EXHIBIT 3
January 30, 2004
gateway.realty.new jersey.llc
000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
Reference is made to Section 7.2(k) of that certain Asset Purchase
Agreement dated as of December 31, 2003 (the "Purchase Agreement") by and among
xxxxxxx.xxxxxx.xxx xxxxxx.xxx ("Seller"), Local Fiber, LLC ("Purchaser") and
FiberNet Telecom Group, Inc. (the "Company") whereby Seller has agreed to sell,
and Purchaser has agreed to purchase, substantially all of the assets of Seller
relating to its business of providing colocation services at its carrier point
facility located at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 (the
"Acquisition"). Capitalized terms not defined herein shall have the meanings
ascribed to them in the Purchase Agreement.
In connection with the Acquisition, the Company hereby confirms and agrees
that Seller shall be entitled to nominate one individual (the "Board Nominee")
to serve as a director on the Board of Directors of the Company (the "Board),
and that such Board Nominee shall be appointed to the Board effective as of the
Closing Date pursuant to a resolution duly adopted by the Board. The Company
agrees that the Board shall use reasonable efforts to ensure the continued
nomination of the Board Nominee at any annual or special meetings of
stockholders at which the election of directors is considered by the
stockholders for as long as the Board Nominee remains a director of the Company.
The Company hereby further confirms and agrees that Seller shall be
entitled to designate one person, in addition to the Board Nominee, to be a
non-voting observer (the "Board Observer") at all meetings of the Company's
Board. The Board Observer shall be entitled to attend all meetings of the Board
thereof and shall receive copies of all notices, minutes, consents, and other
materials that are provided to the Company's directors (whether in written,
graphic, or electronic form), as and when the same are provided to its
directors; provided, however, that the Board Observer shall agree to hold in
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confidence all information so provided and agrees to comply with all applicable
federal and state securities laws including, without limitation, Regulation FD
under the Securities Exchange Act of 1934 and the rules and regulations
prohibiting trading of securities while in possession of material non-public
information; and, provided, further, that the Company reserves the right to
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withhold any information and to exclude the Board Observer from any meeting or
portion thereof if, in the good-faith determination of the Company's Board: (1)
access to such information or attendance at such meeting could adversely affect
the attorney-client privilege between the Company and its counsel or would
result in disclosure of trade secrets or other proprietary information to such
representative, (2) Seller, the Board Nominee or the Board Observer, directly or
indirectly, becomes a competitor of the Company or associated with a competitor
of the Company (as an officer, director, stockholder (not including ownership by
the Board Nominee or the Board Observer of less than three percent of the equity
securities of any entity which are traded or quoted on a national securities
exchange, the Nasdaq SmallCap Market or the Nasdaq National Market), partner,
member, manager, employee, consultant, lender, agent, representative or
otherwise), or (3) three members of the Board determine, in their reasonable
judgment, that it is in the best interests of the stockholders of the Company to
exclude the Board Observer.
The rights granted to Seller pursuant to this letter agreement shall
terminate upon ten (10) days written notice by the Company demanding the
resignation of the Board Nominee and/or the Board Observer. The Board Nominee
shall at such time submit a written resignation to the Company dated as of the
date of the written notice by the Company, and agrees to take any and all other
actions as may be reasonably requested by the Company in order to effectuate
such resignation.
Please acknowledge your agreement to be bound by the terms of this letter
by countersigning below.
Very truly yours,
FiberNet Telecom Group, Inc.
By: _____________________________
Name: ________________________
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Title: _______________________
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Acknowledged and agreed this 30th of January, 2004
gateway. realty.new jersey.llc
By: _____________________________
Name:_________________________
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Title:________________________
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