EXHIBIT 10.3
LOCK UP, VOTING AND CONSENT AGREEMENT
This Lock Up, Voting and Consent Agreement (the "Agreement"), dated as
of June 13, 2002, is entered into and made by and among Stations Holding
Company, Inc., a Delaware corporation ("Debtor" or the "Company"), Xxxx
Communications Systems, Inc., a Georgia corporation ("Xxxx") and each of the
undersigned holders (each, a "Consenting Holder" and, together, the "Consenting
Holders") of the Junior Preferred Stock (as defined below). All capitalized
terms not otherwise defined herein have the meanings given to said terms in the
Plan (as hereinafter defined).
WHEREAS, Debtor has issued 450,000 shares of Junior Discount Preferred
Stock due July 1, 2008 (the "Junior Preferred Stock");
WHEREAS, Debtor and the Consenting Holders have engaged in good faith
negotiations with the objective of reaching an agreement with regard to
satisfying the Debtor's obligations under the Junior Preferred Stock;
WHEREAS, Debtor and Xxxx are, concurrently with the execution of this
Agreement, entering into a Merger Agreement of even date herewith (the "Merger
Agreement") pursuant to which, subject to the terms and conditions set forth in
the Merger Agreement, a wholly-owned subsidiary of Xxxx will be merged into and
with Debtor;
WHEREAS, Debtor and each of the Consenting Holders now desire to
implement a financial restructuring that gives effect to the Merger Agreement
(the "Financial Restructuring"), and in order to implement the Financial
Restructuring, the Debtor intends to prepare and file a disclosure statement
(the "Disclosure Statement") and plan of reorganization (the "Plan") consistent
in all material respects with the terms set forth in this Agreement and the
summary of the Plan attached hereto as Exhibit A (the "Plan Summary") which, if
confirmed, will implement the terms of the Financial Restructuring in the
Debtor's bankruptcy case number 02-10882 (MFW) (the "Chapter 11 Case") filed
under the United States Bankruptcy Code, 11 U.S.C. ss. 101 et seq. (the
"Bankruptcy Code"), and the Debtor intends to use its best efforts to have the
Disclosure Statement approved and such Plan confirmed by the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") in the
Chapter 11 Case as expeditiously as possible under the Bankruptcy Code and the
Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules");
WHEREAS, each Consenting Holder is the legal owner, beneficial owner
and/or the investment advisor or manager for the beneficial owner (with the
power to vote and dispose of such claims on behalf of such beneficial owner) of
the number of shares of Junior Preferred Stock (for each such party, the
"Relevant Claim"), in each case as set forth below each such Consenting Holder's
signature attached hereto;
WHEREAS, each Consenting Holder has reviewed, or has had the
opportunity to review, with the assistance of professional financial and legal
advisors of its choosing, the Plan Summary and the Merger Agreement; and
WHEREAS, each Consenting Holder desires to support and vote for
confirmation of the Plan, and the Debtor desires to obtain the commitment of the
Consenting Holders to support and vote for the Plan, in each case subject to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Debtor, Xxxx and the Consenting Holders, intending to be legally bound, agree as
follows:
Section 1. Voting. Each Consenting Holder represents and
warrants, severally and not jointly, that, as of the date hereof, it is the
legal owner, beneficial owner and/or the investment adviser or manager for the
beneficial owner (with the power to vote and dispose of such claims on behalf of
such beneficial owner) of such legal or beneficial owner's Relevant Claim and
that there is no Junior Preferred Stock of which it is the legal owner,
beneficial owner and/or investment advisor or manager for such legal or
beneficial owner which are not part of its Relevant Claim. Each Consenting
Holder agrees for itself that (i) it shall timely vote (or cause to be voted)
its Relevant Claim and any other claims or interests that it holds (and not
revoke or withdraw such vote) to accept the Plan; provided that the terms of the
Plan and Disclosure Statement are consistent in all material respects with the
Plan attached hereto and (ii) to the extent such election is available, it shall
not elect on its ballot to preserve any claims, if any, such Consenting Holder
may have that may be affected by the releases provided for under the Plan.
Section 2. Support of the Plan.
(1) Each Consenting Holder agrees that it will (i) from
and after the date hereof not agree to, consent to, provide any support to,
participate in the formulation of, or vote for any plan of reorganization or
liquidation, other than the Plan; (ii) execute and deliver a customary letter,
in form and substance reasonably satisfactory to the Company and such Consenting
Holder, from the Consenting Holder for distribution to the holders of any
impaired claims against or interests in the Company, stating that such
Consenting Holder supports and has committed to vote to approve the Plan; and
(iii) agree to permit disclosure in the Disclosure Statement and any filings by
the Company with the Securities and Exchange Commission of the contents of this
Agreement, including, but not limited to, the commitments given in clause (i) of
this Section 2(a) and the aggregate Relevant Claims held by all Consenting
Holders; provided that the Company shall not disclose the number of shares of
Junior Preferred Stock comprising the Relevant Claim of any individual
Consenting Holder, except as otherwise required by applicable law.
(2) Each Consenting Holder further agrees that it shall
not object to or otherwise commence any proceeding, or take any other action, to
oppose or alter any of the terms
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of the Plan or any other document filed in connection with the confirmation of
the Plan (hereinafter a "Reorganization Document") and shall not take any action
which is inconsistent with, or that would delay approval or confirmation of any
of the Disclosure Statement, the Plan or any of the Reorganization Documents;
provided that the terms of all such Reorganization Documents are customary and
otherwise consistent with the material terms of the Plan. Without limiting the
generality of the foregoing, no Consenting Holder may directly or indirectly
seek, solicit, support or encourage any other plan, sale, proposal or offer of
dissolution, winding up, liquidation, reorganization, merger or restructuring of
the Company or any of its subsidiaries that could reasonably be expected to
prevent, delay or impede the restructuring of the Company as contemplated by the
Plan or any Reorganization Document.
Section 3. Forbearance. So long as this Agreement shall remain
in effect, each Consenting Holder hereby agrees to forbear from exercising any
rights or remedies it may have under the Junior Preferred Stock and all related
documents, applicable law, or otherwise, with respect to any existing default
under the Junior Preferred Stock and all related documents.
Section 4. Restrictions on Transfer. Each of the Consenting
Holders hereby agrees that, for so long as this Agreement shall remain in
effect, it shall not sell, transfer or assign all or any of its Relevant Claims
or any option thereon or any right, interest (voting or otherwise) therein,
unless the transferee agrees in writing to be bound by the terms of this
Agreement by executing a counterpart signature page to this Agreement and the
transferor promptly provides the Company with a copy thereof, in which event the
Company shall be deemed to have acknowledged that its obligations to the
Consenting Holders hereunder shall be deemed to constitute obligations in favor
of such transferee, and the Company shall confirm such acknowledgment in
writing.
Section 5. Further Acquisition of Junior Preferred Stock. This
Agreement shall in no way be construed to preclude the Consenting Holders or any
of their respective subsidiaries or affiliates from acquiring additional shares
of Junior Preferred Stock. However, any such additional Junior Preferred Stock
acquired by a Consenting Holder shall automatically be deemed to be Relevant
Claims and to be subject to the terms of this Agreement. The Consenting Holder
agrees that it shall not create any subsidiary or affiliate for the sole purpose
of acquiring any Junior Preferred Stock. Upon the request of the Company, each
Consenting Holder shall provide an accurate and current list of the Relevant
Claims held by such Consenting Holder.
Section 6. Company Agreement. The Company hereby agrees to use
its commercially reasonable efforts to have the Disclosure Statement approved by
the Bankruptcy Court, and thereafter or in conjunction therewith to use its
commercially reasonable efforts to obtain an order of the Bankruptcy Court
confirming the Plan, in each case as expeditiously as commercially reasonable
under the Bankruptcy Code and Bankruptcy Rules, and consistent in all material
respects (including with respect to the treatment of claims and interests) with
the terms and conditions of the Plan.
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Section 7. Acknowledgment. This Agreement is not and shall not
be deemed to be a solicitation for consents to the Plan. The acceptance of the
Consenting Holders will not be solicited until the Consenting Holders have
received the Disclosure Statement and related ballot, as approved by the
Bankruptcy Court.
Section 8. Termination. The obligations of the Consenting
Holders hereunder shall remain effective and binding and shall terminate only
upon the earlier to occur of the time at which (i) the Plan provides or is
modified to provide for treatment of such Holder which is materially adverse to
the treatment described in the Plan Summary; and (ii) the Plan provides or is
modified without the consent of the Consenting Holders to provide for treatment
of the holders of the Debtor's outstanding Common Stock that increases the
aggregate recoveries for such Common Stock as a whole versus that contemplated
by the Plan Summary, or the Plan is modified in a manner which substantially
decreases the likelihood that the Plan will be confirmed.
Section 9. Good Faith Negotiation of Documents. Each party
hereby further covenants and agrees to negotiate the Reorganization Documents
and any definitive documents relating thereto, in good faith and, in any event,
in all material respects consistent with the Plan Summary.
Section 10. Representations and Warranties. Each of the
Consenting Holders, severally and not jointly, represents and warrants to Debtor
and Xxxx, and Xxxx and the Debtor each represents and warrants, only as to
itself and not as to the other, to each Consenting Holder that the following
statements, as applicable, are true, correct and complete as of the date hereof:
(1) Power and Authority. It has all requisite corporate,
partnership, or limited liability company power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and to perform
its obligations hereunder.
(2) Due Organization. It is duly organized, validly
existing and in good standing under the laws of its state of organization and it
has the requisite power and authority to execute and deliver this Agreement and
to perform its obligations hereunder.
(3) Authorization. The execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary corporate, partnership or limited liability company
action on its part (other than the approval of the Bankruptcy Court in the case
of the Debtor).
(4) No Conflicts. The execution, delivery and performance
of this Agreement does not and shall not: (i) violate any provision of law, rule
or regulation applicable to it or any of its subsidiaries, (ii) violate its
certificate of incorporation, bylaws or other organizational documents or those
of any of its subsidiaries; or (iii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation to which it or any of its subsidiaries is a
party.
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(5) Governmental Consents. The execution, delivery and
performance by it of this Agreement do not and shall not require any
registration or filing with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body (other than the approval of the Bankruptcy Court in the case of
the Debtor).
(6) Binding Obligation. Subject to the provision of
sections 1125 and 1126 of the Bankruptcy Code, this Agreement is a legally valid
and binding obligation, enforceable in accordance with its terms.
Section 11. Complete Agreement, Modification of Agreement. This
Agreement and the other agreements referenced herein constitute the complete
agreement between the parties with respect to the subject matter hereof. This
Agreement may not be modified, altered, amended or supplemented except by an
agreement in writing signed by the Company, Xxxx and the Consenting Holders that
hold not less than two-thirds of the outstanding shares of Junior Preferred
Stock.
Section 12. Specific Performance. It is understood and agreed by
the parties that money damages would not be a sufficient remedy for any breach
of this Agreement by any party and each non-breaching party shall be entitled to
the sole and exclusive remedy of specific performance and injunctive or other
equitable relief, including attorneys' fees and costs, as a remedy of any such
breach, and each party agrees to waive any requirement for the securing or
posting of a bond in connection with such remedy.
Section 13. Assignment. Except as set forth in Section 4, no
rights or obligations of any party under this Agreement may be assigned or
transferred to any other person or entity.
Section 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE. By its execution and delivery
of this Agreement, each of the parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, may be brought in the Bankruptcy Court.
By execution and delivery of this Agreement, each of the Parties hereto hereby
irrevocably accepts and submits itself to the exclusive jurisdiction of each
such court, generally and unconditionally, with respect to any such action, suit
or proceeding.
Section 15. Modification of Plan. No modification or change to
the Plan shall release the Consenting Holder from obligations under this
Agreement if the Plan remains substantially similar in all economic and other
respects to the Plan Summary, and if such modification or change does not
negatively impact or lessen the economic recovery or other rights that such
Consenting Holder will receive under the Plan.
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Section 16. Independent Due Diligence and Decision-Making. Each
of the Consenting Holders hereby confirms that its decision to execute this
Agreement has been based upon its independent investigation of the operations,
businesses, financial and other conditions and prospects of Debtor. To the
extent any materials or information have been furnished to it by Debtor, the
undersigned hereby acknowledges that they have been provided for informational
purposes only, without any representation or warranty.
Section 17. Headings. The headings of the sections, paragraphs
and subsections of this Agreement are inserted for convenience only and shall
not affect the interpretation hereof.
Section 18. Prior Negotiations. This Agreement, the Plan Summary
and the Reorganization Documents supersede all prior negotiations with respect
to the subject matter hereof.
Section 19. Consideration. It is hereby acknowledged by the
Company, Xxxx and each of the Consenting Holders that no consideration shall be
due or paid to the Consenting Holders for their agreement to vote to accept the
Plan in accordance with the terms and conditions of this Agreement, other than
the Company's agreement to use its reasonable best efforts to obtain approval of
the Disclosure Statement and to confirm the Plan in accordance with the terms
and conditions of this Agreement.
Section 20. No Third Party Beneficiaries. This Agreement shall be
solely for the benefit of the parties hereto, including their permitted assigns,
and no other person or entity shall be a third party beneficiary hereof. Nothing
in this Agreement, express or implied, shall give to any party or entity other
than the parties any benefit or any legal or equitable right, remedy or claim
under this Agreement.
Section 21. Several Obligations. The obligations of the
Consenting Holders hereunder are several and not joint.
Section 22. Notices. All notices hereunder to be served to the
Company or Xxxx, as applicable, shall be deemed given if in writing and
delivered or sent by telecopy, courier or by registered or certified mail
(return receipt requested) to the following addresses or telecopier numbers (or
at such other addresses or telecopier numbers as shall be specified by like
notice):
Stations Holding Company, Inc.
c/o Xxxx X. Xxxxxxx
Shack Xxxxxx Xxxx Xxxxxxxx & Xxxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000.000.0000
with copies to:
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Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx
Fax: 000.000.0000
To Xxxx: Xxxx Communications Systems, Inc.
0000 Xxxxxxxxx Xxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Xx.
Fax: 000.000.0000
with copies to:
Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Fax: 000.000.0000
Section 23. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall, collectively and separately,
constitute one and the same agreement.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
STATIONS HOLDING COMPANY, INC.
By: /s/ K. Xxxxx Xxxxx
---------------------------------------
Its: President and Chief Operating Officer
XXXX COMMUNICATIONS
SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxx
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Its: Vice President and Chief Financial
Officer
HOLDER OF RELEVANT CLAIM:
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Name of Holder:
By:
--------------------------------
Name:
Title:
Number of Shares
of Junior Preferred
Stock:
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