Exhibit D
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of May 8, 1997 among MAGNAVISION
CORPORATION, a Delaware corporation (the "Company"), the Investors and the other
parties listed on Schedule I hereto (collectively, the "Stockholders").
SECTION 1. Definitions. As used herein, the following terms have
the following respective meanings:
(a) "Cacomm" shall mean Cacomm, Inc., a New Jersey corporation and
a Stockholder of the Company.
(b) "Common Stock" shall mean the Company's Common Stock, $.08 par
value per share, and any successor security to such Common Stock.
(c) "Common-Equivalent Security" means any security convertible
into or exercisable for shares of Common Stock.
(d) "Competitive Business" shall mean any business involving the
design, development, construction or marketing of private cable or wireless
cable systems or services to customers.
(e) "Exchange Agreement" shall mean the Exchange Agreement dated
May 8, 1997 among the Company and the Investors.
(f) "Excluded Issuance" means any issuance (i) for non-cash
consideration, (ii) to lenders in connection with debt financing transactions,
(iii) for compensatory purposes to directors, officers, employees and service
providers, (iv) pursuant to a registered public offering, (v) pursuant to
exercise of the Warrants, or (vi) of "Excluded Stock" as defined in the
Warrants.
(g) "IBJS Stock" shall mean that amount of the Investor Stock
issued or issuable upon exercise of the Warrants originally issued to IBJS
Capital Corporation.
(h) "Investors" means IBJS Capital Corporation and KOCO Capital
Company, L.P. and shall include any successor to, or assignee or transferee of,
any such person who or which agrees in writing to be treated as an Investor and
to be bound by the terms and comply with the provisions hereof.
(i) "Investor Stock" means, collectively, (i) the Common Stock of
the Company issued to the Investors (or their permitted assigns) upon exercise
of the Warrants and (ii) the shares of Common Stock issuable upon exercise of
the Warrants.
(j) "KOCO Stock" shall mean that amount of the Investor Stock
issued or issuable upon exercise of the Warrants originally issued to KOCO
Capital Company, L.P.
(k) "Non-Investor Stockholders" shall mean all Stockholders other
than the Investors.
(l) "Preferred Stock" shall mean the Company's Series A Preferred
Stock, $.10 par value per share, issued to the Investors pursuant to the
Exchange Agreement.
(m) "Rule 144" means Rule 144 promulgated under the Securities Act
or any successor rule thereto or any complementary rule thereto.
(n) "Securities Act" means the Securities Act of 1933, and the
rules and regulations of the Securities and Exchange Commission thereunder, all
as the same shall be in effect from time to time.
(o) "Warrants" means the Warrants issued by the Company to the
Investors pursuant to the Exchange Agreement.
(p) "Warrant Stock" means the shares of Common Stock issued or
issuable upon exercise of the Warrants.
SECTION 2. Election of Directors; Voting.
(a) At each special meeting of the stockholders of the Company
called for the purpose of electing directors of the Company, and at any time at
which stockholders of the Company shall have the right to, or shall, vote for or
consent in writing to the election of directors of the Company, then, and in
each such event, the Stockholders shall vote all shares of stock of the Company
owned by them, and their respective transferees shall so vote, for, or consent
in writing with respect to such shares in favor of, the election of a Board of
Directors consisting of not more than seven (7) persons, of which (i) so long as
the Investor Stock represents 20% or more of the fully diluted Common Stock, the
holders of a majority of the IBJS Stock shall have the right to designate two
(2) directors (the "IBJS Directors") and the holders of a majority of the KOCO
Stock shall have the right to designate two (2) directors (the "KOCO Directors"
and, together with the IBJS Directors, the "Investor Directors"), and (ii) so
long as Cacomm holds 20% or more of the fully-diluted Common Stock, Cacomm shall
have the right to designate three (3) directors that are either members of the
Company's management or approved by the Investor Directors, which approval shall
not be unreasonably withheld or delayed (the "Management Directors").
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(b) In the event of an increase in the size of the Board of
Directors, so long as the Investor Stock represents 20% or more of the
fully-diluted Common Stock, the holders of IBJS Stock and KOCO Stock shall be
entitled to designate additional directors such that the Investor Directors at
all times constitute a simple majority of the Board of Directors.
(c) The Company and Stockholders agree to appoint one IBJS
Director and one KOCO Director to serve on the Audit, Compensation and Executive
Committees of the Board of Directors and one Management Director to serve on the
Compensation and Executive Committees of the Board. The composition of the board
of directors of each subsidiary of the Company shall be identical to that of the
Company's Board of Directors.
(d) The Stockholders shall vote their shares of stock (i) to
remove any director whose removal is required by the parties with the power to
designate such director and (ii) to fill any vacancy created by the removal,
resignation or death of a director, in each case for the election of a new
director designated and approved, if approval is required, in accordance with
the provisions of this Section 2.
(e) Representatives of the Investors shall have the right to
attend and observe all Board of Directors and committee meetings of the Company,
and the Investor Directors and any other representatives of the Investors shall
be reimbursed for their out-of-pocket expenses in attending any such meeting.
Cacomm shall have the right to designate one non-voting observer to attend all
meetings of the Board, subject to the approval of the Investor Directors (which
approval shall not be unreasonably withheld or delayed).
(f) The Board of Directors shall meet no less frequently than
quarterly. The Stockholders agree to amend the bylaws of the Company to provide
that a quorum of the Board of Directors shall require the presence of a majority
of the Investor Directors and any action with respect to compensation or bonuses
or any additional expenditures for wireless cable assets shall require the vote
of a majority of the Investor Directors. Such bylaw provisions shall not be
further amended without the consent of the Investors.
(g) Each Stockholder agrees to cooperate with the Company in all
reasonable respects in complying with the terms and provisions of Sections 6(m),
(n) and (o) of the Exchange Agreement, including without limitation voting to
approve such amendments to the Company's certificate of incorporation and
by-laws and this Agreement as may be reasonably requested by any Regulated
Holder (as defined in the Exchange Agreement) entitled to make such request
pursuant to the Exchange Agreement. Notwithstanding the foregoing, no
Stockholder shall be required by this provision to take any action that would
materially and adversely affect its rights under this Agreement or as a
stockholder of the Company.
(h) The Company and the Stockholders agree not to amend or waive
the voting or other provisions of the Company's certificate of incorporation or
by-laws or this Agreement if such amendment or waiver would cause any Regulated
Holder to have a Regulatory Problem (as
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defined in the Exchange Agreement) and such Regulated Holder has so notified the
Company that it would have a Regulatory Problem promptly after it has notice of
such proposed amendment or waiver.
(i) The provisions of this Section 2 shall terminate in the event
that a majority of the Company's outstanding Preferred Stock is held by persons
other than the Investors.
SECTION 3. Tag-Along Rights.
(a) No Stockholder shall transfer any Common Stock or
Common-Equivalent Securities other than in compliance with the provisions of
this Section 3. If any Stockholder (the "Transferring Stockholder") proposes to
transfer any Common Stock or Common-Equivalent Securities to one or more third
parties (collectively, a "Third Party"), the Transferring Stockholder shall give
written notice (a "Tag-Along Notice") to each other Stockholder, which notice
shall identify the proposed Third Party purchaser and state the number of shares
of Common Stock or Common-Equivalent Securities proposed to be transferred, the
proposed offering price and any other material terms and conditions of the
proposed transfer. The Tag- Along Notice shall also contain a true and correct
copy of any offer by the Third Party offeror.
(b) Each other Stockholder who so elects (a "Participating
Stockholder") shall have the right to transfer, at the same price and upon no
less favorable terms and conditions as the Transferring Stockholder, that number
of shares of Common Stock and/or Common- Equivalent Securities held by such
Participating Stockholder equal to (i) the number of shares of Common Stock
represented by the securities proposed to be transferred pursuant to the Tag-
Along Notice, multiplied by (ii) a fraction, the numerator of which is the
number of shares of Common Stock on a fully-diluted basis held by such
Participating Stockholder, and the denominator of which is the aggregate number
of shares of Common Stock on a fully-diluted basis held by the Transferring
Stockholder and all Participating Stockholders; provided, however, that the
price for any Common-Equivalent Securities to be transferred shall be net of any
unpaid exercise or conversion price associated therewith.
(c) Within thirty (30) days after the date of delivery of a
Tag-Along Notice, any of the Stockholders may elect to participate in the
proposed transfer pursuant to the terms and conditions of such Tag-Along Notice
and this Agreement by delivery of a written notice to the Transferring
Stockholder. No Participating Stockholder shall be required to make any
representations and warranties to the third party purchaser or any other person
except as to good title and the absence of liens with respect to such
Stockholder's shares of Common Stock and/or Common-Equivalent Securities and the
authority for and the validity and binding effect of any agreements entered into
by such Stockholder in connection with such transfer.
(d) The provisions of Section 3 shall not apply to (i) transfers
of Common Stock or Common-Equivalent Securities representing less than 10% of
the fully-diluted Common Stock, or (ii) transfers of Investor Stock to an
Investor or an Affiliate, officer or employee of an Investor.
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SECTION 4. Preemptive Rights.
(a) In the event that any Common Stock or Common-Equivalent
Securities are issued by the Company other than an Excluded Issuance, each
Stockholder shall have the right to purchase its proportionate share of such
issuance in an amount equal to the number of shares of Common Stock or units of
Common-Equivalent Securities to be issued multiplied by a fraction (i) the
numerator of which is the number of shares of Common Stock on a fully-diluted
basis held by such Stockholder and (ii) the denominator of which is the total
number of shares of Common Stock outstanding on a fully-diluted basis prior to
giving effect to such issuance by the Company.
(b) The Company shall give 30 days prior written notice to the
Stockholders of any issuance of Common Stock or Common-Equivalent Securities by
the Company. Each Stockholder shall have the right to purchase its proportionate
share of such issuance by giving written notice of its intention to exercise its
rights in accordance with Section 4(a) hereof, at a closing to be held no later
than 30 days after such Stockholder has received notice of the issuance from the
Company.
SECTION 5. Drag-Along Rights. In the event that the Company's
Board of Directors approves a sale of the Company (pursuant to a merger or other
business combination transaction, sale of outstanding stock or otherwise) to a
third party not affiliated with either Investor (an "Approved Sale"), each
Stockholder shall consent to and raise no objections against such Approved Sale
(including exercising any statutory right of appraisal) and shall take all
necessary and desirable action in their capacities as stockholders of the
Company to facilitate such Approved Sale. If the Approved Sale is structured as
a sale of stock, the Stockholders shall agree to sell all of their shares of
Common Stock and Common-Equivalent Securities on the terms and conditions
approved by the Board of Directors; provided, however, that the obligations of
the Stockholders pursuant to this Section 5 are conditioned upon all
Stockholders concurrently receiving the same form and amount of consideration
per share of Common Stock pursuant to such Approved Sale or, if any Stockholders
are given an option as to the form and amount of consideration to be received,
all Stockholders are given the same option.
SECTION 6. Tax Consolidation. From the date hereof, Cacomm hereby
agrees that it shall not make any federal, state or local tax filing on a
consolidated basis with the Company unless required by law. Cacomm further
agrees that it shall enter into a tax sharing agreement acceptable to the
Investors with respect to such consolidation upon the Investors' request.
SECTION 7. Agreement Not to Compete.
(a) Cacomm acknowledges and agrees that the value and goodwill of
the Company's business would be substantially impaired if Cacomm engaged in a
Competitive Business. Accordingly, Cacomm hereby agrees that until all of the
Preferred Stock has been redeemed by the Company, Cacomm shall not:
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(i) engage in any Competitive Business at any location in the
states between Maine and North Carolina, whether such engagement
shall be as an employer, owner, employee, partner, advisor,
consultant, stockholder or other participant in any Competitive
Business (or in any similar capacity in which Cacomm derives an
economic benefit from a Competitive Business);
(ii) assist others in engaging in any Competitive Business in
the manner described in the foregoing clause (i);
(iii) solicit, entice or induce any employee of the Company
or any subsidiary to terminate his or her employment or engage in
any Competitive Business;
(iv) solicit, entice or induce any vendor, customer or
distributor of the Company or any subsidiary to terminate or
materially diminish its relationship with the Company or such
subsidiary; or
(v) otherwise knowingly damage, disparage or interfere with
the Company or any subsidiary;
provided, however, that (x) nothing contained in this Agreement shall prohibit
(i) Cacomm from owning in the aggregate less than 5% of a class of
publicly-traded securities issued by any Competitive Business or (ii) Cacomm
from maintaining its partnership interest in the Grand Alliance Partnership so
long as Cacomm does not affirmatively vote for, approve or assist the
partnership in a Competitive Business, (y) the provisions of this Section 7
shall expire in the event that the employment of Xxxxxxxx Xxxxxxxxxxx, Xx. is
terminated by the Company without "Cause" (as defined in Xx. Xxxxxxxxxxx'x
employment agreement) upon the expiration of the period in which severance
payments are made by the Company to Xx. Xxxxxxxxxxx, and (z) nothing in this
Agreement shall prohibit Cacomm from taking actions which, in the written
opinion of its counsel, are required in the exercise of fiduciary duties to the
stockholders of Cacomm not affiliated with Xx. Xxxxxxxxxxx.
(b) Cacomm acknowledges that a remedy at law for any breach or
threatened breach of the provisions of this Section 7 would be inadequate and
therefore agrees that the Company shall be entitled to injunctive relief;
provided, however, that nothing contained herein shall be construed as
prohibiting the Company from pursuing any other remedies available for any such
breach or threatened breach.
SECTION 8. Restrictions on Transfer. A Non-Investor Stockholder shall
not sell, transfer, assign, pledge or encumber its stock of the Company or any
of its rights hereunder, except to a transferee (a) who or which, prior to such
sale, transfer, assignment, pledge or encumbrance, has executed an agreement to
be bound by all the provisions of this Agreement or (b) pursuant to a sale,
transfer or assignment (i) in compliance with Rule 144 or (ii) as part of a
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public offering of the stock of the Company pursuant to a registration statement
effective under the Securities Act.
SECTION 9. Additional Shares of Stock. In the event additional shares
of stock are issued by the Company to any Stockholder or transferee thereof at
any time during the term of this Agreement, either directly or upon the
conversion, exercise or exchange of securities of the Company convertible into
or exercisable or exchangeable for shares of stock, such additional shares of
stock shall, as a condition to and effective upon such issuance, be subject to
the terms and provisions of this Agreement.
SECTION 10. Legend on Stock Certificates. Each certificate representing
shares of stock held by the Stockholders shall bear a legend containing the
following words:
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND/OR THE RIGHTS OF THE
HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IN RESPECT OF
THE ELECTION OF DIRECTORS ARE SUBJECT TO THE TERMS AND CONDITIONS OF
THE STOCKHOLDERS AGREEMENT DATED MAY 8, 1997, AMONG MAGNAVISION
CORPORATION AND CERTAIN SECURITY HOLDERS OF MAGNAVISION CORPORATION.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF
MAGNAVISION CORPORATION."
SECTION 11. Severability; Governing Law. If any provision of this
Agreement shall be determined to be illegal and unenforceable by any court of
law, the remaining provisions shall be severable and enforceable in accordance
with their terms. This Agreement shall be governed by, and construed in
accordance with, (a) the laws of the State of New York applicable to contracts
made and to be performed wholly therein and (b) the laws of the State of
Delaware with respect to corporations incorporated therein.
SECTION 12. Successors and Assigns. This Agreement shall bind and inure
to the benefit of the parties and their respective successors and assigns, legal
representatives and heirs.
SECTION 13. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or by telecopy or sent by
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or at such other address as may hereafter be designated
in writing by such party to the other parties:
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(i) if to the Company, to:
MagnaVision Corporation
0000 Xxxxxxx 00 Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxxxxxx, Xx.
with a copy to:
Zimet, Haines, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
(ii) if to the Investors to their respective addresses set
forth on Schedule I hereto, with copies to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxxxx Hyatt Xxxxxx & Xxxxxxxxxx, P.C.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
(iii) if to the Non-Investor Stockholders to their respective
addresses set forth on Schedule I hereto.
All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the
posting thereof.
SECTION 14. Modification. Except as otherwise provided herein, neither
this Agreement nor any provisions hereof can be modified, changed, discharged or
terminated except by an instrument in writing signed by the Company and the
Stockholders.
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SECTION 15. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement.
SECTION 16. Nouns and Pronouns. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.
SECTION 17. Entire Agreement. This Agreement and the other writings
referred to herein or delivered pursuant hereto contain the entire agreement
among the parties hereto with respect to the subject matter hereof and supersede
all prior and contemporaneous agreements and understandings with respect
thereto.
SECTION 18. Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, and each such counterpart hereof shall
be deemed to be an original instrument, but all such counterparts together shall
constitute but one agreement. Facsimile counterpart signatures to this Agreement
shall be acceptable if the originally executed counterpart is delivered within a
reasonable period thereafter.
SECTION 19. Prior Agreement. The Amended and Restated Stockholders'
Agreement dated as of June 3, 1996 among the parties hereto is superseded by
this Agreement, and such prior Stockholders' Agreement is hereby terminated and
is of no further force and effect.
SECTION 20. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles governing conflicts of laws, except that Delaware law shall
govern the relationship between the Company and its stockholders.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholders'
Agreement on the date first above written.
MAGNAVISION CORPORATION
By:________________________________
Name:
Title:
IBJS CAPITAL CORPORATION
By:_________________________________
Name:
Title:
KOCO CAPITAL COMPANY, L.P.
By: KOCO Capital Partners, L.P.
Its General Partner
By: Kisco Capital Corporation
Its General Partner
By:_________________________________
Name:
Title:
CACOMM, INC.
By:_________________________________
Name:
Title:
------------------------------------
XXXXXXXX XXXXXXXXXXX, XX.
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SCHEDULE I
Stockholders
Name and Address of Stockholder Number of Common
------------------------------- Stock Equivalents
-----------------
IBJS Capital Corporation 1,096,159
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxx Xxxxxxx
KOCO Capital Company, L.P. 730,773
000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Cacomm, Inc. 920,889
0000 Xxxxxxx 00 Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxxxx, Xx.
Xxxxxxxx Xxxxxxxxxxx, Xx. 995,460
0000 Xxxxxxx 00 Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
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