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EXHIBIT 4.8
DIGITAL TELEPORT, INC.
AMENDMENT NO. 3 TO SHAREHOLDERS' AGREEMENT
THIS AMENDMENT NO. 3 TO SHAREHOLDERS' AGREEMENT (this
"Amendment") dated as of February 12, 1998, by and among DTI HOLDINGS, INC. (the
"Company"), a Missouri corporation, XXXXXXX X. XXXXXXXXX ("Xxxxxxxxx"), an
individual, and KLT TELECOM INC. ("KLT"), a Missouri corporation. Except as
otherwise provided in the Shareholders' Agreement (as hereinafter defined),
Xxxxxxxxx and KLT are hereinafter sometimes referred to collectively as
"Shareholders" or individually as a "Shareholder."
WITNESSETH:
WHEREAS, Digital Teleport, Inc. ("DTI"), Xxxxxxxxx, and KLT
entered into that certain Shareholders' Agreement, dated as of March 12, 1997
(the "Original Shareholders' Agreement");
WHEREAS, DTI, Xxxxxxxxx and KLT entered into that certain
Amendment No. 1 to Shareholders' Agreement dated as of November 7, 1997 in order
to effectuate certain changes to the structure of the Board of Directors of DTI;
and
WHEREAS, pursuant to that certain Amendment No. 2 to the
Shareholders' Agreement dated as of December 18, 1997 ("Amendment No. 2 to
Shareholders' Agreement"; the Original Shareholders' Agreement, as so amended by
Amendments Nos. 1 and 2, the "Shareholders' Agreement"), DTI assigned to the
Company all DTI's right, title and interest in, to and under the Shareholders'
Agreement, as theretofore amended, and the Company accepted such assignment and
assumed the obligations of DTI thereunder which accrued from and after December
18, 1997;
WHEREAS, in connection with a private debt financing for the
Company, the Shareholders and the Company desire to amend the Shareholders'
Agreement as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the sufficiency of which are hereby acknowledged,
the Shareholders and the Company agree as follows:
1. Section 1.5. Section 1.5 of the Shareholders' Agreement is,
effective as of the date hereof, amended to read in its entirety as follows:
"1.5 Vote Required by Shareholders. In addition to any requirements of
applicable law with respect to class voting or otherwise, the Company shall not
take any of the following actions without the affirmative vote of at least
two-thirds of the outstanding voting stock of the Company:
(a) to approve a proposal to dissolve the Company;
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(b) to authorize the sale, exchange, lease, or other disposition of
all or substantially all the property and assets of the Company;
(c) to approve a proposed plan of merger or consolidation involving
the Company; or
(d) to amend or modify the Articles of Incorporation or By-Laws of
the Company."
2. Section 1.9. Section 1.9 of the Shareholders' Agreement is, effective
as of the date of the filing of an amendment to the Articles of Incorporation to
eliminate the Optional Redemption at the Shareholder's Election and the Optional
Redemption at the Company's Election contained in Sections II.B.5 and II.B.6 of
Article Three of the Company Articles of Incorporation, is deleted in its
entirety.
3. Section 2.2. Section 2.2 of the Shareholders' Agreement is, effective
as of the date hereof, amended to read in its entirety as follows:
"2.2 Demand Registration.
(a) If the Company shall receive at any time following the consummation
of an initial public offering of the Company's Common Stock resulting in net
cash proceeds to the Company, a written request from KLT or any permitted
transferee of KLT holding Purchased Shares ("Initiating Shareholder") that the
Company file a Registration Statement covering the registration of the amount of
Purchased Shares specified in the written request of the Initiating Shareholder,
then the Company shall (i) within five (5) days of the receipt of such
registration request, give written notice of such registration request to all
holders of Purchased Shares, and (ii) effect, as soon as practicable and in any
event no less than thirty (30) nor more than one hundred twenty (120) days after
the receipt of such registration request, the registration of such Purchased
Shares and shall include in such registration all Purchased Shares with respect
to which the Company receives, within the twenty (20) days immediately following
the receipt by the shareholder(s) other than the Initiating Shareholder of such
notice from the Company, a request for inclusion in the registration from such
shareholder(s) thereof. Each such request from a holder of Purchased Shares for
inclusion in the registration shall also specify the aggregate amount of
Purchased Shares proposed to be registered.
(b) If the Initiating Shareholder intends to distribute the Purchased
Shares covered by its request by means of an underwritten public offering, it
shall so advise the Company as a part of its request made pursuant to Section
2.2(b) hereof and the Company shall include such information in its written
notice to the Shareholders required under such Section. In the event that the
Initiating Shareholder intends to distribute the Purchased Shares by means of an
underwritten offering, the right of any holder of Purchased Shares to include
its Purchased Shares in such registration shall be conditioned upon such
holder's participation in such underwriting and the inclusion of such holder's
Purchased Shares in the underwriting to the extent provided herein. All holders
of Purchased Shares proposing to sell Purchased Shares through such underwriting
(including the Company as provided in
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Section 2.4(e) of this Agreement and any other holder of securities permitted to
participate in such registration pursuant to this Section 2.2(b)) shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected by the Initiating Shareholder for such underwriting
(provided the same are underwriters of recognized national standing reasonably
acceptable to the Company), upon the terms and conditions agreed upon between
the Company and such underwriter(s). Notwithstanding any other provision of this
Section 2.2, if the underwriter(s) advise the Initiating Shareholder in writing
that marketing or other factors require that less than 100% of the Purchased
Shares requested by the holder(s) of Purchased Shares be included in the
underwriting, then the Company shall so advise all such holders of Purchased
Shares that would otherwise be underwritten pursuant hereto, and the amount of
Purchased Shares that may be included in the underwriting shall be allocated
among all holders thereof, including the Initiating Shareholder, in proportion
(as nearly as practicable) to the amount of Purchased Shares which each
Shareholder requested be included in such registration. If the amount of
Purchased Shares to be underwritten has not been so limited, the Company may
include securities for its own account (or for the account of other holders) in
such registration if the underwriter(s) so agree and to the extent that, in the
opinion of such underwriter(s), the inclusion of such additional amount will not
adversely affect the offering of the Purchased Shares included in such
registration.
(c) The holder of Purchased Shares will be entitled, following the
consummation of an initial public offering of the Company's Common Stock
resulting in net cash proceeds to the Company to request pursuant to this
Section 2.2 one (1) registration on Form S-1 or any similar long-form
registration and up to two (2) registrations on Form S-2, Form S-3 or similar
short-form registrations, but in no event may the holders of Purchased Shares be
entitled to request more than one (1) such registration in any 12-month period."
4. Section 2.3. Section 2.3 of the Shareholders' Agreement is, effective
as of the date hereof, amended to read in its entirety as follows:
"2.3 Incidental Registration. In the event that (but without any
obligation to do so) the Company proposes to register any securities of the
Company in connection with the public offering of such securities solely for
cash on any form of Registration Statement in which the inclusion of Purchased
Shares is appropriate (other than a registration pursuant to a Registration
Statement on Form S-8 or Form S-4 (or any successor forms) or any form that does
not include substantially the same information, other than information relating
to the selling holders of Purchased Shares or their plan of distribution, as
would be required to be included in a registration statement covering the sale
of Purchased Shares), the Company shall promptly give each such holder written
notice of such registration at least thirty (30) days before the anticipated
filing date of any such Registration Statement. Upon the written request of any
holder of Purchased Shares within fifteen (15) days after the receipt by such
holder of such notice from the Company, the Company shall cause to be registered
under the Securities Act all of the Purchased Shares that such holder of
Purchased Shares has so requested to be registered. Notwithstanding any other
provision of this Section 2.3 to the contrary, if the underwriter(s) advise the
holders of Purchased Shares in writing that marketing or other factors require
that less than 100% of the Purchased Shares requested to be registered by such
holder or holders of Purchased Shares or shares of any other holder of
securities be included in such underwriting, then the Company shall so advise
all holders of Purchased Shares and such other security
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holders that would otherwise be underwritten, and the amount of Purchased Shares
or such other securities that may be included in the underwriting shall be
allocated among all Shareholders and other security holders thereof in
proportion (as nearly as practicable) to the amount of Purchased Shares or other
securities requested to be included in such registration. The Company shall not
be required to proceed with, or maintain the effectiveness of, any registration
of its securities after giving the notice herein provided, and the right of any
holder of Purchased Shares to have Purchased Shares included in such
Registration Statement shall be conditioned upon participation in any
underwriting to the extent provided herein. The Company shall not be required to
include any Purchased Shares in such underwriting unless the holders thereof
enter into an underwriting agreement with the underwriter(s) selected by the
Company in customary form, and upon terms and conditions agreed upon between the
Company and such underwriter(s) (except as to monetary obligations of the holers
of Purchased Shares not contemplated by Section 2.7 of this Agreement)."
5. Section 2.12. A new Section 2.12 is hereby added to the Shareholders'
Agreement:
"2.12. Acknowledgment. The parties hereto acknowledge and agree that as
of the date of this Amendment No. 3 to Shareholders' Agreement, Xxxxxxx X.
Xxxxxxxxx is not a holder of Purchased Shares or otherwise a "Shareholder"
entitled to the rights and benefits of this Section 2."
6. Section 3.1. Section 3.1 of the Shareholders' Agreement is, effective
as of the date hereof, amended to read in its entirety as follows:
"3.1 Right of First Offer
(a) If either Shareholder ("Transferring Shareholder") intends
to transfer all or a portion of its Shares to any person or entity in any
transaction (other than a public offering and other than a transfer by DTI of
all of its Shares in the Company as approved by the Board pursuant to Section
1.6(g)), it shall give written notice (the "Sales Notice") to the other
Shareholder ("Non-Transferring Shareholder") of such intention. The Sales
Notice, in addition to stating the fact of the intention to transfer, shall
state (i) the number of Shares to be transferred, and (ii) an offered amount of
the consideration for such Shares and the other terms of the transfer. The
Non-Transferring Shareholder may, within 30 days of its receipt of a Sales
Notice, exercise an option to purchase all (but not less than all) of the Shares
intended to be transferred by the Transferring Shareholder in the Sales Notice.
The Non-Transferring Shareholder must exercise its option to purchase all of the
Shares intended to be transferred on the terms in the Sales Notice or forfeit
its option. The Non-Transferring Shareholder shall exercise its option by
delivering written notice (the "Acceptance Notice") to the Transferring
Shareholder within the time specified above.
(b) The purchase price for Shares purchased pursuant to this Section 3
shall be as set forth in the Sales Notice. The closing of the sale and purchase
shall take place within 150 days after the delivery to the Transferring
Shareholder of the Acceptance Notice.
(c) If the Non-Transferring Shareholder does not elect to exercise its
option to purchase Shares pursuant to this Section 3, then the Transferring
Shareholder may transfer the
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Shares according to the terms of the Sales Notice at any time within 60 days
after the expiration of the 30 period specified in Section 3.1(a). Such transfer
is subject to the transferee executing an instrument accepting and adopting all
terms and provisions of this Agreement.
(d) Notwithstanding anything contained herein, the provisions
contained in this Section 3.1 shall terminate and be of no further force and
effect upon the closing of the sale of shares of Common Stock or debt securities
of the Company in a Qualified Public Offering as such term is defined in the
Articles of Incorporation of the Company."
7. Section 3.2. Section 3.2 of the Shareholders' Agreement is,
effective as of the date hereof, amended to read in its entirety as follows:
"3.2 Right to Maintain Ownership of Shares. If the Company shall at
any time (i) issue to Xxxxxxxxx any securities of the Company or instruments
convertible into any security of the Company ("New Securities"), and (ii) such
issuance shall reduce the KLT Ratio (as defined herein) to less than the 50%,
then KLT shall have the right to purchase, at the equivalent price per share, on
the same terms and conditions, and of the same type as the New Securities, an
additional number of such securities such that the KLT Ratio shall equal 50%.
The KLT Ratio shall be equal to a fraction, the numerator of which is the sum of
(i) the number of shares of common stock owned by KLT and (ii) the number of
shares of common stock into which any convertible equities of the Company owned
by KLT is convertible (collectively "KLT Shares") and the denominator of which
is the sum of (x) the KLT Shares, (y) the number of shares of Common Stock owned
by Xxxxxxxxx and (z) the number of shares of Common Stock into which any
convertible equities of the Company owned by Xxxxxxxxx is convertible.
Notwithstanding anything contained herein, the provisions contained in this
Section 3.2 shall terminate and be of no further force and effect upon the
closing of the sale of shares of Common Stock or debt securities of the Company
in a Qualified Public Offering as such term is defined in the Articles of
Incorporation of the Company."
8. Section 3.4. Section 3.4 of the Shareholders' Agreement is,
effective as of the date hereof, amended to read in its entirety as follows:
"3.4 Tag Along Sales.
(a) Right to Require Sale. Notwithstanding any other provision
hereof, if either Shareholder (the "Selling Shareholder") agrees to sell any
Shares held by such Selling Shareholder at that time to an unaffiliated third
party (a "Interest Sale"), then upon request of the Nonselling Shareholder, the
Selling Shareholder will afford the Nonselling Shareholder the opportunity to
sell, the same percentage of Shares held by the Nonselling Shareholder at that
time to such third party, at the same price and on the same terms and conditions
as the Selling Shareholder has agreed to sell his Shares.
(b) Interest Sale Notice. Prior to making any Interest Sale,
the Selling Shareholder shall provide the Nonselling Shareholder with written
notice (the "Interest Sale Notice"). If the consideration in the Interest Sale
is cash, the Selling Shareholder shall give the Interest Sale Notice at least
ten (10) business days prior to the proposed date of the Interest Sale
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("Interest Sale Date"). In all other situations, the Interest Sale Date shall
not take place until ten (10) business days following the receipt by the
Nonselling Shareholder of all information about the Interest Sale that the
Nonselling Shareholder reasonably requests within five (5) business days of
receiving the Interest Sale Notice. The Interest Sale Notice will identify the
proposed purchaser, the percentage of Common Stock to be sold, the proposed
amount and form of consideration to be paid per share, the terms and conditions
of payment and, if the consideration in the Interest Sale is cash, the Interest
Sale Date.
(c) Interest Sale Closing. On the Interest Sale Date, the
Selling Shareholder and the Nonselling Shareholder shall deliver certificates,
notes and instruments of assignment for the securities to be sold in the
Interest Sale, duly endorsed for transfer (accompanied as appropriate by stock
power or powers and other appropriate instruments of assignment duly executed),
to the purchaser in the manner and at the address indicated in the Interest Sale
Notice, against delivery of the agreed purchase price.
(d) Termination. Notwithstanding anything contained herein,
the provisions contained in this Section 3.1 shall terminate and be of no
further force and effect upon the closing of the sale of shares of Common Stock
or debt securities of the Company in a Qualified Public Offering as such term is
defined in the Articles of Incorporation of the Company."
9. Definitions. Any capitalized terms used but not defined herein shall
have the meaning ascribed thereto in the Shareholders' Agreement.
10. Effect of this Amendment. Except as otherwise specifically amended
herein, the Shareholders' Agreement, as modified by this Amendment, remains in
full force and effect.
11. Counterparts; Effectiveness. This Ame3ndment may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered as of the day and year first above written.
DTI HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
President
SHAREHOLDERS:
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
KLT Telecom Inc.
By: /s/ X.X. Xxxxxx
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Xxxxxx X. Xxxxxx
President
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