EXHIBIT 4.28
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STOCKHOLDERS' AGREEMENT
BY AND AMONG
WAM!NET INC.
SILICON GRAPHICS, INC.
AND
MCI WORLDCOM, INC.
______________________________
Dated as of March 4, 1999
______________________________
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STOCKHOLDERS' AGREEMENT
Stockholders' Agreement, dated as of March 4, 1999, by and among Silicon
Graphics, Inc., a Delaware corporation ("SGI"); MCI WORLDCOM, Inc., a Georgia
corporation ("MCI WCOM" and, together with SGI, the "Investors"); and WAM!NET
INC., a Minnesota corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, MCI WCOM is the owner of 115,206 shares of the Company's 1999
Class A Preferred Stock, par value $10.00 per share (the "Class A Preferred
Stock"), in addition to certain warrants to purchase, and other securities
convertible into and exchangeable for, the Company's common stock, par value
$0.01 per share (the "Common Stock");
WHEREAS, SGI has, pursuant to the terms of a Preferred Stock Purchase
Agreement, dated as of March 3, 1999, between the Company and SGI, agreed to
purchase (i) 5,710,425 shares of the Company's Class B Convertible Preferred
Stock, par value $0.01 per share (the "Class B Preferred Stock") and (ii)
878,527 shares of the Company's Class C Convertible Preferred Stock, par value
$0.01 per share (the "Class C Preferred Stock");
WHEREAS, MCI WCOM has, immediately prior to the issuance of the Class B
Preferred Stock and the Class C Preferred Stock, pursuant to the terms of a
Subordinated Unsecured Convertible Note, dated as of January 13, 1999, issued by
the Company to MCI
WCOM in a principal amount of up to $25.0 million, due August 28, 1999 (the "MCI
WCOM Note"), converted all of the amounts outstanding thereunder into 2,196,317
shares of the Company's Class D Convertible Preferred Stock, par value $0.01 per
share (the "Class D Preferred Stock");
WHEREAS, the Class B Preferred Stock, the Class C Preferred Stock and the
Class D Preferred Stock are convertible into shares of Common Stock (the
"Conversion Shares" and, together with the Class A Preferred Stock, the Class B
Preferred Stock, the Class C Preferred Stock and the Class D Preferred Stock,
the "Subject Securities");
WHEREAS, the Investors and the Company desire to promote their mutual
interests by agreeing to certain matters relating to, among other things, the
operations of the Company and the disposition and voting of the Subject
Securities;
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereby agree as follows:
1. LEGENDS. The certificates evidencing the Subject Securities will bear
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the following legend reflecting the restrictions on the sale, transfer, pledge
or other disposition or encumbrance (each a "Transfer") of such securities
contained herein and in the Securities Act of 1933, as amended (the "Securities
Act"):
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"The securities evidenced hereby are subject to the terms of that
certain Stockholders Agreement, dated as of March 4, 1999, by and
among the Company, Silicon Graphics, Inc. and MCI WORLDCOM, Inc.,
including certain restrictions on transfer. A copy of this
Agreement has been filed with the Secretary of the Company and is
available upon request. The securities evidenced hereby have not
been registered under the Securities Act of 1933, as amended (the
"Act") and may not be resold, transferred or otherwise disposed
of other than in a transaction exempt from, or not subject to,
the registration requirements of the Act or pursuant to an
effective registration statement thereunder."
2. TRANSFER OF SUBJECT SECURITIES.
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(a) Resale of Subject Securities. No Investor shall Transfer any Subject
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Securities other than in accordance with the provisions of this Section 2. Any
Transfer or purported Transfer made in violation of this Section 2 shall be null
and void and of no effect.
(b) Co-Sale Rights. (i) In the event any Investor intends to Transfer any
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Subject Securities (other than (A) the Class A Preferred Stock and (B) to any of
its "affiliates" (as defined in the Securities Act) or to the Company), such
Investor (the "Selling Investor") shall notify the other Investor (the "Tag-
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Along Investor") in writing, of such proposed Transfer, its terms and conditions
and the proposed purchaser (the "Purchaser"). Within twenty (20) business days
of the date of such notice, the Tag-Along Investor shall notify the Selling
Investor if it elects to participate in such Transfer. If the Tag-Along
Investor fails to notify the Selling Investor within such twenty (20) business
day period, it shall be deemed to have waived its rights under this Section
2(b). Upon notification by the Tag-Along Investor to the Selling Investor, the
Tag-Along Investor shall have the right to sell, at the same price and on the
same terms and conditions as the Selling Investor, an amount of Subject
Securities equal to the amount of Subject Securities the Purchaser actually
proposes to purchase, multiplied by a fraction, the numerator of which shall be
the amount of Subject Securities issued and owned by such Tag-Along Investor,
and the denominator of which shall be the aggregate amount of Subject Securities
issued and owned by the Selling Investor and the Tag-Along Investor. As used
herein, the term "amount of Subject Securities" shall mean the sum of (Y) all
Common Stock proposed to be purchased by the Purchaser or owned by an Investor,
as the case may be, plus (Z) all Common Stock issuable upon the conversion and
exercise in full of the Subject Securities proposed to be purchased by the
Purchaser or owned by an Investor, as the case may be, that are convertible into
or exchangeable for Common Stock.
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(ii) Notwithstanding anything contained in this Section 2(b), in the event
that all or a portion of the purchase price consists of securities, and the sale
of such securities to the Tag-Along Investor would require either registration
under the Securities Act or the preparation of a disclosure document pursuant to
Regulation D under the Securities Act (or any successor regulation) or a similar
provision of any state securities law, and no such registration is otherwise
being effected and no such disclosure document is otherwise being prepared,
then, at the option of the Selling Investor, the Tag-Along Investor may receive,
in lieu of such securities, the fair market value of such securities in cash, as
determined in good faith by the Board.
(c) Securities Act. The Investors understand and acknowledge that the
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Subject Securities have not been registered under the Securities Act and that
they may not be Transferred other than in a transaction exempt from, or not
subject to, the registration requirements of the Securities Act or pursuant to
an effective registration statement thereunder.
3. [INTENTIONALLY OMITTED].
4. BOARD OF DIRECTORS. Throughout the term of this Agreement, the
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Investors and the Company shall take all action within their respective power
(including, without limitation, the voting of all shares of capital stock of the
Company owned by an Investor) to cause the Board of Directors of the Company to
be
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constituted in accordance with the Company's "Statement of Rights and
Preferences of Class A Preferred Shares" and "Statement of Rights and
Preferences of Class B Preferred Shares."
5. TERMINATION. The Agreement shall terminate on the earliest to occur of
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(a) the issuance of shares of Common Stock to the public in an underwritten
offering pursuant to a registration statement filed under the Securities Act
covering the offer and sale of Common Stock in which the net proceeds to the
Company exceed $20,000,000 and the Class B, C and D Preferred Stock have been
converted into Conversion Shares pursuant to the mandatory conversion provisions
thereof or (b) the date on which the Investors and the Company shall have agreed
in writing to terminate this Agreement.
6. WAIVER. MCI WCOM hereby consents to and approves the issuance of the
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Class B Preferred Stock and the Class C Preferred Stock to SGI and the
transactions and other agreements contemplated thereby and agrees to the waiver
of its rights pursuant to Section 5.03 of the Subordinated Unsecured Convertible
Note and Warrant Purchase Agreement, by and between the Company and MCI WCOM,
dated January 13, 1999 (the "Note Agreement").
7. AFFILIATE TRANSACTIONS. The terms of any material agreement,
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arrangement or understanding between the Company and MCI WCOM pursuant to
Sections 5.01 and 5.02 of the Note Agreement shall be approved by a majority of
the "Disinterested Directors"
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of the Company (as such term is defined in the Indenture, dated as of March 5,
1998, relating to the Company's 13.25% Senior Discount Notes due 2005), subject
to the provisions of Article V of the Note Agreement.
8. MISCELLANEOUS.
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(a) Amendments, Waivers and Consents. No provision in this Agreement may be
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altered or amended, and compliance with any covenant or provision set forth
herein may not be omitted or waived, except by an instrument in writing duly
executed by the Investors and the Company. Any waiver or consent may be given
subject to satisfaction of conditions stated therein and any waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
(b) Notices. All notices required or permitted by this Agreement shall be
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in writing, and shall be hand delivered, sent by facsimile or nationally
recognized overnight delivery service, addressed as follows:
(i) If to SGI:
Silicon Graphics, Inc.
2011 N. Shoreline Blvd.
Mountain View, CA 94043-1389
Attention: William M. Kelly,
Senior Vice President, Corporate Operations
Telephone: 650-932-0488
Facsimile: 650-932-0908
with a copy to:
Testa, Hurwitz & Thibeault, LLP
High Street Tower, 125 High Street
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Boston, MA 02110
Attention: William B. Asher, Jr.
Telephone: 617-248-7518
Facsimile: 617-248-7100
(ii) If to MCI WCOM:
MCI WORLDCOM, Inc.
1801 Pennsylvania Avenue, NW
Washington, D.C. 20006-3606
Attention: Susan Mayer, Senior Vice President
Telephone: 202-887-2202
Facsimile: 202-887-3226
with a copy to:
MCI WORLDCOM, Inc.
1801 Pennsylvania Avenue, NW
Washington, D.C. 20006-3606
Attention: Michael Salsbury, General Counsel
Telephone: 202-887-3373
Facsimile: 202-887-3353
(iii) If to the Company:
WAM!NET INC.
6100 West 110th Street
Minneapolis, MN 55438
Attention: Edward J. Driscoll, III, President
Telephone: 612-886-5100
Facsimile: 612-887-2165
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
Attention: Daniel D. Rubino
Telephone: 212-728-8000
Facsimile: 212-728-8111
or to such other person or address as a party shall specify by notice in writing
to the other party. All such notices and other communications shall be effective
when received.
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(c) Binding Effect; Assignment. This Agreement shall be binding upon and
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inure to the benefit of the Company and the Investors. No assignment of rights
or delegation of duties arising under this Agreement may be made by any party
hereto without the prior written consent of the other party.
(d) Third-Party Beneficiaries. This Agreement is for the sole benefit of
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the parties hereto and their permitted assigns and nothing herein expressed or
implied shall give or be construed to give to any person, other than the parties
hereto and such permitted assigns, any legal or equitable rights hereunder.
(e) Entire Agreement. This Agreement constitutes the entire agreement
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between the parties hereto with respect to the subject matter contained herein
and supersedes all other prior understandings or agreements, both written and
oral, between the parties with respect to the matters contained herein.
(f) Severability. The provisions of this Agreement are severable and, in
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the event that any court of competent jurisdiction shall determine that any one
or more of the provisions or part of a provision contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement; but this Agreement
shall be
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reformed and construed as if such invalid or illegal or unenforceable provision,
or part of a provision, had never been contained herein, and such provisions or
part reformed so that it would be valid, legal and enforceable to the maximum
extent possible.
(g) Governing Law. This Agreement shall be governed by, and construed in
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accordance with, the law of the State of Minnesota without regard to its
principles of conflicts of laws.
(h) Headings. Article, Section and sub-Section headings in this Agreement
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are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
(i) Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument, and any of the parties
hereto may execute this Agreement by signing any such counterpart by original or
facsimile signature.
(j) Expenses. Each party shall pay the fees and expenses of its respective
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counsel, accountants and other experts (including any broker, finder, advisor or
intermediary), and shall pay all other expenses incurred by it in connection
with the negotiation,
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preparation and execution of this Agreement and the consummation of the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
WAM!NET INC.
/s/ Allen L. Witters
_________________________________
By: Allen L. Witters
Its: Chief Technology Officer
MCI WORLDCOM, INC.
/s/ Susan Mayer
_________________________________
By: Susan Mayer
Its: Senior Vice President
SILICON GRAPHICS, INC.
/s/ William M. Kelly
_________________________________
By: William M. Kelly
Its: Senior Vice President
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