EXHIBIT 4.1
FIBERNET TELECOM GROUP, INC.
FIRST AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
November 11, 2002
TABLE OF CONTENTS
Page
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I. Covenants.................................................................1
A. Negative Covenants with Other Holders of Common Stock..................1
II. Voting....................................................................1
A. Election of Directors..................................................1
III. Miscellaneous.............................................................2
A. Legends................................................................2
B. Termination of Covenants...............................................3
C. Attendance at Meetings.................................................3
D. Further Assurances.....................................................4
E. Proxies................................................................4
F. Entire Agreement.......................................................4
G. Recapitalizations, Etc.................................................4
H. Successors and Assigns.................................................4
I. Amendments and Waivers.................................................5
J. Notices................................................................5
K. Severability...........................................................5
L. Specific Performance; Delays or Omissions; Remedies
Cumulative.............................................................5
M. Attorney's Fees........................................................6
N. Governing Law..........................................................6
O. Counterparts...........................................................6
P. Titles and Subtitles...................................................6
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FIBERNET TELECOM GROUP, INC.
FIRST AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
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This First Amended and Restated Stockholders Agreement (this "Agreement")
is made as of November 11, 2002, between FiberNet Telecom Group, Inc., a
Delaware corporation (the "Company") and the investors listed on Exhibit A
hereto, each of which is herein referred to as an "Investor".
RECITALS
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Pursuant to a Purchase Agreement among the Company and the Investors dated
October 30, 2002 (the "Old Purchase Agreement"), the Investors purchased from
the Company, and the Company sold to the Investors, upon the terms and subject
to the conditions set forth therein, shares of the Common Stock, par value
$0.001 per share, and warrants of the Company to purchase shares of Common Stock
(the "Old Warrants");
The Company and the Investors have entered into a Common Stock and Warrant
Purchase Agreement (the "Purchase Agreement") of even date herewith pursuant to
which the Company desires to sell to the Investors, and the Investors desire to
purchase from the Company, shares of the Company's Common Stock and warrants to
purchase an additional amount of such shares (the "New Warrants" and together
with the Old Warrants, the "Warrants"). A condition to the Investors'
obligations under the Purchase Agreement is that the Company and the Investors
enter into this Agreement in order to provide the Investors with certain rights
with respect to the Company's Common Stock. The Company desires to induce the
Investors to purchase shares of Common Stock pursuant to the Purchase Agreement
by agreeing to the terms and conditions set forth herein.
AGREEMENT
The parties agree as follows:
I. Covenants
A. Negative Covenants with Other Holders of Common Stock. The Company shall
not enter into any agreement with an existing or future investor acquiring
shares of the Company's Common Stock in connection with such investor's
investment that has the effect of establishing any material rights or otherwise
providing any material benefits for such investor that have not been received by
the Investors under this Agreement, the Old Purchase Agreement, the Purchase
Agreement, or the First Amended and Restated Investors Rights Agreement entered
into concurrently herewith, unless, in any such case, each Investor has been
offered the opportunity to receive, for no additional consideration, such rights
and the benefits of such agreement.
II. Voting
A. Election of Directors. At any annual or special shareholders meeting,
and
whenever the shareholders of the Company act by written consent with respect to
election of directors, each Investor agrees to vote or otherwise give such
Investor's consent in respect of all shares of the Company's Common Stock
acquired by such Investor pursuant to the Purchase Agreement or Old Purchase
Agreement or upon any exercise of any Warrants, and the Company shall take all
necessary and desirable actions within its control, in order to cause:
1. the election to the Board of two Independent Individuals (as defined
below) approved by Investors holding shares of the Company's capital stock
entitled to cast a majority of the total number of votes entitled to be
cast by all Investors in the election of directors to the Company's Board
of Directors (the "Majority Investors");
2. the authorized number of directors of the Board as set forth in the
Company's Certificate of Incorporation or other similar document (in each
case, as amended, amended and restated or otherwise modified from time to
time) of the Company and/or the Bylaws of the Company to remain at six or
such other number as the Majority Investors may specify from time to time
in a notice delivered to the Company and the other Investors;
3. the removal from the Board (with or without cause) of any director
approved hereunder by the Majority Investors, upon the written request of
the Majority Investors for the removal of such director, but only upon such
written request; provided, however, that the removal of any director for
cause or otherwise shall not prejudice the right of the Majority Investors
to nominate pursuant to this Agreement a substitute director to fill the
vacancy created by such removal; and
4. upon any vacancy in the Board as a result of any individual approved as
provided in clause (1) above ceasing to be a member of the Board, whether
by resignation, removal or otherwise, the election to the Board of an
individual approved by the Majority Investors.
For purposes of this Agreement, an "Independent Individual" shall mean any
natural person who upon election to the Board will be an "independent director"
within the meaning of the rules and regulations of the primary national
securities exchange or automated quotation system on which shares of the
Company's Common Stock are traded.
III. Miscellaneous.
A. Legends. Each certificate representing shares of Common Stock held by an
Investor or any subsequent holder of such shares to which rights under this
Agreement are transferred pursuant to the terms of Section III.H shall be
stamped or otherwise imprinted with legends substantially similar to the
following (in addition to any legend required under applicable state securities
laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF AN AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING OF
THE SHARES REPRESENTED HEREBY. ANY
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PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND
SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH
VOTING AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS."
The Company agrees that, during the term of this Agreement, it will not
remove, and will not permit to be removed (upon registration of transfer,
reissuance or otherwise), the legend set forth above from any such certificate
and will place or cause to be placed such legend on any new certificate issued
to represent shares of Common Stock held by the Investors and such transferees
theretofore represented by a certificate carrying such legend. At any time after
the termination of the Company's and the Investors' obligations under Section II
of this Agreement pursuant to the terms of Section III.B and in connection with
any transfer of the shares evidenced by a certificate legended pursuant to this
Section III.A, any holder of a stock certificate so legended may surrender such
certificate to the Company for removal of such legend, and the Company will duly
reissue a new certificate without such legend.
B. Termination of Covenants. All covenants of the Company and the Investors
contained in Section I and Section II of this Agreement shall expire and
terminate upon the earliest of,
1. the closing of a Qualified Public Offering (as defined in the First
Amended and Restated Investor's Rights Agreement, dated November 11, 2002,
between the Company and the Investors), or
2. (i) the sale, lease or other disposition of all or substantially all of
the assets of the Company or (ii) any consolidation or merger of the
Company with or into any other corporation or other entity or person, or
any other corporate reorganization, in which the shareholders of the
Company immediately prior to such consolidation, merger or reorganization,
own less than 50% of the Company's voting power immediately after such
consolidation, merger or reorganization, or (iii) any transaction or series
of related transactions to which the Company is a party in which in excess
of 50% of the Company's voting power is transferred, excluding any
consolidation or merger effected exclusively to change the domicile of the
Company (a "Change in Control"), or
3. the date upon which the aggregate securities of the Company then held by
the Investors that are a party to this Agreement on the date hereof
comprise less than 30% of the Company's Common Stock outstanding on a
fully-diluted basis.
C. Attendance at Meetings. Each of the Investors agrees to be present,
either in person or by proxy, at all meetings of shareholders of the Company at
which one or more members of the Board are to be elected, so that all shares
held by such Investor may be voted for the election of the directors as set
forth herein; provided, that the Company shall have given notice of such meeting
to each Investor not less than 10 days prior to the date of such meeting (unless
waived in writing by such person). Each Investor may abstain from voting at all
such meetings with respect to any matter except for the election of directors.
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D. Further Assurances. The Company agrees to take all actions required to
ensure that the rights given to the parties hereunder are effective and that
they enjoy the benefits thereof. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all of the provisions of this Agreement and in the taking
of all such actions as may be appropriate in order to protect the rights of the
parties hereunder against impairment.
E. Proxies. Each Investor hereby grants to each other Investor an
irrevocable proxy (a "Proxy") with respect to the voting of the shares of
capital stock of the Company owned or controlled by such Investor in accordance
with this Agreement. The Proxy granted by each Investor to each other Investor
is exercisable by any Investor at any time or from time to time, commencing with
the breach by any Investor granting the Proxy of its obligation to vote its
shares of capital stock in accordance with this the Agreement. Each Proxy shall
expire upon the termination of the Company's and the Investors' obligations
under Section II of this Agreement pursuant to the terms of Section III.B. Each
Investor agrees that each Proxy granted hereby is coupled with an interest.
F. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof, and any and all
other written or oral agreements relating to the subject matter hereof existing
among any of the parties hereto are expressly canceled.
G. Recapitalizations, Etc. The provisions of this Agreement (including any
calculation of share ownership) shall apply, to the full extent set forth herein
with respect to the Common Stock, to any and all shares of capital stock of the
Company or any capital stock, partnership or member units or any other security
evidencing ownership interests in any successor or assign of the Company
(whether by merger, consolidation, sale of assets or otherwise) that may be
issued in respect of, in exchange for, or in substitution of the Common Stock by
reason of any stock dividend, split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.
H. Successors and Assigns. Except as provided below, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties (including
transferees of any Common Stock or Warrants). Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
The rights of an Investor under Sections I and II of this Agreement may be
assigned to any Permitted Transferee (as defined below) or to any transferee or
assignee in connection with the transfer or assignment of at least 40% of such
Investor's Common Stock (on a fully diluted basis); provided, that (a) such
transfer is otherwise effected in accordance with applicable securities laws and
other restrictions on transfer applicable to such shares, (b) notice of such
assignment is given to the Company and (c) such transferee or assignee agrees to
be bound by all provisions of this Agreement. For purposes of this Agreement, a
"Permitted Transferee" shall mean (i) in the case of an Investor who is an
individual, such person's
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ancestors, descendants or spouse, or any custodian or trustee for the account of
such person (or for the account of such person's ancestors, descendants or
spouse), (ii) in the case of an Investor which is a partnership or limited
liability company, any constituent partner or member of such entity, (iii) in
the case of an Investor which is a corporation, any parent corporation or
wholly-owned subsidiary corporation or any officer, director or 10% stockholder
of such corporation, and (iv) any other Investor.
I. Amendments and Waivers. Any term of this Agreement may be amended or
waived only with the written consent of the Company and Investors holding at
least 75% of the shares of Common Stock (on a fully-diluted basis) issued
pursuant to the Purchase Agreement or the Old Purchase Agreement and then held
by all Investors. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each Investor. Notwithstanding the foregoing, if
in any particular instance a party's obligations or rights under this Agreement
are adversely affected thereby in a disproportionately adverse manner from that
in which other parties are affected by application of this Section, the consent
of such party shall also be required in such instance.
J. Notices. Unless otherwise provided, any notice required or permitted by
this Agreement shall be in writing and shall be deemed sufficient upon delivery,
when delivered personally or by overnight courier or sent by telegram or
confirmed fax, or if mailed to a domestic address, 48 hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party's address or
fax number as set forth below or on Exhibit A hereto or as subsequently modified
by written notice.
K. Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
L. Specific Performance; Delays or Omissions; Remedies Cumulative. The
parties hereto hereby declare that it is impossible to measure in money the
damages which will accrue to a party hereto or to their heirs, personal
representatives, or assigns by reason of a failure to perform any of the
obligations under this Agreement and agree that the terms of this Agreement
shall be specifically enforceable without the requirement for the posting of a
bond. If any party hereto or his heirs, personal representatives, or assigns
institutes any action or proceeding to specifically enforce the provisions
hereof, any person against whom such action or proceeding is brought hereby
waives the claim or defense therein that such party or such personal
representative has an adequate remedy at law, and such person shall not offer in
any such action or proceeding the claim or defense that such remedy at law
exists.
No delay or omission to exercise any right, power or remedy accruing to any
party under this Agreement, upon any breach or default of any other party under
this Agreement, shall impair any such right, power or remedy of such
non-breaching or non-defaulting party nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single
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breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
M. Attorney's Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorney's fees, costs and
disbursements in addition to any other relief to which such party may be
entitled.
N. Governing Law. This Agreement and all acts and transactions pursuant
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of New York, without giving effect to principles of conflicts of
laws.
O. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
P. Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
[Signature Page Follows]
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The parties have executed this Stockholders Agreement as of the date first
above written.
COMPANY:
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FIBERNET TELECOM GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive
Officer
INVESTORS:
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DEUTSCHE BANK AG NEW YORK BRANCH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
WACHOVIA INVESTORS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Officer
BANK ONE, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
IBM CREDIT CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇
Title: Director, Credit Operations
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President