Exhibit 4.9.1
FIRST AMENDMENT TO
INVESTOR RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO INVESTOR RIGHTS AGREEMENT (this "Amendment")
is entered into as of April 20, 2000 (the "Effective Date"), by and among NETtel
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), GOLD & APPEL
TRANSFER, S.A., WILLIAMS COMMUNICATIONS, INC., NORTEL NETWORKS, INC. AND ALLIED
CAPITAL CORPORATION (each a "Series B Purchaser" and collectively, the "Series B
Purchasers") and certain persons and entities listed on the signature page to
the Series C Purchase Agreement (as defined below) (each a "Series C Purchaser"
and collectively, the "Series C Purchasers" and together with the Series B
Purchasers, the "Purchasers" and each, a "Purchaser").
WHEREAS, the Company entered into that certain Securities Purchase
Agreement by and among the Company and certain of the Series B Purchasers dated
as of July 23, 1999 and amended on August 2, 1999 (the "Series B Purchase
Agreement") pursuant to which the Company issued to certain of the Series B
Purchasers certain shares of the Company's Series B Convertible Preferred Stock,
par value $.0001 per share (the "Series B Preferred Stock");
WHEREAS, the Company entered into that certain Investor Rights
Agreement by and among the Company and the Series B Purchasers dated as of July
23, 1999 and amended on August 2, 1999 (the "Investor Rights Agreement"), which
provided for certain rights and responsibilities as set forth therein;
WHEREAS, the Company has issued shares of the Company's Series C
Convertible Preferred Stock, par value $.0001 per share (the "Series C Preferred
Stock" and together with the Series B Preferred Stock, the "Preferred Stock") to
the Series C Purchasers pursuant to that certain Securities Purchase Agreement
dated as of the Effective Date by and among the Company and the Series C
Purchasers (the "Series C Purchase Agreement");
WHEREAS, the parties desire to amend the Investor Rights Agreement to
include the Series C Preferred Stock and the Series C Purchasers in the
definition of "Purchasers" as set forth in the introduction herein and to
provide for certain rights and responsibilities as set forth in the Investor
Rights Agreement;
WHEREAS, Section 6.2 of the Investor Rights Agreement provides for
amendments in a writing signed by the Company and sixty-six and two-thirds
percent of the Series B Purchasers; and
WHEREAS, capitalized terms used herein without definition shall have
the meanings given to such terms in the Investor Rights Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto agree
as follows:
1. All references to "Series B Preferred Stock" in the Investor Rights
Agreement are deleted in their entirety and are hereby replaced with the
term "Preferred Stock," as such term is defined in this Amendment; provided,
--------
however, that the foregoing shall not apply to Section 2.4 of the Investor
-------
Rights Agreement, which shall retain its reference to "Series B Preferred
Stock" and shall retain its original intent; provided further, that the
-------- -------
foregoing shall not apply to the definition of "Series B Preferred Stock"
set forth in Section 5 of the Investor Rights Agreement.
2. The first sentence of Section 2.4 is hereby deleted in its entirety and is
replaced with the following:
"The following Purchasers may designate one person to serve as an
observer (an "Observer"): (i) any Purchaser holding at least 2,000 shares of
Series B Preferred Stock, and so long as such Purchaser continues to
beneficially own at least (a) 2,000 shares of Series B Preferred Stock or (b)
2,000,000 shares of Common Stock issued on conversion of Series B Preferred
Stock, and (ii) Allied Capital Corporation ("Allied"), until the later of the
expiration of (A) the period during which the aggregate of the following totals
at least $10,000,000: (a) the balance outstanding under Term Loan B Facility
pursuant to that certain Credit Agreement by and among NET-tel Corporation, a
wholly-owned subsidiary of the Company (the "Operating Subsidiary"), Nortel
Networks Inc. and the lenders named therein, dated as of July 28, 1999, as
amended from time to time, owed by the Operating Subsidiary to Allied; (b) the
stated value of the shares of Series B Preferred Stock held by Allied; and (c)
the stated value of the shares of Series C Preferred Stock held by Allied or (B)
the Lock-up Period. As used herein "Lock-up Period" shall mean that specified
period of time following an initial public offering by the Company pursuant to
which certain stockholders of the Company are prohibited by the managing
underwriter of such initial public offering from transferring or disposing of
certain capital stock of the Company.
3. Section 6.7(a) is hereby deleted in its entirety and is replaced with the
following:
"(a) If to the Purchasers, to the addresses and numbers set forth next to
the name of each Purchaser on Schedule 1 hereto."
----------
4. The Investor Rights Agreement is hereby amended to include the Schedule 1
----------
attached hereto.
5. Except as otherwise provided in this Amendment, the Investor Rights
Agreement remains unchanged and in full force and effect, and references to
the "Agreement" contained in the Investor Rights Agreement shall for all
purposes be deemed to refer to the Investor Agreement as amended by this
Amendment.
6. The Investor Rights Agreement, as amended hereby, constitutes the entire
understanding and agreement among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous
agreements and understandings, inducements or conditions, express or
implied, oral or written, among the parties hereto except as herein and
therein contained.
-2-
7. This Amendment may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same instrument, and a facsimile signature shall be deemed and original.
[The remainder of this page intentionally left blank.]
-3-
IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
to Investor Rights Agreement, or have caused this First Amendment to Investor
Rights Agreement to be duly executed on their behalf, as of the day and year
first hereinabove set forth.
COMPANY:
NETTEL COMMUNICATIONS, INC.
By: /s/ James F. Kenefick
------------------------
Name: James Kenefick
-----------------------
Title: CEO
----------------------
PURCHASERS:
ALLIED CAPITAL CORPORATION
By: /s/ Scott S. Binder
------------------------
Name: Scott S. Binder
-----------------------
Title: Principal
----------------------
FOUNDATION FOR THE INTERNATIONAL NON-
GOVERNMENTAL DEVELOPMENT OF SPACE
By: /s/ Walt Anderson
-------------------------
Name: Walt Anderson
-----------------------
Title: President
---------------------
GOLD & APPEL TRANSFER, S.A.
By: /s/ Walt Anderson
------------------------
Name: Walt Anderson
-----------------------
Title: Attorney-in-fact
---------------------
NORTEL NETWORKS INC.
By: /s/ Mitchell L. Stone
------------------------
Name: Mitchell L. Stone
----------------------
Title: Director
---------------------
WILLIAMS COMMUNICATIONS, INC.
By: Gordon C. Martin, Jr.
---------------------------
Name: Gordon C. Martin
-------------------------
Title: SVP, Global Network Svcs
------------------------
The undersigned agrees to be bound by the changes to Section 1.3 of
the Investor Rights Agreement as provided in this Amendment.
James F. Kenefick
------------------------------
James F. Kenefick
Schedule 1
----------
- -------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------
Allied Capital Corporation 1919 Pennsylvania Avenue, N.W. (Third
Floor)
Washington, D.C. 20006
- -------------------------------------------------------------------------------
Foundation for the International C/o: Walter Anderson
Non-Governmental Development of 1023 I Street, NW
Space Washington, DC 20007
- -------------------------------------------------------------------------------
Gold & Appel Transfer, S.A. Omar Hodge Building
Wickhams Cay
Road Town, Tortula
British Virgin Islands
- -------------------------------------------------------------------------------
Nortel Networks Inc. GSM 991 15 A40
2221 Lakeside Boulevard
Richardson, TX 75082
- -------------------------------------------------------------------------------
Williams Communications, Inc. One Williams Center
Suite 4100
Tulsa, OK 74172
- -------------------------------------------------------------------------------