
has advised the Company or any of its Subsidiaries of an intention to
conduct any audit, investigation or other review with respect to the
Company or any of its Subsidiaries that the Company reasonably believes
would be material.
(j) Absence of Certain Changes. Except as set forth in the Company
Reports or on Schedule 3.1(j) or 3.1(d) of the Disclosure Letter, since
June 30, 1999, the Company and its Subsidiaries have conducted their
business only in the ordinary course of such business consistent with past
practices, and there has not occurred (i) any Material Adverse Effect; (ii)
any declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of the Company or any of its
Subsidiaries (other than Subsidiaries that, at all times since June 30,
1999, have been wholly-owned, directly or indirectly, by the Company) or
any repurchase, redemption or any other acquisition by the Company or any
of its Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company or any of its
Subsidiaries; (iii) any change in accounting principles, practices or
methods used by the Company or any of its Subsidiaries; (iv) any entering
into or amendment of any employment agreement, which is, or would be
required to be, set forth on Schedule 3.1(m), with, or any increase in the
rate or terms (including, without limitation, any acceleration of the right
to receive payment) of compensation payable, or to become payable, by the
Company or any of its Subsidiaries to, their respective directors, officers
or employees; (v) any entering into or amendment of any increase in the
rate or terms (including, without limitation, any acceleration of the right
to receive payment) of any bonus, insurance, pension or other employee
benefit plan or arrangement covering any such directors, officers or
employees; (vi) any revaluation by the Company or any of its Subsidiaries
of any of their respective assets except for write-downs and write-offs not
exceeding $500,000 or equivalent in the aggregate or for which specific
reserves were made in the preparation of the consolidated balance sheet of
the Company and its Subsidiaries, as at June 30, 1999, included in the
Company Reports; (vii) any transaction or commitment made by the Company or
any of its Subsidiaries to buy or sell any assets that are or would be
material to the Company's business; or (viii) any other transaction or
event that, had it occurred after the date of this Agreement, would
constitute a breach of the covenant set forth in Section 4.2(b).
(k) Taxes. Except as set forth on Schedule 3.1(k) of the Disclosure
Letter:
(i)(A) All Tax Returns relating to the Company and each of its
Subsidiaries or the business or assets thereof that were required to be
filed on or before the Closing Date have been duly and timely filed and
are correct and complete in all material respects, (B) all Taxes shown
as owing on such Tax Returns have been paid, and (C) neither the Company
nor any of its Subsidiaries is currently the beneficiary of any
extension of time within which to file any Tax Return which has not been
filed.
(ii)(A) All material Taxes that are or may become payable by the
Company or any of its Subsidiaries or chargeable as an Encumbrance upon
the assets thereof as of the Closing Date for which the filing of a Tax
Return is not required have been duly and timely paid, (B) the Company
and each of its Subsidiaries has duly and timely withheld all material
Taxes required to be withheld in connection with the business or assets
of such person, and such withheld Taxes have been either duly and timely
paid to the proper governmental authorities or properly set aside in
accounts for such purpose, and (C) the Company
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Reports reflect an adequate reserve for all material Taxes payable or
asserted to be payable by the Company or any of its Subsidiaries for all
taxable periods or portions thereof through the date of the most recent
financial statements set forth therein.
(iii) There has been no claim or issue (other than a claim or issue
that has been finally settled) concerning any liability for Taxes of the
Company or any of its Subsidiaries asserted, raised or, to the knowledge
of the Company, threatened by any taxing authority.
(iv) Schedule 3.1(k) of the Disclosure Letter lists all Income Tax
Returns that have been filed with respect to the Company and any of its
Subsidiaries for taxable periods ended on or after January 1, 1992 and
that have not yet been audited or are currently the subject of audit.
(v) Neither the Company nor any of its Subsidiaries has (A) waived
any statute of limitations, (B) agreed to any extension of the period
for assessment or collection or (C) executed or filed any power of
attorney with respect to Taxes, which waiver, agreement or power of
attorney is currently in force.
(vi)(A)There are no outstanding adjustments under Section 481 of
the Code (or similar or analogous provision of state, local or foreign
law) for Income Tax purposes applicable to the Company or any of its
Subsidiaries required as a result of changes in methods of accounting
effected on or before the Closing Date, and (B) no material elections
for Income Tax purposes have been made by the Company or any of its
Subsidiaries that are currently in force or by which the Company or any
of its Subsidiaries is bound.
(vii) Neither the Company nor any of its Subsidiaries (A) is a
party to or bound by or has any obligation under any Tax allocation,
sharing, indemnity or similar agreement or arrangement, or (B) is or has
been a member of any group of companies filing a consolidated, combined
or unitary Income Tax Return.
(l) Employee Benefit Plans. (i) Schedule 3.1(l) of the Disclosure
Letter lists all bonus, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus,
stock purchase, restricted stock, stock option plans, or any other employee
benefit plan, program, agreement, or arrangement, whether written or
unwritten and regardless of whether they are funded or unfunded or U.S. or
non-U.S., with, for the benefit of, or covering employees or former
employees of the Company and its Subsidiaries whether maintained by the
Company or its Subsidiaries or with respect to which the Company or its
Subsidiaries have any liability, including any "employee benefit plans"
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") ("Company Benefit Plans"). The
Company has provided Parent with a true and correct copy of each of the
Company Benefit Plans (or a true and correct description of any unwritten
Company Benefit Plan) and all contracts relating thereto, or to the funding
thereof, and the two most recent annual reports and actuarial valuations
(if applicable) relating to each Company Benefit Plan.
(ii) The Company is not aware that any officer, executive or key
employee or any group of employees of the Company or any of its
Subsidiaries has any plans to terminate his, her or its employment.
(iii) Each Company Benefit Plan and Employment Agreement conforms in
all material respects to, and its administration is in conformity in all
material respects with, all applicable laws. No material liability has been
or is expected to be incurred by the Company or any of its
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15
Subsidiaries with respect to any Company Benefit Plan and Employment
Agreement except for benefits payable or contributions due under the terms
of such plans or agreements, and full payment has been made of all amounts
that the Company or any of its Subsidiaries is required to have paid as
contributions to each Company Benefit Plan and Employment Agreement. All
Company Benefit Plans intended and Employment Agreements to satisfy
applicable tax qualification requirements or other requirements necessary
to secure favorable tax or other legal treatment comply in all material
respects with such requirements, and adequate accruals for all obligations
under the Company Benefit Plans and Employment Agreements are reflected in
the financial statements of the Company. Neither the Company nor any of its
Subsidiaries nor any of their ERISA Affiliates has ever maintained,
contributed to or incurred or expects to incur any liability under Title IV
of ERISA. Except as set forth on Schedule 3.1(l) of the Disclosure Letter,
(A) the execution of, and performance of the transactions contemplated in,
this Agreement will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any benefit
plan, policy, arrangement or agreement or any trust or loan that will or
may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase
in benefits or obligation to fund benefits with respect to any employee and
(B) no payment or benefit which will or may be made by the Company, any of
its Subsidiaries or Parent with respect to any employee, officer or
director will constitute an "excess parachute payment" within the meaning
of Section 280G(b)(1) of the Code.
(iv) Except as described in the Company Reports or listed on Schedule
3.1(l) of the Disclosure Letter, neither the Company nor any of its
Subsidiaries maintains or contributes to any plan or arrangement which
provides or has any liability to provide life insurance or medical or other
employee welfare benefits to any employee or former employee upon his or
her retirement or termination of employment, and neither the Company nor
any of its Subsidiaries has ever represented, promised or contracted
(whether in written form or, to the knowledge of the Company, in unwritten
form) to any employee or former employee that such benefits would be
provided. None of the Company Benefit Plans is a Multiemployer Plan or a
Single Employer Plan within the meaning of ERISA.
(m) Labor and Employment Matters. (i) Schedule 3.1(m) of the
Disclosure Letter lists, as of October 15, 1999, each officer and employee
of the Company and any of its Subsidiaries. Not more than 30 additional
employees were hired by the Company and its Subsidiaries between October
15, 1999 and the date hereof. Except as set forth on Schedule 3.1(m) of the
Disclosure Letter, (i) neither the Company nor any of its Subsidiaries is a
party to, or bound by, any collective bargaining agreement or other
Contracts or understanding with a labor union or labor organization; and
(ii) there is no (x) unfair labor practice, labor dispute (other than
routine individual grievances) or labor arbitration proceeding pending or,
to the knowledge of the Company, threatened against the Company or any of
its Subsidiaries, (y) activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any of
its Subsidiaries, or (z) lockouts, strikes, slowdowns, work stoppages or
threats thereof by or with respect to such employees. The Company and each
of its Subsidiaries is in substantial compliance with all Laws regarding
employment, employment practices, terms and conditions of employment and
wages and hours.
(ii) There are no pending or, to the knowledge of the Company,
threatened claims for indemnification by the Company or any of its
subsidiaries in favor of directors, officers, employees and agents of the
Company or any of its Subsidiaries.
(iii) Except for (a) any benefits to be provided to employees under
any Company Benefit Plan, (b) any benefits to be provided to employees
under any Employment Agreement and
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(iii) compensation payable in the ordinary course for services rendered
within the payroll period immediately preceding the date hereof, the
Company and its Subsidiaries have no liabilities with respect to any
employees, other than as reflected in the Company Reports or on Schedule
3.1(m) of the Disclosure Letter.
(n) Brokers and Finders. Except for CIBC World Markets Corp. pursuant
to an engagement letter, a true and complete copy of which has previously
been delivered to Parent, no broker, dealer or financial advisor is
entitled to receive from the Company or any of its Subsidiaries any
broker's, finder's or investment banking fee in connection with this
Agreement or the transactions contemplated hereby.
(o) Licenses and Permits. Schedule 3.1(o) of the Disclosure Letter
sets forth a complete and correct list of all licenses, concessions,
permits, certificates of need, approvals and authorizations (collectively,
"Permits") from all Governmental Entities held by the Company and its
Subsidiaries. Such Permits are sufficient to enable the Company and its
Subsidiaries to lawfully conduct their respective businesses as presently
conducted in all material respects. No Permit listed, or required to be
listed, on Schedule 3.1(o) of the Disclosure Letter is subject to
revocation, forfeiture or renegotiation by virtue of any existing
circumstances affecting the Company and its Subsidiaries or by virtue of
the execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby. There is no
Litigation pending or, to the knowledge of the Company, threatened to
modify or revoke any Permit, and no Permit is subject to any outstanding
order, decree, judgment, stipulation, or investigation that would be likely
to affect such Permit or the rights of the Company or any of its
Subsidiaries thereunder, except for instances of any of the foregoing
matters which, individually or in the aggregate, would not have a Material
Adverse Effect.
(p) Environmental Matters. Except as set forth on Schedule 3.1(p) of
the Disclosure Letter, and except where the failure of any of the following
to be true and correct would not have a Material Adverse Effect:
(i) The Company and its Subsidiaries are in compliance with all
Environmental Laws and the requirements of any permits issued under such
Environmental Laws with respect to any properties or assets of the
Company or any of its Subsidiaries ("Company Property");
(ii) There are no past, pending or, to the knowledge of the
Company, threatened material Environmental Claims against the Company,
any of its Subsidiaries or any Company Property; and
(iii) There are no facts, circumstances, conditions or occurrences
regarding any Company Property or any property adjoining or in the
vicinity of any Company Property, that could reasonably be anticipated
(i) to form the basis of a material claim under any Environmental Law
against the Company, any of its Subsidiaries or any Company Property or
(ii) to cause such Company Property or assets to be subject to any
restrictions on its ownership, occupancy, use or transferability under
any Environmental Law.
(q) Material Contracts. Except as set forth on Schedule 3.1(q) of the
Disclosure Letter, none of the Company and any of its Subsidiaries is bound
by (a) any agreement, contract or commitment providing for annual payments
of more than $250,000, (b) any agreement, indenture or other instrument
which contains restrictions with respect to payment of dividends or any
other distribution in respect of its capital stock providing for annual
payments of more than $250,000, (c) any agreement, indenture or instrument
relating to indebtedness providing for annual payments of more than
$250,000, (d) any agreement or contract with any Affiliate providing for
annual payments of more than $250,000, (e) any interconnection agreement
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providing for annual payments of more than $250,000, (f) any employment,
consulting, severance, "change of control" or other similar agreements,
understandings or arrangements, whether written or unwritten, which cover
any employee or former employee of the Company or any of its Subsidiaries
(the "Employment Agreements"). The Company has provided Parent with a true
and correct copy of each of the Employment Agreements (or a true and
complete description of each unwritten Employment Agreement) (in each case,
which may entitle any Person to receive payments from the Company or any of
its Subsidiaries in excess of $100,000 per year) or any other similar type
of contract, (g) any material license, contract or agreement transferring,
providing for or restricting the use of, or settling any claim with respect
to, any Intellectual Property, or (h) any agreement, contract or commitment
limiting the ability of the Company or any of its Subsidiaries to engage in
any line of business or to compete with any Person or to otherwise acquire
property or conduct business in any area. Except as otherwise set forth on
Schedule 3.1(q) of the Disclosure Letter, each contract or agreement set
forth on Schedule 3.1(q) of the Disclosure Letter (or required to be set
forth in Section 3.1(q) of the Disclosure Letter) is in full force and
effect and there exists no material default or material event of default or
to the knowledge of each of the Company and each of its Subsidiaries,
event, occurrence, condition or act (including the consummation of the
Merger) which, with the giving of notice, the lapse of time or the
happening of any other material event or condition, would become a default
or event of default thereunder.
(r) Assets. Except as set forth in the Company Reports, the Company
and its Subsidiaries own, or otherwise have sufficient and legally
enforceable rights to use, all of the properties and assets (real, personal
or mixed, tangible or intangible), used or held for use in connection with,
necessary for the conduct of, or otherwise material to, the business and
operations of the Company and its Subsidiaries (the "Assets"). The Company
and its Subsidiaries have good, valid and marketable title to, or in the
case of leased property has good and valid leasehold interests in, all
Assets that are material to their respective businesses and operations,
including but not limited to all such Assets reflected in the Company
Reports or acquired since the date most recent thereof (except any that
have been disposed of in the ordinary course of business after the date
hereof and in accordance with this Agreement), in each case free and clear
of any Encumbrance, except Permitted Encumbrances. The Company and its
Subsidiaries have maintained all tangible Assets that are material to their
respective businesses and operations in good repair, working order and
operating condition subject only to ordinary wear and tear, and all such
tangible Assets are fully adequate and suitable for the purposes for which
they are presently being used. Schedule 3.1(r) of the Disclosure Letter
sets forth a list as of August 31, 1999 of all tangible Assets that are
material to the business and operations of the Company and its Subsidiaries
and identifies the location of such Assets.
(s) Intellectual Property; Technology. (i) Except as otherwise
indicated on Schedule 3.1(s) of the Disclosure Letter the Company and its
Subsidiaries own the entire right, title and interest in and to the Marks,
the Copyrights and the Patents free and clear of any Encumbrances except
for Permitted Encumbrances. Each item that is indicated as registered on
Schedule 3.1(s) of the Disclosure Letter has been duly registered, filed
with or issued by the appropriate authorities in the countries indicated on
Schedule 3.1(s) of the Disclosure Letter and to the knowledge of the
Company, all such registrations, filings and issuances remain in full force
and effect. Except as otherwise indicated on Schedule 3.1(s) of the
Disclosure Letter, none of the Marks, the Copyrights or the Patents are the
subject of any pending, or to the Company's knowledge, threatened
opposition, interference, cancellation proceeding or other legal or
governmental proceeding before a registration or issuing authority in any
jurisdiction. Except as otherwise disclosed in Schedule 3.1(s) of the
Disclosure Letter, the conduct of the business of the Company and its
Subsidiaries as presently conducted does not infringe, violate, or
constitute
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misappropriation of any Intellectual Property of any other Person, nor,
since January 1, 1997, has the Company or any of its Subsidiaries received
notice to the contrary from any Person. The Company and its Subsidiaries
own or have the right to use through assignment, lease, license or other
agreement all Intellectual Property necessary for the conduct of the
business as presently conducted. Except as set forth in Schedule 3.1(s) of
the Disclosure Letter, there are no pending, or to the Company's knowledge,
threatened material claims by any Person for infringement of any
Intellectual Property or unfair competition by the Company or any of its
Subsidiaries. Except as set forth in Schedule 3.1(s) of the Disclosure
Letter, to the Company's knowledge no Person is infringing upon the
Intellectual Property owned by, assigned to or subject to assignment of,
the Company or any of its Subsidiaries, and the Company and its
Subsidiaries are aware of no facts that would support such a claim. The
consummation of the transaction contemplated hereby will not result in the
loss or impairment of the Company's or any of its Subsidiaries' right to
own or use any of the Intellectual Property necessary to the conduct of the
business as presently conducted (including, but not limited to the Marks,
the Copyrights and the Patents) nor will it require the consent of any
governmental authority or third party.
(ii) The costs to the Company and its Subsidiaries of reprogramming
required to permit the proper functioning in and following the year 2000,
of the (i) computer systems and (ii) equipment containing embedded
microchips, in each case, owned or operated by the Company or any of its
Subsidiaries and the testing of all such systems and equipment (including,
without limitation, reprogramming errors) could, individually or in the
aggregate, not reasonably be expected to have a Material Adverse Effect.
Except for the cost of such of the reprogramming referred to in this
Section 3.1(s) as may be necessary, the computer and management information
systems of the Company and its Subsidiaries are sufficient to permit the
Company and its Subsidiaries to conduct its business without material
interruption arising out of any failure to be Year 2000 Compliant and
without such conduct resulting in a Material Adverse Effect.
(t) Insurance. All insurance policies maintained by or on behalf of
any the Company or any Subsidiary are in full force and effect, and all
premiums due thereon have been paid. The Company and each Subsidiary has
complied in all material respects with the terms and provisions of such
policies. The Company has delivered to Parent complete and correct copies
of its directors and officers liability insurance policies, which policies
are in full force and effect.
(u) Affiliate Transactions. Except as otherwise described in the
Company's Proxy statement for its 1999 annual meeting of shareholders (the
"1999 Proxy") or on Schedule 3.1(u) of the Disclosure Letter, each
agreement, contract, arrangement, understanding, transfer of assets or
liabilities or other commitment or transaction between the Company or any
Subsidiary of the Company, on one hand, and any Person who is (or, at the
time such agreement, contract, arrangement, understanding, transfer,
commitment or transaction was entered into or made, was) a shareholder,
director or employee of the Company or any Subsidiary of the Company (or
other Person controlled, directly or indirectly, by any of the foregoing),
on the other hand (collectively, "Affiliate Transactions"), is on terms and
conditions at least as favorable to the Company (or such Subsidiary, as the
case may be) as would be obtainable by it in a comparable arm's-length
transaction with a Person unrelated to any shareholder, director or
employee of the Company or any of its Subsidiaries. All Affiliate
Transactions having effect or outstanding as of the date hereof that are
material to the Company or any of its Subsidiaries are described in the
1999 Proxy or on Schedule 3.1(u) of the Disclosure Letter.
(v) Opinion. The board of directors of the Company has received an
opinion of CIBC World Markets Corp. (the "Opinion"), to the effect that, as
of the date of such opinion, the equity ownership of the Company's
shareholders in RV is fair from a financial point of view to
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the holders of the Company Common Stock. The Company has been authorized by
CIBC World Markets Corp. to permit the inclusion of the Opinion in its
entirety and references thereto, subject to prior review of, and consent
to, such inclusion and references by CIBC World Markets Corp. and its
counsel (such consents not to be unreasonably withheld or delayed), in the
Proxy Statement.
(w) State Statutes. The Board of Directors of the Company has approved
the terms of this Agreement and the Merger, and such approval is sufficient
to render inapplicable the provisions of Part Thirteen of the Texas
Business Corporation Act (the "TBCA") to the extent, if any, that such
Section is applicable to the Merger, this Agreement and the transactions
contemplated hereunder. To the knowledge of the Company (based on
consultation with outside legal counsel), except for the DGCL and the TBCA,
no other state takeover statute or similar statute or regulation applies or
purports to apply to the Merger, this Agreement or the transactions
contemplated hereunder.
(x) No Extortion Payments. None of the Company or any of its
Subsidiaries has made, or has agreed to make, any payment in connection
with any Person's scheme or plan to demand money or property in exchange
for (i) the safety of any Person or (ii) the ability of any Person to
conduct otherwise legal business.
(y) No Improper Payments. None of the Company or any of its
Subsidiaries nor any Person acting on behalf of any of them has paid or
delivered, or promised to pay or deliver, directly or indirectly through
any other Person, any monies or anything of value to (i) any person or firm
employed by or acting for or on behalf of any customer or supplier, whether
private or governmental, or (ii) any government official or employee or any
political party, for the purpose of illegally or improperly inducing or
rewarding any action by such customer, supplier, official, employee or
political party favorable to the Company or any of its Subsidiaries.
(z) No Venezuelan Investments. As of the date hereof, the Company does
not operate any business or have any investment in any person operating any
business in Venezuela.
3.2. Representations and Warranties of Parent. Parent hereby represents
and warrants to the Company as of the date hereof and as of the Closing Date as
follows:
(a) Existence; Good Standing; Corporate Authority. Each of Parent, RV
and Merger Sub, and each member of the Jamtis Group, is (i) a corporation
or limited liability company, as the case may be, duly organized, validly
existing and in good standing (to the extent that "good standing" is a
cognizable legal concept under applicable law) under the laws of its
jurisdiction of incorporation and (ii) is duly licensed or qualified to do
business and is in good standing under the laws of any other state of the
United States or any other jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its
business makes such licensure, qualification or good standing necessary,
except where the failure to be so in good standing or to be so licensed or
qualified, individually or in the aggregate, would not have a material
adverse effect on the business, operations, results of operations, assets
or financial condition of RV or Merger Sub, or on the ability of Parent, RV
or Merger Sub to consummate the transactions contemplated herein (an
"Acquiror Material Adverse Effect"). Each of RV and Merger Sub, and each
member of the Jamtis Group, has the requisite corporate power and authority
to own, operate and lease its properties and assets and carry on its
business. True and correct copies of the Certificate of Incorporation and
Bylaws of each of RV and Merger Sub as of the date hereof are attached as
Exhibit A. The organizational documents of RV, Merger Sub and, as of the
Closing Date, each member of the Jamtis Group, are or will be in full force
and effect.
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(b) Authorization, Validity and Effect of Agreements. Each of Parent,
RV and Merger Sub has the requisite corporate power and authority to
execute and deliver this Agreement and the Ancillary Agreements to which it
is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution
and delivery by each of Parent, RV and Merger Sub of this Agreement and the
Ancillary Agreements to which it is a party, the performance of its
obligations hereunder and thereunder and the consummation by it of the
transactions contemplated hereby and thereby have been duly and validly
authorized by the Board of Directors of Parent or by the shareholder or
shareholders of RV and Merger Sub, as the case may be, and no other
corporate proceedings on the part of Parent, RV or Merger Sub are necessary
to authorize this Agreement or the Ancillary Agreements (to which any of
them is a party), to perform the obligations hereunder or thereunder or to
consummate the transactions contemplated hereby or thereby. This Agreement
and, upon execution as contemplated herein, each Ancillary Agreement to
which Parent, RV or Merger Sub is a party, has been duly and validly
executed and delivered by Parent, RV and/or Merger Sub, as the case may be,
and (assuming due execution and delivery of this Agreement and each of the
Ancillary Agreements by each other party hereto and thereto), constitutes
the valid and binding obligation of Parent, RV or Merger Sub, as the case
may be, enforceable against Parent, RV or Merger Sub, as the case may be,
in accordance with its terms.
(c) Compliance with Laws. None of Parent, RV, Merger Sub or any member
of the Jamtis Group is in violation of any Laws applicable to Parent, RV,
Merger Sub or such member, or any of its properties or assets, except for
violations which, individually or in the aggregate, would not have an
Acquiror Material Adverse Effect.
(d) Capitalization. (i) As of the date hereof, the authorized capital
stock of RV consists of 1,000 shares of common stock, par value $.01 per
share, and 1,000 shares of common stock are issued and outstanding. As of
the Closing Date, the aggregate number of shares of capital stock of RV
shall be not more than the sum of (i) 80,848,204, plus (ii) the product of
(x) such number of shares of Preferred Stock issued or accrued as
paid-in-kind dividends from November 1, 1999 to the Closing Date, and (y)
2.077. All issued and outstanding shares of capital stock of RV and of
Merger Sub are duly authorized, validly issued, fully paid, non-assessable
and free of pre-emptive rights. As of the Closing, except for approximately
10% of the aggregate number of shares of capital stock of RV that will be
owned by Promon, in the form of shares of RV Class A Common Stock, all
issued and outstanding shares of capital stock of RV will be owned,
directly or indirectly, by Parent, in the form of shares of RV Class B
Common Stock, all issued and outstanding shares of capital stock of Merger
Sub are owned directly by RV and all issued and outstanding shares or
quota, as the case may be, of each member of the Jamtis Group are owned
indirectly by RV, in each case free and clear of Encumbrances (other than
any Encumbrances created by Promon as to the shares of RV Class A Common
Stock owned by it). None of RV, Merger Sub or any member of the Jamtis
Group has any outstanding bonds, debentures, notes or other similar
obligations, instruments or securities entitling the holders thereof to
vote (or which are convertible into or exercisable for securities having
the right to vote) with the shareholders of RV, Merger Sub or such member
on any matter. As of the date hereof and as of the Closing Date, the amount
and ownership of the issued equity capital of each member of the Jamtis
Group are as set forth on Schedule 3.2(d) of the RV Disclosure Letter.
(ii) Except as described in this Agreement or in the Netstream
Acquisition Agreements, or as set forth in the RV Disclosure Letter, there
are no other shares of capital stock (or quota, as the case may be) of RV,
Merger Sub or any member of the Jamtis Group, no securities of RV, Merger
Sub or any member of the Jamtis Group convertible or exchangeable for
shares of
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capital stock, voting securities (or quota, as the case may be) of RV,
Merger Sub or any member of the Jamtis Group, and no existing options,
warrants, calls, subscriptions, convertible securities, or other rights,
agreements or commitments which obligate RV, Merger Sub or any member of
the Jamtis Group to issue, transfer or sell any shares of capital stock of
RV, Merger Sub or any member of the Jamtis Group.
(e) No Violation; Consents. (i) Neither the execution, delivery or
performance by Parent, RV and Merger Sub of this Agreement or any of the
Ancillary Agreements nor the consummation by Parent, RV and Merger Sub of
the transactions contemplated hereby or thereby will: (x) violate, conflict
with or result in a breach of any provisions of the Certificate of
Incorporation or Bylaws of any of Parent, RV, Merger Sub or any member of
the Jamtis Group; (y) violate, conflict with, result in a breach of any
provision of, constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, result in the
termination or in a right of termination of, accelerate the performance
required by or benefit obtainable under, result in the triggering of any
payment or other obligations pursuant to, result in the creation of any
Encumbrance upon any of the properties or assets of RV, Merger Sub or any
member of the Jamtis Group under, or result in there being declared void,
voidable, subject to withdrawal, or without further binding effect, any of
the terms, conditions or provisions of any contract to which any of RV or
Merger Sub is a party, by which any of RV, Merger Sub or any member of the
Jamtis Group or any of their respective properties are bound, or under
which any of RV, Merger Sub or any member of the Jamtis Group or any of
their respective properties are entitled to a benefit, except for any of
the foregoing matters which, individually or in the aggregate, would not
have an Acquiror Material Adverse Effect or a Material Delaying Effect; or
(z) violate any Laws applicable to any of RV, Merger Sub or any member of
the Jamtis Group or any of its assets or properties, except for violations
which, individually or in the aggregate, would not have an Acquiror
Material Adverse Effect.
(ii) Other than the filings required under the HSR Act, the Exchange
Act, notifications to the Superintendencia de Valores y Seguros of Chile
and the Superintendencia de Industria y Comercio of Colombia and filings in
connection with the maintenance of qualification to do business in other
jurisdictions required or permitted to be made or obtained by Parent, RV or
Merger Sub, neither the execution, delivery or performance by Parent, RV
and Merger Sub of this Agreement or any of the Ancillary Agreements nor the
consummation by Parent, RV and Merger Sub of the transactions contemplated
hereby or thereby will require any consent, approval or authorization of,
or declaration, filing or registration with, (A) any Governmental Entity,
including any such consent, approval, authorization, declaration, filing or
registration under any Foreign Antitrust Laws, (B) any other Law of any
foreign jurisdiction, or (C) any other Person, except for those consents,
approvals, authorizations, declarations, filings or registrations the
failure of which to obtain or make, individually or in the aggregate, would
have an Acquiror Material Adverse Effect or a Material Delaying Effect.
(iii) Neither RV nor any of its Subsidiaries has any liabilities or
obligations, contingent or otherwise, except liabilities and obligations
arising hereunder or under the Netstream Acquisition Agreements and/or, as
of the Closing, liabilities and obligations (a) arising under the Brand
License, the RV Agreement, the Executive Agreement and under any bond
tender offer arrangements being undertaken by RV, if any, and (b) incurred
in the ordinary course of business following the Final Closing under the
Netstream Acquisition Agreements which individually or in the aggregate
would not have an Acquiror Material Adverse Effect.
(f) Netstream Acquisition Agreements. Parent has delivered to the
Company complete and correct copies of the Netstream Acquisition Agreements
(including all exhibits, schedules and other attachments thereto), as
executed and delivered by the parties thereto (or in the form to
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be executed and delivered at the closing thereunder). Each of the Netstream
Acquisition Agreements is (or, following execution and delivery, as the
case may be, will be) in full force and effect in accordance with its
terms.
(g) Litigation. There is no Litigation claim by a third party
(including a Governmental Entity) pending or, to the knowledge of Parent,
threatened against Parent, RV, Merger Sub or any member of the Jamtis
Group, other than those which, individually or in the aggregate, would not
have an Acquiror Material Adverse Effect. No Governmental Entity has
indicated an intention to conduct any audit, investigation or other review
with respect to RV or Merger Sub.
(h) Proxy Statement. None of the information supplied by Parent for
inclusion in the Proxy Statement, at the respective times filed with the
SEC and distributed to shareholders of the Company, will contain any untrue
statement of a material fact or omit to state any material fact relating to
Parent, RV, Merger Sub or any member of the Jamtis Group required to be
stated therein or necessary in order to make the statements therein
relating to Parent, RV, Merger Sub or any member of the Jamtis Group in
light of the circumstances under which they were made, not misleading.
(i) Brokers and Finders. No actions by Parent, RV or Merger Sub or by
any Person acting on behalf of either of them has given rise to any valid
claim against the Company, RV, Merger Sub or any member of the Jamtis Group
for any broker's, finder's or investment banking fee in connection with
this Agreement or the transactions contemplated hereby.
ARTICLE IV
COVENANTS
4.1. No Solicitation. (a) The Company and its Subsidiaries shall, and
shall direct and use reasonable best efforts to cause their respective officers,
directors, employees, representatives and agents to, immediately cease any
discussions or negotiations with any parties other than Parent (or RV or Merger
Sub) that may be ongoing with respect to an Acquisition Proposal. The Company
and its Subsidiaries shall not, and shall not authorize or permit any of their
respective officers, directors or employees or any investment banker, financial
advisor, attorney, accountant or other representative to, directly or
indirectly, (i) solicit, initiate or encourage (including by way of furnishing
non-public information), or take any other action to facilitate, any inquiries
or the making of any proposal that constitutes, or may reasonably be expected to
lead to, an Acquisition Proposal, (ii) participate in any discussions or
negotiations regarding an Acquisition Proposal; provided, however, that if, at
any time prior to the approval of the Merger by the holders of a majority of the
shares of Company Common Stock, the Board of Directors of the Company determines
in good faith, having received the advice of outside counsel concerning its
fiduciary duties to the Company's shareholders under applicable law, the
Company, in response to an Acquisition Proposal that (A) was unsolicited or that
did not otherwise result from a breach of this Section 4.1(a) (subject to
compliance with Sections 4.1(c) and 4.1(d)), and (B) constitutes a Superior
Proposal, may (I) furnish non-public information with respect to the Company and
its Subsidiaries to the person who made such Acquisition Proposal pursuant to a
customary confidentiality agreement and (II) participate in negotiations
regarding such Acquisition Proposal. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the preceding
sentence by any director or officer of the Company or any of its Subsidiaries or
any authorized investment banker, financial advisor, attorney, accountant or
other representative of the Company or any of its Subsidiaries, acting on behalf
of the Company or any of its Subsidiaries, shall be deemed to be a breach of
this Section 4.1(a) by the Company.
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(b) Neither the Board of Directors of the Company nor any committee thereof
shall (i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Parent, the approval or recommendation by such Board of Directors or
such committee of the Merger unless there is a Superior Proposal outstanding,
(ii) approve or recommend, or propose to approve or recommend, an Acquisition
Proposal unless such Acquisition Proposal is a Superior Proposal or (iii) cause
the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other agreement (an "Acquisition Agreement") with
respect to an Acquisition Proposal unless such Acquisition Proposal is a
Superior Proposal, and unless, in each case, such Board of Directors shall have
(A) determined in good faith, based on the advice of outside counsel, that
failure to do so would constitute a breach of its fiduciary duties to the
Company's shareholders under applicable law and (B) delivered a notice of
termination to Parent pursuant to Section 6.1(c).
(c) The Company shall promptly (but in any event within one day) advise
Parent orally and in writing of any Acquisition Proposal or any inquiry
delivered to or received by the chief executive officer, any other senior
officer or any director of the Company regarding the making of an Acquisition
Proposal including any request for information, the material terms and
conditions of such request, Acquisition Proposal or inquiry and the identity of
the person making such request, Acquisition Proposal or inquiry. The Company
will, to the extent reasonably practicable, keep Parent fully informed of the
status and details (including amendments or proposed amendments) of any such
request, Acquisition Proposal or inquiry. In addition to the foregoing, the
Company will deliver to Parent a written notice (the "Acquisition Agreement
Notice") not less than five days prior to entering into any Acquisition
Agreement.
(d) Nothing contained in this Section 4.1 shall prohibit the Company from
at any time taking and disclosing to its shareholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure
to the Company's shareholders if, in the good faith judgment of its Board of
Directors, based upon the advice of outside counsel, failure so to disclose
would constitute a breach of its fiduciary duties to the Company's shareholders
under applicable law; provided, however, that neither the Company nor its Board
of Directors nor any committee thereof shall, except as permitted by Section
4.1(b), withdraw or modify, or propose to withdraw or modify, its position with
respect to this Agreement or approve or recommend, or propose to approve or
recommend, an Acquisition Proposal; and provided, further, that the taking of a
position by the Company pursuant to Rule 14e-2(a)(2) or (3) of the Exchange Act
in respect of an Acquisition Proposal shall not be deemed a withdrawal, a
modification or a proposal to do either, of its position with respect to this
Agreement for purposes hereof.
4.2. Conduct of Business. (a) From the date hereof to and including the
Closing Date, except as set forth on Schedule 4.2(a) of the Disclosure Letter or
as otherwise required pursuant to this Agreement, unless Parent has consented in
writing thereto, the Company shall, and shall cause each of its Subsidiaries to:
(i) conduct its operations according to its usual, regular and
ordinary course of business in accordance with its current business plan;
(ii) use its reasonable best efforts to preserve intact its business
organization and goodwill, to maintain in effect all existing
qualifications, licenses, Permits, approvals and other authorizations
referred to in Sections 3.1(a) and 3.1(o), to keep available the services
of its officers and employees and to maintain satisfactory relationships
with customers, suppliers, distributors, brokers, sales agents and all
other persons having business relationships with it;
(iii) promptly notify Parent upon becoming aware of any material
breach of any representation, warranty or covenant contained in this
Agreement or the occurrence of any event
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that would cause any representation or warranty of the Company contained in
this Agreement no longer to be true and correct or any covenant of the
Company contained in this Agreement not to be complied with;
(iv) timely file with the SEC, and promptly deliver to Parent, true
and correct copies of all reports, statements or schedules or other filings
required to be filed by the Company under the Securities Act or Exchange
Act with the SEC subsequent to the date of this Agreement; and
(v) deliver, as promptly as reasonably practicable but in any event
within 30 business days after the end of each accounting month, monthly
consolidated financial statements for the Company and its Subsidiaries for
and as of the end of each such month.
(b) From the date hereof to and including the Closing Date, except as set
forth on Schedule 4.2(b) of the Disclosure Letter, unless Parent has consented
in writing thereto, the Company shall not, and shall not permit any of its
Subsidiaries to:
(i) amend its Certificate of Incorporation or By-Laws or comparable
governing instruments;
(ii) except as otherwise provided in this Section 4.2(b), issue, sell,
pledge or otherwise dispose of any shares of its capital stock or other
ownership interest in the Company or any of the Subsidiaries, or any
securities convertible into or exchangeable for any such shares or
ownership interest, or any rights, warrants or options to acquire or with
respect to any such shares of capital stock, ownership interest, or
convertible or exchangeable securities, except (a) issuances of shares of
Company Common Stock in respect of any exercise of Options or Warrants
outstanding on the date hereof and disclosed in the Disclosure Letter, (b)
issuances of shares of Company Common Stock in respect of any conversion of
the Company's Series A preferred stock outstanding at the time immediately
prior to such issuance, and (c) issuance of newly created shares of
preferred stock of the Company that are redeemable at the option of the
Company (and the Surviving Corporation or RV, as the case may be) on or, at
the Company's election, at any time after the Closing Date, provided that
the sum of (1) the aggregate redemption price of such newly-created shares
of preferred stock as of the Closing Date, and (2) the aggregate principal
amount of any indebtedness incurred under subclause (b) of clause (xi) of
this Section 4.2, does not exceed US$20,000,000; or accelerate any right to
convert or exchange or acquire any securities of the Company or any of its
Subsidiaries for any such shares or ownership interest;
(iii) effect any stock split, reverse stock split, stock dividend,
subdivision, reclassification or similar transaction, or otherwise change
its capital structure as it exists on the date hereof;
(iv) grant, confer, award or amend any option, warrant, convertible
security or other right to acquire any shares of its capital stock or take
any action to cause to be exercisable any otherwise unexercisable option
under any Company Stock Plan, provided that this Section 4.2(b) shall not
prohibit or restrict the Company from granting unvested options to acquire
up to 300,000 shares of Company Common Stock prior to the Closing Date
("Interim Company Options"), provided further, that no Interim Company
Options (i) shall be granted except in the ordinary course of business to
employees of the Company and its Subsidiaries as of the date hereof and
employees of the Company and its Subsidiaries hired by the Company or such
Subsidiaries after the date hereof, or (ii) shall become vested according
to their terms as a result of the consummation of the Merger and other
transactions contemplated hereby;
(v) declare, set aside or pay any dividend or make any other
distribution or payment with respect to any shares of Common Stock or other
capital stock or ownership interests (other than
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such payments by a majority-owned Subsidiary to the Company or another
majority-owned Subsidiary);
(vi) directly or indirectly redeem, purchase or otherwise acquire any
shares of its capital stock or the capital stock of any of its
Subsidiaries;
(vii) sell, lease, assign, transfer or otherwise dispose of (by merger
or otherwise) any of its property, business or assets (including, without
limitation, receivables, leasehold interests or Intellectual Property and
including any sale and leaseback transaction) except for fair value in the
ordinary course of business provided that the proceeds of such sales do not
exceed $50,000 in any single transaction or $100,000 in the aggregate prior
to the Closing Date;
(viii) settle or compromise any pending or threatened Litigation other
than settlements of Litigations which involve solely the payment of money
(without admission of liability) not to exceed $250,000 in any one case or
$500,000 in the aggregate;
(ix) make any advance, loan, extension of credit or capital
contribution to, or purchase or acquire (by merger or otherwise) any stock,
bonds, notes, debentures or other securities of, or any assets constituting
a business unit of, or make any other investment in (other than capital
contributions to Subsidiaries of the Company made in accordance with the
Company's current business plan), any person, firm or entity, except (a)
extensions of trade credit and endorsements of negotiable instruments and
other negotiable documents in the ordinary course of business, (b)
investments in cash and cash equivalents, (c) payroll and travel advances
in the ordinary course of business and (d) investments in majority-owned
Subsidiaries;
(x) make any capital expenditures in the aggregate for the Company and
its Subsidiaries in excess of the amounts specified in the Company's
current budget for capital expenditures, a true and complete copy of which
has been delivered to Parent, or otherwise acquire assets having a value,
in the aggregate, in excess of $150,000 not in the ordinary course of
business;
(xi) incur, assume or create any indebtedness for borrowed money or
for the deferred purchase price for property or services or pursuant to any
capital lease or other financing, except (a) indebtedness incurred in the
ordinary course of business consistent with past practice for working
capital purposes pursuant to the Company's existing credit facilities as
disclosed in the Disclosure Letter or equipment financing facilities
referred to in the Company's current budget for capital expenditures and
(b) for the incurrence or creation of such indebtedness that is prepayable
by its terms without penalty or premium in excess of % of the proceeds
received from the incurrence or creation of such indebtedness at any time
on or after the Closing Date, provided that the sum of (1) the aggregate
principal amount of such indebtedness incurred or created pursuant to this
subclause, and (2) the aggregate redemption price of all shares of
preferred stock issued under clause (ii) of this Section 4.2(b), does not
exceed US$20,000,000;
(xii) take any action to assume, guarantee or otherwise become liable
or responsible (whether directly, contingently or otherwise) for the
obligations of any other Person except majority-owned Subsidiaries of the
Company and except for obligations in the ordinary course of business
consistent with the past practice of the Company not exceeding $50,000
individually and $150,000 in the aggregate;
(xiii) make any material Tax election (unless required by law or
unless consistent with prior practice) or settle or compromise any material
Income Tax liability except, in each case, with the express consent of
Parent;
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(xiv) waive or amend any term or condition of any confidentiality or
"standstill" agreement to which the Company is a party and which relates to
a business combination with or involving the Company or the purchase of
shares or assets of the Company;
(xv) grant or amend any stock-related or performance awards except as
otherwise permitted herein;
(xvi) enter into or amend any legally binding employment, severance,
retention, change in control, consulting or salary continuation agreement
with any officer, director, employee or former employee of the Company or
any of its Subsidiaries (which would involve, together with all other such
agreements, aggregate payments by the Company or any of its Subsidiaries
the payment by Company or any of its Subsidiaries of more than $250,000 in
the aggregate or grant any increases in compensation or benefits to
employees other than increases to officers and employees in the ordinary
course of business consistent with the past practice of the Company;
(xvii) adopt, amend or terminate any employee benefit plan, policy,
understanding or arrangement;
(xviii) enter into any agreements that would constitute Material
Contracts; or amend any of the foregoing agreements as exist on the date
hereof other than in the ordinary course of business;
(xix) amend, change or waive (or exempt any Person from the effect of)
the Rights Agreement, except for Parent, RV and Merger Sub in connection
with the transactions contemplated by this Agreement;
(xx) make any material changes in the type or amount of insurance
coverage;
(xxi) except as may be required by law or generally acceptable
accounting principles and with prior written notice to Parent, change any
accounting principles or practices used by the Company or its Subsidiaries;
(xxii) effect any material change in the Company's advertising,
services promotion or brand support policies or programs or commit to any
significant new product promotion or advertising campaign except, in each
case, for matters in the ordinary course of business of the Company;
(xxiii) effect any material change in the Company's billing practices
or sales terms, or cause a material acceleration or delay in the collection
of accounts or notes receivable or the payment of accounts or notes
payable;
(xxiv) waive, relinquish, release or terminate any right or claim,
including any such right or claim under any Material Contract or permit any
rights of material value to use any Intellectual Property to lapse or be
forfeited, in each case, except in the ordinary course of business
consistent with the past practice of the Company;
(xxv) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part
of the property of the Company or any Subsidiary, or make a general
assignment for the benefit of creditors, or permit or suffer to exist the
commencement of any bankruptcy, reorganization, debt arrangement or other
case or proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect of the
Company or any Subsidiary;
(xxvi) acquire, invest in or enter into any arrangement or contract
with any person having operations in Venezuela of a nature conducted by any
of the parties hereto; or
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(xxvii) agree in writing or otherwise to take any of the foregoing
actions.
(c) If the Company shall have given notice to Parent of an action as to
which it seeks consent pursuant to section 4.2(b), such notice to describe the
relevant matters in reasonable detail, and Parent shall not have objected within
15 days, the Company may take the action described in such notice.
4.3. Filings; Other Action. Subject to the terms and conditions herein
provided, the Company and Parent shall: (i) promptly make their respective
filings and thereafter make any other required submissions under the HSR Act
with respect to the Merger; (ii) cooperate and consult with one another in (A)
determining which Regulatory Filings are required or, in the case of Other
Antitrust Filings, permitted to be made prior to the Effective Time with, and
which consents, approvals, Permits, authorizations or waivers (collectively,
"Consents") are required or, in the case of Other Antitrust Consents, permitted
to be obtained prior to the Closing Date from Governmental Entities or other
Persons in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, (I) all such Regulatory Filings and Consents as relate to Foreign
Antitrust Laws (the "Other Antitrust Filings" and the "Other Antitrust
Consents," respectively; collectively, the "Other Antitrust Filings and
Consents") and (II) all Consents required to transfer to the Company any Permits
or registrations held on behalf of the Company or any of its Subsidiaries by or
in the name of distributors, brokers or sales agents; (B) preparing all
Regulatory Filings and all other filings, submissions and presentations required
or prudent to obtain all Consents, including by providing to the other party
drafts of such material reasonably in advance of the anticipated filing or
submission dates; and (C) timely making all such Regulatory Filings and timely
seeking all such Consents (it being understood that the parties will make or
seek to obtain all Other Antitrust Filings and Consents, whether mandatory or
voluntary); and (iii) use their reasonable best efforts to take, or cause to be
taken, all other action and do, or cause to be done, all other things necessary,
proper or appropriate to consummate and make effective the transactions
contemplated by this Agreement. Each of Parent and the Company shall use its
reasonable best efforts to contest any proceeding seeking a preliminary
injunction or other legal impediment to, and to resolve any objections as may be
asserted by any Governmental Entity with respect to the Merger under the HSR Act
or Foreign Antitrust Laws; provided that the foregoing shall not require Parent
to take any action that could directly or indirectly (A) impose limitations on
the ability of Parent (or any of its affiliates or Subsidiaries) effectively to
acquire, operate or hold, or require Parent or the Company or any of their
respective affiliates or Subsidiaries to dispose of or hold separate, any
portion of their respective assets or business that (I) is either material to
the business of Parent and its Subsidiaries or material to the business of the
Company and its Subsidiaries, or (II) is reasonably likely to have a Material
Adverse Effect, (B) restrict any future business activity by Parent, the Company
or any of their affiliates or Subsidiaries that (I) is either material to the
business of Parent and its Subsidiaries or material to the business of the
Company and its Subsidiaries, or (II) is reasonably likely to have a Material
Adverse Effect, including, without limitation, requiring the prior consent of
any Governmental Entity to future transactions by Parent, the Company or any of
their affiliates or Subsidiaries, or (C) otherwise adversely affect Parent, the
Company or any of their respective affiliates or Subsidiaries in a manner that
(I) is either material to the business of Parent and its Subsidiaries or
material to the business of the Company and its Subsidiaries, or (II) is
reasonably likely to have a Material Adverse Effect. If, at any time after the
Closing Date, any further action is necessary or desirable to carry out the
purpose of this Agreement, the proper officers and directors of Parent and the
Company shall take all such necessary action.
4.4. Access to Information; Pre-Closing Review. From the date of this
Agreement to the Closing Date, the Company shall, and shall cause its
Subsidiaries to, (i) give Parent and its authorized representatives full access
during normal business hours to all books, records, personnel,
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research and other consultants, offices and other facilities and properties of
the Company and its Subsidiaries and its accountants (and shall use its
reasonable best efforts to give Parent and such representatives access to such
accountants' work papers, as Parent may reasonably request), (ii) permit Parent
to make such copies and inspections thereof as Parent may reasonably request and
(iii) furnish Parent with such financial and operating data and other
information with respect to the business and properties of the Company and its
Subsidiaries as Parent may from time to time reasonably request; provided that
no investigation or information furnished pursuant to this Section 4.4 shall
affect any representations or warranties made by the Company herein or the
conditions to the obligations of Parent to consummate the transactions
contemplated hereby. The Company acknowledges that it has been afforded an
adequate opportunity to investigate the properties, assets, liabilities,
personnel and records of Netstream. Prior to the closing under the Netstream
Acquisition Agreements, Parent will use its reasonable best efforts to assist
the Company in obtaining any further information as to Netstream that the
Company may reasonably request. From and after the date of the Final Closing
under the Netstream Acquisition Agreements, Parent shall, and shall cause its
Subsidiaries to, (i) give the Company and its authorized representatives full
access during normal business hours to all books, records, personnel, research
and other consultants, offices and other facilities and properties of Netstream
and Netstream's accountants (and shall use its reasonable best efforts to give
the Company and such representatives access to such accountants' work papers),
(ii) permit the Company to make such copies and inspections thereof as the
Company may reasonably request and (iii) furnish the Company with such financial
and operating data and other information with respect to the business and
properties of Netstream as the Company may from time to time reasonably request.
4.5. Publicity. Except as otherwise required by law, each of the Company
and Parent shall obtain the prior written consent of the other party (which
consent will not be unreasonably withheld or delayed) before issuing any press
release or otherwise making (or proposing publicly to make) any public statement
with respect to the transactions contemplated hereby or by any of the Ancillary
Agreements and in making any filings with any national securities exchange with
respect thereto.
4.6. Further Action. (a) Each party hereto shall, subject to the
fulfillment at or before the Closing Date of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the Merger.
(b) The Company shall not, and cause its Subsidiaries not to, and Parent
shall not, and shall cause RV and Merger Sub not to, take any action that could
reasonably be expected to result in (i) any of its representations and
warranties set forth in this Agreement that are qualified by materiality
becoming untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect or (iii) any of the conditions
set forth in Article V not being satisfied (subject to the Company's right to
take actions specifically permitted by Section 4.1). The Company shall use, and
the Company shall cause its Subsidiaries to use, and each of Parent, RV and
Merger Sub shall use, their reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
using their reasonable efforts to satisfy the conditions contained in Article V.
(c) The Company and Parent shall confer on a regular and frequent basis as
reasonably requested by either of them. Each of Parent and the Company shall
promptly notify the other in writing of the occurrence of any event that will or
may result in the failure to satisfy any of the conditions to the other party's
obligations specified in Article V. The Company will promptly provide to Parent
(and its counsel) copies of all filings made by the Company with any
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby and shall promptly advise Parent orally and, if requested by
Parent, in writing of any Material Adverse Effect.
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4.7. Insurance; Indemnity. For a period of six years after the Closing
Date, Parent shall cause RV or the Surviving Corporation to maintain officers'
and directors' liability insurance covering the parties who are currently
covered, in their capacities as officers and directors, by the Company's
existing officers' and directors' liability insurance policies (the "Current
Policies") on terms substantially no less advantageous to such parties than such
Current Policies and providing for aggregate coverage of 300% of the amount
covered by the Current Policies.
4.8. Shareholder Approval; Preparation of Proxy Statement. (a) Subject to
the provisions of this Agreement, the Company will (i) duly call, give notice
of, convene and hold a special meeting of its shareholders (the "Shareholder
Meeting") for the purpose of obtaining a vote upon the Merger and (ii) through
its Board of Directors, declare the advisability of the Merger and recommend to
its shareholders that the Company Shareholder Approval be given.
(b) Subject to the provisions of this Agreement, the Company and RV will
prepare and file a preliminary proxy statement (such proxy statement, and any
amendments or supplements thereto, the "Proxy Statement") and a registration
statement in appropriate form (the "Registration Statement") with the SEC and
will use their respective reasonable best efforts to respond to any comments of
the SEC or its staff, to cause the Proxy Statement to be cleared by the SEC and
to have the Registration Statement declared effective under the Securities Act
as soon as practicable after responding to all such comments to the satisfaction
of the staff. Each of the Company and RV will notify the other party promptly of
its receipt of any comments from the SEC or its staff and of any request by the
SEC or its staff for amendments or supplements to the Proxy Statement and/or the
Registration Statement or for additional information and will supply the other
party with copies of all correspondence between it or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Proxy Statement, the Registration Statement or the Merger.
The Company agrees to notify RV a reasonable time prior to any filing or
distribution of the Proxy Statement or the Registration Statement of such filing
or distribution. Each of the Company and RV shall give the other party and its
counsel (who shall provide any comments thereon as soon as practicable) the
opportunity to review and approve the Proxy Statement and the Registration
Statement prior to filing with the SEC and shall give the other party and its
counsel (who shall provide any comments thereon as soon as practicable) the
opportunity to review all amendments and supplements to the Proxy Statement and
the Registration Statement and all responses to requests for additional
information and replies to comments prior to their being filed with, or sent to,
the SEC. Each of the Company and RV agrees to use its reasonable best efforts,
after consultation with the other party, to respond promptly to all such
comments of and requests by the SEC. As promptly as practicable after the Proxy
Statement has been cleared by the SEC, the Company shall mail the Proxy
Statement to the shareholders of the Company. If at any time prior to the
Shareholders Meeting there shall occur any event that should be set forth in an
amendment or supplement to the Proxy Statement, the Company will promptly
prepare and mail to its shareholders such an amendment or supplement. The
Company will not mail or distribute any proxy statement or (except with respect
to shares of Company Common Stock reserved for issuance upon the exercise of
Options or Warrants outstanding on the date hereof not exceeding 100,000 of such
shares) registration statement, or any amendment or supplement thereto, to which
RV reasonably objects; provided that RV shall identify its objections and fully
cooperate with the Company to create a mutually satisfactory Proxy Statement and
Registration Statement.
(c) Notwithstanding anything to the contrary in this Agreement, without the
prior written consent of RV, the Company shall neither (i) call a Shareholder
Meeting for the purpose of voting on the Merger, nor (ii) file a proxy statement
or offering document with the SEC or otherwise publish a proxy statement or
offering document, unless and until the Company shall be in compliance with all
reporting requirements applicable to the Company under the Securities Act and
the
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Exchange Act except such requirements, the failure of with which to comply,
would not, individually or in the aggregate, have a Material Adverse Effect.
4.9. Certain Tax Matters. (a) Each of Parent, RV, Merger Sub and the
Company intend the Merger to qualify as a reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code and shall use their best efforts to
cause the Merger to so qualify. Each of Parent, RV, Merger Sub and the Company
shall take the position for all purposes that the Merger qualifies as a
reorganization under those Sections of the Code. None of Parent, RV, Merger Sub
or the Company shall take any action that would reasonably be expected to cause
the Merger to fail to qualify as a reorganization within the meaning of Section
368(a) of the Code.
(b) Each of Parent, RV, Merger Sub and the Company shall cooperate and use
their best efforts in obtaining the opinions of Debevoise & Xxxxxxxx, counsel to
Parent, RV and Merger Sub, and Xxxxx & XxXxxxxx, counsel to the Company,
described in Sections 5.2(f) and 5.3(g), respectively. In connection therewith,
both the Company, on the one hand, and Parent, RV and Merger Sub, on the other
hand, shall deliver to Debevoise & Xxxxxxxx and Xxxxx & XxXxxxxx representation
letters substantially in the form attached hereto as Annex A (the
"Representation Letters").
4.10. Senior Notes. As promptly as practicable following the date hereof,
the Company shall solicit waivers from holders of a requisite majority or
majorities of the Company's outstanding 14% Senior Notes due 2007 (the "Notes")
of the applicability to the transactions contemplated hereby of certain
covenants set forth in the indenture governing the Notes, as identified by
Parent to the Company (such waivers, the "Requisite Waivers"). If requested by
RV, the Company shall prepare and distribute to the holders of the Notes, as
promptly as reasonably practicable following the date on which the Registration
Statement shall have been declared effective, an offer to purchase and consent
solicitation statement, on terms and conditions and in a form satisfactory to RV
(together with all related transmittal and consent forms and other documents
delivered to such holders, the "Tender Offer Statement"), seeking the tender,
and the delivery of an accompanying consent by holders of a requisite majority
or majorities of outstanding principal amount of the Notes ("Requisite
Majority") to the amendments to the indenture constituting the Notes as are
considered necessary or appropriate by RV. RV shall be entitled to participate
in the preparation of the Tender Offer Statement and in any discussions with
holders of Notes relating to the terms of any offer to purchase Notes or
solicitation of consents or waivers. The Company shall not distribute to any
Person the Tender Offer Statement or any written material relating to any offer
to purchase Notes or to the solicitation of any consents or waivers from holders
of the Notes, or make any announcement with respect to the Tender Offer
Statement or any such offer or solicitation, or engage, directly or through
intermediaries, in any discussions with any holder of Notes after the date
hereof, without the prior express approval of RV. Any registration statement, if
any, required in connection with any such offer or solicitation shall be in form
and substance satisfactory to RV, and RV shall be entitled to participate in the
preparation and filing thereof, and the Company shall cooperate in such
preparation and filing as the registrant thereunder. If RV shall have requested
the distribution of a Tender Offer Statement, at the Closing (provided that the
Requisite Majority has been obtained) the Company shall execute and deliver to
the trustee under the indenture relating to the Notes a supplemental indenture
in the form specified in, and otherwise in accordance with, such Tender Offer
Statement. On or prior to the settlement date of any tender offer, Parent shall,
and shall cause RV to, provide financing as necessary to enable the Company to
pay for tendered Notes, in a manner not inconsistent with the terms of the
Tender Offer Statement. The Company shall be responsible for all out-of-pocket
expenses incurred by it in connection with the making of any offers to purchase
Notes or solicitation as contemplated in this Section, provided that RV shall
pay and reimburse the Company for all out-of-pocket fees and
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expenses of outside advisers actually incurred by the Company prior to the
Closing if this Agreement is terminated in accordance with Section 6.1(b)(i).
4.11. Ancillary Agreements. At or prior to the Closing, and subject to the
fulfillment or waiver of all other conditions to Closing, each of Parent, RV and
the Company shall execute and deliver the Ancillary Agreements to which it is a
party.
4.12. Netstream Purchase Price Adjustment. If the amount Jamtis pays to
purchase the Netstream Shares is reduced pursuant to the Netstream Acquisition
Agreements, Parent shall, or shall cause its affiliates to, make a cash capital
contribution to RV in the amount of such reduction prior to the Closing.
4.13. Conduct of Business of RV and Netstream. (a) From the date hereof to
and including the date of the "Final Closing" (as such term is defined in the
Netstream Acquisition Agreements), Parent, as soon as reasonably practicable,
shall consult in good faith with the Company concerning (i) any approval or
waiver by Parent or Jamtis with respect to actions by or concerning Netstream
that are restricted under Section 7.1(a) of the Netstream Master Agreement and
(ii) designating Xxxxx Xxxxxx (or an affiliate of Xxxxx Xxxxxx) as a preferred
supplier to Netstream. Such consultation shall include meetings between the
parties as reasonably necessary.
(b) From the date hereof to and including the Closing Date, except as set
forth in Schedule 4.13(b) of the RV Disclosure Letter or as otherwise required
pursuant to this Agreement, unless the Company has consented in writing thereto,
RV shall, and shall cause each of its Subsidiaries to:
(i) use its reasonable best efforts to preserve intact its business
organization and goodwill, to maintain in effect all existing
qualifications, licenses, permits, approvals and other authorizations, to
keep available the services of its officers and employees and to maintain
satisfactory relationships with customers, suppliers, distributors,
brokers, sales agents and all other persons having business relationships
with it; and
(ii) promptly notify the Company upon becoming aware of any material
breach of any representation, warranty or covenant contained in this
Agreement or the occurrence of any event that would cause any
representation or warranty of Parent relating to RV or any of its
Subsidiaries no longer to be true and correct;
(c) From the date hereof to and including the Closing Date, except as
contemplated hereby or as set forth in Schedule 4.13(c) of the RV Disclosure
Letter, unless the Company has consented in writing thereto, RV shall not, and
shall not permit any of its Subsidiaries to (and Parent shall not, and/or shall
not cause RV and its Subsidiaries to):
(i) amend its Certificate of Incorporation or By-Laws or comparable
governing instruments;
(ii) issue, sell, pledge or otherwise dispose of any shares of its
capital stock or other ownership interest in RV or any of the Subsidiaries,
or any securities convertible into or exchangeable for any such shares or
ownership interest, or any rights, warrants or options to acquire or with
respect to any such shares of capital stock, ownership interest, or
convertible or exchangeable securities, except (a) issuances related to the
merger of Jamtis with a wholly-owned subsidiary of RV, (b) issuances
related to the contributions to the capital of RV contemplated hereby, and
(c) following the closing under the Netstream Acquisition Agreements and
prior to the Closing, issuance or granting of unvested options to acquire
up to 625,000 shares of RV Class A Common Stock ("Interim RV Options") to
officers and employees of Netstream, provided that no Interim RV Options
shall become vested according to their terms as a result of
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the consummation of the Merger and the other transactions contemplated
hereby and by the Netstream Acquisition Agreements;
(iii) effect any stock split, reverse stock split, stock dividend,
subdivision, reclassification or similar transaction, or otherwise change
its capital structure as it exists on the date hereof, except as required
in order to achieve an appropriate number of shares to effect the share
exchange contemplated in the Merger;
(iv) declare, set aside or pay any dividend or make any other
distribution or payment with respect to any shares of capital stock or
ownership interests (other than such payments by a wholly-owned Subsidiary
of RV to RV or to another such wholly-owned Subsidiary);
(v) directly or indirectly redeem, purchase or otherwise acquire any
shares of its capital stock or the capital stock of any of its
Subsidiaries;
(vi) sell, lease, assign, transfer or otherwise dispose of (by merger
or otherwise) any of its property, business or assets (including, without
limitation, receivables, leasehold interests or Intellectual Property and
including any sale and leaseback transaction) except for fair value in the
ordinary course of business provided that the proceeds of such sales do not
exceed $50,000 in any single transaction or $100,000 in the aggregate prior
to the Closing Date;
(vii) settle or compromise any pending or threatened Litigation other
than settlements of Litigations which involve solely the payment of money
(without admission of liability) not to exceed $50,000 in any one case or
$100,000 in the aggregate;
(viii) make any advance, loan, extension of credit or capital
contribution to, or purchase or acquire (by merger or otherwise) any stock,
bonds, notes, debentures or other securities of, or any assets constituting
a business unit of, or make any other investment in, any person, firm or
entity, except (a) extensions of trade credit and endorsements of
negotiable instruments and other negotiable documents in the ordinary
course of business, (b) investments in cash and cash equivalents, (c)
payroll and travel advances in the ordinary course of business and (d)
investments in majority-owned Subsidiaries;
(ix) incur, assume or create any indebtedness for borrowed money or
for the deferred purchase price for property or services or pursuant to any
capital lease or other financing, except indebtedness incurred in the
ordinary course of business for working capital or capital expenditures;
(x) waive, relinquish, release or terminate any right or claim,
including any such right or claim under any Material Contract or permit any
rights of material value to use any Intellectual Property to lapse or be
forfeited, in each case, except in the ordinary course of business;
(xi) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part
of the property of RV or any Subsidiary, or make a general assignment for
the benefit of creditors, or permit or suffer to exist the commencement of
any bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of RV or any Subsidiary;
(xii) amend the Netstream Acquisition Agreements in any material
respect;
(xiii) agree in writing or otherwise to take any of the foregoing
actions.
(d) If Parent or RV shall have given notice to the Company of an action as
to which it seeks consent pursuant to Section 4.13(c), such notice to describe
the relevant matters in reasonable detail,
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and the Company shall not have objected within 15 days, RV and its Subsidiaries
(and Parent, if applicable) may take the action described in such notice.
4.14. RV Public Shares. Parent shall not take, or cause its affiliates to
take, any action in the twelve-month period following the Effective Time to
increase above 80% Parent's direct and indirect percentage interest in the
capital stock of RV, without the approval of all of the Disinterested Directors
of RV.
4.15. Credit Facility. RV and Parent shall enter into a Credit Facility
containing terms and conditions in accordance with those in the term sheet
attached hereto as Exhibit F.
ARTICLE V
CONDITIONS
5.1. Conditions to Each Party's Obligations. The respective obligation of
each party to consummate the transactions contemplated hereby shall be subject
to the satisfaction or, where permissible, waiver, on or prior to the Closing
Date, of the following conditions:
(a) The waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated.
(b) None of the parties shall be subject to any order, judgment,
injunction, decree or ruling, or other action of a court or other
Governmental Entity of competent jurisdiction restraining, enjoining or
otherwise prohibiting the Merger or any other transactions contemplated by
this Agreement; provided that each of the parties shall have used its
reasonable best efforts to appeal as promptly as practicable any such
order, judgment, injunction, decree, ruling or other action.
(c) The Company Shareholder Approval shall have been obtained in
accordance with the Texas Business Corporation Act and the Company's
Certificate of Incorporation and By-laws.
(d) The Registration Statement shall have become effective under the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.
(e) All Regulatory Filings and Consents (including, without
limitation, the Other Antitrust Filings and Consents) which are necessary
for the consummation of the Merger shall have been made or obtained, or any
waiting period (whether requisite or voluntary) under any Foreign Antitrust
Laws shall have expired, in each case, to the extent that the failure to
make or obtain such Regulatory Filings or Consents or of the waiting period
to have expired, in the aggregate, is reasonably likely, individually or in
the aggregate, to have a Material Delaying Effect (all such Consents,
Regulatory Filings and the lapse of all such waiting periods being referred
to as the "Requisite Regulatory Approvals"), and all such Requisite
Regulatory Approvals shall be in full force and effect. There shall not be
any statute, law, rule or regulation that makes consummation of the
transactions contemplated hereby illegal or prohibited.
(f) The Company shall have received the Requisite Waivers, and, if
Parent shall have requested the Company to prepare and distribute a Tender
Offer Statement, the holders of a Requisite Majority shall have tendered
the Notes held by them, and the Company shall have received written notice
of the approval of a Requisite Majority for the amendments and/or waivers
described in the final version of such Tender Offer Statement distributed
to holders of Notes, and, with respect to any Notes which remain
outstanding, the Trustee with respect to the
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Notes shall have executed and delivered to the Company a supplemental
indenture acceptable in form and substance to Parent.
(g) RV shall have acquired, directly or indirectly, the Netstream
Shares free and clear of any Encumbrances other than any Encumbrances
created pursuant to this Agreement.
5.2. Additional Conditions to Obligations of Parent, RV and Merger
Sub. The obligations of Parent, RV and Merger Sub to consummate the
transactions contemplated hereby shall be subject to the satisfaction or, where
permissible, waiver, on or prior to the Closing Date, of the following
conditions:
(a) (i) The representations and warranties made by the Company in this
Agreement shall be true and correct in all respects as of the date hereof,
and shall be true and correct in all respects as of the Closing Date as if
made as of the Closing Date (other than representations and warranties made
as of a specified date), except where the failure to be so true and correct
(without giving effect to any materiality qualifications or thresholds
contained in such representations and warranties), individually and in the
aggregate, would not have a Material Adverse Effect, (ii) the Company shall
not have breached or failed to comply in any material respect with any of
its obligations under this Agreement or any of the Ancillary Agreements to
which it is a party, provided that the Company shall have a 15 day period
in which to cure breaches that are reasonably likely to be curable, and
(iii) the Company shall have delivered to Parent a certificate dated the
Closing Date and signed by the Company's President or a Vice President to
the effect set forth above in this Section 5.2(a)(i).
(b) Each Ancillary Agreement shall have been executed and delivered by
each party thereto other than Parent, RV or Merger Sub and shall be in full
force and effect, in accordance with its terms.
(c) There shall not have been issued, delivered, sold or granted any
shares of Common Stock pursuant to the Rights Agreement.
(d) The Executive Agreement shall be in full force and effect in
accordance with its terms.
(e) All directors of the Company whose resignations shall have been
requested by Parent not less than five days prior to the Closing Date shall
have submitted their resignations or been removed from office effective as
of the Closing Date.
(f) Parent, RV and Merger Sub shall have received an opinion of
Debevoise & Xxxxxxxx, counsel to Parent, RV and Merger Sub, or other
counsel of national reputation, dated on or about the date of the mailing
to the Company shareholders of the Proxy Statement, which opinion shall be
reconfirmed as of the Effective Time, to the effect that, on the basis of
the facts, representations and assumptions set forth in such opinion, the
Merger will be treated for U.S. federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, and that
RV, Merger Sub and the Company will each be a party to that reorganization
within the meaning of Section 368(b) of the Code. In rendering such
opinion, such counsel may require and rely upon the Representation Letters.
(g) FirstCom Colombia SA shall have duly completed a fusion impropia
as provided in Schedule 5.2(g) (or such other corporate transaction as is
approved by Parent) and shall have received all requisite governmental
approvals with respect to the transfer or assumption of all material
licenses and concessions held by FirstCom Colombia SA as of the date such
fusion impropia is effective, and Parent shall have received from Xxxxx &
XxXxxxxx an opinion with regard to the status of FirstCom Colombia in
substantially the form previously delivered to the Company.
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(h) Parent shall have received such evidence as reasonably requested
that the Company has good and valid title to the shares owned by it of all
of its Subsidiaries.
(i) The Federal Communications Commission shall have given any
approval required in connection with the change of control of the Company.
5.3. Additional Conditions to Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated hereby are subject to
the satisfaction or, where permissible, waiver, on or prior to the Closing Date,
of the following conditions:
(a) (i) The representations and warranties made by Parent in this
Agreement shall be true and correct in all respects as of the date hereof,
and shall be true and correct in all respects as of the Closing Date as if
made as of the Closing Date (other than representations and warranties made
as of a specified date), except where the failure to be so true and correct
(without giving effect to any materiality qualifications or thresholds
contained in such representations and warranties), individually and in the
aggregate, would not have a Material Adverse Effect, (ii) none of Parent,
RV or Merger Sub shall have breached or failed to comply in any material
respect with any of its obligations under this Agreement to which it is a
party, or any of the Ancillary Agreements to which it is a party, provided
that Parent, RV and Merger Sub shall have a 15 day period in which to cure
breaches that are reasonably likely to be curable, and (iii) Parent shall
have delivered to the Company a certificate dated the Closing Date and
signed by an authorized officer of Parent to the effect set forth above in
this Section 5.3(a).
(b) Each Ancillary Agreement shall have been executed and delivered by
each party thereto other than the Company and shall be in full force and
effect, in accordance with its terms.
(c) Parent shall have delivered a certificate to the Company
certifying as to the amount of any reduction, if any, in the purchase price
paid by Jamtis under the Netstream Acquisition Agreements, and the
shareholders of RV shall have contributed to the capital of RV an aggregate
of not less than $70,000,000 plus any additional amount required by Section
4.12, as equity in cash.
(d) The RV Class A Common Stock shall have been accepted for listing
by a national securities exchange.
(e) Parent shall have caused to be duly elected as members of the
board of directors of RV (i) the Chief Executive Officer of the Company,
(ii) if requested by Promon, one "Disinterested Director" (as defined in
the Articles of Incorporation of RV) nominated by Promon, and (iii) two or,
if Promon shall not have nominated any Disinterested Director, three
Disinterested Directors proposed by Parent and agreed by the Company, and
each of such Disinterested Directors shall have agreed to serve in such
capacity.
(f) The shareholders of RV shall have duly adopted the Amended and
Restated Certificate of Incorporation and Amended and Restated By-Laws of
RV in the form attached as Exhibit C, and the board of directors of RV
shall have duly adopted (i) a Board Policy in the form of Exhibit B and
(ii) if any shares of Series A preferred stock of the Company are
outstanding, a Certificate of Designation substantially in the form of
Exhibit G.
(g) The Company shall have received an opinion of Xxxxx & XxXxxxxx,
counsel to the Company, or other counsel of national reputation, dated on
or about the date of the mailing to the Company shareholders of the Proxy
Statement, which opinion shall be reconfirmed as of the Effective Time, to
the effect that, on the basis of the facts, representations and assumptions
set forth in such opinion, the Merger will be treated for U.S. federal
income tax purposes as a
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reorganization within the meaning of Section 368(a) of the Code, and that
RV, Merger Sub and the Company will each be a party to that reorganization
within the meaning of Section 368(b) of the Code. In rendering such
opinion, such counsel may require and rely upon the Representation Letters.
ARTICLE VI
TERMINATION
6.1. Termination. This Agreement may be terminated at any time prior to
the Closing Date, notwithstanding approval thereof by the shareholders of the
Company:
(a) by mutual written consent of the Company and Parent;
(b) by Parent or the Company by written notice if:
(i) the Closing Date shall not have occurred on or before April 30,
2000 (provided that the right to terminate this Agreement pursuant to
this clause (i) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Closing Date to occur on or before such
date); or
(ii) there shall be any statute, law, rule or regulation that makes
consummation of the transactions contemplated hereby illegal or
prohibited or if any court or other Governmental Entity of competent
jurisdiction shall have issued an order, judgment, decree or ruling, or
taken any other action restraining, enjoining or otherwise prohibiting
the Merger and such order, judgment, injunction, decree, ruling or other
action shall have become final and non-appealable, provided that the
party terminating this Agreement has complied with the provisions of the
penultimate sentence of Section 4.3;
(c) by the Company by written notice if:
(i) the Company shall have entered into or agreed to enter into an
Acquisition Agreement, provided that the Company shall have delivered an
Acquisition Agreement Notice in accordance with Section 4.1(c) and paid
the Termination Amount and Parent Expenses as provided in Section
7.7(b);
(ii) the Final Closing under the Netstream Acquisition Agreements
shall have failed to occur, or shall be incapable of occurring, prior to
April 30, 2000 in either case as a result of a breach of any covenant of
Parent or any of its affiliates thereunder; or
(iii) a "Material Adverse Effect", as defined in the Netstream
Master Agreement, shall have occurred with respect to Netstream.
(d) by Parent by written notice if:
(i) Any Person, other than Parent, RV, Merger Sub and any other
Person that would be included with the Parent in a "group" within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as
amended, shall have acquired beneficial ownership of 20% or more of the
outstanding shares of Company Common Stock;
(ii) Since the date hereof, there shall have occurred any event,
change, effect or development that, individually or in the aggregate,
would have a Material Adverse Effect, provided that such a notice from
Parent with respect to this subparagraph (ii) must be given not later
than 15 days after any notice from the Company to Parent that such an
33
37
event, change, effect or development has occurred, such notice to
describe the same in reasonable detail;
(iii) The Company shall have entered into an Acquisition Agreement
or the Board of Directors of the Company shall have (a) withdrawn,
modified or failed to maintain its recommendation to the shareholders of
the Company to approve the Merger in any manner adverse to the ability
of Merger Sub and Parent to complete the Merger hereunder, (b)
recommended an Acquisition Proposal or received from a financial advisor
to the Company of nationally recognized standing a fairness opinion with
respect to an Acquisition Proposal that indicates such Acquisition
Proposal is a Superior Proposal, or (c) authorized the execution of an
agreement in principle or a definitive agreement relating to an
Acquisition Proposal with a Person other than Parent; or
(iv) The Shareholder Approval shall not have been obtained at the
Shareholder Meeting (including any postponement or adjournment thereof).
6.2. Effect of Termination. If this Agreement is terminated pursuant to
Section 6.1 hereof, this Agreement, except for the provisions of Section 6 and
Article VII, shall terminate, without any liability on the part of any party or
its directors, officers or shareholders. Nothing herein shall relieve any party
to this Agreement from any liability for breach of this Agreement or prejudice
the ability of the non-breaching party to seek damages from any other party for
any breach of this Agreement, including without limitation, attorneys' fees and
the right to pursue any remedy at law or in equity. Notwithstanding anything to
the contrary in the foregoing, no party hereto shall be entitled to bring any
action, suit or claim under this Agreement for damages against any other party
hereto unless the amount of such damages exceeds $500,000 (provided that, if the
damages of the claiming party are found to have, or are agreed as having,
exceeded such amount on a cumulative basis, the full amount of such damages will
be recoverable).
ARTICLE VII
GENERAL PROVISIONS
7.1. Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any document delivered
pursuant to this Agreement shall survive the Effective Time.
7.2. Amendment. To the extent permitted by applicable law, this Agreement
may be amended by action taken by or on behalf of the respective Boards of
Directors of the Company and Parent at any time before or after approval of the
Merger by the shareholders of the Company but, after any such shareholder
approval, no amendment shall be made which adversely affects the rights of the
Company's shareholders hereunder without the approval of such shareholders
owning a majority of the outstanding shares of Company Common Stock. This
Agreement may not be amended except by an instrument in writing signed on behalf
of the parties.
7.3. Extension; Waiver. At any time prior to the Closing Date, either
party, may (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein by any other applicable party or
in any document, certificate or writing delivered pursuant hereto by any other
applicable party or (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
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38
7.4. Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission (with a
confirmatory copy sent by overnight courier), by courier service (with proof of
service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
IF TO PARENT, RV OR MERGER SUB: IF TO THE COMPANY:
------------------------------- ------------------
AT&T Corp. FirstCom Corporation
000 Xxxxx Xxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000 Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx Attention: General Counsel
General Attorney
WITH A COPY (WHICH COPY SHALL NOT CONSTITUTE NOTICE) TO: WITH A COPY (WHICH COPY SHALL NOT CONSTITUTE NOTICE) TO:
-------------------------------------------------------- --------------------------------------------------------
Debevoise & Xxxxxxxx Xxxxx & XxXxxxxx
000 Xxxxx Xxxxxx 0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Xx. Attention: Xxxxxx Xxxxx
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
7.5. Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties; provided, however, that Parent may assign
its rights hereunder to an affiliate but nothing shall relieve the assignor from
its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. Notwithstanding anything contained in
this Agreement to the contrary, nothing in this Agreement, expressed or implied,
is intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
7.6. Entire Agreement. This Agreement, the Disclosure Letter, the
Ancillary Agreements and any other documents delivered by the parties in
connection herewith or therewith constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto.
7.7. Fees and Expenses. (a) Except as expressly provided otherwise herein,
whether or not the transactions contemplated hereby are consummated, all costs
and expenses incurred in connection with the transactions contemplated hereby
shall be paid by the party incurring such expenses provided that any such costs
and expenses incurred by RV or Merger Sub shall be paid, or shall be reimbursed
to RV or Merger Sub, as the case may be, by Parent.
(b) If this Agreement is terminated pursuant to Section 6.1(c)(i) or any of
clauses (i) and (iii) of Section 6.1(d), the Company shall pay to Parent as
promptly as practicable in same-day funds an aggregate amount equal to the sum
of (i) $10,000,000 (the "Termination Amount") and (ii) the out-of-pocket
expenses of Parent and its affiliates incurred in connection with or arising out
of this Agreement, the Ancillary Agreements and the transactions contemplated
hereby and thereby
35
39
(including, without limitation, amounts paid or payable to investment bankers
(if any), information agents, lending banks, fees and expenses of counsel,
accountants and consultants and printing and mailing expenses, regardless of
when such expenses are incurred) (the "Parent Expenses"), provided that the
maximum amount of Parent Expenses payable shall be $1,000,000.
(c) If this Agreement is terminated pursuant to Section 6.1(c)(ii), Parent
shall pay to the Company the out-of-pocket expenses of the Company and its
affiliates incurred in connection with or arising out of this Agreement, the
Ancillary Agreements and the transactions contemplated hereby and thereby
(including, without limitation, any amounts paid or payable to investment
bankers, information agents, lending banks, fees and expenses of counsel,
accountants and consultants and printing and mailing expenses, regardless of
when such expenses are incurred) (the "Company Expenses,") provided that the
maximum amount of Company Expenses payable shall be $1,000,000.
(d) If the Company fails to pay promptly any amounts owing pursuant to
Section 7.7(b) when due, the Company shall in addition thereto pay to Parent, or
if Parent fails to pay promptly any amounts owing pursuant to Section 7.7(c)
when due, Parent shall in addition thereto pay to the Company, in each case, all
costs and expenses (including, pursuant to Section 7.7(b), fees and
disbursements of counsel) incurred in collecting such amounts, together with
interest on such amounts (or any unpaid portion thereof) from the date such
payment was required to be made until the date such payment is received by
Parent or the Company, as the case may be, at the prime rate of The Chase
Manhattan Bank as in effect from time to time during such period.
7.8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to its rules of
conflict of laws. Each of the Company and Parent hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America located in the
State of New York (the "New York Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such courts), waives
any objection to the laying of venue of any such litigation in the New York
Courts and agrees not to plead or claim in any New York Court that such
litigation brought therein has been brought in an inconvenient forum.
7.9. Headings. Headings of the Articles and Sections of this Agreement are
for the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
7.10. Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa. Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." As used in this Agreement, the words "Subsidiary," "affiliate" and
"associate" shall have the meanings ascribed thereto in Rule 12b-2 under the
Exchange Act. For purposes of this Agreement, one party shall be considered
"wholly owned" by another party if all of the shares of its outstanding capital
stock, other than directors' qualifying shares, are beneficially owned by such
other party.
7.11. Investigations. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained in this Agreement.
7.12. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
36
40
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.13. Enforcement of Agreement. (a) The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any New York Court, this
being in addition to any other remedy to which they are entitled at law or in
equity.
(b) The prevailing party in any judicial action shall be entitled to
receive from the other party reimbursement for the prevailing party's reasonable
attorneys' fees and disbursements, and court costs.
7.14. Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all, of the parties hereto.
37
41
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year first written
above.
AT&T CORP.
By: /s/ XXXX X. XXXXX
------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
KIRI INC.
By: /s/ XXXXXXX XXXXXXXX
------------------------------------
Name: Xxxxxxx XxXxxxxx
Title: President
FRANTIS, INC.
By: /s/ XXXXXXX XXXXXXXX
------------------------------------
Name: Xxxxxxx XxXxxxxx
Title: President
FIRSTCOM CORPORATION
By: /s/ XXXXXXXX X. NORTHLAND
------------------------------------
Name: Xxxxxxxx X. Northland
Title: Chairman, President and CEO
38
42
SCHEDULE A TO THE
AGREEMENT AND PLAN OF MERGER
43
SCHEDULE A
DEFINITIONS
1. Defined Terms. The following capitalized terms, when used in this
Agreement, shall have the following respective meanings:
"Acquisition Proposal" means any proposal or offer from any person
relating to any direct or indirect acquisition or purchase of 10% or more
of the assets of the Company or any of its Subsidiaries or any shares of
any class of outstanding equity securities of the Company or any of its
Subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 10% or more of any class of equity
securities of the Company or any of its Subsidiaries or any merger,
consolidation, business combination, sale of substantially all the assets,
joint venture, management or operating agreement, recapitalization,
liquidation, dissolution or similar transaction involving the Company or
any of its Subsidiaries, other than the transactions contemplated by this
Agreement.
"Ancillary Agreements" means the Voting Agreement, the RV Agreement
(in the form of Exhibit E), the Brand License, the Employment Agreements
and the Credit Facility Agreement between Parent and RV (based on the terms
set forth in Exhibit F).
"Brand License" means the Service Xxxx License Agreement between
Parent and RV, in the form of Exhibit D).
"Copyrights" shall mean all material copyrights, whether registered or
unregistered, owned by, assigned to or subject to assignment to the Company
or any of its Subsidiaries anywhere in the world.
"Disclosure Letter" means the letter dated as of the date hereof
delivered by the Company to Parent and identified as such and initialed by
the parties to this Agreement.
"Environmental Laws" means laws relating to the protection of human
health or the environment
"ERISA Affiliate" means any person (as defined in Section 3(9) of
ERISA) that is or has been a member of any group of persons described in
Section 414(b), (c), (m) or (o) of the Code, including Company or any one
of its Subsidiaries.
"Executive Agreement" means the Employment Agreement dated as of
November 1, 1999, between RV FirstCom and Xxxxxxxx X. Northland, including
the exhibits thereto.
"Income Tax" means any Tax computed in whole or in part based on or by
reference to net income and any alternative, minimum, accumulated earnings
or personal holding company Tax (including all interest and penalties
thereon and additions thereto).
"Income Tax Return" means any return, report, declaration, form, claim
for refund or information return or statement relating to Income Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
"Intellectual Property" means the United States and foreign
trademarks, service marks, trade names, trade dress, domain names,
copyrights, and similar rights, including registrations and applications to
register or renew the registration of any of the foregoing, the United
States and foreign letters patent and patent applications, inventions,
processes, designs, formulae, trade secrets, know-how, ideas, research and
development, technical data, copyrightable works, engineering notebooks,
confidential information, Software, firmware, Internet Web sites, mask
i
44
works and other semiconductor chip rights and applications, registrations
and renewals thereof, and all similar intellectual property rights
(including moral rights), all rights to xxx for and remedies against past,
present and future infringements of any or all of the foregoing and rights
of priority and protection of interests therein under the Laws of any
jurisdiction, tangible embodiments of any of the foregoing (in any medium
including electronic media), and licenses of any of the foregoing.
"Jamtis Group" means, collectively, Jamtis, Inc., Jamtis LLC, Atlantis
Holdings do Brasil Ltda. and Atlantis do Brasil Ltda..
"Marks" shall mean all registrations for trademarks, service marks and
domain names and all pending applications for such registrations owned by,
assigned to or subject to assignment to the Company or any of its
Subsidiaries anywhere in the world and all material unregistered
trademarks, trade names, service makers, brand names, and business names.
"Netstream Master Agreement" means the Master Agreement, dated as of
August 20, 1999, between Jamtis and the individuals listed on Schedule
4.8(b) attached thereto.
"Patents" shall mean all patents and patent applications owned by,
assigned to or subject to assignment to the Company or any of its
Subsidiaries anywhere in the world.
"Permitted Encumbrances" means (a) Encumbrances reserved against or
reflected in the Company Reports, to the extent reserved or reflected or
described in the notes to any balance sheet set forth therein, (b)
Encumbrances for Taxes not yet due and payable or which are being contested
in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the Company's books in accordance with
GAAP, (c) those Encumbrances set forth in Section 3.1(r) of the Disclosure
Schedule and (d) those Encumbrances that, individually and in the aggregate
with all other Permitted Encumbrances, do not and will not materially
interfere with the use of the properties or assets of the Company and its
Subsidiaries taken as a whole as currently used, or otherwise have or
result in a Material Adverse Effect.
"RV Disclosure Letter" means the letter dated as of the date hereof
delivered by RV to the Company and identified as such and initialed by the
parties to this Agreement.
"Superior Proposal" means any bona fide proposal made by a third party
to acquire, directly or indirectly, for consideration consisting of cash
and/or securities, 50% or more of the voting power of the common stock of,
or all or substantially all the assets of, the Company and its Subsidiaries
and otherwise on terms which the Board of Directors determines in good
faith (after receiving the advice of a financial advisor of nationally
recognized standing (which advice shall be disclosed in reasonable detail
to Parent)) to be more favorable to the Company's shareholders than the
Merger and for which financing, to the extent necessary with respect to
such proposal, is then committed or which, in the good faith judgment of
the Board of Directors, is reasonably capable of being obtained by such
third party.
"Tax" means any federal, state, local or foreign income, alternative,
minimum, accumulated earnings, personal holding company, franchise, capital
stock, profits, windfall profits, gross receipts, sales, use, value added,
transfer, registration, stamp, premium, excise, customs duties, severance,
environmental (including taxes under section 59A of the Code), real
property, personal property, ad valorem, occupancy, license, occupation,
employment, payroll, social security, disability, unemployment, workers'
compensation, withholding, estimated or other similar tax, duty, fee,
assessment or other governmental charge or deficiencies thereof (including
all interest and penalties thereon and additions thereto).
ii
45
"Tax Return" means any return, report, declaration, form, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Year 2000 Compliant" means that software, hardware and equipment (x)
correctly perform date data century recognition, and calculations that
accommodate same century and multi-century formulas and date values; (y)
operate or are expected to operate on a basis comparable to their current
operation during and after calendar year 2000 A.D., including but not
limited to leap years; and (z) shall not end abnormally or provide invalid
or incorrect results as a result of date data which represents or
references different centuries or more than one century.
2. Other Defined Terms. The following capitalized terms, when used in this
Agreement without definition, shall have the meanings set forth in the Sections
of this Agreement indicated below:
DEFINED TERM SECTION REFERENCE
------------ -----------------
"1999 Proxy" Section 3.1(u)
"Acquiror Material Adverse Effect" Section 3.2(a)
"Acquisition Agreement" Section 4.1(b)
"Acquisition Agreement Notice" Section 4.1(c)
"affiliate" Section 7.10
"Affiliate Transactions" Section 3.1(u)
"Agreement" First Paragraph
"Assets" Section 3.1(r)
"associate" Section 7.10
"Assumed Award" Section 2.3(a)
"Certificate of Merger" Section 1.3
"Certificates" Section 2.2(b)
"Closing" Section 1.2
"Closing Date" Section 1.2
"Code" Recitals
"Company" First Paragraph
"Company Benefit Plans" Section 3.1(l)
"Company Common Stock" Section 2.1(a)
"Company Expenses" Section 7.7(c)
"Company Property" Section 3.1(p)
"Company Reports" Section 3.1(g)
"Company Rights" Section 3.1(d)
"Company Shareholder Approval" Section 3.1(h)
"Company Stock Option" Section 2.3(a)
"Company Stock Plans" Section 3.1(d)
"Consents" Section 4.3
"Consent Solicitation Statement" Section 4.10
"Contract" or "Contracts" Section 3.1(f)
"Current Policies" Section 4.7
"Effective Time" Section 1.3
"Employment Agreements" Section 3.1(l)
"Encumbrances" Section 3.1(e)
"ERISA" Section 3.1(l)
"excess parachute payment" Section 3.1(l)
"Excess Shares Trust" Section 2.2(e)
iii
46
DEFINED TERM SECTION REFERENCE
------------ -----------------
"Exchange Act" Section 3.1(f)
"Exchange Agent" Section 2.2(a)
"Exchange Fund" Section 2.2(a)
"Fairness Opinion" Section 3.1(v)
"Foreign Antitrust Laws" Section 3.1(f)
"Governmental Entity" Section 3.1(c)
"HSR Act" Section 3.1(f)
"Interim RV Options" Section 4.13(c)
"Jamtis" Recitals
"Laws" Section 3.1(c)
"Litigation" Section 3.1(i)
"Material Adverse Effect" Section 3.1(a)
"Material Contracts" Section 3.1(q)
"Material Delaying Effect" Section 3.1(f)
"Merger" Recitals
"Merger Sub" First Paragraph
"Netstream Acquisition Agreements" Recitals
"Netstream Shares" Recitals
"New York Courts" Section 7.8
"Notes" Section 4.10
"Option" or "Options" Section 3.1(d)
"Other Antitrust Consents" Section 4.3
"Other Antitrust Filings" Section 4.3
"Other Antitrust Filings and Consents" Section 5.3
"Parent" First Paragraph
"Parent Expenses" Section 7.7(b)
"Permits" Section 3.1(o)
"Person" Section 3.1(e)
"Preferred Stock" Section 2.1(b)
"Proxy Statement" Section 4.8(b)
"Registration Statement" Section 4.8(b)
"Regulatory Filings" Section 3.1(f)
"Representation Letters" Section 4.9(b)
"Requisite Majority" Section 4.10
"Requisite Regulatory Approvals" Section 5.1(e)
"Rights Agreement" Section 3.1(d)
"RV" First paragraph
"RV Class A Common Stock" Section 2.1(a)
"RV Class B Common Stock" Section 2.1(b)
"RV Preferred Stock" Section 2.1(b)
"SEC" Section 3.1(g)
"Securities Act" Section 3.1(g)
"Shareholder Meeting" Section 4.8(a)
"Subsidiary" Section 7.10
"Surviving Corporation" Section 1.1
"TBCA" Section 3.1(w)
"Termination Amount" Section 7.7(b)
"Voting Agreement" Recitals
"Warrants" Section 3.1(d)
iv
47
EXHIBIT A TO THE
AGREEMENT AND PLAN OF MERGER
48
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
---------------------
I, XXXXXX X. XXXXX, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "KIRI INC.", FILED IN THIS OFFICE ON THE THIRTEENTH DAY OF
OCTOBER, A.D. 1999, AT 12:30 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
By: /s/ XXXXXX X. XXXXX
----------------------------------------------------
Xxxxxx X. Xxxxx, Secretary of State
3108376 8100 [SEAL] AUTHENTICATION: 0023372
991432556 DATE: 10-13-99
49
CERTIFICATE OF INCORPORATION
OF
KIRI INC.
ARTICLE I
NAME OF CORPORATION
The name of the corporation is Kiri Inc. (the "Corporation").
ARTICLE II
REGISTERED OFFICE
The Corporation's registered office in the State of Delaware is at 0000
Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000. The name of its registered agent at such address is The Corporation Trust
Company.
ARTICLE III
PURPOSE
The nature of the business of the Corporation and its purpose is to engage
in any lawful act or activity for which corporations may be engaged under the
General Corporation Law of the State of Delaware.
ARTICLE IV
AUTHORIZED STOCK
The aggregate number of shares of stock that the Corporation shall have
authority to issue is 1,000 shares of Common Stock, par value $.01 per share
(the "Common Stock").
ARTICLE V
INCORPORATOR
The name and mailing address of the incorporator is as follows:
Xxxxxxx Xxxxxx, Esq.
x/x Xxxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
1
50
ARTICLE VI
MANAGEMENT OF THE CORPORATION
The following provisions are inserted for the management of the business,
for the conduct of the affairs of the Corporation and for the purpose of
creating, defining, limiting and regulating the powers of the Corporation and
its directors and stockholders:
(a) The number of directors of the Corporation shall be fixed and may
be altered from time to time in the manner provided in the By-Laws, and
vacancies in the Board of Directors and newly created directorships
resulting from any increase in the authorized number of directors may be
filled, and directors may be removed, as provided in the By-Laws.
(b) The election of directors may be conducted in any manner approved
by the stockholders at the time when the election is held and need not be
by written ballot.
(c) All corporate powers and authority of the Corporation (except as
at the time otherwise provided by law, by this Certificate of Incorporation
or by the By-Laws) shall be vested in and exercised by the Board of
Directors.
(d) The Board of Directors shall have the power without the assent or
vote of the stockholders to adopt, amend, alter or repeal the By-Laws of
the Corporation, except to the extent that the By-Laws or this Certificate
of Incorporation otherwise provide.
(e) No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of his or her fiduciary
duty as a director, provided that nothing contained in this Article shall
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of the law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any transaction from
which the director derived an improper personal benefit.
ARTICLE VII
AMENDMENT
The Corporation reserves the right to amend or repeal any provision
contained in this Certificate of Incorporation in the manner now or hereafter
prescribed by the laws of the State of Delaware, and all rights herein conferred
upon stockholders or directors are granted subject to this reservation.
IN WITNESS WHEREOF, I, THE UNDERSIGNED, being the incorporator hereinabove
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make and file this Certificate,
hereby declaring and certifying that the facts herein stated are true, and
accordingly have hereunto set my hand this 13th day of October, 1999.
/s/ XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
2
51
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
KIRI INC.
BY-LAWS
AS ADOPTED ON OCTOBER 14, 1999
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
52
KIRI INC.
BY-LAWS
TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I
STOCKHOLDERS.............................................. 1
Section 1.01. Annual Meetings........................ 1
Section 1.02. Special Meetings....................... 1
Section 1.03. Notice of Meetings; Waiver............. 1
Section 1.04. Quorum................................. 1
Section 1.05. Voting................................. 2
Section 1.06. Voting by Ballot....................... 2
Section 1.07. Adjournment............................ 2
Section 1.08. Proxies................................ 2
Section 1.09. Organization; Procedure................ 3
Section 1.10. Consent of Stockholders in Lieu of
Meeting............................................... 3
ARTICLE II
BOARD OF DIRECTORS........................................ 3
Section 2.01. General Powers......................... 3
Section 2.02. Number and Term of Office.............. 3
Section 2.03. Election of Directors.................. 3
Section 2.04. Annual and Regular Meetings............ 4
Section 2.05. Special Meetings; Notice............... 4
Section 2.06. Quorum; Voting......................... 4
Section 2.07. Adjournment............................ 4
Section 2.08. Action Without a Meeting............... 4
Section 2.09. Regulations; Manner of Acting.......... 4
Section 2.10. Action by Telephonic Communications.... 5
Section 2.11. Resignations........................... 5
Section 2.12. Removal of Directors................... 5
Section 2.13. Vacancies and Newly Created
Directorships...................... 5
Section 2.14. Compensation........................... 5
Section 2.15. Reliance on Accounts and Reports,
etc................................ 5
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES.................. 5
Section 3.01. How Constituted........................ 5
Section 3.02. Powers................................. 6
Section 3.03. Proceedings............................ 6
Section 3.04. Quorum and Manner of Acting............ 6
Section 3.05. Action by Telephonic Communications.... 7
Section 3.06. Absent or Disqualified Members......... 7
Section 3.07. Resignations........................... 7
Section 3.08. Removal................................ 7
Section 3.09. Vacancies.............................. 7
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ARTICLE IV
OFFICERS.................................................. 7
Section 4.01. Number................................. 7
Section 4.02. Election............................... 7
Section 4.03. Salaries............................... 7
Section 4.04. Removal and Resignation; Vacancies..... 7
Section 4.05. Authority and Duties of Officers....... 8
Section 4.06. The President.......................... 8
Section 4.07. The Secretary.......................... 8
Section 4.08. The Treasurer.......................... 8
Section 4.09. Additional Officers.................... 9
Section 4.10. Security............................... 9
ARTICLE V
CAPITAL STOCK............................................. 10
Section 5.01. Certificates of Stock, Uncertificated
Shares................................................ 10
Section 5.02. Signatures; Facsimile.................. 10
Section 5.03. Lost, Stolen or Destroyed
Certificates.......................................... 10
Section 5.04. Transfer of Stock...................... 10
Section 5.05. Record Date............................ 10
Section 5.06. Registered Stockholders................ 11
Section 5.07. Transfer Agent and Registrar........... 11
ARTICLE VI
INDEMNIFICATION........................................... 12
Section 6.01. Nature of Indemnity.................... 12
Section 6.02. Successful Defense..................... 12
Section 6.03. Determination That Indemnification Is
Proper................................................ 12
Section 6.04. Advance Payment of Expenses............ 13
Section 6.05. Procedure for Indemnification of
Directors and Officers................................ 13
Section 6.06. Survival; Preservation of Other
Rights................................................ 1
Section 6.07. Insurance.............................. 14
Section 6.08. Severability........................... 14
ARTICLE VII
OFFICES................................................... 14
Section 7.01. Registered Office...................... 14
Section 7.02. Other Offices.......................... 14
ARTICLE VIII
GENERAL PROVISIONS........................................ 15
Section 8.01. Dividends.............................. 15
Section 8.02. Reserves............................... 15
Section 8.03. Execution of Instruments............... 15
Section 8.04. Corporate Indebtedness................. 15
Section 8.05. Deposits............................... 15
Section 8.06. Checks................................. 15
Section 8.07. Sale, Transfer, etc. of Securities..... 16
Section 8.08. Voting as Stockholder.................. 16
Section 8.09. Fiscal Year............................ 16
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Section 8.10. Seal................................... 16
Section 8.11. Books and Records; Inspection.......... 16
ARTICLE IX
AMENDMENT OF BY-LAWS...................................... 16
Section 9.01. Amendment.............................. 16
ARTICLE X
CONSTRUCTION.............................................. 17
Section 10.01. Construction........................... 17
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KIRI INC.
BY-LAWS
AS ADOPTED ON OCTOBER 14, 1999
ARTICLE I
STOCKHOLDERS
Section 1.01. Annual Meetings. Subject to Section 1.12 of these By-Laws,
the annual meeting of the stockholders of the Corporation for the election of
directors and for the transaction of such other business as properly may come
before such meeting shall be held at such place, either within or without the
State of Delaware, and at 9:00 a.m. local time on the fifteenth of May (or, if
such day is a legal holiday, then on the next succeeding business day), or at
such other date and hour, as may be fixed from time to time by resolution of the
Board of Directors and set forth in the notice or waiver of notice of the
meeting.
Section 1.02. Special Meetings. Special meetings of the stockholders may
be called at any time by the President (or, in the event of his or her absence
or disability, by any Vice President), or by the Board of Directors. A special
meeting shall be called by the President (or, in the event of his or her absence
or disability, by any Vice President), or by the Secretary, immediately upon
receipt of a written request therefor by stockholders holding in the aggregate
not less than a majority of the outstanding shares of the Corporation at the
time entitled to vote at any meeting of the stockholders. If such officers or
the Board of Directors shall fail to call such meeting within twenty days after
receipt of such request, any stockholder executing such request may call such
meeting. Such special meetings of the stockholders shall be held at such places,
within or without the State of Delaware, as shall be specified in the respective
notices or waivers of notice thereof.
Section 1.03. Notice of Meetings; Waiver. The Secretary or any Assistant
Secretary shall cause written notice of the place, date and hour of each meeting
of the stockholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called, to be given personally or by mail,
not less than ten nor more than sixty days prior to the meeting, to each
stockholder of record entitled to vote at such meeting. If such notice is
mailed, it shall be deemed to have been given to a stockholder when deposited in
the United States mail, postage prepaid, directed to the stockholder at his or
her address as it appears on the record of stockholders of the Corporation, or,
if he or she shall have filed with the Secretary of the Corporation a written
request that notices to him or her be mailed to some other address, then
directed to him or her at such other address. Such further notice shall be given
as may be required by law.
No notice of any meeting of stockholders need be given to any stockholder
who submits a signed waiver of notice, whether before or after the meeting.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the stockholders need be specified in a written waiver of
notice. The attendance of any stockholder at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground that the meeting is
not lawfully called or convened.
Section 1.04. Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the shares
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entitled to vote at a meeting of stockholders shall constitute a quorum for the
transaction of business at such meeting.
Section 1.05. Voting. If, pursuant to Section 5.05 of these By-Laws, a
record date has been fixed, every holder of record of shares entitled to vote at
a meeting of stockholders shall be entitled to one vote for each share
outstanding in his or her name on the books of the Corporation at the close of
business on such record date. If no record date has been fixed, then every
holder of record of shares entitled to vote at a meeting of stockholders shall
be entitled to one vote for each share of stock standing in his or her name on
the books of the Corporation at the close of business on the day next preceding
the day on which notice of the meeting is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. Except as otherwise required by law or by the Certificate of Incorporation
or by these By-Laws, the vote of a majority of the shares represented in person
or by proxy at any meeting at which a quorum is present shall be sufficient for
the transaction of any business at such meeting.
Section 1.06. Voting by Ballot. No vote of the stockholders need be taken
by written ballot unless otherwise required by law. Any vote which need not be
taken by ballot may be conducted in any manner approved by the meeting.
Section 1.07. Adjournment. If a quorum is not present at any meeting of
the stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than thirty days, or if after the adjournment a new record date for the
adjourned meeting is fixed pursuant to Section 5.05 of these By-Laws, a notice
of the adjourned meeting, conforming to the requirements of Section 1.03 of
these By-Laws, shall be given to each stockholder of record entitled to vote at
such meeting. At any adjourned meeting at which a quorum is present, any
business may be transacted that might have been transacted on the original date
of the meeting.
Section 1.08. Proxies. Any stockholder entitled to vote at any meeting of
the stockholders or to express consent to or dissent from corporate action in
writing without a meeting may authorize another person or persons to vote at any
such meeting and express such consent or dissent for him or her by proxy. A
stockholder may authorize a valid proxy by executing a written instrument signed
by such stockholder, or by causing his or her signature to be affixed to such
writing by any reasonable means including, but not limited to, by facsimile
signature, or by transmitting or authorizing the transmission of a telegram,
cablegram or other means of electronic transmission to the person designated as
the holder of the proxy, a proxy solicitation firm or a like authorized agent.
No such proxy shall be voted or acted upon after the expiration of three years
from the date of such proxy, unless such proxy provides for a longer period.
Every proxy shall be revocable at the pleasure of the stockholder executing it,
except in those cases where applicable law provides that a proxy shall be
irrevocable. A stockholder may revoke any proxy which is not irrevocable by
attending the meeting and voting in person or by filing an instrument in writing
revoking the proxy or by filing another duly executed proxy bearing a later date
with the Secretary. Proxies by telegram, cablegram or other electronic
transmission must either set forth or be submitted with information from which
it can be determined that the telegram, cablegram or other electronic
transmission was authorized by the stockholder. Any copy, facsimile
telecommunication or other reliable reproduction of a writing or transmission
created pursuant to this section may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used,
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KIRI INC.
provided that such copy, facsimile telecommunication or other reproduction shall
be a complete reproduction of the entire original writing or transmission.
Section 1.09. Organization; Procedure. At every meeting of stockholders
the presiding officer shall be the President or, in the event of his or her
absence or disability, a presiding officer chosen by a majority of the
stockholders present in person or by proxy. The Secretary, or in the event of
his or her absence or disability, the Assistant Secretary, if any, or if there
be no Assistant Secretary, in the absence of the Secretary, an appointee of the
presiding officer, shall act as Secretary of the meeting. The order of business
and all other matters of procedure at every meeting of stockholders may be
determined by such presiding officer.
Section 1.10. Consent of Stockholders in Lieu of Meeting. To the fullest
extent permitted by law, whenever the vote of stockholders at a meeting thereof
is required or permitted to be taken for or in connection with any corporate
action, such action may be taken without a meeting, without prior notice and
without a vote of stockholders, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted (but not less than the minimum number of votes
otherwise prescribed by law) and shall be delivered to the Corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the Corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested.
Every written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within sixty days of the earliest
dated consent delivered in the manner required by law to the Corporation,
written consents signed by a sufficient number of holders to take action are
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. General Powers. Except as may otherwise be provided by law,
by the Certificate of Incorporation or by these By-Laws, the property, affairs
and business of the Corporation shall be managed by or under the direction of
the Board of Directors and the Board of Directors may exercise all the powers of
the Corporation.
Section 2.02. Number and Term of Office. The number of Directors
constituting the entire Board of Directors shall be two, which number may be
modified from time to time by resolution of the Board of Directors, but in no
event shall the number of Directors be less than one. Each Director (whenever
elected) shall hold office until his or her successor has been duly elected and
qualified, or until his or her earlier death, resignation or removal.
Section 2.03. Election of Directors. Except as otherwise provided in
Sections 2.12 and 2.13 of these By-Laws, the Directors shall be elected at each
annual meeting of the stockholders. If the
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KIRI INC.
annual meeting for the election of Directors is not held on the date designated
therefor, the Directors shall cause the meeting to be held as soon thereafter as
convenient. At each meeting of the stockholders for the election of Directors,
provided a quorum is present, the Directors shall be elected by a plurality of
the votes validly cast in such election.
Section 2.04. Annual and Regular Meetings. The annual meeting of the Board
of Directors for the purpose of electing officers and for the transaction of
such other business as may come before the meeting shall be held as soon as
possible following adjournment of the annual meeting of the stockholders at the
place of such annual meeting of the stockholders. Notice of such annual meeting
of the Board of Directors need not be given. The Board of Directors from time to
time may by resolution provide for the holding of regular meetings and fix the
place (which may be within or without the State of Delaware) and the date and
hour of such meetings. Notice of regular meetings need not be given, provided,
however, that if the Board of Directors shall fix or change the time or place of
any regular meeting, notice of such action shall be mailed promptly, or sent by
telegram, radio or cable, to each Director who shall not have been present at
the meeting at which such action was taken, addressed to him or her at his or
her usual place of business, or shall be delivered to him or her personally.
Notice of such action need not be given to any Director who attends the first
regular meeting after such action is taken without protesting the lack of notice
to him or her, prior to or at the commencement of such meeting, or to any
Director who submits a signed waiver of notice, whether before or after such
meeting.
Section 2.05. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the President or, in the event of his
or her absence or disability, by any Vice President, at such place (within or
without the State of Delaware), date and hour as may be specified in the
respective notices or waivers of notice of such meetings. Special meetings of
the Board of Directors may be called on twenty-four hours' notice, if notice is
given to each Director personally or by telephone or telegram, or on five days'
notice, if notice is mailed to each Director, addressed to him or her at his or
her usual place of business. Notice of any special meeting need not be given to
any Director who attends such meeting without protesting the lack of notice to
him or her, prior to or at the commencement of such meeting, or to any Director
who submits a signed waiver of notice, whether before or after such meeting, and
any business may be transacted thereat.
Section 2.06. Quorum; Voting. At all meetings of the Board of Directors,
the presence of a majority of the total authorized number of Directors shall
constitute a quorum for the transaction of business. Except as otherwise
required by law, the vote of a majority of the Directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors.
Section 2.07. Adjournment. A majority of the Directors present, whether or
not a quorum is present, may adjourn any meeting of the Board of Directors to
another time or place. No notice need be given of any adjourned meeting unless
the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.05
of these By-Laws shall be given to each Director.
Section 2.08. Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting if all members of the Board of Directors consent thereto in writing, and
such writing or writings are filed with the minutes of proceedings of the Board
of Directors.
Section 2.09. Regulations; Manner of Acting. To the extent consistent with
applicable law, the Certificate of Incorporation and these By-Laws, the Board of
Directors may adopt such rules and regulations for the conduct of meetings of
the Board of Directors and for the management of the
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KIRI INC.
property, affairs and business of the Corporation as the Board of Directors may
deem appropriate. The Directors shall act only as a Board, and the individual
Directors shall have no power as such.
Section 2.10. Action by Telephonic Communications. Members of the Board of
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting.
Section 2.11. Resignations. Any Director may resign at any time by
delivering a written notice of resignation, signed by such Director, to the
President or the Secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 2.12. Removal of Directors. Any Director may be removed at any
time, either for or without cause, upon the affirmative vote of the holders of a
majority of the outstanding shares of stock of the Corporation entitled to vote
for the election of such Director. Any vacancy in the Board of Directors caused
by any such removal may be filled at such meeting by the stockholders entitled
to vote for the election of the Director so removed. If such stockholders do not
fill such vacancy at such meeting (or in the written instrument effecting such
removal, if such removal was effected by consent without a meeting), such
vacancy may be filled in the manner provided in Section 2.13 of these By-Laws.
Section 2.13. Vacancies and Newly Created Directorships. If any vacancies
shall occur in the Board of Directors, by reason of death, resignation, removal
or otherwise, or if the authorized number of Directors shall be increased, the
Directors then in office shall continue to act, and such vacancies and newly
created directorships may be filled by a majority of the Directors then in
office, although less than a quorum. A Director elected to fill a vacancy or a
newly created directorship shall hold office until his or her successor has been
elected and qualified or until his or her earlier death, resignation or removal.
Any such vacancy or newly created directorship may also be filled at any time by
vote of the stockholders.
Section 2.14. Compensation. The amount, if any, which each Director shall
be entitled to receive as compensation for his or her services as such shall be
fixed from time to time by resolution of the Board of Directors.
Section 2.15. Reliance on Accounts and Reports, etc. A Director, or a
member of any Committee designated by the Board of Directors shall, in the
performance of his or her duties, be fully protected in relying in good faith
upon the records of the Corporation and upon information, opinions, reports or
statements presented to the Corporation by any of the Corporation's officers or
employees, or Committees designated by the Board of Directors, or by any other
person as to the matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 3.01. How Constituted. The Board of Directors may designate one or
more Committees, including an Executive Committee, each such Committee to
consist of such number of Directors as from time to time may be fixed by the
Board of Directors. The Board of Directors may
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KIRI INC.
designate one or more Directors as alternate members of any such Committee, who
may replace any absent or disqualified member or members at any meeting of such
Committee. Thereafter, members (and alternate members, if any) of each such
Committee may be designated at the annual meeting of the Board of Directors. Any
such Committee may be abolished or re-designated from time to time by the Board
of Directors. Each member (and each alternate member) of any such Committee
(whether designated at an annual meeting of the Board of Directors or to fill a
vacancy or otherwise) shall hold office until his or her successor shall have
been designated or until he or she shall cease to be a Director, or until his or
her earlier death, resignation or removal.
Section 3.02. Powers. During the intervals between the meetings of the
Board of Directors, the Executive Committee, except as otherwise provided in
this section, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the property, affairs and business of
the Corporation, including the power to declare dividends and to authorize the
issuance of stock. Each such other Committee, except as otherwise provided in
this section, shall have and may exercise such powers of the Board of Directors
as may be provided by resolution or resolutions of the Board of Directors.
Neither the Executive Committee nor any such other Committee shall have the
power or authority:
(a) to amend the Certificate of Incorporation (except that a Committee
may, to the extent authorized in the resolution or resolutions providing
for the issuance of shares of stock adopted by the Board of Directors as
provided in Section 151(a) of the General Corporation Law, fix the
designations and any of the preferences or rights of such shares relating
to dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Corporation or fix the number of
shares of any series of stock or authorize the increase or decrease of the
shares of any series);
(b) to adopt an agreement of merger or consolidation;
(c) to recommend to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets;
(d) to recommend to the stockholders a dissolution of the Corporation
or a revocation of a dissolution; and
(e) to amend the By-Laws of the Corporation.
The Executive Committee shall have, and any such other Committee may be granted
by the Board of Directors, power to authorize the seal of the Corporation to be
affixed to any or all papers which may require it.
Section 3.03. Proceedings. Each such Committee may fix its own rules of
procedure and may meet at such place (within or without the State of Delaware),
at such time and upon such notice, if any, as it shall determine from time to
time. Each such Committee shall keep minutes of its proceedings and shall report
such proceedings to the Board of Directors at the meeting of the Board of
Directors next following any such proceedings.
Section 3.04. Quorum and Manner of Acting. Except as may be otherwise
provided in the resolution creating such Committee, at all meetings of any
Committee the presence of members (or alternate members) constituting a majority
of the total authorized membership of such Committee shall constitute a quorum
for the transaction of business. The act of the majority of the members present
at any meeting at which a quorum is present shall be the act of such Committee.
Any action
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KIRI INC.
required or permitted to be taken at any meeting of any such Committee may be
taken without a meeting, if all members of such Committee shall consent to such
action in writing and such writing or writings are filed with the minutes of the
proceedings of the Committee. The members of any such Committee shall act only
as a Committee, and the individual members of such Committee shall have no power
as such.
Section 3.05. Action by Telephonic Communications. Members of any
Committee designated by the Board of Directors may participate in a meeting of
such Committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section 3.06. Absent or Disqualified Members. In the absence or
disqualification of a member of any Committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he, she
or they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member.
Section 3.07. Resignations. Any member (and any alternate member) of any
Committee may resign at any time by delivering a written notice of resignation,
signed by such member, to the Chairman or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 3.08. Removal. Any member (and any alternate member) of any
Committee may be removed from his or her position as a member (or alternate
member, as the case may be) of such Committee at any time, either for or without
cause, by resolution adopted by a majority of the whole Board of Directors.
Section 3.09. Vacancies. If any vacancy shall occur in any Committee, by
reason of disqualification, death, resignation, removal or otherwise, the
remaining members (and any alternate members) shall continue to act, and any
such vacancy may be filled by the Board of Directors.
ARTICLE IV
OFFICERS
Section 4.01. Number. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a Treasurer.
The Board of Directors also may elect one or more Assistant Secretaries and
Assistant Treasurers in such numbers as the Board of Directors may determine.
Any number of offices may be held by the same person. No officer need be a
Director of the Corporation.
Section 4.02. Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual meeting,
officers may be elected at any regular or special meeting of the Board of
Directors. Each officer shall hold office until his or her successor has been
elected and qualified, or until his or her earlier death, resignation or
removal.
Section 4.03. Salaries. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
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KIRI INC.
Section 4.04. Removal and Resignation; Vacancies. Any officer may be
removed for or without cause at any time by the Board of Directors. Any officer
may resign at any time by delivering a written notice of resignation, signed by
such officer, to the Board of Directors or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery. Any vacancy
occurring in any office of the Corporation by death, resignation, removal or
otherwise, shall be filled by the Board of Directors.
Section 4.05. Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and perform
such duties as may be specified in these By-Laws, except that in any event each
officer shall exercise such powers and perform such duties as may be required by
law.
Section 4.06. The President. The President shall preside at all meetings
of the stockholders and directors at which he or she is present, shall be the
chief executive officer and the chief operating officer of the Corporation,
shall have general control and supervision of the policies and operations of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He or she shall manage and administer the
Corporation's business and affairs and shall also perform all duties and
exercise all powers usually pertaining to the office of a chief executive
officer and a chief operating officer of a corporation. He or she shall have the
authority to sign, in the name and on behalf of the Corporation, checks, orders,
contracts, leases, notes, drafts and other documents and instruments in
connection with the business of the Corporation, and together with the Secretary
or an Assistant Secretary, conveyances of real estate and other documents and
instruments to which the seal of the Corporation is affixed. He or she shall
have the authority to cause the employment or appointment of such employees and
agents of the Corporation as the conduct of the business of the Corporation may
require, to fix their compensation, and to remove or suspend any employee or
agent elected or appointed by the President or the Board of Directors. The
President shall perform such other duties and have such other powers as the
Board of Directors or the Chairman may from time to time prescribe.
Section 4.07. The Secretary. The Secretary shall have the following powers
and duties:
(a) He or she shall keep or cause to be kept a record of all the
proceedings of the meetings of the stockholders and of the Board of
Directors in books provided for that purpose.
(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these By-Laws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a resolution
of the Board of Directors, he or she shall furnish a copy of such
resolution to the members of such Committee.
(d) He or she shall be the custodian of the records and of the seal of
the Corporation and cause such seal (or a facsimile thereof) to be affixed
to all certificates representing shares of the Corporation prior to the
issuance thereof and to all instruments the execution of which on behalf of
the Corporation under its seal shall have been duly authorized in
accordance with these By-Laws, and when so affixed he or she may attest the
same.
(e) He or she shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by
law, the Certificate of Incorporation or these By-Laws.
(f) He or she shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number
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of shares of stock of the Corporation of each class issued and outstanding,
the names (alphabetically arranged) and the addresses of the holders of
record of such shares, the number of shares held by each holder and the
date as of which each became such holder of record.
(g) He or she shall sign (unless the Treasurer, an Assistant Treasurer
or an Assistant Secretary shall have signed) certificates representing
shares of the Corporation the issuance of which shall have been authorized
by the Board of Directors.
(h) He or she shall perform, in general, all duties incident to the
office of secretary and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors, or the President.
Section 4.08. The Treasurer. The Treasurer shall be the chief financial
officer of the Corporation and shall have the following powers and duties:
(a) He or she shall have charge and supervision over and be
responsible for the moneys, securities, receipts and disbursements of the
Corporation, and shall keep or cause to be kept full and accurate records
of all receipts of the Corporation.
(b) He or she shall cause the moneys and other valuable effects of the
Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or other
depositaries as shall be selected in accordance with Section 8.05 of these
By-Laws.
(c) He or she shall cause the moneys of the Corporation to be
disbursed by checks or drafts (signed as provided in Section 8.06 of these
By-Laws) upon the authorized depositaries of the Corporation and cause to
be taken and preserved proper vouchers for all moneys disbursed.
(d) He or she shall render to the Board of Directors or the President,
whenever requested, a statement of the financial condition of the
Corporation and of all his or her transactions as Treasurer, and render a
full financial report at the annual meeting of the stockholders, if called
upon to do so.
(e) He or she shall be empowered from time to time to require from all
officers or agents of the Corporation reports or statements giving such
information as he or she may desire with respect to any and all financial
transactions of the Corporation.
(f) He or she may sign (unless an Assistant Treasurer or the Secretary
or an Assistant Secretary shall have signed) certificates representing
stock of the Corporation the issuance of which shall have been authorized
by the Board of Directors.
(g) He or she shall perform, in general, all duties incident to the
office of treasurer and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors, or the President.
Section 4.09. Additional Officers. The Board of Directors may appoint such
other officers and agents as it may deem appropriate, and such other officers
and agents shall hold their offices for such terms and shall exercise such
powers and perform such duties as may be determined from time to time by the
Board of Directors. The Board of Directors from time to time may delegate to any
officer or agent the power to appoint subordinate officers or agents and to
prescribe their respective rights, terms of office, authorities and duties. Any
such officer or agent may remove any such subordinate officer or agent appointed
by him or her, for or without cause.
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Section 4.10. Security. The Board of Directors may require any officer,
agent or employee of the Corporation to provide security for the faithful
performance of his or her duties, in such amount and of such character as may be
determined from time to time by the Board of Directors.
ARTICLE V
CAPITAL STOCK
Section 5.01. Certificates of Stock, Uncertificated Shares. The shares of
the Corporation shall be represented by certificates, provided that the Board of
Directors may provide by resolution or resolutions that some or all of any or
all classes or series of the stock of the Corporation shall be uncertificated
shares. Any such resolution shall not apply to shares represented by a
certificate until each certificate is surrendered to the Corporation.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock in the Corporation represented by certificates and upon
request every holder of uncertificated shares shall be entitled to have a
certificate signed by, or in the name of the Corporation, by the President or a
Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary, representing the number of shares registered in
certificate form. Such certificate shall be in such form as the Board of
Directors may determine, to the extent consistent with applicable law, the
Certificate of Incorporation and these By-Laws.
Section 5.02. Signatures; Facsimile. All of such signatures on the
certificate referred to in Section 5.01 of these By-Laws may be a facsimile,
engraved or printed, to the extent permitted by law. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.
Section 5.03. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct that a new certificate be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon delivery to the Board of Directors of an affidavit of
the owner or owners of such certificate, setting forth such allegation. The
Board of Directors may require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to give the Corporation a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of any such new certificate.
Section 5.04. Transfer of Stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by appropriate evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Within a reasonable time after the transfer of uncertificated stock, the
Corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law
of the State of Delaware. Subject to the provisions of the Certificate of
Incorporation and these By-Laws, the Board of Directors may prescribe such
additional rules and regulations as it may deem appropriate relating to the
issue, transfer and registration of shares of the Corporation.
Section 5.05. Record Date. In order to determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix, in
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advance, a record date, which record date shall not precede the date on which
the resolution fixing the record date is adopted by the Board of Directors, and
which shall not be more than sixty nor less than ten days before the date of
such meeting. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting, provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
law, shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the Corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is required by
law, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the Board of Directors adopts the resolution taking such
prior action.
In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
of the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
Section 5.06. Registered Stockholders. Prior to due surrender of a
certificate for registration of transfer, the Corporation may treat the
registered owner as the person exclusively entitled to receive dividends and
other distributions, to vote, to receive notice and otherwise to exercise all
the rights and powers of the owner of the shares represented by such
certificate, and the Corporation shall not be bound to recognize any equitable
or legal claim to or interest in such shares on the part of any other person,
whether or not the Corporation shall have notice of such claim or interests.
Whenever any transfer of shares shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer if, when the
certificates are presented to the Corporation for transfer or uncertificated
shares are requested to be transferred, both the transferor and transferee
request the Corporation to do so.
Section 5.07. Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars.
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ARTICLE VI
INDEMNIFICATION
Section 6.01. Nature of Indemnity. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she
is or was or has agreed to become a director or officer of the Corporation, or
is or was serving or has agreed to serve at the request of the Corporation as a
director or officer, of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a party or
is threatened to be made a party to such an action, suit or proceeding by reason
of the fact that he or she is or was or has agreed to become an employee or
agent of the Corporation, or is or was serving or has agreed to serve at the
request of the Corporation as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her or on his or her behalf in
connection with such action, suit or proceeding and any appeal therefrom, if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding had no reasonable cause to believe his or her
conduct was unlawful; except that in the case of an action or suit by or in the
right of the Corporation to procure a judgment in its favor (1) such
indemnification shall be limited to expenses (including attorneys' fees)
actually and reasonably incurred by such person in the defense or settlement of
such action or suit, and (2) no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper. Notwithstanding the foregoing, but subject
to Section 6.05 of these By-Laws, the Corporation shall not be obligated to
indemnify a director or officer of the Corporation in respect of a Proceeding
(or part thereof) instituted by such director or officer, unless such Proceeding
(or part thereof) has been authorized by the Board of Directors.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
Section 6.02. Successful Defense. To the extent that a present or former
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Section 6.01 of these By-Laws or in defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection therewith.
Section 6.03. Determination That Indemnification Is Proper. Any
indemnification of a present or former director or officer of the Corporation
under Section 6.01 of these By-Laws (unless ordered by a court) shall be made by
the Corporation only upon a determination that indemnification of such person is
proper in the circumstances because such person has met the applicable standard
of conduct set forth in Section 6.01 of these By-Laws. Any indemnification of a
present or former employee or
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agent of the Corporation under Section 6.01 of these By-Laws (unless ordered by
a court) may be made by the Corporation upon a determination that
indemnification of the employee or agent is proper in the circumstances because
he or she has met the applicable standard of conduct set forth in Section 6.01
of these By-Laws. Any such determination shall be made, with respect to a person
who is a director or officer at the time of such determination (1) by a majority
vote of the Directors who are not parties to such action, suit or proceeding,
even though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum,
or (3) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (4) by the stockholders.
Section 6.04. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a present director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the Corporation as authorized in this
Article. Such expenses (including attorneys' fees) incurred by former directors
and officers or other employees and agents may be so paid upon such terms and
conditions, if any, as the Corporation deems appropriate. The Corporation, or in
respect of a present director or officer the Board of Directors, may authorize
the Corporation's counsel to represent such present or former director, officer,
employee or agent in any action, suit or proceeding, whether or not the
Corporation is a party to such action, suit or proceeding.
Section 6.05. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director, officer, employee or agent of the Corporation
under Sections 6.01 and 6.02 of these By-Laws, or advance of costs, charges and
expenses to such person under Section 6.04 of these By-Laws, shall be made
promptly, and in any event within thirty days, upon the written request of such
person. If a determination by the Corporation that such person is entitled to
indemnification pursuant to this Article is required, and the Corporation fails
to respond within sixty days to a written request for indemnity, the Corporation
shall be deemed to have approved such request. If the Corporation denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within thirty days,
the right to indemnification or advances as granted by this Article shall be
enforceable by such person in any court of competent jurisdiction. Such person's
costs and expenses incurred in connection with successfully establishing his or
her right to indemnification, in whole or in part, in any such action shall also
be indemnified by the Corporation. It shall be a defense to any such action
(other than an action brought to enforce a claim for the advance of costs,
charges and expenses under Section 6.04 of these By-Laws where the required
undertaking, if any, has been received by or tendered to the Corporation) that
the claimant has not met the standard of conduct set forth in Section 6.01 of
these By-Laws, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or any committee thereof, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in
Section 6.01 of these By-Laws, nor the fact that there has been an actual
determination by the Corporation (including its Board of Directors or any
committee thereof, its independent legal counsel, and its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
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Section 6.06. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the Delaware Corporation Law are in effect and any repeal or
modification thereof shall not affect any right or obligation then existing with
respect to any state of facts then or previously existing or any action, suit or
proceeding previously or thereafter brought or threatened based in whole or in
part upon any such state of facts. Such a "contract right" may not be modified
retroactively without the consent of such director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Section 6.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her or on his or her behalf in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article, provided that such insurance is available
on acceptable terms, which determination shall be made by a vote of a majority
of the entire Board of Directors.
Section 6.08. Severability. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated and to the fullest
extent permitted by applicable law.
ARTICLE VII
OFFICES
Section 7.01. Registered Office. The registered office of the Corporation
in the State of Delaware shall be located at Corporation Trust Center, 0000
Xxxxxx Xxxxxx in the City of Wilmington, County of New Castle.
Section 7.02. Other Offices. The Corporation may maintain offices or
places of business at such other locations within or without the State of
Delaware as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
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ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Dividends. Subject to any applicable provisions of law and
the Certificate of Incorporation, dividends upon the shares of the Corporation
may be declared by the Board of Directors at any regular or special meeting of
the Board of Directors and any such dividend may be paid in cash, property, or
shares of the Corporation's Capital Stock.
A member of the Board of Directors, or a member of any Committee designated
by the Board of Directors shall be fully protected in relying in good faith upon
the records of the Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of its officers or employees, or
Committees of the Board of Directors, or by any other person as to matters the
Director reasonably believes are within such other person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Corporation, as to the value and amount of the assets, liabilities and/or
net profits of the Corporation, or any other facts pertinent to the existence
and amount of surplus or other funds from which dividends might properly be
declared and paid.
Section 8.02. Reserves. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation or for such other purpose as the
Board of Directors shall think conducive to the interest of the Corporation, and
the Board of Directors may similarly modify or abolish any such reserve.
Section 8.03. Execution of Instruments. The President, any Vice President,
the Secretary or the Treasurer may enter into any contract or execute and
deliver any instrument in the name and on behalf of the Corporation. The Board
of Directors or the President may authorize any other officer or agent to enter
into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation. Any such authorization may be general or limited to
specific contracts or instruments.
Section 8.04. Corporate Indebtedness. No loan shall be contracted on
behalf of the Corporation, and no evidence of indebtedness shall be issued in
its name, unless authorized by the Board of Directors or the President. Such
authorization may be general or confined to specific instances. Loans so
authorized may be effected at any time for the Corporation from any bank, trust
company or other institution, or from any firm, corporation or individual. All
bonds, debentures, notes and other obligations or evidences of indebtedness of
the Corporation issued for such loans shall be made, executed and delivered as
the Board of Directors or the President shall authorize. When so authorized by
the Board of Directors or the President, any part of or all the properties,
including contract rights, assets, business or good will of the Corporation,
whether then owned or thereafter acquired, may be mortgaged, pledged,
hypothecated or conveyed or assigned in trust as security for the payment of
such bonds, debentures, notes and other obligations or evidences of indebtedness
of the Corporation, and of the interest thereon, by instruments executed and
delivered in the name of the Corporation.
Section 8.05. Deposits. Any funds of the Corporation may be deposited from
time to time in such banks, trust companies or other depositaries as may be
determined by the Board of Directors or the President, or by such officers or
agents as may be authorized by the Board of Directors or the President to make
such determination.
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Section 8.06. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such agent or agents
of the Corporation, and in such manner, as the Board of Directors or the
President from time to time may determine.
Section 8.07. Sale, Transfer, etc. of Securities. To the extent authorized
by the Board of Directors or by the President, any Vice President, the Secretary
or the Treasurer or any other officers designated by the Board of Directors or
the President may sell, transfer, endorse, and assign any shares of stock, bonds
or other securities owned by or held in the name of the Corporation, and may
make, execute and deliver in the name of the Corporation, under its corporate
seal, any instruments that may be appropriate to effect any such sale, transfer,
endorsement or assignment.
Section 8.08. Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the President or any Vice President shall
have full power and authority on behalf of the Corporation to attend any meeting
of stockholders of any corporation in which the Corporation may hold stock, and
to act, vote (or execute proxies to vote) and exercise in person or by proxy all
other rights, powers and privileges incident to the ownership of such stock.
Such officers acting on behalf of the Corporation shall have full power and
authority to execute any instrument expressing consent to or dissent from any
action of any such corporation without a meeting. The Board of Directors may by
resolution from time to time confer such power and authority upon any other
person or persons.
Section 8.09. Fiscal Year. The fiscal year of the Corporation shall
commence on the first day of January of each year (except for the Corporation's
first fiscal year which shall commence on the date of incorporation) and shall
terminate in each case on December 31.
Section 8.10. Seal. The seal of the Corporation shall be circular in form
and shall contain the name of the Corporation, the year of its incorporation and
the words "Corporate Seal" and "Delaware". The form of such seal shall be
subject to alteration by the Board of Directors. The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or reproduced, or may be used
in any other lawful manner.
Section 8.11. Books and Records; Inspection. Except to the extent
otherwise required by law, the books and records of the Corporation shall be
kept at such place or places within or without the State of Delaware as may be
determined from time to time by the Board of Directors.
ARTICLE IX
AMENDMENT OF BY-LAWS
Section 9.01. Amendment. Subject to the provisions of the Certificate of
Incorporation, these By-Laws may be amended, altered or repealed
(a) by resolution adopted by a majority of the Board of Directors at
any special or regular meeting of the Board if, in the case of such special
meeting only, notice of such amendment, alteration or repeal is contained
in the notice or waiver of notice of such meeting; or
(b) at any regular or special meeting of the stockholders if, in the
case of such special meeting only, notice of such amendment, alteration or
repeal is contained in the notice or waiver of notice of such meeting.
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ARTICLE X
CONSTRUCTION
Section 10.01. Construction. In the event of any conflict between the
provisions of these By-Laws as in effect from time to time and the provisions of
the Certificate of Incorporation of the Corporation as in effect from time to
time, the provisions of such Certificate of Incorporation shall be controlling.
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PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
I, XXXXXX X. XXXXX, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "FRANTIS, INC.", FILED IN THIS OFFICE ON THE THIRTEENTH DAY OF
OCTOBER, A.D. 1999, AT 12:30 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/s/ XXXXXX X. XXXXX
-----------------------------------------------------
[SEAL] Xxxxxx X. Xxxxx, Secretary of State
3108374 8100
AUTHENTICATION: 0023378
991432541 DATE: 10-13-99
73
CERTIFICATE OF INCORPORATION
OF
FRANTIS, INC.
ARTICLE I
NAME OF CORPORATION
The name of the corporation is Frantis, Inc. (the "Corporation").
ARTICLE II
REGISTERED OFFICE
The Corporation's registered office in the State of Delaware is at 0000
Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000. The name of its registered agent at such address is The Corporation Trust
Company.
ARTICLE III
PURPOSE
The nature of the business of the Corporation and its purpose is to engage
in any lawful act or activity for which corporations may be engaged under the
General Corporation Law of the State of Delaware.
ARTICLE IV
AUTHORIZED STOCK
The aggregate number of shares of stock that the Corporation shall have
authority to issue is 1,000 shares of Common Stock, par value $.01 per share
(the "Common Stock").
ARTICLE V
INCORPORATOR
The name and mailing address of the incorporator is as follows:
Xxxxxxx Xxxxxx, Esq.
x/x Xxxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
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ARTICLE VI
MANAGEMENT OF THE CORPORATION
The following provisions are inserted for the management of the business,
for the conduct of the affairs of the Corporation and for the purpose of
creating, defining, limiting and regulating the powers of the Corporation and
its directors and stockholders:
(a) The number of directors of the Corporation shall be fixed and may
be altered from time to time in the manner provided in the By-Laws, and
vacancies in the Board of Directors and newly created directorships
resulting from any increase in the authorized number of directors may be
filled, and directors may be removed, as provided in the By-Laws.
(b) The election of directors may be conducted in any manner approved
by the stockholders at the time when the election is held and need not be
by written ballot.
(c) All corporate powers and authority of the Corporation (except as
at the time otherwise provided by law, by this Certificate of Incorporation
or by the By-Laws) shall be vested in and exercised by the Board of
Directors.
(d) The Board of Directors shall have the power without the assent or
vote of the stockholders to adopt, amend, alter or repeal the By-Laws of
the Corporation, except to the extent that the By-Laws or this Certificate
of Incorporation otherwise provide.
(e) No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of his or her fiduciary
duty as a director, provided that nothing contained in this Article shall
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of the law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any transaction from
which the director derived an improper personal benefit.
ARTICLE VII
AMENDMENT
The Corporation reserves the right to amend or repeal any provision
contained in this Certificate of Incorporation in the manner now or hereafter
prescribed by the laws of the State of Delaware, and all rights herein conferred
upon stockholders or directors are granted subject to this reservation.
IN WITNESS WHEREOF, I, THE UNDERSIGNED, being the incorporator hereinabove
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make and file this Certificate,
hereby declaring and certifying that the facts herein stated are true, and
accordingly have hereunto set my hand this 13th day of October, 1999.
/s/ XXXXXXX XXXXXX
--------------------------------------
Xxxxxxx Xxxxxx
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BY-LAWS
AS ADOPTED ON OCTOBER 14, 1999
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BY-LAWS
TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I STOCKHOLDERS...................................... 1
Section 1.01. Annual Meetings........................ 1
Section 1.02. Special Meetings....................... 1
Section 1.03. Notice of Meetings; Waiver............. 1
Section 1.04. Quorum................................. 1
Section 1.05. Voting................................. 2
Section 1.06. Voting by Ballot....................... 2
Section 1.07. Adjournment............................ 2
Section 1.08. Proxies................................ 2
Section 1.09. Organization; Procedure................ 3
Section 1.10. Consent of Stockholders in Lieu of
Meeting............................................... 3
ARTICLE II BOARD OF DIRECTORS............................... 3
Section 2.01. General Powers......................... 3
Section 2.02. Number and Term of Office.............. 3
Section 2.03. Election of Directors.................. 3
Section 2.04. Annual and Regular Meetings............ 4
Section 2.05. Special Meetings; Notice............... 4
Section 2.06. Quorum; Voting......................... 4
Section 2.07. Adjournment............................ 4
Section 2.08. Action Without a Meeting............... 4
Section 2.09. Regulations; Manner of Acting.......... 5
Section 2.10. Action by Telephonic Communications.... 5
Section 2.11. Resignations........................... 5
Section 2.12. Removal of Directors................... 5
Section 2.13. Vacancies and Newly Created
Directorships......................................... 5
Section 2.14. Compensation........................... 5
Section 2.15. Reliance on Accounts and Reports,
etc................................................... 5
ARTICLE III EXECUTIVE COMMITTEE AND OTHER COMMITTEES........ 5
Section 3.01. How Constituted........................ 5
Section 3.02. Powers................................. 6
Section 3.03. Proceedings............................ 6
Section 3.04. Quorum and Manner of Acting............ 6
Section 3.05. Action by Telephonic Communications.... 7
Section 3.06. Absent or Disqualified Members......... 7
Section 3.07. Resignations........................... 7
Section 3.08. Removal................................ 7
Section 3.09. Vacancies.............................. 7
ARTICLE IV OFFICERS......................................... 7
Section 4.01. Number................................. 7
Section 4.02. Election............................... 7
Section 4.03. Salaries............................... 7
Section 4.04. Removal and Resignation; Vacancies..... 8
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SECTION PAGE
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Section 4.05. Authority and Duties of Officers....... 8
Section 4.06. The President.......................... 8
Section 4.07. The Secretary.......................... 8
Section 4.08. The Treasurer.......................... 9
Section 4.09. Additional Officers.................... 9
Section 4.10. Security............................... 10
ARTICLE V CAPITAL STOCK..................................... 10
Section 5.01. Certificates of Stock, Uncertificated
Shares................................................ 10
Section 5.02. Signatures; Facsimile.................. 10
Section 5.03. Lost, Stolen or Destroyed
Certificates.......................................... 10
Section 5.04. Transfer of Stock...................... 10
Section 5.05. Record Date............................ 10
Section 5.06. Registered Stockholders................ 11
Section 5.07. Transfer Agent and Registrar........... 11
ARTICLE VI INDEMNIFICATION.................................. 12
Section 6.01. Nature of Indemnity.................... 12
Section 6.02. Successful Defense..................... 12
Section 6.03. Determination That Indemnification Is
Proper................................................ 12
Section 6.04. Advance Payment of Expenses............ 13
Section 6.05. Procedure for Indemnification of
Directors and Officers................................ 13
Section 6.06. Survival; Preservation of Other
Rights................................................ 14
Section 6.07. Insurance.............................. 14
Section 6.08. Severability........................... 14
ARTICLE VII OFFICES......................................... 14
Section 7.01. Registered Office...................... 14
Section 7.02. Other Offices.......................... 14
ARTICLE VIII GENERAL PROVISIONS............................. 15
Section 8.01. Dividends.............................. 15
Section 8.02. Reserves............................... 15
Section 8.03. Execution of Instruments............... 15
Section 8.04. Corporate Indebtedness................. 15
Section 8.05. Deposits............................... 15
Section 8.06. Checks................................. 15
Section 8.07. Sale, Transfer, etc. of Securities..... 16
Section 8.08. Voting as Stockholder.................. 16
Section 8.09. Fiscal Year............................ 16
Section 8.10. Seal................................... 16
Section 8.11. Books and Records; Inspection.......... 16
ARTICLE IX AMENDMENT OF BY-LAWS............................. 16
Section 9.01. Amendment.............................. 16
ARTICLE X CONSTRUCTION...................................... 17
Section 10.01. Construction........................... 17
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FRANTIS, INC.
BY-LAWS
AS ADOPTED ON OCTOBER 14, 1999
ARTICLE I
STOCKHOLDERS
Section 1.01. Annual Meetings. Subject to Section 1.12 of these By-Laws,
the annual meeting of the stockholders of the Corporation for the election of
directors and for the transaction of such other business as properly may come
before such meeting shall be held at such place, either within or without the
State of Delaware, and at 9:00 a.m. local time on the fifteenth of May (or, if
such day is a legal holiday, then on the next succeeding business day), or at
such other date and hour, as may be fixed from time to time by resolution of the
Board of Directors and set forth in the notice or waiver of notice of the
meeting.
Section 1.02. Special Meetings. Special meetings of the stockholders may
be called at any time by the President (or, in the event of his or her absence
or disability, by any Vice President), or by the Board of Directors. A special
meeting shall be called by the President (or, in the event of his or her absence
or disability, by any Vice President), or by the Secretary, immediately upon
receipt of a written request therefor by stockholders holding in the aggregate
not less than a majority of the outstanding shares of the Corporation at the
time entitled to vote at any meeting of the stockholders. If such officers or
the Board of Directors shall fail to call such meeting within twenty days after
receipt of such request, any stockholder executing such request may call such
meeting. Such special meetings of the stockholders shall be held at such places,
within or without the State of Delaware, as shall be specified in the respective
notices or waivers of notice thereof.
Section 1.03. Notice of Meetings; Waiver. The Secretary or any Assistant
Secretary shall cause written notice of the place, date and hour of each meeting
of the stockholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called, to be given personally or by mail,
not less than ten nor more than sixty days prior to the meeting, to each
stockholder of record entitled to vote at such meeting. If such notice is
mailed, it shall be deemed to have been given to a stockholder when deposited in
the United States mail, postage prepaid, directed to the stockholder at his or
her address as it appears on the record of stockholders of the Corporation, or,
if he or she shall have filed with the Secretary of the Corporation a written
request that notices to him or her be mailed to some other address, then
directed to him or her at such other address. Such further notice shall be given
as may be required by law.
No notice of any meeting of stockholders need be given to any stockholder
who submits a signed waiver of notice, whether before or after the meeting.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the stockholders need be specified in a written waiver of
notice. The attendance of any stockholder at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground that the meeting is
not lawfully called or convened.
Section 1.04. Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the shares
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entitled to vote at a meeting of stockholders shall constitute a quorum for the
transaction of business at such meeting.
Section 1.05. Voting. If, pursuant to Section 5.05 of these By-Laws, a
record date has been fixed, every holder of record of shares entitled to vote at
a meeting of stockholders shall be entitled to one vote for each share
outstanding in his or her name on the books of the Corporation at the close of
business on such record date. If no record date has been fixed, then every
holder of record of shares entitled to vote at a meeting of stockholders shall
be entitled to one vote for each share of stock standing in his or her name on
the books of the Corporation at the close of business on the day next preceding
the day on which notice of the meeting is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. Except as otherwise required by law or by the Certificate of Incorporation
or by these By-Laws, the vote of a majority of the shares represented in person
or by proxy at any meeting at which a quorum is present shall be sufficient for
the transaction of any business at such meeting.
Section 1.06. Voting by Ballot. No vote of the stockholders need be taken
by written ballot unless otherwise required by law. Any vote which need not be
taken by ballot may be conducted in any manner approved by the meeting.
Section 1.07. Adjournment. If a quorum is not present at any meeting of
the stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than thirty days, or if after the adjournment a new record date for the
adjourned meeting is fixed pursuant to Section 5.05 of these By-Laws, a notice
of the adjourned meeting, conforming to the requirements of Section 1.03 of
these By-Laws, shall be given to each stockholder of record entitled to vote at
such meeting. At any adjourned meeting at which a quorum is present, any
business may be transacted that might have been transacted on the original date
of the meeting.
Section 1.08. Proxies. Any stockholder entitled to vote at any meeting of
the stockholders or to express consent to or dissent from corporate action in
writing without a meeting may authorize another person or persons to vote at any
such meeting and express such consent or dissent for him or her by proxy. A
stockholder may authorize a valid proxy by executing a written instrument signed
by such stockholder, or by causing his or her signature to be affixed to such
writing by any reasonable means including, but not limited to, by facsimile
signature, or by transmitting or authorizing the transmission of a telegram,
cablegram or other means of electronic transmission to the person designated as
the holder of the proxy, a proxy solicitation firm or a like authorized agent.
No such proxy shall be voted or acted upon after the expiration of three years
from the date of such proxy, unless such proxy provides for a longer period.
Every proxy shall be revocable at the pleasure of the stockholder executing it,
except in those cases where applicable law provides that a proxy shall be
irrevocable. A stockholder may revoke any proxy which is not irrevocable by
attending the meeting and voting in person or by filing an instrument in writing
revoking the proxy or by filing another duly executed proxy bearing a later date
with the Secretary. Proxies by telegram, cablegram or other electronic
transmission must either set forth or be submitted with information from which
it can be determined that the telegram, cablegram or other electronic
transmission was authorized by the stockholder. Any copy, facsimile
telecommunication or other reliable reproduction of a writing or transmission
created pursuant to this section may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used,
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provided that such copy, facsimile telecommunication or other reproduction shall
be a complete reproduction of the entire original writing or transmission.
Section 1.09. Organization; Procedure. At every meeting of stockholders
the presiding officer shall be the President or, in the event of his or her
absence or disability, a presiding officer chosen by a majority of the
stockholders present in person or by proxy. The Secretary, or in the event of
his or her absence or disability, the Assistant Secretary, if any, or if there
be no Assistant Secretary, in the absence of the Secretary, an appointee of the
presiding officer, shall act as Secretary of the meeting. The order of business
and all other matters of procedure at every meeting of stockholders may be
determined by such presiding officer.
Section 1.10. Consent of Stockholders in Lieu of Meeting. To the fullest
extent permitted by law, whenever the vote of stockholders at a meeting thereof
is required or permitted to be taken for or in connection with any corporate
action, such action may be taken without a meeting, without prior notice and
without a vote of stockholders, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted (but not less than the minimum number of votes
otherwise prescribed by law) and shall be delivered to the Corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the Corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested.
Every written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within sixty days of the earliest
dated consent delivered in the manner required by law to the Corporation,
written consents signed by a sufficient number of holders to take action are
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. General Powers. Except as may otherwise be provided by law,
by the Certificate of Incorporation or by these By-Laws, the property, affairs
and business of the Corporation shall be managed by or under the direction of
the Board of Directors and the Board of Directors may exercise all the powers of
the Corporation.
Section 2.02. Number and Term of Office. The number of Directors
constituting the entire Board of Directors shall be two, which number may be
modified from time to time by resolution of the Board of Directors, but in no
event shall the number of Directors be less than one. Each Director (whenever
elected) shall hold office until his or her successor has been duly elected and
qualified, or until his or her earlier death, resignation or removal.
Section 2.03. Election of Directors. Except as otherwise provided in
Sections 2.12 and 2.13 of these By-Laws, the Directors shall be elected at each
annual meeting of the stockholders. If the
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annual meeting for the election of Directors is not held on the date designated
therefor, the Directors shall cause the meeting to be held as soon thereafter as
convenient. At each meeting of the stockholders for the election of Directors,
provided a quorum is present, the Directors shall be elected by a plurality of
the votes validly cast in such election.
Section 2.04. Annual and Regular Meetings. The annual meeting of the Board
of Directors for the purpose of electing officers and for the transaction of
such other business as may come before the meeting shall be held as soon as
possible following adjournment of the annual meeting of the stockholders at the
place of such annual meeting of the stockholders. Notice of such annual meeting
of the Board of Directors need not be given. The Board of Directors from time to
time may by resolution provide for the holding of regular meetings and fix the
place (which may be within or without the State of Delaware) and the date and
hour of such meetings. Notice of regular meetings need not be given, provided,
however, that if the Board of Directors shall fix or change the time or place of
any regular meeting, notice of such action shall be mailed promptly, or sent by
telegram, radio or cable, to each Director who shall not have been present at
the meeting at which such action was taken, addressed to him or her at his or
her usual place of business, or shall be delivered to him or her personally.
Notice of such action need not be given to any Director who attends the first
regular meeting after such action is taken without protesting the lack of notice
to him or her, prior to or at the commencement of such meeting, or to any
Director who submits a signed waiver of notice, whether before or after such
meeting.
Section 2.05. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the President or, in the event of his
or her absence or disability, by any Vice President, at such place (within or
without the State of Delaware), date and hour as may be specified in the
respective notices or waivers of notice of such meetings. Special meetings of
the Board of Directors may be called on twenty-four hours' notice, if notice is
given to each Director personally or by telephone or telegram, or on five days'
notice, if notice is mailed to each Director, addressed to him or her at his or
her usual place of business. Notice of any special meeting need not be given to
any Director who attends such meeting without protesting the lack of notice to
him or her, prior to or at the commencement of such meeting, or to any Director
who submits a signed waiver of notice, whether before or after such meeting, and
any business may be transacted thereat.
Section 2.06. Quorum; Voting. At all meetings of the Board of Directors,
the presence of a majority of the total authorized number of Directors shall
constitute a quorum for the transaction of business. Except as otherwise
required by law, the vote of a majority of the Directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors.
Section 2.07. Adjournment. A majority of the Directors present, whether or
not a quorum is present, may adjourn any meeting of the Board of Directors to
another time or place. No notice need be given of any adjourned meeting unless
the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.05
of these By-Laws shall be given to each Director.
Section 2.08. Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting if all members of the Board of Directors consent thereto in writing, and
such writing or writings are filed with the minutes of proceedings of the Board
of Directors.
Section 2.09. Regulations; Manner of Acting. To the extent consistent with
applicable law, the Certificate of Incorporation and these By-Laws, the Board of
Directors may adopt such rules and regulations for the conduct of meetings of
the Board of Directors and for the management of the
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property, affairs and business of the Corporation as the Board of Directors may
deem appropriate. The Directors shall act only as a Board, and the individual
Directors shall have no power as such.
Section 2.10. Action by Telephonic Communications. Members of the Board of
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting.
Section 2.11. Resignations. Any Director may resign at any time by
delivering a written notice of resignation, signed by such Director, to the
President or the Secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 2.12. Removal of Directors. Any Director may be removed at any
time, either for or without cause, upon the affirmative vote of the holders of a
majority of the outstanding shares of stock of the Corporation entitled to vote
for the election of such Director. Any vacancy in the Board of Directors caused
by any such removal may be filled at such meeting by the stockholders entitled
to vote for the election of the Director so removed. If such stockholders do not
fill such vacancy at such meeting (or in the written instrument effecting such
removal, if such removal was effected by consent without a meeting), such
vacancy may be filled in the manner provided in Section 2.13 of these By-Laws.
Section 2.13. Vacancies and Newly Created Directorships. If any vacancies
shall occur in the Board of Directors, by reason of death, resignation, removal
or otherwise, or if the authorized number of Directors shall be increased, the
Directors then in office shall continue to act, and such vacancies and newly
created directorships may be filled by a majority of the Directors then in
office, although less than a quorum. A Director elected to fill a vacancy or a
newly created directorship shall hold office until his or her successor has been
elected and qualified or until his or her earlier death, resignation or removal.
Any such vacancy or newly created directorship may also be filled at any time by
vote of the stockholders.
Section 2.14. Compensation. The amount, if any, which each Director shall
be entitled to receive as compensation for his or her services as such shall be
fixed from time to time by resolution of the Board of Directors.
Section 2.15. Reliance on Accounts and Reports, etc. A Director, or a
member of any Committee designated by the Board of Directors shall, in the
performance of his or her duties, be fully protected in relying in good faith
upon the records of the Corporation and upon information, opinions, reports or
statements presented to the Corporation by any of the Corporation's officers or
employees, or Committees designated by the Board of Directors, or by any other
person as to the matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 3.01. How Constituted. The Board of Directors may designate one or
more Committees, including an Executive Committee, each such Committee to
consist of such number of Directors as from time to time may be fixed by the
Board of Directors. The Board of Directors may
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designate one or more Directors as alternate members of any such Committee, who
may replace any absent or disqualified member or members at any meeting of such
Committee. Thereafter, members (and alternate members, if any) of each such
Committee may be designated at the annual meeting of the Board of Directors. Any
such Committee may be abolished or re-designated from time to time by the Board
of Directors. Each member (and each alternate member) of any such Committee
(whether designated at an annual meeting of the Board of Directors or to fill a
vacancy or otherwise) shall hold office until his or her successor shall have
been designated or until he or she shall cease to be a Director, or until his or
her earlier death, resignation or removal.
Section 3.02. Powers. During the intervals between the meetings of the
Board of Directors, the Executive Committee, except as otherwise provided in
this section, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the property, affairs and business of
the Corporation, including the power to declare dividends and to authorize the
issuance of stock. Each such other Committee, except as otherwise provided in
this section, shall have and may exercise such powers of the Board of Directors
as may be provided by resolution or resolutions of the Board of Directors.
Neither the Executive Committee nor any such other Committee shall have the
power or authority:
(a) to amend the Certificate of Incorporation (except that a Committee
may, to the extent authorized in the resolution or resolutions providing
for the issuance of shares of stock adopted by the Board of Directors as
provided in Section 151(a) of the General Corporation Law, fix the
designations and any of the preferences or rights of such shares relating
to dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Corporation or fix the number of
shares of any series of stock or authorize the increase or decrease of the
shares of any series);
(b) to adopt an agreement of merger or consolidation;
(c) to recommend to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets;
(d) to recommend to the stockholders a dissolution of the Corporation
or a revocation of a dissolution; and
(e) to amend the By-Laws of the Corporation.
The Executive Committee shall have, and any such other Committee may be
granted by the Board of Directors, power to authorize the seal of the
Corporation to be affixed to any or all papers which may require it.
Section 3.03. Proceedings. Each such Committee may fix its own rules of
procedure and may meet at such place (within or without the State of Delaware),
at such time and upon such notice, if any, as it shall determine from time to
time. Each such Committee shall keep minutes of its proceedings and shall report
such proceedings to the Board of Directors at the meeting of the Board of
Directors next following any such proceedings.
Section 3.04. Quorum and Manner of Acting. Except as may be otherwise
provided in the resolution creating such Committee, at all meetings of any
Committee the presence of members (or alternate members) constituting a majority
of the total authorized membership of such Committee shall constitute a quorum
for the transaction of business. The act of the majority of the members present
at any meeting at which a quorum is present shall be the act of such Committee.
Any action
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required or permitted to be taken at any meeting of any such Committee may be
taken without a meeting, if all members of such Committee shall consent to such
action in writing and such writing or writings are filed with the minutes of the
proceedings of the Committee. The members of any such Committee shall act only
as a Committee, and the individual members of such Committee shall have no power
as such.
Section 3.05. Action by Telephonic Communications. Members of any
Committee designated by the Board of Directors may participate in a meeting of
such Committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section 3.06. Absent or Disqualified Members. In the absence or
disqualification of a member of any Committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he, she
or they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member.
Section 3.07. Resignations. Any member (and any alternate member) of any
Committee may resign at any time by delivering a written notice of resignation,
signed by such member, to the Chairman or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 3.08. Removal. Any member (and any alternate member) of any
Committee may be removed from his or her position as a member (or alternate
member, as the case may be) of such Committee at any time, either for or without
cause, by resolution adopted by a majority of the whole Board of Directors.
Section 3.09. Vacancies. If any vacancy shall occur in any Committee, by
reason of disqualification, death, resignation, removal or otherwise, the
remaining members (and any alternate members) shall continue to act, and any
such vacancy may be filled by the Board of Directors.
ARTICLE IV
OFFICERS
Section 4.01. Number. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a Treasurer.
The Board of Directors also may elect one or more Assistant Secretaries and
Assistant Treasurers in such numbers as the Board of Directors may determine.
Any number of offices may be held by the same person. No officer need be a
Director of the Corporation.
Section 4.02. Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual meeting,
officers may be elected at any regular or special meeting of the Board of
Directors. Each officer shall hold office until his or her successor has been
elected and qualified, or until his or her earlier death, resignation or
removal.
Section 4.03. Salaries. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
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Section 4.04. Removal and Resignation; Vacancies. Any officer may be
removed for or without cause at any time by the Board of Directors. Any officer
may resign at any time by delivering a written notice of resignation, signed by
such officer, to the Board of Directors or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery. Any vacancy
occurring in any office of the Corporation by death, resignation, removal or
otherwise, shall be filled by the Board of Directors.
Section 4.05. Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and perform
such duties as may be specified in these By-Laws, except that in any event each
officer shall exercise such powers and perform such duties as may be required by
law.
Section 4.06. The President. The President shall preside at all meetings
of the stockholders and directors at which he or she is present, shall be the
chief executive officer and the chief operating officer of the Corporation,
shall have general control and supervision of the policies and operations of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He or she shall manage and administer the
Corporation's business and affairs and shall also perform all duties and
exercise all powers usually pertaining to the office of a chief executive
officer and a chief operating officer of a corporation. He or she shall have the
authority to sign, in the name and on behalf of the Corporation, checks, orders,
contracts, leases, notes, drafts and other documents and instruments in
connection with the business of the Corporation, and together with the Secretary
or an Assistant Secretary, conveyances of real estate and other documents and
instruments to which the seal of the Corporation is affixed. He or she shall
have the authority to cause the employment or appointment of such employees and
agents of the Corporation as the conduct of the business of the Corporation may
require, to fix their compensation, and to remove or suspend any employee or
agent elected or appointed by the President or the Board of Directors. The
President shall perform such other duties and have such other powers as the
Board of Directors or the Chairman may from time to time prescribe.
Section 4.07. The Secretary. The Secretary shall have the following powers
and duties:
(a) He or she shall keep or cause to be kept a record of all the
proceedings of the meetings of the stockholders and of the Board of
Directors in books provided for that purpose.
(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these By-Laws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a resolution
of the Board of Directors, he or she shall furnish a copy of such
resolution to the members of such Committee.
(d) He or she shall be the custodian of the records and of the seal of
the Corporation and cause such seal (or a facsimile thereof) to be affixed
to all certificates representing shares of the Corporation prior to the
issuance thereof and to all instruments the execution of which on behalf of
the Corporation under its seal shall have been duly authorized in
accordance with these By-Laws, and when so affixed he or she may attest the
same.
(e) He or she shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by
law, the Certificate of Incorporation or these By-Laws.
(f) He or she shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number
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of shares of stock of the Corporation of each class issued and outstanding,
the names (alphabetically arranged) and the addresses of the holders of
record of such shares, the number of shares held by each holder and the
date as of which each became such holder of record.
(g) He or she shall sign (unless the Treasurer, an Assistant Treasurer
or an Assistant Secretary shall have signed) certificates representing
shares of the Corporation the issuance of which shall have been authorized
by the Board of Directors.
(h) He or she shall perform, in general, all duties incident to the
office of secretary and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors, or the President.
Section 4.08. The Treasurer. The Treasurer shall be the chief financial
officer of the Corporation and shall have the following powers and duties:
(a) He or she shall have charge and supervision over and be
responsible for the moneys, securities, receipts and disbursements of the
Corporation, and shall keep or cause to be kept full and accurate records
of all receipts of the Corporation.
(b) He or she shall cause the moneys and other valuable effects of the
Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or other
depositaries as shall be selected in accordance with Section 8.05 of these
By-Laws.
(c) He or she shall cause the moneys of the Corporation to be
disbursed by checks or drafts (signed as provided in Section 8.06 of these
By-Laws) upon the authorized depositaries of the Corporation and cause to
be taken and preserved proper vouchers for all moneys disbursed.
(d) He or she shall render to the Board of Directors or the President,
whenever requested, a statement of the financial condition of the
Corporation and of all his or her transactions as Treasurer, and render a
full financial report at the annual meeting of the stockholders, if called
upon to do so.
(e) He or she shall be empowered from time to time to require from all
officers or agents of the Corporation reports or statements giving such
information as he or she may desire with respect to any and all financial
transactions of the Corporation.
(f) He or she may sign (unless an Assistant Treasurer or the Secretary
or an Assistant Secretary shall have signed) certificates representing
stock of the Corporation the issuance of which shall have been authorized
by the Board of Directors.
(g) He or she shall perform, in general, all duties incident to the
office of treasurer and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors, or the President.
Section 4.09. Additional Officers. The Board of Directors may appoint such
other officers and agents as it may deem appropriate, and such other officers
and agents shall hold their offices for such terms and shall exercise such
powers and perform such duties as may be determined from time to time by the
Board of Directors. The Board of Directors from time to time may delegate to any
officer or agent the power to appoint subordinate officers or agents and to
prescribe their respective rights, terms of office, authorities and duties. Any
such officer or agent may remove any such subordinate officer or agent appointed
by him or her, for or without cause.
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Section 4.10. Security. The Board of Directors may require any officer,
agent or employee of the Corporation to provide security for the faithful
performance of his or her duties, in such amount and of such character as may be
determined from time to time by the Board of Directors.
ARTICLE V
CAPITAL STOCK
Section 5.01. Certificates of Stock, Uncertificated Shares. The shares of
the Corporation shall be represented by certificates, provided that the Board of
Directors may provide by resolution or resolutions that some or all of any or
all classes or series of the stock of the Corporation shall be uncertificated
shares. Any such resolution shall not apply to shares represented by a
certificate until each certificate is surrendered to the Corporation.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock in the Corporation represented by certificates and upon
request every holder of uncertificated shares shall be entitled to have a
certificate signed by, or in the name of the Corporation, by the President or a
Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary, representing the number of shares registered in
certificate form. Such certificate shall be in such form as the Board of
Directors may determine, to the extent consistent with applicable law, the
Certificate of Incorporation and these By-Laws.
Section 5.02. Signatures; Facsimile. All of such signatures on the
certificate referred to in Section 5.01 of these By-Laws may be a facsimile,
engraved or printed, to the extent permitted by law. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.
Section 5.03. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct that a new certificate be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon delivery to the Board of Directors of an affidavit of
the owner or owners of such certificate, setting forth such allegation. The
Board of Directors may require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to give the Corporation a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of any such new certificate.
Section 5.04. Transfer of Stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by appropriate evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Within a reasonable time after the transfer of uncertificated stock, the
Corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law
of the State of Delaware. Subject to the provisions of the Certificate of
Incorporation and these By-Laws, the Board of Directors may prescribe such
additional rules and regulations as it may deem appropriate relating to the
issue, transfer and registration of shares of the Corporation.
Section 5.05. Record Date. In order to determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix, in
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advance, a record date, which record date shall not precede the date on which
the resolution fixing the record date is adopted by the Board of Directors, and
which shall not be more than sixty nor less than ten days before the date of
such meeting. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting, provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
law, shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the Corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is required by
law, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the Board of Directors adopts the resolution taking such
prior action.
In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
of the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
Section 5.06. Registered Stockholders. Prior to due surrender of a
certificate for registration of transfer, the Corporation may treat the
registered owner as the person exclusively entitled to receive dividends and
other distributions, to vote, to receive notice and otherwise to exercise all
the rights and powers of the owner of the shares represented by such
certificate, and the Corporation shall not be bound to recognize any equitable
or legal claim to or interest in such shares on the part of any other person,
whether or not the Corporation shall have notice of such claim or interests.
Whenever any transfer of shares shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer if, when the
certificates are presented to the Corporation for transfer or uncertificated
shares are requested to be transferred, both the transferor and transferee
request the Corporation to do so.
Section 5.07. Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars.
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ARTICLE VI
INDEMNIFICATION
Section 6.01. Nature of Indemnity. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she
is or was or has agreed to become a director or officer of the Corporation, or
is or was serving or has agreed to serve at the request of the Corporation as a
director or officer, of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a party or
is threatened to be made a party to such an action, suit or proceeding by reason
of the fact that he or she is or was or has agreed to become an employee or
agent of the Corporation, or is or was serving or has agreed to serve at the
request of the Corporation as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her or on his or her behalf in
connection with such action, suit or proceeding and any appeal therefrom, if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding had no reasonable cause to believe his or her
conduct was unlawful; except that in the case of an action or suit by or in the
right of the Corporation to procure a judgment in its favor (1) such
indemnification shall be limited to expenses (including attorneys' fees)
actually and reasonably incurred by such person in the defense or settlement of
such action or suit, and (2) no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper. Notwithstanding the foregoing, but subject
to Section 6.05 of these By-Laws, the Corporation shall not be obligated to
indemnify a director or officer of the Corporation in respect of a Proceeding
(or part thereof) instituted by such director or officer, unless such Proceeding
(or part thereof) has been authorized by the Board of Directors.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
Section 6.02. Successful Defense. To the extent that a present or former
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Section 6.01 of these By-Laws or in defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection therewith.
Section 6.03. Determination That Indemnification Is Proper. Any
indemnification of a present or former director or officer of the Corporation
under Section 6.01 of these By-Laws (unless ordered by a court) shall be made by
the Corporation only upon a determination that indemnification of such person is
proper in the circumstances because such person has met the applicable standard
of conduct set forth in Section 6.01 of these By-Laws. Any indemnification of a
present or former employee or
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agent of the Corporation under Section 6.01 of these By-Laws (unless ordered by
a court) may be made by the Corporation upon a determination that
indemnification of the employee or agent is proper in the circumstances because
he or she has met the applicable standard of conduct set forth in Section 6.01
of these By-Laws. Any such determination shall be made, with respect to a person
who is a director or officer at the time of such determination (1) by a majority
vote of the Directors who are not parties to such action, suit or proceeding,
even though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum,
or (3) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (4) by the stockholders.
Section 6.04. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a present director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the Corporation as authorized in this
Article. Such expenses (including attorneys' fees) incurred by former directors
and officers or other employees and agents may be so paid upon such terms and
conditions, if any, as the Corporation deems appropriate. The Corporation, or in
respect of a present director or officer the Board of Directors, may authorize
the Corporation's counsel to represent such present or former director, officer,
employee or agent in any action, suit or proceeding, whether or not the
Corporation is a party to such action, suit or proceeding.
Section 6.05. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director, officer, employee or agent of the Corporation
under Sections 6.01 and 6.02 of these By-Laws, or advance of costs, charges and
expenses to such person under Section 6.04 of these By-Laws, shall be made
promptly, and in any event within thirty days, upon the written request of such
person. If a determination by the Corporation that such person is entitled to
indemnification pursuant to this Article is required, and the Corporation fails
to respond within sixty days to a written request for indemnity, the Corporation
shall be deemed to have approved such request. If the Corporation denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within thirty days,
the right to indemnification or advances as granted by this Article shall be
enforceable by such person in any court of competent jurisdiction. Such person's
costs and expenses incurred in connection with successfully establishing his or
her right to indemnification, in whole or in part, in any such action shall also
be indemnified by the Corporation. It shall be a defense to any such action
(other than an action brought to enforce a claim for the advance of costs,
charges and expenses under Section 6.04 of these By-Laws where the required
undertaking, if any, has been received by or tendered to the Corporation) that
the claimant has not met the standard of conduct set forth in Section 6.01 of
these By-Laws, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or any committee thereof, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in
Section 6.01 of these By-Laws, nor the fact that there has been an actual
determination by the Corporation (including its Board of Directors or any
committee thereof, its independent legal counsel, and its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
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Section 6.06. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the Delaware Corporation Law are in effect and any repeal or
modification thereof shall not affect any right or obligation then existing with
respect to any state of facts then or previously existing or any action, suit or
proceeding previously or thereafter brought or threatened based in whole or in
part upon any such state of facts. Such a "contract right" may not be modified
retroactively without the consent of such director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Section 6.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her or on his or her behalf in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article, provided that such insurance is available
on acceptable terms, which determination shall be made by a vote of a majority
of the entire Board of Directors.
Section 6.08. Severability. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated and to the fullest
extent permitted by applicable law.
ARTICLE VII
OFFICES
Section 7.01. Registered Office. The registered office of the Corporation
in the State of Delaware shall be located at Corporation Trust Center, 0000
Xxxxxx Xxxxxx in the City of Wilmington, County of New Castle.
Section 7.02. Other Offices. The Corporation may maintain offices or
places of business at such other locations within or without the State of
Delaware as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
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ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Dividends. Subject to any applicable provisions of law and
the Certificate of Incorporation, dividends upon the shares of the Corporation
may be declared by the Board of Directors at any regular or special meeting of
the Board of Directors and any such dividend may be paid in cash, property, or
shares of the Corporation's Capital Stock.
A member of the Board of Directors, or a member of any Committee designated
by the Board of Directors shall be fully protected in relying in good faith upon
the records of the Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of its officers or employees, or
Committees of the Board of Directors, or by any other person as to matters the
Director reasonably believes are within such other person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Corporation, as to the value and amount of the assets, liabilities and/or
net profits of the Corporation, or any other facts pertinent to the existence
and amount of surplus or other funds from which dividends might properly be
declared and paid.
Section 8.02. Reserves. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation or for such other purpose as the
Board of Directors shall think conducive to the interest of the Corporation, and
the Board of Directors may similarly modify or abolish any such reserve.
Section 8.03. Execution of Instruments. The President, any Vice President,
the Secretary or the Treasurer may enter into any contract or execute and
deliver any instrument in the name and on behalf of the Corporation. The Board
of Directors or the President may authorize any other officer or agent to enter
into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation. Any such authorization may be general or limited to
specific contracts or instruments.
Section 8.04. Corporate Indebtedness. No loan shall be contracted on
behalf of the Corporation, and no evidence of indebtedness shall be issued in
its name, unless authorized by the Board of Directors or the President. Such
authorization may be general or confined to specific instances. Loans so
authorized may be effected at any time for the Corporation from any bank, trust
company or other institution, or from any firm, corporation or individual. All
bonds, debentures, notes and other obligations or evidences of indebtedness of
the Corporation issued for such loans shall be made, executed and delivered as
the Board of Directors or the President shall authorize. When so authorized by
the Board of Directors or the President, any part of or all the properties,
including contract rights, assets, business or good will of the Corporation,
whether then owned or thereafter acquired, may be mortgaged, pledged,
hypothecated or conveyed or assigned in trust as security for the payment of
such bonds, debentures, notes and other obligations or evidences of indebtedness
of the Corporation, and of the interest thereon, by instruments executed and
delivered in the name of the Corporation.
Section 8.05. Deposits. Any funds of the Corporation may be deposited from
time to time in such banks, trust companies or other depositaries as may be
determined by the Board of Directors or the President, or by such officers or
agents as may be authorized by the Board of Directors or the President to make
such determination.
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Section 8.06. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such agent or agents
of the Corporation, and in such manner, as the Board of Directors or the
President from time to time may determine.
Section 8.07. Sale, Transfer, etc. of Securities. To the extent authorized
by the Board of Directors or by the President, any Vice President, the Secretary
or the Treasurer or any other officers designated by the Board of Directors or
the President may sell, transfer, endorse, and assign any shares of stock, bonds
or other securities owned by or held in the name of the Corporation, and may
make, execute and deliver in the name of the Corporation, under its corporate
seal, any instruments that may be appropriate to effect any such sale, transfer,
endorsement or assignment.
Section 8.08. Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the President or any Vice President shall
have full power and authority on behalf of the Corporation to attend any meeting
of stockholders of any corporation in which the Corporation may hold stock, and
to act, vote (or execute proxies to vote) and exercise in person or by proxy all
other rights, powers and privileges incident to the ownership of such stock.
Such officers acting on behalf of the Corporation shall have full power and
authority to execute any instrument expressing consent to or dissent from any
action of any such corporation without a meeting. The Board of Directors may by
resolution from time to time confer such power and authority upon any other
person or persons.
Section 8.09. Fiscal Year. The fiscal year of the Corporation shall
commence on the first day of January of each year (except for the Corporation's
first fiscal year which shall commence on the date of incorporation) and shall
terminate in each case on December 31.
Section 8.10. Seal. The seal of the Corporation shall be circular in form
and shall contain the name of the Corporation, the year of its incorporation and
the words "Corporate Seal" and "Delaware". The form of such seal shall be
subject to alteration by the Board of Directors. The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or reproduced, or may be used
in any other lawful manner.
Section 8.11. Books and Records; Inspection. Except to the extent
otherwise required by law, the books and records of the Corporation shall be
kept at such place or places within or without the State of Delaware as may be
determined from time to time by the Board of Directors.
ARTICLE IX
AMENDMENT OF BY-LAWS
Section 9.01. Amendment. Subject to the provisions of the Certificate of
Incorporation, these By-Laws may be amended, altered or repealed
(a) by resolution adopted by a majority of the Board of Directors at
any special or regular meeting of the Board if, in the case of such special
meeting only, notice of such amendment, alteration or repeal is contained
in the notice or waiver of notice of such meeting; or
(b) at any regular or special meeting of the stockholders if, in the
case of such special meeting only, notice of such amendment, alteration or
repeal is contained in the notice or waiver of notice of such meeting.
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ARTICLE X
CONSTRUCTION
Section 10.01. Construction. In the event of any conflict between the
provisions of these By-Laws as in effect from time to time and the provisions of
the Certificate of Incorporation of the Corporation as in effect from time to
time, the provisions of such Certificate of Incorporation shall be controlling.
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EXHIBIT B TO THE
AGREEMENT AND PLAN OF MERGER
96
EXHIBIT B TO THE
MERGER AGREEMENT
REGIONAL VEHICLE ("RV") BOARD POLICY
Corporate Opportunities. AT&T Corp. and its non-RV affiliates (an "AT&T
Entity") and persons affiliated with them shall only be required to make a
corporate opportunity available to RV if the corporate opportunity:
- directly relates to the Territory (as defined in the Regional Vehicle
Agreement, between AT&T Corp. and RV (a form of which is attached to the
Agreement and Plan of Merger, dated November 1, 1999, among AT&T Corp.,
Kiri Inc., Frantis Inc. and FirstCom Corporation)(the "Regional Vehicle
Agreement")),
- directly relates to the provision of RV Services (as defined in the
Regional Vehicle Agreement),
- can, in the good faith judgment of AT&T Corp., be financed by the RV
without issuance of additional debt or equity to an AT&T Entity, and
- has been presented to (1) an RV officer or director who is not an
employee, officer or director of an AT&T Entity, (2) an RV officer or
director, who is also an employee (but not an officer or director) of an
AT&T Entity, (3) an RV officer or director, who is also an officer or
director of an AT&T Entity specifically in his capacity as an officer of
director of the RV or (4) a senior AT&T employee specifically for
consideration by the RV.
AT&T may consider all other opportunities as the province of AT&T Entities.
The AT&T Entities will be free to pursue, or to direct to other Persons,
corporate opportunities presented to the RV pursuant to this Board Policy, which
the RV determines not to pursue.
This Board Policy may not be amended except with the approval of a majority
of the Disinterested Directors (as such term is defined in the Bylaws of RV).
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EXHIBIT C-1 TO THE AGREEMENT
AND PLAN OF MERGER
98
EXHIBIT C-1 TO AGREEMENT
AND PLAN OF MERGER
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
KIRI INC.
---------------------
ARTICLE FIRST
NAME OF CORPORATION
The name of the corporation is AT&T Latin America, Inc. (the
"Corporation").
ARTICLE SECOND
REGISTERED OFFICE AND REGISTERED AGENT
The address of the Corporation's registered office in the State of Delaware
is The Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000. The name of the registered agent of the Corporation at
such address is The Corporation Trust Company.
ARTICLE THIRD
PURPOSE
The purpose of the Corporation is to engage in the business of providing
telecommunications services and related or incidental activities in the
Territory. "Territory" means Antigua and Barbuda, Argentina, Bahamas, Barbados,
Bolivia, Brazil, Chile, Colombia, Dominica, Dominican Republic, Ecuador,
Grenada, Guyana, Haiti, Jamaica, Panama, Paraguay, Peru, Saint Lucia, Saint
Xxxxxxx and the Grenadines, Suriname, St. Kitts and Nevis, Trinidad and Tobago,
Uruguay and Venezuela.
ARTICLE FOURTH
CAPITAL STOCK
A. The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is 450,000,000 shares consisting of:
(1) 300,000,000 shares of Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), (2) 150,000,000 shares of Class B Common Stock, par
value $.01 per share (the "Class B Common Stock" and, together with the Class A
Common Stock, the "Common Stock") and (3) 10,000,000 shares of Preferred Stock,
par value $.01 per share (the "Preferred Stock"). Except as otherwise provided
herein, the number of authorized shares of Class A Common Stock, Class B Common
Stock or Preferred Stock may be increased or decreased (but not below the number
of shares thereof then outstanding or reserved for issuance upon
reclassification or conversion of the Class B Common Stock or any series of
Preferred Stock, or upon the exercise of outstanding options, warrants or other
instruments or securities outstanding from time to time that are convertible
into, or exchangeable for Common Stock or Preferred Stock) by the affirmative
vote of a majority of the combined voting power of outstanding shares of capital
stock of the Corporation entitled to vote thereon, voting as a single class
irrespective of the provisions of Section 242(b)(2) of the General Corporation
Law of the State of Delaware (or
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any successor provision thereto). This paragraph A of Article FOURTH shall not
in any way limit the provisions of Section 242(b)(1) of the General Corporation
Law of the State of Delaware other than with respect to the elimination of any
class vote that would otherwise be required pursuant to Section 242(b)(2).
B. The Board of Directors shall have the full authority permitted by law,
at any time and from time to time, to provide for the issuance of shares of
Preferred Stock in one or more series and to determine by resolution or
resolutions the following provisions, designations, powers, preferences and
relative, participating, optional and other special rights, and the
qualifications, limitations or restrictions, of the shares of any such series of
Preferred Stock:
(1) the designation of such series (which may be by distinguishing
number, letter or title), the number of shares to constitute such series
(which number the Board of Directors may thereafter increase or decrease
(but not below the number of shares thereof then outstanding) and the
stated or liquidation value thereof, if different from the par value
thereof;
(2) whether the shares of such series shall have voting rights in
addition to any voting rights provided by law, and, if so, the terms of
such voting rights, which may be full or limited;
(3) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative and, if so, from what dates, the conditions
and dates upon which such dividends shall be payable, the preference or
relation which such dividends shall bear to the dividends payable on any
shares of any other class of capital stock or any other series of Preferred
Stock;
(4) whether the shares of such series shall be subject to redemption
at the election of the Corporation or the holders of such series, or upon
the occurrence of a specified event and, if so, the times, prices and other
terms and conditions of such redemption, including the manner of selecting
shares for redemption if less than all shares are to be redeemed and the
securities or other property payable on such redemption, if any;
(5) the amount or amounts payable on, if any, and the preferences, if
any, of shares of such series in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of, or upon any
distribution of the assets of, the Corporation;
(6) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to the
purchase or redemption of the shares of such series for retirement or other
corporate purposes and the terms and provisions relative to the operation
thereof;
(7) whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class of capital stock or any other
series of Preferred Stock or any other securities (whether or not issued by
the Corporation) and, if so, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same, and
any other terms and conditions of conversion or exchange;
(8) the limitations and restrictions, if any, to be effective while
any shares of such series are outstanding upon the payment of dividends or
the making of other distributions on, or upon the purchase, redemption or
other acquisition by the Corporation of, the Common Stock or shares of any
other class of capital stock or any other series of Preferred Stock;
(9) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issuance of any additional
stock, including additional shares of any other series of Preferred Stock
or of any other class of capital stock;
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100
(10) the ranking (be it pari passu, junior or senior) of each series
vis-a-vis any other class of capital stock or series of Preferred Stock as
to the payment of dividends, the distribution of assets and all other
matters; and
(11) any other powers, preferences and relative, participating,
optional or other special rights, and any qualifications, limitations or
restrictions of such series of Preferred Stock, insofar as they are not
inconsistent with the provisions of this Certificate of Incorporation, to
the full extent permitted in accordance with the General Corporation Law of
the State of Delaware.
C. The powers, preferences and relative, participating, optional or other
special rights, if any, of each series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series of Preferred Stock at any time outstanding.
All shares of any one series of Preferred Stock shall be identical in all
respects with all other shares of such series, except that shares of any one
series issued at different times may differ as to the dates from which dividends
thereon shall be cumulative.
D. Subject to the other provisions of this Article FOURTH and actions taken
by the Board of Directors pursuant to this Article FOURTH:
(1) The holders of shares of Class A Common Stock and Class B Common
Stock shall be entitled to receive such dividends or other distributions
payable in cash, capital stock or otherwise, when, as and if declared by
the Board of Directors at any time or from time to time, out of funds
legally available for the payment thereof, and shall share equally on a per
share basis in all such dividends or other distributions. No dividend or
other distribution may be declared or paid on any share of Class A Common
Stock unless a like dividend or other distribution is simultaneously
declared or paid, as the case may be, on each share of Class B Common
Stock, nor shall any dividend or other distribution be declared or paid on
any share of Class B Common Stock unless a like dividend or other
distribution is simultaneously declared or paid, as the case may be, on
each share of Class A Common Stock, in each case without preference or
priority of any kind; provided, however, that if a dividend or other
distribution payable in shares of any class of Common Stock or in rights,
options, warrants or other securities convertible into or exchangeable or
exercisable for shares of Common Stock shall be declared with respect to
the Common Stock, the dividend or other distribution payable to holders of
Class A Common Stock shall be payable in shares of Class A Common Stock or
in rights, options, warrants or other securities convertible into or
exchangeable or exercisable for shares of Class A Common Stock, as the case
may be, and the dividend or other distribution payable to holders of Class
B Common Stock shall be payable in shares of Class A Common Stock or in
rights, options, warrants or other securities convertible into or
exchangeable or exercisable for shares of Class A Common Stock, as the case
may be. Neither the shares of Class A Common Stock nor the shares of Class
B Common Stock may be reclassified, subdivided or combined unless such
reclassification, subdivision or combination occurs simultaneously and in
the same proportion for each class of Common Stock.
(2) Except as may be designated by the Board of Directors with respect
to any Preferred Stock issued by the Corporation, the voting power of the
Corporation shall be exclusively vested in the Common Stock.
(3) Holders of Preferred Stock and holders of Common Stock shall not
have any preemptive, preferential or other right to subscribe for or
purchase or acquire any shares of any class or series of capital stock or
any other securities of the Corporation, whether now or hereafter
authorized, and whether or not convertible into, or evidencing or carrying
the right to purchase, shares of any class or series of capital stock or
any other securities now or hereafter
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101
authorized and whether the same shall be issued for cash, services or
property, or by way of dividend or otherwise, other than such right, if
any, as the Board of Directors in its discretion from time to time may
determine. If the Board of Directors shall offer to the holders of the
Preferred Stock or the holders of the Common Stock, or any of them, any
such shares or other securities of the Corporation, such offer shall not in
any way constitute a waiver or release of the right of the Board of
Directors subsequently to dispose of other portions of said shares or
securities without so offering the same to said holders.
(4) The shares of Preferred Stock may be issued for such consideration
and for such corporate purposes as the Board of Directors may from time to
time determine.
(5) The powers, preferences and relative, participating, optional or
other special rights, if any, and any qualifications, limitations or
restrictions with respect to Class A Common Stock and Class B Common Stock
shall be in all respects identical, except as otherwise required by law or
expressly provided in this Certificate of Incorporation.
(6) With respect to all matters upon which holders of Common Stock are
entitled to vote or to which holders of Common Stock are entitled to give
consent, except as may be provided in this Certificate of Incorporation or
by applicable law, every holder of Class A Common Stock shall be entitled
to cast thereon one vote in person or by proxy for each share of Class A
Common Stock standing in such holder's name on the transfer books of the
Corporation, and every holder of Class B Common Stock shall be entitled to
cast thereon ten votes in person or by proxy for each share of Class B
Common Stock standing in such holder's name on the transfer books of the
Corporation. Except as otherwise required by law or as otherwise provided
in this Certificate of Incorporation, the holders of Class A Common Stock
and Class B Common Stock shall vote together as a single class, subject to
any voting rights which may be granted to holders of any outstanding
Preferred Stock, on all matters submitted to a vote of stockholders of the
Corporation.
E. In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, and subject to the
rights of the holders of any series of Preferred Stock, the net assets of the
Corporation available for distribution to stockholders of the Corporation shall
be distributed pro rata to the holders of Common Stock in accordance with their
respective rights and interests and shares of Class B Common Stock shall rank
pari passu with shares of Class A Common Stock as to such distribution. For
purposes of this paragraph E of Article FOURTH, the voluntary sale, conveyance,
lease, exchange or transfer (for cash, shares of capital stock, securities or
other consideration) of all or substantially all the assets of the Corporation
or a consolidation, merger or other restructuring of the corporation with or
into one or more other corporations or other entities (whether or not the
Corporation is the corporation surviving such consolidation, merger or other
restructuring) shall not be deemed to be a liquidation, dissolution or winding
up of the affairs of the Corporation.
F. (1) Each share of Class B Common Stock is convertible while held by the
Original Class B Holder (as defined below), at the option of the holder thereof
and in the manner described below, into one share of Class A Common Stock,
subject to adjustment as provided in paragraph F(1)(b) of this Article FOURTH
and subject to the conditions and limitations described below:
(a) In order to voluntarily convert shares of Class B Common Stock
into shares of Class A Common Stock pursuant to this paragraph F(l) of
Article FOURTH, the holder thereof shall deliver to the office of the
Secretary of the Corporation (or at such additional place or places as may
from time to time be designated by the Secretary of the Corporation) (the
"Office of the Corporation") (i) the certificate or certificates
representing the shares of Class B Common
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Stock to be converted, duly endorsed in blank or accompanied by proper
instruments of transfer and, if required by paragraph F(9) of this Article
FOURTH, by any required tax transfer stamps and (ii) written notice (the
"Conversion Notice") to the Corporation that such holder elects to convert
such shares of Class B Common Stock into shares of Class A Common Stock and
stating the name and address in which each certificate representing shares
of Class A Common Stock issued upon such conversion is to be issued. To the
extent permitted by law, such voluntary conversion shall be deemed to have
been effected at the close of business on the date when such delivery is
made to the Office of the Corporation of the certificate representing the
shares to be converted together with the Conversion Notice, and the person
exercising such voluntary conversion shall be treated for all purposes as
the holder of the number of shares of Class A Common Stock issuable upon
such voluntary conversion at such time; provided, however, that, subject to
paragraph F(6) of this Article FOURTH, such holder shall be entitled to
receive, when paid, any dividends or other distributions declared on Class
B Common Stock with a record date preceding the time of such voluntary
conversion and unpaid as of the time of such voluntary conversion.
Following a voluntary conversion, the Corporation shall promptly issue and
deliver, or cause to be issued and delivered, a certificate or certificates
representing the number of fully paid and nonassessable shares of Class A
Common Stock into which the shares of Class B Common Stock formerly
represented by such certificate has been converted at the address set forth
in the Conversion Notice.
(b) If there occurs any capital reorganization or any reclassification
of the capital stock of the Corporation (other than a reclassification,
subdivision or combination described in paragraph D(l) of this Article
FOURTH or pursuant to a merger, consolidation or other restructuring
referred to in paragraph G of this Article FOURTH), each share of Class B
Common Stock shall thereafter be convertible into, in lieu of one share of
Class A Common Stock, the same kind and amount of securities or other
assets, or both, that were issuable or distributable to the holders of
shares of outstanding Class A Common Stock upon such reorganization or
reclassification with respect to that number of shares of Class A Common
Stock into which such share of Class B Common Stock would have been
converted had such share of Class B Common Stock been converted into Class
A Common Stock immediately prior to such reorganization or
reclassification.
The "Original Class B Holder" shall mean AT&T Corp., a New York corporation
(including any successor thereof) or any one or more persons or entities, other
than the Corporation, in which AT&T Corp. beneficially owns, directly or
indirectly, 50 percent or more of the outstanding voting stock, voting power or
similar voting interests ("AT&T Parties").
(2) Except as otherwise provided in this paragraph F(2) of Article FOURTH,
upon the sale or other transfer (whether by merger, operation of law or
otherwise) by a stockholder of the Corporation of shares of Class B Common Stock
such that any person or persons, other than the Original Class B Holder, shall
have beneficial ownership thereof, including pursuant to any private placement
or public sale of such shares (including a public offering registered under the
Securities Act of 1933, as amended, and/or a sale pursuant to Rule 144 or Rule
144A under the Securities Act of 1933, as amended, or any similar rule then in
force), such shares shall automatically convert into an equal number of shares
of Class A Common Stock without any further action on the part of the
Corporation or any other person, and the certificates representing such shares
of Class B Common Stock shall thereafter be deemed to represent shares of Class
A Common Stock. For purposes of this paragraph F of Article FOURTH, (i)
"beneficial ownership" shall mean control, directly or indirectly, through
record ownership or any contract, arrangement, understanding, relationship or
otherwise, of the voting power (which includes the power to vote or to direct
the voting of such shares, except where such power arises solely from a
revocable proxy or consent given in response to
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a proxy or consent solicitation) of such Class B Common Stock, (ii) a "person"
shall mean a corporation, trust, limited liability company, association,
partnership, joint venture, organization, business, individual, government (or
subdivision thereof), governmental agency or other legal entity and (iii) the
term "transfer" shall not include a bona fide unforeclosed pledge.
Immediately upon any automatic conversion of shares of Class B Common Stock
into shares of Class A Common Stock pursuant to this Article FOURTH, the rights
of the holders of such converted shares of Class B Common Stock as such shall
cease and such holders shall be treated for all purposes as having become
holders of the shares of Class A Common Stock issuable upon such conversion;
provided, however, that, subject to paragraph F(6) of this Article FOURTH, such
holders shall be entitled to receive, when paid, any dividends or other
distributions declared on Class B Common Stock with a record date preceding the
time of such automatic conversion and unpaid as of the time of such automatic
conversion.
As promptly as practicable on or after the date of any conversion of shares
of Class B Common Stock into shares of Class A Common Stock pursuant to this
Article FOURTH, upon the delivery to the Corporation of a certificate formerly
representing shares of Class B Common Stock, the Corporation shall issue and
deliver or cause to be delivered, to or upon the written order of the holder of
the surrendered certificate formerly representing shares of Class B Common
Stock, a certificate or certificates representing the number of fully paid and
nonassessable shares of Class A Common stock into which the shares of Class B
Common Stock formerly represented by such certificate have been converted in
accordance herewith.
(3) Holders of shares of Class B Common Stock may (A) sell or otherwise
dispose of or transfer any or all of such shares held by them, respectively,
only in connection with a transfer which meets the qualifications of paragraph
F(4) of this Article FOURTH, and under no other circumstances, or (B) convert
any or all of such shares into shares of Class A Common Stock, as provided in
paragraph F(1) of this Article FOURTH, for the purpose of effecting the sale or
disposition of such shares of Class A Common Stock to any person. No person
other than the Original Class B Holder (including any transferees or successive
transferees who receive shares of Class B Common Stock in connection with a
transfer which meets the qualifications set forth in paragraph F(4) of this
Article FOURTH), shall by virtue of the acquisition of a certificate for shares
of Class B Common Stock have the status of an owner or holder of shares of Class
B Common Stock or be recognized as such by the Corporation or be otherwise
entitled to enjoy for such person's own benefit the special rights and powers of
a holder of shares of Class B Common Stock.
(4) Shares of Class B Common Stock shall be transferred on the books of the
Corporation, and a new certificate or certificates issued therefor, upon
presentation for transfer at the Office of the Corporation of the certificate
for such shares, in proper form for transfer and accompanied by all requisite
stock transfer tax stamps, only if such certificate when so presented shall also
be accompanied by an affidavit from AT&T Corp. stating that such certificate is
being presented to effect a transfer by one AT&T Party of such shares to another
AT&T Party.
Each affidavit of AT&T Corp. furnished pursuant to paragraph F(4) of this
Article FOURTH shall be verified by an officer of AT&T Corp. as of a date not
earlier than five days prior to the date of delivery thereof.
If a holder of shares of Class B Common Stock shall present a certificate
for such shares, endorsed by said holder for transfer or accompanied by an
instrument of transfer signed by said holder, to a person who receives such
shares in connection with a transfer which does not meet the qualifications set
forth in paragraph F(4) of this Article FOURTH, then such shares shall
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automatically convert into an equal number of shares of Class A Common Stock in
accordance with paragraph F(2) of this Article FOURTH.
If the Board of Directors (or any committee of the Board of Directors or
officer of the Corporation, designated for such purpose by the Board of
Directors) shall determine, upon the basis of facts not disclosed in any
affidavit or other document accompanying the certificate for shares of Class B
Common Stock when presented for transfer, that such shares of Class B Common
Stock have been registered in violation of the provisions of paragraph F(4) of
this Article FOURTH, or shall determine that a person is enjoying for such
person's own benefit the special rights and powers of shares of Class B Common
Stock in violation of such provisions, then the Corporation shall take such
action at law or in equity as is appropriate under the circumstances. A bona
fide unforeclosed pledge of shares of Class B Common Stock shall not be deemed
to violate such provisions; provided that such shares shall not be voted by or
registered in the name of the pledgee.
(5) Each certificate for shares of Class B Common Stock shall bear a legend
on the face thereof reading as follows:
"The shares of Class B Common Stock represented by this certificate
may not be transferred to any person in connection with a transfer that
does not meet the qualifications set forth in paragraph F(4) of Article
FOURTH of the Restated Certificate of Incorporation, as amended, of this
corporation. Any person who receives such shares in connection with a
transfer which does not meet the qualifications prescribed by paragraph
F(4) of Article FOURTH is not entitled to own or to be registered as the
holder of such shares of Class B Common Stock, and such shares of Class B
Common Stock shall automatically convert into an equal number of shares of
Class A Common Stock. Each holder of this certificate, by accepting the
same, accepts and agrees to all of the foregoing."
(6) If (i) any dividend or other distribution has been declared with
respect to shares of Class B Common Stock which will be converted into shares of
Class A Common Stock pursuant to the provisions of this paragraph F of Article
FOURTH, (ii) the record date or payment date therefor will be subsequent to such
conversion and (iii) such dividend or other distribution was declared prior to
such conversion, then such dividend or other distribution shall be deemed to
have been declared, and shall be payable, with respect to the shares of Class A
Common Stock into which such shares of Class B Common Stock shall have been
converted (without duplication), and any such dividend or other distribution
which shall have been declared on such shares payable in shares of Class B
Common Stock or rights, options, warrants or other securities convertible into
or exchangeable or exercisable for shares of Class B Common Stock, shall be
deemed to have been declared, and shall be payable, in corresponding shares of
Class A Common Stock or rights, options, warrants or other securities
convertible into or exchangeable or exercisable for shares of Class A Common
Stock, as the case may be.
(7) The Corporation shall not reissue or resell any shares of Class B
Common Stock which shall have been converted into shares of Class A Common Stock
pursuant to or as permitted by the provisions of this paragraph F of Article
FOURTH, or any shares of Class B Common Stock which shall have been acquired by
the Corporation in any other manner. The Corporation shall, from time to time,
as determined by the Board of Directors, take such appropriate action as may be
necessary to retire such shares and to reduce the authorized amount of Class B
Common Stock accordingly.
The Corporation shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued shares of Class A Common
Stock and its issued Class A Common Stock held in its treasury, solely for the
purpose of effecting any conversion of Class B Common Stock pursuant to this
Article FOURTH, the full number of shares of Class A Common Stock then
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issuable or deliverable upon any such conversion of all of the then outstanding
shares of Class B Common Stock. All shares of Class A Common Stock issued upon
any conversion of Class B Common Stock pursuant to this Article FOURTH shall be
duly and validly issued, fully paid and nonassessable. The Corporation shall
take all such actions as it deems necessary or appropriate to ensure that all
such shares of Class A Common Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any securities
exchange upon which shares of Class A Common Stock may be listed.
(8) In connection with any transfer or conversion of any capital stock of
the Corporation pursuant to or as permitted by the provisions of this paragraph
F of Article FOURTH, or in connection with the making of any determination
referred to in this paragraph F of Article FOURTH:
(a) the Corporation shall be under no obligation to make any
investigation of facts unless an officer, employee or agent of the
Corporation responsible for making such transfer or determination or
issuing Class A Common Stock pursuant to such conversion has substantial
reason to believe, or unless the Board of Directors (or a committee of the
Board of Directors designated for the purpose) determines that there is
substantial reason to believe, that any affidavit or other document is
incomplete or incorrect in a material respect or that an investigation
would disclose facts indicating that such conversion was in violation of
paragraph F(4) of this Article FOURTH, in either of which events the
Corporation shall (i) make or cause to be made such investigation as it may
deem necessary or desirable in the circumstances and (ii) have a reasonable
time to complete such investigation; and
(b) neither the Corporation nor any director, officer, employee or
agent of the Corporation shall be liable in any manner for any action taken
or omitted to be taken in good faith.
(9) The Corporation shall pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Class A Common Stock upon any conversion of shares of Class B Common Stock
pursuant hereto; provided, however, that the Corporation shall not be required
to pay any tax which may be payable in respect of any registration of transfer
involved in the issue or delivery of shares of Class A Common Stock in a name
other than that of the registered holder of the shares of Class B Common Stock
to be converted, and no such issue or delivery shall be made unless and until
the person requesting such issue has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid.
G. In the event of a merger, consolidation or other restructuring of the
Corporation with or into one or more entities (whether or not the Corporation is
the surviving entity), the holders of Class A Common Stock and Class B Common
Stock shall be entitled to receive the same per share consideration.
H. The Corporation shall not be entitled to issue additional shares of
Class B Common Stock, or issue rights, options, warrants or other securities
convertible into or exchangeable or exercisable for shares of Class B Common
Stock, except that the Corporation may make an offer to all holders of Common
Stock of rights to purchase additional shares of the class of Common Stock
already held by such holders; provided, however, that the holders of each share
of Class A Common Stock and Class B Common Stock shall be entitled to purchase
the same number of additional shares or rights, options, warrants or other
securities convertible into or exchangeable or exercisable for additional
shares, and on the same terms as the holders of each share of such other class
of capital stock. Class A Common Stock and Class B Common Stock will be treated
equally with respect to any offer made by the Corporation to all of the holders
of Common Stock of rights, options, warrants or other
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securities convertible into or exchangeable or exercisable for shares of any
other capital stock of the Corporation.
ARTICLE FIFTH
BOARD OF DIRECTORS
A. Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specified circumstances, the number of
directors of the Corporation shall initially be fixed at nine.
B. Unless and except to the extent that the Bylaws so require, the election
of directors of the Corporation need not be by written ballot.
C. A stockholder may raise business or make nominations for the election of
directors at a stockholders' meeting only by complying with all of the
provisions of the Bylaws specifying the manner and extent to which advance
notice shall be given of and any other procedures regarding (i) the submission
of proposals to be considered at any meeting of stockholders or (ii) nominations
for the election of directors to be held at any such meeting.
ARTICLE SIXTH
AMENDMENTS
A. The Corporation reserves the right to adopt, repeal, alter or amend any
provision of this Certificate of Incorporation, in the manner now or hereafter
prescribed by the laws of the State of Delaware and this Certificate of
Incorporation, and all rights, preferences and privileges conferred on
stockholders, directors, officers, employees, agents and other persons in this
Certificate of Incorporation, if any, are granted subject to this reservation.
B. Except where the Board of Directors is permitted by law or by this
Certificate of Incorporation to act without any action by the stockholders and
except as otherwise provided by law or as otherwise provided in this Certificate
of Incorporation, and subject to any voting rights granted to holders of any
outstanding shares of Preferred Stock, provisions of this Certificate of
Incorporation shall not be adopted, repealed, altered or amended, in whole or in
part, without the approval of a majority of the combined voting power of the
outstanding shares of capital stock of the Corporation entitled to vote thereon,
voting as a single class; provided, however, that with respect to any proposed
amendment of this Certificate of Incorporation which would alter or change the
relative powers, preferences or participating, optional or other special rights
of the shares of Class A Common Stock or Class B Common Stock so as to affect
them adversely, the approval of a majority of the combined voting power of the
outstanding shares of capital stock of the Corporation entitled to be voted by
the holders of all of the shares so adversely affected by the proposed
amendment, voting separately as a class, shall be obtained in addition to the
affirmative vote of a majority of the combined voting power of the outstanding
shares of capital stock of the Corporation entitled to vote thereon, voting as a
single class, as hereinbefore provided. Any increase or decrease (but not below
the number of shares thereof then outstanding ox reserved for issuance upon
conversion of the Class B Common Stock or any series of Preferred Stock) in the
authorized number of shares of any class or classes of capital stock of the
corporation or creation, authorization or issuance of any rights, options,
warrants or other securities convertible into or exchangeable or exercisable for
shares of any such class or classes of capital stock shall be deemed not to
affect adversely the powers, preferences or special rights of the shares of
Class A Common Stock or Class B Common Stock.
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ARTICLE SEVENTH
LIMITATION ON DIRECTOR LIABILITY
A. To the fullest extent permitted by the General Corporation Law of the
State of Delaware as it now exists and as it may hereafter be amended, no
director shall be personally liable to the corporation or any of its
stockholders for monetary damages for breach of any fiduciary or other duty as a
director.
B. The rights and authority conferred in this Article EIGHTH shall not be
exclusive of any other right which any person may otherwise have or hereafter
acquire.
C. Neither the amendment, alteration or repeal of this Article EIGHTH, nor
the adoption of any provision inconsistent with this Article EIGHTH, shall
adversely affect any right or protection of a director of the Corporation
existing at the time of such amendment, alteration or repeal with respect to
acts or omissions occurring prior to such amendment, alteration, repeal or
adoption.
ARTICLE EIGHTH
AMENDMENTS TO BY-LAWS BY THE BOARD OF DIRECTORS
In furtherance of, and not in limitation of, the powers conferred by law,
and subject to the provisions of the By-laws relating to amendments thereto, the
Board of Directors is expressly authorized and empowered to:
(1) adopt any By-laws a majority of the entire Board of Directors may
deem necessary or desirable in connection with the conduct of the affairs
of the Corporation, including provisions governing the conduct of, and the
matters which may properly be brought before, meetings of the stockholders
and provisions specifying the manner and extent to which advance notice
shall be given of and any other procedures regarding (i) the submission of
proposals to be considered at any such meeting or (ii) nominations for the
election of directors to be held at any such meeting; and
(2) repeal, alter or amend the By-laws by the affirmative vote of a
majority of the entire Board of Directors.
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EXHIBIT C-2 TO AGREEMENT
AND PLAN OF MERGER
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EXHIBIT C-2 TO AGREEMENT
AND PLAN OF MERGER
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KIRI INC.
AMENDMENT AND RESTATEMENT OF BY-LAWS
AS ADOPTED ON
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AMENDMENT AND RESTATEMENT OF BY-LAWS
TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I STOCKHOLDERS...................................... 1
Section 1.01. Annual Meetings........................ 1
Section 1.02. Special Meetings....................... 1
Section 1.03. Notice of Meetings; Waiver............. 1
Section 1.04. Quorum................................. 1
Section 1.05. Voting................................. 2
Section 1.06. Voting by Ballot....................... 2
Section 1.07. Adjournment............................ 2
Section 1.08. Proxies................................ 2
Section 1.09. Organization; Procedure................ 3
Section 1.10. Shareholder Action..................... 3
ARTICLE II BOARD OF DIRECTORS............................... 3
Section 2.01. General Powers......................... 3
Section 2.02. Number and Term of Office.............. 3
Section 2.03. Election of Directors; Chair........... 3
Section 2.04. Annual and Regular Meetings............ 4
Section 2.05. Special Meetings; Notice............... 4
Section 2.06. Quorum; Voting......................... 4
Section 2.07. Adjournment............................ 4
Section 2.08. Action Without a Meeting............... 4
Section 2.09. Regulations; Manner of Acting.......... 4
Section 2.10. Action by Telephonic Communications.... 5
Section 2.11. Resignations........................... 5
Section 2.12. Removal of Directors................... 5
Section 2.13. Vacancies and Newly Created
Directorships......................................... 5
Section 2.14. Compensation........................... 5
Section 2.15. Reliance on Accounts and Reports,
etc................................................... 5
ARTICLE III COMMITTEES...................................... 5
Section 3.01 How Constituted......................... 5
Section 3.02 Powers.................................. 6
Section 3.03. Proceedings............................ 6
Section 3.04. Quorum and Manner of Acting............ 6
Section 3.05. Action by Telephonic Communications.... 7
Section 3.06. Absent or Disqualified Members......... 7
Section 3.07. Resignations........................... 7
Section 3.08. Removal................................ 7
Section 3.09. Vacancies.............................. 7
ARTICLE IV OFFICERS......................................... 7
Section 4.01. Number................................. 7
Section 4.02. Election............................... 7
Section 4.03. Salaries............................... 7
Section 4.04. Removal and Resignation; Vacancies..... 7
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SECTION PAGE
------- ----
Section 4.05. Authority and Duties of Officers....... 8
Section 4.06. The President.......................... 8
Section 4.07. The Secretary.......................... 8
Section 4.08. The Treasurer.......................... 9
Section 4.09. Additional Officers.................... 9
Section 4.10. Security............................... 10
ARTICLE V CAPITAL STOCK..................................... 10
Section 5.01. Certificates of Stock, Uncertificated
Shares................................................ 10
Section 5.02. Signatures; Facsimile.................. 10
Section 5.03. Lost, Stolen or Destroyed
Certificates.......................................... 10
Section 5.04. Transfer of Stock...................... 10
Section 5.05. Record Date............................ 10
Section 5.06. Registered Stockholders................ 11
Section 5.07. Transfer Agent and Registrar........... 11
ARTICLE VI INDEMNIFICATION.................................. 11
Section 6.01. Nature of Indemnity.................... 11
Section 6.02. Successful Defense..................... 12
Section 6.03. Determination That Indemnification Is
Proper................................................ 12
Section 6.04. Advance Payment of Expenses............ 12
Section 6.05. Procedure for Indemnification of
Directors and Officers................................ 13
Section 6.06. Survival; Preservation of Other
Rights................................................ 13
Section 6.07. Insurance.............................. 13
Section 6.08. Severability........................... 14
ARTICLE VII OFFICES......................................... 14
Section 7.01. Registered Office...................... 14
Section 7.02. Other Offices.......................... 14
ARTICLE VIII GENERAL PROVISIONS............................. 14
Section 8.01. Dividends.............................. 14
Section 8.02. Reserves............................... 14
Section 8.03. Execution of Instruments............... 15
Section 8.04. Corporate Indebtedness................. 15
Section 8.05. Deposits............................... 15
Section 8.06. Checks................................. 15
Section 8.07. Sale, Transfer, etc. of Securities..... 15
Section 8.08. Voting as Stockholder.................. 15
Section 8.09. Fiscal Year............................ 16
Section 8.10. Seal................................... 16
Section 8.11. Books and Records; Inspection.......... 16
Section 9.02. Affiliated Party Transactions.......... 16
ARTICLE X AMENDMENT OF BY-LAWS.............................. 17
Section 10.01. Amendment.............................. 17
ARTICLE XI CONSTRUCTION..................................... 17
Section 11.01 Construction............................ 17
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KIRI INC.
BY-LAWS
AS ADOPTED ON [ , ]
ARTICLE I
STOCKHOLDERS
Section 1.01. Annual Meetings. The annual meeting of the stockholders of
the Corporation for the election of directors and for the transaction of such
other business as properly may come before such meeting shall be held at such
place, either within or outside the State of Delaware, and at 9:00 a.m. local
time on the fifteenth of May (or, if such day is a legal holiday, then on the
next succeeding business day), or at such other date and hour, as may be fixed
from time to time by resolution of the Board of Directors and set forth in the
notice or waiver of notice of the meeting.
Section 1.02. Special Meetings. Special meetings of the stockholders may
be called at any time by the President (or, in the event of his or her absence
or disability, by any Vice President), or by the Board of Directors. A special
meeting shall be called by the President (or, in the event of his or her absence
or disability, by any Vice President), or by the Secretary, immediately upon
receipt of a written request therefor by stockholders holding in the aggregate
not less than a majority of the outstanding shares of the Corporation at the
time entitled to vote at any meeting of the stockholders. If such officers or
the Board of Directors shall fail to call such meeting within twenty days after
receipt of such request, any stockholder executing such request may call such
meeting. Such special meetings of the stockholders shall be held at such places,
within or outside the State of Delaware, as shall be specified in the respective
notices or waivers of notice thereof.
Section 1.03. Notice of Meetings; Waiver. The Secretary or any Assistant
Secretary shall cause written notice of the place, date and hour of each meeting
of the stockholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called, to be given personally or by mail,
not less than ten nor more than sixty days prior to the meeting, to each
stockholder of record entitled to vote at such meeting. If such notice is
mailed, it shall be deemed to have been given to a stockholder when deposited in
the United States mail, postage prepaid, directed to the stockholder at his or
her address as it appears on the record of stockholders of the Corporation, or,
if he or she shall have filed with the Secretary of the Corporation a written
request that notices to him or her be mailed to some other address, then
directed to him or her at such other address. Such further notice shall be given
as may be required by law.
No notice of any meeting of stockholders need be given to any stockholder
who submits a signed waiver of notice, whether before or after the meeting.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the stockholders need be specified in a written waiver of
notice. The attendance of any stockholder at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground that the meeting is
not lawfully called or convened.
Section 1.04. Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of one-third of the shares entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business at such
meeting. For purposes of calculating pursuant to this Section 1.04 the number of
shares
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entitled to vote at a meeting of stockholders, each share of Class A Common
Stock and Class B Common Stock shall be counted equally.
Section 1.05. Voting. If, pursuant to Section 5.05 of these By-Laws, a
record date has been fixed, (a) every holder of record of a share of Class A
Common Stock entitled to vote at a meeting of stockholders shall be entitled to
one vote for each such share outstanding in his or her name on the books of the
Corporation at the close of business on such record date and (b) every holder of
record of a share of Class B Common Stock entitled to vote at a meeting of
stockholders shall be entitled to ten votes for each such share outstanding in
his or her name on the books of the Corporation at the close of business on such
record date. If no record date has been fixed, then (x) every holder of record
of a share of Class A Common Stock entitled to vote at a meeting of stockholders
shall be entitled to one vote for each such share of stock standing in his or
her name on the books of the Corporation at the close of business on the day
next preceding the day on which notice of the meeting is given, or, if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held and (y) every holder of record of a share of Class B Common
Stock entitled to vote at a meeting of stockholders shall be entitled to ten
votes for each such share of stock standing in his or her name on the books of
the Corporation at the close of business on the day next preceding the day on
which notice of the meeting is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. Except
as otherwise required by law or by the Certificate of Incorporation or by these
By-Laws, a majority of the votes of shares represented in person or by proxy at
any meeting at which a quorum is present shall be sufficient for the transaction
of any business at such meeting.
Section 1.06. Voting by Ballot. No vote of the stockholders need be taken
by written ballot unless otherwise required by law. Any vote which need not be
taken by ballot may be conducted in any manner approved by the meeting.
Section 1.07. Adjournment. If a quorum is not present at any meeting of
the stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than thirty days, or if after the adjournment a new record date for the
adjourned meeting is fixed pursuant to Section 5.05 of these By-Laws, a notice
of the adjourned meeting, conforming to the requirements of Section 1.03 of
these By-Laws, shall be given to each stockholder of record entitled to vote at
such meeting. At any adjourned meeting at which a quorum is present, any
business may be transacted that might have been transacted on the original date
of the meeting.
Section 1.08. Proxies. Any stockholder entitled to vote at any meeting of
the stockholders may authorize another person or persons to vote at any such
meeting for him or her by proxy. A stockholder may authorize a valid proxy by
executing a written instrument signed by such stockholder, or by causing his or
her signature to be affixed to such writing by any reasonable means including,
but not limited to, by facsimile signature, or by transmitting or authorizing
the transmission of a telegram, cablegram or other means of electronic
transmission to the person designated as the holder of the proxy, a proxy
solicitation firm or a like authorized agent. No such proxy shall be voted or
acted upon after the expiration of three years from the date of such proxy,
unless such proxy provides for a longer period. Every proxy shall be revocable
at the pleasure of the stockholder executing it, except in those cases where
applicable law provides that a proxy shall be irrevocable. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or by filing
another duly executed
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proxy bearing a later date with the Secretary. Proxies by telegram, cablegram or
other electronic transmission must either set forth or be submitted with
information from which it can be determined that the telegram, cablegram or
other electronic transmission was authorized by the stockholder. Any copy,
facsimile telecommunication or other reliable reproduction of a writing or
transmission created pursuant to this section may be substituted or used in lieu
of the original writing or transmission for any and all purposes for which the
original writing or transmission could be used, provided that such copy,
facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission.
Section 1.09. Organization; Procedure. At every meeting of stockholders
the presiding officer shall be the President or, in the event of his or her
absence or disability, a presiding officer chosen by a majority of the
stockholders present in person or by proxy. The Secretary, or in the event of
his or her absence or disability, the Assistant Secretary, if any, or if there
be no Assistant Secretary, in the absence of the Secretary, an appointee of the
presiding officer, shall act as Secretary of the meeting. The order of business
and all other matters of procedure at every meeting of stockholders may be
determined by such presiding officer.
Section 1.10. Shareholder Action. Any action required or permitted to be
taken under law by the stockholders of the Corporation shall be effected at a
duly called annual or special meeting of stockholders of the Corporation and may
not be effected by any consent in writing by such stockholders.
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. General Powers. Except as may otherwise be provided by law,
by the Certificate of Incorporation or by these By-Laws, the property, affairs
and business of the Corporation shall be managed by or under the direction of
the Board of Directors and the Board of Directors may exercise all the powers of
the Corporation.
Section 2.02. Number and Term of Office. The number of Directors
constituting the entire Board of Directors shall be nine. The total number of
Directors constituting the entire Board of Directors shall include three
Disinterested Directors, which number may be modified from time to time by
resolution of the Board of Directors (which resolution shall have been approved
by (i) all of the Disinterested Directors, if the total number of Disinterested
Directors then in office shall be four or less, or (ii) not less than 80% of the
Disinterested Directors, if the total number of Disinterested Directors then in
office shall be more than four), but in no event shall the number of
Disinterested Directors be less than one. "Disinterested Directors" shall mean
the directors of the Corporation who are not officers or employees of either
AT&T Corp., a New York corporation ("AT&T") or any of its affiliates or the
Corporation, or directors of AT&T or any of its affiliates. Each Director
(whenever elected) shall hold office until his or her successor has been duly
elected and qualified, or until his or her earlier death, resignation or
removal. "Affiliate" shall have the meaning set forth in Rule 12b-2 under the
Securities Exchange Act of 1934.
Section 2.03. Election of Directors; Chair. Except as otherwise provided
in Sections 2.12 and 2.13 of these By-Laws, the Directors shall be elected at
each annual meeting of the stockholders. If the annual meeting for the election
of Directors is not held on the date designated therefor, the Directors shall
cause the meeting to be held as soon thereafter as convenient. At each meeting
of the
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stockholders for the election of Directors, provided a quorum is present, the
Directors shall be elected by a plurality of the votes validly cast in such
election.
Section 2.04. Annual and Regular Meetings. The annual meeting of the Board
of Directors for the purpose of electing officers and for the transaction of
such other business as may come before the meeting shall be held as soon as
possible following adjournment of the annual meeting of the stockholders at the
place of such annual meeting of the stockholders. Notice of such annual meeting
of the Board of Directors need not be given. The Board of Directors from time to
time may by resolution provide for the holding of regular meetings and fix the
place (which may be within or outside the State of Delaware) and the date and
hour of such meetings. Notice of regular meetings need not be given, provided,
however, that if the Board of Directors shall fix or change the time or place of
any regular meeting, notice of such action shall be mailed promptly, or sent by
telegram, radio or cable, to each Director who shall not have been present at
the meeting at which such action was taken, addressed to him or her at his or
her usual place of business, or shall be delivered to him or her personally.
Notice of such action need not be given to any Director who attends the first
regular meeting after such action is taken without protesting the lack of notice
to him or her, prior to or at the commencement of such meeting, or to any
Director who submits a signed waiver of notice, whether before or after such
meeting.
Section 2.05. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by (i) the President or, in the event of
his or her absence or disability, by any Vice President, or (ii) any three
Directors, at such place (within or outside the State of Delaware), date and
hour as may be specified in the respective notices or waivers of notice of such
meetings. Special meetings of the Board of Directors may be called on
twenty-four hours' notice, if notice is given to each Director personally or by
telephone or telegram, or on five days' notice, if notice is mailed to each
Director, addressed to him or her at his or her usual place of business. Notice
of any special meeting need not be given to any Director who attends such
meeting without protesting the lack of notice to him or her, prior to or at the
commencement of such meeting, or to any Director who submits a signed waiver of
notice, whether before or after such meeting, and any business may be transacted
thereat.
Section 2.06. Quorum; Voting. At all meetings of the Board of Directors,
the presence of a majority of the total authorized number of Directors shall
constitute a quorum for the transaction of business. Except as otherwise
required by law, the vote of a majority of the entire Board of Directors shall
be required for an act of the Board of Directors.
Section 2.07. Adjournment. A majority of the Directors present, whether or
not a quorum is present, may adjourn any meeting of the Board of Directors to
another time or place. No notice need be given of any adjourned meeting unless
the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.05
of these By-Laws shall be given to each Director.
Section 2.08. Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting if all members of the Board of Directors consent thereto in writing, and
such writing or writings are filed with the minutes of proceedings of the Board
of Directors.
Section 2.09. Regulations; Manner of Acting. To the extent consistent with
applicable law, the Certificate of Incorporation and these By-Laws, the Board of
Directors may adopt such rules and regulations for the conduct of meetings of
the Board of Directors and for the management of the
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property, affairs and business of the Corporation as the Board of Directors may
deem appropriate. The Directors shall act only as a Board, and the individual
Directors shall have no power as such.
Section 2.10. Action by Telephonic Communications. Members of the Board of
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting.
Section 2.11. Resignations. Any Director may resign at any time by
delivering a written notice of resignation, signed by such Director, to the
President or the Secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 2.12. Removal of Directors. Any Director may be removed at any
time, either for or without cause, upon the affirmative vote of the holders of a
majority of the outstanding shares of stock of the Corporation entitled to vote
for the election of such Director. Any vacancy in the Board of Directors caused
by any such removal may be filled at such meeting by the stockholders entitled
to vote for the election of the Director so removed. If such stockholders do not
fill such vacancy at such meeting (or in the written instrument effecting such
removal, if such removal was effected by consent
without a meeting), such vacancy may be filled in the manner provided in Section
2.13 of these By-Laws.
Section 2.13. Vacancies and Newly Created Directorships. If any vacancies
shall occur in the Board of Directors, by reason of death, resignation, removal
or otherwise, or if the authorized number of Directors shall be increased, the
Directors then in office shall continue to act, and such vacancies and newly
created directorships may be filled by a majority of the Directors then in
office, although less than a quorum. A Director elected to fill a vacancy or a
newly created directorship shall hold office until his or her successor has been
elected and qualified or until his or her earlier death, resignation or removal.
Any such vacancy or newly created directorship may also be filled at any time by
vote of the stockholders.
Section 2.14. Compensation. The amount, if any, which each Director shall
be entitled to receive as compensation for his or her services as such shall be
fixed from time to time by resolution of the Board of Directors.
Section 2.15. Reliance on Accounts and Reports, etc. A Director, or a
member of any Committee designated by the Board of Directors shall, in the
performance of his or her duties, be fully protected in relying in good faith
upon the records of the Corporation and upon information, opinions, reports or
statements presented to the Corporation by any of the Corporation's officers or
employees, or Committees designated by the Board of Directors, or by any other
person as to the matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
ARTICLE III
COMMITTEES
Section 3.01. How Constituted. The Board of Directors may designate one or
more Committees, including an Audit Committee, Nominating Committee, and
Compensation Committee, each such Committee to consist of such number of
Directors as from time to time may be fixed by
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the Board of Directors. The Board of Directors may designate one or more
Directors as alternate members of any such Committee, who may replace any absent
or disqualified member or members at any meeting of such Committee. Thereafter,
members (and alternate members, if any) of each such Committee may be designated
at the annual meeting of the Board of Directors. Any such Committee may be
abolished or re-designated from time to time by the Board of Directors. Each
member (and each alternate member) of any such Committee (whether designated at
an annual meeting of the Board of Directors or to fill a vacancy or otherwise)
shall hold office until his or her successor shall have been designated or until
he or she shall cease to be a Director, or until his or her earlier death,
resignation or removal.
Section 3.02. Powers. Each such Committee, except as otherwise provided in
this section, shall have and may exercise such powers of the Board of Directors
as may be provided by resolution or resolutions of the Board of Directors. No
Committee shall have the power or authority:
(a) to amend the Certificate of Incorporation (except that a Committee
may, to the extent authorized in the resolution or resolutions providing
for the issuance of shares of stock adopted by the Board of Directors as
provided in Section 151(a) of the General Corporation Law, fix the
designations and any of the preferences or rights of such shares relating
to dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Corporation or fix the number of
shares of any series of stock or authorize the increase or decrease of the
shares of any series);
(b) to adopt an agreement of merger or consolidation;
(c) to recommend to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets;
(d) to recommend to the stockholders a dissolution of the Corporation
or a revocation of a dissolution; and
(e) to amend the By-Laws of the Corporation.
Any Committee may be granted by the Board of Directors the power to authorize
the seal of the Corporation to be affixed to any or all papers which may require
it.
Section 3.03. Proceedings. Each such Committee may fix its own rules of
procedure and may meet at such place (within or outside the State of Delaware),
at such time and upon such notice, if any, as it shall determine from time to
time. Each such Committee shall keep minutes of its proceedings and shall report
such proceedings to the Board of Directors at the meeting of the Board of
Directors next following any such proceedings.
Section 3.04. Quorum and Manner of Acting. Except as may be otherwise
provided in the resolution creating such Committee, at all meetings of any
Committee the presence of members (or alternate members) constituting a majority
of the total authorized membership of such Committee shall constitute a quorum
for the transaction of business. The act of the majority of the members present
at any meeting at which a quorum is present shall be the act of such Committee.
Any action required or permitted to be taken at any meeting of any such
Committee may be taken without a meeting, if all members of such Committee shall
consent to such action in writing and such writing or writings are filed with
the minutes of the proceedings of the Committee. The members of any such
Committee shall act only as a Committee, and the individual members of such
Committee shall have no power as such.
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Section 3.05. Action by Telephonic Communications. Members of any
Committee designated by the Board of Directors may participate in a meeting of
such Committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section 3.06. Absent or Disqualified Members. In the absence or
disqualification of a member of any Committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he, she
or they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member.
Section 3.07. Resignations. Any member (and any alternate member) of any
Committee may resign at any time by delivering a written notice of resignation,
signed by such member, to the Chairman or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 3.08. Removal. Any member (and any alternate member) of any
Committee may be removed from his or her position as a member (or alternate
member, as the case may be) of such Committee at any time, either for or without
cause, by resolution adopted by a majority of the whole Board of Directors.
Section 3.09. Vacancies. If any vacancy shall occur in any Committee, by
reason of disqualification, death, resignation, removal or otherwise, the
remaining members (and any alternate members) shall continue to act, and any
such vacancy may be filled by the Board of Directors.
ARTICLE IV
OFFICERS
Section 4.01. Number. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a Treasurer.
The Board of Directors also may elect one or more Assistant Secretaries and
Assistant Treasurers in such numbers as the Board of Directors may determine.
Any number of offices may be held by the same person. No officer need be a
Director of the Corporation.
Section 4.02. Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual meeting,
officers may be elected at any regular or special meeting of the Board of
Directors. Each officer shall hold office until his or her successor has been
elected and qualified, or until his or her earlier death, resignation or
removal.
Section 4.03. Salaries. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
Section 4.04. Removal and Resignation; Vacancies. Any officer may be
removed for or without cause at any time by the Board of Directors. Any officer
may resign at any time by delivering a written notice of resignation, signed by
such officer, to the Board of Directors or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery. Any vacancy
occurring in
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any office of the Corporation by death, resignation, removal or otherwise, shall
be filled by the Board of Directors.
Section 4.05. Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and perform
such duties as may be specified in these By-Laws, except that in any event each
officer shall exercise such powers and perform such duties as may be required by
law.
Section 4.06. The President. The President shall preside at all meetings
of the stockholders at which he or she is present, shall be the chief executive
officer and the chief operating officer of the Corporation, shall have general
control and supervision of the policies and operations of the Corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. He or she shall manage and administer the Corporation's business
and affairs and shall also perform all duties and exercise all powers usually
pertaining to the office of a chief executive officer and a chief operating
officer of a corporation. He or she shall have the authority to sign, in the
name and on behalf of the Corporation, checks, orders, contracts, leases, notes,
drafts and other documents and instruments in connection with the business of
the Corporation, and together with the Secretary or an Assistant Secretary,
conveyances of real estate and other documents and instruments to which the seal
of the Corporation is affixed. He or she shall have the authority to cause the
employment or appointment of such employees and agents of the Corporation as the
conduct of the business of the Corporation may require, to fix their
compensation, and to remove or suspend any employee or agent elected or
appointed by the President or the Board of Directors. The President shall
perform such other duties and have such other powers as the Board of Directors
or the Chairman may from time to time prescribe.
Section 4.07. The Secretary. The Secretary shall have the following powers
and duties:
(a) He or she shall keep or cause to be kept a record of all the
proceedings of the meetings of the stockholders and of the Board of
Directors in books provided for that purpose.
(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these By-Laws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a resolution
of the Board of Directors, he or she shall furnish a copy of such
resolution to the members of such Committee.
(d) He or she shall be the custodian of the records and of the seal of
the Corporation and cause such seal (or a facsimile thereof) to be affixed
to all certificates representing shares of the Corporation prior to the
issuance thereof and to all instruments the execution of which on behalf of
the Corporation under its seal shall have been duly authorized in
accordance with these By-Laws, and when so affixed he or she may attest the
same.
(e) He or she shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by
law, the Certificate of Incorporation or these By-Laws.
(f) He or she shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number of shares of stock of the
Corporation of each class issued and outstanding, the names (alphabetically
arranged) and the addresses of the holders of record of such shares, the
number of shares held by each holder and the date as of which each became
such holder of record.
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(g) He or she shall sign (unless the Treasurer, an Assistant Treasurer
or an Assistant Secretary shall have signed) certificates representing
shares of the Corporation the issuance of which shall have been authorized
by the Board of Directors.
(h) He or she shall perform, in general, all duties incident to the
office of secretary and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors, or the President.
Section 4.08. The Treasurer. The Treasurer shall be the chief financial
officer of the Corporation and shall have the following powers and duties:
(a) He or she shall have charge and supervision over and be
responsible for the moneys, securities, receipts and disbursements of the
Corporation, and shall keep or cause to be kept full and accurate records
of all receipts of the Corporation.
(b) He or she shall cause the moneys and other valuable effects of the
Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or other
depositaries as shall be selected in accordance with Section 8.05 of these
By-Laws.
(c) He or she shall cause the moneys of the Corporation to be
disbursed by checks or drafts (signed as provided in Section 8.06 of these
By-Laws) upon the authorized depositaries of the Corporation and cause to
be taken and preserved proper vouchers for all moneys disbursed.
(d) He or she shall render to the Board of Directors or the President,
whenever requested, a statement of the financial condition of the
Corporation and of all his or her transactions as Treasurer, and render a
full financial report at the annual meeting of the stockholders, if called
upon to do so.
(e) He or she shall be empowered from time to time to require from all
officers or agents of the Corporation reports or statements giving such
information as he or she may desire with respect to any and all financial
transactions of the Corporation.
(f) He or she may sign (unless an Assistant Treasurer or the Secretary
or an Assistant Secretary shall have signed) certificates representing
stock of the Corporation the issuance of which shall have been authorized
by the Board of Directors.
(g) He or she shall perform, in general, all duties incident to the
office of treasurer and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors, or the President.
Section 4.09. Additional Officers. The Board of Directors may appoint such
other officers and agents as it may deem appropriate, and such other officers
and agents shall hold their offices for such terms and shall exercise such
powers and perform such duties as may be determined from time to time by the
Board of Directors. The Board of Directors from time to time may delegate to any
officer or agent the power to appoint subordinate officers or agents and to
prescribe their respective rights, terms of office, authorities and duties. Any
such officer or agent may remove any such subordinate officer or agent appointed
by him or her, for or without cause.
Section 4.10. Security. The Board of Directors may require any officer,
agent or employee of the Corporation to provide security for the faithful
performance of his or her duties, in such amount and of such character as may be
determined from time to time by the Board of Directors.
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ARTICLE V
CAPITAL STOCK
Section 5.01. Certificates of Stock, Uncertificated Shares. The shares of
the Corporation shall be represented by certificates, provided that the Board of
Directors may provide by resolution or resolutions that some or all of any or
all classes or series of the stock of the Corporation shall be uncertificated
shares. Any such resolution shall not apply to shares represented by a
certificate until each certificate is surrendered to the Corporation.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock in the Corporation represented by certificates and upon
request every holder of uncertificated shares shall be entitled to have a
certificate signed by, or in the name of the Corporation, by the President or a
Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary, representing the number of shares registered in
certificate form. Such certificate shall be in such form as the Board of
Directors may determine, to the extent consistent with applicable law, the
Certificate of Incorporation and these By-Laws.
Section 5.02. Signatures; Facsimile. All of such signatures on the
certificate referred to in Section 5.01 of these By-Laws may be a facsimile,
engraved or printed, to the extent permitted by law. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.
Section 5.03. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct that a new certificate be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon delivery to the Board of Directors of an affidavit of
the owner or owners of such certificate, setting forth such allegation. The
Board of Directors may require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to give the Corporation a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of any such new certificate.
Section 5.04. Transfer of Stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by appropriate evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Within a reasonable time after the transfer of uncertificated stock, the
Corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law
of the State of Delaware. Subject to the provisions of the Certificate of
Incorporation and these By-Laws, the Board of Directors may prescribe such
additional rules and regulations as it may deem appropriate relating to the
issue, transfer and registration of shares of the Corporation.
Section 5.05. Record Date. In order to determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix, in advance, a record date, which record
date shall not precede the date on which the resolution fixing the record date
is adopted by the Board of Directors, and which shall not be more than sixty nor
less than ten days before the date of such meeting. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting, provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
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In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors.
In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
of the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
Section 5.06. Registered Stockholders. Prior to due surrender of a
certificate for registration of transfer, the Corporation may treat the
registered owner as the person exclusively entitled to receive dividends and
other distributions, to vote, to receive notice and otherwise to exercise all
the rights and powers of the owner of the shares represented by such
certificate, and the Corporation shall not be bound to recognize any equitable
or legal claim to or interest in such shares on the part of any other person,
whether or not the Corporation shall have notice of such claim or interests.
Whenever any transfer of shares shall be made for collateral security, and not
absolutely, it shall be so ex pressed in the entry of the transfer if, when the
certificates are presented to the Corporation for transfer or uncertificated
shares are requested to be transferred, both the transferor and transferee
request the Corporation to do so.
Section 5.07. Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars.
ARTICLE VI
INDEMNIFICATION
Section 6.01. Nature of Indemnity. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she
is or was or has agreed to become a director or officer of the Corporation, or
is or was serving or has agreed to serve at the request of the Corporation as a
director or officer, of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a party or
is threatened to be made a party to such an action, suit or proceeding by reason
of the fact that he or she is or was or has agreed to become an employee or
agent of the Corporation, or is or was serving or has agreed to serve at the
request of the Corporation as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her or on his or her behalf in
connection with such action, suit or proceeding and any appeal therefrom, if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or
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proceeding had no reasonable cause to believe his or her conduct was unlawful;
except that in the case of an action or suit by or in the right of the
Corporation to procure a judgment in its favor (1) such indemnification shall be
limited to expenses (including attorneys' fees) actually and reasonably incurred
by such person in the defense or settlement of such action or suit, and (2) no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Delaware Court of Chancery or such other court shall deem
proper. Notwithstanding the foregoing, but subject to Section 6.05 of these
By-Laws, the Corporation shall not be obligated to indemnify a director or
officer of the Corporation in respect of a Proceeding (or part thereof)
instituted by such director or officer, unless such Proceeding (or part thereof)
has been authorized by the Board of Directors.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
Section 6.02. Successful Defense. To the extent that a present or former
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Section 6.01 of these By-Laws or in defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection therewith.
Section 6.03. Determination That Indemnification Is Proper. Any
indemnification of a present or former director or officer of the Corporation
under Section 6.01 of these By-Laws (unless ordered by a court) shall be made by
the Corporation only upon a determination that indemnification of such person is
proper in the circumstances because such person has met the applicable standard
of conduct set forth in Section 6.01 of these By-Laws. Any indemnification of a
present or former employee or agent of the Corporation under Section 6.01 of
these By-Laws (unless ordered by a court) may be made by the Corporation upon a
determination that indemnification of the employee or agent is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth in Section 6.01 of these By-Laws. Any such determination shall be made,
with respect to a person who is a director or officer at the time of such
determination (1) by a majority vote of the Directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
Section 6.04. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a present director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the Corporation as authorized in this
Article. Such expenses (including attorneys' fees) incurred by former directors
and officers or other employees and agents may be so paid upon such terms and
conditions, if any, as the Corporation deems appropriate. The Corporation, or in
respect of a present director or officer the Board of Directors, may authorize
the Corporation's counsel to represent such
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present or former director, officer, employee or agent in any action, suit or
proceeding, whether or not the Corporation is a party to such action, suit or
proceeding.
Section 6.05. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director, officer, employee or agent of the Corporation
under Sections 6.01 and 6.02 of these By-Laws, or advance of costs, charges and
expenses to such person under Section 6.04 of these By-Laws, shall be made
promptly, and in any event within thirty days, upon the written request of such
person. If a determination by the Corporation that such person is entitled to
indemnification pursuant to this Article is required, and the Corporation fails
to respond within sixty days to a written request for indemnity, the Corporation
shall be deemed to have approved such request. If the Corporation denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within thirty days,
the right to indemnification or advances as granted by this Article shall be
enforceable by such person in any court of competent jurisdiction. Such person's
costs and expenses incurred in connection with successfully establishing his or
her right to indemnification, in whole or in part, in any such action shall also
be indemnified by the Corporation. It shall be a defense to any such action
(other than an action brought to enforce a claim for the advance of costs,
charges and expenses under Section 6.04 of these By-Laws where the required
undertaking, if any, has been received by or tendered to the Corporation) that
the claimant has not met the standard of conduct set forth in Section 6.01 of
these By-Laws, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or any committee thereof, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in
Section 6.01 of these By-Laws, nor the fact that there has been an actual
determination by the Corporation (including its Board of Directors or any
committee thereof, its independent legal counsel, and its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 6.06. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the Delaware Corporation Law are in effect and any repeal or
modification thereof shall not affect any right or obligation then existing with
respect to any state of facts then or previously existing or any action, suit or
proceeding previously or thereafter brought or threatened based in whole or in
part upon any such state of facts. Such a "contract right" may not be modified
retroactively without the consent of such director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Section 6.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her or on his or her behalf in any such
capacity, or arising out of his or her
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status as such, whether or not the Corporation would have the power to indemnify
him or her against such liability under the provisions of this Article, provided
that such insurance is available on acceptable terms, which determination shall
be made by a vote of a majority of the entire Board of Directors.
Section 6.08. Severability. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated and to the fullest
extent permitted by applicable law.
ARTICLE VII
OFFICES
Section 7.01. Registered Office. The registered office of the Corporation
in the State of Delaware shall be located at Corporation Trust Center, 0000
Xxxxxx Xxxxxx in the City of Wilmington, County of New Castle.
Section 7.02. Other Offices. The Corporation may maintain offices or
places of business at such other locations within or outside the State of
Delaware as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Dividends. Subject to any applicable provisions of law and
the Certificate of Incorporation, dividends upon the shares of the Corporation
may be declared by the Board of Directors at any regular or special meeting of
the Board of Directors and any such dividend may be paid in cash, property, or
shares of the Corporation's capital stock.
A member of the Board of Directors, or a member of any Committee designated
by the Board of Directors shall be fully protected in relying in good faith upon
the records of the Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of its officers or employees, or
Committees of the Board of Directors, or by any other person as to matters the
Director reasonably believes are within such other person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Corporation, as to the value and amount of the assets, liabilities and/or
net profits of the Corporation, or any other facts pertinent to the existence
and amount of surplus or other funds from which dividends might properly be
declared and paid.
Section 8.02. Reserves. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation or for such other purpose as the
Board of
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Directors shall think conducive to the interest of the Corporation, and the
Board of Directors may similarly modify or abolish any such reserve.
Section 8.03. Execution of Instruments. The President, any Vice President,
the Secretary or the Treasurer may enter into any contract or execute and
deliver any instrument in the name and on behalf of the Corporation. The Board
of Directors or the President may authorize any other officer or agent to enter
into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation. Any such authorization may be general or limited to
specific contracts or instruments.
Section 8.04. Corporate Indebtedness. No loan shall be contracted on
behalf of the Corporation, and no evidence of indebtedness shall be issued in
its name, unless authorized by the Board of Directors or the President. Such
authorization may be general or confined to specific instances. Loans so
authorized may be effected at any time for the Corporation from any bank, trust
company or other institution, or from any firm, corporation or individual. All
bonds, debentures, notes and other obligations or evidences of indebtedness of
the Corporation issued for such loans shall be made, executed and delivered as
the Board of Directors or the President shall authorize. When so authorized by
the Board of Directors or the President, any part of or all the properties,
including contract rights, assets, business or good will of the Corporation,
whether then owned or thereafter acquired, may be mortgaged, pledged,
hypothecated or conveyed or assigned in trust as security for the payment of
such bonds, debentures, notes and other obligations or evidences of indebtedness
of the Corporation, and of the interest thereon, by instruments executed and
delivered in the name of the Corporation.
Section 8.05. Deposits. Any funds of the Corporation may be deposited from
time to time in such banks, trust companies or other depositaries as may be
determined by the Board of Directors or the President, or by such officers or
agents as may be authorized by the Board of Directors or the President to make
such determination.
Section 8.06. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such agent or agents
of the Corporation, and in such manner, as the Board of Directors or the
President from time to time may determine.
Section 8.07. Sale, Transfer, etc. of Securities. To the extent authorized
by the Board of Directors or by the President, any Vice President, the Secretary
or the Treasurer or any other officers designated by the Board of Directors or
the President may sell, transfer, endorse, and assign any shares of stock, bonds
or other securities owned by or held in the name of the Corporation, and may
make, execute and deliver in the name of the Corporation, under its corporate
seal, any instruments that may be appropriate to effect any such sale, transfer,
endorsement or assignment.
Section 8.08. Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the President or any Vice President shall
have full power and authority on behalf of the Corporation to attend any meeting
of stockholders of any corporation in which the Corporation may hold stock, and
to act, vote (or execute proxies to vote) and exercise in person or by proxy all
other rights, powers and privileges incident to the ownership of such stock.
Such officers acting on behalf of the Corporation shall have full power and
authority to execute any instrument expressing consent to or dissent from any
action of any such corporation without a meeting. The Board of Directors may by
resolution from time to time confer such power and authority upon any other
person or persons.
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Section 8.09. Fiscal Year. The fiscal year of the Corporation shall
commence on the first day of January of each year (except for the Corporation's
first fiscal year which shall commence on the date of incorporation) and shall
terminate in each case on December 31.
Section 8.10. Seal. The seal of the Corporation shall be circular in form
and shall contain the name of the Corporation, the year of its incorporation and
the words "Corporate Seal" and "Delaware". The form of such seal shall be
subject to alteration by the Board of Directors. The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or reproduced, or may be used
in any other lawful manner.
Section 8.11. Books and Records; Inspection. Except to the extent
otherwise required by law, the books and records of the Corporation shall be
kept at such place or places within or outside the State of Delaware as may be
determined from time to time by the Board of Directors.
ARTICLE IX
CERTAIN TRANSACTIONS
Section 9.01. General. The provisions of this Article IX are in addition
to, and not in limitation of, the provisions of the Delaware General Corporation
Law and the provisions of the Certificate of Incorporation of the Corporation.
Any contract or business relation which does not comply with procedures set
forth in this Article IX shall not by reason thereof be deemed void or voidable
or to result in any breach of any fiduciary duty to, or duty of loyalty to, or
failure to act in good faith or in the best interests of, the Corporation, or to
result in the derivation of any improper personal benefit, but shall be governed
by the remaining provisions of the Certificate of Incorporation of the
Corporation, these Bylaws, the Delaware General Corporation Law and other
applicable law.
Section 9.02. Affiliated Party Transactions. No contract, agreement,
arrangement or transaction between AT&T or its affiliates (other than the
Corporation and any controlled affiliate thereof) (an "AT&T Entity") and the
Corporation, including amendments, modifications or terminations thereof, shall
be void or voidable solely because any directors or officers of an AT&T Entity
are present at or participate in the meeting of the Board of Directors or
committee thereof which authorizes such contract, agreement, arrangement,
transaction, amendment, modification or termination (each a "Transaction") or
solely because his or their votes are counted for such purpose, provided that:
(a) the material facts as to the Transaction are disclosed or known to
the Board of Directors of the Corporation or any relevant committee
thereof, the Board of Directors or such committee approves it and such
approval includes a majority of the Disinterested Directors of the
Corporation;
(b) the Transaction is approved by a majority of the outstanding
shares of the Corporation entitled to vote thereon not owned by an AT&T
Entity, voting together as a single class;
(c) the Transaction is effected in accordance with arrangements,
standards or guidelines that were approved as set forth in (a) or (b)
above; or
(d) the transaction is fair to the Corporation at the time it is
entered into.
Directors of the Corporation who are not Disinterested Directors may be counted
in determining the presence of a quorum at a meeting of the Board of Directors
or of a committee thereof that authorizes or approves any such Transaction or
any such guidelines. Shares of the Corporation owned
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by an AT&T Entity may be counted in determining the presence of a quorum at a
meeting of stockholders that authorizes or approves any such Transaction or any
such guidelines. No vote cast or other action taken by any person who is an
officer, director or other representative of AT&T, which vote is cast or action
is taken by such person in his capacity as a director of the Corporation, shall
constitute an action of, or the exercise of a right by, or a consent of, AT&T
for the purpose of any such Transaction.
ARTICLE X
AMENDMENT OF BY-LAWS
Section 10.01. Amendment. These By-Laws may be amended, altered or
repealed:
(a) by resolution adopted by a majority of the entire Board of
Directors at any special or regular meeting of the Board if, in the case of
such special meeting only, notice of such amendment, alteration or repeal
is contained in the notice or waiver of notice of such meeting (provided
that any such resolution amending Section 2.02 or Article IX of these
By-laws shall have been approved by (i) all of the Disinterested Directors,
if the total number of Disinterested Directors then in office shall be four
or less, or (ii) not less than 80% of the Disinterested Directors, if the
total number of Disinterested Directors then in office shall be more than
four); or
(b) at any regular or special meeting of the stockholders if, in the
case of such special meeting only, notice of such amendment, alteration or
repeal is contained in the notice or waiver of notice of such meeting
(provided that any such resolution amending Section 2.02 or Article IX of
these By-laws shall have been approved by a majority of the votes attaching
to the outstanding shares of Class A Common Stock, voting as a class).
ARTICLE XI
CONSTRUCTION
Section 11.01. Construction. In the event of any conflict between the
provisions of these By-Laws as in effect from time to time and the provisions of
the Certificate of Incorporation of the Corporation as in effect from time to
time, the provisions of such Certificate of Incorporation shall be controlling.
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EXHIBIT D TO THE
AGREEMENT AND PLAN OF MERGER
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EXHIBIT D
SERVICE XXXX LICENSE AGREEMENT
SERVICE XXXX LICENSE AGREEMENT dated as of , by and between
AT&T CORP., a New York corporation ("Licensor"), and KIRI INC., a Delaware
corporation ("Licensee").
WHEREAS, Licensor has, for many years, used the service marks AT&T and AT&T
with a fanciful globe design, as identified in Schedule A attached hereto (the
"Licensed Master Service Marks"), all in connection with telecommunications
services; and
WHEREAS, Licensee wishes to use the Licensed Master Service Marks, and the
Licensed Trade Dress in the Licensed Territory as defined herein in connection
with the marketing and provision of certain services; and
WHEREAS, Licensee also wishes to use the service xxxx "It's all within your
reach" and certain foreign equivalents thereof that are owned by Licensor and
may wish to use certain other service marks which are or will be owned by
Licensor in connection with the Licensed Services; and
WHEREAS, Licensor is willing to license and allow Licensee to use the
Licensed Marks under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions.
"Affiliate": Of a party shall mean an entity which is under common
control with, controls, or is controlled by, such party.
"Bankruptcy": With respect to a Person shall mean the filing by such
Person of a voluntary petition, or by a third party with respect to such
Person, requesting liquidation, dissolution, reorganization, suspension,
rearrangement or re-adjustment, in any form, of its debts under the laws of
the United States (or corresponding provisions of future laws), the laws of
the Licensed Territory, or any other bankruptcy or insolvency law, or such
Person's consenting to or acquiescing in any such petition, the making by
such Person of any assignment for the benefit of its creditors or the
admission by such Person in writing of its inability to pay its debts as
they mature, an application for the appointment of a receiver for the
assets of such Person, or an involuntary petition seeking liquidation,
dissolution, reorganization, suspension, rearrangement or readjustment of
its debts or similar relief under any bankruptcy or insolvency law.
"Claim": As defined in Section 20.1 hereof.
"Claimant": As defined in Section 20.2 hereof.
"Communications Director": The individual described in Section 8.5.
"Corporate Brand": As defined in Section 5.3(d) hereof.
"Corporate Brand Efforts": As defined in Section 5.3(d) hereof.
"Effective Date": As defined in Section 23.12 hereof.
"Exclusive Services": As defined in Schedule F hereto.
"Final Cure Period": As defined in Section 9 hereof.
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EXHIBIT D
"Graphic Standards Manual": As defined in Schedule D hereto.
"Gross Service Revenue": Revenues received by Licensee and its
sublicensees for the Licensed Services, before any deductions or offsets.
"Including": The terms "including" and "such as" are illustrative and
not limitative.
"Initial Cure Period": As defined in Section 9 hereof.
"Licensed Ancillary Service Marks": Service marks that may be
developed for each of the Licensed Services by Licensor or by Licensee that
become Licensed Ancillary Service Marks pursuant to Section 2.2, and any
additional marks that are added to this Agreement pursuant to Section 4.3
and which shall be owned by Licensor and licensed to Licensee pursuant to
this Agreement (and as such service marks may be modified or supplemented
as contemplated by Section 4.2 or Section 4.3), as set forth in Schedule
C1, as it may be amended from time to time. Registrations and applications
covering the Licensed Ancillary Service Marks in the Licensed Territory
include those set forth in Schedule C2 of this Agreement. The listing of
goods or services in the specification of any of these registrations or
applications which are outside the scope of services licensed under this
Agreement shall not be construed as inclusion of such goods or services in
the license granted by this Agreement. It is understood that the only
services licensed under this Agreement are as expressly set forth in this
Agreement.
"Licensed Marks": Collectively, the Licensed Master Service Marks,
Licensed Ancillary Service Marks, and Licensed Trade Dress.
"Licensed Master Service Marks": The service marks AT&T and AT&T with
a fanciful globe design as identified in Schedule A (and as such service
marks may be modified or supplemented as contemplated by Section 4.2 or
Section 4.3). Registrations and applications covering the Licensed Master
Service Marks in the Licensed Territory are set forth in Schedule B of this
Agreement, as it may be amended from time to time. The listing of goods or
services in the specification of any of these registrations or applications
which are outside the scope of services licensed under this Agreement shall
not be construed as inclusion of such goods or services in the license
granted by this Agreement. It is understood that the only services licensed
under this Agreement are as expressly set forth in this Agreement.
"Licensed Services": The services described in Schedule F attached
hereto.
"Licensed Territory": Antigua and Barbuda, Argentina, Bahamas,
Barbados, Bolivia, Brazil, Chile, Colombia, Dominica, Dominican Republic,
Ecuador, Grenada, Guyana, Haiti, Jamaica, Panama, Paraguay, Peru, Saint
Lucia, Saint Xxxxxxx and the Grenadines, Suriname, St. Kitts and Nevis,
Trinidad and Tobago and Uruguay.
"Licensed Trade Dress": The general image, appearance or dress of the
marketing of services performed under the Licensed Master Service Marks and
the Licensed Ancillary Service Marks consisting of colors, designs,
configurations, publication formats, lettering and the like as set forth in
Schedule D attached hereto, and such other trade dress and get-up as may be
added thereto or substituted therefor in accordance with this Agreement.
"Licensee": As defined in the first paragraph hereof.
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EXHIBIT D
"Licensee Brand Efforts": Marketing communications activities
developed in support of specific Licensee products and services, such as
advertising, direct mail and promotions for specific Licensed Services or
rates, or for any activity not specified in this Agreement.
"Licensor": As defined in the first paragraph hereof.
"Managed Network Services" means the provision of (a) service to a
customer consisting solely of the provisioning and maintenance of the
logical and physical elements of the customer's wide area communications
network, and, to the extent relating to a customer's wide area
communications network, directly related planning, design, installation,
maintenance and ongoing life cycle support functions, and (b) equipment on
the customer's premises at the interface between a wide area communications
network and the remainder of the customer's networking environment insofar
as the equipment so provided facilitates (i) the maintenance of the
customer's wide area communication services, (ii) the recording of
performance data with respect to the customer's wide area communications
services, (iii) the provisioning of new wide area communications services
to the customer or changes in the parameters of the wide area
communications services provided to the customer, or (iv) the integration
of multiple wide area communications services, but excluding in the case of
clause (a) or (b) any such service or equipment that materially extends
services beyond the interface described above further into the customer's
non-wide area communications network.
"Xxxx": Any name, xxxxx, xxxx, trademark, service xxxx, trade dress,
trade name, business name or other indicia of origin.
"Marketing Materials": Any and all materials, whether written, audio,
visual or in any other medium, used by Licensee to market, advertise or
otherwise offer or provide any Licensed Service under the Licensed Marks.
"Marketing Specifications": Licensor's standards and guidelines
relating to the permitted use, depiction and graphic display of the
Licensed Marks that are contained in Schedule E hereto, and those standards
and guidelines relating to such use, depiction and graphic display that
Licensor shall provide to Licensee from time to time.
"Material": As defined in Section 21 hereof.
"Merger Agreement": The Agreement and Plan of Merger among AT&T Corp.,
Kiri Inc., Frantis, Inc. and FirstCom Corporation, dated as of November 1,
1999.
"Minimum Guarantee": As defined in Section 5.1(b) hereof.
"Monitoring Services": As defined in Section 5.3(a) hereof.
"New York Courts": As defined in Section 19 hereof.
"Nonexclusive Services": As defined in Schedule F hereto.
"Payment Period": Each period of six (6) full calendar months or
portion thereof during the term of this Agreement, commencing on the first
day of the first month after the Effective Date.
"Payments": As defined in Section 22.1 hereof.
"Person": Any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation with or
without share capital, unincorporated association,
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EXHIBIT D
trust, trustee, executor, administrator or other legal personal
representative, regulatory body or agency, government or governmental
agency, authority or entity however designed or constituted.
"Proprietary Information": Any information that is so designated by
the party disclosing it or deemed to be such under this Agreement.
"Quality Control Representatives": Representatives of Licensor
appointed in accordance with Section 8 hereof.
"Registered User Application": An application by the parties to the
appropriate Regulatory Authority in the Licensed Territory where an owner
of a Xxxx (i) licenses a licensee to use the registered Xxxx, under
conditions in which the nature and quality of the products and/or services
offered under the Xxxx are required to be subject to quality control by the
owner, in accordance with local law and practice for acceptable trademark
licensing to ensure the validity and enforceability of the Xxxx licensed
and (ii) allows the licensee to be recorded by that administrative agency
as a permitted user of the Licensed Marks.
"Regulatory Approval": Any governmental or regulatory approval,
consent or authorization or waiver required to be obtained from or any
filing required to be made with or notice required to be given to any
governmental or Regulatory Authority, commission, tribunal, ministry,
official or agency.
"Regulatory Authority": Any applicable regulatory, administrative or
governmental entity, authority, commission, tribunal, official or agency,
including without limitation the Export Licensing Office of the U.S.
Department of Commerce.
"Request": As defined in Section 20.2 hereof.
"Respondent": As defined in Section 20.2 hereof.
"Second Cure Period": As defined in Section 9.2 hereof.
"Service Specifications": The standards of quality relating to
Marketing Specifications, technical performance, customer service, and
customer satisfaction, including technical network performance, marketing,
design, and use of Marketing Materials, advertising and promotion that will
be set forth in Schedule E to this Agreement (and as they may be amended,
modified or supplemented from time to time in accordance with this
Agreement).
"Significant Breach by Licensee": As defined in Section 12 hereof.
"Subsidiary": With respect to a party, any Person in which the party
directly owns more than 50% of the voting rights.
"Successor": With respect to any party, any successor, monitor,
coordinator, transferee or assignee, including without limitation any
receiver, debtor in possession, trustee, conservator or similar Person with
respect to such party or such party's assets.
"Technical Information": Information provided by either party under
this Agreement, whether Proprietary Information or otherwise.
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2. Scope of License
2.1 Grant of License.
(a) Subject to the terms and conditions of this Agreement, Licensor hereby
grants to Licensee a non-exclusive, non-transferable, non-sublicensable (except
as provided herein) license to use the Licensed Marks solely in connection with
the marketing, advertising, promotion and provision of the Licensed Services in
the Licensed Territory. Licensee may use the Licensed Marks in marketing,
advertising and promotion outside the Licensed Territory so long as such
marketing, advertising and promotion relates to the provision of Licensed
Services in the Licensed Territory. The foregoing notwithstanding, the rights
granted herein do not include the right to use the Licensed Marks in connection
with the marketing, advertising, promotion or provision of any services through
the global venture between Licensor and British Telecommunications plc, which
shall be covered by separate agreements with such global venture.
Licensor and its other Affiliates retain all rights to use the Licensed
Marks in the Licensed Territory. The Licensed Marks may not be used by Licensee
in connection with any service except as expressly set forth in this Agreement.
Licensee shall not use the Licensed Marks, or any other Xxxx of Licensor, or any
confusingly similar Marks in connection with any service or product not within
the scope of this Agreement without Licensor's express written consent.
Licensee may sublicense the rights granted in this Section 2.1(a) to its
Subsidiaries in connection with their operations in the Licensed Territory,
provided that:
(i) such Subsidiaries meet and continue to meet the criteria set forth
in Schedule G of this Agreement;
(ii) such Subsidiaries enter a written agreement with Licensee in
which such Subsidiaries agree to assume all of the same obligations as
Licensee (except for the obligation to make payments pursuant to Section
5.1, as such payments will be made by Licensee) and which is otherwise
consistent with this Agreement; and
(iii) Licensee notifies Licensor within ten (10) days each time a
sublicense is granted and furnishes Licensor with a copy of the relevant
sublicense agreement.
(b) Subject to the terms and conditions of this Agreement and provided that
at least half of the Licensed Services offered by Licensee (namely, those
grossing the highest revenue) are in full compliance with the Service
Specifications furnished by Licensor, Licensee shall have a non-exclusive,
non-sublicensable right (except as otherwise provided herein) to use "AT&T" as
part of the corporate name and trade name set forth in Schedule H of this
Agreement for the remainder of the term of this Agreement. By way of example, if
Licensee offers six (6) Licensed Services, the three (3) Licensed Services
grossing the highest revenue for Licensee would have to be compliant with the
Service Specifications in order to use "AT&T" as part of the corporate name and
trade name. The foregoing notwithstanding, if all of the Licensed Services
contemplated by this Agreement will be provided through Subsidiaries of the
Licensee and not by the Licensee itself, then Licensee may, subject to the terms
and conditions of this Agreement, use "AT&T" as part of the corporate and trade
name set forth in Schedule H for the entire term of this Agreement. In the event
that Licensee wishes to have one or more of its Subsidiaries which has been
granted a sublicense to use the Licensed Marks pursuant to Section 2.1(a) use
"AT&T" as part of its corporate and trade name, Licensee may request Licensor's
written approval to sublicense such use, and Licensee shall not unreasonably
withhold such written approval, provided that such Subsidiaries demonstrate to
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Licensor's satisfaction that at least half of the Licensed Services (namely,
those grossing the highest revenues) offered by such Subsidiaries are in full
compliance with the applicable Service Specifications and provided that such use
is otherwise subject to the terms and conditions and conditions of this
Agreement.
2.2 Use of Licensed Master Service Marks and Development and Use of
Licensed Ancillary Service Marks.
(a) Subject to the terms and conditions of this Agreement, the Licensed
Marks and Licensed Trade Dress shall be used exclusively in connection with all
Licensed Services.
(b) Licensee may use ancillary service marks owned by Licensor with
Licensor's express written consent for one or more service plan names or feature
names. Licensee may develop and use with Licensor's prior written approval
ancillary service marks with respect to one or more service plan names or
feature names, which approval will not be unreasonably withheld. Such ancillary
service marks developed by Licensee and approved by Licensor shall become
Licensed Ancillary Service Marks. Licensee shall assign to Licensor all rights
in and to any such ancillary service marks developed by Licensee that shall
become Licensed Ancillary Service Marks, including all rights in any application
to register or registration of the Licensed Ancillary Service Marks. Upon the
termination of this Agreement, including termination under any renewal and any
transition period provided under Section 12.3, Licensor shall assign to
Licensee, without further consideration, all of its rights, title and interest
in and to such Licensed Ancillary Service Marks developed by Licensee, including
the goodwill attached thereto, in the Licensed Territory. With the exception of
ancillary service marks developed by Licensee and assigned to Licensor as
provided above, Licensor shall be and remain the owner of all Licensed Ancillary
Service Marks, and any foreign language equivalents thereof, that are not
developed by Licensee.
3. Agreement Personal. In recognition of the unique nature of the
relationship between Licensor and Licensee, the parties agree that the rights,
obligations and benefits of this Agreement shall be personal to Licensee and its
authorized sublicensees, and, Licensor shall not be required to accept
performance from or render performance to an entity other than Licensee and its
authorized sublicensees. In the event of the Bankruptcy of the Licensee or its
sublicensees, this Agreement and any sublicense granted pursuant to this
Agreement may not be assigned or assumed by the Licensee, its sublicensees, or
any Successor, and may be terminated by Licensor pursuant to Section 12.2(c)
hereof, and the Licensor shall be excused from rendering performance to or
accepting performance from Licensee, its sublicensees or any Successor.
4. Other Marks
4.1 No Other Xxxx To Be Used. Licensee shall not use any other Xxxx or
create by use, adoption or practice any alternate Xxxx or ancillary Xxxx in
connection with the Exclusive Services, without Licensor's express written
consent. In the marketing of the Licensed Services, any use or display by
Licensee of its corporate, business, trade name, or trading style shall adhere
to the Marketing Specifications of the Service Specifications or shall be with
Licensor's express written consent. So long as Licensee is not providing a
Nonexclusive Service in a particular country in the Licensed Territory using the
Licensed Marks, Licensee may, after consultation with Licensor, use Marks that
are not Licensed Marks on such Nonexclusive Service in such country, provided
that Licensee agrees to conduct reasonable searches to determine the
availability of such Marks prior to commencing use. In the event that Licensee
commences providing a Nonexclusive Service using the Licensed Marks in a
particular country in the Licensed Territory, Licensee shall immediately cease
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EXHIBIT D
providing such Nonexclusive Service using other Marks in such country unless
Licensor consents to the continued use of such other Marks.
4.2 Modification of Licensed Service Marks. Modifications to or
replacements of the Licensed Ancillary Service Marks may be initiated by
Licensee, with the concurrence of Licensor as provided in Section 2.2(b), as to
any modification or replacement of the Licensed Ancillary Service Marks as they
are used by Licensee with respect to the Licensed Services.
If Licensor modifies or replaces any of the Licensed Master Service Marks,
Licensed Ancillary Service Marks, or the Licensed Trade Dress as used by
Licensor, Licensee shall agree with Licensor on a program to cease, over a
reasonable period of time, not to exceed one hundred-twenty (120) days, use of
the previous Licensed Xxxx(s) and to introduce and adopt the modified or
replacement Licensed Xxxx(s), at Licensee's cost, but without undue expense to
Licensee or disruption to Licensee's business or marketing programs, and
Licensor shall reimburse Licensee from the Brand Fund Fee one-half of such
reasonable costs incurred by Licensee. In either case, such modified or replaced
Licensed Master Service Xxxx(s), Licensed Ancillary Service Xxxx(s), or the
Licensed Trade Dress shall be considered the Licensed Xxxx(s) contemplated by
this Agreement.
If Licensor modifies a Licensed Ancillary Service Xxxx for certain uses
outside the Licensed Territory but does not terminate all usage of the
unmodified version, Licensee may choose to adopt the modified version but is not
obliged to do so.
4.3 Use of Additional Marks at Licensor's Request. Licensor may, from time
to time, in consultation with Licensee, request Licensee to adopt and use in
addition to the Licensed Master Service Marks, Licensed Ancillary Service Marks
and Licensed Trade Dress, any Xxxx or Marks used or to be used by Licensor,
including any Marks owned by a third party that Licensor has the right to use
and sublicense, in connection with the marketing and provision of Licensed
Services. Such additional Xxxx or Marks shall be licensed hereunder on the same
terms as the Licensed Marks. All costs associated with adopting and using such
additional Xxxx or Marks shall be borne by Licensor, and shall be paid out of
the Brand Fund Fees.
5. Annual Payments.
5.1 Brand Fund Fee. In consideration of the license granted in this
Agreement and for other good and valuable consideration including Licensor brand
building activities in the Licensed Territory, during the term of this Agreement
with respect to each Payment Period, Licensee shall pay Licensor a Brand Fund
Fee, as provided in Section 5.3, which shall be the greater of:
(a)(i) in Years 1 and 2 of this Agreement, four percent (4%) of Gross
Service Revenues from the Licensed Services;
(ii) in Year 3 of this Agreement, three and one-quarter percent
(3.25%) of Gross Service Revenues from Licensed Services;
(iii) in Years 4 and 5, and for each year during the renewal term, two
and one-half percent (2.5%) of Gross Service Revenues from Licensed
Services; and
(b) two million five hundred thousand dollars ($2,500,000) (the
"Minimum Guarantee").
5.2 Accounting. With respect to each Payment Period as defined herein,
Licensee shall furnish to Licensor a statement, in form reasonably acceptable to
Licensor, certified by a responsible officer of Licensee, showing all Gross
Service Revenues during such Payment Period, and the Brand Fund
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EXHIBIT D
Fee as provided in Section 5.1. payable thereon. During the term of this
Agreement, such statement shall be furnished to Licensor not later than
forty-five (45) days after the end of each Payment Period.
5.3 Payment. With respect to each Payment Period as defined herein,
Licensee shall, irrespective of its own business and accounting method, pay
Licensor or Licensor's designee the Brand Fund Fee as provided in Section 5.1,
forty-five (45) days after the end of each Payment Period. The Brand Fund Fee
will be paid in U.S. currency. Licensee agrees that all of the Brand Fund Fees
received for each Payment Period will be designated and spent by Licensor, with
active participation of Licensee's CEO, on the following activities in support
of Licensor's brand strategy and to ensure proper positioning of the Licensee:
(a) the monitoring of the brand, including the development and
implementation of the Service Specifications set forth in Schedule E and
the requirements set forth in Schedule D of this Agreement, customer
satisfaction surveys, market research, and the management of corporate
identity ("Monitoring Services"). Except as provided in the last sentence
of this Section 5.3(a), no more than three million dollars ($3,000,000) of
the Brand Fund Fees shall be used each year of this Agreement for
Monitoring Services. Monitoring Services shall be subject to the following
conditions: (i) payments for Monitoring Services shall only be made to
Persons that are not Affiliates of Licensee or Licensor, (ii) Monitoring
Services shall be obtained on a cost effective basis using a reasonably
competitive process to the extent practicable and (iii) Monitoring Services
shall be implemented through the Communications Director and his/her team.
Following consultation between Licensor and Licensee's CEO, Brand Fund Fees
in excess of $3,000,000 per year may be designated and spent by Licensor
for Monitoring Services, upon the submission of reasonable supporting
documentation and subject to compliance with the conditions set forth above
in the immediately preceding sentence.
(b) the manpower, including salary and benefits, required to implement
the responsibilities of the Communications Director and his/her team of
five (5) country managers across all of Licensee's communications, provided
that such country managers shall be paid at competitive rates giving effect
to the business conditions in each country and shall devote, in a manner
consistent with the terms of this Agreement, all of their efforts to
support Licensee's business, except that Licensor shall have the right,
with the approval of Licensee's CEO, which shall not be unreasonably
withheld, to use such persons from time to time to support other Licensor
activities in the Latin American region;
(c) any additional manpower, including salary and benefits, based on
the needs of Licensor and Licensee's business and with the agreement of
Licensee's CEO, required to implement the responsibilities of the
Communications Director and his/her team;
(d) following consultation with Licensee's CEO, the implementation of
activities in support of the Licensed Master Service Marks ("the Corporate
Brand") and the position of the RV, as follows: corporate events, media
placement, creativity/production; brand agency costs, sponsorships/events,
and media relations ("Corporate Brand Efforts") and
(e) other items specified in this Agreement.
The foregoing obligation shall not apply to Brand Fund Fees received for
the last Payment Period of the renewal term (unless the parties enter a new
service xxxx license agreement with regard to the Licensed Marks), and shall
immediately cease if this Agreement terminates for any other reason.
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EXHIBIT D
5.4 Audit of Licensee's Records. Licensee and any sublicensees shall keep
accurate books and records of all Gross Service Revenues, payments and Brand
Fund Fees, together with such other data as is necessary and material to
determine accurately the amounts payable hereunder. Licensor and Licensor's
designee shall be entitled to inspect, during normal business hours, the books
and records of Licensee and any sublicensees to ensure the proper reporting of
Gross Service Revenues, payments and Brand Fund Fees and Licensee and any
sublicensee's compliance with the terms and conditions of this Agreement. If
such inspection discloses no deficit or a cumulative deficit over the term of
this Agreement through the last Payment Period ending before the date of the
inspection of less than five percent (5%) from the statements provided under
Section 5.2, the cost of such inspection shall be borne by Licensor. If any such
cumulative deficit is five percent (5%) or greater, the cost of such inspection
shall be borne by Licensee or the appropriate sublicensee. Any payments due
under this Section shall be made in accordance with Section 22 hereof.
5.5 Cure or Termination. If Licensee is in default of any payment or fee
due hereunder, Licensee shall have thirty (30) days after receipt of written
notice of such default to it by Licensor to cure said default, failing which
this Agreement shall be subject to termination by Licensor exercisable thirty
(30) days after delivery of written notice to Licensee. If Licensee is in
default two (2) or more times in any two (2) year period, the Licensor shall
have the right to terminate this Agreement immediately by delivery of written
notice to Licensee by Licensor.
6. Brand Support Functions. Upon mutual agreement, Licensor and Licensee
may enter into a separate agreement, whereby Licensee may procure from Licensor
and Licensor would provide to Licensee certain marketing, promotion and sales
support functions in connection with the Licensed Services.
7. Retention of Rights. All existing goodwill in the Licensed Marks inures
to the sole benefit of the Licensor. Licensee's use of the Licensed Marks and
any and all goodwill that derives from such use, shall, except as provided in
Section 2.2(b), inure to the sole benefit of the Licensor. Except as otherwise
expressly provided in this Agreement, Licensor shall retain all rights in and to
the Licensed Marks, including all rights of ownership in and to the Licensed
Marks and the right to license others to use the Licensed Marks for any product
or service in the Licensed Territory and the rest of the Universe. Licensee
shall execute all documents required to effect any transfer of rights to
Licensor.
8. Quality Control.
8.1 General. Licensee acknowledges that the Licensed Services covered by
this Agreement must be of sufficiently high quality as to provide maximum
enhancement to and protection of the Licensed Marks and the goodwill they
symbolize. Licensee further acknowledges that the maintenance of high quality
services is of the essence of this Agreement and that it will utilize only
Marketing Materials which do not disparage or place in disrepute Licensor, its
businesses or its business reputation, or adversely affect or detract from
Licensor's goodwill.
8.2 Service Specifications. Licensee shall use the Licensed Marks only in
accordance with, and in connection with, the marketing and provision of Licensed
Services that meet the Service Specifications. The Service Specifications shall
consist of technical performance, customer service, customer satisfaction and
Marketing Specifications, shall be set forth in writing by Licensor and become
Schedule E to this Agreement, and shall be defined further as the Licensed
Services are developed for introduction and may evolve to meet market and other
needs. The Service Specifications are deemed to be Proprietary Information under
Section 21 hereof. Licensee shall not commence or continue to offer any Licensed
Service under the Licensed Marks unless it meets each of the relevant Service
Specifications. The initial definition of the Service Specifications will be
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determined solely by Licensor, following consultation with Licensee, and shall
be provided to Licensee for the countries of Brazil, Chile, Colombia and Peru
within three (3) months of the Effective Date of this Agreement, and for any
other country or jurisdiction in the Licensed Territory, within three (3) months
of written notice to Licensor that Licensee intends to begin offering the
Licensed Services in such country or jurisdiction. Licensee shall use its
commercially reasonable best efforts to become fully compliant with the relevant
Service Specifications within six (6) months after the delivery of such Service
Specifications by Licensor to Licensee.
8.3 Changes to Service Specifications.
(a) Except with respect to Marketing Specifications, the Service
Specifications may be amended, modified or supplemented from time to time
by Licensor, following consultation with Licensee. Following any such
amendment, modification or supplement to the Service Specifications,
Licensee shall within a reasonable time determined in the reasonable
judgment of Licensor following consultation with Licensee adhere to such
amendment, modification or supplement.
(b) The Marketing Specifications may be amended, modified or
supplemented from time to time by Licensor in its sole discretion. Within
sixty (60) days of Licensor's request to amend, modify, or supplement the
Marketing Specifications, Licensee shall adhere to such amendment,
modification or supplement.
8.4 Quality Service Reviews. Right of Inspection. Licensor shall have the
right to designate from time to time one or more Quality Control
Representatives, who shall have the right at any time upon fifteen (15) days
prior notice to conduct during Licensee's regular business hours an inspection,
test, survey and review of Licensee's facilities and otherwise to determine
compliance with the applicable Service Specifications. Licensee agrees to
furnish to the Quality Control Representatives (i) samples or simulations of
Licensed Services and Marketing Materials that are marketed or provided under
the Licensed Marks as Licensor may request from time to time, for inspections,
surveys, tests and reviews to assure conformance of the Licensed Services and
the Marketing Materials with the applicable Service Specifications and (ii) all
performance data in its control relating to the conformance of such Licensed
Services with the applicable Service Specifications. Licensor may independently
conduct continuous customer satisfaction surveys to determine if Licensee is
meeting the Service Specifications. Any information obtained by either party or
disclosed by one party to the other party pursuant hereto shall be deemed to be
Proprietary Information of the party obtaining the information or disclosing the
information pursuant to Section 21 hereof. If Licensee has actual knowledge that
it is not complying with any Service Specification it shall notify Licensor and
the provisions of Section 9 shall apply to such noncompliance.
8.5 Communications Director. As set forth in Section 5.3(b) and (c), a
Communications Director and at least five (5) persons reporting to the
Communications Director shall be employed by Licensor at Licensor's sole cost
and expense from the Brand Fund Fee. The Communications Director shall have
several responsibilities relating to Licensee's use of the Licensed Marks, which
shall include: (i) brand management, (ii) marketing communications, (iii)
advertising and direct marketing, (iv) public relations, and (v) the monitoring
of compliance with Service Specifications. The Communications Director shall (i)
review and approve, subject to the concurrence of the Licensor's Vice President
of Communications for Latin America or other Licensor-designated representative,
all Licensee-produced Marketing Materials to ensure adherence to Licensor's
brand positioning, policies and values and shall receive directions regarding
brand position, brand strategy, brand values and implementation parameters from
Licensor's Vice-President of Communications for
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Latin America or other Licensor-designated representative; (ii) ensure
coordination and alignment of Licensee's and Licensor's brand activities,
including brand alignment of all of Licensee's corporate communications,
including advertising, sponsorship/events, and identity; (iii) provide feedback
to Licensee on reports required in the Service Specifications and reporting
Licensee's performance with regard to Service Specifications to Licensor, (iv)
planning and execution of public relations and media relations programs as
further described herein, (v) planning and execution of marketing communications
programs as further described herein, and (vi) manage, along with Licensor's
Vice President of Communications for Latin America or other Licensor-designated
representative, the advertising, direct marketing and public relations brand
agencies used by Licensee. All activities relating to the Corporate Brand
Efforts that are funded by the Brand Fund Fee shall be planned and implemented
in the Latin American region by the Licensor's Latin America Communications
Group with the participation of Licensee's CEO and the Communications Director.
The parties agree that all communications efforts, whether Corporate Brand
Efforts or Licensee Brand Efforts, shall be aligned to Licensor's brand
positioning and strategy, but their implementation shall ensure relevancy to the
markets to which they will be targeted. The Communications Director shall also
attend all Marketing Task Force or similar meetings of Licensor and Licensee,
and will attend relevant marketing and strategy meetings of both Licensor and
Licensee. The Communications Director will work closely with Licensee's CEO and
his/her senior management team and the Licensor's Vice President of
Communications for Latin America in coordinating the overall alignment of
Licensee's and Licensor's brand building activities in the Licensed Territory.
Specifically, Licensee's CEO and his/her senior management team shall provide
the Communications Director with the Licensee's business direction, strategies
and plans for the Communications Director's use in the planning and execution of
marketing communications, public relations and media relations programs which
support Licensee's business goals. Communications programs developed for
Licensee Brand Efforts shall be approved by Licensee's senior management team.
Public relations and media relations programs developed for Licensee Brand
Efforts shall be approved by Licensee's CEO. Licensor and Licensee shall jointly
evaluate the performance of the Communications Director, and Licensor's Vice
President of Communications for Latin America or other Licensor-designated
representative shall provide performance reviews to the Communications Director.
After consultation with Licensee, Licensor will have the sole right to replace
the Communications Director as well as any person reporting to the
Communications Director who was designated by Licensor. Licensee's CEO shall
contact Licensor's Vice President for Latin America regarding problems or
concerns which may arise from time to time with regard to the Communications
Director and his/her team, and Licensor's Vice President for Latin America shall
consult with Licensee's CEO regarding the appropriate corrective measures to be
taken. Funding for Corporate Brand Efforts in Latin America will be defined and
managed by Licensor with the active participation of Licensor's Communications
Director and Licensee's CEO. Licensee shall use brand agencies designated by
Licensor provided that their cost, service and quality are competitive with
local first class international agencies operating in Latin America. The
Licensor's Vice President of Communications for Latin America or other
Licensor-designated representative shall oversee the performance of and shall
have responsibility for employing any corrective measures required with regard
to the brand agencies, but Licensee's CEO and his/her senior management team
shall provide input to Licensor in connection with the evaluation of the brand
agencies. In the event that one or more of the brand agencies designated by
Licensor do not meet or continue to meet relevant cost, service and quality
criteria after corrective measures are implemented, Licensor's Vice President of
Communications for Latin America or other Licensor-designated representative,
with Licensee CEO's active participation, shall select alternative agencies.
Licensee's CEO and his/her senior management team shall communicate directly
with the Communications Director to enable the
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effective performance of his/her responsibilities and management of issues
related to the Licensed Marks.
8.6 Costs. Each party shall bear its own costs associated with, and all
risk of loss and damage resulting from, all inspections, surveys, tests and
reviews under this Section. Except as otherwise agreed herein, Licensee shall
bear the costs for marketing communications, public relations and local
advertising; while Licensor shall bear the cost of regional advertising in Latin
America from the Brand Fund Fee.
8.7 Sponsorship. Licensee shall not use the Licensed Marks to sponsor,
endorse, or claim affiliation with any event, meeting, charitable endeavor or
any other undertaking without the express written permission of Licensor. Any
breach of this provision shall be deemed a Significant Breach by Licensee.
9. Remedies for Noncompliance with Service Specifications.
9.1 Initial Cure Period. If Licensor becomes aware that Licensee is not
complying with any Service Specifications, or otherwise is in breach as defined
by Sections 12.2(d) or (e), Licensor shall notify Licensee in writing, setting
forth, in reasonable detail, a written description of the noncompliance and any
suggestions for curing such noncompliance. Licensee shall have sixty (60) days
from receipt of the description of noncompliance to correct such noncompliance,
in the case of all Service Specifications, except those Service Specifications
relating to Marketing Specifications (an "Initial Cure Period"). In the case of
Licensee's noncompliance with respect to Service Specifications relating to
Marketing Materials or Marketing Specifications, or where the Licensee otherwise
is in breach as defined by Sections 12.2(a) or (f), Licensee shall immediately
cease using any and all Marketing Materials which are in noncompliance with
Service Specifications relating to Marketing Materials or Marketing
Specifications, cease any other activity in noncompliance with these Service
Specifications, and withdraw all Marketing Material in noncompliance with the
Marketing Specifications. If there is any other noncompliance with respect to
Service Specifications or if the Licensee is otherwise in breach as defined in
Sections 12.2(a) or (f), and such breach continues beyond a twenty (20) day
period, Licensee shall within a reasonable time but in any event within sixty
(60) days of the end of such twenty (20) day period either comply with the
Service Specifications or shall be deemed to be in breach of this Agreement.
9.2 Second Cure Period. If the noncompliance with the technical
performance, customer service or customer satisfaction Service Specifications
other than Marketing Specifications is not cured within the Initial Cure Period,
either party may notify the other party thereof, setting forth, in detail, the
reasons for noncompliance. Within ninety (90) days of receipt of any such
notification, Licensor and Licensee shall create a mutually acceptable, detailed
plan to rectify such noncompliance and Licensee and Licensor shall agree upon a
reasonable and prompt timetable (the "Second Cure Period") to develop and
implement this plan. Each party shall use all reasonable efforts to develop and
implement this plan.
9.3 Final Cure Period. If the noncompliance with the technical
performance, customer service or customer satisfaction Service Specifications
continues beyond the Second Cure Period, or if the parties are unable to reach
agreement on a plan within the ninety (90) day time period set forth in Section
9.2 hereof and the Licensee is still in noncompliance, either party may notify
the other party thereof and Licensee shall either cease offering the Licensed
Service(s) which is or are not in compliance until it can comply with the
Service Specifications or be deemed to be in breach of this Agreement.
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9.4 Potential Injury to Persons or Property. Notwithstanding the
foregoing, in the event that Licensor reasonably determines that any
noncompliance with any Service Specification creates a material threat of
personal injury or injury to property of any third party, upon written notice
thereof by Licensor to Licensee, Licensee shall either cease offering the
applicable Licensed Service under the Licensed Marks until it can comply with
the Service Specifications or be deemed to be in breach of this Agreement.
9.5 Costs. Except as otherwise expressly provided herein, all costs
relating to effecting cures, including Licensor's and any consulting firm's
and/or arbitrator's time and expenses and any additional monitoring required,
shall be borne by Licensee.
10. Protection of Licensed Marks.
10.1 Ownership and Rights. Except as otherwise expressly provided in
Section 2.2(b) Licensee acknowledges that Licensor is the sole owner of all
rights, title and interest in and to the Licensed Marks. Licensee admits the
validity of, and agrees not to challenge the ownership or validity of the
Licensed Marks. Licensee shall take no action with respect to obtaining
intellectual property rights in the Licensed Marks without the approval of
Licensor. Licensor represents and warrants that the use of the Licensed Master
Service Marks by the Licensee for the Licensed Services does not infringe the
registered marks of any third party. Licensor shall use reasonable efforts to
ensure that each Licensed Ancillary Service Xxxx (other than those Licensed
Ancillary Service Marks developed by Licensee as provided in Section 2.2) is a
Xxxx which is available for use and registration in the Licensed Territory for
the particular service at issue. Licensee shall not disparage or adversely
affect the validity of the Licensed Master Service Marks, the Licensed Ancillary
Service Marks, or the Licensed Trade Dress. Licensee will not grant or attempt
to grant a security interest in the Licensed Master Service Marks, the Licensed
Ancillary Service Marks, or the Licensed Trade Dress, or this Agreement, or to
record any such security interest in the Licensed Territory or elsewhere against
any trademark or service xxxx application or registration belonging to Licensor.
Licensee agrees to execute all documents including a Registered User Application
reasonably requested by Licensor to effect further registration, maintenance and
renewal of the Licensed Master Service Marks and the Licensed Ancillary Service
Marks and, where applicable, to record Licensee as a registered user of the
Licensed Master Service Marks and the Licensed Ancillary Service Marks. For
purposes of this Agreement, Licensee shall be considered a "registered user" of
the Licensed Master Service Marks and Licensed Ancillary Service Marks under the
laws of the countries in the Licensed Territory, from time to time applicable.
10.2 Similar Marks. Licensee further agrees not to use, acquire or
register in any country any Xxxx resembling or confusingly similar or deceptive
or misleading with respect to the Licensed Marks and not to use or register the
Licensed Marks or any part thereof as part of its corporate or trade name except
as authorized in this Agreement. Licensee further agrees not to use or register
in any country any Xxxx which dilutes the Licensed Marks. If any application for
registration is or has been filed in any country or political entity by Licensee
which relates to any Xxxx which, in the sole opinion of Licensor acting in good
faith, is confusingly similar, deceptive or misleading with respect to the
Licensed Master Service Marks, the Licensed Ancillary Service Marks, or the
Licensed Trade Dress, or which dilutes the Licensed Master Service Marks, the
Licensed Ancillary Service Marks, or the Licensed Trade Dress, Licensee shall,
within a reasonable time, but in any event within 30 days of written request
from Licensor, at Licensor's sole discretion acting in good faith, immediately
abandon any such application or registration or assign it to Licensor. If
Licensee uses any Xxxx which, in the sole opinion of Licensor acting in good
faith, is confusingly similar, deceptive or misleading with respect to the
Licensed Master Service Marks, the Licensed Ancillary Service
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Marks, or the Licensed Trade Dress, or which dilutes the Licensed Master Service
Marks, the Licensed Ancillary Service Marks, or the Licensed Trade Dress, or if
Licensee uses the Licensed Master Service Marks, the Licensed Ancillary Service
Marks, or the Licensed Trade Dress in connection with any product or in
connection with any service not specifically authorized hereunder, Licensee
shall, within a reasonable time, but in any event within thirty (30) days of
receiving written request from Licensor, permanently cease such use. Licensee
shall reimburse Licensor for all the costs and expenses of any litigation,
opposition, cancellation or related legal proceedings, including legal fees,
instigated by Licensor or its authorized representative, in connection with any
such use, registration or application.
10.3 Infringement. In the event that Licensee learns of any infringement
or threatened infringement of the Licensed Marks or any unfair competition,
passing-off or dilution with respect to the Licensed Master Service Marks, the
Licensed Ancillary Service Marks, or the Licensed Trade Dress, or any third
party alleges or claims that either the Licensed Master Service Marks, the
Licensed Ancillary Service Marks, or the Licensed Trade Dress are liable to
cause deception or confusion to the public, or are liable to dilute or infringe
any right of such third party, Licensee shall immediately notify Licensor or its
authorized representative giving particulars thereof and Licensee shall provide
necessary information and assistance to Licensor or its authorized
representatives in the event that Licensor decides that proceedings should be
commenced or defended.
Licensor shall have exclusive control of any litigation, opposition,
cancellation or related legal proceedings, or the settlement or compromise of
any claim. The decision whether to bring, defend, maintain or settle any such
proceedings shall be at the exclusive option and expense of Licensor and all
recoveries shall belong exclusively to Licensor and all reasonable expenses or
losses of Licensee in connection therewith shall be paid by Licensor to
Licensee. Licensee will not initiate any such litigation, opposition,
cancellation or related legal proceedings in its own name but, at Licensor's
request, agrees to be joined as a party in any action taken by Licensor to
enforce its rights in the Licensed Master Service Marks, the Licensed Ancillary
Service Marks, or the Licensed Trade Dress.
Licensor shall reimburse Licensee for all reasonable expenses of Licensee
solely in its role as a party in the action. Nothing in this Agreement shall
require or be deemed to require Licensor to enforce the Licensed Master Service
Marks, the Licensed Ancillary Service Marks, or the Licensed Trade Dress.
In the event of any claim, action, proceeding or suit by a third party
against Licensee alleging an infringement by any of the Licensed Marks or
copyright, by reason of the use, in accordance with the Service Specifications,
of the Licensed Master Service Marks, the Licensed Ancillary Service Marks, or
the Licensed Trade Dress in association with the Licensed Service(s), Licensor,
at its expense, will defend Licensee subject to the following conditions:
Licensor will reimburse Licensee for any reasonable costs, expenses, and
legal fees incurred in connection with obtaining advice concerning its liability
with respect to the claim, action, proceeding or suit, but not legal fees, costs
and expenses involved in connection with the defense of the claim, action,
proceeding or suit, unless incurred at Licensor's written request or
authorization in which case Licensor will promptly reimburse Licensee in full
for such amounts. Licensor also will indemnify Licensee against any liability
(including any fines, penalties and punitive damages) assessed against Licensee
by final judgment or order from which no appeal lies or the time for appeal has
expired on account of such infringement or violation arising out of such use.
10.4 Compliance With Laws. In the performance of this Agreement, Licensee
and Licensor shall comply with all applicable laws and regulations, including
those laws and regulations particularly
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pertaining to the proper use and designation of Marks in the countries in the
Licensed Territory. Should either party be or become aware of any applicable
laws or regulations which are inconsistent with the provisions of this
Agreement, such party shall promptly notify the other of such inconsistency. In
such event, Licensor may, at its option, either waive the performance of such
inconsistent provisions or negotiate with Licensee to make changes in such
provisions to comply with applicable laws and regulations.
11. No Transfer of Licensed Rights.
11.1 No Sublicensing; Assignment; Rights to Marketing Materials and Trade
Dress. Licensee shall not, except as provided in Section 2.1, (i) assign,
license, transfer or part with any of its rights or obligations hereunder
(whether by amalgamation, merger, consolidation, sale or otherwise), or (ii)
grant or purport to grant any sublicense in respect of the Licensed Marks.
11.2 Copyright License. Licensee acknowledges that the Marketing Materials
and all proprietary rights therein are owned by or licensed to and reserved to
Licensor and they are valid. Licensor hereby grants Licensee a royalty-free,
non-exclusive, copyright license in the Licensed Territory to reproduce,
distribute, display, perform and create derivative works from all Marketing
Materials in connection with the provision of Licensed Services pursuant to this
Agreement. Licensee shall neither acquire nor assert copyright, patent,
industrial design, service xxxx or trademark ownership or any other proprietary
rights in and to the Marketing Materials or in any derivation, adaptation or
variation thereof. Any and all trademarks, service marks, copyrights (subject to
any moral rights of Licensee which may not be assigned by operation of
applicable law), or related rights accruing to Licensee in the Marketing
Materials by virtue of its sale, distribution, performance or provision of the
services in the Licensed Territory shall vest automatically at the time of
accrual solely and exclusively in Licensor. Licensee shall sign all documents
requested by Licensor to effectuate the transfer of these rights to Licensor,
failing which Licensor may, and Licensee hereby grants Licensor the right to,
execute documents on behalf of Licensee to secure or effectuate such rights. In
the event this Agreement is terminated, canceled or expires, Licensee shall
immediately upon such termination, cancellation or expiration cease all use in
any manner of such Marketing Materials and shall assign any and all right, title
and interest in and to any and all trademarks, service marks, copyrights,
(subject to any moral rights of Licensee which may not be assigned by operation
of applicable law) and other related proprietary rights in the Marketing
Materials or in any derivation, adaptation or variation thereof the Licensee
owns to Licensor.
11.3 Trade Dress. Licensee shall assign to Licensor all rights, title,
interest and related goodwill in and to any Licensed Trade Dress it develops or
uses in connection with the provision of services under this Agreement. Such
assignment shall be made on a non-fee, royalty-free basis.
12. Terms and Termination.
12.1 Term.
(a) Unless earlier terminated in accordance with this Section 12, the
initial term of this Agreement shall be five (5) years from the Effective
Date. This Agreement shall automatically be renewed at the end of the
initial term for an additional five (5) year term, provided that Licensee
is not in default pursuant to Section 5 or in breach pursuant to Section
12.2.
(b) Licensor in its sole discretion may terminate this Agreement if
Licensor and/or its other Affiliates cease to own, directly and indirectly,
a majority of the voting power of Licensee.
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(c) All sublicenses granted hereunder shall terminate upon the
termination of this Agreement.
(d) This Agreement shall terminate in the event of the termination for
failure of Licensee to perform under the Xxxxx Investment Agreement or
other agreements related thereto.
12.2 Breach by Licensee. Licensor may terminate this Agreement at any time
in the event of a Significant Breach by Licensee. A "Significant Breach by
Licensee" shall mean, after exhaustion of any applicable cure provisions set
forth in Sections 9 or 5 hereof, any of the following:
(a) Licensee's use of any Xxxx (including the Licensed Master Service
Marks, the Licensed Ancillary Service Marks, or Licensed Trade Dress)
contrary to this Agreement including any use which disparages or places in
disrepute Licensor, its businesses, or its business reputation, or
adversely affects or detracts from Licensor's goodwill;
(b) Licensee's refusing or neglecting a request by Licensor for access
to Licensee's facilities or Marketing Materials, which continues for thirty
(30) days following a written description of the noncompliance and any
suggestions for curing such noncompliance;
(c) Licensee's Bankruptcy or Licensee's licensing, assigning,
transferring or parting with (or purporting to license, assign, transfer or
part with) any of the rights granted in this Agreement to others without
the prior written approval of Licensor;
(d) Licensee's failure to maintain the Service Specifications and
other information furnished under this Agreement in confidence or failing
to restrict the transmission of information, products and commodities as
required by this Agreement;
(e) Licensee's failure to abide by the Service Specifications in the
sale, distribution, performance or provision of the Licensed Services,
other than relating to Marketing Materials;
(f) Licensee's failure to abide by the Service Specifications relating
to Marketing Materials in the sale, distribution, performance or provision
of the Licensed Services;
(g) Licensee's failing to make any payment specified in this
Agreement, including without limitation payments required under Sections 4
or 5 or 8 or 9 hereof;
(h) Licensee's failure to abide by Section 8.7 of this Agreement
relating to sponsorship; or
(i) Licensee's failure to obtain the recordal, approval or permits
required under Section 17 hereof.
12.3 Termination Obligations. In the event this Agreement terminates,
expires or is canceled in accordance with Section 12.2 hereunder, Licensee shall
immediately, and permanently cease all use of the Licensed Marks, the use of
"AT&T" as part of its corporate and trade name, and use of any proprietary
materials of Licensor furnished hereunder and shall not use any confusingly
similar name, Xxxx or trade dress, and Licensee shall have no further rights
under this Agreement. In the event this Agreement terminates or expires in
accordance with any other provision of this Agreement, Licensee shall have six
(6) months to cease all use of the Licensed Marks and any proprietary materials
of Licensor furnished hereunder and to change its corporate name and to cause
its Subsidiaries that are using "AT&T" as part of their corporate names to
change their names, and shall thereafter not use any confusingly similar name,
Xxxx or trade dress and Licensee shall have no further rights under this
Agreement.
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12.4 No Waiver of Rights. In addition to any other provision of this
Section 12, each party will retain all rights to any other remedy it may have at
law or equity for any breach by the other of this Agreement.
13. Indemnity. Licensee shall defend, indemnify and hold Licensor, its
other Affiliates and authorized representatives harmless against all claims,
suits, proceedings, costs, damages and judgments incurred, claimed or sustained
by third parties whether for personal injury, or property damage, due to
Licensee's marketing, sale, or use of services bearing the Licensed Master
Service Marks, the Licensed Ancillary Service Marks, or the Licensed Trade Dress
and shall indemnify Licensor for all damages, losses, costs and expenses
(including reasonable attorneys' fees and expenses) due to such use or any
improper or unauthorized use of the Licensed Marks.
14. Insurance.
14.1 Insurance Policy. Licensee shall maintain, at its own expense, in
full force and effect at all times during which services bearing the Licensed
Master Service Marks, the Licensed Ancillary Service Marks or the Licensed Trade
Dress are being sold, with a responsible insurance carrier acceptable to
Licensor, at least a Five (5) Million U.S. Dollar (U.S. $5,000,000.00)
comprehensive general liability insurance policy with respect to the services
offered under the Licensed Marks. This insurance shall name Licensor as an
insured party, shall be for the benefit of Licensor and Licensee and shall
provide for at least ten (10) days prior written notice to Licensor and Licensee
of the cancellation or any substantial modification of the policy. This
insurance may be obtained for Licensor by Licensee in conjunction with a policy
which covers services and/or products other than the Licensed Services covered
under this Agreement.
14.2 Evidence of Insurance. Licensee shall, from time to time upon
reasonable request by Licensor, promptly furnish or cause to be furnished to
Licensor evidence in form and substance satisfactory to Licensor, of the
maintenance of the insurance required by Section 14.1 hereof, including without
limitation originals or copies of policies, certificates of insurance (with
applicable riders and endorsements) and proof of premium payments.
15. Notices, etc. All notices, requests, demands or other communications
required by or otherwise with respect to this Agreement shall be in writing and
shall be deemed to have been duly given to any party when delivered personally
(by courier service or otherwise), when delivered by telecopy and confirmed by
return telecopy, or seven days after being mailed by first-class mail, postage
prepaid in each case to the applicable addresses set forth below:
If to Licensee:
Kiri Inc.
0000 Xxxxx xx Xxxx Xxxx.
Xxxxx Xxxxxx, XX 00000
Attn: Chief Executive Officer
General Counsel
Fax No.: 000-000-0000
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EXHIBIT D
If to Licensor:
AT&T Corp.
000 X. Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
Fax No.: 000-000-0000
and
AT&T Corp.
Xxxxx X. Xxxxxxxx, Esq.
Trademark and Copyright Counsel
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Fax No.: 000-000-0000
or to such other address as such party shall have designated by notice so given
to each other party.
16. Compliance with Law. Nothing in this Agreement shall be construed to
prevent Licensor or Licensee from complying fully with all applicable laws and
regulations, whether now or hereafter in effect.
17. Governmental Licenses, Permits and Approvals. Licensee, at its
expense, shall be responsible for obtaining and maintaining all licenses,
permits and Regulatory Approvals which are required by all Regulatory
Authorities with respect to this Agreement, and to comply with any requirements
of such Regulatory Authorities for the registration, approval or recording of
this Agreement or any related Registered User Applications and for making
payments hereunder. Licensee shall furnish to Licensor written evidence from
such Regulatory Authorities of any such licenses, approvals, permits,
clearances, authorizations, Regulatory Approvals, registration or recording.
Licensor and Licensee agree that Licensor shall record this License Agreement
with the appropriate authorities in the Licensed Territory where such licenses
shall be recorded, pay the necessary fees and do all that may be required to
effect such recordation and to obtain recognition of Licensee as an authorized
or registered user of the Licensed Marks.
18. Export
Licensee acknowledges that any products, software, and technical
information (including, but not limited to services and training) provided under
this Agreement are subject to U.S. export laws and regulations and any use or
transfer of such products, software, and technical information must be
authorized under those regulations. Licensee agrees that it will not use,
distribute, transfer, or transmit the products, software, or technical
information (even if incorporated into other products) except in compliance with
U.S. export regulations. If requested by Licensor, Licensee also agrees to sign
those export-related documents which may be required for Licensor to comply with
U.S. export regulations. The obligations of this section shall survive and
continue after any termination of rights under this Agreement.
19. Applicable Law; Jurisdiction. The construction, performance and
interpretation of this Agreement shall be governed by the laws of the State of
New York, U.S.A. without giving effect to its principles or rules of conflicts
of law to the extent that such principles or rules would require or permit the
application of the laws of another jurisdiction, provided that if the foregoing
laws should be modified during the term hereof in such a way as to adversely
affect the original intent of the parties, the parties will negotiate in good
faith to amend this Agreement to effectuate their original intent as closely as
possible. Subject to Section 20, Licensee and Licensor hereby irrevocably and
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unconditionally consent to submit to the exclusive jurisdiction of the courts of
the State of New York and of the United States of America located in the State
of New York (the "New York Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto in a court except in such
courts), waives any objection to the laying of venue of any such litigation in
the New York Courts and agrees not to plead or claim in any New York Court that
such litigation brought therein has been brought in an inconvenient forum.
Licensee and Licensor hereby waive any right to a trial by jury.
20. Dispute Resolution.
20.1 Arbitration. Any dispute, controversy or claim arising out of,
relating to, or in connection with, this Agreement, or the breach, termination
or validity thereof, whether based on contract, tort, statute, fraud,
misrepresentation or any other legal or equitable theory (each a "Claim"), shall
be finally settled by binding arbitration. The arbitration shall be conducted in
accordance with the CPR Rules for Non-Administered Arbitration in effect at the
time of the arbitration, except as they may be modified herein or by mutual
agreement of the parties. The seat of the arbitration shall be New York City,
New York, and it shall be conducted in the English language. Notwithstanding
Section 19 hereof, the arbitration and this clause shall be governed by Title 9
(Arbitration) of the United States Code. Any request for interim measures
pursuant to Section 23.5 hereof or otherwise shall not be deemed incompatible
with, or a waiver of, this agreement to arbitrate.
20.2 Number of Arbitrators/Selection. The arbitration shall be conducted
by three arbitrators. The party initiating arbitration (the "Claimant") shall
appoint an arbitrator in its request for arbitration (the "Request"). The other
party (the "Respondent") shall appoint an arbitrator within 30 days of receipt
of the Request and shall notify the Claimant of such appointment in writing. If
within 30 days of receipt of the Request by the Respondent, either party has not
appointed an arbitrator, then that arbitrator shall be appointed by CPR
Institute for Dispute Resolution. The first two arbitrators appointed in accord
with this provision shall appoint a third arbitrator within 30 days after the
Respondent has notified Claimant of the appointment of the Respondent's
arbitrator or, in the event of a failure by a party to appoint, within 30 days
after the CPR Institute for Dispute Resolution has notified the parties and any
arbitrator already appointed of its appointment of an arbitrator on behalf of
the party failing to appoint. When the third arbitrator has accepted the
appointment, the two arbitrators making the appointment shall promptly notify
the parties of the appointment. If the first two arbitrators appointed fail to
appoint a third arbitrator or so to notify the parties within the time period
prescribed above, then the CPR Institute for Dispute Resolution shall appoint
the third arbitrator and shall promptly notify the parties of the appointment.
The third arbitrator shall act as Chair of the tribunal.
20.3 Certain Procedures. The arbitration panel shall strictly limit
discovery to the production of documents directly relevant to the facts alleged
by the Claimant and the Respondent, and if depositions are required, each party
shall be limited to five depositions. Each party shall bear its own expenses,
but those related to the compensation of the arbitrators shall be borne equally.
20.4 Arbitral Award. The arbitral award shall be in writing, state only
the damages and injunctive relief granted and be final and binding on the
parties. The parties hereto expressly waive and forgo any right to punitive,
exemplary or similar damages as a result of any Claim. The arbitrators shall
orally state the reasoning on which the arbitral award rests but shall not state
such reasoning in any writing. The arbitration panel shall endeavor to issue the
arbitral award within six months of the Request, but failure to do so shall not
effect the validity of the arbitral award. The parties agree that the existence
and contents of the entire arbitration, including the award, shall be
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EXHIBIT D
deemed a compromise of a dispute under Rule 408 of the Federal Rules of
Evidence, shall not be discoverable in any proceeding, shall not be admissible
in any court (except for the enforcement thereof) or arbitration and shall not
bind or collaterally estop either party with respect to any claim or defense
made by any third party.
20.5 Confidentiality of Proceedings. All proceedings in connection with
any arbitration, including its existence, the content of the proceedings and any
decision, shall be kept confidential to the maximum extent possible consistent
with the law. The arbitrator shall issue an order preventing the parties, CPR
Institute for Dispute Resolution and any other participants to the arbitration
from disclosing to any third party any information obtained via the arbitration,
including discovery of documents, evidence, testimony and the award except as
may be required by law.
20.6 Judgment. Judgment upon the decision may be entered by any court
having jurisdiction thereof or having jurisdiction over the relevant party or
its assets, provided that the party entering the award shall request that the
court prevent the award from becoming publicly available except as may be
required by law.
21. Confidentiality of Information and Use Restriction. The Service
Specifications disclosed and/or furnished to Licensee by Licensor under this
Agreement and all copies of the Service Specifications made by Licensee,
including translations, compilations and partial copies (the "Material") shall
remain the property of the Licensor and shall be returned to Licensor upon
request. Licensee shall use the Material solely for the purposes described in
this Agreement. Licensee shall hold in confidence during and after the
termination, expiration or cancellation of this Agreement and shall not disclose
such Material to any third party without the prior written consent of the
Licensor.
The Proprietary Information disclosed and/or furnished by one party to
another under this Agreement and all copies thereof made by the receiving party,
including translations, compilations and partial copies shall remain the
property of the disclosing party and shall be returned to the disclosing party
upon request. The receiving party shall use the Proprietary Information solely
for the purposes described in this Agreement. The receiving party shall hold in
confidence during and after the termination, expiration or cancellation of this
Agreement and not disclose, provide, or otherwise make available, in whole or in
part such Proprietary Information to any third party without the prior written
consent of the disclosing party, except Proprietary Information which, as
established by reasonable proof by the receiving party:
(i) at the time of the alleged disclosure, is known to the public;
(ii) after the time of disclosure, becomes known to the public other
than by or through a violation of this Agreement by the receiving party
either directly or indirectly;
(iii) at the time of disclosure, is in the possession of the receiving
party and was not acquired directly or indirectly from the disclosing
party;
(iv) after the time of disclosure is lawfully received by the
receiving party from a third party who has lawfully received it; or
(v) at the time of disclosure, is required to be disclosed by law or
by any government or regulatory agency having jurisdiction for
telecommunication services, the receiving party making reasonable effort to
have the agency retain the Proprietary Information in confidence.
Both parties shall ensure that only its employees with a need to know the
Proprietary Information shall have access to it and then only if those employees
have entered an appropriate
20
150
EXHIBIT D
confidentiality and use restriction agreement obligating them at least to the
same extent as the Licensee is obligated under this Agreement.
The receiving party of the Proprietary Information shall exercise a
standard of care under this Section that is not less than the standard of care
Licensor exercises under its own corporate policy for confidentiality and use
restrictions for its own Proprietary Information.
If and when Licensor receives Proprietary Information of Licensee through
inspection, test, survey and review of Licensee's facilities and otherwise to
determine compliance with the applicable Service Specifications, Licensor's
non-disclosure requirements hereunder shall be for a period not to exceed three
years from the termination or expiration of this Agreement.
22. Payments.
22.1 Payments. All payments or fees due under this Agreement ("Payments")
shall be made on the date that they are due and shall be subject to a late
payment charge equal to the lesser of (i) U.S. dollar LIBOR rate (London Inter
Bank Offer Rate) quoted for sixty (60) day advances (quoted on TELERATE, a
service of Dow Xxxxx) plus 600 basis points starting on the date the Payment is
due plus 600 basis points accruing from the due date to date of receipt of the
balance owed by the Licensee and (ii) the maximum rate permitted by law. If
receipt occurs later than sixty (60) days from the due date, a weighted average
is computed based on successive sixty (60) day rates (e.g., if a year elapses
six rates taken sixty (60) days apart would be averaged.)
22.2 Taxes. All Payments due under this Agreement shall be made in full
without any deduction or withholding whatsoever for taxes or duties imposed by
the countries in the Licensed Territory or any subdivision or local jurisdiction
thereof, unless such withholding or deduction is required by law in which event
Licensee shall pay to Licensor such additional amount so that the net amount
received by Licensor after the deduction or withholding will equal the full
amount which would have been received by it had no such deduction or withholding
been made.
22.3 Payment of Brand Fund Fees. The payment of the Brand Fund Fees and
any associated late charges under Section 22.1 shall be made via electronic
funds transfer to a bank account designated by Licensee solely for this purpose
with notice to Licensor as to its existence and signing authority, and the funds
in such account shall be accessible solely by the Licensor Vice President for
Latin America and/or other Licensor-designated representative.
23. Miscellaneous.
23.1 Name, Captions. The name assigned this Agreement and the section
captions used herein are for convenience of reference only and shall not affect
the interpretation or construction hereof.
23.2 Entire Agreement. The provisions of this Agreement (including the
Schedules hereto) contain the entire agreement between the parties relating to
use by Licensee of the Licensed Marks and supersede all prior agreements and
understandings relating to the subject matter hereof. No rights are granted to
use the Licensed Marks except as specifically set forth in this Agreement. In
the event of any conflict between the provisions of this Agreement and
provisions of other agreements involving Licensor and Licensee, the provisions
of this Agreement shall prevail. This Agreement is not a franchise, does not
create a partnership or joint venture and shall not be deemed to constitute an
assignment of any rights of Licensor to Licensee. Licensee is an independent
contractor, not an agent or employee of Licensor, and Licensor is not liable for
any acts or omissions by Licensee. The continuing obligations of Licensee in
this Agreement, including those obligations set forth in Sections 10.2 and 18,
shall survive and continue after the expiration, cancellation, or termination of
21
151
EXHIBIT D
this Agreement. With respect to Section 21, the obligations shall survive and
continue for a period of three (3) years following such expiration, cancellation
or termination of this Agreement. Notwithstanding the foregoing, the
confidentiality provisions of the Purchase Agreement are not in any way altered,
amended, extended, contracted or superseded by this Section 23.2 of this
Agreement.
23.3 Amendments, Waivers, etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified except by an instrument in writing
signed by the parties.
23.4 Severability. If any term of this Agreement or the application
thereof to any party or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such term to
the other parties or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law.
23.5 Specific Performance. The parties acknowledge that money damages are
not an adequate remedy for violations of this Agreement and that any party may,
in its sole discretion, apply to a court of competent jurisdiction for specific
performance, interim or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
23.6 Remedies Cumulative. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
23.7 No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
23.8 No Third Party Beneficiaries. This Agreement is not intended to be
for the benefit of and shall not be enforceable by any person or entity who or
which is not a party hereto.
23.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
23.10 Further Assurances. Each of the parties shall, and shall cause its
Affiliates to, from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take other such actions as
shall be necessary or otherwise reasonably requested by a party, to confirm and
assure the rights and obligations provided for in this Agreement and render
effective the consummation of the transactions contemplated hereby, or otherwise
carry out the intent and purposes of this Agreement.
23.11 Construction of this Agreement. In any construction of this
Agreement, this Agreement shall not be construed against any party based upon
the identity of the drafter of the Agreement or any provision of it.
22
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EXHIBIT D
23.12 Effective Date. This Agreement shall become effective upon the date
of the consummation of the Merger under the Merger Agreement (the "Effective
Date") and shall have no force or effect prior to such time.
23
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EXHIBIT D
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in duplicate originals by its duly authorized representatives as of the
date first stated above.
KIRI INC. AT&T CORP.
By: By:
Name: Name:
Title: Title:
Date: Date:
24
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EXHIBIT D
SCHEDULE A
LICENSED MASTER SERVICE MARKS
[AT&T LOGO]
------------------------------------------------------
[AT&T AND GLOBE DESIGN LOGO]
[AT&T AND GLOBE DESIGN LOGO]
25
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EXHIBIT D
SCHEDULE B
REGISTRATIONS FOR LICENSED MASTER SERVICE MARKS
REGISTRATION REGISTRATION
OR APPLICATION OR APPLICATION
COUNTRY XXXX NO. DATE
------- ---- -------------- --------------
Argentina.................................... AT&T 1099877 Feb. 28, 1995
Argentina.................................... AT&T & Globe Design 1518137 Apr. 29, 1994
Brazil....................................... AT&T 811983030 Aug. 5, 1986
Brazil....................................... AT&T & Globe Design 819860573 Mar. 24, 1997
Chile........................................ AT&T 389224 Mar. 8, 1993
Chile........................................ AT&T & Globe Design 420096 Jan. 18, 1994
Colombia..................................... AT&T 112857 Apr. 4, 1986
Colombia..................................... AT&T & Globe Design 148388 Jan. 28, 1994
Peru......................................... AT&T 2468 Jan. 25, 1984
Peru......................................... AT&T & Globe Design 14617 Jun. 2, 1998
26
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EXHIBIT D
SCHEDULE C1
LICENSED ANCILLARY SERVICE MARKS
RESTRICTIONS ON LICENSE
-------------------------------------
XXXX LICENSED TERRITORY LICENSED SERVICES
---- ------------------ -----------------
IT'S ALL WITHIN YOUR REACH................................. All All
TODO A SEU ALCANCE......................................... All Portuguese- All
speaking countries
TODO A TU ALCANCE.......................................... All Spanish- All
speaking countries
27
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EXHIBIT D
SCHEDULE C2
REGISTRATIONS FOR LICENSED ANCILLARY SERVICE MARKS
REGISTRATION REGISTRATION
OR APPLICATION OR APPLICATION
COUNTRY XXXX NO. DATE
------- ---- -------------- --------------
Argentina.................................... IT'S ALL WITHIN YOUR REACH 0000000 May 20, 1998
Argentina.................................... TODO A TU ALCANCE 2151851 May 20, 1998
Bolivia...................................... IT'S ALL WITHIN YOUR REACH 6065 May 5, 1998
Bolivia...................................... TODO A TU ALCANCE 6064 May 5, 1998
Brazil....................................... IT'S ALL WITHIN YOUR REACH 000000000 Apr. 22, 1997
Brazil....................................... TODO A SEU ALCANCE 820880574 Jun. 29, 1998
Chile........................................ IT'S ALL WITHIN YOUR REACH 414215 May 8, 1999
Chile........................................ TODO A TU ALCANCE 414213 May 8, 1999
Colombia..................................... IT'S ALL WITHIN YOUR REACH 00000000 May 21, 1999
Colombia..................................... TODO A TU ALCANCE 98028799 May 21, 1999
Peru......................................... IT'S ALL WITHIN YOUR REACH 15536 Sep. 10, 1998
Peru......................................... TODO A TU ALCANCE 15442 Aug. 31, 1998
28
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EXHIBIT D
SCHEDULE D
LICENSED TRADE DRESS
1. The overall configurations of the AT&T and globe design corporate
signature as set forth more fully in the AT&T document Corporate Identity
Program: Graphic Standards Manual ("Graphic Standards Manual").
2. The AT&T Garamond typeface, namely AT&T's proprietary typeface used for
all marketing communications materials, including print and television
advertising, promotional brochures, pamphlets and other Marketing Materials and
as set forth in the AT&T document Guidelines For Print and TV Advertising.
3. The AT&T identification stripes, namely a rectangular band consisting of
three parallel lines: the top line being red (PANTONE(R) 485); the middle, blue
(PANTONE(R) Process Blue); the bottom, black (PANTONE(R)Process Black), as set
forth in the Graphic Standards Manual.
4. The acceptable color applications of the AT&T and globe design corporate
signature as set forth in the Graphic Standards Manual.
5. The acceptable graphic techniques relating to the AT&T and globe design
corporate signature as set forth in the Graphic Standards Manual.
6. The acceptable applications of the AT&T globe design corporate signature
and typography, as well as the visual style and design techniques (layout) as
applied to any product marking, as set forth in the AT&T document Product
Marking Reference Manual.
7. The acceptable applications of the AT&T globe design corporate signature
and typography, as well as the visual style and design techniques, as applied to
business stationery, and as set forth in the AT&T document Business Stationery
Specifications.
8. Nothing in this Schedule shall restrict or limit AT&T's claim of trade
dress rights in or protection of AT&T's Trade Dress.
29
159
EXHIBIT D
SCHEDULE E
SERVICE SPECIFICATIONS
30
160
EXHIBIT D
SCHEDULE F
LICENSED SERVICES
EXCLUSIVE SERVICES
- Local voice delivered through fixed-line connectivity
- Domestic long distance
- International long distance
- Point-to-point dedicated line
- Asynchronous Transfer Mode (ATM)
- Frame relay
- Internet access
- 1-800/toll free
- Packet X.25 (data)
- Virtual network services (data)
- Switched digital (data)
NONEXCLUSIVE SERVICES
- AT&T card services
- AT&T Direct(R) services
- E-commerce
- Web-hosting
- Fixed wireless for connectivity
- Voice over Internet Protocol
- Managed Network Services (as defined herein)
31
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EXHIBIT D
SCHEDULE G
CRITERIA FOR SUBLICENSEES
Neither sublicensees nor their affiliates (including any joint venture and
business alliance in which sublicensee is a participant) conduct business or
engage in business practices in any of the following areas:
- Illegal activities;
- Content or practices which demean, ridicule or attack individuals or
groups on the basis of age, color, national origin, race, religion, sex,
sexual orientation or handicap;
- Pornographic, obscene or sexually explicit/suggestive material or
content;
- Material deemed to be harmful to children;
- Tobacco or alcoholic beverages;
- Firearms, ammunition or fireworks;
- Gambling;
- Contraceptives;
- Violence;
- Vulgar or obscene language;
- Solicitation of funds;
- Extreme political or social activism.
32
162
EXHIBIT E TO THE
AGREEMENT AND PLAN OF MERGER
163
EXHIBIT E TO THE
MERGER AGREEMENT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGIONAL VEHICLE AGREEMENT
DATED AS OF
, 1999 BETWEEN
AT&T CORP.
AND
KIRI INC.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
164
TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I SCOPE............................................. 1
1.1. RV Business..................................... 1
ARTICLE II RV SERVICES...................................... 2
2.1. RV Exclusive Services........................... 2
2.2. RV Non-Exclusive Services....................... 2
2.3. Preferred Supplier to Parent.................... 2
ARTICLE III EXCLUDED ACTIVITIES............................. 2
3.1. Excluded Activities............................. 2
ARTICLE IV GLOBAL VENTURE................................... 2
4.1. Regional Vehicle's Provision of RV Services to
the Global Venture.................................... 2
4.2. Regional Vehicle's Distribution of Services of
and Purchase of Services from the Global
Venture......................................... 3
4.3. Services Reserved to the Global Venture......... 3
4.4. Managed Network Services........................ 3
ARTICLE V AT&T GLOBAL NETWORK............................... 4
5.1. AT&T Global Network Services.................... 4
5.2. Regional Vehicle's Provision of Services to the
AT&T Global Network................................... 4
5.3. AT&T Global Network Distribution Arrangements... 4
ARTICLE VI PARENT ACQUISITIONS, ETC. ....................... 4
6.1. Territory Acquisitions.......................... 4
6.2. FMV Determination............................... 5
6.3 Easymail Chile.................................. 6
ARTICLE VII TERM 8.......................................... 6
7.1. Term............................................ 6
ARTICLE VIII ARBITRATION.................................... 7
8.1. Arbitration..................................... 7
8.2. Number of Arbitrators/Selection................. 7
8.3. Certain Procedures.............................. 7
8.4. Arbitral Award.................................. 7
8.5. Confidentiality of Proceedings.................. 7
8.6. Judgment........................................ 8
ARTICLE IX MISCELLANEOUS.................................... 8
9.1. Amendment....................................... 8
9.2. Waiver.......................................... 8
9.3. Notices......................................... 8
9.4. Assignment; Binding Effect...................... 9
9.5. Entire Agreement................................ 9
9.6. Governing Law................................... 9
9.7. Further Assurances.............................. 9
9.8. Headings........................................ 9
9.9. Interpretation.................................. 9
9.10. Severability.................................... 9
9.11. Enforcement..................................... 9
9.12. Counterparts.................................... 10
i
165
EXHIBITS
Exhibit A Definitions
SCHEDULES
Schedule A-1 RV Exclusive Services
Schedule A-2 Parent Group Activities
Schedule B RV Non-Exclusive Services
Schedule C Excluded Activities
ii
166
REGIONAL VEHICLE AGREEMENT, dated as of , 1999,
between AT&T Corp., a New York corporation ("AT&T") and Kiri Inc., a Delaware
corporation ("Regional Vehicle"). Certain capitalized terms used herein without
definition shall have the meanings specified in Exhibit A.
RECITALS
A. Parent, Regional Vehicle, a Delaware Corporation, FirstCom Corporation,
a Texas Corporation (the "Company"), and a subsidiary of Regional Vehicle
("Merger Sub") have entered into an Agreement and Plan of Merger, dated November
1, 1999 (the "Merger Agreement"), pursuant to which the Company will merge with
and into Merger Sub (the "Merger"). Immediately following the Merger, it is
intended that, on a fully-diluted basis, (i) the former shareholders of the
Company will own, collectively, approximately 34% of the shares of common stock
of Regional Vehicle, (ii) Parent will own, directly or indirectly, approximately
60% of the shares of common stock of Regional Vehicle, and (iii) Promon
Tecnologia S.A., or an Affiliate thereof, will own approximately 6% of the
shares of common stock of the Regional Vehicle.
B. Parent and Regional Vehicle anticipate that the establishment of
Regional Vehicle and the commercial arrangements contemplated hereby will enable
the delivery of competitive, comprehensive packages of end-to-end integrated
broadband services to customers in the Territory.
C. Regional Vehicle will benefit from its relationship with Parent as a
result of certain contractual arrangements of Parent, including the Framework
Agreement, dated as of October 23, 1998, among Parent, VLT Corporation, British
Telecommunications PLC, BT (Netherlands) Holdings B.V. and Thistle B.V. (as
amended from time to time, the "Framework Agreement"). Regional Vehicle is also
expected to have increased demand for its services as a result of the commercial
arrangements contemplated hereby. Parent will grant concurrently with the Merger
a non-exclusive license to Regional Vehicle to use certain Brands (the "Licensed
Brands") pursuant to the Brand License Agreement.
D. Regional Vehicle shall serve as Parent's strategic vehicle for
in-country investments in the Territory for the provision of broadband
high-speed connectivity to business customers in the Territory and for the
provision of certain other telecommunications services in the Territory, in each
case to the extent set forth in this Agreement.
E. In consideration of the mutual undertakings of the parties contained
herein and as an inducement to the parties to enter into the Merger Agreement,
Regional Vehicle and Parent desire to define the scope of Regional Vehicle's
business and its relationship with Parent and certain Affiliates and joint
ventures of Parent as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the sufficiency of which is hereby
acknowledged, intending to be legally bound, the parties hereby agree as
follows:
ARTICLE I
SCOPE
1.1. RV Business. (a) Regional Vehicle has been established primarily to
provide broadband, high-speed connectivity to business customers in the
Territory and, in connection therewith, to provide, offer, distribute, market
and sell primarily to business customers RV Exclusive Services and
167
RV Non-Exclusive Services, own facilities and other assets related thereto and
engage in incidental activities related thereto, in each case in the Territory,
in accordance with the terms of this Agreement. Regional Vehicle may conduct its
business through its Subsidiaries in the Territory, provided that Regional
Vehicle shall cause such Subsidiaries to comply with all of the provisions of
this Agreement applicable to Regional Vehicle as if they were signatories
hereof.
(b) Regional Vehicle shall provide, offer, distribute, market and sell all
of its RV Exclusive Services and RV Non-Exclusive Services under (i) the
Licensed Brands, (ii) Brands specified by the Global Venture, subject to the
prior written consent of the Global Venture, in the case of services relating to
the Global Venture or (iii) subject to the approval of Parent as provided in the
Brand License Agreement, Brands created by Regional Vehicle and owned by Parent
or Regional Vehicle.
ARTICLE II
RV SERVICES
2.1. RV Exclusive Services. The services listed in the Schedule of RV
Exclusive Services attached hereto as Schedule A-1 are referred to herein as the
"RV Exclusive Services." Except as identified in the Schedule of Parent Group
Activities attached hereto as Schedule A-2 hereof or as provided in Article V,
Parent will not, and will cause the other members of the Parent Group not to,
provide, offer, distribute, market or sell RV Exclusive Services in the
Territory unless Regional Vehicle supplies such services to Parent or such
member of the Parent Group.
2.2. RV Non-Exclusive Services. The services listed in the Schedule of RV
Non-Exclusive Services attached hereto as Schedule B may, subject to the terms
of this Agreement, be provided, offered, distributed, marketed or sold by any
Person and such services are referred to herein as the "RV Non-Exclusive
Services," and, together with the RV Exclusive Services, as the "RV Services."
2.3. Preferred Supplier to Parent. The Regional Vehicle shall be a
Preferred Supplier of RV Exclusive Services in the Territory to Parent and its
wholly-owned Subsidiaries, except to the extent Parent and its wholly-owned
Subsidiaries are obligated to purchase such services from the Global Venture.
ARTICLE III
EXCLUDED ACTIVITIES
3.1. Excluded Activities. Regional Vehicle shall not provide, offer,
distribute, market or sell any service listed in the schedule of Excluded
Activities attached hereto as Schedule C or take any other action that
contravenes Section 4.3 relating to the Global Venture (collectively, the
"Excluded Activities").
ARTICLE IV
GLOBAL VENTURE
4.1. Regional Vehicle's Provision of RV Services to the Global
Venture. The Regional Vehicle shall be a Preferred Supplier of RV Services in
the Territory to the Global Venture in accordance with and subject to the
Framework Agreement on commercially reasonable terms as agreed between Regional
Vehicle and the Global Venture.
2
168
4.2. Regional Vehicle's Distribution of Services of and Purchase of
Services from the Global Venture. (a) Parent shall request that the Global
Venture grant to Regional Vehicle distribution rights with respect to Global
Business Communications Services of the Global Venture in the Territory on
commercially reasonable terms in accordance with and subject to the terms of the
Framework Agreement.
(b) Regional Vehicle shall purchase all of its requirements for Global
Communications Services from the Global Venture pursuant to commercially
reasonable terms to be set forth in (i) an agreement between the Regional
Vehicle and the Global Venture or (ii) if applicable, an agreement between
Parent and the Global Venture governing the purchase of Global Communications
Services by Parent and its Subsidiaries.
(c) Regional Vehicle shall purchase all of its requirements for
International Traffic Termination Services from the Global Venture, provided
that such services are provided by the Global Venture to Regional Vehicle on
commercially reasonable terms.
4.3. Services Reserved to the Global Venture. Unless Regional Vehicle is a
Limited Cross Border Network Services Provider or as otherwise agreed by Parent
and the Global Venture and any other party whose consent may be required under
the Framework Agreement, Regional Vehicle shall not:
(a) offer, sell or distribute Global Business Communications Services
or any services competitive with the Global Business Communications
Services provided through the Global Venture except as permitted pursuant
to Section 4.2;
(b) offer, sell or distribute any Communications Services, except
through the Global Venture, to any Person that is a Qualifying MNC Customer
(as such term is defined in the Framework Agreement)(each such Person, a
"Qualifying MNC"), a list of which Parent has previously delivered to
Regional Vehicle, and which Parent will update periodically;
(c) own, operate, lease or manage Global Network Facilities; or
(d) provide any International Carrier Services.
Regional Vehicle shall be deemed a "Limited Cross Border Network Services
Provider" for so long as Regional Vehicle and any Person in which it has a
direct or indirect equity interest do not derive aggregate annual revenues
("Cross Border Revenues") that exceed $150 million, directly or indirectly,
whether acting alone or in association with, or through one or more Persons,
from Global Business Communications Services and other services provided over a
cross border network owned by Regional Vehicle or its Subsidiaries or provided
by any cross border network, alliance or consortium in which Regional Vehicle
has any direct or indirect equity interest. For purposes of calculating such
aggregate annual revenues, the actual pro rata share of revenues of any Persons
in which Regional Vehicle owns a direct or indirect equity interest shall be
included with respect to any investments in a Person that is not wholly-owned by
the Regional Vehicle. Within 90 days of the end of each Regional Vehicle fiscal
year, Regional Vehicle shall provide Parent with a certificate executed by the
chief executive officer and chief financial officer of Regional Vehicle
certifying the amount of Cross Border Revenues for such fiscal year and setting
forth the breakdown and calculation thereof in reasonable detail.
4.4. Managed Network Services. Regional Vehicle shall not provide Managed
Network Services to any Qualifying MNC except as contracted through the Global
Venture.
3
169
ARTICLE V
AT&T GLOBAL NETWORK
5.1. AT&T Global Network Services. Any current or future services provided
by any member of the Parent Group using any assets owned or controlled now or in
the future by the AT&T Global Network are referred to herein as the "AT&T Global
Network Services". Notwithstanding Section 2.1, Parent or any member of the
Parent Group may provide, offer, market, distribute or sell to any Person, and,
subject to 5.3, may appoint any Person as a distributor of, AT&T Global Network
Services in the Territory.
5.2. Regional Vehicle's Provision of Services to the AT&T Global
Network. Regional Vehicle shall be a Preferred Supplier of RV Services to the
AT&T Global Network on commercially reasonable terms as agreed between Regional
Vehicle and Parent.
5.3. AT&T Global Network Distribution Arrangements. Promptly after the
execution of this Agreement, Parent will cause the appropriate AT&T Global
Network Person to discuss with Regional Vehicle possible arrangements for the
distribution of AT&T Global Network Services by Regional Vehicle in the
Territory. While the parties have not reached any understanding as to the
outcome of such discussions, they have agreed that Regional Vehicle shall be an
exclusive distributor of AT&T Global Network Services in one or more countries
in the Territory on commercially reasonable terms as may be agreed between
Regional Vehicle and Parent, provided that such exclusive distributorship shall
(i) be subject to Regional Vehicle's ability to meet performance and service
level requirements established by AT&T Global Network; (ii) not limit the rights
of any Person under the Master Services Agreement, dated December 7, 1998 by and
between International Business Machines Corporation and AT&T Solutions, Inc.,
the Master Asset Purchase Agreement, dated December 7, 1998, between
International Business Machines Corporation and AT&T or any related agreements,
or the ability of any such Person to comply with its obligations thereunder; and
(iii) not limit the rights of any member of the Parent Group or any AT&T Global
Network Person to (x) distribute AT&T Global Network Services directly to
customers in the Territory, (y) have its employees market or sell such services
to customers in the Territory or (z) appoint remarketers or global value added
resellers (VARs) of AT&T Global Network Services.
ARTICLE VI
PARENT ACQUISITIONS, ETC.
6.1. Territory Acquisitions. (a) If (i) a member of the Parent Group
acquires (including as a result of a merger or any other business combination
transaction) an interest in any Person that derived (including through any
consolidated Subsidiaries of such Person) revenues in the immediately preceding
fiscal year from assets or customers in the Territory (such revenues, the
"Territory Revenues") (such Person, an " Acquired Person," and together with its
Subsidiaries, if any, an "Acquired Group"), (ii) more than 50% of such Territory
Revenues were derived from the provision of RV Exclusive Services and (iii) such
acquisition would otherwise result in any member of the Acquired Group becoming
a member of the Parent Group (such case, a "Covered Acquisition"), Parent shall
comply with the provisions of Section 6.1(b).
(b) In the case of a Covered Acquisition, within (i) eighteen months, if
the Territory Revenues of such Acquired Group were greater than 33 1/3% of such
Acquired Group's consolidated gross revenues for its immediately preceding
fiscal year, or (ii) thirty months, if the Territory Revenues of such Acquired
Group were less than 33 1/3% of such Acquired Group's consolidated gross
revenues for its immediately preceding fiscal year, after the acquisition of
such Acquired Person, Parent shall
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either (x) cause the members of such Acquired Group to cease in all material
respects providing RV Exclusive Services in the Territory or (y) offer, or cause
the relevant member of the Parent Group to offer, in writing (an "Offer") to
sell to the Regional Vehicle for cash that portion of the Acquired Group's
business that primarily relates to the provision of such RV Exclusive Services
in the Territory (the "Offered Assets") at their Fair Market Value, provided
that this Section 6.1(b) shall not apply if selling such Offered Assets (x)
would conflict with or contravene applicable law or a pre-existing contractual
obligation of any member of the Acquired Group or that is binding on any
material assets of such a member and such obligation is not waived or amended,
(y) would result in a tax obligation for members of the Parent Group that is
material in relation to the consideration paid for the Offered Assets by the
relevant member of the Parent Group or (z) in the case of a business that is not
owned by a direct or indirect substantially wholly-owned Subsidiary of Parent,
would, in the good faith determination of the Board of Directors of any relevant
member of a Parent Group, having received advice of outside counsel with respect
to fiduciary duties to minority shareholders, violate any such fiduciary duties
(each of subsection (x), (y) and (z), an "Offer Exception"), provided further
that Offered Assets shall not include any assets held by a Person that is not
controlled by Parent. Such Offer may be accepted by Regional Vehicle by written
notice to Parent until the later of (A) the one hundred twentieth day after the
date of the Offer and (B) 25 days after the date of determination of the Fair
Market Value of such Offered Assets pursuant to Section 6.3 (such period being
referred to herein as, the "Offer Response Period").
(c) No member of an Acquired Group shall be included in the Parent Group
except as provided below in the case of a Covered Acquisition. In the case of a
Covered Acquisition, no member of an Acquired Group shall be included as a
member of the Parent Group until the later of (i) the day after the expiration
of the Offer Response Period, (ii) two years after such member's acquisition and
(iii) the date of the actual transfer of the Offered Assets to Regional Vehicle
if Regional Vehicle accepts the Offer, provided that, if (x) Regional Vehicle
shall not accept an Offer within the Offer Response Period or (y) a member of a
Acquired Group is subject to an Offer Exception, such member shall not be
included as a member of the Parent Group at any time.
6.2. FMV Determination. (a) Parent shall set forth in any Offer its
determination of the Fair Market Value of the Offered Assets that are the
subject of such Offer. If Regional Vehicle does not agree that the Fair Market
Value set forth in the Offer represents the value Parent could obtain in an
arm's length sale of the Offered Assets to an unaffiliated third party, Regional
Vehicle shall deliver a written notice (an "FMV Notice") to Parent requesting
that a determination of Fair Market Value be made pursuant to this Section 6.2.
If Regional Vehicle does not deliver such FMV Notice within 45 days after the
date of the Offer, the Fair Market Value of the Offered Assets shall be the
amount set forth in the Offer.
(b) If Regional Vehicle delivers an FMV Notice, each of Parent and Regional
Vehicle shall retain within 15 days of such delivery, and provide relevant
information to, an internationally recognized investment banking firm (each, an
"appraiser", together the "Initial Appraisers") to determine the Fair Market
Value of the Offered Assets. Within 30 days following the provision of relevant
information by Parent and Regional Vehicle to the Initial Appraisers, which
information shall be provided within 30 days after retention of the Initial
Appraisers, the Initial Appraisers shall submit their determinations of the Fair
Market Value of the Offered Assets to Parent and Regional Vehicle. If the
difference between the determinations submitted by the Initial Appraisers is
less than 20 percent of the lowest of such determinations, then the average of
the determinations submitted by the appraisers shall be deemed to be the Fair
Market Value for the Offered Assets.
(c) If the difference between the determinations submitted by each
appraiser equals or exceeds 20 percent of the lowest of such determinations, the
Initial Appraisers will within 15 days select a third internationally recognized
investment banking firm to make such determination, provided if the
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Initial Appraisers cannot agree to a third internationally recognized investment
banking firm, such firm shall be chosen by the CPR Institute for Dispute
Resolution. Regional Vehicle and Parent shall provide information to the third
appraiser within ten days after such appraiser is appointed. The third appraiser
shall submit its determination of the Fair Market Value for the Offered Assets
to Regional Vehicle within 30 days following the provision of relevant
information by Regional Vehicle and Parent. The average of the determination
provided by such third appraiser and the determination submitted by the Initial
Appraisers that is closer to the determination provided by such third appraiser
shall be deemed to be the Fair Market Value of the Offered Assets, provided,
however, that to the extent such average is greater than the higher price
submitted by the Initial Appraisers (the "High Price"), the Fair Market Value of
the Offered Assets shall be the High Price or, to the extent such average is
less than the lower price submitted by the Initial Appraisers (the "Low Price"),
the Fair Market Value of the Offered Assets shall be the Low Price. The fees and
expenses of the Initial Appraisers shall be borne by the respective parties that
appointed them. The fees and expenses of any third appraiser shall be split
equally between Regional Vehicle and Parent.
6.3. Easymail Chile. Prior to any sale or transfer of any interest in
Easymail Chile S.A. (an "Easymail Interest") held by Parent or any Subsidiaries
of Parent (such holder, a "Selling Person") to a Person other than Parent or
another Affiliate of Parent, Parent shall, or cause such Selling Person to,
offer in writing (an "Easymail Offer") to sell to Regional Vehicle for cash such
Easymail Interest at its Fair Market Value, provided that this Section 6.3 shall
not apply if selling such Easymail Interest would conflict with or contravene
applicable law or a pre-existing contractual obligation of Parent or such
Selling Person. The Selling Person shall set forth in any Easymail Offer its
determination of the Fair Market Value of such Easymail Interest. If Regional
Vehicle does not agree that the Fair Market Value set forth in the Easymail
Offer represents the value such Selling Person could obtain in an arm's length
sale of such Easymail Interest to an unaffiliated third party, Regional Vehicle
shall deliver a written notice (an "Easymail FMV Notice") to Parent requesting
that a determination of Fair Market Value be made in accordance with the
procedures set forth in Sections 6.2(b) and 6.2(c). If Regional Vehicle does not
deliver such Easymail FMV Notice within 45 days after the date of the Easymail
Offer, the Fair Market Value of the Easymail Interest shall be the amount set
forth in the Easymail Offer. Otherwise the Fair Market Value shall be that value
determined in accordance with the procedures set forth in Sections 6.2(b) and
6.2(c), provided that in the case of any Selling Person other than Parent, a
reference to Parent in such Section shall be deemed to be a reference to such
Selling Person and a reference to Offered Assets shall be deemed to be a
reference to such Easymail Interest. Such Easymail Offer may be accepted by
Regional Vehicle by written notice to Parent until the later of (a) the one
hundred twentieth day after the date of the Easymail Offer and (b) 25 days after
the date of determination of the Fair Market Value of such Easymail Interest in
accordance with the procedures set forth in Sections 6.2(b) and 6.2(c) (such
period being referred to herein as, the "Easymail Offer Response Period"). If
Regional Vehicle does not accept such Easymail Offer within the Easymail Offer
Response Period, such Selling Person may sell its Easymail Interest at any time
to any Person.
ARTICLE VII
TERM
7.1. Term. The term of this Agreement shall begin on the date hereof and
shall terminate upon mutual agreement of the parties hereto; provided that
Parent may in its sole discretion terminate this Agreement at any time after the
termination of the Brand License Agreement.
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ARTICLE VIII
ARBITRATION
8.1. Arbitration. Any dispute, controversy or claim arising out of,
relating to, or in connection with, this Agreement, or the breach, termination
or validity thereof, whether based on contract, tort, statute, fraud,
misrepresentation or any other legal or equitable theory (each a "Claim"), shall
be finally settled by binding arbitration. The arbitration shall be conducted in
accordance with the CPR Rules for Non-Administered Arbitration in effect at the
time of the arbitration, except as they may be modified herein or by mutual
agreement of the parties. The seat of the arbitration shall be New York City,
New York, and it shall be conducted in the English language. Notwithstanding
Section 9.6 hereof, the arbitration and this clause shall be governed by Title 9
(Arbitration) of the United States Code. Any request for interim measures
pursuant to Section 9.11 hereof or otherwise shall not be deemed incompatible
with, or a waiver of, this agreement to arbitrate.
8.2. Number of Arbitrators/Selection. The arbitration shall be conducted
by three arbitrators. The party initiating arbitration (the "Claimant") shall
appoint an arbitrator in its request for arbitration (the "Request"). The other
party (the "Respondent") shall appoint an arbitrator within 30 days of receipt
of the Request and shall notify the Claimant of such appointment in writing. If
within 30 days of receipt of the Request by the Respondent, either party has not
appointed an arbitrator, then that arbitrator shall be appointed by CPR
Institute for Dispute Resolution. The first two arbitrators appointed in accord
with this provision shall appoint a third arbitrator within 30 days after the
Respondent has notified Claimant of the appointment of the Respondent's
arbitrator or, in the event of a failure by a party to appoint, within 30 days
after the CPR Institute for Dispute Resolution has notified the parties and any
arbitrator already appointed of its appointment of an arbitrator on behalf of
the party failing to appoint. When the third arbitrator has accepted the
appointment, the two arbitrators making the appointment shall promptly notify
the parties of the appointment. If the first two arbitrators appointed fail to
appoint a third arbitrator or so to notify the parties within the time period
prescribed above, then the CPR Institute for Dispute Resolution shall appoint
the third arbitrator and shall promptly notify the parties of the appointment.
The third arbitrator shall act as Chair of the tribunal.
8.3. Certain Procedures. The arbitration panel shall strictly limit
discovery to the production of documents directly relevant to the facts alleged
by the Claimant and the Respondent, and if depositions are required, each party
shall be limited to five depositions. Each party shall bear its own expenses,
but those related to the compensation of the arbitrators shall be borne equally.
8.4. Arbitral Award. The arbitral award shall be in writing, state only
the damages and injunctive relief granted and be final and binding on the
parties. The parties hereto expressly waive and forgo any right to punitive,
exemplary or similar damages as a result of any Claim. The arbitrators shall
orally state the reasoning on which the arbitral award rests but shall not state
such reasoning in any writing. The arbitration panel shall endeavor to issue the
arbitral award within six months of the Request, but failure to do so shall not
effect the validity of the arbitral award. The parties agree that the existence
and contents of the entire arbitration, including the award, shall be deemed a
compromise of a dispute under Rule 408 of the Federal Rules of Evidence, shall
not be discoverable in any proceeding, shall not be admissible in any court
(except for the enforcement thereof) or arbitration and shall not bind or
collaterally estop either party with respect to any claim or defense made by any
third party.
8.5. Confidentiality of Proceedings. All proceedings in connection with
any arbitration, including its existence, the content of the proceedings and any
decision, shall be kept confidential to the maximum extent possible consistent
with the law. The arbitrator shall issue an order preventing
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the parties, CPR Institute for Dispute Resolution and any other participants to
the arbitration from disclosing to any third party any information obtained via
the arbitration, including discovery of documents, evidence, testimony and the
award except as may be required by law.
8.6. Judgment. Judgment upon the decision may be entered by any court
having jurisdiction thereof or having jurisdiction over the relevant party or
its assets, provided that the party entering the award shall request that the
court prevent the award from becoming publicly available except as may be
required by law.
ARTICLE IX
MISCELLANEOUS
9.1. Amendment. This Agreement may not be amended except by an instrument
in writing signed on behalf of the parties.
9.2. Waiver. No waivers of or consents to departures from the provisions
hereof shall be effective, unless set forth in a writing signed by Parent and
Regional Vehicle. No failure or delay of any party in exercising any power or
right under this Agreement will operate as a waiver thereof, nor will any single
or partial exercise of any right or power, or any abandonment or discontinuance
of steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.
9.3. Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission (with a
confirmatory copy sent by overnight courier), by courier service (with proof of
service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
IF TO REGIONAL VEHICLE: IF TO PARENT:
----------------------- -------------
0000 Xxxxx xx Xxxx Xxxx. AT&T Corp.
Xxxxx Xxxxxx, XX 00000 000 Xxxxx Xxxxx Xxxxxx
Xxxx 0000X0
Xxxxxxx Xxxxx, XX 00000
Facsimile: 0-000-000-0000 Facsimile: 0-000-000-0000
Attention: Chief Executive Officer Attention: Xxxx Xxxxx
Vice President --
Strategy and Development
WITH A COPY (WHICH COPY SHALL NOT CONSTITUTE NOTICE) TO: WITH A COPY (WHICH COPY SHALL NOT CONSTITUTE NOTICE) TO:
-------------------------------------------------------- --------------------------------------------------------
0000 Xxxxx xx Xxxx Xxxx. AT&T Corp.
Xxxxx Xxxxxx, XX 00000 000 Xxxxx Xxxxx Xxxxxx
Xxxx 0000X0
Xxxxxxx Xxxxx, XX 00000
Facsimile: 0-000-000-0000 Facsimile: 0-000-000-0000
Attention: General Counsel Attention: Xxxxxxx Xxxxxx
Vice President -- Law and
Corporate Secretary
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
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9.4. Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
9.5. Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties with respect thereto.
9.6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to its rules of
conflict of laws. Subject to Article VIII hereof, each of Regional Vehicle and
Parent hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of New York and of the United
States of America located in the State of New York (the "New York Courts") for
any litigation arising out of or relating to this agreement and the transactions
contemplated hereby (and agrees not to commence any litigation in a court
relating thereto except in such courts), waives any objection to the laying of
venue of any such litigation in the New York Courts and agrees not to plead or
claim in any New York Court that such litigation brought therein has been
brought in an inconvenient forum.
9.7. Further Assurances. Each party hereto shall, and shall cause each of
its Subsidiaries (which, in the case of Parent shall not include Regional
Vehicle or its Subsidiaries) to, from time to time, execute and deliver such
additional instruments, documents, conveyances or assurances and take such other
actions as shall be necessary, or otherwise may reasonably be requested by the
other party hereto, to confirm and assure the rights and obligations provided
for in this Agreement, or otherwise to carry out the intent and purposes of this
Agreement.
9.8. Headings. Headings of the Articles and Sections of this Agreement are
for the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
9.9. Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
9.10. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
9.11. Enforcement. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any New York Court, this being in addition to
any other remedy to which they are entitled at law or in equity.
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9.12. Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all, of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.
AT&T Corp.
--------------------------------------
By:
Title:
KIRI INC.
--------------------------------------
By:
Title:
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EXHIBIT A
TO REGIONAL VEHICLE AGREEMENT
DEFINITIONS
1. Defined Terms. The following capitalized terms, when used in this
Agreement, shall have the following respective meanings (each such definition to
be equally applicable to the plural and singular forms of the respective terms
so defined):
"Affiliate" means, with respect to any Person, a Person that directly
or indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with, the first Person, including but not
limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the
first Person is also a Subsidiary.
"Agreement" means this Regional Vehicle Agreement, as the same may be
amended or modified from time to time in accordance with its terms.
"AT&T Global Network" means AT&T Global Network Services Group LLC or
AT&T Global Network Services LLC, any other Person in which such Persons
own any direct or indirect equity interest or any of their respective
successors or assigns. Each of such Persons is sometimes referred to herein
as an "AT&T Global Network Person."
"Brand License Agreement" means that certain Service Xxxx License
Agreement between Regional Vehicle and Parent (the form of which was
attached as an Exhibit to the Merger Agreement), as amended from time to
time.
"Brands" means any name, xxxxx, xxxx, trademark, service xxxx, trade
dress, trade name, business name or other indicia of origin.
"Carrier Services" means the provision of carriage, including hubbing,
routing, transit, reorigination and least cost routing on Global Network
Facilities primarily between two or more countries to other International
Carriers.
"Communications Services" shall mean any services and applications,
including enhanced services and applications, that involve the transmission
of voice, data, sound, music, still and moving image or video and other
elements by fixed media (such as wire, cable or fiber), or radio or other
wave signal, and any similar or substitute service available or offered
from time to time, and the business of developing, designing or offering
content-based applications.
"Control" (including the terms "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 policies of a Person,
whether through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.
"global", when used with respect to Communications Services, shall
mean Communications Services between or among two or more countries.
"Global Business Communications Services" shall mean global
Communications Services provided or targeted to businesses and to their
employees in their capacity as employees.
"Global Communications Services" shall mean current or future (a)
global end-to-end managed and (b) all other global Communications Services
of a type intended for use by end
Def.-1
178
user customers and resellers, but excluding Satellite & Radio Services,
basic switched voice and basic telex.
"Global Network Facilities" shall mean all facilities that support
bandwidth, transmission, signaling, routing, network service intelligence,
network control intelligence, switching and Operational Systems Support
(including any related software support) in connection with the
transmission of voice, data, sound, music, still and moving image, or video
and other elements by fixed media (such as wire, cable or fiber), or radio
or other wave signal, exclusively or predominantly between or among two or
more countries (it being understood that facilities that are predominantly
designed to support such transmission between or among two or more
countries may also support, as a non-predominant use, transmission within
one or more of such countries). Global Network Facilities shall not include
any system or systems that provide Communications Services exclusively
within a given country.
"Global Venture" means each of those certain Persons formed for the
provision of certain telecommunications and related services pursuant to
the Framework Agreement. Each of such Persons is sometimes referred to
herein as a "Global Venture Person."
"International Carrier" shall mean a Person which (a) is licensed or
authorized, or is otherwise permitted to provide, or operates where no
license or authorization is required, crossborder Communications Services
to the public, or (b) owns or operates, or is licensed to own or operate,
the underlying facilities used to provide crossborder Communications
Services to the public.
"International Carrier Services" shall mean Carrier Services and
International Traffic Termination Services.
"International Settlement Process" means the system of accounting and
settlement rates for the exchange of international traffic of a type
referred to in Section 64.1001 of the regulations of the FCC and any
subsequent regime for arranging and managing inbound/outbound traffic
termination terms and conditions with an International Carrier.
"International Traffic Termination Services" shall mean the
arrangement, management and delivery of inbound/outbound traffic
termination of all the communications traffic, including voice and Internet
Protocol traffic, of the Parent Group, including through the International
Settlement Process and least cost routing alternatives, but excluding all
Global Business Communications Services.
"Liberty Media" means Liberty Media Corporation and any Person in
which Liberty Media Corporation owns any direct or indirect equity
interests.
"Managed Network Services" shall mean the provision of (a) service to
a customer consisting solely of the provisioning and maintenance of the
logical and physical elements of the customer's wide area communications
network, and, to the extent relating to a customer's wide area
communications network, directly related planning, design, installation,
maintenance and ongoing life cycle support functions, and (b) equipment on
the customer's premises at the interface between a wide area communications
network and the remainder of the customer's networking environment insofar
as the equipment so provided facilitates (i) the maintenance of the
customer's wide area communication services, (ii) the recording of
performance data with respect to the customer's wide area communications
services, (iii) the provisioning of new wide area communications services
to the customer or changes in the parameters of the wide area
communications services provided to the customer, or (iv) the integration
of multiple wide area communications services, but excluding in the case of
clause (a) or (b) any such service or
Def.-2
179
equipment that materially extends services beyond the interface described
above further into the customer's non-wide area communications network.
"Media One" means Mediaone Group, Inc., Meteor Acquisition Inc., any
successors thereto and any Person in which Mediaone Group, Inc., Meteor
Acquisition Inc. or any successors or assigns thereof own any direct or
indirect equity interests.
"Operational Support Systems" means the computer systems on which a
Person depends for providing management support of all of its operations,
including service delivery and provision, network usage and control,
billing of customers, network planning, fraud identification, resource
planning and facility management.
"Outsourcing Professional Services" shall mean the provision of
professional services relating to network architecture validation,
implementation, operations and life cycle management, including business
process consulting, migration planning and implementation, but excluding
Managed Network Services, and may include the ownership and acquisition of
assets from and on behalf of customers related to the provision of
Outsourcing Professional Services.
"Outsourcing Services" shall mean Outsourcing Professional Services
and Managed Network Services.
"Parent" means AT&T, provided that Parent shall not include Liberty
Media and Media One.
"Parent Group" means Parent and any Subsidiary of Parent except
Liberty Media and Media One, provided that (a) neither Regional Vehicle and
its Subsidiaries, any Global Venture Person nor any AT&T Global Network
Person or any Subsidiaries thereof shall be included in the Parent Group
and (b) no member of a Territory Acquired Group excluded from Parent Group
as provided in Section 6.1(b) shall be included in the Parent Group.
"Person" means any natural person, firm, partnership, association,
corporation, company, limited liability company, trust, business trust or
other entity.
"Preferred Supplier" to a Person (the "Purchaser") means that, to the
extent that the designated Preferred Supplier is able to provide certain
services, products or facilities to the Purchaser on terms and conditions
and standards at least as favorable regarding price, quality and service as
the Purchaser would be able to obtain in an arm's length transaction with a
Person that is not an Affiliate of the Purchaser, such Purchaser shall not,
and shall cause each of its wholly-owned Subsidiaries not to, purchase such
services, products or facilities from any Person other than the designated
Preferred Supplier unless such Person is also a Preferred Supplier to such
Purchaser.
"Satellite & Radio Services" shall mean Communications Services (other
than VSAT services) delivered through satellites using existing and future
satellite constellations and associated ground networks and equipment
through any satellite business and terrestrial radio solutions targeted at
maritime and aeronautical applications using existing and future long,
medium and short-range radio systems.
"Subsidiaries" means each corporation or other Person in which a
Person owns or controls, directly or indirectly, capital stock or other
equity interests representing more than 50% of the outstanding voting stock
or other equity interests.
"Systems Integration" shall mean advising clients on how best to use
information technology to achieve their ends, to reengineer business
processes to make organizations work
Def.-3
180
more effectively, specifying, designing or building or specifying,
designing and building integrated business systems for or on behalf of
clients managing the change to such systems for or on behalf of clients,
supporting, maintaining, enhancing, operating or further developing such
systems for or on behalf of clients, providing program or project
management and integration of customer defined individual customer
solutions and providing other related services required or requested by
clients in connection with any of the foregoing. Systems Integration does
not include (a) the underlying capability to provide Communications
Services or (b) Outsourcing Services.
"Territory" means Antigua and Barbuda, Argentina, Bahamas, Barbados,
Bolivia, Brazil, Chile, Colombia, Dominica, Dominican Republic, Ecuador,
Grenada, Guyana, Haiti, Jamaica, Panama, Paraguay, Peru, Saint Lucia, Saint
Xxxxxxx and the Grenadines, Suriname, St. Kitts and Nevis, Trinidad and
Tobago and Uruguay.
2. Other Defined Terms. All references to "Dollar", "US$" or "$" shall be
deemed to be references to the lawful currency of the United States of America.
The following capitalized terms,
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181
when used in this Agreement without definition, shall have the meanings set
forth in the Sections of this Agreement indicated below:
DEFINED TERM SECTION REFERENCE
------------ -----------------
appraiser............................................ Section 6.2(b)
Acquired Group....................................... Section 6.1(a)
Acquired Person...................................... Section 6.1(a)
AT&T................................................. First Paragraph
AT&T Global Network Services......................... Section 5.1
Claim................................................ Section 8.1
Claimant............................................. Section 8.2
Company.............................................. Recital A
Cross Border Revenues................................ Section 4.3
Covered Acquisition.................................. Section 6.1(a)
Excluded Activities.................................. Section 3.1
FMV Notice........................................... Section 6.2(a)
Framework Agreement.................................. Recital B
Global Venture Person................................ Definition of Global Venture
High Price........................................... Section 6.2(c)
Initial Appraiser.................................... Section 6.2(b)
Licensed Brands...................................... Recital B
Limited Cross Border Network Service Provider........ Section 4.3
Low Price............................................ Section 6.2(c)
Merger............................................... Recital A
Merger Agreement..................................... Recital A
Merger Sub........................................... Recital A
New York Courts...................................... Section 9.6
Offer................................................ Section 6.1(b)
Offered Assets....................................... Section 6.1(b)
Offer Exception...................................... Section 6.1(b)
Offer Response Period................................ Section 6.1(b)
Definition of Preferred
Purchaser............................................ Supplier
Qualifying MNC....................................... Section 4.3(b)
Regional Vehicle..................................... First Paragraph
Request.............................................. Section 8.2
Respondent........................................... Section 8.2
RV Exclusive Services................................ Section 2.1
RV Non-Exclusive Services............................ Section 2.2
RV Services.......................................... Section 2.2
Territory Revenues................................... Section 6.1(a)
Def.-5
182
SCHEDULE A-1
TO REGIONAL VEHICLE AGREEMENT
RV EXCLUSIVE SERVICES
Local voice delivered through fixed-line connectivity
Domestic long distance
International long distance
Point-to-point dedicated line
Asynchronous Transfer Mode (ATM)
Frame relay
Internet access
1-800/toll free
Packet X.25 (data)
Virtual network services (data)
Switched digital (data)
A-1-1
183
SCHEDULE A-2
TO REGIONAL VEHICLE AGREEMENT
PARENT GROUP ACTIVITIES
Any services provided by Parent Group using assets that any member of
Parent Group is obligated under the Framework Agreement, as in effect on the
date hereof, to contribute to the Global Venture.
Service provided to customers in connection with the provision of, or
pursuant to contracts for, Outsourcing Services.
X-0-0
000
XXXXXXXX X
TO REGIONAL VEHICLE AGREEMENT
RV NON-EXCLUSIVE SERVICES
AT&T card services
AT&T Direct(R) services
E-commerce
Web-hosting
Fixed wireless for connectivity
Voice over Internet Protocol
Managed Network Services
B-1
185
SCHEDULE C
TO REGIONAL VEHICLE AGREEMENT
EXCLUDED ACTIVITIES
International Carrier Services
Mobile wireless/PCS
Cable and cable telephony
Solution services, including Outsourcing Professional Services, other than
Managed Network Services
Systems Integration
Messaging Services in Chile, to the extent providing such services would cause a
breach of obligations of Parent or any of its Affiliates under the Shareholders
Agreement, dated as of December 9, 1993, among Easymail Chile S.A., AT&T
International, Inc., Inversiones Rapel, S.A. et al or any related agreements.
C-1
186
EXHIBIT F TO THE
AGREEMENT AND PLAN OF MERGER
187
EXHIBIT F TO MERGER AGREEMENT
REGIONAL VEHICLE REVOLVING CREDIT FACILITY
SUMMARY INDICATIVE TERMS AND CONDITIONS
Borrower: Regional Vehicle ("RV") or its subsidiaries.
AT&T will have the right to decide whether to
lend at either the holding company or
individual operating company level.
Lender: AT&T or AT&T Subsidiary
Facility: US$100 million, to be reduced by any new vendor
financing arrangements. AT&T has the option to
structure the facility through debt or
redeemable preferred.
Purpose: To make loans to RV and its subsidiaries in the
Territory (as defined in the RV Agreement), the
proceeds of which are to be used to (i) fund
capital expenditures and working capital
requirements, (ii) pay cash interest and (iii)
fund operating costs.
Availability: In multiple drawdowns prior to Maturity,
following request by RV via a borrowing
certificate executed by CEO or CFO (relating to
consistency with business plan, absence of
defaults and other conditions to be agreed).
Final Maturity: 24 months from Closing
Amortization: Single repayment at maturity
Interest Rate: To be paid quarterly and calculated (on the
basis of a 360-day year of 30-day months) at
11.0%.
Security: - Lender will have the right at any time to
obtain a security interest in the tangible
and intangible assets of FirstCom/Netstream
and subsidiaries to which loans (including
Inter-company Loans) have been extended
- 100% of the capital stock in FirstCom
Corporation, Netstream and its subsidiaries
Financial Covenants: Maximum Capital Expenditures
In any month, not more than 110% of level
provided for in latest Board-approved business
plan.
Maximum Total Debt
In any month, not more than 110% of level
provided for in latest Board-approved business
plan.
Mandatory Prepayments: Facility to be repaid without penalty from 100%
of proceeds of (i) any capital markets issues,
(ii) equity issues, (iii) international or
local bank financings, and (iv) sales of
material assets.
F-1
188
Negative Covenants: Including but not limited to the following:
- Limitation on other indebtedness (permitted
local currency working capital facilities and
vendor financing, etc.)
- Limitation on liens (US$10 million)
- Limitation on leases (US$10 million)
- Disposal of assets (in excess of US$5
million)
- Limitation on investments (US$5 million)
Events of Default: Including but not limited to the following:
- Failure to pay principal or interest when due
under the Facility
- Cross default to other Indebtedness (US$5
million notional amount)
- Bankruptcy or other insolvency event at any
subsidiary
- Monetary judgments (US$3 million)
- Revocation of material licenses
- Political risk events, such as
expropriation/nationalization, currency
inconvertibility/transferability,
war/political violence
F-2
189
EXHIBIT G TO THE
AGREEMENT AND PLAN OF MERGER
190
EXHIBIT G TO AGREEMENT
AND PLAN OF MERGER
[ INC.]
---------------------
CERTIFICATE OF DESIGNATION
PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
---------------------
SERIES A CONVERTIBLE PREFERRED STOCK
---------------------
, a Delaware corporation (the "Corporation"), certifies that
pursuant to the authority contained in its Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation"), the Board of Directors of
the Corporation has duly adopted the following recitals and resolution:
WHEREAS, Article FOURTH of the Certificate of Incorporation provides that
the Corporation may issue Preferred Stock, par value $0.001 per share
("Preferred Stock") from time to time in one or more series or classes, having
such voting powers and such designations, preferences and relative,
participating, optional and other special rights and qualifications, limitations
or restrictions, as the Board of Directors determines;
WHEREAS, pursuant to Article FOURTH of the Certificate of Incorporation and
in accordance with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, the Board of Directors has adopted the following
resolution creating a series of its Preferred Stock, designated as Series A
Convertible Preferred Stock:
RESOLVED, that a series of the class of authorized Preferred Stock, par
value $0.001 per share, of the Corporation be hereby created, and that the
voting powers and designation, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations and restrictions thereof are as follows:
1. Designation and Amount. This series of Preferred Stock shall be
designated as the Series A Convertible Preferred Stock (the "Series A Preferred
Stock"), and the authorized number of shares constituting such series shall be
1,666,667, par value $0.001 per share.
2. Dividends.
(a) The holders of Series A Preferred Stock shall have the right to
receive, in preference to the holders of Junior Stock, dividends, payable
when and as declared by the Board of Directors of the Corporation out of
assets legally available therefor, as provided in this Section 2(a).
Dividends shall accrue on each share of Series A Preferred Stock at an
annual rate of fifteen percent (15%) on the sum of (i) $8.00 (the "Series A
Purchase Price") and (ii) all accumulated and unpaid dividends accrued
thereon pursuant to this Section 2(a) from the date of issuance thereof
(the "Series A Dividends" and, the sum of the Series A Purchase Price and
Series A Dividends is referred to herein as the "Series A Preference
Amount"). Such dividends will be calculated and, to the extent such
dividends remain unpaid, compounded quarterly in arrears on the first day
of each January, April, July and October of each year prorated on a daily
basis for partial periods. Such dividends shall commence to accrue on each
share of Series A Preferred Stock from the date of issuance of such share
of Series A Preferred Stock whether or not they have been declared and
whether or not there are profits, surplus or other funds legally
191
available for the payment of dividends and shall continue to accrue until
paid out of assets legally available therefor; provided, however, that for
the period from the Original Issue Date until (and including) the first day
of July 2001 (the "PIK Period"), the Corporation shall pay dividends on
each dividend payment date in additional shares of Series A Preferred Stock
(such dividends paid in kind being herein referred to as "PIK Dividend");
and provided further that the amount payable as a PIK Dividend on the final
dividend payment date during the PIK Period shall be adjusted so that the
total number of shares of Series A Preferred Stock paid as PIK Dividends is
equal to (1) and any amount of unpaid dividend resulting
from such adjustment shall accrue as otherwise provided in this Section 2;
and provided further that in the event that the Corporation shall exercise
its right to redeem the Series A Preferred Stock after the closing of a
Strategic Investment as provided in Section 7, then the payment of all PIK
Dividends for the PIK Period shall be accelerated and any PIK Dividends not
previously paid shall be immediately paid to the holders of the Series A
Preferred Stock as described in the next paragraph (notwithstanding any
subsequent conversion pursuant to Section 5 or 6 or redemption pursuant to
Section 8). In addition, the holders of Series A Preferred Stock shall have
the right to receive dividends or other distributions (as defined below),
ratable and equally with the holders of Common Stock, when and as declared
by the Board of Directors of the Corporation out of assets legally
available therefor; provided, however, that each holder of Series A
Preferred Stock shall be entitled to receive dividends or other
distributions on the outstanding shares of Series A Preferred Stock held by
such holder in an amount equal to the product of (i) the per share amount,
if any, of the dividend or other distribution to be declared, paid or set
aside for the Common Stock, multiplied by (ii) the number of whole shares
of Common Stock into which such shares of Series A Preferred Stock are then
convertible.
(b) PIK Dividends shall be paid by delivering to the record holders of
Series A Preferred Stock a number of shares of Series A Preferred Stock
determined by dividing the amount of the payment which otherwise would be
payable on the dividend payment date to each respective holder in cash by
the Series A Purchase Price per share. The issuance of any such PIK
Dividend in such amount shall constitute full payment of such dividend.
Fractional shares of Series A Preferred Stock payable as PIK Dividends may
be paid in cash by the Corporation. Any additional shares of Series A
Preferred Stock issued pursuant to this section shall be subject in all
respects, except as to issue date and the date from which dividends accrue
and cumulate as set forth above, to the same terms as the shares of Series
A Preferred Stock originally issued hereunder.
(c) For purposes of this Section 2, unless the context requires
otherwise, "distribution" shall mean the transfer of cash or property
without consideration, whether by way of dividend or otherwise, or the
purchase or redemption of shares of the Corporation for cash or property,
including any such transfer, purchase or redemption by a subsidiary of this
Corporation.
3. Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations
and Asset Sales.
Upon a liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, (each, a "Liquidation"), each holder of Series A
Preferred Stock shall be entitled, after provision for the payment of the
Corporation's debts and other liabilities, to be paid in cash in full, before
any distribution is made on any Junior Stock, an amount in cash equal to the
Series A Preference Amount of all Series A Preferred Shares held by such holder.
If, upon a Liquidation, the net assets of the Corporation distributable among
the holders of all outstanding Series A Preferred Stock shall be insufficient to
permit the payment of the Series A Preference Amount in full, then the
---------------
1. [1,666,667 less amount issued initially]
2
192
entire net assets of the Corporation remaining after the provision for the
payment of the Corporation's debts and other liabilities shall be distributed
among the holders of the Series A Preferred Stock ratably in proportion to the
full preferential amounts to which they would otherwise be respectively entitled
on account of their Series A Preferred Stock. A merger or consolidation of the
Corporation (except one in which the holders of capital stock of the Corporation
immediately prior to such merger or consolidation continue to hold more than 50%
by voting power of the equity interests of the surviving entity), a single
transaction or a series of transactions pursuant to which holders of capital
stock of the Corporation immediately prior to such transaction or series of
transactions do not continue to hold more than 50% by voting power of the
capital stock after such transaction or series of transactions, or the sale of
all or substantially all the assets of the Corporation, shall be deemed to be a
Liquidation of the Corporation, and all consideration payable to the
stockholders of the Corporation (in the case of a merger or consolidation), or
all consideration payable to the Corporation, together with all other available
assets of the Corporation (in the case of an asset sale), shall be distributed
to the holders of capital stock of the Corporation in accordance with the
foregoing provisions of this Section 3.
4. Voting.
(a) Each holder of outstanding shares of Series A Preferred Stock
shall be entitled to the number of votes equal to the number of whole
shares of Common Stock into which the shares of Series A Preferred Stock
held by such holder are then convertible (as adjusted from time to time
pursuant to Section 5 hereof), at each meeting of stockholders of the
Corporation (and written actions of stockholders in lieu of meetings) with
respect to any and all matters presented to the stockholders of the
Corporation for their action or consideration except as provided by law, by
the provisions of Subsection 4(b) below or elsewhere in the Corporation's
Certificate of Incorporation, as amended, holders of Series A Preferred
Stock shall vote together with the holders of Common Stock and Preferred
Stock as a single class.
(b) Except as provided by law, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of
at least 75% of the then outstanding shares of Series A Preferred Stock,
voting together as a single class of Preferred Stock:
(i) Amend, repeal, alter or waive any provision of, or add any
provision to, the Corporation's Certificate of Incorporation or Bylaws,
if such action could have a material adverse effect on the rights,
preferences or privileges of the Series A Preferred Stock;
(ii) Authorize or issue any new or existing class or classes or
series of capital stock having any preference or priority as to
dividends, liquidation preference, assets or voting superior to or on
parity with any such preference or priority of the Series A Preferred
Stock or authorize or issue shares of stock of any class or any bonds,
debentures, notes or other obligations convertible into or exchangeable
for, or having rights to purchase, any shares of stock of the
Corporation having any preference or priority as to dividends,
liquidation preference, assets or voting superior to or on parity with
any such preference or priority of the Series A Preferred Stock;
(iii) Redeem, purchase or otherwise acquire, directly or
indirectly, any Junior Stock; or
(iv) Authorize or effect the declaration or payment of dividends or
other distributions upon any Junior Stock.
3
193
5. Optional Conversion. The holders of the Series A Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock shall
be convertible, at the option of the holder thereof, at any time and from
time to time, and without the payment of additional consideration by the
holder thereof, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing $6.00 by the Series A Conversion
Price in effect at the time of conversion. The "Series A Conversion Price"
shall initially be $6.00. The rate at which shares of Series A Preferred
Stock may be converted into shares of Common Stock shall be subject to
adjustment as provided below.
In the event of a Liquidation of the Corporation, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on Liquidation to the
holders of Series A Preferred Stock.
(b) Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Series A Conversion Price.
(c) Mechanics of Conversion.
(i) In order for a holder of Series A Preferred Stock to convert
such shares into shares of Common Stock, such holder shall surrender the
certificate or certificates for such shares of Series A Preferred Stock
at the office of the transfer agent for the Series A Preferred Stock (or
at the principal office of the Corporation if the Corporation serves as
its own transfer agent), together with written notice (a "Conversion
Demand") that such holder elects to convert all or any number of the
shares of the Series A Preferred Stock represented by such certificate
of certificates. Such Conversion Demand shall state such holder's name
or the names of the nominees in which such holder wishes the certificate
or certificates for shares of Common Stock to be issued. If required by
the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of
transfer, in form satisfactory to the Corporation, duly executed by the
registered holder of his or its attorney duly authorized in writing. The
date of receipt of such certificates and Conversion Demand notice by the
transfer agent (or by the Corporation if the Corporation serves as its
own transfer agent) shall be the conversion date ("Conversion Date").
The Corporation shall, as soon as practicable after the Conversion Date,
issue and deliver at such office to such holder of Series A Preferred
Stock, or to his or its nominees, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share.
(ii) The Corporation shall at all times when the Series A Preferred
Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the
conversion of the Series A Preferred Stock, such number of its duly
authorized shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Series A
Preferred Stock. Before taking any action which would cause an
adjustment reducing the Series A Conversion Price below the then par
value of the shares of Common Stock issuable upon conversion of the
Series A Preferred Stock, the Corporation will take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Series A Conversion Price.
4
194
(iii) Upon any such conversion, no adjustment to the Series A
Conversion Price shall be made for any declared but unpaid dividends on
the Series A Preferred Stock surrendered for conversion or on the Common
Stock delivered upon conversion.
(iv) All shares of Series A Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be deemed
to be outstanding and all rights with respect to such shares, including
the rights, if any, to receive notices and to vote, shall immediately
cease and terminate on the Conversion Date, except only the right of the
holders thereof to receive shares of Common Stock in exchange therefor
and payment of any dividends declared but unpaid thereon. Any shares of
Series A Preferred Stock so converted shall be retired and canceled and
shall not be reissued, and the Corporation (without the need for
stockholder action) may from time to time take such appropriate action
as may be necessary to reduce the authorized Series A Preferred Stock
accordingly.
(v) The Corporation shall pay any and all issue and other taxes
that may be payable in respect of any issuance or delivery of shares of
Common Stock upon conversion of shares of Series A Preferred Stock
pursuant to this Section 5. The Corporation shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of shares of Common Stock in a
name other than that in which the shares of Series A Preferred Stock so
converted were registered, and no such issuance or delivery shall be
made unless and until the person or entity requesting such issuance has
paid to the Corporation the amount of any such tax or has established,
to the satisfaction of the Corporation, that such tax has been paid.
(vi) Notwithstanding any other provision hereof, if a conversion of
Series A Preferred Stock is to be made in connection with a public
offering of Common Stock, the conversion of any shares of Series A
Preferred Stock may, at the election of the holder of such shares, be
conditioned upon the consummation of such public offering in which case
such conversion shall not be deemed to be effective until the
consummation of such public offering.
(d) Adjustments to Conversion Price for Diluting Issues:
(i) Special Definitions. For purposes of Subsections 5(d)-5(g), the
following definitions shall apply:
(A) "Option" shall mean rights, options or warrants to subscribe
for, purchase or otherwise acquire Common Stock or Convertible
Securities, excluding options described in subsection 5(d)(i)(C)(IV)
below.
(B) "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or indirectly
convertible into or exchangeable for Common Stock.
(C) "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to Subsection 5(d)(iii) below,
deemed to be issued) by the Corporation after the Original Issue
Date, other than shares of Common Stock (or, in the case of clause IV
below, options or warrants to purchase shares of Common Stock) issued
or issuable:
(I) upon conversion of any Convertible Securities
outstanding on the Original Issue Date, or upon exercise of any
Options outstanding on the Original Issue Date;
5
195
(II) as a dividend or distribution on Series A Preferred
Stock;
(III) by reason of a dividend, stock split, split up or
other distribution on shares of Common Stock that is covered by
Subsection 5(c) or 5(f) below;
(IV) to employees, directors, officers or managers of, or
consultants to, the Corporation or any of its subsidiaries
pursuant in a plan adopted by the Board of Directors of the
Corporation in good faith; or
(V) to a Strategic Investor in connection with a Strategic
Investment within nine months after the Original Issue Date;
provided that the average daily closing or last sale price per
share of Common Stock for the ninety (90) days immediately
following such Strategic Investment, as reported on a national
securities exchange or NASDAQ, is greater than or equal to
$9.00.
(ii) No Adjustment of Conversion Price. No adjustment in the number
of shares of Common Stock into which the Series A Preferred Stock is
convertible shall be made, by adjustment in the Series A Conversion
Price, as applicable, unless the consideration per share (determined
pursuant to Subsection 5(d)(v)) for an Additional Share of Common Stock
issued or deemed to be issued by the Corporation is less than the Series
A Conversion Price in effect on the date of, and immediately prior to,
the issue of such Additional Shares.
(iii) Issue of Securities Deemed Issue of Additional Shares of
Common Stock.
If the Corporation at any time or from time to time after the
Original Issue Date shall issue any Options or Convertible Securities or
shall fix a record date for the determination of holders of any class of
securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares of Common Stock (as set
forth in the instrument relating thereto without regard to any provision
contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of
Common Stock issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such
record date, provided that Additional Shares of Common Stock shall not
be deemed to have been issued unless the consideration per share
(determined pursuant to Subsection 5(d)(v) hereof) of such Additional
Shares of Common Stock would be less than the Series A Conversion Price,
as applicable, in effect on the date of and immediately prior to such
issue, or such record date, as the case may be, and provided further
that in any such case in which Additional Shares of Common Stock are
deemed to be issued:
(A) No further adjustment in the Series A Conversion Price shall
be made upon the subsequent issue of Convertible Securities or shares
of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities;
(B) If such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Corporation, upon the exercise,
conversion or exchange thereof, the Series A Conversion Price
computed upon the original issue thereof (or upon the occurrence of a
record date with respect thereto), and any subsequent adjustments
based thereon, shall, upon any such increase becoming effective, be
recomputed to reflect such increase insofar as it affects such
Options or the rights of conversion or exchange under such
Convertible Securities;
6
196
(C) Upon the expiration or termination of any unexercised Option
or any unexercised rights of conversion or exchange under any
Convertible Security, the Series A Conversion Price shall be
readjusted to eliminate the Additional Shares of Common Stock deemed
issued as the result of the original issue of such Option or such
Convertible Security.
(D) In the event of any change in the number of shares of Common
Stock issuable upon the exercise, conversion or exchange of any
Option or Convertible Security, including, but not limited to, a
change resulting from the anti-dilution provisions thereof, the
Series A Conversion Price then in effect shall forthwith be
readjusted to such Conversion Price as would have been obtained had
the adjustment which was made upon the issuance of such Option or
Convertible Security not exercised or converted prior to such change
been made upon the basis of such change; and
(E) No readjustment pursuant to clause (B), (C) or (D) above
shall have the effect of increasing the Series A Conversion Price to
an amount which exceeds the lower of (i) the Series A Conversion
Price on the original adjustment date, or (ii) the Series A
Conversion Price that would have resulted from any issuances of
Additional Shares of Common Stock between the original adjustment
date and such readjustment date.
In the event the Corporation, after the Original Issue Date,
amends the terms of any Options or Convertible Securities (whether
such Options or Convertible Securities were outstanding on the
Original Issue Date or were issued after the Original Issue Date),
then such Options or Convertible Securities, as so amended, shall be
deemed to have been issued after the Original Issue Date and the
provisions of this Subsection 5(d)(iii) shall apply.
It is expressly acknowledged that options issued to persons
described in Subsection 5(d)(i)(C)(IV) are excluded from the
definition of "Option" as provided in Subsection 5(d)(i)(A).
(iv) Adjustment of Series A Conversion Price Upon Issuance of
Additional Shares of Common Stock.
In the event the Corporation shall at any time after the Original
Issue Date issue Additional Shares of Common Stock without consideration
or for a consideration per share less than the applicable Series A
Conversion Price in effect on the date of and immediately prior to such
issue, then and in such event, such Series A Conversion Price shall be
reduced, concurrently with such issue, to a price (calculated to the
nearest cent) determined by multiplying such Series A Conversion Price
by a fraction, (A) the numerator of which shall be (1) the number of
shares of Common Stock outstanding immediately prior to such issue plus
(2) the number of shares of Common Stock with the aggregate
consideration received or to be received by the Corporation for the
total number of Additional Shares of Common stock so issued would
purchase at such Series A Conversion Price; and (B) the denominator of
which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of such Additional
Shares of Common Stock so issued; provided that (i) for the purpose of
this Subsection 5(d)(iv), all shares of Common Stock issuable upon
exercise or conversion of Options or Convertible Securities outstanding
immediately prior to such issue shall be deemed to be outstanding, and
(ii) the number of shares of Common Stock deemed issuable upon exercise
or conversion of such outstanding Options and Convertible Securities
shall not give effect to any adjustments to
7
197
the conversion price or conversion rate of such Options of Convertible
Securities resulting from the issuance of Additional Shares of Common
Stock that is the subject of this calculation.
(v) Determination of Consideration. For purposes of this Subsection
5(d), the consideration received by the Corporation for the issue of any
Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
(I) insofar as it consists of cash, be computed at the
aggregate of cash received by the Corporation, excluding amounts
paid or payable for accrued interest;
(II) insofar as it consists of property other than cash, be
computed at the fair market value thereof at the time of such
issue, as determined in good faith by the Board of Directors;
and
(III) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets
of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as
provided in clauses (I) and (II) above, as determined in good
faith by the Board of Directors.
(B) Options and Convertible Securities. The consideration per
share received by the Corporation for Additional Shares of Common
Stock deemed to have been issued pursuant to Subsection 5(d)(iii),
relating to Options and Convertible Securities, shall be determined
by dividing
(x) the total amount, if any, received or receivable by the
Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such consideration)
payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in
the case of Options for Convertible Securities, the exercise of
such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, by
(y) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.
(vi) Multiple Closing Dates. In the event the Corporation shall
issue on more than one date Additional Shares of Common Stock, and such
issuance dates occur within a period of no more than 30 days, then the
Series A Conversion Price shall each be adjusted only once on account of
such issuance, with such adjustment to occur upon the final such
issuance and to give effect to all such issuances as if they occurred on
the date of the final such issuance.
(e) Adjustment for Stock Splits and Combinations. If the Corporation
shall at any time or from time to time after the Original Issue Date effect
a subdivision of the outstanding Common Stock, the Series A Conversion
Price then in effect immediately before that subdivision shall
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each be proportionately decreased. For example, if there are two
outstanding shares of Common Stock which are subdivided into a total of
four shares of Common Stock and the Series A Conversion Price in effect
immediately prior to such subdivision is $6.00, then the Series A
Conversion Price after giving effect to such subdivision shall be $3.00. If
the Corporation shall at any time or from time to time after the Original
Issue Date effect a subdivision of the Series A Preferred Stock, the Series
A Conversion Price then in effect immediately before that subdivision shall
be proportionately increased. If the Corporation shall at any time or from
time to time after the Original Issue Date combine the outstanding shares
of Common Stock, the Series A Conversion Price then in effect immediately
before the combination shall each be proportionately increased. For
example, if there are two outstanding shares of Common Stock which are
combined into a total of one share of Common Stock and the Series A
Conversion Price in effect immediately prior to such combination is
[$6.00], then the Series A Conversion Price after giving effect to such
combination shall be [$12.00]. If the Corporation shall at any time or from
time to time after the Original Issue Date combine the outstanding shares
of Series A Preferred Stock, the Series A Conversion Price then in effect
immediately before the combination shall be proportionately deceased. Any
adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the event
the Corporation at any time, or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other
distribution payable in Additional Shares of Common Stock, then and in each
such event the Series A Conversion Price then in effect shall each be
decreased as of the time of such issuance or, in the event such a record
date shall have been fixed, as of the close of business on such record
date, by multiplying the Series A Conversion Price then in effect by a
fraction:
(1) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the name of
such issuance or the close of business on such record date, and
(2) the denominator of which shall be 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, if such record date shall have been 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 shall be recomputed
accordingly as of the close of business on such record date and thereafter
the Series A Conversion Price shall be adjusted pursuant to this paragraph
as of the time of actual payment of such dividends or distributions; and
provided further, however, that no such adjustment shall be made if the
holders of Series A Preferred Stock simultaneously receive a dividend or
other distribution of shares of Common Stock in a number equal to the
number of shares of Common Stock as they would have received if all
outstanding shares of Series A Preferred Stock had been converted into
Common Stock on the date of such event.
(g) Adjustments for Other Dividends and Distributions. In the event
the Corporation at any time or from time to time after the Original Issue
Date shall make or issue, or fix 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, then and in each such event provision shall be made so that
the holders of the Series A Preferred Stock shall receive upon conversion
thereof in addition to the number of shares of Common
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Stock receivable thereupon, the amount of securities of the Corporation
that they would have received had the Series A Preferred Stock 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, giving application to all adjustments called
for during such period under this paragraph with respect to the rights of
the holders of the Series A Preferred Stock; and provided further, however,
that no such adjustment shall be made if the holders of Series A Preferred
Stock simultaneously receive a dividend or other distribution of such
securities in an amount equal to the amount of such securities was they
would have received if all outstanding shares of Series A Preferred Stock
had been converted into Common Stock on the date of such event.
(h) Adjustment for Reclassification, Exchange, or Substitution. If
the Common Stock issuable upon the conversion of the Series A Preferred
Stock shall be changed into the same or a different number of shares of any
class or classes of stock, whether by capital reorganization,
reclassification, or otherwise (other than a subdivision or combination of
shares or stock dividend, provided for above, or a reorganization, merger,
consolidation, or sale of assets provided for below), then and in each such
event the holder of each such share of Series A Preferred Stock shall have
the right thereafter to convert such share into the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, by holders of the number
of shares of Common Stock into which such shares of Series A Preferred
Stock might have been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.
(i) Adjustment for Merger or Reorganization, etc. In case of any
consolidation or merger of the Corporation with or into another corporation
or the sale of all or substantially all of the assets of the Corporation to
another corporation (other than a consolidation, merger or sale which is
covered by Subsection 2(b)), each share of Series A Preferred Stock shall
thereafter be converted (or shall be converted into a security which shall
be convertible) into the kind and amount of shares of stock or other
securities or property to which a holder of the number of shares of Common
Stock of the Corporation deliverable upon conversion of such Series A
Preferred Stock would have been entitled upon such consolidation, merger or
sale; and, in such case, appropriate adjustment (as determined in good
faith by the Board of Directors) shall be made in the application of the
provisions in this Section 5 set forth with respect to the rights and
interest thereafter of the holders of the Series A Preferred Stock to the
end that the provisions set forth in this Section 5 (including provisions
with respect to changes in and other adjustments of the Series A Conversion
Price) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable
upon the conversion of the Series A Preferred Stock.
(j) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Corporation, but will at all times in good faith assist in the carrying
out of all the provisions of this Section 5 and in the taking of all such
action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred Stock.
(k) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Series A Conversion Price pursuant to
this Section 5, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish
to each holder of Series A Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is
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based. The Corporation shall, upon the written request at any time of any
holder of Series A Preferred Stock, furnish or cause to be furnished to
such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Series A Conversion Price then in effect, and (iii)
the number of shares of Common Stock and the amount, if any, of other
property which then would be received upon the conversion of Series A
Preferred Stock.
(l) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or other
securities of the Corporation;
(ii) that the Corporation subdivides or combines its outstanding
shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its outstanding
shares of Common Stock or a stock dividend or stock distribution
thereon), or of any consolidation or merger of the Corporation into or
with another corporation, or of the sale of all or substantially all of
the assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed at its principal office or at
the office of the transfer agent of the Series A Preferred Stock and shall
cause to be mailed to the holders of the Series A Preferred Stock at their
last addresses as shown on the records of the Corporation or such transfer
agent, at least ten days prior to the date specified in (A) below or twenty
days before the date specified in (B) below, a notice stating
(A) the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such
dividend, distribution, subdivision or combination are to be
determined, or
(B) the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable
upon such reclassification, consolidation, merger, sale, dissolution
or winding up.
(m) Notwithstanding anything to the contrary, the provisions of
Section 5(d) shall not apply (i) to any share of Series A Preferred Stock
held by a holder other than a 25% Holder or (ii) on or after the fifth
anniversary of the Original Issue Date.
6. Mandatory Conversion.
(a) On the first Business Day following a Mandatory Conversion Period
(the "Mandatory Conversion Date"), all outstanding shares of Series A
Preferred Stock shall automatically be converted into shares of Common
Stock at the then effective conversion rate.
(b) All holders of record of shares of Series A Preferred Stock will
be given written notice of the Mandatory Conversion Date and the place
designated for mandatory conversion of all shares of Series A Preferred
Stock pursuant to this Section 6. Such notice shall be sent by first class
or registered mail, postage prepaid, to each record holder of Series A
Preferred Stock at such holder's address last shown on the records of the
transfer agent for the Series A Preferred
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Stock, as the case may be (or the records of the Corporation, if it serves
as its own transfer agent). Upon receipt of such notice, each holder of
shares of Series A Preferred Stock shall surrender his or its certificate
or certificates for all such shares to the Corporation at the place
designated in such notice, and shall thereafter receive certificates for
the number of shares of Common Stock to which such holder is entitled
pursuant to this Section 6. On the Mandatory Conversion Date, all rights
with respect to the Series A Preferred Stock so converted, including the
rights, if any, to receive notices and vote, will terminate, except only
the rights of the holder thereof, upon surrender of their certificate or
certificates therefor, to receive certificates for the number of shares of
Common Stock into which such Series A Preferred Stock has been converted,
and payment of any declared but unpaid dividends thereon. If so required by
the Corporation, certificates surrendered for conversion shall be endorsed
or accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or
by his or its attorney duly authorized in writing. As soon as practicable
after the Mandatory Conversion Date and the surrender of the certificate or
certificates for Series A Preferred Stock, the Corporation shall cause to
be issued and delivered to such holder, or on his or its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable on such conversion in accordance with the provisions hereof and
cash as provided in Subsection 5(b) in respect of any fraction of a share
of Common Stock otherwise issuable upon such conversion.
(c) All certificates evidencing shares of Series A Preferred Stock
which are required to be surrendered for conversion in accordance with the
provisions hereof shall, from and after the Mandatory Conversion Date, be
deemed to have been retired and canceled and the shares of Series A
Preferred Stock represented thereby converted into Common Stock for all
purposes, notwithstanding the failure of the holder or holders thereof to
surrender such certificates on or prior to such date. The Corporation may
thereafter take such appropriate action (without the need for stockholder
action) as may be necessary to reduce the authorized Series A Preferred
Stock accordingly.
(d) Any Series A Preferred Stock converted pursuant to this Section 6
will be canceled and will not under any circumstances be reissued, sold or
transferred and the Corporation may from time to time take such appropriate
action as may be necessary to reduce the authorized Series A Preferred
Stock accordingly.
7. Redemption at Corporation's Option.
(a) The Corporation shall have the right (the "Redemption Right"), in
its sole discretion, to redeem all but not less than all of the outstanding
shares of Series A Preferred Stock in accordance with the further
provisions of this Section 7. The Redemption Rights shall be exercisable
(i) at any time after June 30, 2001 or (ii) at any time not less than
ninety (90) and not more than one hundred and eighty (180) days after the
closing of a Strategic Investment provided that the closing of such
Strategic Investment occurs within nine (9) months after the Original Issue
Date. The redemption price (the "Corporation Redemption Price") of each
share of Series A Preferred Stock redeemed pursuant to the Redemption Right
shall be equal to the Anniversary Redemption Price as of the Corporation
Redemption Date, in the case of clause (i) in the immediately preceding
sentence, or the Strategic Redemption Price in the case of clause (ii) in
the immediately preceding sentence.
(b) The Corporation may elect to exercise its Redemption Right
pursuant to Section 7(a) by mailing written notice (a "Corporation Notice
of Redemption") to each registered holder specifying the time and place of
such redemption and the number of shares of Series A Preferred Stock held
by such holder to be redeemed. Such Corporation Notice of Redemption
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shall be mailed by certified mail, return receipt requested, at least 30,
and not more than 60 days prior to the date specified for redemption (the
"Corporation Redemption Date"), to each registered holder of the shares of
Series A Preferred Stock at such holder's last address as it appears on the
Corporation's books. At the closing, the Corporation shall pay to each of
the holders of the Series A Preferred Stock called for redemption, against
the Corporation's receipt from such holder of the certificate or
certificates representing the shares of such Series A Preferred Stock then
held by such holder, an amount equal to the aggregate payment due pursuant
to this Section 7 for all such shares, by wire transfer of immediately
available funds, or if such holder shall not have specified wire transfer
instructions to the Corporation prior to the closing, by certified or
official bank check made payable to the order of such holder.
(c) Notwithstanding anything to the contrary contained in this Section
7, the outstanding shares of Series A Preferred Stock shall remain subject
to (i) conversion pursuant to Section 5 and 6 and (ii) redemption pursuant
to Section 8, in each case, at all times on or prior to the Corporation
Redemption Date.
(d) In the case of any redemption pursuant to this Section 7, unless
the Corporation defaults in the payment in full of the Corporation
Redemption Price, dividends on the shares called for redemption shall cease
to accumulate on the applicable Corporation Redemption Date, and all rights
of the holders of the shares of Series A Preferred Stock subject to such
redemption by reason of their ownership of such shares shall cease on such
Corporation Redemption Date, except the right to receive the Corporation
Redemption Price on surrender to the Corporation of the certificates
representing such shares. After the applicable Corporation Redemption Date,
the shares shall not be deemed to be outstanding and shall not be
transferable on the books of the Corporation, except to the Corporation.
(e) Any shares of Series A Preferred Stock redeemed by the Corporation
pursuant to this Section 7 shall be canceled and shall have the status of
authorized and unissued preferred stock, without designation as to series.
8. Redemption at Holder's Option.
(a) Each holder of Series A Preferred Stock shall have the right (the
"Put Right"), in its sole discretion, to require the Corporation to redeem
all or any portion of its outstanding shares of Series A Preferred Stock at
a redemption price (the "Holder Redemption Price") equal to the Series A
Preference Amount as of the Holder Redemption Date in accordance with the
further provisions of this Section 8. The Put Right shall be exercisable
for a period of 70 days after (i) the ninety-first day after the Senior
Note Maturity Date, (ii) any Major Liquidity Event or (iii) a Change of
Control.
(b) A holder of Series A Preferred Stock may elect to exercise its Put
Right pursuant to Section 8(a) by mailing written notice (a "Holder
Redemption Notice") to the Corporation by certified mail, return receipt
requested. The Holder Redemption Notice shall specify:
(i) the name of the holder of shares of Series A Preferred Stock
delivering such Holder Redemption Notice;
(ii) that such holder is exercising its option, pursuant to Section
8, to require the Corporation to redeem shares of Series A Preferred
Stock held by such holder; and
(iii) the number of, and a description of, the shares of Series A
Preferred Stock to be subject to such redemption.
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(c) The Corporation shall, within thirty (30) days of receipt of such
Holder Redemption Notice, deliver to the holder exercising its rights to
require redemption of shares pursuant to Section 8(b), a notice (the
"Corporation Notice") specifying the date set for such redemption, which
date shall be no more than thirty (30) days after the Corporation Notice
(the "Holder Redemption Date").
(d) Notwithstanding anything contained in this Section 8 to the
contrary, the Corporation shall not be obligated to redeem shares of Series
A Preferred Stock which are the subject of a Holder Redemption Notice if
such redemption would result in a breach of, or would cause a default or
event of default under, the Notes Indenture.
provided, however, if such breach, event of default or default would not
result from the purchase of any number of shares of Series A Preferred
Stock which is less than the total number of shares the Corporation is
obligated to redeem on the Holder Redemption Date, the Corporation shall
purchase on the Holder Redemption Date the maximum number of shares of
Series A Preferred Stock it may so purchase, allocated among the holders
which have elected to have their shares so repurchased ratably according to
the number of shares so tendered; provided, further, however, the
Corporation shall use its reasonable efforts to cure such default or
violation on a timely manner and remove any associated restrictions or
limitations which are applicable to the rights of the holders of Series A
Preferred Stock contained in this Section 8.
(e) In the case of any redemption pursuant to this Section 8, unless
the Corporation defaults in the payment in full of the Holder Redemption
Price, dividends on the shares called for redemption shall cease to
accumulate on the applicable Holder Redemption Date, and all rights of the
holders of the shares of Series A Preferred Stock subject to such
redemption by reason of their ownership of such shares shall cease on such
redemption date, except the right to receive the Holder Redemption Price on
surrender to the Corporation of the certificates representing such shares.
After the applicable Holder Redemption Date, the shares shall not be deemed
to be outstanding and shall not be transferable on the books of the
Corporation, except to the Corporation.
(f) Any shares of Series A Preferred Stock redeemed by the Corporation
pursuant to this Section 8 shall be canceled and shall have the status of
authorized and unissued preferred stock, without designation as to series.
9. Definitions.
As used in this Certificate of Designation, and unless the context requires
a different meaning, the following terms have the meanings indicated:
(i) "Anniversary Redemption Price" shall mean an amount per share
equal to (a) the Series A Purchase Price plus (b) an amount then necessary
to provide a holder of Series A Preferred Stock with a 25.0% internal rate
of return on such holder's investment in a share of Series A Preferred
Stock as if such holder held such share of Series A Preferred Stock from
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204
, 2000. Such internal rate of return shall be determined in accordance with
the following formula:
IRR = (P/I) I/N1
where:
IRR = Internal Rate of Return.
P = Anniversary Redemption Price.
I = Series A Purchase Price
N = Number of years from the Original Issue Date to the
Corporation Redemption Date, calculated on the basis of a
365-day year.
(ii) "Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in the
City of New York are authorized or obligated by law or executive order to
close.
(iii)"Change of Control" shall mean a Change of Control as defined in
the Notes Indenture.
(iv) "Common Stock" shall mean the Common Stock of the Corporation,
par value $.001 per share.
(v) "Junior Stock" shall mean any of the Corporation's Common Stock,
and all other equity securities of the Corporation other than the Series A
Preferred Stock.
(vi) "Major Liquidity Event" shall mean (a) a Public Offering or (b) a
Strategic Investment.
(vii) "Mandatory Conversion Period" shall mean, at any time after the
second anniversary of the Original Issue Date, a period of thirty (30)
consecutive trading days during which the daily closing or last sale price
per share of Common Stock, as reported on a national securities exchange or
NASDAQ, is greater than $15.00 per share.
(viii) "NASDAQ" means the National Association of Securities Dealers,
Inc., Automated Quotation System.
(ix) "Notes Indenture" shall mean that certain Indenture, dated as of
October 27, 1997, between FirstCom Corporation, a Texas corporation, and
State Street Bank and Trust Company, N.A., (as Trustee), as in effect on
June 30, 1999 or any supplemental indenture.
(x) "Original Issue Date" shall mean the date on which a share of
Series A Preferred Stock was first issued.
(xi) "Public Offering" shall mean the closing of an underwritten
public offering of shares of Common Stock pursuant to an effective
registration statement filed with the Securities and Exchange Commission
for a public offering and sale of securities of the Corporation (other than
a registration statement on Form S-8 or Form S-4, or their successors, or
any other form for a similar limited purpose, or any registration statement
covering only securities proposed to be issued in exchange for securities
or assets of another corporation).
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(xii) "Senior Note Maturity Date" shall mean the date that the Senior
Notes issued pursuant to the Notes Indenture are paid in full.
(xiii) "Strategic Investment" shall mean the purchase by a Strategic
Investor of thirty-five percent (35%) or more (on an as converted basis) of
the capital stock of the Corporation.
(xiv) "Strategic Investor" shall mean (i) a telecommunications
operator with assets in excess of $2 billion or (ii) an entity with
controlling equity investments in excess of $1 billion in companies
operating in the telecommunications industry; provide that such entity is
not a private equity investment firm or other like entity.
(xv) "Strategic Redemption Price" shall mean $9.00.
(xvi) "25% Holder" shall mean SFG-N Inc., the AIG-GE Capital Latin
American Infrastructure Fund L.P. and/or any of its affiliates and any
holder of not less than twenty-five percent (25%) of the shares of Common
Stock issued or issuable upon conversion of the Series A Preferred Stock.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation of Series A Non-Voting Participating Convertible Preferred Stock to
be duly executed by its Secretary this [ ]th day of
[ ], [ ].
[ INC.]
By
--------------------------------------
Name:
Title: Secretary
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206
ANNEX A TO THE
AGREEMENT AND PLAN OF MERGER
207
ANNEX A
[LETTERHEAD OF FIRSTCOM CORPORATION]
[Date]
Xxxxx & XxXxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AGREEMENT AND PLAN OF MERGER
Ladies and Gentlemen:
We are furnishing the following representations to you to enable you to
prepare and deliver your tax opinion in accordance with Section 5.2(f) of the
Agreement and Plan of Merger, dated as of November 1, 1999 (the "Merger
Agreement"), by and among AT&T Corp., a New York corporation ("Parent"), Kiri
Inc., a Delaware corporation (the "Buyer"), Frantis, Inc., a Delaware
corporation and wholly-owned subsidiary of the Buyer ("Merger Sub"), and
FirstCom Corporation, a Texas corporation (the "Company"). We understand you
will be relying on such representations in rendering your opinion. Unless
otherwise defined herein, capitalized terms have the meanings ascribed to them
in the Merger Agreement.
The Company hereby represents and covenants that:
1. Neither the Company nor any "related person" (within the meaning of
Treas. Reg. sec. 1.368-1T(e)(2)(ii)) has any plan or intention to redeem or
otherwise acquire any Company Common Stock or Preferred Stock prior to and
in connection with the Merger. No "extraordinary distribution" (within the
meaning of Treas. Reg. sec. 1.368-1T(e)(1)(ii)(A)) with respect to Company
Common Stock or Preferred Stock has or will be made prior to and in
connection with the Merger.
2. The fair market value of the consideration received by the
shareholders of the Company in the Merger will be approximately equal to
the fair market value of the Company Common Stock and the Preferred Stock
surrendered in the Merger. The RV Class A Common Stock issued to
shareholders of the Company in the Merger will have a fair market value, as
of the Effective Time, that is greater than or equal to 50 percent of the
fair market value of all of the formerly outstanding Company Common Stock
and Preferred Stock as of the same time. For purposes of this
representation, shares of Company Common Stock and Preferred Stock
exchanged for cash or other property, surrendered by dissenters or
exchanged for cash in lieu of fractional shares of RV Class A Common Stock
will be treated as outstanding as of the Effective Time. Moreover, Company
Common Stock and Preferred Stock that is redeemed by the Company prior to
the Merger will be considered as outstanding in making this representation.
3. The liabilities of the Company assumed by Merger Sub in the Merger
and the liabilities to which the assets of the Company transferred in the
Merger are subject were incurred by the Company in the ordinary course of
its business.
4. The Company will pay its own expenses, if any, incurred in
connection with the Merger.
208
5. There is no intercorporate indebtedness existing between the
Company and the Buyer, or the Company and Merger Sub, that was issued,
acquired, or will be settled at a discount.
6. The Company is not an "investment company" as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
7. The Company is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
8. Merger Sub will acquire at least 90% of the fair market value of
the net assets and at least 70% of the fair market value of the gross
assets held by the Company immediately prior to the Merger. For purposes of
this representation, amounts paid by the Company to shareholders who
receive cash or other property, Company assets used to pay its
reorganization expenses, and all redemptions and distributions (except for
regular, normal dividends) made by the Company immediately preceding the
Merger will be included as assets of the Company held immediately prior to
the Merger.
9. The fair market value of the assets of the Company transferred to
Merger Sub in the Merger will equal or exceed the sum of the liabilities
assumed by Merger Sub in the Merger plus the amount of liabilities, if any,
to which the transferred assets are subject.
10. The Merger will be effected in accordance with the Agreement and
will be effected for bona-fide, non-tax business reasons.
11. None of the compensation received by any stockholder-employee of
the Company in respect of periods that end on or prior to the Closing Date
represents separate consideration for, or is allocable to, any of such
stockholder-employee's Company capital stock. None of the RV Class A Common
Stock that will be received by any Company stockholder-employee in the
Merger represents separately bargained-for consideration that is allocable
to any employment agreement or arrangement. The compensation paid to any
stockholder-employee will be for services actually rendered and will be
determined by bargaining at arm's-length.
The information in this letter is provided in connection with the
preparation of your opinion. We understand that your opinion will be premised on
the basis that all of the facts, representations and assumptions on which you
are relying, whether contained herein or in the documents described herein, are
accurate and complete and will be accurate and complete at the Effective Time.
We further understand that your opinion will be subject to the qualifications
and limitations set forth in your opinion letters.
Very truly yours,
FirstCom Corporation
By:
------------------------------------
Name:
Title:
2
209
[LETTERHEAD OF RV]
[DATE]
Xxxxx & XxXxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AGREEMENT AND PLAN OF MERGER
Ladies and Gentlemen:
We are furnishing the following representations to you to enable you to
prepare and deliver your tax opinion in accordance with Section 5.2(f) of the
Agreement and Plan of Merger, dated as of November 1, 1999 (the "Merger
Agreement"), by and among AT&T Corp., a New York corporation ("Parent"), Kiri
Inc., a Delaware corporation (the "Buyer"), Frantis, Inc., a Delaware
corporation and wholly-owned subsidiary of the Buyer ("Merger Sub"), and
FirstCom Corporation, a Texas corporation (the "Company"). We understand you
will be relying on such representations in rendering your opinion. Unless
otherwise defined herein, capitalized terms have the meanings ascribed to them
in the Merger Agreement.
The Buyer, on behalf of itself and Merger Sub, hereby represents and
covenants that:
1. Neither the Buyer nor any "related person" (within the meaning of
Treas. Reg. sec. 1.368-1(e)(3)) has any plan or intention to redeem or
otherwise acquire any of the RV Class A Common Stock issued in the Merger.
2. The fair market value of the consideration received by the
shareholders of the Company in the Merger will be approximately equal to
the fair market value of the Company Common Stock and the Preferred Stock
surrendered in the Merger. The RV Class A Common Stock issued to
shareholders of the Company in the Merger will have a fair market value, as
of the Effective Time, that is greater than or equal to 50 percent of the
fair market value of all of the formerly outstanding Company Common Stock
and Preferred Stock as of the same time. For purposes of this
representation, shares of Company Common Stock and Preferred Stock
exchanged for cash or other property, surrendered by dissenters or
exchanged for cash in lieu of fractional shares of RV Class A Common Stock
will be treated as outstanding as of the Effective Time. Moreover, Company
Common Stock and Preferred Stock that is redeemed by the Company prior to
the Merger will be considered as outstanding in making this representation.
3. Neither the Buyer nor any "related person" (within the meaning of
Treas. Reg. sec. 1.368-1(e)(3)) owns, or has in the last five years owned,
any capital stock of the Company.
4. Prior to and at the Effective Time, the Buyer will be in "control"
of Merger Sub within the meaning of Section 368(c) of the Code.
5. Merger Sub has no plan or intention to issue additional shares of
its stock after the Merger that would result in the Buyer losing "control"
of Merger Sub within the meaning of Section 368(c) of the Code.
6. The Buyer has no plan or intention to liquidate Merger Sub; to
merge Merger Sub with and into another corporation; to sell or otherwise
dispose of the stock of Merger Sub; or to cause
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Merger Sub to sell or otherwise dispose of any of the assets of the Company
acquired in the Merger, except for dispositions made in the ordinary course
of business or transfers described in Section 368(a)(2)(C) of the Code.
7. Following the Merger, Merger Sub will continue the historic
business of the Company or use a significant portion of the Company's
historic business assets in a business (as such terms are defined in Treas.
Reg. 1.368-1(d)).
8. The Buyer and Merger Sub will pay their own expenses, if any,
incurred in connection with the Merger.
9. There is no intercorporate indebtedness existing between the
Company and the Buyer, or the Company and Merger Sub, that was issued,
acquired, or will be settled at a discount.
10. Neither the Buyer nor Merger Sub is an "investment company" as
defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
11. The fair market value of the assets of the Company transferred to
Merger Sub will equal or exceed the sum of the liabilities assumed by
Merger Sub plus the amount of liabilities, if any, to which the transferred
assets are subject.
12. Any payment of cash by the Buyer in lieu of fractional shares of
Buyer Common Stock is solely for the purpose of avoiding the expense and
inconvenience to the Buyer of issuing fractional shares and does not
represent separately bargained-for consideration. No shareholder of the
Company will receive cash in an amount equal to or greater than the value
of one full share of Buyer Common Stock.
13. The Merger will be effected in accordance with the Agreement and
will be effected for bona-fide, non-tax business reasons.
14. Merger Sub will acquire at least 90% of the fair market value of
the net assets and at least 70% of the fair market value of the gross
assets held by the Company immediately prior to the Merger. For purposes of
this representation, amounts paid by the Company to shareholders who
receive cash or other property, Company assets used to pay its
reorganization expenses, and all redemptions and distributions (except for
regular, normal dividends) made by the Company immediately preceding the
Merger will be included as assets of the Company held immediately prior to
the Merger.
15. No dividends or distributions will be made to former Company
shareholders by the Buyer, other than regular, normal dividend
distributions made (i) with regard to all shares of Buyer Common Stock or
(ii) with regard to RV Preferred Stock in accordance with its terms.
16. No stock of Merger Sub will be issued in the Merger. The
information in this letter is provided in connection with the preparation
of your opinion. We understand that your opinion will be premised on the
basis that all of the facts, representations and assumptions on which you
are relying, whether contained herein or in the documents described herein,
are accurate and
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complete and will be accurate and complete at the Effective Time. We
further understand that your opinion will be subject to the qualifications
and limitations set forth in your opinion letters.
Very truly yours,
[RV]
By:
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Name:
Title:
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