Exhibit 10.21
AMENDMENT NO. 1 TO SHAREHOLDERS' AGREEMENT
AMENDMENT NO. 1 TO SHAREHOLDERS' AGREEMENT, dated as of February 2, 2000
(this "Amendment") to that certain Shareholders' Agreement dated as of April 23,
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1999 between BROADVIEW NETWORKS HOLDINGS, INC. (f/k/a Coaxicom, Inc.), a
Delaware corporation (the "Company"), ▇▇▇▇▇ Communications Fund, L.P. ("▇▇▇▇▇"),
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those parties listed on Schedule I to the (i) Series A Preferred Stock Purchase
Agreement, dated as of January 29, 1998, by and among the Company and the Series
A Holders, and (ii) the Series B Preferred Stock Purchase Agreement, dated as of
September 9, 1998, by and among the Company and the Series B Holders, and each
of the individuals listed on the signature pages thereto under the heading
"Founders" (collectively the "Shareholders"), is made by and between the Company
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and the Shareholders.
WHEREAS, ▇▇▇▇▇ desires to assign portions of its option (the "▇▇▇▇▇
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Option") to purchase shares of 8% Series D Convertible Redeemable Preferred
Stock of the Company ("Series D Preferred Stock") to ▇▇▇▇ ▇▇▇▇▇ and to certain
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other parties (together with ▇▇▇▇ ▇▇▇▇▇, the "Assignees"), and the Company and
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the Shareholders desire to approve and consent to such assignment;
WHEREAS, the Shareholders that hold Series C Convertible Redeemable
Preferred Stock of the Company and the Assignees desire to exercise their
options and purchase, and the Company desires to issue and sell, an aggregate of
6,006,959 shares of Series D Preferred Stock;
WHEREAS, the Shareholders desire to acknowledge that each Assignee is a
Permitted Transferee of ▇▇▇▇▇, and waive any and all rights of first offer, tag
along rights and preemptive rights to which they may be entitled under the
Shareholders' Agreement with respect to ▇▇▇▇▇'▇ assignment of portions of the
▇▇▇▇▇ Option or the Company's issuance of Series D Preferred Stock; and
WHEREAS, the Shareholders desire to extend the date by which the Board of
Directors of the Company must be reconstituted under the Shareholders'
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
obligations hereinafter set forth, the Company and the Purchasers hereby agree
as follows:
SECTION 1. Definitions. Capitalized terms used but not otherwise defined
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herein shall have the meaning given to them in the Shareholders' Agreement or,
if not defined therein, in the Company's Certificate of Incorporation, as
amended.
SECTION 2. Amendments to Shareholders' Agreement. The Shareholders'
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Agreement is hereby amended as of the date hereof as follows:
(a) The first sentence is amended and restated in its entirety as follows:
"THIS SHAREHOLDERS' AGREEMENT (this "Agreement") is made and
entered into effective as of April 23, 1999 among Broadview Networks
Holdings, Inc. (f/k/a Coaxicom, Inc.), a Delaware corporation (the
"Company"), ▇▇▇▇▇ Communications Fund, L.P. ("▇▇▇▇▇"), ▇▇▇▇▇'▇
Permitted Transferees who appear as signatories to this Agreement,
▇▇▇▇ ▇▇▇▇▇, those parties listed on Schedule I to the (i) Series A
Preferred Stock Purchase Agreement (the "Series A Holders"), dated as
of January 29, 1998, by and among the Company and the Series A
Holders, and (ii) Series B Preferred Stock Purchase Agreement (the
"Series B Holders"), dated as of September 9, 1998, by and among the
Company and the Series B Holders (the Series A Holders and the Series
B Holders are collectively referred to herein as, the "Holders"), and
each of the individuals listed on the signature pages hereto under the
heading "Founders" (collectively, the Founders, the Holders, ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ and their respective Permitted Transferees (as defined
herein) are collectively referred to herein, as the "Stockholders").
(b) subsection (iii) of the first recital is amended and restated in its
entirety as follows:
(iii) the purchase by the Holders of an aggregate of 6,006,959
shares of 8% Series D Convertible Redeemable Preferred Stock of the
Company (the "Series D Preferred Shares" and, together with the Series
C Preferred Shares, the "Priority Preferred Shares"), for an aggregate
additional purchase price of Twenty Eight Million Dollars
($28,000,000);
(c) Section 1(a) is amended by substituting "January 31, 2000" for
"December 31, 1999" as the date by which the Board shall be reconstituted to
provide for five (5) members.
(d) Section 13 is hereby amended and restated in its entirety as follows:
13. Rights Regarding Issuance of Priority Preferred Shares. Except
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for the purchase by the Series A Holders and Series B Holders of
Series C Stock and Series D Stock, in each case as provided in
the Securities Purchase Agreement, as amended, the Stockholders
hereby waive any other rights they may have to purchase Priority
Preferred Shares, including, without limitation, any right of
first offer or preemptive rights with respect to ▇▇▇▇▇'▇
assignment of portions of the ▇▇▇▇▇ Option to its Permitted
Transferees and to ▇▇▇▇ ▇▇▇▇▇ or the Company's issuance of Series
D
Preferred Stock to each of ▇▇▇▇▇'▇ Permitted Transferees and to
▇▇▇▇ ▇▇▇▇▇.
SECTION 3. Consent to Assignment by ▇▇▇▇▇. The Shareholders hereby
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approve and consent to ▇▇▇▇▇'▇ assignment of its option to purchase 214,534
shares of Series D Preferred Stock to ▇▇▇▇ ▇▇▇▇▇ and to ▇▇▇▇▇'▇ assignment of
its option to purchase 2,038,075 shares of Series D Preferred Stock to the State
Treasurer of the State of Michigan, Custodian of the Michigan Public School
Employees' Retirement System, State Employees' Retirement System and Michigan
State Police Retirement System (the "State of Michigan") on or before February
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4, 2000, conditional upon the State of Michigan exercising its assigned option
on or before such date. ▇▇▇▇▇ agrees that any portion of such option that
remains unexercised after such date will be exercised within two business days
by ▇▇▇▇▇. The Shareholders acknowledge that, as a result of such approval and
consent, the Assignees are each a Permitted Transferee of ▇▇▇▇▇ and the
provisions of Section 3 and Section 4 of the Shareholders' Agreement are not
applicable to such assignments and transfers by ▇▇▇▇▇.
SECTION 4. Agreement to be Bound by Shareholders' Agreement. Upon each of
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the Assignees' execution of this Amendment, the Shareholders' Agreement shall be
binding upon and inure to the benefit of each of them and their respective
permitted assigns.
SECTION 5. Capitalization. The Company hereby represents and warrants to
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the Shareholders that the authorized and issued capital stock of the Company
immediately prior to and immediately after the Closing is set forth in Schedule
A attached hereto.
SECTION 6. Waiver of Preemptive Rights. Each Shareholder hereby waives
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any preemptive rights to which he or it may be entitled under the Stockholders
Agreement with respect to all issuances of capital stock or other securities by
the Company prior to the date hereof that are reflected in Schedule A.
SECTION 7. No Implied Amendments. Except as herein amended, the
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Shareholders' Agreement shall remain in full force and effect and is ratified in
all respects. On and after the effectiveness of this Amendment, each reference
in the Shareholders' Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each reference to the Shareholders'
Agreement in any other agreements, documents or instruments executed and
delivered pursuant to the Securities Purchase Agreement, shall mean and be a
reference to the Shareholders' Agreement, as amended by this Amendment.
SECTION 8. Effective Date. This Amendment shall be effective as of the
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date hereof.
SECTION 9. Counterparts. This Amendment may be executed by the parties
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hereto in several counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
BROADVIEW NETWORKS HOLDING, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
By:______________________________
Name:
Title:
▇▇▇▇▇ COMMUNICATIONS FUND, L.P.
By: ▇▇▇▇▇ Capital Partners, LLC
Its General Partner
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
By:______________________________
Name:
Title:
The State Treasurer of the State of Michigan,
Custodian of the Michigan Public School
Employees' Retirement System, State Employees'
Retirement System and Michigan State Police
Retirement System
By:______________________________
Name:
Title:
▇▇▇▇ ▇▇▇▇▇
______________________________
COMMUNICATIONS VENTURES II, L.P.
/s/ ▇▇▇▇▇▇ Van der Meer
By:______________________________
Name:
Title:
COMMUNICATIONS VENTURES II
AFFILIATES FUND, L.P.
/s/ ▇▇▇▇▇▇ Van der Meer
By:______________________________
Name:
Title:
NEW ENTERPRISE ASSOCIATES VII, L.P.
By: NEA Partners VII, L.P.,
General Partner
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
By:______________________________
Name:
Title:
NEA PRESIDENTS FUND
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
By:______________________________
Name:
Title:
NEA VENTURES 1998, L.P.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
By:______________________________
Name:
Title:
WPG ENTERPRISE FUND III, L.L.C.
By: WPG VC Fund Adviser, LLC.,
Fund Investment Advisory Member
By:______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ VENTURE
ASSOCIATES IV, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
By:________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
WPG INFORMATION SCIENCES
ENTREPRENEUR FUND, L.P.
By: WPG VC Fund Adviser, L.L.C.
General Partner
By:________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ VENTURE
ASSOCIATES IV CAYMAN, L.P.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Partner
By:________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇