EXECUTION COPY
FIBERNET TELECOM GROUP, INC.
FIRST AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
November 11, 2002
TABLE OF CONTENTS
Page
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I. Covenants............................................................1
A. Negative Covenants with Other Holders of Common Stock..........1
II. Voting...............................................................1
A. Election of Directors..........................................1
III. Miscellaneous........................................................2
A. Legends........................................................2
B. Termination of Covenants.......................................3
C. Attendance at Meetings.........................................3
D. Further Assurances.............................................4
E. Proxies........................................................4
F. Entire Agreement...............................................4
G. Recapitalizations, Etc.........................................4
H. Successors and Assigns.........................................4
I. Amendments and Waivers.........................................5
J. Notices........................................................5
K. Severability...................................................5
L. Specific Performance; Delays or Omissions; Remedies
Cumulative.....................................................5
M. Attorney's Fees................................................6
N. Governing Law..................................................6
O. Counterparts...................................................6
P. Titles and Subtitles...........................................6
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FIBERNET TELECOM GROUP, INC.
FIRST AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
This First Amended and Restated Stockholders Agreement (this
"Agreement") is made as of November 11, 2002, between FiberNet Telecom Group,
Inc., a Delaware corporation (the "Company") and the investors listed on Exhibit
A hereto, each of which is herein referred to as an "Investor".
RECITALS
Pursuant to a Purchase Agreement among the Company and the Investors
dated October 30, 2002 (the "Old Purchase Agreement"), the Investors purchased
from the Company, and the Company sold to the Investors, upon the terms and
subject to the conditions set forth therein, shares of the Common Stock, par
value $0.001 per share, and warrants of the Company to purchase shares of Common
Stock (the "Old Warrants");
The Company and the Investors have entered into a Common Stock and
Warrant Purchase Agreement (the "Purchase Agreement") of even date herewith
pursuant to which the Company desires to sell to the Investors, and the
Investors desire to purchase from the Company, shares of the Company's Common
Stock and warrants to purchase an additional amount of such shares (the "New
Warrants" and together with the Old Warrants, the "Warrants"). A condition to
the Investors' obligations under the Purchase Agreement is that the Company and
the Investors enter into this Agreement in order to provide the Investors with
certain rights with respect to the Company's Common Stock. The Company desires
to induce the Investors to purchase shares of Common Stock pursuant to the
Purchase Agreement by agreeing to the terms and conditions set forth herein.
AGREEMENT
The parties agree as follows:
I. Covenants
A. Negative Covenants with Other Holders of Common Stock. The
Company shall not enter into any agreement with an existing or future investor
acquiring shares of the Company's Common Stock in connection with such
investor's investment that has the effect of establishing any material rights or
otherwise providing any material benefits for such investor that have not been
received by the Investors under this Agreement, the Old Purchase Agreement, the
Purchase Agreement, or the First Amended and Restated Investors Rights Agreement
entered into concurrently herewith, unless, in any such case, each Investor has
been offered the opportunity to receive, for no additional consideration, such
rights and the benefits of such agreement.
II. Voting
A. Election of Directors. At any annual or special shareholders
meeting, and
whenever the shareholders of the Company act by written consent with respect to
election of directors, each Investor agrees to vote or otherwise give such
Investor's consent in respect of all shares of the Company's Common Stock
acquired by such Investor pursuant to the Purchase Agreement or Old Purchase
Agreement or upon any exercise of any Warrants, and the Company shall take all
necessary and desirable actions within its control, in order to cause:
1. the election to the Board of two Independent Individuals
(as defined below) approved by Investors holding shares of the
Company's capital stock entitled to cast a majority of the total
number of votes entitled to be cast by all Investors in the
election of directors to the Company's Board of Directors (the
"Majority Investors");
2. the authorized number of directors of the Board as set
forth in the Company's Certificate of Incorporation or other
similar document (in each case, as amended, amended and restated
or otherwise modified from time to time) of the Company and/or
the Bylaws of the Company to remain at six or such other number
as the Majority Investors may specify from time to time in a
notice delivered to the Company and the other Investors;
3. the removal from the Board (with or without cause) of any
director approved hereunder by the Majority Investors, upon the
written request of the Majority Investors for the removal of such
director, but only upon such written request; provided, however,
that the removal of any director for cause or otherwise shall not
prejudice the right of the Majority Investors to nominate
pursuant to this Agreement a substitute director to fill the
vacancy created by such removal; and
4. upon any vacancy in the Board as a result of any
individual approved as provided in clause (1) above ceasing to be
a member of the Board, whether by resignation, removal or
otherwise, the election to the Board of an individual approved by
the Majority Investors.
For purposes of this Agreement, an "Independent Individual" shall
mean any natural person who upon election to the Board will be an "independent
director" within the meaning of the rules and regulations of the primary
national securities exchange or automated quotation system on which shares of
the Company's Common Stock are traded.
III. Miscellaneous.
A. Legends. Each certificate representing shares of Common Stock
held by an Investor or any subsequent holder of such shares to which rights
under this Agreement are transferred pursuant to the terms of Section III.H
shall be stamped or otherwise imprinted with legends substantially similar to
the following (in addition to any legend required under applicable state
securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF AN AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE
VOTING OF THE SHARES REPRESENTED HEREBY. ANY
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PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND
SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH
VOTING AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS."
The Company agrees that, during the term of this Agreement, it
will not remove, and will not permit to be removed (upon registration of
transfer, reissuance or otherwise), the legend set forth above from any such
certificate and will place or cause to be placed such legend on any new
certificate issued to represent shares of Common Stock held by the Investors and
such transferees theretofore represented by a certificate carrying such legend.
At any time after the termination of the Company's and the Investors'
obligations under Section II of this Agreement pursuant to the terms of Section
III.B and in connection with any transfer of the shares evidenced by a
certificate legended pursuant to this Section III.A, any holder of a stock
certificate so legended may surrender such certificate to the Company for
removal of such legend, and the Company will duly reissue a new certificate
without such legend.
B. Termination of Covenants. All covenants of the Company and the
Investors contained in Section I and Section II of this Agreement shall expire
and terminate upon the earliest of,
1. the closing of a Qualified Public Offering (as defined in
the First Amended and Restated Investor's Rights Agreement, dated
November 11, 2002, between the Company and the Investors), or
2. (i) the sale, lease or other disposition of all or
substantially all of the assets of the Company or (ii) any
consolidation or merger of the Company with or into any other
corporation or other entity or person, or any other corporate
reorganization, in which the shareholders of the Company
immediately prior to such consolidation, merger or
reorganization, own less than 50% of the Company's voting power
immediately after such consolidation, merger or reorganization,
or (iii) any transaction or series of related transactions to
which the Company is a party in which in excess of 50% of the
Company's voting power is transferred, excluding any
consolidation or merger effected exclusively to change the
domicile of the Company (a "Change in Control"), or
3. the date upon which the aggregate securities of the
Company then held by the Investors that are a party to this
Agreement on the date hereof comprise less than 30% of the
Company's Common Stock outstanding on a fully-diluted basis.
C. Attendance at Meetings. Each of the Investors agrees to be
present, either in person or by proxy, at all meetings of shareholders of the
Company at which one or more members of the Board are to be elected, so that all
shares held by such Investor may be voted for the election of the directors as
set forth herein; provided, that the Company shall have given notice of such
meeting to each Investor not less than 10 days prior to the date of such meeting
(unless waived in writing by such person). Each Investor may abstain from voting
at all such meetings with respect to any matter except for the election of
directors.
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D. Further Assurances. The Company agrees to take all actions
required to ensure that the rights given to the parties hereunder are effective
and that they enjoy the benefits thereof. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all of the provisions of this Agreement and in the
taking of all such actions as may be appropriate in order to protect the rights
of the parties hereunder against impairment.
E. Proxies. Each Investor hereby grants to each other Investor an
irrevocable proxy (a "Proxy") with respect to the voting of the shares of
capital stock of the Company owned or controlled by such Investor in accordance
with this Agreement. The Proxy granted by each Investor to each other Investor
is exercisable by any Investor at any time or from time to time, commencing with
the breach by any Investor granting the Proxy of its obligation to vote its
shares of capital stock in accordance with this the Agreement. Each Proxy shall
expire upon the termination of the Company's and the Investors' obligations
under Section II of this Agreement pursuant to the terms of Section III.B. Each
Investor agrees that each Proxy granted hereby is coupled with an interest.
F. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof, and any and
all other written or oral agreements relating to the subject matter hereof
existing among any of the parties hereto are expressly canceled.
G. Recapitalizations, Etc. The provisions of this Agreement
(including any calculation of share ownership) shall apply, to the full extent
set forth herein with respect to the Common Stock, to any and all shares of
capital stock of the Company or any capital stock, partnership or member units
or any other security evidencing ownership interests in any successor or assign
of the Company (whether by merger, consolidation, sale of assets or otherwise)
that may be issued in respect of, in exchange for, or in substitution of the
Common Stock by reason of any stock dividend, split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.
H. Successors and Assigns. Except as provided below, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties (including
transferees of any Common Stock or Warrants). Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
The rights of an Investor under Sections I and II of this
Agreement may be assigned to any Permitted Transferee (as defined below) or to
any transferee or assignee in connection with the transfer or assignment of at
least 40% of such Investor's Common Stock (on a fully diluted basis); provided,
that (a) such transfer is otherwise effected in accordance with applicable
securities laws and other restrictions on transfer applicable to such shares,
(b) notice of such assignment is given to the Company and (c) such transferee or
assignee agrees to be bound by all provisions of this Agreement. For purposes of
this Agreement, a "Permitted Transferee" shall mean (i) in the case of an
Investor who is an individual, such person's ancestors, descendants or spouse,
or any custodian or trustee for the account of such person (or for the account
of such person's
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ancestors, descendants or spouse), (ii) in the case of an Investor which is a
partnership or limited liability company, any constituent partner or member of
such entity, (iii) in the case of an Investor which is a corporation, any parent
corporation or wholly-owned subsidiary corporation or any officer, director or
10% stockholder of such corporation, and (iv) any other Investor.
I. Amendments and Waivers. Any term of this Agreement may be amended
or waived only with the written consent of the Company and Investors holding at
least 75% of the shares of Common Stock (on a fully-diluted basis) issued
pursuant to the Purchase Agreement or the Old Purchase Agreement and then held
by all Investors. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each Investor. Notwithstanding the foregoing, if
in any particular instance a party's obligations or rights under this Agreement
are adversely affected thereby in a disproportionately adverse manner from that
in which other parties are affected by application of this Section, the consent
of such party shall also be required in such instance.
J. Notices. Unless otherwise provided, any notice required or
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon delivery, when delivered personally or by overnight courier or sent by
telegram or confirmed fax, or if mailed to a domestic address, 48 hours after
being deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party's address or
fax number as set forth below or on Exhibit A hereto or as subsequently modified
by written notice.
K. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
L. Specific Performance; Delays or Omissions; Remedies Cumulative.
The parties hereto hereby declare that it is impossible to measure in money the
damages which will accrue to a party hereto or to their heirs, personal
representatives, or assigns by reason of a failure to perform any of the
obligations under this Agreement and agree that the terms of this Agreement
shall be specifically enforceable without the requirement for the posting of a
bond. If any party hereto or his heirs, personal representatives, or assigns
institutes any action or proceeding to specifically enforce the provisions
hereof, any person against whom such action or proceeding is brought hereby
waives the claim or defense therein that such party or such personal
representative has an adequate remedy at law, and such person shall not offer in
any such action or proceeding the claim or defense that such remedy at law
exists.
No delay or omission to exercise any right, power or remedy
accruing to any party under this Agreement, upon any breach or default of any
other party under this Agreement, shall impair any such right, power or remedy
of such non-breaching or non-defaulting party nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single
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breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party 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 or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
M. Attorney's Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorney's fees, costs and
disbursements in addition to any other relief to which such party may be
entitled.
N. Governing Law. This Agreement and all acts and transactions
pursuant hereto shall be governed, construed and interpreted in accordance with
the laws of the State of New York, without giving effect to principles of
conflicts of laws.
O. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
P. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
[Signature Page Follows]
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The parties have executed this Stockholders Agreement as of the date
first above written.
COMPANY:
FIBERNET TELECOM GROUP, INC.
By:_______________________________
Name:
Title:
INVESTORS:
DEUTSCHE BANK AG NEW YORK BRANCH
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
WACHOVIA INVESTORS, INC.
By:_______________________________
Name:
Title:
BANK ONE, N.A.
By:_______________________________
Name:
Title:
IBM CREDIT CORPORATION
By:_______________________________
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:_______________________________
Name:
Title:
Exhibit A
Name of Investor Address
Deutsche Bank AG New York Branch Deutsche Bank AG New York Branch
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Wachovia Investors, Inc. Wachovia Investors, Inc.
000 X. Xxxxxxx Xx.,
XX0 XX0000,
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
Telecopy: (000) 000-0000
Bank One, N.A. FNBC Leasing Corporation
55 West Monroe, 17th floor
Mail Code XX0-0000
Xxxxxxx IL 60670-0502
IBM Credit Corporation IBM Credit Corporation
Xxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Manager, Special Handling
Toronto Dominion (Texas), Inc. Toronto Dominion (Texas), Inc.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn : Xxxx Xxxxx, Vice President
