Exhibit A
FIBERNET TELECOM GROUP, INC.
STOCKHOLDERS AGREEMENT
October 30, 2002
TABLE OF CONTENTS
Page
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I. Covenants .................................................................. 1
A. Negative Covenants with Other Holders of Common Stock ................ 1
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II. Voting ..................................................................... 1
A. Election of Directors ................................................ 1
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III. Miscellaneous. ............................................................. 2
A. Legends .............................................................. 2
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B. Termination of Covenants ............................................. 3
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C. Attendance at Meetings ............................................... 3
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D. Further Assurances ................................................... 3
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E. Proxies .............................................................. 4
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F. Entire Agreement ..................................................... 4
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G. Recapitalizations, Etc ............................................... 4
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H. Successors and Assigns ............................................... 4
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I. Amendments and Waivers ............................................... 4
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J. Notices .............................................................. 5
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K. Severability ......................................................... 5
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L. Specific Performance; Delays or Omissions; Remedies Cumulative ....... 5
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M. Attorney's Fees ...................................................... 5
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N. Governing Law ........................................................ 6
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O. Counterparts ......................................................... 6
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P. Titles and Subtitles ................................................. 6
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FIBERNET TELECOM GROUP, INC.
STOCKHOLDERS AGREEMENT
This Stockholders Agreement (this "Agreement") is made as of October
30, 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
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
"Warrant"). 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 Purchase Agreement and the 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 upon exercise of
warrants issued pursuant to the Purchase Agreement, 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 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
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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
Investor's Rights Agreement, dated the date hereof, 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.
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.
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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 any transferee
or assignee in connection with the transfer or assignment of at least 40% of
such Investor's Common Stock or Warrants; provided, that (a) such transfer may
otherwise be 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
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
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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 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 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
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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 Rights 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, NA
By:______________________________
Name:
Title:
IBM CREDIT CORPORATION
By:______________________________
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:______________________________
Name:
Title:
Exhibit A
Name of Investor Address
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Deutsche Bank AG New York Deutsche Bank AG New York
Branch Branch
00 Xxxx 00/xx/ 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
Tel: (000) 000-0000
Bank One, NA FNBC Leasing Corporation
55 West Monroe, 17th floor
Mail Code XX0-0000
Xxxxxxx IL 60670-0502
IBM Credit Corporation
Xxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
IBM Credit Corporation Attn: Manager, Special
Handling
Toronto Dominion (Texas), Inc. Toronto Dominion (Texas), Inc.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxx, Vice
President
