Exhibit 10.2
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Amendment No. 7
to
Transaction Agreement
This Amendment No. 7 ("Amendment") to the Transaction Agreement dated as of
July 8, 1998, as amended by Amendment No. 1 dated as of December 18, 1998, by
Amendment No. 2 dated as of February 18, 1999, by Amendment No. 3 dated as of
May 14, 1999, by Amendment No. 4 dated as of June 30, 1999, by Amendment No. 5
dated as of June 30, 1999, and by Amendment No. 6 dated as of November 18, 1999
(the "Original Agreement"), is made as of August 1, 2000, among Choice One
Communications Inc. (the "Corporation") and the persons listed on the signature
pages hereto.
WHEREAS, the Corporation, a newly formed Delaware corporation that is a
wholly-owned subsidiary of the Corporation ("Barter Acquisition Corporation"),
US Xchange, Inc., a Delaware corporation ("Target"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Pol,
the holder of all of the issued and outstanding capital stock of Target, have
entered into an Agreement and Plan of Merger as of May 14, 2000 (the "Merger
Agreement");
WHEREAS, upon consummation of the merger (the "Merger") under the Merger
Agreement in accordance with the terms and conditions thereof, Target will be
merged with and into Barter Acquisition Corporation, and Target will become a
wholly-owned subsidiary of the Corporation (the "Acquisition");
WHEREAS, in connection with obtaining financing for the Acquisition, the
Corporation will issue and sell Series A Senior Cumulative Preferred Stock and
warrants to purchase shares of the Corporation's common stock substantially on
the terms set forth in a commitment letter dated April 27, 2000 between MSDWCP
IV and the Corporation;
WHEREAS, Section 6.19 of the Merger Agreement contemplates that the
Original Agreement will be amended to provide for a Board seat for a designee of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ on the terms specified below; and
WHEREAS, the parties desire to amend the Original Agreement to provide for
certain governance arrangements to be effective upon consummation of the Merger;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Section 5.03. (a) Section 5.03(a) is hereby
amended by deleting "seven" and replacing it with "eleven".
(b) Section 5.03(b) is hereby amended by (1) deleting "and" after the
semicolon at the end of clause (iii), (2) inserting "; and" at the end of
clause (iv) before the period, and (3) inserting thereafter the following
new clause (v):
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"(v) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (or other designee of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Pol
approved by the Board of Directors, which approval shall not be
unreasonably withheld) shall be designated as a director so long as
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Pol beneficially owns at least 4,500,000 shares of
Common Stock."
SECTION 2. Amendment to Definitions. (a) The Original Agreement is hereby
amended by inserting the following definition before the definition of
"Subsidiary":
"Preferred Stock" means any Series A Senior Cumulative Preferred Stock
of the Corporation issued to MSDWCP IV to obtain financing for the
Acquisition as contemplated in the commitment letter dated April 27,
2000 between the Corporation and MSDWCP IV.
(b) The definition of "MSCP Equity" in the Original Agreement is
hereby amended by inserting the following new sentence at the end thereof:
"Notwithstanding the foregoing, in order to facilitate ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ Capital Partners IV, L.P.'s status as a "venture capital
operating company" (for purposes of the "plan asset" regulations
published by the Department of Labor in relation to pension and other
plans subject to the Employee Retirement Income Security Act of 1974,
as amended), in the event any Preferred Stock is issued to MSDWCP IV
in connection with the Acquisition, such Preferred Stock will be
deemed MSCP Equity for purposes of Section 5.03 (the intent being
that, without limiting the rights provided for under Section
5.03(b)(i) by virtue of Common Stock ownership, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Capital Partners IV, L.P. will be entitled to designate at
least one director so long as it holds at least 10% of the Preferred
Stock initially issued to it)."
SECTION 3. Other Defined Terms. Capitalized terms used in this Amendment
and not otherwise defined have the meanings ascribed to them in the Original
Agreement.
SECTION 4. Effectiveness; Effect of Amendment, Governing Law. The
amendment to Section 5.03 effected by Section 1 hereof and the amendment to
Definitions effected by Section 2 hereof shall be not effective until
consummation of the Merger. Except as amended hereby, the Original Agreement
shall remain unchanged. The Original Agreement, as amended hereby, shall remain
in full force and effect. This Amendment shall be governed by, and construed
under, the laws of the State of Delaware, all rights and remedies being governed
by said laws, without regard to conflict of laws principles.
SECTION 5. Counterparts. This Amendment 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 such counterparts taken together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
CHOICE ONE COMMUNICATIONS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Chairman and Chief Executive Officer
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MANAGEMENT MEMBERS
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as a Management Member and
as Chief Executive Officer of Choice One
Communications, Inc.
/s/ ▇▇▇ ▇▇▇▇▇▇ - ▇▇▇
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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/s/ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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/s/ ▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
INVESTOR MEMBERS
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL
PARTNERS III, L.P.
By: MSCP III, LLC, its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III,
Inc., its Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Its: Managing Director
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By: ______________________________________
Its: ______________________________________
MSCP III 892 INVESTORS, L.P.
By: MSCP III, LLC, its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III,
Inc., its Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Its: ______________________________________
By: ______________________________________
Its: ______________________________________
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL
PARTNERS III, L.P.
By: MSCP III, LLC, its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III,
Inc., its Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Its: _______________________________________
By: _______________________________________
Its: _______________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL PARTNERS
IV, L.P.
By: MSDW Capital Partners IV, LLC, its
general partner
By: MSDW Capital Partners IV, Inc., its
Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Its: _______________________________________
By: _______________________________________
Its: _______________________________________
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MSDW IV 892 INVESTORS, L.P.
By: MSDW Capital Partners IV, LLC,
its general partner
By: MSDW Capital Partners IV,
Inc., its Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Its: _______________________________________
By: _______________________________________
Its: _______________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL PARTNERS
IV, L.P.
By: MSDW Capital Partners IV, LLC, its
general partner
By: MSDW Capital Partners IV,
Inc., its Member
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Its: _______________________________________
By: _______________________________________
Its: _______________________________________
▇▇▇▇▇▇▇▇ PARTNERS III, L.P.
By: Silverado III, L.P., its General
Partner
By: Silverado III Corp., its General
Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Chairman & CEO
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▇▇▇▇▇▇▇ ▇▇▇▇▇ PARTNERS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Chairman & CEO
FLEET VENTURE RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Chairman & CEO
FLEET EQUITY PARTNERS VI, L.P.
By: Fleet Growth Resources II, Inc., its
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Chairman & CEO
▇▇▇▇▇▇-▇▇▇▇▇▇ MEDIA PARTNERS, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Media, L.L.C., its
general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
FIRST UNION CAPITAL PARTNERS, INC.
By: _______________________________________
Its: _______________________________________
GENERAL ELECTRIC CAPITAL CORPORATION
By: _______________________________________
Its: _______________________________________
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CARAVELLE INVESTMENT FUND, L.L.C.
By: Caravelle Advisors, L.L.C., as
Investment Manager and Attorney In Fact
By: _______________________________________
Its: _______________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
R. ▇▇▇▇▇▇ SILVER
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R. ▇▇▇▇▇▇ Silver