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EXHIBIT 10.3
SECURITIES PURCHASE AGREEMENT
dated as of May __, 1999
by and among
▇▇▇▇▇▇▇▇ COMMUNICATIONS GROUP, INC.
(the "Company"),
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
("TWC")
and
INTEL CORPORATION
(the "Investor")
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS 1
ARTICLE II
PURCHASE AND SALE TERMS; CLOSING 6
2.1 Purchase and Sale 6
2.2 Payment 6
2.3 Closing 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY 7
3.1 Delivery of Underwriting Agreement 7
3.2 Delivery of Articles 7
3.3 Underwriting Agreement Representations and Warranties 7
3.4 Power and Authority 7
3.5 Non-Contravention 7
3.6 Valid Issuance 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR 8
4.1 Existence 8
4.2 Power and Authority 8
4.3 Purchase for Investment 8
4.4 Non-Contravention 9
4.5 Financial Matters 9
4.6 Restricted Securities 9
4.7 Further Limitations on Disposition 9
ARTICLE V
COVENANTS OF THE COMPANY AND THE INVESTOR 10
5.1 Covenants of the Company Only 10
5.2 Further Assurances 10
5.3 Filings and Consents 10
5.4 Covenant to Satisfy Conditions 11
5.5 Notification of Change in Control Event 11
5.6 Information Rights 11
ARTICLE VI
CLOSING CONDITIONS 12
6.1 Conditions of Investor's Obligations at Closing 12
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6.2 Conditions of the Company's Obligations at Closing 12
6.3 Conditions to Each Party's Obligation 13
ARTICLE VII
TRANSFER RESTRICTIONS 13
7.1 Restrictions on Transfer; the 33 Act 13
ARTICLE VIII
VOTING RIGHTS 15
8.1 Voting Rights 15
ARTICLE IX
TERMINATION 15
9.1 Termination 15
9.2 Effect of Termination 16
ARTICLE X
INDEMNIFICATION 16
10.1 Indemnification 16
10.2 Terms of Indemnification 16
ARTICLE XI
REGISTRATION RIGHTS 17
11.1 Registration Rights 17
ARTICLE XII
STANDSTILL 23
12.1 Standstill Provision 23
ARTICLE XIII
MISCELLANEOUS 24
13.1 Governing Law 24
13.2 Remedies Cumulative 24
13.3 Brokerage 24
13.4 Severability 25
13.5 Notices 25
13.6 No Waiver 25
13.7 Amendments and Waivers 25
13.8 Rights of the Investor 25
13.9 Survival 25
13.10 Entire Understanding 26
13.11 Expenses 26
13.12 Counterparts 26
13.13 Assignment; No Third-Party Beneficiaries 26
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13.14 Confidentiality/Publicity 27
13.15 Titles and Subtitles 27
13.16 Aggregation of Stock 27
EXHIBITS
Exhibit 1.1 Form of Articles
Exhibit 1.2 Form of Underwriting Agreement
Exhibit 13.5 Notices
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of May __, 1999, among ▇▇▇▇▇▇▇▇
Communications Group, Inc., a Delaware corporation (the "Company"), The ▇▇▇▇▇▇▇▇
Companies, Inc., a Delaware corporation ("TWC"), and Intel Corporation, a
Delaware corporation ("Intel" and together with any assignee thereof pursuant to
Section 13.13 hereof, the "Investor").
PREAMBLE
The Company wishes to obtain equity financing. The Investor is willing,
on the terms contained in this Agreement, to purchase Class A common stock, par
value $0.01 per share (the "Class A Common Stock"), of the Company having the
characteristics set forth in the Restated Articles of Incorporation of the
Company (the "Articles"). The Company and Intel or certain of their Affiliates
(as defined below) are entering into other agreements, which include that
certain Master Alliance Agreement ("Alliance Agreement"), under which the
parties are setting forth their agreement to work together with Intel building
Internet data center facilities, management and hosting platform systems and
▇▇▇▇▇▇▇▇ providing highly reliable network facilities. Certain capitalized terms
are defined in Article I. Exhibits are incorporated by reference into this
Agreement as though such exhibits were set forth at the point of such reference.
ARTICLE I
DEFINED TERMS
The following terms, when used in this Agreement, have the following
meanings, unless the context otherwise indicates:
"33 Act" means the Securities Act of 1933, as amended, or any similar
federal law then in force.
"34 Act" means the Securities Exchange Act of 1934, as amended, or any
similar federal law then in force.
"Affiliate" has the meaning ascribed to it in Rule 12b-2 under the 34
Act. Notwithstanding the foregoing, unless expressly provided to the contrary
herein, the term Affiliate shall exclude officers, directors and any employee
benefit plan or pension plan of a Person.
"Alliance Agreement" shall have the meaning set forth in the preamble
to this Agreement.
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"Articles" shall have the meaning set forth in the preamble to this
Agreement. A draft of the Articles is attached as Exhibit 1.1.
"Beneficially Own" means having the right to vote or dispose of, or
"beneficially own" as determined pursuant to Rule 13d-3 under the 34 Act as in
effect on the date of this Agreement, including pursuant to any agreement,
arrangement or understanding.
"Board of Directors" means the board of directors of the Company.
"Business Day" means a day other than a Saturday or Sunday or a day on
which banking institutions are authorized or required by law or executive order
to remain closed in New York, New York, Tulsa, Oklahoma or San Francisco,
California.
"Change in Control Event" shall be deemed to have occurred with respect
to the Investor or the Company if (i) there shall be consummated (x) any
consolidation or merger of the Investor or the Company, as the case may be, in
which the Investor or the Company, as the case may be, is not the continuing or
surviving corporation or pursuant to which shares of the common stock of the
Investor or the Company, as the case may be, would be converted into cash,
securities or other property (provided, that a merger of the Investor or the
Company, as the case may be, in which the holders of such common stock
immediately prior to the merger hold at least 70% of the common stock of the
surviving corporation immediately after the merger shall not constitute a Change
in Control Event), or (y) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Investor or the Company, as the case may be, or (ii) the
stockholders of the Investor or the Company, as the case may be, approved any
plan or proposal for the liquidation or dissolution of the Investor or the
Company, as the case may be, or (iii) any Person (other than TWC or any
Subsidiary of TWC in the case of the Company) shall Beneficially Own 30% or more
of the outstanding common stock of the Company or the Investor, as the case may
be (or, in the case of the Company, 50% of the outstanding Common Stock if and
so long as TWC Beneficially Owns 30% of more of the outstanding Common Stock of
the Company), or (iv) during any period of two consecutive years, individuals
who at the beginning of such period constitute the entire board of directors of
the Investor or the Company, as the case may be, shall cease for any reason to
constitute a majority thereof unless the election, or the nomination for
election by such company's stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
"Claims" shall have the meaning set forth in Section 10.1(a) to this
Agreement.
"Class A Common Stock" shall mean the Class A common stock, par value
$0.01 per share, of the Company and any Common Stock of the Company received in
exchange for the Class A Common Stock.
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"Class B Common Stock" shall mean the Class B common stock, par value
$0.01 per share, of the Company.
"Closing" and "Closing Date" mean the consummation of the Company's
sale and the Investor's purchase of Class A Common Stock pursuant to this
Agreement, and the date or dates on which the same occurs or occurred,
respectively.
"Code" means the Internal Revenue Code of 1986, as amended, or any
similar federal law then in force.
"Common Stock" shall mean the Class A Common Stock and the Class B
Common Stock and any other series of common stock of the Company hereafter
issued. The term "Common Stock" shall include, except as otherwise provided
herein, any and all shares of common stock or other securities of the Company or
any successor or assign of the Company (whether by merger, consolidation, sale
of assets or otherwise), which may be issued in respect of, in exchange for, or
in substitution for any shares of Common Stock, by reason of any stock dividend,
split, reverse split, combination, recapitalization, reclassification, merger,
consolidation, partial or complete liquidation, sale of assets, spin-off,
distribution to stockholders or combination of the shares of Common Stock or any
other change in the Company's capital structure, in order to preserve fairly and
equitably as far as practicable, the original rights and obligations of the
parties hereto under this Agreement.
"Company Control Person" shall have the meaning set forth in Section
11.1(f)(ii) to this Agreement.
"Control Person" shall have the meaning set forth in Section 11.1(f)(i)
to this Agreement.
"Employee Benefit Plan" means any plan regulated under ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
"Form S-3" means such form under the 33 Act as in effect on the date
hereof or any successor registration form under the 33 Act subsequently adopted
by the SEC which permits inclusion or incorporation of substantial information
by reference to other documents filed by the Company with the SEC.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (including, without limitation, the Federal Communications
Commission (or any successor thereto) and each applicable public utilities
commission).
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"Hedging Transactions" means engaging in short sales and the purchase
and sale of puts and calls and other derivative securities, so long as Intel
retains Beneficial Ownership of the underlying shares and any and all such
transactions are made in accordance with all applicable law.
"HSR Act" shall have the meaning set forth in Section 5.3(a) to this
Agreement.
"IPO" means the initial public offering of the Company pursuant to a
registration statement filed by the Company under the 33 Act covering an
offering of at least $500 million of Class A Common Stock to the public.
"IPO Price" means the per share offering price for Class A Common Stock
stated on the face of the final prospectus relating to the IPO.
"Net IPO Price" means the IPO Price less any discounts or commissions
per share from the IPO Price to the underwriter or underwriters.
"Plan" means an employee benefit plan, as defined in Section 3(3) of
ERISA, which the Company maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by the Company.
"Permitted Transfer Date" shall have the meaning set forth in Section
7.1(a) to this Agreement.
"Person" means any individual, corporation, partnership, limited
liability company or partnership, joint venture, association, governmental
entity, or any other entity.
"Potential Change in Control Event" means any one of the following
events: (a) the commencement of a tender offer or exchange offer (as such terms
are defined in the rules and regulations under the 34 Act) by any Person that
would, if consummated, constitute a Change in Control Event involving the
Company; (b) the solicitation of proxies by any Person for the purpose of
effecting a Change in Control Event involving the Company; (c) the disclosure by
the Company of any material non-public information to any Person for the purpose
of assisting such Person in evaluating whether to effect a Change in Control
Event involving the Company; (d) the commencement of substantive discussions or
negotiations (involving more than the Company responding to inquiries) between
the Company and any Person contemplating a Change in Control Event involving the
Company; or (e) the agreement by the Company, whether or not in writing, to
facilitate a Change in Control Event involving the Company. For purposes of the
above, in no event shall the term "Person" include the Investor or any of its
Affiliates.
"Purchase Price" shall have the meaning set forth in Section 2.1(c) to
this Agreement.
"Registrable Securities" shall mean: (a) all the shares of Class A
Common Stock issued or issuable under this Agreement and (b) any shares of
Common Stock issued as (or issuable upon
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the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, any such shares of Class A Common Stock described in
clause (a) of this definition. Notwithstanding the foregoing, "Registrable
Securities" shall exclude any otherwise registrable securities sold by a Person
in a transaction in which rights under Article XI hereof are not assigned in
accordance with this Agreement or any otherwise registrable securities sold in a
public offering, whether sold pursuant to Rule 144 promulgated under the 33 Act,
in a registered offering, or otherwise.
"Restricted Security" shall have the meaning set forth in Section
7.1(b) to this Agreement.
"SEC" means the Securities and Exchange Commission.
"Selling Stockholder(s)" shall mean any person owning of record
Registrable Securities or any permitted assignee of record of such Registrable
Securities to whom rights under Article XI hereof have been duly assigned in
accordance with this Agreement.
"Standstill Percentage" shall have the meaning set forth in Section
12.1 of this Agreement.
"Subsidiary" or "Subsidiaries" of any Person means any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such Person.
"Super Voting Rights" shall have the meaning set forth in Section 8.1
to this Agreement.
"Third Party" means, with respect to the Company or the Investor, any
Person other than the Company's or the Investor's Affiliates, respectively;
provided further, that the Transfer to any such Person is in compliance with all
applicable federal, state and foreign securities laws.
"Transfer" means any direct or indirect sale, assignment, mortgage,
transfer, pledge, gift, hypothecation or other disposition of or transfer of
Common Stock, but excludes Hedging Transactions.
"TWC" means The ▇▇▇▇▇▇▇▇ Companies, Inc., a Delaware corporation.
"Underwriting Agreement" means the underwriting agreement among the
Company and ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney and certain other
underwriters to be named therein, in connection with the IPO. A draft of the
Underwriting Agreement is attached as Exhibit 1.2.
"Volume-Weighted Average Trading Price" shall mean, for any day on
which the New York Stock Exchange is open for trading, an amount equal to (a)
the cumulative sum, for each
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trade of Class A Common Stock (or other class or series of capital stock) during
such trading day on the New York Stock Exchange (or, if such security is not
listed on the New York Stock Exchange, such other principal exchange or
over-the-counter market on which such security is listed), of the product of:
(i) the sale price times (ii) the number of shares of Class A Common Stock (or
such other class or series of capital stock) sold at such price, divided by (b)
the total number of shares of Class A Common Stock (or such other class or
series of capital stock) so traded during the trading day.
Additional defined terms are found in the body of the following text.
The masculine form of words includes the feminine and the neuter and
vice versa, and, unless the context otherwise requires, the singular form of
words includes the plural and vice versa. The words "herein," "hereof,"
"hereunder," and other words of similar import when used in this Agreement refer
to this Agreement as a whole, and not to any particular section or subsection.
ARTICLE II
PURCHASE AND SALE TERMS; CLOSING
2.1 Purchase and Sale.
(a) Before the Closing Date, the Company will have adopted and
filed the Articles with the Delaware Secretary of State.
(b) Subject to the terms and conditions of this Agreement, at
the Closing, the Company shall issue and sell to the Investor, and the Investor
shall purchase from the Company, the number of shares of Class A Common Stock
(rounded up to the next whole share) equal to Two Hundred Million Dollars
($200,000,000) divided by the Net IPO Price.
(c) The aggregate purchase price (the "Purchase Price") for
the shares of Class A Common Stock to be purchased by the Investor shall be Two
Hundred Million Dollars ($200,000,000).
2.2 Payment. At the Closing, the Company shall deliver to the Investor
a certificate (registered in the name of the Investor) representing the
appropriate number of shares of Class A Common Stock which the Investor is
purchasing against delivery to the Company by the Investor by wire transfer in
immediately available funds in U.S. dollars in the amount of the Purchase Price
therefor payable to the Company's order.
2.3 Closing. The purchase and sale of the Class A Common Stock to take
place at the Closing shall be held at the offices of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, New
York, New York, or such other place as the parties may agree. The Closing shall
occur on the date of and simultaneously with, or (at the Company's option
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with at least 24 hours' prior written notice to Intel) with two Business Days
after the consummation of the transactions contemplated by the Underwriting
Agreement relating to the IPO (the "Closing Date"). The Closing shall be
conditioned upon the closing of the transactions contemplated by the
Underwriting Agreement relating to the IPO.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Delivery of Underwriting Agreement. The Company has delivered to
the Investor a substantially completed draft Underwriting Agreement in the form
set forth in Exhibit 1.2.
3.2 Delivery of Articles. The Company has delivered to the Investor a
substantially completed draft of the Articles in the form set forth in Exhibit
1.1.
3.3 Underwriting Agreement Representations and Warranties. In
connection with the sale of the Class A Common Stock to the Investor, the
Company will hereby be deemed to make each of the representations and warranties
to, and agreements with, the Investor that are made for the benefit of the
underwriters as set forth in the Underwriting Agreement.
3.4 Power and Authority. The Company has the requisite corporate power
and authority and has taken all required action necessary to authorize the
execution and delivery by it of this Agreement and all other documents or
instruments required by this Agreement, and to carry out the terms of this
Agreement and of all such other documents or instruments. This Agreement has
been duly executed and delivered by the Company and (assuming the due
authorization, execution and delivery hereof by the Investor) constitutes the
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
3.5 Non-Contravention. The execution, delivery and performance of this
Agreement by the Company and the consummation of any of the transactions
contemplated hereby by the Company will not (a) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to any
agreement, instrument, franchise, license or permit to which the Company is a
party or by which any of its properties or assets may be bound or (b) violate or
conflict with any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body applicable to the
Company or any of its properties or assets, other than such breaches, defaults
or violations that are not reasonably expected to impair the ability of the
Company to consummate the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby by the Company do not and
will not violate or conflict with any provision of the Articles or by-laws of
the Company, as currently in effect. Except for filings under the HSR Act and
with respect to the IPO, no
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consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any government agency or body
applicable to the Company is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
3.6 Valid Issuance. The Class A Common Stock, when issued, sold and
delivered in accordance with the terms of this Agreement for the consideration
provided for herein, will be duly and validly issued, fully paid and
nonassessable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to the Company, as of the date
hereof and as of the date of the Closing, that:
4.1 Existence. The Investor is a company duly organized, validly
existing and current in payment of all taxes properly payable pursuant to the
laws of the jurisdiction of its organization. The Investor has the requisite
corporate power and authority to own and operate its properties and assets and
to carry on its business as presently conducted.
4.2 Power and Authority. The Investor has the requisite corporate power
and authority and has taken all required action necessary to authorize the
execution and delivery by it of this Agreement and all other documents or
instruments required by this Agreement, and to carry out the terms of this
Agreement and of all such other documents or instruments. This Agreement has
been duly executed and delivered by the Investor and (assuming the due
authorization, execution and delivery hereof by the Company and the other
parties thereto other than the Investor) constitutes the valid and binding
obligation of the Investor, enforceable against the Investor in accordance with
its terms.
4.3 Purchase for Investment. The Investor is purchasing its shares of
Class A Common Stock for investment, for its own account (not as a nominee or
agent) and not for the account of any Employee Benefit Plan (or, if being
acquired for the account of any such Plan, such acquisition does not involve a
nonexempt prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Code) and not with a view to the resale or distribution of
any part thereof, except for transfers permitted hereunder, and the Investor has
no present intention of selling, granting any participation in or otherwise
distributing the same. By executing this Agreement, the Investor further
represents that it does not have any contract, undertaking, agreement or
arrangement with any Person to sell, Transfer or grant participation to such
Person or to any third person with respect to the Class A Common Stock.
4.4 Non-Contravention. The execution, delivery and performance of this
Agreement by the Investor and the consummation of any of the transactions
contemplated hereby by the
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Investor will not (a) conflict with or result in a breach of any of the terms
and provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Investor pursuant to any agreement, instrument, franchise, license
or permit to which the Investor is a party or by which any of its properties or
assets may be bound or (b) violate or conflict with any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body applicable to the Investor or any of its properties or
assets, other than such breaches, defaults or violations that are not reasonably
expected to impair the ability of the Investor to consummate the transactions
contemplated by this Agreement. The execution, delivery and performance of this
Agreement by the Investor and the consummation of the transactions contemplated
hereby by the Investor do not and will not violate or conflict with any
provision of the organizational documents of the Investor, as currently in
effect. Except for filings under the HSR Act, no consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any government agency or body applicable to the Investor is
required for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby.
4.5 Financial Matters. The Investor, either alone or with its financial
advisor, has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the investment to be
made by it hereunder. The Investor represents that it is an "accredited
investor" as that term is defined in Regulation D promulgated under the 33 Act.
4.6 Restricted Securities. The Investor understands that its shares of
Class A Common Stock must be held indefinitely unless they are registered under
the 33 Act or an exemption from such registration becomes available, and that
its shares of Class A Common Stock may only be Transferred as provided in
Article VII of this Agreement. The Investor acknowledges and agrees to abide by
the restrictions on transfer set forth in Article VII of this Agreement. The
Investor understands that the shares of Class A Common Stock it is purchasing
are characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the 33 Act only in
certain limited circumstances. In this connection, the Investor represents that
it is familiar with Rule 144 promulgated under the 33 Act, as presently in
effect, and understands the resale limitations imposed thereby and by the 33
Act.
4.7 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, the Investor further agrees that, in connection
with any proposed Transfer involving a private sale, the Investor shall notify
the Company of the proposed disposition and shall furnish the Company with a
detailed statement of the circumstances surrounding the proposed disposition
and, if reasonably requested by the Company, the Investor shall have furnished
the Company with an opinion of counsel reasonably satisfactory to the Company,
that such disposition will not require registration of such shares under the 33
Act.
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ARTICLE V
COVENANTS OF THE COMPANY AND THE INVESTOR
5.1 Covenants of the Company Only.
(a) The Company will hereby be deemed to covenant and agree
with the Investor and to its benefit to comply with all agreements made for the
benefit of the underwriters as set forth in the Underwriting Agreement.
(b) The Company shall promptly notify the Investor of any
material developments in connection with the IPO, and provide copies of any and
all filings, notices and other communications with the SEC relating thereto,
including copies of the registration statement filed with the SEC, and with any
Governmental Authority relating to the filings under the HSR Act as described in
Section 5.3(a) below. The Company shall also provide to the Investor any such
filings, notices and other communications sufficiently in advance of their being
filed or provided to the SEC or such Governmental Authorities as described above
so as to permit the Investor sufficient opportunity to review and comment on
such drafts.
(c) The Company shall provide to the Investor copies of any
notices, correspondence or other written communication from the SEC relating to
the IPO or from any Governmental Authority relating to the filings under the HSR
Act as described in Section 5.3(a) below promptly following receipt thereof.
5.2 Further Assurances. Subject to the terms and conditions provided
herein, each of the parties agrees to use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done as promptly as
practicable, all things necessary, proper or advisable under applicable laws and
regulations or otherwise to consummate and make effective the transactions
contemplated by this Agreement. The Company, at its expense, will promptly
execute and deliver to the Investor, and the Investor will, at its expense,
promptly execute and deliver to the Company, upon the other's reasonable
request, all such other and further documents, agreements and instruments in
compliance with or pursuant to its covenants and agreements herein, and will
make any recordings, file any notices, and obtain any consents as may be
necessary or appropriate in connection therewith, including without limitation,
applications under the HSR Act.
5.3 Filings and Consents.
(a) As soon as practicable after execution and delivery of
this Agreement, the Investor and the Company shall make all filings required
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), relating to the transactions contemplated hereby. In addition, the
Investor and the Company will each promptly furnish all information as may be
required by the Federal Trade Commission and the Department of Justice under the
HSR Act in order for the requisite approvals for the purchase and sale of the
Class A
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Common Stock, and the transactions contemplated hereby, to be obtained or any
applicable waiting periods to expire. Each of the parties hereto will cooperate
with each other with respect to obtaining, as promptly as practicable, all
necessary consents, approvals, authorizations and agreements of, and the giving
of all notices and making of all other filings with, any third parties,
including Governmental Authorities, necessary to authorize, approve or permit
the consummation of the transactions contemplated hereby.
(b) The Investor and the Company will provide such information
and communications to the Persons requiring such approvals, authorizations and
consents as reasonably required by such Person.
5.4 Covenant to Satisfy Conditions. Each party agrees to use all
reasonable efforts to insure that the conditions to the other party's
obligations hereunder set forth in Article VI, insofar as such matters are
within the control of such party, are satisfied. The Investor acknowledges
receipt of drafts of the Underwriting Agreement and Articles (attached as
exhibits hereto) and is satisfied with the content thereof.
5.5 Notification of Change in Control Event. Each party shall promptly
notify the other party of any Change in Control Event affecting the Company or
the Investor, as the case may be, and the Company shall promptly notify the
Investor of a Potential Change in Control Event of which it becomes actually
aware.
5.6 Information Rights. The Company covenants and agrees that,
commencing on the Closing and continuing for so long as the Investor owns at
least 50% of the shares initially purchased hereunder (as adjusted for stock
splits, stock dividends, and similar events), the Company shall:
(a) Annual Reports. Furnish to the Investor promptly following
the filing of such report with the SEC a copy of the Company's Annual Report on
Form 10-K for each fiscal year. In the event the Company shall no longer be
required to file Annual Reports on Form 10-K, the Company shall, within ninety
(90) days following the end of each respective fiscal year, deliver to the
Investor a copy of a consolidated balance sheet as of the end of such fiscal
year, a consolidated statement of income and a consolidated statement of cash
flows of the Company and its subsidiaries for such year, setting forth in each
case in comparative form the figures from the Company's previous fiscal year,
all prepared in accordance with generally accepted accounting principles and
practices and audited by nationally recognized independent certified public
accountants.
(b) Quarterly Reports. Furnish to the Investor promptly
following the filing of such report with the SEC, a copy of each of the
Company's Quarterly Reports on Form 10-Q. In the event the Company shall no
longer be required to file Quarterly Reports on Form 10-Q, the Company shall,
within forty-five (45) days following the end of each of the first three (3)
fiscal quarters of each fiscal year, deliver to the Investor a copy of a
consolidated balance sheet as of the end of the respective fiscal quarter,
consolidated statements of income and consolidated
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statements of cash flows of the Company and its subsidiaries for the respective
fiscal quarter and for the year to-date, setting forth in each case in
comparative form the figures from the comparable periods in the Company's
immediately preceding fiscal year, all prepared in accordance with generally
accepted accounting principles and practices, but all of which may be unaudited.
(c) Other SEC Filings. Furnish to the Investor promptly
following the filing of such documents with the SEC, copies of each proxy
statement and Report on Form 8-K filed with the SEC on a non-confidential basis.
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions of Investor's Obligations at Closing. The Investor's
obligation to purchase and pay for the Class A Common Stock to be purchased by
it hereunder is subject to satisfaction of the following conditions:
(a) Underwriting Agreement. (i) the Investor's determination
that there has not been any material revision to the Underwriting Agreement that
is adverse to the Investor as it has been executed by the Underwriters and the
Company since the draft delivered to the Investor pursuant to Section 3.1
hereof, and (ii) the receipt by the Investor of all letters, opinions and
certificates that the Underwriters are entitled to receive from the Company in
connection with the closing of the IPO. Investor shall be entitled to rely upon
such letters, opinions and certificates.
(b) Receipt of Articles. The Investor shall have received from
the Company the Articles pursuant to Section 3.2 in form and substance
reasonably satisfactory to the Investor.
(c) Board Approval. The board of directors of Intel shall have
approved and authorized the execution, delivery and performance of this
Agreement and the Alliance Agreement.
(d) Representations and Warranties. The representations and
warranties of the Company contained in Article III shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.
(e) Legal Opinion. Investor shall have received a legal
opinion from in-house counsel to the Company to the effect that the issuance of
the Class A Common Stock being purchased by it has been duly authorized, and
when issued in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable.
(f) Stock Certificate. The Company shall have delivered the
stock certificate representing the Class A Common Stock being purchased by the
Investor.
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6.2 Conditions of the Company's Obligations at Closing. The obligations
of the Company to the Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Investor contained in Article IV shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.
(b) Payment of Purchase Price. The Investor shall have
delivered the Purchase Price.
(c) Performance of Obligations. The Investor shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing.
(d) Legal Matters. The Company shall have received from the
Investor such legal opinions as shall be reasonably agreed upon by the Company
and the Investor and such other letters, opinions and certificates as the
Company shall reasonably request.
(e) Board Approval. The boards of directors of the Company and
TWC shall have approved and authorized the execution, delivery and performance
of this Agreement and (if necessary) the Alliance Agreement.
6.3 Conditions to Each Party's Obligation. The respective obligation of
each party to consummate the transactions contemplated hereby shall be subject
to the satisfaction at or prior to the Closing of each of the following
conditions:
(a) HSR Approval. The applicable waiting period (and any
extension thereof) under the HSR Act relating to the transactions contemplated
by this Agreement shall have been terminated or shall have expired.
(b) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
consummation of the transactions contemplated hereby shall be in effect.
(c) Alliance Agreement. The Alliance Agreement shall have been
executed and remain in full force and effect.
(d) Consummation of IPO. The closing of the IPO as
contemplated by the Underwriting Agreement shall be consummated simultaneously
with or prior to the Closing.
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ARTICLE VII
TRANSFER RESTRICTIONS
7.1 Restrictions on Transfer; the 33 Act.
(a) Restrictions on Transfer; Restrictive Legends. The Class A
Common Stock owned by the Investor shall not be transferable except upon the
conditions specified in this Article VII, which conditions are intended to
insure compliance with the provisions of the 33 Act in respect of the Transfer
of any such Class A Common Stock.
The Investor (including each assignee) hereby acknowledges and
agrees that it is acquiring the shares of Class A Common Stock in a transaction
exempt from registration under the 33 Act, and that no shares of Class A Common
Stock may be Transferred in the absence of registration under the 33 Act or an
applicable exemption therefrom. The Investor also hereby agrees that it will, if
requested by an underwriter in connection with a public offering of securities
(including the IPO), enter into a standard lock-up agreement for a period of up
to 180 days preventing it from offering, selling or granting any option for the
sale of or disposing of any of its shares of Common Stock for the same time
period to which the Company or TWC and the Company's executive officers and
directors would be subject under the underwriting agreement in connection with
such public offering, which period the Company shall use reasonable efforts to
limit to a period of not more than 90 days (except in the case of the IPO) and
which shall in no event be in excess of 180 days; provided, however, that
(except in the case of the IPO) Intel is participating in such offering, and
provided further, that, following the 180-day lock-up period in connection with
the IPO (during and prior to which Intel will not be permitted to engage in
Hedging Transactions), Intel and its Affiliates are permitted to enter into
Hedging Transactions. In addition, during any lock-up period in connection with
a secondary offering, Intel and its Affiliates shall be permitted to enter into
transactions that have the effect of maintaining or continuing pre-existing (as
of the time Investor is notified of the offering) Hedging Transaction positions
by continuing, renewing or replacing any such positions on substantially
equivalent terms. The Investor also hereby acknowledges and agrees that it shall
not Transfer (other than to an Affiliate) such shares of Class A Common Stock
for a period of eighteen (18) months from the Closing Date (the "Permitted
Transfer Date") except as permitted in Section 11.1(b). Each certificate
representing the Investor's shares of Class A Common Stock shall (unless
otherwise permitted by the provisions of this Article VII) be stamped or
otherwise imprinted with a legend in substantially the following form:
"THE SHARES OF COMMON STOCK OF THE ISSUER REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY APPLICABLE
STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, OR TRANSFERRED WITHOUT (1)
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE LAW OR
(2) AN OPINION OF COUNSEL SATISFACTORY TO ▇▇▇▇▇▇▇▇ COMMUNICATIONS GROUP, INC.
THAT SUCH REGISTRATION IS NOT REQUIRED BECAUSE OF AN EXEMPTION FROM
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THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND ANY APPLICABLE
STATE LAW. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SECURITIES PURCHASE
AGREEMENT DATED AS OF MAY __, 1999, AS AMENDED FROM TIME TO TIME, WHICH PROVIDES
THAT SUCH SHARES MAY NOT BE TRANSFERRED UNTIL NOVEMBER __, 2000 (WHICH DATE IS
EIGHTEEN MONTHS FROM THE DATE HEREOF). COPIES OF THE SECURITIES PURCHASE
AGREEMENT MAY BE OBTAINED UPON REQUEST FROM ▇▇▇▇▇▇▇▇ COMMUNICATIONS GROUP, INC.
AND ANY SUCCESSOR THERETO."
(b) Non-Applicability of Transfer Restrictions; Removal of
Legends. The restrictions imposed by Section 7.1(a) above upon the
transferability of any shares of Class A Common Stock represented by a
certificate bearing the restrictive legends set forth in such Section 7.1(a) (a
"Restricted Security") shall cease and terminate when such Restricted Security
has been sold pursuant to an effective registration statement under the 33 Act
or transferred pursuant to Rule 144 (or any similar or successor rule thereto)
promulgated under the 33 Act unless the holder thereof is an Affiliate of the
Company. Upon a Change in Control Event of the Company, the restriction on the
Investor prohibiting the Transfer of shares of Class A Common Stock prior to the
Permitted Transfer Date shall cease and terminate. The holder of any Restricted
Security as to which such restrictions shall have terminated shall be entitled
to receive from the Company, without expense, a new certificate of the same type
but not bearing the restrictive legend set forth above and not containing any
other reference to the restrictions imposed by Section 7.1(a) above, provided
that a holder's right to receive, and the Company's obligation to issue, a new
certificate not bearing such restrictive legends and not containing any other
reference to the restrictions imposed by Section 7.1(a) above shall be subject,
in the Company's discretion, to the delivery to the Company of an opinion of
counsel of the transferor (which may include in-house counsel to the Investor)
that subsequent transfers of such Restricted Security by the proposed transferee
will not require registration under the 33 Act.
ARTICLE VIII
VOTING RIGHTS
8.1 Voting Rights. The Investor acknowledges that the Articles provide
that Class A Shares shall have one-tenth the voting power as Class B Shares. If
at any time after the date hereof the Company issues to any Person other than
the Company or any Affiliate of the Company in a private or public sale Common
Stock with voting rights ("Super Voting Rights") that are greater in any
material respect than those the Investor has in its Class A Common Stock, other
than in connection with one or more employee or director related plans or
arrangements or in connection with a spin-off by the Company of the Common Stock
to its shareholders, the Investor will have the right at its option to convert
its shares of Class A Common Stock to new shares of Common Stock with such Super
Voting Rights. If such conversion occurs, all
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references in this Agreement to Class A Common Stock shall be deemed to refer to
the Common Stock with Super Voting Rights.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated at any time prior to
the Closing:
(a) by mutual consent of the Investor and the Company;
(b) by either the Company or the Investor if the Closing shall
not have occurred by December 31, 1999, and this Agreement has not previously
been terminated; provided, however, that the failure to consummate the Closing
by such date is not a result of either the failure by the party so electing to
terminate this Agreement to perform any of its obligations hereunder or the
breach by the party so electing of its representations and warranties;
(c) if either the Investor or the Company terminates the
Alliance Agreement;
(d) by either the Company or the Investor in the event any
court or governmental agency of competent jurisdiction shall have issued an
order, decree or ruling or taken any other action restricting, enjoining or
otherwise prohibiting the transactions contemplated hereby and such order,
decree, ruling or other action shall have become final and unappealable.
9.2 Effect of Termination. In the event that this Agreement shall be
terminated pursuant to this Article IX, all further obligations of the parties
under this Agreement other than the obligations set forth in this Section 9.2
and Sections 13.11 and 13.14 shall terminate and there shall be no liability of
any party to another party except for a party's breach of any of its
obligations, representations or warranties under this Agreement prior to such
termination.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification.
(a) The Company hereby agrees to indemnify, defend and hold
harmless the Investor and each of its directors, officers and each Person, if
any, who controls (within the meaning of Section 15 of the 33 Act and Section 20
of the 34 Act) the Investor from and against all actual demands, claims, actions
or causes of action, assessments, losses, damages, liabilities, costs and
expenses (collectively, "Claims"), including without limitation interest,
penalties and
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reasonable attorneys' fees and expenses, asserted against, resulting to, or
imposed upon or incurred by the Investor, directly or indirectly, by reason of
or resulting from a breach of any covenant, representation, warranty or
agreement of the Company contained in or made pursuant to this Agreement or
otherwise in connection with the transactions contemplated hereby.
(b) The Investor hereby agrees to indemnify, defend and hold
harmless the Company and each Company Control Person from and against all
Claims, including without limitation interest, penalties and reasonable
attorneys' fees and expenses, asserted against, resulting to, or imposed upon or
incurred by the Company and each Company Control Person, directly or indirectly,
by reason of or resulting from a breach of any covenant, representation,
warranty or agreement of the Investor contained in or made pursuant to this
Agreement or otherwise in connection with the transactions contemplated hereby.
10.2 Terms of Indemnification. The obligations and liabilities of the
parties with respect to Claims by third parties will be subject to the following
terms and conditions:
(a) the indemnified party will give the indemnifying party
prompt written notice of any Claims asserted against, resulting to, imposed upon
or incurred by the indemnified party, directly or indirectly, and the
indemnifying party will undertake the defense thereof by representatives of
their own choosing which are reasonably satisfactory to the indemnified party;
provided that the failure of the indemnified party to give notice as provided in
this Section 10.2 shall not relieve the indemnifying party of its obligations
under this Article X, except to the extent that such failure has materially and
adversely affected the rights of the indemnifying party;
(b) if within a reasonable time after notice of any Claim, the
indemnifying party fails to defend such Claim, the indemnified party will have
the right to undertake the defense, compromise or settlement of such Claim on
behalf of and for the account and at the risk of the indemnifying party, subject
to the right of the indemnifying party to assume the defense of such Claim at
any time prior to settlement, compromise or final determination thereof;
(c) if there is a reasonable probability that a Claim may
materially and adversely affect the indemnified party other than as a result of
money damages or other money payments, the indemnified party will have the right
at its own expense to defend (provided that the indemnifying party shall
continue to control the defense and the indemnified party shall have the right
to participate in such defense), or co-defend, such Claim;
(d) the indemnifying party on one hand and the indemnified
party on the other hand will not, without the prior written consent of the
other, settle or compromise any Claim or consent to entry of any judgment
relating to any such Claim;
(e) with respect to any Claims asserted against the
indemnified party, the indemnified party will have the right to employ one
counsel of its choice in each applicable jurisdiction (if more than one
jurisdiction is involved) to represent the indemnified party if, in the
indemnified party's reasonable judgment, a conflict of interest between the
indemnified party and
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the indemnifying party exists in respect of such Claims, and in that event the
fees and expenses of such separate counsel shall be paid by such indemnifying
party; and
(f) the indemnifying party will provide the indemnified party
reasonable access to all records and documents of the indemnifying party
relating to any Claim.
ARTICLE XI
REGISTRATION RIGHTS
11.1 Registration Rights.
(a) Form S-3 Registration. In the event, at any time within
ninety (90) days prior to the Permitted Transfer Date, the Company shall receive
from any holder or holders of a majority of all Registrable Securities then
outstanding a written request or requests that the Company effect a registration
on Form S-3 and any related qualification or compliance with respect to all or a
part of the Registrable Securities owned by such Selling Stockholders, then the
Company shall:
(i) Notice. Promptly give written notice of the proposed
registration and the Selling Stockholders' request therefor, and any related
qualification or compliance, to all other holders of Registrable Securities; and
(ii) Registration. As soon as reasonably practicable (but in
no event prior to the Permitted Transfer Date), effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Selling
Stockholders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other holder
joining in such request as are specified in a written request given within
twenty (20) days after the Company provides the notice contemplated by Section
11.1(a)(i); provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance pursuant to this Section
11.1(a):
(A) if the Selling Stockholders, together with the
holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities
(if any) representing less than the larger of (I) 50% of the aggregate
Registrable Securities and such other securities then held by all Selling
Stockholders and such other holders, or (II) $50,000,000 of shares (determined
using the Volume-Weighted Average Trading Price); or
(B) if the Company has, within the six (6) month
period preceding the date of such request, already effected a registration under
the 33 Act other than a registration from which the Registrable Securities of
Selling Stockholders have been excluded
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(with respect to all or any portion of the Registrable Securities the Selling
Stockholders requested be included in such registration) pursuant to the
provisions of Section 11.1(b).
(iii) Unavailability of Form S-3. If the Company is not
eligible to use Form S-3, it shall file a Form S-1 in lieu of a Form S-3.
(b) Piggyback Registrations.
(i) Notice. The Company shall notify all holders of
Registrable Securities in writing at least twenty (20) or, in case of a
registration statement proposed to be filed pursuant to Rule 415 of the 33 Act,
ten (10) Business Days prior to filing any registration statement under the 33
Act (including but not limited to registration statements relating to secondary
offerings of securities of the Company before or after the Permitted Transfer
Date, but excluding registration statements relating to any registration under
subsection (a) of this Section 11.1, any employee benefit plan or any merger or
other corporate reorganization) for purposes of effecting a public offering of
securities of the Company in which the Investor is entitled to participate and,
if other stockholders of the Company also are participating in the registration
statement as selling stockholders (except in connection with an acquisition by
the Company), will afford each such holder an opportunity to include in such
registration statement all or any part of the Registrable Securities then held
by such holder. Each holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by such holder
shall within ten (10) or, in the case of a registration statement proposed to be
filed pursuant to Rule 415 of the 33 Act, five (5) Business Days after receipt
of the above-described notice from the Company, so notify the Company in
writing, and in such notice shall inform the Company of the number of
Registrable Securities such holder wishes to include in such registration
statement. If a holder decides not to include all of its Registrable Securities
in any registration statement thereafter filed by the Company, such holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
(ii) Underwriting. If a registration statement under which the
Company gives notice under this Section 11.1(b) is for an underwritten offering,
then the Company shall so advise the Selling Stockholders. In such event, the
right of any such Selling Stockholder to include its Registrable Securities in a
registration pursuant to this Section 11.1(b) shall be conditioned upon such
Selling Stockholder's participation in such underwriting and the inclusion of
such Selling Stockholder's Registrable Securities in the underwriting to the
extent provided herein. All Selling Stockholders proposing to distribute their
Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the managing underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this Agreement, if the managing underwriter determine(s) in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, then the managing underwriter(s) may exclude shares from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated,
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first to the Company, and second, to each of the Selling Stockholders and other
holders of registration rights on a parity with the Selling Stockholders
requesting inclusion of their Registrable Securities in such registration
statement on a pro rata basis based on the total number of Registrable
Securities and other securities entitled to registration then held by each such
holder or other holder; provided, however, that the right of the underwriters to
exclude shares (including Registrable Securities) from the registration and
underwriting as described above shall be restricted so that all shares that are
not Registrable Securities and are held by any other Person, including, without
limitation, any Person who is an employee, officer or director of the Company
(or any subsidiary of the Company) shall first be excluded from such
registration and underwriting before any Registrable Securities are so excluded
(other than to the extent that such Persons are non-employee directors or other
non-employees of the Company who hold registration rights on a parity with the
Selling Stockholders, such non-employee directors and other non-employees being
entitled to participate with the participating Selling Stockholders on the basis
described under "second" above). If any Selling Stockholder disapproves of the
terms of any such underwriting, such Selling Stockholder may elect to withdraw
therefrom by written notice to the Company and the underwriter delivered at
least ten (10) Business Days prior to the effective date of the registration
statement. Any Registrable Securities excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the registration.
(c) Registration Obligations. With respect to any registration
statement contemplated in this Section 11.1, the Company will:
(i) prepare and file with the SEC the registration statement
within 90 days after a Selling Stockholders' notice requesting registration or
inclusion in a proposed registration, and use its reasonable efforts to cause
the Registrable Securities covered by such registration statement to become
registered and such registration statement to be declared effective as
expeditiously as possible under the 33 Act or other applicable federal law and
regulations (and cause to be prepared and file any amendments or supplements
thereto as may be necessary to comply with applicable federal law and
regulations); provided, however, that the Company may be allowed to defer filing
of the registration statement: (A) if the president or general counsel of the
Company reasonably determines in good faith that it is in the best interests of
the Company not to disclose the existence of or facts surrounding any proposed
or pending material developments; (B) if the underwriters have notified the
Company that market conditions are such as to recommend deferral; (C) pending
the completion of year-end financial statements or quarterly earnings releases;
or (D) if an offering by the Company of any securities is pending; provided,
however, that any deferral pursuant to clauses (A)-(D) of this paragraph shall
not in the aggregate be for more than 60 days.
(ii) use its reasonable efforts to cause to be registered or
qualified the Registrable Securities covered by such registration statement
under such securities or "blue sky" laws in such jurisdictions within the United
States as any Selling Stockholder may reasonably request; provided, however,
that the Company reserves the right, in its sole discretion, not to cause to be
registered or qualified such Registrable Securities in any jurisdiction where
the
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Company would be required in connection therewith to execute a general consent
to service or to qualify as a foreign corporation or to subject itself to
taxation;
(iii) maintain the effectiveness of any registration statement
hereunder for 90 days or such longer period as may be required by the 33 Act to
enable any Selling Stockholder and the underwriters, if any, to complete such
offering;
(iv) promptly notify each Selling Stockholder of the happening
of any event as a result of which any preliminary prospectus or prospectuses
included in any registration statement hereunder includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements not misleading in light of the
circumstances then existing (in such event, the Company shall prepare a
supplement or post-effective amendment to such registration statement or related
prospectus or file any other required document so that, as thereafter delivered
to the purchasers of Registrable Securities sold thereunder, the prospectus will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading);
(v) have the right to reasonably approve the choice of lead
underwriter for the offering, if an underwritten offering;
(vi) furnish, at the request of any Selling Stockholder, an
opinion, dated the date the registration statement becomes effective, of counsel
representing the Company (which may be in-house counsel) for the purposes of
such registration, addressed to the underwriters, if any, and to such Selling
Stockholder as to such legal matters as such Selling Stockholder shall
reasonably request; and
(vii) furnish, at the request of any Selling Stockholder, a
letter, dated the date the registration statement becomes effective, of
independent certified public accountants of the Company, addressed to the
underwriters, if any, and to such Selling Stockholder as to such accounting
matters as such Selling Stockholder shall reasonably request.
(d) Conditions to Obligations. The obligations of the Company to cause
a registration statement to be prepared pursuant to the provisions of this
Section 11.1 and each Selling Stockholder's right to have Registrable Securities
included in any registration statement pursuant to the provisions of this
Section 11.1 shall be subject to the following conditions:
(i) Each Selling Stockholder shall furnish to the Company in
writing such information and documents as, in the opinion of the Company's
counsel, may be reasonably required to properly cause to be prepared such
registration statement in accordance with applicable provisions of the 33 Act
and the SEC's regulations thereunder or federal or state securities or blue sky
laws and regulations then in effect; and
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(ii) If a Selling Stockholder desires to sell and distribute
such Registrable Securities over a period of time, or from time to time,
pursuant to a registration statement prepared pursuant to the provisions of this
Section 11.1, then such Selling Stockholder shall execute and deliver to the
Company such written undertakings as the Company and its counsel may reasonably
require in order to assure full compliance with the relevant provisions of the
33 Act and the SEC's regulations thereunder or other federal or state securities
or blue sky laws and regulations as then in effect.
(e) Expenses. All expenses incurred in connection with a registration
pursuant to this Section 11.1 (excluding underwriters' and brokers'
discounts and commissions related to shares sold by the Selling
Stockholders and legal fees of counsel for the Selling Stockholders),
including, without limitation all federal and "blue sky" registration,
filing and qualification fees, printers' and accounting fees, and fees
and disbursements of counsel for the Company, shall be borne by the
Company.
(f) Indemnity.
(i) The Company agrees to indemnify and hold harmless each
Selling Stockholder and each Person, if any, who controls (within the meaning of
Section 15 of the 33 Act and Section 20 of the 34 Act) such Selling Stockholder
(a "Control Person") against any losses, claims, damages or liabilities, joint
or several, to which such Selling Stockholder or any such Control Person may
become subject, insofar as such losses, claims, damages 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 preliminary or
final registration statement or prospectus with respect thereto, 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; and the
Company will reimburse each Selling Stockholder and each Control Person for any
legal or other expenses reasonably incurred by such Selling Stockholder or such
Control Person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission from any of such documents in reliance
upon and in conformity with written information furnished by or on behalf of
such Selling Stockholder or any such Control Person specifically for use in the
preparation thereof.
(ii) Each Selling Stockholder will, severally and not jointly,
indemnify and hold harmless the Company and each of its directors, officers and
each Person, if any, who controls (within the meaning of Section 15 of the 33
Act and Section 20 of the 34 Act) the Company (a "Company Control Person") to
the same extent as set forth in the foregoing indemnity from the Company to each
Selling Stockholder but only with reference to written information included in
any preliminary or final registration statement or prospectus with respect
thereto, or amendment or supplement thereto, furnished by or on behalf of such
Selling Stockholder specifically for use in the preparation of such documents;
and will reimburse the
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Company or any such Company Control Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
loss, claim, damage, liability or action for which such Selling Stockholder is
obligated to indemnify the Company or any Company Control Person.
(iii) Promptly after receipt by an indemnified party under
this Section 11.1(f) of notice of any claim or the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under Section 11.1(f)(i) or (ii) above, notify the
indemnifying party of any claim or the commencement thereof; but the omission so
to notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under Section 11.1(f)(i) or
(ii) above. In case any such action is brought against any indemnified party and
it notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), 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 in connection
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action.
(iv) If the indemnification provided for in paragraphs (i) or
(ii) of this Section 11.1(f) is unavailable or insufficient in accordance with
its terms in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits as well as
the relative fault of the Company on the one hand and the Selling Stockholder on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable consideration. The relative benefits received by
the Company on the one hand and the Selling Stockholder on the other shall be
deemed to be in the same proportion as (i) the total purchase price received by
the Company from the Investor (based on the average purchase price paid by the
Investor times the number of shares purchased) for the securities to be
reoffered by the Selling Stockholder in such offering bears to (ii) the total
net proceeds received by the Selling Stockholder in such offering. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Selling Stockholder on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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ARTICLE XII
STANDSTILL
12.1 Standstill Provision.
(a) The Investor agrees that for a period of five (5) years
from the Closing Date, it shall not, and shall cause each of its Affiliates not
to, without the prior written consent of the Board of Directors specifically
expressed in a resolution approved by a majority of the directors of the
Company, directly or indirectly, through one or more intermediaries or
otherwise, (i) acquire, agree to acquire or make any proposal to acquire any
securities of the Company or any of its Subsidiaries, any warrant or option to
acquire any such securities, any security convertible into or exchangeable for
any such securities or any other right to acquire any such securities if the
effect of such acquisition would be to increase the beneficial ownership (as
defined in Rule 13d-3 promulgated under the 34 Act) of the Investor to a
percentage greater than five percent (5%) (the "Standstill Percentage") of the
then issued and outstanding shares of Common Stock; (ii) seek or propose any
merger, consolidation, business combination, tender or exchange offer, sale or
purchase of assets or securities, dissolution, liquidation, restructuring,
recapitalization or similar transaction of or involving the Company or any of
its Subsidiaries; (iii) make, or in any way participate in, any "solicitation"
of proxies or consents (whether or not relating to the election or removal of
directors) within the meaning of Rule 14a-1 under the 34 Act with respect to any
securities of the Company or any of its Subsidiaries, or demand a copy of the
stock ledger, list of stockholders, or any other books and records of the
Company or any of its Subsidiaries; (iv) form, join or in any way participate in
a "group" (within the meaning of Section 13(d)(3) of the 34 Act), with respect
to any securities of the Company or any of its Subsidiaries; (v) otherwise act,
alone or in concert with others, to seek to control the management, Board of
Directors or policies of the Company or any of its Subsidiaries; (vi) deposit
any Common Stock in any voting trust or subject any Common Stock to any
arrangement or agreement with respect to the voting of such shares; (vii) call,
seek to have called or execute any written consent calling for any meeting of
the stockholders of the Company; (viii) seek, alone or in concert with others,
representation on the Board of Directors or seek the removal of any member of
such Board or a change in the composition or size of such Board; (ix) enter into
any agreements (whether written or oral) with, or finance or assist, any other
persons in connection with any of the foregoing, or (x) make any publicly
disclosed proposal regarding any of the foregoing. The provisions in this
Article XII shall not apply in the event of a Potential Change in Control Event,
unless the activities defined in (a) or (b) of the definition of "Potential
Change in Control Event" which gave rise to the Potential Change in Control
Event are discontinued and remain so for one year without the occurrence of a
Potential Change in Control Event. In such event, the provisions of this Article
XII shall be reinstated and remain in full force and effect thereafter.
(b) The Investor will not be obliged to dispose of any Common
Stock to the extent that the aggregate percentage of the Common Stock
represented by the Common Stock
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Beneficially Owned by the Investor or which the Investor has a right to acquire
is increased beyond the Standstill Percentage (i) as a result of a
recapitalization of the Company or a repurchase or exchange of securities by the
Company or any other action taken by the Company or its Affiliates; (ii) as a
result of any investment in any equity index (e.g., the S&P 500), provided that
Investor shall not vote such shares; (iii) by way of stock dividends or other
distributions or rights or offerings made available to holders of shares of
Common Stock generally; (iv) with the consent of a simple majority of the
members of the Company's Board of Directors; or (v) as part of a transaction on
behalf of Investor's Defined Benefit Pension Plan, Profit Sharing Retirement
Plan, 401(k) Savings Plan, Sheltered Employee Retirement Plan and Sheltered
Employee Retirement Plan Plus, or any successor or additional retirement plans
thereto (collectively, the "Retirement Plans") where the Company's shares in
such Retirement Plans are voted by a trustee for the benefit of Investor
employees or, for those Retirement Plans where Investor controls voting, where
Investor agrees not to vote any shares of such Retirement Plan Common Stock that
would cause Investor to exceed the Standstill Percentage.
12.2 Notice of Proposed Transfer. If, at any time after the Permitted
Transfer Date, the Investor intends to sell more than one percent (1%) of the
issued and outstanding shares of Class A Common Stock to a Third Party other
than pursuant to a Registration Statement, the Investor shall provide a written
notice of such intent to the Company at least Two (2) Business Days prior to
offering any such shares to any Third Party.
ARTICLE XII
MISCELLANEOUS
13.1 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York (without giving effect to
conflicts of law principles thereof).
13.2 Remedies Cumulative. Except as herein provided, the remedies
provided herein shall be cumulative and shall not preclude assertion by any
party hereto of any other rights or the seeking of any other remedies against
the other party hereto.
13.3 Brokerage. Each party hereto will indemnify and hold harmless the
other against and in respect of any claim for brokerage or other commission
relative to this Agreement or to the transactions contemplated hereby, based in
any way on agreements, arrangements or understandings made or claimed to have
been made by such party with any third party.
13.4 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
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13.5 Notices. Notices required under this Agreement shall be deemed to
have been adequately given if delivered in person or sent to the recipient at
its address (or facsimile number, as the case may be) set forth in Exhibit 13.5
(with copies to the persons specified in Exhibit 13.5 at the respective
addresses for such persons specified in such Exhibit 13.5) or such other address
as such party may from time to time designate in writing by certified mail
(return receipt requested), facsimile or overnight courier.
13.6 No Waiver. No failure to exercise and no delay in exercising any
right, power or privilege granted under this Agreement shall operate as a waiver
of such right, power or privilege. No single or partial exercise of any right,
power or privilege granted under this Agreement shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
13.7 Amendments and Waivers. This Agreement may be modified or amended
only by a writing signed by the Company and by the Investor. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any shares of Class A Common Stock purchased under this Agreement at
the time outstanding, each future holder of all such shares, and the Company.
13.8 Rights of the Investor. Subject to the terms and conditions of
this Agreement, the Investor shall have the absolute right to exercise or
refrain from exercising any right or rights that such holder may have by reason
of this Agreement, including without limitation the right to consent to the
waiver of any obligation of the Company under this Agreement and to enter into
an agreement with the Company for the purpose of modifying this Agreement or any
agreement effecting any such modification, and such holder shall not incur any
liability to any other holder or holders of Class A Common Stock with respect to
exercising or refraining from exercising any such right or rights.
13.9 Survival. All representations and warranties made by the Company
and the Investor contained in this Agreement, and the obligation of the parties
to indemnify each other pursuant to Section 10.1 hereof, shall survive the
execution and delivery of this Agreement, any examination or due diligence
inquiry by a party and the Closing until the date which is one year after the
Closing Date. All covenants and agreements of the Company and the Investor
contained in this Agreement (which terms do not include representations and
warranties) shall, except as provided in such covenant or agreement, survive the
Closing and shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Investor or any controlling Person
thereof or by or on behalf of the Company, any of its officers and directors or
any controlling Person thereof. The obligations to indemnify and hold harmless a
party hereto, pursuant to Article X hereof, shall survive only until the
expiration of the applicable survival period for the representation and warranty
under which the claim for indemnification is being made; provided, however, that
such obligations to indemnify and hold harmless shall not terminate with respect
to any such item as to which the Person to be indemnified shall have, before the
expiration of the applicable period, previously made a claim by delivering a
notice
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(stating in reasonable detain the basis of such claim) to the party to be
providing the indemnification.
13.10 Entire Understanding. This Agreement and the agreements to be
executed in connection therewith on the Closing Date express the entire
understanding of the parties and supersede all prior and contemporaneous
agreements and undertakings of the parties with respect to the subject matter
hereof and thereof. Except as expressly provided herein, neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
13.11 Expenses. Each party will pay all of its own expenses, including
attorney's fees incurred in connection with the negotiation of this Agreement,
the performance of its obligations hereunder and the consummation of
transactions contemplated by this Agreement.
13.12 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but which taken together shall
constitute one agreement.
13.13 Assignment; No Third-Party Beneficiaries.
(a) Except as otherwise expressly provided herein, this
Agreement and the rights hereunder shall not be assignable or transferable by
either party without the prior written consent of the other; provided that, if
such assignment or transfer is consented to, such assignee or transferee
expressly assumes in writing all of the such party's obligations hereunder.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.
(b) This Agreement is for the sole benefit of the parties
hereto and their respective successors and permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any Person, other
than the parties hereto and such successors and permitted assigns, any legal or
equitable rights hereunder.
(c) Intel and the Investor shall be permitted, without the
consent of the Company, to transfer Class A Common Stock (subject to applicable
federal and state securities laws) and to assign all its rights and obligations
under this Agreement, including without limitation the right to purchase Class A
Common Stock and common equity securities under Article II and registration
rights under Article XI, to any of its Affiliates; provided, however, that such
assignee expressly assumes in writing all of Intel or the Investor's, as the
case may be, obligations hereunder; and provided, further that in the event of
such assignment Intel or the Investor, as the case may be, shall notify the
Company in writing of such assignment, and for all purposes of this Agreement
all references to Intel or the Investor shall mean such Affiliate.
13.14 Confidentiality/Publicity. Confidential or proprietary
information disclosed by either party under this Agreement shall be considered
confidential information (the "Confidential
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Information") and shall not be disclosed by the Company or the Investor to any
third party, except as permitted hereunder.
(a) All press releases and announcements concerning the
investment contemplated by this Agreement shall be mutually agreed to by the
Company and the Investor except as otherwise provided in this Section.
(b) The Company may disclose the terms of the investment
contemplated by this Agreement and the terms of the Alliance Agreement in its
registration statement with respect to the IPO. Intel shall cooperate with the
Company in good faith in reviewing such disclosure; provided that Intel shall
have the right to approve such disclosure prior to the filing of any amendment
to the registration statement or prospectus that includes disclosure of the
relationship between the Company and Intel (such approval not to be unreasonably
delayed). The Company will provide Intel drafts of any such disclosure at least
Two (2) Business Days prior to the filing of any amendment to the registration
statement or prospectus. The Company may file this Agreement or the Alliance
Agreement as exhibits to the registration statement, but Intel shall have the
right to request that the Company seek confidential treatment of specified
information in the Alliance Agreement.
(c) In the event that the Company or the Investor is requested
or becomes legally compelled (by statute or regulation or by oral questions,
interrogatories, request for information or documents, subpoena, criminal or
civil investigative demand or similar process (including in connection with a
public offering of the Company's securities), to disclose any Confidential
Information not previously publicly disclosed, such party (the "Disclosing
Party") shall provide the other party (the Non-Disclosing Party") with prompt
written notice of that fact so that the other party may seek (with the
cooperation and reasonable efforts or the Disclosing Party) a protective order,
confidential treatment or other appropriate remedy. In such event, the
Disclosing Party shall furnish only that portion of the Confidential Information
which is legally required and shall exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded the Confidential
Information to the extent reasonably requested by the Non-Disclosing Party.
(d) The provisions of this Section 13.14 shall not prohibit or
restrict in any way disclosure by a party with respect to this Agreement in
connection with any financing, strategic transaction, acquisition or disposition
involving such party or any of its Affiliates, provided that such disclosure
shall be first approved by the other party, which approval shall not be
unreasonably withheld or delayed.
(e) The provisions of this Section 13.14 shall be in addition
to, and not in substitution for, the provisions of any separate nondisclosure
agreement executed by the parties hereto with respect to the transactions
contemplated hereby, except that, in the event of any contradiction between this
Section and any such agreement, this Section shall prevail.
13.15 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
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13.16 Aggregation of Stock. All shares of the Class A Common Stock held
or acquired by Affiliates or Persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
▇▇▇▇▇▇▇▇ COMMUNICATIONS GROUP, INC.
By: _____________________________________
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: _____________________________________
INTEL CORPORATION
By: ______________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Treasurer and Vice Presendent
SIGNATURE PAGE TO ▇▇▇▇▇▇▇▇ COMMUNICATIONS GROUP, INC.
SECURITIES PURCHASE AGREEMENT DATED MAY 24, 1999
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