EXHIBIT 9.5
VOTING AGREEMENT
This Voting Agreement (this "Agreement") is made as of the 6th day of
April, 1999, by and among Rhythms NetConnections Inc., a Delaware corporation
(the "Company") and the parties listed on the Schedule of Investors attached
hereto as Schedule A (the "Series C Investors").
RECITALS
A. The Series C Investors desire to purchase from the Company and/or
already hold shares of the Company's Series C Preferred Stock (the "Series C
Shares"), and the Company desires to sell such Series C Shares (not currently
held) to the Series C Investors;
B. The parties desire that MCI WorldCom Venture Fund, Inc. ("MCI WorldCom")
be given the right to designate one (1) nominee to serve on the Company's Board
of Directors (the "MCI WorldCom Director");
C. The Series C Investors and the Company acknowledge that they are
entering into this Voting Agreement in consideration of the purchase of the
Series C Shares by certain of the Series C Investors pursuant to that certain
Series C Preferred Stock and Warrant Purchase Agreement dated as of the date
hereof (the "Purchase Agreement").
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. MCI WORLDCOM DIRECTOR. During the term of this Agreement, each of the
Series C Investors agrees to vote all of its Series C Shares now or hereafter
owned by it as follows:
(a) for so long as MCI WorldCom holds at least 1,000,000 Series C
Shares, (i) to elect the nominee of MCI WorldCom (the "MCI WorldCom Nominee") as
the MCI WorldCom Director and (ii) if requested by MCI WorldCom, to remove the
incumbent MCI WorldCom Nominee and elect a new MCI WorldCom Nominee as the MCI
WorldCom Director or to fill a vacancy created by death of such MCI WorldCom
Nominee or otherwise.
(b) MCI WorldCom shall designate the MCI WorldCom Nominee in writing
to the Company prior to each election of directors of the Company. The Company
shall promptly notify each of the Series C Investors of the nomination of the
MCI WorldCom Nominee by MCI WorldCom. Any vacancy occurring because of the
death, resignation, removal or disqualification of the MCI WorldCom Nominee
shall be filled according to this Section 1.
2. SUCCESSORS IN INTEREST.
(a) The provisions of this Agreement shall be binding upon the
successors in interest to any of the Series C Shares. The Company shall not
permit the transfer of any of the Series C Shares on its books or issue new
certificates representing any shares of such securities unless and until the
person(s) to whom such shares are to be transferred shall have executed a
written agreement, substantially in the form of this Agreement, pursuant to
which such person
becomes a party to this Agreement, and agrees to be bound by all the provisions
hereof as if such person was a party hereunder.
(b) Each certificate representing any of the Series C Shares shall
bear a legend reading as follows:
"The shares evidenced hereby are subject to the terms
of a Voting Agreement (a copy of which may be
obtained without charge from the issuer), and by
accepting any interest in such shares the person
accepting such interest shall be deemed to agree to
and shall become bound by all the provisions of such
Voting Agreement."
3. TERMINATION. This Agreement shall terminate upon the date the Company
consummates an under-written public offering of its Common Stock under the
Securities Act of 1933, as amended.
4. AMENDMENTS AND WAIVERS. Any term hereof may be amended and the
observance of any term hereof may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of (a) the Company and (b) the Series C Investors, or their assigns,
holding not less than 55% of the Series C Shares then outstanding. Any amendment
or waiver so effected shall be binding upon the Company and all Series C
Investors subject to the terms of this Agreement, whether or not such party,
assignee, or other stockholder entered into or approved such amendment or
waiver.
5. STOCK SPLITS, STOCK DIVIDENDS, ETC. In the event of any stock split,
stock dividend, recapitalization, reorganization, or the like, any securities
issued with respect to the Series C Shares shall become subject to this
Agreement and shall be endorsed with the legend set forth in Section 2(b)
hereof.
6. ENFORCEABILITY/SEVERABILITY. The parties hereto agree that each
provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law. If any provision of this Agreement
shall nevertheless be held to be prohibited by or invalid under applicable law,
(a) such provision shall be effective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement, and (b) the parties shall, to the extent
permissible by applicable law, amend this Agreement, or enter into a voting
trust agreement under which the Series C Shares shall be transferred to the
voting trust created thereby, so as to make effective and enforceable the intent
of this Agreement.
7. GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of Delaware as applied to contracts among Delaware
residents entered into and to be performed entirely within Delaware.
8. 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.
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9. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided in this
Agreement, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors and assigns of the parties hereto.
10. NOTICES. All notices, requests and other communications to the Company
or any of the Investors hereunder shall be in writing, shall refer specifically
to this Agreement and shall be personally delivered or sent by facsimile
transmission, overnight delivery with a nationally recognized overnight delivery
service or by registered or certified mail, return receipt requested, postage
prepaid, in each case to the respective address specified in the preamble hereof
with respect to the Company and in the Schedule of Investors attached as
Schedule A hereto with respect to the Series C Investors (or such other address
as may be specified in writing to the other parties hereto). Any notice or
communication given in conformity with this Section 10 shall be deemed to be
effective when received by the addressee, if delivered by hand or facsimile
transmission, one (1) business day after deposit with a nationally recognized
overnight delivery service and three (3) days after mailing by first class U.S.
Mail.
11. EQUITABLE REMEDIES. The Company and the Series C Investors acknowledge
and agree that the legal remedies available to the Company and the Series C
Investors in the event any party violates the covenants and agreements made in
this Agreement would be inadequate and that the Company and each of the Series C
Investors shall be entitled, without posting any bond or other security, to
temporary, preliminary, and permanent injunctive relief, specific performance
and other equitable remedies in the event of such a violation, in addition to
any other remedies which the Company or any of the Series C Investors may have
at law or in equity.
12. FURTHER ASSURANCES. Each of the parties hereto shall execute and
deliver all additional documents and instruments and shall do any and all acts
and things reasonably requested in connection with the performance of the
obligations undertaken in this Agreement and/or otherwise to effectuate in good
faith the intent of the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year hereinabove first written.
THE COMPANY:
RHYTHMS NETCONNECTIONS INC.
By: /s/ Xxxxxxxxx Xxxxx
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Xxxxxxxxx X. Xxxxx, President and
Chief Executive Officer
THE SERIES C INVESTORS:
U.S. TELESOURCE, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Its: President & Chief Executive Officer
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Address: 000 Xxxxx Xxxxx
000 00xx Xxxxxx
Xxxxxx, XX 00000
MCI WORLDCOM VENTURE FUND, INC.
By: /s/ Xxxxx Xxxxx
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Its: President
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Address: 0000 Xxxxxxxxxxx Xxxxxx, X.X.
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Washington, D.C. 20006
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SCHEDULE A
SCHEDULE OF SERIES C INVESTORS
NAME AND ADDRESS OF SERIES C INVESTORS
U.S. Telesource, Inc.
000 Xxxxx Xxxxx
000 00xx Xxxxxx
Xxxxxx, XX 00000
MCI WorldCom Venture Fund, Inc.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
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Xxxxxxxxxx, X.X. 00000
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