<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
RURAL CELLULAR CORPORATION
--------------------------
(Name of Issuer)
CLASS A COMMON STOCK
--------------------
(Title of Class of Securities)
781904107
---------
(CUSIP Number)
<TABLE>
<S> <C> <C>
PAUL J. FINNEGAN MARTHA L. GARIEPY JOHN HUNT
MADISON DEARBORN PARTNERS, LLC TORONTO DOMINION INVESTMENTS, INC. BOSTON VENTURES COMPANY V, LLC
THREE FIRST NATIONAL PLAZA 909 FANNIN, SUITE 1700 ONE FEDERAL STREET
CHICAGO, IL 60670 HOUSTON, TX 77010 BOSTON, MA 02110
(312) 895-1000 (713) 653-8225 (617) 350-1599
</TABLE>
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
APRIL 3, 2000
-------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [X]
(A fee is not required only if the reporting person (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
Page 1 of 22 Pages
<PAGE>
CUSIP No. 781904107 13D Page 2 of 22 Pages
1 NAME OF REPORTING PERSON
MADISON DEARBORN CAPITAL PARTNERS III, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,012,426 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,012,426 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,012,426 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.5%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 3 of 22 Pages
1 NAME OF REPORTING PERSON
MADISON DEARBORN SPECIAL EQUITY III, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 22,480 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 22,480 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 22,480 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.21%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 4 of 22 Pages
1 NAME OF REPORTING PERSON
SPECIAL ADVISORS FUND I, LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,830 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 2,830 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 2,830 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.026%
14 TYPE OF REPORTING PERSON*
OO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 5 of 22 Pages
1 NAME OF REPORTING PERSON
MADISON DEARBORN PARTNERS III, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,037,736 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,037,736 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,037,736 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.7%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 6 of 22 Pages
1 NAME OF REPORTING PERSON
MADISON DEARBORN PARTNERS, LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,037,736 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,037,736 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
1,037,736 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.7%
14 TYPE OF REPORTING PERSON*
OO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 7 of 22 Pages
1 NAME OF REPORTING PERSON
BOSTON VENTURES LIMITED PARTNERSHIP V
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 691,824 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 691,824 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
691,824 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.0%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 8 of 22 Pages
1 NAME OF REPORTING PERSON
BOSTON VENTURES COMPANY V, L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
MASSACHUSETTS
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 691,824 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 691,824 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
691,824 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.0%
14 TYPE OF REPORTING PERSON*
OO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 9 of 22 Pages
1 NAME OF REPORTING PERSON
TORONTO DOMINION INVESTMENTS, INC.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 345,912 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 345,912 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
345,912 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.1%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 10 of 22 Pages
1 NAME OF REPORTING PERSON
TORONTO DOMINION HOLDINGS (U.S.A.), INC.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 345,912 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 345,912 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
345,912 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.1%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 781904107 13D Page 11 of 22 Pages
1 NAME OF REPORTING PERSON
THE TORONTO-DOMINION BANK
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
ONTARIO, CANADA
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 345,912 (See Item 5)
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 345,912 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
345,912 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.1%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D Statement (this "Statement") relates to the Class A
Common Stock, $.01 par value per share (the "Common Stock"), of Rural Cellular
Corporation, a Minnesota corporation (the "Issuer"). Each of the persons named
in Item 2 below may be deemed to be the beneficial owner of shares of Common
Stock trough its ownership of the Class M Redeemable Voting Convertible
Preferred Stock, $.01 par value per share (the "Preferred Stock"), of the
Issuer, which is convertible into Common Stock at the option of the holder
thereof at any time. The Issuer's principal executive offices are located at
3905 Dakota SW, Alexandria, Minnesota 56308. The Issuer's telephone number is
(320) 762-2000.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is being jointly filed by each of the following persons
pursuant to Rule 13d- 1(k) promulgated by the Securities and Exchange Commission
(the "Commission") pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"):
(i) Madison Dearborn Capital Partners III, L.P., a Delaware limited
partnership ("MDCP"), by virtue of its direct beneficial
ownership of 53,658.55 shares of Preferred Stock;
(ii) Madison Dearborn Special Equity III, L.P., a Delaware limited
partnership ("MDSE"), by virtue of its direct beneficial
ownership of 1,191.45 shares of Preferred Stock;
(iii) Special Advisors Fund I, LLC, a Delaware limited liability
company ("SAF"), by virtue of its direct beneficial ownership of
150 shares of Preferred Stock;
(iv) Madison Dearborn Partners III, L.P., a Delaware limited
partnership ("MDP III"), by virtue of it being the sole general
partner of MDCP, MDSE, and SAF;
(v) Madison Dearborn Partners, LLC, a Delaware limited liability
company ("MDP"), by virtue of it being the sole general partner
of MDP III. Dispositive and voting powers of securities owned by
MDP III is shared by MDP and an advisory committee of limited
partners of MDP (the "LP Committee");
(vi) Boston Ventures Limited Partnership V, a Delaware limited
partnership ("BV V"), by virtue of its direct beneficial
ownership of 36,666.67 shares of Preferred Stock;
(vii) Boston Ventures Company V, L.L.C., a Delaware limited liability
company ("BVC"), by virtue of it being the sole general partner
of BV V;
(viii) Toronto Dominion Investments, Inc., a Delaware corporation
("TD"), by virtue of its direct beneficial ownership of 18,333.33
shares of Preferred Stock;
(ix) Toronto Dominion Holdings (U.S.A.), Inc., a Delaware corporation
("TD Holdings"), by virtue of it being the sole owner of TD; and
(x) The Toronto Dominion Bank, chartered in Ontario, Canada ("TD
Bank"), by virtue of it being the ultimate parent company of TD
and the sole owner of TD Holdings.
MDCP, MDSE and SAF are collectively referred to herein as the "MDP
Investors." The MDP Investors, BV V and TD are collectively referred to herein
as the "Investors." TD, TD Holdings and TD Bank are collectively referred to
herein as the "TD Reporting Persons." BV V and BVC are collectively referred to
herein as the "BV Reporting Persons." The MDP Investors, MDP III and MDP are
collectively referred to herein as the "MDP Reporting Persons." The BV Reporting
Persons, the MDP Reporting Persons and the TD Reporting Persons are collectively
referred to herein as the "Reporting Persons." The Reporting Persons have
entered into a Joint Filing Agreement, a copy of which is filed with this
Statement as Exhibit 1 (which is incorporated herein by reference), pursuant to
which the Reporting Persons have agreed to file this Statement jointly in
accordance with the provisions of Rule 13d-1(k)(1) under the Exchange Act.
Information with respect to each of the Reporting Persons is given
solely by such Reporting Person, and no Reporting Person assumes responsibility
for the accuracy or completeness of information furnished by another Reporting
Person. By their signature on this Statement, each of the Reporting Persons
agrees that this Statement is filed on behalf of such Reporting Person.
Page 12 of 22 Pages
<PAGE>
The Reporting Persons may be deemed to constitute a "group" for
purposes of Section 13(d)(3) of the Exchange Act. The Reporting Persons
expressly disclaim that they have agreed to act as a group other than as
described in this Statement.
Each of the MDP Investors is principally engaged in the business of
investing in securities. MDP III is engaged primarily in the business of serving
as the general partner for MDCP, MDSE and SAF. MDP is engaged primarily in the
business of serving as the general partner for MDP III.
Attached as SCHEDULE A to this Statement is information concerning the
MDP Reporting Persons and other persons to which such information is required to
be disclosed in response to Item 2 and General Instruction C to Schedule 13D.
The address of the principal business of the MDP Reporting Persons is
Three First National Plaza, Suite 3800, Chicago, Illinois 60602.
BV V is principally engaged in the business of investing in securities.
BVC is engaged primarily in the business of serving as the general partner for
BV V.
Attached as SCHEDULE B to this Statement is information concerning the
BV Reporting Persons and other persons to which such information is required to
be disclosed in response to Item 2 and General Instruction C to Schedule 13D.
The address of the principal business of the BV Reporting Persons is
One Federal Street, Boston, Massachusetts 02110.
TD is principally engaged in the business of investing in securities.
TD Holdings is principally engaged in the business of being a holding company
and is the sole owner of its subsidiary, TD. TD Bank is principally engaged in
the financial services business and is the sole owner of TD Holdings and the
ultimate parent company of its indirect wholly-owned subsidiary, TD.
Attached as SCHEDULE C to this Statement is information concerning the
TD Reporting Persons and other persons to which such information is required to
be disclosed in response to Item 2 and General Instruction C to Schedule 13D.
The address of the principal business of TD and TD Holdings is 909
Fannin, Suite 1700, Houston, Texas 77010. The address of the principal business
of TD Bank is TD Tower, 12th Floor, 55 King Street West, PO Box 1, Toronto,
Ontario, Canada M5K1A2.
During the last five years, none of the Reporting Persons or their
executive officers or directors has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
During the last five years, none of the Reporting Persons or their
executive officers or directors was a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and, as a result of such
proceeding, was or is subject to a judgment, decree, or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violations with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to a Preferred Stock Purchase Agreement (the "Purchase
Agreement"), dated as of April 3, 2000, between the Issuer and the Investors,
the Investors acquired an aggregate of 110,000 shares of Preferred Stock for an
aggregate purchase price of $110,000,000. The Investors' sources of funds were
capital contributions from the partners of the Investors and working capital.
ITEM 4. PURPOSE OF TRANSACTION.
The Investors have acquired the shares of Preferred Stock for
investment purposes. Depending on market considerations and other factors
(including, but not limited to, the evaluation of the Issuer's business and
prospects, the availability of funds and general economic conditions), the
Investors may, from time to time, purchase additional shares of Common Stock or
dispose of all or a portion of their investments in the Issuer, subject to the
terms of the agreements listed below in this Item 4.
Page 13 of 22 Pages
<PAGE>
A copy of the Purchase Agreement is attached hereto as EXHIBIT 2 and
incorporated by reference herein; a copy of the Certificate of Designation for
the Series A Preferred Stock (the "Certificate of Designation") is attached
hereto as EXHIBIT 3 and incorporated by reference herein; and a copy of the
Registration Agreement for the Preferred Stock is attached hereto as EXHIBIT 4
and incorporated by reference herein. Set forth below is a summary of the
material terms of the above agreements.
The following summaries are qualified in their entirety by reference to
the detailed provisions of the Purchase Agreement, Certificate of Designation
and Registration Agreement.
PURCHASE AGREEMENT
The Investors purchased an aggregate of 110,000 shares of Preferred
Stock for $1,000 per share, or an aggregate purchase price of $110,000,000. The
Purchase Agreement contains customary representations and warranties for an
agreement of this type and certain indemnification provisions. The Purchase
Agreement also provides that the Investors may transfer the Preferred Stock and
Common Stock issuable upon conversion thereof only in limited circumstances,
including (i) to the Issuer or a purchaser approved by the Issuer, (ii) to an
affiliate, (iii) pursuant to a merger or plan of liquidation of the Issuer, (iv)
in response to an offer to purchase voting securities which is made by the
Issuer or any third party not opposed by the Issuer's board of directors, (v)
pursuant to an open- market sale under Rule 144 of the Commission (or any
similar rule or rules then in force) if such rule is available, (vi) pursuant to
a public offering registered under the Securities Act of 1933, as amended, and
(vii) by way of an in-kind distribution by an investment fund to its partners or
members in connection with a distribution of freely tradeable securities. The
Purchase Agreement also bars the Investors from acquiring additional securities
of the Issuer without the Issuer's consent.
The Purchase Agreement also entitles the MDP Investors and BV V each to
designate one representative to serve on the Issuer's board of directors so long
as they hold at least half of the Preferred Stock and Common Stock issuable upon
conversion of the Preferred Stock purchased pursuant to the Purchase Agreement
by the MDP Investors. So long as any Preferred Stock remains outstanding, the
Preferred Stock may elect the directors so designated by a class vote. After no
Preferred Stock remains outstanding, the Issuer is generally obligated to
nominate the designees for election to its Board of Directors. The Investors
agree, so long as any Preferred Stock remains outstanding, to vote their
Preferred Stock in favor of electing the directors designated by the MDP
Investors and BV V pursuant to the Purchase Agreement.
CERTIFICATE OF DESIGNATION
DIVIDENDS. Pursuant to the Certificate of Designation, the holders of Preferred
Stock are entitled to cumulative preferential dividends. In addition to the
preferential dividends, holders of Preferred Stock shall share pro rata with
holders of Common Stock, on the basis of the number of Common Stock which each
holder of Preferred Stock would be entitled to receive upon conversion of the
holder's Preferred Stock into Common Stock as of the record date for the
dividend or distribution in all other dividends and distributions.
LIQUIDATION. The Certificate of Designation provides that, upon any liquidation,
dissolution or winding up of the Issuer, each holder of Preferred Stock shall be
entitled to be paid, before any distribution or payment is made to any holders
of Common Stock, an amount in cash equal to (i) the sum of $1,000 per share plus
accumulated preferential dividends plus accrued and unpaid dividends not yet
accumulated or (ii) the amount that would be payable to the holder of Preferred
Stock if the Preferred Stock were converted into Common Stock immediately prior
to the liquidation.
VOTING RIGHTS. The Certificate of Designation provides that the holders of
Preferred Stock shall be entitled to vote with holders of Common Stock as a
single class on each matter submitted to a vote of the Issuer's stockholders.
Each share of Preferred Stock shall have a number of votes equal to the number
of shares of Common Stock into which the Preferred Stock is convertible.
Furthermore, so long as any Preferred Stock remains outstanding, the holder of
the Preferred Stock shall be entitled, voting as a separate class, to elect two
directors to the Issuer's board of directors. The voting rights of the Investors
are further enumerated in the Purchase Agreement. Pursuant to the terms of the
Purchase Agreement, and until the first regular or special meeting of the
shareholders at which the Investors may elect directors pursuant to the
Certificate of Designation, on April 4, 2000, Paul J. Finnegan was appointed to
the Issuer's board of directors as the representative for the MDP Investors, and
John Hunt was appointed to the Issuer's board of directors as the representative
for BV V.
Page 14 of 22 Pages
<PAGE>
CONVERSION. At any time, a holder of Preferred Stock may convert all or a
portion of its shares of Preferred Stock into a number of shares of Common Stock
by dividing (a) the aggregate liquidation value (defined as the sum of (i)
$1,000 plus (ii) all accumulated preferential dividends on such share plus (iii)
all accrued and unpaid dividends on such share which have not yet been
accumulated) of the shares to be converted, by (b) an initial conversion price
of $53.00, which is subject to adjustment from time to time pursuant to the
specific terms of the Certificate of Designation.
REGISTRATION AGREEMENT
In connection with the acquisition of the Preferred Stock, the
Investors were granted certain registration rights with respect to the shares of
Preferred Stock pursuant to the Registration Agreement. The Registration
Agreement provides the Investors with the right to require the Issuer to (i)
subject to certain limitations, effect registrations of the Common Stock
issuable upon conversion of the Preferred Stock under applicable United States
federal securities laws upon demand by the Investors, three of which may consist
of long-form registration statements under the Securities Act of 1933 (the
"ACT"), and (ii) include, subject to certain limitations, at the request of the
Investors, the Common Stock issuable upon conversion of the Preferred Stock in
any registration of shares of Common Stock initiated by the issuer. The Issuer
and the Investors also have agreed not to sell any of their shares of Common
Stock during a limited period before and after certain registered offerings of
shares of Common Stock.
Except as described in the Purchase Agreement, Certificate of
Designation or Registration Agreement and otherwise set forth in this Statement
and/or the underlying Common Stock, none of the Reporting Persons or any
person/individual otherwise identified in Item 2 has any present plans or
proposals which relate to or would result in the following: (a) the acquisition
of any additional securities of the Issuer, or the disposition of any securities
of the Issuer; (b) any extraordinary corporate transaction, such as a merger,
reorganization or liquidation of the Issuer or its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Issuer or its subsidiaries; (d)
any material change in the present board of directors or management of the
Issuer, (e) any material change in the present capitalization of or dividend
policy of the Issuer; (f) any material change in the Issuer's business or
corporate structure; (g) any change in the Issuer's charter or by-laws or other
actions which may impede the acquisition of control of the Issuer by any person;
(h) the termination of the Issuer's registration to be quoted on the NASDAQ
National Market; (i) the termination of the Issuer's registration under the
Exchange Act; or (j) any action similar to any of those enumerated above.
Notwithstanding the foregoing, the Reporting Persons reserve the right to effect
any of such actions as any of them may deem necessary or appropriate in the
future.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
As of the date hereof, each share of Preferred Stock is convertible
into 18.87 shares of Common Stock.
As of the date hereof, by virtue of its beneficial ownership of
53,658.55 shares of Preferred Stock, MDCP beneficially owns 1,012,426 shares of
Common Stock. Such 53,658.55 shares of Preferred Stock (assuming conversion of
all such 53,658.55 shares of Preferred Stock into Common Stock) represent
approximately 8.5% of the total number of outstanding shares of Common Stock as
represented by the Issuer in the Purchase Agreement. MDCP has sole voting and
sole dispositive power with respect to such shares.
As of the date hereof, by virtue of its beneficial ownership of
1,191.45 shares of Preferred Stock, MDSE beneficially owns 22,480 shares of
Common Stock. Such 1,191.45 shares of Preferred Stock (assuming conversion of
all such 1,191.45 shares of Preferred Stock into Common Stock) represent
approximately 0.21% of the total number of outstanding shares of Common Stock as
represented by the Issuer in the Purchase Agreement. MDSE has sole voting and
sole dispositive power with respect to such shares.
As of the date hereof, by virtue of its beneficial ownership of 150
shares of Preferred Stock, SAF beneficially owns 2,830 shares of Common Stock.
Such 150 shares of Preferred Stock (assuming conversion of all such 150 shares
of Preferred Stock into Common Stock) represent approximately 0.026% of the
total number of outstanding shares of Common Stock as represented by the Issuer
in the Purchase Agreement. SAF has sole voting and sole dispositive power with
respect to such shares.
MDP III, as the sole general partner of MDCP, MDSE and SAF, may be
deemed to share voting and dispositive power with respect to 1,037,736 shares of
Common Stock currently held by
Page 15 of 22 Pages
<PAGE>
MDCP, MDSE and SAF (assuming conversion of all of the shares of Preferred Stock
held by MDCP, MDSE and SAF into Common Stock), which represents approximately
8.7% of the total number of outstanding shares of Common Stock as represented by
the Issuer in the Purchase Agreement. The filing of this Statement by MDP III
shall not be construed as an admission that MDP III is, for the purpose of
Section 13(d) of the Exchange Act, the beneficial owner of such shares held by
MDCP, MDSE and SAF.
MDP, as the sole general partner of MDP III, may be deemed to share
voting and dispositive power with respect to 1,037,736 shares of Common Stock
currently held by MDCF, MDSE and SAF (assuming conversion of all of the shares
of Preferred Stock held by MDCF, MDSE and SAF into Common Stock), which
represents approximately 8.7% of the total number of outstanding shares of
Common Stock as represented by the Issuer in the Purchase Agreement. The filing
of this Statement by MDP shall not be construed as an admission that MDP is, for
the purpose of Section 13(d) of the Exchange Act, the beneficial owner of such
shares held by MDCF, MDSE and SAF.
As of the date hereof, by virtue of its beneficial ownership of
36,666.67 shares of Preferred Stock, BV V beneficially owns 691,824 shares of
Common Stock. Such 36,666.67 shares of Preferred Stock (assuming conversion of
all such 36,666.67 shares of Preferred Stock into Common Stock) represent
approximately 6.0% of the total number of outstanding shares of Common Stock as
represented by the Issuer in the Purchase Agreement. BV V has sole voting and
sole dispositive power with respect to such shares.
BVC, as the sole general partner of BV V, may be deemed to share voting
and dispositive power with respect to 691,824 shares of Common Stock currently
held by BV V (assuming conversion of all of the shares of Preferred Stock held
by BV V into Common Stock), which represents approximately 6.0% of the total
number of outstanding shares of Common Stock as represented by the Issuer in the
Purchase Agreement. The filing of this Statement by BVC shall not be construed
as an admission that BVC is, for the purpose of Section 13(d) of the Exchange
Act, the beneficial owner of such shares held by BV V.
As of the date hereof, by virtue of its beneficial ownership of
18,333.33 shares of Preferred Stock, TD beneficially owns 345,912 shares of
Common Stock. Such 18,333.33 shares of Preferred Stock (assuming conversion of
all such 18,333.33 shares of Preferred Stock into Common Stock) represent
approximately 3.1% of the total number of outstanding shares of Common Stock as
represented by the Issuer in the Purchase Agreement. TD has sole voting and sole
dispositive power with respect to such shares.
TD Holdings, as the sole owner of TD, may be deemed to share voting
and dispositive power with respect to 345,912 shares of Common Stock
currently held by TD (assuming conversion of all of the shares of Preferred
Stock held by TD into Common Stock), which represents approximately 3.1% of
the total number of outstanding shares of Common Stock as represented by the
Issuer in the Purchase Agreement. The filing of this Statement by TD Holdings
shall not be construed as an admission that TD Holdings is, for the purpose
of Section 13(d) of the Exchange Act, the beneficial owner of such shares
held by TD.
TD Bank, as the ultimate controlling parent company of TD, may be
deemed to share voting and dispositive power with respect to 345,912 shares
of Common Stock currently held by TD (assuming conversion of all of the
shares of Preferred Stock held by TD into Common Stock), which represents
approximately 3.1% of the total number of outstanding shares of Common Stock
as represented by the Issuer in the Purchase Agreement. The filing of this
Statement by TD Bank shall not be construed as an admission that TD Bank is,
for the purpose of Section 13(d) of the Exchange Act, the beneficial owner of
such shares held by TD.
The Investors have agreed to vote their shares of Preferred Stock for
the election of the directors designated by the MDP Investors and BV V in
accordance with the terms of the Purchase Agreement, as described more fully in
Item 4 above. As a result of the voting agreement contained in the Purchase
Agreement, the Investors may be deemed to constitute a "group" for purposes of
Section 13(d)(3) of the Exchange Act. Accordingly, by virtue of their beneficial
ownership of 110,000 shares of Preferred Stock, the Investors beneficially own
2,075,472 shares of Common Stock. Such 110,000 shares of Preferred Stock
(assuming conversion of all such 110,000 shares of Preferred Stock into Common
Stock) represent approximately 16.0% of the total number of outstanding shares
of Common Stock as represented by the Issuer in the Purchase Agreement. The
filing of this Statement by the Investors shall not be construed as an admission
that the Investors are, for the purpose of Section 13(d) of the Exchange Act,
the beneficial owner of the shares held by the Investors.
Page 16 of 22 Pages
<PAGE>
Neither the filing of this statement nor any of its contents shall be
deemed to constitute an admission that any Reporting Person is the beneficial
owner of any Common Stock referred to in this statement for the purpose of
Section 13(d) of the Act or for any other purpose, and such beneficial ownership
is expressly disclaimed.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Reference is made to the responses to Items 2, 3, 4 and 5 of this
Statement which is incorporated by reference in response to this Item.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement
2. Preferred Stock Purchase Agreement, dated April 3,
2000, by and among the Issuer, MDCP, MDSE, SAF,
BV V and TD.
3. Certificate of Designation relating to the Preferred
Stock.
4. Registration Agreement, dated April 3, 2000, by and
among the Issuer and the Investors.
Page 17 of 22 Pages
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: April 12, 2000 MADISON DEARBORN CAPITAL
PARTNERS III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 MADISON DEARBORN SPECIAL
EQUITY III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P.,
its Manager
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 MADISON DEARBORN PARTNERS III, L.P.
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 MADISON DEARBORN PARTNERS, LLC
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Page 18 of 22 Pages
<PAGE>
Date: April 12, 2000 BOSTON VENTURES LIMITED PARTNERSHIP V
By Boston Ventures Company V, L.L.C.,
its General Partner
By: /s/
---------------------------------------
Anthony J. Bolland, its Managing
Director
Date: April 12, 2000 BOSTON VENTURES COMPANY V, L.L.C.
By: /s/
---------------------------------------
Anthony J. Bolland, its Managing
Director
Date: April 12, 2000 TORONTO DOMINION INVESTMENTS, INC.
By: /s/
---------------------------------------
Martha L. Gariepy, its Vice President
Date: April 12, 2000 TORONTO DOMINION HOLDINGS (U.S.A.), INC.
By: /s/
---------------------------------------
Nancy J. Haraf, its President
Date: April 12, 2000 THE TORONTO-DOMINION BANK
By: /s/
---------------------------------------
Carole A. Clause, its Vice President
& Director
Page 19 of 22 Pages
<PAGE>
SCHEDULE A
Madison Dearborn Partners III, L.P. ("MDP III") is the sole general
partner of Madison Dearborn Capital Partners III, L.P., Madison Dearborn Special
Equity III, L.P. and Special Advisors Fund I LLC, L.P. Madison Dearborn
Partners, LLC ("MDP") is the sole general partner of MDP III. The directors and
executive officers of MDP are as follows: John A. Canning, Jr. (Director,
executive officer and President); Paul J. Finnegan (Managing Director); William
J. Hunckler, III (Managing Director); Samuel M. Mencoff (Managing Director);
Paul R. Wood (Managing Director); Justin S. Huscher (Managing Director);
Benjamin D. Chereskin (Managing Director); Thomas R. Reusche (Managing
Director); James N. Perry, Jr. (Managing Director); Nicholas W. Alexos (Managing
Director); Timothy P. Sullivan (Managing Director); Gary J. Little (Managing
Director); David F. Mosher (Managing Director); and Robin P. Selati (Managing
Director). The address of the principal business of all directors and officers
is Three First National Plaza, Suite 3800, Chicago, Illinois 60602. All
directors and executive officers are United States citizens. The Managing
Directors of MDP all serve on the LP Committee.
Page 20 of 22 Pages
<PAGE>
SCHEDULE B
Boston Ventures Company V, L.L.C. ("BVC") is the sole general partner
of Boston Ventures Limited Partnership V. The directors of BVC are as follows:
Richard C. Wallace (Managing Director); Roy F. Coppedge III (Managing Director);
Barbara M. Ginader (Managing Director); James M. Wilson (Managing Director);
Anthony J. Bolland (Managing Director); and Martha H.W. Crowninshield (Managing
Director). The address of the principal business of the directors is One Federal
Street, Boston, Massachusetts 02110. James M. Wilson and Anthony J. Bolland are
citizens of the United Kingdom; the rest of the Managing Directors are United
States citizens.
Page 21 of 22 Pages
<PAGE>
SCHEDULE C
Toronto Dominion Investments, Inc. ("TD") is a wholly-owned subsidiary
of Toronto Dominion Holdings (U.S.A.), Inc. ("TD Holdings"). TD Holdings is a
wholly-owned subsidiary of The Toronto-Dominion Bank ("TD Bank"). The directors
and executive officers of TD are Stephen H. Fryer (Director and Executive
Officer), Carole A. Clause (Director and Executive Officer), Victor J. Huebner
(Director and Executive Officer), Warren R. Finlay (Director and Executive
Officer), Martha L. Gariepy (Director and Executive Officer), Marc H. Michel
(Executive Officer), Sofia Gonzalez (Executive Officer), Chris D. Landherr
(Executive Officer), Mark C. Healy (Director), Thomas R. Spencer (Director),
Idon B. Biron (Director) and Robert F. MacLellan (Director). All are American
citizens except Warren R. Finlay, Victor J. Huebner, Thomas R. Spencer, Idon B.
Biron and Robert F. MacLellan who are Canadian citizens. The principal business
address of the directors and executive officers of TD is 909 Fannin, Suite 1700,
Houston, Texas 77010. The directors and executive officers of TD Holdings are
Carole A. Clause (Director and Executive Officer), Nancy J. Haraf (Director and
Executive Officer), Warren R. Finlay (Executive Officer), Chris D. Landherr
(Executive Officer), Thomas R. Spencer (Director), Victor J. Huebner (Director)
and John R. Geresi (Director). All are United States citizens with the exception
of Warren R. Finlay, Thomas R. Spencer and Victor J. Huebner, who are Canadian
citizens. The directors and executive officers of TD Bank are M. Norman Anderson
(Director), T. Christian Armstrong (Executive Officer), A. Charles Baillie
(Director and Executive Officer), Allen Bell (Executive Officer), G. Montegu
Black (Director), Jeffrey R. Carney (Executive Officer), W. Edmund Clark
(Executive Officer), Eleanor R. Clitheroe (Director), Marshall A. Cohen, Q.C.
(Director), Heather E. Conway (Executive Officer), Wendy K. Dobson (Director),
T. Bernard Dorval (Executive Officer), Michael A. Foulkes (Executive Officer),
J. Duncan Gibson (Executive Officer), Robert P. Kelly (Executive Officer), Henry
H. Ketcham (Director), Pierre H. Lessard (Director), J. David Livingston
(Executive Officer), Robert F. MacLellan (Executive Officer), Brian F. MacNeill
(Director), Daniel A. Marinangell (Executive Officer), Stephen D. McDonald
(Executive Officer), Chris A. Montague (Executive Officer), Michael P. Mueller
(Executive Officer), Frank J. Petrilli (Executive Officer), Rober Phillips
(Director), Edward S. Rogers (Director), Helen K. Sinclair (Director), Donald R.
Sobey (Director), Michael D. Sopko (Director), Thomas R. Spencer (Executive
Officer), Fredric J. Tomczyk (Executive Officer), John M. Thompson (Director),
Richard M. Thomson (Director), Diane E. Walker (Executive Officer), George W.
Watson (Director), Michael D. Woeller (Executive Officer) and Donald A. Wright
(Executive Officer). All are Canadian citizens except for M. Norman Anderson who
is a dual citizen of the United States and Canada and T. Christian Armstrong,
Henry H. Ketcham, and Frank J. Petrilli who are United States citizens. The
principal business address of the directors and executive officers of TD Bank is
TD Tower, 12th Floor, 55 King Street West,PO Box 1, Toronto, Ontario, Canada
M5K1A2.
Page 22 of 22 Pages
<PAGE>
Exhibit 1
JOINT FILING AGREEMENT
Each of the undersigned hereby acknowledges and agrees, in compliance
with the provisions of Rule 13d-1(k)(1) promulgated under the Securities
Exchange Act of 1934, as amended, that the Schedule 13D to which this Agreement
is attached as an Exhibit, and any amendments thereto, will be filed with the
Securities and Exchange Commission jointly on behalf of the undersigned.
This Agreement may be executed in one or more counterparts.
Date: April 12, 2000 MADISON DEARBORN CAPITAL PARTNERS III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 MADISON DEARBORN SPECIAL EQUITY III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P.,
its Manager
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 MADISON DEARBORN PARTNERS III, L.P.
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 MADISON DEARBORN PARTNERS, LLC
By: /s/
---------------------------------------
Paul J. Finnegan, its Managing Director
Date: April 12, 2000 BOSTON VENTURES LIMITED PARTNERSHIP V
<PAGE>
By Boston Ventures Company V, L.L.C.,
its General Partner
By: /s/
---------------------------------------
Anthony J. Bolland, its Managing
Director
Date: April 12, 2000 BOSTON VENTURES COMPANY V, L.L.C.
By: /s/
---------------------------------------
Anthony J. Bolland, its Managing
Director
Date: April 12, 2000 TORONTO DOMINION INVESTMENTS, INC.
By: /s/
---------------------------------------
Martha L. Gariepy, its Vice President
Date: April 12, 2000 TORONTO DOMINION HOLDINGS (U.S.A.), INC.
By: /s/
---------------------------------------
Nancy J. Haraf, its President
Date: April 12, 2000 THE TORONTO-DOMINION BANK
By: /s/
---------------------------------------
Carole A. Clause, its Vice President &
Director
<PAGE>
Exhibit 2
PREFERRED STOCK
PURCHASE AGREEMENT
DATED APRIL 3, 2000
AMONG
RURAL CELLULAR CORPORATION,
MADISON DEARBORN CAPITAL PARTNERS III, L.P.,
MADISON DEARBORN SPECIAL EQUITY III, L.P.,
SPECIAL ADVISORS FUND I, LLC,
BOSTON VENTURES LIMITED PARTNERSHIP V,
AND
TORONTO DOMINION INVESTMENTS, INC.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
1. Authorization and Closing..................................................1
1A. Authorization of the Preferred Stock.........................1
1B. Purchase and Sale of the Preferred Stock.....................1
1C. The Closing..................................................1
2. Conditions of Each Purchaser's Obligation at the Closing...................1
2A. Representations and Warranties; Covenants....................2
2B. Certificate of Designation...................................2
2C. Articles of Incorporation....................................2
2D. Company's Bylaws.............................................2
2E. Registration Agreement.......................................2
2F. Acquisition Agreement........................................2
2G. Senior Loan Agreement........................................3
2H. Bridge Financing Agreement...................................3
2I. Class T Preferred Stock Agreement............................3
2J. Sale of Preferred Stock to Each Purchaser....................3
2K. Securities Law Compliance....................................4
2L. Compliance with Applicable Laws..............................4
2M. Opinions of the Company's Counsel............................4
2N. Expenses.....................................................4
2O. Undrawn Commitment Fee.......................................4
2P. Receipt of Necessary Approvals..............................4
2Q. Closing Documents............................................5
2R. Waiver.......................................................6
3. Covenants..................................................................6
3A. Financial Statements and Other Information...................6
3B. Restrictive Covenants........................................6
3C. Designation of Directors.....................................9
3D. Affirmative Covenants.......................................13
3E. Year 2000 (Y2K) Compliance..................................14
3F. Compliance with Agreements..................................15
3G. Regulatory Compliance Cooperation...........................15
3H. Public Disclosures..........................................15
4. Covenants of the Purchasers...............................................15
4A. Confidentiality.............................................15
4B. Purchaser Standstill........................................16
4C. FCC Compliance..............................................18
5. Transfer of Purchaser Securities..........................................18
5A. General Provisions..........................................18
5B. Legend Removal..............................................18
6. Representations and Warranties of the Company.............................18
6A. Organization; Ownership; Power; Qualification...............18
6B. Authorization; Enforceability...............................19
6C. Capital Stock and Related Matters...........................19
6D. Subsidiaries; Authorization; Enforceability.................20
6E. Compliance with Other Documents and Contemplated
Transactions..........................................21
6F. Business....................................................21
6G. Licenses, etc...............................................21
6H. Compliance with Law.........................................21
6I. Title to Assets.............................................21
6J. Litigation..................................................22
6K. Taxes.......................................................22
6L. Financial Statements........................................22
6M. No Material Adverse Change..................................22
6N. ERISA.......................................................22
6O. Investment Company Act......................................23
6P. Governmental Regulation.....................................23
6Q. Absence of Default, Etc.....................................23
6R. Accuracy and Completeness of Information....................24
- i -
<PAGE>
6S. Agreements with Affiliates..................................24
6T. Payment of Wages............................................24
6U. Indebtedness................................................24
6V. Solvency....................................................24
6W. Year 2000 Compliance........................................25
6X. Reports with the Securities and Exchange Commission.........25
7. Definitions...............................................................25
8. Miscellaneous.............................................................32
8A. Expenses....................................................32
8B. Remedies....................................................32
8C. Purchaser's Investment Representations......................33
8D. Understanding Among the Purchasers..........................35
8E. Treatment of the Preferred Stock............................35
8F. Indemnification.............................................35
8G. Consent to Amendments.......................................35
8H. Survival of Representations and Warranties..................36
8I. Successors and Assigns......................................36
8J. Severability................................................36
8K. Counterparts................................................36
8L. Descriptive Headings; Interpretation........................36
8M. No Strict Construction......................................37
8N. Complete Agreement..........................................37
8O. Schedules...................................................37
8P. Delivery by Facsimile.......................................37
8Q. Governing Law...............................................38
8R. Notices.....................................................38
</TABLE>
SCHEDULES AND EXHIBITS
Schedule of Purchasers
List of Exhibits
List of Disclosure Schedules
- ii -
<PAGE>
RURAL CELLULAR CORPORATION
PREFERRED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of April 3, 2000, by and among Rural
Cellular Corporation, a Minnesota corporation (the "COMPANY"), and the Persons
listed on the SCHEDULE OF PURCHASERS attached hereto (collectively referred to
herein as the "PURCHASERS" and individually as a "PURCHASER"). Except as
otherwise indicated herein, capitalized terms used herein are defined in Section
7 hereof.
The parties hereto agree as follows:
Section 1. AUTHORIZATION AND CLOSING.
1A. AUTHORIZATION OF THE PREFERRED STOCK. The Company shall authorize
the issuance and sale to the Purchasers of 110,000 shares of its Class M
Redeemable Voting Convertible Preferred Stock, par value $0.01 per share (the
"PREFERRED STOCK"), having the rights and preferences set forth with respect
thereto in the Certificate of Designation attached hereto as EXHIBIT A. The
Preferred Stock is convertible into shares of the Company's Class A Common
Stock, par value $0.01 per share (the "CLASS A COMMON STOCK"), in the manner and
upon the terms and conditions set forth in the Certificate of Designation (as
defined in Section 2B below).
1B. PURCHASE AND SALE OF THE PREFERRED STOCK. At the Closing, the
Company shall sell to each Purchaser and, subject to the terms and conditions
set forth herein, each Purchaser shall purchase from the Company the number of
shares of Preferred Stock set forth opposite such Purchaser's name on the
SCHEDULE OF PURCHASERS attached hereto at a price of $1,000 per share of
Preferred Stock. The sale of the Preferred Stock to each Purchaser shall
constitute a separate sale hereunder.
1C. THE CLOSING. The closing of the separate purchases and sales of
the Preferred Stock (the "CLOSING") shall take place at the offices of Moss &
Barnett, 4800 Norwest Center, 90 South 7th Street, Minneapolis, Minnesota, at
10:00 a.m. local time on the date hereof, or at such other place or on such
other date as may be mutually agreeable to the Company and each Purchaser (the
date of the Closing, the "CLOSING DATE"). At the Closing, the Company shall
deliver to each Purchaser a stock certificate evidencing the Preferred Stock to
be purchased by such Purchaser, registered in such Purchaser's or its nominee's
name, upon payment of the purchase price thereof by delivery to the Company by
wire transfer of immediately available funds to an account designated by the
Company prior to the Closing, in the aggregate amount set forth opposite such
Purchaser's name on the SCHEDULE OF PURCHASERS. Unless otherwise waived by the
Company in its sole discretion, the Company's obligations under this Agreement,
including the issuance and sale of the Preferred Stock, are contingent upon the
receipt by the Company of the entire purchase price for the Preferred Stock from
each Purchaser, as set forth on the SCHEDULE OF PURCHASERS.
Section 2. CONDITIONS OF EACH PURCHASER'S OBLIGATION AT THE CLOSING.
The obligation of each Purchaser to purchase and pay for the Preferred Stock at
the Closing is subject to the satisfac tion as of the Closing of the following
conditions:
2A. REPRESENTATIONS AND WARRANTIES; COVENANTS. The representations and
warranties contained in Section 6 hereof shall be true and correct in all
material respects at and as of the Closing as though then made, except to the
extent of changes caused by the transactions expressly contemplated herein, 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.
2B. CERTIFICATE OF DESIGNATION. The Company shall have duly adopted,
executed and filed with the Secretary of State of Minnesota a Certificate of
Designation of Voting Power, Preferences and Relative, Participating, Optional
and Other Special Rights and Qualifications, Limitations and Restrictions
establishing the terms and the relative rights and preferences of the Preferred
Stock in the form set forth in EXHIBIT A hereto (the "CERTIFICATE OF
DESIGNATION"), and the Company shall not have adopted or filed any other
document designating terms, relative rights or preferences of its preferred
stock, other than the Other Preferred Stock Agreements. The Certificate of
Designation shall be in full force and effect as of the Closing under the laws
of the State of Minnesota and shall not have been amended or modified.
2C. ARTICLES OF INCORPORATION. The Company's Articles of Incorporation
shall be in form and substance as previously delivered to the Purchasers, a copy
of which is attached hereto as EXHIBIT B (the "ARTICLES OF INCORPORATION"),
shall be in full force and effect under the laws of the State of Minnesota as of
the Closing and shall not have been amended or modified.
- 1 -
<PAGE>
2D. COMPANY'S BYLAWS. The Company's bylaws shall be in form and
substance as previously delivered to the Purchasers, a copy of which is attached
hereto as EXHIBIT C (the "BYLAWS"), shall be in full force and effect as of the
Closing and shall not have been amended or modified.
2E. REGISTRATION AGREEMENT. The Company and the Purchasers shall have
entered into a registration agreement in form and substance as set forth in
EXHIBIT D attached hereto (the "REGISTRATION AGREEMENT"), and the Registration
Agreement shall be in full force and effect as of the Closing and shall not have
been amended or modified.
2F. ACQUISITION AGREEMENT. The Asset Purchase Agreement, dated as of
November 6, 1999, among the Company, Triton Cellular Partners, L.P., Triton
Communications, L.L.C., Triton Cellular Alabama License Company, L.L.C. and
certain of their affiliates (the "ACQUISITION AGREEMENT"), providing for the
purchase of substantially all of the cellular telephone operations of various
subsidiaries of Triton Cellular Partners, L.P. in the states of Alabama, Kansas,
Mississippi, Oregon and Washington (the "ACQUISITION"), shall be in form and
substance substantially as attached hereto as EXHIBIT E, shall be in full force
and effect as of the Closing and shall not have been amended or modified in any
material respect. All conditions to the obligations of the seller thereunder to
sell the assets subject to the Acquisition shall have been satisfied in full (or
duly waived without the payment of additional consideration in excess of
$5,000,000 in the aggregate, together with all other payments of additional
consideration for waivers to agreements in paragraphs 2F to 2I, inclusive, for
such waiver), and the Acquisition contemplated by the Acquisition Agreement
shall have been consummated prior to or simultaneously with the Closing
hereunder in accordance with the terms of the Acquisition Agreement.
2G. SENIOR LOAN AGREEMENT. The Senior Loan Agreement shall be in form
and substance substantially as attached hereto as EXHIBIT F, shall have been
duly authorized, executed and delivered by the Company and/or its Subsidiaries,
shall be in full force and effect as of the Closing and shall not have been
amended or modified in any material respect. All conditions to the obligations
of the Senior Lenders to make loans under the Senior Loan Agreement shall have
been satisfied in full (or duly waived without the payment of additional
consideration in excess of $5,000,000 in the aggregate, together with all other
payments of additional consideration for waivers to agreements in paragraphs 2F
to 2I, inclusive, for such waiver), and the loans to be made thereunder by the
Senior Lenders at the Closing shall have been advanced to the Company prior to
or simultaneously with the Closing hereunder in accordance with the terms of the
Senior Loan Agreement.
2H. BRIDGE FINANCING AGREEMENT. The Bridge Financing Agreement shall
be in form and substance substantially as attached hereto as EXHIBIT G, shall
have been duly authorized, executed and delivered by the Company, shall be in
full force and effect as of the Closing and shall not have been amended or
modified in any material respect. All conditions to the obligations of the
Bridge Financing Investors to purchase Company securities under the Bridge
Financing Agreement shall have been satisfied in full (or duly waived without
the payment of additional consideration in excess of $5,000,000 in the
aggregate, together with all other payments of additional consideration for
waivers to agreements in paragraphs 2F to 2I, inclusive, for such waiver), all
conditions to the release of funds held in escrow under the Escrow Agreement
entered into pursuant to the Junior Exchangeable Preferred Stock Agreement shall
have been satisfied in full (or duly waived without the payment of additional
consideration in excess of $5,000,000 in the aggregate, together with all other
payments of additional consideration for waivers to agreements in paragraphs 2F
to 2I, inclusive, for such waiver), and the purchase transactions contemplated
by the Bridge Financing Agreement shall have been consummated prior to or
simultaneously with the Closing hereunder in accordance with the terms of the
Bridge Financing Agreement.
2I. CLASS T PREFERRED STOCK AGREEMENT. The Class T Preferred Stock
Agreement shall be in form and substance substantially as attached hereto as
EXHIBIT H, shall have been duly authorized, executed and delivered by the
Company, shall be in full force and effect as of the Closing and shall not have
been amended or modified in any material respect. All conditions to the
obligations of the Class T Preferred Investors to purchase Company securities
under the Class T Preferred Stock Agreement shall have been satisfied in full
(or duly waived without the payment of additional consideration in excess of
$5,000,000 in the aggregate, together with all other payments of additional
consideration for waivers to agreements in paragraphs 2F to 2I, inclusive, for
such waiver), and the purchase transactions contemplated by the Class T
Preferred Stock Agreement shall have been consummated prior to or simultaneously
with the Closing hereunder in accordance with the terms of the Class T Preferred
Stock Agreement.
2J. SALE OF PREFERRED STOCK TO EACH PURCHASER. The Company shall have
simultaneously sold to each Purchaser the Preferred Stock to be purchased by
such Purchaser
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hereunder at the Closing and shall have received payment therefor in full in
immediately available funds as provided in paragraph 1C above; PROVIDED THAT, in
the event that any Purchaser fails to deliver its purchase price for its
Preferred Stock as provided herein, at the sole option of the Company, the
Company may terminate this Agreement as to such defaulting Purchaser and accept
the payment and delivery of each other Purchaser hereunder, and this Agreement
shall remain in full force and effect as to the Company and such non-defaulting
Purchasers.
2K. SECURITIES LAW COMPLIANCE. The Company shall have made all
necessary filings, if any required, under all applicable federal and state
securities laws in connection with the issuance of the Preferred Stock pursuant
to this Agreement.
2L. COMPLIANCE WITH APPLICABLE LAWS.
(i) The issuance and sale of the Preferred Stock to the
Purchasers pursuant to the terms hereof shall not violate, in any
material respect, any order, writ, judgment, injunction, decree,
statute, law, rule or regulation applicable to or bearing upon the
Company of any jurisdiction, court, tribunal or other governmental
entity or authority having jurisdiction over the Company or its assets.
(ii) The purchase of Preferred Stock by each Purchaser
hereunder 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 sole judgment, other onerous
condition under or pursuant to any applicable law or governmental rule
or regulation, and the purchase of the Preferred Stock by each
Purchaser hereunder shall be permitted by laws, rules and regulations
of the jurisdictions and governmental authorities and agencies to which
such Purchaser is subject.
2M. OPINIONS OF THE COMPANY'S COUNSEL. Each Purchaser shall have
received from Moss & Barnett, counsel for the Company, an opinion with respect
to the matters set forth in EXHIBIT I attached hereto, from Mayer, Brown &
Platt, special New York counsel to the Company, an opinion with respect to the
matters set forth in EXHIBIT J attached hereto, and from Lukas, Nace, Gutierrez
& Sachs, special communications counsel to the Company, an opinion with respect
to the matters set forth in EXHIBIT K attached hereto, each of which shall be
addressed to each Purchaser, dated the date of the Closing and in form and
substance reasonably satisfactory to each Purchaser and its special counsel.
2N. EXPENSES. At the Closing, the Company shall have paid or
reimbursed the Purchasers for all fees and expenses required to be paid pursuant
to paragraph 8A hereof.
2O. UNDRAWN COMMITMENT FEE. At the Closing, the Company shall have
paid the Purchasers a fee of $1,800,000, which fee, the Purchasers hereby
consent and agree, will be allocated among the Purchasers PRO RATA according to
the number of shares of Preferred Stock purchased by each such Purchaser at the
Closing hereunder.
2P. RECEIPT OF NECESSARY APPROVALS. The Company shall have obtained
all governmental, regulatory, third party and other consents, approvals, and
filings, if any, required in connection with the consummation of the
transactions contemplated under this Agreement (including, without limitation,
all blue sky law filings and waivers of all preemptive rights and rights of
first refusal with respect to the Company's equity securities), the Acquisition
Agreement and the other agreements described herein and therein.
2Q. CLOSING DOCUMENTS. The Company shall have delivered to each
Purchaser all of the following documents:
(i) an Officer's Certificate, dated the date of the
Closing, stating that the conditions specified in Section 1, paragraphs
2A through 2L(i), inclusive, and paragraph 2P have been fully
satisfied;
(ii) certified copies of the resolutions duly adopted by
the Board authorizing (A) the execution, delivery and performance of
this Agreement, the Registration Agreement, the Senior Loan Agreement,
the Bridge Financing Agreement, the Class T Preferred Stock Agreement,
the Acquisition Agreement and each of the other agreements contemplated
hereby and thereby, (B) the filing of the Certificate of Designation
referred to in paragraph 2B, (C) the appointment to the Board of the
directors designated pursuant to paragraph 3C hereof, (D) the issuance
and sale of the Preferred Stock to the Purchasers at the Closing, (E)
the reservation for issuance upon conversion of the Preferred Stock of
an
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aggregate of 2,075,472 shares of Class A Common Stock and (F) the
consummation of all other transactions contemplated by this Agreement;
(iii) an Officer's Certificate, dated the date of the
Closing, certifying that the Company's stockholders have approved (A)
the issuance and sale of the Preferred Stock, (B) an amendment to the
Articles of Incorporation of the Company increasing the number of
authorized shares of capital stock to 300,000,000 shares, consisting of
200,000,000 shares of Class A Common Stock, 10,000,000 shares of Class
B Common Stock, and 90,000,000 undesignated shares and (C) the adoption
of an amendment to the Bylaws of the Company increasing the size of the
Board to eleven members;
(iv) certified copies of the Articles of Incorporation,
the Certificate of Designation and the Company's Bylaws, each as in
effect at the Closing;
(v) duly completed and executed copies of the
Acquisition Agreement, the Registration Agreement, the Senior Loan
Agreement, the Bridge Financing Agreement and the Class T Preferred
Stock Agreement, each as in effect at the Closing;
(vi) good standing certificates for the jurisdiction of
incorporation of the Company and each of its Subsidiaries and for each
jurisdiction in which the Company or any of its Subsidiaries is
qualified to do business; and
(vii) such other documents relating to the transactions
contemplated by this Agreement as any Purchaser or its special counsel
may reasonably request.
2R. WAIVER. Any condition specified in this Section 2 may be waived if
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. COVENANTS.
3A. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company shall
deliver to each holder of at least 25% of the outstanding Purchaser Securities
(and to Toronto Dominion Investments, Inc. so long as it and its Affiliates hold
at least 80% of the Purchaser Securities originally issued to Toronto Dominion
Investments, Inc. at the Closing hereunder) (each, a "QUALIFIED HOLDER"):
(i) as soon as practicable but in any event within 30
days after the end of each monthly accounting period in each fiscal
year, all of the financial information which is provided to the Board
with respect to such monthly accounting period;
(ii) 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 regular,
special or periodic reports which it files, or (to its knowledge) any
of its officers or directors file with respect to the Company, with the
Securities and Exchange Commission (or any governmental authority that
may by the successor therefor) 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
(iii) with reasonable promptness, such other information
and financial data concerning the Company and its Subsidiaries as any
Qualified Holder may reasonably request.
All financial statements included in the information to be provided pursuant to
paragraphs (i) and (ii) shall fairly report the financial condition and results
of operations of the Company and its Subsidiaries as of the dates and for the
periods stated therein, and shall be prepared in accordance with GAAP,
consistently applied, subject in the case of unaudited financial statements to
changes resulting from normal year-end adjustments for recurring accruals.
For purposes of this Agreement, all holdings of Purchaser Securities by Persons
who are Affiliates of each other shall be aggregated for purposes of meeting any
threshold tests under this Agreement.
3B. RESTRICTIVE COVENANTS. So long as any Preferred Stock remains
outstanding, the Company shall not, without the prior written consent of the
holders of a majority of the Preferred Stock then outstanding:
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(i) directly or indirectly declare or pay, or permit any
Subsidiary to declare or pay, any dividends or make any distributions
upon any of its capital stock or other equity securities, except for
(A) dividends payable on the Other Preferred Stock pursuant to the
terms of the Other Preferred Stock Agreements as in effect on the date
hereof, (B) dividends payable on the Preferred Stock pursuant to the
term of the Articles of Incorporation (and the Certificate of
Designation filed thereunder with respect to the Preferred Stock), (C)
dividends payable in shares of Junior Securities issued upon the
outstanding shares of Junior Securities, (D) so long as no Event of
Noncompliance then exists or would be caused thereby, dividends payable
on the Common Stock out of (1) cumulative earnings available to Common
Stock or (2) net proceeds to the Company from the issuance of Junior
Securities subsequent to the date of this Agreement and (E) dividends
payable by any Subsidiary (1) to the Company or to any of its Wholly
Owned Subsidiaries or (2) if such dividends are made on a PRO RATA
basis with respect to all of such Subsidiary's capital stock or equity
interests;
(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, warrants,
options and other rights to acquire such capital stock or other equity
securities) or directly or indirectly redeem, purchase or make any
payments with respect to any stock appreciation rights, phantom stock
plans or similar rights or plans, except for (A) redemptions of the
Other Preferred Stock pursuant to the terms of the Other Preferred
Stock Agreements as in effect on the date hereof, (B) redemptions of
the Preferred Stock pursuant to the terms of the Articles of
Incorporation (and the Certificate of Designation filed thereunder with
respect to the Preferred Stock), (C) so long as no Event of
Noncompliance then exists or would be caused thereby, redemptions or
repurchases of Common Stock (or payments with respect to any stock
appreciation rights, phantom stock plans or similar rights or plans)
(1) with the net proceeds to the Company from the issuance of Junior
Securities subsequent to the date of this Agreement or (2) from
employees of the Company and its Subsidiaries pursuant to equity
subscription agreements, stock option agreements, stock appreciation
rights, phantom stock plans or similar rights or plans in effect on the
date hereof and which have been disclosed to the Purchasers on the
Schedules hereto and (D) redemptions or repurchases of the capital
stock or other equity securities of a Subsidiary (1) that are held by
the Company or any of its Wholly Owned Subsidiaries or (2) by such
Subsidiary if such redemptions or repurchases are made on a PRO RATA
basis with respect to all of such Subsidiary's capital stock or other
equity interests;
(iii) except as expressly contemplated by this Agreement,
amend, supplement, modify, terminate, waive or permit to be amended,
supplemented, modified, terminated or waived any of the provisions of
the Articles of Incorporation (including the Certificate of Designation
or any other certificate of designation setting forth the terms of any
class or series of preferred stock), the Company's Bylaws, the Other
Preferred Stock Agreements, or any other agreement entered into with
respect to the capital stock or equity securities of the Company or
file any resolution of the Board with the Minnesota Secretary of State,
in each case in any manner which would reasonably be expected to be
adverse to the holders of Preferred Stock;
(iv) except for (A) issuances of the Preferred Stock at
the Closing as contemplated under this Agreement, (B) issuances of
Other Preferred Stock as payment-in- kind dividends on the Other
Preferred Stock pursuant to the terms of the Other Preferred Stock
Agreements as in effect on the date hereof and (C) issuances of Other
Preferred Stock at the Closing as contemplated by the Bridge Financing
Agreement, authorize, issue or enter into any agreement providing for
the issuance (contingent or otherwise) of (or take any action that
would amend the terms of or reclassify any existing securities so as to
constitute) (a) any notes or debt securities containing equity features
(including, without limitation, any notes or debt securities
convertible into 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) or
(b) any capital stock or other equity securities (or any securities
convertible into or exchangeable for any capital stock or other equity
securities) which are senior to or on a parity with the Preferred Stock
with respect to the payment of dividends, redemptions or distributions
upon liquidation or otherwise;
(v) effect any liquidation, dissolutions or winding up
of the Company (whether voluntary or involuntary) (a "LIQUIDATION
EVENT"), unless in connection with such Liquidation Event each holder
of the Preferred Stock receives with respect to its Preferred Stock an
amount not less than the full liquidation value of such Preferred Stock
(together with all accrued but unpaid dividends thereon) as set forth
in the Certificate of Designation,
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or effect any reorganization of the Company into a partnership, limited
liability company or other non-corporate entity which is treated as a
partnership for federal income tax purposes;
(vi) engage, or permit any Subsidiary to engage, directly
or indirectly, in any business activities other than such business
activities which are substantially of the type (or incidental to) the
business being conducted by the Company and its Subsidiaries as of the
date of the Closing;
(vii) enter into, cause, permit or otherwise suffer to
exist or permit any Subsidiary to enter into, cause, permit or
otherwise suffer to exist any agreement, transaction, commitment or
arrangement with any of its or any Subsidiary's officers, directors,
senior executives, principal stockholders (other than the Company or
another Subsidiary) or Affiliates, or with any such individual's
spouse, sibling, lineal ancestor or descendant, or spouse's sibling or
lineal ancestor or descendant, or with any entity in which any of the
foregoing owns a beneficial interest, unless such arrangement is
otherwise not expressly prohibited under this Agreement, is in the
ordinary course of the Company's or such Subsidiary's business and is
on fair and reasonable terms that are not less favorable to the Company
or such Subsidiary than those that would be obtainable at the time in
an arm's length transaction with a Person not described above; PROVIDED
THAT the following shall in any event be permitted: (A) dividends,
redemptions, stock purchases and other distributions otherwise
permitted under this Agreement, (B) the payment of reasonable fees to
directors of the Company or any Subsidiary who are not employees of the
Company or any of its Subsidiaries, (C) so long as no Event of
Noncompliance would arise therefrom, any transaction with an officer or
member of the Board or any Sub Board in the ordinary course of business
involving indemnity or expense reimbursement, (D) loans or advances to
officers, directors or employees in the ordinary court of business, (E)
customary employment arrangements and benefit programs on reasonable
terms as approved by the Board or a committee thereof and (F)
transactions and agreements in existence on the date hereof and
described with particularity in the AFFILIATED TRANSACTIONS SCHEDULE
attached hereto;
(viii) make or permit, or permit any Subsidiary to make or
permit, any change in its respective fiscal year or in any of its other
accounting principles and practices;
(ix) use the proceeds from the sale of the Preferred
Stock other than to pay a portion of the purchase price for the
Acquisition and to pay related costs, fees and expenses; or
(x) agree or commit to any of the foregoing.
3C. DESIGNATION OF DIRECTORS. Subject to the limitations set forth in
this paragraph 3C, MDP and Boston Ventures each shall have the right to
designate one representative for election to the Board (individually a "BOARD
REPRESENTATIVE" and collectively the "BOARD REPRESENTATIVES"). The terms and
conditions governing the election, term of office, filling of vacancies and
other features of such directorships shall be as follows:
(i) INTERIM APPOINTMENT OF DIRECTORS. Pursuant to
written direction delivered by MDP and Boston Ventures to the Company,
MDP and Boston Ventures have each nominated one Board Representative to
be elected to the Board. At a meeting of the Board held on March 23,
2000, in fulfillment of the Company's obligation set forth in clause
(C) of paragraph 2Q(ii), the Board, acting in accordance with authority
provided pursuant to Sections 3.02(a) and 3.02(b) of the Bylaws,
approved resolutions which: (a) increased the size of the Board from
eight members to ten members through the addition of two additional
seats for Class III directors; and (b) filled the vacancies created by
such increase in the size of the Board with the Board Representatives
nominated by MDP and Boston Ventures. The appointment of the Board
Representatives as Class III directors is effective as of the day
following the Closing Date and is contingent upon the consummation of
the transactions contemplated by this Agreement. Each Board
Representative appointed pursuant to this paragraph 3C(i) shall
continue to hold office until the first regular meeting of the
shareholders of the Company following the Closing (at which time the
term shall expire automatically), subject, however, to prior death,
resignation, retirement, disqualification or termination of term of
office as provided in this paragraph 3C.
(ii) CONTINUING DESIGNATION OF BOARD REPRESENTATIVES.
Commencing with the first regular meeting of shareholders of the
Company following the Closing, the term of the Board Representatives
appointed to the Board as provided for in paragraph 3C(i) shall expire
and, thereafter, the Board Representatives designated by MDP and Boston
Ventures
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shall be elected in accordance with the following provisions of
paragraph 3C(ii)(A) or (B), as applicable:
(A) Subject to the provisions of paragraph
3C(iii), so long as any Preferred Stock remains issued and
outstanding, the Board Representative(s) designated by MDP
and/or Boston Ventures shall be elected to the Board by the
affirmative vote of the holders of all of the issued and
outstanding shares of Preferred Stock, voting separately as a
class, at a regular or special meeting of the shareholders of
the Company. The Board Representative(s) elected by the
holders of Preferred Stock shall not be divided into classes
and shall be in addition to the maximum number of directors
who may be elected by the holders of the Company's Common
Stock. Subject to the provisions of paragraph 3C(iii), all
holders of Preferred Stock shall vote their shares of
Preferred Stock in such a manner to effect the election of the
Board Representative(s) designated by MDP and/or Boston
Ventures pursuant to this paragraph. A Board Representative
elected pursuant to this paragraph 3C(ii)(A) shall hold office
until his successor is duly qualified and elected, subject to
prior death, resignation, retirement, disqualification, there
being no Preferred Stock remaining issued and outstanding (at
which time the term shall expire automatically) or termination
of term of office pursuant to the provisions of paragraph
3C(iii) or paragraph 3C(iv).
(B) Commencing at such time as no shares of
Preferred Stock remain issued and outstanding, the term of the
Board Representatives designated by MDP and Boston Ventures as
provided for in paragraph 3C(ii)(A) will expire automatically,
and thereafter the Company shall, subject to the provisions of
paragraph 3C(iii), nominate the Board Representative(s)
designated by MDP and/or Boston Ventures for election to the
Board by the holders of Common Stock and solicit proxies from
the Company's shareholders in favor of the election of such
Board Representative(s) provided written notice is delivered
to the Secretary of the Company in the manner provided in the
Bylaws for the nomination of directors, generally. Subject to
the provisions of paragraph 3C(iii), the Company shall use
commercially reasonable efforts to cause such Board
Representative(s) to be elected to the Board (including voting
all unrestricted proxies in favor of the election of such
board Representative(s)) and shall not take any action which
would diminish the prospects of such Board Representative(s)
being elected to the Board. Board Representatives elected as
directors pursuant to this paragraph 3C(ii)(B) shall be
divided into classes and shall be included in the maximum
number of directors who may be elected by the holders of the
Company's Common Stock in accordance with the provisions of
Section 3.02(a) and (b) of the Bylaws.
(iii) TERMINATION OF BOARD REPRESENTATIVE DESIGNATION
RIGHTS. The right of MDP to designate a Board Representative pursuant
to this paragraph 3C shall terminate at such time as MDP ceases to hold
Purchaser Securities equal to at least 50% of the amount of Purchaser
Securities initially issued to MDP on closing. The right of Boston
Ventures to designate a Board Representative pursuant to this paragraph
3C shall terminate at such time as Boston Ventures ceases to hold at
least 50% of the amount of Purchaser Securities initially issued to MDP
on Closing. If the rights of MDP and/or Boston Ventures, as the case
may be, to designate a Board Representative cease under either of the
two immediately preceding sentences, then (1) the Board may terminate
the term of the Board Representative of the Person as to which such
rights have ceased (MDP or Boston Ventures, as the case may be) by the
affirmative vote of the Board (in which vote the Board Representative
whose term of office the Board seeks to terminate shall not
participate) if such director was designated pursuant to paragraph
3C(ii)(A) or (2) the Company may use commercially reasonable efforts to
effect the removal of such director if such director was designated
pursuant to paragraph 3C(ii)(B). The loss of a Board Representative by
MDP or Boston Ventures shall not, in and of itself, cause the loss of
the other Person's Board Representative designation rights.
(iv) QUALIFICATIONS; DISQUALIFICATION; RESIGNATION;
TERMINATION OF TERM; REMOVAL; AND VACANCIES.
(A) QUALIFICATIONS; DISQUALIFICATION. Any
candidate designated by MDP or Boston Ventures as a Board
Representative may not be, in the Company's sole but
reasonable judgment, a representative of a competitor of the
Company. The Board may, at any time, terminate the term of
office of any Board Representative designated pursuant to
paragraph 3C(ii)(A) who, in the Company's sole but reasonable
judgment, becomes a representative of a competitor of the
Company after the date of such Board Representative's
election, upon the affirmative vote of a
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majority of the Board determined without regard to the vote of
the Board Representative or Representatives who are deemed to
be disqualified from serving based on the criteria hereinabove
described. The Company may, at any time, use commercially
reasonable efforts to effect the removal of any Board
Representative who, in the Company's sole but reasonable
judgment, becomes a representative of a competitor of the
Company after the date of such Board Representative's
election.
(B) RESIGNATION. An elected Board
Representative may resign from the Board at any time by giving
written notice to the Company at its principal executive
office. The resignation is effective without acceptance when
the notice is given to the Company, unless a later effective
time is specified in the notice.
(C) TERMINATION OF TERM OF OFFICE. So long
as any Preferred Stock remains outstanding, the term of office
of any Board Representative designated pursuant to paragraph
3C(ii)(A) may be terminated only in the following
circumstances (and may not otherwise be removed): (1) so long
as MDP or Boston Ventures retain the right to designate a
Board Representative pursuant to paragraph 3C(ii)(A), by the
Person (MDP or Boston Ventures, as the case may be) which
designated such Board Representative to the Board; (2) by the
Board in accordance with the provisions of paragraph 3C(iii);
or (3) by the Board in accordance with the provisions of
paragraph 3C(iv)(A).
(D) REMOVAL. So long as MDP or Boston
Ventures retains the right to designate a director pursuant to
paragraph 3C(ii)(B), the Company shall use commercially
reasonable efforts to remove any such director in the
following circumstances (and only in such circumstances): (1)
if so directed by the Person (MDP or Boston Ventures, as the
case may be) who designated such director; (2) in accordance
with the provisions of paragraph 3C(iii); and (3) at the
Company's option, in accordance with the provisions of
paragraph 3C(iv)(A).
(E) VACANCIES. In the event of a vacancy on
the Board resulting from the death, disqualification,
resignation, retirement or termination of term of office of
the Board Representative designated by MDP or Boston Ventures,
(1) if such Person (MDP or Boston Ventures, as the case may
be) retains the right to designate a director pursuant to
paragraph 3C(ii)(A), then the resulting vacancy shall be
filled by a representative designated by MDP or Boston
Ventures, as the case may be, as provided hereunder, or (2) if
such Person (MDP or Boston Ventures, as the case may be)
retains the right to designate a director pursuant to
paragraph 3C(ii)(B), then the Company shall use commercially
reasonable efforts to fill such vacancy with a representative
designated by MDP or Boston Ventures, as the case may be, as
provided hereunder, in either case to serve until the next
annual or special meeting of the shareholders (and at such
meeting, such representative, or another representative
designated by such Person (MDP or Boston Ventures, as the case
may be), will be elected to the Board in the manner described
in paragraph 3C(ii)). If MDP or Boston Ventures, as the case
may be, fails or declines to fill the vacancy, then the
directorship shall remain open until such time as MDP or
Boston Ventures, as the case may be, elects to fill it with a
representative designated hereunder. During any such period
that MDP or Boston Ventures, as the case may be, is entitled
to, but has failed or declined to, designate a Board
Representative, such Person (MDP or Boston Ventures, as the
may be) shall have the right to designate one representative
to attend all Board meetings as a non-voting observer. The
observer shall be entitled to notice of all Board meetings in
the manner that notice is provided to members of the Board,
shall be entitled to receive all materials provided to members
of the Board, shall be entitled to attend (whether in person,
by telephone, or otherwise) all meetings of the Board as a
non-voting observer, and shall be entitled to fees and
expenses paid to Board Representatives pursuant to paragraph
3C(v).
(v) FEES & EXPENSES. Board Representatives shall be
entitled to fees, other compensation and reimbursement of expenses paid
to Board members who are not employees of the Company or its
Subsidiaries.
(vi) REPORTING INFORMATION. With respect to each Board
Representative designated pursuant to the provisions of paragraph
3C(ii), MDP and Boston Ventures shall provide the Company with all
necessary assistance and information related to such Board
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Representative that is required (or would be required if the Company
were subject to Regulation 14A under the Securities Exchange Act of
1934, as amended) to be disclosed in solicitations of proxies or
otherwise, including such person's written consent to being named in
the proxy statement (if applicable) and to serving as a director if
elected.
(vii) VOTING AGREEMENT. The Purchasers intend the
provisions of this paragraph 3C to be enforceable as a shareholder
voting agreement in accordance with the provisions of Section 302A.455
of the Minnesota Business Corporations Act. In addition to the
limitations on transfer contained in Section 5 hereof, no Purchaser
shall sell, transfer, assign or otherwise dispose of any Preferred
Stock to any Person, other than another Purchaser or pursuant to the
provisions of clauses (iii) through (vii), inclusive, of paragraph 5A,
unless and until such Person shall agree in writing to take such
Preferred Stock subject to, and shall agree in writing to be bound by
the terms and conditions of, this Agreement. The certificates
evidencing the Preferred Stock shall contain a legend referring to the
shareholder voting agreement provisions of this Agreement.
3D. AFFIRMATIVE COVENANTS. So long as any Preferred Stock remains
outstanding, the Company shall, and shall cause each Subsidiary to, unless it
has received the prior written waiver of the holders of a majority of the
outstanding Preferred Stock:
(i) at all times cause to be done all things necessary
to maintain, preserve and renew its corporate existence and all
material licenses (including FCC licenses), authorizations, orders,
permits and other governmental approvals necessary to the conduct of
its businesses, and qualify and remain qualified as a foreign
corporation, except where the failure to do so would not reasonably be
expected to result in a Material Adverse Effect;
(ii) comply with all obligations that 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
(A) the failure to so comply would not (either individually or in the
aggregate) reasonably be expected to result in a Material Adverse
Effect, or (B) the same are being contested in good faith and by
appropriate proceedings and adequate reserves or other provisions (as
determined in accordance with GAAP, consistently applied) have been
made and recorded on the Company's financial records with respect
thereto;
(iii) comply with the applicable requirements of all laws,
rules, regulations and orders of all governmental authorities
(including, but not limited to, ERISA and the rules, regulations and
orders promulgated thereunder and all rules, regulations and orders
promulgated by the FCC), except where the failure to comply would not
(either individually or in the aggregate) reasonably be expected to
result in a Material Adverse Effect;
(iv) maintain and keep its properties in good repair,
working order and condition (ordinary wear and tear excepted), and from
time to time make all necessary or desirable repairs, renewals and
replacements, so that its businesses may be properly and advantageously
conducted at all times, except where the failure to do so would not
(either individually or in the aggregate) reasonably be expected to
result in a Material Adverse Effect;
(v) 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, except where the
failure to do so would not (either individually or in the aggregate)
reasonably be expected to result in a Material Adverse Effect;
(vi) maintain proper records and books of account which
present fairly in all material respects the financial condition,
results of operations and financial transactions of the Company and its
Subsidiaries, and make provisions on its financial statements for all
such proper reserves as in each case are required in accordance with
GAAP, consistently applied;
(vii) maintain insurance on its properties and businesses
with financially sound and reputable insurance companies in such
amounts, of such types and covering such casualties, risks and
contingencies as is ordinarily carried by companies engaged in similar
businesses and owning similar properties in the same general locations
in which the Company and its Subsidiaries operate; and
(viii) pay and discharge when payable all taxes,
assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any properties belonging to it (in each
case prior to the date on which the same becomes delinquent and before
penalties accrue thereon), and all lawful claims which, if unpaid,
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would by law become a Lien upon any of the properties of the Company
or its Subsidiaries, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and adequate
reserves or other provisions (as determined in accordance with GAAP,
consistently applied) have been made and recorded on the Company's
financial records with respect thereto and except where failure to do
so would not reasonably be expected to result in a Material Adverse
Effect.
3E. YEAR 2000 (Y2K) COMPLIANCE.
(i) So long as any Preferred Stock remains outstanding,
the Company and its Subsidiaries shall continue to conduct assessments
and tests of all software, computers, network equipment, technical
infrastructure, production equipment and other equipment and systems
that are material to the operation of its business and that rely or
utilize date or time processing ("SYSTEMS") and shall ensure that all
of such Systems are Year 2000 Compliant. The Company and its
Subsidiaries shall comply with all applicable laws and regulations
relating to Year 2000 compliance, including, without limitation, making
disclosures required by the federal securities laws.
(ii) For purposes of this Purchase Agreement, "YEAR 2000
COMPLIANT" means a System or product will at all times (i) consistently
and accurately handle and process date and time information and data
with values before, during and after January 1, 2000, including,
without limitation, accepting date input, providing date output, and
performing calculations on or utilizing dates or portions of dates;
(ii) function accurately and in accordance with its specifications
without interruption, abnormal endings, degradation, change in
operation or other impact, or disruption of the other parts of the
Company's and its Subsidiaries' Systems, resulting from processing data
or time data with values, before, during and after January 1, 2000;
(iii) respond to and process two-digit date input in a way that
resolves any ambiguity as to century; and (iv) store and provide output
of date information in ways that are unambiguous as to century, except
in any case, as would not result (either individually or in the
aggregate) in a Material Adverse Effect.
3F. COMPLIANCE WITH AGREEMENTS. So long as any Preferred Stock
remains outstanding, the Company shall perform and observe (i) all of its
obligations to each holder of Purchaser Securities set forth in the Articles of
Incorporation, the Certificate of Designation and the Company's Bylaws and (ii)
all of its obligations to each holder of Registrable Securities (as defined in
the Registration Agreement) set forth in the Registration Agreement.
3G. REGULATORY COMPLIANCE COOPERATION. If the Company proposes
or plans to redeem, purchase or otherwise acquire, directly or indirectly, or
convert or take any action with respect to the voting rights of, any shares of
any class of its capital stock or any securities convertible into or
exchangeable for any shares of any class of its capital stock (other than a
redemption or conversion of the Preferred Stock) that would reasonably be
expected to cause a Regulatory Problem for any Purchaser (or other holder of
Purchaser Securities) that is subject to regulation under the Bank Holding
Company Act or any similar law then in force (each, a "REGULATED PURCHASER"),
then the Company shall give written notice of such pending action to each
Purchaser at least 30 days prior to such action. For purposes of this paragraph,
a Person shall be deemed to have a "REGULATORY PROBLEM" when such Person and
such Person's Affiliates would own, control or have power over a greater
quantity of securities of any kind issued by the Company or any other entity
than are permitted under any requirement of any governmental authority.
3H. PUBLIC DISCLOSURES. After the date hereof, the Company
shall not, nor shall it permit any Subsidiary to, disclose any Purchaser's 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 Purchaser, unless such disclosure is
required by applicable law or governmental regulations or by order of a court of
competent juris diction, in which case, unless otherwise prohibited by
Applicable Law, prior to making such disclosure the Company shall give written
notice to such Purchaser describing in reasonable detail the proposed content of
such disclosure and shall permit the Purchaser to review and comment upon the
form and substance of such disclosure.
Section 4. COVENANTS OF THE PURCHASERS.
4A. CONFIDENTIALITY.
(i) Each Purchaser will hold, and will use its commercially
reasonable efforts to cause its officers, directors, shareholders,
employees, accountants, counsel, consultants, advisors, financing
sources, financial institutions and agents (its "REPRESENTATIVES") to
hold,
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in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law or national
stock exchange, all confidential documents and information concerning
the Company or any of its Affiliates furnished to the Purchaser, except
to the extent that such information can be shown to have been (a)
previously known on a non-confidential basis by the Purchaser or such
Representatives, (b) in the public domain through no fault of the
Purchaser or such Representatives (acting in their capacity as such or
with respect to information received in their capacity as such) or (c)
later acquired by the Purchaser or such Representatives from sources
other than the Company or any of its Affiliates not known by the
Purchaser or such Representatives, as applicable, to be bound by any
confidentiality obligation; PROVIDED THAT the Purchaser may disclose
such information to any of the Representatives in connection with the
transactions contemplated by this Agreement so long as such Persons are
informed by the Purchaser of the confidential nature of such
information and are directed by the Purchaser to treat such information
confidentially; AND PROVIDED FURTHER that the Purchaser may disclose
such information in connection with a sale or transfer permitted by
paragraph 5A of any Purchaser Securities if such Purchaser's transferee
agrees to be bound by the provisions of this paragraph. Each Purchaser
shall be responsible for any failure of it or any of its
Representatives to treat such information confidentially. Each
Purchaser agrees that it shall not and it shall cause each of its
Representatives not to use any confidential documents or information
for any purpose other than monitoring and evaluating its investment in
the Company and in connection with the transactions contemplated by
this Agreement. If this Agreement is terminated, then upon written
request from the Company each Purchaser will, and will use its best
efforts to cause its Representatives to, destroy or deliver to the
Company all documents and other materials, and all copies thereof,
obtained by such Purchaser or on its behalf from the Company, or any of
its Representatives, in connection with this Agreement that are subject
to such confidence.
(ii) In the event any of the Purchasers or anyone to whom any
of the Purchasers transmit confidential information is requested or
required (by oral questions, interrogatories, requests for information
or documents, subpoenas, civil investigative demand or similar process)
to disclose any such information, such Purchaser will provide the
Company with prompt notice so that the Company may seek a protective
order or other appropriate remedy and/or waive such Purchaser's
compliance with the provisions of this paragraph. In the event that
such protective order or other remedy is not obtained sufficiently
promptly so as not to adversely affect such Purchaser or those of its
officers, directors, employees, accountants, counsel, consultants,
advisors and agents as to whom the information has been requested or
required, or the Company waives such Purchaser's compliance with the
provisions of this Agreement, such Purchaser will furnish only that
portion of such information that such Purchaser is advised by counsel
is legally required and will, at the Company's expense and direction,
exercise its reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such information.
4B. PURCHASER STANDSTILL.
(i) Except with the prior approval of the Board (as
evidenced by a duly adopted resolution), each Purchaser and each holder
of Purchaser Securities covenants and agrees that until the seventh
anniversary of the date of this Agreement it will not, and will not
cause or permit its Affiliates, directly or indirectly, either
individually or together with any other Persons acting in concert, to
(A) acquire, or offer or agree to acquire,
or become the beneficial owner of or obtain any rights in
respect of any capital stock of the Company, except for any
shares of Class A Common Stock that may be issuable upon the
conversion of the Preferred Stock or otherwise as permitted
pursuant to this Agreement, PROVIDED THAT the foregoing
limitation shall not prohibit the acquisition of securities of
the Company or any of its successors issued as dividends or as
a result of stock splits and similar reclassifications or
received in a merger or other business combination of
Preferred Stock or Purchaser Securities held by the Purchasers
or any of their Affiliates at the time of such dividend, split
or reclassification or merger or business combination;
(B) grant or solicit proxies or consents or
become a "participant" in a "solicitation" (as such terms are
defined or used in Regulation 14A under the Securities
Exchange Act) of proxies or consents with respect to any
securities of the Company or any of its successors having
current or contingent voting power or initiate or become a
participant in any stockholder proposal or "election contest"
(as such term is defined or used in Rule 14a-11 under the
Securities Exchange Act) with respect to the Company or any of
its successors or facilitate or induce others in the
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initiation of the same, or otherwise seek to advise or
influence any Person with respect to the voting of any
voting securities of the Company or any of its successors
(except for activities undertaken by the Purchasers or the
directors elected by MDP and Boston Ventures pursuant to
paragraph 3C in connection with solicitations by the Board);
(C) publicly or privately propose,
encourage, solicit or participate in the solicitation of any
Person to acquire, offer to acquire or agree to acquire, by
merger, tender offer, purchase or otherwise, the Company or a
substantial portion of its assets or more than 5% of the
outstanding capital stock (except in connection with the
registration of securities pursuant to the Registration
Agreement or a sale of Purchaser Securities);
(D) directly or indirectly join in or in any
way participate in a pooling agreement, syndicate, voting
trust or other arrangement with respect to any of the
Company's securities having current or contingent voting power
or otherwise act in concert with any other Person (other than
controlled Affiliates), for the purpose of acquiring, holding,
voting or disposing of any such securities of the Company
except agreements or arrangements related to the voting of
securities for the election of the directors to be designated
by MDP and Boston Ventures pursuant to paragraph 3C;
(E) seek, alone or in concert with others,
representation on the Board except as specifically set forth
in paragraph 3C hereof, or seek the removal or termination of
term of office of any member of the Board;
(F) make any proposal, statement or inquiry,
or disclose any intention, plan or arrangement (whether
written or oral) inconsistent with the foregoing; or
(G) have any discussions or communications,
or enter into any arrangements, understandings or agreements
(whether written or oral) with, or advise, finance, assist or
encourage, any other Person in connection with any of the
foregoing.
(ii) Each holder of Purchaser Securities agrees that, in the
event of any breach of the provisions of this paragraph 4B, the Company
shall in addition to any right at law to damages be deemed irreparably
harmed and entitled to equitable relief (without the posting of any
bond or other security), including injunctive relief requiring prompt
disposition of securities acquired contrary to this Agreement in a
manner which is calculated to cause wide distribution of the shares and
which is agreeable to the Company.
4C. FCC COMPLIANCE. Each Purchaser covenants and agrees that
it will not acquire any interest in a Commercial Mobile Radio Service ("CMRS")
licensee that would cause the Company to be in violation of the FCC's Cellular
Cross Ownership Rules or the FCC's CMRS Spectrum Cap Rules then in effect
(collectively, the "FCC'S CROSS OWNERSHIP RULES"). Each Purchaser further
covenants and agrees that, in the event it does acquire such an interest, it
will use commercially reasonable efforts to dispose promptly of sufficient
interests (either by sale of stock or by divesting business segment(s)) in
either (i) the competing CMRS channel block(s) or (ii) the Company, to the
extent necessary to once again be compliant with the FCC's Cross Ownership
Rules.
Section 5. TRANSFER OF PURCHASER SECURITIES.
5A. GENERAL PROVISIONS. Purchaser Securities are not
transferable by any Purchaser except (i) to the Company or a Person approved by
the Company, (ii) to an Affiliate, (iii) pursuant to a merger or plan of
liquidation of the Company, (iv) in response to an offer to purchase voting
securities which is made by the Company or any third party not opposed by the
Board, (v) pursuant to an open-market sale under Rule 144 of the Securities and
Exchange Commission (or any similar rule or rules then in force) if such rule is
available, (vi) pursuant to a public offering registered under the Securities
Act and (vii) by way of an in-kind distribution by any Purchaser that is an
investment fund to its partners or members in connection with a distribution of
freely tradeable securities.
5B. LEGEND REMOVAL. If any Purchaser Securities become
eligible for sale pursuant to Rule 144(k), the Company shall, upon the request
of the holder of such Purchaser Securities, remove the legend set forth in
paragraph 8C from the certificates for such Purchaser Securities; PROVIDED THAT
such Purchaser Securities shall remain subject to paragraph 5A.
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Section 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Preferred Stock hereunder, the Company hereby represents and warrants at and
as of the Closing Date, after giving effect to the transactions contemplated by
this Agreement (including the Acquisition), that:
6A. ORGANIZATION; OWNERSHIP; POWER; QUALIFICATION. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota. The Company has the corporate power and
authority to own its properties and to carry on its business as now being and as
proposed hereafter to be conducted. Each Subsidiary of the Company is a
corporation or partnership duly organized, validly existing and in good standing
under the laws of the state of its incorporation or formation, as the case may
be, and has the corporate or partnership power, as the case may be, and
authority to own its properties and to carry on its business as now being and as
proposed hereafter to be conducted. The Company and each of its Subsidiaries are
duly qualified, in good standing and authorized to do business in each
jurisdiction in which the character of their respective properties or the nature
of their respective businesses requires such qualification or authorization.
6B. AUTHORIZATION; ENFORCEABILITY. The Company has the
corporate power and has taken all necessary corporate action to authorize it to
execute, deliver and perform this Agreement, the Registration Agreement and all
other documents contemplated hereby to which it is a party in accordance with
their respective terms, and to consummate the transactions contemplated hereby
and thereby. This Agreement has been duly executed and delivered by the Company
and is, and each of the other documents referred to herein to which the Company
is a party is, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject, as to enforcement of
remedies, to the following qualifications: (i) an order of specific performance
and an injunction are discretionary remedies and, in particular, may not be
available where damages are considered an adequate remedy at law; (ii)
enforcement may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such law relates to the bankruptcy,
insolvency or similar event of the Company); and (iii) a court, on equitable
grounds, may decline to enforce certain provisions or allow the exercise of
certain remedies based upon the facts and circumstances that may exist at the
time the enforcement or exercise is sought.
6C. CAPITAL STOCK AND RELATED MATTERS.
(i) As of the Closing and immediately thereafter, the
authorized capital stock of the Company shall consist of (a) 90,000,000
undesignated shares, of which 110,000 shares shall be designated as
Class M Redeemable Voting Convertible Preferred Stock (of which 110,000
shall be issued and outstanding), 15,000 shares shall be designated as
Class T Preferred Stock, Series A (of which 2,176.875 shall be issued
and outstanding), 10,000 shares shall be designated as Class T
Preferred Stock, Series B (of which 5,363.214 shall be issued and
outstanding), 450,000 shares shall be designated as Senior Exchangeable
Preferred Stock (of which 177,046 shall be issued and outstanding),
400,000 shares shall be designated as Junior Exchangeable Preferred
Stock (of which 140,000 shall be issued and outstanding), 200,000
shares shall be designated as Series A Junior Participating Preferred
Stock (of which none shall be issued and outstanding) and 50,000 shares
shall be designated as Series B Junior Participating Preferred Stock
(of which none shall be issued and outstanding); (b) 200,000,000 shares
of Class A Common Stock, of which 10,879,160 shares shall be issued and
outstanding, 2,075,472 shares shall be reserved for issuance upon
conversion of the Preferred Stock, 296,297 shares shall be reserved for
issuance upon conversion of the Class T Preferred Stock, Series A,
2,348,197 shares shall be reserved under the Company's stock option
plans (of which options for 1,218,497 shares of Class A Common Stock
shall have been granted) and 188,418 shares shall be reserved for
issuance under the Company's Employee Stock Purchase Plan; and (c)
10,000,000 shares of Class B Common Stock, of which 888,543 shares
shall be issued and outstanding and 197,531 shares shall be reserved
for issuance upon conversion of the Class T Preferred Stock, Series B.
As of the Closing, neither the Company nor any Subsidiary shall have
outstanding any stock or securities convertible or exchangeable for any
shares of its capital stock or containing any profit participation
features, nor shall they have outstanding any rights or options to
subscribe for or to purchase its capital stock or any stock or
securities convertible into or exchangeable for its capital stock or
any stock appreciation rights or phantom stock plans, except for the
Preferred Stock and except as set forth on the attached "CAPITALIZATION
SCHEDULE." As of the Closing, neither the Company nor any Subsidiary
shall be subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital
stock or any warrants, options or other rights to acquire its capital
stock, except as set forth on the Capitalization Schedule and except
pursuant to the Articles of Incorporation. As of
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the Closing, all of the outstanding shares of the Company's capital
stock shall be validly issued, fully paid and nonassessable.
(ii) Except as set forth on the Capitalization
Schedule, there are no statutory or, to the best of the Company's
knowledge, contractual stockholders preemptive rights or rights of
refusal with respect to the issuance of the Preferred Stock hereunder
or the issuance of the Class A Common Stock upon conversion of the
Preferred Stock. The Company has complied with all applicable federal
or state securities laws in connection with the offer, sale or issuance
of any of its capital stock, and the offer, sale and issuance of the
Preferred Stock 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
stockholders with respect to the voting or transfer of the Company's
capital stock.
6D. SUBSIDIARIES; AUTHORIZATION; ENFORCEABILITY. The Company's
Subsidiaries and the Company's direct and indirect ownership thereof as of the
date of this Agreement are as set forth on the SUBSIDIARY SCHEDULE attached
hereto, and to the extent such Subsidiaries are corporations, the Company has
the unrestricted right to vote the issued and outstanding shares of the
Subsidiaries shown thereon and such shares of such Subsidiaries have been duly
authorized and issued and are fully paid and nonassessable. Each Subsidiary of
the Company has the corporate or partnership power and has taken all necessary
corporate or partnership action to authorize it to execute, deliver and perform
any documents contemplated hereby to which it is a party in accordance with
their respective terms and to consummate the transactions contemplated by this
Agreement and such other documents. Each such document to which any Subsidiary
of the Company is a party is a legal, valid and binding obligation of such
Subsidiary enforceable against such Subsidiary in accordance with its terms,
subject, as to enforcement of remedies, to the following qualifications: (i) an
order of specific performance and an injunction are discretionary remedies and,
in particular, may not be available where damages are considered an adequate
remedy at law; (ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar laws affecting
enforcement of creditors' rights generally (insofar as any such law relates to
the bankruptcy, insolvency or similar event of any such Subsidiary) and (iii) a
court, on equitable grounds, may decline to enforce certain provisions or allow
the exercise of certain remedies based upon the facts and circumstances that may
exist at the time the enforcement or exercise is sought. The Company's ownership
interest in each of its Subsidiaries represents a direct or indirect controlling
interest of such Subsidiary for purposes of directing or causing the direction
of the management and policies of each Subsidiary.
6E. COMPLIANCE WITH OTHER DOCUMENTS AND CONTEMPLATED
TRANSACTIONS. The execution, delivery and performance, in accordance with their
respective terms, by the Company of this Agreement, and by the Company and its
Subsidiaries of each of the other documents contemplated hereby to which they
are respectively party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) require any consent or approval,
governmental or otherwise, not already obtained, (ii) violate any Applicable Law
respecting the Company or any of its Subsidiaries, (iii) conflict with, result
in a breach of, or constitute a default under the certificate or articles of
incorporation or by-laws or partnership agreements, as the case may be, as
amended, of the Company or any of its Subsidiaries, or under any material
indenture, agreement, or other instrument, including, without limitation, the
Licenses, to which the Company or any of its Subsidiaries is a party or by which
any of them or their respective properties may be bound or (iv) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Company or any of its
Subsidiaries, except for Permitted Liens.
6F. BUSINESS. The Company, together with its Subsidiaries, is
engaged in the business of owning, constructing, managing, operating and
investing in Cellular Systems and other wireless communications and related
businesses.
6G. LICENSES, ETC. The Licenses, all of which are set forth on
the LICENSES SCHEDULE, have been duly issued and are in full force and effect.
The Company and its Subsidiaries are in compliance in all material respects with
all of the provisions thereof. The Company and its Subsidiaries have secured all
Necessary Authorizations and all such Necessary Authorizations are in full force
and effect. Except as set forth in the POTENTIAL REVOCATIONS OF LICENSES
SCHEDULE attached hereto, neither any License nor any Necessary Authorization is
the subject of any pending or, to the best of the Company's or any of its
Subsidiaries' knowledge, threatened revocation.
6H. COMPLIANCE WITH LAW. The Company and its Subsidiaries are
in compliance with all Applicable Laws in all material respects, except where
the failure to be in compliance would not, individually or in the aggregate,
have a Material Adverse Effect.
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<PAGE>
6I. TITLE TO ASSETS. As of the date of this Agreement, the
Company and its Subsidiaries have good, legal and marketable title to, or a
valid leasehold interest in, all of its material assets. None of the properties
or assets of the Company or any of its Subsidiaries is subject to any Liens,
except for Permitted Liens. Except for financing statements evidencing Permitted
Liens, no financing statement under the Uniform Commercial Code as in effect in
any jurisdiction and no other filing which names the Company or any of its
Subsidiaries as debtor or which covers or purports to cover any of the assets of
the Company or any of its Subsidiaries is currently effective and on file in any
state or other jurisdiction, and neither the Company nor any of its Subsidiaries
has signed any such financing statement or filing or any security agreement
authorizing any secured party thereunder to file any such financing statement or
filing.
6J. LITIGATION. There is no action, suit, proceeding or
investigation pending against, or, to the knowledge of the Company, threatened
against or in any other manner relating adversely to, the Company or any of its
Subsidiaries or any of their respective properties, including without limitation
the Licenses, in any court or before any arbitrator of any kind or before or by
any governmental body (including without limitation the FCC) except as set forth
on the LITIGATION SCHEDULE attached hereto. No such action, suit, proceeding or
investigation (i) calls into question the validity of this Agreement or (ii)
individually or collectively involves the possibility of any judgment or
liability not fully covered by insurance which, if determined adversely to the
Company or any of its Subsidiaries, would have a Material Adverse Effect.
6K. TAXES. All federal, state and other tax returns of the
Company and each of its Subsidiaries required by law to be filed have been duly
filed and all federal, state and other taxes, including, without limitation,
withholding taxes, assessments and other governmental charges or levies required
to be paid by the Company or any of its Subsidiaries or imposed upon the Company
or any of its Subsidiaries or any of their respective properties, income,
profits or assets, which are due and payable, have been paid, except any such
taxes (i) (x) the payment of which the Company or any of its Subsidiaries is
diligently contesting in good faith by appropriate proceedings, (y) for which
adequate reserves have been provided on the books of the Company or its
Subsidiaries involved, and (z) as to which no Lien other than a Permitted Lien
has attached and no foreclosure, distraint, sale or similar proceedings have
been commenced, or (ii) which may result from audits not yet conducted. The
charges, accruals and reserves on the books of the Company and its Subsidiaries
in respect of taxes are, in the judgment of the Company, adequate.
6L. FINANCIAL STATEMENTS. The Company has furnished or caused
to be furnished to the Purchasers as of the date of this Agreement, audited
financial statements of the Company and audited financial statements of the
Subsidiaries of the Company on a consolidated basis for the fiscal years ended
December 31, 1998, and December 31, 1999, and unaudited financial statements of
the Company and its Subsidiaries on a consolidated basis for the two month
period ended February 29, 2000, all of which have been prepared in accordance
with GAAP and present fairly in all material respects the financial position of
the Company and its Subsidiaries on a consolidated and consolidating basis, as
the case may be, on and as at such dates and the results of operations for the
periods then ended. Neither the Company nor any of its Subsidiaries has any
material liabilities, contingent or otherwise, other than as disclosed in the
financial statements referred to in the preceding sentence or as set forth or
referred to in this Agreement, and there are no material unrealized losses of
the Company or any of its Subsidiaries and no material anticipated losses of the
Company or any of its Subsidiaries, other than as set forth on the attached
CONTINGENT LIABILITIES SCHEDULE.
6M. NO MATERIAL ADVERSE CHANGE. There has occurred no event
since December 31, 1999, which has or which could reasonably be expected to have
a Material Adverse Effect.
6N. ERISA. The Company and each of its Subsidiaries and each
of their respective Plans are in material compliance with ERISA and the IRC.
Neither the Company nor any of its ERISA Affiliates, including its Subsidiaries,
has incurred any accumulated funding deficiency with respect to any Employee
Pension Plan within the meaning of ERISA or the IRC. Neither the Company nor any
of its Subsidiaries has made any promises of retirement or other benefits to
employees, except as set forth in the Plans, in written agreements with such
employees, or in the Company's employee handbook and memoranda to employees.
Neither the Company nor any of its ERISA Affiliates, including its Subsidiaries,
has incurred any material liability to PBGC in connection with any such Plan;
have suffered the imposition of a Lien under Section 412(m) of the IRC; or have
been required to provide security as a result of any amendment to any such Plan
as required by Section 401(a)(29) of the IRC. The assets of each such Plan which
is subject to Title IV of ERISA are sufficient to provide the benefits under
such Plan, the payment of which PBGC would guarantee if such Plan were
terminated, and such assets are also sufficient to provide all other "benefit
liabilities" (within the meaning of Section 4041 of ERISA) due under the Plan
upon
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termination. No Reportable Event which would cause a Material Adverse Effect has
occurred and is continuing with respect to any such Plan. No such Plan or trust
created thereunder, or party in interest (as defined in Section 3(14) of ERISA),
or any fiduciary (as defined in Section 3(21) of ERISA), has engaged in a
"prohibited transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the IRC) which would subject such Plan or any other Plan of the
Company or any of its Subsidiaries, any trust created thereunder, or any such
party in interest or fiduciary, or any party dealing with any such Plan or any
such trust, to the tax or penalty on "prohibited transactions" imposed by
Section 502 of ERISA or Section 4975 of the IRC which would cause a Material
Adverse Effect. Neither the Company nor any of its ERISA Affiliates, including
its Subsidiaries, is or has been obligated to make any payment to a
Multiemployer Plan.
6O. INVESTMENT COMPANY ACT. Neither the Company nor any of its
Subsidiaries is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by
the Company and its Subsidiaries of this Agreement and any other documents
contemplated hereby violate any provision of such Act or requires any consent,
approval or authorization of, or registration with, the Securities and Exchange
Commission or any other governmental or public body or authority pursuant to any
provisions of such Act.
6P. GOVERNMENTAL REGULATION. Neither the Company nor any of
its Subsidiaries is required to obtain any consent, approval, authorization,
permit or license which has not already been obtained from, or effect any filing
or registration which has not already been effected with, any federal, state or
local regulatory authority in connection with the execution and delivery of this
Agreement or any other agreements contemplated hereby. Neither the Company nor
any of its Subsidiaries is required to obtain any consent, approval,
authorization, permit or license which has not already been obtained from, or
effect any filing or registration which has not already been effected with, any
federal, state or local regulatory authority in connection with the performance,
in accordance with their respective terms, of this Agreement or any other
agreements contemplated hereby.
6Q. ABSENCE OF DEFAULT, ETC. The Company and its Subsidiaries
are in compliance in all respects with all of the provisions of their respective
partnership agreements, certificates or articles of incorporation and by-laws,
as the case may be, and no event has occurred or failed to occur which has not
been remedied or waived, the occurrence or non-occurrence of which constitutes a
material default by the Company or any of its Subsidiaries under any indenture,
agreement or other instrument relating to Indebtedness of the Company or any of
its Subsidiaries in the amount of $1,000,000 or more in the aggregate, any
License, or any judgment, decree or order to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
any of their respective properties may be bound or affected. Neither the Company
nor any of its Subsidiaries is a party to or bound by any contract or agreement
continuing after the Closing Date, where the compliance therewith or the
performance thereof would reasonably be expected to have a Material Adverse
Effect or result in the loss of any License issued by the FCC.
6R. ACCURACY AND COMPLETENESS OF INFORMATION. All information,
reports, prospectuses and other papers and data relating to the Company or any
of its Subsidiaries and furnished by or on behalf of the Company or any of its
Subsidiaries to the Purchasers were, at the time furnished, true, complete and
correct in all material respects to the extent necessary to give the Purchasers
true and accurate knowledge of the subject matter, and all projections (i)
disclose all assumptions made with respect to costs, general economic
conditions, and financial and market conditions formulating the Projections;
(ii) are based on reasonable estimates and assumptions; and (iii) reflect, as of
the date prepared, and continue to reflect, as of the date hereof, the
reasonable estimate of Company of the results of operations and other
information projected therein for the periods covered thereby.
6S. AGREEMENTS WITH AFFILIATES. Except for agreements or
arrangements with Affiliates wherein the Company or one or more of its
Subsidiaries provides services to such Affiliates for fair consideration or
which are set forth on the AFFILIATED TRANSACTIONS SCHEDULE attached hereto,
neither the Company nor any of its Subsidiaries has (i) any written agreements
or binding arrangements of any kind with any Affiliate or (ii) any management or
consulting agreements of any kind with any Affiliate.
6T. PAYMENT OF WAGES. The Company and each of its Subsidiaries
are in compliance with the Fair Labor Standards Act, as amended, in all material
respects, and to the knowledge of the Company and each of its Subsidiaries, such
Persons have paid all minimum and overtime wages required by law to be paid to
their respective employees.
6U. INDEBTEDNESS. Except as shown on the financial statements
of the Company for the fiscal year ended December 31, 1999, and the Subordinated
Notes and the Other Preferred
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Stock, neither the Company nor any of its Subsidiaries has outstanding, as of
the date of this Agreement, any Indebtedness other than pursuant to the Senior
Loan Agreement.
6V. SOLVENCY. As of the date of this Agreement and after
giving effect to the transactions contemplated hereby (i) the property of the
Company, at a fair valuation, will exceed its debt; (ii) the capital of the
Company will not be unreasonably small to conduct its business; (iii) the
Company will not have incurred debts, or have intended to incur debts, beyond
its ability to pay such debts as they mature; and (iv) the present fair salable
value of the assets of the Company will be materially greater than the amount
that will be required to pay its probable liabilities (including debts) as they
become absolute and matured. For purposes of this paragraph, "debt" means any
liability on a claim, and "claim" means (i) the right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, undisputed, legal, equitable, secured or unsecured, or (ii)
the right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, undisputed, secured
or unsecured.
6W. YEAR 2000 COMPLIANCE. The Company (i) has completed a
review and assessment of all areas within its and each of its Subsidiaries'
businesses and operations (including those affected by suppliers, vendors and
customers) that could be adversely affected by the "YEAR 2000 PROBLEM" (that is,
the risk that computer applications used by the Company or any of its
Subsidiaries (or suppliers, vendors and customers) may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), (ii) has developed a plan and timeline
for ensuring Year 2000 Compliance on a timely basis and (iii) is implementing
that plan in accordance with that timetable. Based on the foregoing, the Company
believes that all Systems (including those of its suppliers, vendors and
customers) that are material to its or any of its Subsidiaries' businesses and
operations are reasonably expected on a timely basis to be Year 2000 Compliant,
except to the extent that a failure to do so could not reasonably be expected to
have a Material Adverse Effect.
6X. REPORTS WITH THE SECURITIES AND EXCHANGE COMMISSION. The
Company's annual report on Form 10-K for its two most recent fiscal years, all
other reports or documents required to be filed by the Company pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act since the filing of the
most recent annual report on Form 10-K, its most recent annual report to its
stockholders and the solicitation of proxy statements delivered to the Company's
stockholders regarding the Acquisition and the issuance of the Preferred Stock
and the Other Preferred Stock in connection therewith (in each case, together
with all amendments thereof and notices or updates with respect thereto) do not
contain any material false statements or any misstatement of any material fact
and do not omit to state any fact necessary to make the statements set forth
therein not misleading. The Company has made all filings with the Securities and
Exchange Commission which it is required to make, and the Company has not
received any request from the Securities and Exchange Commission to file any
amendment or supplement to any of the reports described in this paragraph.
Section 7. DEFINITIONS.
For the purposes of this Agreement, the following terms have
the meanings set forth below:
"AFFILIATE" of any particular Person means 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, contract or otherwise. With respect to the Company, "control"
includes, without limitation, the direct or indirect beneficial ownership of
more than ten percent (10%) of the voting securities or voting equity of such
Person or the power to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"APPLICABLE LAW" means, in respect of any Person, all
provisions of constitutions, statutes, rules, regulations and orders of
governmental bodies or regulatory agencies applicable to such Person, including,
without limiting the foregoing, the Licenses, the Communications Act and all
Environmental Laws, and all orders, decisions, judgments and decrees of all
courts and arbitrators in proceedings or actions to which the Person in question
is a party or by which it is bound.
"BOARD" means the Company's board of directors.
"BOSTON VENTURES" means Boston Ventures Limited Partnership V
and any of its Affiliates.
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"BRIDGE FINANCING AGREEMENT" means the Junior Exchangeable
Preferred Stock Agreement and the Senior Exchangeable Preferred Stock Agreement
(to the extent relating to the issuance of Senior Exchangeable Preferred Stock
in connection with the Acquisition).
"BRIDGE FINANCING INVESTORS" means the purchasers of Junior
Exchangeable Preferred Stock and Senior Exchange Preferred Stock pursuant to the
Bridge Financing Agreement.
"CELLULAR SYSTEMS" means cellular mobile radio telephone
systems constructed and operated, or a PCS System constructed and operated and
shall include a microwave system or a paging system operated in connection with
(and in the same general service area as) any of the foregoing systems.
"CLASS T PREFERRED STOCK" means up to $15 million aggregate
liquidation value of the Company's Class T Convertible Preferred Stock, par
value $.01 per share, issued to Telephone & Data Systems, Inc. pursuant to the
Class T Preferred Stock Agreement in connection with the Acquisition.
"CLASS T PREFERRED STOCK AGREEMENT" means that certain
Recapitalization Agreement, dated as of October 31, 1999, by and between the
Company and Telephone & Data Systems, Inc., as amended on December 6, 1999, as
such agreement may be further amended or otherwise modified from time to time,
the other agreements and instruments entered into by the parties thereto in
connection therewith, and the certificate of designation filed with the
Secretary of State of Minnesota setting forth the rights and preferences of the
Class T Preferred Stock, all as originally executed and delivered and, except as
otherwise provided herein, as such agreements or instruments may be amended or
modified from time to time in accordance with their respective terms.
"CLASS T PREFERRED INVESTORS" means the purchasers of Class T
Preferred Stock pursuant to the Class T Preferred Stock Agreement.
"COMMITMENT LETTER" means the letter, dated as of November 5,
1999, from several of the Purchasers to the Company.
"COMMON STOCK" means the Company's Class A Common Stock and
the Company's Class B Common Stock, par value $0.01 per share.
"COMMUNICATIONS ACT" means the Communications Act of 1934, and
any similar or successor federal statute, and the rules and regulations of the
FCC thereunder, all as the same may be in effect from time to time.
"EMPLOYEE PENSION PLAN" means any Plan which is (a) maintained
by the Company, any of its Subsidiaries or any of its ERISA Affiliates and (b)
subject to Part 3 of Title I of ERISA.
"ENVIRONMENTAL LAWS" means all applicable federal, state or
local laws, statutes, rules, regulations or ordinances, codes, common law,
consent agreements, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder relating to public health, safety or
the pollution or protection of the environment, including, without limitation,
those relating to releases, discharges, emissions, spills, leaching, or
disposals to air, water, land or ground water, to the withdrawal or use of
ground water, to the use, handling or disposal of polychlorinated biphenyls,
asbestos or urea formaldehyde, to the treatment, storage, disposal or management
of hazardous substances (including, without limitation, petroleum, crude oil or
any fraction thereof, or other hydrocarbons), pollutants or contaminants, to
exposure to toxic, hazardous or other controlled, prohibited, or regulated
substances, including, without limitation, any such provisions under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. ss. 9601 et seq.), or the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. ss. 6901 et seq.).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATES" means any Person, including a Subsidiary or
an Affiliate of the Company, that is a member of any group of organizations
(within the meaning of Code Sections 414(b), (c), (m) or (o)) of which the
Company is a member.
"EVENT OF NONCOMPLIANCE" has the meaning set forth in the
Certificate of Designation.
"FCC" means the Federal Communications Commission and any
governmental body or agency succeeding to the functions thereof.
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<PAGE>
"GAAP" means the generally accepted accounting principles in
the United States, as in effect from time to time, applied on a consistent basis
both as to classification of items and amounts.
"INDEBTEDNESS" means, with respect to any Person and without
duplication, (i) all items, except items of shareholders' and partners' equity
or capital stock or surplus or general contingency or deferred tax reserves,
which in accordance with GAAP would be included in determining total liabilities
for money borrowed as shown on the liability side of a balance sheet of such
Person, including, without limitation, to the extent of the higher of the book
value or fair market value of the property or asset securing such obligation (if
less than the amount of such obligation), secured non-recourse obligations of
such Persons, (ii) all direct or indirect obligations of any other Person
secured by any Lien to which any property or asset owned by such Person is
subject, but only to the extent of the higher of the fair market value or the
book value of the property or asset subject to such Lien (if less than the
amount of such obligation) if the obligation secured thereby shall not have been
assumed, (iii) to the extent not otherwise included, all capitalized lease
obligations of such Person and all obligations of such Person with respect to
leases constituting part of a sale and lease- back arrangement, (iv) all
reimbursement obligations with respect to outstanding letters of credit, (v) to
the extent not otherwise included, all obligations subject to guaranties of such
Person or its Subsidiaries and (vi) all obligations of such Person under
interest hedge agreements in respect of any of the foregoing.
"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 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" means, with respect to the Company or any of its
Subsidiaries, (i) any loan, advance or extension of credit (other than to
customers in the ordinary course of business) by such Person to, or any guaranty
or other contingent liability with respect to the capital stock, Indebtedness or
other obligations of, or any contributions to the capital of, any other Person,
or any ownership, purchase or other acquisition by such Person of any interest
in any capital stock, limited partnership interest, general partnership
interest, or other securities of any such other Person, other than an
acquisition, (ii) any acquisition by the Company or any of its Subsidiaries of
any assets relating to the wireless communications business and (iii) all
expenditures by the Company or any of its Subsidiaries relating to the
foregoing. "Investment" also shall include the total cost of any future
commitment or other obligation binding on any Person to make an Investment or
any subsequent Investment.
"IRC" means the Internal Revenue Code of 1986, as amended, and
any reference to any particular IRC section shall be interpreted to include any
revision of or successor to that section regardless of how numbered or
classified.
"IRS" means the United States Internal Revenue Service and any
governmental body or agency succeeding to the functions thereof.
"JUNIOR EXCHANGEABLE PREFERRED STOCK" means up to $140 million
aggregate liquidation value of the Company's 12 1/4% Junior Exchangeable
Preferred Stock, par value $.01 per share.
"JUNIOR EXCHANGEABLE PREFERRED STOCK AGREEMENT" means that
certain Underwriting Agreement, dated as of February 8, 2000, by and among the
Company, TD Securities (USA) Inc., First Union Securities, Inc. and The
Robinson-Humphrey Company, as Qualified Independent Underwriter, the other
agreements and instruments entered into by the parties thereto in connection
therewith, and the certificate of designation filed with the Secretary of State
of Minnesota setting forth the rights and preferences of the Junior Exchangeable
Preferred Stock, all as originally executed and delivered and, except as
otherwise provided herein, as such agreements or instruments may be amended or
modified from time to time in accordance with their respective terms.
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<PAGE>
"JUNIOR SECURITIES" shall have the meaning set forth in the
Certificate of Designation.
"knowledge" or "aware" in respect of the Company shall mean
and include (i) the actual knowledge or awareness of the chief executive
officer, the chief financial officer, the general counsel or any vice president
of the Company, 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.
"LICENSES" means any cellular telephone, microwave, personal
communications or other license, authorization, certificate of compliance,
franchise, approval or permit, whether for the construction or the operation of
any Cellular System, granted or issued by the FCC and held by the Company or any
of its Subsidiaries, all of which are listed as of the date of this Agreement on
the LICENSES SCHEDULE hereto.
"LIENS" means with respect to any property, any mortgage,
lien, pledge, negative pledge or other agreement not to pledge, assignment,
charge, security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether created by statute, contract, the common law or otherwise, and
whether or not choate, vested or perfected.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means,
any change that, individually or in the aggregate with all other related changes
or effects, is materially adverse to the business, financial condition,
operating results, assets, value, customer or employee relations, operations or,
except to the extent affected by general economic condition, business prospects
of the Company and its Subsidiaries taken as a whole.
"MDP" means Madison Dearborn Partners III, L.P. and any of its
Affiliates.
"MULTIEMPLOYER PLAN" means a multiemployer pension plan as
defined in Section 3(37) of ERISA to which the Company, any of its Subsidiaries,
or any of its ERISA Affiliates is or has been required to contribute subsequent
to September 25, 1980.
"NECESSARY AUTHORIZATIONS" means all approvals and licenses
from, and all filings and registrations with, any governmental or other
regulatory authority, including, without limitation, the Licenses and all
approvals, licenses, filings and registrations under the Communications Act,
necessary in order to enable the Company and its Subsidiaries to own, construct,
maintain, and operate Cellular Systems and to invest in other Persons who own,
construct, maintain, and operate Cellular Systems.
"OFFICER'S CERTIFICATE" means a certificate signed by the
Company's president or its chief financial officer (in his capacity as an
officer of the Company and not in his personal or any other capacity), stating
that (i) the officer signing such certificate has made or has caused to be made
such investigations as are necessary in order to permit him to verify the
accuracy of the information set forth in such certificate and (ii) to the best
of such officer's knowledge, such certificate does not misstate any material
fact and does not omit to state any fact necessary to make the certificate not
misleading.
"OTHER PREFERRED STOCK" means, collectively, the Senior
Exchangeable Preferred Stock, the Junior Exchangeable Preferred Stock, and the
Class T Preferred Stock.
"OTHER PREFERRED STOCK AGREEMENTS" means, collectively, the
Senior Exchangeable Preferred Stock Agreement, the Junior Exchangeable Preferred
Stock Agreement, and the Class T Preferred Stock Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PCS SYSTEM" means any broad band personal communications
services telecommunications system operating on radio spectrum in a "basic
trading area" (as defined and modified from time to time by the FCC) or a
License to operate such a system.
"PERMITTED LIENS" shall have the meaning set forth in the
Senior Loan Agreement.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a trust or estate, a joint venture,
an unincorporated organization, a government or any agency or political
subdivision thereof or any other entity.
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"PLAN" means an employee benefit plan within the meaning of
Section 3(3) of ERISA or any other employee benefit plan maintained for
employees of the Company or any ERISA Affiliate of the Company, including the
Subsidiaries.
"PURCHASER SECURITIES" means (i) the Preferred Stock issued to
the Purchasers hereunder, (ii) any Class A Common Stock issued or issuable upon
conversion of the Preferred Stock referred to in clause (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. 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. Any reference herein to a
"majority of the Purchaser Securities" or the "number of Purchaser Securities"
or words of like effect for purposes of comparison or calculation shall refer,
with respect to any particular Purchaser Securities, to the number shares of
Class A Common Stock (or equivalent common equity securities of the Company)
then represented by such Purchaser Securities (on a fully diluted,
as-if-converted basis).
"REPORTABLE EVENT" means, with respect to any Employee Pension
Plan, an event described in Section 4043(b) of ERISA.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"SECURITIES AND EXCHANGE COMMISSION" 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.
"SENIOR EXCHANGEABLE PREFERRED STOCK" means up to $150 million
aggregate liquidation value of the Company's 11 3/8% Senior Exchangeable
Preferred Stock, par value $.01 per share.
"SENIOR EXCHANGEABLE PREFERRED STOCK AGREEMENT" means that
certain Purchase Agreement, dated as of May 7, 1998, by and among the Company,
TD Securities (USA) Inc., NationsBanc Montgomery Securities LLC and BancBoston
Securities Inc., the other agreements and instruments entered into by the
parties thereto in connection therewith, that certain Underwriting Agreement,
dated as of February 8, 2000, by and among the Company, TD Securities (USA)
Inc., First Union Securities, Inc. and The Robinson-Humphrey Company, as
Qualified Independent Underwriter, the other agreements and instruments entered
into by the parties thereto in connection therewith, and the certificate of
designation filed with the Secretary of State of Minnesota setting forth the
rights and preferences of the Senior Exchangeable Preferred Stock, all as
originally executed and delivered and, except as otherwise provided herein, as
such agreements or instruments may be amended or modified from time to time in
accordance with their respective terms.
"SENIOR LENDERS" means the financial institutions whose names
appear as Lenders on the signature pages to the Senior Loan Agreement.
"SENIOR LOAN AGREEMENT" means that certain Second Amended and
Restated Loan Agreement, dated as of April 3, 2000, among Rural Cellular
Corporation, as Borrower, the lenders parties thereto; Toronto Dominion (Texas),
Inc., as Administrative Agent; TD Securities (USA), Inc., as Book Runner and
Lead Arranger; First Union Securities, Inc. and PNC Bank, National Association,
as Co-Syndication Agents; and Bank of America Securities, LLC, as Documentation
Agent, all notes issued thereunder, and all other agreements and instruments
entered into by the parties thereto in connection therewith, all as originally
executed and delivered and, except as otherwise provided herein, as such
agreements or instruments may be amended or modified from time to time in
accordance with their respective terms.
"SUB BOARD" means the board of directors of any of the
Company's Subsidiaries.
"SUBORDINATED NOTES" means the Company's 9 5/8% Senior
Subordinated Notes in the amount of $125,000,000 due 2008.
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"SUBSIDIARY" means, as applied to any Person, (i) any
corporation of which more than fifty percent (50%) of the outstanding stock
(other than directors' qualifying shares) having ordinary voting power to elect
a majority of its board of directors, regardless of the existence at the time of
a right of the holders of any class or classes of securities of such corporation
to exercise such voting power by reason of the happening of any contingency, or
any partnership or limited liability company of which more than fifty percent
(50%) of the outstanding partnership or membership interests is at the time
owned directly or indirectly by such Person, or by one or more Subsidiaries of
such Person, or by such Person and one or more Subsidiaries of such Person, or
(ii) any other entity which is directly or indirectly controlled or capable of
being controlled by such Person, or by one or more Subsidiaries of such Person,
or by such Person and one or more Subsidiaries of such Person. For purposes of
this Agreement, if the context does not otherwise specify in respect of which
Person the term "Subsidiary" is used, the term "Subsidiary" shall refer to a
Subsidiary of the Company. Notwithstanding the foregoing, Subsidiary shall not
include Wireless Alliance, L.L.C., a Minnesota limited liability company.
Section 8. MISCELLANEOUS.
8A. EXPENSES. The Company shall pay, and hold each Purchaser
and all holders of Purchaser Securities harmless against liability for the
payment of, their reasonable out-of-pocket costs and expenses (including
reasonable attorney's fees and expenses for one counsel selected by the
Purchasers) arising in connection with: (i) the negotiation and execution of the
Commitment Letter, this Agreement, and the other agreements contemplated hereby
and the consummation of the transac tions contemplated hereby or thereby, (ii)
any amendments or waivers (whether or not the same become effective) under or in
respect of this Agreement, any of the agreements contemplated hereby, the
Articles of Incorporation or the Certificate of Designation (including, without
limitation, in connection with any proposed merger, sale or recapitalization of
the Company), (iii) 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 shares of Preferred Stock at the Closing or any shares of
Common Stock issuable upon conversion of the Preferred Stock, (iv) the
enforcement of the rights granted under this Agreement, any of the agreements
contemplated hereby, the Articles of Incorporation and the Certificate of
Designation and (v) any filing with any governmental agency with respect to its
investment in the Company or in any other filing with any governmental agency
with respect to the Company which mentions such Person.
8B. REMEDIES. Each holder of Purchaser Securities shall have
all rights and remedies set forth in this Agreement, the Articles of
Incorporation and the Certificate of Designation 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 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 or at equity.
8C. PURCHASER'S INVESTMENT REPRESENTATIONS. Each of the
Purchasers hereby represents and warrants for itself, severally and ratably and
not jointly, that:
(i) ORGANIZATION, GOOD STANDING, POWER, AUTHORITY,
ETC. Such Purchaser is validly organized and existing and in good
standing under the laws of its jurisdiction of organization and has
full power and authority to execute and deliver this Agreement, the
Registration Agreement and all other agreements contemplated hereby or
thereby to which such Purchaser is a party, and to perform its
obligations hereunder or thereunder. Such Purchaser has taken all
necessary corporate or other organizational action in order to
authorize the execution and delivery of this Agreement, the
Registration Agreement and each other agreement contemplated hereby or
thereby to which such Purchaser is a party and the consummation of the
transactions contemplated hereby or thereby, and each such agreement is
a valid and binding obligation of such Purchaser, enforceable in
accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, similar laws affecting
creditors' rights generally or general principles of equity.
(ii) NO CONFLICTS; NO CONSENTS. Neither the execution
nor delivery of this Agreement, the Registration Agreement and all
other agreements contemplated hereby or thereby to which such Purchaser
is a party nor the consummation by such Purchaser of the purchase of
the Preferred Stock contemplated hereby will conflict with, or result
in any violation of, or constitute any default under, any provision of
such Purchaser's organizational documents.
(iii) OWNERSHIP OF SECURITIES. As of immediately
prior to the date hereof, such Purchaser does not own any debt or
equity securities issued by the Company.
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<PAGE>
(iv) INVESTOR SUITABILITY. Such Purchaser is an
"accredited investor" as such term is defined in Rule 501 promulgated
under the Securities Act.
(v) DISCLOSURE OF INFORMATION. Such Purchaser
acknowledges that it or its representatives have been furnished with
all information regarding the Company and its business, assets, results
of operations and financial condition that such Purchaser has
requested. Each Purchaser further represents that it has had an
opportunity to ask questions of and receive answers from the Company
regarding the Company and its business, assets, results of operations,
and financial condition and the terms and conditions of the issuance of
the Securities; however, no representations or warranties have been
made by the Company to the Purchasers in their capacity as Purchasers
except as are set forth in this Agreement. NOTHING CONTAINED IN THIS
PARAGRAPH 8C(V) AND NO INVESTIGATION, OR NEGLIGENCE OF THE PURCHASERS
IN CONNECTION THEREWITH, BY PURCHASERS SHALL IN ANY WAY AFFECT THE
PURCHASERS' RIGHT TO RELY UPON THE COMPANY'S REPRESENTATIONS AND
COVENANTS CONTAINED IN THIS AGREEMENT.
(vi) INVESTMENT EXPERIENCE. Each Purchaser represents
that it has such knowledge, experience and skill in evaluating and
investing in common and preferred stocks and other securities, based on
actual participation in financial, investment and business matters, so
that each is capable of evaluating the merits and risks of an
investment in the Preferred Stock and has such knowledge, experience
and skill in financial and business maters that each is capable of
evaluating the merits and risks of the investment in the Company and
the suitability of the Preferred Stock as an investment and can bear
the economic risk of an investment in the Preferred Stock . No
guarantees have been made or can be made with respect to the future
value, if any, of the Preferred Stock, or the profitability or success
of the Company's business.
(vii) BROKERAGE. No broker, finder or other party is
entitled to receive from such Purchaser, any brokerage or finder's fee
or any other fee, commission or payment as a result of the transactions
contemplated by this Agreement for which the Company could have any
liability or responsibility.
(viii) PURCHASE FOR OWN ACCOUNT. Such Purchaser is
acquiring the Purchaser Securities purchased hereunder or acquired
pursuant hereto for its own account with the present intention of
holding such securities for purposes of investment, and that 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 and subsequent holders of Purchaser Securities from
transferring such securities in compliance with the provisions of
Section 5 hereof.
(ix) FCC CONCERNS. Each Purchaser represents that, at
and as of the Closing, it holds no direct or indirect interest in any
CMRS licensee that would violate Section 22.942 or Section 20.6 of the
FCC's Cross Ownership Rules if the purchase of the Preferred Stock were
consummated on the terms and subject to the conditions set forth in
this Agreement.
(x) RESTRICTIVE LEGENDS. Each certificate or
instrument representing Purchaser Securities shall be imprinted with a
legend in substantially the following form:
"The securities represented by this certificate were originally issued
on April 3, 2000, and have not been registered under the Securities Act
of 1933, as amended. The securities represented by this certificate are
subject to the restrictions on transfer, voting agreement and other
provisions set forth in the Preferred Stock Purchase Agreement, dated
as of April 3, 2000, and as amended and modified from time to time,
between the issuer (the "Company") and certain investors, and the
Company reserves the right to refuse the transfer of such securities
until such provisions have been complied with in respect of such
transfer. A copy of such provisions shall be furnished by the Company
to the holder hereof upon written request and without charge."
8D. UNDERSTANDING AMONG THE PURCHASERS. The determination of
each Purchaser to purchase the Preferred Stock pursuant to this Agreement has
been made by such Purchaser independent of any other Purchaser and independent
of any statements or opinions as to the advisability of such purchase or as to
the properties, business, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries which may have been made or given by any other
Purchaser or by any agent or employee of any other Purchaser. In addition, it is
acknowledged by
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<PAGE>
each of the other Purchasers that MDP has not acted as an agent of such
Purchaser in connection with making its investment hereunder and that MDP shall
not be acting as an agent of such Purchaser in connection with monitoring its
investment hereunder.
8E. TREATMENT OF THE PREFERRED STOCK. The Company covenants
and agrees that (i) so long as federal income tax laws prohibit a deduction for
distributions made by the Company with respect to preferred stock, it shall
treat all distributions paid by it on the Preferred Stock as non-deductible
dividends on all of its tax returns and (ii) it shall treat the Preferred Stock
as preferred stock in all of its financial statements and other reports and
shall treat all distributions paid by it on the Preferred Stock as dividends on
preferred stock in such statements and reports.
8F. INDEMNIFICATION. In consideration of the Purchaser's
execution and delivery of this Agreement and acquiring the Preferred Stock
hereunder and in addition to all of the Company's other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold harmless each
Purchaser and each other holder of Purchaser Securities and all of their
officers, directors, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "INDEMNITEES") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"INDEMNIFIED LIABILITIES"), incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Preferred Stock, (b) the execution, delivery, performance or
enforcement of this Agreement and any other instrument, document or agreement
executed pursuant hereto by any of the Indemnitees or (c) any breach of any
covenant, agreement, representation or warranty of the Company under this
Agreement or any other instrument, document or agreement contemplated hereby to
which the Company is a party. To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
8G. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or modified 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
written consent of the holders of a majority of the Purchaser Securities
outstanding at the time the amendment or waiver becomes effective or, in the
case of any provision requiring the consent of the holders of a majority of the
Preferred Stock, only if the Company has obtained the written consent of the
holders of a majority of the Preferred Stock outstanding at the time the
amendment or waiver becomes effective; PROVIDED THAT if any such amendment,
modification or waiver would adversely affect any holder of Purchaser Securities
or Preferred Stock, as the case may be, relative to the holders of Purchaser
Securities or Preferred Stock 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 outstanding Purchaser Securities or
Preferred Stock, as the case may be, held by all holders so adversely affected;
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 other
course of dealing between the Company and the holder of any Purchaser Securities
or Preferred Stock or any delay in exercising any rights hereunder or under the
Articles of Incorporation shall operate as a waiver of any rights of any such
holders. For purposes of this Agreement, Purchaser Securities or Preferred Stock
held by the Company or any Subsidiaries shall not be deemed to be outstanding.
8H. 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.
8I. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not other than any transferee pursuant to clause (iii), (iv), (v), (vi) or
(vii) of Section 5A hereof. In addition, and whether or not any express
assignment has been made, 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 other than any transferee pursuant to clause (iii), (iv), (v), (vi)
or (vii) of Section 5A hereof.
- 24 -
<PAGE>
8J. 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.
8K. 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 such counterparts taken together
shall constitute one and the same Agreement.
8L. DESCRIPTIVE HEADINGS; INTERPRETATION. 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, certificate, or instrument means such agreement, document, certificate
or instrument as the same is amended, waived or otherwise modified from time to
time in accordance with the terms thereof and, if applicable, hereof. Words such
as "herein," "hereunder," "hereof" and the like shall be deemed to refer to this
Agreement as a whole and not to any particular document or article, Section,
paragraph or other portion of a document. 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 "knowledge" or "awareness" of a Person means the actual knowledge of such
Person (which includes the actual knowledge of all officers, directors and
executive employees of such Person after reasonable inquiry).
8M. NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event 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.
8N. COMPLETE AGREEMENT. Except as otherwise expressly set
forth herein, this Agreement and the other agreements, certificates and
instruments expressly required to be delivered hereby embody the complete
agreement and understanding of the parties hereto and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
whether written or oral, which may have related to the subject matter hereof in
any way, and such agreements may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral discussions or understandings of the
parties. The parties hereto acknowledge and agree there are no oral
understandings or agreements between them with respect to the subject matter
hereof.
8O. SCHEDULES. Nothing in any Schedule attached hereto shall
be adequate to disclose an exception to a representation or warranty made in
this Agreement unless such Schedule identifies the exception with particularity
and describes the relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be adequate to disclose an exception to a
representation or warranty made in this Agreement, unless the representation or
warranty has to do with the existence of such document or such other item
itself.
8P. 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 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 enforeceability of a contract and each such party forever waives
any such defense.
8Q. GOVERNING LAW. The corporate law of the State of Minnesota
shall govern all issues and questions concerning the relative rights and
obligations of the Company and its stockholders. All other 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 New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of New York or any other juris-
-25-
<PAGE>
diction) that would cause the application of the laws of any jurisdiction other
than the State of New York.
8R. 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 delivered
personally to the recipient, telecopied to the recipient (with hard copy sent by
overnight courier in the manner provided hereunder) if sent prior to 4:00 p.m.
New York time on a business day (and otherwise, on the immediately succeeding
business day), one business day after being sent to the recipient by reputable
overnight courier service (charges prepaid) or three business days after being
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
shall be sent to each Purchaser at the address indicated on the SCHEDULE OF
PURCHASERS and to the Company at the address indicated below:
Rural Cellular Corporation
3905 Dakota Street SW
Alexandria, Minnesota 56308
Attention: Chief Executive Officer
Telephone: (320) 762-2000
Telecopy: (320) 808-2120
WITH COPIES TO:
Moss & Barnett
4800 Norwest Center
90 South 7th Street
Minneapolis, Minnesota 55402-4129
Attention: Richard Kelber, Esq.
Telephone: (612) 347-0300
Telecopy: (612) 339-6686
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Mark S. Wojciechowski, Esq.
Telephone: (212) 506-2500
Telecopy: (212) 262-1910
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.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Preferred Stock Purchase Agreement on the date first written above.
COMPANY: RURAL CELLULAR CORPORATION
By: /s/
-------------------------------------------
Name: Wesley E. Schultz
-------------------------------------------
Its: Sr. Vice President and CFO
-------------------------------------------
PURCHASERS: MADISON DEARBORN CAPITAL
PARTNERS III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
-------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
MADISON DEARBORN SPECIAL
EQUITY III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
-------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P.,
its Manager
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
-------------------------------------------
Name: Paul J. Finnegan
-------------------------------------------
Its Managing Director
(Continuation of Signature Page to Preferred Stock Purchase Agreement)
<PAGE>
BOSTON VENTURES LIMITED
PARTNERSHIP V
By Boston Ventures Company V, L.L.C.
its General Partner
By: /s/
-------------------------------------------
Name: Anthony J. Bolland
-------------------------------------------
Its: Managing Director
-------------------------------------------
TORONTO DOMINION INVESTMENTS,
INC.
By: /s/
-------------------------------------------
Name: Martha L. Gariepy
-------------------------------------------
Its: Vice President
(Continuation of Signature Page to Preferred Stock Purchase Agreement)
<PAGE>
SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>
Total
No. of Purchase
Shares Price
of for
Names and Preferred Preferred
ADDRESSES STOCK STOCK
--------- --------- ---------
<S> <C> <C>
Madison Dearborn Capital Partners III, L.P. 53,658.55 $53,658,550
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
Madison Dearborn Special Equity III, L.P. 1,191.45 $1,191,450
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
Special Advisors Fund I, L.P. 150 $150,000
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
EACH WITH A COPY TO:
Kirkland & Ellis
200 East Randolph Drive, Suite 5400
Chicago, Illinois 60601
Attention: Edward T. Swan
Telephone: (312) 861-2000
Telecopy: (312) 861-2200
Boston Ventures Limited Partnership V 36,666.67 $36,666,670
One Federal Street
Boston, MA 02110
Attention: John Hunt
Telephone: (617) 350-1599
Telecopy: (617) 350-1574
Toronto Dominion Investments, Inc. 18,333.33 $18,333,330
909 Fannin, Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Telephone: (713) 653-8225
Telecopy: (713) 652-2647
WITH A COPY TO:
TD Capital
31 West 52nd Street
New York, NY 10019-6101
Attention: Chris Shipman
Telephone: (212) 827-7733
Telecopy: (212) 974-8429
-------------- -------------
TOTAL 110,000 $110,000,000
</TABLE>
<PAGE>
LIST OF EXHIBITS
Exhibit A - Certificate of Designation
Exhibit B - Articles of Incorporation
Exhibit C - Company's Bylaws
Exhibit D - Registration Agreement
Exhibit E - Acquisition Agreement
Exhibit F - Senior Loan Agreement
Exhibit G - Bridge Financing Agreement
Exhibit H - Class T Preferred Stock Agreement
Exhibit I - Opinion of Moss & Barnett
Exhibit J - Opinion of Mayer, Brown & Platt
Exhibit K - Opinion of Lukas, Nace, Gutierrez & Sachs
LIST OF DISCLOSURE SCHEDULES
Affiliated Transactions Schedule
Capitalization Schedule
Subsidiary Schedule
Licenses Schedule
Potential Revocations of Licenses Schedule
Litigation Schedule
Contingent Liabilities Schedule
<PAGE>
Exhibit 3
CERTIFICATE OF DESIGNATION OF VOTING POWER,
PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF
CLASS M REDEEMABLE VOTING CONVERTIBLE PREFERRED STOCK
OF
RURAL CELLULAR CORPORATION
Pursuant to Section 302A.401 of the
Minnesota Business Corporation Act
Rural Cellular Corporation, a Minnesota corporation (the
"Corporation"), certifies that pursuant to the authority contained in Article
3.03 of its Articles of Incorporation, as amended (the "Articles of
Incorporation"), and in accordance with the provisions of Sections 302A.401 and
302A.239 of the Minnesota Business Corporation Act, the Board of Directors of
the Corporation (the "Board of Directors"), pursuant to minutes of action
effective March 23, 2000, duly approved and adopted the following resolution
which resolution remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by the Articles of Incorporation, the Board of Directors does hereby
designate, create, authorize and provide for the issuance of preferred stock
having a par value of $.01 per share, which shall be designated as Class M
Redeemable Voting Convertible Preferred Stock Preferred Stock, consisting of
110,000 shares, and shall have the voting powers, preferences and relative
participating, optional and other special rights, and qualifications,
limitations, and restrictions thereon as follows:
Section 1. DIVIDENDS.
1A. GENERAL OBLIGATION. When and as declared by the
Corporation's Board of Directors and to the extent permitted under the laws of
Minnesota, the Corporation shall pay preferential dividends in cash to the
holders of the Class M Redeemable Voting Convertible Preferred Stock (the "CLASS
M PREFERRED STOCK") as provided in this Section 1. Except as otherwise provided
herein, dividends on each share of the Class M Preferred Stock (a "SHARE") shall
accrue on a daily basis at the rate of 8% per annum on the sum of the
Liquidation Value thereof plus all Accumulated Dividends (as defined in Section
1B) thereon from and including the date of issuance of such Share to and
including the first to occur of (i) the date on which the Liquidation Value of
such Share (plus all accrued and unpaid dividends thereon) is paid to the holder
thereof in connection with the liquidation of the Corporation or the redemption
of such Share by the Corporation, (ii) the date on which such Share is converted
into shares of Conversion Stock hereunder or (iii) the date on which such Share
is otherwise acquired by the Corporation. Such dividends shall accrue whether or
not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of dividends.
The date on which the Corporation initially issues any Share shall be deemed to
be its "date of issuance" regardless of the number of times transfer of such
Share is made on the stock records maintained by or for the Corporation and
regardless of the number of certificates which may be issued to evidence such
Share.
1B. DIVIDEND REFERENCE DATES. To the extent not paid on March
31, June 30, September 30 and December 31 of each year, beginning June 30, 2000
(the "DIVIDEND REFERENCE DATES"), all dividends which have accrued on each Share
outstanding during the three-month period (or other period in the case of the
initial Dividend Reference Date) ending upon each such Dividend Reference Date
shall be accumulated (and shall be referred to herein as "ACCUMULATED
DIVIDENDS") and shall remain Accumulated Dividends with respect to such Share
until paid to the holder thereof.
1C. DISTRIBUTION OF PARTIAL DIVIDEND PAYMENTS. Except as
otherwise provided herein, if at any time the Corporation pays less than the
total amount of dividends then accrued with respect to the Class M Preferred
Stock, such payment shall be distributed pro rata among the holders thereof
based upon the aggregate accrued but unpaid dividends on the Shares held by each
such holder.
<PAGE>
1D. PARTICIPATING DIVIDENDS. In the event that the Corporation
declares or pays any dividends upon the Common Stock (whether payable in cash,
securities or other property) other than dividends payable solely in shares of
Common Stock, the Corporation shall also declare and pay to the holders of the
Class M Preferred Stock at the same time that it declares and pays such
dividends to the holders of the Common Stock, the dividends which would have
been declared and paid with respect to the Common Stock issuable upon conversion
of the Class M Preferred Stock had all of the outstanding Class M Preferred
Stock been converted immediately prior to the record date for such dividend, or
if no record date is fixed, the date as of which the record holders of Common
Stock entitled to such dividends are to be determined.
Section 2. LIQUIDATION.
Upon any liquidation, dissolution or winding-up of the
Corporation (whether voluntary or involuntary) (a "LIQUIDATION EVENT"), each
holder of Class M Preferred Stock shall be entitled to be paid, before any
distribution or payment is made upon any Junior Securities, an amount in cash
equal to the greater of (i) the aggregate Liquidation Value of all Shares held
by such holder (plus all accrued and unpaid dividends thereon) and (ii) the
aggregate amount that would be paid in connection with such Liquidation Event
with respect to the Common Stock issuable upon conversion of all Shares held by
such holder had all of the outstanding Class M Preferred Stock been converted
immediately prior to such Liquidation Event, and the holders of Class M
Preferred Stock shall not be entitled to any further payment. If upon any such
Liquidation Event the Corporation's assets to be distributed among the holders
of the Class M Preferred Stock are (after satisfaction of the aggregate
liquidation preference of all Senior Preferred Securities pursuant to the terms
of the Senior Preferred Securities Agreements as in effect on the date of the
Purchase Agreement) insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid under this Section 2, then
the entire assets available to be distributed to the Corporation's stockholders
(after satisfaction of the aggregate liquidation preference of all Senior
Preferred Securities pursuant to the terms of the Senior Preferred Securities
Agreements as in effect on the date of the Purchase Agreement) shall be
distributed pro rata among such holders based upon the aggregate Liquidation
Value (plus all accrued and unpaid dividends) of the Class M Preferred Stock
held by each such holder. Not less than 60 days prior to the payment date stated
therein, the Corporation shall mail written notice of any such Liquidation Event
to each record holder of Class M Preferred Stock, setting forth in reasonable
detail the amount of proceeds to be paid with respect to each Share and each
share of Common Stock in connection with such Liquidation Event. Neither the
consolidation or merger of the Corporation into or with any other entity or
entities (whether or not the Corporation is the surviving entity), nor the sale
or transfer by the Corporation of all or any part of its assets, nor the
reduction of the capital stock of the Corporation nor any other form of
recapitalization or reorganization affecting the Corporation shall be deemed to
be a Liquidation Event within the meaning of this Section 2.
Section 3. REDEMPTIONS.
3A. SCHEDULED REDEMPTION. On April 3, 2012 (the "SCHEDULED
REDEMPTION DATE"), the Corporation shall redeem all Shares of Class M Preferred
Stock at a price per Share equal to the Liquidation Value thereof (plus all
accrued and unpaid dividends thereon) (the "SCHEDULED REDEMPTION").
3B. OPTIONAL REDEMPTIONS.
(i) At any time and from time to time after April 3, 2005, the
Corporation may redeem all or any portion of the Shares of Class M Preferred
Stock then outstanding. Upon any such redemption, the Corporation shall pay a
price per Share equal to the Liquidation Value thereof (plus all accrued and
unpaid dividends thereon).
(ii) If, at any time and from time to time after April 3,
2003, the closing price for the Corporation's Class A Common Stock on the
principal securities market on which it is traded has equaled or exceeded 175%
of the Class M Preferred Stock's Conversion Price for the 30 consecutive trading
days immediately preceding the notice delivered pursuant to paragraph 3F, then
the Corporation may redeem all or any portion of the Shares of Class M Preferred
Stock then outstanding. Upon any such redemption, the Corporation shall pay a
price per Share equal to the Liquidation Value thereof (plus all accrued and
unpaid dividends thereon).
(iii) If at any time less than $25 million of Class M
Preferred Stock remains outstanding (determined based on the then aggregate
Liquidation Value thereof plus all accrued and unpaid dividends thereon), then
the Corporation may at any time redeem all, but not less than all, of the Shares
of Class M Preferred Stock then outstanding. Upon any such redemption, the
Corporation shall pay a price per Share equal to the Liquidation Value thereof
(plus all accrued and unpaid dividends thereon).
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3C. OPTIONAL CLAWBACK REDEMPTION.
(i) During the 90-day period commencing on April 3, 2000, the
Corporation may at any time and from time to time redeem all or any portion of
up to an aggregate of $25 million of the Shares of Class M Preferred Stock then
outstanding (determined based on the Liquidation Value thereof, without regard
to any accrued dividends); PROVIDED THAT after any such redemption under this
paragraph 3C, at least $110 million of the Shares of Class M Preferred Stock
must remain outstanding (determined based on the Liquidation Value thereof,
without regard to any accrued dividends).
(ii) For any redemption under this paragraph 3C, the
redemption price paid by the Corporation for the repurchased Shares shall be the
sum of (x) 102% of the Liquidation Value thereof plus (y) accrued and unpaid
dividends thereon; PROVIDED THAT, solely for purposes of this subparagraph
3C(ii), dividends shall be deemed to have accrued from the date of issuance of
such shares at an annual rate of 600 basis points over the three-month LIBOR
(determined as of the date of issuance of such Shares).
3D. CHANGE OF CONTROL PUT REDEMPTIONS.
(i) Upon the occurrence of a Change of Control, the
Corporation shall be required to make an offer to each holder of shares of Class
M Preferred Stock to redeem all or any part of such holder's shares of Class M
Preferred Stock at a cash purchase price equal to the greater of (a) 101% of the
Liquidation Value thereof, plus accrued and unpaid dividends thereon or (b) the
Fair Market Value of the total consideration that the holder of Class M
Preferred Stock to be redeemed would have received in connection with such
Change of Control had such holder converted its Class M Preferred Stock to be
redeemed into Class A Common Stock immediately prior to such Change of Control
(the "CHANGE OF CONTROL PAYMENT").
(ii) Within 30 days following any Change of Control, the
Corporation shall mail a notice to such holder stating: (A) that the offer to
redeem is being made pursuant to this Certificate of Designation and that, to
the extent lawful, all shares of Class M Preferred Stock tendered will be
accepted for payment; (B) the purchase price and the purchase date, which shall
be no earlier than 30 days nor later than 40 days from the date such notice is
mailed (the "CHANGE OF CONTROL PAYMENT DATE"); (C) that any shares of Class M
Preferred Stock not tendered will continue to accrue dividends in accordance
with the terms of this Certificate of Designation; (D) that, unless the
Corporation defaults in the payment of the Change of Control Payment, all shares
of Class M Preferred Stock accepted for payment pursuant to the offer to redeem
shall cease to accrue dividends on and after the Change of Control Payment Date
and all rights of the holders of such Class M Preferred Stock shall terminate on
and after the Change of Control Payment Date; and (E) a description of the
procedures to be followed by such holder in order to have its shares of Class M
Preferred Stock repurchased.
(iii) On the Change of Control Payment Date, (A) the
Corporation shall (1) accept for payment shares of Class M Preferred Stock
tendered pursuant to the offer to redeem and (2) promptly mail to each holder of
shares Class M Preferred Stock so accepted payment in an amount equal to the
Change of Control Payment for such shares and (B) unless the Corporation
defaults in the payment for the shares of Class M Preferred Stock tendered
pursuant to the Offer to Purchase, dividends shall cease to accrue with respect
to the shares of Class M Preferred Stock tendered and all rights of holders of
such tendered shares shall terminate, except for the right to receive payment
therefor, on the Change of Control Payment Date. The Corporation shall publicly
announce the results of the offer to redeem on or as soon as practicable after
the Change of Control Payment Date.
(iv) The Corporation shall comply with Rule 14e-1 under the
Securities Exchange Act of 1934, as amended, and any securities laws and
regulations to the extent such laws and regulations are applicable to the
repurchase of shares of the Class M Preferred Stock in connection with a Change
of Control.
3E. REDEMPTION PAYMENTS. For each Share which is to be
redeemed hereunder, the Corporation shall be obligated on the Redemption Date to
pay to the holder thereof (upon surrender by such holder at the Corporation's
principal office of the certificate representing such Share) an amount in cash
equal to the Liquidation Value of such Share (plus all accrued and unpaid
dividends thereon) (or, in the case of a redemption pursuant to paragraph 3C or
3D, the redemption price specified in such paragraph); PROVIDED THAT, in the
case of a scheduled redemption pursuant to paragraph 3A above, the Corporation
may, at its option, pay the redemption price for such redemption in cash or in
shares of Class A Common Stock (valued at the Market Price for such Class A
Common Stock). If the funds of the Corporation legally available for redemption
of Shares on any Redemption Date are insufficient to redeem the total number of
Shares to be redeemed on such date, those funds which are legally available
shall be used to redeem the maximum possible number of
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Shares pro rata among the holders of the Shares to be redeemed based upon the
aggregate Liquidation Value of such Shares held by each such holder (plus all
accrued and unpaid dividends thereon). At any time thereafter when additional
funds of the Corporation are legally available for the redemption of Shares,
such funds shall immediately be used to redeem the balance of the Shares which
the Corporation has become obligated to redeem on any Redemption Date but which
it has not redeemed.
3F. NOTICE OF REDEMPTION. Except as otherwise provided herein,
the Corporation shall mail written notice of each redemption of any Class M
Preferred Stock to each record holder thereof not more than 60 nor less than 30
days prior to the date on which such redemption is to be made. Upon mailing any
notice of redemption which relates to a redemption at the Corporation's option,
the Corporation shall become obligated to redeem the total number of Shares
specified in such notice at the time of redemption specified therein. In case
fewer than the total number of Shares represented by any certificate are
redeemed, a new certificate representing the number of unredeemed Shares shall
be issued to the holder thereof without cost to such holder as soon as
practicable after surrender of the certificate representing the redeemed Shares.
3G. DETERMINATION OF THE NUMBER OF EACH HOLDER'S SHARES TO BE
REDEEMED. Except as otherwise provided herein, the number of Shares of Class M
Preferred Stock to be redeemed from each holder thereof in redemptions by the
Corporation under this Section 3 shall be the number of Shares determined by
multiplying the total number of Shares of Class M Preferred Stock to be redeemed
times a fraction, the numerator of which shall be the total number of Shares
then held by such holder and the denominator of which shall be the total number
of Shares then outstanding.
3H. DIVIDENDS AFTER REDEMPTION. No Share shall be entitled to
any dividends accruing after the date on which the Liquidation Value of such
Share (plus all accrued and unpaid dividends thereon) (or, in the case of a
redemption pursuant to paragraph 3C or 3D, the redemption price specified in
such paragraph) is paid to the holder of such Share. On such date, all rights of
the holder of such Share shall cease, and such Share shall no longer be deemed
to be issued and outstanding.
3I. REDEEMED OR OTHERWISE ACQUIRED SHARES. Any Shares which
are redeemed or otherwise acquired by the Corporation shall be canceled and
retired to authorized but unissued shares and shall not be reissued, sold or
transferred.
3J. OTHER REDEMPTIONS OR ACQUISITIONS. The Corporation shall
not, nor shall it permit any Subsidiary to, redeem or otherwise acquire any
Shares of Class M Preferred Stock, except as expressly authorized herein or
pursuant to a purchase offer made pro rata to all holders of Class M Preferred
Stock on the basis of the number of Shares owned by each such holder.
Section 4. VOTING RIGHTS.
4A. ELECTION OF DIRECTORS. In the election of directors of the
Corporation, the holders of the Class M Preferred Stock, voting separately as a
class to the exclusion of all other classes of the Corporation's capital stock
and with each Share of Class M Preferred Stock entitled to one vote, shall be
entitled at an annual or special meeting of the shareholders to elect up to two
directors to serve as members of the Corporation's Board of Directors, each
until his successor is duly elected by the holders of the Class M Preferred
Stock, subject to prior death, resignation, retirement, disqualification, or
removal or termination of term of office in accordance with the terms of the
Purchase Agreement. The directors so elected shall be in addition to the
directors elected by the holders of the Common Stock of the Corporation, and
shall increase the maximum number of directors otherwise permitted pursuant to
the Corporation's bylaws. Any directors so elected shall not be divided into
classes. Said right of election, term of office, filling vacancies and other
features of such directorships shall be governed by and are subject to the
applicable terms and conditions set forth in the Purchase Agreement, which
contains, inter alia, provisions which constitute a voting agreement among the
holders of the Class M Preferred Stock. The provisions of paragraph 3C of the
Purchase Agreement are hereby incorporated into this Certificate of Designation
by this reference as though fully set forth herein. The Corporation shall retain
a copy of the Purchase Agreement at its principal executive office.
4B. OTHER VOTING RIGHTS. The holders of the Class M Preferred
Stock shall be entitled to notice of all shareholders' meetings in accordance
with the Corporation's bylaws, and, except as otherwise required by applicable
law, the holders of the Class M Preferred Stock shall be entitled to vote on all
matters submitted to the shareholders for a vote together with the holders of
the Class A Common Stock voting together as a single class with each share of
Class A Common Stock entitled to one vote per share and each Share of Class M
Preferred Stock entitled to one vote
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for each share of Class A Common Stock issuable upon conversion of the Class M
Preferred Stock as of the record date for such vote or, if no record date is
specified, as of the date of such vote.
Section 5. CONVERSION.
5A. CONVERSION PROCEDURE.
(i) At any time and from time to time, any holder of Class M
Preferred Stock may convert all or any portion of the Class M Preferred Stock
(including any fraction of a Share) held by such holder into a number of shares
of Conversion Stock computed by multiplying the number of Shares to be converted
by $1,000.00 and dividing the result by the Conversion Price then in effect.
(ii) Except as otherwise provided herein, each conversion of
Class M Preferred Stock shall be deemed to have been effected as of the close of
business on the date on which the certificate or certificates representing the
Class M Preferred Stock to be converted have been surrendered for conversion at
the principal office of the Corporation. At the time any such conversion has
been effected, the rights of the holder of the Shares converted as a holder of
Class M Preferred Stock shall cease and the Person or Persons in whose name or
names any certificate or certificates for shares of Conversion Stock are to be
issued upon such conversion shall be deemed to have become the holder or holders
of record of the shares of Conversion Stock represented thereby.
(iii) The conversion rights of any Share subject to redemption
hereunder shall terminate on the Redemption Date for such Share unless the
Corporation has failed to pay to the holder thereof the Liquidation Value of
such Share (plus all accrued and unpaid dividends thereon) (or, in the case of a
redemption pursuant to paragraph 3C or 3D, the redemption price specified in
such paragraph).
(iv) Notwithstanding any other provision hereof, if a
conversion of Class M Preferred Stock is to be made in connection with a Public
Offering, a Change of Control or other transaction affecting the Corporation,
the conversion of any Shares of Class M Preferred Stock may, at the election of
the holder thereof, be conditioned upon the consummation of such transaction, in
which case such conversion shall not be deemed to be effective until such
transaction has been consummated.
(v) As soon as practicable after a conversion has been
effected, the Corporation shall deliver to the converting holder:
(A) a certificate or certificates representing the
number of shares of Conversion Stock issuable by reason of such
conversion in such name or names and such denomination or denominations
as the converting holder has specified;
(B) payment in an amount equal to the amount payable
under subparagraph (ix) below with respect to such conversion; and
(C) a certificate representing any Shares of Class M
Preferred Stock which were represented by the certificate or
certificates delivered to the Corporation in connection with such
conversion but which were not converted.
(vi) The issuance of certificates for shares of Conversion
Stock upon conversion of Class M Preferred Stock shall be made without charge to
the holders of such Class M Preferred Stock for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Conversion Stock; PROVIDED,
HOWEVER, that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the holder of the Class M Preferred
Stock to be converted and that no such issue or delivery shall be made unless
and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or has established, to the satisfaction
of the Corporation, that such tax has been paid. Upon conversion of each Share
of Class M Preferred Stock, the Corporation shall take all such actions as are
necessary in order to insure that the Conversion Stock issuable with respect to
such conversion shall be validly issued, fully paid and nonassessable, free and
clear of all taxes, liens, charges and encumbrances with respect to the issuance
thereof.
(vii) The Corporation shall not close its books against the
transfer of Class M Preferred Stock or of Conversion Stock issued or issuable
upon conversion of Class M Preferred Stock in any manner which interferes with
the timely conversion of Class M Preferred Stock. The Corporation shall assist
and cooperate with any holder of Shares required to make any governmental
filings or obtain any governmental approval prior to or in connection with any
conversion of Shares
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hereunder (including, without limitation, making any filings required to be made
by the Corporation); PROVIDED, HOWEVER, that any such holder of Shares
requesting such assistance or cooperation shall bear all expenses, including
reasonable attorney fees, incurred by the Corporation if such filings or
approvals are not required to be made by the Corporation.
(viii) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Conversion Stock, solely
for the purpose of issuance upon the conversion of the Class M Preferred Stock,
the number of shares of Conversion Stock issuable upon the conversion of all
outstanding Class M Preferred Stock. All shares of Conversion Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares of
Conversion Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Conversion Stock may be listed (except for official notice
of issuance which shall be immediately delivered by the Corporation upon each
such issuance). The Corporation shall not take any action which would cause the
number of authorized but unissued shares of Conversion Stock to be less than the
number of such shares required to be reserved hereunder for issuance upon
conversion of the Class M Preferred Stock.
(ix) If any fractional interest in a share of Conversion Stock
would, except for the provisions of this subparagraph, be delivered upon any
conversion of the Class M Preferred Stock, the Corporation, in lieu of
delivering the fractional share therefor, shall pay an amount to the holder
thereof equal to the Market Price of such fractional interest as of the date of
conversion.
5B. CONVERSION PRICE.
(i) The initial Conversion Price shall be $53.00. In order to
prevent dilution of the conversion rights granted under this Section 5, the
Conversion Price shall be subject to adjustment from time to time pursuant to
this paragraph 5B.
(ii) If and whenever the Corporation issues or sells, or in
accordance with paragraph 5C is deemed to have issued or sold, any shares of its
Common Stock for a consideration per share less than the Market Price of the
Common Stock determined as of the date of such issue or sale, then immediately
upon such issue or sale or deemed issue or sale the Conversion Price shall be
reduced to the Conversion Price determined by multiplying the Conversion Price
in effect immediately prior to such issue or sale by a fraction, the numerator
of which shall be the sum of (1) the number of shares of Common Stock Deemed
Outstanding immediately prior to such issue or sale multiplied by the Market
Price of the Common Stock determined as of the date of such issuance or sale,
plus (2) the consideration, if any, received by the Corporation upon such issue
or sale, and the denominator of which shall be the product derived by
multiplying the Market Price of the Common Stock by the number of shares of
Common Stock Deemed Outstanding immediately after such issue or sale.
(iii) Notwithstanding the foregoing, there shall be no
adjustment to the Conversion Price hereunder with respect to issuances of Common
Stock (or of securities exchangeable or exercisable for or convertible into
Common Stock) (A) to officers, directors, employees, or consultants of the
Corporation and its Subsidiaries pursuant to compensation arrangements approved
by the Corporation's board of directors, (B) to suppliers, lessors, or lenders
of the Corporation and its Subsidiaries issued in the ordinary course of
business in connection with (as applicable) their supply arrangements or lease
arrangements with, or loans to, the Corporation or any of its Subsidiaries, or
(C) upon the conversion of any Convertible Securities (including the Class M
Preferred Stock and Class T Preferred Stock).
5C. EFFECT ON CONVERSION PRICE OF CERTAIN EVENTS. For purposes
of determining the adjusted Conversion Price under paragraph 5B, the following
shall be applicable:
(i) ISSUANCE OF RIGHTS OR OPTIONS. If the Corporation in any
manner grants or sells any Options and the price per share for which Common
Stock is issuable upon the exercise of such Options, or upon conversion or
exchange of any Convertible Securities issuable upon exercise of such Options,
is less than the Market Price of the Common Stock determined as of such time,
then the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the exercise of such Options
shall be deemed to be outstanding and to have been issued and sold by the
Corporation at the time of the granting or sale of such Options for such price
per share. For purposes of this paragraph, the "price per share for which Common
Stock is issuable" shall be determined by dividing (A) the total amount, if any,
received or receivable by the Corporation as consideration for the granting or
sale of such Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation upon exercise of all such Options,
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plus in the case of such Options which relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any, payable to the
Corporation upon the issuance or sale of such Convertible Securities and the
conversion or exchange thereof, by (B) the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon the conversion
or exchange of all such Convertible Securities issuable upon the exercise of
such Options. No further adjustment of the Conversion Price shall be made when
Convertible Securities are actually issued upon the exercise of such Options or
when Common Stock is actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Corporation in
any manner issues or sells any Convertible Securities and the price per share
for which Common Stock is issuable upon conversion or exchange thereof is less
than the Market Price of the Common Stock determined as of such time, then the
maximum number of shares of Common Stock issuable upon conversion or exchange of
such Convertible Securities shall be deemed to be outstanding and to have been
issued and sold by the Corporation at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this
paragraph, the "price per share for which Common Stock is issuable" shall be
determined by dividing (A) the total amount received or receivable by the
Corporation as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Corporation upon the conversion or exchange thereof, by (B)
the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment of the
Conversion Price shall be made when Common Stock is actually issued upon the
conversion or exchange of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for
which adjustments of the Conversion Price had been or are to be made pursuant to
other provisions of this Section 5, no further adjustment of the Conversion
Price shall be made by reason of such issue or sale.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock changes at any time, the Conversion Price in
effect at the time of such change shall be immediately adjusted to the
Conversion Price which would have been in effect at such time had such Options
or Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold; PROVIDED THAT if such adjustment would
result in an increase of the Conversion Price then in effect, such adjustment
shall not be effective until 30 days after written notice thereof has been given
by the Corporation to all holders of the Class M Preferred Stock. For purposes
of paragraph 5C, if the terms of any Option or Convertible Security which was
outstanding as of the date of issuance of the Class M Preferred Stock are
changed in the manner described in the immediately preceding sentence, then such
Option or Convertible Security and the Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such change; PROVIDED THAT no such change shall at any time cause
the Conversion Price hereunder to be increased.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE
SECURITIES. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued; PROVIDED THAT if such expiration or termination would result
in an increase in the Conversion Price then in effect, such increase shall not
be effective until 30 days after written notice thereof has been given to all
holders of the Class M Preferred Stock. For purposes of paragraph 5C, the
expiration or termination of any Option or Convertible Security which was
outstanding as of the date of issuance of the Class M Preferred Stock shall not
cause the conversion Price hereunder to be adjusted unless, and only to the
extent that, a change in the terms of such Option or Convertible Security caused
it to be deemed to have been issued after the date of issuance of the Class M
Preferred Stock.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any Common
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Corporation therefor (net of discounts,
commissions and related expenses). If any Common Stock, Option or Convertible
Security is issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Corporation shall be the fair
value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the
Corporation shall be the Market Price thereof as of the date of receipt. If any
Common Stock, Option or Convertible Security is issued to the owners of the
non-surviving entity in connection with any merger in which the Corporation is
the surviving corporation, the
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amount of consideration therefor shall be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is
attributable to such Common Stock, Option or Convertible Security, as the case
may be. The fair value of any consideration other than cash and securities shall
be determined in the reasonable good faith judgment of the board of directors of
the Corporation.
(vi) INTEGRATED TRANSACTIONS. In case any Option is issued in
connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
shall be deemed to have been issued for a consideration of $.01.
(vii) TREASURY SHARES. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or any Subsidiary, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock.
(viii) RECORD DATE. If the Corporation takes a record of the
holders of Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date shall be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
5D. SUBDIVISION OR COMBINATION OF COMMON STOCK. If the
Corporation at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision shall be proportionately reduced, and if
the Corporation at any time combines (by reverse stock split or otherwise) one
or more classes of its outstanding shares of Common Stock into a smaller number
of shares, the Conversion Price in effect immediately prior to such combination
shall be proportionately increased.
5E. REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as an "Organic Change." Prior to the
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance satisfactory to the holders of a majority of
the Class M Preferred Stock then outstanding) to insure that each of the holders
of Class M Preferred Stock shall thereafter have the right to acquire and
receive, in lieu of or in addition to (as the case may be) the shares of
Conversion Stock immediately theretofore acquirable and receivable upon the
conversion of such holder's Class M Preferred Stock, such shares of stock,
securities or assets as such holder would have received in connection with such
Organic Change if such holder had converted its Class M Preferred Stock
immediately prior to such Organic Change. In each such case, the Corporation
shall also make appropriate provisions (in form and substance satisfactory to
the holders of a majority of the Class M Preferred Stock then outstanding) to
insure that the provisions of this Section 5 and Section 6 hereof shall
thereafter be applicable to the Class M Preferred Stock (including, in the case
of any such consolidation, merger or sale in which the successor entity or
purchasing entity is other than the Corporation, an immediate adjustment of the
Conversion Price, and a corresponding immediate adjustment in the number of
shares of Conversion Stock acquirable and receivable upon conversion of Class M
Preferred Stock, if the value so reflected is less than the Market Price of the
Common Stock determined as of the date of such consolidation, merger or sale).
The Corporation shall not effect any such consolidation, merger or sale, unless
prior to the consummation thereof, the successor entity (if other than the
Corporation) resulting from consolidation or merger or the entity purchasing
such assets assumes by written instrument (in form and substance satisfactory to
the holders of a majority of the Class M Preferred Stock then outstanding), the
obligation to deliver to each such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.
5F. CERTAIN EVENTS. If any event occurs of the type
contemplated by the provisions of this Section 5 but not expressly provided for
by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then the Corporation's Board of Directors shall make an appropriate adjustment
in the Conversion Price so as to protect the rights of the holders of Class M
Preferred Stock; PROVIDED THAT no such adjustment shall increase the Conversion
Price as otherwise determined pursuant to this Section 5 or decrease the number
of shares of Conversion Stock issuable upon conversion of each Share of Class M
Preferred Stock.
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5G. NOTICES.
(i) Immediately upon any adjustment of the Conversion Price,
the Corporation shall give written notice thereof to all holders of Class M
Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Corporation shall give written notice to all holders
of Class M Preferred Stock as specified in Section 2 for any liquidation and in
paragraph 3D or paragraph 3F for any redemption.
5H. NO AVOIDANCE. If the Corporation shall enter into any
transaction for the purpose of avoiding the application of the provisions of
this Section 5, the benefits of such provisions shall nevertheless apply and be
preserved.
Section 6. EVENTS OF NONCOMPLIANCE.
6A. DEFINITION. An Event of Noncompliance shall have occurred
if:
(i) the Corporation fails to make any redemption payment with
respect to the Class M Preferred Stock which it is required to make hereunder,
whether or not such payment is legally permissible or is prohibited by any
agreement to which the Corporation is subject;
(ii) the Corporation materially breaches or otherwise fails to
perform or observe any other covenant or agreement set forth herein or in the
Purchase Agreement, and such breach or failure continues for a period of 30
days; or
(iii) the Corporation or any Subsidiary makes an assignment
for the benefit of creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is entered
adjudicating the Corporation or any Subsidiary bankrupt or insolvent; or any
order for relief with respect to the Corporation or any Subsidiary is entered
under the Federal Bankruptcy Code; or the Corporation or any Subsidiary
petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Corporation or any Subsidiary or of any
substantial part of the assets of the Corporation or any Subsidiary, or
commences any proceeding (other than a proceeding for the voluntary liquidation
and dissolution of a Subsidiary) relating to the Corporation or any Subsidiary
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction; or any such petition
or application is filed, or any such proceeding is commenced, against the
Corporation or any Subsidiary and either (a) the Corporation or any such
Subsidiary by any act indicates its approval thereof, consent thereto or
acquiescence therein or (b) such petition, application or proceeding is not
dismissed within 60 days.
6B. CONSEQUENCES OF EVENTS OF NONCOMPLIANCE.
(i) If an Event of Noncompliance (other than an Event of
Noncompliance of the type described in subparagraphs 6A(ii) or 6A(iii)) has
occurred and is continuing, the holder or holders of a majority of the Class M
Preferred Stock then outstanding may demand (by written notice delivered to the
Corporation) immediate redemption of all or any portion of the Class M Preferred
Stock owned by such holder or holders at a price per Share equal to the
Liquidation Value thereof (plus all accrued and unpaid dividends thereon). The
Corporation shall give prompt written notice of such election to the other
holders of Class M Preferred Stock (but in any event within five days after
receipt of the initial demand for redemption, and each such other holder may
demand immediate redemption of all or any portion of such holder's Class M
Preferred Stock by giving written notice thereof to the Corporation within seven
days after receipt of the Corporation's notice. The Corporation shall redeem all
Class M Preferred Stock as to which rights under this paragraph have been
exercised within 15 days after receipt of the initial demand for redemption.
(ii) If an Event of Noncompliance (other than an Event of
Noncompliance of the type described in subparagraphs 6A(i) or 6A(ii)) has
occurred, all of the Class M Preferred Stock then outstanding shall be subject
to immediate redemption by the Corporation (without any action on the part of
the holders of the Class M Preferred Stock) at a price per Share equal to the
Liquidation Value thereof (plus all accrued and unpaid dividends thereon). The
Corporation shall immediately redeem all Class M Preferred Stock upon the
occurrence of such Event of Noncompliance.
(iii) If any Event of Noncompliance exists, each holder of
Class M Preferred Stock shall also have any other rights which such holder is
entitled to under any contract or agreement at any time and any other rights
which such holder may have pursuant to applicable law.
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Section 7. EXCHANGE OF SHARES.
(i) The Corporation, at its option, may at any time exchange
all or any portion of the Shares (including any fraction of a Share) of the
Class M Preferred Stock (the "EXCHANGE OPTION") for junior subordinated
debentures (the "EXCHANGE DEBENTURES"); PROVIDED THAT before exercising the
Exchange Option the Corporation will deliver to each holder of Class M Preferred
Stock an opinion of legal counsel reasonably satisfactory to the holders of a
majority of the Class M Preferred Stock that the exercise of the Exchange
Option, in and of itself, will not trigger the recognition of any material
income (including, without limitation, dividend income or original issue
discount to be included in income in subsequent periods) by such holder for any
U.S. federal or state income tax purpose. The Exchange Debentures shall mature
on April 3, 2012, and shall have other terms, including but not limited to
coupons or discounts equivalent to the dividends on the Class M Preferred Stock,
put rights, redemption rights and options and convertibility into Class A Common
Stock with anti-dilution protections, substantively equivalent to the terms
herein, in the Purchase Agreement, the Registration Agreement and in the other
agreements entered into by and among the Corporation and the holders of Class M
Preferred Stock with respect to it. If at any time the Corporation exchanges
less than all of the Shares outstanding, then such exchange shall be made
ratably among the holders thereof based upon the aggregate Liquidation Value
plus all accrued and unpaid dividends thereon of the Shares of each such holder
and the aggregate Liquidation Value plus all accrued and unpaid dividends
thereon of all Shares then issued and outstanding.
(ii) The Corporation shall mail written notice of its proposed
exercise of an Exchange Option to each holder of Class M Preferred Stock no more
than 60 nor less than 30 days prior to the date on which such Exchange Option is
to be made.
(iii) Upon exercise of the Exchange Option, each holder of
outstanding Shares shall receive Exchange Debentures in an aggregate principal
amount equal to the Liquidation Value of all Shares held by such holder to be
exchanged by the Corporation (together with all accrued and unpaid dividends
thereon) as of the date such exchange is effective. The Exchange Debentures
shall be duly executed and authenticated as of the date on which such exchange
is effective.
Section 8. REGISTRATION OF TRANSFER.
The Corporation shall keep at its principal office a register
for the registration of Class M Preferred Stock. Upon the surrender of any
certificate representing Class M Preferred Stock at such place, the Corporation
shall, at the request of the record holder of such certificate, execute and
deliver (at the Corporation's expense) a new certificate or certificates in
exchange therefor representing in the aggregate the number of Shares represented
by the surrendered certificate. Each such new certificate shall be registered in
such name and shall represent such number of Shares as is requested by the
holder of the surrendered certificate and shall be substantially identical in
form to the surrendered certificate, and dividends shall accrue on the Class M
Preferred Stock represented by such new certificate from the date to which
dividends have been fully paid on such Class M Preferred Stock represented by
the surrendered certificate.
Section 9. REPLACEMENT.
Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing Shares of Class M Preferred Stock, and in the case of any such loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (PROVIDED THAT if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate, and dividends
shall accrue on the Class M Preferred Stock represented by such new certificate
from the date to which dividends have been fully paid on such lost, stolen,
destroyed or mutilated certificate.
Section 10. DEFINITIONS.
"ACQUISITION" means the acquisition of substantially all of
the cellular telephone operations of various subsidiaries of Triton Cellular
Partners, L.P. pursuant to the Acquisition Agreement.
"ACQUISITION AGREEMENT" means that certain Asset Purchase
Agreement, dated as of November 6, 1999, among the Corporation, Triton Cellular
Partners, L.P., Triton Communications, L.L.C., Triton Cellular Alabama License
Company, L.L.C. and certain of their affiliates.
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"CHANGE OF CONTROL" means (a) any transaction or event
(including, without limitation, any sale, transfer or issuance or series of
sales, transfers and/or issuances of Common Stock by the Corporation or any
holders thereof) which results in any Person or group of Persons (as the term
"group" is used under the Securities Exchange Act of 1934), other than the
holders of Common Stock and Class M Preferred Stock as of the date of the
Purchase Agreement, acquiring "beneficial ownership" (as that term is used under
the Securities Exchange Act of 1934) of more than 50% of the Common Stock
outstanding at the time of such transaction or event, or of capital stock of the
Corporation possessing the voting power (under ordinary circumstances) to elect
a majority of the Corporation's board of directors, or (b) (i) any sale or
transfer of all or substantially all of the assets of the Corporation and its
Subsidiaries on a consolidated basis (measured either by book value in
accordance with generally accepted accounting principles consistently applied or
by fair market value determined in the reasonable good faith judgment of the
Corporation's board of directors) in any transaction or series of transactions
(other than sales in the ordinary course of business) and (ii) any merger or
consolidation to which the Corporation is a party, except for a merger in which
the Corporation is the surviving corporation, the terms of the Class M Preferred
Stock are not changed and the Class M Preferred Stock is not exchanged for cash,
securities or other property, and after giving effect to such merger no Person
or group of Persons (as the term "group" is used under the Securities Exchange
Act of 1934), other than the holders of Common Stock and Class M Preferred Stock
as of the date of the Purchase Agreement, has "beneficial ownership" (as that
term is used under the Securities Exchange Act of 1934) of more than 50% of the
outstanding Common Stock or of capital stock of the Corporation possessing the
voting power (under ordinary circumstances) to elect a majority of the
Corporation's board of directors.
"CLASS T PREFERRED STOCK" means up to $15 million aggregate
liquidation value of the Corporation's Class T Convertible Preferred Stock, par
value $.01 per share, issued to Telephone & Data Systems, Inc. pursuant to the
Class T Preferred Stock Agreement in connection with the Acquisition.
"CLASS T PREFERRED STOCK AGREEMENT" means that certain
Recapitalization Agreement, dated as of October 31, 1999, by and between the
Corporation and Telephone & Data Systems, Inc., as amended on December 6, 1999,
as such agreement may be further amended or otherwise modified from time to
time, the other agreements and instruments entered into by the parties thereto
in connection therewith, and the certificate of designation filed with the
Secretary of State of Minnesota setting forth the rights and preferences of the
Class T Preferred Stock, all as originally executed and delivered and, except as
otherwise provided herein, as such agreements or instruments may be amended or
modified from time to time in accordance with their respective terms.
"COMMON STOCK" means, collectively, the Corporation's Class A
Common Stock, par value $.01 per share, the Corporation's Class B Common Stock,
par value $.01 per share, and any capital stock of any class of the Corporation
hereafter authorized which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding-up of the Corporation.
"COMMON STOCK DEEMED OUTSTANDING" means, at any given time,
the number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock deemed to be outstanding pursuant to
subparagraphs 5C(i) and 5C(ii) hereof whether or not the Options or Convertible
Securities are actually exercisable at such time.
"CONVERSION STOCK" means shares of the Corporation's Class A
Common Stock, par value $0.01 per share; PROVIDED THAT if there is a change such
that the securities issuable upon conversion of the Class M Preferred Stock are
issued by an entity other than the Corporation or there is a change in the type
or class of securities so issuable, then the term "Conversion Stock" shall mean
one share of the security issuable upon conversion of the Class M Preferred
Stock if such security is issuable in shares, or shall mean the smallest unit in
which such security is issuable if such security is not issuable in shares.
"CONVERTIBLE SECURITIES" means any stock or securities
directly or indirectly convertible into or exchangeable for Common Stock.
"FAIR MARKET VALUE" means (a) with respect to cash, the amount
thereof, (b) with respect to securities, their Market Price and (c) with respect
to any consideration other than cash or securities, its fair value as determined
by the reasonable good faith judgment of the board of directors of the
Corporation.
"JUNIOR EXCHANGEABLE PREFERRED STOCK" means up to $140 million
aggregate liquidation value of the Corporation's 12 1/4% Junior Exchangeable
Preferred Stock, par value $.01 per share.
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"JUNIOR EXCHANGEABLE PREFERRED STOCK AGREEMENT" means that
certain Underwriting Agreement, dated as of February 8, 2000, by and among the
Corporation, TD Securities (USA) Inc., First Union Securities, Inc. and The
Robinson-Humphrey Company, as Qualified Independent Underwriter, the other
agreements and instruments entered into by the parties thereto in connection
therewith, and the certificate of designation filed with the Secretary of State
of Minnesota setting forth the rights and preferences of the Junior Exchangeable
Preferred Stock, all as originally executed and delivered and, except as
otherwise provided herein, as such agreements or instruments may be amended or
modified from time to time in accordance with their respective terms.
"JUNIOR SECURITIES" means any capital stock or other equity
securities of the Corporation, except for the Class M Preferred Stock and the
Senior Preferred Securities.
"LIBOR" means the average (rounded upward to the nearest
one-hundredth (1/100th) of one percent (1%)) of the interest rates per annum at
which deposits in United States Dollars for a three-month period are offered to
The Toronto-Dominion Bank, in the London interbank borrowing market at
approximately 11:00 a.m. (London, England time), for the three-month period
following the Issue Date, in an amount approximately equal to the Issue Price of
the shares to be redeemed.
"LIQUIDATION VALUE" of any Share as of any particular date
shall be equal to $1,000.
"MARKET PRICE" of any security means the average, over a
period of 15 days consisting of the day as of which "Market Price" is being
determined and the 14 consecutive trading days prior to such day, of the closing
prices of such security's sales on the principal securities exchange on which
such security may at the time be listed, or, if there has 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 security is not so
listed, the average of the representative bid and asked prices quoted in the
Nasdaq National Market System as of 4:00 P.M., New York time, or, if on any day
such security is not quoted in the Nasdaq National Market System, 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. If at any time such
security is not listed on any securities exchange or quoted in the Nasdaq
National Market System or the over-the-counter market, the "Market Price" shall
be the fair value thereof as determined by the reasonable good faith judgment of
the board of directors of the Corporation.
"OPTIONS" means any rights, warrants or options to subscribe
for or purchase Common Stock or Convertible Securities.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, a limited liability, 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.
"PUBLIC OFFERING" means any offering by the Corporation of its
capital stock or equity securities to the public pursuant to an effective
registration statement under the Securities Act of 1933, as then in effect, or
any comparable statement under any similar federal statute then in force.
"PURCHASE AGREEMENT" means the Preferred Stock Purchase
Agreement, dated as of April 3, 2000, by and among the Corporation and certain
purchasers, as such agreement may from time to time be amended in accordance
with its terms.
"REDEMPTION DATE" as to any Share means the date specified in
the notice of any redemption at the Corporation's option or at the holder's
option or the applicable date specified herein in the case of any other
redemption; PROVIDED THAT no such date shall be a Redemption Date unless the
Liquidation Value of such Share is actually paid in full on such date, and if
not so paid in full, the Redemption Date shall be the date on which such amount
is fully paid.
"REGISTRATION AGREEMENT" means the Registration Agreement,
dated as of April 3, 2000, by and among the Corporation and certain investors,
as such agreement may be amended from time to time in accordance with its terms.
"SENIOR EXCHANGEABLE PREFERRED STOCK" means up to $150 million
aggregate liquidation value of the Corporation's 11 3/8% Senior Exchangeable
Preferred Stock, par value $.01 per share.
"SENIOR EXCHANGEABLE PREFERRED STOCK AGREEMENT" means that
certain Purchase Agreement, dated as of May 7, 1998, by and among the
Corporation, TD Securities (USA) Inc., NationsBanc Montgomery Securities LLC and
BancBoston Securities Inc., the other agreements and instruments entered into by
the parties thereto in connection therewith, that certain Underwriting
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Agreement, dated as of February 8, 2000, by and among the Corporation, TD
Securities (USA) Inc., First Union Securities, Inc. and The Robinson-Humphrey
Company, as Qualified Independent Underwriter, the other agreements and
instruments entered into by the parties thereto in connection therewith, and the
certificate of designation filed with the Secretary of State of Minnesota
setting forth the rights and preferences of the Senior Exchangeable Preferred
Stock, all as originally executed and delivered and, except as otherwise
provided herein, as such agreements or instruments may be amended or modified
from time to time in accordance with their respective terms.
"SENIOR PREFERRED SECURITIES" means, collectively, the Senior
Exchangeable Preferred Stock, the Junior Exchangeable Preferred Stock, and the
Class T Preferred Stock.
"SENIOR PREFERRED SECURITIES AGREEMENTS" means, collectively,
the Senior Exchangeable Preferred Stock Agreement, the Junior Exchangeable
Preferred Stock Agreement, and the Class T Preferred Stock Agreement.
"SUBSIDIARY" means, as applied to any Person, (i) any
corporation of which more than fifty percent (50%) of the outstanding stock
(other than directors' qualifying shares) having ordinary voting power to elect
a majority of its board of directors, regardless of the existence at the time of
a right of the holders of any class or classes of securities of such corporation
to exercise such voting power by reason of the happening of any contingency, or
any partnership or limited liability company of which more than fifty percent
(50%) of the outstanding partnership or membership interests, is at the time
owned directly or indirectly by such Person, or by one or more Subsidiaries of
such Person, or by such Person and one or more Subsidiaries of such Person, or
(ii) any other entity which is directly or indirectly controlled or capable of
being controlled by such Person, or by one or more Subsidiaries of such Person,
or by such Person and one or more Subsidiaries of such Person. For purposes of
this Certificate of Designation, if the context does not otherwise specify in
respect of which Person the term "Subsidiary" is used, the term "Subsidiary"
shall refer to a Subsidiary of the Corporation. Notwithstanding the foregoing,
Subsidiary shall not include Wireless Alliance, L.L.C., a Minnesota limited
liability company.
Section 11. AMENDMENT AND WAIVER.
No amendment, modification or waiver shall be binding or
effective with respect to any provision of Sections 1 to 13 hereof without the
prior written consent of the holders of a majority of the Class M Preferred
Stock outstanding at the time such action is taken; PROVIDED THAT if any such
amendment, modification or waiver would adversely affect any holder of Class M
Preferred Stock relative to the holders of Class M Preferred Stock 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 outstanding Class M Preferred Stock held by all holders so adversely
affected; PROVIDED FURTHER THAT if any such amendment, modification or waiver is
to a provision in this Certificate of Designation 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; and PROVIDED FURTHER THAT no change in the terms hereof may be
accomplished by merger or consolidation of the Corporation with another
corporation or entity unless the Corporation has obtained the prior written
consent of the holders of the applicable percentage of the Class M Preferred
Stock then outstanding. No other course of dealing between the Corporation and
the holder of any Class M Preferred Stock or any delay in exercising any rights
hereunder shall operate as a waiver of any rights of any such holders. For
purposes of this Certificate of Designation, Class M Preferred Stock held by the
Corporation or any Subsidiaries shall not be deemed to be outstanding.
Section 12. NOTICES.
All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Certificate of
Designation shall be in writing and shall be deemed to have been given when
delivered personally to the recipient, telecopied to the recipient (with hard
copy sent by overnight courier in the manner provided hereunder) if sent prior
to 4:00 p.m. New York time on a business day (and otherwise, on the immediately
succeeding business day), one business day after being sent to the recipient by
reputable overnight courier service (charges prepaid) or three business days
after being mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent (i) to the Corporation, at its principal executive
offices and (ii) to any stockholder, at such holder's address as it appears in
the stock records of the Corporation (unless otherwise indicated by any such
holder).
Section 13. EFFECTIVE DATE.
The effective date of this Certificate of Designation shall be April 3,
2000.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be duly executed by the Sr. V.P. & CEO of the Corporation this
30th day of March, 2000.
RURAL CELLULAR CORPORATION
By: /s/
---------------------------------
Name: Wesley E. Schultz
---------------------------------
Title: Sr. V.P. & CFO
---------------------------------
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Exhibit 4
RURAL CELLULAR CORPORATION
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT is made as of April 3, 2000,
between Rural Cellular Corporation, a Minnesota corporation (the "COMPANY"), and
the Investors listed on the SCHEDULE OF INVESTORS attached hereto.
The parties to this Agreement are parties to a Preferred Stock
Purchase Agreement of even date herewith (the "PURCHASE AGREEMENT"). In order to
induce the Investors to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the Closing under the
Purchase Agreement. Unless otherwise provided in this Agreement, capitalized
terms used herein shall have the meanings set forth in paragraph 8 hereof.
The parties hereto agree as follows:
1. DEMAND REGISTRATIONS.
1A. REQUESTS FOR REGISTRATION. At any time after the third
anniversary of the Closing under the Purchase Agreement, the holders of a
majority of the Registrable Securities then outstanding may request up to three
registrations under the Securities Act of all or any portion of their
Registrable Securities on Form S-1 or any similar long-form registration as the
Company may elect ("LONG-FORM REGISTRATIONS"), and the holders of at least
one-third of the Registrable Securities then outstanding may request
registration under the Securities Act of all or any portion of their Registrable
Securities on Form S-3 or any similar short-form registration as the Company may
elect ("SHORT-FORM REGISTRATIONS"), if available; PROVIDED THAT the aggregate
offering value of the Registrable Securities requested to be registered in any
registration under this paragraph 1(a) (any "DEMAND REGISTRATION") must equal at
least $25 million in any Long-Form Registration and at least $5 million in any
Short-Form Registration.
All requests for Demand Registrations shall be made by giving
written notice thereof to the Company (a "DEMAND NOTICE"). Each Demand Notice
shall specify the number of Registrable Securities requested to be registered.
Within ten business days after receipt of any Demand Notice, the Company shall
give written notice of such requested registration to all other holders of
Registrable Securities and, subject to the terms of paragraph 1(e) hereof, shall
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within 15
business days after the delivery of the Company's notice in accordance with
Section 10(k) hereof.
1B. DEMAND EXPENSES. The Registration Expenses (as defined in
Section 5(a) hereof) in all Demand Registrations shall be paid by the Company.
1C. LONG-FORM REGISTRATIONS. A registration shall not count as
one of the permitted Long-Form Registrations until it has become effective;
PROVIDED THAT in any event the Company shall pay all Registration Expenses in
connection with any registration initiated as a Demand Registration whether or
not it has become effective and whether or not such registration has counted as
one of the permitted Long-Form Registrations, but solely to the extent provided
in Section 5(b) below. All Long-Form Registrations shall be underwritten
registrations unless otherwise requested by the holders of a majority of the
Registrable Securities included in the applicable Long- Form Registration.
1D. SHORT-FORM REGISTRATIONS. Demand Registrations shall be
Short-Form Registrations whenever the Company is permitted to use any applicable
short form and if the managing underwriters (if any) agree to the use of a
Short-Form Registration, and the Company shall use commercially reasonable
efforts to make Short-Form Registrations on Form S-3 available for the sale of
Registrable Securities. The holders of a majority of the Registrable Securities
then outstanding may, in connection with any Demand Registration requested by
such holders that is a Short-Form Registration, require the Company to file such
Short-Form Registration with the Securities and Exchange Commission in
accordance with and pursuant to Rule 415 promulgated under the Securities Act
(or any successor rule then in effect) (a "SHELF REGISTRATION").
1E. PRIORITY ON DEMAND REGISTRATIONS. The Company shall not
include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of a majority of the
Registrable Securities included in such registration. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within
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a price range acceptable to the holders of a majority of the Registrable
Securities requested to be included in such offering, the Company shall include
in such registration prior to the inclusion of any securities which are not
Registrable Securities the number of Registrable Securities requested to be
included which in the opinion of such underwriters can be sold in an orderly
manner within the price range of such offering, pro rata among the respective
holders thereof on the basis of the amount of Registrable Securities owned by
each such holder.
1F. RESTRICTIONS ON DEMAND REGISTRATIONS. The Company shall
not be obligated to effect any Demand Registration within 365 days after the
effective date of a previous Demand Registration or a previous registration in
which the holders of Registrable Securities were given piggyback rights pursuant
to paragraph 2 and in which such holders were able to register and sell at least
80% of the Registrable Securities requested to be included therein.
The Company may postpone for up to 180 days the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company's board of directors determines in its reasonable good faith judgment
that such Demand Registration could reasonably be expected to have a material
adverse effect on any activities, operations or prospects of the Company or any
of its Subsidiaries (whether or not in the ordinary course of business);
PROVIDED THAT in such event, the holders of Registrable Securities initially
requesting such Demand Registration shall be entitled to withdraw such request
and, if such request is withdrawn, such Demand Registration shall not count as
one of the permitted Long-Form Registrations hereunder and the Company shall pay
all Registration Expenses in connection with such registration. The Company may
delay a Demand Registration hereunder only once in any twelve-month period.
1G. SELECTION OF UNDERWRITERS. The holders of a majority of
the Registrable Securities included in any Demand Registration shall have the
right to select the investment banker(s) and manager(s) to administer the
offering, subject to the Company's approval which shall not be unreasonably
withheld or delayed.
1H. OTHER REGISTRATION RIGHTS. The Company represents and
warrants that it is not a party to, or otherwise subject to, any other agreement
granting registration rights to any other Person with respect to any securities
of the Company, except as set forth on the attached SCHEDULE OF OTHER
REGISTRATION RIGHTS. Except as provided in this Agreement, the Company shall not
grant to any Person the right to request the Company to register any equity
securities of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, without the prior written consent of the
holders of a majority of the Registrable Securities; PROVIDED THAT the Company
may grant rights to other Persons to (i) participate in Piggyback Registrations
so long as such rights are subordinate to or pari passu with the rights of the
holders of Registrable Securities with respect to such Piggyback Registrations
as provided in paragraphs 2(c) and 2(d) below and (ii) request registrations so
long as the holders of Registrable Securities are entitled to participate in any
such registrations in the manner described in Section 2 below. Any securities
(other than Registrable Securities) as to which the Company has granted
contractual registration rights shall be referred to as "OTHER SECURITIES."
2. PIGGYBACK REGISTRATIONS.
2A. RIGHT TO PIGGYBACK. Whenever the Company proposes to
register any of its equity securities under the Securities Act other than
pursuant to a Demand Registration and the registration form to be used may be
used for the registration of Registrable Securities and is not in Form S-4 or
S-8 or a successor form (a "PIGGYBACK REGISTRATION"), the Company shall give
prompt written notice to all holders of Registrable Securities of its intention
to effect such a registration and, subject to the terms of paragraphs 2(c) and
2(d) hereof, shall include in such registration all Registrable Securities with
respect to which the Company has received written requests for inclusion therein
within 20 days after the receipt of the Company's notice.
2B. PIGGYBACK EXPENSES. The Registration Expenses in all
Piggyback Registrations shall be paid by the Company.
2C. PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the Company, the Company shall include in
such registration (i) first, the securities the Company proposes to sell, and
(ii) second, the Registrable Securities requested to be included in such
registration and the Other Securities requested to be included in such
registration, pro rata among the holders of any such securities on the basis of
the number of shares requested to be included therein by each such holder.
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<PAGE>
2D. PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in an orderly manner
in such offering within a price range acceptable to the holders initially
requesting such registration, the Company shall include in such registration (i)
first, the securities requested to be included therein by the holders requesting
such registration, and (ii) second, the Registrable Securities requested to be
included in such registration and the Other Securities requested to be included
in such registration, pro rata among the holders of any such securities on the
basis of the number of shares requested to be included therein by each such
holder.
2E. SELECTION OF UNDERWRITERS. If any Piggyback Registration
is an underwritten offering, the selection of investment banker(s) and
manager(s) for the offering shall be made by the Company after consulting in
good faith with the holders of a majority of the Registrable Securities included
in such Piggyback Registration.
2F. OTHER REGISTRATIONS. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
paragraph 1 or pursuant to this paragraph 2, and if such previous registration
has not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-4, Form S-8 or any successor form), whether
on its own behalf or at the request of any holder or holders of such securities,
until a period of at least 90 days has elapsed from the effective date of such
previous registration.
3. HOLDBACK AGREEMENTS.
3A. HOLDERS OF REGISTRABLE SECURITIES. Each holder of
Registrable Securities shall not effect any public sale or distribution
(including sales pursuant to Rule 144 promulgated under the Securities Act) of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during (i) with respect to any
underwritten Demand Registration or any underwritten Piggyback Registration in
which Registrable Securities are included, the seven days prior to and the
90-day period beginning on the effective date of such registration and (ii) upon
notice from the Company of the commencement of an underwritten distribution in
connection with any Shelf Registration, the seven days prior to and the 90-day
period beginning on the date of commencement of such distribution, in each case
except as part of such underwritten registration and in each case unless the
underwriters managing the registered public offering otherwise agree.
3B. The Company (i) shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities (except pursuant to registration
on Form S-4, Form S-8 or any successor form), during (A) with respect to any
underwritten Demand Registration or any underwritten Piggyback Registration in
which Registrable Securities are included, the seven days prior to and the
90-day period beginning on the effective date of such registration and (B) upon
notice from any holder(s) of Registrable Securities subject to a Shelf
Registration that such holder(s) intend to effect a distribution of Registrable
Securities pursuant to such Shelf Registration (upon receipt of which, the
Company will promptly notify all other holders of Registrable Securities of the
date of commencement of such distribution), the seven days prior to and the
90-day period beginning on the date of commencement of such distribution and
(ii) shall cause each holder of its Common Stock, or any securities convertible
into or exchangeable or exercisable for Common Stock, purchased from the Company
at any time after the date of this Agreement (other than in a registered public
offering or pursuant to Rule 144 or pursuant to equity subscription agreements,
stock option agreements, stock appreciation rights, phantom stock plans or
similar rights or plans in effect on the date of this Agreement) to agree not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
any such securities during such period, in each case except as part of such
underwritten registration and in each case unless the underwriters managing the
registered public offering otherwise agree.
4. REGISTRATION PROCEDURES. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use commercially
reasonable efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Company shall as expeditiously as practicable:
4A. prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable Securities
and use commercially reasonable efforts to
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<PAGE>
cause such registration statement to become effective (PROVIDED THAT before
filing a registration statement or prospectus or any amendments or supplements
thereto, the Company shall furnish to the counsel selected by the holders of a
majority of the Registrable Securities covered by such registration statement
copies of all such documents proposed to be filed, and the Company shall in good
faith consider any comments of such counsel);
4B. notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of not less than 90 days (or, in the case of a Shelf Registration, a period
ending on the earlier of (i) the date on which all Registrable Securities have
been sold pursuant to the Shelf Registration or have otherwise ceased to be
Registrable Securities and (ii) the second anniversary of the effective date of
such Shelf Registration) and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
4C. furnish to each seller of Registrable Securities such
number of copies of the prospectus included in such registration statement
(including each preliminary prospectus), each amendment and supplement thereto
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such seller;
4D. use commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and to do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (PROVIDED THAT the Company shall not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
4E. notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
4F. cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use commercially
reasonable efforts to secure designation of all such Registrable Securities
covered by such registration statement as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-1 of the Securities and Exchange
Commission or, failing that, to secure NASDAQ authorization for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register as such with respect to such Registrable
Securities with the NASD;
4G. provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
4H. enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including preparing for and
participating in such number of "road shows" as the underwriters managing such
offering may reasonably request);
4I. make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
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<PAGE>
4J. otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
4K. permit any holder of Registrable Securities which holder,
in its sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included; PROVIDED THAT such holder
shall indemnify and hold harmless the Company from any liability arising from
the inclusion of such material or the receiving or incurring thereof in the
manner and on the term set forth in Section 6(b);
4L. in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use commercially reasonable efforts promptly to
obtain the withdrawal of such order;
4M. use commercially reasonable efforts to cause such
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the sellers thereof to consummate the disposition of such
Registrable Securities; and
4N. in the case of an underwritten offering, and if required
by the underwriting agreement with respect thereto, obtain a cold comfort letter
from the Company's independent public accountant in the form and covering such
matters as may be required by such underwriting agreement.
5. REGISTRATION EXPENSES.
5A. All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company (but except
as provided in paragraph (b) not fees and disbursements of counsel for any
holder of Registrable Securities) and all independent certified public
accountants (excluding costs of accountants retained to conduct any special
audits required in connection with a Demand Registration), underwriters
(excluding discounts and commissions) and other Persons retained by the Company
(all such expenses being herein called "REGISTRATION EXPENSES"), shall be borne
by the Company as provided in this Agreement, except that the Company shall, in
any event, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the NASD automated
quotation system.
5B. In connection with (i) each registration initiated as a
Long-Form Registration (whether or not such registration is declared effective
or counts as one of the permitted Long-Form Registrations) until the Company has
consummated a Demand Registration that counts as one of the permitted Long-Form
Registrations hereunder and (ii) the first Demand Registration the Company
consummates that counts as one of the permitted Long-Form Registrations
hereunder, the Company shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration. Notwithstanding the foregoing, the Company shall
not be required to reimburse the holders of Registrable Securities for any fees
or disbursements of counsel with respect to any registration terminated by the
holders due to unacceptable pricing or underwriter cutbacks.
5C. To the extent any expenses relating to a registration
hereunder are not required to be paid by the Company, each holder of securities
included in any registration hereunder shall pay those expenses allocable to the
registration of such holder's securities so included, and any expenses not so
allocable shall be borne by all sellers of securities included in such
registration in proportion to the aggregate selling price of the securities to
be so registered.
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<PAGE>
5D. Any obligation to pay Registration Expenses or other
expenses provided for in this Agreement shall survive the termination of the
rights of any particular holder of Registrable Securities and the termination of
this Agreement.
6. INDEMNIFICATION.
6A. The Company agrees to indemnify, to the extent permitted
by law, each holder of Registrable Securities, its officers, directors,
employees, agents, Affiliates and each Person who controls such holder (within
the meaning of the Securities Act and the Securities Exchange Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with such number of copies of the same as was
previously requested by such holder. In connection with an underwritten
offering, the Company shall indemnify such underwriters, their officers,
directors, employees, agents and each Person who controls such underwriters
(within the meaning of the Securities Act and the Securities Exchange Act) to
substantially the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
6B. In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder shall
furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, shall indemnify the Company,
its directors, officers, employees, agents, Affiliates and each Person who
controls the Company (within the meaning of the Securities Act and the
Securities Exchange Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such holder; PROVIDED THAT the obligation to indemnify shall be
individual and ratable, not joint and several, for each holder and shall be
limited to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.
6C. Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt
notice shall not impair any Person's right to indemnification hereunder to the
extent such failure has not prejudiced the indemnifying party) and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
6D. The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director, employee, agent,
Affiliate or controlling Person of such indemnified party and shall survive the
transfer of securities, the termination of the rights of any particular holder
of Registrable Securities and the termination of this Agreement. The Company
also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder that is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; PROVIDED THAT no
holder of Registrable Securities included
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<PAGE>
in any underwritten registration shall be required to make any representations
or warranties to the Company or the underwriters (other than representations and
warranties regarding such holder, such holder's title to the securities and such
holder's intended method of distribution) or to undertake any indemnification
obligations to the Company or the underwriters with respect thereto, except as
otherwise provided in paragraph 6 hereof.
8. DEFINITIONS.
8A. "REGISTRABLE SECURITIES" means (i) any Class A Common
Stock issued upon the conversion of any Preferred Stock issued pursuant to the
Purchase Agreement and (ii) any Class A Common Stock or other Common Stock
issued or issuable with respect to any Registrable Securities 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 Registrable Securities, such securities shall cease to be Registrable
Securities when they have been sold, transferred or otherwise disposed of
pursuant to an offering registered under the Securities Act, through a broker,
dealer or market maker in compliance with Rule 144 under the Securities Act (or
any similar rule then in force) or repurchased by the Company or any Subsidiary.
For purposes of this Agreement, including exercising any rights or meeting any
threshold tests hereunder, a Person shall be deemed to hold any Registrable
Securities issuable upon conversion of any Preferred Stock on an as-if-converted
basis, and such Registrable Securities shall be deemed to be in existence
without taking into account any restriction or limitation on the conversion
thereof.
8B. Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Purchase Agreement.
9. TERMINATION. Except as otherwise provided herein, the
rights granted to any particular holder of Registrable Securities herein shall
terminate whenever such holder and any Affiliate with which it must aggregate
its Registrable Securities for purposes of Rule 144 promulgated under the
Securities Act may sell all of their Registrable Securities during a single
three-month period pursuant to the provisions of Rule 144. Except as otherwise
provided herein, this Agreement shall terminate at such time as no holder of
Registrable Securities has any rights hereunder.
10. MISCELLANEOUS.
10A. NO INCONSISTENT AGREEMENTS. The Company shall not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
10B. CURRENT PUBLIC INFORMATION. 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 Registrable Securities may reasonably request, all to the extent
required to enable such holders to sell Registrable Securities pursuant to 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. Upon
request, the Company shall deliver to any holder of Registrable Securities a
written statement as to whether it has complied with such requirements. The
Company shall at all times cause the Class A Common Stock into which the
Preferred Stock is convertible to be listed on one or more of the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National Market System.
10C. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. Except for
actions taken by the Company or its board of directors in the exercise of their
fiduciary duties and prudent business judgment, the Company shall not take any
action, or permit any change to occur, with respect to its securities which
would materially and adversely affect the ability of the holders of Registrable
Securities to include such Registrable Securities in a registration undertaken
pursuant to this Agreement or which would materially and adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares).
10D. REMEDIES. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that, in addition to any other rights and
remedies existing in its favor, any party shall be entitled to specific
performance and/or other injunctive relief
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<PAGE>
from any court of law or equity of competent jurisdiction (without posting any
bond or other security) in order to enforce or prevent violation of the
provisions of this Agreement.
10E. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or modified 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
written consent of the holders of a majority of the Registrable Securities
outstanding at the time the amendment or waiver becomes effective; PROVIDED THAT
if any such amendment, modification or waiver would adversely affect any holder
of Registrable Securities relative to the holders of Registrable 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 outstanding Registrable Securities held by all holders so
adversely affected; 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
other course of dealing between the Company and the holder of any Registrable
Securities or any delay in exercising any rights hereunder shall operate as a
waiver of any rights of any such holders. For purposes of this Agreement,
Registrable Securities held by the Company or any Subsidiaries shall not be
deemed to be outstanding.
10F. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities. Notwithstanding
the foregoing, the registration rights granted to the Investors pursuant to this
Agreement may be transferred to a party that is not an Affiliate of such
Investor only if (i) as a result of such transfer such party and its Affiliates
acquire at least 25% of the Registrable Securities held by such Investor as of
the date hereof, (ii) the transfer of the Registrable Securities complies with
all restrictions on the transfer of such securities found in the Purchase
Agreement and any other agreement contemplated thereby and (iii) the Investor
provides written notice to the Company of such assignment no less than ten
business days prior to the transfer of the Registrable Securities.
10G. 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.
10H. 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 such counterparts taken together
shall constitute one and the same Agreement.
10I. DESCRIPTIVE HEADINGS. 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, certificate, or
instrument means such agreement, document, certificate or instrument as the same
is amended, waived or otherwise modified from time to time in accordance with
the terms thereof and, if applicable, hereof. Except as otherwise provided in
this Agreement, words such as "herein," "hereunder," "hereof" and the like shall
be deemed to refer to this Agreement as a whole and not to any particular
document or article, Section, paragraph or other portion of a document. 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.
10J. GOVERNING LAW. The corporate law of the State of
Minnesota shall govern all issues and questions concerning the relative rights
of the Company and its stockholders. All other issues and questions concerning
the construction, validity, interpretation and enforcement of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
New York or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York.
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<PAGE>
10K. 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 delivered
personally to the recipient, telecopied to the recipient (with hard copy sent by
overnight courier in the manner provided hereunder) if sent prior to 4:00 p.m.
New York time on a business day (and otherwise, on the immediately succeeding
business day), one business day after being sent to the recipient by reputable
overnight courier service (charges prepaid) or three business days after being
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
shall be sent to each Investor at the address indicated on the SCHEDULE OF
INVESTORS and to the Company at the address indicated below:
Rural Cellular Corporation
3905 Dakota Street SW
Alexandria, Minnesota 56308
Attention: chief executive officer
Telephone: (320) 762-2000
Telecopy: (320) 808-2120
WITH COPIES TO:
Moss & Barnett
4800 Norwest Center
90 South 7th Street
Minneapolis, Minnesota 55402-4129
Attention: Richard Kelber, Esq.
Telephone: (612) 347-0300
Telecopy: (612) 339-6686
and
Mayer Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Mark S. Wojciechowski, Esq.
Telephone: (212) 506-2500
Telecopy: (212) 262-1910
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.
10L. 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 Minnesota 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.
10M. 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 originals forms thereof and
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.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this
Registration Agreement as of the date first written above.
THE COMPANY: RURAL CELLULAR CORPORATION
By: /s/
---------------------------------------------
Name: Wesley E. Schultz
---------------------------------------------
Its: Senior Vice President and CFO
---------------------------------------------
INVESTORS: MADISON DEARBORN CAPITAL
PARTNERS III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------------
Name: Paul J. Finnegan
---------------------------------------------
Its Managing Director
MADISON DEARBORN SPECIAL
EQUITY III, L.P.
By Madison Dearborn Partners III, L.P.,
its General Partner
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------------
Name: Paul J. Finnegan
---------------------------------------------
Its Managing Director
SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P.,
its Manager
By Madison Dearborn Partners, LLC,
its General Partner
By: /s/
---------------------------------------------
Name: Paul J. Finnegan
---------------------------------------------
Its Managing Director
BOSTON VENTURES LIMITED
PARTNERSHIP V
By Boston Ventures Company V, L.L.C.
its General Partner
By: /s/
---------------------------------------------
Name: Anthony J. Bolland
---------------------------------------------
Its: Managing Director
---------------------------------------------
(Continuation of Signature Page to Registration Agreement)
<PAGE>
TORONTO DOMINION INVESTMENTS,
INC.
By: /s/
---------------------------------------------
Name: Martha L. Gariepy
---------------------------------------------
Its Vice President
(Continuation of Signature Page to Registration Agreement)
<PAGE>
SCHEDULE OF INVESTORS
NAME AND ADDRESS
Madison Dearborn Capital Partners III, L.P.
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
Madison Dearborn Special Equity III, L.P.
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
Special Advisors Fund I, L.P.
Three First National Plaza, Suite 3800
Chicago, Illinois 60670
Attention: Paul J. Finnegan
James H. Kirby
Telephone: (312) 895-1000
Telecopy: (312) 895-1001
EACH WITH A COPY TO:
Kirkland & Ellis
200 East Randolph Drive, Suite 5400
Chicago, Illinois 60601
Attention: Edward T. Swan
Telephone: (312) 861-2000
Telecopy: (312) 861-2200
Boston Ventures Limited Partnership V
One Federal Street
Boston, MA 02110
Attention: John Hunt
Telephone: (617) 350-1599
Telecopy: (617) 350-1574
TD Investments Inc.
909 Fannin, Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Telephone: (713) 652-8225
Telecopy: (713) 652-2647
WITH A COPY TO:
TD Capital
31 West 52nd Street
New York, NY 10019-6101
Attention: Chris Shipman
Telephone: (212) 827-7733
Telecopy: (212) 974-8429
<PAGE>
SCHEDULE OF OTHER REGISTRATION RIGHTS
Registration rights granted to Telephone & Data Systems, Inc. pursuant to that
certain Registration Rights Agreement, dated as of March 31, 2000, by and
between Rural Cellular Corporation, a Minnesota corporation, and Telephone &
Data Systems, Inc., a Delaware corporation.
