Second Amended and Restated Stock Ownership Agreement
Exhibit
10.1
Second Amended and Restated
Stock Ownership Agreement
This
SECOND AMENDED AND RESTATED STOCK OWNERSHIP AGREEMENT (the “Agreement”),
effective as of June 11, 2010 (the “Effective Date”), is by and between Arbinet
Corporation, a Delaware corporation (“Arbinet”), and the Singer Children’s
Management Trust (the “Trust”), ▇▇▇▇ ▇▇▇▇▇▇ (“GS”) and ▇▇▇▇▇ ▇▇▇▇▇▇ (“KS” and
together with the Trust and GS, the “Singer Entities”).
WHEREAS,
Arbinet and the Singer Entities entered into a Stock Ownership Agreement dated
as of May 30, 2008, as amended and restated on December 19, 2008 (the “Original
Stock Ownership Agreement”), regarding the Singer Entities’ ability to purchase
additional shares of the outstanding voting stock of Arbinet without being
subject to limitations on their ability to enter into business combinations (as
such term is hereinafter defined) with Arbinet;
WHEREAS,
on June 10, 2010, the Singer Entities were the beneficial owners of 5,104,447
shares of common stock, par value $0.001 per share, of Arbinet (the “Common
Stock”), which is below the 5,141,608 share limit provided in the Original Stock
Ownership Agreement;
WHEREAS,
on May 17, 2010, the Board of Directors of Arbinet approved a reverse stock
split of Arbinet’s Common Stock at a split ratio of 1-for-4 (the “Reverse Stock
Split”) and on the Effective Date, Arbinet filed a Certificate of Amendment with
the Secretary of State of the State of Delaware to effect the Reverse Stock
Split; and
WHEREAS,
Arbinet and the Singer Entities desire to amend and restate the Original Stock
Ownership Agreement with this Second Amended and Restated Stock Ownership
Agreement in order to account for the Reverse Stock Split in the manner set
forth herein and intend that, upon execution of this Agreement, the provisions
of the Original Stock Ownership Agreement shall be terminated and superseded in
their entirety by this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
Section
1. Representations.
(a) Binding Agreement;
Authority.
Arbinet
hereby represents and warrants that this Agreement has been duly authorized,
executed and delivered by Arbinet, and is a valid and binding obligation of
Arbinet, enforceable against Arbinet in accordance with its
terms. Each of the Singer Entities hereby represents and warrants
that this Agreement has been duly authorized, executed and delivered by such
Singer Entity, and is a valid and binding obligation of such Singer Entity,
enforceable against such Singer Entity in accordance with its
terms.
(b) Share Ownership of Common
Stock.
The
Trust hereby represents and warrants that, as of the close of business on the
business day prior to the Effective Date, it is the owner (as such term is
hereinafter defined) of 5,104,447 shares of Common Stock, and that neither it
nor its Affiliates or Associates (as such terms are hereinafter defined) own, or
have any rights, options or agreements to acquire or vote, any other shares of
Common Stock. GS hereby represents and warrants that, as of the
Effective Date, he does not own any shares of Common Stock, and that neither he
nor his Affiliates or Associates (other than the Trust) own, or have any rights,
options or agreements to acquire or vote, any other shares of Common
Stock. KS hereby represents and warrants that, as of the Effective
Date, she does not own any shares of Common Stock, and that neither she nor her
Affiliates or Associates (other than the Trust) own, or have any rights, options
or agreements to acquire or vote, any other shares of Common
Stock. Each of the Singer Entities, together with his, her or its
Affiliates or Associates, is not an interested stockholder (as such term is
hereinafter defined).
(c) Capitalization.
Arbinet
hereby represents and warrants that, as of the close of business on the business
day prior to the Effective Date, there were 21,925,294 shares of Common Stock
issued and outstanding.
(d) Defined
Terms.
For
purposes of this Agreement, the terms “Affiliate,” “Associate,” “business
combination,” “control,” “interested stockholder,” “person,” “stock,” “voting
stock,” “owner,” “own,” and “owned” shall have the respective meanings set forth
in Section 203 of the General Corporation Law of the State of Delaware (the
“DGCL”) in effect as of the Effective Date.
Section
2. Approval of Acquisitions of
Common Stock. Subject to the due execution and delivery of
this Agreement by the Singer Entities, the disinterested members of the Board of
Directors of Arbinet have approved, for purposes of Section 203 of the DGCL, the
purchase by the Trust of up to 1,285,402 shares of the outstanding voting stock
of Arbinet (as adjusted for any stock splits, stock dividends, combinations,
subdivisions, recapitalizations or the like occurring after the Effective Date)
(the “Share Limit”) through open market purchases, privately negotiated
transactions or otherwise (the “Transaction”).
Section
3. Stock
Ownership.
(a) As
a condition to the approval by the Board of the Transaction, if, at any time
during the three (3) year period from December 19, 2008, the Singer Entities,
together with their Affiliates and Associates, become the owner of shares of
voting stock exceeding the Share Limit, the parties hereby agree that neither
the Singer Entities nor any of their respective Affiliates or Associates will be
able to engage in any business combination with Arbinet for a period of three
(3) years following the date on which the Singer Entities exceeded the Share
Limit. Without limiting the foregoing, each of the Singer Entities
hereby represents that any such business combination would be null and
void.
(b) The
restrictions contained in Section 3(a) of this Agreement shall not apply if the
Singer Entities, together with their Affiliates and Associates, inadvertently
exceeds the Share Limit (the “Inadvertent Transaction”) and (i) as soon as
practicable, but in any event within ten (10) business days of the Inadvertent
Transaction, the Singer Entities, together with their Affiliates and Associates,
divest themselves of ownership of a sufficient number of shares so that the
Singer Entities, together with their Affiliates and Associates, cease to own
more than the Share Limit, and (ii) the Singer Entities, together with their
Affiliates and Associates, would not, at any time within the three (3) year
period immediately prior to a business combination between Arbinet and the
Singer Entities, have been the owner of more than the Share Limit but for the
Inadvertent Transaction.
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(c) The
restrictions contained in Section 3(a) of this Agreement shall not apply if the
Singer Entities would be entitled to rely on the exemptions from prohibitions on
business combinations set forth in Section 203(b)(6) of the DGCL.
(d) The
restrictions contained in Section 3(a) of this Agreement shall not apply if the
Singer Entities, together with their Affiliates and Associates, become the owner
of shares of the outstanding voting stock of Arbinet in excess of the Share
Limit as a result of action taken solely by Arbinet; provided, that the
restrictions contained in Section 3(a) of this Agreement shall apply if the
Singer Entities, together with their Affiliates and Associates, thereafter
acquire additional shares of voting stock of Arbinet, except as a result of
further corporate action not caused, directly or indirectly, by the Singer
Entities or their respective Affiliates and Associates.
(e) Each
of the Singer Entities agrees to cause its respective Affiliates and Associates
to comply with the terms of this Agreement, including the restrictions on
ownership set forth in this Section 3.
Section
4. Remedies. Each
party hereto hereby acknowledges and agrees that irreparable harm would occur in
the event any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to specific relief
hereunder, including, without limitation, an injunction or injunctions to
prevent and enjoin breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any state or federal court in
the State of Delaware, in addition to any other remedy to which they may be
entitled at law or in equity. Any requirements for the securing or
posting of any bond with such remedy are hereby waived.
Section
5. Entire
Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof, including without
limitation the Original Stock Ownership Agreement, which understandings or
agreements (if any) are of no further force or effect, and may be amended only
by an agreement in writing executed by the parties hereto.
Section
6. Notices. All
notices, consents, requests, instructions, approvals and other communications
provided for herein and all legal process in regard hereto shall be validly
given, made or served, if in writing and sent by U.S. registered mail, return
receipt requested:
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if
to Arbinet:
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Arbinet
Corporation
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Attention:
General Counsel
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with
a copy to:
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Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
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Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Esq.
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if
to the Singer Entities:
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Singer
Children’s Management Trust
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with
a copy to:
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▇▇▇▇▇▇▇
▇▇▇▇▇ LLP
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Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
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Section
7. Law
Governing. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
regard to any conflict of laws provisions thereof. The parties, on
behalf of itself and its Affiliates and Associates, hereby irrevocably and
unconditionally consent to the exclusive jurisdiction of the courts in the State
of Delaware and/or the courts of the United States of America located in the
State of Delaware for any action, suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby, and agree not to
commence any action, suit or proceeding related thereto except in such
courts. The parties, on behalf of itself and its Affiliates and
Associates, hereby irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby, in the courts in the State of Delaware
and/or the courts of the United States of America located in the State of
Delaware, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action, suit or proceeding in
any such court has been brought in any inconvenient forum.
Section
8. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
Section
9. No Presumption Against
Draftsman. Each of the undersigned parties hereby acknowledges
the undersigned parties fully negotiated the terms of this Agreement, that each
such party had an equal opportunity to influence the drafting of the language
contained in this Agreement and that there shall be no presumption against any
such party on the ground that such party was responsible for preparing this
Agreement or any part hereof. The headings contained in this
Agreement are for convenience purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section
10. Enforceability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated. It is hereby stipulated and declared to be the
intention of the parties that the parties would have executed the remaining
terms, provisions, covenants and restrictions without including any of such
which may be hereafter declared invalid, void or unenforceable. In
addition, the parties agree to use their best efforts to agree upon and
substitute a valid and enforceable term, provision, covenant or restriction for
any such term, provision, covenant or restriction that is held invalid, void or
unenforceable by a court of competent jurisdiction. Each of the
Singer Entities acknowledges that this Agreement shall be binding upon each of
their respective heirs, successors and assigns, and agrees to take all action
necessary to cause this Agreement to be binding on such persons.
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IN
WITNESS WHEREOF, each of the parties hereto has executed this Second Amended and
Restated Stock Ownership Agreement, or caused the same to be executed by its
duly authorized representative as of the date first above written.
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ARBINET
CORPORATION
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By: /s/ ▇▇▇▇▇ ▇.
▇’▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇.
▇’▇▇▇▇▇▇▇
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Title: President and
CEO
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SINGER
CHILDREN’S MANAGEMENT TRUST
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By: /s/ ▇▇▇▇▇
▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇, its Trustee
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/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇▇, individually and as consultant to the
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Singer
Children’s Management Trust
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇
▇▇▇▇▇▇, individually
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