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EXHIBIT H
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STOCKHOLDERS AGREEMENT
AMONG
FIBERNET TELECOM GROUP, INC.
AND
CERTAIN STOCKHOLDERS
DATED AS OF MAY 7, 1999
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STOCKHOLDERS AGREEMENT dated as
of May 7, 1999, among FIBERNET TELECOM
GROUP, INC., a Nevada corporation (the
"Company"), and certain stockholders of the
Company identified on Annex I hereto (each,
a "Stockholder" and collectively, the
"Stockholders").
Each Stockholder owns, on the date hereof, that number of shares of
Stock (as hereinafter defined) set forth opposite such Stockholder's name on
Annex I hereto purchased pursuant to the Securities Purchase Agreement dated as
of the date hereof (the "Securities Purchase Agreement") among the Company and
the purchasers named therein. It is deemed to be in the best interest of the
Company and the Stockholders that provision be made for the continuity and
stability of the business and policies of the Company, and, to that end, the
Company and the Stockholders hereby set forth their agreement with respect to
the shares of Stock owned by the Stockholders.
NOW, THEREFORE, in consideration of the premises and of the mutual
consents and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Securities Purchase Agreement. As used
herein, the following terms shall have the following respective meanings:
"Affiliate" has the meaning ascribed thereto in the Purchase
Agreement.
"all or substantially all" shall have the meaning ascribed to such
term in the Securities Purchase Agreement.
"Board" means the Board of Directors of the Company.
"Business Day" shall mean any day other than a Saturday or Sunday or
a day on which banks are authorized or required to be closed in New York, New
York.
"Charter" shall mean the Certificate of Incorporation of the
Company, as amended from time to time.
"Common Stock" shall mean the common stock, $.001 par value, of the
Company.
"Concordia" shall mean Concordia Telecom Management, L.L.C., a
Delaware limited liability company.
"Founders Shares" shall mean at any time the shares of Common Stock,
any securities which by their terms are exercisable or exchangeable for or
convertible into Common Stock, and any securities of the Company received in
respect thereof, which are held by the Founding Stockholders.
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"Founding Stockholders" shall mean the Persons listed as
Stockholders under the heading "Founding Stockholders" in Annex I hereto, and
shall include any successor to, or assignee or transferee of, any of the
Founding Stockholders whether or not such Persons shall agree in writing to be
treated as a Founding Stockholder and to be bound by the terms and to comply
with the provisions of this Agreement.
"Group" shall mean:
(i) in the case of any Stockholder who is an individual, (A) such
Stockholder, (B) the spouse, lineal descendants and adopted children of
such Stockholder and (C) any trust for the benefit of any of the
foregoing; and
(ii) in the case of any Stockholder which is a corporation, limited
liability company or partnership, (A) such corporation, limited liability
company or partnership, (B) any corporation or other business organization
to which such corporation, limited liability company or partnership shall
sell or transfer all or substantially all of its assets or with which it
shall be merged, (C) with respect to any limited liability company or
partnership, any partner (general or limited) or member thereof and (D)
any Affiliate of such corporation.
"Majority in Interest" has the meaning ascribed to such term in the
Securities Purchase Agreement.
"Operating Budget" has the meaning ascribed to such term in the
Securities Purchase Agreement.
"Person" shall mean any individual, partnership, corporation, group,
trust or other legal entity.
"Proportionate Percentage" shall mean:
(i) for the purposes of Section 3, the pro rata percentage of Stock
being offered by a Selling Group pursuant to Section 3 that each
Stockholder (other than the Selling Group) shall be entitled to purchase,
which pro rata percentage, as to each such Stockholder, shall be the
percentage figure which expresses the ratio, on a Common Stock equivalent
basis (which for purposes of this Agreement shall mean the conversion of
all securities convertible into Common Stock and the exercise of all
options and warrants then exercisable for Common Stock), between the
number of shares of Stock owned by such Stockholder and the aggregate
number of shares of Stock owned by all Stockholders (other than the
Selling Group) at the date of determination;
(ii) for the purposes of Section 4, the pro rata percentage of the
number of shares of Stock to which a Section 4 Offer relates that each
Stockholder shall be entitled to Transfer to the Section 4 Purchaser,
which pro rata percentage, as to each such Stockholder, shall be the
percentage figure which expresses the ratio, on a Common Stock equivalent
basis, between the number of shares of Stock owned by such Stockholder and
the aggregate number of shares of Stock owned by all Stockholders and the
Section 4 Offeree at the date of determination; and
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(iii) for the purposes of Section 7, the pro rata percentage of
Stock subject to purchase pursuant to Section 7 that each Stockholder
shall be entitled to purchase, which pro rata percentage, as to each such
Stockholder, shall be the percentage figure which expresses the ratio, on
a Common Stock equivalent basis, between the number of shares of Stock
owned by such Stockholder and the aggregate number of shares of Stock
owned by all Stockholders at the date of determination.
"Purchase Agreement" shall mean the Securities Purchase Agreement dated as
of the date hereof by and among the Company and the Purchasers as the same may
be amended, modified or supplemented from time to time pursuant to the terms
thereof.
"Purchasers" shall mean the Persons listed as Stockholders under the
heading "Purchasers" in Annex I hereto, and shall include any successor to, or
assignee or transferee of, any of the Purchasers whether or not such Persons
shall agree in writing to be treated as a Purchaser and to be bound by the terms
and to comply with the provisions of this Agreement, each a "Purchaser".
"Qualified Public Offering" shall mean a fully underwritten public
offering (underwritten by a reputable underwriter of national reputation) of
shares of Common Stock registered pursuant to the Securities Act with proceeds
to the Company of at least $30,000,000 (net of underwriting discounts and
expenses) or otherwise on terms reasonably acceptable to the Majority in
Interest.
"Securities Act" shall mean the Securities Act of 1933 together with
any applicable regulations, as the same may be amended from time to time.
"Selling Group" shall mean a Stockholder or a member of the Group of
a Stockholder proposing to Transfer its Stock, or which has delivered a notice
of intention to Transfer, pursuant to Section 3 or Section 4 hereof.
"Series C Preferred Stock" shall mean the Series C Convertible
Preferred Stock, par value $.001, of the Company.
"Signal" shall mean Signal Capital Partners, L.P., a Delaware
limited partnership.
"Stock" shall mean (i) the presently issued and outstanding shares
of Common Stock and Series C Preferred Stock and any options, warrants or other
instruments exercisable therefor (which options, warrants or other instruments
shall be deemed to be that number of outstanding shares of Stock for which they
are exercisable), (ii) any additional shares of capital stock of the Company
hereafter issued and outstanding and (iii) any shares of capital stock of the
Company into which such shares may be converted or for which they may be
exchanged or exercised.
"Stockholders" shall mean those Persons identified on Annex I and
shall include any other person who agrees in writing with the parties hereto to
be bound by and to comply with all applicable provisions of this Agreement as a
Stockholder hereunder.
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"Transfer", as to any Stock shall mean to sell, or in any other way
transfer, assign, pledge, distribute, encumber or otherwise dispose of, such
Stock, either voluntarily or involuntarily and with or without consideration.
"Trident" shall mean Trident Telecom Partners LLC, a Delaware
limited liability company.
Section 2. Limitations on Transfers of Stock by Stockholders.
The Stockholders shall not, at any time during the term of this
Agreement, Transfer any Stock without first complying with the provisions of
Sections 3, 4 and 6; provided, that a Stockholder may Transfer Stock to another
member of the Group of such Stockholders without complying with Sections 3, 4
and 6 if the recipient of such Stock shall agree in writing with the parties to
this Agreement to be bound by and to comply with all applicable provisions of
this Agreement and to be deemed a Stockholder; and provided further that in no
event shall any Stockholder Transfer any Stock prior to the first anniversary of
this Agreement without the prior written consent of Signal and Trident unless
such Transfer of Stock is specifically permitted under any exemption, rule or
regulation of the Securities Act. Any Transfer made or attempted to be made in
contravention of the terms of this Section 2 shall be null and void.
Section 3. Right of First Refusal.
Except as otherwise provided in Section 2, each Stockholder hereby
agrees that he or it shall not Transfer any Stock, except in accordance with the
following procedures:
(a) In the event such Stockholder desires to Transfer any of the
shares of Stock held by such Stockholder to a Person, the Selling Group shall
first deliver to the Stockholders a written notice (the "Section 3 Offer
Notice"), which shall be irrevocable for a period of 30 days after delivery
thereof, offering (the "Section 3 Offer") all of the Stock proposed to be
Transferred by the Selling Group at the purchase price and on the terms
specified therein (such Section 3 Offer Notice shall include the foregoing
information and all other relevant terms of the proposed Transfer). The
Stockholders shall have the right and option, for a period of 30 days after
receipt of a Section 3 Offer Notice, to accept all of its Proportionate
Percentage of the Stock so offered at the purchase price and on the terms stated
in the Section 3 Offer Notice by delivering written notice of acceptance to the
Selling Group within said 30-day period. If the Selling Group shall not have
received an acceptance for the Section 3 Offer from a Stockholder (the
"Non-Interested Stockholder") for all of its Proportionate Percentage of Stock
within said 30-day period, the Selling Group shall deliver to the Stockholders
which have delivered a written notice of acceptance for the Section 3 Offer a
second written notice (the "Section 3 Second Offer Notice"), which shall be
irrevocable for a period of 15 days after the delivery thereof, offering (the
"Section 3 Second Offer") all of the Stock proposed to be transferred by the
Selling Group not accepted by the Non-Interested Stockholders on the same terms
and conditions contained in the Section 3 Offer Notice. The Stockholders (other
than the Non-Interested Stockholders) shall have the right and option, for a
period of 15 days after receipt of a Section 3 Second Offer Notice, to accept
all or any part of its Proportionate Percentage of Stock so offered at the terms
stated in the Section 3 Second Offer Notice by delivering written notice of
acceptance to the Selling Group within said 15-day period.
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(b) A notice of acceptance delivered by any of the Stockholders
pursuant to Section 3(a) shall be a binding commitment to purchase the Stock
referred to therein.
(c) Transfers of Stock under the terms of Section 3(a) shall be made
at the offices of the Company on a mutually satisfactory business day within 20
days after the expiration of the last applicable period described in Section
3(a) above. Delivery of certificates or other instruments evidencing such Stock
duly endorsed for transfer shall be made on such date against payment of the
purchase price therefor.
(d) If effective acceptance shall not be received pursuant to
Section 3(a) with respect to all Stock offered for Transfer pursuant to the
Section 3 Offer Notice, then the Selling Group may Transfer all or any part of
the Stock so offered and not so accepted at a price not less than the price, and
on terms not more favorable to the purchaser thereof than upon the terms, stated
in the Section 3 Offer Notice at any time within 30 days after the expiration of
the Section 3 Second Offer required by Section 3(a). In the event that the Stock
is not Transferred by the Selling Group during such 30-day period, the right of
the Selling Group to Transfer such Stock shall expire and the obligations of
this Section 3 shall be reinstated.
(e) Anything contained herein to the contrary notwithstanding, any
purchaser of Stock pursuant to Section 3 who is not then a Stockholder shall
execute and deliver a joinder agreement substantially in the form of Exhibit A
hereto by which a person shall be deemed to be a Stockholder for all purposes of
this Agreement.
(f) Restrictions shall terminate upon a Qualified Public Offering.
Section 4. Tag-along Right.
(a) In the event that a Stockholder ("Section 4 Offeror") desires to
Transfer any of the shares of Stock held by such Stockholder (the "Section 4
Offer") to a Person (the "Section 4 Purchaser"), the Selling Group shall
promptly forward a notice (the "Section 4 Offer Notice") complying with Section
4(b) to the Stockholders. Subject to Section 4(c), the Selling Group shall not
Transfer any Stock to the Section 4 Purchaser unless the terms of the Section 4
Offer are extended to the Stockholders with respect to their Proportionate
Percentage of the aggregate number of shares of Stock (on a Common Stock
equivalent basis) to which the Section 4 Offer relates, whereupon each
Stockholder shall be entitled to Transfer to the Section 4 Purchaser pursuant to
the Section 4 Offer the Stockholder's Proportionate Percentage of the aggregate
number of shares of Stock (on a Common Stock equivalent basis) to which the
Section 4 Offer relates by delivering a written notice of acceptance to the
Selling Group within 15 days after delivery of the Section 4 Offer Notice.
(b) Anything contained herein to the contrary notwithstanding, the
Section 4 Offeror shall, in addition to complying with the provisions of this
Section 4, comply with the provisions of Section 3 (it being understood that the
Section 3 Offer Notice contemplated by Section 3(a) and the Section 4 Offer
Notice may be included in a single notice), and each Stockholder, prior to
Transferring any Stock to the Section 4 Purchaser, shall comply with the
provisions of Section 3.
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(c) Anything contained herein to the contrary notwithstanding, any
purchaser of Stock pursuant to this Section 4 which is not then a Stockholder
shall agree in writing to be bound by all applicable provisions of this
Agreement and shall be deemed to be a Stockholder for all purposes of this
Agreement.
Section 5. Right of First Offer.
(a) In the event that Signal desires to propose to the Company to
Transfer to a Person all or substantially all of the then outstanding Stock
and/or substantially all of the stock and/or equity interests of the Company,
which includes more than fifty percent (50%) of the Stock owned or held by
Signal (the "Section 5 Offer"), Signal shall deliver a written notice to Trident
and the Founding Stockholders with respect to such Section 5 Offer, which shall
be irrevocable for a period of 10 days. Trident and the Founding Stockholders
shall have the right to offer (the "Section 5 Purchase Offer") to purchase that
number of shares of Stock owned or held by Signal included in the Section 5
Offer in any written notice delivered to Signal within said 10-day period.
Signal shall have the right to condition its acceptance of the Section 5
Purchase Offer, and Trident and the Founding Stockholders shall consent to such
conditions, on only the following: (i) approval by Signal of the Section 5
Purchase Offer and (ii) execution of all agreements and documents in connection
with the transactions contemplated by the Section 5 Purchase Offer within 60
Business Days after Signal's delivery of written notice to Trident and the
Founding Stockholders ("Section 5 Offer Acceptance Notice") accepting the
Section 5 Purchase Offer.
(b) Notwithstanding anything contained herein to the contrary, if
either Trident and/or the Founding Stockholders shall not have made a Section 5
Purchase Offer pursuant to this Section 5 and/or (x) Trident and the Founding
Stockholders or (y) Trident or the Founding Stockholders shall not have received
a Section 5 Offer Acceptance Notice pursuant to Section 5(a), the terms and
provisions of this Section 5 shall be of no further effect, and the terms and
provisions of Section 6 shall apply to any subsequent Section 5 Offer.
Section 6. Drag Along Right.
Anything contained herein to the contrary notwithstanding, if at any
time after the terms and provisions of Section 5 shall not apply pursuant to the
terms of Section 5, the Board, with the consent of the director(s) to be
appointed to the Board of Directors of the Company by Signal, shall approve (i)
a bona fide arms length proposal from a Person for the Transfer, directly or
indirectly, of all or a majority of the Stock of the Company to such Person,
(ii) the merger or consolidation of the Company with or into another Person in
which the Stockholders will receive cash or securities of any other Person for
their shares or (iii) the sale by the Company of all or substantially all of its
assets to a Person, in each of the above cases for a specified price payable in
cash or otherwise and on specified terms and conditions (a "Sale Proposal"),
then the Board may deliver a notice (a "Required Sale Notice") with respect to
such Sale Proposal to each other Stockholder (as well as each other holder of
any shares of Stock) stating that Signal has approved the Sale Proposal, the
Company proposes to effect the Sale Proposal and providing the identity of the
Persons involved in such Sale Proposal and the terms thereof. Each such
Stockholder and the members of the Group thereof, upon receipt of a Required
Sale Notice, shall be obligated to sell their Stock and participate in the
transaction (a
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"Required Sale") contemplated by the Sale Proposal, vote their shares of Stock
in favor of such Sale Proposal at any meeting of Stockholders called to vote on
or approve such Sale Proposal and otherwise to take all necessary action to
cause the Company and the Stockholders to consummate such Required Sale. Any
such Required Sale Notice may be rescinded by the Board, with the written
consent of Signal, by delivering written notice thereof to all of the
Stockholders.
Section 7. Pre-emptive Rights.
(a) Except in the case of Excluded Securities, the Company shall not
issue, sell or exchange, agree to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange, any (i) Stock, (ii) any other equity
security of the Company, (iii) any debt security of the Company which by its
terms is convertible into or exchangeable for any equity security of the Company
or has any other equity feature, (iv) any security of the Company that is a
combination of a debt and equity security or (v) any option, warrant or other
right to subscribe for, purchase or otherwise acquire any security of the
Company specified in the foregoing clauses (i) through (iv), unless in each case
the Company shall have first offered to sell such securities to the Stockholders
(the "Offered Securities"), at each Stockholder's respective Proportionate
Percentage at a price and on such other terms and conditions as shall have been
specified by the Company in writing delivered to each Stockholder (the "Offer"),
which Offer by its terms shall remain open and irrevocable for a period of 30
days from the date it is delivered by the Company to the Stockholder.
(b) The Company may specify in the Offer that all or a minimum
amount of the Offered Securities must be sold in such offering (to the
Stockholders and/or any third parties pursuant to Section 7(d)), in which case
any Notice of Acceptance (as defined below) shall be deemed conditioned upon (i)
receipt of Notices of Acceptance of all or such minimum amount, as applicable,
of the Offered Securities and/or (ii) the sale of all, or such minimum amount,
as applicable, of the Offered Securities pursuant to Section 7(d).
(c) Notice of the Stockholder's intention to accept, in whole or in
part, an Offer shall be evidenced by a writing signed by such Stockholder and
delivered to the Company prior to the end of the 30-day period of such Offer,
setting forth such portion of the Offered Securities the Stockholders elect to
purchase (the "Notice of Acceptance").
(d) In the event that Notice of Acceptance is not given by the
Stockholders in respect of all the Offered Securities, the Company shall have
120 days from the expiration of the foregoing 30-day period to sell all or any
part of such Offered Securities as to which Notice of Acceptances have not been
given by the Stockholders (the "Refused Securities") to any other person or
persons, but only upon terms and conditions in all material respects, including,
without limitation, unit price and interest rates, which are no more favorable
to such other person or persons and no less favorable to the Company than those
set forth in the Offer. Upon the closing, which shall include full payment to
the Company, of the sale to such other person or persons of all the Refused
Securities, the Stockholders shall purchase from the Company, and the Company
shall sell to the Stockholders, the Offered Securities in respect of which
Notice of Acceptances were delivered to the Company by the Stockholders, at the
terms specified in the Offer.
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(e) In each case, any Offered Securities not purchased by the
Stockholders or any other person or persons in accordance with Section 7(d) may
not be sold or otherwise disposed of until they are again offered to the
Stockholders under the procedures specified in Sections 7(a), (c) and (d).
(f) The rights of the Stockholders under this Section 7 shall not
apply to the following securities (the "Excluded Securities"):
(i) (A) up to 5,000,000 shares (as adjusted equitably for stock
dividends, stock splits, combinations, etc.) of Common Stock issuable upon
exercise of stock options granted to officers, employees or directors of
the Company or its subsidiaries pursuant to and in accordance with any
Employee Plan duly authorized by the Board and/or the appropriate
committee thereof, (B) shares of Common Stock issued upon conversion of
shares of Series C Preferred Stock and (C) shares of Common Stock issued
upon exercise of the Warrants, including in the case of (A), (B) and (C),
any additional shares of Common Stock as may be issued by virtue of
antidilution provisions, if any, applicable to such options or shares, as
the case may be;
(ii) Stock issued as a stock dividend or upon any stock split or
other subdivision or combination of shares of Stock;
(iii) Stock issued as part of a Qualified Public Offering; and
(iv) Common Stock issued upon conversion of convertible securities
outstanding on the date of this Agreement and disclosed on the appropriate
Schedule to the Securities Purchase Agreement.
Section 8. Irrevocable Proxy.
(a) Each Founding Stockholder hereby grants to the Managing
Purchasers and their assignees an irrevocable proxy coupled with an interest
(the "Proxy") attached hereto as Exhibit B to vote the Founders Shares at each
and all meetings of the stockholders of the Company, to execute and otherwise to
exercise any consensual rights with respect to such Founders Shares to the same
extent and with the same effect as each of the Founding Stockholders could do
under any applicable agreement or instrument or any applicable laws or
regulations governing the rights and powers of stockholders of the Company
(collectively, the "Proxy Rights"); provided, that the exercise of any Proxy
Rights requires the consent of the majority of the Managing Purchasers unless,
in the sole judgment of the Majority in Interest that in order to protect its
investment, the Majority in Interest requires the sole right to exercise the
Proxy Rights in which case the Majority in Interest shall upon 10 days written
notice to each other Managing Purchaser have the sole right to exercise the
Proxy Rights until the Majority in Interest, in its sole discretion, shall deem
otherwise. Anything contained in the preceding sentence to the contrary
notwithstanding, the Proxy shall automatically terminate without further action
upon the earliest to occur of (i) the valid and enforceable Transfer of all
Stock owned by such Stockholder, (ii) a Qualified Public Offering or (iii) three
years from the date hereof. The Managing Purchasers shall have the right to
assign the Proxy to any of their Affiliates.
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(b) If the Proxy granted pursuant to Section 8(a) is not valid or is
otherwise ineffective for any reason, then each Founding Stockholder shall vote
all of his respective Founders Shares in the same manner as the Majority in
Interest votes any shares of Stock owned by the Majority in Interest at any and
all meetings of the stockholders of the Company, by written consent in lieu
thereof and otherwise in connection with any exercise of any consensual rights
with respect to such Founders Shares.
Section 9. Voting Agreement.
(a) Each Stockholder shall vote all of his or its Shares (by Proxy
if applicable) and shall take all other necessary or desirable actions within
his or its control (whether in such Stockholder's capacity as a stockholder of
the Company or otherwise, and including, without limitation, attendance at
meetings in person or by proxy for purposes of obtaining a quorum and execution
of written consents in lieu of meetings), and the Company shall take all
necessary and desirable actions within its control (including, without
limitation, calling special Board and stockholder meetings), so that:
(i) the authorized number of directors on the Board of the Company
shall be established at no less than six (6) directors;
(ii) the initial directors of the Board of the Company shall be
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
(iii) one Person designated by the Majority in Interest and one
Person designated by Trident shall have the right to observe and attend all
meetings, whether held by teleconference or otherwise, of the Board of the
Company and to receive all information and notices received by directors on the
Board of the Company.
(b) The consent of the director(s) designated by each of Signal and
Trident to the Board will be necessary for (i) any material change or
modification of the Company's business plan as agreed upon by the Managing
Purchasers as of the date hereof (the "Business Plan"), (ii) the redemption of
any capital stock, (iii) the issuance of securities senior to or on a parity
with the Preferred Stock, (iv) the authorization or issuance of securities
convertible into such senior or parity securities or (v) the amendment of the
Certificate of Incorporation of the Company. The consent of the director(s)
designated by Signal to the Board will be necessary for (i) any transactions
with an Affiliate or related party to the Company, (ii) any merger or
consolidation of the Company or any Subsidiary of the Company with any other
entity, (iii) the sale of all or substantially all of the assets of the Company
or its Subsidiaries, (iv) the approval or authorization of any liquidation, (v)
the removal of any senior executive of the Company, (vi) the incurrence of any
fund Indebtedness in excess of $500,000, (vii) the incurrence of any capital
expenditures in any 12-month period in excess of $100,000, which such capital
expenditures were not authorized in or by the Company's Business Plan or
Operating Budget or (viii) any changes to or removal of the Company's auditor.
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Section 10. Covenants.
(a) The Company and the Stockholders shall take any and all
necessary actions to make Exchange Act Filings (as defined in the Securities
Purchase Agreement) immediately after the Closing.
(b) The Company and the Stockholders shall take any and all
necessary actions to increase the size of the Board to six (6) directors, and to
appoint ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ as replacements for
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ effective on the
Filing Expiration Date.
Section 11. Legend on Stock Certificates.
Each certificate representing shares of Stock issued under the
Securities Purchase Agreement shall bear a legend containing the following words
(in addition to any other legend required by law or applicable agreement):
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A STOCKHOLDERS AGREEMENT DATED AS OF MAY 7, 1999,
BY AND AMONG FIBERNET TELECOM GROUP, INC. AND CERTAIN HOLDERS OF THE
OUTSTANDING CAPITAL STOCK OF SUCH CORPORATION. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF SUCH
CORPORATION."
Section 12. Additional Shares of Stock; Etc.
In the event additional shares of Stock are issued by the Company to
a Stockholder of the Company at any time during the term of this Agreement,
either directly or upon the exercise or exchange of securities of the Company
exercisable for or exchangeable into shares of Stock, the Company shall cause
such additional shares of Stock, as a condition to such issuance, to become
subject to the terms and provisions of this Agreement.
Section 13. Duration of Agreement; Compliance.
The rights and obligations of each Stockholder under this Agreement
shall terminate as to such Stockholder upon the earliest to occur of (a) the
valid and enforceable Transfer of all Stock owned by such Stockholder, and (b) a
Qualified Public Offering.
Section 14. Severability; Governing Law.
If any provision of this Agreement shall be determined to be illegal
and unenforceable by any court of law, the remaining provisions shall be
severable and enforceable in accordance with their terms. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of New York (without regard to principles of
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conflicts of laws), except to the extent that this Agreement relates to the
internal laws of the Company, which shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
Section 15. Successors and Assigns.
This Agreement shall bind and inure to the benefit of the parties
and their respective successors and assigns, transferees, legal representatives
and heirs.
Section 16. Notices.
All notices, requests, consents and other communications hereunder
to any party shall be deemed to be sufficient if contained in a written
instrument delivered in person or by telecopy or sent by nationally-recognized
overnight courier or first class registered or certified mail, return receipt
requested, postage prepaid, addressed to such party at the address set forth
below or at such other address as may hereafter be designated in writing by such
party to the other parties:
if to the Company, to:
FiberNet Telecom Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
if to the Stockholders, to their respective addresses set
forth on Annex I hereto with a copy to:
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
All such notices, requests, consents and other communications shall
be deemed to have been delivered (a) in the case of personal delivery or
delivery by telecopy, on the date of such delivery, (b) in the case of dispatch
by nationally-recognized overnight courier, on the next business day following
such dispatch and (c) in the case of mailing, on the third business day after
the posting thereof.
Section 17. Modification.
Except as otherwise provided herein, neither this Agreement nor any
provisions hereof can be modified, changed, discharged or terminated except by
an instrument in writing signed by the Company and a Majority in Interest of the
Purchasers; provided, however,
11
13
that no modification or amendment shall discriminate against any Stockholder
without the consent of such Stockholder.
Section 18. Headings.
The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be a part of this
Agreement.
Section 19. Nouns and Pronouns.
Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of names and pronouns shall include the plural and vice versa.
Section 20. Entire Agreement.
This Agreement and the other writings referred to herein or
delivered pursuant hereto contain the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements and understandings with respect thereto.
Section 21. Counterparts.
This Agreement may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
12
14
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement on the date first above written.
FIBERNET TELECOM GROUP, INC.
By:__________________________________
Name:
Title:
SIGNAL CAPITAL PARTNERS, L.P.
By: Signal Capital Advisors, L.P.
Its: General Partner
By: Signal Capital Advisors, Inc.
Its: General Partner
By:__________________________________
Name:
Title:
TRIDENT TELECOM PARTNERS LLC
By: Trident Telecom Management LLC
Its: Managing Member
By: ▇▇▇▇▇▇▇ Management, Inc.
Its: Managing Member
By:__________________________________
Name:
Title:
15
CONCORDIA TELECOM MANAGEMENT, L.L.C.
By:__________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Sole Member
BURDEN DIRECT INVESTMENT FUND III
By: ▇▇▇▇▇▇▇ A.M. Burden & Co., L.P.
Its: Managing General Partner
By: Burden Brothers, Inc.
Its: Sole General Partner
By:__________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
PEQUOT SCOUT FUND, LP
By:__________________________________
Name:
Title:
▇▇▇▇▇ ▇▇▇▇ PARTNERS, L.P.
By: ▇▇▇▇▇ ▇▇▇▇ Associates, L.P.
Its: General Partner
By: ▇▇▇▇▇ ▇▇▇▇, Inc.
Its: General Partner
By:__________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Chairman, ▇▇▇▇▇ ▇▇▇▇, Inc.
16
LANCER OFFSHORE, INC.
By:__________________________________
Name:
Title:
ALEXANDER ENTERPRISE HOLDINGS CORP.
By:__________________________________
Name:
Title:
KING STREET CAPITAL LTD.
By:__________________________________
Name:
Title:
KING STREET CAPITAL LP
By:__________________________________
Name:
Title:
TAURUS TELECOMMUNICATION, INC.
By:__________________________________
Name:
Title:
17
SMFS, INC.
By:__________________________________
Name:
Title:
LPS CONSULTANTS INC.
By:__________________________________
Name:
Title:
LTJ GROUP, INC.
By:__________________________________
Name:
Title:
18
ANNEX I
-----------------------------------------------------------------------------------------------------
Stockholders Series C Convertible
Preferred Stock Common Stock
-----------------------------------------------------------------------------------------------------
Purchasers
-----------------------------------------------------------------------------------------------------
Signal Capital Partners, L.P. 43,499.00 0
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
Trident Telecom Partners LLC 40,189.00 0
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
Concordia Telecom Management, L.L.C. 4,728.00 0
c/o FiberNet Telecom Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
Burden Direct Investment Fund III 9,456.00 0
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
Pequot Scout Fund, LP 9,456.00 0
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ Partners, L.P. 7,092.00 0
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
19
-----------------------------------------------------------------------------------------------------
Lancer Offshore, Inc. 4,728.00 0
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
Alexander Enterprise Holdings Corp. 8,511.00 0
c/o Alpha Investment Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
King Street Capital Ltd. 2,269.00 0
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
King Street Capital LP 2,459.00 0
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
Taurus Telecommunication, Inc. 946.00 0
▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------
20
-----------------------------------------------------------------------------------------------------
Founding Stockholders Series C Convertible Common Stock
Preferred Stock
-----------------------------------------------------------------------------------------------------
SMFS, Inc. 0 6,900,000
c/▇ ▇▇▇▇▇▇▇▇▇▇ Communications Company
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------------------------------------------------------------------------
LTJ Group, Inc. 0 4,025,000
c/o FiberNet Telecom Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------------------------------------------------------------------------
LPS Consultants, Inc. 0 575,000
c/▇ ▇▇▇▇▇▇▇▇▇▇ Communications Company
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ 0 0
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier:
-----------------------------------------------------------------------------------------------------
21
EXHIBIT A
Joinder
By execution of this Purchaser Joinder, the undersigned agrees to
become a party to that certain Stockholders Agreement dated as of May 7, 1999
attached hereto, among FiberNet Telecom Group, Inc., a Nevada corporation, and
certain of its stockholders. The undersigned shall have all the rights, and
shall observe all of the obligations, applicable to a Stockholder.
Name:_______________________________
Address for Notices: With copies to:
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
Signature:__________________________
Date:_______________________________
A-1