STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of July 23, 1997,
by and among Delta Three, Inc., a Delaware croporation (the "Company"), and each
of the persons who have executed this Agreement and all other persons who may
hereafter acquire shares of the capital stock of the Company (together with any
rights to acquire such capital stock, herein referred to as (the "Capital
Stock") and become a party to this Agreement as hereinafter provided (the
persons, other than the Company, who have executed this Agreement and such other
persons who hereafter acquire shares of Capital Stock and become a party hereto
being collectively referred to herein as the "Stockholders").
W I T N E S S E T H:
WHEREAS, the Stockholders are the owners and registered holders of all of
the outstanding shares of the Capital Stock;
WHEREAS, the Company and the Stockholders desire to set forth certain
agreements between and among them with respect to the shares of Capital Stock
now and hereafter outstanding and certain rights represented thereby; and
WHEREAS, the Company and the Stockholders desire to make certain
representations and agreements with respect to the acquisition of shares of
Capital Stock of the Company by the Stockholders and the transferability of
such shares.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, the parties hereto hereby agree as follows:
ARTICLE I
Representations and Warranties
Section 1.1. Representations and Warranties to RSL. Each Stockholder other
than RSL Communications, Ltd. (each, a "Non-RSL Stockholder"), severally and not
jointly, represents and warrants to RSL Communications, Ltd. ("RSL") that the
shares of Capital Stock and other securities exercisable for or convertible into
Capital Stock listed on Schedule 1 hereto as being owned by him constitute all
of the equity ownership or rights to equity ownership of the Company owned by
him; that he has no other rights, options, or warrants to purchase equity
interests in the Company, whether granted by a Non-RSL Stockholder or the
Company; that such securities are not subject to any lien, charge or encumbrance
and are beneficially owned solely by such Stockholder; and that he owns no other
securities which are convertible into equity interests in the Company.
Section 1.2. Indemnification by the Non-RSL Stockholders. Each Non-RSL
Stockholder, severally and not jointly, shall indemnify RSL for breach of his
representation and warranty set forth in Section 1.1 hereof, it being understood
that the intent of the parties hereto is that RSL shall own no less than 51% of
all equity interests in the Company on a fully-diluted basis as of the date
hereof.
ARTICLE II
Corporate Governance
Section 2.1. Election of Board of Directors. Subject to Section 3.3.2, all
of the Stockholders agree to vote their shares of Capital Stock, either by
execution of a written consent or at annual or special meetings called for the
purpose, for the election and maintenance of a Board of Directors of the Company
consisting of five persons of whom three persons shall be nominated by RSL, one
person shall be nominated by Xxxxx X. Xxxxxxxx ("Xxxxxxxx") and one person shall
be nominated by Pioneer Management Corporation, LLC, a Nevada limited liability
company ("Pioneer").
Section 2.2. Migration. If, at any time after the date hereof, RSL requests
that the Company be either reincorporated in Bermuda or any other jurisdiction
within or outside the United States or merged into a corporation organized under
the laws of Bermuda or any other jurisdiction within or outside the United
States, the Company and the Non-RSL Stockholders agree to take such actions
(including, but not limited to, voting their shares of Capital Stock, either by
execution of a written consent or at a special meeting called for that purpose),
and the Non-RSL Stockholders agree to cause the directors of the Company
nominated by them to take such actions, to cause the Company to be so
reincorporated or merged on the most advantageous basis to the Company and the
Stockholders provided that such reincorporation or merger can be accomplished
tax-free and without any direct charges to the Stockholders.
ARTICLE III
Transfers of Capital Stock to Third Parties
Section 3.1. Restrictions on Transfer by Non-RSL Stockholders.
3.1.1 Non-Transferability Period. Each of the Non-RSL Stockholders agrees
that it will not sell, transfer, assign or otherwise dispose of or pledge,
hypothecate or otherwise create or permit to be created any lien, claim, charge
or other encumbrance (each, a "Transfer") upon any shares of the Capital
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Stock or any other securities of the Company that may now or hereafter be held
or owned by it, except for Transfers to RSL or its designated affiliates, for a
period commencing on the date hereof and ending on the third anniversary of the
date hereof (the "Non-Transferability Period"); provided, however, that,
notwithstanding anything to the contrary contained herein, each Non-RSL
Stockholder shall have the right, in its sole and absolute discretion, to sell
or transfer any or all shares of the Capital Stock or any other securities of
the Company that may now or hereafter be held or owned by it to an affiliate of
such Non-RSL Stockholder (which term, as it relates to a natural person shall be
deemed to mean a spouse, sibling, child and trusts for the benefit of such
person and the foregoing) without any of the restrictions or limitations
contained herein; provided that such affiliate shall be required to agree in
writing, in form satisfactory to RSL, to become a party to this Agreement and to
hold the transferred shares of Capital Stock or other securities subject to the
same obligations as if held by such Non-RSL Stockholder.
3.1.2 RSL's Right of First Refusal.
(a) From and after the expiration of the Non-Transferability Period, each
of the Non-RSL Stockholders agrees that it will not Transfer any shares of the
Capital Stock or any other securities of the Company that may now or hereafter
be held or owned by it unless such Non-RSL Stockholder shall have first offered
such shares or other securities to RSL pursuant to this Section 3.1.2 and
unless, in the opinion of legal counsel reasonably satisfactory to the Company,
such Transfer is exempt from the provisions of the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder, and any other
applicable federal or state law; and, in any event, not to sell, transfer,
assign or otherwise dispose of any of such shares or other securities (or the
certificates representing the same) unless the purchaser(s), assignee(s),
transferee(s) or other parties (other than RSL) agree in writing, in form
satisfactory to legal counsel reasonably satisfactory to the Company, to abide
by and conform to the terms and conditions of this Agreement.
(b) In the event that any Non-RSL Stockholder proposes to sell, transfer,
assign or otherwise dispose any or all of the Capital Stock or other securities
of the Company which it then owns (the "Offered Securities") to a third party
(the "Proposed Purchaser"), such selling Non-RSL Stockholder shall give written
notice (the "Offer Notice") of such intention to RSL by registered or certified
mail. The Offer Notice shall (i) state the name and address of the Proposed
Purchaser, (ii) the designation of the Offered Securities and (iii) the purchase
price and the other terms and conditions on which the selling Non-RSL
Stockholder proposes to sell the Offered Securities to the Proposed Purchaser
(the "Third Party Terms"). The Offer Notice shall also be accompanied by a true
copy of any bona fide
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written offer received by the selling Non-RSL Stockholder from the Proposed
Purchaser. The Offer Notice shall constitute an offer to sell to RSL all of the
Offered Securities, at the election of RSL, upon the Third Party Terms.
(c) RSL shall have a period of ten (10) days (the "Offer Period") after its
receipt of the Offer Notice within which to accept such offer by giving notice
to such effect to the selling Non-RSL Stockholder within such period (the
"Acceptance Notice"). The offer referred to in the preceding sentence will
terminate if RSL fails to deliver the Acceptance Notice prior to the expiration
of the Offer Period.
(d) If RSL shall accept the offer made by the Offer Notice, then the
selling Non-RSL Stockholder shall sell to RSL, and RSL shall purchase from the
selling Non-RSL Stockholder, the Offered Securities upon the Third Party Terms
in accordance with the procedures set forth in Section 3.3.
(e) If RSL shall not accept the offer made by the Offer Notice, then within
the thirty (30) day period following the expiration of the Offer Period, the
selling Non-RSL Stockholder shall have the right to sell all, but not less than
all, of the Offered Securities to the Proposed Purchaser; provided, however,
that any such sale shall be on the Third Party Terms and in the manner set forth
in the Offer Notice. In the event that the selling Non-RSL Stockholder does not
dispose of the Offered Securities within such period, the selling Non-RSL
Stockholder may not sell any of such shares without again first offering them to
RSL in accordance with the foregoing right of first refusal.
Section 3.2. Transfers by RSL.
3.2.1 General. From and after the date hereof, RSL agrees that it will not
sell or transfer any shares of the Capital Stock that may now or hereafter be
held or owned by it except as otherwise provided in this Section 3.2; provided,
however, that, notwithstanding anything to the contrary contained herein, RSL
shall have the right, in its sole and absolute discretion, to sell or transfer
any or all shares of the Capital Stock or any other securities of the Company
that may now or hereafter be held or owned by it to an affiliate of RSL without
any of the restrictions or limitations contained herein; provided that such
affiliate shall be required to agree in writing, in form satisfactory to the
majority in interest of the Non-RSL Stockholders, to become a party to this
Agreement and to hold the transferred shares of Capital Stock or other
securities subject to the same obligations as if held by RSL.
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3.2.2 Right of First Refusal; Tag-Along Rights.
(a) In the event that RSL proposes to sell or transfer any or all of the
Capital Stock which it then owns (the "RSL Offered Securities") to a third party
(the "RSL Proposed Purchaser"), RSL shall give written notice (the "RSL Offer
Notice") of such intention to the Non-RSL Stockholders by registered or
certified mail. The RSL Offer Notice shall (i) state the name and address of the
RSL Proposed Purchaser, (ii) the designation of the RSL Offered Securities and
(iii) the purchase price and the other terms and conditions on which RSL
proposes to sell the RSL Offered Securities to the RSL Proposed Purchaser (the
"RSL Third Party Terms"). The RSL Offer Notice shall also be accompanied by a
true copy of any bona fide written offer received by RSL from the RSL Proposed
Purchaser.
(b) The RSL Offer Notice shall constitute an offer to sell to the Non-RSL
Stockholders, either individually or as a group, all (but not less than all) of
the RSL Offered Securities, at the election of the Non-RSL Stockholders, upon
the RSL Third Party Terms. The Non-RSL Stockholders, either individually or as a
group, shall have a period of ten (10) days (the "RSL Offer Period") after their
receipt of the RSL Offer Notice within which to accept such offer by giving
notice to such effect to RSL within such period (the "RSL Acceptance Notice").
In the event RSL receives RSL Acceptance Notices from more than one Non-RSL
Stockholder or group of Non-RSL Stockholders, each such Non-RSL Stockholder or
group of Non-RSL Stockholders, as the case may be, shall be entitled to purchase
a pro rata share of the RSL Offered Securities (i.e., the amount of Capital
Stock owned by such Non-RSL Stockholder or group of Non-RSL Stockholders, as the
case may be, divided by the total amount of Capital Stock owned by all Non-RSL
Stockholders who are parties to an RSL Acceptance Notice). The offer referred to
in this paragraph (b) will terminate with respect to each Non-RSL Stockholder
who fails to deliver an RSL Acceptance Notice prior to the expiration of the RSL
Offer Period.
(c) If the Non-RSL Stockholders shall accept the offer made by the RSL
Offer Notice, then RSL shall sell to the Non-RSL Stockholders, and the Non-RSL
Stockholders shall purchase from RSL, the RSL Offered Securities upon the RSL
Third Party Terms in accordance with the procedures set forth in Section 3.3.
(d) If any Non-RSL Stockholder shall not accept the offer made by the RSL
Offer Notice, then such Non-RSL Stockholder shall have the right within fifteen
(15) days of its receipt of the RSL Offer Notice to elect, by written notice to
RSL (the "Tag-Along Notice"), to require the RSL Proposed Purchaser to purchase
from such Non-RSL Stockholder, at the RSL Third Party Terms, up to the same
proportion of the Capital Stock held by such person as the proportion of Capital
Stock owned by RSL which is proposed to be sold to the third party; provided,
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however, that if any other Non-RSL Stockholder or group of Non-Stockholders
elects to accept the offer made by the RSL Offer Notice, then the Non-RSL
Stockholders not a party to such election shall not have the right to require
either the other Non-RSL Stockholders or the RSL Proposed Purchaser to purchase
their Capital Stock. Each Non-RSL Stockholder who fails to deliver a Tag-Along
Notice to RSL prior to the expiration of the fifteen (15) day period referred to
in the preceding sentence shall forfeit all of such Non-RSL Stockholder's rights
pursuant to this paragraph (d).
(e) If the Non-RSL Stockholders shall not accept the offer made by the RSL
Offer Notice, then RSL shall have the right, within the thirty (30) day period
following the expiration of the RSL Offer Period, to sell all, but not less than
all, of the RSL Offered Securities, together with the Capital Stock of the
Non-RSL Stockholders who elect to exercise their rights pursuant to clause (d)
of this Section 3.2.2, to the RSL Proposed Purchaser; provided, however, that
any such sale shall be on the Third Party Terms and in the manner set forth in
the RSL Offer Notice. In the event that RSL does not dispose of the RSL Offered
Securities within such period, RSL may not sell any of such shares without again
first offering them to the Non-RSL Stockholders in accordance with the foregoing
right of first refusal.
3.2.3 Drag-Along Rights. The Non-RSL Stockholders severally agree that, in
the event RSL has complied with the procedures set forth in Section 3.2.2 after
receiving an offer to purchase its shares of Capital Stock from an RSL Proposed
Purchaser, they will each, if they have not elected to exercise their rights
pursuant to clause (d) of Section 3.2.2, sell to such RSL Proposed Purchaser,
upon the written request of such RSL Proposed Purchaser, a pro rata portion of
the shares of Capital Stock and derivative securities (i.e., convertible
securities, warrants and options) owned by them (in the same proportion as the
amount of RSL Offered Securities bears to all shares of Capital Stock owned by
RSL as of the date of the RSL Offer Notice) upon the RSL Third Party Terms.
Section 3.3. Closing.
3.3.1 Transfer. In the event of the exercise of a right of first refusal by
RSL in accordance with Section 3.1.2 or by the Non-RSL Stockholders in
accordance with Section 3.2.2 (the Stockholders exercising such rights being
hereinafter referred to as the "Exercising Stockholders"), the Stockholder
selling its Capital Stock (the "Selling Stockholder") shall deliver to the
Exercising Stockholders certificates representing the Offered Securities or the
RSL Offered Securities, as the case may be, and the Exercising Stockholders
shall pay the Selling Stockholder therefor no later than 12:00 noon of the tenth
business day following the expiration of the Offer Period or the
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RSL Offer Period, as the case may be, or such other time and date as shall be
agreed upon by the Exercising Stockholders and the Selling Stockholder. The
certificates representing the Offered Securities or the RSL Offered Securities,
as the case may be, shall be duly endorsed in blank or accompanied by
appropriate stock powers and appropriate stock transfer stamps shall be affixed
thereto.
3.3.2 Resignation of Selling Stockholder. If, upon consummation of any of
the transactions contemplated by Section 3.1.2, 3.2.2 or 3.2.3, the Selling
Stockholder shall no longer own any shares of Capital Stock or other securities
of the Company, the Selling Stockholder, if he is then a director or officer of
the Company, shall deliver to the Company his written resignation from all
positions he then holds with the Company or any subsidiary of the Company. If
there is any person acting as a director for or on behalf of such a Selling
Stockholder, such Selling Stockholder shall procure the written resignation of
each such person as a director of the Company.
ARTICLE IV
Options to Purchase or Sell Capital Stock
Section 4.1. General.
4.1.1 Purchase Price per Share. For the purposes of this Article IV, the
"Purchase Price per Share" of Capital Stock shall be based on a total Company
valuation determined by a nationally recognized investment banking firm
qualified to value the Company (the "Appraiser") selected by RSL in its sole and
absolute discretion, which shall be RSL's managing underwriter in the event of
an exercise of the First Exercise Right (as defined below); provided, however,
that in no event shall the total valuation amount imputed to the shares of
Capital Stock owned by all current stockholders of the Company other than RSL
(including all persons or entities who become stockholders upon conversion or
exercise of all securities listed on Schedule 3.02 to the Stock Purchase
Agreement, dated as of July __, 1997, by and among the Company, RSL, Davidson,
Pioneer and Xxxx Xxxxxxx) be less than $5,000,000. All decisions and valuations
made by the Appraiser in accordance with the terms of this Article IV shall be
final and binding upon the parties. Such valuation amount shall be divided by
the total number of shares of Capital Stock of the Company outstanding on a
fully diluted basis to determine the Purchase Price per Share. For the purposes
of this Article IV, holders of derivative securities (i.e., convertible
securities, warrants and options) shall be required and will be deemed to have
converted or exercised such derivative securities immediately prior to a
purchase by RSL of the Non-RSL Stockholders' Capital Stock and, accordingly,
will be deemed to hold the number of shares of the Company's common stock
resulting
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from such conversion or exercise, which shares will be treated as Capital Stock
for all purposes of this Article IV.
4.1.2 Payment of the Purchase Price Per Share. In the event RSL elects to
purchase the shares of Capital Stock owned by the Non-RSL Stockholders pursuant
to Section 4.2 or is obligated to purchase shares of Capital Stock from the
Non-RSL Stockholders pursuant to Section 4.3, RSL shall have the option, in its
sole and absolute discretion, to (i) purchase the Capital Stock of the Non-RSL
Stockholders by cash payment (the "Cash Payment") of the Purchase Price per
Share, to be delivered in accordance with Section 4.4.1, or (ii) exchange shares
(the "Exchange Option") of RSL's Class A common stock, par value $.01 per share
("RSL Stock"), for shares of the Capital Stock held by the Non-RSL Stockholders,
in accordance with Section 4.4.2.
Section 4.2. RSL Call Option.
4.2.1 General. The Non-RSL Stockholders hereby grant to RSL the right (the
"Call Option"), exercisable, at the sole option of RSL, at any time after the
second anniversary of the date hereof, to purchase from them all of the shares
of Capital Stock that may then be owned by them.
4.2.2 Procedure. If RSL desires to exercise the Call Option, it must
purchase all, but not less than all, of the Non-RSL Stockholders' Capital Stock
and it shall give written notice (the "Option Notice") of such intention to each
such Non-RSL Stockholder by registered or certified mail. For the purposes of
determining the Purchase Price per Share for the purchase of Capital Stock
pursuant to the Call Option, the valuation of the Company by the Appraiser shall
occur as of the date of the Option Notice. Upon determination of the Purchase
Price per Share by the Appraiser in accordance with Section 4.1., RSL shall
provide written notice (the "Second Notice") to the Non-RSL Stockholders of the
Purchase Price per Share together with the Appraiser's report of its calculation
of the Purchase Price per Share. Within 10 days after receipt of the Second
Notice, each Non-RSL Stockholder shall tender to RSL its certificates for the
Capital Stock duly endorsed in blank or accompanied by appropriate stock powers
and with appropriate stock transfer stamps affixed thereto (a "Receipt Date").
Section 4.3. Non-RSL Stockholder Put Options.
4.3.1 IPO Put Option.
(a) In the event that RSL consummates an initial public offering of any
class of its equity securities (the "RSL IPO") on or prior to the third
anniversary of the date hereof, each Non-RSL Stockholder shall have the right
(the "IPO Put Option"), in accordance with the procedures set forth herein, to
sell to RSL (a) at the closing of the RSL IPO (the "First
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Exercise Right"), 25% of the shares of Capital Stock owned by such Non-RSL
Stockholder and (b) following the second anniversary of the date hereof (the
"Second Exercise Right"), the remaining 75% of the shares of Capital Stock owned
by such Non-RSL Stockholder; provided, however, that both the First Exercise
Right and the Second Exercise Right shall expire on the fifth anniversary of the
date hereof.
(b) RSL shall give written notice (the "IPO Notice") to the Non-RSL
Stockholders of its intention to commence an RSL IPO at least thirty (30) days
prior to the anticipated effective date of such RSL IPO. The Non-RSL
Stockholders holding a majority of the shares of Capital Stock held at such time
by a11 of the Non-RSL Stockholders (the "Majority Non-RSL Stockholders") shall
have the one-time right to elect to exercise the First Exercise Right by giving
written notice (the "First Exercise Put Notice") of such intention to RSL and
the other Non-RSL Stockholders by registered or certified mail within ten (10)
days after receipt of the IPO Notice. The First Exercise Right shall expire
after the expiration of the ten (10) day period referred to in the preceding
sentence if the First Exercise Put Notice is not delivered to RSL within such
period by the Majority Non-RSL Stockholders. Each Non-RSL Stockholder who was
not a party to the First Exercise Put Notice but who, after receipt of the First
Exercise Put Notice, has elected to exercise its First Exercise Right, shall
give written notice of such intention to RSL by registered or certified mail
within ten (10) days after receipt of the First Exercise Put Notice. For the
purposes of determining the Purchase Price per Share for the sale of Capital
Stock pursuant to the First Exercise Right, the valuation of the Company by the
Appraiser shall occur on the date of the pricing of the RSL IPO. Upon
determination of the Purchase Price per Share by the Appraiser in accordance
with Section 4.1.1, RSL shall provide written notice (the "First Exercise
Pricing Notice") to the Non-RSL Stockholders of the Purchase Price per Share
together with the Appraiser's report of its calculation of the Purchase Price
per Share. Prior to the closing of the RSL IPO, each selling Non-RSL Stockholder
shall tender to RSL its certificates for the Capital Stock duly endorsed in
blank or accompanied by appropriate stock powers and with appropriate stock
transfer stamps affixed thereto (a "Receipt Date") against payment of the
Purchase Price per Share pursuant to Section 4.4.1. In no event shall RSL be
obligated, pursuant to the exercise of the First Exercise Right, to purchase the
shares of Capital Stock held by any Non-RSL Stockholder unless the First
Exercise Right is exercised by the Majority Non-RSL Stockholders.
(c) After the second anniversary of the date hereof (and assuming, as
provided in Section 4.3.l(a) above, that there has been an RSL IPO), the
Majority Non-RSL Stockholders shall have the one-time right to elect to exercise
the Second Exercise Right by giving written notice (the "Second Exercise Put
Notice") of such intention to RSL and the other Non-RSL
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Stockholders by registered or certified mail. Each Non-RSL Stockholder who was
not a party to the Second Exercise Put Notice but who, after receipt of the
Second Exercise Put Notice, has elected to exercise its Second Exercise Right,
shall give written notice of such intention to RSL by registered or certified
mail within ten (10) days after receipt of the Second Exercise Put Notice. For
the purposes of determining the Purchase Price per Share for the sale of Capital
Stock pursuant to the Second Exercise Right, the valuation of the Company by the
Appraiser shall occur on either (i) the effective date of the first equity
offering by RSL which occurs after the exercise of the Second Exercise Right or
(ii) if there has been no such equity offering, on any date, to be determined in
the sole discretion of RSL, between the exercise of the Second Exercise Right
and March 31 of the calendar year following the exercise of the Second Exercise
Right. Upon determination of the Purchase Price per Share by RSL's Appraiser in
accordance with Section 4.1.1, RSL shall provide written notice (the "Second
Exercise Pricing Notice") to the Non-RSL Stockholders of the Purchase Price per
Share together with the Appraiser's report of its calculation of the Purchase
Price per Share. Within 10 days after receipt of the Second Exercise Pricing
Notice, each selling Non-RSL Stockholder shall tender to RSL its certificates
for the Capital Stock duly endorsed in blank or accompanied by appropriate
stock powers and with appropriate stock transfer stamps affixed thereto (a
"Receipt Date") against payment of the Purchase Price per Share pursuant to
Section 4.4.1. In no event shall RSL be obligated, pursuant to the exercise of
the Second Exercise Right, to purchase the shares of Capital Stock held by any
Non-RSL Stockholder unless the Second Exercise Right is exercised by the
Majority Non-RSL Stockholders.
4.3.2 Non-IPO Put Option.
(a) In the event that RSL has not consummated an RSL IPO on or prior to the
third anniversary of the date hereof, the Non-RSL Stockholders shall have the
right (the "Non-IPO Put Option"), in accordance with the procedures set forth
herein, to sell to RSL all of the shares of Capital Stock owned by such Non-RSL
Stockholder (the "Final Exercise Right"); provided, however, that the Final
Exercise Right shall expire on the fifth anniversary of the date hereof.
(b) The Majority Non-RSL Stockholders shall have the one-time right to
elect to exercise the Final Exercise Right by giving written notice (the "Final
Exercise Put Notice") of such intention to RSL and the other Non-RSL
Stockholders by registered or certified mail. Each Non-RSL Stockholder who was
not a party to the Final Exercise Put Notice but who, after receipt of the Final
Exercise Put Notice, has elected to exercise its Final Exercise Right, shall
give written notice of such intention to RSL by registered or certified mail
within ten (10) days after receipt of the Final Exercise Put Notice. For the
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purposes of determining the Purchase Price per Share for the sale of Capital
Stock pursuant to the Final Exercise Right, the valuation of the Company by the
Appraiser shall occur on either (i) the effective date of the first equity
offering by RSL after the exercise of the Final Exercise Right or (ii) if there
has been no such equity offering, any date, to be determined in the sole
discretion of RSL, between the exercise of the Final Exercise Right and March 31
of the calendar year following the exercise of the Final Exercise Right. Upon
determination of the Purchase Price per Share by RSL's Appraiser in accordance
with Section 4.1.1, RSL shall provide written notice (the "Final Exercise
Pricing Notice") to the Non-RSL Stockholders of the Purchase Price per Share
together with the Appraiser's report of its calculation of the Purchase Price
per Share. Within 10 days after receipt of the Final Exercise Pricing Notice,
each selling Non-RSL Stockholder shall tender to RSL its certificates for the
Capital Stock duly endorsed in blank or accompanied by appropriate stock powers
and with appropriate stock transfer stamps affixed thereto (a "Receipt Date")
against payment of the Purchase Price per Share pursuant to Section 4.4.1. In no
event shall RSL be obligated, pursuant to the exercise of the Final Exercise
Right, to purchase the shares of Capital Stock held by any Non-RSL Stockholder
unless the Final Exercise Right is exercised by the Majority Non-RSL
Stockholders.
Section 4.4. Delivery of the Purchase Price.
4.4.1 Cash Payment. If RSL elects to make a Cash Payment of the Purchase
Price per Share, RSL may, in its sole and absolute discretion, elect (i) in the
case of an exercise of either the Call Option or the IPO Put Option, to pay
one-third of the Cash Payment on the Receipt Date, one-third of the Cash Payment
on the first anniversary of the Receipt Date and one-third of the Cash Payment
on the second anniversary of the Receipt Date and (ii) in the case of an
exercise of Non-IPO Put Option, to pay one-fifth of the Cash Payment on the
Receipt Date, one-fifth of the Cash Payment on the first anniversary of the
Receipt Date, one-fifth of the Cash Payment on the second anniversary of the
Receipt Date, one-fifth of the Cash Payment on the third anniversary of the
Receipt Date and one-fifth of the Cash Payment on the fourth anniversary of the
Receipt Date. Any payments of the Purchase Price per Share to be made after the
Receipt Date shall be evidenced by a promissory note delivered to each Non-RSL
Stockholder in the principal amount of such unpaid payments, which shall accrue
interest at a rate per annum equal to the lowest applicable federal rate
available on the Receipt Date.
4.4.2 Exchange of RSL Stock. If RSL elects the Exchange Option, each
Non-RSL Stockholder shall receive the number of shares of RSL Stock equal to the
product of (a) the number of shares of Capital Stock owned by such Non-RSL
Stockholder and (b) a fraction, the numerator of which is the
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Purchase Price per Share and the denominator of which is the per share price of
the RSL Stock (x) as quoted as the closing price on a nationally recognized
stock exchange on the day prior to the Receipt Date if the RSL IPO has
previously occurred or (y) as determined by the Appraiser, (with such
adjustments as may be necessary to avoid the issuance of fractional shares). RSL
shall, as promptly as reasonably practicable after the Receipt Date, issue and
deliver, in accordance with each Non-RSL Stockholder's instructions, a
certificate evidencing the RSL Stock to be issued to such Non-RSL Stockholder.
ARTICLE V
Issuances of Capital Stock; Capital Calls
Section 5.1. Issuances of Capital Stock. The Company and the Stockholders
hereby agree that, except for the issuance of options or stock upon the exercise
of options pursuant to a Company stock option plan (the "Stock Option Plan"),
each future issuance of the Company's common stock (including the issuance of
stock options (other than in accordance with the Stock Option Plan), warrants or
convertible securities) (collectively, "Equity Securities") must be approved by
the majority vote of the Company's Board of Directors. In the event that the
Board of Directors elects to issue additional Equity Securities to a party other
than RSL (each, a "Purchaser"), RSL shall have the right to purchase its pro
rata share of such Equity Securities (i.e., the amount of Equity Securities
owned by RSL prior to such issuance divided by the total amount of Equity
Securities outstanding prior to such issuance, in each case determined without
regard to any non-voting shares issued pursuant to the Company's Stock Option
Plan). In the event RSL elects to exercise its right to purchase its pro rata
share of the additional Equity Securities, then the Company shall sell such
Equity Securities to RSL upon the same terms as the Equity Securities are
proposed to be sold to the Purchaser except that the price per share of the
Equity Securities to be sold to RSL shall be at a discount of 15% of the price
per share of the Equity Securities to be sold to the Purchaser.
Section 5.2. Capital Calls.
5.2.1 Determination of Required Capital. In the event that the Company's
Board of Directors determines that the Company requires additional capital for
its operations and that such capital should be provided by the Stockholders, the
Company shall provide each Stockholder with a written notice (the "Required
Capital Notice") specifying the total amount of capital required by the Company
(the "Required Capital") and the number of shares of Capital Stock outstanding
as of the date thereof. The Required Capital Notice shall request each
Stockholder, in its
12
so1e and absolute discretion, to make an additional capital contribution to the
Company in accordance with this Section 5.2.
5.2.2 Election by Stockholders. Each Stockholder who wishes to provide the
Company with all or a portion of the Required Capital must provide the Company
with written notice (the "Capital Contribution Notice") within 10 days of the
date of the Capital Call Notice. The Capital Contribution Notice shall specify
(i) the amount of the Required Capital, up to such stockholder's pro rata share
of the Required Capital (based on the proportion of shares of Capital Stock
owned by such stockholder to the total number of shares of Capital Stock
outstanding at such time), that such Stockholder is agreeing to provide to the
Company and (ii) the amount of the Required Capital such Stockholder is willing
to provide in excess of its pro rata share (the "Overfunding Amount"). If one or
more stockholders elects not to provide the Company with any of the Required
Capital or elects to provide the Company with less than its pro rata share of
the Required Capital, then the amount of the Required Capital not theretofore
provided to the Company shall be provided by the Stockholders who elected to
contribute an Overfunding Amount, in proportion to their respective ownership of
Capital Stock: provided, however, that no Stockholder shall be required to
provide capital in excess of its Overfunding Amount. If any portion of the
Required Capital has not been satisfied after implementing the procedure in the
prior sentence, such amount shall be provided by the Stockholders whose
specified Overfunding Amounts have not been satisfied, in proportion to their
respective ownership of Capital Stock, and the procedure employed in this
sentence shall be used until the entire Overfunding Amount of each Stockholder
shall be satisfied or the entire amount of the Required Capital has been funded.
Upon determination of the amount of the Required Capital to be provided by each
Stockholder (each, an "Additional Capital Contribution") in accordance with the
procedures set forth in this Section 5.2.2, the Company shall provide each
Stockholder with a written notice (the "Capital Call Notice") of such amount.
All Additional Capital Contributions shall be made in cash within ten (10) days
of the date of the Capital Call Notice.
5.2.3 Issuance of Additional Shares of Capital Stock. In the event one or
more Stockholders elects not to contribute any or a pro rata portion of the
Required Capital, the Company shall issue shares of its Capital Stock to each
contributing Stockholder in an amount equal to (a) the Additional Capital
Contribution made by such Stockholder divided by (b) the Market Value per Share
of the Capital Stock (as hereinafter defined). The "Market Value per Share" of
the Capital Stock shall be based on a total Company valuation calculated as
follows: (a) seven (7) times Earnings Before Interest, Taxes, Depreciation and
Amortization expense, as determined under U.S. generally accepted accounting
principles ("GAAP"), for the calendar quarter prior to the date of the Required
Capital Notice, multiplied by four (4)
13
plus (b) the difference between (i) Current Assets (as determined under GAAP) as
of the date of the Required Capital Notice and (ii) the sum of Current
Liabilities and Long Term Liabilities (as determined under GAAP) for money
borrowed by the Company as of the date of the Required Capital Notice. Such
valuation amount shall be divided by the total number of shares of Capital Stock
of the Company then outstanding on a fully diluted basis to determine the Market
Value per Share.
ARTICLE VI
Miscellaneous
Section 6.1. Legend. All certificates representing shares of Capital Stock
shall bear a legend substantially in the form as follows:
"TRANSFER RESTRICTED
This Certificate and the shares of stock represented hereby are
subject to the provisions of a certain stockholders' agreement (as the
same may from time to time be amended, supplemented and/or restated)
among the Company and its stockholders, to which reference is hereby
made, which stockholders' agreement, among other things, restricts the
transfer of the shares of stock represented hereby. A copy of such
stockholders' agreement is on file at the principal office of the
Company.
These securities have not been registered under the Securities
Act of 1933, as amended, or under the securities laws of any State.
They may not be sold, offered for sale, pledged or hypothecated,
except in compliance with, or pursuant to an exemption from, the
requirements of such act or such laws or, in the absence of an
effective registration statement under such act with respect to these
securities, an opinion of counsel reasonably satisfactory to Delta
Three, Inc. that such registration is not required or unless these
securities are sold pursuant to Rule 144 of said act."
Section 6.2. Covenant of the Company. In the event the Company issues
additional shares of Capital Stock, or securities exercisable or convertible
into shares of Capital Stock, the Company shall include terms and provisions in
the agreements, certificates and other documents evidencing the issuance of such
securities requiring the proposed holder of such securities to agree in writing
to be bound by the terms of this Agreement, and the securities so issued shall
be held subject to all of the terms of this Agreement.
14
Section 6.3. Arbitration. Any controversy or claim arising out of or
relating to this Agreement or any modification or extension thereof, shall be
settled by arbitration before a panel of three arbitrators in New York City in
accordance with the rules, as then in effect, of the American Arbitration
Association or any successor organization thereto. Such decision shall be final
and binding upon the parties hereto. The parties consent to the jurisdiction of
the Supreme Court of the State of New York, and of the United States District
Court for the Southern District of New York, for all purposes in connection
with arbitration, including the entry of judgment on any award; and consent that
any process, notice of motion or other application to either of said courts, and
any papers in connection with arbitration, may be served by registered or
certified mail, return receipt requested, by personal service, or in such other
manner as may be permissible under the rules of the applicable court or
arbitration tribunal, provided a reasonable time for appearance is allowed. The
arbitrators shall have no power to alter or modify any express provision of this
Agreement or to render an award which has the effect of altering or modifying
any express provision hereof. The costs of any arbitration shall be borne
equally by the parties thereto except as the arbitrator(s) may otherwise
determine.
Section 6.4. Termination. This Agreement shall terminate at such time as
(i) only one Stockholder remains party hereto or (ii) RSL is no longer a
Stockholder.
Section 6.5. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, unless such amendment, modification or supplement is in writing
and signed by the Stockholders holding at least 80% of the shares of Capital
Stock held at such time by all of the Stockholders.
Section 6.6. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered
(i) when delivered personally or by private courier, (ii) when actually
delivered by registered United States mail, return receipt requested or (iii)
when sent by telecopy (provided, that, it is confirmed by a means specified in
clause (i) or (ii)), addressed as follows:
If to the Company:
c/o Wolf Haldenstein Xxxxx Xxxxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxxx, Esq.
15
with a copy to:
Wolf Haldenstein Xxxxx Xxxxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxxx, Esq.
with a copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
If to the Non-RSL Stockholders:
To the address that shall appear on the books of the Company.
If to RSL:
x/x XXX Xxxxxxxxxxxxxx, X. Xxxxxxx, Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
with a copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
or to such other address as such party may indicate by a notice delivered to the
other party hereto.
Section 6.7. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the heirs, successors and permitted assigns of
each of the parties, including without limitation and without the need for an
express assignment, subsequent holders of the Shares subject to the terms
hereof. If any person, firm or corporation shall acquire any shares of Capital
Stock or other securities of the Company in any manner, whether by operation of
law or otherwise, such securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such shares, such person, firm or
corporation shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms of this Agreement.
16
Section 6.8. Headings. The headings in this Agreement are for convenience
of references only and shall not limit or otherwise affect the meaning hereof.
Section 6.9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of New York without reference
to its conflicts of law provisions.
Section 6.10. Severability. In the event that any one or more of the
provisions contained herein, or the application hereof in any circumstance is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
Section 6.11. Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of this agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, concerning the registration rights granted by the Company pursuant to
this Agreement.
Section 6.12. Gender. Words used herein regardless of the gender
specifically used shall be deemed and construed to include any other gender,
masculine, feminine or neuter, as the context shall require.
Section 6.13. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
DELTA THREE, INC.
By /s/ Xxxxx Xxxxxxxx
-------------------------------
Name:
Title:
17
RSL COMMUNICATIONS, LTD.
By /s/ Xxxxxx Xxxxxx
---------------------------------
Name:
Title:
/s/ Xxxxx Xxxxxxxx
-----------------------------------
XXXXX XXXXXXXX
PIONEER MANAGEMENT CORPORATION, INC.
By /s/ Xxxx Xxxxxxx
---------------------------------
Name: Xxxx Xxxxxxx
Title:
/s/ Xxx X. Xxxxxx
-----------------------------------
XXX X. XXXXXX
-----------------------------------
XXXX XXXXX
/s/ Xxxx Xxxxxx
-----------------------------------
XXXX XXXXXX
-----------------------------------
XXXXX XXXX
-----------------------------------
XXXXXX XXXXXXX
18
-----------------------------------
XXXXXXX XXXXXX
-----------------------------------
XXXX XXXXXX
-----------------------------------
XXXXXXX XXXXXXX
-----------------------------------
XXXX XXXXXX
-----------------------------------
XXXXX XXXXXXXXXX
-----------------------------------
XXXXX XXXXXXXX
-----------------------------------
OMIT AVIDAR
-----------------------------------
XXXX XXXXXXX
-----------------------------------
XXXX XXXXXX
-----------------------------------
XXXXXXX XXXXXXX
-----------------------------------
XXXXX AISENTHAL
19
/s/ Xxxx Xxxx
-----------------------------------
XXXX XXXX
-----------------------------------
XXXXX XXXXXXXX
-----------------------------------
XXXXX XXXXXXXX
-----------------------------------
XXXX XXXXX
20
SCHEDULE 1
DELTA THREE, INC.
EXPECTED NON-RSL EQUITY HOLDERS (POST-CLOSING)
SHAREHOLDERS:
----------------------------------------------------------------------------------------
Shareholder Certificate Shares
========================================================================================
Xxxxx Xxxxxxxx 1 875,000
c/o Delta Three, Inc.
----------------------------------------------------------------------------------------
Pioneer Management Corporation, Inc. (sic) 2 875,000
c/o Xxxx Xxxxxxx, Delta Three, Inc.
----------------------------------------------------------------------------------------
Xxxx Xxxxx 3 (old certificate 3 still 125,000
00 Xxxxxxxx Xxxxx to be replaced)
Xxx Xxxxx, XX 00000
TEL: 0-000-000-0000
FAX: 0-000-000-0000
----------------------------------------------------------------------------------------
Xxxx Xxxxxx 5 100,000
c/o Delta Three, Inc.
----------------------------------------------------------------------------------------
Xxx Xxxxxx 6 437,500
c/o Delta Three, Inc.
----------------------------------------------------------------------------------------
Xxxxx Xxxx 7 100,000
c/o Delta Three, Inc.
----------------------------------------------------------------------------------------
Xxxxx Xxxxxxxx 20 (old ceriificate 11 10,000
000 Xxxxxxxxx Xxxx still to be replaced)
Xxxxxxxx, XX 00000
----------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 21 (old certificate 12 233,000
c/o Northeast Securities, Inc. still to be replaced)
----------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx 22 (old certificate 13 105,000
c/o Northeast Securities, Inc. still to be replaced)
----------------------------------------------------------------------------------------
Xxxx X. Xxxxxx 24 (old cerdficate 15 45,000
c/o Xxxxxxx X. Xxxxxx still to be replaced)
Northeast Securities, Inc.
----------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 28 50,000
x/x Xxxxxx Securities Center Corp.
----------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx (Not yet issued) 6,500
----------------------------------------------------------------------------------------
TOTAL: 2,962,000
----------------------------------------------------------------------------------------
EMPLOYEE RESTRICTED SHARES:
================================================================================
Employee Shares(1)
================================================================================
Xxxx Xxxxxx 100,000
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxxxx 30,000
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxx 15,000
--------------------------------------------------------------------------------
Omit Avidar 12,000
--------------------------------------------------------------------------------
Xxxx Xxxxxxx 10,000
--------------------------------------------------------------------------------
Xxxx Xxxxxx 10,000
--------------------------------------------------------------------------------
Xxxxx Aisenthal 5,000
--------------------------------------------------------------------------------
Xxxx Xxxx 5,000
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxx 2,500
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxx 1,000
--------------------------------------------------------------------------------
Xxxx Xxxxx 1,000
--------------------------------------------------------------------------------
TOTAL: 191,500
================================================================================
1. No stock certificates have yet been issued to evidence these stock grants.
-2-
DECEMBER 1996 UNITS:
================================================================================
Unit Holder Units(2)
================================================================================
Xxx X. Xxxxx 1
000 Xxxx 00xx Xx., Xxx. 0X
Xxx Xxxx, XX 00000
SSN: ###-##-####
--------------------------------------------------------------------------------
Xxxx Xxxxxx 1
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
TEL: 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 1
0000 Xxxxxx Xxxxxx
Xxx. 0X-X
Xxxxxx Xxxx, XX 00000
TEL. 0-000-000-0000
FAX: 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
Xxxx X. Xxxxx 1
000 Xxxxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000
TEL. 0-000-000-0000
FAX: 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
Xxxxxx X. and Xxxxxxx Xxxxx 1
00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
TEL. 0-000-000-0000
FAX: 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
Xxxxxx X. Xxxxx, M.D. 1
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
TEL. 0-000-000-0000
FAX: 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxxxxxxx XXX 1
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
TEL. 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
-3-
================================================================================
Unit Holder Units(2)
================================================================================
Smithfield Corp. 0
Xxxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XXXXXX
FAX: 000-000-0-000-0000
--------------------------------------------------------------------------------
2. Each Unit consist of a $25,000 convertible promissory note (subject to
anti-dilution provisions, principal and interest can be converted into common
shares at $2.00 per share) and a common stock purchase warrant which (subject to
anti-dilution provisions) permits the holder to acquire 12,500 common shares at
$2.00 per share. Unit holders have pre-emptive rights, and were sent a notice of
these rights more than ten business days in advance of the Closing.
-4-
APR1L 1997 UNITS:
================================================================================
Unit Holder Note and Warrant Nos. Units(3)
================================================================================
Xxxxxxxxx X. Xxxxx XXX CN-201 3
0000 Xxxxxxx Xxxxx X-000
Xxxxxxx, XX 00000
TEL. 0-000-000-0000
FAX: 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
Surety Bank & Trust Co. Ltd. Acct. 0100 CN-202 3
Suite 6 W-202
Hurricane Xxxx Xxxxx
X.X. Xxx XX-0000
Xxxxxx, Xxxxxxx
Attn: Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx
TEL. 0-000-000-0000
FAX: 0-000-000-0000
--------------------------------------------------------------------------------
Surety Bank & Trust Co. Ltd. Acct. 1000 CN-203 2
Suite 6 W-203
Hurricane Xxxx Xxxxx
X.X. Xxx XX-0000
Xxxxxx, Xxxxxxx
Attn: Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx
TEL. 0-000-000-0000
FAX: 0-000-000-0000
--------------------------------------------------------------------------------
Surety Bank & Trust Co. Ltd. Acct. 1002 CN-204 1
Suite 6 W-204
Hurricane Xxxx Xxxxx
X.X. Xxx XX-0000
Xxxxxx, Xxxxxxx
Attn: Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx
TEL. 0-000-000-0000
FAX: 0-000-000-0000
--------------------------------------------------------------------------------
Xxxxxx X. Xxxxx, M.D. CN-206 1
000 X. Xxxxxxxx Xxxxxx X-000
Xxxxxxxxxxx, XX 00000
TEL. 0-000-000-0000
FAX: 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
-5-
================================================================================
Unit Holder Note and Warrant Nos. Units(3)
================================================================================
Xxxxxxx Xxxxxxxxxxx XXX CN-208 1
00 Xxxxxxxx Xxxxxx X-000
Xxxxx Xxxx, XX 00000
TEL. 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
The Gross Investment Company L.P. CN 209 1
000 Xxx Xxxx Xxxx - Xxxxx 000 X-000
Xxxxxxxxxx, XX 00000
TEL. 0-000-000 6666
FAX: 0-000-000-0000
TIN: 52-6748538
--------------------------------------------------------------------------------
M.A.S. Xxxxxxx XXX CN-210 1
0000 Xxxxxxxxx Xxxxxx W-210
Pavillion No. 3
Xxxxxxxxxx, XX 00000
TEL. 0-000-000-0000
SSN: ###-##-####
--------------------------------------------------------------------------------
3. Each Unit consist of a $32,500 convertible promissory note (subject to
anti-dilution provisions, principal and interest can be converted into common
shares at $3.25 per share) and a common stock purchase warrant which (subject to
anti-dilution provisions) permits the holder to acquire 10,000 common shares at
$3.25 per share. Unit holders have pre-emptive rights, and were sent a notice of
these rights more than ten business days in advance of the Closing.
-6-
ADDITIONAL EQUITY INTERESTS:
===========================================================================================
Equity Holder Equity Interest
===========================================================================================
Northeast Securities, Inc. $42,900 convertible note and warrant for the
00 Xxxxx Xxxxxxxx Xxxx. purchase of 21,450 common shares substantially
Suite 706 in the form of the notes and warrants described in
Xxxxxxxx Xxxxx, XX 00000 footnote 1.
Attn: Xx. Xxx Xxxxxxx
TEL. 0-000-000-0000
FAX: 1-5l6-396-1623
TIN: 11-2997095
-------------------------------------------------------------------------------------------
Xxxxxx Xxxx Warrant for the purchase of 5,000 common shares
00 Xxxxxxx Xxxxx substantially in the form of the warrants
Xxxxxxx Xxxxxx, XX 00000 described in footnote 1.
-------------------------------------------------------------------------------------------
Xxxxxxxxx X. Xxxxx XXX Warrant (W-201A) for the purchase of 10,500
0000 Xxxxxxx Xxxxx common shares substantially in the form of the
Xxxxxxx, XX 00000 warrants described in footnote 2.
TEL. 0-000-000-0000
FAX: 0-000-000-0000
SSN: ###-##-####
-------------------------------------------------------------------------------------------
Surety Bank & Trust Co. Ltd. Acct. 1001 Warrant (W-202A) for the purchase of 10,500
Suite 6 common shares substantially in the form of the
Hurricane Hole Plaza warrants described in footnote 2.
X.X. Xxx XX-0000
Xxxxxx, Xxxxxxx
Attn: Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx
TEL. 0-000-000-0000
FAX: 0-000-000-0000
-------------------------------------------------------------------------------------------
Xxxx Xxxxxx Warrant (W-205A) for the purchase of 3,500
00 Xxxx 00xx Xxxxxx common shares substantially in the form of the
Xxx Xxxx, XX x0000 warrants described in footnote 2.
TEL. 0-000-000-0000
SSN: ###-##-####
-------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxx, M.D. Warrant (W-206A) for the purchase of 3,500
000 X. Xxxxxxxx Xxxxxx common shares substantially in the form of the
Xxxxxxxxxxx, XX 00000 warrants described in footnote 2.
TEL. 0-000-000-0000
FAX: 0-000-000-0000
SSN: ###-##-####
-------------------------------------------------------------------------------------------
-7-
===========================================================================================
Equity Holder Equity Interest
===========================================================================================
Surety Bank & Trust Co. Ltd. Acct. 1002 One Unit consisting of a convertible note and
Suite 6 common stock purchase unit as issued to
Hurricane Hole Plaza investors in the April 1997 Offering, except that
X.X. Xxx XX-0000 the note (CN-213) and the warrant (W-213) are
Nassau, Bahamas dated May 6, 1997.
Attn: Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx
TEL. 0-000-000-0000
FAX: 0-000-000-0000
===========================================================================================
-8-
