Exhibit 10.28
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STOCKHOLDER/OPTIONEE AGREEMENT
AGREEMENT made and entered into, as of October 11, 2001, by and among
ATC Mexico Holding Corp., a Delaware corporation ("Holding"), American Tower
Corporation, a Delaware corporation ("ATC"), American Tower International, Inc.,
a Delaware corporation ("ATC International"), J. Xxxxxxx Xxxxxx, Xx., an
individual residing in Atlanta, Georgia ("Gearon") and the Persons who from time
to time execute a counterpart of this Agreement (individually a "Stockholder"
and collectively the "Stockholders" which terms shall include Gearon in his
capacity as such).
W I T N E S S E T H:
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WHEREAS, ATC and Gearon desire to provide for the organization, funding
and management of Holding;
WHEREAS, the Stockholders other than Gearon will be acquiring from
Holding, and Holding will issue to such Stockholders, pursuant to a 2001 Stock
Option Plan (the "Plan") to be adopted pursuant to the provisions of Section 8,
an option (individually an "Option" and collectively the "Options") to acquire
shares of Holding Common Stock; and
WHEREAS, Holding is unwilling to grant the Options, or to permit their
exercise, without the assurances with respect to its ability to acquire the
Option and/or Common Stock on the terms and conditions of this Agreement and
with respect to investment intent provided herein; and
WHEREAS, the Stockholders are unwilling to accept or exercise, as the
case may be, the Option without assurances of the ability to dispose of the
Holding Securities on the terms and conditions of this Agreement;
WHEREAS, it is in the best interests of Holding and of all of the
owners of shares of Holding Common Stock to ensure the business success of
Holding through the preservation and encouragement of harmonious relationships
within Holding; and
WHEREAS, the parties agree that these goals will be furthered by
providing for certain restrictions as to the transferability of the shares of
Holding Common Stock owned by the holders thereof and by providing for
succession of ownership thereof;
NOW, THEREFORE, in consideration of the premises, of the mutual
covenants hereinafter set forth, as a condition to the grant and/or exercise of
the Options, and other valuable consideration, the receipt, adequacy and
sufficiency whereof are hereby acknowledged, the parties hereto, intending to be
legally bound, do hereby covenant and agree as follows:
Section 1. Definitions. As used herein, unless the context otherwise
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requires, the terms used herein which are not defined herein and are defined in
Appendix A shall have the respective meanings set forth in Appendix A. Terms
defined in the singular shall have a comparable meaning when used in the plural,
and vice versa, and the reference to any gender shall be deemed to include all
genders. Unless otherwise defined or the context otherwise clearly requires,
terms for which meanings are provided in this Agreement shall have such meanings
when used in each document or other instrument executed or required to be
executed pursuant hereto or thereto or otherwise delivered, from time to time,
pursuant hereto or thereto. References to "hereof," "herein" or similar terms
are intended to refer to this
Agreement as a whole and not a particular section, and references to "this
Section" are intended to refer to the entire section and not a particular
subsection thereof.
Section 2. Representations and Warranties of Parties. Each of the
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parties represents and warrants as follows:
(a) Authority to Execute and Perform Agreements. Such party
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(if an Entity) has been duly organized and is validly existing as an
Entity in good standing in its jurisdiction of organization as
indicated in the preamble of this Agreement and has all requisite power
and authority (corporate, partnership, limited liability company, and
other) and has in full force and effect all governmental authorizations
and private authorizations necessary to enable it to execute and
deliver, and to perform its obligations under, this Agreement. The
execution and delivery of this Agreement by such party (if an Entity)
have been duly authorized by all requisite corporate, partnership,
limited liability company, or other organizational action, if any, on
the part of such party. This Agreement has been duly executed and
delivered and constitutes the legal, valid and binding obligation of
such party enforceable against such party in accordance with its terms,
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and (ii) the availability of equitable remedies may be
limited by equitable principles of general applicability.
(c) No Conflict; Required Filings and Consents. Neither the
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execution and delivery by such party of this Agreement, nor the
consummation of the transactions contemplated by this Agreement, nor
compliance with the terms, conditions and provisions hereof by such
party:
(i) will conflict with, or result in a breach or
violation of, or constitute a default under, any applicable
Law, or will conflict with, or result in a breach or violation
of, or constitute a default under, or permit the acceleration
of any obligation or liability in, or but for any requirement
of the giving of notice or passage of time or both would
constitute such a conflict with, breach or violation of, or
default under, or permit any acceleration in, any organization
document (in the case of an Entity), governmental
authorization or material agreement of such party;
(ii) will result in or permit the creation or
imposition of any Lien upon any property or asset of such
party; or
(iii) will require any approval or action of, or
filing with, any governmental authority.
Section 3. Funding Covenants of ATC and Gearon. ATC and Gearoncovenant
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and agree as follows:
(a) ATC Additional Common Stock Investments. If ATC and/or its
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Affiliates have not, on or prior to the date hereof, invested an
aggregate of US$88,000,000 in Holding, ATC will, at such time and from
time to time as required to finance the business and operations of
Holding, cause ATC International (or another Affiliate of ATC) to
purchase additional shares of Holding Common Stock; provided, however,
that in no event shall ATC and its Affiliates be required or, without
the written consent of Gearon, permitted to invest more than an
aggregate of US$88,000,000 in Holding Common Stock. Payment for all
such shares shall be in the form of wire transfer of immediately
available funds.
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(b) Additional Gearon Investments. If Gearon has not, on or prior to
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the date hereof, invested an aggregate of US$8,400,000 in Holding, he
will, simultaneously with ATC making additional purchases of Holding
Common Stock, purchase additional shares of Holding Common Stock such
that Gearon shall on each such occasion purchase, at the same price
per share as ATC, eighty-four nine hundred sixty-fourth (84/964th) of
the number of shares being purchased by ATC; provided, however, that
in no event shall Gearon be required to invest more than an aggregate
of US$8,400,000 in Holding Common Stock or to make any other
investment in Holding. Payment for all such shares shall be in the
form of wire transfer of immediately available funds to the extent of
twenty percent (20%) of each purchase and the balance in the form of a
promissory note in the form attached hereto and made a part hereof as
Exhibit A (the "Gearon Note"); provided, however, that Gearon shall
(i) have the right, at his sole discretion, to make payment for all
such shares in the form of wire transfer of immediately available
funds, and (ii) not, except as hereinafter provided, be obligated to
invest more than US$1,680,000 in the form of cash. Anything in this
Section or elsewhere in this Agreement to the contrary
notwithstanding, Gearon shall be required to make payment in full in
the form of wire transfer of immediately available funds for all
shares of Holding Common Stock proposed to be sold or otherwise
Transferred (other than any pledge by it to Holding pursuant to the
Pledge Agreement) by him pursuant to any provision of this Agreement
prior to any such sale or Transfer.
(c) ATC Other Investments. ATC shall have the right, but not
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the obligation, to provide, or to cause ATC International (or another
Affiliate of ATC) to provide, additional funds as are required, from
time to time, to finance the business and operations of Holding. If ATC
elects, in its sole discretion, to provide (or cause to be provided)
such funds, they shall be invested in either 10% subordinated notes
(which shall be prepayable at any time by Holding and shall be
nonrecourse to Gearon and the other Stockholders) or nonconvertible
preferred stock (bearing dividends at 10% of its purchase price), at
ATC's option. The other terms and conditions of the subordinated notes
or preferred stock shall be commercially reasonable under the
circumstances at the time of issuance. Payment for all such investments
shall be in the form of wire transfer of immediately available funds.
(d) Third Party Investments/Equity Investments. ATC and Gearon
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will consider, from time to time, the possibility of issuing and/or
selling shares of Holding Common Stock or other forms of equity
participation to individuals involved solely in the business,
management and operation of Holding in Mexico (and not in the business,
management or operations of any Affiliate of Holding other than those
doing business solely in Mexico), it being the understanding of the
parties that any such participation would dilute, on a pro rata basis,
the interests of ATC and Gearon.
Section 4. Designation of Directors; Voting Agreement; Corporate
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Governance. Each of the parties covenants and agrees with the other parties as
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follows:
(a) The Board of Directors of Holding (the "Holding Board")
shall be composed at all times of three (3) persons. ATC International
shall be entitled to designate for nomination for election, and have
elected, to the Holding Board two persons who shall be the Chief
Executive Officer and the Chief Financial Officer of ATC, unless the
Board of Directors of ATC International shall otherwise determine.
Gearon shall be entitled to designate for nomination for election, and
have elected, to the Holding Board one person who shall be Gearon,
unless Gearon shall otherwise determine with the prior approval of ATC,
such approval not to be unreasonably withheld, delayed or conditioned.
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(b) Holding shall provide ATC International and Gearon with at
least twenty (20) days' prior notice in writing of any intended mailing
of notice to stockholders for a meeting at which directors are to be
elected. ATC and Gearon shall notify Holding in writing within ten (10)
days of actual receipt of such notice of the person designated by him
as nominee for election as a director. In the absence of any notice
from ATC International or Gearon, as the case may be, the director or
directors then serving and previously designated by him shall be deemed
to have been redesignated.
(c) Any director designated by ATC International or Gearon
shall be subject to removal for cause by the vote of (i) the directors
of Holding to the extent permitted by applicable Law or (ii) the
stockholders of Holding in accordance with applicable Law. ATC
International and Gearon shall also be entitled to require that any
member of the Holding Board so designated by it or him pursuant to this
Section be removed or replaced by it or him.
(d) In the event any designee for nomination of ATC
International or Gearon as director shall cease for any reason to serve
as a director, including without limitation removal pursuant to the
preceding paragraph or resignation, ATC International or Gearon, as the
case may be, shall have the right to designate a replacement to fill
such vacancy upon notice to Holding. Holding shall, unless Holding
Board shall have elected such designee to Holding Board, solicit
stockholder approval for the election of such nominee as a director in
accordance with the provisions of this Section.
(e) ATC International and Gearon covenant and agree that so
long as the other has the right to nominate a director to Holding Board
in accordance with the provisions of this Agreement, at any meeting of
the stockholders of Holding, however called, and at every adjournment
thereof, and in any action by written consent of the stockholders of
Holding, to vote all of the shares of capital stock of Holding entitled
to vote thereon then owned or controlled by such Person in favor of the
election of the nominee or nominees of the other pursuant to the
provisions of this Section.
(f) ATC International covenants and agrees that, until the
occurrence of a Forfeiture Event or the earlier termination by Gearon
of his employment with Holding, whether with or without Good Reason, it
will cause its nominees as directors to vote for the election of Gearon
as president of Holding. It is also the understanding of the parties,
that Gearon's compensation shall, taking into account the compensation
to be paid to him by Other Holding, ATC and its subsidiaries, be
determined annually by the Holding Board, all of which (other than
US$100,000 (subject to proportionate increased based on future
increases for other ATC senior management), which is to be paid by ATC)
shall be paid by Holding or Other Holding.
Section 5. Restrictions on Transfers of Holding Securities. Without the
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written consent of ATC, except in accordance with the provisions of Section 6 or
pursuant to a Permitted Transfer, neither Gearon nor any other Stockholder shall
Transfer all or any part of the Holding Securities at the time held by it to any
Person (a) prior to July 1, 2006 and (b) thereafter except in accordance with
the provisions of Section 7.
Section 6. Put and Call; Tagalong Right.
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(a) Gearon Put. Gearon may, at any time after the soonest to occur of
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(i) July 1, 2004, (ii) an ATC Change of Control, (iii) a Holding Change of
Control, or (iv) his death or Disability, require ATC to purchase at the
Put/Call Price for the Holding Securities of all but not less than all of the
Holding
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Securities then owned by him. Any such election (which may not, in any event, be
made prior to the date that is six (6) months and one (1) day after the date of
this Agreement) shall be made by written notice from Gearon to ATC (the "Put
Notice") of its election to that effect. Gearon shall send a copy of the Put
Notice to each of the other Stockholders. In such event, each of the other
Stockholders shall have the right, exercised by written notice to ATC delivered
within twenty (20) days of the mailing of the Put Notice to him, to require ATC
to purchase at the Put/Call Price for the Holding Securities to be sold by such
Stockholder (an "Electing Put Stockholder") all but not less than all of the
Holding Securities then owned by each Electing Put Stockholder. Gearon may give
the Put Notice at any time after December 31, 2003. For purposes of this Section
6(a), the Put/Call Price shall be determined as of the later of July 1, 2004 or
the date of the Put Notice; provided, however, with respect to each Electing Put
Stockholder who has not held the Holding Securities proposed to be sold by him
for a period of at least six (6) months and one (1) day as of the date of the
Put Notice, the Put/Call Price shall be determined as of the date such Holding
Securities were held by him for a period of at least six (6) months and one (1)
day.
The closing pursuant to this Section shall occur at 10:00 a.m., local
time, on the later of July 1,2004 or the sixtieth (60th) day (or, if such day is
not a Business Day, the next succeeding Business Day) following the date of
receipt by ATC of the Put Notice, at the principal executive offices of ATC, or
such other time, date and place as ATC and Gearon shall reasonably agree (notice
of which shall be given by ATC to each Electing Put Stockholder); provided,
however, notwithstanding the foregoing, if, on the proposed closing date, any
Electing Stockholder has not held the Holding Securities proposed to be sold by
him for a period of at least six (6) months and one (1) day, then the closing
with respect to those Holding Securities shall occur at 10:00 a.m., local time,
on the tenth (10th) day (or, if such day is not a Business Day, the next
succeeding Business Day) following the expiration of such six (6) months and one
(1) day. Each of the following (unless and except to the extent waived by ATC
and Gearon) shall be a condition of the obligation of ATC, Gearon and each
Electing Put Stockholder to proceed with any such purchase and sale: (i) ATC and
Gearon shall have obtained all lender and other third-party consents, if any,
required in connection with such purchase and sale, (ii) there shall be no suit,
action or proceeding pending on the date of closing before or by any court or
other governmental authority seeking to restrain or prohibit, or material
damages or other relief in connection with, the purchase and sale, and (iii)
ATC, Gearon and the Electing Put Stockholders shall have entered into a
securities purchase agreement in form, scope and substance customary in
comparable transactions and reasonably satisfactory to ATC and Gearon, including
representations and warranties, covenants, closing certificates and opinions,
and indemnities.
(b) ATC Call. ATC may, at any time after (i) July 1, 2005, require
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Gearon to sell at the Put/Call Price and each other Stockholder to sell at the
Put/Call Price for the Holding Securities to be sold by him all but not less
than all of the Holding Securities then owned by him, or (ii) the soonest to
occur of (x) the death or Disability of Gearon, (y) a Gearon Termination Event,
or (z) a Forfeiture Event require each member of the Gearon Group to sell at the
Put/Call Price all but not less than all of the Holding Securities then owned by
him. Any such election (which may not, in any event, be made prior to the date
that is six (6) months and one (1) day after the date of this Agreement) shall
be made by written notice from ATC to Gearon and, as applicable, each other
Stockholder (the "Call Notice") of his election to that effect. ATC may give the
Call Notice at any time after December 31, 2004. For purposes of this Section
6(b), the Put/Call Price shall be determined as of the later of July 1, 2005 or
the date of the Call Notice; provided, however, with respect to each other
Stockholder who has not held the Holding Securities proposed to be sold by him
for a period of at least six (6) months and one (1) day as of the date of the
Call Notice, the Put/Call Price shall be determined as of the date such Holding
Securities were held by him for a period of at least six (6) months and one (1)
day. The closing pursuant to this Section shall occur at 10:00 a.m., local time,
on the later of July 1, 2005 or the sixtieth (60th) day (or, if such day is not
a Business Day, the next succeeding Business Day) following the date of receipt
by Gearon and, as
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applicable, the other Stockholders of the Call Notice, at the principal
executive offices of ATC, or such other time, date and place as ATC and Gearon
shall reasonably agree (notice of which shall be given by ATC to each other
Stockholder); provided, however, notwithstanding the foregoing, if, on the
proposed closing date, any other Stockholder has not held the Holding Securities
proposed to be sold by him for a period of at least six (6) months and one (1)
day, then the closing with respect to those Holding Securities shall occur at
10:00 a.m., local time, on the tenth (10th) day (or, if such day is not a
Business Day, the next succeeding Business Day) following the expiration of such
six (6) months and one(1) day. Each of the following (unless and except to the
extent waived by ATC and Gearon) shall be a condition of the obligation of ATC,
Gearon and, as applicable, the other Stockholders to proceed with any such
purchase and sale: (i) ATC and Gearon shall have obtained all lender and other
third-party consents, if any, required in connection with such purchase and
sale, (ii) there shall be no suit, action or proceeding pending on the date of
closing before or by any court or other governmental authority seeking to
restrain or prohibit, or material damages or other relief in connection with,
the purchase and sale, and (iii) ATC, Gearon and, as applicable, the other
Stockholders shall have entered into a securities purchase agreement in form,
scope and substance customary in comparable transactions and reasonably
satisfactory to ATC and Gearon, including representations and warranties,
covenants, closing certificates and opinions, and indemnities.
(c) Closing. At the closing Gearon and, as applicable, the Electing Put
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Stockholders or the other Stockholders shall convey the Holding Securities to be
sold by it, properly endorsed for transfer, free of all Liens, and the
applicable Put/Call Price shall be paid by wire transfer of immediately
available funds or, at the election of ATC, shares of ATC Common Stock, or any
combination thereof. If the Gearon Note or any note from any Electing
Stockholder under Section 6(a) or any other Stockholder under Section 6(b) is
not paid in full at the closing in connection with the purchase of the Holding
Securities, ATC shall be entitled to apply the purchase price to the payment of
the unpaid principal amount thereof together with interest accrued and unpaid to
the closing. If any shares of ATC Common Stock are so delivered, they shall be
(i) valued at Fair Market Value as of the applicable closing date and (ii)
entitled to the benefit of the ATC Registration Rights Agreement. At the
election of ATC, the Holding Securities to be purchased may be acquired in the
name of one or more nominees, including without limitation Holding (whether or
not any such nominee is an Affiliate of ATC); provided, however, that any such
nominee is designated by written notice given at least five (5) days prior to
the date of closing.
(d) Gearon and Other Stockholder Tagalong Right. In addition to the
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rights of Gearon and the other Stockholders set forth in Section 6(a), if a
Holding Change of Control is likely to occur, ATC shall give prompt written
notice (the "Holding Change of Control Notice") of the likelihood of such
occurrence to Gearon and the other Stockholders, which notice shall describe, in
reasonable detail, the material terms and conditions of such transaction (the
"Holding Change of Control Transaction"). As a condition to the consummation of
any Transfer by ATC in connection with a Holding Change of Control Transaction,
Gearon and each other Stockholder shall have the right, exercised by written
notice to ATC within ten (10) business days of its receipt of the Holding Change
of Control Notice, to participate in the Holding Change of Control Transaction
on the same terms and conditions as ATC (i.e., to sell or otherwise transfer the
same relative proportion of its holdings as is ATC for the same type and per
share amount of consideration). If Gearon or any other Stockholder elects to
participate in a Holding Change of Control Transaction, it shall be required to
execute and deliver all of the documents executed and delivered by ATC and to be
bound by all of the same terms and conditions. Without limiting the generality
of the foregoing, if the Gearon Note or any note from any other Stockholder
electing to participate in a Holding Change of Control Transaction is not paid
in full at the closing in connection with a Holding Change of Control
Transaction, the purchaser shall be entitled to apply the purchase price to the
payment of the unpaid principal amount thereof together with interest accrued
and unpaid to the closing. The failure of Gearon or any other Stockholder to
give timely notice of its election to participate in a Holding Change of
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Control Transaction in accordance with this Section 6(d) shall be deemed to be
an irrevocable election by it not to so participate.
Section 7. Right of First Refusal on Holding Securities. If at any time
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on or after July 1, 2006 (prior to which time any such Transfer is prohibited
pursuant to the provisions of Section 5), Gearon or any other Stockholder (an
"Electing Offering Stockholder") desires to Transfer any Holding Securities to
any Third Party (the "Proposed Transfer"), it shall, prior to committing to the
Proposed Transfer to any such Third Party, offer to sell such Holding Securities
in accordance with the procedures, and upon the terms, set forth below.
(a) Gearon or the Electing Offering Stockholder shall send a
written notice (a "Transfer Notice") to Gearon (in the case of an
Electing Offering Stockholder), Holding and ATC, which Transfer Notice
shall state that Gearon or the Electing Offering Stockholder intends to
effect a Proposed Transfer and shall specify the number and class or
type of Holding Securities (the "Offered Securities") subject to the
Proposed Transfer, the name and address of the Third Party or Third
Parties to whom such Transfer is proposed to be made (or if no
particular Third Party is identified, then the general class of Persons
to whom the Transfer is proposed to be made), a price per share which
shall be the minimum price at which Gearon or the Electing Offering
Stockholder proposes to effect the Proposed Transfer (the "Minimum
Price") and the other material terms and conditions (including, without
limitation, representations and warranties to be made and any
indemnification to be provided) on which Gearon or the Electing
Offering Stockholder proposes to Transfer the Offered Securities. The
Transfer Notice shall contain an affirmation by Gearon or the Electing
Offering Stockholder that it has a reasonable expectation of being able
to effect a Transfer of the Offered Securities at the Minimum Price and
on such other terms and conditions to such Third Party or Third Parties
(or class of Persons), and shall recite the basis for such expectation.
The Transfer Notice shall constitute an offer (the "First Refusal
Offer") to Transfer the Offered Securities to Gearon (in the case of a
proposed Transfer by an Electing Offering Stockholder), Holding (in the
case of a proposed Transfer by Gearon and, to such extent, if any, that
the First Refusal Offer is not accepted by Gearon, by an Electing
Offering Stockholder), and, to such extent, if any, that the First
Refusal Offer is not accepted by Holding, to Transfer the Offered
Securities to ATC, in each case in accordance with this Section, for a
cash price equal to one hundred percent (100%) of the Minimum Price and
on other terms and conditions, if any, no less favorable to Gearon (in
the case of a proposed Transfer by an Electing Offering Stockholder),
Holding and ATC than those proposed to be offered to such Third Party
or Third Parties (or class of Persons). If any portion of the
consideration to be paid to Gearon or an Electing Offering Stockholder
in the Proposed Transfer shall consist of assets other than cash, in
determining the price the Offered Securities are to be offered to
Gearon (in the case of a proposed Transfer by an Electing Offering
Stockholder), Holding and ATC, the fair cash value of such assets shall
be considered.
(b) Subject to Section 7(f), in the case of a proposed
Transfer by an Electing Offering Stockholder, the right of first
refusal may be exercised by Gearon by delivery of a written notice to
such Electing Offering Stockholder, Holding and to ATC within twenty
(20) days after receipt by Gearon of the Transfer Notice (the "Gearon
Notice Period"), which notice shall state the number of Offered
Securities Gearon intends to purchase pursuant to this paragraph (b).
If Gearon fails to respond to an Electing Offering Stockholder within
the Gearon Notice Period, the failure shall be deemed a rejection by
Gearon of the First Refusal Offer.
(c) Subject to Section 7(f), the right of first refusal may be
exercised by Holding by delivery of a written notice to Gearon or an
Electing Offering Stockholder and to ATC within
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twenty (20) days after receipt by Holding of the Transfer Notice (the
"Holding Notice Period"), which notice shall state the number of
Offered Securities Holding intends to purchase pursuant to this
paragraph (c). If Holding fails to respond to Gearon or an Electing
Offering Stockholder within the Holding Notice Period, the failure
shall be deemed a rejection by Holding of the First Refusal Offer.
(d) Subject to Section 7(f), to the extent Holding rejects the
First Refusal Offer or exercises the right of first refusal with
respect to fewer than all of the Offered Securities, ATC may exercise
the First Refusal Offer, by delivery of a written notice to Gearon or
an Electing Offering Stockholder within the Holding Notice Period with
respect to the balance or all of the Offered Securities, as applicable.
If ATC fails to respond to Gearon or an Electing Offering Stockholder
within the Holding Notice Period, the failure shall be deemed a
rejection of the First Refusal Offer.
(e) If the First Refusal Offer is accepted in its entirety by
Gearon, Holding and/or ATC, the purchase of the Offered Securities by
Gearon, Holding and/or ATC pursuant to this Section shall take place at
10:00 a.m., local time, at the principal executive offices of ATC, on
such date within thirty (30) days after the expiration of the Holding
Notice Period as Gearon, Holding and/or ATC shall notify Gearon or an
Electing Offering Stockholder of in writing at least five (5) days
prior to such closing, on the terms and conditions of the Proposed
Transfer, and Gearon, Holding and/or ATC and Gearon or an Electing
Offering Stockholder shall enter into a securities purchase agreement
containing the Minimum Price and the other terms and conditions set
forth in the Proposed Transfer. The Minimum Price for the Offered
Securities purchased by Gearon, Holding and ATC shall be paid by wire
transfer to Gearon or an Electing Offering Stockholder against receipt
of a certificate or certificates representing all Offered Securities so
purchased, properly endorsed for transfer, free and clear of all Liens.
If the Gearon Note or any note from any Electing Offering Stockholder
is not paid in full at the closing, Holding and/or ATC shall be
entitled to apply the purchase price to the payment of a principal
amount of the Gearon Note or any such other note, as applicable, in an
amount determined by (i) multiplying the Minimum Price by (ii) a
fraction (x) the numerator of which is the number of Offered Securities
and (y) the denominator of which is the number of Holding Securities
owned by Gearon or the Electing Offering Stockholder, as applicable,
immediately prior to such Transfer, and Gearon or the Electing Offering
Stockholder, as applicable, shall pay all accrued and unpaid interest
on such principal amount to the closing. At the election of ATC, the
Holding Securities, if any, to be purchased by it may be acquired in
the name of one or more nominees (whether or not any such nominee is an
Affiliate of ATC); provided, however, that any such nominee is
designated by written notice given at least five (5) days prior to the
date of closing.
(f) Any purchase of the Offered Securities by Gearon, Holding
and/or ATC pursuant to this Section shall be conditioned (by Gearon or
an Electing Offering Stockholder) upon Gearon, Holding and/or ATC
exercising in the aggregate the right of first refusal with respect to
all of the Offered Securities.
(g) Notwithstanding anything to the contrary contained herein,
if Gearon, Holding and/or ATC have not exercised the right of first
refusal with respect to all of the Offered Securities pursuant to this
Section, then Gearon or an Electing Offering Stockholder may, subject
to the provisions of Section 5, Transfer to the Third Party or Third
Parties specified in the Notice (or to a member of the class of Persons
described in the Notice) (the "Third Party Transferee") on the terms
and conditions of the Proposed Transfer all but not less than all of
the Offered Securities; provided, however, that such sale is
consummated within ninety (90) days from the expiration of
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the Holding Notice Period; and provided further, however, that such
Third Party Transferee shall agree, in writing, in advance with Gearon,
Holding and ATC to be bound by and to comply with all applicable
provisions of this Agreement to the same extent as if such Third Party
Transferee were Gearon or an Electing Offering Stockholder, as
applicable. If such sale is not consummated within such ninety (90)-day
period, the restrictions provided for in this Section shall again
become effective, and no Transfer of such Offered Securities may be
made thereafter without again offering the same to Gearon, Holding and
ATC in accordance with the terms and conditions of this Agreement. Any
reduction in the Minimum Price or any material change in any of the
other material terms and conditions of the Proposed Transfer favorable
to the Third Party Transferee shall constitute a new Proposed Transfer
and shall require Gearon or an Electing Offering Stockholder to comply
with all of the provisions of this Section. It shall be a condition to
the consummation of any Transfer of Offered Securities by Gearon to any
Third Party Transferee pursuant to the provisions of this Section that
Gearon shall have repaid a principal amount of the Gearon Note in an
amount determined by (i) multiplying the cash proceeds (or the fair
cash value of any non-cash proceeds) by (ii) a fraction (x) the
numerator of which is the number of Offered Securities and (y) the
denominator of which is the number of Holding Securities owned by
Gearon immediately prior to such Transfer, together with all accrued
and unpaid interest on such principal amount to the closing.
(h) The provisions of this Section shall not apply to any
Transfer by Gearon or an Electing Offering Stockholder pursuant to
Section 6.
Section 8. Holding Stock Option Plan. Holding and ATC, jointly and
-------------------------
severally, covenant and agree that Holding will, as soon as reasonably
practicable, adopt the Plan which will contain terms and conditions comparable
to those of the 1997 Stock Option Plan, as amended, of ATC, except as follows:
(a) Number of Shares. The Plan will cover a number of shares
----------------
of Holding Common Stock equal to three and six-tenths percent (3.6%) of
the number of shares of Holding Common Stock to be outstanding on a pro
forma basis assuming all shares covered by the Plan were issued and
outstanding.
(b) Prospective Optionees. Options will be granted from time
---------------------
to time to such individuals as may, from time to time, be an officer,
employee or independent consultant or adviser to Holding and are
approved by the Holding Board. ATC hereby approves the individuals
listed in Schedule A attached hereto and made a part hereof as eligible
to acquire Options.
(c) Certain Option Terms. Options will not, except as
--------------------
hereinafter provided, vest prior to July 1, 2006, at which time they
will vest in their entirety, will be subject to earlier vesting under
certain circumstances, including the exercise by Gearon of the put
pursuant to the provisions of Section 6(a) or the exercise by ATC of
the call pursuant to the provisions of Section 6(b)(i), and will be
cancelled in its entirety upon the termination of the optionee for
cause or his terminating his employment other than for good reason.
(d) Noncompetition Agreements. It will be a condition of any
-------------------------
grant of Options under the Plan that the optionee execute and deliver
to Holding, a noncompetition agreement substantially in the form of the
Gearon Noncompetition Agreement, modified, to the extent deemed
reasonably necessary by Holding, to ensure compliance with Mexican law.
Section 9. Miscellaneous Provisions.
-------------------------
-9-
(a) Termination. This Agreement shall continue until, and shall
------------
terminate immediately upon, (a) execution of a written agreement of termination
by (i) ATC and (ii) Gearon, so long as he or any member of the Gearon Group owns
any Holding Common Stock, or, at such time as no member of the Gearon Group owns
any Holding Common Stock, a majority in interest of the other Stockholders (on a
fully diluted basis) or (b) ATC (and/or its Affiliates) owning all of the
outstanding shares of Holding Common Stock.
(b) Expenses. Whether or not the transactions contemplated hereby shall
--------
be consummated, each party will pay all of its respective expenses in connection
with such transactions and in connection with any amendments or waivers (whether
or not the same become effective) under or in respect of this Agreement.
(c) Assignment; Successors and Assigns. This Agreement shall not be
----------
assignable by any party and any such assignment shall be null and void, except
that it shall inure to the benefit of and be binding upon any successor to any
party by operation of Law, including by way of merger, consolidation or sale of
all or substantially all of its assets, and any of the parties may assign its
rights and remedies hereunder to any bank or other financial institution that
has loaned funds or otherwise extended credit to it or any of its Affiliates.
This Agreement shall be binding upon and inure solely to the benefit of the
parties and their permitted successors and assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any person
any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, except as otherwise provided in this Section.
(d) Notices and Communications. All notices and other communications
--------------------------
which by any provision of this Agreement are required or permitted to be given
shall be given in writing and shall be effective (i) five (5) days after being
mailed by first-class, express mail, postage prepaid, (ii) the next day when
sent by overnight by a nationally recognized overnight mail courier service,
(iii) upon confirmation when sent by telegram, telecopy or other similar form of
rapid transmission, confirmed by mailing (by first class or express mail,
postage prepaid, or nationally recognized overnight mail courier service)
written confirmation at substantially the same time as such rapid transmission,
or (iv) upon delivery personally delivered to the receiving party (if an
individual) or an officer or other responsible individual of the receiving
party. All such communications shall be mailed, set or delivered as set forth
below or at such other addresses as the party entitled thereto shall have
designated by notice as herein provided.
(i) if to Holding or ATC, at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 Attention: Chief Executive Officer and Chief
Financial Officer, Telecopier No.: (000) 000-0000 with a copy (which
shall not constitute notice to ATC or Holding) to Xxxxxxxx & Worcester
LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxx, Esq., Telecopier No.: (000) 000-0000);
(ii) if to Gearon, at 0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000, Telecopier No: (000) 000-0000 with a copy
(which shall not constitute notice to Gearon) to King & Spalding, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X
Xxxxxx, Esq., Telecopier No.: (000) 000-0000); and
(iii) if to any other Stockholder, at his address as it
appears on the stock register of Holding.
(e) Amendments and Waivers. Changes in or additions to this Agreement
----------------------
may be made, or compliance with any term, covenant, agreement, condition or
provision set forth herein may be omitted or waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
-10-
with, the consent in writing of the parties hereto. No delay on the part of any
party at any time or times in the exercise of any right or remedy shall operate
as a waiver thereof. Any consent may be given subject to satisfaction of
conditions stated therein. The failure to insist upon the strict provisions of
any covenant, term, condition or other provision of this Agreement or to
exercise any right or remedy thereunder shall not constitute a waiver of any
such covenant, term, condition or other provision thereof or default in
connection therewith. The waiver of any covenant, term, condition or other
provision thereof or default thereunder shall not affect or alter this Agreement
in any other respect, and each and every covenant, term, condition or other
provision of this Agreement shall, in such event, continue in full force and
effect, except as so waived, and shall be operative with respect to any other
then existing or subsequent default in connection therewith.
(f) Governing Law. The validity, interpretation, construction and
-------------
performance of this Agreement shall be governed by, and construed in accordance
with, the applicable Laws of the United States of America and the Laws of the
State of Delaware applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction.
(g) Entire Agreement. This Agreement (including the Exhibits)
----------------
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements, arrangements,
covenants, promises, conditions, understandings, inducements, representations
and negotiations, expressed or implied, oral or written, between them as to such
subject matter.
(h) Specific Performance; Other Rights and Remedies. Each party
-----------------------------------------------
recognizes and agrees that in the event any other party should refuse to perform
any of its obligations under this Agreement, the remedy at law would be
inadequate and agrees that for breach of such provisions, each party shall be
entitled to injunctive relief and to enforce its rights by an action for
specific performance to the extent permitted by Applicable Law. Each party
hereby waives any requirement for security or the posting of any bond or other
surety in connection with any temporary or permanent award of injunctive,
mandatory or other equitable relief. Nothing herein contained shall be construed
as prohibiting each party from pursuing any other remedies available to it
pursuant to the provisions of, and subject to the limitations contained in, this
Agreement for such breach or threatened breach.
(i) Saturdays, Sundays, Holidays, etc. If the last or appointed day for
---------------------------------
taking of any action required or permitted hereby shall be day other than a
Business Day, then such action may be taken on the next succeeding Business Day.
(j) Headings; Counterparts. The headings contained in this Agreement
----------------------
are for reference purposes only and shall not limit or otherwise affect the
meaning of any provision of this Agreement. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument, binding upon all of the parties
hereto. In pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
(k) Severability. If any provision of this Agreement shall be held or
------------
deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the conflict
of any provision with any constitution or statute or rule of public policy or
for any other reason, such circumstance shall not have the effect of rendering
the provision or provisions in question invalid, inoperative, illegal or
unenforceable in any other jurisdiction or in any other case or circumstance or
of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that
-11-
such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative, illegal or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case.
Notwithstanding the foregoing, in the event of any such determination the effect
of which is to affect materially and adversely any party, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the transactions
contemplated by this Agreement are fulfilled and consummated to the maximum
extent possible.
(l) Further Acts. Each party agrees that at any time, and from time to
------------
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such other
agreements, instruments and documents and other assurances, as any other party
or its counsel reasonably deems necessary or desirable in order to carry out the
terms and conditions of this Agreement and the transactions contemplated hereby
or to facilitate the enjoyment of any of the rights created hereby or to be
created hereunder. Without limiting the generality of the foregoing, ATC agrees
to use its reasonable business efforts to secure all consents and approvals
required from its lenders or others holding its debt instruments to the extent
necessary to enable it to perform its obligations under this Agreement,
including without limitation any purchase of the Holding Securities from Gearon
or any other Stockholder.
(l) Legend on Certificate. Each party acknowledges that no Transfer of
---------------------
any of the shares of Holding Common Stock held by it may be made except in
compliance with applicable federal and state securities laws. All the
certificates or other instruments representing any of such shares that are now
or hereafter held by such party shall be subject to the terms of this Agreement
and shall have endorsed in writing, stamped or printed, thereon the following
legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THOSE LAWS. THE SECURITIES ARE ALSO SUBJECT TO
CERTAIN RIGHTS AND RESTRICTIONS, INCLUDING BUT NOT LIMITED TO
RESTRICTIONS ON TRANSFER, SET FORTH IN AN AGREEMENT AMONG THE
HOLDER, THE CORPORATION AND CERTAIN STOCKHOLDERS OF THE
CORPORATION, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS
ON FILE WITH AND AVAILABLE FROM THE SECRETARY OF THE
CORPORATION UPON WRITTEN REQUEST."
(m) Effectiveness of Transfers. Any Holding Securities transferred by
--------------------------
any party to this Agreement shall be held by the transferee thereof pursuant to
this Agreement. Such transferee shall, except as otherwise expressly stated
herein, have all the rights and be subject to all of the obligations of its
transferor (including in the case of a Gearon Holder all of those of Gearon)
under this Agreement automatically and without requiring any further act by such
transferee or by any parties to this Agreement. Without affecting the preceding
sentence, if such transferee is not a party to this Agreement on the date of
such Transfer, then such transferee, as a condition to such Transfer, shall
confirm such transferee's obligations hereunder in accordance with Section 9(n).
No Transfer of Holding Securities shall be recorded on Holding's books and
records, and no such Transfer shall be otherwise effective, unless such Transfer
is made in accordance with the terms and conditions of this Agreement, and
Holding is hereby authorized by all of the parties to enter appropriate stop
transfer notations on its transfer records
-12-
to give effect to this Agreement. No actual or purported Transfer of any Holding
Securities (or any portion thereof), nor any right thereto, whether voluntary or
involuntary, direct or indirect, which is in violation of any provision of this
Agreement shall be valid or effective to grant any Person any right, title or
interest in or to such Holding Securities (or portion thereof) or any rights as
a stockholder of Holding. Anything in this Section or elsewhere in this
Agreement to the contrary notwithstanding, (i) no ATC Holder other than ATC
shall have any obligation under Section 3 or 6, it being the intent of the
parties that any such ATC Holder shall be obligated only under Sections 4 and 9,
but any such ATC Holder may, except as it may have otherwise agreed in writing
with ATC (or any other ATC Holder), exercise the rights of ATC (or any such ATC
Holder) set forth in this Agreement, and (ii) ATC shall remain obligated, to the
greatest extent applicable, under all Sections of this Agreement notwithstanding
any Transfer of all or any part of the Holding Securities owned by it or any of
its Affiliates.
(n) Additional Stockholders. Any Person acquiring any shares of Holding
-----------------------
capital stock shall on or before the Transfer or issuance to it of such shares,
sign a counterpart signature page hereto in form reasonably satisfactory to
Holding, Gearon and ATC and shall thereby become a party to this Agreement.
Holding shall require each Person acquiring any shares of capital stock of
Holding or an option, warrant or other right to purchase shares of capital stock
of Holding under any option or other equity participation plan to execute a
counterpart signature page hereto.
(o) Power of Attorney. Gearon and each other Stockholder hereby
-----------------
appoints ATC as its agent and attorney-in-fact, which appointment is coupled
with an interest, and is irrevocable, for purposes of executing and delivering
all such agreements, instruments and documents necessary or desirable in order
to effectuate the provisions of this Agreement, including without limitation the
right and power to transfer the Holding Securities of Gearon and such other
Stockholder to ATC in accordance with the provisions of Sections 6 and 7.
Notwithstanding the foregoing, if Gearon or any other Stockholder shall have
given a good faith written notice to ATC specifying in reasonable detail that a
bona fide dispute exists between the parties relating to the potential exercise
of such power of attorney, ATC shall not be entitled to exercise it until
further written notice from Gearon or such other Stockholder or a final,
nonappealable judicial order or decision.
(p) Mutual Drafting. This Agreement is the result of the joint efforts
---------------
of the parties, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the parties and there shall be no
construction against any party based on any presumption of that party's
involvement in the drafting thereof. Each of the parties is a sophisticated
legal entity or individual that was advised by experienced counsel and, to the
extent it deemed necessary, other advisors in connection with this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement, as
of the date and year first above written.
ATC Mexico Holding Corp.
By: /s/ Xxxxxx X. Xxxx
---------------------------------
-13-
Name:
Title: Chief Financial Officer
American Tower Corporation
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and CEO
American Tower International, Inc.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and CEO
/s/ J. Xxxxxxx Xxxxxx, Xx.
------------------------------------
J. Xxxxxxx Xxxxxx, Xx.
-14-
APPENDIX A
"Adjusted EBITDA" shall mean the excess of (a) the sum of (i) earnings
before taxes, interest, and depreciation and amortization of Holding and (ii)
interest income from the loan to TV Azteca S.A. de C.V. (or from comparable
transactions) over (b) a reasonable allocation of administrative overhead of ATC
and its subsidiaries, to the extent (i) ATC actually provides administrative
services to Holding and (ii) expenses related to such services are not already
deducted from earnings. Adjusted EBITDA shall, unless ATC and Gearon agree on
the amount, be determined by the independent accountants of Holding, whose
determination shall, unless objected to in writing by Gearon within ten (10)
Business Days of the delivery of such determination, be binding and conclusive
on all of the Parties. If Gearon shall so timely object, it shall have the right
to submit the matter to an independent accounting firm reasonably acceptable to
ATC and Gearon whose determination shall be binding and conclusive on all of the
Parties and whose expenses shall be paid by Gearon unless its determination of
Adjusted EBITDA is more than five percent (5%) greater than that determined by
Holding's independent accountants in which event they shall be paid by ATC.
"Affiliate", when used with respect to any Person, shall mean (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, (b) any other Person
of which such Person at the time owns, or has the right to acquire, directly or
indirectly, five percent (5%) or more on a consolidated basis of the equity or
beneficial interests, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, five percent (5%) or more of any class
of the capital stock or beneficial interests of such Person, (d) any executive
officer or director of such Person, and (e) when used with respect to an
individual, shall include a spouse, any ancestor or descendant, or any other
relative (by blood, adoption or marriage), within the third degree of such
individual. A Person shall be deemed to be "controlled by" any other Person if
such other Person possesses, directly or indirectly, power to direct or cause
the direction of the management or policies of such Person or the disposition of
its assets or properties, whether by stock, equity or other ownership, by
contract, arrangement or understanding, or otherwise.
"ATC" shall have the meaning given to it in the preamble.
"ATC Change of Control" shall mean (a) the acquisition, directly or
indirectly, by any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act), other than any Person who is, as of the date hereof, an
executive officer, director or the holder of five percent (5%) or more of the
aggregate voting power of all classes of common stock of ATC, or any Affiliate
of any such officer, director or holder, or any group of which any such officer,
director, holder or Affiliate is a member, of more than fifty percent (50%), of
the aggregate voting power of all classes of common stock of ATC, (b) Xxxxxx X.
Xxxxx ceasing to act as either the Chairman of the Board of Directors or Chief
Executive Officer of ATC, or (c) Gearon being required to report to any Person
other than Xxxxxx X. Xxxxx, the Holding Board and the ATC Board of Directors.
"ATC Common Stock" shall mean the Class A Common Stock, par value $.01
per share, of ATC or any publicly traded class of common stock into which such
stock shall have been converted or exchanged pursuant to any recapitalization,
reorganization, merger, consolidation or similar event.
"ATC Holder(s)" shall mean ATC, ATC International, any Affiliate of ATC
or ATC International to whom any Holding Securities may from time to time be
transferred and any other Person
-15-
deriving its interest, directly or indirectly, in any Holding Securities from
any of the foregoing, other than any Gearon Holder or other Stockholder.
"ATC International" shall have the meaning given to it in the preamble.
"ATC Registration Rights Agreement" shall mean the Amended and Restated
Registration Rights Agreement dated February 25, 1999, as heretofore and
hereafter amended.
"Authority" shall mean any governmental or quasi-governmental
authority, whether administrative, executive, judicial, legislative or other, or
any combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
or comparable agency or Entity, commission, corporation, court, department,
instrumentality, mediator, panel, system or other political unit or subdivision
or other Entity of any of the foregoing, whether domestic or foreign.
"Business Day" shall mean any day, other than a Saturday, Sunday or
legal holiday, on which banks in Atlanta, Georgia and Boston, Massachusetts are
permitted to be open for business.
"Call Notice" shall have the meaning given to it in Section 6(b).
"Core Business" shall mean the ownership, operation, construction,
leasing and management of telecommunications towers and related businesses such
as site acquisition and zoning activities, but shall exclude, without
limitation, (a) marketing and sale of equipment and components, (b) providing
integrated satellite and fiber network access services (i.e., teleports), and
(c) engineering services, such as wireless broadband and wireless network design
and implementation; radio frequency network design; drive testing; performance
engineering; technical planning for spectrum license holders; upgrading networks
to 3G; transport engineering; and interconnection and microwave services.
"Disability" shall mean a condition (mental or physical or both) which,
in the good faith judgment of the Holding Board, renders Gearon, in his capacity
as an executive officer of Holding, and by reason of incapacity (mental or
physical or both) unable to perform properly his duties as such executive
officer for a period of not less than six (6) months during any twenty-four (24)
month period.
"Electing Offering Stockholder" shall have the meaning given to it in
Section 6(a).
"Electing Put Stockholder" shall have the meaning given to it in
Section 6(a).
"Entity" shall mean any corporation, partnership, limited liability
company, trust, unincorporated association, government or any agency or
political subdivision thereof.
"Fair Market Value" shall mean, with respect to the ATC Common Stock,
(a) the average of the high and low reported sales prices, regular way, or, in
the event that no sale takes place on any day, the average of the reported high
and low bid and asked prices, regular way, in either case as reported on the
principal stock exchange on which such stock is listed, or, if not so listed, on
the Nasdaq National Market System; or (b) if such stock is not so listed, (i)
the average of the high and low bid and high and low asked prices on each such
day in the over-the-counter market as reported by Nasdaq, or (ii) if bid and
asked prices for such security on any day shall not have been reported through
Nasdaq, the average of the bid and asked prices for such day as furnished by any
New York Stock Exchange member firm regularly making a market in such security
selected for such purpose by ATC; in each case for the twenty (20)
-16-
trading days ending five business days prior to the date as of which such Fair
Market Value is being determined.
"First Refusal Offer" shall have the meaning given to it in Section
7(a).
"Forfeiture Event" shall mean any of the following acts (other than as
a result of the death or Disability of Gearon) committed by Gearon:
(a) any willful or gross failure or refusal to perform, or any
willful or gross misconduct in the performance of, any significant
portion of his obligations, duties and responsibilities as an executive
officer of Holding, the effect of which has been or reasonably could be
expected to materially and adversely affect the business of ATC or any
of its Affiliates, as determined in good faith by the ATC Board of
Directors, and that (i) is incapable of cure, or (ii) has not been
cured or remedied as promptly as is reasonably possible (and in any
event within thirty (30) days) after written notice from the Holding
Board to Gearon specifying in reasonable detail the nature of such
failure, refusal or misconduct, or
(b) material breach of the provisions of Section 2, 3 or 4 of
the Gearon Noncompetition Agreement which (i) is incapable of cure, or
(ii) has not been cured or remedied promptly (and in any event within
thirty (30) days) after written notice from the Holding Board to Gearon
specifying in reasonable detail the nature of such breach, or
(c) Gearon is convicted of, pleads guilty or nolo contendero
to any act of fraud, embezzlement or misappropriation or other crime
involving moral turpitude in connection with his employment by Holding
or any of its Affiliates intended by Gearon to result in substantial
personal enrichment and which adversely affects the business of ATC or
any of its Affiliates, all as determined in good faith by the ATC Board
of Directors.
"Gearon" shall have the meaning given to it in the preamble and shall,
to the extent applicable, include his heirs, legal representatives and trustees.
"Gearon Holder(s)" shall mean any member of the Gearon Group, any
Affiliate of any of the foregoing or any other Person deriving its interest,
directly or indirectly, from any member of the Gearon Group or any Affiliate of
any of the foregoing, other than any ATC Holder.
"Gearon Group" shall mean (a) Gearon, (b) any spouse, ancestor or
descendant, or other relative (by blood, adoption or marriage, past or present),
within the third degree of Gearon, (c) any Affiliate of any of the individuals
included within clause (a) or (b), and (d) any trust for the benefit of any of
the Persons included within clause (a), (b) or (c).
"Gearon Notice Period" shall have the meaning given to it in Section
7(b).
"Gearon Noncompetiton Agreement" shall mean the agreement, of even
date, by and among, Holding, Other Holding, ATC and Gearon.
"Gearon Note" shall have the meaning given to it in Section 3(b).
"Gearon Termination Event" shall mean the termination by (a) Gearon of
his employment with Holding other than a termination for Good Reason following
an ATC Change of Control or a Holding Change of Control, or (b) Holding of
Gearon's employment as a result of (i) a Forfeiture Event or (ii) a
-17-
material breach by Gearon of any material provision of this Agreement, or any of
the Related Documents which (x) is incapable of cure, or (y) has not been cured
or remedied promptly (and in any event within thirty (30) days) after written
notice from the Holding Board to Gearon, specifying in reasonable detail the
nature of such breach.
"Good Reason" shall mean:
(a) the assignment to Gearon of any duties inconsistent in any
material respect with his position, authority, duties or
responsibilities as contemplated in Section 4(f) or any other action by
Holding, Other Holding or their Affiliates that results in a
diminution, in any material respect, in such position, authority,
duties or responsibilities; or
(b) an ATC Change of Control or a Holding Change of Control;
or
(c) a material reduction in Gearon's compensation or other
benefits (taking into account the compensation and other benefits from
all Affiliates of Holding from whom he may, from time to time, receive
compensation), the result of which is to place Gearon in a materially
less favorable position as to such compensation and benefits compared
to other employees of Holding and its Affiliates of similar stature and
position; or
(d) any other failure by Holding or ATC to comply in any
material respect with any material provision of this Agreement or by
Other Holding or ATC to comply in any material respect with any
material provision of the Other Agreement; or
(e) the failure of Gearon to be nominated as a director of
ATC;
that (i) is incapable of cure, or (ii) has not been cured or remedied promptly
(and in any event within thirty (30) days) after written notice to the Holding
Board and ATC from Gearon specifying in reasonable detail the nature of such
assignment, action, reduction or failure.
"Holding" shall have the meaning given to it in the preamble
"Holding Board" shall have the meaning given to it in Section 4(a).
"Holding Change of Control" shall mean the acquisition, directly or
indirectly, by any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act), other than ATC or any of its subsidiaries or any Person who
is, as of the date hereof, an executive officer, director or the holder of five
percent (5%) or more of the ATC Common Stock, or any Affiliate of any such
officer, director or holder, or any group of which any such officer, director,
holder or Affiliate is a member, of more than fifty percent (50%), of the voting
power of all classes of common stock of Holding.
"Holding Change of Control Notice" shall have the meaning given to it
in Section 6(d).
"Holding Change of Control Transaction" shall have the meaning given to
it in Section 6(d).
"Holding Common Stock" shall mean all shares of Common Stock, par
value $.01 per share, of Holding.
"Holding Notice Period" shall have the meaning given to it in Section
7(c).
-18-
"Holding Securities" shall mean all shares of Holding Common Stock
from time to owned by Gearon or any other Person other than the ATC Holders.
"Holding Value" shall mean the fair market value of the Holding Common
Stock, determined in accordance with this definition. The parties agree that the
fair market value of the Holding Common Stock shall mean the price at which a
willing seller would sell and a willing buyer would buy a comparable business as
an ongoing business in an arm's length transaction (as a sale of the stock or,
if applicable, other equity interests), determined as if Holding were a public
company and the Holding Common Stock were publicly traded on a securities
exchange in the United States of America and widely held at the time of such
determination and without consideration of any restrictions or encumbrances or
contractual rights relating to the equity securities thereof, and assuming all
of the outstanding stock or, if applicable, other equity interests are to be
sold in a single transaction. The Board of Directors of ATC has determined, and
Gearon agrees, that the fair market value of the Holding Common Stock would be
an amount equal to the excess, if any, of (a) fifteen (15) times the Adjusted
EBITDA of Holding for the four fiscal quarters ended prior to the date of
determination over (b) the sum of (i) the aggregate principal amount and accrued
and unpaid interest on all Indebtedness for Money Borrowed of Holding, and (ii)
the aggregate liquidation preference and accrued and unpaid dividends on all
preferred stock of Holding, in each case as of the last day of such four fiscal
quarters. The parties agree that the Board of Directors of ATC shall, from time
to time, determine whether the foregoing valuation methodology is an appropriate
one for determining Holding Value. If the ATC Board of Directors determines,
after consultation with Gearon, that such valuation methodology no longer
reflects the fair market value of the Holding Common Stock, it shall (a)
determine such fair market value, (b) establish new valuation methodology, or
(c) establish other means for determining it, including without limitation by
the appointment of an investment banking firm knowledgeable in the business in
which Holding is engaged and reasonably acceptable to Gearon or, in the event
they are unable to agree upon a single investment banking firm, each shall
appoint one such firm and the two firms thus appointed shall select a third firm
whose determination of such fair market value shall be binding and conclusive on
the parties. Any such investment banking firm shall determine such fair market
value based on the then existing facts and circumstances, including the existing
business plan and projections of Holding. Holding shall pay all costs and
expenses of any investment banking firm appointed pursuant to these provisions.
ATC shall promptly advise Gearon of its determination. If the ATC Board of
Directors makes a determination or establishes a new valuation methodology and
such determination or valuation methodology results in a lower Holding Value
than the valuation methodology set forth in this definition, Gearon shall have
the right to have an independent investment banking firm appointed in accordance
with the foregoing provisions of this definition. Anything in this definition to
the contrary notwithstanding, for purposes of determining the fair market value
of the Holding Common Stock, it shall be assumed that, and the valuation shall
be based on the assumption that, the only business conducted by Holding was the
Core Business. Without limiting the generality of the foregoing, there shall be
excluded from the revenues and expenses of Holding for purposes of determining
Holding Value all revenues and expenses (including without limitation any
increased administrative costs, incremental taxes, and exchange rate
fluctuations) attributable to any business that is not a Core Business and, to
the extent that any item of revenue or expense is not specifically related to a
Core or non-Core Business (e.g., revenue and expenses attributable to a
"bundled" agreement), it shall be equitably allocated to each in accordance with
generally accepted accounting principles.
"Indebtedness for Money Borrowed" shall mean money borrowed and
indebtedness represented by notes payable and drafts accepted representing
extensions of credit, all obligations evidenced by bonds, debentures, notes or
other similar instruments, the maximum amount currently or at any time
thereafter available to be drawn under all outstanding letters of credit issued
for the account of such Person, all indebtedness upon which interest charges are
customarily paid by such Person, and all
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indebtedness (including capitalized lease obligations) issued or assumed as full
or partial payment for property or services, whether or not any such notes,
drafts, obligations or indebtedness represent Indebtedness for Money Borrowed,
but shall not include (a) trade payables, (b) expenses accrued in the ordinary
course of business, or (c) customer advance payments and customer deposits
received in the ordinary course of business.
"Law" shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, law, injunction, interpretation, judgment, order, ordinance, policy
statement, proclamation, promulgation, regulation, requirement, rule, rule of
law, rule of public policy, settlement agreement, statute, or writ of any
Authority, domestic or foreign; or (b) the common law, or other legal precedent.
"Lien" shall mean any of the following: mortgage, lien (statutory or
other), or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; preemptive or similar right; any financing lease involving
substantially the same economic effect as any of the foregoing; the filing of
any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction; restriction on sale, transfer, assignment, disposition or
other alienation; or any option, equity, claim or right of or obligation to, any
other Person, of whatever kind and character.
"Minimum Price" shall have the meaning given to it in Section 7(a).
"Noncompetition Agreement" shall mean the noncompetition agreement,
dated as of the date hereof, in the form of Exhibit C hereto.
"Offered Securities" shall have the meaning given to it in Section
7(a).
"Option(s)" shall have the meaning given to it in the second Whereas
paragraph.
"Other Agreement" shall mean the agreement, of even date, by and among
Other Holding, ATC, ATC International, and Gearon.
"Other Holding" shall mean ATC South America Holding Corp., a Delaware
corporation owned by ATC and Gearon in the same proportions as ATC and Gearon
own Holding.
"Other Note" shall mean the note attached to the Other Agreement as
Exhibit A.
"Other Pledge Agreement" shall mean the pledge agreement attached to
the Other Agreement as Exhibit B.
"Permitted Transfer" shall mean:
(a) a Transfer of any Holding Securities (other than an
Option) by Gearon or any other Stockholder who is a natural person and
such Person's spouse, children, parents or siblings (whether natural,
step or by adoption) or to a trust solely for the benefit of one or
more of any of such Persons, so long as such Person is the sole trustee
of such trust;
(b) a Transfer of Holding Securities between or among the
Stockholders ; and
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(c) a Transfer of Holding Securities between Gearon or any
other Stockholder who is a natural person and such Person's legal
representatives, guardians or conservators.
No Permitted Transfer shall be effective unless and until the transferee of the
Holding Securities so transferred executes and delivers to Holding an executed
counterpart of this Agreement pursuant to the provisions of Section 9(n).
"Permitted Transferee" shall mean any Person who shall have acquired
and who shall hold any Holding Securities pursuant to a Permitted Transfer, and
shall include the Persons listed on Schedule A attached hereto so long as they
are employees of Holding or any Affiliate of Holding.
"Person" means an individual or Entity.
"Plan" shall have the meaning given to it in the second Whereas
paragraph.
Pledge Agreement" means the Pledge Agreement attached to this
Agreement as Exhibit B.
"Proposed Transfer" shall have the meaning given to it in Section 7.
"Put/Call Price" shall mean, with respect to Holding Securities owned
by any Stockholder, the amount derived by multiplying (i) the Holding Value by
(ii) a fraction (x) the numerator of which is the number of shares of Holding
Common Stock represented by the Holding Securities held by such Stockholder and
(y) the denominator of which is the aggregate number of shares of Holding Common
Stock at the time outstanding.
"Put Notice" shall have the meaning given to it in Section 5(a).
"Related Documents" shall mean the Other Agreement, the Note, the Other
Note, the Noncompetition Agreement, the Pledge Agreement, and the Other Pledge
Agreement.
"Stockholder(s)" shall have the meaning given to it in the preamble.
"Third Party" means any Person other than Holding or ATC (or any of
its Affiliates).
"Third Party Transferee" shall have the meaning given to it in Section
7(g).
"Transfer" shall mean to transfer, issue, sell, assign, pledge,
hypothecate, give, grant or create a security interest in or lien on, place in
trust (voting or otherwise), assign an interest in or in any other way encumber
or dispose of, directly or indirectly and whether or not by operation of law or
for value, any of the Holding Securities.
"Transfer Notice" shall have the meaning given to it in Section 7(a).
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