XXXXXX COMMUNICATIONS CORPORATION
AMENDED AND RESTATED STOCKHOLDER AND
INVESTOR RIGHTS AGREEMENT
dated as of April 13, 1999
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AMENDED AND RESTATED STOCKHOLDER AND INVESTOR RIGHTS AGREEMENT
AMENDED AND RESTATED STOCKHOLDER AND INVESTOR RIGHTS AGREEMENT, dated as of
April 13, 1999 (this "Agreement"), by and among the investors listed on Schedule
I (individually, each a "Cash Equity Investor" and, collectively, with any of
its Affiliated Successors, the "Cash Equity Investors") and Xxxxxx
Communications Corporation, an Oklahoma corporation (the "Company"). Each of
the foregoing Persons, together with all other Persons who, in connection with a
Transfer (as hereinafter defined) are required to become a party to this
Agreement (other than the Company) are sometimes referred to herein,
individually, as a "Stockholder" and, collectively, as the "Stockholders."
RECITALS
WHEREAS:
(A) The Company and certain of its stockholders originally entered into
this Agreement on December 23, 1998 following the termination of the earlier
Stockholder Agreement of the Company, dated as of February 26, 1997, in order to
provide for the management of the Company and to impose certain restrictions
with respect to the sale, transfer or other disposition of Common Stock and
Preferred Stock on the terms and conditions hereinafter set forth; and
(B) The Company, together with the other parties thereto have agreed to
amend and restate the Stockholder and Investor Rights Agreement and AT&T
Wireless Services, Inc. wishes to become a party hereto as of the date hereof;
and
(C) The authorized capital stock of the Company consists of: (a)
1,500,000 shares of common stock, par value $0.001 per share ("Common Stock"),
consisting of (i) 1,438,000 shares of Class A Common Stock ("Class A Common
Stock"), of which 491,954 shares are issued and outstanding, (ii) 31,000 shares
of Class B Common Stock ("Class B Common Stock"), of which 29,767 shares are
subject to options which have been granted but not exercised, and (iii) 31,000
shares of Class C Common Stock ("Class C Common Stock"), of which 2,414 shares
are subject to options which have been granted but not exercised; and
(b) 2,500,000 shares of preferred stock, par value $1.00 per share ("Preferred
Stock"), consisting of (i) 734,000 shares designated 12 1/4% Senior Exchangeable
Preferred Stock, Mandatorily Redeemable 2008, of which 270,497 shares are issued
and outstanding, including PIK dividends thereon through April 15, 1999, (ii)
450,000 shares designated Class A 5% Non-Cumulative, Non-Voting, Non-Convertible
Preferred Stock ("Class A Preferred Stock"), of which 314,286 shares are issued
and outstanding, (iii) 90,000 shares designated Class D Convertible Preferred
Stock ("Class D Preferred Stock"), of which 75,093.7 shares are
issued and outstanding, (iv) 517,000 shares designated Class E Preferred Stock
("Class E Preferred Stock"), of which zero shares are issued and outstanding,
(v) 30,000 shares designated Class F Preferred Stock ("Class F Preferred
Stock"), of which 30,000 shares are issued and outstanding, (vi) 62,000 shares
designated Class G Preferred Stock ("Class G Preferred Stock"), of which 37,853
shares are issued and outstanding, and (vii) 62,000 shares designated Class H
Preferred Stock ("Class H Preferred Stock"), of which zero shares are issued and
outstanding; and
(D) Each Stockholder is the registered owner of the respective shares of
Common Stock and Preferred Stock set forth opposite its name on Schedule II.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used herein, the following terms have
the following meanings (unless indicated otherwise, all Section and Article
references are to Sections and Articles in this Agreement, and all Schedule and
Exhibit references are to Schedules and Exhibits to this Agreement):
"AAA RULES" shall have the meaning set forth in Section 14.9.
"ADVICE" shall have the meaning set forth in Section 5(d)(xvii).
"AFFILIATE" shall have the meaning given such term in Rule 501(b) under the
Securities Act, provided, that, (i) Logix Communications will not be deemed to
be part of the Company or an Affiliate of the Company for purposes of this
Agreement, including for purposes of giving rise to Conflicts from and after the
Logix Communications, Spin-Off or an initial public offering of Logix
Communications stock or tracking stock, and (ii) prior to the Logix
Communications Spin-Off or an initial public offering of Logix Communications
stock or tracking stock Logix Communications will not be deemed to be part of
the Company or an Affiliate of the Company for purposes of giving rise to
Conflicts unless the Logix Communications Spin-Off or an initial public offering
of Logix Communications stock or tracking stock does not occur by the second
anniversary of the Amendment and Restatement Date, in which case, effective as
of such second anniversary, this clause (ii) will have no further effect.
"AFFILIATED SUCCESSOR" shall mean, with respect to any Person, an Affiliate
thereof
that is a transferee or a successor in interest to any or all of such Person's
Company Stock and that is required to become a party to this Agreement in
accordance with the terms hereof; provided, however, that, for purposes of
Section 4, with respect to any Cash Equity Investor, "Affiliated Successor"
shall also include partners, limited partners or members of a Cash Equity
Investor that are transferees of Preferred Stock or Common Stock pursuant to
distributions in accordance with the partnership agreement or operating
agreement of such Cash Equity Investor.
"AMENDMENT AND RESTATEMENT DATE" shall mean April __, 1999.
"APPRAISAL PROCEDURE" means the following procedure for determining the
Market Price, for the purpose of valuing the Logix Communications Common Stock
pursuant to Section 6.4 or the Class A Common Stock pursuant to a Conflict Put
Notice pursuant to Section 12.2(c), in the event that the shares of Class A
Common Stock are not listed or admitted for trading on any national securities
exchange and are not quoted on NASDAQ or any similar service:
(i) The Company and the holders of a majority of the outstanding
shares of stock being appraised, or any investment bank
appointed by them, shall each determine, and attempt to
mutually agree upon, the Market Price.
(ii) In the event that the parties fail to agree on the Market
Price or to mutually agree on an investment bank within 30
days then two independent accounting or investment banking
firms of nationally recognized standing (each, an
"Appraiser"), one chosen by the Company and one by the
holders of a majority of the outstanding shares of stock
being appraised, shall each determine and attempt to
mutually agree upon, the Market Price. Each party shall
deliver a notice to the other appointing its Appraiser
within 15 days after the expiration of the 30-day period
referred to in the prior sentence. If either the Company or
such holders fail to appoint an Appraiser within such 15-day
period, the Market Price shall be determined by the
Appraiser that has been so appointed.
(iii) If within 30 days after appointment of the two Appraisers
they are unable to agree upon the Market Price, an
independent accounting or investment banking firm of
nationally recognized standing shall within 10 days
thereafter be chosen to serve as a third Appraiser by the
mutual consent of such first two Appraisers. The
determination of the Market Price by the third Appraiser so
appointed and chosen shall be made within 30 days after the
selection of such third Appraiser.
(iv) If three Appraisers shall be appointed and the determination
of one Appraiser is disparate from the middle determination
by more than twice the amount by which the other
determination is disparate from the middle determination,
then the determination of such Appraiser shall be excluded,
the remaining two determinations shall be averaged, and such
average shall be binding and conclusive on the Company and
such holders; otherwise the average of all three
determinations shall be binding and conclusive on the
Company and such holders.
(v) In connection with any appraisal conducted pursuant to this
Appraisal Procedure, the Appraisers shall adhere to the
guidelines provided in the definition of "Market Price" set
forth below, including the proviso thereto.
(vi) The fees and expenses of each Appraiser shall be borne
one-half by the Company and one-half by such holders.
"ARBITRATION NOTICE" shall have the meaning set forth in Section 14.9.
"AT&T" shall mean AT&T Wireless Services, Inc., a Delaware corporation.
"AT&T COMPETITIVE CONFLICT" shall mean that the aggregate number of POPs in
the AT&T Overlap Territory exceeds the lesser of 2,000,000 or 10% of all POPs in
the Company Territory, after giving effect to the particular acquisition or
transaction giving rise to such Conflict.
"AT&T OVERLAP TERRITORY" shall mean any AT&T Territory (excluding AT&T
Territory as of the Amendment and Restatement Date) that also constitutes
Company Territory as of the date AT&T or an Affiliate of AT&T (i) commences
Offering CMRS Service in such Company Territory or (ii) enters into a binding
agreement to acquire, manage or control a Person that is Offering CMRS Service
in such Company Territory.
"AT&T REGULATORY CONFLICT" shall mean a Regulatory Conflict that arises
solely as a result of actions taken or activities commenced by AT&T and its
Affiliates after the Amendment and Restatement Date.
"AT&T TERRITORY" shall mean, as of any date, any geographic area in which
AT&T or any Affiliate of AT&T is Offering CMRS Service, together with any
geographic area in which any other Person is Offering CMRS Service if, as of the
applicable date, AT&T or an Affiliate of AT&T has entered into a binding
agreement to acquire, manage or control such Person or such Person's business of
Offering CMRS Service in such area.
"AVAILABLE CASH" shall have the meaning given to such term in the
Subordinated Put Note.
"BENEFICIALLY OWN" shall have the meaning set forth in Rule 13d-3 of the
Exchange Act.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the Company, as
duly constituted in accordance with this Agreement, or any committee thereof
duly constituted in accordance with this Agreement, the by-laws and applicable
law and duly authorized to make the relevant determination or take the relevant
action. To the extent that the Board of Directors (or any committee thereof) is
required under this Agreement to authorize or approve, or make a determination
in respect of a transaction between the Company, on the one hand, and a
Stockholder, and/or a Stockholder's Affiliates, on the other hand, the Board of
Directors shall be deemed to exclude such Stockholder, any of its Affiliates,
and any of the directors, officers, employees, agents or representatives of such
Stockholder and/or its Affiliates, who are members of the Board of Directors.
"BTA" shall mean a geographic area established by the Rand XxXxxxx 1992
Commercial Atlas & Marketing Guide, 123rd Edition, as modified by the FCC to
form the initial geographic area of license for the C, D, E and F blocks of
broadband PCS spectrum as defined in Section 24.202 of the FCC's rules.
"CALL NOTICE" shall have the meaning set forth in Section 13.2.
"CASH EQUITY INVESTORS" shall have the meaning set forth in the preamble.
"CELLULAR SYSTEM" shall mean a mobile communication system constructed and
operated in a MSA or a RSA (or any successor territorial designations or
subdivision thereof authorized by the FCC) exclusively using frequencies in the
800 MHz band, or portions thereof, pursuant to a License therefor issued by the
FCC.
"CELLULAR TERRITORY" shall mean the cellular geographic service area in an
MSA or RSA in which the Company or its Subsidiaries has been granted a licence
to operate a Cellular System by the FCC.
"CERTIFICATES OF DESIGNATION" shall mean collectively the Certificates of
Designation of the Company in respect of each class of Preferred Stock,
substantially in the forms of Exhibits B-1 through B-6 hereto.
"CHANGE OF CONTROL" shall mean (i) prior to an IPO, any transaction as a
result of which Xxxxxxx Xxxxxx and his Affiliates, directly or indirectly, cease
to control 50.1% of the Company's Voting Securities, (ii) following an IPO, any
transaction as a result of
which Xxxxxxx Xxxxxx and his Affiliates, directly or indirectly, cease to
control 35% of the Company's Voting Securities, or (iii) the sale of all or
substantially all of the Company's stock, business or assets (including through
a merger or otherwise), PROVIDED, HOWEVER, that a Change of Control will not be
deemed to occur in connection with and solely as a result of (x) the sale or
redemption by the Xxxxxx Partnership of up to $25.0 million in aggregate
principal amount of capital stock of the Company, together with any accrued and
unpaid dividends thereon, in one transaction or a series of transactions in
accordance with Section 4.2(e), (y) an IPO, and (z) the Logix Communications
Spin-Off.
"CHANGE OF LAW" shall mean a change in a Law applicable to the Company,
AT&T and/or any of their respective Affiliates or their respective businesses,
properties or assets which is adopted or occurs after the Amendment and
Restatement Date.
"CLASS A COMMON STOCK" shall have the meaning given such term in recital
(C) hereto.
"CLASS A PREFERRED STOCK" shall have the meaning set forth in recital (C)
hereto.
"CLASS B COMMON STOCK" shall have the meaning given such term in recital
(C) hereto.
"CLASS B PREFERRED STOCK" shall mean the Class B Convertible Preferred
Stock of the Company, which has been redeemed as of the date of this Agreement.
"CLASS C COMMON STOCK" shall have the meaning set forth in recital (C)
hereto, which is designed to track the financial performance of the Wireless
Subsidiaries.
"CLASS C PREFERRED STOCK" shall mean the Class C 8% Cumulative, Non-Voting,
Non-Convertible, Preferred Stock of the Company, which has been redeemed as of
the date of this Agreement.
"CLASS D PREFERRED STOCK" shall have the meaning set forth in recital (C)
hereto.
"CLASS E PREFERRED STOCK" shall have the meaning set forth in recital (C)
hereto.
"CLASS F PREFERRED STOCK" shall have the meaning set forth in recital (C)
hereto.
"CLASS F PREFERRED STOCK DOCUMENTS" shall mean the Class F Preferred Stock
Investors Agreement, the Class F Preferred Stock Warrants and the Class F
Preferred Stock (and the Certificate of Designation relating thereto).
"CLASS F PREFERRED STOCK SUBSCRIPTION AGREEMENTS" shall mean the
Subscription
Agreements between the Company and certain former Sygnet Wireless, Inc.
stockholders, in respect of the Class F Preferred Stock Warrants.
"CLASS F PREFERRED STOCK WARRANTS" shall mean the Class F Preferred Stock
Warrants issued by the Company in conjunction with the Class F Preferred Stock.
"CLASS F PREFERRED STOCK WARRANT SHARES" shall mean the Class A Common
Stock to be issued by the Company upon exercise of the Class F Preferred Stock
Warrants.
"CLASS G PREFERRED STOCK" shall have the meaning set forth in recital (C)
hereto. The terms of the Class G Preferred Stock are set forth in the form of
Certificate of Designation on Exhibit B-5 hereto.
"CLASS H PREFERRED STOCK" shall have the meaning set forth in recital (C)
hereto. The terms of the Class H Preferred Stock are set forth in the form of
Certificate of Designation set forth on Exhibit B-6 hereto.
"CLAWBACK EXERCISE PRICE" shall have the meaning given such term in
Article 11.
"CLOSING PRICE" shall mean, with respect to each share of any class or
series of capital stock for any day, (i) the last reported sale price regular
way or, in case no such sale takes place on such day, the average of the closing
bid and asked prices regular way, in either case as reported on the principal
national securities exchange on which such class or series of capital stock is
listed or admitted for trading or (ii) if such class or series of capital stock
is not listed or admitted for trading on any national securities exchange, the
last reported sale price or, in case no such sale takes place on such day, the
average of the highest reported bid and the lowest reported asked quotation for
such class or series of capital stock, in either case as reported on NASDAQ or a
similar service if NASDAQ is no longer reporting such information.
"CMRS" shall mean a Commercial Mobile Radio Service regulated under Part 20
of the FCC rules as of the date of this Agreement.
"COMMISSION" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"COMMON STOCK" shall collectively mean the Class A Common Stock, the Class
B Common Stock and the Class C Common Stock.
"COMPANY" shall have the meaning set forth in the preamble.
"COMPANY STOCK" shall mean the Preferred Stock and the Common Stock.
"COMPANY COMPETITIVE CONFLICT" shall mean that the aggregate number of POPs
in the Company Overlap Territory exceeds the lesser of 2,000,000 or 10% of all
POPs in the Company Territory, after giving effect to the particular acquisition
or transaction giving rise to such Conflict.
"COMPANY OVERLAP TERRITORY" shall mean any Company Territory (other than
Company Territory as of the Amendment and Restatement Date) that constitutes
AT&T Territory as of the date the Company or an Affiliate of the Company (i)
commences Offering CMRS Service in such AT&T Territory or (ii) enters into a
binding agreement to acquire, manage or control a Person that is Offering CMRS
Service in such AT&T Territory.
"COMPANY REGULATORY CONFLICT" shall mean a Regulatory Conflict that arises
solely as a result of actions taken or activities commenced by the Company and
its Affiliates after the Amendment and Restatement Date.
"COMPANY TERRITORY" shall mean, as of any date, any geographic area in
which the Company or any Affiliate of the Company is Offering CMRS Service,
together with any geographic area in which any other Person is Offering CMRS
Service if, as of the applicable date, the Company or an Affiliate of the
Company has entered into a binding agreement to acquire, manage or control such
Person or such Person's business of Offering CMRS Service in such area.
"CONFIDENTIAL INFORMATION" shall have the meaning assigned to such term in
Section 6.3(a).
"CONFLICT" shall mean an AT&T Competitive Conflict, a Company Competitive
Conflict or a Regulatory Conflict.
"CONFLICT NON-VOTING NOTICE" shall have the meaning set forth in Section
12.2(b).
"CONFLICT NOTICE" shall have the meaning set forth in Section 12.2(a).
"CONFLICT PUT NOTICE" shall have the meaning set forth in Section 12.2(b).
"CONSOLIDATED LEVERAGE RATIO" shall be calculated in accordance with the
Senior Notes Indenture regardless of whether or not the Senior Notes Indenture
is still in effect.
"CREDIT AGREEMENTS" shall mean (i) the Credit Agreement, dated as of March
25, 1998, among First Union National Bank (as successor by merger to CoreStates
Bank, N.A.) as Administrative Agent, Xxxxxx Operating Company, as Borrower, the
Company, as Guarantor, and the Company Subsidiaries party thereto, as amended on
December 23, 1998, (ii) the Revolving Credit Agreement, dated as of March 25,
1998, among Xxxxxx Cellular Operations Company as Borrower, and NationsBank,
N.A. (as successor by merger to NationsBank of Texas, N.A.), as Administrative
Agent, (iii) the 364-Day Revolving Credit and Term Loan Agreement, dated as of
March 25, 1998, between Xxxxxx Cellular Operations Company, as Borrower, and
NationsBank, N.A. (as successor by merger to NationsBank of Texas, N.A.), as
Administrative Agent, (iv) the Credit Agreement, dated December 23, 1998,
between Xxxxxx/Sygnet Operating Company, as Borrower and NationsBank N.A., as
Administrative Agent and (v) the Term Loan Agreement, dated as of December 23,
1998, among Xxxxxx Tower Company and NationsBank, N.A.
"CREDIT DOCUMENTS" shall mean, collectively, the Credit Agreements and all
documents and instruments evidencing or securing or guarantying indebtedness
thereunder.
"DISPUTE" shall have the meaning set forth in Section 14.9.
"XXXXXX PARTNERSHIP" shall mean Xxxxxx XX Limited Partnership, an Oklahoma
limited partnership.
"XXXXXX/SYGNET" shall mean Xxxxxx/Sygnet Communications Company, an
Oklahoma corporation.
"XXXXXX/SYGNET NOTE DOCUMENTS" shall mean, collectively, the Xxxxxx/Sygnet
Note Indenture, the Xxxxxx/Sygnet Note Purchase Agreement, the Xxxxxx/Sygnet
Notes and the Xxxxxx/Sygnet Note Registration Rights Agreement.
"XXXXXX/SYGNET NOTE INDENTURE" shall mean the Indenture, dated December 23,
1998, among Xxxxxx/Sygnet and United States Trust Company of New York, as
trustee thereunder, in respect of the Xxxxxx/Sygnet Notes.
"XXXXXX/SYGNET NOTE PURCHASE AGREEMENT" shall mean the Purchase Agreement,
dated as of December 16, 1998, among Xxxxxx/Sygnet and NationsBanc Xxxxxxxxxx
Securities LLC.
"XXXXXX/SYGNET NOTE REGISTRATION RIGHTS AGREEMENT" shall mean the
Registration Rights Agreement, dated December 23, 1998, among Xxxxxx/Sygnet and
NationsBanc Xxxxxxxxxx Securities LLC.
"XXXXXX/SYGNET NOTES" shall mean the $200 million in aggregate principal
amount of 12 1/4% Senior Notes due 2008 issued by Xxxxxx/Sygnet pursuant to the
Xxxxxx/Sygnet Note Indenture.
"EQUITY SECURITIES" shall mean, with respect to any Person, any shares of
stock of, or partnership interest or other ownership or beneficial interest in,
such Person, in each case outstanding at any time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business, whether or not incorporated,
that, together with the Company, would be deemed to be a "single employer"
within the meaning of Section 4001(b) of ERISA.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FCC" shall mean the Federal Communications Commission or similar
regulatory authority established in replacement thereof.
"FINANCING AGREEMENTS" shall mean, collectively, the Senior Note Documents,
the Xxxxxx/Sygnet Notes Documents, the Credit Documents, the Senior PIK
Preferred Stock Certificate of Designation, the Sygnet PIK Preferred Stock
Documents, the Class F Preferred Stock Documents, the Investment and Transaction
Agreement and, as appropriate, all documents, instruments and agreements
evidencing or securing the foregoing and any amendments or refinancings
permitted by Section 12.6. This definition shall not be construed in accordance
with the final sentence of Section 1.2.
"FLEET BUYOUT STOCK" shall mean collectively the 17,412 shares of Class A
Common Stock purchased by JWC, the 22,459 shares of Class A Common Stock
purchased by the Company, the 17,412 shares of Class A Common Stock purchased by
the Xxxxxx Partnership and the 20,886 shares of Class A Common Stock purchased
by Xxxxxx Operating Company directly, in each case from Fleet Equity on December
23, 1998 pursuant to the terms of the Stock Purchase Agreement among Fleet
Equity and each such purchaser.
"FLEET EQUITY" shall mean collectively Fleet Venture Resources, Inc., Fleet
Equity Partners VI, L.P. and Xxxxxxx Plaza Partners together with their
respective Affiliates.
"FLEET EQUITY PURCHASE AGREEMENT" shall mean the Securities Purchase
agreement, dated as of March 19, 1996, among the Company and the Purchasers
named therein as amended by Amendment No.1 thereto, dated as of February 26,
1997.
"FORMER SHAREHOLDERS' AGREEMENT" shall mean the Shareholders' Agreement of
the Company, dated as of February 26, 1996, among the Company and the
shareholders named therein, and which has been terminated, effective as of
December 23, 1998.
"FULLY DILUTED BASIS" shall mean with respect to any Equity Securities
issued by any Person, without duplication, (a) all shares or units of, or
interests in, such Equity Securities outstanding at the time of determination,
and (b) all convertible securities, or other rights to acquire such Equity
Securities, whether or not exercisable or convertible at the time of such
determination.
"GAAP" means U.S. generally accepted accounting principles, consistently
applied.
"GOVERNMENTAL AUTHORITY" shall mean a Federal, state or local court,
legislature, governmental agency (including, without limitation, the United
States Department of Justice), commission or regulatory or administrative
authority or instrumentality.
"GUARANTEED PENSION PLAN" shall mean any employee pension benefit plan
within the meaning of Section 3(2) of ERISA maintained or contributed to by the
Company or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
"INDEBTEDNESS" means any indebtedness (including, without limitation,
Senior Indebtedness), whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing the
deferred and unpaid balance of the purchase price of any property (including
pursuant to capital leases), and any financial hedging obligations, if and to
the extent such indebtedness (other than a financial hedging obligation) would
appear as a liability upon a balance sheet of such person prepared on a
consolidated basis in accordance with generally accepted accounting principles,
other than a trade payable or accrued expense, and also includes, the guarantee
of items that would be included within this definition.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(e)(v).
"INDEMNIFIED STOCKHOLDER" shall have the meaning set forth in Section
5(e)(i).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(e)(v).
"INVESTMENT AND TRANSACTION AGREEMENT" shall mean the Investment and
Transaction Agreement, dated as of December 23, 1998, among the Company and the
Purchasers named therein, as amended by this Agreement.
"IPO" shall mean an initial public offering of Class A Common Stock
pursuant to an effective Registration Statement under the Securities Act, the
aggregate gross proceeds from such public offering equals or exceeds $50.0
million (or, where the context expressly provides otherwise in this Agreement,
such other amount as is
expressly stated).
"IPO DATE" shall mean the first date on which an IPO occurs.
"JWC" and "JWC Group Stockholders" each mean X.X. Childs Equity Partners
II, L.P., a Delaware limited partnership, and its affiliated funds and
co-investors listed on Schedule I hereto.
"JWC COMMON STOCK" shall mean the 17,412 shares of Class A Common Stock
purchased by JWC from Fleet Equity pursuant to the Fleet Purchase Agreement,
dated December 23, 1998, among Fleet Equity and the purchasers named therein.
The term JWC Common Stock, for purposes of this Agreement, shall include the
shares of Class A Common Stock purchased by AT&T from JWC pursuant to the Stock
Purchase Agreement.
"JWC SELLDOWN" shall mean the sale by JWC of up to $33.3 million of its
initial investment in Company Stock including, without limitation, Company Stock
sold to AT&T, pursuant to the Stock Purchase Agreement and Section 5.14 of the
Investment and Transaction Agreement.
"LAW" shall mean applicable common law and any statute, ordinance, code or
other law, rule, permit, permit condition, regulation, order, decree, technical
or other standard, requirement or procedure enacted, adopted, promulgated,
applied or followed by any Governmental Authority.
"LICENSE" shall mean a license, permit, certificate of authority, waiver,
approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance to construct or operate a facility,
including any emissions, discharges or releases therefrom, or to transact an
activity or business, to construct a tower or to use an asset or process, in
each case issued or granted by a Governmental Authority.
"LIENS" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, right of first refusal or right of others therein or
encumbrance of any nature whatsoever in respect of such asset.
"LIQUIDATION PREFERENCE" shall mean, with respect to each share of
Preferred Stock, the liquidation preference therefore, calculated in accordance
with the Certificate of Designation for the relevant class of Preferred Stock.
"LIQUIDITY EVENT" shall mean any of the following events, the occurrence of
the IPO Date, the sale of all or substantially all of the Company Stock or the
Company's business and assets (including through a merger or otherwise), the
substantial
recapitalization of the Company or any other event which provides substantial
financial liquidity to the Company's Stockholders in respect of their investment
in the Company.
"LOGIX COMMUNICATIONS" shall mean Logix Communications Enterprises, Inc. an
Oklahoma corporation.
"LOGIX COMMUNICATIONS COMMON STOCK" shall mean Common Stock, par value
$1.00 per share, of Logix Communications.
"LOGIX COMMUNICATIONS 1998 STOCK OPTION PLAN" shall mean the Logix
Communications 1998 Stock Option Plan.
"LOGIX COMMUNICATIONS SPIN-OFF" shall mean the consummation of the proposed
spin-off by the Company of the business of Logix Communications.
"MAJOR TELECOM COMPETITOR" shall mean any of (i) MCI/Worldcom Corp., Sprint
Corporation, Xxxx Atlantic Corporation, GTE Corporation, LCI International Inc.,
British Telecommunications plc, Cable & Wireless plc, Deutsche Telecom, Telecom
Italia SpA, France Telecom, Stentor companies, Omnipoint Corporation, AirTouch
Communications, Inc., and Telecommunicaciones de Mexico or (ii) any other Person
that derives over $2 billion of revenue per annum (based on the most recently
available data for the immediately preceding year) from the provision or sale of
telecommunications services, as of the date of measurement.
"MARKET PRICE" shall mean, with respect to each share of any class or
series of capital stock for any day, (i) the average of the daily Closing Prices
for the ten consecutive trading days commencing 15 days before the day in
question or (ii) if on such date the shares of such class or series of capital
stock are not listed or admitted for trading on any national securities exchange
and are not quoted on NASDAQ or any similar service, the cash amount that a
willing buyer would pay a willing seller (neither acting under compulsion) in an
arm's-length transaction without time constraints per share of such class or
series of capital stock as of such date, viewing the Company on a going concern
basis, determined in accordance with the Appraisal Procedure; provided that, in
determining such cash amount, the following shall be ignored: (i) any contract
or legal limitation in respect of the stock, including transfer, voting and
other rights, (ii) the "minority interest" or "control" status of the stock,
(iii) any illiquidity arising by contract in respect of the stock and any voting
rights or control rights amongst the stockholders, and (iv) any other contract
rights or restrictions, including those set forth herein.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect in the
business, assets, properties (tangible and intangible), operations, condition
(financial or otherwise), liabilities or prospects of the Company and the
Subsidiaries, taken as a
whole, whether or not in the ordinary course of business, whether separately or
in the aggregate with other occurrences or developments, and whether insured
against or not or any event, circumstances or conditions which reasonably may
have such a material adverse effect.
"MSA" means a Metropolitan Statistical Area, comprised of one or more
counties in the Unites States, as listed in Public Notice Report No. CL-92-40,
"Common Carrier Public Mobile Services Information, Cellular MSA/RSA Markets and
Counties," dated January 24, 1992. DA 92-109.
"MTA" shall mean a geographic area established by the Rand XxXxxxx 1992
Commercial Atlas & Marketing Guide, 123rd Edition, as modified by the FCC to
form the initial geographic area of license for the A and B blocks of broadband
PCS spectrum as defined in Section 24.202 of the FCC's rules.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ" shall mean the National Association of Securities Dealers'
Automated Quotation System.
"NEW COMPANY STOCK OPTION PLAN" shall mean the Xxxxxx Communications
Corporation 1996 Stock Option Plan, adopted on February 6, 1997, as amended by
Amendment No. 1 thereto, dated December 21, 1998.
"NEW SECURITIES" shall have the meaning set forth in Section 4.7(b).
"OFFERING CMRS SERVICES" means the offering of CMRS Services to the public
utilizing radio facilities licensed to the offeror by the FCC or in which the
offeror is advertising the availability of, and directly or through franchise
arrangements operating, retail outlets for the offering of the offeror's or its
Affiliate's CMRS Services.
"OVERLAP TERRITORY" shall mean the aggregate of AT&T Overlap Territory and
Company Overlap Territory.
"PCS SYSTEM" shall mean a mobile communication system constructed and
operated in a BTA or a MTA (or any successor territorial designations or
subdivision thereof authorized by the FCC) exclusively using the 1850 MHZ to
1910 MHZ and 1930 MHZ to 1990 MHZ frequencies, or portions thereof, pursuant to
a License therefor issued by the FCC.
"PCS TERRITORY" shall mean an MTA or BTA in which the Company or any of its
Subsidiaries has been granted a license to operate a PCS System by the FCC.
"PERSON" shall mean an individual, corporation, partnership, limited
liability company, association, joint stock company, Governmental Authority,
business trust or other legal entity.
"POPs" shall mean, with respect to any distinct geographic area, the
residents of such area based on the most recent publication by Equifax Marketing
Decision Systems, Inc.
"PREFERRED STOCK" shall mean collectively, the Senior PIK Preferred Stock,
the Sygnet PIK Preferred Stock, the Class A Preferred Stock, the Class D
Preferred Stock, the Class E Preferred Stock, the Class F Preferred Stock, the
Class G Preferred Stock and the Class H Preferred Stock.
"PREFERRED STOCK PUT RIGHT" shall have the meaning given such term in
Section 12.1.
"PROHIBITED TRANSFEREE" shall mean any Person (other than AT&T and its
Affiliates) that is one of the five largest providers of wireless
telecommunications services (based on revenue derived from the provision of such
wireless telecommunications services during the most recent fiscal year for
which such information is available) in any PCS Territory or Cellular Territory
or any entity which is controlled by any such Person; or a Person (other than
the Company and AT&T and its Affiliates) who derives a material portion of its
business by providing wireless telecommunications services in any PCS Territory
or Cellular Territory.
"PROSPECTUS" shall have the meaning set forth in Section 5(d)(i).
"PUT RIGHT" shall mean a Preferred Stock Put Right or the right of AT&T to
require the Company to repurchase Company Stock held by it pursuant to Section
12.2(c), as the context requires.
"QUALIFIED HOLDER" shall mean any Stockholder or group of Stockholders that
Beneficially Owns shares of Common Stock reasonably expected to, upon sale,
result in aggregate gross proceeds of at least $50.0 million.
"REGISTRABLE SECURITIES" shall mean (a) the Common Stock now owned or
hereafter acquired by any Stockholder or issuable upon conversion of any Equity
Security or exchange of Common Stock, and (b) all Common Stock issued or
issuable upon conversion, exchange or exercise of any Equity Security which is
issued pursuant to a stock split, stock dividend or other similar distribution
or event with respect to Common Stock but with respect to any Common Stock, only
until such time as such Common Stock (i) has been effectively registered under
the Securities Act and disposed of in accordance with the Registration Statement
covering it, (ii) has been
sold to the public pursuant to Rule 144 (or any similar provision then in
force), (iii) shall otherwise have been transferred, a new certificate
evidencing such Common Stock without a legend restricting further transfer shall
have been delivered by the Company, and subsequent public distribution of such
Common Stock shall neither require registration under the Securities Act nor
qualification (or any similar filing) under any state securities or "blue sky"
law then in effect, or (iv) shall have ceased to be issued and outstanding.
"REGISTRATION" shall have the meaning set forth in Section 5(d).
"REGISTRATION EXPENSES" shall have the meaning set forth in Section 5(g).
"REGISTRATION STATEMENT" shall have the meaning set forth in Section
5(d)(i).
"REGULATORY CONFLICT" shall mean the existence or occurrence of any of the
following conditions: (a) either AT&T or the Company or any of their respective
Affiliates own an attributable interest in both Cellular Systems authorized to
serve a Cellular Territory which violates any FCC rule or regulation prohibiting
such overlapping interests; or (b) either AT&T, the Company or any of their
respective Affiliates holds an attributable interest in more licensed broadband
PCS, cellular, and SMR spectrum regulated as CMRS than is permitted under any
FCC spectrum cap regulation prohibiting such interest; or (c) either AT&T or the
Company or any of their respective Affiliates holds any other attributable
interest or interests which violates any rule or regulation of the FCC, for
example, prohibitions on the ownership of certain interests in the telephone
company and cable television company serving the same market; provided, that, in
any case, a Regulatory Conflict will not be deemed to exist if such Regulatory
Conflict would not exist but for a Change of Law.
"RELATED AGREEMENTS" shall mean the Investment and Transaction Agreement,
the Stock Purchase Agreement, the Certificates of Designation for each of the
Class D Preferred Stock, the Class E Preferred Stock, the Class G Preferred and
the Class H Preferred, the New Company Stock Option Plan, and the Logix
Communications 1998 Stock Option Plan and the Investor Questionnaires.
"RELEVANT PERCENTAGE INTEREST" shall have the meaning given such term in
Section 3.4.
"REPRESENTATIVES" shall have the meaning set forth in Section 6.3(a).
"RESTATED BY-LAWS" shall mean the Amended and Restated By-Laws of the
Company in the form of Exhibit C.
"RESTATED CERTIFICATE" shall mean the Amended and Restated Certificate of
Incorporation of the Company, in the form of Exhibit A.
"RSA" means a Rural Statistical Area, comprised of one or more counties in
the United States, as listed in Public Notice Report No. CL-92-40, "Common
Carrier Public Mobile Services Information, Cellular MSA/RSA Markets and
Counties," dated January 24, 1992, DA 92-109.
"RULE 144" shall mean Rule 144 promulgated under the Securities Act (or any
similar rule as may be in effect from time to time).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING STOCKHOLDER" shall have the meaning set forth in Section 4.2(a).
"SENIOR INDEBTEDNESS" shall mean the principal, interest on, premium, if
any, fees (including, without limitation, any attorneys', commitment, agency,
facility, structuring, restructuring or other fee), costs, expenses,
indemnities, and other amounts due on or in connection with the Financing
Agreements and any refinancings or replacements of the foregoing prior to the
date of issuance of any Subordinated Put Note, in accordance with Section 12.6
hereof or from the date of issuance of any Subordinated Put Note, in accordance
with the terms of such Subordinated Put Note, in each case whether or not with
new lenders, now or hereafter incurred, any documents executed under or in
connection therewith, and any amendments, modifications, deferrals, renewals of
the Financing Agreements prior to the date of issuance of any Subordinated Put
Note, in accordance with Section 12.6, or from the date of issuance of any
Subordinated Put Note, in accordance with the terms of such Subordinated Put
Note, any amounts owed in respect of any Indebtedness incurred in refinancing,
replacing or refunding the foregoing prior to the date of issuance of any
Subordinated Put Note, in accordance with Section 12.6 or from the date of
issuance of any Subordinated Put Note, in accordance with the terms of such
Subordinated Put Note, in each case whether or not with new lenders, unless the
terms of such Indebtedness expressly provide that such Indebtedness is not
Senior Indebtedness with respect to any Subordinated Put Note.
"SENIOR NOTE DOCUMENTS" shall mean, collectively, the Senior Note
Indenture, the Senior Notes and the Senior Notes Escrow and Security Agreement.
"SENIOR NOTE INDENTURE" shall mean the Indenture, dated as of February 28,
1997, among the Company and United States Trust Company of New York, as Trustee
thereunder, in respect of the Senior Notes.
"SENIOR NOTES" shall mean the 11 3/4% Senior Notes due 2007 issued by the
Company pursuant to the Senior Note Indenture.
"SENIOR NOTES ESCROW AND SECURITY AGREEMENT" shall mean the Escrow and
Security Agreement, dated February 28, 1997, among, the Company and the
placement agents, party thereto, and United States Trust Company of New York, as
Trustee thereunder.
"SENIOR PIK PREFERRED STOCK" shall have the meaning set forth in recital
(C) hereto.
"SENIOR PIK PREFERRED STOCK CERTIFICATE OF DESIGNATION" shall mean the
Certificate of Designation in respect of the Senior PIK Preferred Stock.
"STOCKHOLDER" shall have the meaning set forth in the preamble.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated as of
April __, 1999, among the Company, JWC and AT&T.
"SUBORDINATED PUT NOTE" shall mean any Negotiable Junior Subordinated
Unsecured Note of the Company, substantially in the form of Exhibit D, issued in
accordance with the terms of this Agreement in connection with the exercise of
Put Rights.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed
to have a majority ownership interest in a partnership, association, or other
business entity if such Person or Persons shall be allocated a majority of
partnership, association or other business entity gains or losses or shall be or
control the managing general partner of such partnership, association or other
business entity.
"SYGNET ACQUISITION" shall mean the acquisition by the Company's wholly
owned subsidiary, Xxxxxx/Sygnet, of all of the outstanding capital stock of
Sygnet Wireless, Inc., an Ohio corporation, pursuant to the Sygnet Merger
Agreement dated July 28, 1998, as amended, between Xxxxxx/Sygnet Operating
Company and Sygnet Wireless, Inc.
"SYGNET MERGER AGREEMENT" shall mean the Agreement and Plan of Merger,
dated as of July 28, 1998, between Xxxxxx/Sygnet Operating Company and Sygnet
Wireless, Inc.
"SYGNET PIK PREFERRED STOCK" shall have the meaning set forth in recital
(C) hereof.
"TAG-ALONG EVENT" shall have the meaning set forth in Section 4.2(a).
"TAG-ALONG EVENT PURCHASER" shall have the meaning set forth in Section
4.2(a).
"TAG-ALONG NOTICE" shall have the meaning set forth in Section 4.2(a).
"TAG-ALONG STOCK" shall have the meaning set forth in Section 4.2(a).
"TAXES" means with respect to any Person a net income, gross income, gross
receipts, sales, use, ad valorem, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, transfer, occupation, premium,
property or windfall profit tax, custom duty or other tax, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest and any penalty, addition to tax or additional amount imposed by any
jurisdiction or other taxing authority (domestic or foreign) on such Person.
"TERRITORY" shall mean, collectively, all of the PCS Territories and all
of the Cellular Territories.
"TRANSFER" shall have the meaning set forth in Section 4.1(a).
"VOTING SECURITIES" shall mean equity securities of a Person having the
right to vote generally in the election of the directors of such Person.
"WIRELESS SUBSIDIARIES" shall mean collectively DCC PCS Inc., Western
Financial Services, Inc., Xxxxxx Cellular Operations Company, DOC Cellular
Subsidiary Company, Xxxxxx Operating Company, Xxxxxx Tower Company,
Xxxxxx/Sygnet Communications Company and their respective Subsidiaries.
1.2 OTHER DEFINITIONAL PROVISIONS. Each definition or pronoun herein
shall be deemed to refer to the singular, plural, masculine, feminine or neuter
as the context requires. Words such as "herein," "hereinafter," "hereof,"
"hereto" and "hereunder" refer to this Agreement as a whole, unless the context
otherwise requires. References to a document or agreement shall be to such
document or agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
ARTICLE 2.
STOCKHOLDER APPROVAL
2.1 ORGANIZATIONAL DOCUMENTS. The Stockholders consent to the
amendment of the By-Laws and their replacement by the Restated By-Laws and adopt
and approve the Restated By-Laws.
2.2 APPROVAL OF STOCK OPTION PLANS. The Stockholders approve and
adopt the New Company Stock Option Plan and the Logix Communications 1998 Stock
Option Plan and consent to the issuance of stock options and common stock in
accordance with the terms thereof and to the consummation of the other
transactions contemplated thereby.
2.3 LOGIX COMMUNICATIONS SPIN-OFF. The Stockholders hereby approve
and consent to the consummation of the Logix Communications Spin-Off provided
that such Logix Communications Spin-Off occurs within 12 months of the receipt
by the Company of (A) either (i) a private letter ruling by the Internal Revenue
Service with respect to the Logix Communications Spin-Off under the currently
pending application therefor by the Company or (ii) an opinion from a nationally
recognized law firm or accounting firm, acceptable in form and substance to the
Board of Directors, that the Logix Communications Spin-Off will not result in
the recognition of income, gain or loss for the Company or its Stockholders for
US federal tax purposes and (B) all necessary creditor, noteholder and other
third party approvals, consents and waivers shall have been obtained or waived.
In addition, if the alternative referred to in (A)(ii) above is pursued, the
Company will, as a pre-condition of the Logix Communications Spin-Off, obtain
insurance coverage in respect of any tax-related risks or liabilities arising if
the Logix Communications Spin-Off is a taxable event for the Company and/or its
stockholders, and such insurance policy, including its terms and coverage, will
be approved by the Board of Directors of the Company. The Stockholders
acknowledge that the holders of Class D Preferred Stock will participate in the
Logix Communications Spin-Off on a pro rata basis according to their percentage
ownership of Common Stock on a Fully Diluted Basis at the time of the Logix
Communications Spin-Off (assuming for this purpose that all options issued under
the Logix Communications 1998 Stock Option Plan have been exercised). The JWC
Common Stock shall participate in the Logix Communications Spin-Off on the same
terms as all other shares of Class A Common Stock.
ARTICLE 3.
MANAGEMENT OF THE COMPANY
3.1 BOARD OF DIRECTORS. (a) The Board of Directors shall, subject to
the other
provisions hereof, consist of seven (7) directors; PROVIDED, HOWEVER, that the
number of directors constituting the Board of Directors shall be reduced in the
circumstances set forth in this Section 3.1. Each of the Stockholders hereby
agrees that it will vote all of the shares of its Common Stock and Preferred
Stock (to the extent entitled to vote) owned or held of record by it (whether
now owned or hereafter acquired), in person or by proxy, to cause the election
of directors and thereafter the continuation in office of such directors as
follows:
(i) one director selected by JWC, in its sole discretion, so
long as it Beneficially Owns at least 35% of the Class D Preferred Stock (or the
Class A Common Stock or Class E Preferred Stock acquired upon conversion
thereof) it holds as of the Amendment and Restatement Date;
(ii) one director selected by AT&T, in its sole discretion, so
long as it Beneficially Owns at least 50% of the Class D Preferred Stock (or the
Class A Common Stock or Class E Preferred Stock acquired upon conversion
thereof) it holds as of the Amendment and Restatement Date, subject to section
3.1(b);
(iii) four directors selected by the Xxxxxx Partnership, in its
sole discretion; and
(iv) one director jointly selected by JWC, AT&T (in the event
its designee is a member of the current Board of Directors) and the Xxxxxx
Partnership, subject to Section 3.1(b). In the event that AT&T shall have
relinquished, and shall continue to relinquish, its right to designate a
director under Section 3.1(a)(ii) in accordance with Section 3.1(b), then the
director jointly selected by JWC and the Xxxxxx Partnership pursuant to this
Section 3.1(a)(iv) shall be reasonably acceptable to AT&T, which consent shall
not be unreasonably withheld.
Each of JWC and AT&T (in the event its designee is a member of the
current Board of Directors) shall have the right to, so long as they hold their
respective Relevant Percentage Interest, designate one director for the Board of
Directors of each Subsidiary of the Company.
If, for any reason, any director to be designated pursuant to
clause (iv) hereof is not designated within 45 days of the time when such
designation right arises, then (x) such director will be jointly selected by JWC
and AT&T (in the event its designee is a member of the current Board of
Directors), and (y) if any such director is not designated pursuant to clause
(x) within 90 days of such time, then such director will be selected by the
Xxxxxx Partnership. In the event that any Class D Preferred Stock is converted
into Class A Common Stock and Class E Preferred Stock in accordance with the
terms thereof, the rights of the holders of such Preferred Stock to vote to
appoint directors in accordance with the terms hereof shall survive such
conversion.
Any nomination or designation of directors and the acceptance
thereof pursuant to Section 3.1 shall be evidenced in writing.
(b) If, for any reason, AT&T's director selected pursuant to
clause (a)(ii) above resigns or AT&T determines that it no longer desires to
have director designation rights, including as a result of a Conflict and the
related provisions herein, then AT&T may, at its option, relinquish such
director designation rights, in which case, an additional director will be
designated pursuant to Section 3.1(a)(iv) above and AT&T will be entitled to
observer rights as provided in Section 3.1(d) below, PROVIDED, that if AT&T
subsequently determines to reinstate such director designation rights, it may do
so by notifying the parties hereto, in which case, such observer rights will
terminate, AT&T's director designation rights in Section 3.1(a)(ii) will be
reinstated, and the additional director designated pursuant to this Section
3.1(b) and 3.1(a)(iv) will concurrently resign or be removed.
(c) The Stockholders acknowledge the rights of the holders of
Senior PIK Preferred Stock to designate an additional 2 directors, the right of
the holders of Sygnet PIK Preferred Stock to designate an additional 2 directors
and the right of the holders of the Class F Preferred Stock to designate one
additional director, in the event that the triggering events described in
paragraph (iii) of the Senior PIK Preferred Stock Certificate of Designation,
paragraph (iii) of the Sygnet PIK Preferred Stock Certificate of Designation,
and subparagraph (c)(iii) of the Class F Preferred Stock Certificate of
Designation, respectively occur.
(d) If AT&T relinquishes its director designation rights pursuant
to Section 3.1(b), then AT&T will be entitled to designate an observer in
addition to its observer appointed under Section 3.4, who will be entitled to
attend all meetings of the Board of Directors and receive the same notice and
information provided to members of the Board of Directors. The Company will
reimburse the observer appointed pursuant to this Section in connection with
such person's role as observer for the reasonable and documented out-of-pocket
expenses and costs (including travel expenses), incurred by such observer in
connection with the performance of his service as an observer of the Board of
Directors.
3.2 REMOVAL; FILLING OF VACANCIES. Except as set forth in Section 3.1,
each Stockholder agrees it will not vote any shares of Company Stock
Beneficially Owned by such Stockholder, and shall not permit any Affiliated
Successor of such Stockholder holding any Company Stock, to vote for the removal
without cause of any director designated by any other Stockholder in accordance
with Section 3.1. Any Stockholder or group of Stockholders who has the right to
designate any member(s) of the Board of Directors shall have the right to
replace any member(s) so designated by it (whether or
not such member is removed from the Board of Directors with or without cause or
ceases to be a member of the Board of Directors by reason of death, disability
or for any other reason) upon written notice to the other Stockholders, the
Company and the members of the Board of Directors which notice shall set forth
the name of the member(s) being replaced and the name of the new member(s). Each
of the Stockholders agrees to vote, and to cause its Affiliated Successors to
vote, its shares of Preferred Stock and Common Stock, or shall otherwise take
any action as is necessary to cause the election of any successor director
designated by any Stockholder pursuant to this Section 3.2.
3.3 DIRECTORS. In accordance with the Oklahoma General Corporation Law
and pursuant to the provisions of Section 3.1 of this Agreement, the
Stockholders hereby consent to the election of and do hereby elect in accordance
with Section 3.1 hereof the persons designated in Schedule III hereto as
directors of the Company. Such persons shall hold office until their successors
are duly elected and qualified, except as otherwise provided in this Agreement,
the Restated Certificate or the Restated By-Laws.
3.4 COMPENSATION AND REIMBURSEMENT. The members of the Board of
Directors (other than the director selected pursuant to Section 3.1(a)(iv))
shall not be compensated for their services as a director or as a member of any
committee of the Board of Directors. For so long as JWC Beneficially Owns at
least 35% and AT&T Beneficially Owns at least 50%, respectively, of the number
of shares of Class D Preferred Stock (or any Class A Common Stock or Class E
Preferred Stock into which it may have been converted) which JWC or AT&T, as the
case may be, owns as of the Amendment and Restatement Date (the "Relevant
Percentage Interests"), JWC and AT&T shall each have the right to have an
observer present at all meetings of the Board of Directors and any committees
thereof (in addition to any directors appointed pursuant to Sections 3.1(a)(i)
and (ii) above). The Company will reimburse the observers appointed pursuant to
this Section and each member of the Board of Directors for the reasonable and
documented out-of-pocket expenses and costs (including travel expenses) incurred
by such observers or such directors in connection with the performance by each
such person of his service as an observer or as a director or as a member of any
committee of the Board of Directors.
3.5 BUSINESS OF THE COMPANY. The business and affairs of the Company
shall be conducted by the officers of the Company under the supervision of the
Board of Directors. The Board of Directors of the Company shall meet at least
once per fiscal quarter. The Board of Directors of Logix Communications shall
meet at least once in every two month period.
3.6 REQUIRED VOTES. All actions of the Board of Directors of the
Company shall require the vote of at least a majority of the entire Board of
Directors, unless
otherwise required by Law, the Restated Certificate, the Restated By-Laws or
this Agreement.
3.7 TRANSACTIONS BETWEEN THE COMPANY AND THE STOCKHOLDERS OR THEIR
AFFILIATES. Any transaction or series of transactions outside the ordinary
course of business and agreements or transactions entered into from time to time
and involving, in any 12-month period, in the aggregate, more than $1.0 million,
between the Company or its Subsidiaries, on the one-hand, and its Stockholders
or Affiliates, or any of them, on the other hand, must be approved by any two of
the directors selected in clauses (i), (ii) and (iv) of Section 3.1(a), PROVIDED
that no such approval will be required in connection with (A) this Agreement,
the Investment and Transaction Agreement, the New Company Stock Option Plan and
the Logix Communications 1998 Stock Option Plan, any Financing Agreement to be
entered into simultaneously herewith, (B) the Logix Communications Spin-Off, (C)
the Stock Purchase Agreement, (D) the proposed arms-length development and lease
by the Company and its Subsidiaries of space in an office building in which the
Xxxxxx family has an ownership interest and (E) the AT&T Operating Agreement and
any other transactions between Xxxxxx and/or its Subsidiaries on the one hand
and AT&T and/or its Affiliates on the other; PROVIDED, HOWEVER, that in the
event that the director in Section 3.1 (a)(iv) above has been selected by the
Xxxxxx Partnership without the approval of JWC and AT&T, then the consent of the
director designated by JWC in Section 3.1(a)(i) and the director designated by
AT&T in Section 3.1(a)(ii) shall be required to approve a transaction of the
type described in this Section 3.7.
3.8 BOARD COMMITTEES. If a committee of the Board of Directors is
established, the directors selected pursuant to Section 3.1(a)(i) and (ii) shall
each be entitled to be a member of such committee, and if AT&T shall relinquish
its director designation rights, AT&T shall be entitled to observer rights in
respect of such committee.
3.9 OTHER ACTIONS. The Company shall not, and shall not permit any of
its Subsidiaries to, take any of the following actions without the prior
approval of a majority of directors of the Board of Directors of the Company:
(i) register securities under the Securities Act or grant registration rights;
(ii) change the size of the Board of Directors; (iii) change the Company's
independent public accountants; (iv) amend this Agreement, subject to Section
14.3; (v) adversely amend or alter any preferences, rights or powers of the
Class D Preferred Stock, whether such rights be set forth in the Restated
Certificate or Restated Bylaws or in any other agreement; (vi) redeem,
repurchase or pay any dividends on any stock that is junior to, or on a parity
with, the Class D Preferred Stock, except for repurchases of management,
employee or consultant stock or stock options pursuant to contractual rights
which do not exceed $500,000 in any fiscal year of the Company or $1,500,000 in
the aggregate; (vii) issue or authorize any shares of capital stock of the
Company having a preference over, or being on parity
with, the Class D Preferred Stock, including the issuance of additional shares
of Class D Preferred Stock, subject to Section 6.5, PROVIDED, that the Company
may issue and authorize shares of capital stock in connection with (x) public or
private (which provides for registration within one year of issuance)/144A
preferred stock financing in connection with future acquisitions and capital
projects and the financing thereof, and (y) the Logix Communications Spin-Off;
or (viii) merge or consolidate with or into another Person, or sell all or
substantially all of its assets or liquidate its assets or business. Nothing in
this Section 3.9 is intended to imply that by virtue of the approval of the
Board of Directors pursuant to this Section 3.9 the Company can take any action
(including any action requiring separate or additional approval by the
Stockholders herein) that it is otherwise prohibited from taking.
ARTICLE 4.
TRANSFERS OF SHARES
4.1 GENERAL.
(a) Each Cash Equity Investor (other than Xxxxxx Partnership)
agrees that at all times prior to, the earliest of (A) the IPO Date (B) December
23, 2003 or (C) a Change of Control, it shall not, directly or indirectly,
transfer, sell, assign, pledge, or tender or otherwise grant or create a Lien in
or upon, give, or otherwise voluntarily or involuntarily (including transfers by
testamentary or intestate succession) dispose of by operation of law, offer or
otherwise (any such action being referred to herein as a "Transfer") any of the
shares of Company Stock Beneficially Owned by such Stockholder as of the date
hereof or which may hereafter be acquired by such Stockholder, except that a
Cash Equity Investor may Transfer shares of Preferred Stock and Common Stock (i)
to an Affiliate or an Affiliated Successor (notwithstanding anything else to the
contrary in this Article 4), (ii) to family members and trusts and partnerships
which are Affiliates thereof, (iii) to another Stockholder, (iv) in connection
with a public sale in accordance with Rule 144, (v) by JWC under the JWC
Selldown or the Stock Purchase Agreement, and (vi) to any other Person after
complying with Section 4.2, if applicable, PROVIDED, that in the case of clauses
(i), (ii), (iii), (v), and (vi) each such transferee shall execute a counterpart
of and become a party to this Agreement and shall agree in a writing in form and
substance reasonably satisfactory to the Company to be bound and becomes bound
by the terms of this Agreement. Nothing in this Agreement shall prohibit a bona
fide pledge of Company Stock by co-investors in the JWC Group (other than JWC)
to a bank or financial institution.
(b) Notwithstanding anything to the contrary contained in this
Article 4, JWC Common Stock shall not be subject to Section 4.1, PROVIDED that
any transferee of such shares shall execute a counterpart of and become party to
this Agreement and
shall agree in a writing in form and substance satisfactory to the Company to be
bound and becomes bound by the terms of this Agreement. Fleet Buyout Stock shall
be subject to the provisions of Section 4.2 and 4.5 of this Agreement.
4.2 TAG-ALONG RIGHTS.
(a) Subject to Sections 4.2(e) and 4.3(c), no Stockholder
("Selling Stockholder") shall, directly or indirectly, Transfer, in any single
transaction or series or related transactions to one or more Persons who are not
Affiliated Successors of such Stockholder (each such Person a "Tag-Along Event
Purchaser") shares of Preferred Stock or Common Stock (collectively, "Tag-Along
Stock") constituting 5% or more of such Stockholder's total investment in the
Company on a Fully Diluted Basis (a "Tag-Along Event"), unless the terms and
conditions of such sale to such Tag-Along Event Purchaser shall include an offer
to each Stockholder (including the Selling Stockholder) to Transfer to such
Tag-Along Event Purchasers up to that number of shares determined as follows:
(i) subject to Section 4.3(c), each JWC Group Stockholder
and AT&T shall have the right to Transfer to such Tag-Along Event
Purchaser up to that number of shares of Tag-Along Stock then
Beneficially Owned by such JWC Group Stockholder (without duplication)
or AT&T, respectively, as are equal in value to (x) the aggregate value
of the shares of Tag-Along Stock that such Tag-Along Event Purchaser
has offered to purchase (the "Total Tag-Along Value"), times (y) a
fraction, the numerator of which is the value of the shares of Class A
Common Stock and Class E Preferred Stock (valued at its Liquidation
Preference) at that time Beneficially Owned (without duplication) by
such JWC Group Stockholder or AT&T, as the case may be, and the
denominator of which is the value of all then outstanding Class A
Common Stock (the aggregate value of all of the shares of Tag-Along
Stock that may be purchased from the JWC Group Stockholders and AT&T is
hereinafter referred to as the "JWC/AT&T Group Value", and the Total
TagAlong Value minus the JWC/AT&T Group Value is hereinafter referred
to as the "Remaining Value");
(ii) subject to Section 4.3(c), each Stockholder that
is not a JWC Group Stockholder or AT&T (together with the Selling
Stockholders, the "Remaining Offerees") shall have the right to
Transfer to such Tag-Along Event Purchaser up to that number of shares
of Tag-Along Stock then Beneficially Owned by such Remaining Offeree
(without duplication) as are equal in value to (x) the Remaining Value,
times (y) a fraction, the numerator of which is the value of shares of
Class A Common Stock and Class E Preferred Stock (other than such stock
held by Xxxxxx Partnership) (valued at its Liquidation Preference) at
that time Beneficially Owned (without duplication) by such Remaining
Offeree, and the denominator of which is the value of all then
outstanding Class A Common Stock.
If the Selling Stockholders receive a bona fide offer from a Tag-Along
Event Purchaser to purchase shares of Tag-Along Stock in circumstances in which
would result in a Tag-Along Event, and which offer such Selling Stockholders
wish to accept, the Selling Stockholders shall then cause the Tag-Along Event
Purchaser's offer to be reduced to writing (which writing shall include an offer
to purchase shares of Tag-Along Stock from each Stockholder according to the
terms and conditions set forth in this Section 4.2) and the Selling Stockholders
shall send written notice of the Tag-Along Event Purchaser's offer (the
"TagAlong Notice") to each Stockholder, which Tag-Along Notice shall specify (i)
the names of the Selling Stockholders, (ii) the names and addresses of the
proposed acquiring Person, (iii) the amount of shares proposed to be Transferred
and the price, form of consideration and other terms and conditions of such
Transfer (including, if in a series of related transactions, such information
with respect to shares of Tag-Along Stock theretofore Transferred), (iv) that
the acquiring Person has been informed of the rights provided for in this
Section 4.2 and has agreed to purchase shares of Tag-Along Stock in accordance
with the terms hereof, (v) the date by which each other Selling Stockholder may
exercise its respective rights contained in this Section 4.2, which date shall
not be less than thirty (30) days after the giving of the Tag-Along Notice and
(vi) whether the provisions of Section 4.3(c) are applicable to such Tag-Along
Event. The Tag-Along Notice shall be accompanied by a true and correct copy of
the TagAlong Event Purchaser's offer. At any time within thirty (30) days after
receipt of the Tag-Along Notice, each Stockholder may accept the offer included
in the Tag-Along Notice for up to such number of shares of Tag-Along Stock as is
determined in accordance with this Section 4.2, by furnishing written notice of
such acceptance to each Selling Stockholder, and delivering, to an escrow agent
(which shall be a bank or a law or accounting firm designated by the Company),
on behalf of the Selling Stockholders, the certificate or certificates
representing the shares of Tag-Along Stock to be sold pursuant to such offer by
each Stockholder, duly endorsed in blank, together with a limited power-of-
attorney authorizing the escrow agent, on behalf of the Stockholder, to sell the
shares to be sold pursuant to the terms of such Tag-Along Event Purchaser's
offer.
If any Stockholder desires to sell less than its proportionate amount
of shares of Tag-Along Stock that it is entitled to sell pursuant to this
Section 4.2, then each of the other Stockholders shall have the right to sell to
the Tag-Along Event Purchaser an additional amount of shares of Tag-Along Stock
as shall be calculated in accordance with the allocations and procedures set
forth in the immediately preceding paragraph. Such process shall be repeated in
series until all of the remaining Stockholders agree to sell their remaining
proportionate number of shares of Tag-Along Stock.
Schedule IV sets forth an illustrative example for this Section 4.2(a),
PROVIDED, HOWEVER, that in the event of any conflict between such illustration
and this Section 4.2, Section 4.2 shall govern.
(b) The purchase from each Tag-Along Event Offeree pursuant to
this Section 4.2 shall be on the same terms and conditions, including the price
per share received by the Selling Stockholders and stated in the Tag-Along
Notice provided to each Stockholder. In the event that the Tag-Along Stock is
Common Stock, all Stockholders shall be required, as a condition of
participating in such transaction (in cases where the Preferred Stock is
convertible into Common Stock), to convert the required amount of its Preferred
Stock into Common Stock and Transfer Common Stock to the Tag-Along Event
Purchaser.
(c) Simultaneously with the consummation of the sale of the
shares of Tag-Along Stock to the Tag-Along Event Purchaser pursuant to the
Tag-Along Event Purchaser's offer, the Selling Stockholders shall notify each
Stockholder and shall cause the Tag-Along Event Purchaser to remit to each
Stockholder the total sales price of the shares of Tag-Along Stock held by each
Stockholder sold pursuant thereto and shall furnish such other evidence of the
completion and time of completion of such sale and the terms thereof as may be
reasonably requested by each Stockholder.
(d) If within thirty (30) days after receipt of the Tag-Along
Notice, a Stockholder has not accepted the offer contained in the Tag-Along
Notice, such Stockholder shall be deemed to have waived any and all rights with
respect to the sale described in the Tag-Along Notice (but not with respect to
any subsequent sale, to the extent this Section 4.2 is applicable to such
subsequent sale) and the Selling Stockholders shall have sixty (60) days from
the initial delivery of the last Tag-Along Notice in which to sell not more than
the number of shares of Tag-Along Stock described in the Tag-Along Notice, on
terms not more favorable to the Selling Stockholders than were set forth in the
Tag-Along Notice; PROVIDED, HOWEVER, that if such purchase is subject to the
consent of the FCC or any public service or public utilities commission, the
purchase of such shares shall be closed on the first business day after all such
consents shall have been obtained by Final Order.
(e) Without limiting Section 4.1(a), Section 4.2 will not apply
to (i) Transfers of Company Stock made after the IPO Date in a public offering
in accordance with Section 5 or pursuant to Rule 144, (ii) subject to Section
6.12.8, the sale or redemption of up to $25.0 million in aggregate principal
amount by the Xxxxxx Partnership of Company Stock, together with any dividends
thereon, in one transaction or a series of transactions, (iii) the sale of any
Class F Preferred Stock; (iv) any transfer pursuant to Section 4.1(a)(i), (ii),
(iii) or (v) hereof (and similar Transfers of Fleet Buyout Stock); and (v)
transfers by any JWC Group Stockholder or AT&T after the earliest to occur of
(A) the IPO Date, (B) December 23, 2003 or (C) a Change of Control.
4.3 ADDITIONAL CONDITIONS TO PERMITTED TRANSFERS.
(a) As a condition to any Transfer to an Affiliated Successor
permitted pursuant to Section 4.1, or any Transfer pursuant to Section 4.2, each
transferee that is not a party hereto shall, prior to such Transfer, agree in
writing to be bound by all of the provisions of this Agreement applicable to the
Stockholders (and shall thereby become a Stockholder for all purposes of this
Agreement). Any Transfer without compliance with such provisions of this
Agreement shall be null and void and such transferee shall have no rights as a
Stockholder of the Company.
(b) Notwithstanding anything to the contrary contained in this
Agreement (other than the next sentence) each Stockholder agrees that it will
not effect a Transfer of shares of Company Stock to a Prohibited Transferee. In
the event that the Xxxxxx Partnership Transfers any Preferred Stock or Common
Stock to a Prohibited Transferee, JWC and AT&T shall equally be entitled to
transfer such securities to such Person pursuant to Section 4.2. It shall be
deemed a breach of this Section 4.3(b) by a Stockholder Beneficially Owning more
than 10% of the Common Stock outstanding if any Prohibited Transferee shall
acquire, directly or indirectly, in a private sale Beneficial Ownership of more
than 331/3% of any class of equity securities or equity interest in, such
Stockholder and the Xxxxxx Partnership shall not have Transferred any shares of
Company Stock to such Prohibited Transferee.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Xxxxxx Partnership shall not, nor shall it permit any of its
Affiliates (other than the Company) to, sell any shares of Company Stock to a
Major Telecom Competitor, unless such Major Telecom Competitor makes an
irrevocable offer to AT&T and its Affiliates to purchase from them, at the same
price and otherwise on the same terms and conditions as the sale to such Major
Telecom Competitor by the Xxxxxx Partnership or such Affiliate, up to all of the
shares of Company Stock Beneficially Owned by AT&T and its Affiliates. At any
time within 14 days after receipt by AT&T of the Tag-Along Notice with respect
to such sale, AT&T may accept such offer and, to the extent AT&T and its
Affiliates elect to accept such offer, concurrently with the consummation of any
such sale by the Xxxxxx Partnership or such Affiliate, the sale of all of At&T's
shares of Tag-Along Stock in respect of which it accepted such offer shall be
consummated. The provisions of this Section 4.3(c) shall not apply to any
transferees or assigns of AT&T.
4.4 STOP-TRANSFER. The Company agrees not to effect any Transfer of
shares of Company Stock by any Stockholder whose proposed Transfer is subject to
Section 4.2 until it has received evidence reasonably satisfactory to it that
the rights provided to any other Stockholders pursuant to such Section, if
applicable to such Transfer, have been complied with and satisfied in all
respects. No Transfer of any shares of Preferred Stock and/or Common Stock shall
be made except in compliance with all applicable securities laws. Any Transfer
made in violation of this Agreement shall be null and void.
4.5 DRAG ALONG RIGHTS. If at any time the Board of Directors shall
approve the sale or exchange (in a business combination or otherwise) by
Stockholders of Common Stock and Class D Preferred Stock and Class E Preferred
Stock of the Company in a bona fide arm's-length transaction to a third party
pursuant to an agreement that (i) treats equally, on an "as-if-converted basis,"
the value of all holders of Common Stock, Class D Preferred Stock and Class E
Preferred Stock, except as provided in the Restated Certificate of
Incorporation, (ii) is approved by the Board of Directors as fair to all
Stockholders, and (iii) which shall have been approved by Stockholders holding
50.1% of the outstanding Common Stock of the Company on an as-if-converted
basis, then, upon the written request of the Company, each Stockholder shall be
obligated to, and shall, if so requested by such third party, (a) sell, transfer
and deliver or cause to be sold, transferred and delivered to such third party,
shares of Common Stock and Preferred Stock owned by such Stockholder, and (b) if
Stockholder approval of the transaction is required, vote his, her or its shares
of Company Stock in favor thereof. Notwithstanding the previous sentence, a Cash
Equity Investor may not be obligated to sell any shares of Class D Preferred
Stock or Class E Preferred Stock unless it receives as consideration for such
shares at least their Liquidation Preference and it may not be obligated to sell
any shares of Common Stock unless all of the shares of Class D Preferred Stock
or Class E Preferred Stock then held by such Cash Equity Investors are to be
sold for cash in such transaction.
4.6 REDEMPTION RIGHTS. Subject to the terms of the Financing
Agreements and not giving rise to either a default or an event of default
thereunder, the Class D Preferred Stock (or Class E Preferred Stock) will be
redeemed within 90 days following the vote of holders of a majority of the
outstanding shares of the Class D Preferred Stock (or Class E Preferred Stock as
the case may be), at any time (a) after twelve years from the date of this
Agreement or (b) upon the completion of an IPO by the Company of Common Stock.
Upon redemption of Class D Preferred Stock, the holders of Class D Preferred
Stock so redeemed will receive a cash payment equivalent to the then current
Liquidation Preference per share plus the number of shares of Class A Common
Stock such holders would have received had they converted such Class D Preferred
Stock into shares of Class E Preferred Stock and Class A Common Stock
immediately prior to such redemption.
4.7 RIGHT OF FIRST REFUSAL FOR NEW SECURITIES; CAPITAL RAISING.
(a) The Company hereby grants to each of JWC and AT&T, on the
same terms and conditions, a right of first refusal, to the extent necessary to
maintain their ownership in the Company on a Fully Diluted Basis, to purchase
shares of any New Securities (as defined below) which the Company may, from time
to time, propose to issue and sell to private equity investors (and not through
a public offering or a private
placement (which provides for registration within one year of issuance)/Rule
144A offering, which, together with any supplemental or additional offerings,
results in gross proceeds in excess of $50.0 million). Such right of first
refusal shall allow each of JWC and AT&T to purchase a pro rata portion
necessary to maintain such ownership on a Fully Diluted Basis of the New
Securities proposed to be issued, determined with reference to the aggregate
number of outstanding shares of Common Stock (on an as-if-converted basis) held
by JWC and AT&T as the case may be, before the proposed issuance of New
Securities. The right of first refusal granted hereunder may be exercised by
either of JWC or AT&T as to themselves and shall terminate if unexercised within
30 calendar days after receipt of notice from the Company to the Cash Equity
Investors.
(b) "New Securities" shall mean any authorized but unissued
shares, and any treasury shares, of preferred stock or common stock of the
Company and all rights, options or warrants to purchase common stock, and
securities of any type whatsoever that are, or may become, convertible into
common stock; PROVIDED, HOWEVER, that the term "New Securities" does not include
(i) shares of Common Stock or stock options issued to officers, employees,
directors, consultants of the Company or others in connection with their
services pursuant to a plan or plans approved by the Board of Directors; (ii)
securities issued upon conversion of shares of Class D Preferred Stock to Class
A Common Stock and Class E Preferred Stock or shares issued upon the conversion
of any Class G Preferred Stock for Class H Preferred Stock; (iii) securities
issued by the Company pursuant to the acquisition of another corporation by the
Company by merger, purchase of all or substantially all of the assets or other
reorganization whereby the Company shall become the owner of more than 50% of
the voting power of such corporation; (iv) shares of Common Stock issued in
connection with any stock split or stock dividend of the Company; (v) capital
stock (including warrants, options or other rights to purchase capital stock, or
that are convertible into or exchangeable for capital stock of the Company)
issued directly in connection with any borrowings or the incurrence of any
indebtedness by the Company or its Subsidiaries in connection with acquisitions
or capital projects; (vi) shares of Class A Common Stock issued pursuant to any
IPO in excess of $50.0 million (taken together with any supplemental or
additional offerings) or Rule 144A promulgated thereunder which provide for
registration of such Capital Stock within one year of their issuance; or (vii)
shares issuable upon exercise of the Sygnet PIK Preferred Stock Warrants.
(c) If the Company or any Subsidiary in the future proposes to
raise private equity capital it shall provide JWC with the terms of such
proposal prior to approaching other potential investors and shall grant JWC the
initial opportunity to make any such investment, PROVIDED that nothing herein
shall require the Company to enter into any agreement or sale with the Company
as to such private equity capital on terms less favorable than the prevailing
market terms and rates offered to comparable companies to the Company. If JWC
determines to provide such private equity capital,
then JWC will make available to AT&T its pro rata portion thereof, determined by
reference to their respective holdings of Company Stock on a Fully Diluted Basis
in the Company at the Amendment and Restatement Date, on similar terms and
conditions as provided by JWC.
ARTICLE 5.
REGISTRATION RIGHTS
The Company will not grant registration rights for Company capital stock to
a Person other than the Cash Equity Investors on terms pari passu with or senior
to or more favorable than those granted to the Cash Equity Investors.
(a) DEMAND REGISTRATION RIGHTS.
(i) RIGHT TO DEMAND REGISTRATION. At any time following 180 days
after the IPO Date (or such longer period as may be reasonably required by the
managing underwriters of the Company's IPO) and (A) the Xxxxxx Partnership
shall have the right to make one written request, and (B) JWC shall have the
right to make two written requests, and (C) AT&T shall have the right to make
one written request (each, a "Demanding Stockholder" and, collectively, the
"Demanding Stockholders") to the Company for registration with the Commission,
under and in accordance with the provisions of the Securities Act, of all or
part of their Registrable Securities pursuant to an underwritten offering (a
"Demand Registration"), which request shall specify the number of Registrable
Securities proposed to be sold in the offering; PROVIDED, HOWEVER, that (x) the
Company need not effect a Demand Registration unless the sale of the Registrable
Securities proposed to be sold by the Demanding Stockholder shall reasonably be
expected to result in aggregate gross proceeds of at least $25.0 million, and
(y) if the Board of Directors determines that a Demand Registration would
interfere with any pending or contemplated material acquisition, disposition,
financing or other material transaction, the Company may defer a Demand
Registration (including by withdrawing any Registration Statement filed in
connection with a Demand Registration); so long as that the aggregate of all
such deferrals shall not exceed ninety (90) days in any 360-day period. A Demand
Registration shall not be deemed a Demand Registration hereunder until such
Demand Registration has been declared effective by the Commission (without
interference by any stop order, injunction or other order or requirement of the
Commission or other governmental agency, for any reason), and maintained
continuously effective for a period of at least six (6) months or such shorter
period when all Registrable Securities included therein have been sold in
accordance with such Demand Registration. A Demanding Stockholder may make a
written request for a Demand Registration in accordance with the foregoing in
respect of Company Stock that it intends to convert into shares of Common Stock
upon the
effectiveness of the Registration Statement prepared in connection with such
demand, and the Company shall fulfill its obligations under this Article 5 in a
manner that permits such Demanding Stockholder to exercise its conversion rights
in respect of such Company Stock and substantially contemporaneously sell the
shares of Common Stock issuable upon such conversion under such Registration
Statement.
In addition to the rights set forth above, each of the Demanding
Stockholders shall have the right to demand that the Company file a registration
statement on Form S-3 (or any successor form to Form S-3) for an offering of
Registrable Securities in which at least $15.0 million of gross proceeds are
reasonably expected therefrom, PROVIDED that the Company is not obligated to
participate in any "road-show" or exceptional marketing, diligence or other
efforts in connection with such offering. This additional demand registration
may be a one year "shelf-registration." The procedures and limitations for
effecting the registration of the Registrable Securities on Form S-3 (or any
successor form to Form S-3), including the procedure used for any underwriting
limitation, shall be as set forth in this Article 5.
Within ten (10) days after receipt of the request for a Demand
Registration, the Company will send written notice (the "Demand Notice") of such
Registration request and its intention to comply therewith to all Stockholders
who are holders of Registrable Securities and, subject to Section 5(a)(ii), the
Company will include in such Demand Registration all Registrable Securities of
such Stockholders with respect to which the Company has received written
requests for inclusion therein within twenty (20) days after the last date such
Demand Notice was deemed to have been given pursuant to Section 14.1.
(ii) PRIORITY ON REGISTRATION. If the managing underwriter or
underwriters advise the Company and the holders of the Registrable Securities to
be registered in writing that in its or their opinion the number of Registrable
Securities proposed to be sold in any Registration (including, without
limitation, a Piggyback Registration) and any other securities of the Company
requested or proposed to be included in such Registration exceeds the number
that can be sold in such offering without (A) creating a substantial risk that
the proceeds or price per share that will be derived from such Registration will
be materially reduced or that the number of Registrable Securities to be
registered is too large a number to be reasonably sold, or (B) materially and
adversely affecting such Registration in any other respect, the Company will (x)
include in such Registration the aggregate number of Registrable Securities
recommended by the managing underwriter (the number of Registrable Securities to
be registered for each Stockholder to be reduced FIRSTLY, against the Xxxxxx
Partnership, SECONDLY, against the other Stockholders (other than JWC and AT&T)
and LASTLY, against JWC and AT&T; in each case PRO RATA based on the amount of
Registrable Securities of the Stockholders in the applicable class requested to
be included in such Registration), and (y) not allow any securities other than
Registrable Securities to be included in such
Registration unless all Registrable Securities requested to be included shall
have been included therein, and then only to the extent recommended by the
managing underwriter or determined by the Company after consultation with an
investment banker of nationally recognized standing (notification of which
number shall be given by the Company to the holders of Registrable Securities).
(iii) SELECTION OF UNDERWRITERS. The offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of an underwritten offering. The Demanding Stockholder that initiated such
Demand Registration will select a managing underwriter or underwriters of
recognized national standing to administer the offering, which managing
underwriter or underwriters shall be reasonably acceptable to the Company.
(b) PIGGYBACK REGISTRATION RIGHTS.
RIGHT TO PIGGYBACK. If the Company proposes to register any
shares of Common Stock (or securities convertible into or exchangeable for
Common Stock) with the Commission under the Securities Act (other than a
Registration on Form S-4 or Form S-8, or any successor forms), and the
Registration form to be used may be used for the Registration of the Registrable
Securities (a "Piggyback Registration"), the Company will give written notice (a
"Piggyback Notice") to all Stockholders, at least thirty (30) days prior to the
anticipated filing date, of its intention to effect such a Registration, which
notice will specify the proposed offering price (if determined at that time),
the kind and number of securities proposed to be registered, the distribution
arrangements and will, subject to Section 5(a)(ii), include in such Piggyback
Registration all Registrable Securities with respect to which the Company has
received written requests (which requests have not been withdrawn) for inclusion
therein within twenty (20) days after the last date such Piggyback Notice was
deemed to have been given pursuant to Section 15.1. If at any time after giving
the Piggyback Notice and prior to the effective date of the Registration
Statement filed in connection with such Registration, the Company determines for
any reason not to register or to delay Registration, the Company may, at its
election, give written notice of such determination to each holder of
Registrable Securities that has requested inclusion of Registrable Securities in
such Registration and (A) in the case of a determination not to register, shall
be relieved of its obligation to register any Registrable Securities in
connection with such Registration, and (B) in the case of a determination to
delay registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other
securities.
No Stockholder may obtain a Piggyback Registration on a Demand
Registration initiated by JWC or AT&T except that each of AT&T and JWC may
Piggyback on the Demand Registrations of the other; PROVIDED that, in such
circumstances, any reduction requested by the managing underwriter(s) in such
registration in the number of Registrable Securities to be registered shall
first be applied to the party seeking to Piggyback on the Demand Registration.
(c) SELECTION OF UNDERWRITERS. Except as set forth in Section 5.1(a)(iii),
the Company (by action of the Board of Directors) will select the managing
underwriter or underwriters to administer offerings of its capital stock, which
managing underwriter or underwriters will be of nationally recognized standing.
(d) REGISTRATION PROCEDURES. With respect to any Demand Registration or
Piggyback Registration (each, a "Registration"), the Company shall, subject to
Sections 5(a)(i) and (5)(a)(ii) and Section 5(b)(i), as expeditiously as
practicable:
(i) prepare and file with the Commission, as promptly as
reasonably practicable (but in no event more than forty-five (45) days) after
the receipt of the Registration requests under Sections 5(a) or 5(b), a
registration statement or registration statements (each, a "Registration
Statement") relating to the applicable Registration on any appropriate form
under the Securities Act, which form shall be available for the sale of the
Registrable Securities in accordance with the intended method or methods of
distribution thereof; cooperate and assist in any filings required to be made
with the NASD; and use its reasonable best efforts to cause such Registration
Statement to become and (to the extent provided herein) remain effective;
PROVIDED, HOWEVER, that before filing a Registration Statement or prospectus
related thereto (a "Prospectus") or any amendments or supplements thereto, the
Company shall furnish to the holders of the Registrable Securities covered by
such Registration Statement and the underwriters, if any, copies of all such
documents proposed to be filed, which documents will be subject to the
reasonable review of such holders and underwriters and their respective counsel,
and the Company shall not file any Registration Statement or amendment thereto
or any Prospectus or any supplement thereto to which the holders of a majority
of the Registrable Securities covered by such Registration Statement or the
underwriters, if any, shall reasonably object;
(ii) prepare and file with the Commission such amendments and
supplements to the Registration Statement as may be necessary to keep each
Registration Statement effective for six (6) months (nine (9) months in the case
of any shelf registration requested by a Qualified Holder pursuant to this
Section 5) or such shorter period that will terminate when all Registrable
Securities covered by such Registration Statement have been sold; cause each
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to the
Prospectus;
(iii) promptly notify the selling holders of Registrable
Securities and the managing underwriters, if any (and, if requested by any such
Person or entity, confirm such advice in writing), (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective; (B) of any request by the Commission for amendments
or supplements to the Registration Statement or the Prospectus or for additional
information; (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; (D) if at any time the representations and
warranties of the Company contemplated by subsection (xiv) of this subsection
(d) below cease to be true and correct; (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and (F) of the happening of any event which makes any statement made in
the Registration Statement, the Prospectus or any document incorporated therein
by reference untrue or which requires the making of any changes in the
Registration Statement, the Prospectus or any document incorporated therein by
reference in order to make the statements therein not misleading;
(iv) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of (I) the Registration Statement, or
(II) the qualification of the Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction at the earliest possible time;
(v) if requested by the managing underwriter or underwriters or
a holder of Registrable Securities being sold in connection with an underwritten
offering, promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters and the holders of a
majority of the Registrable Securities being sold agree should be included
therein relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and any other terms of the
underwritten (or best efforts underwritten) offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(vi) furnish to each selling holder of Registrable Securities and
each managing underwriter, without charge, at least one signed copy of the
Registration Statement and any amendment thereto, including financial statements
and schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(vii) deliver to each selling holder of Registrable Securities
and the underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such selling holder of Registrable Securities underwriters may reasonably
request in order to facilitate the public sale or other disposition of the
securities owned by such selling holder;
(viii) prior to any public offering of Registrable Securities,
use its reasonable best efforts to register or qualify or cooperate with the
selling holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the Registration or qualification of such
Registrable Securities for offer and sale under the securities or "blue sky"
laws of such jurisdictions in the United States as any seller or underwriter
reasonably requests in writing, use its reasonable best efforts to obtain all
appropriate registrations, permits and consents required in connection
therewith, and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; PROVIDED, HOWEVER, that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to taxation or general service of process in any such jurisdiction
where it is not then so subject;
(ix) cooperate with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and to be in such denominations and registered
in such names as the managing underwriters may request at least two (2) business
days prior to any sale of Registrable Securities to the underwriters;
(x) use its reasonable best efforts to cooperate with any
selling holder to cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary to
enable the seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities;
(xi) upon the occurrence of any event contemplated by subsection
(iii)(F) above, promptly prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, the Prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(xii) cause all Registrable Securities covered by any Registration
Statement to be listed on each securities exchange on which similar securities
issued by the Company are then listed, or, if not so listed, cause such
Registrable Securities to be authorized for trading on the NASDAQ National
Market System if any similar securities issued by the Company are then so
authorized, if requested by the holders of a majority of such Registrable
Securities or the managing underwriters, if any;
(xiii) not later than the effective date of the applicable
Registration, provide a CUSIP number for all Registrable Securities;
(xiv) enter into such customary agreements (including in the case
of a Demand Registration that is an underwritten offering, an underwriting
agreement in customary form) and take all such other actions reasonably required
in connection therewith in order to expedite or facilitate the disposition of
such Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into and whether or not the Registration is an
underwritten Registration, (A) make such representations and warranties to the
holders of such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters in
primary underwritten offerings; (B) use reasonable best efforts to obtain
opinions of counsel to the Company and updates thereof (which opinions of
counsel shall be in form, scope and substance reasonably satisfactory to the
managing underwriters, if any, and to the holders of a majority of the
Registrable Securities being sold), addressed to each selling holder and the
underwriters, if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such holders and underwriters; (C) use reasonable best efforts to
obtain "cold comfort" letters and updates thereof from the Company's independent
certified public accountants addressed to the selling holders of Registrable
Securities and the underwriters, if any, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort" letters
by underwriters in connection with primary underwritten offerings; and (D)
deliver such documents and certificates as may be reasonably requested by the
holders of a majority of the Registrable Securities being sold and the managing
underwriters, if any, to evidence compliance with subsection (xi) above and with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company. All the above in this Section 5(d)(xiv)
shall be done at each closing under each underwriting or similar agreement or as
and to the extent required thereunder;
(xv) make available for inspection by a representative of each
Demanding Stockholder or selling holder, any underwriter participating in any
disposition pursuant to such Registration, and any attorney or accountant
retained by the sellers or underwriter, copies or extracts of all financial and
other records, pertinent
corporate documents and properties of the Company as shall be reasonably
necessary, in the opinion of the holders' or underwriter's counsel, to enable
them to fulfill their due diligence responsibilities; and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such representative, underwriter, attorney or accountant in connection
with such Registration Statement; PROVIDED, HOWEVER, that the Company shall not
be required to comply with this paragraph (xv) unless such Person executes
confidentiality agreements whereby such person agrees that any records,
information or documents that are designated by the Company in writing as
confidential shall be kept confidential by such Persons and used only in
connection with the proposed Registration unless disclosure of such records,
information or documents is required by court or administrative order or any
regulatory body having jurisdiction; and each seller of Registrable Securities
agrees that it will, upon learning that disclosure of such records, information
or documents is sought in a court of competent jurisdiction or by a governmental
agency, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of any records,
information or documents deemed confidential; PROVIDED FURTHER, HOWEVER,
notwithstanding any designation of confidentiality by the Company, confidential
information shall not include information which (i) becomes generally available
to the public other than as a result of a disclosure by or on behalf of any such
Person, or (ii) becomes available to any such Person on a non-confidential basis
from a source other than the Company or its advisors, PROVIDED that such source
is not to such Person's knowledge bound by a confidentiality agreement with or
other obligations of secrecy to the Company or another party with respect to
such information;
(xvi) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders, earnings statements satisfying the provisions
of Section 11(a) of the Securities Act, no later than forty-five (45) days after
the end of any twelve (12)-month period (or ninety (90) days, if such period is
a fiscal year) (A) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm or best efforts
underwritten offering, or (B) if not sold to underwriters in such an offering,
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the Registration Statement, which statements shall
cover said twelve (12)-month periods; and
(xvii) promptly prior to the filing of any document that is to be
incorporated by reference into any Registration Statement or Prospectus (after
initial filing of the Registration Statement), provide copies of such document
to counsel to the selling holders of Registrable Securities and to the managing
underwriters, if any, make the Company's executive officers and other
representatives available for discussion of such document and make such changes
in such document prior to the filing thereof as counsel for such selling holders
or underwriters may reasonably request.
The Company may require each seller of Registrable Securities
as to which any Registration is being effected to furnish to the Company such
information regarding the proposed distribution of such securities as the
Company may from time to time reasonably request in writing. Each holder of
Registrable Securities agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 5(d)(xi), such holder shall forthwith
discontinue disposition of Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
5(d)(xi), or until it is advised in writing (the "Advice") by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus; and, if so directed by the Company, such holder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such seller's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event the
Company gives any such notice, the time periods regarding the maintenance of the
effectiveness of any Registration Statement in Section 5(d)(ii) shall be
extended by the number of days during the period from and including the date of
the receipt of such notice pursuant to Section 5(d)(iii)(F) hereof to and
including the date when each seller of Registrable Securities covered by such
Registration Statement shall have received the copies of the supplemented or
amended prospectuses contemplated by Section 5(d)(xi) or the Advice.
(e) INDEMNIFICATION.
(i) In the event of the Registration or qualification of any
Registrable Securities under the Securities Act or any other applicable
securities laws pursuant to the provisions of this Section 5, the Company agrees
to indemnify and hold harmless each Stockholder thereby offering such
Registrable Securities for sale (an "Indemnified Stockholder"), underwriter,
broker or dealer, if any, of such Registrable Securities, and each other person,
if any, who controls any such Indemnified Stockholder, underwriter, broker or
dealer within the meaning of the Securities Act or any other applicable
securities laws, from and against any and all losses, claims, damages, expenses
or liabilities (or actions in respect thereof), joint or several, to which such
Indemnified Stockholder, underwriter, broker or dealer or controlling person may
become subject under the Securities Act or any other applicable federal or state
securities laws or otherwise, insofar as such losses, claims, damages, expenses
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement under which such Registrable Securities were
registered or qualified under the Securities Act or any other applicable
securities laws, any preliminary prospectus or final prospectus relating to such
Registrable Securities, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of any rule
or regulation under the Securities Act or any other applicable federal or state
securities laws applicable to the Company or relating to any action or inaction
required by the Company in connection with any such Registration or
qualification, and will reimburse each such Indemnified Stockholder,
underwriter, broker or dealer and each such controlling person for any legal or
other expenses reasonably incurred by such Indemnified Stockholder, underwriter,
broker or dealer or controlling person in connection with investigating or
defending any such loss, claim, damage, expense, liability or action; PROVIDED,
HOWEVER, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage, expense or liability arises out of or is based
upon an untrue statement or omission contained in such Registration Statement,
such preliminary prospectus, such final prospectus or such amendment or
supplement thereto, made in reliance upon and in conformity with written
information furnished to the Company by such Indemnified Stockholder,
underwriter, broker, dealer or controlling person specifically and expressly for
use in the preparation thereof or by the failure of such Indemnified
Stockholder, underwriter, broker or dealer, or controlling person to deliver a
copy of the Registration Statement, such preliminary prospectus, such final
prospectus or such amendment or supplement thereto after the Company has
furnished such party with a sufficient number of copies of the same and such
party failed to deliver or otherwise provide a copy of the final prospectus to
the person asserting an untrue statement or omission or alleged untrue statement
or omission at or prior to the written confirmation of the sale of securities to
such person, if such statement or omission was in fact corrected in such final
prospectus.
(ii) In the case of an underwritten offering in which the
Registration Statement covers Registrable Securities, the Company agrees to
enter into an underwriting agreement in customary form and substance with such
underwriters and to indemnify the underwriters, their officers and directors, if
any, and each person, if any, who controls such underwriters within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act, to the
same extent as provided in the preceding paragraph with respect to the
indemnification of the holders of Registrable Securities; PROVIDED, HOWEVER, the
Company shall not be required to indemnify any such underwriter, or any officer
or director of such underwriter or any person who controls such underwriter
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act, to the extent that the loss, claim, damage, expense or liability
(or actions in respect thereof) for which indemnification is sought results from
such underwriter's failure to deliver or otherwise provide a copy of the final
prospectus to the person asserting an untrue statement or omission or alleged
untrue statement or omission at or prior to the written confirmation of the sale
of securities to such person, if such statement or omission was in fact
corrected in such final prospectus.
(iii) In the event of the Registration or qualification of any
Registrable Securities of the Stockholders under the Securities Act or any other
applicable federal or state securities laws for sale pursuant to the provisions
hereof, each Indemnified Stockholder agrees severally, and not jointly, to
indemnify and hold harmless the Company, each person who controls the Company
within the meaning of the Securities Act, and each officer and director of the
Company from and against any losses, claims, damages, expenses or liabilities
(or actions in respect thereof), joint or several, to which the Company, such
controlling person or any such officer or director may become subject under the
Securities Act or any other applicable securities laws or otherwise, insofar as
such losses, claims, damages, expenses or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of any material
fact contained in any Registration Statement under which such Registrable
Securities were registered or qualified under the Securities Act or any other
applicable securities laws, any preliminary prospectus or final prospectus
relating to such Registrable Securities, or any amendment or supplement thereto,
or arise out of or are based upon an untrue statement therein or the omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, which untrue statement or omission was
made therein in reliance upon and in conformity with written information
furnished to the Company by such Indemnified Stockholder specifically and
expressly for use in connection with the preparation thereof, and will reimburse
the Company, such controlling person and each such officer or director for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, expense, liability or
action; PROVIDED, HOWEVER, an Indemnified Stockholder's liability under this
Section 5(e)(iii) shall not exceed the net proceeds received by such Indemnified
Stockholder with respect to the sale of any Registrable Securities.
(iv) In the case of an underwritten offering of Registrable
Securities, each holder of a Registrable Security included in a Registration
Statement shall agree to enter into an underwriting agreement in customary form
and substance with such underwriters, and to indemnify such underwriters, their
officers and directors, if any, and each person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act, to the same extent as provided in the preceding
paragraph with respect to indemnification by such holder of the Company, but
subject to the same limitation as provided in Section 5(e)(ii) with respect to
indemnification by the Company of such underwriters, officers, directors and
control persons.
(v) Promptly after receipt by a person entitled to
indemnification under this Section 5(e) (an "Indemnified Party") of notice of
the commencement of any action or claim relating to any Registration Statement
filed under this Section 5 as to which indemnity may be sought hereunder, such
Indemnified Party will, if a claim for indemnification hereunder in respect
thereof is to be made against any other party
hereto (an "Indemnifying Party"), give written notice to each such Indemnifying
Party of the commencement of such action or claim, but the omission to so notify
each such Indemnifying Party will not relieve any such Indemnifying Party from
any liability which it may have to any Indemnified Party otherwise than pursuant
to the provisions of this Section 5(e) and shall also not relieve any such
Indemnifying Party of its obligations under this Section 5(e) except to the
extent that any such Indemnifying Party is actually prejudiced thereby. In case
any such action is brought against an Indemnified Party, and such Indemnified
Party notifies an Indemnifying Party of the commencement thereof, such
Indemnifying Party will be entitled (at its own expense) to participate in and,
to the extent that it may wish, jointly with any other Indemnifying Party
similarly notified, to assume the defense, with counsel reasonably satisfactory
to such Indemnified Party, of such action and/or to settle such action and,
after notice from the Indemnifying Party to such Indemnified Party of its
election so to assume the defense thereof, the Indemnifying Party will not be
liable to such Indemnified Party for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof, other
than the reasonable cost of investigation; PROVIDED, HOWEVER, that no
Indemnifying Party shall consent to the entry of any judgment or enter into any
settlement agreement without the prior written consent of the Indemnified Party
unless such Indemnified Party is fully released and discharged from any such
liability, and no Indemnified Party shall consent to the entry of any judgment
or enter into any settlement of any such action the defense of which has been
assumed by an Indemnifying Party without the consent of each Indemnifying Party.
Notwithstanding the foregoing, the Indemnified Party shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless (a) the
employment of such counsel shall have been authorized in writing by the
Indemnifying Party in connection with the defense of such suit, action, claim or
proceeding; (b) the Indemnifying Party shall not have employed counsel
(reasonably satisfactory to the Indemnified Party) to take charge of the defense
of such action, suit, claim or proceeding; or (c) such Indemnified Party shall
have reasonably concluded, based upon the advice of counsel, that there may be
defenses available to it which are different from or additional to those
available to the Indemnifying Party which, if the Indemnifying Party and the
Indemnified Party were to be represented by the same counsel, could result in a
conflict of interest for such counsel or materially prejudice the prosecution of
the defenses available to such Indemnified Party. If any of the events specified
in clause (a), (b) or (c) of the preceding sentence shall have occurred or shall
otherwise be applicable, then the fees and expenses of one counsel or firm of
counsel selected by a majority in interest of the Indemnified Parties (and
reasonably acceptable to the Indemnifying Party) shall be borne by the
Indemnifying Party. If, in any such case, the Indemnified Party employs separate
counsel, the Indemnifying Party shall not have the right to direct the defense
of such action, suit, claim or proceeding on behalf of the Indemnified Party and
the Indemnified Party shall assume such defense and/or settle such action;
PROVIDED, HOWEVER, that an Indemnifying Party shall not be liable for the
settlement of any action,
suit, claim or proceeding effected without its prior written consent, which
consent shall not be unreasonably withheld.
The provisions of this Section 5(e) shall be in addition to
any liability which any party may have to any other party and shall survive any
termination of this Agreement.
(f) CONTRIBUTION. If for any reason the indemnification provided
for in Section 5(e)(i) or 5(e)(iii) is unavailable to an Indemnified Party as
contemplated therein, then the Indemnifying Party, in lieu of indemnification
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage, expense or liability (or action in respect
thereof) in such proportion as is appropriate to reflect not only the relative
benefits received by the Indemnified Party and the Indemnifying Party, but also
the relative fault of the Indemnified Party and the Indemnifying Party, as well
as any other relevant equitable considerations, PROVIDED that no Stockholder
shall be required to contribute in an amount greater than the net proceeds
received by such Stockholder with respect to the sale of any Registrable
Securities less all amounts already contributed by such Stockholder with respect
to such claims, including amounts paid for any legal or other fees or expenses
incurred by such Stockholder. No person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of any such fraudulent
misrepresentation. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
(g) REGISTRATION EXPENSES. Except as hereinafter provided, all
expenses incident to the Company's performance of or compliance with this
Section 5 will be borne by the Company, including, without limitation, all
Registration and filing fees under the Securities Act and the Exchange Act, the
fees and expenses of the counsel and accountants for the Company (including the
expenses of any "cold comfort" letters and special audits required by or
incident to the performance of such persons), all other costs and expenses of
the Company incident to the preparation, printing and filing under the
Securities Act of the Registration Statement (and all amendments and supplements
thereto), and furnishing copies thereof and of the Prospectus included therein,
all out-of-pocket expenses of underwriters customarily paid for by issuers to
the extent provided for in any underwriting agreement, the costs and expenses
incurred by the Company in connection with the qualification of the Registrable
Securities under the state securities or "blue sky" laws of various
jurisdictions, the costs and expenses associated with filings required to be
made with the NASD, the costs and expenses of
listing the Registrable Securities for trading on a national securities exchange
or authorizing them for trading on NASDAQ and all other costs and expenses
incurred by the Company in connection with any Registration hereunder. In
addition, the Company shall pay or reimburse the sellers of Registrable
Securities the reasonable fees and expenses of one law firm to such sellers
incurred in connection with a registration (collectively, with the expenses
referred to in the immediately preceding sentence, the "Registration Expenses").
Except as provided in the immediately preceding sentence, each Stockholder shall
bear the costs and expenses of any underwriters' discounts and commissions,
brokerage fees or transfer taxes relating to the Registrable Securities sold by
such Stockholder and the fees and expenses of any attorneys, accountants or
other representatives retained by the Stockholder.
(h) PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Stockholder
may participate in any underwritten Registration hereunder unless such
Stockholder (i) agrees to sell its Registrable Securities on the basis provided
in any customary and reasonable underwriting arrangements approved by the
persons entitled hereunder to select the underwriter, and (ii) accurately
completes in a timely manner and executes all questionnaires, powers of
attorney, underwriting agreements, indemnities and other documents customarily
required under the terms of such underwriting arrangements.
(i) HOLDBACK AGREEMENTS.
(i) Each holder of Registrable Securities whose securities
are included in a Registration Statement agrees not to effect any sale, transfer
or other disposition of Company Stock or any securities convertible into Company
Stock or other interest in the Company, including through any hedging or
derivative transaction or to effect any distribution of the issue being
registered or a similar security of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144 or Rule 144A under the Securities Act, during the fifteen
(15) days prior to, and during the one hundred eighty (180)-day period (or such
longer period as reasonably requested by the managing underwriter or
underwriters in the case of an underwritten public offering) beginning on, the
effective date of such Registration Statement (except as part of such
Registration), if and to the extent requested by the managing underwriter or
underwriters in an underwritten public offering.
(ii) The Company agrees not to effect any public sale or
distribution of the issue being registered or a similar security of the Company,
or any securities convertible into or exchangeable or exercisable for such
securities (other than any such sale or distribution of such securities in
connection with any merger or consolidation by the Company or any Subsidiary or
the acquisition by the Company or any Subsidiary of the capital stock or
substantially all of the assets of any other Person), during the fifteen (15)
days prior to, and during the ninety (90)-day period beginning on, the effective
date of each Demand Registration.
(j) PUBLIC INFORMATION REPORTING. (i) The Company hereby covenants
and agrees to and with the Stockholders that at all times following the IPO Date
it shall provide and file such financial and other information concerning the
Company as may from time to time be required by the Commission and any other
governmental authority having jurisdiction, so as to comply with all reporting
requirements under the Exchange Act, and shall, upon request, state in writing
that it has complied with all such requirements, and further agrees that, for so
long as (following the IPO Date) the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company shall comply in all respects with
paragraph (c)(2) of Rule 144.
(ii) If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company covenants that it will file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the Commission thereunder (or, if the Company is not required to file such
reports, it will, upon the request of any holder of Registrable Securities, make
publicly available other information), and it will take such further action as
any holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell shares of Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements. Upon the request
of a holder of Registrable Securities, the Company covenants and agrees to
provide the information required by Rule 144A(d)(4) under the Securities Act.
ARTICLE 6.
ADDITIONAL RIGHTS AND COVENANTS
6.1 WHOLLY-OWNED SUBSIDIARIES. All of the Company's Subsidiaries shall
be direct or indirect wholly owned Subsidiaries of the Company, and the Company
shall not, and shall not permit any Subsidiary to, sell or issue, transfer,
encumber or otherwise dispose of any shares of capital stock of any of the
Company's Subsidiaries to any Person other than the Company and its direct or
indirect wholly owned Subsidiaries, except for a pledge of any such shares in
connection with the incurrence of indebtedness.
6.2 AMENDMENTS OF THE RESTATED CERTIFICATE AND BY-LAWS. Prior to the
IPO Date, the Company shall not authorize or adopt any amendment, modification
or repeal of any provision of the Restated Certificate or the Restated By-Laws,
unless such amendment is consistent with the terms of this Agreement, and the
Restated Certificate and has been approved by a majority of directors of the
Board of Directors.
6.3 CONFIDENTIALITY.
(a) Each party shall, and shall cause each of its Affiliates, and
its and their respective stockholders, members, managers, directors, officers,
employees and agents (collectively, "Representatives") to, keep secret and
retain in strictest confidence any and all information relating to the Company
or any other party that is either a trade secret or material, non-public
information or is designated in writing by the party providing such information
or the Company as confidential (other than, in each case, such information as is
otherwise or becomes publicly available (other than in violation of this
Agreement or other applicable confidentiality agreements among the parties), or
has been or is independently developed or obtained from a person in a manner not
in violation of this Agreement or, to its knowledge, any other confidentiality
agreement) ("Confidential Information") and shall not disclose such information,
and shall cause its Representatives not to disclose such information, to anyone
except such Affiliates, Representatives or any other Person that agrees in
writing to keep in confidence all such information in accordance with the terms
of this Section 6.3. Each party agrees to use such information received from
another party or the Company only in connection with its ownership interest in
the Company but not for any other purpose. All such information furnished
pursuant to this Agreement shall be returned promptly to the party to whom it
belongs upon request by such party.
(b) To the fullest extent permitted by law, if a party or any of
its Affiliates or Representatives breaches, or threatens to commit a breach of,
this Section 6.3, the party whose Confidential Information shall be disclosed,
or threatened to be disclosed, shall have the right and remedy to have this
Section 6.3 specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that money damages will not provide an adequate remedy
to such party. Nothing in this Section 6.3 shall be construed to limit the right
of any party to collect money damages in the event of breach of this Section
6.3.
(c) Anything else in this Agreement notwithstanding, each party
shall have the right to disclose any information, including Confidential
Information of the other party or such other party's Affiliates, in any filing
with any regulatory agency, court or other authority or any disclosure to a
trustee of public debt of a party to the extent that the disclosing party
determines in good faith that it is required by Law, regulation or the terms of
such debt to do so; PROVIDED, HOWEVER, that any such disclosure shall be as
limited in scope as possible and shall be made only after giving
the other party as much notice as practicable of such required disclosure and an
opportunity to contest such disclosure if possible.
6.4 SALE OF LOGIX COMMUNICATIONS STOCK. If JWC or AT&T proposes to
sell any number of shares of Logix Communications Common Stock which sale would
result in a reduction in the ownership interest of JWC or AT&T in Logix
Communications below 35% of the JWC or AT&T Logix Communications ownership
interest, as the case may be, on the Logix Communications Spin-Off (calculated
with reference only to shares of Logix Communications issued with respect to the
Class D Preferred Stock (or any Class A Common Stock or other capital stock
issued with respect thereto other than the JWC Common Stock held as of the
Amendment and Restatement Date), JWC or AT&T, as the case may be, shall give 10
Business Days' written notice thereof to the Company (the "Section 6.4 Notice
Period") and during such Section 6.4 Notice Period the Company may elect to
purchase such Logix Communications Common Stock at a price which is the Market
Price thereof. In the event the Company elects to purchase such Logix
Communications Common Stock, it shall have 30 days (or such longer period as may
be necessary under the Appraisal Procedure) from the date of receipt of the
written notice from JWC or AT&T, as the case may be, in which to purchase such
Logix Communications Common Stock. This purchase right shall terminate upon the
earliest to occur of (i) the consummation by Logix Communication of an initial
public offering of its common stock with aggregate gross proceeds of at least
$50 million, (ii) December 23, 2003, (iii) the exercise by the Stockholders of
the call right pursuant to the terms of Article 11, or (iv) the expiration of
the call right pursuant to the terms of Article 11.
6.5 CLASS PROTECTION. The Company shall not, without first obtaining
consent or approval of the holders of at least a majority of the holders of each
affected class of Company Stock (including each of JWC and AT&T, if they are
holders of such class of Company Stock), voting as a separate class: (i)
adversely amend or alter any preferences, rights or powers of any such class of
Company Stock; or (ii) redeem, repurchase or pay any dividends on any junior
stock or parity stock, except for repurchases of stock or stock options issued
to management, employees or consultants which do not exceed $500,000 in any
fiscal year of the Company or in any event $1,500,000 in the aggregate.
6.6 NEW SECURITIES. (a) Subject to the terms of the Class D Preferred
Stock Certificate of Designation, any Common Stock (other than JWC Common Stock)
and any Logix Communications Common Stock issued to holders of Class D Preferred
Stock shall receive anti-dilution protection, as determined reasonably in good
faith by the Board of Directors to protect the holders thereof in connection
with (i) dilution from the issuance or the exercise of warrants issued in
connection with the Sygnet Acquisition, (ii) any dilution relating to options
then issued or committed as of the Closing Date under the New Company Stock
Option Plan, (iii) any dilution resulting
from the issuance of options with respect to an aggregate maximum of 5% of the
Logix Communications Stock, (iv) the redemption of all shares of Class B
Preferred Stock and Class C Preferred Stock pursuant to the terms of the
Investment and Transaction Agreement and (v) dilution relating to the conversion
of the Class G Preferred Stock into Class H Preferred Stock and Class A Common
Stock.
(b) Without the prior written consent of JWC (except where any such
issuance would not have a dilutive effect on JWC's Beneficial Ownership interest
in either the Common Stock (including Common Stock issuable upon conversion of
Class D Preferred Stock) or the Logix Communications Common Stock, or both) (as
determined reasonably and in good faith by the Board of Directors) the Company
shall not (i) issue any options pursuant to the New Company Stock Option Plan
other than such options as are committed on the Closing Date, or (ii) issue
options with respect to more than 5% in the aggregate of Logix Communications
Common Stock.
6.7 LOGIX COMMUNICATIONS SPIN-OFF. (a) Upon the consummation of the
Logix Communications Spin-Off, the holders of Class D Preferred Stock and the
holders of Class E Preferred Stock (including Common Stock issuable upon
conversion of Class D Preferred Stock) shall immediately receive their PRO RATA
share, calculated on a Fully Diluted Basis, of such number of shares of Class A
Common Stock equal to the value of the 4,454 options to purchase shares of Class
C Common Stock outstanding on the Closing Date (the "Wireless Options"), as
determined reasonably and in good faith by the Board of Directors (the "Wireless
Option Value Shares").
(b) In the event that the Logix Communications Spin-Off is not
consummated, the holders of Class D Preferred Stock and the holders of Class E
Preferred Stock will receive, immediately prior to the consummation of a
Liquidity Event, Wireless Option Value Shares plus their PRO RATA share,
calculated on a Fully- Diluted Basis as determined reasonably, and in good faith
by the Board of Directors, of Class A Common Stock equal to the value of Logix
Communications stock options that are issued (up to a maximum of 5% of Logix
Communications Common Stock).
(c) An example of the implementation and intent of this Section 6.7 is
set forth on Exhibit E hereto.
6.8 REGULATION M. In the event of any IPO, the Cash Equity Investors
shall not sell, transfer or otherwise dispose any Company Stock or purchase
Company Stock or securities convertible into Company Stock or any interests in
the Company, or otherwise engage in any transaction that would involve a
prohibited market manipulation, whether under Regulation M under the Securities
Act, or otherwise.
6.9 (a) POOLING OF INTERESTS. In the event that the Company is sold in
a transaction involving a "pooling of interests" transaction, for a period of
not more than
90 days following consummation of such transaction, no Stockholder shall sell,
transfer or otherwise dispose of any Company Stock, securities convertible into
Company Stock or any other interest in the Company, if any such sale, transfer
or other disposition would limit or deny the applicability of the treatment of
such pooling of interests.
(b) In the event of the Logix Communications Spin-Off, the Company
shall enter into a stockholders agreement with the stockholders of Logix
Communications, substantially similar to this Agreement except that there shall
be no transfer restrictions analogous to Section 4.1
6.10 OTHER TAX MATTERS. JWC and AT&T intend that (i) pay in kind
dividends on the Class D Preferred Stock when paid and (ii) any constructive
distribution on the Class D Preferred Stock when deemed paid, will not be
includible in JWC's or AT&T's gross income for Federal, state or local tax
purposes. Accordingly, unless the Company reasonably concludes in good faith
that it cannot make or file any tax return that is consistent with the
Purchaser's intention in the preceding sentence, the Company shall not make or
file any tax return that is inconsistent with such intention. In the event the
Company concludes it is required to file any tax return that is inconsistent
with the Purchaser's intention in the preceding sentence, the Company will
notify JWC and AT&T at least 60 days before filing such return and will attempt,
through discussions with the holders and their representatives, to reach mutual
agreement on such filing requirement.
6.11 CLASS A PREFERRED STOCK TRANSFER RESTRICTION. In the event that
any share of Class D Preferred Stock or Class E Preferred Stock is at any time
outstanding and held by JWC or AT&T, (A) the Class A Preferred Stock held by
Xxxxxx Operating Company as of December 23, 1998 shall not be transferred,
directly or indirectly, to any Person; PROVIDED, HOWEVER, that such shares of
Class A Preferred Stock may be transferred at any time (i) by Xxxxxx Operating
Company to any wholly owned Subsidiary of the Company and (ii) by any
wholly-owned Subsidiary of the Company to any other wholly-owned Subsidiary of
the Company, and (B) such shares of Class A Preferred Stock must be owned by a
wholly-owned Subsidiary of the Company.
6.12 ADDITIONAL COVENANTS. The Company covenants to AT&T and JWC that
so long as AT&T Beneficially Owns at least 50% or JWC owns at least 35% of the
Class D Preferred Stock (or Class E Preferred Stock or Class A Common Stock
received upon conversion thereof) each respectively holds as of the Amended and
Restated Date, the Company will comply, and the Company will cause each of the
Subsidiaries to comply, with the following provisions unless otherwise consented
to in writing by each of AT&T (except in the case of Sections 6.12.9, 6.12.10
and 6.12.12, where the consent of AT&T or any director designated by AT&T shall
not be required) and JWC so long as they continue to own the percentage amounts
of their respective investments stated herein.
6.12.1 RECORDS AND ACCOUNTS. Each of the Company and the Subsidiaries
will keep true and accurate records and books of account in which full, true and
correct entries will be made in accordance with GAAP and in all other respects
consistent with industry practices.
6.12.2 EXISTENCE; RELATED SECURITIES; MAINTENANCE OF PROPERTIES. Each
of the Company and the Subsidiaries will preserve and keep in full force and
effect and in good standing its corporate or partnership existence, as the case
may be, rights and franchises except for any combination or merger with and into
the Company or a Subsidiary or where the failure to do so would not have a
Material Adverse Effect.
6.12.3 INSURANCE. Each of the Company and the Subsidiaries will maintain
with financially sound and reputable insurance companies, funds or underwriters
insurance of the kinds, covering the risks and in the relative proportionate
amounts usually carried by reasonable and prudent companies conducting
businesses similar to that of the Company and the Subsidiaries, except where the
failure to do so would not have a Material Adverse Effect.
6.12.4 TAXES. Each of the Company and the Subsidiaries will pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all Taxes, assessments and other governmental charges imposed upon it
and its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials or
supplies, which if unpaid might by law become a Lien upon any of their
properties and would have a Material Adverse Effect; PROVIDED, HOWEVER, that any
such Tax, assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Company or the applicable Subsidiary shall have set aside
on its books adequate reserves with respect thereto; and PROVIDED, FURTHER, that
the Company and the applicable Subsidiary will pay or cause to be paid all such
Taxes, assessments, charges, levies or claims forthwith upon the commencement of
foreclosure on any Lien which may have attached as security therefor.
6.12.5 INSPECTION OF PROPERTIES AND BOOKS. Each of the Company and the
Subsidiaries shall permit each of AT&T or JWC, or any of their designated
representatives, at the Company's cost, to visit and inspect any of its
properties, to examine its books of account (and to make copies thereof and
extracts therefrom), and, upon reasonable notice, to discuss its affairs,
finances and accounts with, and to be advised as to the same by, officers or
partners of such Persons, all at such times and intervals during normal business
hours and after reasonable notice as AT&T or JWC may reasonably request,
PROVIDED, that in no event shall any such visit, inspection, examination,
discussion or advice interfere in any material respect in the business or other
operations of the Company or any of its employees, representatives or officers.
6.12.6 COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS. Each of
the Company and the Subsidiaries will comply in all material respects with (a)
all FCC laws and regulations, all Oklahoma Corporations Commission laws and
regulations and all other material laws and regulations wherever its business is
conducted, (b) the provisions of its Restated Certificate and Restated Bylaws,
(c) all other material agreements and instruments by which it or any of its
properties may be bound (including, without limitation, the Related Agreements
and the agreements, documents and instruments executed and delivered by it in
connection with the Financing Agreements), (d) all applicable decrees, orders
and judgments, and (e) all required FCC and Oklahoma Corporations Commission
approvals, permits and licenses and all other material approvals, permits and
licenses, if, in the case of clauses (a), (c) and (e) , the failure to comply
would have a Material Adverse Effect.
6.12.7 EMPLOYEE BENEFIT PLANS. Neither the Company nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code;
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA,
whether or not such deficiency is or may be waived;
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Company or any of the Subsidiaries pursuant to Section 302(f) or Section
4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities,
if, in each such case, such action or failure would have a Material Adverse
Effect.
The Company will (i) promptly upon filing the same with the Department of Labor
or Internal Revenue Service, furnish to each of the Purchasers a copy of the
most recent actuarial statement required to be submitted under Section 103(d) of
ERISA and Annual Report, Form 5500, with all required attachments, in respect of
each Guaranteed Pension Plan, and (ii) promptly upon receipt or dispatch,
furnish to each Purchaser any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan
under Sections 302, 4041, 4042, 4043, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan, under Section 4041A, 4202, 4219, 4242 or 4245
of ERISA.
6.12.8 DISTRIBUTIONS. The Company shall not make any distribution except
(a) repurchases of management, employee or consultant stock and options pursuant
to contractual rights, PROVIDED, that no such repurchases shall exceed $500,000
in any fiscal year or in any event $1,500,000 in the aggregate (other than stock
and options owned, directly or indirectly, by members of the Xxxxxx family
unless approved by two of the three directors selected in clauses (i), (ii) or
(iv) of Section 3.1(a) of this Agreement), (b) the sale or redemption of up to
$25.0 million in aggregate principal amount now held by Xxxxxx Partnership of
Company securities, plus any accrued and unpaid dividends thereon, in one
transaction or a series of transactions; PROVIDED that no financing or
refinancing by the Company in connection with any such redemption or sale may
have an interest rate in excess of 14% per annum (the "Rate Cap"); and PROVIDED,
FURTHER, that after the first anniversary of the date hereof, the Rate Cap will
not apply to any financing or refinancing to the extent that the Company has met
or exceeded its EBITDA projections as set forth in the budget attached as
Exhibit D to the Investment and Transaction Agreement, for the previous four
fiscal quarters, (c) required distributions in respect of Senior PIK Preferred
Stock and Class F Preferred Stock (and related warrants and warrant shares), (d)
distributions provided by the Restated Certificate, (e) distributions required
or permitted by this Agreement, including the put and call provisions therein,
and (f) the Logix Communications Spin-Off.
6.12.9 MERGER, CONSOLIDATION, SALE OF ASSETS OR OTHER DISPOSITIONS.
Neither the Company nor any Subsidiary will become a party to any merger or
consolidation, or sell, lease, sublease or otherwise transfer or dispose of any
shares of or other equity interests in a Subsidiary or any substantial portion
of its assets, rights and licenses to any Person, or turn over the management
of, or enter into any management contract with respect to, any of its assets,
properties, rights or licenses, whether directly or indirectly or in a single
transaction or a series of related transactions, without the approval by a vote
of 50.1% of the Board of Directors, or, in the case of any such transaction
involving 10% or more of the Company's consolidated assets or consolidated POPs
as of the end of the most recently completed fiscal quarter, the unanimous
approval by the Company Board of Directors (excluding any directors designated
pursuant to Sections 3.1(a)(ii) and 3.1(a)(iv)), PROVIDED, that the foregoing
will not apply to (a) any pledges, Liens or security interests in connection
with Company financing or the Sygnet Acquisition, (b) any merger, consolidation,
sale, lease, sublease, transfer or disposition solely among or involving the
Company and/or its Subsidiaries, (c) the Logix Communications Spin-Off, (d)
management stock options and incentives approved by the Company's Board of
Directors, and (e) transactions in the ordinary course of business.
6.12.10 SALE AND LEASEBACK OF PROPERTY. Neither the Company nor any
Subsidiary will enter into any arrangement, directly or indirectly, with any
Person whereby it shall sell or transfer any property, whether real, personal or
a combination thereof, used or useful in its business, whether now owned or
hereinafter acquired, and thereafter rent or lease such property, without the
approval by a vote of 50.1 % of the Board of Directors, or, in the case of any
such transaction involving 10% or more of the Company's consolidated assets or
consolidated POPs as of the end of the most recently completed fiscal quarter,
the unanimous approval by the Company Board of Directors (excluding any
directors designated pursuant to Sections 3.1(a)(ii) and 3.1(a)(iv)), PROVIDED
that no such approval shall be required in connection with the sale and
leaseback by the Company or any Subsidiary of cellular towers owned by Sygnet
Communications, Inc. prior to its acquisition by the Company
6.12.11 INVESTMENTS. The Company will not, and will not permit any
Subsidiary to, have outstanding or acquire or commit itself to acquire or hold
any investment except investments in: (a) marketable direct obligations issued
or guaranteed by the United States of America which mature within one year from
the date of acquisition thereof or which are subject to a repurchase agreement,
exercisable within 90 days from the date of acquisition of such agreement, with
any commercial bank or trust company incorporated under the laws of the United
States of America or any State thereof or the District of Columbia, (b)
commercial paper maturing within one year from the date of acquisition thereof
and having, at the date of acquisition thereof, the highest rating obtainable
from Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings Services,
Inc., (c) bankers' acceptances eligible for rediscount under Federal Reserve
Board requirements accepted by any commercial bank or trust company referred to
in clause (a) hereof, (d) certificates of deposit maturing within one year from
the date of acquisition thereof issued by any commercial bank or trust company
referred to in clause (a) hereof and having capital and surplus of at least
$500,000,000, (e) certificates of deposit issued by banks organized under the
laws of any other jurisdiction, each having combined capital and surplus of not
less than $500,000,000, (f) investments by the Company and each Subsidiary
existing on the date of this Agreement, (g) investments by the Company and its
Subsidiaries in the Company or in Subsidiaries of the Company, (h) investments
up to $25,000,000 in aggregate, and (i) investments permitted by the Company's
Financing Agreements.
6.12.12 MERGER, CONSOLIDATION OR OTHER ACQUISITIONS. Neither the Company
nor any Subsidiary shall directly or indirectly, by operation of law or
otherwise, merge with, consolidate with, acquire all or substantially all of the
assets or capital stock of, or otherwise combine with, any Person without the
approval of 50.1 % of the Board of Directors, or, in the case of any such
transaction involving 10% or more of the Company's consolidated assets or
consolidated POPs as of the end of the most recently completed fiscal quarter,
the unanimous approval of the Company Board of Directors (excluding any
directors designated pursuant to Sections 3.1(a)(ii) and 3.1(a)(iv)), PROVIDED,
that the foregoing will not apply to (a) any merger, consolidation or
acquisition solely among or involving the Company and/or its Subsidiaries, (b)
capital expenditures or capital projects approved by the Board of Directors, and
(c) transactions in the ordinary course of business.
6.13 INFORMATION COVENANTS. The Company hereby agrees that so long as
any shares of the Preferred Stock or any shares of the Common Stock are held by
either AT&T or JWC, it will comply with, and it will cause each Subsidiary to
comply with, the following provisions:
6.13.1 ANNUAL STATEMENTS. (a) As soon as available and in any event
within 90 days after the close of each fiscal year of the Company, the Company
will deliver to each of AT&T and JWC, audited consolidated and unaudited
consolidating balance sheets and statements of income and retained earnings and
of cash flows of the Company audited by Xxxxxx Xxxxxxxx, L.L.P. or any other
public accounting firm selected by the Company and reasonably acceptable to AT&T
and JWC, showing the financial condition of the Company as of the close of such
fiscal year and the results of the Company's operations during such fiscal year,
all on a consolidated basis.
(b) Each of the financial statements delivered pursuant to
this SECTION 6.13.1 shall be certified without qualification by the applicable
accounting firm to have been prepared in accordance with GAAP consistently
applied.
6.13.2 QUARTERLY STATEMENTS. Within forty-five (45) days after the end
of each quarter, the Company will deliver to each of AT&T and JWC consolidated
and consolidating unaudited balance sheets and statements of income and retained
earnings and of cash flows of the Company as of the end of each such quarter and
for the period of the then current fiscal year to the end of such month, and
presenting on a comparative basis the corresponding figures for such period in
the preceding fiscal year and the then current Budget (as defined below), in
each case by region, certified by the Chief Financial Officer of the Company to
be true and correct and to have been prepared in accordance with GAAP subject to
normal year-end adjustments described in reasonable detail.
6.13.3 BUDGETS AND OTHER REPORTS. (a) The Company will deliver to each
of AT&T and JWC, prior to the commencement of each fiscal year project spending
and capital budgets for the succeeding fiscal year, projected monthly statements
of income and cash flow for such fiscal year (the "Budget"), projected quarterly
balance sheets for such fiscal year and as soon as practical after preparation
thereof, complete and correct copies of all quarterly (if any) or annual
budgetary analyses or forecasts of the Company and the Subsidiaries in the form
customarily prepared by management for its own internal use or the use of the
Company. The Company, AT&T and JWC shall once each calendar year, conduct an
annual off-site meeting to review the Company's projections and business plans
with respect to such fiscal year.
(b) The Company shall also furnish to each of AT&T and JWC (i)
within five (5) days of the Company's receipt thereof, copies of all management
letters of the Company's accountants; (ii) within five (5) days of the Company's
receipt thereof, notice with respect to any material pending or threatened
litigation to which the Company or any Subsidiary is or may become a party;
(iii) within five (5) days of the Company's receipt thereof, notice of any
default or event of default with respect to any material agreement to which the
Company or any Subsidiary is a party; (iv) within five (5) days of the filing
thereof, copies of all material filings made by or on behalf of the Company or
any Subsidiary with any governmental regulatory agency; and (v) such other
information as either AT&T or JWC may reasonably request from time to time.
(c) Within thirty (30) days after the end of each calendar
month, the Company will deliver to each of AT&T and JWC monthly and year-to-date
summaries, in a form and to the same extent prepared by the Company management
on a consolidated basis broken down for each market in which the Company or any
Subsidiary operates any System compared on a monthly and year-to-date basis to
the Company's Budget, of the following: (a) number of POPs, (b) number of
subscribers, (c) gross activations, (d) net activations, (e) deactivations (and
setting forth the reason therefor), (f) acquisition cost per gross activation,
(g) average monthly revenue per subscriber, (h) total number of roaming minutes,
(i) total roaming revenue and (j) any other reasonable information which either
AT&T or JWC may request from time to time.
ARTICLE 7.
EXCLUSIVITY
7.1 EXCLUSIVITY. Prior to the earlier of December 23, 2003 or the date
on which the relevant Cash Equity Investor Beneficially Owns less than 50% of
the Common Stock it Beneficially Owns as of the Amendment and Restatement Date
on an "as-if converted" basis, none of the Stockholders or their respective
Affiliates will provide or resell, or act as the agent for any Person offering,
within the Territory, mobile wireless telecommunications services that compete
with those provided by the Company using wireless technologies and frequencies
licensed by the FCC without the Company's prior written consent. Nothing in this
Article 7 shall (i) prohibit JWC or its Affiliates from providing such services
in any part of the Territory in which the Company did not provide such services
at the time that JWC or its Affiliates initially began providing them or (ii)
restrict the ability of limited partners of any of JWC or its Affiliates to
invest in Persons engaged, directly or indirectly, in the mobile wireless
telecommunications industry. Anything to the contrary herein, the terms of this
Section 7.1 shall not apply to AT&T and its Affiliates (but nothing in this
proviso shall relieve AT&T's assigns and transferees that are not Affiliates of
AT&T from the operation of
this Section 7.1).
ARTICLE 8.
AFTER-ACQUIRED SHARES; RECAPITALIZATION; INVESTMENT AND TRANSACTION AGREEMENT
8.1 AFTER ACQUIRED SHARES; RECAPITALIZATION; INVESTMENT AND
TRANSACTION AGREEMENT.
(a) Except as expressly set forth herein, all of the
provisions of this Agreement shall apply to all of the shares of Company Stock
now owned or hereafter issued or transferred to a Stockholder or to his, her or
its Affiliated Successors as a consequence of any additional issuance,
conversion, purchase, exchange or reclassification of shares of Company Stock,
corporate reorganization, or any other form of recapitalization, or
consolidation, or merger, or share split, or share dividend, or which are
acquired by a Stockholder or its Affiliated Successors in any other manner.
(b) Whenever the number of outstanding shares of Company Stock
is changed by reason of a stock dividend or a subdivision or combination of
shares effected by a reclassification of shares, each specified number of shares
referred to in this Agreement shall be adjusted accordingly.
8.2 AMENDMENT OF RESTATED CERTIFICATE. Whenever the number of shares
of authorized Common Stock is not sufficient in order to issue shares of Common
Stock upon conversion of Class D Preferred Stock and Class G Preferred Stock or
upon exercise of the Class F Preferred Stock Warrants in accordance with the
Restated Certificate and the Certificates of Designation, (i) the Company shall
promptly amend the Restated Certificate in order to authorize a sufficient
number of shares of Common Stock, and (ii) each Stockholder agrees to vote its
shares of Preferred Stock and Common Stock in favor of such amendment.
8.3 INVESTMENT AND TRANSACTION AGREEMENT. Each of the parties to the
Investment and Transaction Agreement hereby amend such Agreement by terminating
and deleting Articles V and VI thereof and all sections therein.
ARTICLE 9.
SHARE CERTIFICATES
9.1 RESTRICTIVE ENDORSEMENTS; REPLACEMENT CERTIFICATES. (a) Each
certificate representing the shares of Company Stock now or hereafter held by a
Stockholder
(including any such certificate delivered upon conversion of the
Preferred Stock) or delivered in substitution or exchange for any of the
foregoing certificates shall be stamped with legends in substantially the
following form:
The shares represented by this Certificate have been acquired for
investment and have not been registered under the Securities Act of
1933, as amended (the "Act"), or under any state securities or "Blue
Sky" laws. Said securities may not be sold, transferred, assigned,
pledged, hypothecated or otherwise disposed of, unless and until
registered under the Act and the rules and regulations thereunder and
all applicable state securities or "Blue Sky" laws or exempted
therefrom under the Act and all applicable state securities or "Blue
Sky" laws.
The shares represented by this Certificate are also subject to a
Stockholder and Investor Rights Agreement, a copy of which is on file
at the offices of the Company and will be furnished by the Company to
the holder hereof upon written request. Such Stockholder and Investor
Rights Agreement provides, among other things, for the granting of
certain restrictions on the sale, transfer, pledge hypothecation or
other disposition of the shares represented by this Certificate, and
that under certain circumstances, the holder hereof may be required to
sell the shares represented by this Certificate. By acceptance of this
Certificate, each holder hereof agrees to be bound by the provisions of
such Stockholder and Investor Rights Agreement. The Company reserves
the rights to refuse to transfer the shares represented by this
Certificate unless and until the conditions to transfer set forth in
such Stockholder and Investor Rights Agreement have been fulfilled.
Each Stockholder agrees that he, she or it will deliver all
certificates for shares of Company Stock owned by him, her or it to the Company
for the purpose of affixing such legends thereto.
(b) Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any certificate
representing shares of Company Stock subject to this Agreement and of a bond or
other indemnity reasonably satisfactory to the Company, and upon reimbursement
to the Company of all reasonable expenses incident thereto, and upon surrender
of such certificate, if mutilated, the Company will make and deliver a new
certificate of like tenor in lieu of such lost, stolen, destroyed or mutilated
certificate.
ARTICLE 10.
EQUITABLE RELIEF
10.1 EQUITABLE RELIEF. The parties hereto agree and declare that legal
remedies may be inadequate to enforce the provisions of this Agreement and that,
in addition to being entitled to exercise all of the rights provided herein or
in the Restated Certificate or granted by law, including recovery of damages,
equitable relief, including specific performance and injunctive relief, may be
used to enforce the provisions of this Agreement.
ARTICLE 11.
STOCKHOLDER CALL RIGHT
11.1 STOCKHOLDER CALL RIGHT. The Xxxxxx Partnership and the other
Stockholders (other than JWC, JWC Group Stockholders and AT&T) (including
optionholders under the New Company Stock Option Plan at closing under the
Investment and Transaction Agreement) and their respective assignees will have
the right to call on a pro rata basis from the holders thereof up to 35% of the
Class D Preferred Stock held as of the Amendment and Restatement Date (and/or
Class A Common Stock, Class E Preferred Stock, Logix Communications Stock or
other capital stock, issued upon conversion, exchange, as a distribution or
otherwise in respect of the Class D Preferred Stock and the Class E Preferred
Stock, other than the JWC Common Stock) on a Fully Diluted basis, together, in
each case, with all accrued and unpaid dividends thereon (collectively, the
"Equity Investor Package") at (i) a price payable by wire transfer of
immediately available funds to an account designated by the relevant Stockholder
or the JWC Representative, in the case of the JWC Group Stockholders (other
than AT&T), equal to 35% times the following valuations (each, the "Clawback
Exercise Price"), (A) at any time prior to the twenty-fourth month anniversary
of the date of issuance of the Class D Preferred Stock at a valuation which is
equal to three times the original purchase of the Class D Preferred Stock, and
(B) at any time following the twenty-fourth month anniversary of the date of
issuance of such shares and prior to the sixtieth- month anniversary thereof,
at a valuation which is equal to an amount equal to the sum of (x) three times
the original purchase price of the Class D Preferred Stock, plus (y) one times
such original purchase price multiplied by a fraction, the numerator of which
is the number of quarterly periods elapsed after such twenty-fourth month
anniversary of their date of issuance (measured from the commencement of such
twenty-fifth month anniversary), up to 12 quarterly periods, and the denominator
of which is 12. Schedule V set forth an illustrative example for this Article
11, PROVIDED, HOWEVER, that in the case of any conflict between such
illustration and this Article 11, this Article 11 shall govern. In the event of
a sale or sales by JWC or AT&T of any portion of the final 35% of their
respective investment in Logix Communications Common Stock as of the date of the
Logix Communications Spin-off
(calculated with reference only to shares of Logix Communications issued with
respect to the Class D Preferred Stock (or any Class A Common Stock or other
capital stock issued in respect thereto other than the JWC Common Stock) held
as of the Amendment and Restatement Date), then the Clawback Exercise Price
with respect to such selling stockholder's Company Stock shall, if applicable,
be reduced by the aggregate amount of the net proceeds of such sales, PROVIDED
that proceeds received by JWC or AT&T, as the case may be, from the exercise by
the Company of its purchase right under Section 6.4 shall not so reduce the
Clawback Exercise Price.
This call right may only be exercised in respect of the entire
part of the Equity Investor Package subject thereto and the initial
determination whether to exercise this call right will be made by the Xxxxxx
Partnership on behalf of all the Stockholders, PROVIDED that after such
determination, each Stockholder will make its own determination whether to
consummate the call right. This call right shall terminate upon the earlier of
the occurrence of (A) the IPO Date, (B) the fifth anniversary of issuance of
the Class D Preferred Stock, (C) a Change of Control or (D) the exercise in
full of this call right, PROVIDED, that this call right may be exercised in
connection and concurrently with an IPO and the proceeds resulting from such
public offering may be applied by the Company in payment of the Clawback
Exercise Price. Except pursuant to Sections 4.2, 4.5 and Article 12 of
this Agreement, each Cash Equity Investor will agree not to sell or transfer the
securities included in their Equity Investor Package (excluding Logix
Communications Common Stock) until the call right expires if, after such sale or
transfer, such Cash Equity Investor would hold less than 35% of (x) the Class D
Preferred Stock it held as of the Amendment and Restatement Date, (y) any class
of securities issued in respect of the Class D Preferred Stock (other than Logix
Communication Stock), or (z) each class of securities included in the Equity
Investor Package (excluding Logix Communications Common Stock).
ARTICLE 12.
PUT RIGHTS
12.1 CLASS D AND CLASS E PREFERRED STOCK PUT RIGHT. At any time after
the earliest to occur of (i) December 23, 2005, (ii) a Change of Control, or
(iii) the consummation of an IPO, each of JWC and AT&T shall have the right to
sell all of the Class D Preferred Stock or Class E Preferred Stock held by such
party to the Company (the "Preferred Stock Put Right") and the Company shall
have the obligation to purchase the shares as to which the Preferred Stock Put
Rights are exercised. Subject to Section 12.3, the Company shall, within 120
days of the exercise by JWC or AT&T of its Preferred Stock Put Right (or
immediately in the case of a Change of Control) pay (A) in the case of a put of
Class D Preferred Stock a cash amount per share equal to the then current
Liquidation Preference thereon plus the number of shares of Class A
Common Stock that the holder of such Class D Preferred Stock would have
received upon conversion immediately prior to such put and (B) in the case of
Class E Preferred Stock a cash amount per share held by such Stockholder equal
to its Liquidation Preference. Notwithstanding the foregoing, the Company shall
not redeem any shares pursuant to this Section 12.1 unless such redemption is
made pro-rata amongst all the parties who have exercised their Preferred Stock
Put Rights pursuant to this Section 12.1 on the date of any redemption. The
closing of any redemption pursuant to this Section 12.1 shall take place at the
Company's offices or at such reasonable other location as the Company may notify
the other parties in writing. Notwithstanding anything in this section to the
contrary, neither AT&T nor JWC shall be bound to transfer its Preferred Stock
upon the exercise by the other party of its Preferred Stock Put Right and in the
event that AT&T or JWC elects not to so transfer its Preferred Stock, such party
shall retain the right to exercise the Preferred Stock Put Right with respect to
its Preferred Stock. In the event that AT&T or JWC exercises its Preferred Stock
Put Right and the other party does not elect to exercise its Preferred Stock Put
Right within 20 days of such exercise, then such other party may not exercise
its Preferred Stock Put Right until 120 days following such initial exercise.
12.2 CONFLICT EVENTS. (a) (i) Either AT&T or the Company may give
notice (a "Conflict Notice") to the other parties hereto, if it becomes aware of
the existence of a Conflict or enters into an agreement that would give rise to
a Conflict, or reasonably believes that a Conflict is likely to occur as a
result of pending transactions or other proposed actions, which notice shall
describe the Conflict in reasonable detail.
(ii) In the event that a party gives a Conflict Notice, the Company and
AT&T shall use their commercially reasonable best efforts to determine whether a
Conflict exists (or will exist after giving effect to pending transactions or
other proposed actions) and, if so, will use their commercially reasonable
efforts to agree in principle, within 60 days of receipt of such Conflict Notice
by the recipient thereof, as to a course of action (including a framework of
time within which to execute binding definitive agreements or to consummate and
complete the transaction contemplated by such agreements) to cure such Conflict
to the reasonable satisfaction of each of the Company and AT&T (an "Agreement in
Principle"). In the event the parties fail to (x) agree in principle as to such
course of action within such 60-day period, or (y) execute such binding
definitive agreements or consummate and complete the transactions contemplated
by such binding definitive agreements, in each case in accordance with the
Agreement in Principle then the provisions of Section 12.2(b) shall be
applicable.
(b) In the event that a Conflict Notice is given with respect to
either a Competitive Conflict or a Regulatory Conflict, and the provisions of
Section 12.2(b) are applicable pursuant to Section 12.2(a), then:
(i) In the case of the occurrence (without the prior written
consent of
AT&T) of a Company Competitive Conflict or a Company Regulatory
Conflict, AT&T shall have the right to send a notice (a "Conflict Put Notice")
to the other parties hereto, which notice triggers the terms of Section 12.2(c).
(ii) In the case of the occurrence (without the prior written
consent of the Company) of an AT&T Competitive Conflict or an AT&T Regulatory
Conflict, the Company shall have the right to send a notice (a "Conflict
Non-Voting Notice") to AT&T, which notice triggers the terms of Section 12.2(d).
(iii) In the case of a Conflict resulting solely from a Change
of Law, then the parties agree to address such Conflict and the remedies
appropriate to resolve such conflict in good faith and a reasonable manner, at
the time such Conflict occurs.
(c) If AT&T sends a Conflict Put Notice in accordance with
Section 12.2(b)(i), the Company shall have the obligation to purchase all of the
shares of Company Stock (other than any stock of Logix Communications from and
after the Logix Communications Spin-Off) then held by AT&T or its Affiliates.
Subject to Section 12.3, the purchase price therefor shall be payable in cash
and shall equal: (i) in the case of Class D Preferred Stock, an amount per share
equal to the then-current Liquidation Preference thereof, plus the Market Price
of the number of shares of Class A Common Stock that would have been received
upon conversion thereof on the date of the purchase; (ii) in the case of Class E
Preferred Stock, an amount per share equal to the then current Liquidation
Preference thereof; and (iii) in the case of any other class of Common Stock, an
amount per share equal to the Market Price thereof. The closing of any purchase
pursuant to this Section 12.2(c) shall take place within 120 business days after
the date of the Conflict Put Notice (or such longer period as may be necessary
under the Appraisal Procedure) at the Company's offices or such other location
or time as to which AT&T and the Company agree.
(d) If the Company sends a Conflict Non-Voting Notice to AT&T in
accordance with Section 12.2(b)(ii) or AT&T sends a Conflict Non-Voting Notice,
in its sole discretion at any time, then (i) AT&T shall cause the director
designated by it pursuant to Section 3.1(a)(ii) to resign (or the parties shall
cause the removal of such director) from the Company's Board of Directors,
within 10 business days of the date of the Conflict Non-Voting Notice and AT&T
will relinquish its director designation right in accordance with Section
3.1(b), (ii) the parties shall negotiate in good faith, and promptly implement,
steps appropriate to eliminate the voting rights of any Company Stock then owned
by AT&T or its Affiliates (E.G., by AT&T exchanging its shares of Class D
Preferred Stock for an equal number of shares of a new class of preferred stock
having no voting rights and convertible into common stock having no voting
rights, except in each case to the extent required by law, or AT&T agreeing to
vote all of its shares in the same proportion as all other shares of Company
Stock are voted) and, to the extent necessary to eliminate a Regulatory
Conflict, to eliminate any
consent, approval, veto or similar rights AT&T enjoys pursuant to the terms of
this Agreement and (iii) the parties will otherwise proceed reasonably and in
good faith to resolve the circumstances giving rise to the Conflict Non-Voting
Notice; PROVIDED that and except as set forth in this Agreement no party shall
be required to agree to any change, modification or supplement that adversely
affects such party in any material respect, and nothing in this Agreement shall
be construed to require any party to agree to divest or hold separate any of
its assets or otherwise take or commit to take any action that limits its
freedom of action in any material respect with respect to any of its
businesses, product lines or assets. Notwithstanding the foregoing, if a
Conflict Non-Voting Notice shall be sent, and AT&T shall subsequently Transfer
any Company Stock, then the voting rights of such Company Stock to be
transferred shall be immediately reinstated and the transferee shall be
transferred Company Stock with full voting rights. The parties hereby
acknowledge and agree that any procedures effected pursuant to this Section
12.2(d) shall remain in effect until the Conflict giving rise to the Conflict
Non-Voting Notice no longer exists.
(e) The parties agree that Section 12.2(b) will be inapplicable to any
Regulatory Conflict existing on the date hereof, and that the parties will
proceed in good faith to resolve or cure such Conflicts; AT&T further agrees
that it will not exercise its right to select a director pursuant to Section
3.1(a)(ii) until each of the Company and AT&T are satisfied that no Regulatory
Conflict exists as of the date hereof or any such Regulatory Conflict has been
cured or the appropriate Governmental Authorities have furnished a waiver with
respect thereto.
(f) Notwithstanding anything in this Agreement to the contrary
(including, without limitation, Section 12.2(a)) AT&T shall have 30 days from
the date of receipt of a Conflict Notice within which to either confirm or deny
that a Conflict may exist upon consummation of the transactions referred to in
the Conflict Notice. If AT&T either fails to respond to such Conflict Notice or
informs the Company that no Conflict may exist upon consummation of the
transactions referred to in the Conflict Notice and the parties subsequently
learn that a Conflict did in fact arise, AT&T shall be precluded from asserting
its rights under Section 12.2(b)(i) in respect of such Conflict.
(g) Nothing in this Agreement shall be construed to require AT&T or
any of its Subsidiaries to take any action, including without limitation
divesting any of their respective properties or other assets, other than in
respect of shares of Company Stock Beneficially Owned by them or their rights
under this Agreement or other rights arising from ownership of such Company
Stock or agreements with the Company.
(h) The Company may deliver a notice to AT&T requesting that AT&T
confirm or deny that a Conflict exists, or may exist upon completion of a
transaction or transactions that have been publicly announced by AT&T, (i) at
any time the Company reasonably believes that AT&T has engaged in a transaction
or transactions that may
create a Conflict, and (ii) once during any calendar year (without regard to any
notices given pursuant to clause (i) of this sentence). Such notice shall
include a list of the Licenses held by the Company and its Subsidiaries. AT&T
shall respond to such notice within 15 days stating whether or not it is aware,
to the best of its knowledge, that a Conflict exists. Any such notice or
information given by AT&T will be deemed to be Confidential Information subject
to Section 6.3 of this Agreement.
12.3 PAYMENT; RESTRICTIONS ON PAYMENT. Upon the surrender of the
certificate or certificates evidencing the shares of stock to be repurchased by
the Company pursuant to the Put Rights in Section 12.1 or 12.2(c), the
repurchase price in respect of such shares shall be paid to the order of the
Person whose name appears on such certificate or certificates in cash by wire
transfer of immediately available funds, PROVIDED, that if there is no Available
Cash under the Financing Agreements and consistent with the limitations set
forth in Section 12.4, the Company shall arrange additional credit facilities or
borrowing availability to obtain cash to meet its obligations upon the exercise
of the Put Right. If the Company cannot, within the time periods stated in
Sections 12.1 and 12.2(c), obtain cash to meet its obligations upon the exercise
of the Put Right, then the Company shall issue to the Cash Equity Investor
exercising the Put Right a Subordinated Put Note, dated as of the date of
exercise of the Put Right, which shall rank senior to each class of Preferred
Stock existing on the date hereof other than the Senior PIK Preferred Stock and
the Sygnet PIK Preferred Stock. Each surrendered certificate shall be canceled
and/or retired. In the event that a Cash Equity Investor receives a Subordinated
Put Note, such Cash Equity Investors shall be entitled to all of the rights of
the holders of Class D Preferred Stock hereunder as if such Cash Equity
Investors were holders of Class D Preferred Stock until the Subordinated Put
Notes are paid in full. In the event that Subordinated Put Notes are issued, all
such Subordinated Put Notes will rank pari passu and shall share pro rata in any
Available Cash, PROVIDED, HOWEVER, that in the event that any Subordinated Put
Note shall have matured, such Subordinated Put Note shall rank senior to any
Subordinated Put Note which has not yet matured.
12.4 RESTRICTIONS ON PAYMENTS BY THE COMPANY. Notwithstanding anything
to the contrary contained in this Agreement, the payment of cash upon exercise
of a Put Right and pursuant to any Subordinated Put Notes pursuant to this
Article shall be subject to (i) applicable restrictions contained in any
applicable law, including the availability of adequate capital and surplus for
corporate law purposes and (ii) restrictions contained in the Financing
Agreements (other than the Class F Preferred Stock Documents) each as refinanced
or amended and in effect from time to time in accordance with Section 12.6, and
restrictions contained in any Senior Indebtedness. If any such restrictions or
unavailability prohibit the repurchase of Securities or other capital stock of
the Company hereunder which the Company is otherwise entitled or required to
make, the Company shall make such repurchases as soon as it is permitted to do
so under such restrictions.
12.5 PAYMENT OF CASH. Notwithstanding anything else in this
Article 12 to the contrary (including Sections 12.3 and 12.4), in the event of a
Change of Control, and in each case in which Stockholders receive cash, cash
equivalents or marketable securities for the sale or transfer of the Company's
Voting Securities, then the holders of the Class D Preferred Stock and Class E
Preferred Stock shall be paid cash upon exercise of a Put Right and shall not be
issued Subordinated Put Notes in lieu of cash.
12.6 FINANCING AGREEMENTS; INDEBTEDNESS. The Class D Preferred Stock
and Class E Preferred Stock, including any redemptions (except as set forth
below), puts and calls and any Subordinated Put Notes issued pursuant to such
puts, are subject to the terms and restrictions contained in the Financing
Agreements. The Company will be permitted to refinance or replace (whether or
not with new lenders) any Financing Agreement and/or incur additional
indebtedness in connection with acquisitions and capital projects at any time
prior to the issuance of any Subordinated Put Note issued in connection with a
Put Right, so long as the Company has used commercially reasonable efforts to
negotiate standard covenant flexibility with regard to permitting payment of the
Put Right and such refinancing, replacement or additional indebtedness (i) is
not more restrictive with respect to the Preferred Stock than the Financing
Agreements and (ii) specifically permits the payment of amounts owing by the
Company upon exercise of such Preferred Stock Put Right or to the holder of any
such Subordinated Put Note if after giving pro forma effect to any such payment,
the Consolidated Leverage Ratio would be less than 8 to 1. Following the
issuance of any Subordinated Put Note issued in connection with a Put Right, the
Company may not undertake any refinancing or replacement (but shall be free to
obtain waivers from the holders of existing indebtedness) or incur additional
financing indebtedness in excess of $1,000,000, in the aggregate, without the
prior written consent of the holder of such Subordinated Put Note. Nothing
herein shall limit the right of the Company to incur indebtedness in order to
discharge all amounts owing under any such outstanding Subordinated Put Notes.
No refinancing replacement or additional financing indebtedness shall adversely
affect, and shall be expressly subordinate to, the redemption rights of the
Class D Preferred Stock and Class E Preferred Stock set forth in the
Certificates of Designation of the Class D Preferred Stock and Class E Preferred
Stock. The Cash Equity Investors shall deliver acknowledgments of the foregoing
to the Company's creditors under the Financing Agreements upon the request of
the Company.
ARTICLE 13.
COMPANY CALL RIGHT
13.1 COMPANY RIGHT TO CALL AGAINST CASH EQUITY INVESTORS. On or
immediately prior to an IPO, the Company or its assignees shall have the right
to purchase on a pro rata basis from the holders thereof all or any portion of
the outstanding shares of Class
D Preferred Stock held by a Cash Equity Investor and upon the exercise of such
right, each Cash Equity Investor shall have the obligation to sell such shares
of Class D Preferred Stock held by such Cash Equity Investor to the Company.
The call purchase price for each share of Class D Preferred Stock shall be the
Liquidation Preference thereof plus the number of shares of Class A Common
Stock that would have been received by the holder of such Class D Preferred
Stock had such Class D Preferred Stock been converted immediately prior to the
exercise of the call. Notwithstanding anything herein to the contrary, a holder
of Class D Preferred Stock may upon receiving a Call Notice (as defined below)
elect to convert his Class D Preferred Stock into Class E Preferred Stock and
Class A Common Stock, in which event the Company's right pursuant to this
Article 13 will apply to such Class E Preferred Stock. The call purchase price
of any such Class E Preferred Stock shall be the Liquidation Preference thereof.
13.2 PROCEDURE. The Company may exercise the Call Rights by providing
to the Cash Equity Investors a written notice (a "Call Notice") that the Company
will repurchase the shares of Company Stock described in Section 13.1. The
Company shall within thirty (30) days after the determination of the relevant
call price, and the notification of the Cash Equity Investors and in any event
no later than the receipt by the Company of the proceeds of the IPO, redeem the
shares held by the Stockholders to whom the Company provided a Call Notice by
paying to such Stockholders an amount for each share held by such Stockholder
equal to the relevant call price by wire transfer of immediately available
funds. The closing of the repurchase of the shares pursuant to this Article 13
shall take place at the office of the Company, or at such other reasonable
location, as it shall notify the relevant party to whom the Call Notice was
sent.
13.3 PAYMENT. Upon the surrender of the certificate or certificates
evidencing the shares of Class D Preferred Stock or Class E Preferred Stock to
be repurchased by the Company pursuant to this Article 13, the applicable call
price in respect of such shares shall be paid by wire transfer of immediately
available funds to the order of the Person whose name appears on such
certificate or certificates in cash in immediately available funds (which shall
include any accrued and unpaid dividends to the date of repurchase of such
shares of Class D Preferred Stock or Class E Preferred Stock). Each surrendered
certificate evidencing the shares of Class D Preferred Stock or Class E
Preferred Stock being repurchased shall be canceled and/or retired.
ARTICLE 14.
MISCELLANEOUS
14.1 JWC GROUP STOCKHOLDER REPRESENTATIVE. (a) Each JWC Group
Stockholder hereby designates and irrevocably appoints Xxxx X. Xxxxxxxx, as his
attorney-in-fact with full power of substitution (the "JWC Group Stockholder
Representative"), to serve as the representative of each such JWC Group
Stockholder to (i) perform all such acts as are required, authorized or
contemplated by this Agreement to be performed by such JWC Group Stockholder
(other than AT&T) and (ii) exercise such rights, power and authority as are
incidental to this Agreement and hereby acknowledges that the JWC Group
Stockholder Representative shall be the only person authorized to take any
action so required, authorized or contemplated by this Agreement by each such
person. Any such actions taken, exercises of rights, power or authority and any
decision or determination made by the JWC Group Stockholder Representative
consistent therewith, shall be absolutely and irrevocably binding on each JWC
Group Stockholder (other than AT&T) as if such JWC Group Stockholder (other than
AT&T) personally had taken such action, exercised such rights, power or
authority or made such decision or determination in such Stockholder's
individual capacity. Each such JWC Group Stockholder (other than AT&T) further
acknowledges that the foregoing appointment and designation shall be deemed to
be coupled with an interest and shall survive the death or incapacity of such
JWC Group Stockholder (other than AT&T). The other parties hereto are and will
be entitled to rely on any action taken or any notice given by the JWC Group
Stockholder Representative and are and will be entitled and authorized to give
notices only to the JWC Group Stockholder Representative for any notice
contemplated by this Agreement to be given to any such person. A successor to
the JWC Group Stockholder Representative may be chosen by a majority in interest
of the JWC Group Stockholders (other than AT&T), PROVIDED that notice thereof is
given by the new JWC Group Stockholder Representative to the Company.
(b) The JWC Group Stockholder Representative shall not be
liable to the JWC Group Stockholders for the performance of any act or the
failure to act under or in connection with this Agreement so long as he acted or
failed to act in good faith in what he believed to be the scope of his authority
and for a purpose which he believed to be in the best interests of the JWC Group
Stockholders (other than AT&T). Each of the JWC Group Stockholders (other than
AT&T) will indemnify the JWC Group Stockholder Representative, from and against
any loss, liability, damage, deficiency, cost and expense (including without
limitation reasonable expenses of investigation and reasonable attorney's fees
incurred in connection with any claim, suit or proceeding brought against him)
incurred or sustained by him as a result of his individual acts or omissions in
connection with this Agreement, so long as he acted or failed to act in good
faith.
14.2 NOTICES. All notices or other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by facsimile transmission, or by registered or
certified mail (return receipt requested), postage prepaid, with an
acknowledgment of receipt signed by the
addressee or an authorized representative thereof, addressed as follows (or to
such other address for a party as shall be specified by like notice; PROVIDED
that notice of a change of address shall be effective only upon receipt thereof:
If to JWC, to:
X. X. Childs Associates, L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxx-Xxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxxxx
If to AT&T, to:
AT&T Wireless Services, Inc.
0000 000xx Xxx., X.X.
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
With a copy to:
AT&T Wireless Services, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Attention: General Counsel
With a copy to:
Xxxxxxxx Xxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
If to the Company, to it:
Xxxxxx Communications Corporation
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, President
With a copy to the Company at the same address to:
Attention: Xxx Xxxxxx, Senior Corporate Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With a further copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
14.3 ENTIRE AGREEMENT; AMENDMENT; CONSENTS.
(a) This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof, including, without
limitation, the Former Shareholders' Agreement.
(b) No change or modification of this Agreement shall be
valid, binding or enforceable unless the same shall be in writing and signed by
the Company, the Xxxxxx Partnership, the holders of a majority of the shares of
each class of Common
Stock and Preferred Stock and each of JWC and AT&T so long as they hold their
respective Relevant Percentage Interests; PROVIDED, HOWEVER, that in the event
any party hereto shall cease to own any shares of Company Stock such party
hereto shall cease to be a party to this Agreement and the rights and
obligations of such party hereunder shall terminate.
(c) Whenever in this Agreement the consent or approval of a
Stockholder is required, except as expressly provided herein, such consent or
approval may be given or withheld in the sole and absolute discretion of each
Stockholder.
14.4 TERM.
(a) This Agreement shall terminate upon the earliest to occur
of any of the following events and PROVIDED that no Subordinated Put Notes are
outstanding:
(i) The consent in writing of all of the parties hereto; or
(ii) December 23, 2010; or
(iii) One Stockholder shall Beneficially Own all of the
Common Stock.
(b) In the event that JWC shall Beneficially Own less than 35%
of shares of Common Stock or Class E Preferred Stock received from conversion of
the original Class D Preferred Stock investment (in each case on an
"as-if-converted" basis) Beneficially Owned by JWC on the Amendment and
Restatement Date, the provisions of Section 3.1(a)(i) shall terminate. In the
event the provisions of Section 3.1(a)(i) are terminated pursuant to this
Section 14.3(b), the director designated by JWC pursuant to Section 3.1(a)(i),
shall resign (or the other directors or Stockholders shall remove such director
from the Board of Directors) and the remaining directors shall take such action
so that the number of directors constituting the entire Board of Directors is
accordingly reduced.
(c) In the event that AT&T shall Beneficially Own less than
50% of shares of Common Stock or Class E Preferred Stock received from
conversion of the original Class D Preferred Stock investment (in each case on
an "as-if-converted" basis) Beneficially Owned by AT&T on the Amendment and
Restatement Date, the provisions of Section 3.1(a)(ii) shall terminate. In the
event the provisions of Section 3.1(a)(ii) are terminated pursuant to this
Section 14.3(c), the director designated by AT&T pursuant to Section 3.1(a)(ii),
shall resign (or the other directors or Stockholders shall remove such director
from the Board of Directors) and the remaining directors shall take such action
so that the number of directors constituting the entire Board of Directors is
accordingly reduced.
Notwithstanding anything in this Agreement to the contrary,
the holder of any Subordinated Put Note shall be entitled to all of the rights
and benefits of the Cash Equity Investors hereunder and under the Certificate of
Designations for the Class D Preferred Stock and the Investment and Transaction
Agreement, as if such holder still held the shares of Class D Preferred Stock
for which such Subordinated Put Note was issued until such Subordinated Put Note
has been paid in full.
14.5 SURVIVAL. Nothing contained in Section 14.5 shall impair any
rights or obligations of any party hereto arising prior to the time of the
termination of this Agreement, or which may arise by an event causing the
termination of this Agreement. The provisions of Article 5 shall survive any
termination of this Agreement and shall continue in full force and effect until
December 23, 2018. The provisions of Section 6.3 and Section 14 shall survive
the termination of this Agreement.
14.6 WAIVER. No failure or delay on the part of any Stockholder in
exercising any right, power or privilege hereunder, nor any course of dealing
between the Company and any Stockholder shall operate as a waiver thereof nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the simultaneous or later exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights and remedies which any Stockholder would otherwise
have. No notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Stockholders or any of
them to take any other or further action in any circumstances without notice or
demand.
14.7 OBLIGATIONS SEVERAL. The obligations of each Stockholder under
this Agreement shall be several with respect to each such Stockholder.
14.8 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the law of the State of New York without reference to the
conflicts of law principles thereof.
14.9 DISPUTE RESOLUTION; WAIVER OF JURY TRIAL.
(a) The parties shall use and strictly adhere to the following
dispute resolution processes, except as otherwise expressly provided in this
Section 14.9, to resolve any and all disputes, controversies or claims, whether
based on contract, tort, statute, fraud, misrepresentation or any other legal or
equitable theory (hereinafter, "Dispute(s)"), arising out of or relating to this
Agreement (and any prior agreement this Agreement supersedes), including without
limitation, its making, termination, non-renewal, its alleged breach and the
subject matter of this Agreement (E.G., products or services furnished hereunder
or those related to those furnished):
(b) The parties shall first attempt to settle each Dispute
through good faith negotiations. The aggrieved party shall initiate such
negotiations by giving the other party(ies) written notice of the existence and
nature of the Dispute. The other party(ies) shall in a writing to the aggrieved
party acknowledge such notice of Dispute within ten (10) business days. Such
acknowledgment may also set forth any Dispute that the acknowledging party
desires to have resolved in accordance with this Section.
(c) Thereafter, if any Dispute is not resolved by the parties
through negotiation within thirty (30) calendar days of the date of the notice
of acknowledgment, either party may terminate informal negotiations with respect
to that Dispute and have the right, by delivery of written notice thereof (the
"Arbitration Notice") to the other party, to submit the matter to be finally
settled by arbitration in accordance with the Commercial Arbitration Rules then
in effect of the American Arbitration Association, as modified herein (the "AAA
Rules"). The place of arbitration shall be Oklahoma City, Oklahoma. All matters
so submitted to arbitration shall be settled by three arbitrators. The disputing
party and the Company shall each designate one arbitrator within 20 days of the
delivery of the Arbitration Notice. If either the disputing party or the Company
fails so to timely designate an arbitrator, the matter shall be resolved by the
one arbitrator timely designated. The disputing party and the Company shall
cause the designated arbitrators to mutually agree upon and to designate a third
arbitrator, PROVIDED, HOWEVER, that failing such agreement within 45 days of
delivery of the Arbitration Notice, the third arbitrator shall be appointed in
accordance with the AAA Rules. The disputing party and the Company, shall be
responsible for the payment of the fees and expenses of their respectively
designated arbitrators and shall bear equally the fees and expenses of the third
arbitrator. The disputing party and the Company, shall cause the arbitrators to
decide the matter to be arbitrated pursuant hereto within 60 days after the
appointment of the last arbitrator. The arbitral tribunal is not empowered to
award damages in excess of compensatory damages and each party hereby
irrevocably waives any right to recover punitive, exemplary or similar damages
with respect to any Dispute. The final decision of the majority of the
arbitrators shall be furnished to the disputing party and the Company and each
of the Stockholders in writing and shall constitute a conclusive determination
of the matter in question, binding upon JWC, the Company and the Stockholders
and shall not be contested by any of them. Such decision may be used in a
court of law only for the purpose of seeking enforcement of the arbitrators'
award. Any arbitration proceeding, decision or award rendered hereunder and the
validity, effect and interpretation of this arbitration agreement shall be
governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16, and judgment
upon any award may be entered in any court of competent jurisdiction.
(d) The Company and each of the Stockholders hereby
irrevocably consents to the exclusive jurisdiction of the state or federal
courts in the State of New York, and all state or federal courts competent to
hear appeals therefrom, over any
actions which may be commenced against any of them under or in connection with
this Agreement. The Company and each Stockholder hereby irrevocably waive, to
the fullest extent permitted by applicable law, any objection which any of them
may now or hereafter have to the laying of venue of any such dispute brought in
such court or any defense of inconvenient forum for the maintenance of such
dispute in the Xxxxxxxx Xxxxxxxx xx Xxx Xxxx xxx Xxx Xxxx Xxxxxx. The Company
and each Stockholder hereby agree that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The Company and each Stockholder hereby consent to process
being served by any party to this Agreement in any actions by the transmittal of
a copy thereof in accordance with the provisions of Section 14.2.
(e)EACH OF THE PARTIES HERETO, AFTER CONSULTING WITH COUNSEL
WAIVE THEIR RIGHTS, IF ANY, TO JURY TRIAL IN RESPECT TO ANY DISPUTE OR CLAIMS
BETWEEN OR AMONG THE PARTIES TO THIS AGREEMENT RELATING TO OR IN RESPECT OF THIS
AGREEMENT, ITS NEGOTIATION, EXECUTION, PERFORMANCE, SUBJECT MATTER, OR ANY
COURSE OF CONDUCT OR DEALING OR ACTIONS UNDER OR IN RESPECT OF THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION ANY CLAIM UNDER THE SECURITIES ACT, THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, ANY OTHER STATE OR FEDERAL LAW RELATING TO
SECURITIES OR FRAUD OR BOTH, THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
ACT, AS AMENDED, OR FEDERAL OR STATE COMMON LAW.
14.10 BENEFIT AND BINDING EFFECT; SEVERABILITY. This Agreement shall
be binding upon and shall inure to the benefit of the Company, its successors
and assigns, and each of the Stockholders and their respective executors,
administrators and personal representatives and heirs and permitted assigns.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy or any listing
requirement applicable to the Common Stock, all other terms and provisions of
this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto affected by such
determination in any material respect shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as possible in an acceptable manner in order that the provisions hereof are
given effect as originally contemplated to the greatest extent possible.
14.11 AMENDMENT OF BY-LAWS. The Stockholders agree that the terms of
this Agreement shall supersede any inconsistent provision that is contained in
the Restated By-Laws and, to the extent required by Oklahoma law or the Restated
By-Laws, this Agreement shall be deemed to constitute a written action taken by
the Stockholders of the Company and shall be deemed an amendment of the Restated
By-Laws.
14.12 FCC AND REGULATORY APPROVALS. Notwithstanding anything contained
in this Agreement to the contrary, no transaction or action contemplated herein
shall be consummated and no interests or rights transferred, converted or
exchanged prior to receiving FCC approvals with respect thereto to the extent
such FCC approvals are necessary.
14.13 EXPENSES. All attorneys' fees incurred by the Stockholders in
connection with this Agreement (including, without limitation, in the
preparation of notices (and responses thereto) and consents) shall be borne by
the Stockholder(s) incurring such fees.
14.14 ATTORNEYS' FEES. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
14.15 HEADINGS. The captions in this Agreement are for convenience only
and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
14.16 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed or consent this
Agreement to be executed by its duly authorized officers as of the date first
written above.
COMPANY:
XXXXXX COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
CASH EQUITY INVESTORS:
XXXXXX XX LIMITED PARTNERSHIP
By: RLD, Inc., its General Partner
By:
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
XXXXXX OPERATING COMPANY
By:
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Executive Officer
X.X. CHILDS EQUITY PARTNERS II, L.P.
By: X.X. Childs Advisors II, L.P.,
its general partner
By: X.X. Childs Associates, L.P.,
its general partner
By: X.X. Childs Associates, Inc.,
its general partner
By:
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
---------------------------------------
Xxxx X. Xxxxxxxx, as agent and
attorney-in-fact for the JWC Group
Stockholders under Purchaser
Appointment of Agent and Power of
Attorney and not in his individual
capacity
AT&T WIRELESS SERVICES, INC.
By:
---------------------------------------
Name:
Title:
Schedule I
CASH EQUITY INVESTORS:
Xxxxxx XX Limited Partnership
c/x Xxxxxx Communications Corporation
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Attention: Senior Corporate Counsel
Xxxxxx Operating Company
c/x Xxxxxx Communications Corporation
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Attention: Senior Corporate Counsel
X.X. Childs Equity Partners II, L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxx-Xxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Attention: Xxxx Xxxxxxxx
JWC Group Stockholders:
(See attached sheet)
AT&T Wireless Services, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Attention: General Counsel
Schedule II
CAPITALIZATION
Schedule III
NEW DIRECTORS
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
[AT&T Designee](*)
----------------------------
Subject to Section 3.1(d).
TABLE OF CONTENTS
SECTION PAGE
ARTICLE 1. Definitions
1.1 Certain Defined Terms 2
1.2 Other Definitional Provisions 18
ARTICLE 2. Stockholder Approval
2.1 Organizational Documents 18
2.2 Approval of Stock Option Plans 18
2.3 Logix Communications Spin-Off 18
ARTICLE 3. Management of the Company
3.1 Board of Directors 19
3.2 Removal; Filling of Vacancies 21
3.3 Directors 21
3.4 Compensation and Reimbursement 21
3.5 Business of the Company 21
3.6 Required Votes 22
3.7 Transactions between the Company and the Stockholders or
their Affiliates 22
3.8 Board Committees 22
3.9 Other Actions 22
ARTICLE 4. Transfers of Shares
4.1 General 23
4.2 Tag-Along Rights 24
4.3 Additional Conditions to Permitted Transfers 26
4.4 Stop-Transfer 27
4.5 Drag Along Rights 27
4.6 Redemption Rights 28
4.7 Right of First Refusal for New Securities; Capital Raising 28
ARTICLE 5. Registration Rights
(a) Demand Registration Rights 29
(b) Piggyback Registration Rights 31
TABLE OF CONTENTS
(continued)
SECTION PAGE
(c) Selection of Underwriters 32
(d) Registration Procedures 32
(e) Indemnification 37
(f) Contribution 40
(g) Registration Expenses 40
(h) Participation in Underwritten Registrations 41
(i) Holdback Agreements 41
(j) Public Information Reporting 42
ARTICLE 6. Additional Rights and Covenants
6.1 Wholly-Owned Subsidiaries 42
6.2 Amendments of the Restated Certificate and By-Laws 42
6.3 Confidentiality 43
6.4 Sale of Logix Communications Stock 43
6.5 Class Protection 44
6.6 New Securities 44
6.7 Logix Communications Spin-Off 45
6.8 Regulation M 45
6.9 (a) Pooling of Interests 45
6.10 Other Tax Matters 45
6.11 Class A Preferred Stock Transfer Restriction 46
6.12 Additional Covenants 46
6.12.1 Records and Accounts 46
6.12.2 Existence; Related Securities; Maintenance of
Properties 46
6.12.3 Insurance 46
6.12.4 Taxes 47
6.12.5 Inspection of Properties and Books 47
6.12.6 Compliance with Laws, Contracts, Licenses and Permits 47
6.12.7 Employee Benefit Plans 47
6.12.8 Distributions 48
6.12.9 Merger, Consolidation, Sale of Assets or Other
Dispositions 48
6.12.10 Sale and Leaseback of Property 49
6.12.11 Investments 49
6.12.12 Merger, Consolidation or Other Acquisitions 50
6.13 Information Covenants 50
6.13.1 Annual Statements 50
6.13.2 Quarterly Statements 50
TABLE OF CONTENTS
(continued)
SECTION PAGE
6.13.3 Budgets and Other Reports 50
ARTICLE 7. Exclusivity
7.1 Exclusivity 51
ARTICLE 8. After-Acquired Shares; Recapitalization; Investment and Transaction
Agreement
8.1 After Acquired Shares; Recapitalization; Investment and
Transaction Agreement 52
8.2 Amendment of Restated Certificate 52
8.3 Investment and Transaction Agreement 52
ARTICLE 9. Share Certificates
9.1 Restrictive Endorsements; Replacement Certificates 52
ARTICLE 10. Equitable Relief
10.1 Equitable Relief 53
ARTICLE 11. Stockholder Call Right
11.1 Stockholder Call Right 54
ARTICLE 12. Put Rights
12.1 Class D and Class E Preferred Stock Put Right 55
12.2 Conflict Events 56
12.3 Payment; Restrictions on Payment 58
12.4 Restrictions on Payments by the Company 58
12.5 Payment of Cash 58
12.6 Financing Agreements; Indebtedness 59
ARTICLE 13. Company Call Right
13.1 Company Right to Call Against Cash Equity Investors 59
13.2 Procedure 60
13.3 Payment 60
ARTICLE 14. Miscellaneous
14.1 JWC Group Stockholder Representative 60
14.2 Notices 61
14.3 Entire Agreement; Amendment; Consents 63
14.4 Term 64
14.5 Survival 64
14.6 Waiver 64
14.7 Obligations Several 65
14.8 Governing Law 65
14.9 Dispute Resolution; Waiver of Jury Trial 65
14.10 Benefit and Binding Effect; Severability 66
14.11 Amendment of By-Laws 67
14.12 FCC and Regulatory Approvals 67
14.13 Expenses 67
14.14 Attorneys' Fees 67
14.15 Headings 67
14.16 Counterparts 67
SCHEDULES
Schedule I -- Cash Equity Investors
Schedule II -- Capitalization
Schedule III -- New Directors
EXHIBITS
Exhibit A -- Form of Restated Certificate
Exhibit B-1 -- Form of Class A Preferred Stock Certificate of Designation
Exhibit B-2 -- Form of Class D Preferred Stock Certificate of Designation
Exhibit B-3 -- Form of Class E Preferred Stock Certificate of Designation
Exhibit B-4 -- Form of Class F Preferred Stock Certificate of Designation
Exhibit B-5 -- Form of Class G Preferred Stock Certificate of Designation
Exhibit B-6 -- Form of Class H Preferred Stock Certificate of Designation
Exhibit C -- Form of Restated By-Laws
Exhibit D -- Form of Subordinated Put Note
Exhibit E -- Logix Spin-Off Dilution Protection Example
