EXHIBIT 4.2
VESTING AGREEMENT
-----------------
THIS VESTING AGREEMENT (this "Agreement") is made as of November 27,
1996, by and among Frontenac VI, L.P. (the "New Capital Investor"), Focal
Communications Corporation (the "Company"), and each of Xxxxxx X. Xxxxxx, Xx.,
Xxxx X. Xxxxxxxx, Xxxxx X. Xxxx and Xxxxxx Xxxxxx (individually an "Executive
Investor" and collectively the "Executive Investors").
The execution and delivery of this Agreement is a condition to the
purchase of the Company's Class A Common Stock, par value $.01 per share (the
"Class A Common"), by the New Capital Investor, the Executive Investors and
certain other investors (collectively, the "Investors"), pursuant to a Stock
Purchase Agreement of even date herewith by and among the Company and such
Investors (the "Stock Purchase Agreement"). Capitalized terms used but not
otherwise defined herein are used herein with the meanings ascribed to such
terms in Sections 2 and 3 below.
NOW, THEREFORE, in consideration of the mutual premises made herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
Section 1. Vesting and Forfeiture.
1A. Vesting and Forfeiture upon a Sale. Contemporaneously with any
sale or transfer by the New Capital Investor to any person of any shares of
Qualified Common (including by way of merger or consolidation, but excluding (i)
any sale or transfer of shares to a Successor Fund upon such Successor Fund's
execution of a counterpart to this Agreement agreeing to be bound by the
provisions hereof and to succeed to the rights and obligations of New Capital
Investor hereunder with respect to the shares of Qualified Common sold or
transferred to such Successor Fund, and (ii) any recapitalization or other
reorganization in which the New Capital Investor's holdings of the Company's
equity immediately after such transaction are equal to the New Capital
Investor's holdings of the Company's equity immediately prior to such
transaction) (a "Sale"):
(a) a number (if any) of the shares of Unvested Class C Common
held by each holder of Unvested Class C Common shall vest equal to the
product obtained by multiplying (x) the number of shares of Qualified
Common being transferred in such Sale, times (y) such holder's Applicable
Percentage for such Sale;
(b) a number (if any) of the New Capital Investor's shares of
Nonqualified Common equal to the product obtained by multiplying (i) the
number of shares of Qualified Common being transferred in such Sale, times
(ii) the sum of the Applicable Percentages for all holders of Unvested
Class C Common for such Sale, shall without further action by the Company
or the New Capital Investor automatically be deemed forfeited, and the New
Capital Investor shall thereafter no longer exercise nor have the right to
exercise any of its rights with respect to such forfeited shares; and
(c) a number of the shares of Unvested Class C Common held by
each holder of Unvested Class C Common equal to the difference (if any)
obtained by subtracting (i) the number of such holder's shares of Unvested
Class C Common that are to vest as a result of such Sale, from (ii) the
number of such holder's shares of Unvested Class C Common that would vest
as a result of such Sale if the Return Multiple for such Sale were 35,
shall without further action by the Company or such holder automatically be
deemed forfeited, and such holder shall thereafter no longer exercise nor
have the right to exercise any of its rights with respect to such forfeited
shares.
1B. Vesting and Forfeiture upon Election Notice following a Rule 144
Quarter. If, within 10 business days after any calendar quarter (following the
consummation of the Company's initial Public Offering) during which any shares
of Qualified Common then held by the New Capital Investor (excluding (i) shares
sold or transferred pursuant to a Sale during such calendar quarter, and (ii)
shares the transfer of which during such calendar quarter would have been
restricted under any hold-back agreement entered into with, or for the benefit
of, the Company or its underwriters) are eligible to be transferred pursuant to
Rule 144 promulgated by the Securities Exchange Commission under the Securities
Act of 1933, as amended, or any successor rule or rules then in effect ("Rule
144") as of the last business day of such calendar quarter (such a calendar
quarter, a "Rule 144 Quarter") (such eligible shares, the "Rule 144 Eligible
Shares"), any holder of Unvested Class C Common gives written notice to the New
Capital Investor setting forth the number of Rule 144 Eligible Shares for such
Rule 144 Quarter, such holder's estimated calculation of the Fair Market Value
of such Rule 144 Eligible Shares (including all market information necessary to
enable the New Capital Investor to perform such calculation), and such holder's
estimated calculation of the number of such holder's shares of Unvested Class C
Common that will vest pursuant to paragraph 1B(a) with respect to such Rule 144
Quarter ("Election Notice"), then on the 20th business day following such Rule
144 Quarter:
(a) a number (if any) of the shares of Unvested Class C Common
held by each such electing holder shall vest equal to the product obtained
by multiplying (x) the number of Rule 144 Eligible Shares for such Rule 144
Quarter, times (y) such holder's Applicable Percentage for such Rule 144
Quarter;
(b) a number (if any) of the New Capital Investor's shares of
Nonqualified Common equal to the product obtained by multiplying (x) the
number of Rule 144 Eligible Shares for such Rule 144 Quarter, times (y) the
sum of the Applicable Percentages for such Rule 144 Quarter for all holders
of Unvested Class C Common giving Election Notice with respect to such Rule
144 Quarter, shall without further action by the Company or the New Capital
Investor automatically be deemed forfeited, and the New Capital Investor
shall thereafter no longer exercise nor have the right to exercise any of
its rights with respect to such forfeited shares;
(c) a number of the shares of Unvested Class C Common held by
each holder of Unvested Class C Common giving Election Notice with respect
to such Rule 144 Quarter equal to the difference (if any) obtained by
subtracting (i) the number of such
holder's shares of Unvested Class C Common that are to vest as a result of
giving such Election Notice, from (ii) the number of such holder's shares
of Unvested Class C Common that would vest as a result of giving such
Election Notice if the Return Multiple for such Rule 144 Quarter were 35,
shall without further action by the Company or such holder automatically be
deemed forfeited, and such holder shall thereafter no longer exercise nor
have the right to exercise any of its rights with respect to such forfeited
shares.
1C. Vesting and Forfeiture upon Liquidation. Contemporaneously with
a complete liquidation of the Company (the "Liquidation"):
(a) a number (if any) of the shares of Unvested Class C Common
held by each holder of Unvested Class C Common shall vest equal to the
product obtained by multiplying (x) the number of shares of Qualified
Common held by New Capital Investor as of the date of the Liquidation,
times (y) such holder's Applicable Percentage for such Liquidation;
(b) a number (if any) of the New Capital Investor's shares of
Nonqualified Common equal to the product obtained by multiplying (i) the
number of shares of Qualified Common held by the New Capital Investor as of
the date of the Liquidation, times (ii) the sum of the Applicable
Percentages for all holders of Unvested Class C Common for such
Liquidation, shall without further action by the Company or the New Capital
Investor automatically be deemed forfeited, and the New Capital Investor
shall thereafter no longer exercise nor have the right to exercise any of
its rights with respect to such forfeited shares.
(c) a number of the shares of Unvested Class C Common held by
each holder of Unvested Class C Common equal to the difference (if any)
obtained by subtracting (i) the number of such holder's shares of Unvested
Class C Common that are to vest as a result of such Liquidation, from (ii)
the number of such holder's shares of Unvested Class C Common that would
vest as a result of such Liquidation if the Return Multiple for such
Liquidation were 35, shall without further action by the Company or such
holder automatically be deemed forfeited, and such holder shall thereafter
no longer exercise nor have the right to exercise any of its rights with
respect to such forfeited shares.
1D. Forfeiture upon Termination of this Agreement. Upon the seventh
anniversary of the date hereof, all Unvested Class C Common then outstanding
shall without further action by the Company or any holder of such Unvested Class
C Common automatically be deemed forfeited, and each such holder shall
thereafter no longer exercise nor have the right to exercise any of its rights
with respect to such forfeited shares.
1E. Forfeiture Procedure. Upon any forfeiture of any shares of
Unvested Class C Common or Nonqualified Common pursuant to this Agreement, the
holder of such forfeited shares shall promptly submit the certificate or
certificates representing such forfeited shares to the Company for cancellation.
Upon such submission, the Company shall take all actions necessary to retire
such forfeited shares and to cause such shares to resume the status of
authorized and unissued shares. The Company shall promptly cancel the submitted
certificate(s) and issue to such holder (i) a certificate, bearing the legend
set forth in paragraph 5B below, representing the number of shares (if any) of
- 3 -
Unvested Class C Common or Nonqualified Common, as applicable, which were
evidenced by the submitted certificate(s) but which were not forfeited, and (ii)
a certificate, not bearing the legend set forth in paragraph 4B below,
representing the number of shares represented by the submitted certificate(s)
that were not forfeited and that in connection with such forfeiture ceased to be
Nonqualified Common or became Vested Class C Common, as applicable.
Section 2. Calculation of Each Holder's Applicable Percentage.
2A. Applicable Percentage. For each Sale, Liquidation, or Rule 144
Quarter, the "Applicable Percentage" for each holder of Unvested Class C Common
shall be equal to the percentage obtained by multiplying:
(a) 25% (or if such holder is no longer employed by the Company
or any of its Subsidiaries ("Termination"), the product of (i) 25%, times
(ii) a fraction, the numerator of which is the number of shares of Unvested
Class C Common held by such holder immediately prior to Termination that
were not elected to be repurchased pursuant to an Executive Stock Agreement
as a result of such Termination, and the denominator of which is the number
of shares of Unvested Class C Common held by such holder immediately prior
to such Termination); times
(b) the quotient obtained by dividing (x) the Return Multiple for
such Sale, Liquidation, or Rule 144 Quarter minus 20 (provided that such
difference shall not be less than zero nor greater than 15), by (y) 65.
2B. Calculation of the Return Multiple.
(a) The "Return Multiple" for each Sale shall be equal to the quotient
obtained by dividing:
(i) the Fair Market Value of all consideration that the New
Capital Investor will receive in such Sale in exchange for the shares of
Qualified Common to be transferred or sold by the New Capital Investor in
such Sale, by
(ii) the Total Cost and Contributions for the shares of Qualified
Common to be transferred or sold by the New Capital Investor in such Sale
(as well as any shares of Nonqualified Common that will be forfeited
pursuant to this Agreement in connection with such Sale).
(b) The "Return Multiple" for each Liquidation shall be equal to the
quotient obtained by dividing:
(i) the Fair Market Value of all consideration to be distributed
in such Liquidation to the New Capital Investor with respect to the shares
of Qualified Common held by the New Capital Investor as of the date of such
Liquidation, by
- 4 -
(ii) the Total Cost and Contributions for the shares of Qualified
Common held by the New Capital Investor as of the date of such Liquidation
(as well as any shares of Nonqualified Common that will be forfeited
pursuant to this Agreement in connection with such Liquidation).
(c) The "Return Multiple" for each Rule 144 Quarter shall be equal to
the quotient obtained by dividing:
(i) the Fair Market Value of all of the New Capital Investor's
Rule 144 Eligible Shares for such Rule 144 Quarter, by
(ii) the Total Cost and Contributions for the New Capital
Investor's Rule 144 Eligible Shares for such Rule 144 Quarter (as well as
any shares of Nonqualified Common to be forfeited pursuant to this
Agreement by virtue of all Election Notices filed with respect to such Rule
144 Quarter).
Section 3. Definitions.
"Executive Stock Agreements" means the executive stock agreements of
even date herewith, each by and between the Company and one Executive Investor,
as amended from time to time pursuant to their terms.
"Fair Market Value" shall mean:
(i) with respect to any Rule 144 Eligible Share, the weighted
average (based on the volume of trading in shares of the class of the
Company's common stock that includes the Rule 144 Eligible Shares (the
Company's "Common Stock") on each business day during the Rule 144 Quarter)
over all of the business days during such Rule 144 Quarter, of the average
of the closing prices of the sales of such Common Stock on all securities
exchanges on which such Common Stock may at that time be listed, or, if
there have been no sales on any such exchange on any day, the average of
the highest bid and lowest asked prices on all such exchanges at the end of
such day, or, if on any day the Common Stock is not so listed, the average
of the representative bid and asked prices quoted in the NASDAQ System as
of 4:00 P.M., New York time, or, if on any day the Common Stock is not
quoted in the NASDAQ System, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau Incorporated, or any similar
successor organization; and
(ii) with respect to consideration received in a Sale or
Liquidation, the amount of all cash consideration received plus the fair
market value of all other consideration received (as shall be determined in
good faith by the New Capital Investor).
"Nonqualified Common" means 4,038.46 of the shares of Class A Common
purchased by the New Capital Investor under the Stock Purchase Agreement
(together with any shares issued with respect to such shares of Nonqualified
Common, including any stock splits, stock dividends, or recapitalizations);
provided that
- 5 -
(i) contemporaneously with a Sale, the number of shares of
Nonqualified Common that would be forfeited in connection with such Sale if
the Return Multiple for such Sale were 35 shall (whether or not actually
forfeited in connection with such Sale) forever cease to be Nonqualified
Common,
(ii) if any holder or holders of Unvested Class C Common give(s)
Election Notice with respect to a Rule 144 Quarter, the number of shares of
Nonqualified Common that would be forfeited in connection with such Rule
144 Quarter if the Return Multiple for such Rule 144 Quarter were 35 shall
(whether or not actually forfeited in connection with such Rule 144
Quarter) forever cease to be Nonqualified Common, and
(iii) contemporaneously with a Liquidation or termination of
this Agreement, any and all shares of Nonqualified Common then held by the
New Capital Investor shall forever cease to be Nonqualified Common,
(iv) if any shares of an Executive Investor's Unvested Class C
Common are repurchased pursuant to the provisions of an Executive Stock
Agreement, or if any Executive Investor waives (pursuant to paragraph 5G
below) his right to have any of his shares of Unvested Class C Common vest,
a number of New Capital Investor's shares of Nonqualified Common shall vest
equal to the number of shares of Unvested Class C Common so repurchased or
of which the rights to vest are so waived.
"Public Offering" means the initial underwritten sale of the company's
common stock pursuant to an effective registration statement under the
Securities Act filed with the Securities and Exchange Commission on Form S-1 (or
a successor form adopted by the Securities and Exchange Commission); provided
that the following shall not be considered a Public Offering: (i) any issuance
of common stock as consideration or financing for a merger or acquisition, and
(ii) any issuance of common stock or rights to acquire common stock to employees
of the Company or its Subsidiaries as part of an incentive or compensation plan.
"Qualified Common" means 17,500 of the shares of Class A Common
purchased by the New Capital Investor under the Stock Purchase Agreement
(together with any shares issued with respect to such shares of Qualified
Common, including by any stock splits, stock dividends, or recapitalizations),
provided that any such share shall forever cease to be Qualified Common (i) upon
a Liquidation, (ii) when such share has been sold or transferred in a Sale, or
(iii) upon termination of this Agreement; and provided further that if any
holder of Unvested Class C Common gives Election Notice with respect to a Rule
144 Quarter, all Rule 144 Eligible Shares for such Rule 144 Quarter shall, for
all purposes as to such electing holder, thereafter forever cease to be
Qualified Common.
"Successor Fund" means, with respect to the New Capital Investor, any
private equity fund formed for the principal purpose of making equity
investments, where such fund is managed by the same principal parties having
management responsibility for the New Capital Investor.
- 6 -
"Total Cost and Contributions" means, with respect to each share of
Qualified Common or Nonqualified Common held by the New Capital Investor on any
specified date, the sum of (i) the New Capital Investor's Initial Contribution
(as that term is defined in the Stock Purchase Agreement) divided by the
aggregate number of shares of Class A Common purchased by the New Capital
Investor under the Stock Purchase Agreement (as adjusted for stock splits, stock
dividends, recapitalizations, and other reorganizations, the "Original Class A
Common"), and (ii) for all Subsequent Contributions (as that term is defined in
the Stock Purchase Agreement) made by the New Capital Investor from the date
hereof through such specified date, the quotient obtained by dividing (x) the
amount of each such Subsequent Contribution by the aggregate number of shares of
Original Class A Common held by the New Capital Investor as of the date of each
such Subsequent Contribution.
"Unvested Class C Common" means, as to each Executive Investor,
1,009.615 of the shares of Class C Common issued as of the date hereof (together
with shares issued with respect to such shares of Unvested Class C Common as
part of any stock split, stock dividend, or recapitalization); provided that any
such share shall forever cease to be Unvested Class C Common when it has been
(i) repurchased by the Company, an Investor, or an executive employee of the
Company or its Subsidiaries pursuant to paragraph 3 of an Executive Stock
Agreement, (ii) forfeited pursuant to the terms of this Agreement, or (iii)
vested pursuant to the terms of this Agreement (at which time, such share shall
become Vested Class C Common).
"Vested Class C Common" means all shares of Unvested Class C Common
that have vested pursuant to the terms of this Agreement (and thereby ceased to
be Unvested Class C Common).
Section 4. Pledge of Unvested Class C Common.
4A. Pledge. Each Executive Investor hereby initially pledges to the
New Capital Investor, and grants to the New Capital Investor a security interest
in such Executive Investor's Unvested Class C Common (such Executive Investor's
"Pledged Shares") as security for its duties and obligations pursuant to this
Agreement.
4B. Delivery of Pledged Shares. Upon the execution of this
Agreement, each Executive Investor shall deliver to the New Capital Investor the
certificate(s) representing such Executive Investor's Pledged Shares, together
with duly executed forms of assignment sufficient to transfer title thereto to
the New Capital Investor.
4C. Status as Holder. For purposes of determinations and
calculations under this Agreement, each Executive Investor shall be deemed to be
the holder of such Executive Investor's Pledged Shares.
4D. Distributions, Other Certificates, etc. If any Executive
Investor becomes entitled to receive or receives any securities or other
property with respect to, in substitution of, or in exchange for any of such
Executive Investor's Pledged Shares (whether as a distribution in connection
with any recapitalization, reorganization or reclassification, a stock dividend
or otherwise), or any certificate(s) representing any of such Executive
Investor's Pledged Shares, such
- 7 -
Executive Investor shall accept such securities, property, or certificate(s) on
behalf of and for the benefit of the New Capital Investor as additional security
for such Executive Investor's obligations hereunder and shall promptly deliver
such additional security to the New Capital Investor together with duly executed
forms of assignment, and such additional security shall be deemed to be part of
such Executive Investor's Pledged Shares.
4E. Delivery to and by the New Capital Investor. If the Company
issues any certificate representing Pledged Shares, the Company shall in keeping
with the purpose of paragraph 4D deliver such certificate directly to the New
Capital Investor. If the holder of such Pledged Shares is required pursuant to
the terms of this Agreement to transfer any certificate representing Pledged
Shares to the Company for cancellation, the New Capital Investor shall transfer
such certificate to the Company on behalf of such holder.
4F. Release of Pledged Shares upon Vesting. Upon any of Executive
Investor's Pledged Shares becoming Vested Class C Common pursuant to this
Agreement, the New Capital Investor shall deliver to such Executive Investor the
certificate or certificates representing such shares of Vested Class C Common
(or, if necessary, the New Capital Investor shall submit the certificate or
certificates representing such Vested Class C Common to the Company, and the
Company shall issue to such Executive Investor a certificate representing the
number of shares of Vested Class C Common represented by such submitted
certificate(s), and shall deliver to the New Capital Investor a certificate
(issued in such Executive Investor's name) representing the number of shares of
Class C Common which were represented by such submitted certificate(s) but which
were not Vested Class C Common and not forfeited), and such Vested Class C
Common shall no longer constitute part of such Executive Investor's Pledged
Shares.
4G. Voting Proxy. Each Executive Investor hereby appoints the New
Capital Investor as his true and lawful proxy and attorney-in fact, with full
power of substitution, to vote all of such Executive Investor's Pledged Shares
on all matters to be voted on by the Company's shareholders. These proxies and
powers granted by each Executive Investor pursuant to this paragraph 4G are
coupled with an interest, and are given to secure each Executive Investor's
obligations to the New Capital Investor under this Agreement. Such proxies and
powers shall be irrevocable with respect to each such Pledged Share (and shall
survive the death, disability, incompetency, or bankruptcy of such Executive
Investor) until such time as such Pledged Share becomes Vested Class C Common
pursuant to the provisions of this Agreement and thereby ceases to be a Pledged
Share, at which time such proxy shall be deemed revoked with respect to such
share (but not with respect to any shares of such holder that remain Pledged
Shares).
4H. Further Assurances. Each Executive Investor agrees that at any
time and from time to time upon the request of the New Capital Investor, such
Executive Investor shall execute and deliver such further documents and take
such further actions as the New Capital Investor may reasonably request in order
to effect the purpose of this Agreement.
Section 5. Miscellaneous.
5A. New Capital Investor Determinations. All calculations and other
determinations under provisions of this Agreement (including the final
determination of the Fair
-8-
Market Value of Rule 144 Eligible Shares) shall be performed and made in good
faith by the New Capital Investor, and such good faith determinations shall be
binding on all parties hereto. The Company and the Executive Investors shall
deliver to the New Capital Investor such information as the New Capital Investor
may reasonably request in connection with performing such calculations or making
such determinations.
5B. Restrictive Legend. Each certificate evidencing shares of
Nonqualified Common and Unvested Class C Common shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO FORFEITURE PROVISIONS SET FORTH IN A VESTING AGREEMENT
DATED AS OF NOVEMBER 27, 1996, BY AND AMONG THE ISSUER OF
SUCH SECURITIES, AND CERTAIN PERSONS LISTED ON THE SIGNATURE
PAGES ATTACHED THERETO, AS AMENDED FROM TIME TO TIME
PURSUANT TO ITS TERMS. A COPY OF SUCH VESTING AGREEMENT
SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE
HOLDER HEREOF UPON WRITTEN REQUEST."
The legend set forth above shall be removed from the certificates evidencing any
of the above shares when such shares cease to be Nonqualified Common or Unvested
Class C Common, as applicable.
5C. Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
5D. Counterparts. This Agreement may be executed in separate
counterparts, none of which need contain the signature of more than one party
hereto but each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
5E. Successors and Assigns. Except as otherwise provided herein,
this Agreement shall bind the parties hereto and their respective successors and
assigns and shall inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns. Notwithstanding the
foregoing, the Executive Investors shall not transfer any Unvested Class C
Common to any person, except (i) pursuant to the pledge and forfeiture
provisions of this Agreement, or (ii) to the executor of such Executive
Investor's estate, at which time such executor shall sign a counterpart to this
Agreement agreeing to stand in the place of the Executive Investor and be bound
by the provisions hereof with respect to such shares of Unvested Class C Common.
5F. Choice of Law. The corporate law of the State of Delaware shall
govern all questions concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the
-9-
exhibits hereto shall be governed by the internal law, and not the law of
conflicts, of the State of Illinois.
5G. Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company, the New
Capital Investor and the holders of a majority of the shares of Unvested Class C
Common then outstanding, and such an amendment or waiver shall be binding on all
parties; provided that any holder of Unvested Class C Common may waive the
rights under this Agreement to have the shares of Unvested Class C Common held
by such holder vest (upon such waiver, such shares the rights to vest of which
are waived shall be treated for purposes of this Agreement (including paragraph
2A(c) and Section 3) as if they had been repurchased pursuant to the repurchase
provisions of an Executive Stock Agreement.
5H. Notice. Any notice provided for in this Agreement shall be in
writing and shall be deemed to have been given when personally delivered to the
recipient, three business days after being mailed to the recipient by first
class mail (postage prepaid and return receipt requested), or one business day
after being sent to the recipient by reputable overnight courier service
(charges prepaid). Such notices shall be sent to each recipient at the address
specified for such recipient in the Stock Purchase Agreement, or to such other
address or to the attention of such other person as the recipient party shall
have specified by prior written notice to the sending party. Any notice given by
a holder of Unvested Class C Common pursuant to paragraph 1B hereof shall, in
addition to the other requirements for such notice set forth in paragraph 1B,
state in a conspicuous manner that, subject to the conditions and determinations
contemplated thereby, the events described therein are scheduled to occur on the
20th day following the end of the Rule 144 Quarter (and the notice shall
conspicuously specify the actual date that is such 20th day).
5I. Remedies. Each of the parties to this Agreement shall be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including reasonable attorney's fees) caused by any breach of
any provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
5J. Termination. The provisions of this Agreement shall terminate
upon the earlier of (i) the first date upon which there remains either no
Unvested Class C Common outstanding, and (ii) the seventh anniversary of the
date hereof; provided that the obligations under this Agreement with respect to
any events resulting in the termination hereof shall survive such termination.
* * * *
-10-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
FRONTENAC VI, L.P.
By Frontenac Company, its General Partner
By:
-------------------------------------
Its:
------------------------------------
-----------------------------------------
Xxxxx X. Xxxx
-----------------------------------------
Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx, Xx.
FOCAL COMMUNICATIONS CORPORATION
By:
-----------------------------------
Its:
-----------------------------------
-S1-
