Exhibit 4.16
REGISTRATION AGREEMENT
----------------------
THIS REGISTRATION AGREEMENT (the "Agreement") is made as of November
---------
27, 1996, by and among Focal Communications Corporation, a Delaware corporation
(the "Company"), Madison Dearborn Capital Partners, L.P., a Delaware limited
-------
partnership ("MDCP"), Frontenac VI, L.P., a Delaware limited partnership
----
("Frontenac"), Battery Ventures III, L.P., a Delaware limited partnership ("BV,"
--
and collectively with MDCP and Frontenac, the "Institutional Investors"), Xxxxxx
-----------------------
X. Xxxxxx, Xx. ("Xxxxxx"), Xxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxx X. Xxxx
------ --------
("Addy"), and Xxxxxx Xxxxxx ("Xxxxxx," and collectively with Taylor, Barnicle,
---- ------
and Addy, 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 ("Class
-----
A Common") by the Institutional Investors and the Executive 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 in this
---------
Agreement are used herein with the meanings ascribed to such terms in the Stock
Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual promises made herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Demand Registrations.
--------------------
(a) Requests for Registration. At any time after the date hereof and
-------------------------
prior to the Company's Initial Public Offering (as defined below), the holders
of at least 67% of the Institutional Investor Registrable Securities then
outstanding may request registration under the Securities Act of all or any
portion of their Registrable Securities on Form S-1 or any similar long-form
registration ("Long-Form Registrations"). "Initial Public Offering" means a
----------------------- -----------------------
sale of Common Stock to the public registered with the Securities and Exchange
Commission on Form S-1 or any similar form. After the Company's Initial Public
Offering, (i) the holders of a majority of the MDCP Registrable Securities then
outstanding may request two Long-Form Registrations, (ii) the holders of a
majority of the Frontenac Registrable Securities then outstanding and the
holders of a majority of the BV Registrable Securities then outstanding may each
request one Long-Form Registration, (iii) and the holders of at least 10% of the
Institutional Investor Registrable Securities then outstanding may request
registration under the Securities Act of all or any portion of their Registrable
Securities on Form S-2 or S-3 or any similar short-form registration ("Short-
------
Form Registrations") if available; provided that the aggregate offering value
------------------ --------
of the Registrable Securities requested to be registered in any Long-Form
Registration must equal at least $20 million if the registration is the
Company's Initial Public Offering, at least $10
1
million in all other Long-Form Registrations, and at least $2 million in any
Short-Form Registration.
All requests for registration hereunder shall be made by giving
written notice to the Company (the "Demand Notice"). Each Demand Notice shall
-------------
specify the approximate number of Registrable Securities requested to be
registered and the anticipated per share price range for such offering. Within
ten days after receipt of any Demand Notice, the Company shall give written
notice of such requested registration to all other holders of Registrable
Securities and, subject to the provisions of paragraph 1(e) below, shall include
in such registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within 15 days after
the receipt of the Company's notice. All registrations requested pursuant to
this paragraph 1(a) are referred to herein as "Demand Registrations."
--------------------
(b) Definitions.
-----------
"Registrable Securities" means (i) any Class A Common issued pursuant
----------------------
to the Stock Purchase Agreement, any Class B Common issued pursuant to an
Executive Stock Agreement, or any Class B Common issued upon conversion of
Class C Common issued pursuant to an Executive Stock Agreement into such
Class B Common pursuant to the Company's Certificate of Incorporation, (ii)
any Common Stock issued with respect to the securities referred to in
clause (i) by way of a stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization, and (iii) any other common stock of the Company (except
shares of Class C Common) held by any holder of Registrable Securities;
provided that such securities shall cease to be Registrable Securities when
they have been distributed to the public pursuant to an offering registered
under the Securities Act or sold to the public through a broker, dealer or
market maker in compliance with Rule 144 under the Securities Act (or any
similar rule promulgated by the Securities Exchange Commission then in
force).
"Institutional Investor Registrable Securities" means, collectively,
---------------------------------------------
MDCP Registrable Securities, Frontenac Registrable Securities, and BV
Registrable Securities.
"MDCP Registrable Securities" means Registrable Securities consisting
---------------------------
of, or derived from, Class A Common initially purchased by MDCP under the
Stock Purchase Agreement, "Frontenac Registrable Securities" means
--------------------------------
Registrable Securities consisting of, or derived from, Class A Common
initially purchased by Frontenac under the Stock Purchase Agreement, and
"BV Registrable Securities" means Registrable Securities consisting of, or
-------------------------
derived from, Class A Common initially purchased by BV under the Stock
Purchase Agreement.
"Class B Registrable Securities" means Registrable Securities
------------------------------
consisting of, or derived from, Class B Common initially issued under the
Executive Stock Agreements or
-2-
Class B Common issued upon conversion of Class C Common initially issued
under the Executive Stock Agreements into such Class B Common pursuant to
the Company's Certificate of Incorporation.
(c) Expenses; Withdrawal. The Company shall pay all Registration
--------------------
Expenses of holders of Registrable Securities in any registration under this
Agreement. A registration shall not count as one of the permitted Long-Form
Registrations until it has become effective (unless such Long-Form Registration
has not become effective due solely to the fault of the holders requesting such
registration) or if the holders of Registrable Securities initially requesting
such registration are not able to register and sell at least 90% of the
Registrable Securities requested to be included in such registration; provided
--------
that the Company shall in any event pay all Registration Expenses in connection
with any registration initiated as a Demand Registration whether or not it has
become effective and whether or not such registration has counted as one of the
permitted Long-Form Registrations. All Long-Form Registrations shall be
underwritten registrations.
(d) Short-Form Registrations. Demand Registrations shall be Short-
------------------------
Form Registrations whenever the Company is permitted to use any applicable short
form. After the Company has become subject to the reporting requirements of the
Securities Exchange Act, the Company shall use its best efforts to make Short-
Form Registrations on Form S-3 (or any successor form) available for the sale of
Registrable Securities.
(e) Priority on Demand Registrations. The Company shall not include
--------------------------------
in any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the holders of a majority of the
Registrable Securities included in such registration. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders of a majority of the Registrable Securities initially
requesting registration, the Company shall include in such registration the
number which can be so sold in the following order of priorities: (i) first,
the Registrable Securities other than Class B Registrable Securities requested
to be included in such registration, pro rata among the holders of such
Registrable Securities on the basis of the number of shares owned by each such
holder, (ii) second, the Class B Registrable Securities requested to be included
in such registration, pro rata among the holders of such Registrable Securities
on the basis of the number of shares owned by each such holder, and (iii) third,
other securities requested to be included in such registration.
(f) Restrictions on Long-Form Registrations. The Company shall not be
---------------------------------------
obligated to effect any Demand Registration which is a Long-Form Registration
within 180 days after the effective date of a previous Demand Registration which
was a Long-Form Registration or a previous registration in which the holders of
Registrable Securities were given piggyback rights pursuant to paragraph 2 and
in which there was no reduction in the number of Registrable Securities
requested to be included. The Company may postpone for up to 180 days the
filing
-3-
or the effectiveness of a registration statement for a Demand Registration if
the Company's board of directors determines in its reasonable good faith
judgment that such Demand Registration would reasonably be expected to have a
material adverse effect on any proposal or plan by the Company or any of its
Subsidiaries to engage in any acquisition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer, reorganization
or similar transaction; provided that in such event, the holders of Registrable
Securities initially requesting such Demand Registration shall be entitled to
withdraw such request and, if such request is withdrawn, such Demand
Registration shall not count as one of the permitted Demand Registrations
hereunder and the Company shall pay all Registration Expenses in connection with
such withdrawn registration. The Company may delay a Demand Registration
hereunder only once in any twelve-month period.
(g) Selection of Underwriters. The holders of a majority of the
-------------------------
Registrable Securities initially requesting registration hereunder shall have
the right to select the investment banker(s) and manager(s) to administer the
offering, subject to the Company's approval which shall not be unreasonably
withheld.
(h) Other Registration Rights. Except as provided in this Agreement,
-------------------------
the Company shall not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the prior written
consent of the holders of at least 67% of the Institutional Investor Registrable
Securities then outstanding; provided that the Company may grant rights to other
--------
Persons to (i) participate in Piggyback Registrations so long as such rights are
subordinate to the rights of the holders of Registrable Securities with respect
to such Piggyback Registrations and (ii) request registrations so long as the
holders of Registrable Securities are entitled to participate in any such
registrations with such Persons pro rata on the basis of the number of shares
owned by each such holder.
2. Piggyback Registrations.
-----------------------
(a) Right to Piggyback. Whenever the Company proposes to register any
------------------
of its securities under the Securities Act (other than pursuant to a Demand
Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
----------------------
shall give prompt written notice (in any event within three business days after
its receipt of notice of any exercise of demand registration rights other than
under this Agreement) to all holders of Registrable Securities of its intention
to effect such a registration and shall include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 20 days after the receipt of the Company's
notice.
(b) Piggyback Expenses. The Registration Expenses of the holders of
------------------
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration is
---------------------------------
an underwritten primary registration on behalf of the Company, and the managing
underwriters
-4-
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in an orderly manner in such offering within a price range acceptable to
the Company, the Company shall include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable Securities
(other than Class B Registrable Securities) requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares owned by each such holder, (iii) third, the Class
B Registrable Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of the number of
shares owned by each such holder, and (iv) fourth, other securities requested to
be included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback Registration
-----------------------------------
is an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the holders initially requesting
such registration, the Company shall include in such registration (i) first,
the securities requested to be included therein by the holders requesting such
registration and the Registrable Securities requested to be included in such
registration, pro rata among the holders of such securities on the basis of the
number of securities so requested to be included therein owned by each such
holder, and (ii) second, other securities requested to be included in such
registration.
(e) Other Registrations. If the Company has previously filed a
-------------------
registration statement with respect to Registrable Securities pursuant to
paragraph 1 or pursuant to this paragraph 2, and if such previous registration
has not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any successor form), whether on its
own behalf or at the request of any holder or holders of such securities, until
a period of at least 180 days has elapsed from the effective date of such
previous registration.
3. Holdback Agreements.
-------------------
(a) Holders of Registrable Securities. Each holder of Registrable
---------------------------------
Securities shall not effect any public sale or distribution (including sales
pursuant to Rule 144) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and the 180-day period beginning on the effective date of
any underwritten Demand Registration or any underwritten Piggyback Registration
in which Registrable Securities are included (except as part of such
underwritten registration), unless the underwriters managing the registered
public offering otherwise agree.
(b) The Company. The Company (i) shall not effect any public sale or
-----------
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 180-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten
-5-
Piggyback Registration (except as part of such underwritten registration or
pursuant to registrations on Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree, and (ii)
shall cause each holder of at least 3% (on a fully-diluted basis) of its Common
Stock, or any securities convertible into or exchangeable or exercisable for
Common Stock, purchased from the Company at any time after the date of this
Agreement (other than in a registered public offering or pursuant to Rule 144)
to agree not to effect any public sale or distribution (including sales pursuant
to Rule 144) of any such securities during such period (except as part of such
underwritten registration, if otherwise permitted), unless the underwriters
managing the registered public offering otherwise agree.
4. Registration Procedures. Whenever the holders of Registrable
-----------------------
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed, which documents
shall be subject to the review and comment of such counsel);
(b) notify each holder of Registrable Securities of the effectiveness
of each registration statement filed hereunder and prepare and file with the
Securities and Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not less
than 180 days and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this
-6-
subparagraph, (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction);
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its best
efforts to secure designation of all such Registrable Securities covered by such
registration statement as a NASDAQ "national market system security" within the
meaning of Rule 11Aa2-1 of the Securities and Exchange Commission or, failing
that, to secure NASDAQ authorization for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such Registrable Securities
with the NASD;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including effecting a stock split or a combination of
shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
-7-
(k) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order; and
(m) obtain a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the holders of a majority of the
Registrable Securities being sold reasonably request (provided that such
Registrable Securities constitute at least 10% of the securities covered by such
registration statement).
5. Registration Expenses.
---------------------
(a) Expenses. All expenses incident to the Company's performance of
--------
or compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), shall be borne as provided in this
---------------------
Agreement, except that the Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance and
the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on the NASD automated quotation system.
(b) Reimbursement of Counsel. In connection with each Demand
------------------------
Registration and each Piggyback Registration, the Company shall reimburse the
holders of Registrable Securities included in such registration for the
reasonable fees and disbursements of one counsel chosen by the holders of a
majority of the Registrable Securities included in such registration and for the
reasonable fees and disbursements of each additional counsel retained by any
holder of Registrable Securities for the purpose of rendering a legal opinion on
behalf of such holder in connection with any underwritten Demand Registration or
Piggyback Registration.
6. Indemnification.
---------------
-8-
(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company shall indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder shall furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, shall indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing by such holder; provided that the obligation to indemnify
shall be individual, not joint and several, for each holder and shall be limited
to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may
-9-
exist between such indemnified party and any other of such indemnified parties
with respect to such claim.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
-------------------------------------------
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder
and such holder's intended method of distribution) or to undertake any
indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in paragraph 6 hereof.
8. MISCELLANEOUS.
-------------
(a) No Inconsistent Agreements. The Company shall not hereafter enter
--------------------------
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement.
(b) Adjustments Affecting Registrable Securities. The Company shall
--------------------------------------------
not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would materially and
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) Remedies. Any Person having rights under any provision of this
--------
Agreement shall be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may 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 other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
-10-
(d) Amendments and Waivers. Except as otherwise provided herein, the
----------------------
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of at least 67% of the Institutional
Investor Registrable Securities outstanding at the time such amendment or waiver
becomes effective; provided, that an amendment which adversely affects the Class
--------
B Registrable Securities in a manner different from other Registrable Securities
also requires the prior written consent of holders of a majority of the Class B
Registrable Securities then outstanding.
(e) Successors and Assigns. All covenants and agreements in this
----------------------
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(f) Severability. Whenever possible, each provision of this Agreement
------------
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 prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement
--------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
(i) Governing Law. The corporate law of the State of Delaware shall
-------------
govern all issues and questions concerning the relative rights of the Company
and its stockholders. All other issues and questions concerning the
construction, validity, interpretation and enforcement of this Agreement and the
exhibits and schedules hereto 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.
(j) Notices. All notices, demands or other communications to be given
-------
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, one business day after being sent to the recipient by reputable
overnight courier service (charges prepaid), or three business days after being
sent to the recipient by certified or registered mail, return receipt requested
and postage prepaid. Such notices, demands and other communications shall be
sent to each Investor at the address indicated on the Schedule of Investors and
to the Company at the address indicated below:
-11-
Focal Communications Corporation
000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: President
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
-12-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
/s/ Xxxxx X. Xxxx MADISON DEARBORN CAPITAL PARTNERS, L.P.
-----------------
Xxxxx X. Xxxx By Madison Dearborn Partners, L.P., Its General
Partner
By Madison Dearborn Partners, Inc., its General
Partner
/s/ Xxxx X. Xxxxxxxx By /s/ Xxxxx X. Xxxxx, Xx.
--------------------- -------------------------
Xxxx X. Xxxxxxxx Its Vice President
----------------
/s/ Xxxxxx Xxxxxx
------------------
Xxxxxx Xxxxxx FRONTENAC VI, L.P.
By Frontenac Company, its General Partner
/s/ Xxxxxx X. Xxxxxx, Xx. By /s/ Xxxxx X. Xxxxxxxx III
-------------------------- --------------------------
Xxxxxx X. Xxxxxx, Xx. Its General Partner
----------------
BATTERY VENTURES III, L.P.
By Battery Partners, III, L.P.
By /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Its Managing Partner
------------------
FOCAL COMMUNICATIONS CORPORATION
By /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Its President
---------
-13-
