SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
FIBERNET TELECOM GROUP, INC.
--------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
--------------------------------
(Title of Class of Securities)
315653105
------------
(CUSIP Number)
Santo Petrocelli, Sr.
c/o Petrocelli Communications
22-09 Bridge Plaza North
Long Island City, New York 11101
718-752-2203
--------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
August 30, 2000
--------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3)
or (4), check the following box |_|
Page 1 of __ pages
NY/297686.5
<PAGE>
CUSIP No. 315653105 SCHEDULE 13D
________________________________________________________________________________
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SMFS, Inc.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS
00
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0(1)
OWNED ________________________________________________________________
BY EACH 8 SHARED VOTING POWER
REPORTING
11,737,558(1)(2)
________________________________________________________________________________
PERSON WITH
---------------------
(1)Pursuant to a stockholders agreement dated May 7, 1999, SMFS, Inc.
granted an irrevocable proxy to Signal Equity Partners, L.P., Trident
Telecom Partners, LLC and Concordia Telecom Management, L.L.C. to vote all
of SMFS, Inc.'s shares at all meetings of stockholders of the Issuer.
Signal Equity Partners, L.P. Trident Telecom Partners, LLC and Concordia
Telecom Management, L.L.C. have previously filed a Schedule 13D.
(2)Includes 5,037,558 shares of Common Stock of the Issuer held by Signal
Equity Partners, L.P., Trident Telecom Partners, LLC and Concordia Telecom
Management, L.L.C., which, together with SMFS, Inc., may constitute a
"group" for purposes of Rule 13d-1(k)(1) of the Securities Exchange Act of
1934 by virtue of the irrevocable proxy referred to above.
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_________________________________________________________________
9 SOLE DISPOSITIVE POWER
6,700,000
_________________________________________________________________
10 SHARED DISPOSITIVE POWER
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,700,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
Excludes 5,037,558 shares of Common Stock of the Issuer held by Signal
Equity Partners, L.P., Trident Telecom Partners, LLC and Concordia
Telecom Management, L.L.C., which, together with SMFS, Inc., may
constitute a "group" for purposes of Rule 13d-1(k)(1)under the
Securities Exchange Act of 1934. SMFS, Inc. disclaims beneficial
ownership of such shares.
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.24
________________________________________________________________________________
14 TYPE OF REPORTING PERSON
CO
________________________________________________________________________________
NY/297686.5
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CUSIP No. 315653105 SCHEDULE 13D
________________________________________________________________________________
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Santo Petrocelli, Sr.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS
00
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 528,796(3)
OWNED ________________________________________________________________
BY EACH 8 SHARED VOTING POWER
REPORTING
12,266,354(3)(4)
________________________________________________________________________________
PERSON WITH
----------------
(3)Excludes 6,700,000 shares beneficially owned by Petrocelli through SMFS,
Inc., which is controlled by Petrocelli. Pursuant to a stockholders
agreement dated May 7, 1999, SMFS, Inc. granted an irrevocable proxy to
Signal Equity Partners, L.P., Trident Telecom Partners, LLC and Concordia
Telecom Management, L.L.C. to vote all of SMFS, Inc.'s shares at all
meetings of stockholders of the Issuer. Signal Equity Partners, L.P.
Trident Telecom Partners, LLC and Concordia Telecom Management, L.L.C. have
previously filed a Schedule 13D.
(4)Includes 5,037,558 shares of Common Stock of the Issuer held by Signal
Equity Partners, L.P., Trident Telecom
(continued...)
NY/297686.5
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_________________________________________________________________
9 SOLE DISPOSITIVE POWER
7,228,796(5)
_________________________________________________________________
10 SHARED DISPOSITIVE POWER
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,228,796
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]
Excludes 5,037,558 shares of Common Stock of the Issuer held by Signal
Equity Partners, L.P., Trident Telecom Partners, LLC and Concordia
Telecom Management, L.L.C., which, together with Petrocelli, may
constitute a group for purposes of Rule 13d-1(k)(1)under the
Securities Exchange Act of 1934. SMFS, Inc. disclaims beneficial
ownership of such shares.
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.53
________________________________________________________________________________
14 TYPE OF REPORTING PERSON
IN
________________________________________________________________________________
(4)(continued)
Partners, LLC and Concordia Telecom Management, L.L.C., which, together
with SMFS, Inc., may constitute a "group" for purposes of Rule 13d-1(k)(1)
under the Securities Exchange Act of 1934 by virtue of the irrevocable
proxy referred to above.
5/ Includes 6,700,000 shares of Common Stock of the Issuer held by SMFS,
Inc., which is controlled by Petrocelli, 220,043 shares of Common Stock of
the Issuer issuable upon the exercise of currently exercisable warrants, of
which Petrocelli Industries, Inc., a Delaware corporation ("Industries"),
which is controlled by Petrocelli, owns 118,753 shares of Common Stock of
the Issuer held by Industries. Petrocelli disclaims beneficial ownership of
such shares.
NY/297686.5
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Schedule 13D
------------
Item 1. Security and Issuer.
-------------------
The class of equity securities to which this statement on Schedule 13D
relates is the common stock, $0.001 par value (the "Common Stock"), of FiberNet
Telecom Group, Inc., a Delaware corporation (the "Issuer"). The principal
executive offices of the Issuer are located at 570 Lexington Avenue, New York,
New York 10022.
Item 2. Identity and Background.
-----------------------
(a) SMFS, Inc. ("SMFS"), a Delaware corporation, and Santo
Petrocelli, Sr. ("Petrocelli"), a citizen of the United States of America (SMFS
and Petrocelli are jointly referred to as the "Reporting Persons"), hereby
jointly file this statement on Schedule 13D.
Petrocelli controls the voting power of SMFS and Petrocelli
Industries, Inc., a Delaware corporation ("Industries"), and therefore is the
beneficial owner of the shares held by SMFS and Industries for purposes of Rule
13d-3 under the Securities Exchange Act of 1934, as amended.
(b) Each of the Reporting Persons' business address is 22-09
Bridge Plaza North, Long Island City, New York 11101.
SMFS is principally engaged in the business of communications
industry consulting.
(c) Petrocelli's principal occupation is Chief Executive Officer
of Petrocelli Electric Company, a New York corporation. Petrocelli Electric
Company is principally engaged in the business of electrical contracting.
Listed below are the principal occupations of the directors
and officers of SMFS.
Name Occupation
Santo Petrocelli President
Santo Petrocelli, Jr. Vice President
Florence Petrocelli Gordon Secretary
(d) None.
(e) None.
NY/297686.5
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Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The merger of Desert Native Designs Inc. and FiberNet Telecom Inc.
(discussed fully below) was a stock-for-stock transaction.
Item 4. Purpose of Transaction.
----------------------
(a) This filing is to bring the filings of the Reporting Persons
up to date in respect of their holdings in the Issuer. SMFS, which is controlled
by Petrocelli, and two other shareholders formed FiberNet Telecom, Inc., the
Issuer's predecessor in interest, on August 10, 1994. On November 24, 1997,
Desert Native Designs Inc., an existing public company incorporated in the State
of Nevada, acquired FiberNet Telecom, Inc. pursuant to an agreement and plan of
merger dated as of the same date. Upon consummation of the merger, FiberNet
Telecom, Inc. became a wholly owned subsidiary of Desert Native Designs, Inc.,
which subsequently changed its name to FiberNet Telecom Group, Inc. As a result
of the merger, in November 1997, (i) SMFS acquired 6,900,000 shares of the
Common Stock of the Issuer, and (ii) Petrocelli was granted options to purchase
190,000 shares of Common Stock pursuant to the Issuer's Incentive Stock Option
Plan (the "Stock Option Plan"), which options are currently exercisable. The
Issuer became a reporting company under Section 12(g) of the Securities Exchange
Act of 1934, as amended, on July 22, 1998. On August 30, 2000, SMFS sold 200,000
shares of restricted Common Stock of the Issuer in a private transaction not
conducted on a securities exchange and not transacted through a broker. The
purchasers of such shares were required to enter into a stockholders agreement
containing terms and conditions substantially similar to the stockholders
agreement previously entered into by SMFS. Since November 1997, neither
Petrocelli nor SMFS has acquired or disposed any shares of the Common Stock
other than such sale of 200,000 shares of restricted Common Stock by SMFS to
such purchasers.
(b) In addition to shares held by SMFS and Petrocelli mentioned in
paragraph (a) above, in May 1999, Industries acquired 118,753 shares of the
Common Stock of the Issuer and (ii) warrants to purchase 220,043 shares of
Common Stock which are currently exercisable. Since May 1999, Industries has not
acquired or disposed of any shares of the Common Stock.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) 1. As of the close of business on August 31, 2000, SMFS
beneficially owned, within the meaning of Rule 13d-3 under the Act, 6,700,000
shares of Common Stock. Based on 32,084,650 shares outstanding, SMFS
beneficially owns 20.88% of the outstanding Common Stock of the Issuer.
Pursuant to a stockholders agreement dated May 7, 1999, SMFS
granted an irrevocable proxy to Signal Equity Partners, L.P., Trident Telecom
Partners, LLC and Concordia Telecom Management, L.L.C. (the "Funds") to vote all
of SMFS's shares at all meetings of stockholders of the Issuer. As a result,
SMFS may be considered a member of a "group" that includes the Funds for
purposes of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934. SMFS and
the Funds together beneficially own 11,737,558 shares of Common Stock. Such
amount includes 6,700,000 shares of Common Stock of which SMFS is the record
owner and 5,037,558 shares of Common Stock held by the Funds. Based on
36,768,845 shares of Common Stock outstanding as of July 31, 2000 (which number
also includes exercisable warrants and stock options of the Funds), the group
beneficially owns 31.92% of the outstanding Common Stock of the Issuer.
NY/297686.5
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<PAGE>
2. As of the close of business on August 31, 2000, Petrocelli
beneficially owned, within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, 7,228,796 shares of Common Stock. Such amount includes (i)
6,700,000 shares of Common Stock of which SMFS is the record owner (ii)
currently exercisable options to purchase 190,000 shares of Common Stock of
which Petrocelli is the record owner, (iii) 220,043 shares of Common Stock
issuable upon the exercise of currently exercisable warrants ("Warrants") of
which Industries is the record owner and (iv) 118,753 shares of Common Stock of
which Industries is the record owner. Based on 32,494,693 shares of Common Stock
outstanding as of July 31, 2000 (which number also includes shares issuable upon
exercise of the Stock Options beneficially owned by Petrocelli, and the
Warrants), Petrocelli beneficially owns 22.24% of the outstanding Common Stock
of the Issuer.
Pursuant to a stockholders agreement dated May 7, 1999, SMFS
granted an irrevocable proxy to the Funds to vote all of SMFS's shares of stock
of the Issuer at all meetings of stockholders. As a result, Petrocelli may be
considered a member of a "group" that includes the Funds and SMFS for purposes
of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934. As of August 31,
2000, Petrocelli and the Funds beneficially owned 12,266,354 shares of Common
Stock. Such amount includes (i) 6,700,000 shares of Common Stock of which SMFS
is the record owner, (ii) currently exercisable options to purchase 190,000
shares of Common Stock of which Petrocelli is the record owner, (iii) 220,043
shares of Common Stock issuable upon the exercise of the Warrants, (iv) 118,753
shares of Common Stock of which Industries is the record owner, and (v)
5,037,558 shares of Common Stock held by the Funds. Based on 36,988,888 shares
of Common Stock outstanding as of July 31, 2000 (which number also includes
shares issuable upon exercise of the Stock Option beneficially owned by
Petrocelli, the Warrants and exercisable warrants and stock options of the
Funds), Petrocelli and the Funds beneficially own 33.16% of the outstanding
Common Stock of the Issuer.
(b) Pursuant to a stockholders agreement dated May 7, 1999, SMFS
granted an irrevocable proxy to the Funds to vote all of its shares at all
meetings of stockholders. Signal Equity Partners, L.P. Trident Telecom Partners,
LLC and Concordia Telecom Management, L.L.C. have previously filed a Schedule
13D.
(c) Except as set forth or incorporated by reference herein,
neither the Reporting Persons, nor, to the best of their knowledge, any
executive officer or director of the Reporting Persons, has effected any
transaction in the Common Stock of the Issuer during the past 60 days.
(d) No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds of sale of, the
shares of Common Stock of the Issuer beneficially owned by SMFS or Petrocelli.
(e) Not applicable.
Item 6. Contracts Arrangements, Understandings or Relationships with Respect to
-----------------------------------------------------------------------
Securities of the Issuer.
------------------------
SMFS is an affiliate of Petrocelli, and Petrocelli is an affiliate of
Industries. The shares of capital stock of both SMFS and Industries are owned by
the same stockholders, who are family members.
SMFS is a party to a Stockholders Agreement dated as of May 7, 1999
among the Issuer, SMFS, the Funds and certain other shareholders. Pursuant to
this Stockholders
NY/297686.5
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<PAGE>
Agreement, SMFS granted an irrevocable proxy to the Funds to vote all of SMFS's
shares of stock of the Issuer at all meetings of stockholders.
On August 29, 2000, SMFS entered into a Lock-Up Agreement with the
proposed managing underwriters in respect of the Issuer's proposed public
offering of Common Stock in respect of which the Issuer has filed a registration
statement on Form S-1 on August 15, 2000. Pursuant to such Lock-Up Agreement,
SMFS has agreed not to dispose of its shares of Common Stock of the Issuer
(subject to certain exceptions), without the consent of such proposed managing
underwriters, for a period ending 135 days after the distribution of such Common
Stock. The proposed managing underwriters have waived such restriction in
respect of SMFS's one-time sale of only 200,000 shares of restricted Common
Stock of the Issuer referenced above on the basis that such purchaser has itself
executed the same Lock-Up Agreement with respect to such 200,000 shares of
restricted Common Stock.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit 1 Joint Filing Agreement dated September 11, 2000.
Exhibit 2 Irrevocable Proxy dated August 30, 2000.
Exhibit 3 Stockholders Agreement dated as of May 7, 1999
NY/297686.5
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SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: September 11, 2000
SMFS, INC.
By:/s/ Santo Petrocelli
---------------------------
President
PETROCELLI INDUSTRIES, INC.
By:/s/ Santo Petrocelli
---------------------------
President
/s/ Santo Petrocelli
------------------------------
SANTO PETROCELLI, SR.
NY/297686.5
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EXHIBIT 1
JOINT FILING AGREEMENT
SMFS, Inc., a Delaware corporation, Petrocelli Industries, Inc., a
Delaware corporation, and Santo Petrocelli, Sr., hereby agree, in accordance
with Rule 13d-1(k) under the Securities Exchange Act of 1934, that the Schedule
13D filed herewith, and any amendments thereto, relating to the shares of common
stock, par value $0.001, of FiberNet Telecom Group, Inc., a Delaware
corporation, is, and will be, filed jointly on behalf of each such person.
Dated: September 11, 2000
SMFS, INC.
By:/s/ Santo Petrocelli
---------------------------
President
PETROCELLI INDUSTRIES, INC.
By:/s/ Santo Petrocelli
---------------------------
President
/s/ Santo Petrocelli
------------------------------
SANTO PETROCELLI, SR.
NY/297686.5
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EXHIBIT 2
IRREVOCABLE PROXY
FIBERNET TELECOM GROUP, INC.
The undersigned, SMFS, INC., hereby irrevocably and
unconditionally appoints the Managing Purchasers (as such term is defined in the
Securities Purchase Agreement) the attorney and proxy of the undersigned, with
full power of substitution, to vote, with respect to (i) the election of
directors and any and all matters presented at any and all meetings of the
stockholders of the Company and (ii) the Transfer of Stock (as such terms are
defined in the Stockholders Agreement hereinafter referred to) in such manner as
such attorneys and proxy shall, in their sole discretion, deem proper, all of
the shares of Stock of FiberNet Telecom Group, Inc., a Delaware corporation (the
"Company"), standing in the name of the undersigned (including shares of Stock
acquired after the date hereof in respect of shares of Stock held on the date
hereof) at such time (the "Proxy Shares"), including the giving of any and all
stockholder consents (such rights, collectively with the rights listed in
clauses (i) and (ii) herein, the "Proxy Rights"); provided, that the exercise of
any Proxy Rights requires the consent of the majority of the Managing Purchasers
unless, in the sole judgment of the Majority in Interest that in order to
protect its investment, the Majority in Interest requires sole right to exercise
the Proxy Rights, in which case the Majority in Interest shall upon 10 days
written notice to each other Managing Purchaser have sole control of the Proxy
Rights until the Majority in Interest, in its sole discretion, shall deem
otherwise. This is an irrevocable proxy coupled with an interest and shall
become and remain valid and irrevocable until the automatic termination hereof
pursuant to the provisions of a Stockholders Agreement, dated as of May 7, 1999,
among the undersigned, the Company and certain stockholders of the Company, as
the same may be amended from time to time. The granting of this proxy shall
revoke all prior proxies given by the undersigned at any time with respect to
all Stock (and Proxy Shares) owned or controlled by the undersigned and no
subsequent proxies will be given with respect thereto by the undersigned, except
pursuant to the provisions of such Stockholders Agreement.
Dated: August 30, 2000
SMFS, INC.
By:__________________________________
Name: Santo Petrocelli, Sr.
Title: President
NY/298630.1
29034. 90101
<PAGE>
EXHIBIT 3
--------------------------------------------------------------------------------
STOCKHOLDERS AGREEMENT
AMONG
FIBERNET TELECOM GROUP, INC.
AND
CERTAIN STOCKHOLDERS
DATED AS OF MAY 7, 1999
--------------------------------------------------------------------------------
<PAGE>
STOCKHOLDERS AGREEMENT dated as
of May 7, 1999, among FIBERNET TELECOM
GROUP, INC., a Nevada corporation (the
"Company"), and certain stockholders of the
Company identified on Annex I hereto (each,
a "Stockholder" and collectively, the
"Stockholders").
Each Stockholder owns, on the date hereof, that number of shares of
Stock (as hereinafter defined) set forth opposite such Stockholder's name on
Annex I hereto purchased pursuant to the Securities Purchase Agreement dated as
of the date hereof (the "Securities Purchase Agreement") among the Company and
the purchasers named therein. It is deemed to be in the best interest of the
Company and the Stockholders that provision be made for the continuity and
stability of the business and policies of the Company, and, to that end, the
Company and the Stockholders hereby set forth their agreement with respect to
the shares of Stock owned by the Stockholders.
NOW, THEREFORE, in consideration of the premises and of the mutual
consents and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Securities Purchase Agreement. As used
herein, the following terms shall have the following respective meanings:
"Affiliate" has the meaning ascribed thereto in the Purchase
Agreement.
"all or substantially all" shall have the meaning ascribed to such
term in the Securities Purchase Agreement.
"Board" means the Board of Directors of the Company.
"Business Day" shall mean any day other than a Saturday or Sunday or
a day on which banks are authorized or required to be closed in New York, New
York.
"Charter" shall mean the Certificate of Incorporation of the
Company, as amended from time to time.
"Common Stock" shall mean the common stock, $.001 par value, of the
Company.
"Concordia" shall mean Concordia Telecom Management, L.L.C., a
Delaware limited liability company.
"Founders Shares" shall mean at any time the shares of Common Stock,
any securities which by their terms are exercisable or exchangeable for or
convertible into Common Stock, and any securities of the Company received in
respect thereof, which are held by the Founding Stockholders.
<PAGE>
"Founding Stockholders" shall mean the Persons listed as
Stockholders under the heading "Founding Stockholders" in Annex I hereto, and
shall include any successor to, or assignee or transferee of, any of the
Founding Stockholders whether or not such Persons shall agree in writing to be
treated as a Founding Stockholder and to be bound by the terms and to comply
with the provisions of this Agreement.
"Group" shall mean:
(i) in the case of any Stockholder who is an individual, (A) such
Stockholder, (B) the spouse, lineal descendants and adopted children of
such Stockholder and (C) any trust for the benefit of any of the
foregoing; and
(ii) in the case of any Stockholder which is a corporation, limited
liability company or partnership, (A) such corporation, limited liability
company or partnership, (B) any corporation or other business organization
to which such corporation, limited liability company or partnership shall
sell or transfer all or substantially all of its assets or with which it
shall be merged, (C) with respect to any limited liability company or
partnership, any partner (general or limited) or member thereof and (D)
any Affiliate of such corporation.
"Majority in Interest" has the meaning ascribed to such term in the
Securities Purchase Agreement.
"Operating Budget" has the meaning ascribed to such term in the
Securities Purchase Agreement.
"Person" shall mean any individual, partnership, corporation, group,
trust or other legal entity.
"Proportionate Percentage" shall mean:
(i) for the purposes of Section 3, the pro rata percentage of Stock
being offered by a Selling Group pursuant to Section 3 that each
Stockholder (other than the Selling Group) shall be entitled to purchase,
which pro rata percentage, as to each such Stockholder, shall be the
percentage figure which expresses the ratio, on a Common Stock equivalent
basis (which for purposes of this Agreement shall mean the conversion of
all securities convertible into Common Stock and the exercise of all
options and warrants then exercisable for Common Stock), between the
number of shares of Stock owned by such Stockholder and the aggregate
number of shares of Stock owned by all Stockholders (other than the
Selling Group) at the date of determination;
(ii) for the purposes of Section 4, the pro rata percentage of the
number of shares of Stock to which a Section 4 Offer relates that each
Stockholder shall be entitled to Transfer to the Section 4 Purchaser,
which pro rata percentage, as to each such Stockholder, shall be the
percentage figure which expresses the ratio, on a Common Stock equivalent
basis, between the number of shares of Stock owned by such Stockholder and
the aggregate number of shares of Stock owned by all Stockholders and the
Section 4 Offeree at the date of determination; and
2
<PAGE>
(iii) for the purposes of Section 7, the pro rata percentage of
Stock subject to purchase pursuant to Section 7 that each Stockholder
shall be entitled to purchase, which pro rata percentage, as to each such
Stockholder, shall be the percentage figure which expresses the ratio, on
a Common Stock equivalent basis, between the number of shares of Stock
owned by such Stockholder and the aggregate number of shares of Stock
owned by all Stockholders at the date of determination.
"Purchase Agreement" shall mean the Securities Purchase Agreement dated as
of the date hereof by and among the Company and the Purchasers as the same may
be amended, modified or supplemented from time to time pursuant to the terms
thereof.
"Purchasers" shall mean the Persons listed as Stockholders under the
heading "Purchasers" in Annex I hereto, and shall include any successor to, or
assignee or transferee of, any of the Purchasers whether or not such Persons
shall agree in writing to be treated as a Purchaser and to be bound by the terms
and to comply with the provisions of this Agreement, each a "Purchaser".
"Qualified Public Offering" shall mean a fully underwritten public
offering (underwritten by a reputable underwriter of national reputation) of
shares of Common Stock registered pursuant to the Securities Act with proceeds
to the Company of at least $30,000,000 (net of underwriting discounts and
expenses) or otherwise on terms reasonably acceptable to the Majority in
Interest.
"Securities Act" shall mean the Securities Act of 1933 together with
any applicable regulations, as the same may be amended from time to time.
"Selling Group" shall mean a Stockholder or a member of the Group of
a Stockholder proposing to Transfer its Stock, or which has delivered a notice
of intention to Transfer, pursuant to Section 3 or Section 4 hereof.
"Series C Preferred Stock" shall mean the Series C Convertible
Preferred Stock, par value $.001, of the Company.
"Signal" shall mean Signal Capital Partners, L.P., a Delaware
limited partnership.
"Stock" shall mean (i) the presently issued and outstanding shares
of Common Stock and Series C Preferred Stock and any options, warrants or other
instruments exercisable therefor (which options, warrants or other instruments
shall be deemed to be that number of outstanding shares of Stock for which they
are exercisable), (ii) any additional shares of capital stock of the Company
hereafter issued and outstanding and (iii) any shares of capital stock of the
Company into which such shares may be converted or for which they may be
exchanged or exercised.
"Stockholders" shall mean those Persons identified on Annex I and
shall include any other person who agrees in writing with the parties hereto to
be bound by and to comply with all applicable provisions of this Agreement as a
Stockholder hereunder.
3
<PAGE>
"Transfer", as to any Stock shall mean to sell, or in any other way
transfer, assign, pledge, distribute, encumber or otherwise dispose of, such
Stock, either voluntarily or involuntarily and with or without consideration.
"Trident" shall mean Trident Telecom Partners LLC, a Delaware
limited liability company.
Section 2. Limitations on Transfers of Stock by Stockholders.
The Stockholders shall not, at any time during the term of this
Agreement, Transfer any Stock without first complying with the provisions of
Sections 3, 4 and 6; provided, that a Stockholder may Transfer Stock to another
member of the Group of such Stockholders without complying with Sections 3, 4
and 6 if the recipient of such Stock shall agree in writing with the parties to
this Agreement to be bound by and to comply with all applicable provisions of
this Agreement and to be deemed a Stockholder; and provided further that in no
event shall any Stockholder Transfer any Stock prior to the first anniversary of
this Agreement without the prior written consent of Signal and Trident unless
such Transfer of Stock is specifically permitted under any exemption, rule or
regulation of the Securities Act. Any Transfer made or attempted to be made in
contravention of the terms of this Section 2 shall be null and void.
Section 3. Right of First Refusal.
Except as otherwise provided in Section 2, each Stockholder hereby
agrees that he or it shall not Transfer any Stock, except in accordance with the
following procedures:
(a) In the event such Stockholder desires to Transfer any of the
shares of Stock held by such Stockholder to a Person, the Selling Group shall
first deliver to the Stockholders a written notice (the "Section 3 Offer
Notice"), which shall be irrevocable for a period of 30 days after delivery
thereof, offering (the "Section 3 Offer") all of the Stock proposed to be
Transferred by the Selling Group at the purchase price and on the terms
specified therein (such Section 3 Offer Notice shall include the foregoing
information and all other relevant terms of the proposed Transfer). The
Stockholders shall have the right and option, for a period of 30 days after
receipt of a Section 3 Offer Notice, to accept all of its Proportionate
Percentage of the Stock so offered at the purchase price and on the terms stated
in the Section 3 Offer Notice by delivering written notice of acceptance to the
Selling Group within said 30-day period. If the Selling Group shall not have
received an acceptance for the Section 3 Offer from a Stockholder (the
"Non-Interested Stockholder") for all of its Proportionate Percentage of Stock
within said 30-day period, the Selling Group shall deliver to the Stockholders
which have delivered a written notice of acceptance for the Section 3 Offer a
second written notice (the "Section 3 Second Offer Notice"), which shall be
irrevocable for a period of 15 days after the delivery thereof, offering (the
"Section 3 Second Offer") all of the Stock proposed to be transferred by the
Selling Group not accepted by the Non-Interested Stockholders on the same terms
and conditions contained in the Section 3 Offer Notice. The Stockholders (other
than the Non-Interested Stockholders) shall have the right and option, for a
period of 15 days after receipt of a Section 3 Second Offer Notice, to accept
all or any part of its Proportionate Percentage of Stock so offered at the terms
stated in the Section 3 Second Offer Notice by delivering written notice of
acceptance to the Selling Group within said 15-day period.
4
<PAGE>
(b) A notice of acceptance delivered by any of the Stockholders
pursuant to Section 3(a) shall be a binding commitment to purchase the Stock
referred to therein.
(c) Transfers of Stock under the terms of Section 3(a) shall be made
at the offices of the Company on a mutually satisfactory business day within 20
days after the expiration of the last applicable period described in Section
3(a) above. Delivery of certificates or other instruments evidencing such Stock
duly endorsed for transfer shall be made on such date against payment of the
purchase price therefor.
(d) If effective acceptance shall not be received pursuant to
Section 3(a) with respect to all Stock offered for Transfer pursuant to the
Section 3 Offer Notice, then the Selling Group may Transfer all or any part of
the Stock so offered and not so accepted at a price not less than the price, and
on terms not more favorable to the purchaser thereof than upon the terms, stated
in the Section 3 Offer Notice at any time within 30 days after the expiration of
the Section 3 Second Offer required by Section 3(a). In the event that the Stock
is not Transferred by the Selling Group during such 30-day period, the right of
the Selling Group to Transfer such Stock shall expire and the obligations of
this Section 3 shall be reinstated.
(e) Anything contained herein to the contrary notwithstanding, any
purchaser of Stock pursuant to Section 3 who is not then a Stockholder shall
execute and deliver a joinder agreement substantially in the form of Exhibit A
hereto by which a person shall be deemed to be a Stockholder for all purposes of
this Agreement.
(f) Restrictions shall terminate upon a Qualified Public Offering.
Section 4. Tag-along Right.
(a) In the event that a Stockholder ("Section 4 Offeror") desires to
Transfer any of the shares of Stock held by such Stockholder (the "Section 4
Offer") to a Person (the "Section 4 Purchaser"), the Selling Group shall
promptly forward a notice (the "Section 4 Offer Notice") complying with Section
4(b) to the Stockholders. Subject to Section 4(c), the Selling Group shall not
Transfer any Stock to the Section 4 Purchaser unless the terms of the Section 4
Offer are extended to the Stockholders with respect to their Proportionate
Percentage of the aggregate number of shares of Stock (on a Common Stock
equivalent basis) to which the Section 4 Offer relates, whereupon each
Stockholder shall be entitled to Transfer to the Section 4 Purchaser pursuant to
the Section 4 Offer the Stockholder's Proportionate Percentage of the aggregate
number of shares of Stock (on a Common Stock equivalent basis) to which the
Section 4 Offer relates by delivering a written notice of acceptance to the
Selling Group within 15 days after delivery of the Section 4 Offer Notice.
(b) Anything contained herein to the contrary notwithstanding, the
Section 4 Offeror shall, in addition to complying with the provisions of this
Section 4, comply with the provisions of Section 3 (it being understood that the
Section 3 Offer Notice contemplated by Section 3(a) and the Section 4 Offer
Notice may be included in a single notice), and each Stockholder, prior to
Transferring any Stock to the Section 4 Purchaser, shall comply with the
provisions of Section 3.
5
<PAGE>
(c) Anything contained herein to the contrary notwithstanding, any
purchaser of Stock pursuant to this Section 4 which is not then a Stockholder
shall agree in writing to be bound by all applicable provisions of this
Agreement and shall be deemed to be a Stockholder for all purposes of this
Agreement.
Section 5. Right of First Offer.
(a) In the event that Signal desires to propose to the Company to
Transfer to a Person all or substantially all of the then outstanding Stock
and/or substantially all of the stock and/or equity interests of the Company,
which includes more than fifty percent (50%) of the Stock owned or held by
Signal (the "Section 5 Offer"), Signal shall deliver a written notice to Trident
and the Founding Stockholders with respect to such Section 5 Offer, which shall
be irrevocable for a period of 10 days. Trident and the Founding Stockholders
shall have the right to offer (the "Section 5 Purchase Offer") to purchase that
number of shares of Stock owned or held by Signal included in the Section 5
Offer in any written notice delivered to Signal within said 10-day period.
Signal shall have the right to condition its acceptance of the Section 5
Purchase Offer, and Trident and the Founding Stockholders shall consent to such
conditions, on only the following: (i) approval by Signal of the Section 5
Purchase Offer and (ii) execution of all agreements and documents in connection
with the transactions contemplated by the Section 5 Purchase Offer within 60
Business Days after Signal's delivery of written notice to Trident and the
Founding Stockholders ("Section 5 Offer Acceptance Notice") accepting the
Section 5 Purchase Offer.
(b) Notwithstanding anything contained herein to the contrary, if
either Trident and/or the Founding Stockholders shall not have made a Section 5
Purchase Offer pursuant to this Section 5 and/or (x) Trident and the Founding
Stockholders or (y) Trident or the Founding Stockholders shall not have received
a Section 5 Offer Acceptance Notice pursuant to Section 5(a), the terms and
provisions of this Section 5 shall be of no further effect, and the terms and
provisions of Section 6 shall apply to any subsequent Section 5 Offer.
Section 6. Drag Along Right.
Anything contained herein to the contrary notwithstanding, if at any
time after the terms and provisions of Section 5 shall not apply pursuant to the
terms of Section 5, the Board, with the consent of the director(s) to be
appointed to the Board of Directors of the Company by Signal, shall approve (i)
a bona fide arms length proposal from a Person for the Transfer, directly or
indirectly, of all or a majority of the Stock of the Company to such Person,
(ii) the merger or consolidation of the Company with or into another Person in
which the Stockholders will receive cash or securities of any other Person for
their shares or (iii) the sale by the Company of all or substantially all of its
assets to a Person, in each of the above cases for a specified price payable in
cash or otherwise and on specified terms and conditions (a "Sale Proposal"),
then the Board may deliver a notice (a "Required Sale Notice") with respect to
such Sale Proposal to each other Stockholder (as well as each other holder of
any shares of Stock) stating that Signal has approved the Sale Proposal, the
Company proposes to effect the Sale Proposal and providing the identity of the
Persons involved in such Sale Proposal and the terms thereof. Each such
Stockholder and the members of the Group thereof, upon receipt of a Required
Sale Notice, shall be obligated to sell their Stock and participate in the
transaction (a
6
<PAGE>
"Required Sale") contemplated by the Sale Proposal, vote their shares of Stock
in favor of such Sale Proposal at any meeting of Stockholders called to vote on
or approve such Sale Proposal and otherwise to take all necessary action to
cause the Company and the Stockholders to consummate such Required Sale. Any
such Required Sale Notice may be rescinded by the Board, with the written
consent of Signal, by delivering written notice thereof to all of the
Stockholders.
Section 7. Pre-emptive Rights.
(a) Except in the case of Excluded Securities, the Company shall not
issue, sell or exchange, agree to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange, any (i) Stock, (ii) any other equity
security of the Company, (iii) any debt security of the Company which by its
terms is convertible into or exchangeable for any equity security of the Company
or has any other equity feature, (iv) any security of the Company that is a
combination of a debt and equity security or (v) any option, warrant or other
right to subscribe for, purchase or otherwise acquire any security of the
Company specified in the foregoing clauses (i) through (iv), unless in each case
the Company shall have first offered to sell such securities to the Stockholders
(the "Offered Securities"), at each Stockholder's respective Proportionate
Percentage at a price and on such other terms and conditions as shall have been
specified by the Company in writing delivered to each Stockholder (the "Offer"),
which Offer by its terms shall remain open and irrevocable for a period of 30
days from the date it is delivered by the Company to the Stockholder.
(b) The Company may specify in the Offer that all or a minimum
amount of the Offered Securities must be sold in such offering (to the
Stockholders and/or any third parties pursuant to Section 7(d)), in which case
any Notice of Acceptance (as defined below) shall be deemed conditioned upon (i)
receipt of Notices of Acceptance of all or such minimum amount, as applicable,
of the Offered Securities and/or (ii) the sale of all, or such minimum amount,
as applicable, of the Offered Securities pursuant to Section 7(d).
(c) Notice of the Stockholder's intention to accept, in whole or in
part, an Offer shall be evidenced by a writing signed by such Stockholder and
delivered to the Company prior to the end of the 30-day period of such Offer,
setting forth such portion of the Offered Securities the Stockholders elect to
purchase (the "Notice of Acceptance").
(d) In the event that Notice of Acceptance is not given by the
Stockholders in respect of all the Offered Securities, the Company shall have
120 days from the expiration of the foregoing 30-day period to sell all or any
part of such Offered Securities as to which Notice of Acceptances have not been
given by the Stockholders (the "Refused Securities") to any other person or
persons, but only upon terms and conditions in all material respects, including,
without limitation, unit price and interest rates, which are no more favorable
to such other person or persons and no less favorable to the Company than those
set forth in the Offer. Upon the closing, which shall include full payment to
the Company, of the sale to such other person or persons of all the Refused
Securities, the Stockholders shall purchase from the Company, and the Company
shall sell to the Stockholders, the Offered Securities in respect of which
Notice of Acceptances were delivered to the Company by the Stockholders, at the
terms specified in the Offer.
7
<PAGE>
(e) In each case, any Offered Securities not purchased by the
Stockholders or any other person or persons in accordance with Section 7(d) may
not be sold or otherwise disposed of until they are again offered to the
Stockholders under the procedures specified in Sections 7(a), (c) and (d).
(f) The rights of the Stockholders under this Section 7 shall not
apply to the following securities (the "Excluded Securities"):
(i) (A) up to 5,000,000 shares (as adjusted equitably for stock
dividends, stock splits, combinations, etc.) of Common Stock issuable upon
exercise of stock options granted to officers, employees or directors of
the Company or its subsidiaries pursuant to and in accordance with any
Employee Plan duly authorized by the Board and/or the appropriate
committee thereof, (B) shares of Common Stock issued upon conversion of
shares of Series C Preferred Stock and (C) shares of Common Stock issued
upon exercise of the Warrants, including in the case of (A), (B) and (C),
any additional shares of Common Stock as may be issued by virtue of
antidilution provisions, if any, applicable to such options or shares, as
the case may be;
(ii) Stock issued as a stock dividend or upon any stock split or
other subdivision or combination of shares of Stock;
(iii) Stock issued as part of a Qualified Public Offering; and
(iv) Common Stock issued upon conversion of convertible securities
outstanding on the date of this Agreement and disclosed on the appropriate
Schedule to the Securities Purchase Agreement.
Section 8. Irrevocable Proxy.
(a) Each Founding Stockholder hereby grants to the Managing
Purchasers and their assignees an irrevocable proxy coupled with an interest
(the "Proxy") attached hereto as Exhibit B to vote the Founders Shares at each
and all meetings of the stockholders of the Company, to execute and otherwise to
exercise any consensual rights with respect to such Founders Shares to the same
extent and with the same effect as each of the Founding Stockholders could do
under any applicable agreement or instrument or any applicable laws or
regulations governing the rights and powers of stockholders of the Company
(collectively, the "Proxy Rights"); provided, that the exercise of any Proxy
Rights requires the consent of the majority of the Managing Purchasers unless,
in the sole judgment of the Majority in Interest that in order to protect its
investment, the Majority in Interest requires the sole right to exercise the
Proxy Rights in which case the Majority in Interest shall upon 10 days written
notice to each other Managing Purchaser have the sole right to exercise the
Proxy Rights until the Majority in Interest, in its sole discretion, shall deem
otherwise. Anything contained in the preceding sentence to the contrary
notwithstanding, the Proxy shall automatically terminate without further action
upon the earliest to occur of (i) the valid and enforceable Transfer of all
Stock owned by such Stockholder, (ii) a Qualified Public Offering or (iii) three
years from the date hereof. The Managing Purchasers shall have the right to
assign the Proxy to any of their Affiliates.
8
<PAGE>
(b) If the Proxy granted pursuant to Section 8(a) is not valid or is
otherwise ineffective for any reason, then each Founding Stockholder shall vote
all of his respective Founders Shares in the same manner as the Majority in
Interest votes any shares of Stock owned by the Majority in Interest at any and
all meetings of the stockholders of the Company, by written consent in lieu
thereof and otherwise in connection with any exercise of any consensual rights
with respect to such Founders Shares.
Section 9. Voting Agreement.
(a) Each Stockholder shall vote all of his or its Shares (by Proxy
if applicable) and shall take all other necessary or desirable actions within
his or its control (whether in such Stockholder's capacity as a stockholder of
the Company or otherwise, and including, without limitation, attendance at
meetings in person or by proxy for purposes of obtaining a quorum and execution
of written consents in lieu of meetings), and the Company shall take all
necessary and desirable actions within its control (including, without
limitation, calling special Board and stockholder meetings), so that:
(i) the authorized number of directors on the Board of the Company
shall be established at no less than six (6) directors;
(ii) the initial directors of the Board of the Company shall be
Santo Petrocelli, Sr., Lawrence S. Polan, Frank Chiaino, Timothy P. Bradley,
Michael S. Liss and Richard Sayers;
(iii) one Person designated by the Majority in Interest and one
Person designated by Trident shall have the right to observe and attend all
meetings, whether held by teleconference or otherwise, of the Board of the
Company and to receive all information and notices received by directors on the
Board of the Company.
(b) The consent of the director(s) designated by each of Signal and
Trident to the Board will be necessary for (i) any material change or
modification of the Company's business plan as agreed upon by the Managing
Purchasers as of the date hereof (the "Business Plan"), (ii) the redemption of
any capital stock, (iii) the issuance of securities senior to or on a parity
with the Preferred Stock, (iv) the authorization or issuance of securities
convertible into such senior or parity securities or (v) the amendment of the
Certificate of Incorporation of the Company. The consent of the director(s)
designated by Signal to the Board will be necessary for (i) any transactions
with an Affiliate or related party to the Company, (ii) any merger or
consolidation of the Company or any Subsidiary of the Company with any other
entity, (iii) the sale of all or substantially all of the assets of the Company
or its Subsidiaries, (iv) the approval or authorization of any liquidation, (v)
the removal of any senior executive of the Company, (vi) the incurrence of any
fund Indebtedness in excess of $500,000, (vii) the incurrence of any capital
expenditures in any 12-month period in excess of $100,000, which such capital
expenditures were not authorized in or by the Company's Business Plan or
Operating Budget or (viii) any changes to or removal of the Company's auditor.
9
<PAGE>
Section 10. Covenants.
(a) The Company and the Stockholders shall take any and all
necessary actions to make Exchange Act Filings (as defined in the Securities
Purchase Agreement) immediately after the Closing.
(b) The Company and the Stockholders shall take any and all
necessary actions to increase the size of the Board to six (6) directors, and to
appoint Charles Mahoney, Trey Farmer and Joseph Tortoretti as replacements for
Santo Petrocelli, Sr., Lawrence S. Polan and Frank Chiaino effective on the
Filing Expiration Date.
Section 11. Legend on Stock Certificates.
Each certificate representing shares of Stock issued under the
Securities Purchase Agreement shall bear a legend containing the following words
(in addition to any other legend required by law or applicable agreement):
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A STOCKHOLDERS AGREEMENT DATED AS OF MAY 7, 1999,
BY AND AMONG FIBERNET TELECOM GROUP, INC. AND CERTAIN HOLDERS OF THE
OUTSTANDING CAPITAL STOCK OF SUCH CORPORATION. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF SUCH
CORPORATION."
Section 12. Additional Shares of Stock; Etc.
In the event additional shares of Stock are issued by the Company to
a Stockholder of the Company at any time during the term of this Agreement,
either directly or upon the exercise or exchange of securities of the Company
exercisable for or exchangeable into shares of Stock, the Company shall cause
such additional shares of Stock, as a condition to such issuance, to become
subject to the terms and provisions of this Agreement.
Section 13. Duration of Agreement; Compliance.
The rights and obligations of each Stockholder under this Agreement
shall terminate as to such Stockholder upon the earliest to occur of (a) the
valid and enforceable Transfer of all Stock owned by such Stockholder, and (b) a
Qualified Public Offering.
Section 14. Severability; Governing Law.
If any provision of this Agreement shall be determined to be illegal
and unenforceable by any court of law, the remaining provisions shall be
severable and enforceable in accordance with their terms. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of New York (without regard to principles of
10
<PAGE>
conflicts of laws), except to the extent that this Agreement relates to the
internal laws of the Company, which shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
Section 15. Successors and Assigns.
This Agreement shall bind and inure to the benefit of the parties
and their respective successors and assigns, transferees, legal representatives
and heirs.
Section 16. Notices.
All notices, requests, consents and other communications hereunder
to any party shall be deemed to be sufficient if contained in a written
instrument delivered in person or by telecopy or sent by nationally-recognized
overnight courier or first class registered or certified mail, return receipt
requested, postage prepaid, addressed to such party at the address set forth
below or at such other address as may hereafter be designated in writing by such
party to the other parties:
if to the Company, to:
FiberNet Telecom Group, Inc.
570 Lexington Avenue
New York, NY 10022
Telephone: (212) 421-4900
Telecopy: (212) 421-8860
Attention: President
if to the Stockholders, to their respective addresses set
forth on Annex I hereto with a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, NY 10112
Telephone: (212) 408-2400
Telecopy: (212) 408-2420
Attention: Gordon R. Caplan, Esq.
All such notices, requests, consents and other communications shall
be deemed to have been delivered (a) in the case of personal delivery or
delivery by telecopy, on the date of such delivery, (b) in the case of dispatch
by nationally-recognized overnight courier, on the next business day following
such dispatch and (c) in the case of mailing, on the third business day after
the posting thereof.
Section 17. Modification.
Except as otherwise provided herein, neither this Agreement nor any
provisions hereof can be modified, changed, discharged or terminated except by
an instrument in writing signed by the Company and a Majority in Interest of the
Purchasers; provided, however,
11
<PAGE>
that no modification or amendment shall discriminate against any Stockholder
without the consent of such Stockholder.
Section 18. Headings.
The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be a part of this
Agreement.
Section 19. Nouns and Pronouns.
Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of names and pronouns shall include the plural and vice versa.
Section 20. Entire Agreement.
This Agreement and the other writings referred to herein or
delivered pursuant hereto contain the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements and understandings with respect thereto.
Section 21. Counterparts.
This Agreement may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement on the date first above written.
FIBERNET TELECOM GROUP, INC.
By:__________________________________
Name:
Title:
SIGNAL CAPITAL PARTNERS, L.P.
By: Signal Capital Advisors, L.P.
Its: General Partner
By: Signal Capital Advisors, Inc.
Its: General Partner
By:__________________________________
Name:
Title:
TRIDENT TELECOM PARTNERS LLC
By: Trident Telecom Management LLC
Its: Managing Member
By: Needham Management, Inc.
Its: Managing Member
By:__________________________________
Name:
Title:
<PAGE>
CONCORDIA TELECOM MANAGEMENT, L.L.C.
By:__________________________________
Name: Michael Liss
Title: Sole Member
BURDEN DIRECT INVESTMENT FUND III
By: William A.M. Burden & Co., L.P.
Its: Managing General Partner
By: Burden Brothers, Inc.
Its: Sole General Partner
By:__________________________________
Name: Jeffrey A. Weber
Title: President and CEO
PEQUOT SCOUT FUND, LP
By:__________________________________
Name:
Title:
PENNY LANE PARTNERS, L.P.
By: Penny Lane Associates, L.P.
Its: General Partner
By: Penny Lane, Inc.
Its: General Partner
By:__________________________________
Name: William R. Denslow, Jr.
Title: Chairman, Penny Lane, Inc.
<PAGE>
LANCER OFFSHORE, INC.
By:__________________________________
Name:
Title:
ALEXANDER ENTERPRISE HOLDINGS CORP.
By:__________________________________
Name:
Title:
KING STREET CAPITAL LTD.
By:__________________________________
Name:
Title:
KING STREET CAPITAL LP
By:__________________________________
Name:
Title:
TAURUS TELECOMMUNICATION, INC.
By:__________________________________
Name:
Title:
<PAGE>
SMFS, INC.
By:__________________________________
Name:
Title:
LPS CONSULTANTS INC.
By:__________________________________
Name:
Title:
LTJ GROUP, INC.
By:__________________________________
Name:
Title:
<PAGE>
ANNEX I
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Stockholders Series C Convertible
Preferred Stock Common Stock
- -----------------------------------------------------------------------------------------------------
Purchasers
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Signal Capital Partners, L.P. 43,499.00 0
10 E. 53rd Street, 32nd Floor
New York, NY 10022
Attn: Timothy Bradley
Telephone: (212) 872-1180
Telecopier: (212) 208-2497
- -----------------------------------------------------------------------------------------------------
Trident Telecom Partners LLC 40,189.00 0
350 Park Avenue, 14th Floor
New York, NY 10022
Attn: Gerald Goldberg
Telephone: (212) 753-4718
Telecopier: (212) 753-5977
- -----------------------------------------------------------------------------------------------------
Concordia Telecom Management, L.L.C. 4,728.00 0
c/o FiberNet Telecom Group, Inc.
570 Lexington Avenue, 3rd Floor
New York, NY 10022
Attn: Michael S. Liss
Telephone: (212) 421-4900
Telecopier: (212) 421-8860
- -----------------------------------------------------------------------------------------------------
Burden Direct Investment Fund III 9,456.00 0
10 E. 53rd Street, 32nd Floor
New York, NY 10022
Attn: Jeffrey Weber
Telephone: (212) 872-1133
Telecopier: (212) 872-1199
- -----------------------------------------------------------------------------------------------------
Pequot Scout Fund, LP 9,456.00 0
500 Nyala Farm Road
Westport, CT 06880
Attn: Mark Broach
Telephone: (203) 429-2203
Telecopier: (203) 429-2410
- -----------------------------------------------------------------------------------------------------
Penny Lane Partners, L.P. 7,092.00 0
767 Fifth Avenue
New York, NY 10153
Attn: William R. Denslow Jr.
Telephone: (212) 980-4292
Telecopier: (212) 319-6046
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Lancer Offshore, Inc. 4,728.00 0
375 Park Avenue
New York, NY 10152
Attn: Michael Lauer
Telephone: (212) 521-8400
Telecopier: (212) 521-8401
- -----------------------------------------------------------------------------------------------------
Alexander Enterprise Holdings Corp. 8,511.00 0
c/o Alpha Investment Inc.
499 Park Avenue, 24th Floor
New York, NY 10022
Attn: Richard O'Connell
Telephone: (212) 702-0606
Telecopier: (212) 421-0169
- -----------------------------------------------------------------------------------------------------
King Street Capital Ltd. 2,269.00 0
575 Lexington Avenue
New York, NY 10022
Attn: Ara Cohen
Telephone: (212) 350-4434
Telecopier: (212) 350-4702
- -----------------------------------------------------------------------------------------------------
King Street Capital LP 2,459.00 0
575 Lexington Avenue
New York, NY 10022
Attn: Ara Cohen
Telephone: (212) 350-4434
Telecopier: (212) 350-4702
- -----------------------------------------------------------------------------------------------------
Taurus Telecommunication, Inc. 946.00 0
3625 Ridge Run
Canandaigua, NY 14424
Attn: Richard Sayers
Telephone: (716) 396-0130
Telecopier: (716) 396-9237
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Founding Stockholders Series C Convertible Common Stock
Preferred Stock
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
SMFS, Inc. 0 6,900,000
c/o Petrocelli Communications Company
12-12 43rd Avenue
Long Island City, NY 11101
- -----------------------------------------------------------------------------------------------------
LTJ Group, Inc. 0 4,025,000
c/o FiberNet Telecom Group, Inc.
570 Lexington Avenue
New York, NY 10022
- -----------------------------------------------------------------------------------------------------
LPS Consultants, Inc. 0 575,000
c/o Petrocelli Communications Company
12-12 43rd Avenue
Long Island City, NY 11101
- -----------------------------------------------------------------------------------------------------
Frank Chiaino 0 0
6700 Song Hill Lane
Rochester, NY 14564
Telephone: (716) 924-5481
Telecopier:
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT A
Joinder
By execution of this Purchaser Joinder, the undersigned agrees to
become a party to that certain Stockholders Agreement dated as of May 7, 1999
attached hereto, among FiberNet Telecom Group, Inc., a Nevada corporation, and
certain of its stockholders. The undersigned shall have all the rights, and
shall observe all of the obligations, applicable to a Stockholder.
Name:_______________________________
Address for Notices: With copies to:
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
Signature:__________________________
Date:_______________________________
A-1
