Exhibit 10.8
NATIONAL FIBER NETWORK, INC.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
February 11, 1997
Xxxxx Xxxxxxx
Sahagen Consulting Group
000 Xxxx Xxxxxx Xxxxx 0000
Xxx Xxxx, XX 00000
Dear Xxxxx:
This letter shall confirm our agreement and understanding with
respect to the compensation which is due and payable to you for all services
rendered on behalf of National Fiber Network, Inc. (the "Company"), your
services as a director of the Company and other matters referred to herein.
1. The Company will pay to you upon the first equity infusion of a
minimum of $10,000,000, the sum of $250,000 in full and complete payment for (i)
all services of any nature, manner or form which have been provided or performed
by you on behalf of the Company in any capacity; and (ii) any fees, expenses or
compensation due to you pursuant to any agreement, contract or understanding
between you and the Company whether oral or written (with the exception of the
reimbursement of moneys paid by you on behalf of the Company as provided for in
a separate letter agreement between us as of this date.)
2. Subject to the payment of the foregoing sum to you as provided
herein, this letter shall confirm your release of any claims, causes of action,
damages, expenses, wages or salary, known or unknown, liquidated or
unliquidated, which you may have against the Company or any of its officers,
directors, attorneys or agents; and the release by the Company and Xxxxxxx
Xxxxxxxx of any claims, causes of action, damages, and or expenses, known or
unknown, liquidated or unliquidated which either the Company or Xxxxxxx Xxxxxxxx
may have against you.
3. You or your designee (who shall be reasonably acceptable to this
Board of directors) will be designated as a director of the Company and will
continue to serve as a director of the Company without compensation for a period
of six months commencing with the date of the execution of this letter
agreement.
4. The Company, shall direct its counsel, Xxxxxxxxx, Xxxxxxx &
Xxxxxxx, P.C., to file an application with the City of New York under the terms
of the franchise agreement between the Company and the City of New York to
obtain either a waiver or consent to your ownership of more than 5% of the
issued and outstanding stock of the Company.
5. The Company grants to you piggyback registration rights with
respect to common stock of the Company owned by you which piggyback registration
rights shall be in accordance with the same terms as provided for in the form of
warrant which the Company has agreed to issue to US One Communications Corp., a
copy of which terms is annexed hereto.
6. This letter agreement shall be governed by the laws of the State
of New York and may be executed in counterparts and by fax transmission among
the parties.
I would appreciate it if you would sign this letter in the space
provided below in acknowledgement of the foregoing terms which shall serve as
our agreement.
Very truly yours,
NATIONAL FIBER NETWORK, INC.
By:
Xxxxxxx Xxxxxxxx, Chief Executive
Consented and Agreed to:
Xxxxx Xxxxxxx Xxxxxxx Xxxxxxxx
SAHAGEN CONSULTING GROUP
By:
Xxxxx Xxxxxxx
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5. PIGGYBACK REGISTRATIONS
5.1 Right to Piggyback. Each time following the Company's initial
public offering of securities for its own account pursuant to a registration
statement declared effective under the Securities Act that the Company proposes
to register any of its securities (other than a registration statement on Form
S-8 or Form S-4) under the Securities Act for cash sale and the registration
form to be used may be used for the registration of Registrable Shares, the
Company shall give prompt written notice to the Holders of its intention to
effect such a registration (which notice shall be given not less than 30 days
prior to the date the registration statement is filed) and such notice shall
offer the Holders the opportunity to have any or all of the Registrable Shares
included in such registration statement, subject to the limitations contained in
Section 5.2. In the event the Holders desire to have their Registrable Shares
registered under this Section 5.1, the Holders will so advise the Company in
writing within 20 days after the date of receipt of such notice from the
Company. Subject to Section 5.2 below, the Company shall include in such
registration statement all such Registrable Shares so requested to be included
therein; provided, however, that the Company may at any time withdraw or cease
proceeding with any such registration if it shall at the same time withdraw or
cease proceeding with the registration of all other shares of Common Stock
originally proposed to be registered.
5.2 Priority on Registrations. If the managing underwriter advises
the Company in writing that the number of shares of Registrable Shares requested
to be included in the registration by all Persons (including the Company)
exceeds the number of shares of Common Stock which can be sold in such offering,
the Company will be obligated to include in such registration only (i) first,
any and all shares of Common Stock for sale by the Company, and (ii) second, pro
rata among the Registrable Shares and any other shares of Common Stock requested
to be included pursuant to any other registration rights that may have been, or
may hereafter be, granted by the Company (on the basis of the total number of
shares of Registrable Shares and Common Stock that each holder has requested to
be registered).
5.3 Holdback Agreement. Unless the managing underwriter otherwise
agrees, each of the Holders agrees not to effect any public sale or private
offer or distribution of any Registrable Shares, Common Stock or Common Stock
Equivalents during the ten (10) Business Days prior to any underwritten
registration and during such time period after any underwritten registration
(not to exceed 90 days) (except, if applicable, as part of such underwritten
registration) as the Company and the managing underwriter may agree.
5.4 Registration Procedures. Whenever the Holders have requested
that any Registrable Shares be registered pursuant to this Section 5, the
Company will use all reasonable efforts to effect the registration and the sale
of such Registrable Shares in
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accordance with the intended method of disposition thereof, and pursuant thereto
the Company will as expeditiously as possible: (i) prepare and file with the
Commission a registration statement on any appropriate form with respect to such
Registrable Shares and use all reasonable efforts to cause such registration
statement to become effective; (ii) prepare and file with the Commission such
amendments, post-effective amendments, and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective for a period of not less than one
year (or such lesser period as is necessary for the underwriters in an
underwritten offering to sell unsold allotments or to otherwise effect the sale
of the Registrable Shares) and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(iii) furnish to each seller of Registrable Shares and the underwriters of the
securities being registered such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus), and such
other documents as such seller or underwriters may reasonably request in order
to facilitate the disposition of the Registrable Shares or the sale of such
securities by such underwriters; (iv) use all reasonable efforts to register or
qualify such Registrable Shares under such other securities or blue sky laws of
such jurisdictions as the managing underwriter, if any, or holders of
Registrable Shares reasonably request and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller to
consummate the disposition of the Registrable Shares owned by such seller in
such jurisdictions (provided, however, that the Company sell not be required to
(A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph or (B) consent to
general service of process in any such jurisdiction); (v) notify each seller of
Registrable Shares promptly after it shall receive notice thereof, of the time
when such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed; (vi)
notify each seller of Registrable Shares promptly of any request by the
Commission for the amending or supplementing of such registration statement or
prospectus or for additional information; (vii) prepare and file with the
Commission promptly, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for the Company, the
sellers of Registrable Shares or the managing underwriter, is required in
connection with the distribution of the Registrable Shares; (viii) enter into
such agreements (including underwriting agreements in the managing underwriter's
customary form) as are customary in connection with an underwritten
registration; and (ix) advise each seller of such Registrable Shares, promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding for
such purpose and promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be issued.
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5.5. Suspension of Dispositions. Each Holder agrees that, upon
receipt of any notice (a "Suspension Notice") from the Company of the happening
of any event of the kind which, in the opinion of the Company, requires the
amendment or supplement of any prospectus, such Holder will forthwith
discontinue disposition of Registrable Shares until such Holder's receipt of the
copies of the supplemented or amended prospectus, or until it is advised in
writing (the "Advice") by the Company that the use of the prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the prospectus, and, if so directed by the
Company, such Holder will deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Shares current at the time of receipt of such notice.
In the event the Company shall give any such notice, the time period regarding
the effectiveness of registration statements set forth in Section 5.4(ii) hereof
shall be extended by the number of days during the period from and including the
date of the giving of the Suspension Notice to and including the date when each
seller of Registrable Shares covered by such registration statement shall have
received the copies of the supplemented or amended prospectus or the Advice.
5.6 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Section 5 including, without limitation,
all registration and filing fees, all fees and expenses associated with filings
required to be made with the National Association of Securities Dealers, Inc.
("NASD") (including, if applicable, the fees and expenses of any "qualified
independent underwriter" as such term is defined in Schedule E of the By-laws of
the NASD, and of its counsel), as may be required by the rules and regulations
of the NASD, fees and expenses of compliance with securities or "blue sky" laws
(including reasonable fees and disbursements of counsel in connection with "blue
sky" qualifications of the Registrable Shares), rating agency fees, printing
expenses (including expenses of printing certificates for the Registrable Shares
in a form eligible for deposit with Depositary Trust Company and of printing
prospectuses if the printing of prospectuses is requested by a holder of
Registrable Shares), messenger and delivery expenses, fees and expenses of
counsel for the Company and its independent certified public accountants
(including the expenses of any special audit or "cold comfort" letters required
by or incident to such performance), securities acts liability insurance (if the
Company elects to obtain such insurance), the fees and expenses of any special
experts retained by the Company in connection with such registration, and fees
and expenses of other persons retained by the Company (all such expenses being
herein called "Registration Expenses") will be borne by the Company whether or
not any registration statement becomes effective; provided, however, that in no
event shall Registration Expenses include any underwriting discounts or
commissions attributable to the sale of the Registrable Shares or fees and
expenses of counsel to the Holders.
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