Exhibit 10.23
MANAGEMENT RIGHTS
AGREEMENT
THIS MANAGEMENT RIGHTS AGREEMENT
(this “ Agreement ”) is effective as of
May 2, 2005, by and among Carlyle Partners III Hawaii, L.P.
(“ CP III ”), a Delaware limited partnership, CP
III Coinvestment, L.P., a Delaware limited partnership (“
Coinvest ”), Carlyle Hawaii Partners, L.P., a Delaware
limited partnership (“ Hawaii Partners ”),
Hawaiian Telcom HoldCo, Inc., a Delaware corporation (“
Holdco ”), Hawaiian Telcom Communications, Inc., a
Delaware corporation (“ Hawaii Telcom ”),
Hawaiian Telcom, Inc., a Hawaii corporation (“ Telcom
”) and Hawaiian Telcom Services Company, Inc. (“
Services ”, collectively with Telcom, the “
Telcom Entities ”).
RECITALS
W HEREAS , (i) the Telecom Entities are wholly owned
by Hawaii Telcom; (ii) Hawaii Telcom is wholly owned by
Holdco; and (iii) CP III owns a majority of the Voting
Securities (as defined below) of Holdco as of the date
hereof;
W HEREAS , Coinvest, Hawaii Partners and CP III together
own 100% of the equity interests of Holdco;
W HEREAS , Holdco, Hawaii Telcom and the Telcom Entities
wish to provide CP III with certain rights with regard to the
equity interests of Holdco held by CP III and to set forth their
understanding with regard to the operations, control and management
of the Holdco and the Telcom Entities; and
W HEREAS , CP III has requested to be granted, and
Holdco, Hawaii Telcom and the Telcom Entities have agreed to grant
to CP III, the right to review the books and records of Holdco and
the Telcom Entities and their subsidiaries and consult with
management of Holdco and the Telcom Entities and their subsidiaries
regarding their and their subsidiaries operations.
AGREEMENT
NOW THEREFORE, in consideration of
the foregoing and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. Certain Definitions . As
used in this Agreement, the following terms shall have the
following respective meanings:
(a) “ Beneficial
Ownership ” means the power, directly or indirectly,
through any contract, arrangement, understanding, relationship or
otherwise, to (i) vote, or to direct the voting of, a
security; and (ii) dispose, or to direct the disposition of,
such security. “ Beneficially Owns ” shall mean
having Beneficial Ownership.
(b) “ Holdco Board
” means the board of directors of Holdco.
(c) “ Telcom Board
” means the board of directors of Telcom.
(d) “ Services Board
” means the board of directors of Services.
(e) “ Voting Securities
” shall mean with respect to any entity, all debt or equity
securities of such entity entitled to vote for the board of
directors, board of managers or other similar body elected or
appointed to manage the business of such entity.
2. Designation and Election of
Directors .
(a) During the term of this
Agreement, CP III shall be entitled to nominate one director to
serve as a member of the Holdco Board (the “ Holdco
Nominee ”).
(b) During the term of the
Agreement, Holdco and Hawaii Telcom agree that CP III shall be
entitled to nominate one director to serve as a member of the
Telcom Board (the “ Telcom Nominee ”) and one
director to serve as a member of the Telcom Services Board (the
“ Services Nominee ”).
(c) CP III hereby designates James
A. Attwood, Jr. as the Holdco Nominee, as the Telcom Nominee and as
the Services Nominee.
(d) With respect to the Telcom
Nominee and the Services Nominee, each of Holdco and Hawaii Telcom
agrees to (i) vote (at any regular or special meeting of the
Telcom Entities) or cause its direct and indirect subsidiaries to
vote all of the Voting Securities of the Telcom Entities then
Beneficially Owned by it (whether so Beneficially Owned as of the
date hereof or hereafter acquired) in favor of, or otherwise to
consent to the election or appointment of the Telcom Nominee to the
Telcom Board and the Services Nominee to the Services Board; and
(ii) take all other actions necessary and appropriate (whether
by vote or consent or otherwise) to cause the election or
appointment of the Telcom Nominee to the Telcom Board and the
Services Nominee to the Services Board.
(e) If the Holdco Nominee, Telcom
Nominee or Services Nominee shall be unable or unwilling to serve
prior to his or her election or appointment to the applicable
Holdco Board, Telcom Board or Services Board, CP III shall be
entitled to nominate a replacement who shall then be the respective
Holdco Nominee, Telcom Nominee or Services Nominee for the purposes
of this Agreement. If, following election or appointment to the
Holdco Board, Telcom Board or Services Board, the Holdco Nominee,
Telcom Nominee or Services Nominee shall resign or be removed for
cause or be unable to serve by reason of death or disability, CP
III shall, within 30 days of such event, notify the respective
Holdco Board, Telcom Board or Services Board in writing of a
replacement, and all parties hereto shall take such steps as may be
necessary to elect or appoint such replacement to the Holdco Board,
Telcom Board or the Services Board to fill the unexpired term of
the respective Holdco Nominee, Telcom Nominee or Services
Nominee.
(f) Each party hereto agrees not to
take any action without the written consent of CP III, which
consent may be given or withheld in CP III’s sole discretion,
to remove, whether or not for cause, the Holdco Nominee from the
Holdco Board, the Telcom Nominee from the Telcom Board or the
Services Nominee from the Services Board following his or her
election thereto, incl
