Exhibit 10.23
AMENDMENT NO. 3 TO SHAREHOLDERS' AGREEMENT
AMENDMENT NO. 3 TO SHAREHOLDERS' AGREEMENT, dated as of February 7, 2000
(this "Amendment") to that certain Shareholders' Agreement dated as of April 23,
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1999, as amended by Amendment No. 1 dated February 2, 2000 and Amendment No. 2
dated February 4, 2000 (the Shareholders' Agreement") between BROADVIEW NETWORKS
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HOLDINGS, INC. (f/k/a Coaxicom, Inc.), a Delaware corporation (the "Company"),
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and each of the shareholders listed on the signature pages thereto
(collectively, the "Shareholders") is made by and between the Company and the
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Shareholders.
WHEREAS, in connection with the proposed initial public offering of the
Company's common stock (the "IPO"), the underwriters of the IPO have advised the
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Company that the special veto rights of All Preferred Holders and the board
representation rights of the Shareholders could adversely affect the marketing
of the IPO and, accordingly, have requested that such rights be terminated;
WHEREAS, the managing underwriter of the IPO has advised the Company in
writing that in its opinion it is necessary for the Stockholders to waive the
preemptive rights granted under the Shareholders' Agreement in order for the IPO
to achieve its maximum benefit;
WHEREAS, the Company and the Shareholders desire to amend the Shareholders'
Agreement in order to (a) eliminate All Preferred Holders' special veto rights
and modify the Shareholders' board representation rights, in each case effective
upon the consummation of a Qualifying IPO and (b) waive All Preferred Holders'
rights to first offer to provide equity financing and the Shareholders'
preemptive rights with respect to the issuance of common stock pursuant to the
IPO, in each case effective as of the date of this Amendment;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
obligations hereinafter set forth, the Company and the Shareholders hereby agree
as follows:
SECTION 1. Definitions. Capitalized terms used but not otherwise defined
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herein shall have the meaning given to them in the Shareholders' Agreement or,
if not defined therein, in the Company's Certificate of Incorporation, as
amended.
SECTION 2. Amendments to Shareholders' Agreement. The Shareholders'
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Agreement shall be amended, effective upon the consummation of a Qualifying IPO,
as follows:
(a) Section 1 shall be amended and restated in its entirety as follows:
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1. Voting Rights. For so long as this Agreement is in effect, the
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Stockholders shall each vote all of their securities of the Company,
including any securities of the Company acquired after the date of
this Agreement, in favor of the size of the
Board of Directors of the Company (the "Board") and the election of
each of the other Stockholders' designees to the Board, or any
committee thereof, as provided below:
(a) The Board shall consist of five (5) members;
(b) One designee to the Board who is selected by holders of at least
a majority in interest of the then outstanding Priority Preferred
Shares ("Majority Priority Preferred Holders"). The designee
selected by the Majority Priority Preferred Holders shall have
the right to serve on all of the Board's committees; and
(c) One designee to the Board who is jointly selected by the Series A
Holders and the Series B Holders.
(b) Section 2 shall be deleted in its entirety and replaced with the
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following:
2. Restrictions. [Intentionally deleted.]
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SECTION 3. Waiver of Preemptive Rights. Each Shareholder hereby waives,
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effective as of the date of this Amendment, any preemptive rights to which he
or it may be entitled under the Shareholders' Agreement with respect to the
issuance of common stock by the Company pursuant to a Qualifying IPO.
SECTION 4. Waiver of Rights to First Offer to Provide Equity Financing.
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All Preferred Holders hereby waive, effective as of the date of this Amendment,
any rights of first offer to provide equity financing to which he or it may be
entitled under the Shareholders' Agreement with respect to the issuance of
common stock by the Company pursuant to a Qualifying IPO.
SECTION 5. No Implied Amendments. Except as herein amended, the
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Shareholders' Agreement shall remain in full force and effect and is ratified in
all respects. On and after the effectiveness of this Amendment, each reference
in the Shareholders' Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each reference to the Shareholders'
Agreement in any other agreements, documents or instruments executed and
delivered pursuant to the Securities Purchase Agreement, shall mean and be a
reference to the Shareholders' Agreement, as amended by this Amendment.
SECTION 6. Effective Date. This Amendment shall be effective as of the
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date hereof; provided, however, that the provisions of Section 2 of this
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Amendment shall be effective upon the consummation of a Qualifying IPO;
provided, further, however, that if a Qualifying IPO is not consummated within
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90 days, following the date hereof, this Amendment shall become null and void.
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SECTION 7. Counterparts. This Amendment may be executed by the parties
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hereto in several counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
BROADVIEW NETWORKS HOLDING, INC.
/s/ Xxxx Xxxxxxx
By:______________________________
Name:
Title:
XXXXX COMMUNICATIONS FUND, L.P.
By: Xxxxx Capital Partners, LLC
Its General Partner
/s/ Xxxxxx Xxxxx
By:______________________________
Name:
Title:
The State Treasurer of the State of Michigan,
as Custodian of the Michigan Public School
Employees' Retirement System, State Employees'
Retirement System and Michigan State Police
Retirement System
By:______________________________
Name:
Title:
XXXX XXXXX
______________________________
COMMUNICATIONS VENTURES II, L.P.
/s/ Xxxxxx Van der Meer
By:______________________________
Name:
Title:
COMMUNICATIONS VENTURES II
AFFILIATES FUND, L.P.
/s/ Xxxxxx Van der Meer
By:______________________________
Name:
Title:
NEW ENTERPRISE ASSOCIATES VII, L.P.
By: NEA Partners VII, L.P.,
General Partner
/s/ Xxxxx Xxxxxx
By:______________________________
Name:
Title:
NEA PRESIDENTS FUND
/s/ Xxxxx Xxxxxx
By:______________________________
Name:
Title:
NEA VENTURES 1998, L.P.
/s/ Xxxxx Xxxxxx
By:______________________________
Name:
Title:
WPG ENTERPRISE FUND III, L.L.C.
By: WPG VC Fund Adviser, LLC.,
Fund Investment Advisory Member
/s/ Xxxxx Xxxxxx
By:______________________________
Name: Xxxxx Xxxxxx
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV, L.L.C.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Member
/s/ Xxxxx Xxxxxx
By:________________________________
Name: Xxxxx Xxxxxx
Title: Managing Member
WPG INFORMATION SCIENCES
ENTREPRENEUR FUND, L.P.
By: WPG VC Fund Adviser, L.L.C.
General Partner
/s/ Xxxxx Xxxxxx
By:________________________________
Name: Xxxxx Xxxxxx
Title: Managing Member
XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV CAYMAN, L.P.
By: WPG VC Fund Adviser, L.L.C.,
Fund Investment Advisory Partner
/s/ Xxxxx Xxxxxx
By:________________________________
Name: Xxxxx Xxxxxx
Title: Managing Member
/s/ Xxxx Xxxxxxx
________________________________
Xxxx X. Xxxxxxx
/s/ Xxxxxxxx Xxxxxxxx
________________________________
Xxxxxxxx X. Xxxxxxxx
/s/ Xxxxxx Xxxxx
________________________________
Xxxxxx X. Xxxxx
/s/ Xxxxx Xxxxxx
________________________________
Xxxxx X. Xxxxxx