Exhibit 4.3
EXECUTION COPY
TAG ALONG AGREEMENT
THIS AGREEMENT, dated August 2, 2000, is by and among (i) Focal
Communications Corporation, a Delaware corporation (the "Company"), (ii) Madison
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Dearborn Capital Partners, L.P., a Delaware limited partnership ("MDCP"),
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Frontenac VI, L.P., a Delaware limited partnership ("Frontenac"), Battery
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Ventures III, L.P., a Delaware limited partnership ("BV", and collectively with
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MDCP and Frontenac, the "Institutional Stockholders"), and (iii)(A) Xxxxxx X.
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Xxxxxx, Xx. ("Xxxxxx"), Mistral Partners, L.P. ("Xxxxxx FLP", and collectively
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with Xxxxxx, the "Xxxxxx Group"), (B) Xxxx X. Xxxxxxxx ("Xxxxxxxx"), JRB
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Partners, L.P. ("Xxxxxxxx FLP", and collectively with Xxxxxxxx, the "Xxxxxxxx
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Group"), (C) Xxxxxx X. Xxxxxx ("Xxxxxx"), and Coventry Court Partners, L.P.
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("Xxxxxx FLP," and collectively with Xxxxxx, the "Xxxxxx Group." Xxxxxx, Xxxxxx
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FLP, Xxxxxxxx, Xxxxxxxx FLP, Xxxxxx, and Xxxxxx FLP are collectively referred to
as the "Founding Stockholders"). Capitalized terms not otherwise defined in
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this Agreement are used in this Agreement with the meanings assigned to such
terms in the Stockholders Agreement, dated November 27, 1996, by and among the
Company and the stockholders thereof that were a party to such agreement, as
amended (the "Stockholders Agreement").
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RECITALS
A. The Institutional Stockholders and the Founding Stockholders have
determined that it is in their respective best interests to establish an
agreement to enable the Founding Stockholders to participate in certain sales of
common stock, par value $.01 per share, of the Company ("Common Stock") by the
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Institutional Stockholders as provided in this Agreement.
B. It is in the Company's best interest to have notice of the
communications among the parties under and to otherwise act as provided in this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Sale Notice. If an Institutional Stockholder desires to Transfer
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shares of Common Stock other then in (a) an underwritten public offering or (b)
a Permitted Transfer, the Institutional Stockholder(s) desiring to make such
Transfer (the "Transferring Institutional Stockholder(s)") shall deliver written
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notice (a "Sale Notice") to the Company, the other Institutional Stockholders,
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and the Founding Stockholders specifying in reasonable detail the identity of
the prospective transferee(s), the number of shares to be transferred ("Offered
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Shares"), and the terms and conditions of the Transfer.
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2. Tag Along Rights. (a) A Founding Stockholder may participate in any
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sale that is the subject of a Sale Notice by providing written notice of such
Founding Stockholder's desire to participate in such sale (a "Tag Along Notice")
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to the Company and the Institutional Stockholder(s) that provided the Sale
Notice by 5:00 p.m. Chicago time on the tenth day after the date of the Sale
Notice.
(b) If a Founding Stockholder elects to participate in a Transfer under
Section 2(a), the Transferring Institutional Stockholder(s) and such electing
Founding Stockholder(s) shall each be entitled to sell in the contemplated
Transfer, at the same price and on the same terms, a number of shares of Common
Stock equal to the product of (i) the quotient determined by dividing (A) the
number of shares of Common Stock owned by such Person by (B) the number of
shares of Common Stock owned by all Institutional Stockholders and Founding
Stockholders participating in such Transfer (including the Transferring
Institutional Stockholder(s)), and (ii) the number of Offered Shares specified
in the Sale Notice.
(c) Each Transferring Institutional Stockholder shall use its best efforts
to obtain the agreement of the prospective transferee(s) to the participation of
the participating Founding Stockholder(s) in any contemplated Transfer, and no
Transferring Institutional Stockholder shall transfer any Offered Shares to any
prospective transferee unless (i) such prospective transferee agrees to the
participation of the participating Founding Stockholder(s) in such Transfer or
(ii) the Transferring Institutional Stockholder purchases from each
participating Founding Stockholder(s) the same number of shares (on the same
date, at the same price, and on the same terms) that such participating Founding
Stockholder(s) would have been entitled to sell had the prospective transferee
so agreed.
(d) Each Stockholder transferring shares under this Section 2 shall pay
its ratable share (based on the number of shares of Common Stock to be
transferred by such Stockholder) of the aggregate expense incurred by the
Transferring Institutional Stockholders and the transferring Founding
Stockholders in connection with such transfer and shall be obligated to join
ratably (based on the number of shares of Common Stock to be sold) in any
indemnification or other obligations that the Transferring Institutional
Stockholder agrees to provide in connection with such Transfer (other than any
such obligations that relate specifically to a particular Stockholder, such as
indemnification with respect to representations and warranties given by a
Stockholder regarding such Stockholder's title to and ownership of shares);
provided that no holder shall be obligated in connection with such Transfer to
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agree to indemnify or hold harmless the transferee(s) with respect to an amount
in excess of the net cash proceeds paid to such holder in connection with such
Transfer.
3. Transferees. Prior to transferring any Common Stock in a Permitted
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Transfer to any Person, the Transferring Institutional Stockholder shall cause
the prospective transferee to be bound by this Agreement and to execute and
deliver to the Company and the other Institutional Stockholders and Founding
Stockholders a written counterpart of this Agreement.
4. Transfers in Violation of Agreement. Any Transfer or attempted
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Transfer of any Common Stock in violation of this Agreement shall be null and
void, and the Company shall not record such Transfer on its books or treat any
purported transferee of such Common Stock as the owner of such shares for any
purpose.
5. Amendment and Waiver. Except as otherwise provided herein, no
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modification, amendment, or waiver of any provision of this Agreement shall be
effective unless such modification, amendment, or waiver is approved in writing
by all of the Institutional Stockholders and all of the Founding Stockholders.
The failure of any party to enforce any of
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the provisions of this Agreement shall not 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.
6. Severability. Whenever possible, each provision of this Agreement
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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
the validity, legality, or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality, or
enforceability of any provision in 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.
7. Entire Agreement. This Agreement constitutes the complete agreement
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and understanding among the parties with respect to the subject matter hereof
and supersedes and preempts any prior or contemporary understandings,
agreements, or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
8. Successors and Assigns. This Agreement shall bind and inure to the
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benefit of, and be enforceable by, the Company, the Institutional Stockholders,
the Founding Stockholders, and their respective transferees that receive shares
of Common Stock in a Permitted Transfer, provided that if any of the Xxxxxx
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Group, the Xxxxxxxx Group, or the Xxxxxx Group, or the transferee of a Founding
Stockholder that receives shares of Common Stock in a Permitted Transfer, holds
fewer than 500,000 shares of Common Stock, the parties that are constituents of
such group, or such transferee, as the case may be, shall automatically be
withdrawn as a party to this Agreement.
9. Counterparts. This Agreement may be executed in multiple counterparts,
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each of which shall be an original and all of which taken together shall
constitute one and the same agreement.
10. Remedies. The parties may enforce their rights under this Agreement
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specifically, to recover damages by reason of any breach of any provision of
this Agreement, and to exercise all other rights existing in their favor.
11. Notices. Any notice provided for in this Agreement shall be in
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writing and shall be deemed to have been given when personally delivered or one
business may after being sent by reputable overnight courier service (charges
prepaid) to the address listed on the attached Exhibit A to any subsequent
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holder of Common Stock subject to this Agreement at such address as indicated by
the Company's records, or at such address or to the attention of such other
person as the recipient party has specified by prior written notice to the
sending party.
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12. Governing Law. All issues and questions concerning the construction,
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validity, interpretation, and enforceability of this Agreement shall be governed
by, and construed in accordance with, the laws of the State of Illinois, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Illinois or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Illinois.
13. Business Days. If any time period for giving notice or taking action
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hereunder expires on a day that is a Saturday, Sunday, or holiday on which the
Nasdaq National Market is closed, the time period shall automatically be
extended to the business day immediately following such Saturday, Sunday, or
holiday.
14. Descriptive Headings. The descriptive headings of this Agreement are
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inserted for convenience only and do not constitute a part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MADISON DEARBORN CAPITAL
PARTNERS L.P.
By Madison Dearborn Partners, L.P., its
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Xxxx X. Xxxxxxxx General Partner
By Madison Dearborn Partners, Inc., its
JRB PARTNERS, INC. General Partner
By ___________________________________ By __________________________________
Xxxx X. Xxxxxxxx, General Partner Its _______________________________
FRONTENAC VI, L.P.
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Xxxxxx X. Xxxxxx By Frontenac Company, its General
Partner
COVENTRY COURT PARTNERS, L.P. By __________________________________
Its _______________________________
By ___________________________________
Xxxxxx X. Xxxxxx, General Partner
BATTERY VENTURES III, L.P.
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Xxxxxx X. Xxxxxx, Xx. By Battery Partners III, L.P., its
General Partner
MISTRAL PARTNERS, L.P. By __________________________________
Its _______________________________
By ___________________________________
Xxxxxx X. Xxxxxx, Xx., General
Partner
FOCAL COMMUNICATIONS CORPORATION
By: __________________________________
Its _______________________________
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