Exhibit 10.37
INSTITUTIONAL STOCKHOLDER SUBSCRIPTION AGREEMENT
This Institutional Stockholder Subscription Agreement (this
"AGREEMENT"), dated as of January 20, 2000, between MJD Communications, Inc., a
Delaware corporation (the "COMPANY"), and the Purchaser named on the signature
page of this Agreement (the "PURCHASER").
WHEREAS, the Purchaser desires to subscribe for, and the Company
desires to make available for purchase, those shares of the Company's Class C
NonVoting Common Stock, par value $.01 per share (the "SHARES"), indicated as
being subscribed for by the Purchaser on the signature page of this Agreement on
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, the parties hereto agree as follows:
1. PURCHASE AND SALE OF THE SHARES. (a) GENERAL. Subject to all of the
terms and conditions of this Agreement, and in reliance upon the representations
and warranties contained herein, the Purchaser hereby subscribes for and agrees
to pur chase, and the Company agrees to sell to the Purchaser for the
Purchaser's own account, the number of Shares set forth opposite the Purchaser's
signature on the signature page of this Agreement.
Notwithstanding anything in this Agreement to the contrary, the Company
shall not have any obligation to sell any of the Shares to any Purchaser who is
a resident of a jurisdiction in which the sale of Shares to such Purchaser would
constitute a violation of the securities, "blue sky" or other similar laws of
such jurisdiction.
(b) PURCHASE PRICE. The purchase price per Share shall be $262.33. At
the Closing, the Purchaser shall purchase the Shares for the aggregate amount
set forth on the signature page of this Agreement (the "PURCHASE PRICE"). The
Purchase Price shall be paid by the Purchaser at the Closing in cash (payable by
wire transfer of immediately available funds to an account designated by the
Company).
2. CLOSING. (a) TIME AND PLACE. The closing of the
transactions contemplated by this Agreement (the "CLOSING") shall be held at the
same place and at the same time and date (the "CLOSING DATE") as the closing
under the Stock Purchase
Agreement (the "STOCK PURCHASE AGREEMENT"), dated as of January 4, 2000, among
the Company, Xxxxx Investment Associates V, L.P. ("KIA V"), Xxxxx Equity
Partners V, L.P. ("KEP V"; together with KIA V, "XXXXX"), Xxxxxx X. Xxx Equity
Fund IV, L.P. and the other parties thereto, as the same shall be amended from
time to time.
(b) DELIVERY BY THE COMPANY. At the Closing, against delivery of the
Purchase Price, the Company will deliver to the Purchaser (I) a stock
certificate registered in the Purchaser's name and representing the number of
Shares purchased by the Purchaser, which certificate shall bear the legends set
forth in the Institutional Stockholders' Agreement, dated as of the Closing Date
(the "INSTITUTIONAL STOCKHOLDERS' AGREEMENT"), among the Company and each other
purchaser of the Company's Class C Common Stock and (II) a signature page to the
Institutional Stockholders' Agreement executed by the Company.
(c) DELIVERY BY THE PURCHASER. At the Closing, the Purchaser will
deliver (I) the Purchase Price as provided in Section 1(b) and (II) a signature
page to the Institutional Stockholders' Agreement executed by the Purchaser.
(d) CONDITIONS PRECEDENT. The obligation of the Purchaser under this
Agreement to purchase the Shares, and the obligation of the Company under this
Agreement to sell the Shares, are both subject to the condition that the closing
under the Stock Purchase Agreement shall have occurred or shall be occurring.
3. PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. (a)
INVESTMENT INTENTION AND RESTRICTIONS ON DISPOSITION. The Purchaser represents
and warrants that the Purchaser is acquiring the Shares solely for the
Purchaser's own account for investment and not with a view to, or for sale in
connection with, any distribution thereof. The Purchaser agrees that the
Purchaser will not, directly or indirectly, offer, transfer, sell, pledge,
hypothecate or otherwise dispose of any of the Shares (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of any of the Shares) or any
interest therein or any rights relating thereto, except in compliance with the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "ACT"), all applicable state securities or "blue sky" laws and the
Institutional Stockholders' Agreement, as the same shall be amended from time to
time. Any attempt by the Purchaser, directly or indirectly, to offer, transfer,
sell, pledge, hypothecate or otherwise dispose of any of the Shares or any
interest therein or any rights relating thereto without complying with the
provisions of this Agreement and the Institutional Stockholders' Agreement, as
the same shall be amended from time to time, shall be void and of no effect.
(b) SECURITIES LAW MATTERS. The Purchaser acknowledges receipt of
advice from the Company that (I) the Shares have not been registered under the
Act or
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qualified under any state securities or "blue sky" laws, (II) it is not
anticipated that there will be any public market for the Shares, (III) the
Shares must be held indefinitely and the Purchaser must continue to bear the
economic risk of the investment in the Shares unless such Shares are
subsequently registered under the Act and such state laws or an exemption from
such registration is available, (IV) Rule 144 promulgated under the Act ("RULE
144") is not presently available with respect to sales of any securities of the
Company and the Company has made no covenant to make Rule 144 available and Rule
144 is not anticipated to be available in the foreseeable future, (V) when and
if the Shares may be disposed of without registration in reliance upon Rule 144,
such disposition can be made only in limited amounts and in accordance with the
terms and conditions of such Rule, (VI) if the exemption afforded by Rule 144 is
not available, public sale of the Shares without registration will require the
availability of an exemption under the Act, (VII) restrictive legends in the
form set forth in the Institutional Stockholders' Agreement shall be placed on
the certificate representing the Shares and (VIII) a notation shall be made in
the appropriate records of the Company indicating that the Shares are subject to
restrictions on transfer and, if the Company should in the future engage the
services of a stock transfer agent, appropriate stop-transfer instructions will
be issued to such transfer agent with respect to the Shares.
(c) ABILITY TO BEAR RISK. The Purchaser represents and warrants that
(I) the financial situation of the Purchaser is such that the Purchaser can
afford to bear the economic risk of holding the Shares for an indefinite period
and (II) the Purchaser can afford to suffer the complete loss of the Purchaser's
investment in the Shares.
(d) ACCESS TO INFORMATION; SOPHISTICATION; LACK OF RELIANCE. The
Purchaser represents and warrants that (I) the Purchaser has been granted the
opportunity to ask questions of, and receive answers from, representatives of
the Company concerning the Company and the terms and conditions of the purchase
of the Shares and to obtain any additional information that the Purchaser deems
necessary, (II) the Purchaser's knowledge and experience in financial business
matters is such that the Purchaser is capable of evaluating the merits and risks
of the investment in the Shares and (III) the Purchaser has carefully reviewed
the terms and provisions of the Institutional Stockholders' Agreement and has
evaluated the restrictions and obligations contained therein. In furtherance of
the foregoing, each Purchaser represents and warrants that (I) no representation
or warranty, express or implied, whether written or oral, as to the financial
condition, results of operations, prospects, properties or business of the
Company or as to the desirability or value of an investment in the Company has
been made to such Purchaser by or on behalf of the Company, except for those
representations and warranties contained in Section 4 hereof and in the
Institutional Stockholders' Agreement, (II) such Purchaser has relied upon such
Purchaser's own independent appraisal and investigation, and the advice of such
Purchaser's own counsel, tax advisors and other advisors, regarding the risks of
an
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investment in the Company and (III) such Purchaser will continue to bear sole re
sponsibility for making its own independent evaluation and monitoring of the
risks of its investment in the Company. For purposes of this Section 3(d), the
Company includes each subsidiary of the Company.
(e) ACCREDITED INVESTOR. The Purchaser represents and warrants that the
Purchaser is an "accredited investor" as such term is defined in Rule 501(a)
promulgated under the Act
(f) DUE EXECUTION, ENFORCEABILITY, ETC. The Purchaser represents and
warrants that (I) the Purchaser has duly executed and delivered this Agreement,
(II) all actions required to be taken by or on behalf of the Purchaser to
authorize it to execute, deliver and perform its obligations under this
Agreement and the Institutional Stockholders' Agreement have been taken, (III)
this Agreement constitutes and, upon execution thereof, the Institutional
Stockholders' Agreement will constitute, the Purchaser's legal, valid and
binding obligations, enforceable against the Purchaser in accordance with their
respective terms, (IV) the execution and delivery of this Agreement and the
Institutional Stockholders' Agreement and the consummation by the Purchaser of
the transactions contemplated hereby and thereby in the manner contemplated
hereby and thereby do not and will not conflict with, or result in a breach of
any terms of, or constitute a default under, any agreement or instrument or any
statute, law, rule or regulation, or any judgment, decree, writ, injunction,
order or award of any arbitrator, court or governmental authority which is
applicable to the Purchaser or by which the Purchaser or any material portion of
its properties is bound, (V) no consent, approval, authorization, order, filing,
registration or qualification of or with any court, governmental authority or
third person is required to be obtained by the Purchaser in connection with the
execution and delivery of this Agreement or the Institutional Stockholders'
Agreement or the performance of the Purchaser's obligations hereunder or
thereunder and (VI) the Purchaser's principal place of business and mailing
address are in the state set forth below the Purchaser's signature on the
signature page.
(g) NO BROKERS. No broker has acted on behalf of the Purchaser in
connection with this Agreement, and there are no brokerage commissions, finders'
fees or commissions payable in connection herewith.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Purchaser that:
(i) prior to the Closing it will have taken all corporate
actions necessary to authorize it to enter into and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby;
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(ii) this Agreement will be duly executed and delivered by the
Company and constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as the same may be affected by bankruptcy, insolvency,
moratorium or similar laws, or by legal or equitable principles
relating to or limiting the rights of contracting parties generally;
(iii) upon the delivery of and payment for the Shares at the
Closing as provided for in this Agreement, the Purchaser will acquire
good and valid title to all such shares of capital stock being sold to
it by the Company, free and clear of all liens, and all such shares of
capital stock being acquired by the Purchaser will be duly authorized,
validly issued, fully paid and non-assessable;
(iv) immediately prior to the Closing, the authorized capital
stock of the Company will consist of 3,000,000 shares of Common Stock,
of which 1,810,147 shares will be issued and outstanding and 300,000
shares of Preferred Stock, par value $.01 per share (the "Preferred
Stock"), of which no shares will be issued and outstanding; and
immediately following the Closing and after giving effect to the
transactions contemplated by this Agreement and the Stock Purchase
Agreement and assuming that Xxxxx will purchase 212,183 shares of the
Class B Common Stock, par value $.01 per share (the "Class B Common
Stock") at the Closing, the authorized capital stock of the Company
will consist of (A) 60,000,000 shares of Class A Common Stock, of which
571,117.4 shares will be issued and outstanding on a fully-diluted
basis, (B) 50,000,000 shares of Class B Common Stock, 627,186.4 of
which shares will be issued and outstanding and owned of record by
Xxxxx, which if converted into shares of Class A Common Stock at such
time (assuming all shares of Series D Non-Voting Convertible Preferred
Stock, par value $.01 per share (the "Series D Preferred Stock") were
converted into Class A Common Stock simultaneously), would represent
25.2% of the issued and outstanding Class A Common Stock (or 22.1% on a
fully diluted basis (assuming the consummation of the option exchange
contemplated by Section 6.21 of the Stock Purchase Agreement on the
terms contemplated as of the Closing Date)), (C) 4,600,000 shares of
Class C Common Stock, of which 213,472 will be issued and outstanding,
which if converted into shares of Class A Common Stock at such time
(assuming all shares of Class B Common Stock and Series D Preferred
Stock were converted into Class A Common Stock simultaneously), would
represent 8.6% of the issued and outstanding Class A Common Stock (or
7.5% on a fully diluted basis (assuming the consummation of the option
exchange contemplated by Section 6.21 of the Stock Purchase Agreement
on the terms contemplated as of the Closing Date)), and (D) 30,000,000
shares of Preferred Stock, par value $.01 per share, of which
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1,073,086 shares of Series D Preferred Stock will be issued and
outstanding. THL will own 1,073,086 shares of Series D Preferred Stock,
which if converted into shares of Class A Common Stock at such time
(assuming all shares of Class B Common Stock were converted into Class
A Common Stock simultaneously), would represent 43.2% of the issued and
outstanding Class A Common Stock (or 37.7% on a fully diluted basis
(assuming the consummation of the option exchange contemplated by
Section 6.21 of the Stock Purchase Agreement on the terms contemplated
as of the Closing Date)); and
(v) Except for as set forth on Schedule I hereto, the
execution, delivery and performance by the Company of this Agreement
and the Institutional Stockholders' Agreement and the consummation of
the transactions contemplated hereby and thereby (including, without
limitation, the issuance and ownership of the Shares to be issued to
the Purchaser hereunder and the receipt and exercise of the rights of
the Purchaser hereunder and thereunder), do not and will not conflict
with, contravene, result in a violation or breach of or default under
(with or without the giving of notice or the lapse of time, or both),
create in any other person a right or claim of termination, amendment,
modification, acceleration or cancellation of, or result in or require
the creation of any lien (or any obligation to create any lien) on any
of the properties or assets of the Company or any subsidiary under (A)
any applicable law, (B) any provision of the certificate or articles of
incorporation, by-laws or other organizational documents, as the case
may be, of the Company or any subsidiary, or (C) any contract,
agreement, license or other instrument to which the Company or any
subsidiary is a party or by which any of the Company's or any
subsidiary's properties or assets may be bound, except, in the case of
clause (c), for violations, breaches and defaults that, individually
and in the aggregate, would not cause a material adverse effect.
5. MISCELLANEOUS. (a) BINDING EFFECT; BENEFITS. This Agreement shall be
binding upon and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns. Nothing in this Agreement, express
or implied, is intended or shall be construed to give any person other than the
parties to this Agreement and their respective successors or permitted assigns
any legal or equitable right, remedy or claim under or in respect of any
agreement or any provision contained herein.
(b) WAIVER. The waiver by either party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges
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hereunder or shall be deemed a waiver of such party's rights to exercise the
same at any subsequent time or times hereunder.
(c) SURVIVAL; REMEDY. The representations and warranties
contained in Section 4 of this Agreement shall survive for one year after the
Closing. The sole and exclusive remedy for any breach or inaccuracy of the
representations and warranties contained in Section 4 of this Agreement shall be
as set forth in Section 4 of the Institutional Stockholders' Agreement.
(d) ATTORNEYS' FEES. At the Closing and only if there is a
Closing, the Company will reimburse the Purchaser for its reasonable attorneys'
fees for the review and negotiation of this Agreement and the Institutional
Stockholders' Agreement, not to exceed $________.1/
(e) AMENDMENTS. This Agreement may be amended, modified or
supplemented only by the written agreement of the parties hereto executed by the
Purchaser and the Company.
(f) ASSIGNABILITY. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or the Purchaser without the prior written
consent of the other party.
(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with, the law of the State of New York, without giving
effect to the choice of law principles thereof.
(h) NOTICES. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if (A) delivered personally, (B) mailed, certified or
registered mail with postage prepaid, (C) sent by next-day or overnight mail or
delivery or (D) sent by fax, as follows: if to the Purchaser, to the Purchaser
at the address set forth under the Purchaser's name on the signature page of
this Agreement or to such other person or
----------------------
1$5,000 per bank. For banks investing with multiple funds, the $5,000
cap will be split equally among the funds.
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address as the Purchaser shall specify by notice in writing to the Company; and
if to the Company, to it at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxxxx X. Xxxxx, Xx. All such notices,
requests, demands, letters, waivers and other communications shall be deemed to
have been received (W) if by personal delivery, on the day after such delivery,
(X) if by certified or registered mail, on the fifth business day after the
mailing thereof, (Y) if by next-day or overnight mail or delivery, on the day
delivered or (Z) if by fax, on the next day following the day on which such fax
was sent, provided that a copy is also sent by certified or registered mail.
(i) HEADINGS. The headings contained herein are for
convenience only and shall not control or affect the meaning or interpretation
of any provision hereof.
(j) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and which
together shall constitute one and the same agreement.
(k) TERMINATION. In the event the Stock Purchase Agreement is
terminated, this Agreement shall automatically terminate, without any liability
on the part of either party.
(l) SEVERABILITY. In case any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, the validity and
enforceability of the remaining provisions shall not in any way be affected
thereby.
(m) ENTIRE AGREEMENT. The Institutional Stockholders'
Agreement and this Agreement shall constitute the entire agreement of the
parties hereto with respect to the subject hereof and shall supersede all prior
agreements, arrangements, understandings, documents, instruments and
communications, whether written or oral, with respect to such subject matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company and the Purchaser have
executed this Agreement as of the date set forth below.
Date: January 31, 2000
MJD COMMUNICATIONS, INC.
By: /s/ XXXXXX X. XXXXX, XX.
------------------------------------
Name: Xxxxxx X. Xxxxx Xx.
Title: Senior Vice President and CFO
Total number of shares TRV EXECUTIVES FUND, L.P.
of Class C Common Stock By: GREENWICH STREET INVESTMENTS II,
subscribed for: L.L.C., its General Partner
710 Shares By: /s/ XXXXXX X. XXXXX
-------------- ------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Member
Purchase Price for Address of Purchaser:
Shares of Class C
Common Stock Greenwich Street Capital Partners
subscribed for: 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
$ 44,030.20
[Counterparts of this page were executed by each party listed on
Exhibit A to the Institutional Stockholders' Agreement]
[Institutional Stockholder Subscription Agreement Signature Page]
