EXHIBIT 10.12
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FIRST AMENDED AND RESTATED
EQUITY PURCHASE AGREEMENT
BY AND AMONG
COMPLETEL LLC
AND
THE PURCHASERS LISTED ON
THE SIGNATURE PAGES ATTACHED HERETO
JANUARY 28, 1999
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TABLE OF CONTENTS
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Section 1. Authorization and Closings......................................................................2
1A. Authorization of the Preferred Units............................................................2
1B. Purchase and Sale of Preferred Units under the Prior Purchase Agreements........................3
1C. Additional Capital Contributions with Respect to Prior Preferred Units; Purchase and
Sale of Incremental Preferred Units.............................................................3
1D. The Closing.....................................................................................3
Section 2. Conditions to the Closing.......................................................................4
2A. Representations and Warranties; Covenants.......................................................4
2B. Amendment and Restatement of LLC Agreement......................................................4
2C. Securityholders Agreement.......................................................................4
2D. Registration Agreement..........................................................................4
2E. Performance Vesting Agreement...................................................................5
2F. Sale of Incremental Preferred Units to Each Participating Purchaser; Receipt of
Additional Contributions........................................................................5
2G. Securities Law Compliance.......................................................................5
2H. Compliance with Applicable Laws.................................................................5
2I. Expenses........................................................................................5
2J. Closing Documents...............................................................................5
2K. Proceedings.....................................................................................6
2L. Waiver..........................................................................................6
Section 3. [INTENTIONALLY OMITTED].........................................................................6
Section 4. Representations and Warranties of the Company...................................................6
4A. Organization, Corporate Power and Licenses......................................................6
4B. Capitalization and Related Matters..............................................................6
4C. Authorization; No Breach........................................................................7
4D. Conduct of Business; Absence of Liabilities.....................................................8
4E. Assets..........................................................................................8
4F. Subsidiaries....................................................................................8
4G. Contracts and Commitments.......................................................................8
4H. Intellectual Property Rights....................................................................9
4I. Litigation, etc.................................................................................9
4J. Brokerage......................................................................................10
4K. Governmental Consent, etc......................................................................10
4L. Compliance with Laws...........................................................................10
4M. Affiliated Transactions........................................................................10
4N. Disclosure.....................................................................................10
Section 5. Representations and Warranties of the Purchasers...............................................10
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TABLE OF CONTENTS
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5A. Organization; Authorization....................................................................11
5B. Brokerage......................................................................................11
5C. Purchasers' Investment Representations.........................................................11
Section 6. Covenants......................................................................................12
6A. Financial Statements and Other Information.....................................................12
6B. Inspection of Property.........................................................................15
6C. Restrictions...................................................................................15
6D. Affirmative Covenants..........................................................................19
6E. Compliance with Agreements.....................................................................20
6F. Current Public Information.....................................................................20
6G. Intellectual Property Rights...................................................................21
6H. Public ▇▇▇▇▇▇▇▇▇▇▇.............................................................................▇▇
▇▇. [Intentionally Omitted]........................................................................21
6J. Preemptive Rights..............................................................................21
Section 7. Purchasers' Put Rights.........................................................................23
7A. Put Right......................................................................................23
7B. Duties of the Company..........................................................................23
7C. Repurchase Price...............................................................................24
7D. Fair Market Value of Securities................................................................24
Section 8. Transfer of Restricted Securities..............................................................26
8A. General Provisions.............................................................................26
8B. Opinion Delivery...............................................................................26
8C. Rule 144A......................................................................................27
8D. Legend Removal.................................................................................27
Section 9. Definitions....................................................................................27
9A. Definitions....................................................................................27
9B. Knowledge......................................................................................37
Section 10. Miscellaneous Provisions.......................................................................37
10A. Expenses.......................................................................................37
10B. Remedies.......................................................................................37
10C. Consent to Amendments..........................................................................38
10D. Survival of Representations and Warranties.....................................................39
10E. Successors and Assign..........................................................................39
10F. Severability...................................................................................39
10G. Counterparts...................................................................................39
10H. Descriptive Headings; Interpretation; No Strict Construction...................................39
10I. Governing Law..................................................................................40
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TABLE OF CONTENTS
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10J. Notices........................................................................................40
10K. Business Days..................................................................................41
10L. Delivery by Facsimile..........................................................................42
10M. Effectiveness of Agreement.....................................................................42
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LIST OF EXHIBITS
Exhibit 1 - Second Amended and Restated LLC Agreement
Exhibit 2 - First Amended and Restated Securityholders Agreement
Exhibit 3 - First Amended and Restated Registration Agreement
Exhibit 4 - First Amended and Restated Performance Vesting Agreement
LIST OF SCHEDULES
Schedule of Original Purchasers
Schedule of Prior Purchasers
Schedule of Purchasers
Licenses Schedule
Capitalization Schedule
Activities and Liabilities Schedule
Assets Schedule
Subsidiaries Schedule
Contracts Schedule
Intellectual Property Schedule
Litigation Schedule
Company Brokerage Schedule
Consents Schedule
Affiliated Transactions Schedule
Purchasers Brokerage Schedule
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FIRST AMENDED AND RESTATED
EQUITY PURCHASE AGREEMENT
THIS FIRST AMENDED AND RESTATED EQUITY PURCHASE AGREEMENT
(this "AGREEMENT") is made as of January 28, 1999, by and among CompleTel LLC
(formerly known as CableTel Europe LLC), a Delaware limited liability company
(the "COMPANY"), Madison Dearborn Capital Partners II, L.P. ("MDCP"), ▇▇▇▇▇▇▇▇
Holdings Limited Partnership ("▇▇▇▇▇▇▇▇ HOLDINGS"), ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"),
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"),
Dovey Company LLC ("DOVEY LLC"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("LACEY"). MDCP, ▇▇▇▇▇▇▇▇ Holdings,
▇▇▇▇▇, Holland, Laub, and ▇▇▇▇▇ are referred to herein collectively as the
"INVESTORS" and individually as an "INVESTOR." Dovey LLC, Pearson, Clevenger,
and Lacey are referred to herein collectively as the "EXECUTIVES" and
individually as an "EXECUTIVE." The Investors and the Executives are referred to
herein collectively as the "PURCHASERS," and each Investor and Executive is
referred to herein individually as a "PURCHASER." Capitalized terms used but not
otherwise defined herein have the meanings ascribed to such terms in Section 9.
As of May 18, 1998, the Company and MDCP, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("DOVEY"), ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇▇ (collectively,
the "ORIGINAL PURCHASERS") entered into an Equity Purchase Agreement (the "PRIOR
AGREEMENT"), pursuant to which each of the Original Purchasers made capital
contributions (and committed to make subsequent capital contributions subject to
the terms and conditions set forth in the Prior Agreement) to the Company in the
amount set forth opposite such Original Purchaser's name on the SCHEDULE OF
ORIGINAL PURCHASERS attached hereto in exchange for, and the Company issued to
each such Original Purchaser, the number of Preferred Units set forth opposite
such Original Purchaser's name on the attached SCHEDULE OF ORIGINAL PURCHASERS.
Pursuant to an Assignment and Substitution dated June 3, 1998
(the "▇▇▇▇▇▇▇▇ ASSIGNMENT"), ▇▇▇▇▇▇▇▇ transferred all of his Preferred Units in
the Company to ▇▇▇▇▇▇▇▇ Holdings as of the date of the ▇▇▇▇▇▇▇▇ Assignment, and
in connection therewith ▇▇▇▇▇▇▇▇ Holdings became bound by the terms and
conditions of the Prior Agreement.
As of July 15, 1998, the Company and ▇▇▇▇▇ entered into an
Additional Investor Equity Purchase and Joinder and Rights Agreement (the "▇▇▇▇▇
PURCHASE AGREEMENT"), pursuant to which ▇▇▇▇▇ made capital contributions to the
Company in exchange for, and the Company issued to ▇▇▇▇▇, the number of
Preferred Units set forth opposite ▇▇▇▇▇'▇ name on the attached SCHEDULE OF
PRIOR PURCHASERS, and in connection therewith ▇▇▇▇▇ became a party to the Prior
Agreement. As of July 15, 1998, the Company and Holland entered into an
Additional Investor Equity Purchase and Joinder and Rights Agreement (the
"HOLLAND PURCHASE AGREEMENT"), pursuant to which Holland made capital
contributions to the Company in exchange for, and the Company issued to Holland,
the number of Preferred Units set forth opposite Holland's name on the attached
SCHEDULE OF PRIOR PURCHASERS, and in connection therewith Holland became a party
to the Prior Agreement.
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Pursuant to the Assignment and Purchase Agreement dated as of
November 11, 1998 (the "DOVEY ASSIGNMENT"), Dovey transferred all of his
Preferred Units in the Company to Dovey LLC as of the date of the Dovey
Assignment. In addition, as of November 11, 1998, the Company and Dovey LLC
entered into an Additional Preferred Units Purchase Agreement (the "DOVEY LLC
PURCHASE AGREEMENT"), pursuant to which Dovey LLC made capital contributions to
the Company in exchange for, and the Company issued to Dovey LLC, an additional
150 Preferred Units (such that, after giving effect to the Dovey Assignment and
the Dovey LLC Purchase Agreement, Dovey LLC held the number of Preferred Units
set forth opposite Dovey LLC's name on the attached SCHEDULE OF PRIOR
PURCHASERS). In connection therewith, Dovey LLC became a party to the Prior
Agreement.
As of December 2, 1998, the Company and Lacey entered into an
Additional Investor Equity Purchase and Joinder and Rights Agreement (the "LACEY
PURCHASE AGREEMENT"), pursuant to which Lacey made capital contributions to the
Company in exchange for, and the Company issued to Lacey, the number of
Preferred Units set forth opposite Lacey's name on the attached SCHEDULE OF
PRIOR PURCHASERS, and in connection therewith Lacey became a party to the Prior
Agreement.
The parties hereto desire that, effective as of the date
hereof:
(i) each of MDCP, ▇▇▇▇▇▇▇▇ Holdings, Allen, Holland, Dovey
LLC, Pearson, Clevenger, and Lacey (collectively, the "PRIOR PURCHASERS") shall
(subject to the terms and conditions set forth herein) make additional capital
contributions to the Company with respect to their Preferred Units pursuant to
the Prior Purchase Agreements (as defined below);
(ii) each of MDCP, ▇▇▇▇▇▇▇▇ Holdings, Laub, Hundt, Dovey LLC,
Pearson, Clevenger, and Lacey (collectively, the "PARTICIPATING PURCHASERS")
shall (subject to the terms and conditions set forth herein) purchase Preferred
Units from the Company;
(iii) the Prior Agreement shall be amended and restated in its
entirety as set forth herein; and
(iv) each of the Prior Agreement, the ▇▇▇▇▇ Purchase
Agreement, the Holland Purchase Agreement, the Dovey LLC Purchase Agreement, and
the Lacey Purchase Agreement (collectively, the "PRIOR PURCHASE AGREEMENTS")
shall be superseded in its entirety by this Agreement and the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises made
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
SECTION 1. AUTHORIZATION AND CLOSINGS.
a. AUTHORIZATION OF THE PREFERRED UNITS. The Company shall
authorize the issuance and sale to the Participating Purchasers of an aggregate
of 5,000 Preferred Units (the "INCREMENTAL PREFERRED UNITS"), each having the
rights and preferences set forth with respect thereto
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in the LLC Agreement, such that the total number of authorized Preferred Units
(which consist of the Preferred Units issued pursuant to the Prior Purchase
Agreements (the "PRIOR PREFERRED UNITS") and the Incremental Preferred Units to
be issued to the Participating Purchasers pursuant to this Agreement) shall be
65,750. The Preferred Units are convertible into the Company's Common Units, in
the manner and on the terms set forth in the LLC Agreement.
b. PURCHASE AND SALE OF PREFERRED UNITS UNDER THE PRIOR
PURCHASE AGREEMENTS. Pursuant to the Prior Purchase Agreements, each of the
Prior Purchasers has prior to the date hereof purchased from the Company, and
the Company has issued to each such Prior Purchaser, the number of Preferred
Units listed opposite such Prior Purchaser's name on the attached SCHEDULE OF
PRIOR PURCHASERS. Prior to or contemporaneously with the execution of this
Agreement, each of the Prior Purchasers has made capital contributions to the
Company with respect to the Prior Preferred Units (either as "Initial
Contributions" or as "Subsequent Contributions" pursuant to the terms of the
Prior Purchase Agreements) in the aggregate equal to the amount set forth
opposite such Prior Purchaser's name on the attached SCHEDULE OF PRIOR
PURCHASERS.
c. ADDITIONAL CAPITAL CONTRIBUTIONS WITH RESPECT TO PRIOR
PREFERRED UNITS; PURCHASE AND SALE OF INCREMENTAL PREFERRED UNITS. At the
Closing (as defined below), subject to the terms and conditions set forth
herein:
i. each of the Prior Purchasers shall make capital
contributions to the Company in respect of such Prior Purchaser's Prior
Preferred Units in the aggregate amount (such Prior Purchaser's "ADDITIONAL
CONTRIBUTION AMOUNT") set forth opposite such Prior Purchaser's name on the
SCHEDULE OF PURCHASERS attached hereto (and such Additional Contribution Amount
shall be deemed to be a "Subsequent Contribution" hereunder by such Prior
Purchaser with respect to such Prior Preferred Units); and
ii. the Company shall sell to each Participating Purchaser,
and each Participating Purchaser shall purchase from the Company, the number of
Incremental Preferred Units set forth opposite such Participating Purchaser's
name on the SCHEDULE OF PURCHASERS. The aggregate purchase price to be paid at
the Closing by each such Participating Purchaser (such Participating Purchaser's
"INCREMENTAL PURCHASE PRICE") is set forth opposite such Participating
Purchaser's name on the attached SCHEDULE OF PURCHASERS and is deemed herein to
be such Participating Purchaser's "Initial Contribution" with respect to such
Incremental Preferred Units. The sale of Incremental Preferred Units to each
Participating Purchaser at the Closing shall constitute a separate sale
hereunder.
d. THE CLOSING. The closing of the separate purchases and
sales of the Incremental Preferred Units and the making of the Additional
Contribution Amounts (the "CLOSING") shall take place at the offices of ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ in Chicago, Illinois, on January 28, 1999, or at such other place or on
such other date as may be mutually agreeable to the Company and the Purchasers
(the date of the Closing, the "CLOSING DATE"). At the Closing:
(i) the Company shall deliver to each Participating Purchaser
certificates evidencing the Incremental Preferred Units to be purchased by such
Participating Purchaser, registered in such Participating Purchaser's name (or
if such Incremental Preferred Units are
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uncertificated, shall enter such Participating Purchaser's name in the Company's
books and records as the record holder of such Incremental Preferred Units),
upon such Participating Purchaser's payment of the purchase price therefor by
delivery to the Company of a cashier's or certified check, or wire transfer of
immediately available funds to an account designated by the Company, in an
aggregate amount equal to such Participating Purchaser's Incremental Purchase
Price; and
(ii) each Prior Purchaser shall deliver to the Company a
cashier's or certified check, or wire transfer of immediately available funds to
an account designated by the Company, in the aggregate amount equal to such
Prior Purchaser's Additional Contribution Amount.
SECTION 2. CONDITIONS TO THE CLOSING. The obligation of each
Prior Purchaser to make its Additional Contribution Amount and of each
Participating Purchaser to purchase and pay for the Incremental Preferred Units
at the Closing is subject to the satisfaction as of the Closing of the following
conditions:
a. REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties contained in Sections 4 and 5 hereof shall be
true and correct in all material respects at and as of the date of the Prior
Agreement (except to the extent of changes caused by the transactions expressly
contemplated herein and therein), the representations and warranties contained
in Sections 4A (Organization), 4B (Capitalization), 4C (Authorization), 4J
(Brokerage), 4K (Governmental Consent), 4L (Compliance with Laws), and 4N
(Disclosure) shall be true and correct in all material respects at and as of the
Closing as though then made, and the Company shall have performed in all
material respects all of the covenants required to be performed by it hereunder
prior to the Closing.
b. AMENDMENT AND RESTATEMENT OF LLC AGREEMENT. The limited
liability company agreement governing the affairs of the Company shall have been
amended and restated in form and substance as set forth in EXHIBIT 1 hereto (as
so amended and restated, the "LLC AGREEMENT"), shall be in full force and effect
under the laws of Delaware as of the Closing, and shall not have been further
amended or modified.
c. SECURITYHOLDERS AGREEMENT. The Securityholders Agreement
originally dated as of May 18, 1998, by and among the Company and certain of its
Securityholders (as amended from time to time in accordance with its terms, the
"SECURITYHOLDERS AGREEMENT"), shall have been amended and restated in form and
substance as set forth in EXHIBIT 2 attached hereto, shall be in full force and
effect as of the Closing, and shall not have been further amended or modified.
d. REGISTRATION AGREEMENT. The Registration Agreement
originally dated as of May 18, 1998, by and among the Company and certain of its
securityholders (as amended from time to time in accordance with its terms, the
"REGISTRATION AGREEMENT"), shall have been amended and restated in form and
substance as set forth in EXHIBIT 3 attached hereto, shall be in full force and
effect as of the Closing, and shall not have been further amended or modified.
e. PERFORMANCE VESTING AGREEMENT. The Performance Vesting
Agreement originally dated as of May 18, 1998, by and among the Company, the
Investors, and certain holders of Executive Securities (as amended from time to
time in accordance with its terms, the
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"PERFORMANCE VESTING AGREEMENT"), shall have been amended and restated in form
and substance as set forth in EXHIBIT 4 attached hereto, shall be in full force
and effect as of the Closing, and shall not have been further amended or
modified.
f. SALE OF INCREMENTAL PREFERRED UNITS TO EACH PARTICIPATING
PURCHASER; RECEIPT OF ADDITIONAL CONTRIBUTIONS. The Company shall have
simultaneously sold to each Participating Purchaser the Incremental Preferred
Units to be purchased by such Participating Purchaser hereunder at the Closing
and shall have received payment therefor in full as specified in Section 1D
hereof; and the Company shall have received from each of the Prior Purchasers
payment in full of such Prior Purchaser's Additional Contribution Amount as
specified in Section 1D.
g. SECURITIES LAW COMPLIANCE. The Company shall have made all
filings under all applicable federal and state securities laws necessary to
consummate the issuance, in compliance with such laws, of the Incremental
Preferred Units to be issued at the Closing pursuant to this Agreement.
h. COMPLIANCE WITH APPLICABLE LAWS. The payment of the
Additional Contribution Amount by each Prior Purchaser and the purchase of
Incremental Preferred Units by each Participating Purchaser hereunder at the
Closing shall not be prohibited by any applicable law or governmental rule or
regulation and shall not subject such Purchaser to any penalty, liability or, in
such Purchaser's reasonable judgment, other onerous condition under or pursuant
to any applicable law or governmental rule or regulation, and the payment of the
Additional Contribution Amount by each Prior Purchaser and the purchase of the
Incremental Preferred Units by each Participating Purchaser hereunder shall be
permitted by the laws, rules and regulations of the jurisdictions and
governmental authorities and agencies to which such Purchaser is subject.
i. EXPENSES. At the Closing, the Company shall have reimbursed
MDCP and ▇▇▇▇▇▇▇▇ Holdings for their reasonable out-of-pocket expenses as
provided in paragraph 10A hereof, to the extent then known.
j. CLOSING DOCUMENTS. The Company shall have delivered to each
Purchaser all of the following documents:
i. an Officer's Certificate, dated the Closing Date,
stating that the conditions specified in paragraphs 1A-1D and 2A-2H,
inclusive, have been fully satisfied; and
ii. such other documents relating to the transactions
contemplated by this Agreement as any Purchaser or its special counsel
may reasonably request.
k. PROCEEDINGS. All corporate and other proceedings taken or
required to be taken by the Company in connection with the transactions to occur
at the Closing shall be consummated at or prior to the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Purchasers and their respective special counsel.
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l. WAIVER. Any condition specified in this Section 2 may be
waived if such waiver is consented to by each Purchaser; PROVIDED that no such
waiver shall be effective against any Purchaser unless it is set forth in a
writing executed by such Purchaser.
SECTION 3. [INTENTIONALLY OMITTED].
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a
material inducement to the Prior Purchasers to enter into this Agreement,
purchase the Preferred Units under the Prior Purchase Agreements, and pay the
Additional Contribution Amounts hereunder, the Company hereby represents and
warrants to such Prior Purchasers that Sections 4A through 4N, inclusive, were
true and correct at and as of the date of the Prior Agreement (except, with
respect to Section 4B, to the extent of changes caused by the transactions
expressly contemplated therein and herein). In addition, as a material
inducement to the Purchasers to enter into this Agreement, purchase the
Incremental Preferred Units hereunder, and pay the Additional Contribution
Amounts hereunder, the Company hereby represents and warrants that Sections 4A
(Organization), 4B (Capitalization), 4C (Authorization), 4J (Brokerage), 4K
(Governmental Consent), 4L (Compliance with Laws), and 4N (Disclosure) below are
true and correct at and as of the date of the Closing:
a. ORGANIZATION, CORPORATE POWER AND LICENSES. The Company is
a limited liability company duly organized, validly existing and in good
standing under the laws of Delaware and is qualified to do business in every
jurisdiction in which its ownership of property or conduct of business requires
it to qualify. The Company possesses all requisite power and authority and,
except as set forth in the "LICENSES SCHEDULE" attached hereto or the Offering
Memorandum, all material licenses, permits and authorizations necessary to own
and operate its properties, to carry on its businesses as presently proposed to
be conducted and to carry out the transactions contemplated by this Agreement.
The copies of the Company's LLC Agreement which have been furnished to the
Investors' respective special counsel reflect all amendments made thereto at any
time prior to the date of this Agreement and are correct and complete.
b. CAPITALIZATION AND RELATED MATTERS.
i. As of the Closing and immediately thereafter, the
authorized equity capital of the Company shall consist of. (a) 65,750 Preferred
Units, all of which shall be issued and outstanding; (b) 107,500 Common Units,
16,496 of which shall be issued and outstanding, 7,029 of which shall be issued
and outstanding and shall be subject to performance vesting under the
Performance Vesting Agreement, 1,004 of which shall be reserved for issuance to
management and other key employees ("KEY EMPLOYEES") of the Company and its
Subsidiaries in accordance with terms of the LLC Agreement, 471 of which shall
be reserved for issuance to Key Employees of the Company and its Subsidiaries in
accordance with the terms of the LLC Agreement and shall when issued be subject
to performance vesting under the Performance Vesting Agreement, and 82,500 of
which shall be reserved for issuance upon conversion of the outstanding
Preferred Units; (c) an unlimited number of Class A Senior Units, all of which
shall in accordance with the LLC Agreement be reserved for issuance upon a
repurchase of Common Units from the Executives or other Key Employees of the
Company and its Subsidiaries pursuant to the provisions of the Executive
Securities Agreements; (d) an unlimited number of Class B Senior Units, all of
which shall in
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accordance with the LLC Agreement be reserved for issuance upon the forfeiture
of Preferred Units pursuant to the provisions of the Performance Vesting
Agreement; and (e) an unlimited number of Class C Senior Units, all of which
shall in accordance with the LLC Agreement be reserved for issuance to
defaulting holders of Purchaser Securities under Section 10B(ii) hereof. Except
as set forth on the attached "CAPITALIZATION SCHEDULE" or in the first sentence
of this Section 4B(i), as of the Closing, the Company shall not have outstanding
any equity securities (including any options, warrants or other rights to
acquire equity securities of the Company).
ii. There are no statutory or, to the best of the Company's
knowledge, contractual securityholders' preemptive rights or rights of first
refusal with respect to the issuance of the Preferred Units hereunder or the
issuance of the Common Units upon conversion of any of the Preferred Units. The
Company has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its equity securities, and
the offer, sale and issuance of the Preferred Units hereunder do not require
registration under the Securities Act or any applicable state securities laws.
To the best of the Company's knowledge, there are no agreements between the
Company's securityholders with respect to the voting or transfer of the
Company's equity securities or with respect to any other aspect of the Company's
affairs, except for this Agreement, the LLC Agreement, the Executive Securities
Agreements, the Performance Vesting Agreement, the Registration Agreement, and
the Securityholders Agreement.
c. AUTHORIZATION; NO BREACH. The execution, delivery and
performance of this Agreement, the Registration Agreement, the Securityholders
Agreement, the Executive Securities Agreements, the Performance Vesting
Agreement, and all other agreements contemplated hereby to which the Company is
a party, and the amendment and restatement of the LLC Agreement, have been duly
authorized by the Company. This Agreement, the Registration Agreement, the
Securityholders Agreement, the Executive Securities Agreements, the Performance
Vesting Agreement, and all other agreements contemplated hereby to which the
Company is a party each constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and limitations on the availability of
equitable remedies. The execution and delivery by the Company of this Agreement,
the Registration Agreement, the Securityholders Agreement, the Executive
Securities Agreements, the Performance Vesting Agreement, and all other
agreements contemplated hereby to which the Company is a party and the
consummation of the transactions contemplated hereby and thereby, the offering,
sale and issuance of the Preferred Units hereunder and the Common Units under
the Executive Securities Agreements, the issuance of the Company's equity
securities under the Permitted Securities Plan (as defined below), the issuance
of the Common Units upon conversion of the Preferred Units, the amendment and
restatement of the LLC Agreement, and the fulfillment of and compliance with the
respective terms hereof and thereof by the Company, do not and shall not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) result in the creation of any lien,
security interest, charge or encumbrance upon the Company's or any Subsidiary's
equity securities or assets pursuant to, (iv) give any third party the right to
modify, terminate or accelerate any obligation under, (v) result in a violation
of, or (vi) require any authorization, consent, approval, exemption or other
action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency, pursuant to, the LLC Agreement of
the Company,
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or any law, statute, rule or regulation to which the Company or any Subsidiary
is subject, or any agreement, instrument, order, judgment or decree to which the
Company or any Subsidiary is subject.
d. CONDUCT OF BUSINESS; ABSENCE OF LIABILITIES. Prior to the
date of the Prior Agreement, except as set forth on the attached "ACTIVITIES AND
LIABILITIES SCHEDULE" the Company has not conducted any business, activities or
operations nor incurred any expenses, obligations or liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise, whether or not known
to the Company and whether due or to become due and regardless of when
asserted).
e. ASSETS. Except as set forth on the attached "ASSETS
SCHEDULE," none of the Company or its Subsidiaries owns or leases any assets of
any kind, whether tangible or intangible (excluding Intellectual Property
Rights). The Company has good and marketable title to, or a valid leasehold
interest in, all assets listed on the Assets Schedule, free and clear of all
Liens.
f. SUBSIDIARIES. Except as set forth on the attached
"SUBSIDIARIES SCHEDULE," the Company does not own or hold, and has never owned
or held, any shares of stock or any other securities or interests in or any
rights to acquire any shares of stock or any other security or interest in any
other Person.
g. CONTRACTS AND COMMITMENTS.
i. Except as expressly contemplated by this Agreement or as
set forth on the attached "CONTRACTS SCHEDULE," neither the Company nor any
Subsidiary is a party to or bound by any written or oral contract of any kind,
including but not limited to any agreement, employee benefit plan, employment
contract, insurance contract, loan agreement, guarantee, lease, license,
warranty, or affirmative or restrictive covenant.
ii. All of the contracts, agreements and instruments set forth
on the Contracts Schedule are valid, binding and enforceable in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, in oratorium., or other laws affecting creditors'
rights generally and limitations on the availability of equitable remedies.
iii. The Investors and their respective special counsel have
been supplied with a true and correct copy of each of the written instruments,
plans, contracts and agreements and an accurate written description of each of
the oral arrangements, contracts and agreements which are referred to on the
Contracts Schedule, together with all amendments, waivers or other changes
thereto.
h. INTELLECTUAL PROPERTY RIGHTS. The attached "INTELLECTUAL
PROPERTY SCHEDULE" contains a complete and accurate list of all (i) patented or
registered Intellectual Property Rights owned or used by the Company or any
Subsidiary, (ii) pending patent applications and applications for registrations
of other Intellectual Property Rights filed by the Company or any Subsidiary,
(iii) unregistered trade names and corporate names owned or used by the Company
or any Subsidiary, and (iv) unregistered trademarks and service marks owned or
used by the Company or any Subsidiary. The Intellectual Property Schedule also
contains a complete and accurate list of all
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licenses and other rights granted by the Company or any Subsidiary to any third
party with respect to any Intellectual Property Rights and all licenses and
other rights granted by any third party to the Company or any Subsidiary with
respect to any Intellectual Property Rights, in each case identifying the
subject Intellectual Property Rights. Notwithstanding the foregoing, the
Intellectual Property Schedule need not list or describe any "off-the-shelf"
products (including computer software applications) generally available to the
public that are used by the Company and its Subsidiaries. Except as set forth on
the Intellectual Property Schedule: (a) the Company or one of its Subsidiaries
owns all right, title and interest to, or has the right to use pursuant to a
valid license, all Intellectual Property Rights necessary for the operation of
the businesses of the Company and its Subsidiaries as presently proposed to be
conducted, free and clear of all Liens, (b) the Company and its Subsidiaries own
all right, title and interest in and to all of the Intellectual Property Rights
listed on such schedule, free and clear of all Liens, (c) there have been no
claims made against the Company or any Subsidiary asserting the invalidity,
misuse, or unenforceability of any of such Intellectual Property Rights, and
there are no valid grounds for the same, and (d) neither the Company nor any
Subsidiary has received any notices of, and is not aware of any facts which
indicate the likelihood of, any infringement or misappropriation by, or conflict
with, any third party with respect to such Intellectual Property Rights
(including, without limitation, any demand or request that the Company or any
Subsidiary license any rights from a third party).
i. LITIGATION, ETC. Except as set forth on the attached
"LITIGATION SCHEDULE," there are no actions, suits, proceedings, orders,
investigations or claims pending or, to the best of the Company's actual
knowledge, threatened against or affecting the Company or any Subsidiary (or to
the best of the Company's actual knowledge, pending or threatened against or
affecting any of the officers, directors or employees of the Company and its
Subsidiaries with respect to their businesses or proposed business activities),
or pending or threatened by the Company or any Subsidiary against any third
party, at law or in equity, or before or by any governmental department,
commission, board, bureau, agency or instrumentality (including, without
limitation, any actions, suits, proceedings or investigations with respect to
the transactions contemplated by this Agreement); neither the Company nor any
Subsidiary is subject to, to the best of the Company's actual knowledge, any
governmental investigations or inquiries (including, without limitation,
inquiries as to the qualification to hold or receive any license or permit);
and, to the best of the Company's knowledge, there is no basis for any of the
foregoing. Neither the Company nor any Subsidiary is subject to any judgment,
order or decree of any court or other governmental agency.
j. BROKERAGE. Other than as specifically described on the
attached "COMPANY BROKERAGE SCHEDULE," there are no claims for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement binding upon the Company. The Company shall pay, and hold each
Purchaser harmless against, any liability, loss or expense (including, without
limitation, reasonable attorneys' fees and out-of-pocket expenses) arising in
connection with any such claim (including, without limitation, the claims
described on the Company Brokerage Schedule); PROVIDED that with respect to any
claim not described on the Company Brokerage Schedule, the Company need not
indemnify pursuant to this Section 4J any Purchaser that had actual knowledge of
such arrangement or agreement prior to the Closing Date.
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k. GOVERNMENTAL CONSENT, ETC. Except as set forth on the
attached "CONSENTS SCHEDULE," no permit, consent, approval or authorization of,
or declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance by the Company of this
Agreement or the other agreements contemplated hereby, or the consummation by
the Company of any other transactions contemplated hereby or thereby.
l. COMPLIANCE WITH LAWS. Neither the Company nor any
Subsidiary has violated any law or any governmental regulation or requirement in
any material respect.
m. AFFILIATED TRANSACTIONS. Except for this Agreement and the
other agreements expressly contemplated hereby, and except as set forth on the
attached "AFFILIATED TRANSACTIONS SCHEDULE," no officer, director, employee or
Affiliate of the Company or any Subsidiary or any individual related by blood,
marriage or adoption to any such individual or any entity in which any such
Person or individual owns at least a 2% beneficial interest, is a party to any
agreement, contract, commitment or transaction with the Company or any
Subsidiary or has any material interest in any material property owned or used
by the Company or any of its Subsidiaries.
n. DISCLOSURE. Neither this Agreement nor any of the exhibits,
schedules, attachments, written statements, documents, certificates or other
written items supplied to any Purchaser or any other holder of Purchaser
Securities by or on behalf of the Company with respect to the transactions
contemplated hereby (including, without limitation, the Offering Memorandum)
contain any untrue statement of a material fact or omit a material fact
necessary to make each statement contained herein or therein not misleading.
There is no fact which the Company has not disclosed to the Purchasers and the
holders of Purchaser Securities in writing and of which any of its officers,
directors or executive employees is aware and which would reasonably be expected
to have a material adverse effect upon the expected business, financial
condition, operations, assets, or business prospects of the Company and its
Subsidiaries taken as a whole.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
As a material inducement to the Company to enter into this Agreement and to
engage in the transactions and enter into the agreements contemplated hereby
(including, without limitation, issuing the Preferred Units hereunder and under
the Prior Purchase Agreements), each of the Purchasers hereby represents and
warrants for itself, severally and not jointly, that:
a. ORGANIZATION; AUTHORIZATION. Such Purchaser (if an entity)
is duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization. If such Purchaser is an entity, the execution,
delivery, and performance of this Agreement, the LLC Agreement, the Registration
Agreement, the Securityholders Agreement, the Performance Vesting Agreement, and
the other agreements contemplated hereby to which such Purchaser is a party by
such Purchaser and the consurnmation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all requisite action on the
part of such Purchaser and the partners, stockholders, members, or other owners
thereof, and no other proceedings on its or their part (other than giving notice
of drawdowns on fund capital commitments) is necessary to authorize the
execution, delivery or performance of this Agreement or such other agreements.
If such Purchaser is an individual, such Purchaser has all requisite capacity
and authority to execute and
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deliver this Agreement, the Registration Agreement, the Securityholders
Agreement, the Performance Vesting Agreement, and the other agreements
contemplated hereby to which such Purchaser is a party, and to perform and
consummate the transactions contemplated hereby and thereby. This Agreement
constitutes, and each of the other agreements contemplated hereby to which such
Purchaser is a party will when executed constitute, a valid and binding
obligation of such Purchaser, enforceable in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and limitations
on the availability of equitable remedies. If such Purchaser is an entity, the
execution, delivery, and performance by such Purchaser of this Agreement, the
Registration Agreement, the Securityholders Agreement, the Performance Vesting
Agreement, and the other agreements contemplated hereby to which such Purchaser
is a party do not and shall not conflict with or constitute a default, breach,
or violation of the terms, conditions, or provisions of such Purchaser's
partnership agreement, certificate of incorporation, or similar organizational
document.
b. BROKERAGE. Other than as specifically described on the
attached "PURCHASERS BROKERAGE SCHEDULE," there are no claims for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement binding upon any Purchaser. Each Purchaser shall pay, and hold the
Company and each other Purchaser harmless against, any liability, loss or
expense (including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses) arising in connection with any such arrangement or
agreement binding upon such Purchaser (including, without limitation, the claims
described on the Purchasers Brokerage Schedule); PROVIDED that with respect to
any claim not described on the Purchasers Brokerage Schedule, such an
indemnifying Purchaser need not indemnify pursuant to this Section 5B any
Purchaser that had actual knowledge of such arrangement or agreement prior to
the Closing Date.
c. PURCHASERS' INVESTMENT REPRESENTATIONS. Each Purchaser
hereby represents that (i) it is an "accredited investor" as defined in Rule 501
of Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act, (ii) it is sophisticated in financial matters and is able to
evaluate the risks and benefits of the investment in the Preferred Units, (iii)
it has had an opportunity to ask questions and receive answers concerning the
terms and conditions of its purchase of the Preferred Units issued hereunder and
has had full access to such other information concerning the Company (including,
without limitation, the Offering Memorandum and copies of the agreements
referred to herein) as it has requested, (iv) it is acquiring the Restricted
Securities purchased hereunder or acquired pursuant hereto for its own account
with the present intention of holding such securities for purposes of
investment, and (v) it has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable state
securities laws; PROVIDED that nothing contained herein shall prevent any
Purchaser or any subsequent holders of Restricted Securities from transferring
such securities in compliance with the provisions of Section 8 hereof. Each
certificate or instrument representing Restricted Securities shall be imprinted
with a legend in substantially the following form:
"The securities represented by this certificate were originally issued
on __________________, and have not been registered under the
Securities Act of 1933, as amended. The transfer of the securities
represented by this certificate is
- 11 -
subject to the conditions specified in the Equity Purchase Agreement
dated as of May 18, 1998 (and as amended and restated as of January 28,
1999), as amended and modified from time to time, between the issuer
(the "Company") and the initial holder of these securities. The Company
reserves the right to refuse the transfer of such securities until such
conditions have been fulfilled with respect to such transfer.
A copy of such conditions shall be famished by the Company to the
holder hereof upon written request and without charge."
SECTION 6. COVENANTS.
a. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
shall deliver to each of MDCP and ▇▇▇▇▇▇▇▇ Holdings (so long as such Person
holds any Purchaser Securities) and to any subsequent holder of at least 20% of
the Purchaser Securities then outstanding (each of MDCP and ▇▇▇▇▇▇▇▇ and each
such subsequent 20% holder, a "QUALIFIED HOLDER") all the information described
in this paragraph 6A:
i. as soon as available but in any event within 30
days after the end of each monthly accounting period in each fiscal
year: (a) unaudited consolidating (unless the Company has only one
operating Subsidiary) and consolidated statements of income and cash
flows of the Company and its Subsidiaries for such monthly period and
for the period from the beginning of the fiscal year to the end of such
month, and unaudited consolidating (unless the Company has only one
operating Subsidiary) and consolidated balance sheets of the Company
and its Subsidiaries as of the end of such monthly period, setting
forth in each case comparisons to the Company's annual budget and to
the corresponding period in the preceding fiscal year, and all such
statements shall be prepared in accordance with GAAP (subject to the
absence of footnote disclosures and to changes resulting from normal
year-end adjustments for recurring accruals), and shall be certified by
the Company's chief financial officer, and (b) a status report prepared
by the Company's chief financial officer, indicating whether the
Company has met its budgeted financial goals (including, without
limitation, those specified in any Approved Business Plan and those
delivered pursuant to subparagraph (v) below), discussing the reasons
for any variation from such goals, and describing what actions the
Company and its Subsidiaries have taken and propose to take in order to
meet budgeted financial targets in the future;
ii. within 45 days after the end of each quarterly
accounting period in each fiscal year, an Officer's Certificate stating
that the Company is not in default under this Agreement or the
Registration Agreement, and that neither the Company nor any of its
Subsidiaries is in default under any of its other material agreements
or, if any such default exists, specifying the nature and period of
existence thereof and what actions the Company and its Subsidiaries
have taken and propose to take with respect thereto;
iii. within 90 days after the end of each fiscal
year, consolidating (unless the Company has only one operating
Subsidiary) and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such fiscal year, and consolidating
(unless the Company has only one operating Subsidiary) and consolidated
balance sheets of
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the Company and its Subsidiaries as of the end of such fiscal year,
setting forth in each case comparisons to the Company's annual budget
and to the preceding fiscal year, all prepared in accordance with GAAP,
and accompanied by (a) with respect to the consolidated portions of
such statements, an opinion containing no exceptions or qualifications
(except for qualifications regarding specified contingent liabilities)
of an independent accounting firm of recognized national standing
acceptable to the holders of a majority of the Purchaser Securities,
(b) a certificate from such accounting firm, addressed to the Board,
stating that in the course of its examination nothing came to its
attention that caused it to believe that there was any default
specified in paragraph 6A(ii) in existence or that there was any other
default by the Company or any Subsidiary in the fulfillment of or
compliance with any of the terms, covenants, provisions or conditions
of any material agreement to which the Company or any Subsidiary is a
party or, if such accountants have reason to believe any such default
by the Company or any Subsidiary exists, a certificate specifying the
nature and period of existence thereof, and (c) a copy of such firm's
annual management letter to the Board;
iv. promptly upon receipt thereof, any additional
reports, management letters or other detailed information concerning
significant aspects of the Company's operations or financial affairs
given to the Company by its independent accountants (and not otherwise
contained in other materials provided hereunder);
v. at least 30 days but not more than 90 days prior
to the beginning of each fiscal year, an annual budget prepared on a
monthly basis for the Company and its Subsidiaries for such fiscal year
(displaying anticipated statements of income and cash flows and balance
sheets and budgeted capital expenditures), which annual budget shall
have been approved by the holders of a majority of the Purchaser
Securities then outstanding (as approved, an "APPROVED BUDGET"), and
promptly upon preparation thereof any other significant budgets
prepared by the Company and any revisions of such annual or other bud
gets (it being understood that any revisions of any Approved Budget
must be approved by the holders of a majority of the Purchaser
Securities then outstanding);
vi. promptly (but in any event within five business
days) after the discovery or receipt of notice of any default under any
material agreement to which the Company or any of its Subsidiaries is a
party, any condition or event which is reasonably likely to result in
any material liability under any federal, state, local or foreign
statute or regulation relating to public health and safety, worker
health and safety or pollution or protection of the environment or any
other material adverse change, event or circumstance affecting the
Company or any Subsidiary (including, without limitation, the filing of
any material litigation against the Company or any Subsidiary or the
existence of any dispute with any Person which involves a reasonable
likelihood of such litigation being commenced), an Officer's
Certificate specifying the nature and period of existence thereof and
what actions the Company and its Subsidiaries have taken and propose to
take with respect thereto;
vii. within ten days after transmission thereof,
copies of all financial statements, proxy statements, reports and any
other general written communications which the Company sends to its
stockholders and copies of all registration statements and all
- 13 -
regular, special or periodic reports which it files, or (to its
knowledge) any of its officers or directors files with respect to the
Company, with the Securities and Exchange Commission or with any
securities exchange on which any of its securities are then listed, and
copies of all press releases and other statements made available
generally by the Company to the public concerning material developments
in the Company's and its Subsidiaries' businesses; and
viii. with reasonable promptness, such other
information and financial data concerning the Company and its
Subsidiaries as any Qualified Holder may reasonably request.
Each of the financial statements referred to in subparagraphs 6A(i) and (iii)
shall be true and correct in all material respects as of the dates and for the
periods stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal year-end adjustments for recurring
accruals (none of which would, alone or in the aggregate, be materially adverse
to the financial condition, operating results, assets, operations or business
prospects of the Company and its Subsidiaries taken as a whole).
Notwithstanding the foregoing, the provisions of this paragraph 6A shall cease
to be effective so long as the Company (a) is subject to the periodic reporting
requirements of the Securities Exchange Act and continues to comply with such
requirements and (b) promptly provides to each Qualified Holder all reports and
other materials filed by the Company with the Securities and Exchange Commission
pursuant to the periodic reporting requirements of the Securities Exchange Act;
provided that so long as any Preferred Units remain outstanding, the Company
shall continue to deliver to each Qualified Holder the information specified in
subparagraphs 6A(ii), 6A(iii)(b), 6A(v), 6A(vi), and 6A(viii).
Except as otherwise required by law or judicial order or decree or requested by
any governmental agency or authority, or as specified in the immediately
following proviso, each Person entitled to receive information regarding the
Company and its Subsidiaries under paragraph 6A or 6B shall not disclose any
such information to any third party (other than such Person's advisors or
representatives); PROVIDED that such a Person may disclose such information (i)
in connection with the sale or transfer of any Purchaser Securities if such
Person's prospective transferee agrees in writing to be bound by the provisions
of this paragraph, (ii) if such Person is a partnership, limited liability
company or corporation, to such Person's partners, members and shareholders, as
the case may be, in the ordinary course of its business, or (iii) if such
information is available to the public other than by reason of any breach of
this provision.
For purposes of this Agreement, all holdings of Preferred Units or other
Purchaser Securities by Persons who are Affiliates shall be aggregated for
purposes of meeting any threshold tests under this Agreement.
b. INSPECTION OF PROPERTY. To the extent not otherwise
prohibited by law or regulation, the Company shall permit any representatives
designated by any Qualified Holder, upon reasonable notice and during normal
business hours and at such other times as any such Qualified Holder may
reasonably request to (i) visit and inspect any of the properties of the Company
and its Subsidiaries, (ii) examine the corporate and financial records of the
Company and its Subsidiaries
- 14 -
and make copies thereof or extracts therefrom and (iii) discuss the affairs,
finances and accounts of any such corporations with the directors, officers, key
employees and independent accountants of the Company and its Subsidiaries. The
presentation of an executed copy of this Agreement (or photocopy thereof) by any
Qualified Holder or representative thereof to the Company's independent
accountants shall constitute the Company's permission to its independent
accountants to participate in discussions with such Persons.
c. RESTRICTIONS. Prior to the consummation of a Public
Offering, the Company shall not, without the prior written consent of the
holders of a majority of the Purchaser Securities then outstanding (or, in the
case of clauses (i), (ii), (vii), and (ix), without the prior written consent of
the holders of at least 80% of the Purchaser Securities then outstanding):
i. directly or indirectly declare or pay any
dividends or make any distributions upon any of its equity securities
other than the Preferred Units pursuant to the terms of the LLC
Agreement;
ii. directly or indirectly redeem, purchase or
otherwise acquire, or permit any Subsidiary to redeem, purchase or
otherwise acquire, any of the Company's or any Subsidiary's capital
stock or other equity securities (including, without limitation, any
warrants, options and other rights to acquire such capital stock or
other equity securities), except for (A) cancellations of the Company's
equity securities pursuant to the Performance Vesting Agreement; (B)
repurchases of equity securities (including, without limitation, any
warrants, options and other rights to acquire capital stock or other
equity securities) pursuant to the terms of any Permitted Securities
Plan (as defined below), (C) repurchases of the Company's securities
pursuant to the terms of the Executive Securities Agreements, or (D)
repurchases of the Company's securities pursuant to the terms of
Section 7 (Purchasers' Put Rights) or Section 10B(ii) (Remedies for
Defaulting Purchaser) hereof,
iii. except for (w) issuances of Preferred Units at
the Closing as contemplated under this Agreement or of Common Units
upon conversion of such Preferred Units, (x) issuances of Common Units
as contemplated under the Executive Securities Agreements or to Key
Employees as contemplated under the LLC Agreement, (y) issuances of
Senior Units in accordance with the LLC Agreement pursuant to the
repurchase provisions set forth in the Executive Securities Agreements
or in Section 10B(ii) hereof or pursuant to the forfeiture provisions
set forth in the Performance Vesting Agreement, or (z) issuances of
securities pursuant to the terms of a Permitted Securities Plan (as
defined below), authorize, issue or enter into any agreement providing
for the issuance (contingent or otherwise) of (a) any notes or debt
securities containing equity features (including, without limitation,
any notes or debt securities convertible into or exercisable or
exchangeable for capital stock or other equity securities, issued in
connection with the issuance of capital stock or other equity
securities or containing profit participation features), other than as
may be expressly specified in any Approved Business Plan or Approved
Budget, or (b) any capital stock or other equity securities (or any
securities convertible into or exercisable or exchangeable for any
capital stock or other equity securities);
- 15 -
iv. make, or permit any Subsidiary to make, any loans
or advances to, guarantees for the benefit of, or Investments in, any
Person (other than a Wholly Owned Subsidiary established under the laws
of a jurisdiction of the United States or any of its territorial
possessions or under the laws of any country that is a member of the
European Union), except for (a) reasonable advances to employees or
customers in the ordinary course of business, (b) acquisitions
permitted under subparagraph (viii) below, and (c) Investments having a
stated maturity no greater than one year from the date the Company
makes such Investment in (1) obligations of the United States
government or any agency thereof or obligations guaranteed by the
United States government, (2) certificates of deposit of commercial
banks having combined capital and surplus of at least $500 million or
(3) commercial paper with a rating of at least "PRIME-1 " by ▇▇▇▇▇'▇
Investors Service, Inc. (or the equivalent rating from another,
comparably reputable rating agency);
v. merge or consolidate with any Person or, except as
permitted under subparagraph (viii) below, permit any Subsidiary to
merge or consolidate with any Person (other than a merger between
Wholly Owned Subsidiaries);
vi. sell, lease or otherwise dispose of, or permit
any Subsidiary to sell, lease or otherwise dispose of, any assets,
where such assets (together with all other assets disposed of by the
Company and its Subsidiaries in such transaction or a series of related
transactions) represent more than 10% of the consolidated assets of the
Company and its Subsidiaries (computed on the basis of book value,
determined in accordance with GAAP, or fair market value, determined by
the Board in its reasonable good faith judgment), or sell or
permanently dispose of any of its or any Subsidiary's material
Intellectual Property Rights;
vii. liquidate, dissolve or effect a recapitalization
or reorganization, or permit any Subsidiary to liquidate, dissolve or
effect a recapitalization or reorganization, in any form of transaction
(including, without limitation, any reorganization of a corporation
into a limited liability company, a partnership or any other
non-corporate entity which is treated as a partnership for federal
income tax purposes, or vice versa), except as expressly provided in
the LLC Agreement or Securityholders Agreement;
viii. acquire, or permit any Subsidiary to acquire,
any interest in any company or business (whether by a purchase of
assets, purchase of stock, merger or otherwise), or enter into any
joint venture (in each case, other than as may be expressly specified
in any Approved Business Plan or Approved Budget);
ix. enter into, or permit any Subsidiary to enter
into, the ownership, active management or operation of any business
other than the provision of wireline telecommunications services in
markets in Europe;
x. become subject to, or permit any of its
Subsidiaries to become subject to (including, without limitation, by
way of amendment to or modification of) any agreement or instrument
which by its terms would (under any circumstances) restrict (a) the
right of any Subsidiary to make loans or advances or pay dividends to,
transfer property to, or repay any
- 16 -
Indebtedness owed to, the Company or another Subsidiary or (b) the
Company's performance of its obligations under the provisions of this
Agreement (including, without limitation, the provisions of Section 7
(Put Rights) hereof), the Securityholders Agreement, the Registration
Agreement, or the LLC Agreement (including, without limitation,
provisions relating to the making of distributions with respect to the
Preferred Yield on, and the conversion of, any Preferred Units);
xi. except as expressly contemplated by this
Agreement, make any amendment to the LLC Agreement;
xii. enter into, amend, modify or supplement, or
permit any Subsidiary to enter into, amend, modify or supplement, any
agreement, transaction, benefit plan, commitment or arrangement with
any of its or any Subsidiary's executive officers, directors or
Affiliates or with any individual related by blood, marriage or
adoption to any such indi vidual or with any entity in which any such
Person or individual owns at least a 2% beneficial interest, except for
customary and reasonable employment arrangements and except as
otherwise expressly contemplated by this Agreement;
xiii. establish or acquire any Subsidiaries other
than Wholly Owned Subsidiaries organized under the laws of a
jurisdiction of the United States or any of its territorial possessions
or under the laws of any country that is a member of the European
Union;
xiv. create, incur, assume or suffer to exist, or
permit any Subsidiary to create, incur, assume or suffer to exist,
Indebtedness on a consolidated basis in an aggregate outstanding
principal amount in excess of $100,000 at any time (other than
Indebtedness expressly specified in any Approved Business Plan or
Approved Budget);
xv. create, incur, assume or suffer to exist, or
permit any Subsidiary to create, incur, assume or suffer to exist, any
Liens other than Permitted Liens;
xvi. make any capital expenditures or permit any
Subsidiary to make any capital expenditures (including, without
limitation, payments with respect to capitalized leases, as determined
in accordance with GAAP) exceeding $100,000 in the aggregate on a
consolidated basis during any 12-month period (other than capital
expenditures expressly specified in any Approved Business Plan or
Approved Budget);
xvii. enter into, or permit any Subsidiary to enter
into, any leases or other rental agreements (excluding capitalized
leases, as determined in accordance with GAAP) under which the amount
of the aggregate lease payments for all such agreements exceeds
$100,000 on a consolidated basis for any 12-month period, PROVIDED that
the Company and its Subsidiaries shall be allowed to enter into any
leasing arrangements (including, but not limited to, leasing
telecommunications networks) that are expressly specified in any
Approved Business Plan or Approved Budget;
- 17 -
xviii. change its fiscal year or permit any
Subsidiary to change its fiscal year;
xix. adopt any option plan or employee securities
ownership plan or issue any equity securities (including any options,
warrants, or other rights to acquire equity securities) to any Key
Employee other than (a) in accordance with the LLC Agreement, (b) in
accordance with the repurchase provisions set forth in the Executive
Securities Agreements or in Section 10B(ii) hereof, or in accordance
with the forfeiture provisions set forth in the Performance Vesting
Agreement, or (c) pursuant to a securities plan, the terms of which
shall be approved by the holders of a majority of the Purchaser
Securities then outstanding, under which Key Employees may, after the
third anniversary of the date of the Prior Agreement, be granted equity
securities (including options, warrants, or other rights to acquire
equity securities) representing up to 5% of the Company's Common Units,
determined immediately after giving-effect to the transactions
contemplated hereby on a fully diluted and as-if-converted basis (a
"PERMITTED SECURITIES PLAN");
xx. issue or sell any shares of the capital stock or
other equity securities (including, without limitation, any warrants,
options, and other rights to acquire such capital stock or other equity
securities) of any Subsidiary to any Person other than the Company or a
Wholly Owned Subsidiary;
xxi. terminate the employment of, hire, or enter
into, amend or modify any employment agreement or arrangement with the
Company's chief executive officer;
xxii. grant, or permit any of its Subsidiaries to
grant, any registration rights (including, without limitation, any
demand or piggyback registration rights) with respect to any of its
capital stock or other equity securities, other than pursuant to the
Registration Agreement as in effect on the Closing Date;
xxiii. amend, waive, or otherwise modify any Approved
Business Plan;
xxiv. use the proceeds from the sale of the Preferred
Units hereunder or from any Subsequent Closings other than for working
capital and budgeted general corporate purposes reflected in any
Approved Business Plan or Approved Budget, or for such other purposes
as are contemplated by any Approved Business Plan or Approved Budget;
xxv. select, retain, or enter into, amend, terminate,
or modify any retention arrangement with, any underwriter, manager, or
financial advisor to advise the Company and its Subsidiaries with
respect to any proposed Sale of the Company or to underwrite, or advise
the Company with respect to, a Public Offering or any acquisitions or
financing transactions;
xxvi. change any of the accounting principles or
practices utilized by the Company or its Subsidiaries, or select,
retain, or amend, terminate, or modify any retention arrangement with
any accounting firm engaged to audit the Company's or its Subsidiaries'
financial statements; or
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xxvii. agree or commit to any of the foregoing.
d. AFFIRMATIVE COVENANTS. So long as any Purchaser Securities
remain outstanding, the Company shall, and shall cause each Subsidiary (if any)
to, unless it has received the prior written consent of the holders of a
majority of the Purchaser Securities then outstanding:
i. at all times cause to be done all things necessary
to maintain, preserve and renew its corporate or other entity
existence;
ii. at all times take all actions and cause to be
done all things necessary to obtain, maintain, preserve, and renew all
material licenses, authorizations, orders, permits, and other
governmental approvals necessary to the conduct of its businesses as
presently proposed to be conducted and as hereafter conducted;
iii. maintain and keep its material properties in
good repair, working order and condition, and from time to time make
all necessary or desirable repairs, renewals and replacements, so that
its businesses may be properly and advantageously conducted in all
material respects at all times;
iv. pay and discharge when payable all taxes,
assessments and governmental charges imposed upon its properties or
upon the income or profits therefrom (in each case before the same
becomes delinquent and before penalties accrue thereon) and all
material claims for labor, materials or supplies which if unpaid would
by law become a Lien upon any of its property unless and to the extent
that the same are being contested in good faith and by appropriate
proceedings and adequate reserves (as determined in accordance with
GAAP) have been established on its books with respect thereto;
v. comply with all other material obligations which
it incurs pursuant to any contract or agreement, whether oral or
written, express or implied, as such obligations become due, unless and
to the extent that the same are being contested in good faith and by
appropriate proceedings and adequate reserves (as determined in
accordance with GAAP) have been established on its books with respect
thereto;
vi. comply in all material respects with all
applicable laws, rules and regulations of the Securities and Exchange
Commission, the ART (and other comparable governmental bodies) and all
other governmental authorities to which any of the Company or its
Subsidiaries are subject;
vii. apply for and continue in force with good and
responsible insurance companies adequate insurance covering risks of
such types and in such amounts as are customary for corporations of
similar size engaged in similar lines of business; and
viii. maintain proper books of record and account
which present fairly in all material respects its financial condition
and results of operations and make provisions on
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its financial statements for all such proper reserves as in each case
are required in accordance with GAAP.
e. COMPLIANCE WITH AGREEMENTS. The Company shall perform and
observe all of its obligations to each holder of Preferred Units or other
Purchaser Securities as set forth in the LLC Agreement and the Registration
Agreement.
f. CURRENT PUBLIC INFORMATION. At all times after the Company
has filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of, or otherwise becomes subject to the periodic
reporting requirements of, either the Securities Act or the Securities Exchange
Act, the Company shall file all reports required to be filed by it under the
Securities Act and the Securities Exchange Act and the rules and regulations
adopted by the Securities and Exchange Commission thereunder and shall take such
further action as any holder or holders of Restricted Securities may reasonably
request, all to the extent required to enable such holders to sell Restricted
Securities pursuant to (i) Rule 144 adopted by the Securities and Exchange
Commission under the Securities Act (as such rule may be amended from time to
time) or any similar rule or regulation hereafter adopted by the Securities and
Exchange Commission or (ii) a registration statement on Form S-2 or S-3 or any
similar registration form hereafter adopted by the Securities and Exchange
Commission. Upon request, the Company shall deliver to any holder of Restricted
Securities a written statement as to whether it has complied with such
requirements.
g. INTELLECTUAL PROPERTY RIGHTS. The Company shall, and shall
cause each Subsidiary to, possess and maintain all material Intellectual
Property Rights necessary to the conduct of their respective businesses and own
all right, title and interest in and to, or have a valid license for, all such
Intellectual Property Rights. Neither the Company nor any Subsidiary shall take
any action, or fail to take any action, which would result in the invalidity,
abandonment, misuse or unenforceability of such Intellectual Property Rights or
which would infringe upon or misappropriate any rights of other Persons.
h. PUBLIC DISCLOSURES. The Company shall not, nor shall it
permit any Subsidiary to, disclose any Investor's or any holder of Investor
Securities' name or identity as an investor in the Company in any press release
or other public announcement or in any document or material filed with any
governmental entity, without the prior written consent of such Person, unless
such disclosure is required by applicable law or governmental regulations or by
order of a court of competent jurisdiction, in which case prior to making such
disclosure the Company shall give written notice to such Person describing in
reasonable detail the proposed content of such disclosure and shall permit such
Person to review and comment upon the form and substance of such disclosure.
i. [INTENTIONALLY OMITTED].
j. PREEMPTIVE RIGHTS.
i. If the Company authorizes the issuance or sale of any
Common Units (or any securities containing options or rights to acquire any
Common Units), other than an Exempt Issuance (as defined below), the Company
shall first offer to sell to each holder of Purchaser Securities or
- 20 -
Fully Vested Securities a portion of the securities to be issued equal to the
number of securities to be issued MULTIPLIED BY the quotient obtained by
dividing (1) the number of Purchaser Securities and Fully Vested Securities held
by such holder, by (2) the total number of Purchaser Securities and Fully Vested
Securities then outstanding. Each such holder shall be entitled to purchase such
securities at the most favorable price and on the most favorable terms as such
securities are to be offered to any other Persons; PROVIDED that if all Persons
entitled to purchase or receive such securities are required to also purchase
other securities of the Company, the holders exercising their rights pursuant to
this paragraph shall also be required to purchase the same strip of securities
(on the same terms and conditions) that such other Persons are required to
purchase. The purchase price for all securities offered to such holders
hereunder shall be payable in cash.
ii. In order to exercise its purchase rights hereunder, a
holder of Purchaser Securities or Fully Vested Securities must within 30 days
after receipt of written notice from the Company describing in reasonable detail
the securities being offered, the purchase price thereof, the payment terms and
such holder's percentage allotment, deliver a written notice to the Company
describing such holder's election hereunder. If all of the securities offered to
the holders of Purchaser Securities and Fully Vested Securities are not fully
subscribed, the remaining stock and securities shall be reoffered by the Company
to the holders purchasing their full allotment upon the terms set forth in this
paragraph, except that such holders must exercise their rights within 5 business
days after receipt of such reoffer.
iii. Upon the expiration of the offering periods described
above, the Company shall be entitled to sell such securities which the holders
of Purchaser Securities and Fully Vested Securities have not elected to purchase
during the 180 days following such expiration at a price not less and on other
terms and conditions no more favorable to the purchasers thereof than that
offered to such holders. Any securities offered or sold by the Company after
such 180-day period must be reoffered to the holders of Purchaser Securities and
Fully Vested Securities pursuant to the terms of this paragraph.
iv. The rights of the holders of Purchaser Securities and
Fully Vested Securities under this paragraph 6J shall terminate upon the
consummation of the first to occur of (x) a Qualified Public Offering and (y) a
Sale of the Company.
v. For purposes of this Agreement, "EXEMPT ISSUANCE" shall
mean any issuance (a) of Preferred Units at the Closing as contemplated under
this Agreement, (b) of Common Units as contemplated under the Executive
Securities Agreements or to Key Employees as contemplated under the LLC
Agreement, (c) of securities upon conversion or exercise of, or in exchange for,
any securities of the Company or any options or other rights to acquire
securities of the Company, (d) to Key Employees of the Company and its
Subsidiaries pursuant to the terms of a Permitted Securities Plan (as defined
above) or otherwise, (d) of the Company's securities in connection with the
acquisition of another company or business, (e) as a pro rata distribution with
respect to the Company's Common Units, (f) pursuant to any securities split,
securities dividend, recapitalization or reorganization that does not dilute the
economic interest of any holder of Common Units, (g) of warrants or equity
securities issued to a lender in connection with its loan to the Company or any
of its Subsidiaries, (h) of Senior Units in accordance with the LLC Agreement
pursuant to the
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repurchase provisions set forth in the Executive Securities Agreements or
Section 10B(ii) hereof or pursuant to the forfeiture provisions set forth in the
Performance Vesting Agreement, or (i) pursuant to a Public Offering.
vi. Each of the parties to this Agreement accepts,
acknowledges, and agrees that the provisions of this Section 6 are entered into
for the benefit of the holders of Fully Vested Securities as third-party
beneficiaries, and that such provisions shall be enforceable by the holders of
Fully Vested Securities as provided herein.
SECTION 7. PURCHASERS' PUT RIGHTS.
a. PUT RIGHT.
i. At any time and from time to time on or after the seventh
anniversary of the date of the Prior Agreement, but not after the consummation
of a Qualified Public Offering or a Sale of the Company, each holder of
Purchaser Securities and Class B Senior Units shall have the right to require
the Company to repurchase all, but not less than all, of the outstanding
Purchaser Securities and Class B Senior Units held by such holder at the
Repurchase Price (as defined below) by giving written notice to the Company of
such holder's exercise of this right (the "EXERCISE NOTICE").
ii. Within 10 days after receipt of an Exercise Notice, the
Company shall give written notice (the "REPURCHASE NOTICE") to each other holder
of Purchaser Securities and Class B Senior Units, setting forth the identity of
the holder tendering such Exercise Notice, the number of Purchaser Securities
and Class B Senior Units to be repurchased from such holder, and a reasonable
approximation of the fair market value of the Company's assets (net of any
liabilities) and of each Purchaser Security and Class B Senior Unit at the time
of such Repurchase Notice. Each other holder of Purchaser Securities or Class B
Senior Units shall be entitled to join in such repurchase and require the
Company to purchase all, but not less than all, of the Purchaser Securities and
Class B Senior Units held by such holder at the same closing, at the same price,
and on the same terms as the holder tendering the Exercise Notice by giving
Exercise Notice within 20 days after the date of the Repurchase Notice.
iii. Promptly (but in any event within five days after the end
of this 20-day period), the Company shall send each holder of Purchaser
Securities and Class B Senior Units written notice updating the information
contained in the Repurchase Notice (the "REVISED REPURCHASE NOTICE").
iv. Within 10 days after the Repurchase Price (as defined
below) for the Purchaser Securities and Class B Senior Units to be repurchased
at any repurchase hereunder has been determined as set forth below, the Company
shall send a notice to each holder of Purchaser Securities and Class B Senior
Units setting forth the consideration to be paid for the Purchaser Securities
and Class B Senior Units to be repurchased, as well as a time and place,
mutually agreeable to the Company and the holders of a majority of the total
number of Purchaser Securities and Class B Senior Units to be repurchased
(treating the Purchaser Securities and the Class B Senior
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Units as a single class for purposes of such consent), for the closing of the
repurchase transaction. At the closing of the repurchase transaction, the
electing holders shall sell to the Company and the Company shall purchase from
such holders the Purchaser Securities and Class B Senior Units specified in the
Revised Repurchase Notice at the Repurchase Price (as defined below).
b. DUTIES OF THE COMPANY. The Company shall do everything
within its power under the law and the LLC Agreement, including but not limited
to assuming or refinancing debt, obtaining consents or waivers from its or its
Subsidiaries' lenders, recapitalizing the Company, consummating a Public
Offering, or selling the Company or one or more of its Subsidiaries, to enable
the Company to satisfy its repurchase obligations under this Section 7 (and each
holder of Purchaser Securities shall vote all Company securities over which it
has voting control, and shall take all such further actions, as may be necessary
or desirable to effectuate the foregoing).
c. REPURCHASE PRICE. The repurchase price for each Purchaser
Security or Class B Senior Unit repurchased by the Company under this Section 7
(the "REPURCHASE PRICE") shall be equal to (i) in the case of any Preferred
Unit, the greater of (A) the "Liquidation Value" of such Preferred Unit
(together with all accrued but unpaid "Preferred Yield" thereon) as of the date
of valuation as calculated under the LLC Agreement and (B) the Fair Market Value
for such Preferred Unit, and (ii) in the case of any other Purchaser Security or
any Class B Senior Unit, the Fair Market Value for such security.
d. FAIR MARKET VALUE OF SECURITIES.
i. The "FAIR MARKET VALUE" of any Purchaser Securities and
Class B Senior Units to be repurchased hereunder (the "VALUED SECURITIES") shall
be determined in accordance with this paragraph 7D.
ii. The holders of the Valued Securities to be repurchased and
the holders of the Company's Common Units (other than Valued Securities)
(determined on a fully diluted, as-if-converted basis, but excluding all
Un-Performance-Vested Securities) shall attempt in good faith to agree on the
Fair Market Value of the Valued Securities to be repurchased. Any agreement
reached by the holders of a majority of the Valued Securities, on the one hand,
and the holders of a majority of the Company's Common Units (other than Valued
Securities) (determined on a fully diluted, as-if-converted basis, but excluding
all Un-Performance-Vested Securities), on the other hand, shall be final and
binding on all parties hereto.
iii. If such Persons are unable to reach such agreement within
20 days after the giving of any Repurchase Notice, the Fair Market Value of any
Valued Securities that are publicly traded shall be the average, over a period
of 21 days consisting of the date of the Exercise Notice and the 20 consecutive
business days prior to that date, of the average of the closing prices of the
sales of such securities on the principal securities exchange on which such
securities may at that time be listed, or, if there have been no sales on such
exchange on any day, the average of the highest bid and lowest asked prices on
such exchange at the end of such day, or, if on any day such securities are not
so listed, the average of the representative bid and asked prices quoted in the
Nasdaq System as of 4:00 P.M., New York time, or, if on any day such securities
are not quoted in the Nasdaq System,
- 23 -
the average of the highest bid and lowest asked prices on such day in the
domestic over-the-counter market as reported by the National Quotation Bureau
Incorporated, or any similar successor organization.
iv. If such Persons are unable to reach agreement pursuant to
subparagraph (ii) within 20 days after the giving of such Repurchase Notice, and
to the extent any Valued Securities are not publicly traded:
(1) The holders of a majority of the Valued
Securities to be repurchased, on the one hand, and the holders of a
majority of the Company's Common Units (other than Valued Securities)
(determined on a fully diluted, as-if-converted basis, but excluding
all Un-Performance-Vested Securities), on the other hand, shall each,
within 10 days thereafter, choose one investment banker or other
appraiser with experience in valuing companies such as the Company, and
the two investment bankers/appraisers so selected shall together select
a third investment banker/appraiser similarly qualified.
(2) The three investment bankers/appraisers shall
first appraise the fair market value of the Company's equity (based on
the assumption of an orderly, arm's length sale (structured to produce
the highest price to the equity holders of the Company, whether such
structure is a merger, combination, sale of equity securities, sale of
assets, or otherwise) to a willing unaffiliated buyer (or to a willing
affiliated strategic buyer, PROVIDED that the investment
bankers/appraisers shall not consider any premium that such affiliated
strategic buyer would be willing to pay to the extent such premium is
attributable solely to such Person's then current affiliation with the
Company, unless the Company or its equityholders have received a fully
financed, firm Commitment offer (with no material conditions) from such
affiliated strategic buyer to purchase a majority (based on common
equity equivalents) of the Company's outstanding equity at a price that
includes such premium, IT BEING UNDERSTOOD, HOWEVER, that the
investment bankers/appraisers shall consider, without the need for such
a firm commitment offer, the premium, if any, that is attributable to
such Person's future expected synergies to be generated by combining
such Person's operations with those of the Company and its Subsidiaries
if such Person were to acquire the Company). The three investment
bankers/appraisers shall then appraise the fair market value of such
non-publicly-traded Valued Securities as follows:
(i) the fair market value of each Common
Unit (or equivalent common equity security) shall be equal to
the fair market value of the Company's equity DIVIDED BY the
total number of Common Units (or equivalent common equity
securities) outstanding on the date of the giving of the
Exercise Notice (determined on a fully diluted,
as-if-converted basis, but excluding all Un-Performance-Vested
Securities);
(ii) the fair market value of each Preferred
Unit shall be equal to the greater of (x) the Liquidation
Value (as defined in the LLC Agreement) of such Preferred
Unit, together with all accrued but unpaid Preferred Yield (as
defined in the LLC Agreement) thereon, and (y) the fair market
value (determined in accordance
- 24 -
with subparagraph (1) above) of the Common Units (including
fractional units) into which such Preferred Unit is
convertible on the date of the giving of the Exercise Notice;
(iii) the fair market value of each Class B
Senior Unit shall be equal to the Class B Senior Value (as
defined in the LLC Agreement) of such Class B Senior Unit,
together with all accrued but unpaid Class B Senior Yield (as
defined in the LLC Agreement) thereon, on the date of the
giving of the Exercise Notice; and
(iv) the fair market value of any other
non-publicly-traded Valued Securities shall be the fair value
of such securities, determined on the basis of an orderly,
arm's length sale to a willing, unaffiliated buyer, taking
into account all relevant factors determinative of value.
The three investment bankers/appraisers shall, within thirty days of
their retention, provide the written results of such appraisals to the
holders of a majority of the Valued Securities to be repurchased, on
the one hand, and the holders of a majority of the Company's Common
Units (other than Valued Securities) (determined on a fully diluted,
as-if-converted basis, but excluding all Un-Performance-Vested
Securities), on the other hand.
(3) The "FAIR MARKET VALUE" of the
non-publicly-traded Valued Securities to be repurchased shall be the
average of the two appraisals closest to each other, and such amount
shall be final and binding on all parties hereto; PROVIDED that any
Person electing to have Purchaser Securities repurchased hereunder may
at any time within five days after receiving written notice of such
determination rescind its prior exercise of such Person's put rights by
giving written notice of such revocation to the Company, and upon such
revocation the revoking party will be treated as if it had never
exercised such put right hereunder.
(4) The costs of such appraisal shall be borne by the
Company.
SECTION 8. TRANSFER OF RESTRICTED SECURITIES.
a. GENERAL PROVISIONS. Restricted Securities are transferable
only pursuant to (i) public offerings registered under the Securities Act, (ii)
Rule 144 or Rule 144A of the Securities and Exchange Commission (or any similar
rule or rules then in force) if such rule is available, and (iii) subject to the
various conditions and prohibitions set forth in this Agreement (including,
without limitation, paragraph 8B below) and in the other agreements contemplated
hereby (including, without limitation, the Securityholders Agreement, the
Executive Securities Agreements, and the Performance Vesting Agreement), any
other legally available means of transfer.
b. OPINION DELIVERY. In connection with the transfer of any
Restricted Securities (other than a transfer described in paragraph 8A(i) or
(ii) above), the holder thereof shall deliver written notice to the Company
describing in reasonable detail the transfer or proposed transfer, together with
an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ or other counsel which (to the Company's
reasonable satisfaction) is knowledgeable in securities law matters to the
effect that such transfer of
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#520880
Restricted Securities may be effected without registration of such Restricted
Securities under the Securities Act. In addition, if the holder of the
Restricted Securities delivers to the Company an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ or
such other counsel that no subsequent transfer of such Restricted Securities
shall require registration under the Securities Act, the Company shall promptly
upon such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in paragraph 5C
above. If the Company is not required to deliver new certificates for such
Restricted Securities not bearing such legend, the holder thereof shall not
transfer the same until the prospective transferee has confirmed to the Company
in writing its agreement to be bound by the conditions contained in this Section
8 and paragraph 5C.
c. RULE 144A. Upon the request of any holder of Purchaser
Securities, the Company shall promptly supply to such Person or its prospective
transferees all information regarding the Company required to be delivered in
connection with a transfer pursuant to Rule 144A of the Securities and Exchange
Commission.
d. LEGEND REMOVAL. If any Restricted Securities become
eligible for sale pursuant to Rule 144(k), the Company shall, upon the request
of the holder of such Restricted Securities, remove the legend set forth in
paragraph 5C from the certificates for such Restricted Securities.
SECTION 9. DEFINITIONS.
a. DEFINITIONS. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"ADDITIONAL CONTRIBUTION AMOUNT" has the meaning set forth
with respect thereto in Section 1C.
"AFFILIATE" of any particular Person means (i) any other
Person controlling, controlled by or under common control with such particular
Person, where "control" means the possession, directly or indirectly, of the
power to direct the management and policies of a Person whether through the
ownership of voting securities, by contract or otherwise, and (ii) if such
Person (other than the Company) is a partnership, any partner thereof.
"▇▇▇▇▇" has the meaning set forth with respect thereto in the
preamble.
"▇▇▇▇▇ PURCHASE AGREEMENT" has the meaning set forth with
respect thereto in the preamble.
"APPROVED BUDGET" has the meaning set forth with respect
thereto in Section 6A(v).
"APPROVED BUSINESS PLAN" means a business proposal submitted
by the chief executive officer of the Company to the Board and to the Investors,
setting forth: (i) the proposed business activities of the Company in a
specified geographical area during a specified period of time; (ii) projections
of revenues, expenses, and income from such business activities during such
period;
- 26 -
(iii) projections of the amounts, timing, and proposed terms for vendor
financing and other financing to be obtained by the Company to support such
business activities during such period; (iv) the expected amounts and
anticipated timing of periodic capital drawdowns that the Company's management
deems necessary to support such business activities during such period; and (v)
a budget of proposed expenditures of such capital; PROVIDED, however, that no
such business proposal shall constitute an Approved Business Plan unless and
until it has been approved by the Board and the holders of a majority of the
Purchaser Securities then outstanding.
"ART" means the French Autorite de Regulation des
Telecommunications and includes and governmental body or agency succeeding to
the functions thereof.
"BOARD" means the board of managers of the Company or, if the
Company is hereafter converted into a corporation or other entity form, the
board of directors or comparable governing body of the Company.
"CLASS A SENIOR UNITS" means the Class A Senior Units of the
Company, having the rights and preferences set forth with respect thereto in the
LLC Agreement.
"CLASS B SENIOR UNITS" means the Class B Senior Units of the
Company, having the rights and preferences set forth with respect thereto in the
LLC Agreement.
"CLASS B SENIOR VALUE" has the meaning ascribed to such term
in the LLC Agreement.
"CLASS B SENIOR YIELD" has the meaning ascribed to such term
in the LLC Agreement.
"CLASS C SENIOR UNITS" means the Class C Senior Units of the
Company, having the rights and preferences set forth with respect thereto in the
LLC Agreement.
"▇▇▇▇▇▇▇▇▇ " has the meaning set forth with respect thereto in
the preamble.
"CLOSING" has the meaning set forth with respect thereto in
Section 1D.
"CLOSING DATE" has the meaning set forth with respect thereto
in Section 1D.
"COMMON UNITS" means the Common Units of the Company, having
the rights and preferences set forth with respect thereto in the LLC Agreement.
"COMPANY" has the meaning set forth with respect thereto in
the preamble (including any successor described in Section 10.1 of the LLC
Agreement).
"▇▇▇▇▇▇▇▇" has the meaning set forth with respect thereto in
the preamble.
"▇▇▇▇▇▇▇▇ ASSIGNMENT" has the meaning set forth with respect
thereto in the preamble.
- 27 -
"▇▇▇▇▇▇▇▇ HOLDINGS" has the meaning set forth with respect
thereto in the preamble.
"DOVEY " has the meaning set forth with respect thereto in the
preamble.
"DOVEY ASSIGNMENT" has the meaning set forth with respect
thereto in the preamble.
"DOVEY LLC" has the meaning set forth with respect thereto in
the preamble.
"DOVEY LLC PURCHASE AGREEMENT" has the meaning set forth with
respect thereto in the preamble.
"EXECUTIVE" and "EXECUTIVES" have the meanings set forth with
respect thereto in the preamble.
"EXECUTIVE SECURITIES" means (i) the Common Units issued under
the Executive Securities Agreements (including to Key Employees in accordance
with the LLC Agreement), and (ii) any securities issued directly or indirectly
with respect to any Executive Securities by way of a stock split, stock
dividend, or other division of securities, or in connection with a combination
of securities, recapitalization, merger, consolidation, or other reorganization;
PROVIDED that Executive Securities shall not include any Senior Units. As to any
particular securities constituting Executive Securities, such securities shall
cease to be Executive Securities when they have been (a) effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering them, (b) distributed to the public through a broker, dealer
or market maker pursuant to Rule 144 under the Securities Act (or any similar
provision then in force), or (c) repurchased or otherwise acquired by the
Company (or its assignees). Any reference herein to a "majority of the Executive
Securities" or the "number of Executive Securities" for purposes of comparison
shall refer, with respect to any particular Executive Securities, to the number
of Common Units (or equivalent common equity securities of the Company) then
represented by such Executive Securities (on a fully diluted, as-if-converted
basis, but excluding any Un-Performance-Vested Securities).
"EXECUTIVE SECURITIES AGREEMENT" shall mean any of the
executive securities agreements heretofore entered into between the Company and
an Executive or another employee of the Company or its Subsidiaries, pursuant to
which such employee has purchased Common Units of the Company, as well as any
executive securities agreement substantially similar thereto, entered into by
and between the Company and any Key Employee of the Company and its
Subsidiaries, pursuant to which such Key Employee purchases securities of the
Company in accordance with the LLC Agreement.
"EXEMPT ISSUANCE" has the meaning set forth with respect
thereto in Section 6J.
"EXERCISE NOTICE" has the meaning set forth with respect
thereto in Section 7A(i).
"FAIR MARKET VALUE" has the meaning and shall be determined in
the manner set forth with respect thereto in Section 7D.
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"FULLY VESTED SECURITIES" means Executive Securities as of the
date of any determination to be made hereunder (and after giving effect to any
vesting which would occur under the Performance Vesting Agreement with respect
to any sale of securities on such date) which both (A) have time vested pursuant
to the provisions of the Executive Securities Agreements and (B) are not
Un-Performance-Vested Securities.
"GAAP" means United States generally accepted accounting
principles consistently applied.
"HOLLAND" has the meaning set forth with respect thereto in
the preamble.
"HOLLAND PURCHASE AGREEMENT" has the meaning set forth with
respect thereto in the preamble.
"▇▇▇▇▇" has the meaning set forth with respect thereto in the
preamble.
"INCREMENTAL PREFERRED UNITS" has the meaning set forth with
respect thereto in Section 1A.
"INCREMENTAL PURCHASE PRICE" has the meaning set forth with
respect thereto in Section 1C.
"INDEBTEDNESS" means at a particular time, without
duplication, (i) any indebtedness for borrowed money or indebtedness issued in
substitution for or exchange of indebtedness for borrowed money, (ii) any
indebtedness evidenced by any note, bond, debenture or other debt security,
(iii) any indebtedness for the deferred purchase price of property or services
with respect to which a Person is liable, contingently or otherwise, as obligor
or otherwise (other than trade payables and other current liabilities incurred
in the ordinary course of business which are not more than six months past due),
(iv) any commitment by which a Person assures a creditor against loss
(including, without limitation, contingent reimbursement obligations with
respect to letters of credit), (v) any indebtedness guaranteed in any manner by
a Person (including, without limitation, guarantees in the form of an agreement
to repurchase or reimburse), (vi) any obligations under capitalized leases with
respect to which a Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or with respect to which obligations a Person assures a
creditor against loss, (vii) any indebtedness secured by a Lien on a Person's
assets and (viii) any unsatisfied obligation for "withdrawal liability" to a
"multiemployer plan" as such terms are defined under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
"INITIAL CONTRIBUTION" has the meaning set forth with respect
thereto in Sections 1B and 1C and under the Prior Purchase Agreements.
"INTELLECTUAL PROPERTY RIGHTS" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works
- 29 -
and registrations and applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v) computer software,
data, data bases and documentation thereof, (vi) trade secrets and other
confidential information (including, without limitation, ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works, financial and
marketing plans and customer and supplier lists and information), (vii) other
intellectual property rights and (viii) copies and tangible embodiments thereof
(in whatever form or medium).
"INVESTMENT" as applied to any Person means (i) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
"INVESTOR" and "INVESTORS" have the meanings set forth with
respect thereto in the preamble.
"INVESTOR SECURITIES" means (i) the Preferred Units issued to
the Investors hereunder (including under the Prior Purchase Agreements), (ii)
any Common Units issued or issuable upon conversion of the Preferred Units
referred to in paragraph (i), and (iii) any securities issued directly or
indirectly with respect to any of the foregoing securities by way of a stock
split, stock dividend, or other division of securities, or in connection with a
combination of securities, recapitalization, merger, consolidation, or other
reorganization; PROVIDED that Investor Securities shall not include any Senior
Units. As to any particular securities constituting Investor Securities, such
securities shall cease to be Investor Securities when they have been (a)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, (b) distributed to the public
through a broker, dealer or market maker pursuant to Rule 144 under the
Securities Act (or any similar provision then in force), or (c) repurchased or
otherwise acquired by the Company or forfeited pursuant to the terms of the
Performance Vesting Agreement. Any reference herein to a "majority of the
Investor Securities" or the "number of Investor Securities" for purposes of
comparison shall refer, with respect to any particular Investor Securities, to
the number of Common Units (or equivalent common equity securities of the
Company) then represented by such Investor Securities (on a fully diluted,
as-if-converted basis).
"KEY EMPLOYEES" has the meaning set forthwith respect thereto
in Section 4B(i).
"LACEY" has the meaning set forth with respect thereto in the
preamble.
"LACEY PURCHASE AGREEMENT" has the meaning set forth with
respect thereto in the preamble.
"▇▇▇▇" has the meaning set forth with respect thereto in the
preamble.
- 30 -
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against the Company, any of its
Subsidiaries or any Affiliate, any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code or any similar statute
other than to reflect ownership by a third party of property leased to the
Company or any of its Subsidiaries under a lease which is not in the nature of a
conditional sale or title retention agreement, or any subordination arrangement
in favor of another Person (other than any subordination arising in the ordinary
course of business).
"LIQUIDATION VALUE" has the meaning ascribed to such term in
the LLC Agreement.
"LLC AGREEMENT" has the meaning set forth with respect thereto
in Section 2B.
"MAXIMUM COMMITMENT" means, (i) with respect to a Purchaser's
Prior Preferred Units, the maximum commitment amount relating to such Prior
Preferred Units set forth opposite such Purchaser's name on the SCHEDULE OF
PRIOR PURCHASERS, and (ii) with respect to a Purchaser's Incremental Preferred
Units, the maximum commitment amount relating to such Incremental Preferred
Units set forth opposite such Purchaser's name on the SCHEDULE OF PURCHASERS.
"MDCP" has the meaning set forth with respect thereto in the
preamble.
"OFFERING MEMORANDUM" means the Preliminary Offering
Memorandum dated as of December 29, 1998, concerning the proposed private
placement of certain unit securities consisting of notes and equity interests of
certain of the Company's Subsidiaries.
"OFFICER'S CERTIFICATE" means a certificate signed by the
Company's president or its chief financial officer, stating that (i) the officer
signing such certificate has made or has caused to be made such investigations
as are reasonably necessary in order to permit him to verify the accuracy of the
information set forth in such certificate and (ii) such certificate does not
misstate any material fact and does not omit to state any fact necessary to make
the certificate not misleading.
"ORIGINAL PURCHASERS" has the meaning set forth with respect
thereto in the preamble.
"PARTICIPATING PURCHASERS" has the meaning set forth with
respect thereto in the preamble.
"▇▇▇▇▇▇▇" has the meaning set forth with respect thereto in
the preamble.
"PERFORMANCE VESTING AGREEMENT" has the meaning set forth with
respect thereto in Section 2E.
- 31 -
"PERMITTED LIEN" means:
(i) tax liens with respect to taxes not yet due and
payable or which are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established in
accordance with GAAP;
(ii) deposits or pledges made in connection with, or
to secure payment of, utilities or similar services, workers'
compensation, unemployment insurance, old age pensions or other social
security obligations;
(iii) purchase money security interests in any
property acquired by the Company or any Subsidiary to the extent
permitted by this Agreement;
(iv) interests or title of a lessor under any lease
permitted by this Agreement;
(v) mechanics', materialmen's or contractors' liens
or encumbrances or any similar lien or restriction for amounts not yet
due and payable;
(vi) easements, rights-of-way, restrictions and other
similar charges and encumbrances not interfering with the ordinary
conduct of the business of the Company and its Subsidiaries or
detracting from the value of the assets of the Company and its
Subsidiaries; and
(vii) security interests in the assets of the Company
and its Subsidiaries granted to the Company's and its Subsidiaries'
lenders to secure Indebtedness permitted under Section 6C above.
"PERMITTED SECURITIES PLAN" has the meaning set forth with
respect thereto in Section 6C(xix).
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"PREFERRED UNITS" means the Preferred Units of the Company,
having the rights and preferences set forth with respect thereto in the LLC
Agreement.
"PREFERRED YIELD" has the meaning ascribed to such term in the
LLC Agreement.
"PRIOR AGREEMENT" has the meaning set forth with respect
thereto in the preamble.
"PRIOR PREFERRED UNITS" has the meaning set forth with respect
thereto in Section ▇▇.
- ▇▇ -
"▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇" has the meaning set forth with
respect thereto in the preamble.
"PRIOR PURCHASERS" has the meaning set forth with respect
thereto in the preamble.
"PUBLIC OFFERING" means any underwritten sale of the Company's
common stock pursuant to an effective registration statement under the
Securities Act filed with the Securities and Exchange Commission on Form S-1 (or
a successor form adopted by the Securities and Exchange Commission); provided
that the following shall not be considered a Public Offering: (i) any issuance
of common stock as consideration for a merger or acquisition, and (ii) any
issuance of common stock or rights to acquire common stock to existing
securityholders or to employees of the Company or its Subsidiaries on Form S-4
or Form S-8 (or any successor forms adopted by the Securities and Exchange
Commission) or otherwise.
"PURCHASER" and "PURCHASERS" have the meanings set forth with
respect thereto in the preamble.
"PURCHASER SECURITIES" means (i) the Preferred Units issued to
the Purchasers hereunder (including under the Prior Purchase Agreements), (ii)
any Common Units issued or issuable upon conversion of the Preferred Units
referred to in paragraph (i), and (iii) any securities issued directly or
indirectly with respect to any of the foregoing securities by way of a stock
split, stock dividend, or other division of securities, or in connection with a
combination of securities, recapitalization, merger, consolidation, or other
reorganization; PROVIDED that Purchaser Securities shall not include any Senior
Units. As to any particular securities constituting Purchaser Securities, such
securities shall cease to be Purchaser Securities when they have been (a)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, (b) distributed to the public
through a broker, dealer or market maker pursuant to Rule 144 under the
Securities Act (or any similar provision then in force), or (c) repurchased or
otherwise acquired by the Company (or its assignee) or forfeited pursuant to the
terms of the Performance Vesting Agreement. Any reference herein to a "majority
of the Purchaser Securities" or the "number of Purchaser Securities" for
purposes of comparison shall refer, with respect to any particular Purchaser
Securities, to the number of Common Units (or equivalent common equity
securities of the Company) then represented by such Purchaser Securities (on a
fully diluted, as-if-converted basis).
"QUALIFIED HOLDER" has the meaning set forth with respect
thereto in Section 6A.
"QUALIFIED PUBLIC OFFERING" means a Public Offering where BOTH
(i) the proceeds (net of underwriting discounts and
commissions) received by the Company in exchange for its issuance of
shares of common stock in such Public Offering equal or exceed $60
million, AND
(ii) the price per share of common stock paid to the Company
in such Public Offering equals or exceeds the product of (x) 3.0 TIMES
(y) the quotient of (A) the aggregate Initial Contributions and
Subsequent Contributions made on or prior to the date of such
- 33 -
Public Offering with respect to all Purchaser Securities then
outstanding, divided by (B) the number of shares of the Company's
common stock represented by all Purchaser Securities (on a fully
diluted, as-if-converted basis) outstanding immediately prior to the
consummation of such Public Offering.
"REGISTRATION AGREEMENT" has the meaning set forth with
respect thereto in Section 2D.
"REPURCHASE NOTICE" has the meaning set forth with respect
thereto in Section 7A(ii).
"REPURCHASE PRICE" has the meaning set forth with respect
thereto in Section 7C.
"RESTRICTED SECURITIES" means (i) the Preferred Units issued
hereunder (including under the Prior Purchase Agreements), (ii) the Common Units
issued upon conversion of the Preferred Units, and (iii) any securities issued
with respect to the securities referred to in clauses (i) or (ii) above by way
of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular Restricted Securities, such securities shall cease to be
Restricted Securities when they have (a) been effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them, (b) become eligible for sale pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act or (c) been otherwise
transferred and new certificates for them not bearing the Securities Act legend
set forth in paragraph 5C have been delivered by the Company in accordance with
paragraph 8B. Whenever any particular securities cease to be Restricted
Securities, the holder thereof shall be entitled to receive from the Company,
without expense, new securities of like tenor not bearing a Securities Act
legend of the character set forth in paragraph 5C.
"SALE OF THE COMPANY" means the arm's length sale of the
Company to a third party or group of third parties acting in concert, pursuant
to which such party or parties acquire (i) equity securities of the Company
possessing the voting power under normal circumstances to control the Company,
or (ii) all or substantially all of the Company's assets determined on a
consolidated basis (in either case, whether by merger, consolidation, sale or
transfer of the Company's equity securities, or sale or transfer of the
Company's consolidated assets).
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SECURITIES AND EXCHANGE COMMISSION" means the United States
Securities and Exchange Commission and includes any governmental body or agency
succeeding to the functions thereof.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"SECURITYHOLDERS AGREEMENT" has the meaning set forth with
respect thereto in Section 2C.
- 34 -
"SENIOR UNITS" means the Company's Class A Senior Units, Class
B Senior Units, and Class C Senior Units.
"SUBSEQUENT CLOSING" means each of the subsequent closings
under the Prior Agreement (including, with respect to the Additional
Contribution Amounts, the Closing) at which the Purchasers made or make
"Subsequent Contributions" within the meaning of the Prior Agreement.
"SUBSEQUENT CONTRIBUTION" has the meaning set forth with
respect thereto in Sections 1B and 1C and under the Prior Purchase Agreements.
"SUBSIDIARY" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a limited liability company, partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director, manager or general
partner of such limited liability company, partnership, association or other
business entity. For purposes of this Agreement, if the context does not
otherwise indicate in respect of which Person the term "SUBSIDIARY" is used, the
term "SUBSIDIARY" shall refer to any Subsidiary of the Company.
"UN-PERFORMANCE-VESTED SECURITIES" means any Executive
Securities which are subject to performance vesting, but have not yet
performance vested, pursuant to the provisions of the Performance Vesting
Agreement.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, a
Subsidiary of which all of the outstanding capital stock or other ownership
interests (other than director shares) are owned by such Person or another
Wholly Owned Subsidiary of such Person. For purposes of this Agreement, if the
context does not otherwise indicate in respect of which Person the term "WHOLLY
OWNED SUBSIDIARY" is used, the term "WHOLLY OWNED SUBSIDIARY" shall refer to any
Wholly Owned Subsidiary of the Company.
b. KNOWLEDGE. As used in Section 4, the terms "knowledge" or
"aware" in respect of the Company shall mean and include (i) the actual
knowledge or awareness of the Executives (including Dovey), and (ii) with
respect to each of the Persons identified in clause (i) above, the knowledge or
awareness which a prudent business person would have obtained in the conduct of
his business after making reasonable inquiry and reasonable diligence with
respect to the particular matter in question.
- 35 -
SECTION 10. MISCELLANEOUS PROVISIONS.
a. EXPENSES. The Company shall pay, and hold each of MDCP and
▇▇▇▇▇▇▇▇ Holdings harmless against liability for the payment of, the reasonable
out-of-pocket expenses of MDCP and ▇▇▇▇▇▇▇▇ Holdings, including the reasonable
fees and expenses of MDCP's special counsel, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, and MDCP's
special French counsel, Serra ▇▇▇▇▇▇▇, arising in connection with (i) the
performance of due diligence investigations concerning the Company and its
operations and management, the negotiation and execution of this Agreement, the
LLC Agreement, and the other agreements contemplated hereby, and the
consummation of the transactions to occur at the Closing or any Subsequent
Closing as contemplated hereby, (ii) any amendments or waivers (whether or not
the same become effective) under or in respect of this Agreement, the LLC
Agreement, or any of the other agreements contemplated hereby, (iii) the
enforcement of the rights granted under this Agreement, the LLC Agreement, or
any of the other agreements contemplated hereby, (iv) any filing with any
governmental agency with respect to such Investor's investment in the Company or
any other filing with any governmental agency with respect to the Company or any
of its Subsidiaries which mentions such Investor, and (v) stamp and other taxes
which may be payable in respect of the execution and delivery of this Agreement
or the issuance, delivery or acquisition of any Preferred Units or any Common
Units issuable upon conversion of any Preferred Units.
b. REMEDIES.
i. Each holder of Purchaser Securities shall have all rights
and remedies set forth in this Agreement and the LLC Agreement and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law or at equity. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce (upon demonstration of irreparable harm)
such rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement, and to
exercise all other rights granted by law.
ii. If at the Closing, after all conditions to the Closing set
forth in Section 2 hereof have been either satisfied or waived in accordance
with the terms hereof, any Prior Purchaser refuses to tender such Purchaser's
required Additional Contribution Amount for such Closing, the Company shall have
the right, in addition to the remedies available under Section 10B(i) above, to
repurchase all Purchaser Securities held by such refusing Purchaser for an
aggregate price equal to the lesser of (x) the Fair Market Value of such
securities and (y) the sum of the Initial Contribution made with respect to such
Purchaser Securities and all Subsequent Contributions made with respect to such
Purchaser Securities at all prior Subsequent Closings. The Company shall have
the option, in accordance with the LLC Agreement, to pay such repurchase price
by issuing to such holder in exchange for such Purchaser Securities an equal
number of Class C Senior Units, and each such Class C Senior Unit issued in
connection with such repurchase shall be deemed as of the date of such
repurchase to have capital contributions to the Company made with respect to
such Class C Senior Unit equal to the lesser of (A) the Fair Market Value of the
repurchased Unit in exchange for which such Class C Senior Unit was issued and
(B) the aggregate capital contributions (including Initial Contributions and
Subsequent Contributions) made on or prior to the date of such repurchase with
respect to the repurchased Unit in exchange for which such Class C Senior Unit
was issued (PROVIDED
- 36 -
that if the Company has prior to the date of such repurchase converted into a
corporation or other corporate form, the Company shall have the option to pay
such repurchase price in the form of a promissory note with the following terms:
(a) principal equal to the repurchase price for such Purchaser Securities; (b)
liquidation preference junior to (I) all senior debt obligations of the Company
then or thereafter incurred, (II) the "Liquidation Value" of the Preferred Units
(together with all accrued but unpaid "Preferred Yield" thereon) and (III) the
"Class B Senior Value" of the Class B Senior Units (together with all accrued
but unpaid "Class B Senior Yield" thereon) as determined under the LLC
Agreement; (c) simple interest at a rate of 8% per annum; and (d) all principal
and accrued interest due and payable on the first to occur of (1) the closing of
a Qualified Public Offering, (2) a Sale of the Company, and (3) the fifth
anniversary of the issuance of such note). If a Purchaser's holdings of
Purchaser Securities are repurchased pursuant to this paragraph, such Purchaser
shall with respect to the repurchased Purchaser Securities thereafter retain no
further (I) right to enforce or benefit from the provisions of this Agreement or
any other agreement contemplated hereby to which such Purchaser is a party,
other than the promissory note described in the immediately preceding sentence,
or (II) obligation under this Agreement to make Subsequent Contributions at any
Subsequent Closing.
c. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended, modified, or
waived, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the prior written consent of the holders of a majority of the Purchaser
Securities outstanding at the time such amendment or waiver becomes effective;
PROVIDED that if any such amendment, modification or waiver would adversely
affect any holder of Purchaser Securities relative to the holders of Purchaser
Securities voting in favor of such amendment, modification, or waiver, such
amendment, modification or waiver shall also require the written consent of the
holders of a majority of the Purchaser Securities held by all holders so
adversely affected; AND PROVIDED FURTHER that if any such amendment,
modification or waiver would adversely affect the holders of Executive
Securities relative to the holders of Purchaser Securities voting in favor of
such amendment, modification, or waiver, such amendment, modification or waiver
shall also require the written consent of the holders of a majority of the
Executive Securities held by all holders so adversely affected; AND PROVIDED
FURTHER that if any such amendment, modification or waiver is to a provision in
this Agreement that requires a specific vote to take an action thereunder or to
take an action with respect to the matters described therein, such amendment,
modification or waiver shall not be effective unless such vote is obtained with
respect to such amendment, modification or waiver. No course of dealing between
the Company and any holder of Purchaser Securities or any delay by such holder
in exercising any rights hereunder or under the LLC Agreement shall operate as a
waiver of any rights of such holder.
d. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
regardless of any investigation made by any Purchaser or on its behalf.
e. SUCCESSORS AND ASSIGN. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto
- 37 -
shall bind and inure to the benefit of the respective successors and assigns of
the parties hereto whether so expressed or not. In addition, and whether or not
any express assignment has been made, (i) the provisions of this Agreement which
are for any Purchaser's benefit as a Purchaser or holder of Purchaser Securities
are also for the benefit of, and enforceable by, any subsequent holder of such
Purchaser Securities, and (ii) the provisions of this Agreement relating to each
Purchaser's obligation to make Subsequent Contributions at Subsequent Closings
with respect to such Purchaser's Purchaser Securities (including, without
limitation, such obligation, the preconditions to such obligation, and the
Maximum Commitment applicable to such Purchaser Securities) shall bind and inure
to the benefit of any subsequent holder of such Purchaser Securities in
proportion to the number of such Purchaser Securities acquired by such
subsequent holder.
f. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
g. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all which counterparts taken together shall constitute
one and the same Agreement.
h. DESCRIPTIVE HEADINGS; INTERPRETATION; NO STRICT
CONSTRUCTION. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a substantive part of this Agreement.
Whenever required by the context, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
forms of nouns, pronouns, and verbs shall include the plural and vice versa.
Reference to any agreement, document, or instrument means such agreement,
document, or instrument as amended or otherwise modified from time to time in
accordance with the terms thereof, and if applicable hereof. The use of the
words "include" or "including" in this Agreement shall be by way of example
rather than by limitation. The use of the words "or," "either" or "any" shall
not be exclusive. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. The parties agree that prior drafts of this
Agreement shall be deemed not to provide any evidence as to the meaning of any
provision hereof or the intent of the parties hereto with respect hereto.
i. GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE
EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF DELAWARE OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE. IN FURTHERANCE OF THE FOREGOING,
THE INTERNAL LAW OF THE STATE OF DELAWARE SHALL CONTROL THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT (AND ALL SCHEDULES AND EXHIBITS HERETO), EVEN
THOUGH UNDER THAT JURISDICTION'S
- 38 -
CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER
JURISDICTION WOULD ORDINARILY APPLY.
j. NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when (a) delivered
personally to the recipient, (b) telecopied to the recipient (with hard copy
sent to the recipient by reputable overnight courier service (charges prepaid)
that same day) if telecopied before 5:00 p.m. Chicago, Illinois time on a
business day, and otherwise on the next business day, or (c) one business day
after being sent to the recipient by reputable overnight courier service
(charges prepaid). Such notices, demands and other communications shall be sent
to the following Persons at the following addresses:
TO MDCP:
Three First National Plaza, Suite 3800
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
TO ▇▇▇▇▇▇▇▇:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
- 39 -
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Vice President, Secretary, and General Counsel
▇▇▇▇▇▇▇▇ Financial Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
TO ANY EXECUTIVE: at the Company's address, to the attention
of such Executive
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
TO THE COMPANY:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
k. BUSINESS DAYS. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday, or legal
holiday in the State of Colorado, the Republic of France or the jurisdiction in
which the Company's principal office is located, the time period shall
automatically be extended to the business day immediately following such
Saturday, Sunday, or legal holiday.
l. DELIVERY BY FACSIMILE. This Agreement, the agreements
referred to herein, and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall reexecute original forms thereof and
- 40 -
deliver them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.
m. EFFECTIVENESS OF AGREEMENT. This Agreement shall be valid,
binding, and effective against each Purchaser when it has been signed by such
Purchaser. Pursuant to Section 10C of the Prior Agreement, this Agreement
amending and restating the Prior Agreement (and superseding the Prior Purchase
Agreements) shall be valid, binding, and effective against all Purchasers when
it has been signed by the holders of a majority of the Purchaser Securities.
* * * * *
- 41 -
IN WITNESS WHEREOF, the parties hereto have executed this
First Amended and Restated Equity Purchase Agreement as of the date first above
written.
COMPANY:
COMPLETEL LLC
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, its Chairman and CEO
INVESTORS:
▇▇▇▇▇▇▇▇ HOLDINGS LIMITED PARTNERSHIP
By LPL Investment Group, Inc., its
general partner
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, its Chairman
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By Madison Dearborn Partners II, L.P., its
general partner
By Madison Dearborn Partners, Inc., its
general partner
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Its Managing Director
--------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
(Signature Page for First Amended and Restated Equity Purchase Agreement)
_/s/ Reed E. Hundt_______________________________________
▇▇▇▇ ▇. ▇▇▇▇▇
EXECUTIVES:
DOVEY FAMILY PARTNERS LLLP
By _/s/ ▇▇▇▇▇ ▇. Dovey___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, its general partner
DOVEY COMPANY LLC
By _/s/ ▇▇▇▇▇ ▇. Dovey___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, its manager
_/s/ ▇▇▇▇▇ ▇. Dovey______________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
_/s/ ▇▇▇▇▇▇▇ ▇. Pearson__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_/s/ ▇▇▇▇▇▇▇ ▇. Clevenger_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_/s/ ▇▇▇▇▇ ▇. Lacey_______________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
(Signature Page for First Amended and Restated Equity Purchase Agreement)