Exhibit 10.1 COVER
SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
among
IFX CORPORATION,
UBS CAPITAL AMERICAS III, L.P.,
UBS CAPITAL LLC,
INTERNATIONAL TECHNOLOGY INVESTMENTS, LC,
JOEL EIDELSTEIN,
MICHAEL SHALOM
and
CASTY GRANTOR SUBTRUST
dated as of May 7, 2001
Exhibit 10.1
IFX CORPORATION
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THIS SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this
"Agreement") is entered as of May 7, 2001, among IFX CORPORATION, a Delaware
corporation (the "Company"), UBS CAPITAL AMERICAS III, L.P., a Delaware limited
partnership, and UBS CAPITAL LLC, a Delaware limited liability company
(collectively, "UBS" and together with successors and assigns, the "Investor
Stockholders"), INTERNATIONAL TECHNOLOGY INVESTMENTS, LC, a Nevada limited
liability company ("ITI"), JOEL EIDELSTEIN, individually ("Eidelstein"), MICHEAL
SHALOM, individually ("Shalom"), and the CASTY GRANTOR SUBTRUST ("Casty"; ITI,
Shalom, Eidelstein and Casty, individually, a "Stockholder," and collectively,
the "Stockholders").
RECITALS
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WHEREAS, the Company and the Investor Stockholders entered into that
certain IFX Corporation Preferred Stock Purchase Agreement, dated as of June 15,
2000, pursuant to which the Investor Stockholders purchased 2,030,869 shares of
Series A Preferred Stock; and
WHEREAS, as a condition to and in consideration of the Investor
Stockholders' purchase of Series A Preferred Stock, the Company, the Investor
Stockholders and the Stockholders entered into that certain Amended and Restated
Stockholders Agreement dated as of June 15, 2000 (the "Existing Agreement"); and
WHEREAS, the Company and the Investor Stockholders have entered into
the IFX Corporation Preferred Stock Purchase Agreement, dated March 13, 2001
(the "Stock Purchase Agreement"), pursuant to which the Investor Stockholders
will purchase newly issued shares of Series B Preferred Stock; and
WHEREAS, as a condition to and in consideration of the Investor
Stockholders' purchase of Series B Preferred Stock, the Company, the Investor
Stockholders and the Stockholders have agreed to amend and restate the Existing
Agreement in the manner set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and for other valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used herein, the following terms
shall have the following meanings:
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"Affiliate" of a specified Person shall mean (a) any Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person, (b) in
the case of a natural Person, such Person's spouse, parent or lineal descendant
(whether by blood or adoption and including stepchildren), a trust primarily for
the benefit of such Person and the foregoing, (c) in the case of a trust any
Person with whom the beneficiaries of the Trust are Affiliates, or (d) in the
case of UBS, (i) any company under the direct or indirect control of UBS AG (a
"UBS Group Company") and/or any partnership or unincorporated association under
the direct or indirect control of any UBS Group Company which includes, without
limiting the generality of the foregoing, any limited partnership the general
partner of which is a UBS Group Company and any limited liability company the
managing member of which is a UBS Group Company, and (ii) any alternative
investment vehicle formed by either of the foregoing, or any other entity (x) in
which UBS AG directly or indirectly owns at least 20% of the equity interests
and (y) is advised or managed (whether pursuant to contract, as general partner,
managing member or otherwise) by an entity in which UBS AG has a direct or
indirect equity interest. "Control" (including the terms "controlled by" and
"under common control with") shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of a
Person, whether through the ownership of voting securities, by contract or
credit arrangement, as trustee or executor, or otherwise.
"Agent" has the meaning assigned to such term in Section 5.13.
"as converted" has the meaning assigned to such term in Section 2.3.
"beneficial owner" or "beneficially own" has the meaning given such
term in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of
Common Stock, Series A Preferred Stock or Series B Preferred Stock or other
Voting Securities of the Company shall be calculated in accordance with the
provisions of such Rule; provided, however, that for purposes of determining
beneficial ownership, (i) a Person shall be deemed to be the beneficial owner of
any security which may be acquired by such Person whether within 60 days or
thereafter, upon the conversion, exchange or exercise of any warrants, options,
rights or other securities and (ii) no Person shall be deemed to beneficially
own any security solely as a result of such Person's execution of this
Agreement.
"Board" means the Board of Directors of the Company.
"Bona Fide Purchaser" means, with respect to a proposed Transfer of
Equity Securities, any transferee of Equity Securities who or which (a) is not
an Affiliate of the Investor Stockholders and (b) has delivered a good faith
written offer to purchase Equity Securities.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in New York
City on the city of Miami, Florida.
"Buyer" has the meaning assigned to such term in Section 3.6.
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"Bylaws" means the Bylaws of the Company, as in effect on the date
hereof and as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof, the terms of the Certificate
and the terms of this Agreement.
"Capital Stock" means, with respect to any Person at any time, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of capital stock, partnership interests (whether
general or limited) or equivalent ownership interests in or issued by such
Person, and includes, in the case of the Company without limitation, any and all
shares of Common Stock, Series A Preferred Stock and Series B Preferred Stock.
"Casty" has the meaning assigned to such term in the preamble.
"Certificate" means the Certificate of Incorporation of the Company, as
in effect on the date hereof and as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Closing" has the meaning assigned to such term in the Stock Purchase
Agreement.
"Common Stock" means the common stock, par value $0.02 per share, of
the Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.
"Director" means any member of the Board.
"Eidelstein" has the meaning assigned to such term in the preamble.
"Equity Securities" means any and all shares of Capital Stock of the
Company, securities of the Company convertible into, or exchangeable or
exercisable for, such shares, and options, warrants or other rights to acquire
such shares.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute and the rules and regulations promulgated
thereunder.
"Family" means any spouse, lineal ancestor or descendant, brother or
sister
"Holder" means an Investor Stockholder and any other holder of Equity
Securities who or which is a permitted transferee of an Investor Stockholders
pursuant to Section 3.1(c).
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"Independent Director" has the meaning specified in Rule 4200(a)(14) of
the NASD listing standards, as in effect on the date hereof and as the same may
be amended or supplemented, or in any successor rule or regulation.
"Independent Representative" has the meaning assigned to such term in
Section 2.1(a).
"Investor Representative" has the meaning assigned to such term in
Section 2.1(a).
"ITI" has the meaning assigned to such term in the preamble.
"Joint Representative" has the meaning assigned to such term in Section
2.1(a).
"NASD" means the National Association of Securities Dealers, Inc.
"Offer" has the meaning assigned to such term in Section 3.5(a).
"Offered Shares" has the meaning assigned to such term in Section
3.5(a).
"Permitted Sales" means the Transfers permitted in the first and second
sentences of Section 3.3(a) and the first sentence of Section 3.4(a).
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivisions thereof or any other entity.
"Preferred Stock" means the Series A Preferred Stock and Series B
Preferred Stock.
"Proposed Transferee" has the meaning assigned to such term in Section
3.5(a).
"Pro Rata Fraction" has the meaning assigned to such term in Section
3.5(c).
"Qualified Public Offering" has the meaning assigned to such term in
the Stock Purchase Agreement.
"Registration Rights Agreement" has the meaning assigned to such term
in the Stock Purchase Agreement.
"Representatives" has the meaning assigned to such term in Section
2.1(b).
"SEC" means the U.S. Securities and Exchange Commission or any other
federal agency then administering the federal securities laws.
"Securities Act" has the meaning assigned to such term in Section 3.1.
"Seller" has the meaning assigned to such term in Section 3.5(a).
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"Series A Certificate of Designation" means the Amended and Restated
Series A Certificate of Designation, Number, Powers, Preferences and Relative,
Participating and Other Rights of Series A Convertible Preferred Stock of the
Company in the form attached as Exhibit I to the Stock Purchase Agreement.
"Series B Certificate of Designation" means the Certificate of
Designation, Number, Powers, Preferences and Relative, Participating and Other
Rights of Series B Convertible Preferred Stock of the Company in the form
attached as Exhibit B to the Stock Purchase Agreement.
"Series A Preferred Stock" means the Series A Preferred Stock, par
value $1.00 per share, of the Company.
"Series B Preferred Stock" means the Series B Preferred Stock, par
value $1.00 per share, of the Company.
"Shalom" has the meaning assigned to such term in the preamble.
"Stockholders" has the meaning assigned to such term in the preamble.
"Stock Purchase Agreement" has the meaning assigned to such term in the
recitals.
"Transfer" means, directly or indirectly, to sell, transfer, assign,
pledge, encumber, hypothecate or similarly dispose of, either voluntarily or
involuntarily, or to enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, assignment, pledge,
encumbrance, hypothecation or similar disposition of, any shares of Equity
Securities beneficially owned by a Person or any interest in any shares of
Equity Securities beneficially owned by a Person.
"UBS" means (i) UBS Capital Americas III, L.P., a Jersey, Channel
Island Islands limited partnership, (ii) UBS Capital LLC, a Delaware limited
liability Company, and (iii) any Affiliate of UBS, individually and
collectively.
"Voting Securities" means, at any time, shares of any class of Equity
Securities of the Company which are then entitled to vote generally in the
election of Directors.
SECTION 1.2 Other Definitional Provisions.
(a) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Article and Section references are to this Agreement
unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
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ARTICLE II
CORPORATE GOVERNANCE
SECTION 2.1 Board Representation.
(a) Effective on the date hereof, the Board shall be comprised
of eight (8) Directors of whom: (i) three (3) shall be designees of the
Investor Stockholders (the "Investor Representatives"), (ii) one (1)
shall be the designee of ITI (the "ITI Representative"), (iii) one (1)
shall be the designee of Casty (the "Casty Representative"), (iv) one
(1) shall be jointly designated by ITI and Casty (the "Joint
Representative") and (v) two (2) shall be Independent Directors
acceptable to the Investor Stockholders, ITI and Casty (with such
consents not to be unreasonably withheld or delayed) (the "Independent
Representatives") and who, commencing with the election of Directors at
the next annual meeting of stockholders, has been elected by the
holders of a majority of the outstanding Voting Securities. The initial
Investor Representatives shall be Charles W. Moore, Mark O. Lama and
Charles Delaney, the initial ITI Representative shall be Michael
Shalom, the initial Casty Representative shall be George Myers, the
initial Joint Representative shall be Joel Eidelstein and the initial
Independent Representatives shall be Burton Meyer and Patrick
Delhougne. If, at any time, ITI and Casty are unable to agree upon the
designation of the Joint Representative, the Joint Representative shall
be designated by Jose Leiman. For purposes hereof, each of the two
Series A Preferred Directors (as defined in the Series A Certificate of
Designation) and the Series B Preferred Director (as defined in the
Series B Certificate of Designation) shall each count as one of the
three Investor Representatives.
(b) The Company shall take such action as may be required
under applicable law (i) to cause the Board to consist of the number of
Directors specified in clause (a), (ii) to include in the slate of
nominees recommended by the Board the Investor Representatives, the ITI
Representative, the Casty Representative, the Joint Representative and
the Independent Representatives (collectively, the "Representatives"),
and (iii) to cause the Representatives to be duly appointed in
accordance with the foregoing and, in the case of the Investor
Representatives, in accordance with the Series A Certificate of
Designation or the Series B Certificate of Designation, as the case may
be. The Company agrees to use its reasonable best efforts to cause the
election of the Representatives to the Board, including nominating such
individuals to be elected as Directors as provided herein.
(c) Each of the Investor Stockholders and the Stockholders
agrees to vote, or act by written consent with respect to any Voting
Securities beneficially owned by him or it, at each annual or special
meeting of the stockholders of the Company at which Directors are to be
elected or to take all actions by written consent in lieu of any such
meeting as are necessary to cause the Representatives designated by the
others in accordance with the terms of this Agreement to be elected to
the Board and agrees to use his or its reasonable best efforts to cause
the election of each such designee to the Board, including nominating
such individuals to be elected as Directors.
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(d) In the event that a vacancy is created at any time by the
death, disability, retirement, resignation or removal (with or without
cause) of any Representative, the remaining Directors and the Company
shall cause the vacancy created thereby to be filled by a new designee
of the party or parties that designated such Director as soon as
possible, who is designated in the manner specified in this Section
2.1. Each of the Company, Investor Stockholders and the Stockholders
hereby agrees to take, at any time and from time to time, all actions
necessary to accomplish the same. Upon the written request of any party
who is entitled to designated a Representative, each of the Investor
Stockholders and Stockholders shall vote, or act by written consent
with respect to all Voting Securities beneficially owned by him or it
and otherwise take or cause to be taken all actions necessary to remove
any Director designated by such party. Unless, any party who is
entitled to designate a Representative shall otherwise request in
writing, none of the others shall take any action to cause the removal
of any Director designated by the former.
(e) Each of the Company, the Investor Stockholders and the
Stockholders agrees not to take any action that would cause the number
of Directors constituting the entire Board to be other than eight (8)
without the written consent of each other party.
(f) The covenants and agreements set forth herein shall be
subject to the fiduciary obligations of the Representatives now or
hereafter serving on the Board and shall not prevent the
Representatives now or hereafter serving on the Board from taking any
action or refraining to take any action while acting in the capacity as
a Director of the Company. The foregoing shall not limit the
obligations of the Investor Stockholders, ITI and Casty in their
capacity as stockholders of the Company hereunder.
(g) The Company has hired an executive search firm to help
locate two new Independent Representatives who will serve as
Independent Representative instead of Messrs. Meyer and Delhougne.
After the Company has located such Independent Representatives
acceptable to the Investor Stockholders, ITI and Casty, each of the
Company, the Investor Stockholders and the Stockholders agree to take
all actions reasonably necessary to cause (including all of such
actions described in Section 2.1(c) hereof) Messrs. Meyer and Delhougne
to be removed from the Board and to cause the newly designated
Independent Representatives to be named as Directors of the Company.
SECTION 2.2 Committees. The Company shall, except as provided below, by
amending its Bylaws or otherwise, establish and maintain a Compensation
Committee and an Audit Committee of the Board which satisfies the requirements
of this Section. The Compensation Committee shall consist of two (2) Directors,
both of whom shall be the Independent Representatives. The Audit Committee shall
consist of three (3) Directors, one (1) of whom shall be an Investor
Representative and two (2) of whom shall be Independent Representatives. The
Compensation Committee shall have responsibility for compensation matters
customarily addressed by compensation committees of similarly situated companies
and shall have the full power and authority of the Board with respect thereto,
except as limited by applicable law. The Audit Committee shall
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have responsibility for matters customarily addressed by audit committees of
similarly situated companies and shall have the full power and authority of the
Board with respect thereto, except as limited by applicable law. Notwithstanding
anything to the contrary herein, the Investor Stockholders and the Stockholders
acknowledge and agree that the composition of the Compensation and Audit
Committees must satisfy any applicable rules and regulations of the SEC and the
NASD as in effect from time to time.
SECTION 2.3 Termination of Rights.
(a) Except with respect to the rights of the Investor
Stockholders as provided in subparagraph (b) below, Sections 2.1 and
2.2 shall terminate upon a Qualified Public Offering.
(b) The rights of the Investor Stockholders under Sections 2.1
and 2.2 (and the corresponding obligations of the Stockholders) shall
survive a Qualified Public Offering, provided that, at such time as the
Investor Stockholders and their Affiliates shall cease to own in the
aggregate at least 25% of the number of shares of Common Stock
(determined with respect to the Preferred Stock and any other Equity
Securities owned by the Investor Stockholders and their Affiliates that
are convertible into (whether or not, in the case of the Preferred
Stock, such Preferred Stock is then currently convertible at the option
of the holder into Common Stock), or exchangeable or exercisable for
Common Stock, on an as-converted, exchanged or exercised basis (any
determination made in accordance with the foregoing shall hereinafter
be referred to as "as converted")) that the Investor Stockholders and
such Affiliates held as of the Closing (adjusted for stock splits,
combinations, stock dividends and the like), the Investor Stockholders
shall cease to have the right to designate Directors pursuant to
Section 2.1 and members of the Compensation Committee and Audit
Committee pursuant to Section 2.2 and all other rights of the Investor
Stockholders or such Stockholder under this Article II shall terminate.
ARTICLE III
TRANSFERS
SECTION 3.1 Investor Stockholder Transfers. Each Investor Stockholder
hereby agrees that it shall not Transfer any shares of its Equity Securities,
unless such Transfer is effected through (a) a public offering registered under
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), (b) sales made pursuant to Rule
144 under the Securities Act, or any successor provisions or (c) a Transfer
otherwise permitted hereunder and in compliance herewith. Any Equity Securities
Transferred pursuant to clause (a) or (b) shall no longer be subject to this
Agreement. Each transferee Holder under clause (c) shall agree in writing as a
condition to such Transfer, to be bound by all of the provisions of this
Agreement to the same extent as if such transferee were the transferring
Investor Stockholder, and all stock certificates representing shares transferred
to such transferee shall bear a legend providing notice of the restrictions
contained in this Agreement.
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SECTION 3.2 Stockholder Transfers. Each Stockholder hereby agrees that
it shall not Transfer any shares of its Equity Securities, unless such Transfer
is effected through (a) a public offering registered under the Securities Act,
(b) sales made pursuant to Rule 144 under the Securities Act or any successor
provisions or (c) a Transfer otherwise permitted hereunder and in compliance
herewith. Any Equity Securities Transferred pursuant to clauses (a) or (b) shall
no longer be subject to this Agreement, except as provided herein. Each
transferee under clause (c) shall agree in writing as a condition to such
Transfer, to be bound by all of the provisions of this Agreement to the same
extent as if such transferee were the transferring Stockholder, and all stock
certificates representing shares transferred to such transferee shall bear a
legend providing notice of the restrictions contained in this Agreement.
SECTION 3.3 Transfers by Eidelstein, ITI and Shalom.
(a) ITI and Shalom agree that neither such Stockholder nor any
of its Affiliates shall Transfer more than 25,000 shares of Common
Stock during any calendar quarter, in each case, without the written
consent of the Investor Stockholders, which consent shall not be
unreasonably withheld or delayed, or without compliance with Sections
3.5 and 3.6; provided that Transfers by ITI and Shalom shall be
aggregated for purposes of the foregoing. Eidelstein hereby agrees that
neither he nor any of his Affiliates shall Transfer more than 25,000
shares of Common Stock during any calendar quarter without the written
consent of the Investor Stockholders, which consent shall not be
unreasonably withheld or delayed, or without compliance with Sections
3.5 and 3.6. Notwithstanding the foregoing, Eidelstein, ITI or Shalom
may Transfer all or any of their Equity Securities (x) to any member of
such Stockholder's Family or to any trust for the benefit of any such
Family member of such Stockholder or to any other Affiliate (including,
without limitation, the members of ITI), provided that any such
transferee shall agree in writing with the Company and the Investor
Stockholders as a condition to such Transfer, to be bound by all of the
provisions of this Agreement to the same extent as if such transferee
were such Stockholder, or (y) by will or the laws of descent and
distribution; provided, however, in such event each such transferee
shall be bound by all of the provisions of this Agreement to the same
extent as if such transferee were such Stockholder; and provided,
further, that each such transferee shall execute an irrevocable proxy
appointing the original Stockholder (except in the case of death of the
original Stockholder) transferring such shares as proxy to vote all
such shares so transferred, such appointment shall be coupled with an
interest, and all stock certificates representing such shares shall
bear a legend providing notice of such appointment of proxy and the
restrictions contained in this Agreement.
(b) The Transfer restrictions contained in Section 3.3(a)
shall terminate upon the earlier of: (i) a Qualified Public Offering
and (ii) the time at which the Investor Stockholders and the other
Holders own less than 20% of the Common Stock (on an as converted
basis) that the Investor Stockholders owned as of the Closing.
SECTION 3.4 Transfers by Casty.
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(a) Casty agrees that neither it nor any of its Affiliates
shall Transfer, during any calendar quarter, more than the number of
Shares of Common Stock permitted under Rule 144(e) of the Securities
Act measured as of the last day of such calendar quarter plus 50% of
the number of Shares of Common Stock which were eligible for sale (but
not sold under this Section 3.4(a)) during the preceding calendar
quarters (beginning with the calendar quarter ending March 31, 2001),
without the written consent of the Investor Stockholders, which consent
shall not be unreasonably withheld or delayed, or without compliance
with Sections 3.5 and 3.6. Notwithstanding the foregoing, Casty may
Transfer all or any of his Equity Securities (x) to any member of such
Stockholder's Family, to any trust for the benefit of any such Family
member of such Stockholder or to any other Affiliate, provided that any
such transferee shall agree in writing as a condition to such Transfer,
to be bound by all of the provisions of this Agreement to the same
extent as if such transferee were such Stockholder, or (y) by will or
the laws of descent and distribution; provided, however, in such event
each such transferee shall be bound by all of the provisions of this
Agreement to the same extent as if such transferee were such
Stockholder; and provided, further, that each such transferee shall
execute an irrevocable proxy appointing Joel Eidelstein as proxy to
vote all such shares so transferred, such appointment shall be coupled
with an interest, and all stock certificates representing such shares
shall bear a legend providing notice of such appointment of proxy and
the restrictions contained in this Agreement.
(b) The Transfer restrictions contained in Section 3.4(a)
shall terminate upon the earlier of: (i) a Qualified Public Offering
and (ii) the time at which the Investor Stockholders and the other
Holders own less than 20% of the Common Stock (on an as converted
basis) that the Investor Stockholders owned as of the Closing.
SECTION 3.5 Right of First Refusal on Certain Transfers.
(a) If at any time a Stockholder or any of his/its Affiliates,
other than the Company, desires to Transfer all or any part of their
Equity Securities (other than pursuant to Permitted Sales) to any
Person (the "Proposed Transferee"), such Stockholder (the "Seller")
shall, except as provided below, submit a written offer (the "Offer")
to sell such Equity Securities (the "Offered Shares"), first to the
Company, and second to the Holders, on the same terms and conditions on
which the Seller proposes to sell such Offered Shares to the Proposed
Transferee. The parties acknowledge and agree that any Transfer
described in the last sentence of Sections 3.3(a) and 3.4(a) shall not
be subject to the terms of this Section. The Offer shall disclose the
identity of the Proposed Transferee, the Offered Shares proposed to be
sold, the terms and conditions, including price, of the proposed sale,
and any other material facts relating to the proposed sale. The Offer
shall further state that the Company and the Holders may acquire, in
accordance with the provisions of this Agreement, all or any portion of
the Offered Shares for the price and upon the other terms and
conditions, including deferred payment (if applicable), set forth
therein.
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(b) Upon receipt of the Offer, if the Company desires to
purchase all or any part of the Offered Shares, the Company shall
communicate in writing its election to purchase to the Seller, which
communication shall state the number of Offered Shares the Company
desires to purchase and shall be given to the Seller in accordance with
Section 5.4 below within thirty (30) days of the date the Offer was
made. Such notice shall, when taken in conjunction with the Offer, be
deemed to constitute a valid, legally binding and enforceable agreement
for the sale to, and purchase by, the Company of the number of Offered
Shares specified by the Company in such notice and on the terms of the
Offer. Sales of the Offered Shares to be sold to the Company pursuant
to this Section 3.5(b) shall be made at the offices of the Company on
the 45th day following the date the Offer was made (or if such 45th day
is not a Business Day, then on the next succeeding Business Day). Such
sales shall be effected by the Seller's delivery to the Company of a
certificate or certificates evidencing the Offered Shares to be
purchased by it, duly endorsed for transfer to the Company, against
payment to the Seller of the purchase price therefor by the Company.
(c) Each Holder shall, subject to the prior purchase right of
the Company, have the absolute right to purchase that number of Offered
Shares not purchased by the Company as shall be equal to the number of
Offered Shares not purchased by the Company multiplied by a fraction,
the numerator of which shall be the number of shares of Common Stock
(determined on an as converted basis) then owned by such Holder and the
denominator of which shall be the aggregate number of shares of Common
Stock (determined on an as converted basis) then owned by all of the
Holders. The amount of Offered Shares that each Holder is entitled to
purchase under this Section 3.5(c) shall be referred to as its "Pro
Rata Fraction." The Holders shall have a right of oversubscription such
that if any Holder fails to accept the Offer as to its Pro Rata
Fraction, the other Holders shall, among them, have the right to
purchase up to the balance of the Offered Shares not so purchased. Such
right of oversubscription may be exercised by a Holder by accepting the
Offer as to more than its Pro Rata Fraction. If, as a result thereof,
such oversubscriptions exceed the total number of Offered Shares
available in respect of such oversubscription privilege, the
oversubscribing Holders shall be cut back with respect to their
oversubscriptions on a pro rata basis in accordance with their
respective Pro Rata Fractions or as they may otherwise agree among
themselves. If a Holder desires to purchase all or any portion of the
Offered Shares, said Holder shall communicate in writing its election
to purchase to the Seller and the Company, which communication shall
state the number of Offered Shares said Holder desires to purchase and
shall be given to the Seller in accordance with Section 5.4 below
within thirty (30) days of the date the Offer was made. Such
communication shall, when taken in conjunction with the Offer, be
deemed to constitute a valid, legally binding and enforceable agreement
for the sale and purchase of such Offered Shares (subject to the
aforesaid limitations as to a Holder's right to purchase more than its
Pro Rata Fraction) and on the terms of the Offer. Sales of the Offered
Shares to be sold to purchasing Holders pursuant to this Section 3.5(c)
shall be made at the offices of the Company on the later of (i) the
45th day following the date the Offer was made (or if such later of (i)
the 45th day is not a Business Day, then on the next succeeding
Business Day) and (ii) the third Business Day following receipt of all
material governmental or other consents in connection with such sale.
Such sales shall be effected by the Seller's
11
delivery to each purchasing Holder of a certificate or certificates
evidencing the Offered Shares to be purchased by it, duly endorsed for
transfer to such purchasing Holder, against payment to the Seller of
the purchase price therefor by such purchasing Holder.
(d) If the Holders and the Company do not purchase in the
aggregate all of the Offered Shares, the Offered Shares not so
purchased may be sold by the Seller at any time within 90 days after
the date the Offer was made, subject to the provisions of Section 3.6
hereof. Any such sale shall be to the Proposed Transferee, at the price
and upon the other terms and conditions specified in the Offer. Any
Offered Shares not sold within such 90-day period shall continue to be
subject to the requirements of a prior offer pursuant to this Section
3.5. If Offered Shares are sold pursuant to this Section 3.5 to any
purchaser who is not a party to this Agreement, the Offered Shares so
sold shall no longer be subject to this Agreement.
(e) The provisions of this Section 3.5 shall terminate upon
the earlier of: (i) a Qualified Public Offering and (ii) the time at
which the Investor Stockholders and the other Holders own less than 20%
of the Common Stock (on an as converted basis) that the Investor
Stockholders owned as of the Closing.
SECTION 3.6 Right of Participation in Sales by Stockholders.
(a) If at any time any of the Stockholders (the "Tag-Along
Seller") desires to Transfer all or any part of the Equity Securities
(other than pursuant to Permitted Sales) owned by such Tag-Along Seller
to any Person other than Investor Stockholders (including the other
Holders) (the "Buyer"), the Investor Stockholders shall, except as
provided below, have the right to sell to the Buyer, as a condition to
such sale by Tag-Along Seller, at the same price per share and on the
same terms and conditions as involved in such sale by the Tag-Along
Seller, a number of shares of Common Stock (on an as converted basis)
equal to the number derived from multiplying the total number of shares
of Common Stock (on an as converted basis) proposed to be sold by the
Tag-Along Seller by a fraction, the numerator of which is the total
number of shares of Common Stock (on an as converted basis) held by the
Investor Stockholders and the denominator of which is the total number
of shares of Common Stock (on an as converted basis) held by the
Tag-Along Seller and the Investor Stockholders (including the other
Holders). The parties acknowledge and agree that any Transfer described
in the last sentence of Sections 3.3(a) and 3.4 (a) shall not be
subject to the terms of this Section.
(b) Each Investor Stockholder wishing to so participate in any
sale under this Section 3.6 shall notify the Tag-Along Seller in
writing of such intention within twenty (20) days after the date of
their receipt of the Offer.
(c) The Tag-Along Seller and each participating Investor
Stockholder shall sell to the Buyer all, or at the option of the Buyer
any part, of the Equity Securities proposed to be sold by them at the
price and upon other terms and conditions contained in the Offer
provided by the Tag-Along Seller under Section 3.5 above; provided,
however, that any purchase of less than all of such Equity Securities
by the Buyer shall be made from the Tag-Along Seller and each
participating Investor
12
Stockholder pro rata based upon the relative amount of the Equity
Securities that the Tag-Along Seller and each participating Investor
Stockholder is otherwise entitled to sell pursuant to Section 3.6(a).
(d) The provisions of this Section 3.6 shall terminate upon a
Qualified Public Offering.
SECTION 3.7 Right of Participation in Sales by Investor Stockholders.
(a) If at any time the Investor Stockholders desire to
Transfer at least 40% of the Equity Securities owned in the aggregate
by them and their Affiliates to any Person other than an Affiliate of
the Investor Stockholders (the "Tag-Along Purchaser"), each of the
other Stockholders, shall have the right to sell to the Tag-Along
Purchaser, as a condition to such sale by the Investor Stockholders, at
the price per share and on the terms and conditions applicable to the
Common Stock set forth in the Tag-Along Purchaser's offer to the
Investor Stockholders (the "Tag-Along Purchase Offer"), a number of
shares of Common Stock equal to the number derived from multiplying the
total number of shares of Common Stock (on an as converted basis)
proposed to be sold by the Investor Stockholders by a fraction, the
numerator of which is the total number of shares of Common Stock (on an
as converted basis) held by such Stockholder and the denominator of
which is the total number of shares of Common Stock (on an as converted
basis) held by all Stockholders and the Investor Stockholders.
(b) Each Stockholder wishing to so participate in any sale
under this Section 3.7 shall notify the Agent in writing of such
intention within twenty (20) days after the date such Stockholder's
receipt of the Tag-Along Purchase Offer.
(c) The Investor Stockholders and each participating
Stockholder shall sell to the Tag-Along Purchaser all, or at the option
of the Tag-Along Purchaser any part, of the Equity Securities proposed
to be sold by them at the price per share and on the terms and
conditions as set forth with respect to each class and series of
Capital Stock in the Tag-Along Purchaser Offer; provided, however, that
any purchase of less than all of such Equity Securities by the
Tag-Along Purchaser shall be made from the Investor Stockholders and
each participating Stockholder pro rata based upon the relative amount
of the Equity Securities that the Investor Stockholder (including the
other Holders) and each participating Stockholder is otherwise entitled
to sell pursuant to Section 3.7(a).
(d) The provisions of this Section 3.7 shall terminate upon a
Qualified Public Offering.
SECTION 3.8 Drag-Along Rights.
(a) Subject to Section 3.8(c) hereof, if the Investor
Stockholders (collectively, the "Drag-Along Transferor") approve a sale
of (i) a majority of the outstanding shares of Common Stock on an as
converted basis to a Bona Fide Purchaser or (ii) all or substantially
all of the assets of the Company to a Bona Fide
13
Purchaser (each an "Approved Sale"), whether by way of merger,
consolidation, sale of stock or assets, or otherwise, all Stockholders
shall consent to and raise no objections against the Approved Sale, and
if the Approved Sale is structured as (A) a merger or consolidation of
the Company or a subsidiary, or a sale of all or substantially all of
the assets of the Company or a subsidiary, each Stockholder shall waive
any dissenters rights, appraisal rights or similar rights in connection
with such merger, consolidation or asset sale, or (B) a sale of a
majority of the outstanding shares of Common Stock on an as converted
basis the Stockholders shall agree to sell their respective
proportionate percentages of the Common Stock on an as converted basis
which are the subject of the Approved Sale, on the same terms and
conditions as applicable to the Common Stock of the Drag-Along
Transferor. The Stockholders shall take all actions reasonably
requested by the Drag Along Transferor in connection with the
consummation of the Approved Sale, including the execution of all
agreements and such instruments and other actions requested by the Drag
Along Transferor to provide the representations, warranties,
indemnities, covenants, conditions, agreements, escrow agreements and
other provisions and agreements relating to such Approved Sale;
provided, however, that each participating Stockholder's liability
under any such agreement or instrument shall be limited to his/her/its
proportionate percentage of such liability (based on the number of
shares of Common Stock on an as converted basis held by such
Stockholder which are subject to the Approved Sale) and shall not
exceed the proceeds received by such Stockholder. The Stockholders
shall be permitted to sell their Equity Securities pursuant to an
Approved Sale without complying with the provisions of Sections 3.1,
3.2, 3.3, 3.4, 3.5, 3.6 and 3.7 of this Agreement.
(b) If the Company and/or the Drag-Along Transferor or their
representatives, enter into any negotiation or transaction for which
Regulation D under the Securities Act (or any similar rule or
regulation then in effect) may be available with respect to such
negotiation or transaction (including a merger, consolidation or other
reorganization), each Stockholder who is not an accredited investor (as
such term is defined in Rule 501 under the Securities Act) will, at the
request of the Company or the Drag Along Transferor, appoint a
purchaser representative (as such term is defined in Rule 501 under the
Securities Act) reasonably acceptable to the Company and such Drag
Along Transferor.
(c) At the closing of the Approved Sale, each of the
Stockholders shall (a) execute any documents or instruments reasonably
requested by the Bona Fide Purchaser, and (b) deliver to the Bona Fide
Purchaser certificates for the Equity Securities, duly endorsed or
accompanied by duly executed stock assignments separate from
certificate, free and clear of all encumbrances (other than those
created pursuant to this Agreement), against delivery by the Bona Fide
Purchaser of the consideration (including a certified check for the
cash portion of such consideration) for the total sales price of the
Equity Securities being sold by such Stockholder.
(d) The provisions of this Section 3.8 shall terminate upon
consummation of a Qualified Public Offering.
14
ARTICLE IV
APPROVAL RIGHTS OF STOCKHOLDERS
SECTION 4.1 Stockholder Approval Rights. The Company shall not (and the
Investor Stockholders shall not take any action to cause the Company to) take
any action to (i) enter into any transaction, or any agreement or understanding
with the Investor Stockholders or any Affiliate of the Investor Stockholders
(other than with respect to a Transfer of Equity Securities or as contemplated
by this Agreement, the Stock Purchase Agreement or the Transaction Documents (as
defined in the Stock Purchase Agreement)) or (ii) amend, modify, change or alter
the Company's Certificate of Incorporation or By-Laws or the Series A
Certificate of Designation or the Series B Certificate of Designation in a
manner adverse to the Company or holders of Common Stock, without the written
consent of the Stockholders holding a majority of the Common Stock, on an as
converted basis, held by all Stockholders which consent shall not be
unreasonably withheld or delayed.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Termination. Except as otherwise provided herein, the
provisions of this Agreement shall terminate: (a) upon the agreement of all of
the parties hereto, (b) with respect to any of the Stockholders (other than
Eidelstein) and their respective permitted transferees referred to in the last
sentence of Section 3.3(x) or Section 3.4, as the case may be, when such
Stockholder together with its permitted transferees owns less than 1.25% of the
outstanding Common Stock (on an as converted basis) and (c) with respect to
Eidelstein and his permitted transferees referred to in the last sentence of
Section 3.3, when Eidelstein's employment with the Company is terminated.
SECTION 5.2 Amendments and Waivers. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or any other party unless such
modification, amendment or waiver is approved in writing by the Company, the
Agent, acting on behalf of the Investor Stockholders, and the Stockholders. The
failure of any party to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
SECTION 5.3 Successors, Assigns and Transferees. This Agreement shall
bind and inure to the benefit of and be enforceable by the parties hereto and
their respective heirs, personal representatives, successors and permitted
assigns. This Agreement may not be assigned by any party hereto without the
prior written consent of the other parties, except as otherwise provided herein.
15
SECTION 5.4 Notices. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified; (b) when sent by confirmed facsimile if sent during
normal business hours of the recipient, if not, then on the next business day;
(c) five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (d) one (1) business day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent, with
respect to the Company and the Investor Stockholders, to their respective
addresses specified in the Stock Purchase Agreement (or at such other address as
any such party may specify by like notice) and, with respect to any other party,
to the address of such party as shown in the stock record books of the Company
(or at such other address as any such party may specify to all of the above by
like notice).
SECTION 5.5 Further Assurances. At any time or from time to time after
the date hereof, the parties agree to cooperate with each other, and at the
request of any other party, to execute and deliver any further instruments or
documents and to take all such further action as the other party may reasonably
request in order to evidence or effectuate the consummation of the transactions
contemplated hereby and otherwise to carry out the intent of the parties
hereunder.
SECTION 5.6 Entire Agreement. Except as otherwise expressly set forth
herein, this document, the Stock Purchase Agreement and the Registration Rights
Agreement embody the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, that may have related to the subject matter hereof in any way.
SECTION 5.7 Delays or Omissions. It is agreed that no delay or omission
to exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of or in
any similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
the part of any party hereto of any breach, default or noncompliance under this
Agreement or any waiver on such party's part 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, by law, or otherwise afforded to any party, shall be cumulative and
not alternative.
SECTION 5.8 Governing Law; Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York without regard to the principles of
conflicts of law thereof. Each party hereto hereby irrevocably submits to the
nonexclusive jurisdiction of the courts of the state of New York and of the
United States of America sitting in the City of New York, Borough of Manhattan,
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
16
any claim that it is not personally subject to the jurisdiction of any such
court, that the venue thereof may not be appropriate, that such suit, action or
proceeding is improper or that this Agreement or any of the documents referred
to in this Agreement may not be enforced in or by said courts, and each party
hereto irrevocably agrees that all claims with respect to such suit, action or
proceeding may be heard and determined in such a New York state or federal
court. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party in the manner provided in Section 12(b) of
the Stock Purchase Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
SECTION 5.9 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
SECTION 5.10 Enforcement. Each party hereto acknowledges that money
damages would not be an adequate remedy in the event that any of the covenants
or agreements in this Agreement are not performed in accordance with its terms,
and it is therefore agreed that in addition to and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
the terms and provisions hereof.
SECTION 5.11 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement
SECTION 5.12 Legend. Each certificate evidencing any of the shares of
Equity Securities held by the parties hereto shall bear a legend substantially
as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF THE SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT, DATED AS OF MAY __, 2001, AS THE SAME
MAY BE AMENDED, A COPY OF WHICH THE COMPANY WILL FURNISH TO
THE HOLDER OF THIS CERTIFICATE UPON REQUEST AND WITHOUT
CHARGE."
17
SECTION 5.13 Appointment of Agent. Each of the Investor Stockholders
hereby irrevocably appoints UBS (the "Agent") to act as its true and lawful
agent and attorney-in-fact and representative with full power and authority in
its name, place and stead to act on its behalf for all purposes under this
Agreement. The foregoing power of attorney is hereby declared to be irrevocable
and coupled with an interest, and such appointment includes, among other powers,
the power and authority to exercise all rights and privileges, and to discharge
all obligations, of the Investor Stockholders under this Agreement, including:
(a) designating and removing the Investor Representatives and
otherwise taking all actions required to be taken by the Investor
Stockholders under Article II, including providing consents;
(b) providing consents to Transfers under Section 3.3;
(c) giving and receiving notices hereunder and service of
process in any legal action or other proceedings arising out of or
related to this Agreement and the transactions hereby; and
(d) amending or waiving the provisions of this Agreement.
Any instructions given by the Agent hereunder shall be validly given on behalf
of each of the Investor Stockholders, and the Company shall have the right to
rely thereon. UBS hereby accepts the appointment provided for in this Agreement
and agrees to be bound by the provisions of this Agreement. All decisions and
actions by the Agent shall be binding upon each of the Investor Stockholders and
no Investor Stockholders shall have the right to object, dissent, protest or
otherwise contest the same. The Company may conclusively rely upon any action
taken by the Agent hereunder.
SECTION 5.14 Termination of Joint Venture Agreement. By its execution
hereof, each of the Company, ITI, Emerging Networks, Inc. and Casty confirms
that the Subscription and Joint Venture Agreement, dated as of November 23,
1998, as amended, by and among the Company, Emerging Networks, Inc., ITI and
Casty was terminated as of June 15, 2000.
SECTION 5.15 Stockholder's Representation.
(a) Each of the Stockholders severally (and not jointly)
represents and warrants that all of the Equity Securities owned by
it/him and any of its/his Affiliates is set forth on Exhibit A hereto
and that each such Stockholder or it/his Affiliate owns such Equity
Securities listed opposite its/his/their name free and clear of all
Encumbrances (as defined in the Stock Purchase Agreement) except with
respect to Casty, an option to purchase 100,000 shares of the Common
Stock owned by Casty at a price of $.625 per share has been issued to
Burton Meyer, a copy of which is attached hereto as Exhibit B.
18
(b) Each of Shalom and ITI severally (and not jointly)
represents and warrants that Shalom controls the voting and disposition
rights on all shares of Equity Securities owned by ITI or any of ITI's
Affiliates.
SECTION 5.16 Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument. This Agreement may be
executed by facsimile signature(s).
[Remainder of Page Intentionally Left Blank]
19
IN WITNESS WHEREOF, the parties hereto have executed the SECOND AMENDED
AND RESTATED STOCKHOLDERS AGREEMENT as of the date set forth in the first
paragraph hereof.
IFX CORPORATION
By: /s/ Joel Eidelstein
-------------------
Name: Joel Eidelstein
Title: President
UBS CAPITAL AMERICAS III, L.P.
By: UBS Capital Americas III, LLC
By: /s/ Mark O. Lama
Name: Mark O. Lama
Title: Principal
By: /s/ Marc A. Unger
Name: Marc A. Unger
Title: Chief Financial Officer
UBS CAPITAL LLC
By: /s/ Mark O. Lama
Name: Mark O. Lama
Title: Chief Financial Officer
By: /s/ Marc A. Unger
Name: Marc A. Unger
Title: Chief Financial Officer
NTERNATIONAL TECHNOLOGY
INVESTMENTS, LC
By: /s/ Michael Shalom
------------------
Name: Michael Shalom
Title: Manager
20
/s/ Joel Eidelstein
---------------------------
Joel Eidelstein
/s/ Michael Shalom
Michael Shalom
CASTY GRANTOR SUBTRUST
By: /s/ Mary Myers
Name: Mary Myers
Title: Trustee
The provisions of Section 5.14 of
this Agreement are hereby acknowledged
and agreed to.
EMERGING NETWORKS, INC.
By: /s/ Zalman Lekach
------------------------
Name: Zalman Lekach
Title: Vice President
21