EXHIBIT 10.27
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (the "AGREEMENT") dated as of August 27, 1999 among
PRINCES GATE INVESTORS II, L.P., ACORN PARTNERSHIP II, L.P., PGI INVESTMENTS
LIMITED, INVESTORS INVESTMENTS AB and MARINBEACH UNITED S.A. (collectively,
"STOCKHOLDER"), VIATEL, INC., a Delaware corporation ("PARENT"), VIATEL
ACQUISITION CORP., a Delaware corporation and a wholly-owned subsidiary of
Parent ("PARENT SUBSIDIARY"), and DESTIA COMMUNICATIONS, INC., a Delaware
corporation ("COMPANY").
W I T N E S S E T H:
WHEREAS, Parent, Company and Parent Subsidiary are entering into an
Agreement and Plan of Merger of even date herewith (the "MERGER AGREEMENT"),
pursuant to which Parent will acquire all of the outstanding shares of voting
common stock, $0.01 par value per share (the "VOTING SHARES"), and all of the
outstanding shares of non-voting common stock, $0.01 par value per share (the
"NON-VOTING SHARES," and together with the Voting Shares, the "COMMON STOCK"),
of the Company pursuant to a merger of Parent Subsidiary with and into Company
(the "MERGER");
WHEREAS, Stockholder collectively owns, as of the date hereof, 3,613,823
shares of Common Stock (the "EXISTING SHARES," and together with any shares of
Common Stock acquired by Stockholder after the date hereof and prior to the
termination hereof, the "SHARES");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, and in reliance upon Stockholder's representations, warranties,
covenants and agreements hereunder, Parent and Parent Subsidiary have requested
that Stockholder agree, and Stockholder has agreed, to enter into this
Agreement; and
WHEREAS, this Agreement is being entered into concurrently with the
execution of the Merger Agreement;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained and for such other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, it is agreed as follows. Capitalized terms
not otherwise defined herein shall have the meaning set forth in the Merger
Agreement.
1. AGREEMENT TO VOTE. Stockholder hereby agrees that, during the term this
Agreement, at any meeting of the stockholders of Company, however called, and in
any action by consent of the stockholders of Company, however taken, Stockholder
shall cause the Shares to be present for quorum purposes and to vote at such
meeting and shall cause the Shares to be voted in any such consent, and in
either case, shall: (a) vote the Shares in favor of the adoption of the Merger
Agreement; (b) vote the Shares against any action or agreement that would, or
could reasonably be expected to, result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Company under
the Merger Agreement or that would result in a
failure to satisfy any condition on the part of the Company or its stockholders
to be satisfied under the Merger Agreement; (c) vote the Shares against any
action or agreement that would, or could reasonably be expected to, impede,
interfere with, delay, postpone or attempt to discourage the Merger, including,
but not limited to, (i) any extraordinary corporate transaction (other than the
Merger), such as a merger, other business combination, recapitalization,
reorganization or liquidation, involving Company (a "BUSINESS COMBINATION
TRANSACTION"), (ii) a sale or transfer of a material amount of assets of Company
or any of its Subsidiaries (as defined in the Merger Agreement), (iii) any
change in the management or board of directors of Company, except as otherwise
agreed to in writing by Parent, (iv) any material change in the present
capitalization of the Company or (v) any other material change in the corporate
structure or business of Company; and (d) without limiting the foregoing,
consult with Parent prior to any such meeting or consent and, in either case,
vote such Shares in such manner as is determined by Parent to be in compliance
with the provisions of this Section 1. Stockholder acknowledges receipt and
review of a copy of the Merger Agreement. In furtherance of this Section 1,
Stockholder hereby irrevocably grants to, and appoints, Parent, and any
individual designated in writing by it, and each of them individually, as its
proxy and attorney-in-fact (with full power of substitution), for and in its
name, place and stead, to vote the Shares at any meeting of the stockholders of
the Company called with respect to any of the matters specified in this
Agreement. The Stockholder understands and acknowledges that Parent is entering
into the Merger Agreement in reliance upon Stockholder's execution and delivery
of this Agreement. The Stockholder hereby affirms that the irrevocable proxy set
forth in this Section 1 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of Stockholder under this Agreement. Except as otherwise provided for
herein, Stockholder hereby (i) affirms that the irrevocable proxy is coupled
with an interest and may under no circumstances be revoked, (ii) ratifies and
confirms all that the proxies appointed hereunder may lawfully do or cause to be
done by virtue hereof and (iii) affirms that such irrevocable proxy is executed
and intended to be irrevocable in accordance with the provisions of Section
212(e) of the Delaware General Corporation Law (as defined in the Merger
Agreement). Notwithstanding any other provision of this Agreement, the
irrevocable proxy granted hereunder shall automatically terminate upon the
termination of this Agreement pursuant to Section 4.
2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Princes Gate Investors II,
L.P., Acorn Partnership II, L.P., PGI Investments Limited, Investors Investments
AB and Marinbeach United S.A. represent and warrant to Parent and Parent
Subsidiary with respect to that part of the Existing Shares owned by it as
follows:
2.1 OWNERSHIP OF SHARES. On the date hereof, Stockholder is the sole record
and beneficial owner of the Existing Shares, except as set forth on Schedule 2.1
attached hereto. For purposes of this Agreement, beneficial ownership of
securities shall be determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). On the date
hereof and at the Closing Date (as defined in the Merger Agreement), neither
Stockholder nor any Affiliate (as defined in the Merger Agreement) of
Stockholder (other than Company) owns or will own, of record or beneficially,
solely or jointly with others, (i) any shares of Common Stock other than the
Existing Shares and shares of Common Stock acquired upon the exercise of
employee stock options granted by the Company and listed on Schedule 2.1
attached hereto or (ii) any securities convertible into or exchangeable or
exercisable for shares of Common Stock or any rights to acquire any shares of
Common Stock other than employee stock
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options granted by Company and listed on Schedule 2.1 attached hereto. Except as
set forth on Schedule 2.1 attached hereto, Stockholder currently has with
respect to the Existing Shares, and at Closing will have with respect to the
Shares, good, valid and marketable title, free and clear of all liens,
encumbrances, restrictions, options, warrants, rights to purchase, voting
agreements or voting trusts, and claims of every kind (other than the
encumbrances created by this Agreement and other than restrictions on transfer
under applicable federal and state securities laws). Stockholder has not and
will not pledge more than 2,730,000 of the Existing Shares.
2.2 POWER; BINDING AGREEMENT. Stockholder has the full legal right, power
and authority to enter into and perform all of Stockholder's obligations under
this Agreement. The execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which Stockholder is a party
including, without limitation, any voting agreement, stockholder agreement or
voting trust. This Agreement has been duly executed and delivered by Stockholder
and constitutes a legal, valid and binding agreement of Stockholder, enforceable
in accordance with its terms. Neither the execution or delivery of this
Agreement nor the consummation by Stockholder of the transactions contemplated
hereby will (a) require any consent or approval of or filing with any third
party, including any governmental or other regulatory body, other than filings
required under the federal securities laws and consents or waivers listed on
Schedule 2.2 attached hereto, all of which have been obtained, or (b) constitute
a violation of, conflict with or constitute a default under, any material
contract, commitment, agreement, understanding, arrangement or other restriction
of any kind to which Stockholder is a party or by which Stockholder or his
material property is bound.
2.3 FINDER'S FEES. No person or entity is, or will be, entitled to any
commission or finder's fees from Stockholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. REPRESENTATIONS AND WARRANTIES OF PARENT. Each of Parent and Parent
Subsidiary represents and warrants to Stockholder as follows:
3.1 AUTHORITY. Each of Parent and Parent Subsidiary has the full legal
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution, delivery and performance of this Agreement
by each of Parent and Parent Subsidiary will not violate or conflict with any
other agreement to which it is a party. This Agreement has been duly executed
and delivered by each of Parent and Parent Subsidiary and constitutes a legal,
valid and binding agreement of each of Parent and Parent Subsidiary, enforceable
against Parent and Parent Subsidiary in accordance with its terms. Neither the
execution or delivery of this Agreement nor the consummation of the transactions
contemplated hereby by each of Parent and Parent Subsidiary will (a) require any
consent or approval of or filing with any third party, including any
governmental or other regulatory body, other than filings required under the
federal securities laws, or (b) constitute a violation of, conflict with or
default under, any material contract (including any registration rights),
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Parent or Parent Subsidiary is a party or by which either of them
or their material property is bound.
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3.2 FINDER'S FEES. No person or entity is, or will be, entitled to any
commission or finder's fee from Parent or Parent Subsidiary in connection with
this Agreement or the transactions contemplated hereby exclusive of any
commission or finder's fees referred to in the Merger Agreement.
4. TERMINATION. The term of this Agreement commences upon the execution and
delivery of this Agreement by all of the parties hereto and continues until it
is terminated in accordance with its terms. This Agreement shall terminate on
the earliest of (a) the Effective Time (as defined in the Merger Agreement) or
(b) the date 180 days after the termination of the Merger Agreement in
accordance with its terms; PROVIDED, HOWEVER, the termination of this Agreement
shall be immediate if the Merger Agreement is terminated pursuant to Sections
7(a)(i), 7(a)(ii), 7(a)(iii), 7(a)(vi), 7(a)(vii) or 7(a)(ix); and, PROVIDED,
FURTHER, (i) the provisions of Sections 5 and 9 through 18 shall survive any
termination of this Agreement, (ii) the provisions of Sections 6.3, 6.4 and 7
shall survive the termination of this Agreement if this Agreement terminates
pursuant to clause (a) above and (iii) the provisions of Sections 2 and 3 shall
survive for a period of one year after any termination of this Agreement.
5. EXPENSES. Except as provided in Section 7, each party hereto will pay all of
its expenses in connection with the transactions contemplated by this Agreement,
including, without limitation, the fees and expenses of its counsel and other
advisers.
6.COVENANTS
6.1 Except in accordance with the provisions of this Agreement, Stockholder
(and the Company, pursuant to Section 6.8 hereof) agrees, prior to the
termination of this Agreement as provided in Section 4 above, not to, directly
or indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise dispose of
(including by merger, testamentary disposition, interspousal disposition
pursuant to a domestic relations proceeding or otherwise or otherwise by
operation of law), or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares, PROVIDED, HOWEVER, that
Stockholder may transfer Shares, with the prior written consent of Parent, which
shall not be unreasonably withheld, to a trust of which there are no
beneficiaries other than the parents, spouse or children of Stockholder, or
otherwise make transfers for estate planning purposes, so long as the trust and
the trustee(s), or other transferee, thereof deliver a written agreement to
Parent, reasonably acceptable to Parent, to be bound by the restrictions set
forth in this Agreement, and Parent receives an opinion of counsel reasonably
satisfactory to it that this Agreement is binding upon such trust and the
trustee(s), or other transferee, thereof, as if such trust and trustee(s), or
other transferee, were Stockholder. Any action taken in violation of this
Section 6.1(a) shall be void and of no effect;
(b) grant any proxies with respect to any Shares, deposit any Shares
into a voting trust or enter into a voting agreement with respect to any Shares;
or
(c) take any action to solicit, initiate or encourage any inquiries or
proposals that constitute, or could reasonably be expected to lead to, an
Acquisition Proposal (as defined in
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the Merger Agreement) or engage in negotiations or discussions with any person
or entity (or group of persons and/or entities) other than Parent or its
Affiliates concerning, or provide any non-public information to any person or
entity relating, to an Acquisition Proposal or otherwise assist or facilitate
any effort or attempt by any person or entity (other than Parent and Parent
Subsidiary) to make or implement an Acquisition Proposal. Stockholder will
immediately cease and terminate any existing solicitation, initiation,
encouragement, activity, discussion or negotiation on its part with any parties
conducted heretofore with respect to any proposed, potential or contemplated
Acquisition Proposal, and will notify Parent promptly if it becomes aware of any
Acquisition Proposal or any request for non-public information in connection
with an Acquisition Proposal or for access to the properties, books or records
of the Company by any person or entity that informs the Company (or its
officers, directors, representatives, agents, Affiliates or associates) that it
is considering making or has made an Acquisition Proposal. Such notice shall be
made orally and in writing and shall indicate the identity of the offeror and
the terms and conditions of such proposal, inquiry or contact.
6.2 Stockholder agrees, during the term of this Agreement, to notify Parent
promptly of the number of any shares of Common Stock acquired by Stockholder
after the date hereof.
6.3 [INTENTIONALLY OMITTED]
6.4 [INTENTIONALLY OMITTED]
6.5 [INTENTIONALLY OMITTED]
6.6 [INTENTIONALLY OMITTED]
6.7 [INTENTIONALLY OMITTED]
6.8 The Company recognizes and agrees to use commercially reasonable
efforts to enforce the Transfer restrictions placed on the Shares under this
Agreement.
7. REGISTRATION RIGHTS. [INTENTIONALLY OMITTED]
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as expressly provided
otherwise, all representations, warranties, covenants and agreements made by
Stockholder or Parent in this Agreement shall survive the termination of this
Agreement as set forth in Section 4 and any investigation at any time made by or
on behalf of any party.
9. NOTICES. All notices or other communications required or permitted hereunder
shall be in writing (except as otherwise provided herein), given in the manner
provided in the Merger Agreement, and shall be deemed duly given when received,
addressed as follows:
If to Parent or Parent Subsidiary:
Viatel, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
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Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxx & Xxxxxx LLP
Two Stamford Plaza
000 Xxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Stockholder:
Princes Gate Investors II, L.P.
c/o Morgan Xxxxxxx & Co.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Company:
Destia Communications, Inc.
00 Xxxxx 00 Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx, Esq.
Facsimile: (000) 000-0000
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10. ENTIRE AGREEMENT: AMENDMENT. This Agreement, together with the documents
expressly referred to herein, constitute the entire agreement among the parties
hereto with respect to the subject matter contained herein and supersede all
prior agreements and understandings among the parties with respect to such
subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by Parent, Parent
Subsidiary and Stockholder.
11. LEGEND. In addition to any other legend which may be required by applicable
law, each share certificate representing shares which are subject to this
Agreement shall have endorsed, to the extent appropriate, upon its face the
following words:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY JURISDICTION. SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
ASSIGNED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO (I) A REGISTRATION STATEMENT WITH RESPECT TO
SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR APPLICABLE
STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM REGISTRATION
UNDER SUCH ACT, OR APPLICABLE STATE SECURITIES LAW, RELATING TO
THE DISPOSITION OF SECURITIES, INCLUDING RULE 144, PROVIDED AN
OPINION OF COUNSEL IS FURNISHED TO THE COMPANY, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND/OR APPLICABLE STATE SECURITIES LAW IS AVAILABLE.
IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER
COMPLIES WITH THE PROVISIONS OF A STOCKHOLDER AGREEMENT DATED AS
OF AUGUST 27, 1999 (THE "STOCKHOLDER AGREEMENT"), A COPY OF WHICH
IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE
COMPANY. NO TRANSFER OF THE SECURITIES WILL BE MADE ON THE BOOKS
OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH
THE TERMS OF SUCH STOCKHOLDER AGREEMENT. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO OTHER RIGHTS
AND OBLIGATIONS AS SET FORTH IN THE STOCKHOLDER AGREEMENT.
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12. ASSIGNS. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, assigns and personal
representatives, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
13. GOVERNING LAW. EXCEPT AS EXPRESSLY SET FORTH BELOW, THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES
OF CONFLICTS OF LAWS THEREOF. IN ADDITION, EACH OF STOCKHOLDER, PARENT, PARENT
SUBSIDIARY AND COMPANY HEREBY AGREE THAT ANY DISPUTE ARISING OUT OF THIS
AGREEMENT SHALL BE HEARD IN THE APPROPRIATE COURT OF THE STATE OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND, IN
CONNECTION THEREWITH, EACH PARTY TO THIS AGREEMENT HEREBY CONSENTS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ANY SERVICE OF PROCESS IN CONNECTION
WITH ANY DISPUTE ARISING OUT OF THIS AGREEMENT MAY BE GIVEN TO ANY OTHER PARTY
HERETO BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT THE RESPECTIVE ADDRESSES
SET FORTH IN SECTION 9 ABOVE.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of any
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of any
provision of this Agreement, the aggrieved party shall be entitled to obtain in
any court of competent jurisdiction a decree of specific performance or to
enjoin the continuing breach of such provision, in each case without the
requirement that a bond be posted and without having to prove actual damages, as
well as to obtain damages for breach of this Agreement. By seeking or obtaining
such relief, the aggrieved party will not be precluded from seeking or obtaining
any other relief to which it may be entitled.
15. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed,
including execution by facsimile, in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents and take such additional actions as may be necessary or
desirable to consummate the transactions contemplated by this Agreement.
18. THIRD-PARTY BENEFICIARIES. Nothing in this Agreement, expressed or implied,
shall be construed to give any person or entity other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, Parent, Parent Subsidiary, Stockholder, Princes Gate
Investors II, L.P., Acorn Partnership II, L.P., PGI Investments Limited,
Investors Investments AB, Marinbeach United S.A. and Company have executed this
Agreement or caused this Agreement to be executed by their duly authorized
officers, as the case may be, each as of the date and year first above written.
PRINCES GATE INVESTORS II, L.P.
By:_________________________________
Name:
Title:
ACORN PARTNERSHIP II, L.P.
By:_________________________________
Name:
Title:
PGI INVESTMENTS LIMITED
By:_________________________________
Name:
Title:
INVESTORS INVESTMENTS AB
By:_________________________________
Name:
Title:
MARINBEACH UNITED S.A.
By:_________________________________
Name:
Title:
VIATEL, INC.
By:_________________________________
Name:
Title:
VIATEL ACQUISITION CORP.
By:_________________________________
Name:
Title:
DESTIA COMMUNICATIONS, INC.
By:_________________________________
Name:
Title:
SCHEDULE 2.1
NONE.
SCHEDULE 2.2
NONE.
