EXHIBIT 10.5
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STOCKHOLDERS AGREEMENT
by and among
METROMEDIA FIBER NETWORK, INC.,
▇▇▇▇ ATLANTIC INVESTMENTS, INC.
and
THE STOCKHOLDERS LISTED ON SCHEDULE I HERETO
Dated as of ___________ __, ____
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.......................................................1
Section 1.1 Certain Definitions..........................................1
Section 1.2 Other References.............................................4
ARTICLE II COVENANTS OF THE PURCHASER........................................5
Section 2.1 Purchase Restrictions........................................5
Section 2.2 Sale Restrictions............................................6
Section 2.3 Other Standstill Restrictions...............................11
ARTICLE III ADDITIONAL PROVISIONS............................................15
Section 3.1 Additional Shares...........................................15
Section 3.2 Tag-Along Rights............................................15
Section 3.3 Directors...................................................19
Section 3.4 Rule 144....................................................19
ARTICLE IV MISCELLANEOUS....................................................19
Section 4.1 Specific Performance........................................19
Section 4.2 Entire Agreement............................................19
Section 4.3 Amendment...................................................20
Section 4.4 Term........................................................20
Section 4.5 Severability................................................20
Section 4.6 Notices.....................................................20
Section 4.7 Governing Law...............................................21
Section 4.8 Successors and Assigns......................................22
Section 4.9 No Recourse.................................................22
Section 4.10 Counterparts...............................................22
Schedule I -- Stockholders
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of ________ __, ____ (this
"Agreement"), by and among Metromedia Fiber Network, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇ Atlantic Investments, Inc., a Delaware
corporation (the "Purchaser"), and for purposes of Sections 3.2 and Section 3.3
and Article 4 only, the stockholders of the Company listed on Schedule I hereto
(each a "Stockholder" and collectively, the "Stockholders").
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of
October 7, 1999 (the "Securities Purchase Agreement"), between the Company and
the Purchaser, the Purchaser has agreed to purchase up to 25,558,109 shares (the
"Shares") of the Company's Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), and has agreed to acquire up to $975,281,364 aggregate
principal amount of 6.15% Convertible Subordinated Notes (the "Notes") that are
convertible, subject to certain conditions, into shares of Class A Common Stock;
and
WHEREAS, as a condition to the willingness of the Company to enter
into the Securities Purchase Agreement, the Company has required that the
Purchaser enter into, and the Purchaser has agreed to enter into, this Agreement
with respect to the Shares and the Notes.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. As used in this Agreement:
(a) The term "Acquisition Proposal" shall mean a bona fide
written proposal received by the Company from any Person or Group that
contemplates a transaction which, if effected, would constitute a Change of
Control of the Company.
(b) The term "Affiliate" shall have the meaning given such
term in Rule 12b-2 under the Exchange Act.
(c) The terms "Beneficial Ownership" and "Beneficial Owner"
shall have the meanings given such terms in Section 13(d)(3) of the Exchange Act
and the rules and regulations promulgated thereunder, and for purposes of
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determining Beneficial Ownership for purposes of Sections 2.1 and 4.4 only, the
Notes shall be deemed immediately convertible into shares of Class A Common
Stock.
(d) The term "Board of Directors" shall mean the Company's
Board of Directors.
(e) The term "Change of Control" shall mean the occurrence of
any of the following: (i) any Person or Group, other than a Permitted Holder, is
or becomes the Beneficial Owner, directly or indirectly, of 35% or more of the
Voting Stock (measured by voting power rather than number of shares) (for the
purposes of this clause, such other Person shall be deemed to Beneficially Own
any voting stock of a specified corporation held by a parent corporation if such
other person beneficially owns, directly or indirectly, more than 35% of the
voting stock (measured by voting power rather than by number of shares) of such
parent corporation and the Permitted Holders beneficially own, directly or
indirectly, in the aggregate a lesser percentage of voting stock (measured by
voting power rather than by number of shares) of such parent corporation and do
not have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
corporation), (ii) during any period of two consecutive years, Continuing
Directors cease for any reason to constitute a majority of the Board of
Directors of the Company, (iii) the Company consolidates or merges with or into
any other Person, or any Person consolidates with, or merges with or into, the
Company, other than a consolidation or merger (a) of the Company into a wholly
owned subsidiary of the Company or (b) pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for cash,
securities or other property with the effect that the beneficial owners of the
outstanding Voting Stock immediately prior to such transaction, beneficially
own, directly or indirectly, at least a majority of the voting stock (measured
by voting power rather than number of shares) of the surviving corporation
immediately following such transaction, (iv) the sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole to any person other than a wholly
owned subsidiary of the Company or a Permitted Holder or a person more than 50%
of the voting stock (measured by voting power rather than by number of shares)
of which is owned, directly or indirectly, following such transaction or
transactions by the Permitted Holders; provided, however, that sales, transfers,
conveyances or other dispositions in the ordinary course of business of capacity
on fiber optic or cable systems owned, controlled or operated by the Company or
any of its subsidiaries or of telecommunications capacity or transmission
rights, rights of way or conduit acquired by the Company or any subsidiaries for
use in the business of the Company or any of its subsidiaries, including,
without limitation, for sale, lease, transfer, conveyance or other disposition
to any customer of the Company or any subsidiaries shall not be
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deemed a disposition of assets for purposes of this clause (iv) , or (v) the
adoption of a plan relating to the total liquidation of the Company.
(f) The term "Class B Common Stock" shall mean the Company's
Class B Common Stock, par value $.01 per share.
(g) The term "Common Stock" shall mean collectively the shares
of Class A Common Stock and the shares of Class B Common Stock determined as a
single class assuming that all outstanding shares of Class B Common Stock had
been converted into shares of Class A Common Stock on the determination date.
(h) The term "Continuing Directors" shall mean individuals who
at the beginning of the period of determination constituted the Board of
Directors, together with any new directors whose election by Board of Directors
or whose nomination for election by the shareholders of the Company was approved
by a vote of a majority of the Board of Directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved or is the designee of any one of the
Permitted Holders or any combination thereof or was nominated or elected by any
such Permitted Holder(s) or any of their designees.
(i) The term "Equity Registration Rights Agreement" shall mean
the Equity Registration Rights Agreement dated as of the date hereof between the
Purchaser and the Company, as the same may be amended from time to time.
(j) The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended or any successor act thereto, and the rules and
regulations promulgated thereunder from time to time.
(k) The term "Form 13F Filer" shall mean any Person required
under Section 13(f) of the Exchange Act to file a Form 13F or that would be a
Person that would satisfy the requirements under Rule 13d-1(b)(1)(i) and
(ii)(A-F, H or I) under the Exchange Act with respect to the acquisition of
securities of the Company, including as a result of a Transfer of Shares or
Notes from the Purchaser and such Person's permitted transferees.
(l) The term "Governmental Entity" shall mean any nation or
government, any state, local or other political subdivision thereof, any court,
arbitrator, official, agency, department or other Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, or any federal, state or local governmental or regulatory agency,
authority, commission or instrumentality.
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(m) The term "Group" shall have the meaning given such term in
Section 13(d)(3) of the Exchange Act and the rules and regulations promulgated
thereunder.
(n) The term "Notes Registration Rights Agreement" shall mean
the Notes Registration Rights Agreement dated as of the date hereof between the
Purchaser and Company, as the same may be amended from time to time.
(o) The term "Permitted Holder" shall mean Metromedia Company,
its general partners and their respective Related Persons and Persons that would
constitute a Class B Permitted Holder, each as defined in the Company's Amended
and Restated Certificate of Incorporation as in effect on the date hereof.
(p) The term "Person" shall mean any individual, sole
proprietorship, partnership, limited liability company, joint venture, trust,
unincorporated organization, association, corporation, institution, public
benefit corporation, entity or government (whether foreign, federal, state,
county, city, municipal or otherwise, including any instrumentality, division,
agency, body or department thereof).
(q) The term "Securities Act" shall mean the Securities Act of
1933, as amended or any successor act thereto, and the rules and regulations
promulgated thereunder from time to time.
(r) The term "Voting Stock" shall mean (i) the Class A Common
Stock, the Class B Common Stock and any other securities issued by the Company
having the ordinary power to vote in the election of directors of the Company
(other than securities having such power only upon the happening of a
contingency), and (ii) the common stock and any other securities issued by any
successor to the Company pursuant to a merger, consolidation or reorganization
having the ordinary power to vote in the election of directors of such successor
company (other than securities having such power only upon the happening of a
contingency).
(s) The term "Transfer" shall have the meaning given such term
under Section 2.2(a) hereof.
Section 1.2 Other References. As used herein, any references to
specified numbers (but not percentages) of Shares, Class A Common Stock, Class B
Common Stock or Common Stock shall be deemed to be references to such number of
Shares, Class A Common Stock, Class B Common Stock or Common Stock as may be
adjusted in the event of any change in the capital stock of the Company by
reason of stock dividends, split-ups, reverse split-ups, mergers,
recapitalizations, subdivisions, conversions, exchanges of shares or the like
occurring after the date of this Agreement.
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ARTICLE II
COVENANTS OF THE PURCHASER
Section 2.1 Purchase Restrictions. (a) Other than the purchase of
the Shares and the Notes pursuant to the Securities Purchase Agreement, the
Purchaser shall not, and shall cause its Affiliates or any Group including the
Purchaser or any of its Affiliates not to acquire shares of Class A Common Stock
or any other Voting Stock, which when combined with shares of Class A Common
Stock and Notes then owned by the Purchaser and its Affiliates would result in
the Purchaser Beneficially Owning more than 22% of the shares of the Common
Stock then issued and outstanding (the "Standstill Cap"), except for any such
purchases by the Purchaser approved by the Board of Directors or otherwise
permitted hereunder; provided, however, that (i) if the Company or any
Stockholder Transfers to any Person or Group shares of Class A Common Stock such
that as a result of such Transfer, such Person or Group would Beneficially Own
22% or more of the shares of Common Stock then issued and outstanding and such
Person or Group is subject to an agreement with the Company restricting or
prohibiting the acquisition of Beneficial Ownership of additional shares of
Class A Common Stock similar to the provisions of this Section 2.1 and with
provisions similar to those contained in Section 2.3 hereof, the Standstill Cap
will be increased to that maximum percentage of shares of Voting Stock the
Beneficial Ownership of which such other Person or Group is permitted to acquire
pursuant to such agreement to the extent it exceeds the Standstill Cap and the
provisions of this Agreement will be deemed modified so they are no less
favorable taken as a whole than those set forth in such agreement with such
other Person or Group, or (ii) if the Company or any Stockholder Transfers to
any Person or Group shares of Class A Common Stock such that as a result of such
Transfer, such Person or Group would Beneficially Own 22% or more of the shares
of the Common Stock then issued and outstanding and such Person or Group is not
subject to an agreement with the Company restricting or prohibiting the
acquisition of Beneficial Ownership of additional shares of Class A Common Stock
similar to the provisions of this Section 2.1 and with provisions similar to
those contained in Section 2.3 hereof, the Standstill Cap and this Agreement
will be terminated automatically without the requirement that any Person takes
any additional action.
(b) Nothing in this Section 2.1 shall require the Purchaser or
its Affiliates to transfer any Shares or Notes if the aggregate percentage
ownership of the Purchaser and its Affiliates is increased as a result of a
reduction in the number of outstanding shares of Common Stock resulting from an
action taken solely by the Company or its Affiliates (including, specifically,
Metromedia Company) including, without limitation, by reason of any
reclassification, recapitalization, stock split, reverse stock split,
combination or exchange of shares, redemption, repurchase or cancellation of
shares or any other similar transaction.
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(c) In the event that the Company shall adopt a stockholder
rights or other preferred rights or "poison pill" plan with provisions that are
triggered by the acquisition of Beneficial Ownership (or any similar concept) of
a specified percentage of the Common Stock (a "Trigger Percentage"), the Company
agrees that, for purposes of determining application of the stockholder rights
plan to the Purchaser, the plan will be deemed to refer to "22%" in all cases
where it in fact refers to any Trigger Percentage that is below 22%.
Section 2.2 Sale Restrictions. (a) The Purchaser shall not, and
shall not cause or permit its Affiliates or any Group, including the Purchaser
or any of its Affiliates to, directly or indirectly, offer, sell, transfer,
assign, exchange, grant an option to purchase, hedge, short sell, encumber,
pledge, hypothecate or otherwise dispose of the Beneficial Ownership of Shares
or any Notes, whether in one or more transactions (any such act or series of
acts, a "Transfer"), except as permitted by this Agreement and otherwise in
compliance with all applicable requirements of law, which any such noncompliance
would have an adverse effect or impact on the Company. In addition, except for
Transfers pursuant to a Public Resale (as defined below) or sales to a Form 13F
Filer, Purchaser may not Transfer any Shares or Notes if immediately after
giving effect to such Transfer the transferee and its Affiliates or any Group
would Beneficially Own 5% or more of the outstanding shares of Common Stock,
unless prior to or simultaneously with any such Transfer, such transferee agrees
in writing to be bound by the terms and conditions of this Agreement. To the
extent any Transfer permitted hereunder requires the approval of the Company or
its Board of Directors, the Company and/or its Board of Directors shall not
unreasonably delay delivering such consent.
(b) The Purchaser shall not, and shall not cause or permit its
Affiliates or any Group including the Purchaser or any of its Affiliates to
Transfer, directly or indirectly, any Shares or any Notes, other than in one or
more of the following transactions: (i) a Transfer of Shares or Notes any time
after ________, 2000(1/) pursuant to (A) a bona fide secondary offering of
Shares or Notes registered under the Securities Act effectuated through the
exercise by the Purchaser or its permitted transferee of its registration rights
as contemplated by Section 2, 3 or 4 of the Equity Registration Rights Agreement
or by Section 2, 3 or 4 of the Notes Registration Rights Agreement, (B) a
purchase agreement with a placement agent or group of placement agents covering
the Shares, Notes or any Derivative Securities (as defined in the Equity
Registration Rights Agreement) that contemplates the immediate resale of
securities by such placement agent pursuant to the resale exemption provided by
Rule 144A promulgated under the Securities Act solely to Qualified Institutional
Buyers (as defined in the Securities Act) and other permitted purchasers under
Rule 144A or to "off-shore purchasers" in a Transfer permitted by Regulation S
promulgated under the Securities Act (any such transaction, a "Rule 144A/ Reg S
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(1/) Six month anniversary of the First Closing Date.
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Transaction"), or (C) bona fide "brokers transactions" as permitted by or as
otherwise permitted by the exemption from registration of the resale of the
Shares under the Securities Act provided by Rule 144 promulgated thereunder;
provided that in the case of each of clauses (A) through (C), no Person or Group
other than a Form 13F Filer, to the Purchaser's knowledge (and the Purchaser
shall require any underwriter or placement agent for such Transfer to agree to
use its reasonable efforts to so ensure), would Beneficially Own in excess of 5%
of the Common Stock then issued and outstanding immediately after giving effect
to such Transfer (a Transfer made pursuant to this clause (i) referred to as a
"Public Resale") and any such Transfer also complies with the limitations
specified in Section 2.2(d) below; and (ii) any other Transfer which has been
approved by the Board of Directors.
(c) From and after ________, 2000(2/) until __________,
2001,(3/) the Purchaser shall not, and shall not cause or permit its Affiliates
or any Group including the Purchaser or any of its Affiliates to Transfer,
directly or indirectly, any Shares or any Notes to any Person that, to the
knowledge of the Purchaser, would result, immediately after giving effect to
such Transfer, in such Person Beneficially Owning more than 5% of the shares of
Common Stock then issued and outstanding, except (i) a Transfer approved by the
Board of Directors, (ii) a Transfer constituting a Public Resale, or (iii) a
Transfer to any Person that is, and immediately after giving effect to such
Transfer, would be a Form 13F Filer.
(d) In addition to the foregoing restrictions, from and after
________, 2000(4/) until ________, 2001,(5/) the Purchaser shall not, and shall
not cause or permit its Affiliates or any Group including the Purchaser or any
of its Affiliates to Transfer, directly or indirectly, any Shares or any Notes
(including any Derivative Securities) that would otherwise be permitted by this
Section 2.2(b) or (c) if, immediately after giving effect to such Transfer, the
Purchaser and its Affiliates would no longer Beneficially Own and own as of
record at least 50% of the number of the Shares and 50% of the aggregate
principal amount of the Notes that were originally acquired by the Purchaser
pursuant to the Securities Purchase Agreement; provided, however, that the
limitations contained in this Section 2.2(d) shall not apply to Transfers by the
Purchaser exercising its Tag-Along Right (as defined below) as provided in and
in accordance with Section 3.2.
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(2/) First anniversary of the First Closing Date.
(3/) Second anniversary of the First Closing Date.
(4/) Six month anniversary of the First Closing Date.
(5/) 18 month anniversary of the First Closing Date.
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(e) From and after ________, 2001,(6/) if the Purchaser has
received a bona fide offer to buy all or any portion of its Shares or Notes from
any Person (a "Third Party Offeror") and desires to accept such offer (in each
case, a "Third Party Offer"), the Purchaser shall send a written notice (an
"Offering Notice") to the Company, which shall state (A) the number and/or
principal amount of Shares and/or Notes proposed to be transferred to the
Third-Party Offeror (the "Offered Securities"), (B) the proposed purchase price
per Share and/or per Note to be paid by the Third Party Offeror (the "Offer
Price"), (C) the name of the Third Party Offeror, and (D) the proposed closing
date for the Third Party Offer (the "Third Party Closing Date") which date shall
not be sooner than 30 days from the date an Offering Notice is received (as
determined under Section 4.6 hereof) by the Company. The Offering Notice shall
also state any other material terms and conditions of the Third Party Offer and
shall include copies of the contemplated definitive agreements (to the extent
available and, if not available, drafts thereof that are the most recent
versions thereof) for the Third Party Offer and all writings between the Third
Party Offeror and the Purchaser that would be reasonably necessary for Purchaser
to establish the terms and conditions of the Third Party Offer. For
clarification purposes, it is understood and agreed that the provisions of this
Section 2.2(e) shall not apply to a Transfer by Purchaser that constitutes a
Public Resale.
(i) The Offering Notice shall not be effective unless
and until all of the following conditions are met: (A) the Offering Notice shall
be accompanied by a certificate of the Purchaser to the Company stating that the
Third Party Offer has been approved by the boards of directors (or the
equivalent if the Third Party Offeror is not a corporation) of the Third Party
Offeror (if required by such Third Party Offeror and solely to the Purchaser's
knowledge based on representations and warranties of the Third Party Offeror),
and that Purchaser has made the Third Party Offeror aware of the rights of the
Company contained in this Section 2.2(e), and that if as a result of such
Transfer of Offered Securities the Third Party Offeror would, immediately after
giving effect to such Transfer (except if the Third-Party Offeror would be a
Form 13F Filer immediately after giving effect to such Transfer), Beneficially
Own 5% or more of the Company's then issued and outstanding shares of Common
Stock, such Person will be obligated to become a party to this Agreement and
agree in writing to be bound by the terms and conditions hereof to the same
extent and in the same manner as the Purchaser; (B) the Offer Price shall be
payable wholly in cash; and (C) the Third Party Offeror shall have furnished
evidence satisfactory to the Company in its reasonable judgment as to the
financial ability or resources of such Third Party Offeror to consummate the
proposed purchase.
(ii) For a period of 30 days after the receipt (as
determined under Section 4.6 hereof) of the Offering Notice pursuant to
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(6/) Second anniversary of the First Closing Date.
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Section 2.2(e)(i) (the "Option Period"): (A) the Company or its designees shall
have the right to purchase all of the Offered Securities at a purchase price
equal to the Offer Price and upon the terms and conditions of the Third Party
Offer; or (B) if the Company and its designees do not elect to purchase all of
the Offered Securities pursuant to clause (A) of this Section 2.2(e)(ii), the
Purchaser shall have the right to sell, to the Third Party Offeror upon the
terms and conditions set forth in the Third Party Offer, that number of Shares
and/or Notes specified in the Offering Notice.
(iii) The option of the Company or its designees under
Section 2.2(e)(ii)(A) shall be exercisable by delivering written notice of the
exercise thereof, which shall be irrevocable, prior to the expiration of the
Option Period, to the Purchaser. Such notice shall state that the Company or its
designees desires to purchase the Offered Securities pursuant to Section
2.2(e)(ii)(A). The failure of the Company to deliver such written notice prior
to the expiration of the Option Period to the Purchaser shall be deemed to be a
waiver of its rights under Section 2.2(e)(ii)(A). The tender of such notice
shall constitute agreement by the Company to purchase from the Purchaser the
Offered Securities at the Offer Price and on the terms and conditions set forth
in the Offering Notice and shall include evidence satisfactory to Purchaser in
its reasonable judgment as to Company's or its designee's financial ability or
resources to consummate the proposed purchase, which agreement can be made
subject to financing only to the same extent that the Third Party Offer is so
subject.
(iv) The closing of the purchase of Offered Securities
subscribed to by the Company or its designees under Section 2.2(e)(ii)(A) shall
be held at the principal office of the Company at 10:00 a.m., local time, on the
Third Party Closing Date or at such other time and place as the parties to the
transaction may agree; provided that the Third Party Closing Date shall be
extended to a later date not to exceed 60 days after such Third Party Closing
Date if the Transfer has not been consummated by the Third Party Closing Date as
a result solely of a failure to obtain a required consent or approval of any
Governmental Entity and the parties are using reasonable commercial efforts to
obtain such required consent or approval; provided, further, that such 60-day
period shall be extended until such required regulatory consents or approvals
are obtained if the delay in obtaining such required regulatory consents and
approvals is solely as a result of the failure of the Company to cooperate in a
commercially reasonable manner with the Purchaser in obtaining the required
regulatory consents and approvals for such Transfer. At such closing, the
Purchaser shall deliver to the Company or its designees certificates
representing the Offered Securities, duly endorsed with a signature guarantee
for transfer and accompanied by all requisite transfer taxes, if any, and such
Offered Securities shall be free and clear of any liens, claims, options,
charges, encumbrances or rights ("Liens") (other than those arising hereunder),
and the Purchaser shall so represent and warrant, and shall further represent
and warrant that it is the beneficial and record owner of such Offered
Securities. The Company or its designees shall, at such closing, deliver to the
Purchaser payment in full in immediately available funds for
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the Offered Securities purchased by it. At such closing, all of the parties to
the transaction shall execute such additional documents as are otherwise
necessary or appropriate.
(v) Unless the Company or its designees elect to
purchase all of the Offered Securities pursuant to Section 2.2(e)(ii)(A), the
Purchaser may sell such portions of its Shares and/or Notes as can be sold under
Section 2.2(e)(ii)(B) to the Third Party Offeror on the terms and conditions of
the Third Party Offer; provided, however, that such sale is bona fide and made
prior to or on the Third Party Closing Date or such later date not to exceed 60
days after such Third Party Closing Date as the Purchaser and the Third Party
Offeror may agree if the Transfer has not been consummated by the Third Party
Closing Date as a result solely of a failure to obtain consent or approval of
any Governmental Entity and the parties are using reasonable commercial efforts
to obtain such consent or approval; provided, further, that such 60-day period
shall be extended until the required regulatory consents or approvals are
obtained if the delay in obtaining such required regulatory consents and
approvals is solely a result of the failure of the Company to cooperate in a
commercially reasonable manner with the Purchaser in obtaining such required
regulatory consents and approvals. If such sale is not consummated prior to or
on the Third Party Closing Date for any reason, except as the same may be
extended as provided above, then the restrictions provided for in this Section
2.2(e) shall again become effective, and no Transfer of such Offered Securities
may be made thereafter (other than to an Affiliate or pursuant to a Transfer
that constitutes a Public Resale) by the Purchaser without again offering the
same to the Company in accordance with this Section 2.2(e). The Company shall
take such actions as the Purchaser reasonably requests, at the Purchaser's sole
cost and expense, to facilitate the Transfer of the Offered Securities to the
Third Party Offeror pursuant to the Third Party Offer.
(f) Subject to Section 2.1(a), nothing in this Agreement shall
prevent or restrict the Purchaser from Transferring any Shares or Notes to any
direct or indirect majority-owned subsidiary of ▇▇▇▇ Atlantic Corporation to
whose board of directors or comparable governing body ▇▇▇▇ Atlantic Corporation
appointed a majority of the members, provided, that, any such transferee shall
agree in writing to be bound hereby and no such Transfer shall act as a novation
of the Purchaser's obligations hereunder unless the consolidated net worth, as
determined in accordance with U.S. generally accepted accounting principles, of
the transferee prior to and after giving effect to such Transfer equals $2
billion and the transferee provides reasonably satisfactory evidence of such
consolidated net worth.
(g) In the event (i) the Company elects to redeem outstanding
Notes pursuant to the provisions of Section 3.07 of the Indenture dated as of
the date hereof (the "Indenture") between the Company and U.S. Bank Trust
National Association prior to the occurrence of the Regulatory Relief Date (as
defined in the Indenture), (ii) the Regulatory Relief Date has occurred and the
Purchaser
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desires to convert outstanding Notes but it may not so convert such Notes due to
the provisions of Section 4.01 of the Indenture related to the Franchise
Agreements (as defined in the Indenture), or (iii) the Company takes any of the
actions referred to in Section 2.1(b) and, as a result, the Purchaser would
Beneficially Own in excess of 10% of the shares of then issued and outstanding
Common Stock, then notwithstanding the provisions of this Agreement, the
Purchaser may (x) irrevocably Transfer without otherwise complying with the
provisions of this Agreement such Notes, in the case of clauses (i) and (ii), or
such shares of Common Stock in excess of such 10% threshold in the case of
clause (iii) above, to a liquidating trust so that after giving effect to such
Transfer, (1) in the case of clauses (i) and (ii), it no longer Beneficially
Owns or owns of record following such Transfer (though Purchaser shall remain
entitled to the net proceeds of such liquidating trust) such Notes, and
immediately convert such Notes as provided in Section 4.01 of the Indenture, or,
(2) in the case of clause (iii), Transfer without otherwise complying with the
provisions of this Agreement such shares of Common Stock to a liquidating trust
so it Beneficially Owns less than 10% of the then issued and outstanding shares
of Common Stock, (y) cause such trust to simultaneously, or at such other time
as provided in the trust agreement or similar governing documents for such
trust, convert all such Notes into shares of Class A Common Stock in accordance
with Article 4 of the Indenture and/or (z) cause such trust to Transfer such
Notes, shares of Class A Common Stock obtained upon conversion of Notes or
shares of Class A Common Stock Transferred to such trust in the case of clause
(iii) in a Public Resale and distribute the proceeds of such Transfer to the
Purchaser, all as provided in the trust agreement or similar governing documents
for such trust. The Company shall take such actions as the Purchaser reasonably
requests, at the Purchaser's sole cost and expense, to facilitate the Transfer
of the Notes or shares of Class A Common Stock to the liquidating trust pursuant
to this Section 2.2(g). Nothing set forth herein shall be deemed to amend or
modify the provisions of Article 4 of the Indenture.
(h) The Company shall cause its transfer agent to issue
certificates for shares of Class A Common Stock transferred by Purchaser or any
of its permitted transferees in accordance with this Section 2.2 that do not
contain the second legend specified in Section 2.3(b) of the Securities Purchase
Agreement, as directed by the Purchaser or any such permitted transferee, unless
the transferee continues to be bound by the terms of this Agreement.
Section 2.3 Other Standstill Restrictions. (a) The Purchaser
covenants to and agrees with the Company that, except as it may be specifically
permitted by this Agreement, or as contemplated by the Securities Purchase
Agreement or the Indenture, it will not, and will cause each of its Affiliates
not to, directly or indirectly, unless it is expressly invited to do so by the
Company or any of its authorized representatives or advisors:
(i) in any way acquire or agree to acquire Beneficial
Ownership of any securities or any direct or indirect rights or options to
12
acquire Beneficial Ownership of any securities of the Company in violation
of Section 2.1 of this Agreement;
(ii) make any public announcement with respect to, or
submit to the Company or any of its directors, officers, representatives,
employees, attorneys, advisers, agents or Affiliates (whether publicly or
otherwise) any proposal for, the acquisition of Voting Stock with respect
to any merger, consolidation, business combination or Acquisition Proposal
involving the Company or its Affiliates, or for or with respect to any
purchase of a substantial portion of the assets of the Company or its
Affiliates, whether or not any parties other than the Purchaser and its
Affiliates are involved and whether or not such proposal might require the
making of a public announcement by the Company;
(iii) make, or in any way participate in, any
"solicitation" of "proxies" to vote any Voting Stock or become a
"participant" in any "election contest" (as such terms are defined or used
in Regulation 14A under the Exchange Act, as such Regulation is currently
in effect);
(iv) propose any matter for submission to a vote of
stockholders of the Company;
(v) form, join or in any way participate in a Group with
respect to any Voting Stock of the Company;
(vi) grant any proxy with respect to any Voting Stock to
any Person not approved by the Company;
(vii) deposit any Voting Stock in a voting trust or
subject any Voting Stock to any arrangement or agreement with respect to
the voting of such Voting Stock or other agreement having similar effect,
except as provided in Section 2.2(g);
(viii) take any action which would be reasonably likely
to require the Company to make a public announcement regarding any of the
matters specified in this Section 2.3(a)(i)-(xii);
(ix) enter into any negotiations, arrangements or
understandings with any third party with respect to any of the foregoing,
or any discussions designed to advise, assist or encourage any third party
in connection with any of the foregoing;
(x) disclose publicly any intention, plan or arrangement
inconsistent with the foregoing;
13
(xi) otherwise act, alone or in concert with others, to
seek to control or influence the management, Board of Directors or
policies of the Company (except as a result of the good faith actions
taken by any person that serves on the Board of Directors, solely in such
person's capacity as a director); or
(xii) request the Company (or any of its officers,
directors, representatives, employees, attorneys, advisors, agents or
Affiliates) to waive, amend or modify any provisions of Section
2.3(a)(i)-(xi).
(b) The Purchaser will not be in breach of this Section 2.3 if
it or any of its Affiliates (or either of their authorized representatives or
advisors) (i) seek permission to privately and confidentially present a proposal
to the Company to allow the Purchaser and/or its Affiliates to take any action
described in Section 2.3(a) above which is presented in a manner reasonably
formulated based on the advice of counsel so as not to require public disclosure
by the Company of such presentation or proposal, but if the Company refuses to
grant permission to present the proposal, neither the Purchaser nor its
Affiliates shall take further action in connection therewith except as otherwise
permitted by this Section 2.3, or (ii) present or propose commercial
relationships in the ordinary course of business, including those similar to
those contemplated by the Fiber Optic Private Network Agreement, dated October
7, 1999, by and between ▇▇▇▇ Atlantic Global Networks, Inc. and Metromedia Fiber
Network Services, Inc.
(c) Notwithstanding any provision of Section 2.1, 2.2 and
2.3(a) to the contrary, in the event that (i) the Company and any Person or
Group enter into a definitive agreement for an Acquisition Proposal, (ii) a bona
fide tender or exchange offer, or a bona fide proxy or consent solicitation
subject to Section 14 of the Exchange Act to elect or remove at least a majority
of directors of the Company, by any Person or Group (other than the Company)
which would result, if consummated in accordance with its terms, in a Change of
Control is, in either case, announced and it is either (A) approved or
recommended by the Board of Directors or (B) within 10 days of the receipt of
such offer by the Company (or such longer time as is then permitted by the
appropriate regulations under the Exchange Act) of such tender or exchange offer
or proxy or consent solicitation, the Board of Directors has not publicly
rejected the offer or has taken no position on such offer, or, in the case of
any such proxy or consent solicitation, publicly opposed or taken no position
with respect to such proxy or consent solicitation, (iii) the occurrence of a
Change of Control of the Company, or (iv) the Company and any Person enter into
a definitive agreement providing for a transaction or series of related
transactions that results in the Transfer by the Company of all or substantially
all of its assets, this Agreement shall not prohibit (x) the Purchaser or any of
its Affiliates (unless acting in concert with such Person) from, notwithstanding
the provisions of Section 2.1, (I) making and consummating either a competing
Acquisition Proposal or a tender or exchange offer pursuant to which the
Purchaser or its Affiliates would acquire at least the same
14
percentage (calculated by voting power) of Company's outstanding Voting Stock as
would be acquired in such non-Purchaser Acquisition Proposal or such
non-Purchaser tender or exchange offer, (II) commencing a competing proxy or
consent solicitation to elect or remove at least a majority of the directors of
the Company, or (III) taking any of the actions prohibited by Section 2.3(a) of
this Agreement (a "Purchaser Response"), or (y) the Transfer by the Purchaser of
its Shares and Notes to any Person without complying with the restrictions set
forth in Section 2.2 or 2.3 of this Agreement. The Purchaser agrees that any
Purchaser Response (including amendments thereto) will provide for consideration
that is no less favorable, taken as a whole, to the Company's stockholders than
that being offer pursuant to such non- Purchaser Acquisition Proposal or such
non-Purchaser tender or exchange offer (taking into account the form of
consideration and the number of shares to be acquired pursuant to such Purchaser
Response). In the event that the transactions contemplated by clauses (i), (ii),
(iii) or (iv) of this Section 2.3(c) shall have been terminated or abandoned
after the bona fide commencement of the Purchaser Response, the Purchaser shall
have the ability, subject to the requirements of the preceding sentence, to
amend or modify its response, and to consummate the transaction contemplated by
the Purchaser Response or such amendment or modification, so long as the
Purchaser shall not have terminated or abandoned its initial response other than
as a result of such amendment or modification. In the event that the
transactions contemplated by clauses (i), (ii), (iii) or (iv) of this Section
2.3(c) shall have been terminated or abandoned prior to the bona fide
commencement of the Purchaser Response, or, if not so terminated or abandoned,
in the event thereafter that such transactions and those contemplated by such
Purchaser Response shall have been terminated or abandoned, all of the
restrictions contained in Sections 2.1, 2.2 and 2.3 shall again be applicable.
(d) Nothing contained within this Section 2.3 shall prevent
the Purchaser or any of its Affiliates from (i) enforcing its rights under this
Agreement, the Securities Purchase Agreement, the Equity Registration Rights
Agreement, the Notes Registration Rights Agreement, the Indenture or the Notes,
the Fiber Optic Private Network Agreement or any other commercial arrangement or
other agreement entered into by the Company or any of its Affiliates and the
Purchaser or any of its Affiliates after the date hereof, or (ii) discussing
with the Company or any of its Affiliates any possible amendments or
modifications with respect to any of the foregoing referred to in clause (i) of
this Section 2.3(d).
(e) Notwithstanding anything herein to the contrary, (i) the
provisions of this Section 2.3 shall automatically terminate if the Company or a
majority of its Board of Directors publicly announces that the Company is "for
sale" or makes any public announcement to the same effect unless and until such
time as the Company issues a contrary public statement, and (ii) the Company, in
its sole and absolute discretion, may waive the provisions of this Section 2.3
as it deems necessary, advisable or appropriate.
15
(f) Notwithstanding the first proviso to Section 4.01 of the
Indenture, if the Purchaser and any permitted transferee desires to convert any
of the Notes and as a result it would become an "affiliate" for purposes of and
under either of the Franchise Agreements (as defined in the Indenture), the
Company shall consent to any such conversion and instruct the Trustee under the
Indenture to cause such conversion accordingly if, in connection with a demand
for conversion, the Purchaser or any such permitted transferee provides a
satisfactory indemnification to the Company and its subsidiaries against any
additional expenses, fees, taxes or other amounts that would be payable by the
Company or any of its Subsidiaries to any Governmental Entity as a result of the
fact that the Purchaser or any such permitted transferee would be deemed an
"affiliate", in the reasonable opinion of the Company after consultation with
outside counsel, for purposes of any of the Franchise Agreements solely as a
result of such conversion.
ARTICLE III
ADDITIONAL PROVISIONS
Section 3.1 Additional Shares. If, after the date hereof, the
Purchaser acquires Beneficial Ownership of any shares of Class A Common Stock or
acquires any Notes (any such securities shall be referred to herein as
"Additional Securities"), including, without limitation, upon exercise or
conversion of any derivative security or through any stock dividend or stock
split, the provisions of this Agreement applicable to the Shares or Notes shall
be applicable to such Additional Securities as if such Additional Securities had
been outstanding as of the date hereof. The provisions of the immediately
preceding sentence shall be effective with respect to Additional Securities
without action by any Person immediately upon the acquisition by the Purchaser
of record or Beneficial Ownership of such Additional Securities.
Section 3.2 Tag-Along Rights. (a) In the event at any time after the
Stockholders, collectively, Transfer at least an aggregate of 20% of the shares
of Common Stock owned by them as of the date of the Securities Purchase
Agreement and prior to the earliest to occur of (i) the date the Purchaser and
its Affiliates are no longer bound by the provisions of Section 2.1 or (ii) the
date the Purchaser and its Affiliates no longer Beneficially Own in excess of 5%
of the then outstanding shares of Common Stock for a period of 90 consecutive
days, any Stockholder (each a "Selling Stockholder") proposes to Transfer any
shares of Common Stock as of the date hereof owned by such Stockholder to a
non-Affiliated third party, the Selling Stockholder(s) shall have the
obligation, and the Purchaser shall have the right (the "Tag-Along Right"), to
require the proposed transferee (the "Transferee") to purchase (the "Tag-Along
Transfer") from the Purchaser or any of its Affiliates a number of shares of
Class A Common Stock up to or equal to the product (rounded up to the nearest
integer) of (i) the quotient determined by dividing the number of
16
shares of the Class A Common Stock held by the Purchaser and its Affiliates by
the aggregate number of shares of Common Stock owned by the Selling
Stockholder(s) and the Purchaser and its Affiliates (calculated with respect to
the Purchaser to include any shares of Class A Common Stock that may be received
upon conversion of outstanding Notes, only if such Notes may then be immediately
converted in accordance with their terms prior to or upon such Transfer and the
Purchaser irrevocably notifies the Company that it intends to convert Notes
prior to or concurrently with the Tag-Along Transfer and Transfer the shares of
Class A Common Stock into which they convert to the Transferee of part of the
exercise of its Tag-Along Right and it subsequently converts such Notes, in
which case only such shares of Class A Common Stock obtained upon conversion of
Notes prior to or concurrently with the Tag-Along Transfer shall be included for
purposes of calculating the number of shares owned by the Purchaser and its
Affiliates), and (ii) the number of shares of the Common Stock proposed to be
transferred in the contemplated sale, and at the same price per share and upon
the same terms and conditions offered to the Selling Stockholder(s). The number
of shares of Common Stock to be sold by the Selling Stockholders in such
Tag-Along Transfer shall be reduced by the number of shares of Common Stock that
the Purchaser elects to require the Transferee to purchase in such Tag-Along
Transfer pursuant to the Purchaser's right contained in the preceding sentence.
By way of example only, if Stockholders intend to sell 1,000 shares
of Common Stock to a third party, and at such time such Stockholders own 75,000
shares of Class A Common Stock and the Purchaser owns 20,000 shares of Class A
Common Stock and has notified the Company that it intends to convert Notes to
obtain an additional 5,000 shares of Class A Common Stock (although it has Notes
convertible into more shares of Class A Common Stock) and sell such shares in
connection with the exercise of its Tag-Along Right, then the Purchaser, if it
gives irrevocable notice of such conversion and intention to sell, shall be
entitled to Transfer 250 shares of Class A Common Stock exercising its Tag-Along
Right in such sale (calculated by solving for: (25,000 / (25,000 + 75,000)) x
1,000) and the Selling Stockholder shall be entitled to Transfer the remaining
750 shares of Class A Common Stock in such tag-along sale.
(b) The provisions of Section 3.2(a) shall not apply to any
Transfer by any Stockholder in connection with a Transfer that is (i) an
underwritten offering of securities registered under the Securities Act, (ii) a
sale of securities (including Derivative Securities) that constitutes a Rule
144A/Reg S Transaction, (iii) exempt from registration under the Securities Act
as a result of the applicability of Rule 144 promulgated thereunder; provided
that, from (I) the First Closing Date to ______, 2000,(7/) the Stockholders may
not, directly or indirectly, Transfer any shares of Common Stock pursuant to
this Section 3.2(b), if after giving effect to such
--------
(7/) Six months from First Closing Date.
17
Transfer, the Stockholders would collectively no longer Beneficially Own at
least 80% of the number of shares of Common Stock owned by them on the date of
the Securities Purchase Agreement and (II) from _________, 2000(8/) to
_________, 2001,(9/) the Stockholders may not, directly or indirectly, Transfer
any shares of Common Stock pursuant to this Section 3.2(b), if after giving
effect to such Transfer, the Stockholders would collectively no longer
Beneficially Own a number of shares of Common Stock equal to the difference
between (x) 60% of the number of shares of Common Stock owned by them on the
date of the Securities Purchase Agreement minus (y) the shares of Common Stock
Transferred pursuant to clause (I) of this Section 3.2(b).
(c) The Selling Stockholder(s) shall give written notice (the
"Tag-Along Notice") to the Purchaser of each proposed Transfer giving rise to
the Tag-Along Right which shall state (i) the maximum number of shares of Class
A Common Stock proposed to be Transferred, (ii) the proposed purchase price per
share of Class A Common Stock, (iii) the name of the transferee, and (iv) the
proposed closing date for the Transfer, which date shall be no sooner than 30
days from the date the Tag-Along Notice is received (as determined under Section
4.6 hereof) by the Purchaser. The Tag-Along Notice shall also state any other
material terms and conditions of the proposed Transfer, and shall include copies
of the contemplated definitive agreements for the offer (to the extent available
and, if not available, drafts thereof that are the most recent versions thereof)
and all writings between the Selling Stockholder(s) and the transferee necessary
to establish the terms and conditions of the offer. The Tag-Along Notice shall
not be effective unless and until (A) the Tag- Along Notice shall be accompanied
with a certificate of the Selling Stockholder(s) to the Purchaser stating that
the offer has been approved by the board of directors (or the equivalent if the
offeror is not a corporation) of the offeror (if required by such offeror and
solely to the Selling Stockholder's knowledge based on representations and
warranties of the offeror), and that such Selling Stockholder(s) have made the
offeror aware of the rights of the Purchaser contained in, and that any Transfer
by the Selling Stockholders is subject to this, Section 3.2(b), (B) the
consideration to be received by the Purchaser in the Tag-Along Transfer consists
entirely of cash and/or securities of a Person, which securities are registered
under the Exchange Act and are traded on the New York Stock Exchange, the
American Stock Exchange, The Nasdaq National Market or any successor or
equivalent securities exchange, and (C) the offeror shall furnish evidence
satisfactory to the Purchaser in its reasonable judgment as to the financial
ability or resources of such offeror to consummate the proposed purchase if it
is a cash offer.
--------
(8/) Six month anniversary of First Closing Date.
(9/) 18 month anniversary of First Closing Date.
18
(d) The Tag-Along Right provided by this Section 3.2 must be
exercised by the Purchaser within the 30-day period following the receipt (as
determined under Section 4.6 hereof) of the Tag-Along Notice by delivery prior
to the end of such 30-day period of a written notice (the "Acceptance Notice")
to the Selling Stockholder(s) stating the Purchaser's desire to exercise its
Tag-Along Right under this Section 3.2 and specifying the number of shares of
Class A Common Stock it desires to sell. The tender of the Acceptance Notice by
the Purchaser shall constitute agreement by the Purchaser to sell in connection
with the Tag-Along Transfer the amount of securities specified and at the price
specified in the Acceptance Notice and otherwise on the terms and conditions set
forth in the notice provided by the Selling Stockholder to the Purchaser.
Failure to deliver the Acceptance Notice within 30 days after delivery of the
Tag-Along Notice shall be deemed a determination by the Purchaser not to
exercise its Tag-Along Right and a waiver of such right. If the sale
contemplated by the Tag-Along Notice is not consummated on the same terms and
conditions as those contained in the Tag-Along Notice for any reason, then the
restrictions provided for herein shall again become effective, and the Selling
Stockholders may not Transfer any shares of Class A Common Stock without
complying with the provisions of this Section 3.2.
(e) The closing of the purchase by the Transferee of the
shares of Class A Common Stock owned by the Purchaser shall be held (i) at the
principal office of the Company on the same day as the closing of the sale from
the Selling Stockholder(s) to the Transferee, or (ii) at such other time and
place as the parties to the applicable transaction may agree; provided that the
date of such closing shall be extended to a later date not to exceed 60 days
after such date of such closing if such closing has not been consummated by such
date of closing as a result solely of a failure to obtain a required consent or
approval of any Governmental Entity and the parties are using reasonable
commercial efforts to obtain such required consent or approval; provided,
further, that such closing shall be extended until such required regulatory
consents and approvals are obtained if the delay in obtaining such required
regulatory consents and approvals is a result of the failure of the Company to
cooperate in a commercially reasonable manner with the Purchaser in obtaining
such required consents and approvals. At such closing, the Selling
Stockholder(s) and the Purchaser shall each deliver certificates representing
the shares of Class A Common Stock being sold, duly authenticated by another
officer of the corporation, for transfer and accompanied by all requisite
transfer taxes, if any, and such shares of Class A Common Stock shall be free
and clear of any Liens other than those arising hereunder. The Purchaser shall
further represent and warrant that it Beneficially Owns such shares of Class A
Common Stock, that it or its designee is the record holder of such shares and
that the delivery of such shares shall convey good and marketable title to such
shares. At such closing, the Transferee shall deliver payment in full in
immediately available funds for the Class A Common Stock purchased by such
Transferee.
19
(f) From the date hereof until this Agreement is no longer in
effect, the Stockholders will not amend, modify or supplement in any manner or
grant any consent under the letter dated the date of the Securities Purchase
Agreement among the Stockholders and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ without the Purchaser's
prior consent, which will not be unreasonably withheld, delayed or conditioned.
Section 3.3 Directors. Each Stockholder agrees that in the event the
Purchaser elects to select one or two nominees to the Board of Directors
pursuant to Section 5.2 of the Securities Purchase Agreement, dated as of
October 7, 1999, between the Purchaser and the Company, and so notifies the
Stockholders each year at least 30 days prior to the election held to elect
directors, the Stockholders shall either (i) take all action to nominate and
cause the election of one such person as a Class B Director (as defined in the
Company's Amended Certificate of Incorporation as in effect on the date hereof)
for as long as such Stockholders are entitled to nominate and vote as a separate
class for the election of Class B Directors to the Board of Directors or (ii) if
he or it does not own any shares of Class B Common Stock, vote his or its shares
of Class A Common Stock in favor of any Purchaser nominee to the Board of
Directors nominated pursuant to the Securities Purchase Agreement.
Section 3.4 Rule 144. The Company covenants that it shall file any
reports required to be filed by it under the Exchange Act; and that it shall
take such further action as may be reasonably necessary (including providing any
information necessary to comply with Rule 144 under the Securities Act), all to
the extent required from time to time to enable the Purchaser and its Affiliates
to Transfer Shares or Notes (including the shares of Class A Common Stock
underlying the Notes) without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such rules may be amended from time to time, or (b) any similar rules or
regulations hereafter adopted by the Securities and Exchange Commission. The
Company shall, upon the request of the Purchaser and its Affiliates, deliver to
such Purchaser and its Affiliates a written statement as to whether it has
complied with such requirements.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
20
Section 4.2 Entire Agreement. This Agreement, the Securities
Purchase Agreement, the Equity Registration Rights Agreement and Notes
Registration Rights Agreement and the Indenture constitute the entire agreement
between Company and the Purchaser with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between Company and the Purchaser with respect to the subject matter hereof.
Section 4.3 Amendment. This Agreement may not be amended except by
an instrument in writing signed by the Company and the Purchaser, except that
any amendment to the provisions of Sections 3.2 and 3.3 shall require the
consent of the Stockholders.
Section 4.4 Term. Except as otherwise expressly provided herein,
this Agreement shall terminate on the earliest to occur of (i) the 90th
consecutive day on which the Purchaser does not Beneficially Own 5% or more of
the then issued and outstanding shares of Common Stock, (ii) 30 days following
delivery of a notice to the Stockholders of a material breach by any Stockholder
of the provisions of Section 3.2 or 3.3 of this Agreement, if such breach has
not been cured during such period or (iii) the tenth anniversary of the date
hereof.
Section 4.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereby shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in a mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated.
Section 4.6 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made and shall be effective (a) upon receipt if delivered personally,
(b) upon receipt of a transmission confirmation if sent by facsimile (with a
confirming copy sent by overnight courier), and (c) on the next business day if
sent by Federal Express, United Parcel Service, Express Mail or other reputable
overnight courier to the parties at the following addresses (or at such other
address for a party as shall be specified by notice):
If to the Purchaser, to:
▇▇▇▇ Atlantic Investments, Inc.
1095 Avenue of the Americas
▇▇▇▇ ▇▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Associate General Counsel - Mergers & Acquisitions
▇▇▇▇ Atlantic Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Metromedia Fiber Networks, Inc.
c/o Metromedia Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholders, to:
c/o Metromedia Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 4.7 Governing Law. The corporate law of the State of
Delaware shall govern all issues concerning the relative rights of the Company
and its
22
stockholders and the duties and responsibilities of the Company's directors to
the Company and its stockholders. All other questions concerning the
construction, validity and interpretation of this Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state, without giving
effect to any choice of law or conflict of law provisions.
Section 4.8 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and legal
representatives; provided, however, that this Agreement shall not be binding
upon any transferee of Shares or Notes which receives his, her or its Shares or
Notes pursuant to a Public Resale or, in the case of a Transfer that is not a
Public Resale, only unless otherwise required by Section 2.2(a) hereof. No party
to this Agreement shall be permitted to assign this Agreement; provided, that,
the Purchaser may assign its rights under this Agreement to any Person of the
type described in Section 2.2(f) of this Agreement that agrees in writing to be
bound by the terms of this Agreement.
Section 4.9 No Recourse. Except for the provisions of Sections 3.2
and 3.3, no recourse under this Agreement shall be had against any "controlling
person" (within the meaning of Section 20 of the Exchange Act) of any party or
the stockholders, directors, officers, employees, agents and Affiliates of such
party of such controlling persons, whether by the enforcement or any assessment
or by any legal or equitable proceeding, or by virtue of any regulation, it
being expressly agreed and acknowledged that no personal liability whatsoever
shall attach to, be imposed on or otherwise incurred by any such controlling
person, stockholder, director, officer, employee, agent or Affiliate, as such,
for any obligation or such party under this Agreement or for any claim based on,
in respect of, or by reason of such obligations or their creation.
Section 4.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original and all of which, when
taken together, shall constitute one and the same instrument.
[Signatures appear on the following page.]
23
IN WITNESS WHEREOF, each of the Purchaser and Company have caused
this Agreement to be duly executed on the date hereof.
METROMEDIA FIBER NETWORK, INC.
By:_____________________________________
Name:
Title:
▇▇▇▇ ATLANTIC INVESTMENTS, INC.
By:_____________________________________
Name:
Title:
Accepted and agreed to for purposes of Sections 3.2, 3.3 and Article 4 only:
METROMEDIA COMPANY
By:______________________________
Name:
Title:
_________________________________
▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇