EXHIBIT E
FOURTH AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
among
IFX CORPORATION,
UBS CAPITAL AMERICAS III, L.P.,
UBS CAPITAL LLC,
INTERNATIONAL TECHNOLOGY INVESTMENTS, LC,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
LSC, LLC,
JAK ▇▇▇▇▇▇▇▇,
and
▇▇▇ ▇. ▇▇▇▇▇
dated as of June 28, 2002
IFX CORPORATION
FOURTH AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THIS FOURTH AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this
"Agreement") is entered as of June 28, 2002, among IFX CORPORATION, a Delaware
corporation (the "Company"), UBS CAPITAL AMERICAS III, L.P., a Jersey, Channel
Islands 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"), JAK ▇▇▇▇▇▇▇▇,
individually ("▇▇▇▇▇▇▇▇"), LSC, LLC, a Delaware limited liability company
("LSC") and ▇▇▇ ▇. ▇▇▇▇▇ ("Casty"; ITI, LSC, Shalom, Eidelstein, Bursztyn,
Casty and any other Person who becomes a party to this Agreement pursuant to
the last sentence of Section 5.2, individually, a "Stockholder," and
collectively, the "Stockholders").
RECITALS
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 certain of the Stockholders entered into that certain Amended
and Restated Stockholders Agreement dated as of June 15, 2000; and
WHEREAS, the Company and the Investor Stockholders entered into that
certain IFX Corporation Preferred Stock Purchase Agreement, dated March 13,
2001, pursuant to which the Investor Stockholders purchased 4,418,262 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, Casty Grantor Subtrust and certain of the Stockholders (except
Casty) entered into that certain Second Amended and Restated Stockholders
Agreement dated as of May 7, 2001; and
WHEREAS, the Company and the Investor Stockholders entered into the
IFX Corporation Series C Convertible Preferred Stock Purchase Agreement, dated
October 11, 2001, pursuant to which the Investor Stockholders acquired
3,833,333 shares of newly issued Series C Preferred Stock; and
WHEREAS, as a condition to and in consideration of the Investor
Stockholders' purchase of Series C Preferred Stock, the Company, the Investor
Stockholders and certain
of the Stockholders entered into that certain Third Amended and Restated
Stockholders Agreement dated as of February 19, 2002 (the "Existing
Agreement"); and
WHEREAS, the Company, the Investor Stockholders, LSC, ▇▇▇▇▇▇▇▇ and ITI
have entered into the IFX Corporation Series D Convertible Preferred Stock
Purchase Agreement, dated February 19, 2002 (the "Stock Purchase Agreement"),
pursuant to which the Investor Stockholders, ITI, ▇▇▇▇▇▇▇▇ and LSC will
acquire shares of newly issued Series D Preferred Stock; and
WHEREAS, as a condition to and in consideration of the purchase of
Series D Preferred Stock by UBS, ITI, ▇▇▇▇▇▇▇▇ and LSC, the Company, the
Investor Stockholders, and the Stockholders have agreed to amend and restate
the Existing Agreement as 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
SECTION 1.1 Certain Defined Terms. As used herein, the following terms
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.
"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
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Stock, 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.
"▇▇▇▇▇▇▇▇" has the meaning assigned to such term in the preamble.
"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 and 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.
"Certificates of Designation" means, collectively, the Series A
Certificate of Designation, the Series B Certificate of Designation, the
Series C Certificate of Designation, the Series D Certificate of Designation
and any other Certificate of Designation approved and filed by the Company
with the Secretary of State of the State of Delaware.
"Closing" has the meaning assigned to such term in the Stock Purchase
Agreement.
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"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.
"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 Stockholder
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.
"LSC" has the meaning assigned to such term in the preamble.
"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 (i) in the case of ITI and Shalom, the
Transfers permitted in the first sentence of Section 3.3(a), (ii) in the case
of Eidelstein or ▇▇▇▇▇▇▇▇,
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the Transfers permitted in the second sentence of Section 3.3(a), (iii) in the
case of Casty or LSC, any Transfer described in the first sentence of Section
3.4(a) hereof, and (iv) in the case of any other Stockholder, Transfers to or
among such Stockholder's Affiliates.
"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, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and any
other class or series of preferred stock of the Company which is convertible,
directly or indirectly, into Common Stock, whether at the time of issuance or
upon passage of time or the occurrence of some future event.
"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).
"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 Certificate of
Designation, Number, Powers, Preferences and Relative, Participating, Optional
and Other Rights of Series A Convertible Preferred Stock of the Company in the
form filed with the Secretary of State of the State of Delaware, as amended
from time to time.
"Series B Certificate of Designation" means the Amended Certificate of
Designation, Number, Powers, Preferences and Relative, Participating, Optional
and Other Rights of Series B Convertible Preferred Stock of the Company in the
form filed with the Secretary of State of the State of Delaware, as amended
from time to time.
"Series C Certificate of Designation" means the Certificate of
Designation, Number, Powers, Preferences and Relative, Participating, Optional
and Other Rights of Series C Convertible Preferred Stock of the Company in the
form filed with the Secretary of State of the State of Delaware, as amended
from time to time.
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"Series D Certificate of Designation" means the Certificate of
Designation, Number, Powers, Preferences and Relative, Participating, Optional
and Other Rights of Series D Convertible Preferred Stock of the Company in the
form filed with the Secretary of State of the State of Delaware, as amended
from time to time.
"Series A Preferred Stock" means the Series A Convertible Preferred
Stock, par value $1.00 per share, of the Company.
"Series B Preferred Stock" means the Series B Convertible Preferred
Stock, par value $1.00 per share, of the Company.
"Series C Preferred Stock" means the Series C Convertible Preferred
Stock, par value $1.00 per share, of the Company.
"Series D Preferred Stock" means the Series D Convertible 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
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.
(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 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.
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ARTICLE II
CORPORATE GOVERNANCE
SECTION 2.1 Board Representation.
(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 (the "Casty Representative"), (iv) one (1)
shall be an Independent Director designated by the Investor Stockholders
(the "Investor Independent Representative") and (v) one (1) shall be an
Independent Director acceptable to the Investor Stockholders, Casty and
ITI (with such consents not to be unreasonably withheld or delayed) (the
"Independent Representative"). The initial Investor Representatives shall
be ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. Lama and ▇▇▇▇▇▇ ▇▇▇▇▇▇, the initial ITI
Representative shall be Shalom, the initial Casty Representative shall be
Eidelstein, the initial Investor Independent Representative shall be
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the initial Independent Representative shall be
▇▇▇▇▇▇ ▇▇▇▇▇. For purposes hereof, each of the three Investor
Representatives and the Investor Independent Representative shall count as
one of the four Preferred Directors (as defined in the Certificates of
Designation).
(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 Investor Independent
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 Certificates of
Designation. 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 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
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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 designate 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
designate 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 agree not to take any action that would cause the number of
Directors constituting the entire Board to be other than the number
provided in Section 2.1(a) without the written consent of each other party
entitled to designate a Representative.
(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 rights or 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 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 three (3)
Directors, one (1) of whom shall be an Investor Representative and two (2) of
whom shall be Independent Representatives. The Audit Committee shall consist
of three (3) Directors, one (1) of whom shall be an Investor Representative
and two (2) of whom shall be Independent Representatives. 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 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.
(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. Prior to a Qualified
Public Offering, the rights of the Investor Stockholders and any
Stockholder under Sections 2.1 and 2.2 (and the corresponding obligation
of the Stockholders) shall terminate at such time as such Investor
Stockholder or Stockholders, as the case may be (together with their
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respective Affiliates), ceases to own at least 25% of the number of shares
of Common Stock on an as converted basis that such Investor Stockholder or
Stockholders held (together with their respective Affiliates) as of
Closing.
(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 (whether or not, in the case of the Preferred Stock, such Preferred
Stock is then currently convertible at the option of the holder into
Common Stock), 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 under this Article II shall
terminate.
ARTICLE III
TRANSFERS
SECTION 3.1 Investor Stockholder Transfers. Each Investor 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 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 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
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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, Bursztyn, ITI and Shalom.
(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. Each of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ hereby agrees
that neither of them nor any of their respective Affiliates shall Transfer
more than 25,000 shares of Common Stock (determined with respect to each
of ▇▇▇▇▇▇▇▇ and Eidelstein separately) 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, Bursztyn, 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
___________________________________ 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 LSC and Casty.
(a) Casty and LSC agree that neither they nor any of their
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 March 31, 2001),
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, Casty or LSC may
Transfer all or any of
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their 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. Notwithstanding anything
contained in this Agreement to the contrary, the number of shares that
Casty shall be deemed to be permitted to transfer under Rule 144(e) of the
Securities Act shall include all shares of Common Stock owned by him which
were not received on exercise of any Company Preferred Stock.
(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 3.4A. Former Tutopia Stockholders. If a Person who was a
common stockholder of ▇▇▇▇▇▇▇.▇▇▇, Inc. becomes a party to this Agreement
directly as a result of Section 2(e) of the Amended and Restated Put Agreement
("Put Agreement") dated as of June 28, 2002, then with respect to any Equity
Securities received in connection with the Put Agreement (but not with respect
to any Equity Securities otherwise held by such Person), such Person (other
than ▇▇▇▇▇▇▇▇) shall be free to Transfer such Equity Securities received under
the Put Agreement, subject to compliance with Sections 3.5 and 3.6 hereof.
Notwithstanding the foregoing, each such stockholder may Transfer any of their
Equity Securities received in connection with the Put Agreement: (a) 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, provided
that each such transferee shall agree in writing to be bound by all of the
provisions of this Agreement to the same extent as if such transferee were
such Stockholder or (b) 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. Notwithstanding anything contained herein to the
contrary, Sections 3.5 and 3.6 will not apply to a Person described in the
first sentence of this Section 3.4A with respect to any Common Stock of the
Company that such Person did not receive by exercising his rights under the
Put Agreement.
SECTION 3.5 Right of First Refusal on Certain Transfers.
11
(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 second sentence of Section 3.4(a) or
the last sentence of Section 3.3(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 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
12
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 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
13
Investor Stockholders (including the other Holders). The parties
acknowledge and agree that any Transfer described in the last sentence of
Section 3.3(a) or the second sentence of Section 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 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
14
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 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.
15
(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 Certificates 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 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 ITI and Shalom and their respective
permitted transferees referred to in the last sentence of Section 3.3(a) and
Casty and LSC and their transferees referred to in the second sentence of
Section 3.4(a), as the case may be, when such Stockholder together with such
permitted transferees owns less than 1.25% of the outstanding Common Stock (on
an as converted basis), (c) with respect to Eidelstein and his permitted
transferees referred to in the last sentence of Section 3.3(a), when
Eidelstein's employment with the Company is terminated, (d) with respect to
▇▇▇▇▇▇▇▇ and his permitted transferees referred to in the last sentence of
Section 3.3(a), when ▇▇▇▇▇▇▇▇'▇ employment with the Company is terminated, (e)
with respect to any other Stockholder (other than a Stockholder described in
the first sentence of Section 3.4A), when such Stockholder together with its
Affiliates owns less than 1.25% of the outstanding Common Stock (on an
as-converted basis), and (f) with respect to all Investor
16
Stockholders and Stockholders, except as expressly provided herein, upon a
Qualified Public Offering.
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
holding a majority of the Common Stock on an as converted basis held by all
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. The parties hereby
consent to any amendment to this Agreement solely to add as a party hereto any
Person acquiring shares of Preferred Stock after the date hereof pursuant to
the Tutopia Put Agreement (as defined in the Stock Purchase Agreement).
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 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.
17
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.
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
18
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 AND CONDITIONS OF THE FOURTH AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT, DATED AS OF JUNE 28, 2002, 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;
(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
19
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).
(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 Successor to Eidelstein. If Eidelstein is unable or
unwilling to exercise voting rights with respect to any proxy granted to him
under Article III hereof, any successor to Eidelstein shall require the
written approval of UBS.
SECTION 5.17 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).
IN WITNESS WHEREOF, the parties hereto have executed the FOURTH
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT as of the date set forth in the
first paragraph hereof.
IFX CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
UBS CAPITAL AMERICAS III, L.P.
By: UBS Capital Americas III, LLC
20
By: /s/ ▇▇▇▇ ▇. Lama
----------------------
Name: ▇▇▇▇ ▇. Lama
Title: Principal
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
UBS CAPITAL LLC
By: /s/ ▇▇▇▇ ▇. Lama
-----------------------------
Name: ▇▇▇▇ ▇. Lama
Title: Attorney-in-Fact
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
INTERNATIONAL TECHNOLOGY
INVESTMENTS, LC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Manager
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇ ▇. ▇▇▇▇▇
LSC, LLC
21
By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------
▇▇▇ ▇▇▇▇▇, Manager
/s/ Jak ▇▇▇▇▇▇▇▇
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Jak ▇▇▇▇▇▇▇▇
The provisions of Section 5.14 of
this Agreement are hereby acknowledged
and agreed to.
EMERGING NETWORKS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
22
EXHIBIT A
EQUITY SECURITIES OWNERSHIP BY STOCKHOLDERS AND THEIR AFFILIATES
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10,201 (1)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 383,245 (2)
▇▇▇ ▇. ▇▇▇▇▇ 2,960,282
International Technology Investments, LC 4,500,000
(1) Includes 10,201 shares subject to a currently exercisable option to
purchase held by ITI
(2) Includes 351,750 shares of Common Stock subject to an option granted to
Eidelstein pursuant to the IFX 1998 Stock Option and Incentive Plan, which
option currently is exercisable
NGEDOCS:705663.11
