Exhibit 4.16
AMENDMENT NO.3 TO
STOCKHOLDERS AGREEMENT, WAIVER AND CONSENT
------------------------------------------
This Amendment No. 3 to Stockholders Agreement and Consent (this
"Amendment") is entered into as of this 16th day of February, 1999, among Focal
Communications Corporation, a Delaware corporation (the "Company") and the
stockholders listed on the signature page hereof (the "Stockholders").
Capitalized terms not otherwise defined in this Agreement are used herein with
the meanings assigned to such terms in the Stock Purchase Agreement, dated
November 27, 1996, by and among the Company and the other parties thereto (as
amended, the "Stock Purchase Agreement").
WHEREAS, the Company and the Stockholders wish to amend the provisions of
the Stockholders Agreement, dated November 27, 1996, by and among the Company
and the other parties thereto (as amended, the "Stockholders Agreement") as
provided in paragraph 1 of this Amendment;
WHEREAS, the Stockholders collectively own all of the Institutional
Investor Stock and at least a majority of the Executive Stock; and
WHEREAS, the Stockholders wish to consent to the amendment (as provided in
paragraph 1 of this Amendment) for purposes of the Stock Purchase Agreement and
to waive certain rights they have with respect to related actions;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties to this Amendment
hereby agree as follows:
1. Amendment to Stockholders Agreement. Pursuant to Section 9 of the
-----------------------------------
Stockholders Agreement:
(a) Section 1(a)(i) of the Stockholders Agreement is hereby amended
and restated to read as follows:
"(i) The authorized number of directors on the Board shall be
established at and remain at eight directors."
(b) Section 1(a)(ii)(E) of the Stockholders Agreement is hereby
amended and restated to read as follows:
"(E) two representatives (the "Outside Directors") designated by
holders of a majority of the outstanding shares of Institutional
Investor Stock and reasonably acceptable to holders of a majority
of the outstanding shares of Management Stock, provided that each
of the representatives
is not a member of the Company's management or an employee or
officer of the Company or any of its Subsidiaries.
(c) All references in the Stockholders Agreement to "Outside
Director" shall hereafter be deemed to refer to "Outside
Directors."
2. Acknowledgment. The parties to this Amendment hereby acknowledge
--------------
that, as of the date of this Amendment, Xxxx X. Xxxxxxxx and Xxxx X. Xxxxxxxxx
constitute the "Outside Directors" as defined above.
3. Consent. For all purposes of the Stock Purchase Agreement (including,
-------
without limitation, Sections 4C(iii), 4C(xii) and 4E thereof), each of the
Stockholders consents to:
a. the amendments set forth in paragraph 1 of this Amendment;
b. the issuance of up to 300 shares of the Company's Class A Common
Stock for $1,576.00 per share (the "Share Issuance");
c. the grant of a stock option (the "Option") to Xxxx X. Xxxxxxxxx
covering 130,000 option units or 260 shares of the Company's
--------------------------------
Class A Common Stock at an exercise price of $ 3.15
--------------
per unit (the "Option Grant").
4. Waiver. On behalf of all holders of Investor Stock, the Stockholders
------
hereby waive any and all rights of holders of Investor Stock under Section 4J of
the Stock Purchase Agreement arising from (i) the Share Issuance, and (ii) the
Option Grant, and (iii) issuance by the Company of any shares of the Company's
capital stock pursuant to any exercise of the Option in accordance with its
terms.
5. Counterparts. This Amendment may be executed in multiple
------------
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
6. Descriptive Headings. The descriptive headings of this Amendment are
--------------------
inserted for convenience only and do not constitute a part of this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
2
/s/ Xxxxx X. Xxxx
------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxxx X. Xxxxxx, Xx.
AD-VENTURE
CAPITAL PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxx
--------------------------------
Xxxxx X. Xxxx
MISTRAL PARTNERS, L.P.
By: /s/ Xxxxxx X. Xxxxxx, Xx
-------------------------------
Xxxxxx X. Xxxxxx, Xx.
JRB PARTNERS, L.P.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Xxxx X. Xxxxxxxx
COVENTRY COURT PARNERS, L.P.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
FOCAL COMMUNICATIONS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
MADISON DEARBORN
CAPITAL PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxx, Xx.
-------------------------------
Its:_______________________________
FRONTENAC VI, L.P.
By: /s/ Xxxxx X. Xxxxxxxx, III
-------------------------------
Its:_______________________________
BATTERY VENTURES III, L.P.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Its:_______________________________
3
