Exhibit 10.1
SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
among
IFX CORPORATION,
UBS CAPITAL AMERICAS III, L.P.,
UBS CAPITAL LLC,
INTERNATIONAL TECHNOLOGY INVESTMENTS, LC,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and
CASTY GRANTOR SUBTRUST
dated as of _____________, 2001
IFX CORPORATION
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THIS SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement")
is entered as of __________, 2001, among IFX CORPORATION, a Delaware corporation
(the "Company"), UBS CAPITAL AMERICAS III, L.P., a Delaware limited partnership,
and UBS CAPITAL LLC, a Delaware limited liability company (collectively, "UBS"
and together with successors and assigns, the "Investor Stockholders"),
INTERNATIONAL TECHNOLOGY INVESTMENTS, LC, a Nevada limited liability company
("ITI"), ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, individually ("Eidelstein"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
individually ("Shalom"), and the CASTY GRANTOR SUBTRUST ("Casty"; ITI, Shalom,
Eidelstein and Casty, individually, a "Stockholder," and collectively, the
"Stockholders").
RECITALS
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WHEREAS, the Company and the Investor Stockholders entered into that
certain IFX Corporation Preferred Stock Purchase Agreement, dated as of June 15,
2000, pursuant to which the Investor Stockholders purchased 2,030,869 shares of
Series A Preferred Stock; and
WHEREAS, as a condition to and in consideration of the Investor
Stockholders' purchase of Series A Preferred Stock, the Company, the Investor
Stockholders and the Stockholders entered into that certain Amended and Restated
Stockholders Agreement dated as of June 15, 2000 (the "Existing Agreement"); and
WHEREAS, the Company and the Investor Stockholders have entered into the
IFX Corporation Preferred Stock Purchase Agreement, dated March __, 2001 (the
"Stock Purchase Agreement"), pursuant to which the Investor Stockholders will
purchase newly issued shares of Series B Preferred Stock; and
WHEREAS, as a condition to and in consideration of the Investor
Stockholders' purchase of Series B Preferred Stock, the Company, the Investor
Stockholders and the Stockholders have agreed to amend and restate the Existing
Agreement in the manner set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and for other valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
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SECTION 1.1 Certain Defined Terms. As used herein, the following terms
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shall have the following meanings:
"Affiliate" of a specified Person shall mean (a) any Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such specified Person, (b) in the case of a
natural Person, such Person's spouse, parent or lineal descendant (whether by
blood or adoption and including stepchildren), a trust primarily for the benefit
of such Person and the foregoing, (c) in the case of a trust any Person with
whom the beneficiaries of the Trust are Affiliates, or (d) in the case of UBS,
(i) any company under the direct or indirect control of UBS AG (a "UBS Group
Company") and/or any partnership or unincorporated association under the direct
or indirect control of any UBS Group Company which includes, without limiting
the generality of the foregoing, any limited partnership the general partner of
which is a UBS Group Company and any limited liability company the managing
member of which is a UBS Group Company, and (ii) any alternative investment
vehicle formed by either of the foregoing, or any other entity (x) in which UBS
AG directly or indirectly owns at least 20% of the equity interests and (y) is
advised or managed (whether pursuant to contract, as general partner, managing
member or otherwise) by an entity in which UBS AG has a direct or indirect
equity interest. "Control" (including the terms "controlled by" and "under
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common control with") shall mean the possession, directly or indirectly, of the
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power to direct or cause the direction of the management policies of a Person,
whether through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.
"Agent" has the meaning assigned to such term in Section 5.13.
"as converted" has the meaning assigned to such term in Section 2.3.
"beneficial owner" or "beneficially own" has the meaning given such term in
Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of Common
Stock, Series A Preferred Stock or Series B Preferred Stock or other Voting
Securities of the Company shall be calculated in accordance with the provisions
of such Rule; provided, however, that for purposes of determining beneficial
ownership, (i) a Person shall be deemed to be the beneficial owner of any
security which may be acquired by such Person whether within 60 days or
thereafter, upon the conversion, exchange or exercise of any warrants, options,
rights or other securities and (ii) no Person shall be deemed to beneficially
own any security solely as a result of such Person's execution of this
Agreement.
"Board" means the Board of Directors of the Company.
"Bona Fide Purchaser" means, with respect to a proposed Transfer of Equity
Securities, any transferee of Equity Securities who or which (a) is not an
Affiliate of the Investor Stockholders and (b) has delivered a good faith
written offer to purchase Equity Securities.
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"Business Day" means any day that is not a Saturday, a Sunday or other day
on which banks are required or authorized by law to be closed in New York City
on the city of Miami, Florida.
"Buyer" has the meaning assigned to such term in Section 3.6.
"Bylaws" means the Bylaws of the Company, as in effect on the date hereof
and as the same may be amended, supplemented or otherwise modified from time to
time in accordance with the terms thereof, the terms of the Certificate and the
terms of this Agreement.
"Capital Stock" means, with respect to any Person at any time, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of capital stock, partnership interests (whether
general or limited) or equivalent ownership interests in or issued by such
Person, and includes, in the case of the Company without limitation, any and all
shares of Common Stock, Series A Preferred Stock and Series B Preferred Stock.
"Casty" has the meaning assigned to such term in the preamble.
"Certificate" means the Certificate of Incorporation of the Company, as in
effect on the date hereof and as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Closing" has the meaning assigned to such term in the Stock Purchase
Agreement.
"Common Stock" means the common stock, par value $0.02 per share, of the
Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
"control" (including the terms "controlled by" and "under common control
with"), with respect to the relationship between or among two or more Persons,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise.
"Director" means any member of the Board.
"Eidelstein" has the meaning assigned to such term in the preamble.
"Equity Securities" means any and all shares of Capital Stock of the
Company, securities of the Company convertible into, or exchangeable or
exercisable for, such shares, and options, warrants or other rights to acquire
such shares.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute and the rules and regulations promulgated
thereunder.
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"Family" means any spouse, lineal ancestor or descendant, brother or sister
"Holder" means an Investor Stockholder and any other holder of Equity
Securities who or which is a permitted transferee of an Investor Stockholders
pursuant to Section 3.1(c).
"Independent Director" has the meaning specified in Rule 4200(a)(14) of the
NASD listing standards, as in effect on the date hereof and as the same may be
amended or supplemented, or in any successor rule or regulation.
"Independent Representative" has the meaning assigned to such term in
Section 2.1(a).
"Investor Representative" has the meaning assigned to such term in Section
2.1(a).
"ITI" has the meaning assigned to such term in the preamble.
"Joint Representative" has the meaning assigned to such term in Section
2.1(a).
"NASD" means the National Association of Securities Dealers, Inc.
"Offer" has the meaning assigned to such term in Section 3.5(a).
"Offered Shares" has the meaning assigned to such term in Section 3.5(a).
"Permitted Sales" means the Transfers permitted in the first and second
sentences of Section 3.3(a) and the first sentence of Section 3.4(a).
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivisions thereof or any other entity.
"Preferred Stock" means the Series A Preferred Stock and Series B Preferred
Stock.
"Proposed Transferee" has the meaning assigned to such term in Section
3.5(a).
"Pro Rata Fraction" has the meaning assigned to such term in Section
3.5(c).
"Qualified Public Offering" has the meaning assigned to such term in the
Stock Purchase Agreement.
"Registration Rights Agreement" has the meaning assigned to such term in
the Stock Purchase Agreement.
"Representatives" has the meaning assigned to such term in Section 2.1(b).
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"SEC" means the U.S. Securities and Exchange Commission or any other
federal agency then administering the federal securities laws.
"Securities Act" has the meaning assigned to such term in Section 3.1.
"Seller" has the meaning assigned to such term in Section 3.5(a).
"Series A Certificate of Designation" means the Amended and Restated Series
A Certificate of Designation, Number, Powers, Preferences and Relative,
Participating and Other Rights of Series A Convertible Preferred Stock of the
Company in the form attached as Exhibit I to the Stock Purchase Agreement.
"Series B Certificate of Designation" means the Certificate of Designation,
Number, Powers, Preferences and Relative, Participating and Other Rights of
Series B Convertible Preferred Stock of the Company in the form attached as
Exhibit B to the Stock Purchase Agreement.
"Series A Preferred Stock" means the Series A Preferred Stock, par value
$1.00 per share, of the Company.
"Series B Preferred Stock" means the Series B Preferred Stock, par value
$1.00 per share, of the Company.
"Shalom" has the meaning assigned to such term in the preamble.
"Stockholders" has the meaning assigned to such term in the preamble.
"Stock Purchase Agreement" has the meaning assigned to such term in the
recitals.
"Transfer" means, directly or indirectly, to sell, transfer, assign,
pledge, encumber, hypothecate or similarly dispose of, either voluntarily or
involuntarily, or to enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, assignment, pledge,
encumbrance, hypothecation or similar disposition of, any shares of Equity
Securities beneficially owned by a Person or any interest in any shares of
Equity Securities beneficially owned by a Person.
"UBS" means (i) UBS Capital Americas III, L.P., a Jersey, Channel Island
Islands limited partnership, (ii) UBS Capital LLC, a Delaware limited liability
Company, and (iii) any Affiliate of UBS, individually and collectively.
"Voting Securities" means, at any time, shares of any class of Equity
Securities of the Company which are then entitled to vote generally in the
election of Directors.
SECTION 1.2 Other Definitional Provisions.
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(a) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
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not to any particular provision of this Agreement, and Article and Section
references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE II
CORPORATE GOVERNANCE
SECTION 2.1 Board Representation.
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(a) Effective on the date hereof, the Board shall be comprised of
seven (7) Directors of whom: (i) three (3) shall be designees of the Investor
Stockholders (the "Investor Representatives"), (ii) one (1) shall be the
designee of ITI (the "ITI Representative"), (iii) one (1) shall be the designee
of Casty who shall be an Independent Director (the "Casty Representative"), (iv)
one (1) shall be jointly designated by ITI and Casty (the "Joint
Representative") and (v) one (1) shall be an Independent Director acceptable to
the Investor Stockholders, ITI and Casty (with such consents not to be
unreasonably withheld or delayed) (the "Independent Representative") and who,
commencing with the election of Directors at the next annual meeting of
stockholders, has been elected by the holders of a majority of the outstanding
Voting Securities. The initial Investor Representatives shall be ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇ ▇. Lama and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the initial ITI Representative shall be
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the initial Casty Representative shall be ___________, the
initial Joint Representative shall be _____________ and the initial Independent
Representative shall be _____________. If, at any time, ITI and Casty are
unable to agree upon the designation of the Joint Representative, the Joint
Representative shall be designated by ▇▇▇▇ ▇▇▇▇▇▇. For purposes hereof, each of
the two Series A Preferred Directors (as defined in the Series A Certificate of
Designation) and the Series B Preferred Director (as defined in the Series B
Certificate of Designation) shall each count as one of the three Investor
Representatives.
(b) The Company shall take such action as may be required under
applicable law (i) to cause the Board to consist of the number of Directors
specified in clause (a), (ii) to include in the slate of nominees recommended by
the Board the Investor Representatives, the ITI Representative, the Casty
Representative, the Joint Representative and the Independent Representative
(collectively, the "Representatives"), and (iii) to cause the Representatives to
be duly appointed in accordance with the foregoing and, in the case of the
Investor Representatives, in accordance with the Series A Certificate of
Designation or the Series B Certificate of Designation, as the case may be. The
Company agrees to use its reasonable best efforts to cause the election of the
Representatives to the Board, including nominating such individuals to be
elected as Directors as provided herein.
(c) Each of the Investor Stockholders and the Stockholders agrees to
vote, or act by written consent with respect to any Voting Securities
beneficially owned by him or it, at each annual or special meeting of the
stockholders of the Company at
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which Directors are to be elected or to take all actions by written consent in
lieu of any such meeting as are necessary to cause the Representatives
designated by the others in accordance with the terms of this Agreement to be
elected to the Board and agrees to use his or its reasonable best efforts to
cause the election of each such designee to the Board, including nominating such
individuals to be elected as Directors.
(d) In the event that a vacancy is created at any time by the death,
disability, retirement, resignation or removal (with or without cause) of any
Representative, the remaining Directors and the Company shall cause the vacancy
created thereby to be filled by a new designee of the party or parties that
designated such Director as soon as possible, who is designated in the manner
specified in this Section 2.1. Each of the Company, Investor Stockholders and
the Stockholders hereby agrees to take, at any time and from time to time, all
actions necessary to accomplish the same. Upon the written request of any party
who is entitled to designated a Representative, each of the Investor
Stockholders and Stockholders shall vote, or act by written consent with respect
to all Voting Securities beneficially owned by him or it and otherwise take or
cause to be taken all actions necessary to remove any Director designated by
such party. Unless, any party who is entitled to designated a Representative
shall otherwise request in writing, none of the others shall take any action to
cause the removal of any Director designated by the former.
(e) Each of the Company, the Investor Stockholders and the
Stockholders agrees not to take any action that would cause the number of
Directors constituting the entire Board to be other than seven (7) without the
written consent of each other party.
(f) The covenants and agreements set forth herein shall be subject to
the fiduciary obligations of the Representatives now or hereafter serving on the
Board and shall not prevent the Representatives now or hereafter serving on the
Board from taking any action or refraining to take any action while acting in
the capacity as a Director of the Company. The foregoing shall not limit the
obligations of the Investor Stockholders, ITI and Casty in their capacity as
stockholders of the Company hereunder.
SECTION 2.2 Committees. The Company shall, except as provided below, by
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amending its Bylaws or otherwise, establish and maintain a Compensation
Committee and an Audit Committee of the Board which satisfies the requirements
of this Section. The Compensation Committee shall consist of two (2) Directors,
one (1) of whom shall be the Casty Representative and one (1) of whom shall be
the Independent Representative. The Audit Committee shall consist of three (3)
Directors, one (1) of whom shall be an Investor Representative, one (1) of whom
shall be the Casty Representative and one (1) of whom shall be the Independent
Representative. The Compensation Committee shall have responsibility for
compensation matters customarily addressed by compensation committees of
similarly situated companies and shall have the full power and authority of the
Board with respect thereto, except as limited by applicable law. The Audit
Committee shall have responsibility for matters customarily addressed by audit
committees of similarly situated companies and shall have the full power and
authority of the Board with respect thereto, except as limited by applicable
law. Notwithstanding anything to the contrary herein, the Investor Stockholders
and the
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Stockholders acknowledge and agree that the composition of the Compensation and
Audit Committees must satisfy any applicable rules and regulations of the SEC
and the NASD as in effect from time to time.
SECTION 2.3 Termination of Rights.
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(a) Except with respect to the rights of the Investor Stockholders as
provided in subparagraph (b) below, Sections 2.1 and 2.2 shall terminate upon a
Qualified Public Offering.
(b) The rights of the Investor Stockholders under Sections 2.1 and
2.2 (and the corresponding obligations of the Stockholders) shall survive a
Qualified Public Offering, provided that, at such time as the Investor
Stockholders and their Affiliates shall cease to own in the aggregate at least
25% of the number of shares of Common Stock (determined with respect to the
Preferred Stock and any other Equity Securities owned by the Investor
Stockholders and their Affiliates that are convertible into, or exchangeable or
exercisable for Common Stock, on an as-converted, exchanged or exercised basis
(any determination made in accordance with the foregoing shall hereinafter be
referred to as "as converted")) that the Investor Stockholders and such
Affiliates held as of the Closing (adjusted for stock splits, combinations,
stock dividends and the like), the Investor Stockholders shall cease to have the
right to designate Directors pursuant to Section 2.1 and members of the
Compensation Committee and Audit Committee pursuant to Section 2.2 and all other
rights of the Investor Stockholders or such Stockholder under this Article II
shall terminate.
ARTICLE III
TRANSFERS
SECTION 3.1 Investor Stockholder Transfers. Each Investor Stockholder
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hereby agrees that it shall not Transfer any shares of its Equity Securities,
unless such Transfer is effected through (a) a public offering registered under
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), (b) sales made pursuant to Rule
144 under the Securities Act, or any successor provisions or (c) a Transfer
otherwise permitted hereunder and in compliance herewith. Any Equity Securities
Transferred pursuant to clause (a) or (b) shall no longer be subject to this
Agreement. Each transferee Holder under clause (c) shall agree in writing as a
condition to such Transfer, to be bound by all of the provisions of this
Agreement to the same extent as if such transferee were the transferring
Investor Stockholder, and all stock certificates representing shares transferred
to such transferee shall bear a legend providing notice of the restrictions
contained in this Agreement.
SECTION 3.2 Stockholder Transfers. Each Stockholder hereby agrees that
---------------------
it shall not Transfer any shares of its Equity Securities, unless such Transfer
is effected through (a) a public offering registered under the Securities Act,
(b) sales made pursuant to Rule 144 under the Securities Act or any successor
provisions or (c) a Transfer otherwise permitted hereunder and in compliance
herewith. Any Equity Securities
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Transferred pursuant to clauses (a) or (b) shall no longer be subject to this
Agreement, except as provided herein. Each transferee under clause (c) shall
agree in writing as a condition to such Transfer, to be bound by all of the
provisions of this Agreement to the same extent as if such transferee were the
transferring Stockholder, and all stock certificates representing shares
transferred to such transferee shall bear a legend providing notice of the
restrictions contained in this Agreement.
SECTION 3.3 Transfers by Eidelstein, ITI and Shalom.
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(a) ITI and Shalom agree that neither such Stockholder nor any of its
Affiliates shall Transfer more than 25,000 shares of Common Stock during any
calendar quarter, in each case, without the written consent of the Investor
Stockholders, which consent shall not be unreasonably withheld or delayed, or
without compliance with Sections 3.5 and 3.6; provided that Transfers by ITI and
Shalom shall be aggregated for purposes of the foregoing. Eidelstein hereby
agrees that neither he nor any of his Affiliates shall Transfer more than 25,000
shares of Common Stock during any calendar quarter without the written consent
of the Investor Stockholders, which consent shall not be unreasonably withheld
or delayed, or without compliance with Sections 3.5 and 3.6. Notwithstanding the
foregoing, Eidelstein, ITI or Shalom may Transfer all or any of their Equity
Securities (x) to any member of such Stockholder's Family or to any trust for
the benefit of any such Family member of such Stockholder or to any other
Affiliate (including, without limitation, the members of ITI), provided that any
such transferee shall agree in writing with the Company and the Investor
Stockholders as a condition to such Transfer, to be bound by all of the
provisions of this Agreement to the same extent as if such transferee were such
Stockholder, or (y) by will or the laws of descent and distribution; provided,
however, in such event each such transferee shall be bound by all of the
provisions of this Agreement to the same extent as if such transferee were such
Stockholder; and provided, further, that each such transferee shall execute an
irrevocable proxy appointing the original Stockholder (except in the case of
death of the original Stockholder) transferring such shares as proxy to vote all
such shares so transferred, such appointment shall be coupled with an interest,
and all stock certificates representing such shares shall bear a legend
providing notice of such appointment of proxy and the restrictions contained in
this Agreement.
(b) The Transfer restrictions contained in Section 3.3(a) shall
terminate upon the earlier of: (i) a Qualified Public Offering and (ii) the time
at which the Investor Stockholders and the other Holders own less than 20% of
the Common Stock (on an as converted basis) that the Investor Stockholders owned
as of the Closing.
SECTION 3.4 Transfers by Casty.
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(a) Casty agrees that neither it nor any of its Affiliates shall
Transfer, during any calendar quarter, more than the number of Shares of Common
Stock permitted under Rule 144(e) of the Securities Act measured as of the last
day of such calendar quarter plus 50% of the number of Shares of Common Stock
which were eligible for sale (but not sold under this Section 3.4(a)) during the
preceding calendar quarters (beginning with the calendar quarter ending
________, 2001), without the written consent of the Investor Stockholders, which
consent shall not be unreasonably withheld or delayed, or
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without compliance with Sections 3.5 and 3.6. Notwithstanding the foregoing,
Casty may Transfer all or any of his Equity Securities (x) to any member of such
Stockholder's Family, to any trust for the benefit of any such Family member of
such Stockholder or to any other Affiliate, provided that any such transferee
shall agree in writing as a condition to such Transfer, to be bound by all of
the provisions of this Agreement to the same extent as if such transferee were
such Stockholder, or (y) by will or the laws of descent and distribution;
provided, however, in such event each such transferee shall be bound by all of
the provisions of this Agreement to the same extent as if such transferee were
such Stockholder; and provided, further, that each such transferee shall execute
an irrevocable proxy appointing ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ as proxy to vote all such shares
so transferred, such appointment shall be coupled with an interest, and all
stock certificates representing such shares shall bear a legend providing notice
of such appointment of proxy and the restrictions contained in this Agreement.
(b) The Transfer restrictions contained in Section 3.4(a) shall
terminate upon the earlier of: (i) a Qualified Public Offering and (ii) the time
at which the Investor Stockholders and the other Holders own less than 20% of
the Common Stock (on an as converted basis) that the Investor Stockholders owned
as of the Closing.
SECTION 3.5 Right of First Refusal on Certain Transfers.
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(a) If at any time a Stockholder or any of his/its Affiliates, other
than the Company, desires to Transfer all or any part of their Equity Securities
(other than pursuant to Permitted Sales) to any Person (the "Proposed
Transferee"), such Stockholder (the "Seller") shall, except as provided below,
submit a written offer (the "Offer") to sell such Equity Securities (the
"Offered Shares"), first to the Company, and second to the Holders, on the same
terms and conditions on which the Seller proposes to sell such Offered Shares to
the Proposed Transferee. The parties acknowledge and agree that any Transfer
described in the last sentence of Sections 3.3(a) and 3.4(a) shall not be
subject to the terms of this Section. The Offer shall disclose the identity of
the Proposed Transferee, the Offered Shares proposed to be sold, the terms and
conditions, including price, of the proposed sale, and any other material facts
relating to the proposed sale. The Offer shall further state that the Company
and the Holders may acquire, in accordance with the provisions of this
Agreement, all or any portion of the Offered Shares for the price and upon the
other terms and conditions, including deferred payment (if applicable), set
forth therein.
(b) Upon receipt of the Offer, if the Company desires to purchase all
or any part of the Offered Shares, the Company shall communicate in writing its
election to purchase to the Seller, which communication shall state the number
of Offered Shares the Company desires to purchase and shall be given to the
Seller in accordance with Section 5.4 below within thirty (30) days of the date
the Offer was made. Such notice shall, when taken in conjunction with the
Offer, be deemed to constitute a valid, legally binding and enforceable
agreement for the sale to, and purchase by, the Company of the number of Offered
Shares specified by the Company in such notice and on the terms of the Offer.
Sales of the Offered Shares to be sold to the Company pursuant to this Section
3.5(b) shall be made at the offices of the Company on the 45th day following the
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date the Offer was made (or if such 45th day is not a Business Day, then on the
next succeeding Business Day). Such sales shall be effected by the Seller's
delivery to the Company of a certificate or certificates evidencing the Offered
Shares to be purchased by it, duly endorsed for transfer to the Company, against
payment to the Seller of the purchase price therefor by the Company.
(c) Each Holder shall, subject to the prior purchase right of the
Company, have the absolute right to purchase that number of Offered Shares not
purchased by the Company as shall be equal to the number of Offered Shares not
purchased by the Company multiplied by a fraction, the numerator of which shall
be the number of shares of Common Stock (determined on an as converted basis)
then owned by such Holder and the denominator of which shall be the aggregate
number of shares of Common Stock (determined on an as converted basis) then
owned by all of the Holders. The amount of Offered Shares that each Holder is
entitled to purchase under this Section 3.5(c) shall be referred to as its "Pro
Rata Fraction." The Holders shall have a right of oversubscription such that if
any Holder fails to accept the Offer as to its Pro Rata Fraction, the other
Holders shall, among them, have the right to purchase up to the balance of the
Offered Shares not so purchased. Such right of oversubscription may be
exercised by a Holder by accepting the Offer as to more than its Pro Rata
Fraction. If, as a result thereof, such oversubscriptions exceed the total
number of Offered Shares available in respect of such oversubscription
privilege, the oversubscribing Holders shall be cut back with respect to their
oversubscriptions on a pro rata basis in accordance with their respective Pro
Rata Fractions or as they may otherwise agree among themselves. If a Holder
desires to purchase all or any portion of the Offered Shares, said Holder shall
communicate in writing its election to purchase to the Seller and the Company,
which communication shall state the number of Offered Shares said Holder desires
to purchase and shall be given to the Seller in accordance with Section 5.4
below within thirty (30) days of the date the Offer was made. Such
communication shall, when taken in conjunction with the Offer, be deemed to
constitute a valid, legally binding and enforceable agreement for the sale and
purchase of such Offered Shares (subject to the aforesaid limitations as to a
Holder's right to purchase more than its Pro Rata Fraction) and on the terms of
the Offer. Sales of the Offered Shares to be sold to purchasing Holders
pursuant to this Section 3.5(c) shall be made at the offices of the Company on
the later of (i) the 45th day following the date the Offer was made (or if such
later of (i) the 45th day is not a Business Day, then on the next succeeding
Business Day) and (ii) the third Business Day following receipt of all material
governmental or other consents in connection with such sale. Such sales shall
be effected by the Seller's delivery to each purchasing Holder of a certificate
or certificates evidencing the Offered Shares to be purchased by it, duly
endorsed for transfer to such purchasing Holder, against payment to the Seller
of the purchase price therefor by such purchasing Holder.
(d) If the Holders and the Company do not purchase in the aggregate
all of the Offered Shares, the Offered Shares not so purchased may be sold by
the Seller at any time within 90 days after the date the Offer was made, subject
to the provisions of Section 3.6 hereof. Any such sale shall be to the Proposed
Transferee, at the price and upon the other terms and conditions specified in
the Offer. Any Offered Shares not sold within such 90-day period shall continue
to be subject to the requirements of a prior offer
11
pursuant to this Section 3.5. If Offered Shares are sold pursuant to this
Section 3.5 to any purchaser who is not a party to this Agreement, the Offered
Shares so sold shall no longer be subject to this Agreement.
(e) The provisions of this Section 3.5 shall terminate upon the
earlier of: (i) a Qualified Public Offering and (ii) the time at which the
Investor Stockholders and the other Holders own less than 20% of the Common
Stock (on an as converted basis) that the Investor Stockholders owned as of the
Closing.
SECTION 3.6 Right of Participation in Sales by Stockholders.
-----------------------------------------------
(a) If at any time any of the Stockholders (the "Tag-Along Seller")
desires to Transfer all or any part of the Equity Securities (other than
pursuant to Permitted Sales) owned by such Tag-Along Seller to any Person other
than Investor Stockholders (including the other Holders) (the "Buyer"), the
Investor Stockholders shall, except as provided below, have the right to sell to
the Buyer, as a condition to such sale by Tag-Along Seller, at the same price
per share and on the same terms and conditions as involved in such sale by the
Tag-Along Seller, a number of shares of Common Stock (on an as converted basis)
equal to the number derived from multiplying the total number of shares of
Common Stock (on an as converted basis) proposed to be sold by the Tag-Along
Seller by a fraction, the numerator of which is the total number of shares of
Common Stock (on an as converted basis) held by the Investor Stockholders and
the denominator of which is the total number of shares of Common Stock (on an as
converted basis) held by the Tag-Along Seller and the Investor Stockholders
(including the other Holders). The parties acknowledge and agree that any
Transfer described in the last sentence of Sections 3.3(a) and 3.4 (a) shall not
be subject to the terms of this Section.
(b) Each Investor Stockholder wishing to so participate in any sale
under this Section 3.6 shall notify the Tag-Along Seller in writing of such
intention within twenty (20) days after the date of their receipt of the Offer.
(c) The Tag-Along Seller and each participating Investor Stockholder
shall sell to the Buyer all, or at the option of the Buyer any part, of the
Equity Securities proposed to be sold by them at the price and upon other terms
and conditions contained in the Offer provided by the Tag-Along Seller under
Section 3.5 above; provided, however, that any purchase of less than all of such
Equity Securities by the Buyer shall be made from the Tag-Along Seller and each
participating Investor Stockholder pro rata based upon the relative amount of
the Equity Securities that the Tag-Along Seller and each participating Investor
Stockholder is otherwise entitled to sell pursuant to Section 3.6(a).
(d) The provisions of this Section 3.6 shall terminate upon a
Qualified Public Offering.
SECTION 3.7 Right of Participation in Sales by Investor Stockholders.
--------------------------------------------------------
(a) If at any time the Investor Stockholders desire to Transfer at
least 40% of the Equity Securities owned in the aggregate by them and their
Affiliates to any
12
Person other than an Affiliate of the Investor Stockholders (the "Tag-Along
Purchaser"), each of the other Stockholders, shall have the right to sell to the
Tag-Along Purchaser, as a condition to such sale by the Investor Stockholders,
at the price per share and on the terms and conditions applicable to the Common
Stock set forth in the Tag-Along Purchaser's offer to the Investor Stockholders
(the "Tag-Along Purchase Offer"), a number of shares of Common Stock equal to
the number derived from multiplying the total number of shares of Common Stock
(on an as converted basis) proposed to be sold by the Investor Stockholders by a
fraction, the numerator of which is the total number of shares of Common Stock
(on an as converted basis) held by such Stockholder and the denominator of which
is the total number of shares of Common Stock (on an as converted basis) held by
all Stockholders and the Investor Stockholders.
(b) Each Stockholder wishing to so participate in any sale under this
Section 3.7 shall notify the Agent in writing of such intention within twenty
(20) days after the date such Stockholder's receipt of the Tag-Along Purchase
Offer.
(c) The Investor Stockholders and each participating Stockholder
shall sell to the Tag-Along Purchaser all, or at the option of the Tag-Along
Purchaser any part, of the Equity Securities proposed to be sold by them at the
price per share and on the terms and conditions as set forth with respect to
each class and series of Capital Stock in the Tag-Along Purchaser Offer;
provided, however, that any purchase of less than all of such Equity Securities
by the Tag-Along Purchaser shall be made from the Investor Stockholders and each
participating Stockholder pro rata based upon the relative amount of the Equity
Securities that the Investor Stockholder (including the other Holders) and each
participating Stockholder is otherwise entitled to sell pursuant to Section
3.7(a).
(d) The provisions of this Section 3.7 shall terminate upon a
Qualified Public Offering.
SECTION 3.8 Drag-Along Rights.
-----------------
(a) Subject to Section 3.8(c) hereof, if the Investor Stockholders
(collectively, the "Drag-Along Transferor") approve a sale of (i) a majority of
the outstanding shares of Common Stock on an as converted basis to a Bona Fide
Purchaser or (ii) all or substantially all of the assets of the Company to a
Bona Fide Purchaser (each an "Approved Sale"), whether by way of merger,
consolidation, sale of stock or assets, or otherwise, all Stockholders shall
consent to and raise no objections against the Approved Sale, and if the
Approved Sale is structured as (A) a merger or consolidation of the Company or a
subsidiary, or a sale of all or substantially all of the assets of the Company
or a subsidiary, each Stockholder shall waive any dissenters rights, appraisal
rights or similar rights in connection with such merger, consolidation or asset
sale, or (B) a sale of a majority of the outstanding shares of Common Stock on
an as converted basis the Stockholders shall agree to sell their respective
proportionate percentages of the Common Stock on an as converted basis which are
the subject of the Approved Sale, on the same terms and conditions as applicable
to the Common Stock of the Drag-Along Transferor. The Stockholders shall take
all actions reasonably requested by the Drag Along Transferor in connection with
the consummation of the Approved Sale, including the execution of all agreements
and such instruments and other actions requested by the Drag
13
Along Transferor to provide the representations, warranties, indemnities,
covenants, conditions, agreements, escrow agreements and other provisions and
agreements relating to such Approved Sale; provided, however, that each
-------- -------
participating Stockholder's liability under any such agreement or instrument
shall be limited to his/her/its proportionate percentage of such liability
(based on the number of shares of Common Stock on an as converted basis held by
such Stockholder which are subject to the Approved Sale) and shall not exceed
the proceeds received by such Stockholder. The Stockholders shall be permitted
to sell their Equity Securities pursuant to an Approved Sale without complying
with the provisions of Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6 and 3.7 of this
Agreement.
(b) If the Company and/or the Drag-Along Transferor or their
representatives, enter into any negotiation or transaction for which Regulation
D under the Securities Act (or any similar rule or regulation then in effect)
may be available with respect to such negotiation or transaction (including a
merger, consolidation or other reorganization), each Stockholder who is not an
accredited investor (as such term is defined in Rule 501 under the Securities
Act) will, at the request of the Company or the Drag Along Transferor, appoint a
purchaser representative (as such term is defined in Rule 501 under the
Securities Act) reasonably acceptable to the Company and such Drag Along
Transferor.
(c) At the closing of the Approved Sale, each of the Stockholders
shall (a) execute any documents or instruments reasonably requested by the Bona
Fide Purchaser, and (b) deliver to the Bona Fide Purchaser certificates for the
Equity Securities, duly endorsed or accompanied by duly executed stock
assignments separate from certificate, free and clear of all encumbrances (other
than those created pursuant to this Agreement), against delivery by the Bona
Fide Purchaser of the consideration (including a certified check for the cash
portion of such consideration) for the total sales price of the Equity
Securities being sold by such Stockholder.
(d) The provisions of this Section 3.8 shall terminate upon
consummation of a Qualified Public Offering.
ARTICLE IV
APPROVAL RIGHTS OF STOCKHOLDERS
SECTION 4.1 Stockholder Approval Rights. The Company shall not (and the
---------------------------
Investor Stockholders shall not take any action to cause the Company to) take
any action to (i) enter into any transaction, or any agreement or understanding
with the Investor Stockholders or any Affiliate of the Investor Stockholders
(other than with respect to a Transfer of Equity Securities or as contemplated
by this Agreement, the Stock Purchase Agreement or the Transaction Documents (as
defined in the Stock Purchase Agreement)) or (ii) amend, modify, change or alter
the Company's Certificate of Incorporation or By-Laws or the Series A
Certificate of Designation or the Series B Certificate of Designation in a
manner adverse to the Company or holders of Common Stock, without the written
consent of the Stockholders holding a majority of the Common Stock, on an as
converted
14
basis, held by all Stockholders which consent shall not be unreasonably withheld
or delayed.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Termination. Except as otherwise provided herein, the
-----------
provisions of this Agreement shall terminate: (a) upon the agreement of all of
the parties hereto, (b) with respect to any of the Stockholders (other than
Eidelstein) and their respective permitted transferees referred to in the last
sentence of Section 3.3(x) or Section 3.4, as the case may be, when such
Stockholder together with its permitted transferees owns less than 1.25% of the
outstanding Common Stock (on an as converted basis) and (c) with respect to
Eidelstein and his permitted transferees referred to in the last sentence of
Section 3.3, when Eidelstein's employment with the Company is terminated.
SECTION 5.2 Amendments and Waivers. Except as otherwise provided
----------------------
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or any other party unless such
modification, amendment or waiver is approved in writing by the Company, the
Agent, acting on behalf of the Investor Stockholders, and the Stockholders. The
failure of any party to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
SECTION 5.3 Successors, Assigns and Transferees. This Agreement shall
-----------------------------------
bind and inure to the benefit of and be enforceable by the parties hereto and
their respective heirs, personal representatives, successors and permitted
assigns. This Agreement may not be assigned by any party hereto without the
prior written consent of the other parties, except as otherwise provided herein.
SECTION 5.4 Notices. All notices required or permitted hereunder shall
-------
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified; (b) when sent by confirmed facsimile if sent during
normal business hours of the recipient, if not, then on the next business day;
(c) five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (d) one (1) business day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent, with
respect to the Company and the Investor Stockholders, to their respective
addresses specified in the Stock Purchase Agreement (or at such other address as
any such party may specify by like notice) and, with respect to any other party,
to the address of such party as shown in the stock record books of the Company
(or at such other address as any such party may specify to all of the above by
like notice).
SECTION 5.5 Further Assurances. At any time or from time to time after
------------------
the date hereof, the parties agree to cooperate with each other, and at the
request of any other
15
party, to execute and deliver any further instruments or documents and to take
all such further action as the other party may reasonably request in order to
evidence or effectuate the consummation of the transactions contemplated hereby
and otherwise to carry out the intent of the parties hereunder.
SECTION 5.6 Entire Agreement. Except as otherwise expressly set forth herein,
----------------
this document, the Stock Purchase Agreement and the Registration Rights
Agreement embody the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, that may have related to the subject matter hereof in any way.
SECTION 5.7 Delays or Omissions. It is agreed that no delay or omission to
-------------------
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of or in
any similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
the part of any party hereto of any breach, default or noncompliance under this
Agreement or any waiver on such party's part 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, by law, or otherwise afforded to any party, shall be cumulative and
not alternative.
SECTION 5.8 Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement
-------------------------------------------------
shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York without regard to the principles of conflicts of
law thereof. Each party hereto hereby irrevocably submits to the nonexclusive
jurisdiction of the courts of the state of New York and of the United States of
America sitting in the City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
the venue thereof may not be appropriate, that such suit, action or proceeding
is improper or that this Agreement or any of the documents referred to in this
Agreement may not be enforced in or by said courts, and each party hereto
irrevocably agrees that all claims with respect to such suit, action or
proceeding may be heard and determined in such a New York state or federal
court. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party in the manner provided in Section 12(b) of
the Stock Purchase Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
16
SECTION 5.9 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 invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
SECTION 5.10 Enforcement. Each party hereto acknowledges that money damages
-----------
would not be an adequate remedy in the event that any of the covenants or
agreements in this Agreement are not performed in accordance with its terms, and
it is therefore agreed that in addition to and without limiting any other remedy
or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
the terms and provisions hereof.
SECTION 5.11 Titles and Subtitles. The titles of the sections and subsections
--------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement
SECTION 5.12 Legend. Each certificate evidencing any of the shares of Equity
------
Securities held by the parties hereto shall bear a legend substantially as
follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS ANDCONDITIONS OF THE SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT, DATED AS OF __________, 2001, AS THE
SAME MAY BE AMENDED, A COPY OF WHICH THE COMPANY WILL FURNISH
TO THE HOLDER OF THIS CERTIFICATE UPON REQUEST AND WITHOUT
CHARGE."
SECTION 5.13 Appointment of Agent. Each of the Investor Stockholders hereby
--------------------
irrevocably appoints UBS (the "Agent") to act as its true and lawful agent and
attorney-in-fact and representative with full power and authority in its name,
place and stead to act on its behalf for all purposes under this Agreement. The
foregoing power of attorney is hereby declared to be irrevocable and coupled
with an interest, and such appointment includes, among other powers, the power
and authority to exercise all rights and privileges, and to discharge all
obligations, of the Investor Stockholders under this Agreement, including:
(a) designating and removing the Investor Representatives and
otherwise taking all actions required to be taken by the Investor Stockholders
under Article II, including providing consents;
(b) providing consents to Transfers under Section 3.3;
17
(c) giving and receiving notices hereunder and service of process in
any legal action or other proceedings arising out of or related to this
Agreement and the transactions hereby; and
(d) amending or waiving the provisions of this Agreement.
Any instructions given by the Agent hereunder shall be validly given on behalf
of each of the Investor Stockholders, and the Company shall have the right to
rely thereon. UBS hereby accepts the appointment provided for in this Agreement
and agrees to be bound by the provisions of this Agreement. All decisions and
actions by the Agent shall be binding upon each of the Investor Stockholders and
no Investor Stockholders shall have the right to object, dissent, protest or
otherwise contest the same. The Company may conclusively rely upon any action
taken by the Agent hereunder.
SECTION 5.14 Termination of Joint Venture Agreement. By its execution hereof,
--------------------------------------
each of the Company, ITI, Emerging Networks, Inc. and Casty confirms that the
Subscription and Joint Venture Agreement, dated as of November 23, 1998, as
amended, by and among the Company, Emerging Networks, Inc., ITI and Casty was
terminated as of June 15, 2000.
SECTION 5.15 Stockholder's Representation.
----------------------------
(a) Each of the Stockholders severally (and not jointly) represents
and warrants that all of the Equity Securities owned by it/him and any of
its/his Affiliates is set forth on Exhibit A hereto and that each such
---------
Stockholder or it/his Affiliate owns such Equity Securities listed opposite
its/his/their name free and clear of all Encumbrances (as defined in the Stock
Purchase Agreement) except with respect to Casty, an option to purchase 100,000
shares of the Common Stock owned by Casty at a price of $.625 per share has been
issued to ▇▇▇▇▇▇ ▇▇▇▇▇, a copy of which is attached hereto as Exhibit B.
---------
(b) Each of Shalom and ITI severally (and not jointly) represents and
warrants that Shalom controls the voting and disposition rights on all shares of
Equity Securities owned by ITI or any of ITI's Affiliates.
SECTION 5.16 Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument. This Agreement may be
executed by facsimile signature(s).
[Remainder of Page Intentionally Left Blank]
18
IN WITNESS WHEREOF, the parties hereto have executed the SECOND AMENDED AND
RESTATED STOCKHOLDERS AGREEMENT as of the date set forth in the first paragraph
hereof.
IFX CORPORATION
By: ____________________________________
Name:
Title:
UBS CAPITAL AMERICAS III, L.P.
By: UBS Capital Americas III, LLC
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
UBS CAPITAL LLC
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
INTERNATIONAL TECHNOLOGY
INVESTMENTS, LC
By: ____________________________________
Name:
Title:
19
__________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
CASTY GRANTOR SUBTRUST
By:_________________________________
Name:
Title:
The provisions of Section 5.14 of
this Agreement are hereby acknowledged
and agreed to.
EMERGING NETWORKS, INC.
By: __________________________
Name:
Title:
20
EXHIBIT A
---------
Equity Securities Ownership by Stockholders and their Affiliates
See Attachment hereto.
[To Be Prepared By The Company]
21
EXHIBIT B
---------
Option
See Attachment hereto.
22