-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TTfqtMWJ2SizuxhO6xklOEtP7nRhRJRdjNcAlzMr0jBJbi8sklytw0a2bb1L8nBu XNneSl0fPk88E16qTXyLFA== /in/edgar/work/20000706/0000950131-00-004221/0000950131-00-004221.txt : 20000920 0000950131-00-004221.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950131-00-004221 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 20000615 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000705 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IFX CORP CENTRAL INDEX KEY: 0000792861 STANDARD INDUSTRIAL CLASSIFICATION: [7370 ] IRS NUMBER: 363399452 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-15187 FILM NUMBER: 667950 BUSINESS ADDRESS: STREET 1: 707 SKOKIE BLVD 5TH FLOOR CITY: NORTHBROOK STATE: IL ZIP: 60062 BUSINESS PHONE: 8474129411 MAIL ADDRESS: STREET 1: 707 SKOKIE BLVD 5TH FLOOR CITY: NORTHBROOK STATE: IL ZIP: 60062 FORMER COMPANY: FORMER CONFORMED NAME: CARL JACK 312 FUTURES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: 312 FUTURES INC DATE OF NAME CHANGE: 19860916 8-K 1 0001.txt FORM 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 15, 2000 IFX Corporation --------------- (Exact name of Registrant as Specified in Its Charter) Delaware 0-15187 36-3399452 -------- ------- ---------- (State or Other Jurisdiction of (Commission file number) (I.R.S. Employer Incorporation or Organization) Identification No.) IFX Corporation 707 Skokie Blvd., 5th Floor Northbrook, Illinois 60062 -------------------------- (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) (847) 412-9411 -------------- (Registrant's Telephone Number, Including Area Code) _____________________________________________________________ (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS. On June 15, 2000, Registrant secured a commitment for $25 million in funding ($14.9 million payable on June 15, 2000 and $10.1 million payable on the subsequent closing date) from UBS Capital Americas III, L.P. and UBS Capital LLC (collectively, the "Purchasers"), to be used for working capital purposes. Pursuant to the Stock Purchase Agreement dated as of June 15, 2000, by and among Registrant and the Purchasers (the "Stock Purchase Agreement"), the Purchasers purchased 1,210,398 shares of IFX Class I Series A Preferred Stock. Furthermore, UBS Capital Americas III, L.P. and UBS Capital LLC shall collectively purchase up to an additional 820,471 shares of IFX Class II Series A Preferred Stock (for an aggregate purchase price of $10.1 million) on the subsequent closing date of the Stock Purchase Agreement. The number of members of the Board of Directors of Registrant was increased from six to seven. Under the terms of the Certificate of Designation, the Purchasers are entitled to elect one director to the Board of Directors of Registrant. Under a Stockholders Agreement entered into as of June 15, 2000 among the Purchasers, Lee S. Casty, Joel Eidelstein, Michael Shalom and International Technology Investments, L.C. ("ITI"), the parties thereto who hold Registrant Common Stock have agreed to vote for the election of an additional director designated by the Purchasers, a director designated by Mr. Casty, a director designated by ITI, a director jointly designated by ITI and Mr. Casty, and two independent directors reasonably acceptable to the Purchasers. The Stockholders Agreement replaces a terminated agreement among Messrs. Casty, Shalom and ITI regarding voting for directors. Tutopia.com, Inc. ("Tutopia"), an indirect subsidiary of Registrant, obtained a $15 million commitment for the purchase of Tutopia Series A Convertible Preferred Stock from Purchasers. Subject to certain conditions the purchase is expected to close at approximately the same time as the purchase by the Purchasers of Registrant's Class II Series A Preferred Stock. Latin Guide, Inc., a wholly-owned subsidiary of IFX Corp., is the majority shareholder of Tutopia. The purchase of the Tutopia Series A Convertible Preferred Stock may result in a change of control of Tutopia. Lee Casty, who owns more than 10% of the Common Stock of the Registrant, has agreed to purchase up to $5 million of Tutopia Series A Convertible Preferred Stock on the same terms and conditions as the sale to the Purchasers. ITEM 7. FINANCIAL STATEMENT AND EXHIBITS
Exhibit Number Description of Exhibit - -------------- ---------------------- 3(i) Restated Certificate of Incorporation of the Registrant 3(ii) By-laws, effective June 15, 2000 4.1 Certificate of Designation, Powers, Preferences and Rights of Series A Convertible Preferred Stock of the Registrant 4.2 Registration Rights Agreement dated as of June 15, 2000 among the Registrant, UBS Capital Americas III, L.P., UBS Capital LLC, International Technology Investments, LC and Lee S. Casty
10.1 Stockholders Agreement dated as of June 15, 2000 among Registrant, UBS Capital Americas III, L.P., UBS Capital LLC, International Technology Investments, LC, Joel Eidelstein, Michael Shalom and Lee S. Casty 10.2 Stock Purchase Agreement dated as of June 15, 2000 among the Registrant, UBS Capital Americas III, L.P. and UBS Capital LLC 10.3 Form of Non-Qualified Stock Option Agreement between the Registrant and employee with attached schedule describing actual option grants 10.4 Employment Agreement dated as of January 1, 2000 between Joel Eidelstein and the Registrant 10.5 Stock Option Agreement dated as of November 10, 1998, between Joel Eidelstein and the Registrant 10.6 Employment Agreement dated as of January 1, 2000 between Michael Shalom and the Registrant 10.7 Amendment to Employment Agreement dated as of April 1, 2000 between Zalman Lekach and the Registrant 10.8 Stock Option Agreement dated as of January 1, 2000, between Zalman Lekach and the Registrant 10.9 Employment Agreement dated as of June 26, 1999 between Jose Leiman and the Registrant 10.10 Amended and Restated Stock Purchase Agreement dated as of June 12, 2000, between Registrant and Lee S. Casty 10.11 Form of Directors Stock Option Agreement with attached schedule describing actual option grants 99.1 Press release dated June 16, 2000 99.2 Press release dated June 16, 2000
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IFX Corporation By: /s/ Joel Eidelstein ------------------------ Joel Eidelstein, President Date: July 5, 2000 IFX CORPORATION EXHIBIT INDEX
Exhibit Number Description of Exhibit - -------------- ---------------------- 3(i) Restated Certificate of Incorporation of the Registrant 3(ii) By-laws, effective June 15, 2000 4.1 Certificate of Designation, Powers, Preferences and Rights of Series A Convertible Preferred Stock of the Registrant 4.2 Registration Rights Agreement dated as of June 15, 2000 among the Registrant, UBS Capital Americas III, L.P., UBS Capital LLC, International Technology Investments, LC and Lee S. Casty 10.1 Stockholders Agreement dated as of June 15, 2000 among Registrant, UBS Capital Americas III, L.P., UBS Capital LLC, International Technology Investments, LC, Joel Eidelstein, Michael Shalom and Lee S. Casty 10.2 Stock Purchase Agreement dated as of June 15, 2000 among the Registrant, UBS Capital Americas III, L.P. and UBS Capital LLC 10.3 Form of Non-Qualified Stock Option Agreement between the Registrant and employee with attached schedule describing actual option grants 10.4 Employment Agreement dated as of January 1, 2000 between Joel Eidelstein and the Registrant 10.5 Stock Option Agreement dated as of November 10, 1998, between Joel Eidelstein and the Registrant 10.6 Employment Agreement dated as of January 1, 2000 between Michael Shalom and the Registrant 10.7 Amendment to Employment Agreement dated as of April 1, 2000 between Zalman Lekach and the Registrant 10.8 Stock Option Agreement dated as of January 1, 2000, between Zalman Lekach and the Registrant 10.9 Employment Agreement dated as of June 26, 1999 between Jose Leiman and the Registrant 10.10 Amended and Restated Stock Purchase Agreement dated as of June 12, 2000, between Registrant and Lee S. Casty 10.11 Form of Directors Stock Option Agreement with attached schedule describing actual option grants 99.1 Press release dated June 16, 2000 99.2 Press release dated June 16, 2000
EX-3.I 2 0002.txt RESTATED CERTIFICATE OF INCORPORATION OF IFX Exhibit 3(i) ------------ RESTATED CERTIFICATE OF INCORPORATION OF IFX CORPORATION It is hereby certified that: 1. (a) The present name of the corporation (hereinafter called the "Corporation") is IFX Corporation. (b) The name under which the Corporation was originally incorporated is 312 Merger Corporation, and the date of filing the original Certificate of Incorporation of the Corporation with the Secretary of State of the State of Delaware is April 5, 1994. 2. The Certificate of Incorporation of the Corporation is hereby amended by striking out Article Fourth thereof and by substituting in lieu thereof new Article Fourth which is set forth in the Restated Certificate of Incorporation hereinafter provided for. 3. The provisions of the Certificate of Incorporation of the Corporation as heretofore amended and/or supplemented, and as herein amended, are hereby restated and integrated into the single instrument which is hereinafter set forth, and which is entitled Restated Certificate of Incorporation of IFX Corporation, without further amendment other than the amendment herein certified and without any discrepancy between the provisions of the Certificate of Incorporation as heretofore amended and supplemented and the provisions of the said single instrument hereinafter set forth. 4. The amendment and restatement of the Restated Certificate of Incorporation herein certified have been duly adopted by the stockholders in accordance with the provisions of Section 242 and of Section 245 of the General Corporation Law of the State of Delaware 5. The Certificate of Incorporation of the Corporation, as amended and restated herein, shall at the effective time of this Restatement Certificate of Incorporation, read as follows: "Restated Certificate of Incorporation of IFX Corporation" FIRST: The name of the Corporation is IFX Corporation. SECOND: The Registered Office of the Corporation is located at 1013 Centre Road, Wilmington, New Castle County, Delaware, 19805-1297. The name of its Registered Agent at that address is Corporation Service Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The authorized capital stock of the Corporation is 1. Class Par Value Number of Shares Authorized ----- --------- --------------------------- Common $0.02 50,000,000 Preferred $1.00 10,000,000 2. The preferences, qualifications, limitations, restrictions and the special or relative rights of the shares of each class are: A. Preferred Stock. The Preferred Stock may be issued from time to time --------------- in one or more series. The Board of Directors is hereby authorized to provide for the issuance of shares of Preferred Stock as a class or in series and, by filing a statement pursuant to the General Corporation Law of the State of Delaware (hereinafter referred to as a "Preferred Stock Designation"), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following: (i) The designation of the series, which may be by distinguishing number, letter or title: (ii) The number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease; (iii) The dividend rate on the shares of the class or of any series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of the class or of that series; (iv) Dates at which dividends, if any, shall be payable; (v) Whether or not the shares of the class or of any series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they shall be redeemable and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (vi) The terms and amounts of a sinking fund, if any, provided for the purchase or redemption of shares of the class or any series; -2- (vii) The rights of the shares of the class or of any series in the event of voluntary or involuntary dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of the class or of that series; (viii) Whether the shares of the series shall be convertible into shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the rate or rates, any adjustments thereof, the date or dates of which such shares shall be convertible and all other terms and conditions upon which such conversion may be made; (ix) Restrictions on the issuance of shares of the same series or of any other class or series; (x) The voting rights, if any, of the holders of shares of the series; and (xi) Any other powers, preferences, rights, qualifications, limitations, and restrictions of the class or of any series. B. Common Stock. (i) The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. (ii) Except as may be provided in this Restated Certificate of Incorporation or in a Preferred Stock Designation, the holders of shares of the Common Stock shall have the exclusive right to vote on all matters (for which a common stockholder shall be entitled to vote thereon) at all meeting of the stockholders of the Corporation, and shall be entitled to one vote for each share of the Common Stock entitled to vote at such meeting. There shall be no cumulative voting rights with respect to any shares of the Corporation's stock. FIFTH: The Corporation is to have perpetual existence. SIXTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under Subsection 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under Subsection 279 of Title 8 of the Delaware Code order a meeting of the creditors or a class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such a manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and or stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all creditors -3- or class of creditors, and/or on all the stockholders or class of stockholders of this Corporation, as the case may be, and also on this Corporation. SEVENTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided: (1) The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws. The phrase "whole Board" and the phrase "total number of directors" shall be deemed to have the same meaning to wit, the total number of directors which the Corporation would have if there were no vacancies. No election of directors need be by written ballot. (2) In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the board of directors is expressly authorized and empowered to make, alter, amend and repeal by-laws, subject to the power of the stockholders to alter or repeal by-laws made by the board of directors. EIGHTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by paragraph (7) of Subsection (b) of Subsection 102 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented. NINTH: The Corporation shall, to the fullest extent permitted by Subsection 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, have the power to indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said section, and the power provided for herein shall not be deemed exclusive of any other right to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders, or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. TENTH: The Corporation hereby expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware, in its entirety, as the same may be amended and supplemented. ELEVENTH: From time to time any of the provisions of this Certificate of Incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of this Corporation by this Certificate of Incorporation are granted subject to the provisions of this Article ELEVENTH. -4- Signed on the 9th day of November, 1999. --- By: /s/ Colleen M. Downes --------------------- Its: Secretary --------------------- -5- EX-3.II 3 0003.txt BYLAWS OF IFX CORP Exhibit 3(ii) BY-LAWS OF IFX CORPORATION ARTICLE I --------- OFFICES ------- SECTION 1. REGISTERED OFFICE. The registered office shall be established and maintained at Suite L-100, 32 Loockerman Square, City of Dover, in the County of Kent in the State of Delaware. SECTION 2. OTHER OFFICES. The corporation may have other offices, either within or without the State of Delaware, at such place or places as the Board of Directors may from time to time appoint or the business of the corporation may require. ARTICLE II ---------- MEETING OF STOCKHOLDERS ----------------------- SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders for the election of directors and for such other business as may be stated in the notice of the meeting, shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors, by resolution, shall determine and as set forth in the notice of the meeting. In the event the Board of Directors fails to so determine the time, date and place of meeting, the annual meeting of stockholders shall be held at the main business office of the corporation in Delaware on the last Friday of October of each year. If the date of the annual meeting shall fall upon a legal holiday, the meeting shall be held on the next succeeding business day. At each annual meeting, the stockholders entitled to vote shall elect a Board of Directors and may transact such other corporate business as shall be stated in the notice of the meeting. SECTION 2. OTHER MEETINGS. Meetings of stockholders for any purpose other than the election of directors may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting. SECTION 3. VOTING. Each stockholder shall be entitled to vote in accordance with the terms and provisions of the Certificate of Incorporation and these By-Laws, in person or by proxy, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. All elections for directors shall be decided by plurality vote; all other questions shall be decided by majority vote except as otherwise provided by the Certificate of Incorporation or the laws of the State of Delaware. SECTION 4. PROXIES. A stockholder may execute a writing authorizing another person or persons to act for him as proxy. Execution may be accomplished by the stockholder or his authorized officer, director, employee or agent signing such writing or causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. SECTION 5. FIXING OF RECORD DATE. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend, or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of shares or for the purpose of any other lawful action, the board of directors of the corporation may fix in advance a record date which shall not be more than sixty days and not less than ten days, or in the case of a merger or consolidation, not less than twenty days, before the date of such meeting. If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of the business day on the day next preceding the day on which notice is given and the record date for the determination of shareholders for any other purpose shall be the date on which the board of directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting. SECTION 6. QUORUM. In all matters, except as otherwise required by law, by the Certificate of Incorporation or by these By-Laws, the presence, in person or by proxy, of stockholders holding a majority of the stock of the corporation entitled to vote shall constitute a quorum at all meetings of the stockholders. In case a quorum shall not be present at any meeting, a majority in interest of the stockholders entitled to vote thereat shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of stock entitled to vote shall be present. At any such adjourned meeting at which the requisite amount of stock entitled to vote shall be represented, any business may be transacted which might have been transacted at the meeting as originally noticed; but only those stockholders entitled to vote at the meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof. SECTION 7. SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by Board of Directors. SECTION 8. NOTICE OF MEETINGS. Written notice, stating the place, date and time of the meeting, and the general nature of the business to be considered, shall be given to each stockholder entitled to vote thereat at his address as it appears on the records of the corporation, not less than ten nor more than sixty days before the date of the meeting, either personally or by mail, by or at the direction of the president, or the secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the records of the corporation, with the postage thereon prepaid. Whenever any notice whatever is required to be given under the provisions of any law, or under the provisions of the Certificate of Incorporation of the corporation or these By-Laws, a waiver thereof in writing signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed proper notice. SECTION 9. ACTION WITHOUT MEETING. Any action that is ordinarily taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, and shall be delivered to the Corporation by delivery to its registered office, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or regular mail, return receipt requested. ARTICLE III ----------- DIRECTORS --------- SECTION 1. NUMBER. The number of directors shall be such number (not less than four) as determined by the Board of Directors from time to time. SECTION 2. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the board of directors and publicized among all directors. A notice of such regular meeting shall not be required. SECTION 3. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the President or any two directors and shall be held at such place, on such date and at such time as they or he shall fix. Notice of the place, date and time of each such special meeting shall be given each director by whom it is not waived, by mailing written notice not less than two days before the meeting or, by faxing or electronic mailing of the same not less than 18 hours before the meeting, to each director at his business address. If mailed, such notice shall be deemed to be delivered, when deposited in the United States mail so addressed, with postage thereon prepaid. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of any regular or special meeting of the Board of Directors need be specified in any written waiver of notice. SECTION 4. QUORUM. At any meeting of the Board of Directors, one-half of the numbers of directors then in office, but not less than two, shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date or time without further notice or waiver thereof. SECTION 5. PARTICIPATION AND MEETINGS BY CONFERENCE TELEPHONE. Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment that enables all persons participating in a meeting to hear each other. Such participation shall constitute presence in person at such meeting for all purposes. SECTION 6. CONDUCT OF BUSINESS. The act of a majority of the directors present at a meeting of which a quorum is present shall be the act of the Board of Directors, except as otherwise provided herein or provided by law. SECTION 7. RESIGNATIONS. Any director, member of a committee or other officer may resign at any time. Such resignation shall be made in writing, and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective. SECTION 8. VACANCIES. Subject to the provisions of the Certificate of Incorporation, if the office of any director, member of a committee or other officer becomes vacant, the remaining directors in office though less than a quorum by a majority vote, may appoint any qualified person to fill such vacancy, who shall hold office for the unexpired term and until his successor shall be duly chosen. SECTION 9. REMOVAL. Subject to the provisions of the Certificate of Incorporation, any director or directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of all the shares of stock outstanding and entitled to vote, at a special meeting of the stockholders called for this purpose, or by written consent as provided by law. Any director or directors may be removed for cause by the majority vote of the other directors. SECTION 10. INCREASE OF NUMBER. Subject to the provisions of the Certificate of Incorporation, the number of directors may be increased or decreased by amendment of these By-Laws by the affirmative vote of a majority of the directors, though less than a quorum, or, by the affirmative vote of a majority in interest of the stockholders, at the annual meeting or at a special meeting called for that purpose, and by like vote the additional directors may be chosen at such meeting to hold office until the next annual election and until their successors are elected and qualified. SECTION 11. COMPENSATION. Directors shall not receive any stated salary for their services as directors or as member of committees, but by resolution of the Board of Directors, fixed fees and expenses of attendance may be allowed for attendance at each meeting. By resolution of the Board of Directors, directors may also be granted coverage under the Corporation's health insurance, life insurance or other benefit plans. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent or otherwise, and receiving compensation therefor. SECTION 12. ACTION WITHOUT MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting, if prior to such action a written consent thereto is signed by all members of the board, or of such committee as the case may be, and such written consent is filed with the minutes of proceedings of the board or committee. SECTION 13. PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be conclusively presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. SECTION 14. RELIANCE ON CORPORATE RECORDS. A member of the board of directors, or a member of any committee designated by the board of directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the corporation and upon such information, opinions, reports or statements presented to the corporation by any of the corporation's officers or employees, or committees of the board of directors, or by any other person as to matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the corporation. ARTICLE IV ---------- OFFICERS -------- SECTION 1. OFFICERS. The officers of the corporation shall consist of the President, Secretary and such other officers as determined by the Board of Directors. None of the officers of the corporation need be directors. The officers shall be elected at the first meeting of the Board of Directors after each annual meeting. More than one office may be held by the same person. SECTION 2. SALARIES. The salaries of the officers shall be fixed from time to time by the board of directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation. ARTICLE V --------- STOCK ----- SECTION 1. CERTIFICATES OF STOCK Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary of the corporation, certifying the number of shares owned by him in the corporation. The designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations, or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Where a certificate is countersigned (1) by a transfer agent other than the corporation or its employee, or (2) by a registrar other than the corporation or its employee, the signatures of such officers may be facsimiles. SECTION 2. LOST CERTIFICATES. New certificates of stock may be issued in the place of any certificate issued by the corporation, alleged to have been lost or destroyed, and the directors may, in their discretion, require the owner of the lost or destroyed certificate or his legal representatives, to give the corporation a bond, in such sum as they may direct, not exceeding double the value of the stock, to indemnify the corporation against it on account of the alleged loss of any such new certificate. SECTION 3. TRANSFER OF SHARES. The shares of stock of the corporation shall be transferable only upon its books by the holders thereof in person or by their duly authorized attorneys or legal representatives, and upon such transfer the old certificates shall be surrendered to the corporation by the delivery thereof to the person in charge of the stock and transfer books and ledgers, or to such other persons as the directors may designate, by who they shall be canceled, and new certificates shall thereupon be issued. A record shall be made of each transfer and whenever a transfer shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer. SECTION 4. RETIREMENT OF STOCK The corporation, by resolution of its board of directors, may retire any shares of its capital stock that are issued but are not outstanding. Whenever any shares of the capital stock of this corporation are retired, they shall resume the status of authorized and unissued shares of the class or series to which they belong unless the certificate of incorporation otherwise provides. SECTION 5. DIVIDENDS. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor at any regular or special meeting, declare and pay dividends upon the shares of its capital stock. ARTICLE VI ---------- FISCAL YEAR ----------- SECTION 1. FISCAL YEAR. The fiscal year of the corporation shall be determined by resolution of the Board of Directors. ARTICLE VII ----------- NOTICES ------- SECTION 1. NOTICES. Whenever notice is required to be given to any stockholder, director, officer or agent, such requirement shall not be construed to mean personal notice. Such notice may in any instance be effectively given by depositing a writing in a post office or letter box in a pre-paid, sealed wrapper, or by dispatching a fax or electronic mail, addressed to such stockholder, director, officer or agent at his or her address as the same appears on the books of the corporation. The time when such notice is dispatched shall be the time of the giving of the notice. SECTION 2. WAIVERS. A written waiver of any notice, signed by a stockholder, director, officer or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, director, officer or agent. Neither the business nor the purpose of any meeting need to be specified in such a waiver. ARTICLE VIII ------------ AMENDMENTS ---------- SECTION 1. These By-Laws may be amended and/or repealed and new or additional By-Laws may be made at any annual meeting of the stockholders or at any special meeting thereof if notice thereof is contained in the notice of such special meeting by the affirmative vote of a majority of the stock issued and outstanding or entitled to vote thereat, or by the regular meeting of the Board of Directors, or at any special meeting of the Board of Directors, if notice thereof is contained in the notice of such special meeting. SECTION 2. A resolution authorizing a proposed amendment to the certificate of incorporation may provide that at any time prior to the filing of the amendment with the Secretary of State, notwithstanding authorization of the proposed amendment by the stockholders of the corporation or by the members of a nonstock corporation, the board of directors or governing body may abandon such proposed amendment without further action by the stockholders or members. ARTICLE IX ---------- INDEMNIFICATION OF OFFICERS --------------------------- DIRECTORS, EMPLOYEES AND AGENTS ------------------------------- SECTION 1. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director or officer of another corporation, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. SECTION 2. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. SECTION 3. No director of the corporation shall be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for (a) any breach of the director's duty of loyalty to the corporation or its stockholders; (b) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (c) acts under Section 174 of the Delaware General Corporation Law; or (d) any transaction from which the director derived an improper personal benefit. SECTION 4. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer, to repay such amount unless it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Article Ninth. Such expenses (including attorneys' fees) incurred by other employees or agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. SECTION 5. Any indemnification under Section (1) and (2) above (unless ordered by a Court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections (1) and (2). Such determination shall be made (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable and a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders. SECTION 6. The indemnification provided by this Article Ninth shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-laws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. SECTION 7. The corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director or officer of another corporation, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article Ninth. SECTION 8. For the purposes of this Article Ninth, reference to "the corporation" shall include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director or officer of such a constituent corporation or is or was serving at the request of such constituent corporation or other enterprise shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation in the same capacity. EX-4.1 4 0004.txt CERTIFICATE OF DESIGNATION Exhibit 4.1 CERTIFICATE OF DESIGNATION, NUMBER, POWERS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER RIGHTS OF SERIES A CONVERTIBLE PREFERRED STOCK OF IFX CORPORATION IFX Corporation (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, hereby certifies that, pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, its Board of Directors, at a meeting duly held on June 12, 2000, adopted the following resolution: WHEREAS, the Board of Directors of the Corporation is authorized by the Restated Certificate of Incorporation to issue up to 10,000,000 shares of preferred stock in one or more series and, in connection with the creation of any series, to fix by the resolutions providing for the issuance of shares the powers, designations, preferences and relative, participating, optional or other rights of the series and the qualifications, limitations or restrictions thereof; and WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to such authority, to authorize and fix the terms and provisions of a series of preferred stock, classes of such series of preferred stock and the number of shares constituting such classes; NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized a series of preferred stock on the terms and with the provisions herein set forth on Annex A attached to this resolution. Name:/s/Joel Eidelstein ------------------ Title: Joel Eidelstin President ATTEST:/s/ Jose Leiman --------------- Name: Jose Leiman Title: Chief Financial Officer ANNEX A SERIES A CONVERTIBLE PREFERRED STOCK The powers, designations, preferences and relative, participating, optional or other rights of the Series A Convertible Preferred Stock of IFX Corporation (the "Corporation") are as follows: 1. DESIGNATION AND AMOUNT. This series of preferred stock shall be designated as "Series A Convertible Preferred Stock" and shall be divided into two classes: Class I Series A Preferred Stock ("Class I Preferred") and Class II Series A Preferred Stock ("Class II Preferred," and together with the Class I Preferred, the "Series A Convertible Preferred Stock"). The Series A Convertible Preferred Stock shall have $1.00 par value per share. The number of authorized shares constituting the Class I Preferred shall be 1,210,398 shares. The number of authorized shares constituting the Class II Preferred shall be 820,471 shares. Shares of the Class I Preferred have a stated value of Twelve and 31/100 Dollars ($12.31) per share and shares of the Class II Preferred shall have a stated value equal to the Closing Per Share Price (as defined in the Preferred Stock Purchase Agreement dated June 15, 2000 among the Company, UBS Capital Americas III, L.P. and UBS Capital LLC (the "Preferred Stock Purchase Agreement")) (as applicable to the Class I Preferred or the Class II Preferred, as the case may be, the "Stated Value"). 2. DIVIDENDS. (a) Right to Receive Dividends. Holders of Series A Convertible Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors of the Corporation (the "Board of Directors"). (b) Participation with Common Stock. In the event the Board of Directors shall elect to pay or declare and set apart for payment any dividend on any shares of common stock, par value $.02 per share, of the Corporation (the "Common Stock") in cash out of funds legally available therefor or in stock or other consideration, the holders of the Series A Convertible Preferred Stock shall be entitled to receive, before any dividend shall be declared and paid or set aside for the Common Stock, dividends payable in the form and in an amount per share equal to the per share amount that would have been payable to such holders had such holders converted their Series A Convertible Preferred Stock into Common Stock pursuant to Section 5 below. (c) Dividend Preference. Dividends on the Series A Convertible Preferred Stock shall be payable before any dividends or distributions or other payments shall be paid or set aside for payment upon the Common Stock or any other stock ranking on liquidation or as to dividends or distributions junior to the Series A Convertible Preferred Stock (any such stock, together with the Common Stock, being referred to hereinafter as "Junior Stock"). If there shall be outstanding shares of any class or series of capital stock which is entitled to share ratably with the Series A Convertible Preferred Stock in the payment of dividends or distributions or upon liquidation ("Parity Securities"), no full dividends shall be declared or paid or set apart for payment on any such securities unless dividends have been or contemporaneously are ratably declared and paid -2- or declared and a sum sufficient for the payment thereof set apart for such payment on the Series A Convertible Preferred Stock. 3. LIQUIDATION PREFERENCE. (a) In the event of any bankruptcy, liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, each holder of Series A Convertible Preferred Stock at the time thereof shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of the Common Stock or other Junior Stock by reason of their ownership of such stock, an amount per share of Series A Convertible Preferred Stock equal to the sum of (x) the applicable Stated Value plus any declared and unpaid dividends to the date of liquidation, plus (y) 10% of such Stated Value per annum, calculated from the date of issuance of such share through date of payment of the liquidation preference as set forth in this Section 3 (the "Liquidation Preference"). After the payment of the full Liquidation Preference on account of all shares of Series A Convertible Preferred Stock as set forth in this Section 3, the remaining assets of the Corporation legally available for distribution, if any, shall be distributed ratably to the holders of the Common Stock. If the assets and funds legally available for distribution among the holders of Series A Convertible Preferred Stock shall be insufficient to permit the payment to the holders of the full aforesaid preferential amount, then the assets and funds shall be distributed ratably among holders of Series A Convertible Preferred Stock in proportion to the number of shares of Series A Convertible Preferred Stock owned by each holder. If the assets and funds of the Corporation available for distribution to stockholders upon any bankruptcy, liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, shall be insufficient to permit the payment to holders of the full aforesaid preferential amount and amounts payable to holders of outstanding Parity Securities, the holders of Series A Convertible Preferred Stock and the holders of such other Parity Securities shall share ratably (and ratably as to cash, in-kind or other distributions) in any distribution of assets of the Corporation in proportion to the full respective preferential amounts to which they are entitled. (b) Except as described in the following sentence, a merger, recapitalization, reorganization, sale of voting control to a single buyer or a group of related buyers in one or a series of related transactions, or other business combination transaction involving the Corporation in which the shareholders of the Corporation immediately prior to the consummation of such transaction do not own at least a majority of the outstanding shares of the surviving corporation or the Corporation (as applicable) immediately following the consummation of such transaction or sale of all or substantially all of the assets of the Corporation (collectively, a "Liquidation Event") shall be deemed to be a liquidation of the Corporation. Notwithstanding the foregoing, the following shall not be deemed to be a Liquidation Event: a merger of the Corporation with a public company (I) in which the merger consideration to be received by the holders of the Series A Convertible Preferred Stock is fully registered marketable securities (the "Merger Shares") which are not subject to any restrictions on transfer, (II) in which the value of such merger consideration for each share of Series A Convertible Preferred Stock, valued at the average closing price of the Merger Shares for the 30 days prior to the consummation of the merger, or such lesser period which follows the public announcement of the merger, is greater than 120% of the Liquidation Preference per share as of the date of consummation of the merger, and (III) with aggregate trading volume for the 30 -3- calendar days prior to the merger date of at least 10 times the aggregate number of Merger Shares received by all holders of Series A Convertible Preferred Stock. (c) In any Liquidation Event, if the consideration received by the Corporation is other than cash, its value will be deemed its fair market value as determined in good faith by the Board of Directors. Any securities shall be valued as follows: (i) Securities not subject to investment letter or other similar restrictions on free marketability covered by subsection (ii) below: (A) If traded on a securities exchange or through The Nasdaq National Market or Small Cap Market, the value shall be deemed to be the average of the closing prices of the securities on such quotation system over the thirty (30) day period ending three (3) days prior to the closing of the Liquidation Event; (B) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the closing of the Liquidation Event; and (C) If there is no active public market, the value shall be the fair market value thereof, as mutually determined by the Board of Directors and the holders of at least a majority of the voting power of all then outstanding shares of Series A Convertible Preferred Stock. (ii) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a shareholder's status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in subsections (i)(A), (B) or (C) to reflect the approximate fair market value thereof, as mutually determined by the Board of Directors and the holders of at least a majority of the voting power of all then outstanding shares of Series A Convertible Preferred Stock. 4. VOTING RIGHTS. In addition to any voting rights provided elsewhere herein or in the Corporation's Restated Articles of Incorporation, as it may be amended or restated from time to time (the "Articles of Incorporation"), and any voting rights provided by law, the holders of shares of Series A Convertible Preferred Stock shall have the following voting rights: (a) Election of Directors. (i) Subject to the terms hereof, the holders of the Series A Convertible Preferred Stock, voting as a single class in accordance with Section 4(d), shall have the right to elect one director (in addition to the directors elected by the holders of Common Stock or any other capital stock of the Corporation). -4- (ii) Any director elected by the holders of shares of Series A Convertible Preferred Stock shall be referred to herein as a "Series A Preferred Director." Subject to Section 4(a)(v), the initial term of the director to be appointed pursuant to Section 4(a)(i) will commence upon his/her election by the Series A Convertible Preferred Stock and shall expire at the first annual meeting of stockholders of the Corporation. Upon expiration of the initial term of such Series A Preferred Director, so long as the Series A Convertible Preferred Stock is outstanding, the holders of the Series A Convertible Preferred Stock shall have the right to elect a Series A Preferred Director to replace such director in the same manner described above in Section 4(a)(i). Subject to Section 4(a)(v), a Series A Preferred Director so elected shall hold office for a term expiring at the annual meeting of stockholders in the year following the election of such director. Notwithstanding the foregoing, but subject to Section 4(a)(v), a Series A Preferred Director elected under Section 4(a)(i) shall serve until such Series A Preferred Director's successor is duly elected and qualified or until such director's earlier removal as provided in Section 4(a)(iii) or death or resignation and, in the event a vacancy occurs, a replacement Series A Preferred Director shall be selected as provided in Section 4(a)(i). (iii) A Series A Preferred Director may be removed by, and shall not be removed except by, the vote of the holders of record of a majority of the outstanding shares of Series A Convertible Preferred Stock, voting together as a single class. (iv) The Corporation shall at all times reserve and keep available a vacant seat on the Board of Directors solely for the purpose of enabling the holders of the Series A Convertible Preferred Stock to designate a Series A Preferred Director as provided in this Section 4(a). (v) This Section 4(a) shall survive a Qualified Public Offering until such time as the holders of Series A Convertible Preferred Stock and their Affiliates own in the aggregate less than 25% of their initial holdings of Series A Shares determined after the Subsequent Closing (as defined in the Preferred Stock Purchase Agreement). (b) Certain Corporate Actions. Until a Qualified Public Offering or until such time as the holders of Series A Convertible Preferred Stock collectively with their Affiliates hold less than an aggregate of 50% of the number of shares of Series A Convertible Preferred Stock issued pursuant to the Preferred Stock Purchase Agreement (as adjusted in connection with the events described in Section 6) determined after the Subsequent Closing, the Corporation shall not, and shall not permit any of its subsidiaries to, without first obtaining the affirmative vote or written consent of the holders of a majority of the shares of Series A Convertible Preferred Stock, voting as a single class in accordance with Section 4(d): (A) amend, repeal, modify or supplement any provision of the Restated Certificate of Incorporation (including any certificate of designation forming a part thereof), the Bylaws of the Corporation, as in effect on the Issuance Date, or any successor articles of incorporation or bylaws or this Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Rights of Series A Convertible Preferred Stock (the "Certificate of Designation"); -5- (B) authorize or permit the Corporation or any subsidiary of the Corporation to issue any capital stock or any options, warrants or other rights exchangeable or exercisable therefor, other than (i) shares of Series A Convertible Preferred Stock pursuant to the Preferred Stock Purchase Agreement, (ii) Common Stock upon conversion of the Series A Convertible Preferred Stock or upon the exercise of stock options to purchase up to 2,460,000 shares of Common Stock, (iii) securities issued as consideration for any acquisition approved by a majority of the Board of Directors (including the affirmative vote of the Series A Preferred Directors), (iv) up to $15 million of Common Stock, issued as consideration for any acquisition approved by a majority of the Board of Directors (without the affirmative vote of the Series A Preferred Directors), provided such Common Stock is valued at no less than the greater of (1) the Stated Value (as adjusted for stock splits, combinations, stock dividends and the like) and (2) the average of the closing price for the Common Stock for the 30 days prior to the issuance, (v) a warrant to purchase 210,000 shares of Common Stock to Spinway, Inc. (the "Spinway Warrant"), (vi) 210,000 shares of Common Stock upon exercise of the Spinway Warrant, or (vii) shares of Common Stock in exchange for shares of common stock of Tutopia.com, Inc. ("Tutopia") upon a change-in-control of the Corporation pursuant to the Tutopia Stockholders Agreement dated as of April 24, 2000; (C) reclassify any class or series of any Common Stock into shares having any preference or priority as to dividends or liquidation superior to or on a parity with any such preference or priority of Series A Convertible Preferred Stock; (D) authorize or effect, in a single transaction or through a series of related transactions, (1) a liquidation, winding up or dissolution of the Corporation or adoption of any plan for the same; (2) a Liquidation Event; or (3) any direct or indirect purchase or other acquisition of the Corporation or any of its subsidiaries of any capital stock (other than the Series A Convertible Preferred Stock pursuant to its terms); (E) enter into or otherwise become a party to any agreement whereby any shareholder or shareholders of the Corporation shall transfer capital stock of the Corporation to an independent third party or a group of independent third parties pursuant to which such parties acquire capital stock of the Corporation possessing the voting power to elect a majority of the Board of Directors; (F) declare or pay or set aside for payment any dividend or distribution or other payment upon the Common Stock or upon any other Junior Stock, nor redeem, purchase or otherwise acquire any Common Stock or other Junior Stock for any consideration (or pay or make available any moneys, whether by means of a sinking fund or otherwise, for the redemption of or other distribution or payment with respect to any shares of any Common Stock or other Junior Stock), except for the repurchase of shares of Common Stock from directors, consultants or employees of the Corporation or any subsidiary pursuant to agreements approved by the disinterested directors on the Board of Directors, under which the Corporation has the right to repurchase such shares upon the occurrence of certain events, including but not limited to, termination of employment or services; -6- (G) approve the annual budget of the Corporation and its subsidiaries (the "Annual Budget"); (H) enter into any financial commitment over and above those approved in the annual budget in excess of $15 million in the aggregate (for the Corporation and its subsidiaries, taken together), except as prescribed in the Annual Budget; (I) dismiss or hire or modify or enter into any employment agreement, non-competition agreement, bonus or stock issuance arrangements or other compensation (including, without limitation, fringe benefit) arrangements with its President, Chief Executive Officer or Chief Financial Officer, or other equivalent or senior level officer; (J) permit the creation or existence of any lien, mortgage, pledge, hypothecation, assignment, security interest, charge or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on any of the Corporation's or any of its subsidiaries' assets with an aggregate value in excess of $15 million, except as part of any financing in the ordinary course of business; (K) make any capital expenditure in any fiscal year in excess of $15 million in the aggregate (for the Corporation and its subsidiaries, taken together), except as prescribed in the Annual Budget; (L) acquire any assets or equity or other interest in any other entity with a value in excess of $15 million in the aggregate (for the Corporation and its subsidiaries, taken together), except as prescribed in the Annual Budget; (M) incur indebtedness for borrowed money (including, without limitation, any capitalized lease obligations, accounts receivable financing or other asset-backed financing), any guarantee or other similar contingent obligation or any lease financing (whether a capitalized lease, operating lease, pursuant to a sale leaseback arrangement or otherwise), in excess of $15 million in the aggregate (for the Corporation and its subsidiaries, taken together), except as prescribed in the Annual Budget; (N) amend, supplement, restate, revise, waive or otherwise modify any stock option plan, agreement or other arrangement of the Corporation (each, a "Stock Option Plan"), as in effect on June 15, 2000; (O) create or adopt any stock option plan, stock appreciation rights plan, bonus plan or similar plan that was not in existence on June 15, 2000, except as approved by the Compensation Committee of the Board of Directors; (P) dispose of or acquire assets with a value in excess of $15 million other than in the normal course of business; -7- (Q) liquidate, dissolve or voluntarily elect to commence bankruptcy or insolvency proceedings under applicable laws; (R) change in any material respect the nature of the business of the Corporation and its subsidiaries taken as a whole; (S) enter into any transaction, or any agreement or understanding with any affiliate of the Corporation or any subsidiary thereof, other than a wholly-owned subsidiary of the Corporation; (T) (i) solicit or negotiate any inquiries or proposals with respect to (x) any direct or indirect issuance, sale, disposition or redemption of any securities of Latin Guide, Inc. ("LGI"), Tutopia or any of Tutopia's subsidiaries, (y) the direct or indirect sale or disposition of all or any material portion of the assets or business of LGI, Tutopia or any of Tutopia's subsidiaries, or (z) any merger, reorganization, consolidation or recapitalization or other similar transaction involving LGI, Tutopia or any of Tutopia's subsidiaries; or (ii) discuss with or provide to any person or entity information of LGI, Tutopia or any of Tutopia's subsidiaries with respect to or in contemplation of any of the foregoing; or (U) agree to do any of the foregoing. (c) Additional Voting Rights. Except as required by law, the holders of Series A Convertible Preferred Stock shall be entitled to notice of any stockholders' meeting and to vote together as a single class with the holders of Common Stock, on an as-converted basis, upon any matter submitted to the stockholders for a vote, other than with respect to the election of directors, as follows: (i) the holders of the Series A Convertible Preferred Stock shall have one (1) vote for each full share of Common Stock into which their respective shares of Series A Convertible Preferred Stock are convertible on the record date for the vote and (ii) the holders of Common Stock shall have one (1) vote per share of Common Stock. (d) Means of Voting. On all matters on which the holders of Series A Convertible Preferred Stock are entitled to vote pursuant to Section 4(a) and 4(b), each holder of Series A Convertible Preferred Stock shall be entitled to one vote for each share held by such holder. The rights of the holders of Series A Convertible Preferred Stock under this Section 4 may be exercised (i) with respect to the election of the Series A Preferred Directors pursuant to Section 4(a), at a meeting of the holders of the Series A Convertible Preferred Stock or by written consents executed by the holders entitled to vote therefor and delivered to the Secretary or Assistant Secretary of the Corporation; (ii) at any meeting of stockholders of the Corporation on all matters other than the election of directors; (iii) at a meeting of the holders of shares of such Series A Convertible Preferred Stock, called for the purpose by the Corporation or by the holders of record of 25% or more of the Series A Convertible Preferred Stock, pursuant to requests delivered in writing to the Secretary or Assistant Secretary of the Corporation; (iv) by written consent signed by the holders of the requisite percentage of the then outstanding shares, delivered to the Secretary or Assistant Secretary of the Corporation; or (v) with respect to the voting rights referred to in Section 4(c), at any meeting of the stockholders of the Corporation or by written consent signed by the holders of the requisite percentage of the then outstanding -8- shares of Common Stock (and Series A Convertible Preferred Stock), delivered to the Secretary or Assistant Secretary of the Corporation. Except to the extent otherwise provided herein or to the extent that holders of 75% of the Series A Convertible Preferred Stock decide otherwise, any meeting of the holders of Series A Convertible Preferred Stock shall be conducted in accordance with the provisions of the By-Laws of the Corporation applicable to meetings of stockholders. In the event of a conflict or inconsistency between the By-Laws of the Corporation and any term of this Certificate of Designation, including, but not limited to this Section 4, the terms of this Certificate of Designation shall prevail. 5. CONVERSION. Shares of Series A Convertible Preferred Stock may be converted into shares of Common Stock, on the terms and conditions set forth in this Section 5. (a) Optional Conversion. (i) At any time and from time to time, each holder of shares of Series A Convertible Preferred Stock may, upon 30 days' notice to the Corporation, convert all or any portion of such shares held by such holder into the number of shares of Common Stock determined by dividing (x) the applicable Stated Value multiplied by the number of shares surrendered for conversion plus any declared but unpaid dividends on such shares, by (y) the Conversion Price on the date of conversion determined in accordance with Section 5(c). (ii) References in this Section 5 to "Common Stock" shall include all stock or other securities or property (including cash) into which Common Stock is converted following any merger, reorganization or reclassification of the capital stock of the Corporation. (b) Mandatory Conversion. Each share of Series A Convertible Preferred Stock shall automatically be converted into such number of shares of Common Stock as is determined by dividing (x) the applicable Stated Value multiplied by the number of shares surrendered for conversion plus any declared but unpaid dividends on such shares, by (y) the Conversion Price on the date of conversion determined in accordance with Section 5(c), without further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent, upon the closing of an underwritten public offering of shares of Common Stock for which the Corporation has obtained a firm commitment from one or more underwriter(s) for at least $75 million of Common Stock and in which the Corporation receives gross proceeds from the sale of Common Stock to the public of at least $56.25 million (before deduction of underwriter's discounts and commissions), and which values the equity of the Corporation at no less than $400 million pre-offering (a "Qualified Public Offering"). Except for the purposes of the calculation in the immediately preceding sentence, in the event of a Qualified Public Offering, the person(s) entitled to receive the Common Stock issuable upon conversion of Series A Convertible Preferred Stock shall not be deemed to have converted such Series A Convertible Preferred Stock until the closing of such offering. (c) Conversion Price. The initial Conversion Price per share for the Class I Preferred shall be Twelve and 31/100 Dollars ($12.31) and the initial Conversion Price for the -9- Class II Preferred shall be the Closing Per Share Price, each subject to adjustment as provided in Section 6 hereof. (d) Common Stock. The Common Stock to be issued upon conversion hereunder shall be fully paid and nonassessable. (e) Procedures for Conversion. (i) In order to convert shares of Series A Convertible Preferred Stock into shares of Common Stock pursuant to Section 5(a) (or, in the case of an automatic conversion pursuant to Section 5(b), to receive a certificate for such holder's shares of Common Stock outstanding as a result of such conversion), the holder shall surrender the certificate or certificates therefore, duly endorsed for transfer, at any time during normal business hours, to the Corporation at its principal or at such other office or agency then maintained by it for such purpose (the "Payment Office"), accompanied, in the case of a conversion pursuant to Section 5(a), by written notice to the Corporation of such holder's election to convert and (if so required by the Corporation or any conversion agent) by an instrument of transfer, in form reasonably satisfactory to the Corporation and to any conversion agent, duly executed by the registered holder or by his duly authorized attorney, and any taxes required pursuant to Section 5(e)(iii). As promptly as practicable after the surrender for conversion of any share of Series A Convertible Preferred Stock in the manner provided in the preceding sentence, and the payment in cash of any amount required by the provisions of Section 5(e)(iii), but in any event within five Trading Days of such surrender for payment, the Corporation will deliver or cause to be delivered at the Payment Office to or upon the written order of the holder of such shares, certificates representing the number of full shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares in proper order for conversion, and all rights of the holder of such shares as a holder of such shares shall cease at such time and the person or persons in whose name or names the certificates for such shares of Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders thereof at such time; provided, however, that any such surrender and payment on any date when the stock transfer books of the Corporation shall be closed shall constitute the person or persons in whose name or names the certificates for such shares of Common Stock are to be issued as the record holder or holders thereof for all purposes immediately prior to the close of business on the next succeeding day on which such stock transfer books are opened and such conversion shall be at the Conversion Price in effect at such time on such succeeding day. For purposes hereof, "Trading Day" shall mean (i) any day on which stock is traded on the principal stock exchange on which the Common Stock is listed or admitted to trading, (ii) if the Common Stock is not then listed or admitted to trading on any stock exchange but is traded on the Nasdaq Stock Market, any day on which stock is traded on the Nasdaq Stock Market, or (iii) if the Common Stock is not then traded on the Nasdaq Stock Market, any day on which stock is traded in the over-the-counter market, as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of reporting prices). -10- (ii) The Corporation shall not be required to issue fractional shares of Common Stock upon conversion of shares of Series A Convertible Preferred Stock. At the Corporation's discretion, in the event the Corporation determines not to issue fractional shares, in lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the closing price of the Common Stock on the date of conversion. (iii) The issuance of certificates for shares of Common Stock upon conversion shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the holder of record of the shares converted, the person or persons requesting the issuance thereof shall pay to the Corporation the amount of any tax which may be payable in respect of any transfer involved in such issuance or shall establish to the satisfaction of the Corporation that such tax has been paid or is not payable. (f) Reservation of Stock Issuable Upon Conversion. Subject to the limitation set forth in the last sentence of this Section 5(f), the Corporation shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Convertible Preferred Stock, 2,030,869 shares of Common Stock. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Convertible Preferred Stock without regard to whether the holders of Series A Convertible Preferred Stock are then entitled to convert, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, taking appropriate board action, recommending such an increase to the holders of Common Stock, holding shareholders meetings, soliciting votes and proxies in favor of such increase to obtain the requisite stockholder approval and upon such approval, the Corporation shall reserve and keep available such additional shares solely for the purpose of effecting the conversion of the shares of the Series A Convertible Preferred Stock. (g) Merger, Etc. (i) Notwithstanding any other provision hereof, in case of any merger or other business combination transaction involving the Corporation which does not constitute a Liquidation Event, then, concurrently with the consummation of such transaction, provision shall be made so that each share of Series A Convertible Preferred Stock shall thereafter be convertible into the number of shares of stock or other securities or property (including cash) to which a holder of the number of shares of Common Stock deliverable upon conversion of such share of Series A Convertible Preferred Stock would have been entitled assuming conversion immediately prior to the closing of the transaction. (ii) In case of any merger or other business combination transaction involving the Corporation which does not constitute a Liquidation Event, in which the Corporation is not the surviving entity, and the Corporation or the holders do not otherwise convert all outstanding shares of Series A Convertible Preferred Stock, the Series A Convertible Preferred Stock shall be converted into or exchanged for and shall become shares of the -11- surviving corporation having, in respect of the surviving corporation, substantially the same powers, preferences and relative participating, optional or other special rights, and the qualifications, limitations or restrictions thereon, that the Series A Convertible Preferred Stock had immediately prior to such transaction. 6. ADJUSTMENTS. The Conversion Price shall be subject to adjustment from time to time as set forth in this Section 6. The Corporation shall give holders of Series A Convertible Preferred Stock notice of any event described below which requires an adjustment pursuant to this Section 6 at the time of such event. (a) Definitions. As used in this Section 6, the following terms have the respective meanings set forth below: "Additional Shares of Common Stock" shall mean all shares of Common Stock issued by the Corporation after the Initial Closing (as defined in the Preferred Stock Purchase Agreement). "Convertible Securities" shall mean evidences of indebtedness, shares of stock of other securities which are convertible into or exchangeable, with or without payment of additional consideration in cash or property, for Additional Shares of Common Stock, either immediately or upon the occurrence of a specified date or a specified event. "Fully Diluted Outstanding" shall mean, when used with reference to Common Stock, at any date as of which the number of shares thereof is to be determined, all shares of Common Stock Outstanding at such date and all shares of Common Stock issuable in respect of Series A Convertible Preferred Stock outstanding on such date and other securities convertible into, or options or warrants to purchase, shares of Common Stock outstanding on such date, whether or not such options, warrants or other securities are presently convertible or exercisable. "Other Property" shall have the meaning set forth in Section 6(i). "Outstanding" shall mean, when used with reference to Common Stock, at any date as of which the number of shares thereof is to be determined, all issued shares of Common Stock, except shares then owned or held by or for the account of the Corporation or any subsidiary of the Corporation, and shall include all shares issuable in respect of outstanding scrip or any certificates representing fractional interests in shares of Common Stock. "Permitted Issuances" shall mean (i) the issuance of up to 2,460,000 shares of Common Stock issuable pursuant to options to purchase Common Stock under the Stock Option Plan, (ii) shares of Common Stock issued or issuable in connection with a Qualified Public Offering, (iii) shares of Common Stock issued upon conversion of Series A Convertible Preferred Stock, (iv) securities issued as consideration for any acquisition approved by a majority of the Board of Directors (including the affirmative vote of the Series A Preferred Director), (v) the issuance of up to 820,471 shares of Series A Convertible Preferred Stock at the Subsequent Closing (as defined in the Preferred Stock Purchase Agreement), (vi) the issuance of an aggregate of up to 100,000 additional shares of Common Stock (as adjusted for stock splits, -12- combinations, stock dividends and the like) in transactions approved by a majority of the Board of Directors, (vii) the issuance of an aggregate of up to another 100,000 additional shares of Common Stock (as adjusted for stock splits, combinations, stock dividends and the like) in transactions approved by a majority of the Board of Directors (including the affirmative vote of the Series A Preferred Director), (viii) the Spinway Warrant, and (ix) 210,000 shares of Common Stock upon exercise of the Spinway Warrant. "Qualified Private Offering" shall mean a private equity offering resulting in gross proceeds to the Corporation of at least $30 million, in which the securities issued contain anti-dilution provisions no more favorable to the investor than the anti-dilution provisions of the Series A Convertible Preferred Stock which take effect following the consummation of a Qualified Private Offering. "Stock Option Plan" shall mean the IFX Corporation Directors Stock Option Plan and the 1998 IFX Corporation Stock Option and Incentive Plan, as amended. (b) Stock Dividends, Subdivisions and Combinations. If at any time the Corporation shall: (i) take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, Additional Shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the applicable Conversion Price immediately after the occurrence of any such event shall be adjusted to equal the product of (A) the Conversion Price immediately prior to the occurrence of such event and (B) a fraction, the numerator of which shall be the number of Fully Diluted Outstanding shares of Common Stock immediately prior to the occurrence of such event and the denominator of which shall be the number of Fully Diluted Outstanding shares of Common Stock immediately after the occurrence of such event. (c) Issuance of Additional Shares of Common Stock. (ii) In the event that prior to the consummation of or in connection with a Qualified Private Offering, the Corporation shall issue or sell any Additional Shares of Common Stock, other than Permitted Issuances, for a consideration per Additional Share of Common Stock less than the applicable Conversion Price, then the applicable Conversion Price shall be reduced to the consideration per Additional Share of Common Stock paid for such Additional Shares of Common Stock. (ii) In the event that following the consummation of a Qualified Private Offering, the Corporation shall issue or sell any Additional Shares of Common Stock, other than Permitted Issuances, for a consideration per Additional Share of Common Stock less than the applicable Conversion Price, then the applicable Conversion Price shall be reduced to a price determined by dividing (A) an amount equal to the sum of (x) the number of -13- Fully Diluted Outstanding shares of Common Stock immediately prior to such issue or sale multiplied by the then existing Conversion Price plus (y) the aggregate consideration, if any, received by the Corporation upon such issue or sale, by (B) the total number of Fully Diluted Outstanding shares of Common Stock outstanding immediately after such issue or sale. (iii) The provisions of this Section 6(c) shall not apply to any issuance of Additional Shares of Common Stock for which an adjustment is provided under Section 6(b). No adjustment shall be made under this Section 6(c) upon the issuance of any Additional Shares of Common Stock which are issued pursuant to the exercise of any warrants or other subscription or purchase rights or pursuant to the exercise of any conversion or exchange rights in any Convertible Securities, if any such adjustment shall previously have been made upon the issuance of such warrants or other rights or upon the issuance of such Convertible Securities (or upon the issuance of any warrant or other rights therefor) pursuant to Section 6(d) or Section 6(e). (d) Issuance of Warrants or Other Rights. Except with respect to Permitted Issuances, if at any time the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a distribution of, or shall in any manner (whether directly or by assumption in a merger in which the Corporation is the surviving corporation) issue or sell, any warrants or other rights to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such warrants or other rights or upon conversion or exchange of such Convertible Securities shall be less than the applicable Conversion Price in effect immediately prior to the time of such distribution, issue or sale, then the applicable Conversion Price shall be adjusted as provided in Section 6(c)(i) or (ii), as applicable, on the basis that (i) the maximum number of Additional Shares of Common Stock issuable pursuant to all such warrants or other rights or necessary to effect the conversion or exchange of all such Convertible Securities shall be deemed to have been issued and outstanding, (ii) the price per share for such Additional Shares of Common Stock shall be deemed to be the lowest price per share at which such Additional Shares of Common Stock are issuable to such holders, and (iii) the Corporation shall have received all of the consideration, if any, payable for such warrants or other rights as of the date of the actual issuance thereof. No further adjustments of the Conversion Price shall be made upon the actual issue of such Common Stock or of such Convertible Securities upon exercise of such warrants or other rights or upon the actual issue of such Common Stock upon such conversion or exchange of such Convertible Securities. (e) Issuance of Convertible Securities. Except with respect to Permitted Issuances, if at any time the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a distribution of, or shall in any manner (whether directly or by assumption in a merger in which the Corporation is the surviving corporation) issue or sell, any Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange shall be less than the applicable Conversion Price in effect immediately prior to the time of such issue or sale, then the applicable Conversion Price shall be adjusted as provided in Section 6(c)(i) or (ii), as applicable, on the basis that (i) the maximum number of Additional Shares of Common Stock issuable upon the conversion or -14- exchange of all such Convertible Securities shall be deemed to have been issued and outstanding, (ii) the price per share of such Additional Shares of Common Stock shall be deemed to be the lowest possible price in any range of prices at which such Additional Shares of Common Stock are available to such holders, and (iii) the Corporation shall have received all of the consideration payable therefor, if any, as of the date of actual issuance of such Convertible Securities. No further adjustment of the Conversion Price shall be made under this Section 6(e) upon the issuance of any Convertible Securities which are issued pursuant to the exercise of any warrants or other subscription or purchase rights therefor, if any such adjustment shall previously have been made upon the issuance of such warrants or other rights pursuant to Section 6(d). No further adjustments of the Conversion Price shall be made upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities and, if any issue or sale of such Convertible Securities is made upon exercise of any warrant or other right to subscribe for or to purchase or any warrant or other right to purchase any such Convertible Securities for which adjustments thereof have been or are to be made pursuant to other provisions of this Section 6, no further adjustments shall be made by reason of such issue or sale. (f) Superseding Adjustment. If, at any time after any adjustment of the applicable Conversion Price shall have been made pursuant to Section 6(d) or 6(e) as the result of any issuance of warrants, rights or Convertible Securities, and either (i) such warrants or rights, or the right of conversion or exchange in such other Convertible Securities, shall expire, and all or a portion of such warrants or rights, or the right of conversion or exchange with respect to all or a portion of such other Convertible Securities, as the case may be, shall not have been exercised, or (ii) the consideration per share for which shares of Common Stock are issuable pursuant to such warrants or rights, or such other Convertible Securities, shall be increased or decreased by virtue of provisions therein contained, then such previous adjustment shall be rescinded and annulled and the Additional Shares of Common Stock which were deemed to have been issued by virtue of the computation made in connection with the adjustment so rescinded and annulled shall no longer be deemed to have been issued by virtue of such computation. Thereupon, a recomputation shall be made of the effect of such rights or options or other Convertible Securities on the applicable Conversion Price, on the basis of (iii) treating the number of Additional Shares of Common Stock or other property, if any, theretofore actually issued or issuable pursuant to the previous exercise of any such warrants or rights or any such right of conversion or exchange, as having been issued on the date or dates of any such exercise and for the consideration actually received and receivable therefor, and (iv) treating any such warrants or rights or any such other Convertible Securities which then remain outstanding as having been granted or issued immediately after the time of such increase or decrease of the consideration -15- per share for which shares of Common Stock or other property are issuable under such warrants or rights or other Convertible Securities. (g) Other Provisions Applicable to Adjustments Under This Section. The following provisions shall be applicable to the making of adjustments provided for in this Section 6: (i) Computation of Consideration. To the extent that any Additional Shares of Common Stock or any Convertible Securities or any warrants or other rights to subscribe for or purchase any Additional Shares of Common Stock or any Convertible Securities shall be issued for cash consideration, the consideration received by the Corporation therefor shall be the amount of the cash received by the Corporation therefor, or, if such Additional Shares of Common Stock or Convertible Securities are offered by the Corporation for subscription, the subscription price, or, if such Additional Shares of Common Stock or Convertible Securities are sold to underwriters or dealers for public offering without a subscription offering, the public offering price (in any such case subtracting any amounts paid or receivable for accrued interest or accrued dividends, but not subtracting any compensation, discounts or expenses paid or incurred by the Corporation for and in the underwriting of, or otherwise in connection with, the issuance thereof). To the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the amount of such consideration shall be deemed to be the fair value of such consideration at the time of such issuance as determined in good faith by the Board of Directors. In case any Additional Shares of Common Stock or any Convertible Securities or any warrants or other rights to subscribe for or purchase such Additional Shares of Common Stock or Convertible Securities shall be issued in connection with any merger in which the Corporation issues any securities, the amount of consideration therefor shall be deemed to be the fair value, as determined in good faith by the Board of Directors, of such portion of the assets and business of the nonsurviving corporation as the Board of Directors in good faith shall determine to be attributable to such Additional Shares of Common Stock, Convertible Securities, warrants or other rights, as the case may be. The consideration for any Additional Shares of Common Stock issuable pursuant to any warrants or other rights to subscribe for or purchase the same shall be the consideration received by the Corporation for issuing such warrants or other rights plus the additional consideration payable to the Corporation upon exercise of such warrants or other rights. The consideration for any Additional Shares of Common Stock issuable pursuant to the terms of any Convertible Securities shall be the consideration, if any, received by the Corporation for issuing warrants or other rights to subscribe for or purchase such Convertible Securities, plus the consideration paid or payable to the Corporation in respect of the subscription for or purchase of such Convertible Securities, plus the additional consideration, if any, payable to the Corporation upon the exercise of the right of conversion or exchange in such Convertible Securities. In case of the issuance at any time of any Additional Shares of Common Stock or Convertible Securities in payment or satisfaction of any dividends upon any class of stock other than -16- Common Stock, the Corporation shall be deemed to have received for such Additional Shares of Common Stock or Convertible Securities a consideration equal to the amount of such dividend so paid or satisfied. (ii) When Adjustments to Be Made. The adjustments required by this Section 6 shall be made whenever and as often as any specified event requiring an adjustment shall occur. For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. (iii) When Adjustment Not Required. If the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or distribution or subscription or purchase rights and shall, thereafter and before the distribution to stockholders thereof, legally abandon its plan to pay or deliver such dividend, distribution, subscription or purchase rights, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled. (iv) Escrow of Common Stock. If after any property becomes distributable as a result of the provisions of this Section 6 by reason of the taking of any record of the holders of Common Stock, but prior to the occurrence of the event for which such record is taken, a holder of shares of Series A Convertible Preferred Stock exercises its conversion rights pursuant to Section 5, any Additional Shares of Common Stock issuable and other property distributable upon exercise by reason of such adjustment shall be held in escrow for such holder by the Corporation to be issued to such holder upon and to the extent that the event actually takes place. Notwithstanding any other provision to the contrary herein, if the event for which such record was taken fails to occur or is rescinded, then such escrowed shares shall be canceled by the Corporation and escrowed property returned. (v) Challenge to Good Faith Determination. Whenever the Board of Directors shall be required to make a determination in good faith of the fair value of any item under this Section 6, such determination may be challenged in good faith by a holder of shares of Series A Convertible Preferred Stock, and any dispute shall be resolved by an investment banking firm of recognized national standing selected by the Corporation and acceptable to such holder. (h) Other Action Affecting Common Stock. In case at any time or from time to time the Corporation shall take any action in respect of its Common Stock, other than any action described in this Section 6 for which a specific adjustment is provided, then, unless such action will not have a materially adverse effect upon the rights of the holders of shares of Series A Convertible Preferred Stock, the number of shares of Common Stock or other stock into which such shares of Series A Convertible Preferred Stock are convertible and/or the applicable Conversion Price shall be adjusted in such manner as may be equitable in the circumstances. -17- (i) Certain Limitations. Notwithstanding anything herein to the contrary, the Corporation shall not enter into any transaction which, by reason of any adjustment hereunder, would cause the applicable Conversion Price to be less than the par value per share of Common Stock. (j) Notice of Adjustments. Whenever the number of shares of Common Stock into which shares of Series A Convertible Preferred Stock are convertible or whenever the applicable Conversion Price shall be adjusted pursuant to this Section 6, the Corporation shall forthwith prepare a certificate to be executed by the chief financial officer of the Corporation setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment was calculated (including a description of the basis on which the Board of Directors determined the fair value of any consideration referred to in Section 6(g)(i)), specifying any change in the applicable Conversion Price or the number of shares of Common Stock into which shares of Series A Convertible Preferred Stock are convertible and (if such adjustment was made pursuant to Section 5(g)(i) or 6(h)) describing the number and kind of any other shares of stock or Other Property into which shares of Series A Convertible Preferred Stock are convertible, and any change in the applicable Conversion Price or prices thereof, after giving effect to such adjustment or change. The Corporation shall promptly cause a signed copy of such certificate to be delivered to the holders of Series A Convertible Preferred Stock. The Corporation shall keep at the Payment Office copies of all such certificates and cause the same to be available for inspection at said office during normal business hours by the holders of Series A Convertible Preferred Stock or any prospective purchaser of shares of Series A Convertible Preferred Stock designated by such holders. 7. TRIGGERING EVENTS. Any of the following actions or events shall constitute a "Triggering Event" for purposes hereof: (a) Failure to Pay Dividends. The Corporation shall fail to pay any dividend on any Series A Convertible Preferred Stock which it is required to pay in accordance with Section 2 for any reason, including but not limited to, that such payment is prohibited by applicable law or the Board of Directors elect not to pay such dividend, or shall otherwise violate any term of Section 2 and such failure shall not be cured within a period of 30 days after such violation (which cure shall be effected in a manner ensuring the holders the same yield as if such violation had not occurred). (b) Failure of Voting Rights. The Corporation shall enter into any transaction or take any action required to be approved by holders of Series A Convertible Preferred Stock without obtaining the requisite approval of the holders of the Series A Convertible Preferred Stock. (c) Failure to Convert. The Corporation shall fail for any reason to issue Common Stock as required under Section 5 upon the request of any holder of Series A Convertible Preferred Stock as provided in Section 5 or shall fail for any reason to comply in any material respect with any term of Section 5(f) or any other term of Section 5 hereof. -18- (d) Registration Rights Agreement. The Corporation shall fail in any material respect to comply with the rights of the holders of Series A Convertible Preferred Stock pursuant to the Registration Rights Agreement, dated as of June 15, 2000, among the Corporation, UBS Capital Americas III, L.P., UBS Capital LLC and other stockholders of the Corporation, and such failure shall continue for a period of 30 days after notice from any such holder. (e) Preferred Stock Purchase Agreement. The Corporation shall fail to comply with Section 3, 6(e) or 6(g) of the Preferred Stock Purchase Agreement and such failure shall continue for a period of 30 days after notice from the Purchasers or the representations made under Section 4(c) or 4(u) of the Preferred Stock Purchase Agreement shall prove to have been incorrect or misleading in any material respect when made pursuant thereto or any other material representation made under the Preferred Stock Purchase Agreement shall prove to have been incorrect or misleading in any substantial material respect when made. 8. REMEDIES. (a) In the event that a Triggering Event described in Section 7 shall occur and be continuing, each holder of Series A Convertible Preferred Stock shall be entitled to receive all cash and other dividends, distributions and other payments which would be paid or payable to a holder of a number of shares of Common Stock into which the shares of Series A Convertible Preferred Stock held by such holder are convertible at such time (without regard to the number of shares of Common Stock which are authorized or reserved for issuance at such time). (b) Upon the occurrence and during the continuance of any Triggering Event, the size of the Board of Directors shall immediately be increased by the minimum number of directors which, if all of such additional directors were deemed "Series A Preferred Directors," would result in Series A Preferred Directors constituting a majority of the Board of Directors and the holders of Series A Convertible Preferred Stock shall be entitled to appoint such newly created directors, in the manner provided in Section 4(d). (c) Upon the occurrence and during the continuance of any Triggering Event, any holder of shares of Series A Convertible Preferred Stock, at its election, may, by notice to the Corporation (the "Put Notice"), demand repurchase of all or any portion of such holder's shares of Series A Convertible Preferred Stock for a cash purchase price in an amount per share equal to the Liquidation Preference. The Corporation shall, on the date (not less than 10 business days after the date of the Put Notice) designated in such Put Notice, repurchase from the Holder such holder's shares of Series A Convertible Preferred Stock specified in the Notice. On the date of any repurchase of shares of Series A Convertible Preferred Stock pursuant to this Section 8(c), the holder thereof shall surrender for redemption a certificate for the number of shares of Series A Convertible Preferred Stock being redeemed, without any representation or warranty (other than that the holder has good and marketable title thereto, free and clear of liens, encumbrances and restrictions of any kind), against payment therefor of the repurchase price by, at the option of the holder, (i) wire transfer to an account designated by the holder for such purpose or (ii) a certified or official bank check payable to the order of the holder. If less than all of the holder's shares of Series A Convertible Preferred Stock represented by a single certificate are being redeemed, the Corporation shall cancel such certificate and issue in the name of, and deliver to, the holder a new certificate for the portion not being redeemed. At any time following delivery -19- of a Put Notice but prior to the date of repurchase, any holder of Series A Convertible Preferred Stock may, by notice to the Corporation, withdraw the repurchase demand contained in the Put Notice. (d) The Corporation stipulates that the remedies at law of each holder of Series A Convertible Preferred Stock in the event of any Triggering Event or threatened Triggering Event or otherwise or other failure in the performance of or compliance with any of the terms hereof are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise without requiring any holder to post a bond or other security except to the extent required by applicable law. (e) Any holder of Series A Convertible Preferred Stock shall be entitled to recover from the Corporation the reasonable attorneys' fees and expenses incurred by such holder in connection with any Triggering Event or enforcement by such holder of any obligation of the Corporation hereunder. (f) No failure or delay on the part of any holder of Series A Convertible Preferred Stock in exercising any right, power or remedy hereunder or under applicable law or otherwise shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or thereunder. The remedies herein provided are cumulative and not exclusive of any remedies provided by law or otherwise. 9. PREEMPTIVE RIGHT. (a) Each holder of Series A Convertible Preferred Stock or Common Stock issued upon conversion of Series A Convertible Preferred Stock, shall have a right of first refusal (the "Preemptive Right") to purchase its pro rata share, based on such holder's percentage ownership interest in the Corporation, of New Securities (as defined below) which the Corporation, from time to time, proposes to sell and issue (subject to such requirements and restrictions imposed by the Securities Act of 1933, as amended, and state securities laws and to the actual issuance of the New Securities). The pro rata shares of any holder of Series A Convertible Preferred Stock or Common Stock issued upon conversion of Series A Convertible Preferred Stock, for purposes of this Preemptive Right, shall be the ratio of (i) the number of shares of Common Stock owned, of record or beneficially, by such holder (including all shares issuable upon conversion of the Series A Convertible Preferred Stock or the exercise or conversion of any other option, warrant or convertible security held by such holder) immediately prior to the issuance of the New Securities, to (ii) the total number of shares of Common Stock issued and outstanding immediately prior to the issuance of the New Securities, determined on a fully diluted basis after giving effect to the exercise in full of then outstanding options and warrants and the conversion of all securities convertible into shares of Common Stock; provided, however, that if any holder of Series A Convertible Preferred Stock or Common Stock issued upon conversion of Series A Convertible Preferred Stock does not elect to purchase its entire pro rata share of such New Securities, then each other holder that has elected to purchase its entire pro rata share shall have the right to purchase up to a number of such unpurchased portion, in -20- addition to its own, in the proportion that (1) the number of shares of Common Stock owned, of record or beneficially, by such holder (including all shares issuable upon conversion of the Series A Convertible Preferred Stock or the exercise or conversion of any other option, warrant or convertible security held by such holder) immediately prior to the issuance of the New Securities bears to (2) the number of shares of Common Stock owned, of record or beneficially, by all holders of Series A Convertible Preferred Stock or Common Stock issued upon conversion of Series A Convertible Preferred Stock (including all shares issuable upon conversion of the Series A Convertible Preferred Stock or the exercise or conversion of any other option, warrant or convertible security held by such holders) immediately prior to the issuance of the New Securities. The overallotment mechanism set forth in this paragraph shall be repeatedly applied until all New Securities available for purchase by holders of Series A Convertible Preferred Stock or Common Stock issued upon conversion of Series A Convertible Preferred Stock have been purchased or no holders remain who have indicated a desire to purchase any unsubscribed for portion in their notice to the Corporation. (b) "New Securities" shall mean (a) any capital stock of the Corporation, rights, options or warrants to purchase capital stock and securities of any type whatsoever that are, or may become convertible into or exchangeable for capital stock and (b) so-called "high yield" bonds, debt instruments with equity like features or other similar debt instruments, which bear a rating lower than investment-grade or are unrated, issued by the Corporation; provided, however, that the term "New Securities" does not include (i) the issuance of up to 2,460,000 shares of Common Stock issuable pursuant to the outstanding options to purchase Common Stock under the Stock Option Plan, (ii) shares of Common Stock issued or issuable in connection with a Qualified Public Offering, (iii) shares of Common Stock issued upon conversion of Series A Convertible Preferred Stock, (iv) securities issued as consideration for any acquisition approved by a majority of the Board of Directors (including the affirmative vote of the Series A Preferred Directors), (v) the issuance of up to 820,471 shares of Series A Convertible Preferred Stock at the Subsequent Closing (as defined in the Preferred Stock Purchase Agreement), (vi) the Spinway Warrant, (vii) 210,000 shares of Common Stock upon exercise of the Spinway Warrant, or (viii) shares of Common Stock in exchange for shares of common stock of Tutopia upon a change-in-control of the Corporation pursuant to the Tutopia Stockholders Agreement dated as of April 24, 2000. (c) In the event the Corporation proposes to undertake an issuance of New Securities, it shall give each holder of Series A Convertible Preferred Stock or Common Stock issued upon conversion of Series A Convertible Preferred Stock written notice of its intention, describing the type of New Securities and the price and the terms upon which the Corporation proposes to issue the same. Each such holder shall have twenty (20) business days from the date of receipt of any such notice to agree to purchase its pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Corporation and stating therein the quantity of New Securities to be purchased. (d) The Corporation shall have ninety (90) days after expiration of the twenty (20) business day period described in Section 9(c) to sell any New Securities with respect to which a Preemptive Right was not exercised, at a price not less than and upon terms no more favorable in the aggregate to the purchasers thereof than specified in the Corporation's notice. To the extent the Corporation does not sell all the New Securities offered within said ninety (90) -21- day period, the Corporation shall not thereafter issue or sell such New Securities without first again offering such securities to each holder of Series A Convertible Preferred Stock or Common Stock issued upon conversion of Series A Convertible Preferred Stock in the manner provided above. (e) The rights granted under this Section 9 to each holder of Series A Convertible Preferred Stock or Common Stock issued upon conversion of Series A Convertible Preferred Stock shall expire upon the earlier of (i) the closing of a Qualified Public Offering and (ii) such time as the holders of Series A Convertible Preferred Stock and their Affiliates no longer collectively hold in the aggregate at least 50% of the number of shares of Series A Convertible Preferred Stock (including, for this purpose, Common Stock issued upon conversion of the Series A Convertible Preferred Stock) issued pursuant to the Preferred Stock Purchase Agreement (as adjusted in connection with the events described in Section 6) determined after the Subsequent Closing (as defined in the Preferred Stock Purchase Agreement). -22- EX-4.2 5 0005.txt REGISTRATION RIGHTS AGREEMENT Exhibit 4.2 ----------- REGISTRATION RIGHTS AGREEMENT among IFX CORPORATION, UBS CAPITAL AMERICAS III, L.P., UBS CAPITAL LLC, INTERNATIONAL TECHNOLOGY INVESTMENTS, LLC, and LEE S. CASTY dated as June 15, 2000 REGISTRATION RIGHTS AGREEMENT ----------------------------- THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of June 15, 2000, among IFX Corporation, a Delaware corporation (the "Company"), UBS Capital Americas III, L.P., a Delaware limited partnership, and UBS Capital LLC, a Delaware limited liability company, (collectively "UBS" and together with their successors and assigns, the "Investor Stockholders"), INTERNATIONAL TECHNOLOGY INVESTMENTS, LC, a Nevada limited liability company ("ITI"), and LEE S. CASTY, individually ("Casty"). RECITALS -------- WHEREAS, the Company and the Investor Stockholders have entered into the IFX Corporation Preferred Stock Purchase Agreement, of even date herewith (the "Stock Purchase Agreement"), pursuant to which the Investor Stockholders will purchase shares (the "Preferred Shares") of newly issued Series A Convertible Preferred Stock, par value $1.00 per share, of the Company ("Series A Preferred Stock"); WHEREAS, in connection with the Stock Purchase Agreement, the Company has agreed to grant the Investor Stockholders the registration rights described herein; WHEREAS, the Company, Emerging Networks, Inc., ITI and Casty were parties to a Subscription and Joint Venture Agreement, dated as of November 23, 1998, as amended, providing, inter alia, for registration rights, which Subscription and ----- ---- Joint Venture Agreement is being terminated as of the date hereof; and WHEREAS, in connection with the termination of such agreement, the Company has agreed to grant ITI and Casty the registration rights described herein; NOW THEREFORE, the parties hereto, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, hereby agree as follows: 1. Certain Definitions. As used herein, the following terms shall have the ------------------- following meanings: "Commission" means the Securities and Exchange Commission or any other federal agency then administering the federal securities laws. "Common Shares" means shares of Common Stock held by ITI and Casty and their permitted assigns under Section 13(b) or the Investor Stockholders. "Common Stock" means the common stock, par value $0.02 per share, of the Company and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation exchange or other similar reorganization. "Conversion Shares" means shares of Common Stock issued or issuable upon conversion of the Preferred Shares or any other Convertible Securities held by the Investor Stockholders. "Convertible Securities" shall mean (i) any rights, options or warrants to acquire Common Stock or any capital stock of the Company or any Subsidiary, including the shares of Series A Preferred Stock to be issued hereunder, and (ii) any notes, debentures, shares of preferred stock or other securities, options, warrants or rights, which are convertible or exercisable into, or exchangeable for, Common Stock or any capital stock of the Company or any Subsidiary. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations promulgated thereunder. "Initial Closing" has the meaning assigned to such term in the Stock Purchase Agreement. "Registration Expenses" means the expenses so described in Section 8. "Restricted Stock" means the Conversion Shares and Common Shares, excluding Conversion Shares and Common Shares which have been (a) registered under the Securities Act pursuant to an effective registration statement filed thereunder and disposed of in accordance with the registration statement covering them or (b) publicly sold pursuant to Rule 144 under the Securities Act. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations promulgated thereunder. "Selling Expenses" shall mean the expenses so described in Section 8. 2. Restrictive Legend. Each certificate representing Preferred Shares, ------------------ Conversion Shares or Common Shares shall, except as otherwise provided in this Section 2 or in Section 3, be stamped or otherwise imprinted with a legend substantially in the following form: "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE." A certificate shall not bear such legend if in the opinion of counsel satisfactory to the Company (it being agreed that each of Neal, Gerber & Eisenberg and Kaye, Scholer, Fierman, Hays & Handler, LLP shall be satisfactory) the securities represented thereby may be publicly sold without registration under the Securities Act and any applicable state securities laws. 3. Removal of Legend. Each certificate for Preferred Shares, ----------------- Conversion Shares or Common Shares transferred shall bear the legend set forth in Section 2, except that such certificate shall not bear such legend if (i) such transfer is in accordance with the provisions of Rule 144 (or any other rule permitting public sale without registration under the Securities Act) or (ii) in the opinion of counsel satisfactory to the Company (it being agreed that either of Neal, 2 Gerber & Eisenberg or Kaye, Scholer, Fierman, Hays & Handler, LLP shall be satisfactory) the transferee and any subsequent transferee would be entitled to transfer such securities in a public sale without registration under the Securities Act. 4. Required Registration. (a) At any time after the earlier of (i) 180 --------------------- days following the consummation of a Qualified Public Offering (as defined in the Stock Purchase Agreement) and (ii) the first anniversary of the Initial Closing, the Investor Stockholders holding Restricted Stock constituting at least 66 2/3% of the total shares of Restricted Stock held by Investor Stockholders then outstanding, ITI or Casty may request the Company to register under the Securities Act all or any portion of the shares of Restricted Stock held by such requesting holder or holders for sale in the manner specified in such notice, provided that the shares of Restricted Stock for which registration -------- has been requested shall have a reasonably anticipated aggregate price to the public which is at least $15,000,000 (the "Minimum Offering Price"); provided -------- further that neither ITI nor Casty shall request such registration prior to a - ------- Qualified Public Offering without the consent of UBS. The only securities which the Company shall be required to register pursuant hereto shall be shares of Common Stock, provided, however, that, in any underwritten public offering -------- ------- contemplated by this Section 4 or Sections 5 and 6, the holders of Preferred Shares shall be entitled to sell such Preferred Shares to the underwriters for conversion and sale of the shares of Common Stock issued upon conversion thereof. Notwithstanding anything to the contrary contained herein, the Company shall not be required to file any registration statement under this Section 4, within such period of time after the effective date of any earlier registration statement relating to an underwritten public offering (other than a registration statement on Form S-3 or any successor thereto relating to the resale of securities of the Company acquired in connection with an acquisition or similar transaction (each, an "Acquisition Registration Statement")) as shall be determined in good faith by the managing underwriter of an underwritten public offering, provided that such time period shall not exceed 180 days. (b) Following receipt of any notice under this Section 4, the Company shall immediately notify all holders of Restricted Stock from whom notice has not been received and shall use its reasonable best efforts to register under the Securities Act, for public sale in accordance with the method of disposition specified in such notice from requesting holders, the number of shares of Restricted Stock specified in such notice (and in all notices received by the Company from other holders within 30 days after the giving of such notice by the Company). If such method of disposition shall be an underwritten public offering, the Company shall designate the underwriter(s) of such offering, subject to the approval by the holders of a majority of the shares of Restricted Stock, including the approval of holders of at least 66 2/3% of the shares of Restricted Stock proposed to be sold by Investor Stockholders, to be sold in such offering (such approval not to be unreasonably withheld or delayed). If the managing underwriter advises the Company in writing that in such underwriter's good faith determination the marketing factors require a limitation of the amount of Restricted Stock to be underwritten in such registration, the Company shall (to the extent that the managing underwriter believes that such securities can be sold in such offering without having an adverse effect upon the marketing of such offering) register in such registration (i) first, the Restricted Stock ----- proposed to be sold by the parties participating in the demand registration of Restricted Stock under this Section 4, pro rata based upon the number of shares --- ---- of Restricted Stock proposed to be sold by such holders; provided that until at least 50% of the Restricted Stock held by the Investor Stockholders determined on a fully 3 diluted basis after the Subsequent Closing (as defined in the Stock Purchase Agreement) is registered and sold, the Investor Stockholders shall be entitled to have included in any registration under this Section 4 at least 50% of the Restricted Stock proposed to be included in such registration, and (ii) second ------ securities held by the Company. The Company shall be obligated to register Restricted Stock pursuant to this Section 4, in the case of registrations requested by the Investor Stockholders, on two occasions only, and in the case of each of ITI and Casty on three occasions only, provided, however, that such -------- ------- obligation shall be deemed satisfied only when a registration statement covering all shares of Restricted Stock specified in demand notices delivered pursuant to Section 4(a), for sale in accordance with the method of disposition specified by the requesting holders, shall have become effective and, if such method of disposition is a firm commitment underwritten public offering, all such shares designated in the notice shall have been sold pursuant thereto. (c) The Company shall, subject to Section 4(b), be entitled to include in any registration statement referred to in this Section 4 for sale in accordance with the method of disposition specified by the requesting holders, shares of Common Stock to be sold by the Company for its own account. 5. Incidental Registration. If the Company at any time (other than ----------------------- pursuant to Section 4 or Section 6) proposes to register any of its securities under the Securities Act for sale to the public, whether for its own account or for the account of other security holders or both (except with respect to registration statements on Forms S-4, S-8 or another form not available for registering the Restricted Stock for sale to the public), each such time it will give written notice to all holders of outstanding Restricted Stock of its intention so to do. Upon the written request of any such holder, received by the Company within 30 days after the giving of any such notice by the Company, to register any of its Restricted Stock, the Company will use its reasonable best efforts to cause the Restricted Stock as to which registration shall have been so requested to be included in the securities to be covered by the registration statement proposed to be filed by the Company, all to the extent requisite to permit the sale or other disposition by the holder of such Restricted Stock so registered. In the event that any registration pursuant to this Section 5 shall be, in whole or in part, an underwritten public offering of Common Stock, and the managing underwriter advises the Company in writing that in such underwriter's good faith determination the marketing factors require a limitation of the amount of Restricted Stock to be underwritten in such registration then (a) if such registration is a primary registration on behalf of the Company, the Company shall (to the extent that the managing underwriter believes that such securities can be sold in such offering without having an adverse effect upon the marketing of such offering) register in such registration (i) first, the Company securities which the Company proposes to ----- sell in such registration, (ii) second, the Restricted Stock held by Investor ------ Stockholders which they propose to sell in such registration on a pro rata basis --- ---- based upon the number of shares of Restricted Stock owned by such holders, (iii) third, Restricted Stock held by ITI and Casty which they propose to sell in such - ----- registration on a pro rata basis based upon the number of shares of Restricted --- ---- Stock owned by such holders and (iv) fourth, securities held by other parties ------ eligible for inclusion in such registration statement on a pro rata basis based --- ---- upon the amount of securities held by them, and (b) if such registration is a secondary registration, the Company shall (to the extent that the managing underwriter believes that such securities can be sold in such offering without having an adverse effect upon the marketing of such offering) register in such registration (i) first, the Restricted Stock held by Investor Stockholders which ----- 4 they propose to sell in such registration on a pro rata basis based upon the --- ---- number of shares of Restricted Stock owned by such holders, (ii) second, the ------ Restricted Stock held by ITI and Casty which they propose to sell in such registration on a pro rata basis based upon the number of shares of Restricted --- ---- Stock owned by such holders and (iii) third, the securities held by other ----- parties eligible for inclusion in such registration on a pro rata basis based --- ---- upon the amount of securities held by them. Notwithstanding the foregoing provisions, the Company may withdraw any registration statement referred to in this Section 5, without thereby incurring any liability to the holders of Restricted Stock other than for the payment of Registration Expenses in accordance with Section 8. 6. Registration on Form S-3. If at any time (i) one or more Investor ------------------------ Stockholders, ITI or Casty requests that the Company file a registration statement on Form S-3 or any successor thereto for a public offering of all or any portion of the shares of Restricted Stock held by such requesting holder or holders, the reasonably anticipated aggregate price to the public of which would exceed $2,500,000, provided that the Restricted Stock for which registration has been requested constitutes at least 10% of the total shares of Restricted Stock then outstanding held by Investor Stockholders, if such registration is requested by one or more Investor Stockholders, or at least 10% of the total shares of Restricted Stock then outstanding held by ITI or Casty, as the case may be, if such registration is requested by ITI or Casty, and (ii) the Company is a registrant entitled to use Form S-3 or any successor thereto to register such shares, then the Company shall use its reasonable best efforts to register under the Securities Act on Form S-3 or any successor thereto, for public sale in accordance with the method of disposition specified in such notice, the number of shares of Restricted Stock specified in such notice. Whenever the Company is required by this Section 6 to use its reasonable best efforts to effect the registration of Restricted Stock, each of the procedures and requirements of Section 4 (including but not limited to the requirement that the Company notify all holders of Restricted Stock from whom notice has not been received and provide them with the opportunity to participate in the offering) shall apply to such registration, provided, however, that each of the Investor -------- ------- Stockholders (considered as a group), ITI and Casty may only request and obtain two registrations on Form S-3 under this Section in any calendar year, provided, -------- further, that no request may be made by a party under this Section 6 within 180 - ------- days after the effective date of any other registration statement filed by the Company pursuant to this Section on behalf of such party, and provided further, -------- ------- however, that the requirements contained in Section 4(a) (other than the - ------- requirements as to a Minimum Offering Price) shall apply to any registration on Form S-3 which may be requested and obtained under this Section 6. 7. Registration Procedures. If and whenever the Company is required by ----------------------- the provisions of Sections 4, 5 or 6 to use its reasonable best efforts to effect the registration of any shares of Restricted Stock under the Securities Act, the Company will, as expeditiously as possible: (a) prepare and file with the Commission a registration statement (which, other than in the case of an underwritten public offering pursuant to Section 4, may be on Form S-3 or any successor thereto if the Company is a registrant entitled to use such Form) with respect to such securities and use its reasonable best efforts to cause such registration statement to become and remain effective for the period of the distribution contemplated thereby (determined as hereinafter provided); 5 (b) prepare and file with the 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 the period specified in paragraph (a) above and comply with the provisions of the Securities Act with respect to the disposition of all Restricted Stock covered by such registration statement in accordance with the sellers' intended method of disposition set forth in such registration statement for such period; (c) furnish to each seller of Restricted Stock and to each underwriter such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the public sale or other disposition of the Restricted Stock covered by such registration statement; (d) use its reasonable best efforts to register or qualify the Restricted Stock covered by such registration statement under the securities or "blue sky" laws of such jurisdictions as the sellers of Restricted Stock or, in the case of an underwritten public offering, the managing underwriter reasonably shall request, provided, however, that the Company shall not for any such purpose be -------- ------- required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction; (e) list the Restricted Stock covered by such registration statement with any securities exchange on which the Common Stock of the Company is then listed; (f) immediately notify each seller of Restricted Stock and each underwriter under such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (g) as soon as practicable upon the occurrence of any event contemplated by Section 7(f), prepare and file a supplement or post-effective amendment to such registration statement or the prospectus contained in such registration statement, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the shares of Restricted Stock covered thereby, the prospectus contained in such registration statement will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the obligation to prepare and file any such supplement, - -------- ------- post-effective amendment or other document shall be suspended (a "Suspension") if the Company shall furnish to the holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such registration to be effected at such time due to any pending material financing, acquisition or corporate reorganization or other material corporate development involving the Company or any of its subsidiaries; provided further, that the Company shall only be permitted to effectuate one (1) - -------- ------- Suspension in any twelve 6 (12) month period and any such suspension will be lifted by the Company as soon as practicable and will not, in any event, extend for more than 60 days with respect to any such specified event; (h) if the offering is underwritten and at the request of any seller of Restricted Stock, use its reasonable best efforts to furnish on the date that Restricted Stock is delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters and to such seller, stating that such registration statement has become effective under the Securities Act and that (A) to the best knowledge of such counsel, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act, (B) the registration statement, the related prospectus and each amendment or supplement thereof comply as to form in all material respects with the requirements of the Securities Act (except that such counsel need not express any opinion as to financial statements contained therein) and (C) to such other effects as reasonably may be requested by counsel for the underwriters or by such seller or its counsel and (ii) a letter dated such date from the independent public accountants retained by the Company, addressed to the underwriters and to such seller, stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five business days prior to the date of such letter) with respect to such registration as such underwriters reasonably may request; and (i) make available for inspection by each seller of Restricted Stock, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement. Upon receipt of any notice from the Company of any event of the kind described in Section 7.3(f), each seller of Restricted Stock (x) promptly will discontinue disposition of any shares of Restricted Stock pursuant to such registration statement until such seller of Restricted Stock has received copies of the supplemented or amended prospectus contemplated by Section 7(g) (it being understood that such discontinuance shall be deemed a Suspension subject to the limitations on Suspensions set forth in Section 7(g)), (y) thereafter, will utilize and distribute only such supplemented or amended prospectus, and (z) if so directed by the Company, will deliver to the Company all copies of the prospectus covering such shares of Restricted Stock in such party's possession at the time of receipt of such suspension notice. For purposes of Section 7(a) and 7(b), the period of distribution of Restricted Stock in a firm commitment underwritten public offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchased by it, and the period of distribution of Restricted Stock in any other registration shall be deemed to extend until the earlier of the sale of all Restricted Stock covered thereby and 180 days following effectiveness of registration. 7 In connection with each registration hereunder, each seller of Restricted Stock will furnish to the Company in writing such information with respect to itself and the proposed distribution by it as reasonably shall be necessary in order to assure compliance with federal and applicable state securities laws, and will notify the Company promptly upon the happening of any event during the period any registration statement is effective that makes any statement regarding such seller made in a registration statement or the prospectus contained therein untrue in any material respect or which requires the making of any changes in a registration statement or the prospectus contained therein in order to make the statements therein regarding such seller, in light of circumstances under which they were made, not misleading. In connection with each registration pursuant to Sections 4, 5 or 6 covering an underwritten public offering, the Company and each seller agree to enter into a written agreement with the managing underwriter selected in the manner herein provided in such form and containing such provisions as are customary in the securities business for such an arrangement between such underwriter and companies of the Company's size and investment stature. 8. Expenses. All expenses incurred by the Company in complying with -------- Sections 4, 5 and 6, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with complying with state securities or "blue sky" laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs of insurance and reasonable fees and disbursements of one counsel for the sellers of Restricted Stock, but excluding any Selling Expenses, are called "Registration Expenses". If ITI and/or Casty are the only parties (other than the Company) selling Restricted Stock pursuant to a registration statement described herein, "Registration Expenses" shall not include the fees and disbursements of counsel for such sellers of Restricted Stock. All underwriting discounts and selling commissions applicable to the sale of Restricted Stock are called "Selling Expenses". The Company will pay all Registration Expenses in connection with each registration statement under Sections 4, 5 or 6. 9. Indemnification and Contribution. (a) In the event of a registration -------------------------------- of any of the Restricted Stock under the Securities Act pursuant to Sections 4, 5 or 6, the Company will indemnify and hold harmless each seller of such Restricted Stock thereunder, each underwriter of such Restricted Stock thereunder and each of their respective officers, directors, employees, partners, agents or other person, if any, who controls such seller or underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such seller, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Sections 4, 5 or 6, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse 8 each such seller, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Company will not be liable in any such case if and - -------- ------- to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by any such seller, any such underwriter or any such controlling person in writing specifically for use in such registration statement or prospectus and, provided -------- further, however, that the Company will not be liable to any such person or - ------- ------- entity with respect to any such untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus that is corrected in the final prospectus filed with the Commission pursuant to Rule 424(b) promulgated under the Securities Act (or any amendment or supplement to such prospectus) if the person asserting any such loss, claim, damage or liability purchased securities but was not given a copy of the final prospectus (as amended or supplemented) at or prior to the written confirmation of the sale of such securities to such person in any case where such delivery of the final prospectus (as amended or supplemented) is required by the Securities Act, unless such failure to deliver the final prospectus (as amended or supplemented) was a result of the Company's failure to provide such prospectus (as amended or supplemented). (b) In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Sections 4, 5 or 6, each seller of such Restricted Stock thereunder, severally and not jointly, will indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Sections 4, 5 or 6, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that such seller will be liable hereunder in any such case if - -------- ------- and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such seller, as such, furnished in writing to the Company by such seller specifically for use in such registration statement or prospectus, and provided, further, however, that the liability of each seller hereunder shall be - -------- ------- ------- limited to the proportion of any such loss, claim, damage, liability or expense which is equal to the proportion that the public offering price of the shares sold by such seller under such registration statement bears to the total public offering price of all securities sold thereunder, but not in any event to exceed the net proceeds received by such seller from the sale of Restricted Stock covered by such registration statement. 9 (c) Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 9 and shall only relieve it from any liability which it may have to such indemnified party under this Section 9 if and to the extent the indemnifying party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 9 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, -------- however, that, if the defendants in any such action include both the indemnified - ------- party and the indemnifying party and the indemnified party shall have reasonably concluded, based on advice of counsel, that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. (d) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Sections 9(a) and 9(b) above is for any reason held to be unenforceable by the indemnified party although applicable in accordance with its terms, the Company and each holder of Restricted Stock exercising rights under this Agreement shall contribute to the aggregate losses, claims, damages and liabilities of the nature contemplated by such indemnity agreement incurred by the Company and such holder, (i) in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and such holder on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative fault of, but also the relative benefits to, the Company on the one hand and such holder on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits to the indemnifying party and indemnified party shall be determined by reference to, among other things, the gross proceeds received by the indemnifying party and indemnified party in connection with the offering to which such losses, claims, damages or liabilities relate. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether the action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, the indemnifying party or the indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The parties hereto agree that it would not be just or equitable if contribution 10 pursuant to this Section 9(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding sentence. Notwithstanding the provisions of this Section 9(d), each holder of Restricted Stock exercising rights under this Agreement shall not be required to contribute any amount in excess of the amount of the gross proceeds to such holder from sales of the Restricted Stock of such holder under a registration statement. Notwithstanding the foregoing, no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9(d), each person, if any, who controls a holder of Restricted Stock within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such holder, and each director of the Company, each officer of the Company who signed a registration statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act shall have the same rights to contribution as the Company. 10. Changes in Common Stock or Preferred Stock. If, and as often as, there ------------------------------------------ is any change in the Common Stock or the Preferred Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Common Stock or the Preferred Stock as so changed. 11. Rule 144 Reporting. With a view to making available the benefits of ------------------ certain rules and regulations of the Commission which may at any time permit the sale of the Restricted Stock to the public without registration, the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act; (b) use its reasonable best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (c) furnish to each holder of Restricted Stock forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of such Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as such holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such holder to sell any Restricted Stock without registration. 12. Representations and Warranties of the Company. The Company --------------------------------------------- represents and warrants to the Investor Stockholders, ITI and Casty as follows: (a) The execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite corporate action on its part and will not violate any provision of law, any order of any court or other agency of government, the Certificate of Incorporation or By-laws each, as amended, of the Company or any provision of any indenture, 11 agreement or other instrument to which it or any or its properties or assets is bound, conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company, except where the foregoing would not reasonably be expected to have a material adverse effect on the Company or its business. (b) This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. 13. Miscellaneous. (a) Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Company or any other party unless such modification, amendment or waiver is approved in writing by the Company and the holders of at least 66 2/3% of the outstanding shares of Restricted Stock held by each of the Investor Stockholders, ITI and Casty, provided that any modification, amendment or waiver which would adversely -------- affect any party hereto in a manner which is different from the manner the other parties hereto are affected shall also require the approval of such party. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. (b) This Agreement shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective heirs, personal representatives, successors and permitted assigns. This Agreement and the rights of the parties hereunder may not be assigned by any party hereto without the prior written consent of the other parties, except as otherwise provided herein. The Investor Stockholders may assign their rights and obligations hereunder to a transferee of Restricted Stock, provided that such transferees agree in writing -------- to be bound by the provisions of this Agreement. ITI and Casty may assign their rights and obligations hereunder to a transferee of Restricted Stock, provided that each such transferee of ITI and Casty and any subsequent transferee shall, together with ITI or Casty, as the case may be, be deemed one person for purposes of this Agreement, and any right or notice hereunder on behalf of such person may only be delivered by ITI or by Casty (personally, or through his personal representatives) and, provided, further, that ITI or Casty, as the case -------- ------- may be, shall provide notice of any such assignment to the other parties hereto, and any such transferee must agree in writing to be bound by the provisions of this Agreement. (c) All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent, with respect to the Company and the Investor Stockholders, to their respective addresses specified in the Stock Purchase Agreement (or at such other address as 12 any such party may specify by like notice) and, with respect to any other party, to the address of such party as shown in the stock record books of the Company (or at such other address as any such party may specify to all of the above by like notice). (d) Except as otherwise expressly set forth herein, this document, the Stock Purchase Agreement, the Certificate (as defined in the Stock Purchase Agreement) and the Stockholders Agreement embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, that may have related to the subject matter hereof in any way. (e) This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York without regard to the principles of conflicts of law thereof. Each party hereto hereby irrevocably submits to the nonexclusive jurisdiction of the courts of the state of New York and of the United States of America sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that the venue thereof may not be appropriate, that such suit, action or proceeding is improper or that this Agreement or any of the documents referred to in this Agreement may not be enforced in or by said courts, and each party hereto irrevocably agrees that all claims with respect to such suit, action or proceeding may be heard and determined in such a New York state or federal court. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party in the manner provided in Section 12(b) of the Stock Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. (f) The obligations of the Company to register shares of Restricted Stock under Section 4, 5 or 6 shall terminate at the time at which all Restricted Securities are eligible for resale pursuant to Rule 144(k) under the Securities Act. (g) If requested in writing by the Company and the underwriters for an underwritten public offering of securities of the Company, each holder of Restricted Stock who is a party to this Agreement shall agree not to sell publicly any shares of Restricted Stock or any other shares of Common Stock (other than shares of Restricted Stock or other shares of Common Stock being registered in such offering), without the consent of the Company and such underwriters, for such period requested by the underwriters (not to exceed 180 days) following the effective date of the registration statement relating to the Qualified Public Offering (as defined in the Stock Purchase Agreement) or 90 days following the effective date of a registration statement relating to any other offering; provided, however, that all persons entitled to registration -------- ------- rights with respect to shares of Common Stock who are not parties to this Agreement, all persons holding 5% or more 13 of the capital stock of the Company on a fully diluted basis and all executive officers and directors of the Company shall also have agreed not to sell publicly their Common Stock under the circumstances and pursuant to the terms set forth in this Section 13(g). (h) Notwithstanding the provisions of Section 7(a), the Company's obligation to file a registration statement, or cause such registration statement to become and remain effective, shall be suspended for a period not to exceed 90 days in any 12-month period if the Company shall furnish to the holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such registration to be effected at such time due to any pending material financing, acquisition or corporate reorganization or other material corporate development involving the Company or any of its subsidiaries; provided, however, that any suspension -------- ------- effectuated by the Company under this Section 13(h) shall be deemed a Suspension subject to the limitation on the number of Suspensions permitted in any twelve month period under Section 7(g) hereof. (i) The Company shall not grant to any third party any registration rights more favorable than or inconsistent with any of those contained herein, so long as any of the registration rights under this Agreement remains in effect. (j) 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 invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. (k) The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. (l) This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile signature(s). 14 IN WITNESS WHEREOF, the parties have executed this REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof. IFX CORPORATION By:/s/ Joel Eidelstein -------------------------------------- Name: Joel Eidelstein Title: President UBS CAPITAL AMERICAS III, L.P By: UBS Capital Americas (LA-Advisors), LLC By:/s/ Charles W. Moore -------------------------------------- Name: Charles W. Moore Title: Principal By:/s/ Marc Unger -------------------------------------- Name: Marc Unger Title: Chief Financial Officer UBS CAPITAL LLC By:/s/ George Duarte -------------------------------------- Name: George Duarte Title: Attorney-in-Fact By:/s/ Marc Unger -------------------------------------- Name: Marc Unger Title: Attorney-in-Fact INTERNATIONAL TECHNOLOGIES INVESTMENTS, LLC By:/s/ Michael Shalom -------------------------------------- Name: Michael Shalom Title: Manager /s/ Lee S. Casty -------------------------------------- Lee S. Casty 15 EX-10.1 6 0006.txt STOCKHOLDER AGREEMENT Exhibit 10.1 ------------ STOCKHOLDERS AGREEMENT among IFX CORPORATION, UBS CAPITAL AMERICAS III, L.P., UBS CAPITAL LLC, INTERNATIONAL TECHNOLOGY INVESTMENTS, LC, JOEL EIDELSTEIN, MICHAEL SHALOM and LEE S. CASTY dated as of June 15, 2000 IFX CORPORATION STOCKHOLDERS AGREEMENT THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement") is entered as of June 15, 2000, among IFX CORPORATION, a Delaware corporation (the "Company"), UBS CAPITAL AMERICAS III, L.P., a Delaware limited partnership, and UBS CAPITAL LLC, a Delaware limited liability company (collectively, "UBS" and together with successors and assigns, the "Investor Stockholders"), INTERNATIONAL TECHNOLOGY INVESTMENTS, LC, a Nevada limited liability company ("ITI"), JOEL EIDELSTEIN, individually, ("Eidelstein") MICHEAL SHALOM, individually, (and together with any Affiliated entities, "Shalom"), and LEE S. CASTY, individually ("Casty", and collectively with ITI, Shalom and Eidelstein, the "Stockholders"). RECITALS -------- WHEREAS, the Company and the Investor Stockholders have entered into the IFX Corporation Preferred Stock Purchase Agreement, dated the date hereof (the "Stock Purchase Agreement"), pursuant to which the Investor Stockholders will purchase newly issued shares of Class I and Class II Series A Convertible Preferred Stock, par value $1.00 per share, of the Company ("Series A Preferred Stock"); and WHEREAS, the parties hereto desire to enter into certain arrangements relating to the Company. NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises hereinafter set forth, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 Certain Defined Terms. As used herein, the following terms --------------------- shall have the following meanings: "Acquisition" has the meaning assigned to such term in Section 4.1(a). "Acquisition Restrictions" has the meaning assigned to such term in Section 4.1(a). "Affiliate" means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person, for so long as such Person remains so associated to the specified Person, or, in the case of an individual, such individual's 1 spouse, lineal descendents or a trust primarily for the benefit of such individual or any of the foregoing. "Agent" has the meaning assigned to such term in Section 5.13. "as converted" has the meaning assigned to such term in Section 2.3. "beneficial owner" or "beneficially own" has the meaning given such term in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of Common Stock or Series A Preferred Stock or other Voting Securities of the Company shall be calculated in accordance with the provisions of such Rule; provided, however, that for purposes of determining beneficial ownership, (i) a Person shall be deemed to be the beneficial owner of any security which may be acquired by such Person whether within 60 days or thereafter, upon the conversion, exchange or exercise of any warrants, options, rights or other securities and (ii) no Person shall be deemed to beneficially own any security solely as a result of such Person's execution of this Agreement. "Board" means the Board of Directors of the Company. "Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in New York City on the city of Miami, Florida. "Buyer" has the meaning assigned to such term in Section 3.6. "Bylaws" means the Bylaws of the Company, as in effect on the date hereof and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the terms of the Certificate and the terms of this Agreement. "Capital Stock" means, with respect to any Person at any time, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, partnership interests (whether general or limited) or equivalent ownership interests in or issued by such Person, and includes, in the case of the Company without limitation, any and all shares of Common Stock and Series A Preferred Stock. "Casty" has the meaning assigned to such term in the preamble. "Casty Representative" has the meaning assigned to such term in Section 2.1(a). "Certificate" means the Certificate of Incorporation of the Company, as in effect on the date hereof and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof. "Certificate of Designation" means the Certificate of Designation, Number, Powers, Preferences and Relative, Participating and Other Rights of Series A Convertible Preferred Stock of the Company in the form attached as Exhibit B to the Stock Purchase Agreement. 2 "Common Stock" means the common stock, par value $0.02 per share, of the Company and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation, exchange or other similar reorganization. "control" (including the terms "controlled by" and "under common control with"), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise. "Director" means any member of the Board. "Eidelstein" has the meaning assigned to such term in the preamble. "Equity Securities" means any and all shares of Capital Stock of the Company, securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations promulgated thereunder. "Holder" means an Investor Stockholders and any other holder of Equity Securities who or which is a permitted transferee of an Investor Stockholders pursuant to Section 3.1(c). "Independent Director" has the meaning specified in Rule 4200(a)(15) of the NASD listing standards, as in effect on the date hereof and as the same may be amended or supplemented, or in any successor rule or regulation. "Investor Representative" has the meaning assigned to such term in Section 2.1(a). "ITI" has the meaning assigned to such term in the preamble. "ITI Representative" has the meaning assigned to such term in Section 2.1(a). "Joint Representative" has the meaning assigned to such term in Section 2.1(a). "NASD" means the National Association of Securities Dealers, Inc. "Offer" has the meaning assigned to such term in Section 3.5(a). "Offered Shares" has the meaning assigned to such term in Section 3.5(a). "Person" means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated 3 organization, government or any agency or political subdivisions thereof or any other entity. "Proposed Transferee" has the meaning assigned to such term in Section 3.5(a). "Pro Rata Fraction" has the meaning assigned to such term in Section 3.5(c). "Qualified Public Offering" has the meaning assigned to such term in the Stock Purchase Agreement. "Registration Agreement" has the meaning assigned to such term in the Stock Purchase Agreement. "Representatives" has the meaning assigned to such term in Section 2.1(b). "SEC" means the U.S. Securities and Exchange Commission or any other federal agency then administering the federal securities laws. "Securities Act" has the meaning assigned to such term in Section 3.1. "Series A Preferred Stock" has the meaning assigned to such term in the recitals. "Seller" has the meaning assigned to such term in Section 3.5(a). "Shalom" has the meaning assigned to such term in the preamble. "Stockholder" has the meaning assigned to such term in the preamble. "Stock Purchase Agreement" has the meaning assigned to such term in the recitals. "Subsequent Closing" has the meaning assigned to such term in the Stock Purchase Agreement. "Transfer" means, directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any shares of Equity Securities beneficially owned by a Person or any interest in any shares of Equity Securities beneficially owned by a Person. "Voting Securities" means, at any time, shares of any class of Equity Securities of the Company which are then entitled to vote generally in the election of Directors. SECTION 1.2 Other Definitional Provisions. ----------------------------- (a) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole 4 and not to any particular provision of this Agreement, and Article and Section references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. ARTICLE II CORPORATE GOVERNANCE SECTION 2.1 Board Representation. -------------------- (a) Effective on the date hereof, the Board shall, except as otherwise provided below, be comprised of seven (7) Directors of whom: (i) two (2) shall be designees of the Investor Stockholders (the "Investor Representatives"), (ii) one (1) shall be a designee of ITI (the "ITI Representative"), (iii) one (1) shall be a designee of Casty (the "Casty Representative"), (iv) one (1) shall be jointly designated by ITI and Casty (the "Joint Representative") and (v) the others shall be Independent Directors acceptable to the Investor Stockholders (with such consent not to be unreasonably withheld) who, commencing with the election of Directors at the next annual meeting of stockholders, have been elected by the holders of a majority of the outstanding Voting Securities. The initial Investor Representatives shall be Charles W. Moore and Mark O. Lama, the initial ITI Representative shall be Michael Shalom, the initial Casty Representative shall be Joel Eidelstein, and the initial Joint Representative shall be Zalman Lekach. If, at any time, ITI and Casty are unable to agree upon the designation of a Joint Representative, the Joint Representative shall be designated by Jose Leiman. Notwithstanding the foregoing, at such time as an Independent Director acceptable to the Investor Stockholders (with such consent not to be unreasonably withheld) and the holders of a majority of the outstanding Voting Securities held by the Stockholders has been elected to the Board, the Investor Stockholders shall only be entitled to designate one Investor Representative, and the Investor Stockholders shall thereafter, as promptly as practicable, take all action necessary to cause one of the Investor Representatives to resign from the Board. For purposes hereof, the Series A Preferred Director (as defined in the Certificate of Designation) shall count as one of the two Investor Representatives. (b) The Company shall take such action as may be required under applicable law (i) to cause the Board to consist of the number of Directors specified in clause (a), (ii) to include in the slate of nominees recommended by the Board the Investor Representatives, the ITI Representative, the Casty Representative and the Joint Representative (collectively, the "Representatives"), with the remaining Directors to be Independent Directors acceptable to the Investor Stockholders (with such acceptance not to be unreasonably withheld) and (iii) to cause the Investor Representatives to be duly appointed in accordance with the foregoing and the Certificate of Designation. The Company agrees to use its reasonable best efforts to 5 cause the election of the Representatives to the Board, including nominating such individuals to be elected as Directors as provided herein. (c) Each of the Investor Stockholders, ITI and Casty agrees to vote, or act by written consent with respect to any Voting Securities beneficially owned by him or it, at each annual or special meeting of the stockholders of the Company at which Directors are to be elected or to take all actions by written consent in lieu of any such meeting as are necessary to cause the Representatives designated by the others in accordance with the terms of this Agreement to be elected to the Board and agrees to use his or its reasonable best efforts to cause the election of each such designee to the Board, including nominating such individuals to be elected as Directors. (d) In the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal (with or without cause) of any Representative, the remaining Directors and the Company shall cause the vacancy created thereby to be filled by a new designee of the party or parties that designated such Director as soon as possible, who is designated in the manner specified in this Section 2.1. Each of the Company, each Investor Stockholders, ITI and Casty hereby agrees to take, at any time and from time to time, all actions necessary to accomplish the same. Upon the written request of the Investor Stockholders, ITI and/or Casty, as the case may be, each of the others shall vote, or act by written consent with respect to all Voting Securities beneficially owned by him or it and otherwise take or cause to be taken all actions necessary to remove any Director designated by the former. Unless the Investor Stockholders, ITI and/or Casty, as the case may be, shall otherwise request in writing, none of the others shall take any action to cause the removal of any Director designated by the former. (e) Without the written consent of the Investor Stockholders, each of the Company, ITI and Casty agrees not to take any action that would cause the number of Directors constituting the entire Board to be other than seven (7). (f) The covenants and agreements set forth herein shall be subject to the fiduciary obligations of the designees of the Investor Stockholders, ITI and Casty now or hereafter serving on the Board and shall not prevent the designees of the Investor Stockholders, ITI or Casty now or hereafter serving on the Board from taking any action or refraining to take any action while acting in the capacity as a Director of the Company. The foregoing shall not limit the obligations of the Investor Stockholders, ITI and Casty in their capacity as stockholders of the Company hereunder. SECTION 2.2 Committees. The Company shall, except as provided below, by ---------- amending its Bylaws or otherwise, establish and maintain a Compensation Committee and an Audit Committee of the Board which satisfies the requirements of this Section. Each Committee shall consist of three (3) Directors, one (1) of whom shall be an Investor Representative. The Compensation Committee shall have responsibility for compensation matters customarily addressed by compensation committees of similarly 6 situated companies and shall have the full power and authority of the Board with respect thereto, except as limited by applicable law. The two (2) members of the Committee who are not Investor Representatives may not be employees of the Company or any subsidiary. The Audit Committee shall have responsibility for matters customarily addressed by audit committees of similarly situated companies and shall have the full power and authority of the Board with respect thereto, except as limited by applicable law. The two (2) members of the Audit Committee who are not Investor Representatives shall not be members of the Compensation Committee. Notwithstanding anything to the contrary herein, the Investor Stockholders acknowledge and agree that the composition of the Compensation and Audit Committees must satisfy any applicable rules and regulations of the SEC and the NASD as in effect from time to time. SECTION 2.3 Termination of Rights. Notwithstanding Section 2.1, at such --------------------- time following a Qualified Public Offering as the Investor Stockholders and their Affiliates shall cease to own in the aggregate at least 25% of the number of shares of Common Stock (determined with respect to the Preferred Stock and any other Equity Securities owned by the Investor Stockholders and their Affiliates that are convertible into, or exchangeable or exercisable for Common Stock, on an as-converted, exchanged or exercised basis (any determination made in accordance with the foregoing shall hereinafter be referred to as "as converted")) that the Investor Stockholders held as of the Subsequent Closing (adjusted for stock splits, combinations, stock dividends and the like), the Investor Stockholders shall cease to have the right to designate Directors and members of the Compensation Committee and Audit Committee pursuant to Sections 2.1 and 2.2, and all other rights of the Investor Stockholders under this Article II shall terminate. ARTICLE III TRANSFERS SECTION 3.1 Investor Stockholders Transfers. Each Investor Stockholders ------------------------------- hereby agrees that it shall not Transfer any shares of its Equity Securities, unless such Transfer is effected through (a) a public offering registered under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the "Securities Act"), (b) sales made pursuant to Rule 144 under the Securities Act, or any successor provisions or (c) sales involving Transfers of Equity Securities with a purchase price in excess of $1,000,000 (per transaction) which may be effected without registration under the Securities Act, provided that any Transfer to a Person which the Company reasonably considers a competitor shall be prohibited for purposes of clause (c). Any Equity Securities Transferred pursuant to clauses (a) or (b) shall no longer be subject to this Agreement. Each transferee Holder under clause (c) shall agree in writing with the Company and the other Stockholders as a condition to such Transfer, to be bound by all of the provisions of this Agreement to the same extent as if such transferee were the transferring Investor Stockholders, and all stock certificates representing shares transferred to a Holder shall bear a legend providing notice of the restrictions contained in this Agreement. 7 SECTION 3.2 Stockholder Transfers. Each Stockholder hereby agrees that it --------------------- shall not Transfer any shares of its Equity Securities, unless such Transfer is effected through (a) a public offering registered under the Securities Act, (b) sales made pursuant to Rule 144 under the Securities Act or any successor provisions or (c) a Transfer otherwise permitted hereunder and in compliance herewith. Transfers pursuant to clause (b) or (c) shall also comply with Section 3 of the Restated Registration Agreement. Any Equity Securities Transferred pursuant to clauses (a) or (b) shall no longer be subject to this Agreement, except as provided herein. SECTION 3.3 Transfers by Eidelstein, ITI and Shalom. --------------------------------------- (a) ITI and Shalom agree that neither such Stockholder nor any of its Affiliates shall, Transfer more than the number of Shares of Common Stock permitted under Rule 144(e) of the Securities Act until the Pledge Agreements (as defined below) are satisfied, and thereafter, ITI and Shalom agree that neither such Stockholder nor any of its Affiliates shall, Transfer more than 25,000 Shares of Common Stock during any calendar quarter, in each case, without the written consent of the Investor Stockholders or without compliance with Sections 3.5 and 3.6; provided that Transfers by ITI and Shalom shall be aggregated for purposes of the foregoing. Eidelstein hereby agrees that neither he nor any of his Affiliates shall, Transfer more than 25,000 Shares of Common Stock during any calendar quarter ("Permitted Sales") without the written consent of the Investor Stockholders, which consent shall not be unreasonably withheld or delayed or without compliance with Sections 3.5 and 3.6. Notwithstanding the foregoing, (i) such Stockholders may Transfer all or any of their Equity Securities (x) by way of gift to any member of such Stockholder's family or to any trust for the benefit of any such family member of such Stockholder or to any other Affiliate (including, without limitation, the members of ITI), provided that any such transferee shall agree in writing with the Company and the Investor Stockholders as a condition to such Transfer, to be bound by all of the provisions of this Agreement to the same extent as if such transferee were such Stockholder, or (y) by will or the laws of descent and distribution; provided, however, in such event each such transferee shall be bound by all of the provisions of this Agreement to the same extent as if such transferee were such Stockholder; and provided, further, that each such transferee shall execute an irrevocable proxy appointing the original Stockholder (except in the case of death of the original Stockholder) transferring such shares as proxy to vote all such shares so transferred, such appointment shall be coupled with an interest, and all stock certificates representing such shares shall bear a legend providing notice of such appointment of proxy and the restrictions contained in this Agreement, and (ii) the restrictions described herein shall not prohibit the pledges by ITI of 6,000,000 shares of Common Stock, in the aggregate, pursuant to the pledge agreements listed on Exhibit A hereto (the "Pledge Agreements") --------- or any replacement or substitute agreement which shall be on no less favorable terms to the pledgor than the Pledge Agreements, but such shares shall otherwise be subject to this Agreement. As used herein, the term "family" shall include any spouse, lineal ancestor or descendant, brother or sister. 8 (b) The provisions of this Section 3.3 shall terminate upon the earlier of: (i) a Qualified Public Offering and (ii) the time at which the Investor Stockholders and the other Holders own fewer than 50% of the number of shares of Common Stock (determined on an as converted basis) that the Investor Stockholders owned as of the Subsequent Closing (adjusted for stock splits, combinations, stock dividends and the like). SECTION 3.4 Transfers by Casty. Casty agrees that neither he nor any of ------------------ his Affiliates shall, Transfer more than the number of Shares of Common Stock permitted under Rule 144(e) of the Securities Act without the written consent of the Investor Stockholders, which consent shall not be unreasonably withheld or delayed or without compliance with Sections 3.5 and 3.6. Notwithstanding the foregoing, Casty may Transfer all or any of his Equity Securities (a) by way of gift to any member of such Stockholder's family or to any trust for the benefit of any such family member of such Stockholder or to any other Affiliate, provided that any such transferee shall agree in writing with the Company and the Investor Stockholders as a condition to such Transfer, to be bound by all of the provisions of this Agreement to the same extent as if such transferee were such Stockholder, or (b) by will or the laws of descent and distribution; provided, however, in such event each such transferee shall be bound by all of the provisions of this Agreement to the same extent as if such transferee were such Stockholder; and provided, further, that each such transferee shall execute an irrevocable proxy appointing the original Stockholder (except in the case of death of the original Stockholder) transferring such shares as proxy to vote all such shares so transferred, such appointment shall be coupled with an interest, and all stock certificates representing such shares shall bear a legend providing notice of such appointment of proxy and the restrictions contained in this Agreement. SECTION 3.5 Right of First Refusal on Certain Transfers. ------------------------------------------- (a) If at any time ITI, Shalom, Casty, Eidelstein or any of their respective Affiliates, other than the Company, desires to Transfer all or any part of their Equity Securities, (other than pursuant to Permitted Sales) to any Person (the "Proposed Transferee"), such Stockholder (the "Seller") shall, except as provided below, submit a written offer (the "Offer") to sell such Equity Securities (the "Offered Shares") first to the Company, and second to the Holders on the same terms and conditions on which the Seller proposes to sell such Offered Shares to the Proposed Transferee. The parties acknowledge and agree that any Transfer described in the second sentence of Section 3.3(a) or in Section 3.4 shall not be subject to the terms of this Section. The Offer shall disclose the identity of the Proposed Transferee, the Offered Shares proposed to be sold, the terms and conditions, including price, of the proposed sale, and any other material facts relating to the proposed sale. The Offer shall further state that the Company and the Holders may acquire, in accordance with the provisions of this Agreement, all or any portion of the Offered Shares for the price and upon the other terms and conditions, including deferred payment (if applicable), set forth therein. (b) Upon receipt of the Offer, if the Company desires to purchase all or any part of the Offered Shares, the Company shall communicate in writing its election 9 to purchase to the Seller, which communication shall state the number of Offered Shares the Company desires to purchase and shall be given to the Seller in accordance with Section 5.4 below within thirty (30) days of the date the Offer was made. Such notice shall, when taken in conjunction with the Offer, be deemed to constitute a valid, legally binding and enforceable agreement for the sale to, and purchase by, the Company of the number of Offered Shares specified by the Company in such notice and on the terms of the Offer. Sales of the Offered Shares to be sold to the Company pursuant to this Section 3.5(b) shall be made at the offices of the Company on the 45th day following the date the Offer was made (or if such 45th day is not a Business Day, then on the next succeeding Business Day). Such sales shall be effected by the Seller's delivery to the Company of a certificate or certificates evidencing the Offered Shares to be purchased by it, duly endorsed for transfer to the Company, against payment to the Seller of the purchase price therefor by the Company. (c) Each Holder shall, subject to the prior purchase right of the Company, have the absolute right to purchase that number of Offered Shares not purchased by the Company as shall be equal to the number of Offered Shares not purchased by the Company multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (determined on an as converted basis) then owned by such Holder and the denominator of which shall be the aggregate number of shares of Common Stock (determined on an as converted basis) then owned by all of the Holders. The amount of Offered Shares that each Holder is entitled to purchase under this Section 3.5(c) shall be referred to as its "Pro Rata Fraction." The Holders shall have a right of oversubscription such that if any Holder fails to accept the Offer as to its Pro Rata Fraction, the other Holders shall, among them, have the right to purchase up to the balance of the Offered Shares not so purchased. Such right of oversubscription may be exercised by a Holder by accepting the Offer as to more than its Pro Rata Fraction. If, as a result thereof, such oversubscriptions exceed the total number of Offered Shares available in respect of such oversubscription privilege, the oversubscribing Holders shall be cut back with respect to their oversubscriptions on a pro rata basis in accordance with their respective Pro Rata Fractions or as they may otherwise agree among themselves. If a Holder desires to purchase all or any portion of the Offered Shares, said Holder shall communicate in writing its election to purchase to the Seller and the Company, which communication shall state the number of Offered Shares said Holder desires to purchase and shall be given to the Seller in accordance with Section 5.4 below within thirty (30) days of the date the Offer was made. Such communication shall, when taken in conjunction with the Offer, be deemed to constitute a valid, legally binding and enforceable agreement for the sale and purchase of such Offered Shares (subject to the aforesaid limitations as to a Holder's right to purchase more than its Pro Rata Fraction) and on the terms of the Offer. Sales of the Offered Shares to be sold to purchasing Holders pursuant to this Section 3.5(c) shall be made at the offices of the Company on the later of (i) the 45th day following the date the Offer was made (or if such later of (i) the 45th day is not a Business Day, then on the next succeeding Business Day) and (ii) the third Business Day following receipt of all material governmental or other consents in connection with such sale. Such sales shall be effected by the Seller's delivery to each purchasing Holder of a certificate or certificates evidencing the Offered Shares to be 10 purchased by it, duly endorsed for transfer to such purchasing Holder, against payment to the Seller of the purchase price therefor by such purchasing Holder. (d) If the Holders and the Company do not purchase in the aggregate all of the Offered Shares, the Offered Shares not so purchased may be sold by the Seller at any time within 90 days after the date the Offer was made, subject to the provisions of Section 3.6 hereof. Any such sale shall be to the Proposed Transferee, at the price and upon the other terms and conditions specified in the Offer. Any Offered Shares not sold within such 90-day period shall continue to be subject to the requirements of a prior offer pursuant to this Section 3.5. If Offered Shares are sold pursuant to this Section 3.5 to any purchaser who is not a party to this Agreement, the Offered Shares so sold shall no longer be subject to this Agreement. (e) The provisions of this Section 3.5 shall terminate upon the earlier of: (i) a Qualified Public Offering and (ii) the time at which the Investor Stockholders and the other Holders own fewer than 50% of the number of shares of Common Stock (determined on an as converted basis) that the Investor Stockholders owned as of the Subsequent Closing (adjusted for stock splits, combinations, stock dividends and the like). SECTION 3.6 Right of Participation in Sales. ------------------------------- (a) If at any time the Seller desires to Transfer all or any part of the Equity Securities owned by the Seller to any Person other than one or more of the Holders (the "Buyer"), each of the Holders shall, except as provided below, have the right to sell to the Buyer, as a condition to such sale by the Seller, at the same price per share and on the same terms and conditions as involved in such sale by the Seller, the same percentage of the shares of Common Stock (on an as converted basis) owned by such Holder as the shares of Common Stock (on an as converted basis) to be sold by the Seller to the Buyer represents with respect to the shares of Common Stock (on an as converted basis) owned by the Seller immediately prior to the sale of any of the Seller's shares of Equity Securities to the Buyer. The parties acknowledge and agree that any Transfer described in the second sentence of Section 3.3(a) or in Section 3.4 or which, pursuant to the terms of Section 3.5(a) is not the subject of an Offer, shall not be subject to the terms of this Section. (b) Each Holder wishing to so participate in any sale under this Section 3.6 shall notify the Seller in writing of such intention as soon as practicable after such Holder's receipt of the Offer made pursuant to Section 3.5, and in any event within twenty (20) days after the date the Offer was made. Such notification shall be given to the Seller in accordance with Section 5.4 below. (c) The Seller and each participating Holder shall sell to the Buyer all, or at the option of the Buyer, any part of the Equity Securities proposed to be sold by them at the price and upon other terms and conditions contained in the Offer provided by the Seller under Section 3.5 above; provided however, that any purchase of less than all of such Equity Securities by the Buyer shall be made from the Seller and each 11 participating Holder pro rata based upon the relative amount of the Equity Securities that the Seller and each participating Holder is otherwise entitled to sell pursuant to Section 3.6(a). (d) Any Equity Securities sold by the Seller or a participating Holder pursuant to this Section 3.6 shall no longer be subject to this Agreement. (e) The provisions of this Section 3.6 shall terminate upon the earlier of: (i) a Qualified Public Offering and (ii) the time at which the Investor Stockholders and the other Holders own fewer than 50% of the number of shares of Common Stock (determined on an as-converted basis) that the Investor Stockholders owned as of the Subsequent Closing (adjusted for stock splits, combinations, stock dividends and the like). ARTICLE IV STANDSTILL SECTION 4.1 Acquisition of Additional Voting Securities. ------------------------------------------- (a) Until the second anniversary of the date hereof, except as otherwise provided in this Section 4.1, each of the Investor Stockholders covenants and agrees with the Company that it shall not, and shall cause each of its controlled Affiliates not to, directly or indirectly, acquire, offer or propose to acquire or agree to acquire, whether by purchase, tender or exchange offer, through the acquisition of control of another Person (including by way of merger or consolidation), by joining a partnership, syndicate or other group (within the meaning of Section 13(d)(3) of the Exchange Act) or otherwise, the beneficial ownership of any additional Voting Securities if following such proposed acquisition (an "Acquisition") the Investor Stockholders together with their Affiliates would beneficially own, in the aggregate, in excess of 20% of the voting power represented by the Company's Voting Securities (the "Permitted Ownership Percentage") on an as converted and fully diluted basis (except (i) by way of stock dividends, stock reclassifications or other distributions or offerings made available and, if applicable, exercised on a pro rata basis, to holders of Equity Securities of the Company generally, (ii) Equity Securities acquired from the Company (including upon conversion of shares of Series A Preferred Stock) and (iii) pursuant to this Agreement (the "Acquisition Restrictions"); provided, however, that the foregoing Acquisition Restrictions shall not apply to any Acquisition that is approved by a majority of the Directors, excluding for the purposes of such approval any Investor Directors. (b) Upon a repurchase or redemption of Equity Securities by the Company that, by reducing the number of outstanding Equity Securities, increases the Investor Stockholders' ownership percentage to an amount in excess of the then-applicable Permitted Ownership Percentage, none of the Investor Stockholders or their Affiliates shall be required to dispose of Equity Securities beneficially owned by them; provided, however, that in such event, none of the Investor Stockholders or their 12 Affiliates may purchase additional Equity Securities until such time as their ownership percentage is less than the then-applicable Permitted Ownership Percentage. (c) Subject to Section 4.1(b) at any time the Investor Stockholders or any of their Affiliates become aware that the Investor Stockholders and their Affiliates beneficially own in the aggregate more than the Permitted Ownership Percentage, then the Investor Stockholders shall, as soon as is reasonably practicable (but in no manner that would require the Investor Stockholders or any such Affiliate to incur liability under Section 16(b) of the Exchange Act), take all action necessary to reduce the amount of Equity Securities beneficially owned by them and their Affiliates to an amount not greater than the Permitted Ownership Percentage in effect at such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Termination. Except as otherwise provided herein, the ----------- provisions of this Agreement shall terminate: (a) upon the agreement of all of the parties hereto, (b) at the time at which the Investor Stockholders and the other Holders own fewer than 50% of the number of shares of Common Stock (determined on an as converted basis that the Investor Stockholders owned as of the Subsequent Closing (adjusted for stock splits, combinations, stock dividends and the like), and (c) with respect to any of ITI, Shalom, Eidelstein, Casty and its respective permitted transferees referred to in clause (i) of the second sentence of Section 3.3(a) or in Section 3.4, as the case may be, when such Stockholder together with its permitted transferees owns less than 2% of the outstanding Common Stock, on an as converted basis. SECTION 5.2 Amendments and Waivers. Except as otherwise provided herein, ---------------------- no modification, amendment or waiver of any provision of this Agreement shall be effective against the Company or any other party unless such modification, amendment or waiver is approved in writing by the Company and the Agent, acting on behalf of the Investor Stockholders. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. SECTION 5.3 Successors, Assigns and Transferees. This Agreement shall ----------------------------------- bind and inure to the benefit of and be enforceable by the parties hereto and their respective heirs, personal representatives, successors and permitted assigns. This Agreement may not be assigned by any party hereto without the prior written consent of the other parties, except as otherwise provided herein. SECTION 5.4 Notices. All notices required or permitted hereunder shall be ------- in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) five (5) days after having been sent 13 by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent, with respect to the Company and the Investor Stockholders, to their respective addresses specified in the Stock Purchase Agreement (or at such other address as any such party may specify by like notice) and, with respect to any other party, to the address of such party as shown in the stock record books of the Company (or at such other address as any such party may specify to all of the above by like notice). SECTION 5.5 Further Assurances. At any time or from time to time after ------------------ the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and otherwise to carry out the intent of the parties hereunder. SECTION 5.6 Entire Agreement. Except as otherwise expressly set forth ---------------- herein, this document, the Stock Purchase Agreement and the Restated Registration Agreement embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, that may have related to the subject matter hereof in any way. SECTION 5.7 Delays or Omissions. It is agreed that no delay or omission ------------------- to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on the part of any party hereto of any breach, default or noncompliance under this Agreement or any waiver on such party's part of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to any party, shall be cumulative and not alternative. SECTION 5.8 Governing Law; Jurisdiction; Waiver of Jury Trial. This ------------------------------------------------- Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York without regard to the principles of conflicts of law thereof. Each party hereto hereby irrevocably submits to the nonexclusive jurisdiction of the courts of the state of New York and of the United States of America sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that the venue thereof may not be appropriate, that such suit, action or proceeding is improper or that this Agreement or any of the documents referred to in this Agreement may not be 14 enforced in or by said courts, and each party hereto irrevocably agrees that all claims with respect to such suit, action or proceeding may be heard and determined in such a New York state or federal court. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party in the manner provided in Section 12(b) of the Stock Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. SECTION 5.9 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 invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. SECTION 5.10 Enforcement. Each party hereto acknowledges that money ----------- damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof. SECTION 5.11 Titles and Subtitles. The titles of the sections and -------------------- subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement SECTION 5.12 Legend. Each certificate evidencing any of the shares of ------ Equity Securities held by the parties hereto shall bear a legend substantially as follows: "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE STOCKHOLDERS AGREEMENT, DATED AS OF JUNE, 2000, AS THE SAME MAY BE AMENDED, A COPY OF WHICH THE COMPANY WILL FURNISH TO THE HOLDER OF THIS CERTIFICATE UPON REQUEST AND WITHOUT CHARGE." SECTION 5.13 Appointment of Agent. -------------------- 15 Each of the Investor Stockholders hereby irrevocably appoints UBS (the "Agent") to act as its true and lawful agent and attorney-in-fact and representative with full power and authority in its name, place and stead to act on its behalf for all purposes under this Agreement. The foregoing power of attorney is hereby declared to be irrevocable and coupled with an interest, and such appointment includes, among other powers, the power and authority to exercise all rights and privileges, and to discharge all obligations, of the Investor Stockholders under this Agreement, including: (a) designating and removing the Investor Representatives and otherwise taking all actions required to be taken by the Investor Stockholders under Article II, including providing consents; (b) providing consents to Transfers under Section 3.3; (c) giving and receiving notices hereunder and service of process in any legal action or other proceedings arising out of or related to this Agreement and the transactions hereby; and (d) amending or waiving the provisions of this Agreement. Any instructions given by the Agent hereunder shall be validly given on behalf of each of the Investor Stockholders, and the Company shall have the right to rely thereon. UBS hereby accepts the appointment provided for in this Agreement and agrees to be bound by the provisions of this Agreement. All decisions and actions by the Agent shall be binding upon each of the Investor Stockholders and no Investor Stockholders shall have the right to object, dissent, protest or otherwise contest the same. The Company may conclusively rely upon any action taken by the Agent hereunder. SECTION 5.14 Termination. By its execution hereof, each of the Company, ----------- ITI Emerging Networks, Inc. and Casty agrees that the Subscription and Joint Venture Agreement, dated as of November 23, 1998, as amended, by and among the Company, Emerging Networks, Inc., ITI and Casty shall terminate concurrently with the execution and delivery of this Agreement. SECTION 5.15 Stockholder's Representation. (a) Each of the Stockholders ---------------------------- severally (and not jointly) represents and warrants that all of the Equity Securities owned by it/him and any of its/his Affiliates is set forth on Exhibit A hereto and that each such Stockholder or it/his Affiliate owns such Equity Securities listed opposite its/his/their name free and clear of all Encumbrances (as defined in the Stock Purchase Agreement) except, with respect to Shalom, the Pledge Agreement. (b) Each of Shalom and ITI severally (and not jointly) represents and warrants that Shalom controls the voting and disposition rights on all shares of Equity Securities owned by ITI or any of ITI's Affiliates. 16 SECTION 5.16 Counterparts; Facsimile Signatures. This Agreement may be ---------------------------------- executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile signature(s). [Remainder of Page Intentionally Left Blank] 17 IN WITNESS WHEREOF, the parties hereto have executed the STOCKHOLDERS AGREEMENT as of the date set forth in the first paragraph hereof. IFX CORPORATION By: /s/ Joel Eidelstein ---------------------------------------- Name: Joel Eidelstein Title: President UBS CAPITAL AMERICAS III, L.P. By: UBS Capital Americas (LA-Advisors), LLC By: /s/ Charles W. Moore ---------------------------------------- Name: Charles W. Moore Title: Principal By: /s/ Marc Unger ---------------------------------------- Name: Marc Unger Title: Chief Financial Officer UBS CAPITAL LLC By: /s/ George A. Duarte ---------------------------------------- Name: George A. Duarte Title: Attorney-in-Fact By: /s/ Marc Unger ---------------------------------------- Name: Marc Unger Title: Attorney-in-Fact INTERNATIONAL TECHNOLOGY INVESTMENTS, LC By: /s/ Michael Shalom ---------------------------------------- Name: Michael Shalom Title: Manager 18 /s/ Joel Eidelstein ---------------------------------------- Joel Eidelstein /s/ Lee S. Casty ---------------------------------------- Lee S. Casty /s/ Michael Shalom ---------------------------------------- Michael Shalom The provisions of Section 5.14 of this Agreement are hereby acknowledged and agreed to. EMERGING NETWORKS, INC. By: /s/ Joel Eidelstein -------------------------------- Name: Joel Eidelstein Title: President 19 EXHIBIT A --------- PLEDGES BY ITI 1. Control or Restricted (Rule 144) Stock Borrower's Agreement (undated) between Donaldson Lufkin & Jenrette Securities Corporation ("DLJ"), and International Technology Investments, L.C. ("ITI"), whereby ITI pledges to DLJ 3,750,000 shares of IFX Corporation"s Common Stock which ITI owns of record. 2. Hypothecation Agreement between Scotiabank (Cayman Islands) Ltd. and International Technology Investments, L.C. ("ITI"), dated September 12, 1999, and related documents, whereby ITI pledges to Scotiabank 750,000 shares of IFX Corporation's Common Stock which ITI owns of record. 3. We were advised by IFX Corporation that there is a third pledge agreement between Crenshire Capital, L.P. ("Crenshire"), and International Technology Investments, L.C. ("ITI"), dated approximately, March 24, 2000, whereby ITI pledges to Crenshire 1,500,000 shares of IFX Corporation's Common Stock which ITI owns of record. 20 EX-10.2 7 0007.txt STOCK PURCHASE AGREEMENT Exhibit 10.2 ------------ _____________________________________ IFX CORPORATION PURCHASE AGREEMENT Series A Convertible Preferred Stock _____________________________________ Dated as of June 15, 2000 TABLE OF CONTENTS 1. Authorization of the Securities; Nature of Agreement............................................ 1 (a) Series A Preferred Stock..................................................................... 1 (b) Nature of Agreement.......................................................................... 2 2. Initial Sale and Purchase of Series A Preferred Stock........................................... 2 3. Subsequent Sale and Purchase of Preferred Stock................................................. 2 4. Representations and Warranties of the Company................................................... 3 (a) Organization and Good Standing............................................................... 3 (b) Authorization................................................................................ 4 (c) Capital Stock................................................................................ 4 (d) Subsidiaries................................................................................. 6 (e) Compliance With Material Instruments......................................................... 6 (f) Good Title................................................................................... 7 (g) Litigation................................................................................... 7 (h) Tax Matters.................................................................................. 7 (i) Registration Rights.......................................................................... 8 (j) Offering..................................................................................... 8 (k) Insurance.................................................................................... 8 (l) Certain Transactions......................................................................... 8 (m) Contracts.................................................................................... 9 (n) Governmental Consents........................................................................ 11 (o) Officers, Employees and Labor................................................................ 11 (p) Compliance with Laws......................................................................... 13 (q) Intellectual Property........................................................................ 13 (r) Environmental Matters........................................................................ 14 (s) Certain Practices............................................................................ 14 (t) Brokers...................................................................................... 15 (u) No Undisclosed Liabilities................................................................... 15 (v) Disclosure................................................................................... 15 (w) SEC Filings.................................................................................. 15 (x) Financial Statements......................................................................... 16
i (y) Availability and Transfer of Foreign Currency................................................ 16 (z) Absence of Changes........................................................................... 16 (aa) Real Property Holding Company................................................................ 18 (bb) Investment Company Act.................................................................... 18 (cc) Subchapter S................................................................................. 18 (dd) State Takeover Statutes................................................................... 18 5. Representations and Warranties of the Purchasers................................................ 18 (a) Investment Intent............................................................................ 18 (b) Sophistication............................................................................... 18 (c) Illiquidity.................................................................................. 18 (d) Accredited Investor.......................................................................... 19 (e) Brokers...................................................................................... 19 (f) Requisite Power and Authority................................................................ 19 (g) No Conflict.................................................................................. 19 6. Covenants....................................................................................... 19 (a) Pre-Closing Actions.......................................................................... 19 (b) Compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976..................... 20 (c) Covenants Pending Subsequent Closing......................................................... 20 (d) No Solicitation.............................................................................. 20 (e) Books and Records............................................................................ 21 (f) Post-Closing Covenants....................................................................... 21 (g) Inspection Rights............................................................................ 22 7. Conditions to Obligations of the Purchasers..................................................... 22 (a) Representations and Warranties............................................................... 22 (b) Performance.................................................................................. 23 (c) Absence of Litigation........................................................................ 23 (d) Opinion of Counsel to the Company and Subsidiaries........................................... 23 (e) Consents..................................................................................... 23 (f) Assignment of Intellectual Property.......................................................... 23 (g) Contemporaneous Transactions................................................................. 23 (h) Closing Papers............................................................................... 24 (i) Absence of Material Adverse Effect........................................................... 25
ii (j) Proceedings.................................................................................. 25 (k) Legends...................................................................................... 25 (l) Private Equity Fee........................................................................... 25 (m) HSR Approval................................................................................. 25 8. Conditions to the Obligations of the Company.................................................... 25 (a) Representations and Warranties............................................................... 25 (b) Performance.................................................................................. 25 (c) HSR Approval................................................................................. 25 9. Survival........................................................................................ 26 10. Termination..................................................................................... 26 11. Effect of Termination........................................................................... 26 12. Miscellaneous Provisions........................................................................ 26 (a) Acknowledgment............................................................................... 26 (b) Notices...................................................................................... 27 (c) Severability................................................................................. 27 (d) Governing Law................................................................................ 27 (e) Publicity.................................................................................... 28 (f) Captions and Section Headings................................................................ 28 (g) Amendments and Waivers....................................................................... 28 (h) Successors and Assigns....................................................................... 28 (i) Expenses..................................................................................... 29 (j) Entire Agreement............................................................................. 29 (k) Exhibits..................................................................................... 29 (l) Further Assurances........................................................................... 29 (m) Condition to Effectiveness................................................................... 29 (n) Counterparts................................................................................. 29 (o) Attorneys' Fees.............................................................................. 29 (p) Disclosure Generally......................................................................... 29 13. Definitions..................................................................................... 30 (a) Definitions.................................................................................. 30 (b) Other Definitional Provisions................................................................ 35
iii EXHIBITS EXHIBIT A SCHEDULE OF PURCHASERS...................................... A-1 EXHIBIT B CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES A PREFERRED STOCK OF IFX CORPORATION....................... B-1 EXHIBIT C SCHEDULE OF EXCEPTIONS..................................... C-1 EXHIBIT D FORM OF OPINION OF COMPANY COUNSEL......................... D-1 EXHIBIT E FORM OF STOCKHOLDERS AGREEMENT............................. E-1 EXHIBIT F FORM OF REGISTRATION RIGHTS AGREEMENT...................... F-1 EXHIBIT G FORM OF COMMITMENT LETTER.................................. G-1
iv IFX CORPORATION PURCHASE AGREEMENT This Purchase Agreement is made and entered into as of the 15 day of June, 2000, by and among IFX Corporation, a Delaware corporation (the "Company"), and ------- each Person listed on the Schedule of Purchasers attached as Exhibit A hereto --------- (the "Schedule of Purchasers") who executes this Agreement as a Purchaser (such ---------------------- Persons are referred to in this Agreement, collectively, as the "Purchasers" and ---------- individually, as a "Purchaser"). Unless defined elsewhere herein, capitalized --------- and other defined terms shall have the meanings specified in Section 13. ---------- RECITALS The Company desires to sell to the Purchasers, and the Purchasers desire to purchase from the Company such number of shares of the Series A Convertible Preferred Stock determined in accordance with Section 2 and 3 hereof for a total aggregate purchase price for all shares of Series A Preferred Stock purchased hereunder equal to Twenty Five Million Dollars ($25,000,000) to be purchased in two installments consisting of an initial investment of $14,900,000 (the "Initial Share Aggregate Purchase Price") at the Initial Closing (as defined below) and, subject to the terms and conditions herein, an additional investment of $10,100,000 (the "Additional Share Aggregate Purchase Price") at the Subsequent Closing (as defined below). The shares will constitute one hundred percent (100%) of all the issued and outstanding shares of the Series A Preferred Stock of the Company as of the date of the final closing thereof, all on the terms and conditions set forth herein. AGREEMENT In consideration of the premises and the mutual covenants, agreements, hereinafter set forth, the parties to this Agreement agree as follows: 1. Authorization of the Securities; Nature of Agreement. ---------------------------------------------------- (a) Series A Preferred Stock. The Company has authorized the issuance ------------------------ and sale pursuant to the terms and conditions of this Agreement of up to 2,030,869 shares of its Preferred Stock, $1.00 par value per share, to be designated as Class I Series A Convertible Preferred Stock ("Class I Preferred") or Class II Series A Preferred Stock ("Class II Preferred" and together with the Class I Preferred, the "Series A Preferred Stock"), as provided herein. The shares of Series A Preferred Stock have all of the rights, preferences, privileges and restrictions set forth in the Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Rights of Series A Convertible Preferred Stock of IFX Corporation (the "Certificate"), a copy of which, in the form to be filed with the Secretary of State of the State of Delaware, is attached hereto as Exhibit B hereto. Upon issuance, Shares of Series A Preferred Stock shall be - --------- designated either Class I Preferred or Class II Preferred as provided in this Agreement. (b) Nature of Agreement. This Agreement insofar as it relates ------------------- to the purchase of a particular number of the Series A Preferred Stock by any Purchaser is a separate agreement between that Purchaser and the Company. But this Agreement insofar as it relates to the rights, duties and remedies of the Company and the Purchasers, from and after the Closing, shall be deemed to be one Agreement. 2. Initial Sale and Purchase of Series A Preferred Stock. Subject to the ----------------------------------------------------- terms and conditions set forth in this Agreement, the Company agrees to sell to the Purchasers, and each of the Purchasers severally and not jointly agrees to purchase from the Company, the number of shares of Class I Preferred indicated as the Initial Shares opposite such Purchaser's name on the Schedule of Purchasers (the "Initial Shares") for a purchase price of Twelve and 31/00 Dollars ($12.31) per share (the "Initial Per Share Price"). The initial sale and purchase of the Series A Preferred Stock shall take place at the offices of Kaye, Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New York, New York 10022, at 10:00 a.m., New York City time, at a closing (the "Initial Closing") on the date hereof. At the Initial Closing, the Company will deliver to each Purchaser the Series A Preferred Stock to be purchased by such Purchasers in the form of a single certificate (or such greater number of certificates representing such shares as such Purchaser may request), each dated the date of the Initial Closing and registered in such Purchaser's name (or in the name of such Purchaser's nominee(s)), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price for such shares of Series A Preferred Stock. If at the Initial Closing, the Company shall fail to tender to any Purchaser the Series A Preferred Stock to be purchased by such Purchasers, or any of the conditions specified in Section 7 shall not have been fulfilled to the satisfaction of such Purchaser, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any other rights such Purchaser may have by reason of such failure or such nonfulfillment. 3. Subsequent Sale and Purchase of Preferred Stock. Subject to the terms ----------------------------------------------- and conditions set forth in this Agreement, including, among other things, receipt of HSR Approval, the Company agrees to sell to the Purchasers, and each of the Purchasers severally and not jointly agrees to purchase from the Company, such Purchaser's pro rata portion (based on the number of Initial Shares purchased) of the number of shares of Class II Preferred (the "Additional Shares") and for a per share price (the "Closing Per Share Price") determined as follows: (a) If the Average Closing Price (as defined below) is less than or equal to the Initial Per Share Price, then (i) the Closing Per Share Price shall equal the Initial Per Share Price and (ii) the total number of Additional Shares shall equal the Additional Share Aggregate Purchase Price divided by such Closing Per Share Price. -2- (b) If the Average Closing Price is greater than the Initial Per Share Price but less than $14.29, then (i) the Closing Per Share Price shall equal the Average Closing Price and (ii) the total number of Additional Shares shall equal the Additional Share Aggregate Purchase Price divided by such Closing Per Share Price. (c) If the Average Closing Price is greater than or equal to $14.29, then (i) the Closing Per Share Price shall equal $18.74 and (ii) the total number of Additional Shares shall equal 539,077 such that the weighted average price per share of all shares purchased of the Initial Closing and the Subsequent Closing shall be $14.29. (d) The "Average Closing Price" shall mean the average of the closing prices per share of the Common Stock as reported on the NASDAQ Small Cap Market and published in The Wall Street Journal for the period of five (5) consecutive ----------------------- trading days ending with (and including) the trading day immediately preceding the Subsequent Closing. The purchase and sale of such Additional Shares shall take place at the offices of Kaye, Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New York, New York 10022, at 10:00 a.m. New York City time, at a closing (the "Subsequent Closing" and together with the Initial Closing, each a "Closing") to be held as soon as practicable, but not more than ten (10) business days, following receipt of HSR Approval. At the Subsequent Closing, the Company will deliver to each Purchaser the Series A Preferred Stock to be purchased by such Purchasers in the form of a single certificate (or such greater number of certificates representing such shares as such Purchaser may request), each dated the date of the Subsequent Closing and registered in such Purchaser's name (or in the name of such Purchaser's nominee(s)), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price for such shares of Series A Preferred Stock. If at the Subsequent Closing, the Company shall fail to tender to any Purchaser the Series A Preferred Stock to be purchased by such Purchasers, or any of the conditions specified in Section 7 shall not have been fulfilled to the satisfaction of such Purchaser, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any other rights such Purchaser may have be reason of such failure or such nonfulfillment. 4. Representations and Warranties of the Company. Subject to the --------------------------------------------- exceptions set forth in the Schedule of Exceptions attached as Exhibit C hereto --------- (the "Schedule of Exceptions"), the Company represents and warrants to each of the Purchasers that: (a) Organization and Good Standing. ------------------------------ (i) The Company and each of its Subsidiaries is an entity duly organized and validly existing under and by virtue of the laws of its state or country of incorporation and is in good standing under such laws (to the extent the concept of good standing is recognized under the laws of such jurisdictions). The Company and each of its Subsidiaries is qualified, licensed or domesticated as a foreign corporation in all -3- jurisdictions where the failure to be so qualified, licensed or domesticated would have a Material Adverse Effect. The Company and each of its Subsidiaries has full power and authority (corporate and other) to own, lease and operate its properties and assets and to operate the Business as currently being operated. (ii) Except as set forth on the Schedule of Exceptions, the minute books of the Company and each of its Subsidiaries, as previously made available to the Purchasers, contain accurate records of all meetings of and resolutions of, or written consents by, its shareholders and its board of directors (or committees thereof) since the date of its incorporation. (b) Authorization. The Company has all requisite right, power and ------------- authority (corporate or otherwise) to execute and deliver this Agreement and each of the other agreements and instruments referred to herein to be entered into by the Company at or prior to a Closing (including the Certificate) in connection with the consummation of the transactions contemplated by this Agreement (the "Other Agreements") and to perform its obligations and consummate all of the transactions contemplated hereunder and thereunder, including the sale and issuance of the shares of Series A Preferred Stock to be purchased by each Purchaser at the Initial Closing and Subsequent Closing. All corporate proceedings have been taken and all corporate authorizations have been secured which are necessary on the part of the Company and each of its Subsidiaries to authorize the execution, delivery and performance of this Agreement and each of the Other Agreements. (i) This Agreement has been duly executed and delivered and constitutes, and each of the Other Agreements when executed and delivered by the Company, will constitute, legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency or other similar laws affecting the enforceability of creditors' rights generally and court decisions with respect thereto, and the discretion of courts in granting equitable remedies. (ii) The shares of the Series A Preferred Stock to be purchased by each Purchaser at the Initial Closing and Subsequent Closing have been duly authorized and, when delivered, will be duly and validly issued and outstanding, fully paid and nonassessable, and will be free of Encumbrances. The Common Stock of the Company issuable upon conversion of the Series A Preferred Stock (the "Conversion Shares") (i) has been duly authorized, (ii) has been reserved for issuance upon conversion of the Series A Preferred Stock, and (iii) when issued, will be duly and validly issued and outstanding, fully paid and nonassessable and will be free of Encumbrances. (c) Capital Stock. ------------- (i) (A) On the date hereof, the authorized capital stock of the Company consists of (1) 50,000,000 shares of Common Stock, par value $.02 per share (the "Common Stock"), of which 13,296,455 shares of Common Stock are ------------ issued and -4- outstanding, and (2) 10,000,000 shares of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of which 2,030,869 shares of Preferred Stock will --------------- have been designated Series A Preferred Stock and none of which shares of Preferred Stock are issued and outstanding; and (B) immediately after the Initial Closing, the authorized capital of the Company will consist of (1) 50,000,000 shares of Common Stock, of which 13,296,455 shares of Common Stock will be issued and outstanding, and (2) 10,000,000 shares of Preferred Stock, of which 2,030,869 shares of Preferred Stock will have been designated Series A Preferred Stock and of which 1,210,398 shares of Series A Preferred Stock will be issued and outstanding. (ii) Except as set forth in the Schedule of Exceptions, the Company has not (A) issued or granted, (B) agreed to issue or grant, or (C) caused or permitted any of its Subsidiaries to issue or grant, any option, warrant, right or other Convertible Security which affords any Person the right to purchase or otherwise acquire any shares of the Common Stock or the Series A Preferred Stock, or any other security of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to purchase or otherwise acquire or retire any shares of its securities. (iii) All of the issued and outstanding securities of the Company and its Subsidiaries have been duly authorized and validly issued, are fully paid, nonassessable and free of preemptive rights (other than those preemptive rights set forth in the Schedule of Exceptions) and other Encumbrances, and were issued in compliance with all Applicable Laws, including those regulating the offer, sale or issuance of securities. (iv) Except as set forth in the Schedule of Exceptions, no Person has any rights of first refusal or similar rights or any preemptive rights in connection with the issuance of the shares of Series A Preferred Stock or Conversion Shares, or with respect to any future offer, sale or issuance of securities by the Company, any of its Subsidiaries or any of its stockholders, other than as provided in this Agreement or after the Closings, the Registration Rights Agreement, the Stockholders Agreement or the Certificate. (v) The Schedule of Exceptions sets forth a true and correct list of (1) to the knowledge of the Company, each of the Company's shareholders who owns, of record or beneficially, more than 5% of the Common Stock on a Fully Diluted Basis, indicating the number and class of shares owned by each shareholder, and such shareholder's percentage interest in the Company and percentage interest in the Common Stock on a Fully Diluted Basis, and (2) each of the holders of Convertible Securities, the number and type of Convertible Securities owned by such holder and to the knowledge of the Company, such holder's percentage interest in the Company and percentage interest in the Common Stock on a Fully Diluted Basis. (vi) True and correct copies of all documents relating to the issuance and terms of all outstanding shares of capital stock and other equity securities of -5- the Company and all Convertible Securities of the Company issued after November 10, 1998 have been provided to the Purchasers. Except as set forth in the Schedule of Exceptions, each option issued to purchase capital stock or other equity securities of the Company granted under the Stock Option Plan or otherwise was granted pursuant to an option agreement in substantially the form provided to the Purchasers. (d) Subsidiaries. ------------ (i) The name of each Subsidiary of the Company, the jurisdiction of its incorporation and the ownership of capital stock of its shareholders are listed in the Schedule of Exceptions. Except as set forth on the Schedule of Exceptions, all of the issued and outstanding shares of capital stock of each Subsidiary are 100% owned, beneficially and of record, by the Company (other than a single share (if any) of such Subsidiary held by a nominee of the Company in order to comply with Applicable Law), are validly issued, fully paid and nonassessable, and free from Encumbrances. (ii) Except for the capital stock or other securities of the Subsidiaries listed on the Schedule of Exceptions, the Company does not own, directly or indirectly, beneficially or of record, or have any obligations to purchase or otherwise acquire, any capital stock or other securities of any Person. Except as set forth on the Schedule of Exceptions, none of the Subsidiaries owns, directly or indirectly, beneficially or of record, or has any obligation to acquire any capital stock or other securities of any Person. (e) Compliance With Material Instruments. Except as set forth on the ------------------------------------ Schedule of Exceptions, the Company and each Subsidiary is not in violation of (i) any Applicable Law, (ii) any term of its Certificate of Incorporation or Bylaws (or equivalent documents in its jurisdiction of organization), or (iii) any Contract to which it is subject and which is material to the Business (collectively, the "Material Instruments"). The execution and delivery by the Company of this Agreement and the Other Agreements, the performance by the Company of its obligations hereunder and thereunder and the consummation by the Company of the transactions contemplated hereby and thereby, including the issuance and sale of the Series A Preferred Stock, the issuance of the Conversion Shares and the taking of any other action contemplated by this Agreement or the Other Agreements, will not (i) result in (A) any violation of any Applicable Law, or (B) any violation of any term of the Company's or any of its Subsidiaries' Certificate of Incorporation or Bylaws (or equivalent documents), or (C) any violation of or any conflict with or a default (with or without notice, lapse of time or both) under any of the Material Instruments, which violation, conflict or default might reasonably be expected to materially adversely affect the ability of the Company or any of its Subsidiaries to satisfy its obligations under this Agreement, any of the Other Agreements or any of the Material Instruments, (ii) accelerate or constitute an event entitling the holder of any indebtedness of the Company or any of its Subsidiaries to accelerate the maturity of any such indebtedness or to increase the rate of interest presently in effect with respect to such indebtedness, or (iii) result in the creation of any Encumbrance upon any of the material -6- properties or assets of the Company or any of its Subsidiaries. The performance by the Company or any of its Subsidiaries of its obligations and the enforcement of its rights under the Material Instruments will not have a Material Adverse Effect. (f) Good Title. Except as set forth on the Schedule of Exceptions, ---------- the Company and each of its Subsidiaries has good title to, a valid license to, or a valid leasehold interest in, the properties and assets used by it, in each case free and clear of all Encumbrances, except liens for current property taxes not yet due and payable and any immaterial workmen's, repairmen's, warehouseman's and carriers' liens arising in the ordinary course of business. The buildings, equipment and other tangible assets of the Company and each of its Subsidiaries are in all material respects in good operating condition and repair, free from any known defects and are usable in the ordinary course of the Business; and the Company and each of its Subsidiaries owns, or has a valid leasehold interest in or license to use, all assets necessary for the conduct of the Business as presently conducted. (g) Litigation. ---------- (i) Except as set forth on the Schedule of Exceptions, there are no actions, proceedings, investigations (civil, criminal, regulatory or otherwise), arbitrations, claims, demands or grievances ("Actions") pending ------- against the Company or any Subsidiary (or, to the best knowledge of the Company, any basis therefor or threat thereof). (ii) There are no judgments unsatisfied against the Company or any Subsidiary or consent decrees or injunctions to which the Company, any Subsidiary or any assets of the Business are subject. (h) Tax Matters. Except as set forth in the Schedule of Exceptions, ----------- the Company and each of its Subsidiaries (i) has timely filed (including extensions) all Tax returns that are required to have been filed by it with all appropriate Governmental Authorities (and all such Tax returns are true, complete and correct in all material respects), (ii) has timely paid all Taxes owed by it or withheld and remitted to the appropriate Governmental Authority all Taxes which it is obligated to withhold and remit from amounts owing to any employee (including social security taxes), creditor, customer or third party, and (iii) has not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. The assessment of any additional Taxes for periods for which returns have been filed is not expected to exceed the recorded liability therefor, and there are no material unresolved questions or claims concerning the Tax liability of the Company or any Subsidiary. There is no pending dispute with, or notice from, any taxing authority relating to any of the Tax returns which, if determined adversely to the Company or any Subsidiary, would result in the assertion by any taxing authority of any valid deficiency in a material amount for Taxes, and to the knowledge of the Company, there is no proposed liability for a deficiency in any Tax to be imposed upon the properties or assets of the Company, the -7- Business or any Subsidiary. There are no federal, state, local or foreign Tax Encumbrances on any asset of the Company, the Business or any Subsidiary (other than Encumbrances for Taxes not yet due and payable). (i) Registration Rights. Except as set forth in the Schedule of ------------------- Exceptions and the Registration Rights Agreement, the Company is not a party to any agreement or commitment which obligates the Company to register under the Securities Act of 1933, as amended (the "Securities Act"), or any other securities law of any jurisdiction, any of its presently outstanding securities or any of its securities which may hereafter be issued. (j) Offering. Subject to the accuracy of the Purchasers' -------- representations in Section 5 of this Agreement, the offer, issuance and sale of the Series A Preferred Stock and the Conversion Shares constitute, and will constitute, transactions exempt from the registration and prospectus delivery requirements of Section 5 of the Securities Act and analogous provisions of the Applicable Laws of all other jurisdictions, and the Company has obtained (or is exempt from the requirement to obtain) all qualifications, permits and other consents required by all Applicable Laws governing the offer, sale or issuance of securities. (k) Insurance. The Schedule of Exceptions contains a true, complete --------- and correct list of all insurance policies covering the Business and the respective material assets of the Company and each Subsidiary. The Company and each Subsidiary maintains in full force and effect such insurance policies. Neither the Company nor any Subsidiary is in default with respect to any provision contained in any insurance policy. Neither the Company nor any Subsidiary has failed to give any notice under any insurance policy in due time. (l) Certain Transactions. Except as set forth in the Schedule of -------------------- Exceptions, neither the Company nor any of its Subsidiaries is indebted, either directly or indirectly, to any of the officers, directors, advisory board members or stockholders of the Company or any Subsidiary, or to any Affiliates of the foregoing, in any amount whatsoever, other than for payment of salary for services rendered and reasonable expenses; except as set forth on the Schedule of Exceptions, none of said officers, directors, advisory board members, stockholders and their respective Affiliates are indebted to the Company or any Subsidiary or, to the knowledge of the Company, have any direct or indirect ownership interest in, or any contractual relationship with, any Affiliates of the Company or any Subsidiary or with any Person with which the Company or any Subsidiary has a business relationship, or any Person which, directly or indirectly, competes with the Company or any Subsidiary. Except as set forth in the Schedule of Exceptions, no such officer, director, advisory board member or stockholder, nor any of their respective Affiliates, is, directly or indirectly, a party to or otherwise an interested party with respect to any contract, agreement, arrangement or understanding with the Company or any Subsidiary other than agreements for the issuance of stock options to any such Person under the Stock Option Plan. -8- (m) Contracts. --------- (i) Except as expressly contemplated by this Agreement, or as set forth in the Schedule of Exceptions, the Company and each of its Subsidiaries is not, and as of each of the Closings the Company and each of its Subsidiaries will not be, a party to, or bound by, and none of their respective assets is or will be subject to, any written or oral agreement, contract, commitment, order, license, lease or other instrument and arrangement of the types described below (the "Contracts"): (A) any pension, profit sharing, stock option, employee stock purchase or other plan providing for deferred, incentive or other compensation to employees, any other employee benefit plan, or any contract with any labor union; (B) any contract for the employment or personal services of any officer, individual employee or other person or entity on a full-time, part-time, consulting, advisory or other basis providing annual compensation in excess of $125,000 or which, in any way, restricts or limits the right of the Company or any Subsidiary to terminate such contract at will; (C) any loan agreement, indenture, letter of credit, security agreement, mortgage, pledge agreement, deed of trust, bond, note, or other agreement relating to the borrowing of money in excess of $125,000 or to the mortgaging, pledging, transferring of a security interest, or otherwise placing an Encumbrance on any material asset or material group of assets (whether tangible or intangible) of the Company or any Subsidiary; (D) any guarantee of the payment or performance of any Person in excess of $125,000; any agreement to indemnify any Person or act as a surety for an amount in excess of $125,000; any other agreement to be contingently or secondarily liable for the obligations of any Person; or any "keep well" or similar credit support arrangements; (E) any lease or agreement under which it is the lessee of or holds or operates any property, real or personal, owned by any other party requiring annual payments in excess of $125,000; (F) any contract or agreement or group of related agreements with the same party or any group of affiliated parties which requires or may in the future require an aggregate payment by or to the Company or any Subsidiary in excess of $125,000; -9- (G) any contract or agreement prohibiting it from freely engaging in any business or competing anywhere in the world; (H) any material licenses, licensing arrangements and other similar contracts providing in whole or in part for the use by a third party of, or limiting the use by the Company or any Subsidiary of, any Intellectual Property; (I) any brokerage or finder's agreements relating to this Transaction; (J) any joint venture, partnership and similar contracts involving a sharing of profits or expenses (including joint development and joint marketing contracts); (K) any asset purchase agreements, stock purchase agreements and other acquisition or divestiture agreements, including any agreements relating to the sale, lease or disposal of any assets of the Company or any of its Subsidiaries for consideration in excess of $50,000 or involving continuing indemnity or other obligations; (L) any material sales agency, marketing or distributorship agreements; (M) any contracts which contain "take or pay" provisions; (N) [Intentionally omitted]; (O) any contracts, agreements or arrangements regarding pre-emptive rights, rights of first refusal, put or call rights or obligations, anti-dilution rights or other restrictions on or with respect to the issuance, sale or redemption of the capital stock of the Company or any of its Subsidiaries; (P) any contracts, agreements or arrangements regarding the rights, obligations, restrictions on or with respect to the voting of any of the capital stock of the Company or any of its Subsidiaries or the registration of such stock for offering to the public pursuant to the Securities Act; and/or (Q) any other contract, agreement or commitment not the subject matter of clauses (A) through (P) above which is or could be reasonably expected to be material to the Company, any Subsidiary or the Business. -10- (ii) The Company and each of its Subsidiaries has performed all obligations required to be performed by it to date and is not in material default under, or in material breach of, or in receipt of any claim of material default under or material breach of, any agreement to which it is a party or to which any of its assets is subject; the Company has no present expectation or intention of not fully performing, or of permitting any of its Subsidiaries not to perform fully, all such obligations; and the Company does not have any knowledge of any material breach or anticipated material breach by the other parties to any contract or commitment to which it or any of its Subsidiaries is a party or to which any of its or their assets is subject. (iii) To the knowledge of the Company, none of the officers of the Company or any Subsidiary is a party to any oral or written contract which prohibits, restricts or limits his or her performance of his or her duties or the fulfillment of his or her obligations as an employee and an officer of the Company or any Subsidiary. (iv) Each Contract is a legal, valid, binding and enforceable obligation of the Company or a Subsidiary, and to the knowledge of the Company, the other parties thereto, subject to applicable bankruptcy, insolvency, or other similar laws affecting the enforceability of creditors' rights generally and court decisions with respect thereto, and the discretion of courts in granting equitable remedies. Except as set forth in the Schedule of Exceptions, no Consent of any Person is required under any Contract as a result of or in connection with the execution and delivery by the Company or any of its Subsidiaries or the performance by the Company or any of its Subsidiaries of its obligations hereunder or under any of the Other Agreements or the consummation by the Company or any of its Subsidiaries of the transactions contemplated hereby or thereby. (n) Governmental Consents. Except with respect to HSR Approval, no --------------------- Governmental Approvals or Consents are required to be obtained under Applicable Law or the Certificate of Incorporation and By-Laws of the Company in connection with (i) the execution, delivery or performance by the Company of this Agreement or any of the Other Agreements or the consummation of any transaction contemplated hereby or thereby, and (ii) the carrying on of the Business as it is presently carried on and is contemplated to be carried on, except as have been obtained or accomplished and except for immaterial Governmental Approvals or Consents, except as set forth on the Schedule of Exceptions. All such Governmental Approvals and Consents have been duly obtained or accomplished and are in full force and effect and the Company and its Subsidiaries are in compliance in all material respects with each such Governmental Approval and Consent. (o) Officers, Employees and Labor. ----------------------------- (i) Except as set forth in the Schedule of Exceptions, the Company and each of its Subsidiaries has complied in all material respects with all Applicable Laws relating to the employment of labor, including provisions thereof relating to wages, hours, social welfare, equal opportunity and collective bargaining. The Company does not have any material labor relations problems. All the employment -11- agreements entered into between the Company or any Subsidiary, on the one hand, and their respective employees, on the other hand, are in full force and effect. (ii) The Schedule of Exceptions contains a list of all officers of the Company and each of its Subsidiaries and all other current employees and consultants whose current annual salary or rate of compensation (including bonuses, commissions and inventive compensation) is $125,000 or more, together with their current job titles or relationship to the Company or its Subsidiaries. None of the Persons referred to above, nor any other employee or consultant of the Company and its Subsidiaries, has notified the Company or such Subsidiary that such Person will cancel or otherwise terminate such Person's relationship with the Company or such Subsidiary, or is being terminated by the Company or such Subsidiary. (iii) To the Company's knowledge, none of the officers or employees of the Company or any of its Subsidiaries is in breach of any covenant or agreement with any previous employer or other Person with regard to (A) restrictions on competition with the business of such previous employer or other Person, (B) solicitation of the employees of such previous employer or other Persons, or (C) non-disclosure of the confidential or proprietary information of such previous employer or other Person. (iv) Except as set forth on the Schedule of Exceptions, the Company and its Subsidiaries do not have any Benefit Plans. The Company has delivered to the Purchasers true, correct and complete copies of all documents, summary plan descriptions, insurance contracts, third party administration contracts and all other documentation created to embody all Benefit Plans, plus descriptions of any Benefit Plans that have not been reduced to writing. (v) Except as set forth on the Schedule of Exceptions and for required contributions or benefit accruals for the current plan year, no material liability has been or is expected to be incurred by the Company under or pursuant to any Applicable Law relating to Benefit Plans and, to the best knowledge of the Company, no event, transaction or condition has occurred or exists that could result in any such liability to the Company or any of its Subsidiaries or, following the Closing, the Company, its Subsidiaries, the Purchasers or any such Benefit Plan. (vi) Except as set forth on the Schedule of Exceptions, each of the Benefit Plans listed in the Schedule of Exceptions is and has at all times been in compliance in all material respects with all applicable provisions of Applicable Laws. (vii) Except as specifically set forth in the Schedule of Exceptions, the execution and performance of the transactions contemplated by this Agreement will not (either alone or upon the occurrence of any currently planned additional or subsequent event) constitute an event under any Benefit Plan or individual agreement that will or may result in any payment (whether of severance pay or otherwise), -12- acceleration, vesting or increase in material benefits with respect to any employee, former employee, consultant, agent or director of the Company or any Subsidiary. (viii) With respect to all Benefit Plans which are funded, or are required by Applicable Law to be funded, the present value of all accrued benefits (vested and non-vested) of each such Benefit Plan as of the Closing Date, will not exceed the fair market value of the assets of each such Benefit Plan as of the Closing Date. (p) Compliance with Laws. Except as set forth on the Schedule of -------------------- Exceptions, the Company and each of its Subsidiaries is not, in any material respects, in violation of any Applicable Laws and has not received notice of any such violation. (q) Intellectual Property. Except as set forth in the Schedule of --------------------- Exceptions, the Company owns free and clear of all Encumbrances, or possesses and is validly licensed under, all Intellectual Property material to the operation of the Business, as conducted in the past, as presently conducted and as contemplated to be conducted. Any such licenses are in full force and effect. No past, current, or planned activity, service or product of the Company or any Subsidiary infringes or conflicts with the Intellectual Property of any third party. The Company and its Subsidiaries have taken appropriate steps and measures to establish and preserve ownership of or right to use all Intellectual Property material to the operation of the Business. The Company owns all rights in and to any and all Intellectual Property used or planned to be used by the Company or any Subsidiary, or covering or embodied in any past, current or planned activity, service or product of the Company or any Subsidiary, which Intellectual Property was made, developed, conceived, created or written by any consultant retained, or any employee employed, by the Company or any Subsidiary. To the Company's knowledge, no former or current employee, and no former or current consultant, of the Company or any Subsidiary has any rights in any Intellectual Property made, developed, conceived, created or written by the aforesaid employee or consultant during the period of his retention by the Company or the Subsidiary which can be asserted against the Company or any Subsidiary. The Company owns, or has full and unrestricted rights to use, any and all domain names containing the word "Unete" and "Tutopia" (including the word ""Unete" or "Tutopia" in combination with any non-military extension, including Unete.com, Unete.net, Unete.org, Tutopia.com, Tutopia.net and Tutopia.org). The domain names Unete.com and Tutopia.com, do not and will not receive an amount of Internet traffic intended for any website or webpage of the Company that would have a Material Adverse Effect. Except as set forth on the Schedule of Exceptions, neither the Company nor any Subsidiary has knowledge of any Intellectual Property owned by the Company or any Subsidiary and material to the operation of the Business which is the subject of any Encumbrance or other agreement granting rights therein to any third party. Except as set forth on the Schedule of Exceptions, neither the Company nor any Subsidiary is obligated or under any liability whatsoever to make any payments by way of royalties, fees or otherwise to any owner, licensor of, or other claimant to, any Intellectual Property, with respect to the use thereof or in connection with the conduct of the Business, or otherwise. The Company and each of its Subsidiaries has taken reasonable steps to protect, maintain and safeguard the -13- Intellectual Property material to the Business, including any Intellectual Property for which improper or unauthorized disclosure would impair its value or validity, and has executed and has had executed appropriate nondisclosure and confidentiality agreements and made all appropriate filings and registrations in connection with the foregoing. Neither the Company nor any Subsidiary has knowledge of any infringement by any third party of any Intellectual Property of the Company or any Subsidiary. There has been no judgment, decree, injunction, rule, or order rendered by any Governmental Authority, and no claim made against the Company or any Subsidiary, asserting the invalidity, abuse, misuse or unenforceability of any Intellectual Property material to the operation of the Business, or that would limit, cancel, or question the validity of, or the rights of the Company or any Subsidiary in, any Intellectual Property material to the operation of the Business. (r) Environmental Matters. --------------------- (i) The Company has compiled in all material respects with all applicable Environmental Laws. There is no pending or, to the knowledge of the Company, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Authority, relating to any Environmental Law involving the Company or any of its Subsidiaries. (ii) Neither the Company, nor to the knowledge of the Company, any third party has released any Materials of Environmental Concern into the environment at any parcel of real property or any facility formerly or currently owned, leased, operated or controlled by the Company. The Company is not aware of any releases of Materials of Environmental Concern at parcels of real property or facilities other than those owned, leased, operated or controlled by the Company that could reasonably be expected to have an impact on the real property or facilities owned, leased, operated or controlled by the Company. (iii) Set forth in the Schedule of Exceptions is a list of all environmental reports, investigations and audits of which the Company is aware (whether conducted by or on behalf of the Company or a third party, and whether done at the initiative of the Company or directed by a Governmental Authority or other third party) issued or conducted during the five years preceding the date hereof relating to premises currently or previously owned, leased or operated by the Company or any of its Subsidiaries. Complete and accurate copies of each such report, or the results of each such investigation or audit, have been provided to the Purchasers. (s) Certain Practices. Neither the Company nor any Subsidiary (nor ----------------- any constituent corporation of any merger of which the Company or any Subsidiary is a surviving corporation, or other Person of which the Company or any Subsidiary is the surviving corporation) nor any of their respective officers, employees, directors, representatives or agents has, since the inception of the Business by the Company or any of its Subsidiaries (or their predecessors): (i) taken any action in furtherance of any boycott -14- not sanctioned by the United States; (ii) entered into any contract or agreement to conduct any transaction with any Governmental Authority, agent, representative or resident of, or any Person based or resident in, any of the following countries: Angola (UNITA); Burma (Myanmar); Cuba; Iran; Iraq; Libya; North Korea; Sudan; Syria; and the Federal Republic of Yugoslavia (Serbia and Montenegro); or (iii) knowingly offered, promised, authorized or made, directly or indirectly, (A) any unlawful payments under Applicable Laws, or (B) any payments or other inducements (whether or not unlawful), to any government official, including any official of an entity owned or controlled by a government, political party or official thereof or any candidate for political office, with the intent or purpose of: (1) influencing any act or decision of such official in his official capacity; (2) inducing such official to do or omit to do any act in violation of the lawful duty of such official; (3) receiving an improper advantage; or (4) inducing such official to use his influence with a Governmental Authority to affect or influence any act or decision of such Governmental Authority; in order to assist the Company or any Subsidiary in obtaining or retaining business for or with, or directing business to, any person. (t) Brokers. No finder, broker, agent, financial advisor or other ------- intermediary has acted on behalf of the Company or any of its Affiliates in connection with the offering of the Series A Preferred Stock or the negotiation or consummation of this Agreement or the Other Agreements or any of the transactions contemplated hereby or thereby. All such negotiations or the consummation of this Agreement or the Other Agreements or any of the transactions contemplated hereby or thereby will not give rise to any valid claim against the Company, any Subsidiary or any of the Purchasers for any brokerage or finder's commission, fee or similar compensation. (u) No Undisclosed Liabilities. Except as set forth on the Schedule -------------------------- of Exceptions or in the SEC Reports, neither the Company nor any Subsidiary has any liabilities, obligations, claims, commitments or debts of any nature, whether known or unknown, whether due or becoming due, or asserted or unasserted (whether fixed, accrued, absolute, contingent, secured or otherwise). The Schedule of Exceptions sets forth a true and complete schedule of accrued liabilities and future payments due with respect to any acquisitions by the Company or any Subsidiary of any equity securities or assets of any Person. (v) Disclosure. This Agreement (including the Schedules and Exhibits ---------- hereto) does not contain any untrue statement of any material fact or omits to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. To the Company's knowledge, there are no facts that, individually or in the aggregate, would have a Material Adverse Effect that have not been set forth in this Agreement (including the Schedule of Exceptions). (w) SEC Filings. Since January 1, 1997, the Company has timely filed ----------- all forms, reports and documents with the SEC required to be filed by it pursuant to the Federal securities laws and the rules and regulations of the SEC thereunder, all of which -15- complied in all material respects with all applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC thereunder. The above referenced forms, reports and documents of the Company are sometimes collectively referred to herein as the "SEC Reports." A true and complete list of the SEC Reports is set forth in the Schedule of Exceptions. All documents required to be filed as exhibits to the SEC Reports have been timely filed. None of the SEC Reports, including without limitation any financial statements or schedules included therein, at the time filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (x) Financial Statements. The consolidated balance sheets and the -------------------- related consolidated statements of income, stockholders' equity and cash flows (including the related notes thereto) of the Company and its Subsidiaries included in the SEC Reports complied as to form in all material respects with the applicable accounting requirements and published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP, applied on a basis consistent with prior periods except as otherwise noted therein, present fairly the consolidated financial position of the Company and its Subsidiaries as of their respective dates, and the consolidated results of their operations and their cash flows for the periods presented therein, and reflect all adjustments necessary for the fair presentation of results for the periods presented except as set forth on the Schedule of Exceptions. (y) Availability and Transfer of Foreign Currency. All requisite --------------------------------------------- foreign exchange control approvals and other authorizations, if any, by any Governmental Authority have been validly obtained and are in full force and effect to assure: (a) the ability of the Company and its Subsidiaries to make any and all payments necessary to (i) each Purchaser for dividend payments on the Common Stock and the Series A Preferred Stock, or (ii) any other party in order to conduct the Business; (b) the ability of the Company's Subsidiaries to make any and all payments of dividends and other distributions to the Company and any and all other intercompany payments to or from the Company; and (c) the availability of dollars to enable each Purchaser to convert its investment to dollars, if necessary, if such Purchaser liquidates its investment in the Series A Preferred Stock or the Common Stock. (z) Absence of Changes. Except as set forth in the Schedule of ------------------ Exceptions, since June 30, 1999, neither the Company nor any Subsidiary has: (i) suffered any Material Adverse Effect; (ii) incurred, assumed, guaranteed or discharged any debt, claim, commitment, obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due (including any indebtedness for borrowed money), in excess of $100,000, individually or in the aggregate; -16- (iii) mortgaged, pledged or subjected to any other Encumbrance, any material piece of property, business or assets, tangible or intangible; (iv) sold, transferred, leased to others or otherwise disposed of any of the assets of the Business, in excess of $100,000, individually or in the aggregate, or canceled or compromised any debt, claim, commitment, liability or obligation, or waived or released any right of substantial value, involving an amount in excess of $100,000, individually or in the aggregate; (v) received any written notice of termination of any Contract with required payments thereunder in excess of $100,000; (vi) suffered any damage, destruction or loss (whether or not covered by insurance) to property, in excess of $100,000, individually or in the aggregate; (vii) transferred or granted any rights under, or entered into any settlement regarding the breach, misappropriation, infringement or violation of, any Intellectual Property, or modified any existing rights with respect thereto in a manner involving payments by or to the Business in excess of $100,000, individually or $100,000 in the aggregate; (viii) with respect to amounts in excess of $25,000 per year, made any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or paid or agreed or made any enforceable oral promise to pay, conditionally or otherwise, any bonus, incentive, retention or other compensation, retirement, welfare, fringe or severance benefit or vacation pay, to or in respect of any employee, distributor or agent; (ix) made any change in its accounting, auditing or tax methods, practices or principles; (x) encountered any labor union organizing activity, had any actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or had any material and adverse change in its relations with its employees, distributors, agents, customers or suppliers; (xi) entered into any Contract, involving an amount per year in excess of $100,000, individually or in the aggregate, or paid or agreed to pay any brokerage or finder's fee, or incurred any severance pay obligations by reason of, this Agreement or any of the transactions contemplated hereby; (xii) made any grant of credit to any customer or distributor on terms or in amounts materially more favorable than had been extended to that customer or distributor in the past; or -17- (xiii) taken any action or omitted to take any action that has resulted or could reasonably be expected to result in the occurrence of any of the foregoing. (aa) Real Property Holding Company. The Company is not a real ----------------------------- property holding company within the meaning of Section 897(c)(2) of the United States Internal Revenue Code of 1986, as amended. (bb) Investment Company Act. The Company is not, nor is it directly or ---------------------- indirectly controlled by or acting on behalf of, any Person that is an "investment company" within the meaning of the United States Investment Company Act of 1940, as amended. (cc) Subchapter S. The Company has not elected to be treated as a ------------ Subchapter S corporation or a collapsible corporation pursuant to Section 1362(a) or Section 341(f) of the United States Internal Revenue Code of 1986, as amended. (dd) State Takeover Statutes. The Board of Directors of the Company ----------------------- has approved this Agreement, the Other Agreements and the transactions contemplated hereby and thereby and the provisions of any "fair price," "moratorium," "control share," "interested stockholders," "affiliated transaction" or other anti-takeover statute or regulation, and any antitakeover or other restrictive provisions of the Company's Certificate of Incorporation are not applicable to the transactions contemplated by this Agreement or the Other Agreements. 5. Representations and Warranties of the Purchasers. Each Purchaser ------------------------------------------------ severally (and not jointly) represents and warrants to the Company that: (a) Investment Intent. The shares of Series A Preferred Stock to be ----------------- purchased by and issued to the Purchaser pursuant to this Agreement are being acquired by the Purchaser solely for its own account, for investment purposes only, and with no present intention of distributing, selling or otherwise disposing of them. (b) Sophistication. Such Purchaser is able to bear the economic risk -------------- of an investment in shares of the Series A Preferred Stock to be purchased by it pursuant to this Agreement and can afford to sustain a total loss of such investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the proposed investment and therefore has the capacity to protect its own interests in connection with the purchase of its respective shares of Series A Preferred Stock. (c) Illiquidity. Such Purchaser understands that there is no public ----------- market for the shares of Series A Preferred Stock to be purchased by it and that there may never be a public market for such stock, and that even if a market develops for such stock such Purchaser may have to bear the risk of its investment in such stock for a substantial period of time. -18- (d) Accredited Investor. Such Purchaser is an "accredited investor" ------------------- within the meaning of Regulation D promulgated under the Securities Act. In addition (but without limiting the effect of the Company's representations and warranties contained herein), such Purchaser has received such information as it considers necessary or appropriate for deciding whether to purchase its respective shares of Series A Preferred Stock. (e) Brokers. No finder, broker, agent, financial advisor or other ------- intermediary has acted on behalf of such Purchaser in connection with the transactions contemplated by this Agreement or the Other Agreements. (f) Requisite Power and Authority. Each Purchaser has all necessary ----------------------------- power and authority to execute and deliver this Agreement and the Other Agreements to which it is a party and to carry out their provisions. This Agreement has been duly executed and delivered by each Purchaser, and each of the Other Agreements when executed and delivered by each Purchaser who is a party thereto, will constitute the legal, valid and binding obligations of such Purchaser, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, or other similar laws affecting the enforceability of creditors' rights generally and court decisions with respect thereto, and the discretion of courts in granting equitable remedies. (g) No Conflict. The execution and delivery by each Purchaser of this ----------- Agreement and the consummation of the transactions contemplated hereby by each Purchaser will not result in any violation of or default under, any provision of the organizational documents of such Purchaser, any contract to which such Purchaser is a party or any applicable law, rule or regulation, which violation or default could reasonably be expected to (i) affect the validity of this Agreement or any agreement entered into pursuant hereto, (ii) affect in any material respect any action taken or to be taken by such Purchaser pursuant to this Agreement or any agreement entered into pursuant hereto or (iii) have a material adverse effect on the properties, assets, business or operations of such Purchaser. 6. Covenants. --------- (a) Pre-Closing Actions. As promptly as practicable, each of the parties to this Agreement will: (i) use commercially reasonable efforts to take all actions required of such party to do all other things reasonably necessary, proper or advisable to consummate the transactions contemplated hereby by the date of the respective Closing, (ii) file or supply, or cause to be filed or supplied, all applications, notifications and information required to be filed or supplied by such party pursuant to Applicable Law in connection with this Agreement, the issuance of the shares of Series A Preferred Stock pursuant hereto and the consummation of the other transactions contemplated hereby and by the Other Agreements; (iii) use all reasonable efforts to obtain, or cause to be obtained, all Consents (including all Governmental Approvals and any Consents required under any contract) necessary to be obtained by such party in order to consummate the transactions -19- contemplated pursuant to this Agreement and the Other Agreements; and (iv) coordinate and cooperate with the other parties in exchanging such information and supplying such assistance as may be reasonably requested by the other parties in connection with any filings and other actions to be made or taken in order to consummate the transactions contemplated pursuant to this Agreement and by the Other Agreements. (b) Compliance with the Hart-Scott-Rodino Antitrust Improvements Act ---------------------------------------------------------------- of 1976. As promptly as practicable after the execution of this Agreement, the - ------- Company and the Purchasers shall file notifications requesting early termination of the waiting period under and in accordance with the Hart-Scott-Rodino Act of 1976, as amended (the "HSR Act") in connection with the consummation of the sale of the Additional Shares contemplated herein and the acquisition by UBS of preferred stock of Tutopia.com, Inc. The parties shall promptly respond to any inquiries received from the Federal Trade Commission or the Antitrust Division of the Department of Justice in connection with such filings and shall cooperate and use their reasonable best efforts to cause the expiration or early termination of the waiting period in connection therewith ("HSR Approval"). The parties acknowledge that such filings and the HSR Approval pursuant thereto shall be deemed a condition precedent to the consummation of the sale of the Additional Shares in addition to the conditions precedent applicable thereto set forth in Section 7 and elsewhere in this Agreement. The costs and expenses thereof (including filing fees) shall be borne by the Company. (c) Covenants Pending Subsequent Closing. Pending the Subsequent ------------------------------------ Closing, neither the Company nor any Subsidiary will, without the Purchasers' prior written consent, take any action which would result in any of the representations or warranties made by the Company in this Agreement not being true in any material respect at and as of the time immediately after such action, or in any of the covenants contained in this Agreement becoming incapable of performance. The Company will promptly advise the Purchasers of any action or event of which it becomes aware which has the effect of making incorrect any of such representations or warranties in any material respect or which has the effect of rendering any of such covenants incapable of performance. (d) No Solicitation. Except as otherwise expressly authorized in this --------------- Agreement, from the date hereof to the Subsequent Closing, the Company and its Subsidiaries shall (and shall cause their respective employees, directors, agents and Affiliates to) immediately suspend any existing negotiations or discussions relating to any sale or other transfer of actual or beneficial ownership of the Company, any shares of capital stock of the Company or any Subsidiary, the Business or any of the Company's or any Subsidiary's assets (other than in the ordinary course of business) (collectively, a "Transaction"), and the Company and its Subsidiaries shall not, and shall cause their respective employees, directors, agents and Affiliates to not, (a) solicit any proposals or offers relating to a Transaction, or (b) negotiate or discuss with any third party concerning any proposal or offer for a Transaction. -20- (e) Books and Records. The Company shall, and shall cause each ----------------- Subsidiary to, maintain books and records accurately disclosing all payments made. (f) Post-Closing Covenants. Until the consummation of a Qualified ---------------------- Public Offering, the Company will deliver to each holder of at least 100,000 shares of Series A Preferred Stock and/or Conversion Shares: (i) as soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Company, a copy of the audited consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year and the related audited statements of consolidated income, stockholders' equity and changes in financial position of the Company and its Subsidiaries for such fiscal year, setting forth in each case (after the first full fiscal year of the Company) in comparative form the figures for the previous year which shall be prepared in accordance with GAAP applied consistently throughout the periods reflected therein and reported on without any qualification as to the scope of the audit by independent certified public accountants of nationally recognized standing; (ii) as soon as available but in any event within thirty (30) days after the end of each calendar month of the Company such monthly reports as are presented to management of the Company or any of its Subsidiaries. (iii) No later than thirty (30) days prior to the start of each fiscal year, an annual business plan setting forth the anticipated strategic business activities and goals of the Company and its Subsidiaries, including an expected annual budget and operating plan (containing projections of operating results) for the Company and its Subsidiaries. (iv) as soon as available, but in any event within forty-five (45) days after the end of each semi-annual fiscal period of the Company, an update to the monthly projections contained in the annual budget, operating plan and business plan furnished by the Company to the Purchasers pursuant to subsection (iii) above; (v) promptly upon receipt thereof, copies of all final reports submitted to the Company or any of its Subsidiaries by independent certified public accountants in connection with each annual, interim or special audit of the books of the Company or of any of its Subsidiaries made by such accountants, including, without limitation, any final comment letter submitted by such accountants to management in connection with their annual audit; (vi) promptly upon their becoming available, copies of all financial statements, reports, notices and proxy statements sent or made available generally by the Company to all of its security holders in their capacity as such or by any Subsidiary of the Company to its security holders, other than the Company, and of all regular and periodic reports and all final registration statements and final prospectuses, if -21- any, filed by the Company or any of its Subsidiaries with any securities exchange or with the SEC or any Governmental Authority succeeding to any of its functions; (vii) as soon as available, but in any event within thirty (30) days after the end of each month and within ten (10) days prior to each regularly scheduled meeting of the Board of Directors of the Company, a narrative report prepared by the Chief Operating Officer of the Company detailing the activities, business developments, operating results and marketing efforts of the Company and its Subsidiaries since the date of the previous such report delivered by the Company pursuant to this subsection (vii); and (viii) such other information reasonably requested by such Purchaser. (g) Inspection Rights. Until the consummation of a Qualified Public ----------------- Offer, each holder of at least 100,000 shares of Series A Preferred Stock and/or Conversion shares shall have the right, upon reasonable notice, to visit and inspect any of the properties of the Company or any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Company or any of its Subsidiaries with its directors, officers and employees, all at such reasonable times and as often as may be reasonably requested; provided, however, that the Company shall not be obligated to provide access to any information which it reasonably considers to be a trade secret or similar confidential information unless the recipient of such information executes a nondisclosure agreement in a form reasonably acceptable to the Company. (h) Post-Closing Covenant of Purchaser. Each Purchaser shall vote all ---------------------------------- of the Series A Preferred Stock or any Conversion owned by it in favor of the increase in the number of shares of Common Stock issuable under the 1998 Stock Option and Incentive Plan, as amended from 1,800,000 to 2,400,000 at the next meeting of the stockholders of the Company following the date hereof or by written consent, as the case may be. 7. Conditions to Obligations of the Purchasers. The obligation of each of ------------------------------------------- the Purchasers to purchase and pay for the Series A Preferred Stock which it has agreed to purchase at any Closing and the other obligations of each of the Purchasers under this Agreement are subject to the fulfillment at or prior to the respective Closing of the following conditions, any of which may be waived in writing in whole or in part by such Purchaser: (a) Representations and Warranties. On the date of the respective ------------------------------ Closing each of the representations and warranties of the Company set forth in this Agreement that is qualified as to materiality shall be true and correct in all respects and each such representation and warranty that is not so qualified shall be true and correct in all material respects in each case on the date hereof and at and as of the date of the respective -22- Closing with the same effect as though such representations and warranties had been made at and as of the date of the respective Closing. (b) Performance. The Company and each of its Subsidiaries shall have ----------- performed and complied in all material respects with all agreements and conditions contained herein required to be performed or complied with by it prior to or at the respective Closing. (c) Absence of Litigation. (i) The consummation of the transactions --------------------- contemplated hereby shall not have been restrained, enjoined or otherwise prohibited by any Applicable Law, including any order, injunction, decree or judgment of any court or other Governmental Authority; (ii) no court or other Governmental Authority shall have determined that any Applicable Law makes illegal the consummation of the transactions contemplated hereby and no Action with respect to the application of any such Applicable Law to such effect shall be pending or threatened; and (iii) no Action shall be pending or shall have been threatened which seeks to impose liability upon any of the Purchasers by reason of the consummation of the transactions contemplated by this Agreement. (d) Opinion of Counsel to the Company and Subsidiaries. The -------------------------------------------------- Purchasers shall each have received the written opinion of counsel for the Company, in form and substance satisfactory to the Purchasers dated and delivered as of the date of the applicable Closing, substantially identical in form and substance to Exhibit D hereto. --------- (e) Consents. The Company shall have obtained any and all Consents -------- and Governmental Approvals set forth in the Schedule of Exceptions, and shall have made any and all filings and declarations necessary or appropriate (A) for the consummation of the transactions contemplated by this Agreement and the Other Agreements, (B) pursuant to Applicable Law, and (C) pursuant to Contracts applicable to the Company in connection with the transactions contemplated by this Agreement and the Other Agreements. (f) Assignment of Intellectual Property. All the Intellectual ----------------------------------- Property set forth in the Schedule of Exceptions shall have been assigned or licensed, as applicable, to the Company pursuant to instruments in form and substance satisfactory to the Purchasers, and the written Consent of any third party necessary for any such assignment or license shall have been obtained. (g) Contemporaneous Transactions. Prior to or contemporaneously with ---------------------------- the respective Closing: (i) Each of the Stockholders Agreement and Registration Rights Agreement shall have been executed and delivered by each party named on the signature pages thereof; (ii) (A) The Company shall have sold to each Purchaser, and each of the Purchasers shall have purchased, the shares of Series A Preferred Stock to be -23- purchased at such Closing by such Purchaser under this Agreement, and (B) the Company shall have delivered to each Purchaser certificates representing such shares of Series A Preferred Stock, each registered in the name of such Purchaser or the name of its nominee(s). (iii) The Certificate in the form attached hereto as Exhibit B --------- hereto shall have been duly filed with the Secretary of State of the State of Delaware. The Certificate shall be in full force and effect as of the Initial Closing and shall not have been amended or modified. (iv) Each of the Company and Tutopia.com, Inc. shall have executed and delivered to the Purchasers the Commitment Letter. (v) The Subscription and Joint Venture Agreement, dated as of November 23, 1998, among the Company, Emerging Networks, Inc., International Technology Investments, LLC and Lee S. Casty, as amended by the First Amendment to Subscription and Joint Venture Agreement dated as of March 22, 2000 shall have been terminated and be of no further force or effect. (vi) With respect to the Subsequent Closing, the acquisition by UBS of preferred stock of Tutopia.com, Inc. contemplated by the Commitment Letter shall have been consummated on substantially the same terms as those outlined in the Commitment Letter. (h) Closing Papers. The Company shall have delivered to each of the -------------- Purchasers all of the following: (i) a certificate signed by the President and Chief Executive Officer of the Company, dated as of the date of the respective Closing, stating that (A) the person signing such certificate has made or has caused to be made such investigations as are necessary to permit him to certify the accuracy of the information set forth therein, (B) such certificate does not misstate any material fact and does not omit to state any fact necessary to make the certificate not misleading, and (C) the other conditions specified in this Section 7 have been satisfied; - --------- (ii) copies (certified by the President, Secretary or Assistant Secretary of the Company or, if required under Applicable Law, the applicable Governmental Authority) of the resolutions duly adopted by the Board of Directors of the Company authorizing the adoption of the Certificate and authorizing the execution, delivery and performance of this Agreement, the Other Agreements and all other agreements referred to in this Agreement as being executed at or prior to the Initial Closing; (iii) copies (certified by the Secretary or Assistant Secretary of the Company) of the Certificate of Incorporation and Bylaws (or equivalent documents) of -24- the Company and, each of the Subsidiaries listed on Schedule 7(h)(iii) hereto, ------------------ in each case as amended through the date of the respective Closing; and (iv) such other documents relating to the transactions contemplated by this Agreement as any Purchaser may reasonably request. (i) Absence of Material Adverse Effect. No event or series of events ---------------------------------- shall have occurred which has had or could reasonably be expected to have a Material Adverse Effect. (j) Proceedings. All corporate and other proceedings of the Company ----------- taken or to be taken in connection with the transactions contemplated hereby and by the Other Agreements to be consummated at the respective Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to each Purchaser. (k) Legends. (i) Each stock certificate issued by the Company to ------- stockholders party to the Stockholder Agreement or Registration Rights Agreement on or prior to the date of respective Closing shall have been stamped or otherwise imprinted with a legend in substantially the form provided in Section 5.12 of the Stockholders Agreement and Section 2 of the Registration Rights Agreement. (l) Private Equity Fee. At the time of each of the Initial Closing ------------------ and the Subsequent Closing, the Company shall have paid UBS Capital Americas III, L.P., a private equity fee of 3% of the purchase price of the Shares purchased in such Closing. (m) HSR Approval. In connection with the Subsequent Closing, the HSR ------------ Approval with respect to the sale of the Additional Shares shall have been obtained. 8. Conditions to the Obligations of the Company. The obligations of the -------------------------------------------- Company under this Agreement are subject to the fulfillment on or prior to the date of the respective Closing of the following conditions, any of which may be waived in writing, in whole or in part, by the Company: (a) Representations and Warranties. On the date of the respective ------------------------------ Closing, each of the representations and warranties of the Purchasers set forth in this Agreement shall be true and correct in all respects on the date hereof and at and as of the date of the respective Closing with the same effect as though such representations and warranties had been made at and as of the date of the respective Closing. (b) Performance. The Purchasers shall have performed and complied in ----------- all material respects with all agreements and conditions contained herein required to be performed by or complied with by them prior to the respective Closing. (c) HSR Approval. In connection with the Subsequent Closing, the HSR ------------ Approval with respect to the sale of the Additional Shares shall have been obtained. -25- 9. Survival. The representations and warranties of the Company set forth -------- in Sections 4(a), 4(b), 4(c), 4(d), 4(e), 4(h), 4(j), 4(o), 4(q), 4(t), 4(u) and 4(y) and shall survive the Closings indefinitely. All other representations and warranties of the Company contained herein shall expire at the second anniversary of the Subsequent Closing. The representations and warranties of the Purchasers contained herein shall survive the Subsequent Closing for a period of two years. All covenants and agreements contained herein shall survive the Closings indefinitely. 10. Termination. The obligations to purchase and sell Additional Shares ----------- pursuant to Section 3 may be terminated: (a) by mutual written consent of all of the parties hereto; (b) by any of the Purchasers by written notice to the Company if any of the conditions to the Subsequent Closing set forth in Section 7 shall not --------- have been fulfilled by 5:00 p.m. New York time on August 15, 2000, unless such failure shall be due to the failure of such Purchaser to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Subsequent Closing; or (c) by the Company or any of the Purchasers, by written notice to the other parties, if the HSR Approval with respect to the sale of the Additional Shares shall not have been obtained by 5:00 p.m. New York time on August 15, 2000, unless such failure shall be due in part to the failure of such party to perform or comply with its obligations under Section 6(b). 11. Effect of Termination. If the obligations to purchase and sell --------------------- Additional Shares pursuant to Section 3 are terminated pursuant to the provisions of Section 10, then Sections 3, 6(c), 6(d) and 6(e) of this Agreement shall become void and have no effect, without any liability to any person in respect hereof or of the transactions contemplated hereby on the part of any party hereto, or any of its directors, officers, employees, consultants, agents, representatives, advisers, stockholders or Affiliates except for any liability resulting from such party's breach or default under this Agreement. 12. Miscellaneous Provisions. ------------------------ (a) Acknowledgment. Each Purchaser acknowledges and agrees that it -------------- has, independently and without reliance upon any other Purchaser, made its own evaluation and decision to purchase the Series A Preferred Stock to be purchased by it pursuant to this Agreement. Each Purchaser further acknowledges that no other Purchaser has acted as an agent for such Purchaser or the Company in connection with the purchase of the shares of Series A Preferred Stock hereunder and will not be acting as an agent for such Purchaser in connection with monitoring its investment hereunder. -26- (b) Notices. All notices, requests, demands, approvals, consents, ------- waivers or other communications required or permitted to be given hereunder (each, a "Notice") shall be in writing and shall be (a) personally delivered, (b) transmitted by telecopy facsimile, provided that the original copy thereof also is sent by pre-paid, first class, registered or certified mail (return receipt requested) or by next-day or overnight mail (to any United States address), or by an internationally recognized express delivery service (to any foreign address), (c) sent by first class, registered or certified mail (return receipt requested) or by next-day or overnight mail (to any United States address), postage and charges prepaid, or (d) delivered by an internationally recognized express delivery service (to any foreign address), postage and charges prepaid: (i) if to any Purchaser, at the address and numbers set forth at the end of this Agreement, marked for attention as therein indicated; (ii) if to the Company, to: IFX Corporation 707 Skokie Boulevard Suite 580 Northbrook, Illinois 60062 Attention: Chief Executive Officer Telephone Number: 847-412-9411 Telecopy Number: 305-574-7867 With a copy to: Neal, Gerber & Eisenberg Two North LaSalle Street Chicago, Illinois 60602 Attention: Scott J. Bakal, Esq. Telephone Number: 312-269-8000 Telecopy Number: 312-269-1747 or, in each case, at such other address and numbers as may have been furnished in a Notice by such Person to the other parties. Any Notice shall be deemed effective or given upon receipt (or refusal of receipt). (c) Severability. Should any Section or any part of a Section within ------------ this Agreement be rendered void, invalid or unenforceable by any court of law for any reason, such invalidity or unenforceability shall not void or render invalid or unenforceable any other Section or part of a Section in this Agreement. (d) Governing Law. This Agreement shall be governed by and construed ------------- and enforced in accordance with the internal laws of the State of New York without regard to the principles of conflicts of law thereof. Each party hereto hereby -27- irrevocably submits to the nonexclusive jurisdiction of the courts of the State of New York and of the United States of America sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that the venue thereof may not be appropriate, that such suit, action or proceeding is improper or that this Agreement or any of the documents referred to in this Agreement may not be enforced in or by said courts, and each party hereto irrevocably agrees that all claims with respect to such suit, action or proceeding may be heard and determined in such a New York state or federal court. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party in the manner provided in Section 12(b) and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. (e) Publicity. Except as required by Applicable Law or the --------- requirements of any securities exchange or market (in which case the nature of the announcement shall be described to the other parties (and the other parties shall be allowed reasonable time to comment) prior to dissemination to the public), no party shall make any public announcement in respect of this Agreement or the transactions contemplated hereby without the prior written consent of the other parties. (f) Captions and Section Headings. Captions or section headings ----------------------------- contained in this Agreement are inserted as a matter of convenience and for reference purposes only, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof. (g) Amendments and Waivers. Neither this Agreement nor any term ---------------------- hereof, may be changed, waived, discharged or terminated orally or in writing, except that any term of this Agreement may be amended and the observance of any such term may be waived (either generally or in a particular instance and either retroactively or prospectively) with (but only with) the prior written consent of the Company and all the Purchasers; provided, however, that no such amendment or waiver shall extend to or affect any obligation not expressly waived or impair any right consequent therein. (h) Successors and Assigns. All rights, covenants and agreements of ---------------------- the parties contained in this Agreement shall, except as otherwise provided herein, be binding upon and inure to the benefit of their respective successors and assigns. This Agreement may not be assigned (by operation of law, contract or otherwise) by any party hereto; provided, however, that each Purchaser may assign or otherwise transfer its rights -28- and obligations hereunder to: (i) any Person who acquires shares of Series A Preferred Stock from any Purchaser or any successor or assign of any Purchaser; or (ii) any successor-in-interest to substantially all of such Purchaser's or successor's or assign's business (whether by stock sale, asset sale or otherwise). (i) Expenses. The Company agrees to pay the reasonable fees and -------- reimburse the reasonable out-of-pocket expenses, including legal and accounting fees and expenses, of the Purchasers, upon receipt of the bill therefor, in connection with the transactions contemplated by this Agreement and the Other Agreements. The Company agrees to reimburse reasonable travel and lodging expenses of the Purchasers in connection with attendance of the Purchasers' representatives at meetings of the Board of Directors of the Company and other visits to the Company associated with exercising or fulfilling any of its rights or obligations under this Agreement or the Other Agreements. (j) Entire Agreement. This Agreement (including the attached Exhibits ---------------- and Schedules) contains the entire agreement and understanding of the parties and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof. (k) Exhibits. The Exhibits and Schedules attached to this Agreement -------- hereby are incorporated into and made a part of this Agreement. (l) Further Assurances. Each party shall cooperate and take such ------------------ actions as may be reasonably requested by another party in order to carry out the provisions and purposes of this Agreement and the Other Agreements and the transactions contemplated hereby and thereby. (m) Condition to Effectiveness. This Agreement shall become effective -------------------------- only upon its execution and delivery by the Company and each Purchaser. (n) Counterparts. This Agreement may be executed (including by ------------ facsimile transmission) with counterpart signature pages or 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. (o) Attorneys' Fees. If any party initiates any legal action arising --------------- out of or in connection with this Agreement or any of the Other Agreements, the prevailing party in such legal action shall be entitled to recover from the other party all reasonable attorneys' fees, expert witness fees and expenses incurred by the prevailing party in connection therewith. (p) Disclosure Generally. The Schedule of Exceptions shall be -------------------- arranged in sections corresponding to the Sections contained in this Agreement, and the disclosures in any section of the Schedule of Exceptions shall qualify only (a) the corresponding section of this Agreement, and (b) other sections of Section 4 to the extent it is clear -29- (notwithstanding the absence of a specific cross-reference) from a reading of the exception that such exception is applicable to such other sections. The inclusion of any information in the Schedules shall not be deemed to be an admission or acknowledgment, in and of itself, that such information is material or has or would have a Material Adverse Effect, or is outside the ordinary course of business. 13. Definitions. ----------- (a) Definitions. For the purposes of this Agreement, the following ----------- terms shall have the meanings specified below: "Action" has the meaning set forth in Section 4(g)(i). ------ --------------- "Additional Share Aggregate Purchase Price" has the meaning set forth ----------------------------------------- the Recitals. "Additional Shares" has the meaning set forth in Section 3. ----------------- --------- "Affiliate" of a specified Person means (i) any Person that directly --------- or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person, or (ii) in the case of a natural Person, such Person's spouse, parent or lineal descendant (whether by blood or adoption and including stepchildren). "Control" (including the terms ------- "controlled by" and "under common control with") means the possession, directly ------------- ------------------------- or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise. "Agreement" shall mean this Agreement (including the Schedules and --------- Exhibits hereto), as amended, supplemented or modified from time to time in accordance with the provisions hereof. "Applicable Law" shall mean, with respect to any Person, any and all -------------- provisions of any constitution, treaty, statute, law, regulation, ordinance, code, rule, judgment, rule of common law, order, decree, award, injunction, Governmental Approval, concession, grant, franchise, license, agreement, directive, guideline, policy, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority, whether in effect as of the date hereof or thereafter and in each case as amended, applicable to such Person or its subsidiaries or their respective assets. "Average Closing Price" has the meaning set forth in Section 3. --------------------- --------- "Benefit Plan" shall mean any plan, agreement or arrangement, formal ------------ or informal, whether oral or written, whereby the Company or any Subsidiary provides any benefit to any present or former officer, director or employee, or dependent or beneficiary thereof, including any profit sharing, deferred compensation, stock option performance -30- stock, pension, death benefit or other fringe benefit, employee stock purchase, bonus, severance, retirement, health or insurance plan. "Board" shall mean the Board of Directors of the Company. ----- "Business" shall mean the business of the Company and each of -------- its Subsidiaries. "Certificate" has the meaning set forth in Section 1(a). ----------- ------------ "Closing(s)" has the meaning set forth in Section 3. ---------- --------- "Closing Per Share Price" has the meaning set forth in Section ----------------------- ------- 3. - - "Common Stock" has the meaning set in Section 4(c)(i). ------------ --------------- "Commitment Letter" shall mean the commitment letter and ----------------- attached term sheet relating to UBS' acquisition of preferred stock of Tutopia.com, Inc. in form and substance identical to Exhibit G hereto. --------- "Company" has the meaning set forth in the first paragraph ------- hereof. "Consent" shall mean any consent, approval, authorization, ------- waiver, permit, grant, franchise, concession, agreement, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority. "Contracts" has the meaning set forth in Section 4(m)(i). --------- --------------- "Contracts Schedule" has the meaning set forth in Section ------------------ ------- 4(m)(i). - ------- "Conversion Shares" has the meaning set forth in Section ----------------- ------- 4(c)(iv). - -------- "Convertible Securities" shall mean (i) any rights, options or ---------------------- warrants issued by the Company or any of its Subsidiaries to acquire Common Stock or any capital stock of the Company or any Subsidiary, including the shares of Series A Preferred Stock to be issued hereunder, and (ii) any notes, debentures, shares of preferred stock or other securities, options, warrants or rights issued by the Company or any of its Subsidiaries, which are convertible or exercisable into, or exchangeable for, Common Stock or any capital stock of the Company or any Subsidiary. "$" or "dollars" shall mean lawful money of the United States - ------- of America. "Encumbrance" shall mean any lien, encumbrance, hypothecation, ----------- right of others, proxy, voting trust or similar arrangement, pledge, security interest, collateral security agreement, limitations on voting rights, limitations on rights of ownership filed -31- with any Governmental Authority, claim, charge, equities, mortgage, pledge, objection, title defect, title retention agreement, option, restrictive covenant, restriction on transfer, right of first refusal, right of first offer, statutory or contractual preemptive right or any comparable interest or right created by or arising under Applicable Law, of any nature whatsoever. "Environmental Law" means any United States federal, state, ----------------- local or foreign law, statute, rule or regulation or the common law relating to the protection of human health or the environment, including, without limitation, CERCLA (as defined below), the United States federal Resource Conservation and Recovery Act of 1976 as amended (the "Recovery Act"), any statute, regulation or order pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous materials or substances, or solid or hazardous waste, including, without limitation, emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants, or chemicals; (v) the protection of wild life, marine life and wetlands, including, without limitation, all endangered and threatened species; (vi) storage tanks, vessels, abandoned or discarded barrels, containers and other closed receptacles; (vii) health and safety of employees and other persons; and (viii) manufacture, processing, use, distribution, treatment, storage, disposal, transportation or handling of pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste. As used herein, the terms "release" and "environment" has the meaning set forth in the United States federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"). "Fully Diluted Basis" shall mean, when used with respect to ------------------- outstanding shares of Common Stock, all shares of Common Stock which would be outstanding after giving effect to the transactions contemplated by this Agreement and assuming the exercise, conversion or exchange of all Convertible Securities. "GAAP" shall mean United States generally accepted accounting ---- principles consistently applied. "Governmental Approvals" shall mean any action, order, ---------------------- authorization, consent, approval, license, lease, waiver, franchise, concession, agreement, license, ruling, permit, tariff, rate, certification, exemption of, filing or registration by or with, or report or notice to, any Governmental Authority. "Governmental Authority" shall mean any nation or foreign or ---------------------- domestic government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including, without limitation, any government authority, agency, department, board, commission or instrumentality of the United States, any State of the United States -32- or any political subdivision thereof), or any tribunal or arbitrator(s) of competent jurisdiction, or any self-regulatory organization. "HSR Approval" has the meaning set forth in Section 6(b). ------------ ------------ "include", "includes", "included" and "including" shall be ------- -------- -------- --------- construed as if followed by the phrase "without being limited to". "Initial Share Aggregate Purchase Price" has the meaning set -------------------------------------- forth in the Recitals "Initial Shares" has the meaning set forth in Section 2. -------------- --------- "Initial Per Share Price" has the meaning set forth in Section ----------------------- ------- 2. - - "Intellectual Property" shall mean any and all worldwide, --------------------- international, U.S. and/or foreign, patents, all applications therefor and all reissues, reexaminations, continuations, continuations-in-part, divisions, and patent term extensions thereof, inventions (whether patentable or not), discoveries, improvements, concepts, innovations, industrial models, registered and unregistered copyrights, copyright registrations and applications, author's rights, works of authorship (including any text or artwork of any kind, and software of all types in whatever medium, inclusive of computer programs, source code, object code and executable code, and related documentation), URLs, web sites, web pages and any part thereof, technical information, know-how, trade secrets, drawings, designs, design protocols, specifications for parts and devices, quality assurance and control procedures, design tools, manuals, research data concerning historic and current research and development efforts, including the results of successful and unsuccessful designs, databases and proprietary data, proprietary processes, technology, engineering, discoveries, formulae, algorithms, operational procedures, trade names, trade dress, trademarks, domain names, and service marks, and registrations and applications therefor, the goodwill of the business symbolized or represented by the foregoing, customer lists and other proprietary information and common-law rights. "Material Adverse Effect" shall mean any event, circumstance, ----------------------- occurrence, fact, condition, change or effect that is materially adverse to (i) the Business, operations, results of operations, financial condition, prospects, properties, assets or liabilities of the Company and its Subsidiaries, taken as a whole, or (ii) the ability of the Company to perform fully its obligations hereunder and under the Other Agreements and to consummate the transactions contemplated hereby and thereby. For the purposes of this Agreement, a currency devaluation or foreign exchange restriction or other actions by any Governmental Authority limiting repatriation of capital or any other material change in the governmental or political climate of the countries in which the Company or its Subsidiaries carry out the Business shall be deemed to have a Material Adverse Effect. "Material Instruments" has the meaning set forth in Section -------------------- ------- 4(e). - ---- -33- "Materials of Environmental Concern" means any chemicals, ---------------------------------- pollutants or contaminants, hazardous substances (as such term is defined under CERCLA), solid wastes and hazardous wastes (as such terms are defined under the Recovery Act), toxic materials, oil or petroleum and petroleum products, or any other material subject to regulation under any Environmental Law. "Notice" has the meaning set forth in Section 12(b). ------ ------------- "Other Agreements" has the meaning set forth in Section ---------------- ------- 4(b)(i). - ------- "Per Share Price" has the meaning set forth in Section 2. --------------- --------- "Person" or "person" shall mean any natural person, company, ------ ------ corporation, association, partnership, organization, business, firm, joint venture, trust, unincorporated organization or any other entity or organization, and shall include any Governmental Authority. "Preferred Stock" has the meaning set forth in Section --------------- ------- 4(c)(i). - ------- "Qualified Public Offering" shall mean an underwritten public ------------------------- offering of shares of Common Stock for which the Company has obtained a firm commitment from one or more underwriter(s) for at least $75 million of Common Stock and in which the Company receives gross proceeds from the sale of Common Stock to the public of at least $56.25 million (before deduction of underwriter's discounts and commissions), and which values the equity of the Company at no less than $400 million pre-offering. "Registration Rights Agreement" means the Registration Rights ----------------------------- Agreement to be entered into among the Company and the stockholders of the Company, in form and substance identical to Exhibit F hereto. --------- "Schedule of Exceptions" has the meaning set forth in the ---------------------- first paragraph of Section 4. --------- "Schedule of Purchasers" has the meaning set forth in the ---------------------- first paragraph hereof. "Securities Act" has the meaning set forth in Section 4(i). -------------- ------------ "Series A Preferred Stock" has the meaning set forth in ------------------------ Section 1(a). - ------------ "SEC" shall mean the U.S. Securities and Exchange Commission --- or any successor agency thereto. "SEC Reports" has the meaning set forth in Section 4(y). ----------- -34- "Stock Option Plan" means the IFX Corporation Directors Stock ----------------- Option Plan and the 1998 IFX Corporation Stock Option and Incentive Plan. "Stockholders Agreement" means the Stockholders Agreement to ---------------------- be entered into among the Company and the stockholders of the Company, in form and substance identical to Exhibit E hereto. --------- "Subsidiary" means any Person of which equity securities ---------- possessing a majority of (i) the ordinary voting power in electing the board of directors, or (ii) the outstanding capital stock or other equity interests, are, at the time as of which such determination is being made, owned by the Company either directly or indirectly through one or more Subsidiaries. "Taxes" shall mean any domestic or foreign taxes, charges, ----- feed, levies or other assessments, including any income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental, real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, worker's compensation, payroll, health care, withholding, estimated or other taxes, charges, fees, levies or other assessments, and including any interest, penalties or additions relating thereto, imposed by any Governmental Authority or other taxing authority. "Transaction" has the meaning set forth in Section 6(d). ----------- ------------ "UBS" shall mean (i) UBS Capital Americas III, L.P., a --- Delaware limited partnership, (ii) UBS Capital LLC, a Delaware limited liability company and (iii) any Affiliate of either of the foregoing entities, individually and collectively. (b) Other Definitional Provisions. The words "hereof", ----------------------------- ------ "herein", and "hereunder" and words of similar import shall refer to this ------ --------- Agreement as a whole and not to any particular provision of this Agreement. Terms defined in the singular shall have a comparable meaning when used in the plural and vice versa. Whenever a representation or warranty made by a Person herein refers to the knowledge of such Person, such knowledge shall be deemed to consist of the actual knowledge of such Person or the knowledge which would have been present after reasonable due inquiry by such Person. A Person (other than an individual) will be deemed to have "knowledge" of a particular fact or other --------- matter if any individual who is serving, or who has at any time served, as a director, executive officer, member, partner, executor or trustee of such Person (or a Person acting in any similar capacity) has, or any time had, actual knowledge of such fact or other matter, or should have had knowledge thereof given such individual's office or capacity and given industry standards or given reasonable due inquiry by such individual. -35- IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. IFX CORPORATION /s/ Joel Eidelstein ------------------------ By: Joel Eidelstein Title: President S-1 Purchaser: - --------- The undersigned hereby executes and delivers this Agreement as of the date first above written as one of the Purchasers referred to therein for the purpose of purchasing from the Company the Initial Shares at the Initial Closing and the Additional Shares at a Subsequent Closing. UBS CAPITAL AMERICAS III, L.P. By: UBS Capital Americas (LA-Advisors), LLC By: /s/ Charles W. Moore -------------------------------------- Name: Charles W. Moore Title: Principal By: /s/ Marc Unger -------------------------------------- Name: Marc Unger Title: Chief Financial Officer Address: UBS Capital Americas III, L.P. c/o UBS Capital Americas (LA - Advisors), LLC 299 Park Avenue New York, NY 10171 Attention: Charles W. Moore Telephone No.: (212) 821-6330 Telecopy No.: (212) 821-6333 S-2 With a copy of Notices to: Kaye, Scholer, Fierman, Hays & Handler, LLP 425 Park Avenue New York, New York 10022 Attention: Nancy Fuchs, Esq. Telephone No.: (212) 836-8565 Telecopy No.: (212) 826-7246 S-3 Purchaser: - --------- The undersigned hereby executes and delivers this Agreement as of the date first above written as one of the Purchasers referred to therein for the purpose of purchasing from the Company the Initial Shares at the Initial Closing and the Subsequent Shares at a Subsequent Closing. UBS CAPITAL LLC By: /s/ George Duarte --------------------------- Name: George Duarte Title: Attorney-in-Fact By: /s/ Marc Unger --------------------------- Name: Marc Unger Title: Attorney-in-Fact Address: UBS Capital LLC 299 Park Avenue New York, NY 10171 Attention: Charles W. Moore Telephone No.: (212) 821-6330 Telecopy No.: (212) 821-6333 With a copy of Notices to: Kaye, Scholer, Fierman, Hays & Handler, LLP 425 Park Avenue New York, New York 10022 Attention: Nancy Fuchs, Esq. Telephone No.: (212) 836-8565 Telecopy No.: (212) 826-7246 S-1 EXHIBIT A SCHEDULE OF PURCHASERS IFX Corporation Series A Preferred Stock - -------------------------------------------------------------------------------- Purchaser Number of Initial Shares --------- ------------------------ - -------------------------------------------------------------------------------- UBS Capital Americas III, L.P. 1,149,878 - -------------------------------------------------------------------------------- UBS Capital LLC 60,520 - -------------------------------------------------------------------------------- A-1 EX-10.3 8 0008.txt NON-QUALIFIED STOCK OPTION AGREEMENT Exhibit 10.3 ------------ IFX CORPORATION NON-QUALIFIED STOCK OPTION AGREEMENT THIS STOCK OPTION AGREEMENT (the "Agreement") is dated as of --------- _______________ with respect to options granted on the dates set forth in the table below (the "Grant Date") and is entered into between IFX CORPORATION, a ---------- Delaware corporation ("IFX"), and _______________ ("Optionee"). This agreement --- -------- supersedes any option agreement that may have been previously entered into by the parties. In consideration of the mutual promises and covenants made herein, the parties hereby agree as follows: 1. Defined Terms. Capitalized terms not otherwise defined herein shall ------------- have the same meaning ascribed to them in the IFX Corporation 1999 Stock Option and Incentive Compensation Plan (the "Plan"). ---- 2. Grant of Option. --------------- (a) Subject to the terms and conditions of the Plan, a copy of which is attached hereto and incorporated herein by this reference, IFX grants to Optionee the options described below (the "Option") to purchase shares (the ------ "Shares") of IFX's common stock, $.02 par value (the "Common Stock"), at a price ------ ------------ equal the per share price below (the "Option Price"). The Option Price has been ------------ determined by the Compensation Committee of the Board of Directors of IFX (the "Committee"), acting in good faith, to be in equal to the fair market value of --------- the Common Stock on the Grant Date, based upon the price of the Common Stock reported by the Nasdaq Stock Market, Inc. as of the Grant Date. (b) The Option is not intended to qualify as an incentive stock option described in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). All provisions of this Agreement are to be construed in ---- conformity with this intention. 3. Term; Termination. ----------------- (a) Standard Term. Except as otherwise provided herein, the Option ------------- shall be valid for a term commencing on the Grant Date and ending 10 years after the Grant Date (the "Termination Date"). ---------------- (b) Rights Upon Termination of Employment. If Optionee ceases to be ------------------------------------- employed by IFX or any of its subsidiaries (collectively, the "Subsidiaries") ------------ for any reason other than (i) for "Cause" (as defined herein), (ii) Optionee's death, or (iii) Optionee's permanent or long-term mental, physical or emotional disability (a "Disability"), the Option shall be exercisable at any time prior ---------- to the earlier of the Termination Date or the date three months after the date of termination of Optionee's employment. (c) Rights Upon Termination for Cause. If Optionee's employment with --------------------------------- IFX and/or its Subsidiaries is terminated for Cause, the Option shall be immediately cancelled, no portion of the Option may be exercised thereafter and Optionee shall forfeit all rights to the Option. The term "Cause" shall have the meaning given to the term "Cause," "For Cause" or other similar phrase in Optionee's Employment Agreement with IFX or any Subsidiary; provided, however, that (i) if at any time Optionee's employment with IFX or any Subsidiary is not governed by an employment agreement, then the term "Cause" shall have the meaning given to such term in the Plan, and (ii) "Cause" shall exclude Optionee's death or Disability. (d) Rights Upon Death/Disability of Optionee. If Optionee's ---------------------------------------- employment with IFX and/or its Subsidiaries is terminated as a result of (i) Optionee's death, the Option may be exercised at any time prior to the earlier of the Termination Date or the date six months after the date of Optionee's death, or (ii) Optionee's Disability, the Option may be exercised at any time prior to the earlier of the Termination Date or the date six months after the date of Optionee's employment is terminated as a result of Optionee's Disability. 4. Vesting. ------- (a) Standard Vesting. The Option may only be exercised to the extent ---------------- vested. Any vested portion of the Option may be exercised at any time in whole or from time to time in part. Vesting shall commence on the first anniversary of the Grant Date and Optionee shall vest in the Option according to the table set forth above. Optionee must be employed by IFX or any Subsidiary on any Vesting Date, in order to vest in the portion of the Option set forth in the chart above that vests on such Vesting Date. No portion of the Option shall vest between Vesting Dates; if Optionee ceases to be employed by IFX or any Subsidiary, then any portion of the Option that is scheduled to vest on any Vesting Date after the date Optionee's employment is terminated automatically shall be forfeited as of the date of Optionee's termination of employment. For purposes of this Section 4, a transfer or reassignment of Optionee from IFX to any Subsidiary, or vice versa, shall not constitute a termination of employment ---- ----- for purposes of this Agreement. -2- (b) Vesting Upon Change of Control. Notwithstanding the provisions ------------------------------ of Section 4(a) or anything contained in this Agreement or in the Plan to the contrary, upon a Change in Control (as defined herein), the Option shall become 100% vested and immediately exercisable as of the effective date of the Change in Control. For purposes of this Agreement, "Change in Control" means the ----------------- occurrence of any one of the following events: (i) any consolidation, merger or other similar transaction involving the Company, if the Company is not the continuing or surviving corporation, or which contemplates that all or substantially all of the business and/or assets of the Company will be controlled by another corporation; (ii) any sale, lease, exchange or transfer (in one transaction or series of related transactions) of all or substantially all of the assets of the Company; (iii) approval by the shareholders of the Company of any plan or proposal for the liquidation or dissolution of the Company, unless such plan or proposal is abandoned within 60 days following such approval; (iv) the acquisition by any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), or two or more persons acting in concert, of beneficial ownership (within the meaning of Rule 13d- 3 promulgated under the Exchange Act) of 50% or more of the outstanding shares of voting stock of the Company; provided, however, that for purposes -------- ------- of the foregoing, "person" excludes Lee S. Casty, International Technology Investments, LC or any of their affiliates; or (v) if, during any period of 24 consecutive calendar months commencing on the date of this Agreement, those individuals (the "Continuing Directors") who either (A) were directors of the Company on the --------------------- first day of each such period, or (B) subsequently became directors of the Company and whose actual election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the board of directors of the Company, cease to constitute a majority of the board of directors of the Company. 5. Procedure for Exercise. Exercise of the Option or a portion thereof ---------------------- shall be effected by the giving of written notice to IFX in accordance the Plan and payment of the pro rata portion of the Option Price for the number of Shares to be acquired pursuant to the exercise. 6. Payment for Shares. Payment of the Option Price (or portion thereof) ------------------ shall be made in cash or by such other method as may be permitted by the Committee in accordance with the provisions of the Plan. No Shares shall be delivered upon exercise of the Option until full payment has been made and all applicable withholding requirements satisfied. 7. Options Not Transferable and Subject to Certain Restrictions. The ------------------------------------------------------------ Option may not be sold, pledged, assigned or transferred in any manner without the prior consent of the Committee, which may be given or withheld in its sole discretion, other than by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order as defined in Section 414(p) of the Code. During Optionee's lifetime, the Option may be exercised only by the Optionee, a permitted assignee or by a legally authorized representative. In the event of -3- Optionee's death, the Option may be exercised by the distributee to whom Optionee's rights under the Option shall pass by will or by the laws of descent and distribution. 8. Acceptance of Plan. Optionee hereby accepts and agrees to be bound by ------------------ all the terms and conditions of the Plan. 9. No Right to Employment. Nothing herein contained shall confer upon ---------------------- Optionee any right to continuation of employment by IFX or any Subsidiary, or interfere with the right of IFX or any Subsidiary to terminate at any time the employment of Optionee. Nothing contained herein shall confer any rights upon Optionee as a shareholder of IFX, unless and until Optionee actually receives Shares. 10. Compliance with Securities Laws. The Option shall not be exercisable ------------------------------- and Shares shall not be issued pursuant to exercise of the Option unless the exercise of the Option and the issuance and delivery of Shares pursuant thereto shall comply with all relevant provisions of law including, without limitation, the Securities Act of 1933, as amended (the "Securities Act"), the Securities -------------- Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which Common Stock may then be listed, and shall be further subject to the approval of counsel for IFX with respect to such compliance. If, in the opinion of counsel for IFX, a representation is required to be made by Optionee in order to satisfy any of the foregoing relevant provisions of law, IFX may, as a condition to the exercise of the Option, require Optionee to represent and warrant at the time of exercise that the Shares to be delivered as a result of such exercise are being acquired solely for investment and without any present intention to sell or distribute such Shares. 11. Adjustments. Subject to the sole discretion of the Board of ----------- Directors, IFX may, with respect to any unexercised portion of the Option, make any adjustments necessary to prevent accretion, or to protect against dilution, in the number and kind of shares covered by the Option and in the applicable exercise price thereof in the event of a change in the corporate structure or shares of IFX; provided, however, that no adjustment shall be made for the issuance of preferred stock or other convertible securities of IFX or the conversion of the same. For purposes of this Section 11, a change in the corporate structure or shares of IFX includes, without limitation, any change resulting from a recapitalization, stock split, stock dividend, consolidation, rights offering, spin-off, reorganization or liquidation, and any transaction in which shares of Common Stock are changed into or exchanged for a different number or kind of shares of stock or other securities of IFX or another entity. 12. No Other Rights. Optionee hereby acknowledges and agrees that, except --------------- as set forth herein, no other representations or promises, either oral or written, have been made by IFX, any Subsidiary or anyone acting on their behalf with respect to Optionee's right to acquire any shares of Common Stock, stock options or awards under the Plan, and Optionee hereby releases, acquits and forever discharges IFX, the Subsidiaries and anyone acting on their behalf of and from all claims, demands or causes of action whatsoever relating to any such representations or promises and waives forever any claim, demand or action against IFX, any Subsidiary or anyone acting on their behalf with respect thereto. -4- 13. Severability. Any provision of this Agreement (or portion thereof) ------------ that is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section 13, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. 14. Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties concerning the subject matter hereof and supersedes all prior and contemporaneous agreements, oral or written, between IFX and Optionee relating to Optionee's entitlement to stock options, Common Stock or similar benefits, under the Plan or otherwise. 15. Amendment. This Agreement may be amended and/or terminated at any --------- time by mutual agreement of IFX and Optionee. 16. Governing Law. The construction and operation of this Agreement are ------------- governed by the laws of the State of Delaware (without regard to its conflict of laws provisions). [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -5- This Agreement has been executed as of the date first written above. IFX CORPORATION By:________________________________ Jose Leiman, Chief Financial Officer Employee Social Security Number -6- EX-10.4 9 0009.txt EMPLOYMENT AGREEMENT-EIDELSTEIN Exhibit 10.4 ------------ EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of --------- January 1, 2000 by and between IFX CORPORATION, a Delaware corporation ("IFX" --- and, collectively with its subsidiaries, "Employer"), and JOEL EIDELSTEIN -------- ("Employee"). -------- W I T N E S S E T H: -------------------- WHEREAS, Employer is in the business of acquiring, developing and maintaining Internet access and related services in Latin America and other non- U.S. jurisdictions (the "Business"); WHEREAS, Employer desires to continue to employ Employee to oversee all management and day-to-day operations as President of Employer, and Employee desires to continue such employment, on the terms and subject to the conditions set forth herein; WHEREAS, Employer believe it would be in the best interest of Employer to have Employee's terms of employment set forth in a written agreement; WHEREAS, Employee also desires to have a written agreement and to have the option to acquire an additional equity interest in Employer; and WHEREAS, Employee has had an opportunity to review the terms and conditions of this Agreement, to negotiate the terms hereof and to engage legal counsel on his behalf if he so desires. NOW THEREFORE, in consideration of Employer's continued employment of Employee, the terms, conditions and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee and Employer, intending to be legally bound, hereby agree as follows: ARTICLE I DEFINITIONS 1.1 Terms Defined Herein. Except as otherwise herein expressly provided, -------------------- the following terms and phrases shall have the meanings set forth below: "Affiliate" means (a) in the case of an entity, any Person who or which, --------- directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any specified Person or (b) in the case of an individual, such individual's spouse, children, grandchildren or parents or a trust primarily for the benefit of any of the foregoing. "Cause" means (a) the willful and continued failure by Employee to ----- substantially perform his duties under this Agreement (other than any failure resulting from Employee's death or incapacity due to physical or mental illness) for five days after written demand for substantial performance is delivered by Employer which specifically identifies the manner in which Employer believes Employee has not substantially performed his duties, (b) the commission by Employee of theft, embezzlement, fraud or misappropriation of funds against Employer or the willful engaging by Employee in other misconduct which is materially injurious to Employer, (c) the willful violation by Employee of Section 3.1, 3.2, 3.3 or 3.4 of this Agreement or (d) the conviction of Employee of a felony involving fraud, dishonesty or moral turpitude. Notwithstanding anything to the contrary contained herein, none of the following events shall be treated as "cause." (i) bad judgment, (ii) negligence, (iii) any act or omission that Employee believed in good faith to have been in or not opposed to the interests of the Company, or (iv) any act or omission of which any member of the Board who is not a party to such act or omission has had actual knowledge for at least 12 months. "Change in Control" means the occurrence of any one of the following ----------------- events: (a) any consolidation, merger or other similar transaction involving IFX, if IFX is not the continuing or surviving corporation, or which contemplates that all or substantially all of the business and/or assets of IFX will be controlled by another corporation; (b) any sale, lease, exchange or transfer (in one transaction or series of related transactions) of all or substantially all of the assets of IFX; (c) approval by the stockholders of IFX of any plan or proposal for the liquidation or dissolution of IFX, unless such plan or proposal is abandoned within 60 days following such approval; (d) the acquisition by any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the outstanding shares of voting stock of IFX; provided, however, that for purposes of the foregoing, "person" excludes -------- ------- Lee S. Casty, International Technology Investments, LC or any of their Affiliates, any underwriter purchasing shares of IFX with the intent of reselling them, or any sale to GEM (or its affiliates); or (e) if, during any period of 24 consecutive calendar months commencing on the date of this Agreement, those individuals (the "Continuing Directors") who either (i) were -------------------- directors of IFX on the first day of each such period, or (ii) subsequently became directors of IFX and whose actual election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the board of directors of IFX, cease to constitute a majority of the board of directors of IFX. "Common Stock" means shares of common stock, par value $.02 per share, of ------------ IFX. "Disability" means disability as defined in Employer's disability insurance ---------- plan then in effect. "Involuntary Termination" means if Employer terminates Employee for any ----------------------- reason other than Cause or if Employee terminates his employment with Employer (a) within 30 days after -2- Employer materially reduces Employee's duties and responsibilities hereunder; (b) within five days after Employer's receipt of written notice from Employee that Employer is in material breach of its obligations under this Agreement, which material breach has not been cured during such five-day period; (c) the failure to nominate or elect Employee as President, Chief Executive Officer or Chief Operating Officer of IFX; (d) causing or requiring Employee to report to anyone other than Michael Shalom or the Board; (e) assignment of duties materially inconsistent with his position and duties described in this Agreement; (f) the failure of IFX to assign this Agreement to a successor to IFX or the failure of a successor to IFX to explicitly assume and agree to be bound by this Agreement; (g) requiring Employee to be principally located at any office or location more than 50 miles from IFX's current office in Miami Lakes, Florida; or (h) a termination of employment by Employee for any reason or no reason during the 30-day period commencing 12 months after a Change in Control; provided, however, that in the event such breach is curable but Employer is - -------- ------- unable to cure such breach within such five-day period, then any such breach shall not be deemed to justify Employee's "Involuntary Termination" hereunder so long as Employer is diligently and in good faith pursuing a cure and such breach is cured no later than 30 days following receipt of the foregoing written notice from Employee. Any reasonable good faith determination by Employee that any of the foregoing has occurred shall be conclusive and binding for all purposes hereunder. "Person" means any individual, partnership, corporation, limited liability ------ company, joint venture, trust, firm, association, unincorporated organization or other entity. "Plan" means the IFX Corporation 1998 Stock Option and Incentive Plan, as ---- amended. ARTICLE II TERMS OF EMPLOYMENT 2.1 Employment; Scope of Duties. ---------------------------- (a) Employer hereby continues to employ Employee as President of Employer to act as chief operating officer of Employer and to manage and oversee all day- to-day operations of Employer, and Employee hereby accepts such employment with Employer. In performing his duties hereunder, Employee shall report solely to, and shall be subject to the supervision of, the Board of Directors or Michael Shalom. (b) Employee shall devote his best efforts and full business time and attention to the performance of services for Employer in accordance with the terms hereof. During the Term (as defined in Section 2.4), Employee shall not engage in any other business or professional activities, either on a full-time or part-time basis, as an employee, consultant or in any other capacity, whether or not he receives any compensation therefor, without the prior written consent of Employer's Board of Directors; provided, however, that nothing herein shall -------- ------- prevent Employee from (i) making and managing personal investments consistent with Section 3.3 of this Agreement, (ii) from engaging in community and/or charitable activities, so long as such activities, either singly or in the aggregate, do not interfere with the proper performance of Employee's responsibilities to Employer, or (iii) being involved as an officer, director, employee -3- or consultant of ePagos, Inc., or any subsidiary or Affiliate of Employer (including but not limited to Tutopia.com, Inc. and Facilito, Inc.). 2.2 Compensation. ------------- (a) As compensation for Employee's services hereunder during the Term, Employer shall pay to Employee (the "Salary"), (i) during the first year of the Term, $225,000 per year and (ii) during the second year of the Term, $250,000, less applicable income tax withholdings. The Salary shall be payable in equal biweekly installments in accordance with Employer's customary compensation policies. If, during the term of this Agreement, the Employee should be prevented from performing his duties by reason of Disability, amounts payable by Employer hereunder shall be reduced by the amounts payable under the Employer's disability insurance policy. (b) In addition to the Salary, Employer will pay an annual cash bonus to Employee of $50,000. For the first year of the Term, the bonus shall be paid within 30 days of the Employer obtaining 600,000 user registrations for its Web services. For years after the first year, the Employer and Employee agree to jointly establish the criteria upon which the bonus will be paid. (c) In addition to the Salary, Employee shall be granted Options as shown on Exhibit A hereto. The Options shall be evidenced by a standard option agreement between Employer and Employee in a form approved by the Compensation Committee of the Board of Directors of Employer. 2.3 Employee Benefits. ------------------ (a) Employee shall be entitled to such paid holidays and vacation time as is consistent with Employer's standard holiday and vacation policy for executive employees of Employer. (b) Subject to Employer's rules, policies and regulations as in effect from time to time (and subject to applicable eligibility requirements, including a minimum employment period), Employee shall be entitled to (i) group life insurance, disability or accident, death or dismemberment insurance, (ii) medical and/or dental insurance program; provided that regardless of the payment for other employees, Employee's premiums for himself and his family shall be paid in full by Employer and shall be for a preferred provider plan or similar plan, (iii) 401(k) benefit plan, if and when Employer establishes such a plan, (iv) other employee benefits that Employer may, in its sole discretion, make generally available to employees of Employer of the same level and responsibility as Employee, (v) all cell phone bills (provided that substantially all calls are made for business related to the Employer, (vi) a car allowance of $750 per month, (vii) high-speed internet access from Employee's principal residence. 2.4 Term. Employee's employment pursuant to this Agreement shall ---- commence on the date hereof and shall continue in effect for three years from the date hereof unless otherwise terminated in accordance with Section 2.5. Commencing on the first anniversary of the date hereof, if on or before that date, Employer has not delivered to Employee or Employee has not delivered to Employer, written notice that the Term will not be extended, the Term shall automatically be extended each day by one day, until a date which is two years following the -4- first date, if any, that Employer delivers to Employee or Employee delivers to Employer, as the case may be, such a written notice. The period of time during which Employee remains employed by Employer pursuant to this Section 2.4 is referred to herein as the "Term." ---- 2.5 Termination of Employment. -------------------------- (a) Disability. ---------- (i) If during the term of this Agreement, the Employee should be prevented from performing his duties by reason of Disability for a continuous period greater than 180 days, Employer may terminate the Employee's employment hereunder by giving written notice thereof to the Employee, effective on the date set forth in the notice (which date shall be not less than 15 business days after the notice is given). For purposes hereof, a continuous period of incapacity shall not be deemed interrupted until the Employee returns to substantially full time work for a period of at least 30 days. (ii) If termination of employment results or occurs due to Disability under this Section 2.5(a), Employee shall receive no other compensation hereunder; provided, however, that until Employee receives disability insurance payments under Employer's disability insurance coverage, Employee shall receive his Salary. All Options held by Employee under the Plan (or any successor thereto) shall vest immediately upon the date of termination for Disability. (b) Death. ------ (i) In the event of the Employee's death during the term of this Agreement, the Employee's employment hereunder shall be deemed terminated as of the date of the Employee's death. Employee's family shall be entitled to receive fully paid health and dental insurance coverage for one year after Employee's death and all Options held by Employee under the Plan or any successor thereto shall vest immediately. (c) Cause. ----- (i) This Agreement and the Employee's employment hereunder may be terminated at any time by the Company for Cause. (ii) If the Employee's employment is terminated by the Company for Cause or Employee terminates his employment other than by reason of death, Disability or an Involuntary Termination, Employee shall be entitled to no additional payments hereunder and Employee's Options shall be treated as required under the Plan. (iii) Employer may not terminate Employee's employment for Cause unless the following procedures are followed or waived by Employee: -5- (A) no fewer than 60 days prior to the proposed date of termination, the Employer provides Employee with written notice (the "Notice of Consideration") ----------------------- of its intent to consider termination of Employer's employment for Cause, including a detailed description of the specific reasons which form the basis for such consideration; (B) for a period of not less than 30 days after the date of Notice of Consideration is provided, Employer shall have the opportunity to appear before the Board, with or without legal representation, at a date and time specified in the Notice of Consideration, to present arguments and evidence on his own behalf; and (C) following the presentation to the Board as provided in Section 2.5(c)(iii)(B) above or Employee's failure to appear before the Board at such date and time specified in the Notice of Consideration (which date shall not be less than 30 days after the date the Notice of Consideration is provided), Employee may be terminated for Cause only if (x) the Board, by the affirmative vote of all of its members (excluding Employee if he is a member of the Board, and any other member of the Board reasonably believed by the Board to be involved in the events leading the Board to terminate Employee for Cause), determines that the actions or inactions of Employee specified in the Notice of Termination occurred, that such actions or inactions constitute Cause, and that Employee's employment should accordingly be terminated for Cause; and (y) the Board provides Employee with a written determination (a "Notice of Termination --------------------- for Cause") setting forth in specific detail the basis of such Termination of - --------- Employment, which Notice of Termination for Cause shall be consistent with the reasons set forth in the Notice of Consideration. (D) Unless Employer establishes both (i) its full compliance with the substantive and procedural requirements of this Section 2.5(c) prior to a Termination of Employment for Cause, and (ii) that Employee's action or inaction specified in the Notice of Termination for Cause did occur and constituted Cause, any Termination of Employment shall be deemed an Involuntary Termination for all purposes of this Agreement. (d) Involuntary Termination. In the event of an Involuntary Termination, ----------------------- Employee shall receive the following: (i) immediately after the Date of Termination, a lump-sum amount in immediately available funds equal to the sum of Executive's accrued but unpaid Salary and a pro-rated portion of the bonus paid to Employee during the prior year; (ii) immediately after the Date of Termination, a lump-sum amount in immediately available funds equal to the product of the number of whole and fractional years included in the period from the Date of Termination until the end of the Term (the "Severance Period") multiplied by the sum of Employee; annualized Salary for the current year plus bonus for the prior year; (iii) the continuation of the benefits (or, if such benefits are not available, the after-tax economic equivalent thereof) specified in Section 2.3(b) to which Employee is entitled as of the Date of Termination for the entire duration of the Severance Period or, at the election of -6- Employee, an immediate lump-sum cash payment equal to the value of such benefits; provided that with respect to any benefit to be provided on an insured basis, such value shall be the present value of the premiums expected to be paid for such coverage, and with respect to other benefits, such value shall be the present value of the expected net cost to the Company of providing such benefits; (iv) all options held by Employee under the Plan or any successor thereto shall vest immediately; and (v) all contractual restrictions on the transfer, sale or pledge of the common stock held by the Employee (or his Affiliates) will be immediately extinguished and released. (e) Termination After a Change of Control. If a Termination without ------------------------------------- Cause or an Involuntary Termination occurs within two years after a Change of Control, then Executive shall receive the payments required by Section 2.5(d), except that for purposes of Section 2.5(d)(ii), Executive shall receive three (3.0) times the sum of: i) Employee's annualized Salary in the year of the Change of Control and ii) the highest bonus received to Employee from the Company in the year of the Change of Control or any prior year. (f) Other Termination Benefits. In addition to any amounts or benefits -------------------------- payable upon a Termination of Employment hereunder, Executive shall, except as otherwise specifically provided herein, be entitled to any payments or benefits provided hereunder or under the terms of any plan, policy or program of the Company or as otherwise required by applicable law. ARTICLE III COVENANTS AND AGREEMENTS 3.1 Records and Confidential Data. ------------------------------ (a) Employee acknowledges that, in connection with the performance of his duties hereunder, Employer and its Affiliates will make available to Employee, and/or Employee will have access to, certain Confidential Information (as defined below) of Employer and its Affiliates. Employee acknowledges and agrees that any and all Confidential Information learned or obtained by Employee during the course of his employment by Employer or otherwise, whether developed by Employee alone or in conjunction with others or otherwise, shall be and is the property of Employer and its Affiliates. Employee shall keep all Confidential Information confidential and shall not use any Confidential Information in any manner other than in connection with Employee's discharge of his duties hereunder. (b) Following the first to occur of the termination of Employee's employment hereunder, or as soon as reasonably possible after Employer's written request, Employee shall return to Employer all written Confidential Information which has been provided to Employee and Employee shall destroy all copies of any analyses, compilations, studies or other documents prepared by Employee or for Employee's use containing or reflecting any Confidential Information. Within five business days after receipt of such request by Employee, Employee -7- shall, upon written request of Employer, deliver to Employer a notarized document certifying that such written Confidential Information has been returned or destroyed in accordance with this Section 3.1(b). (c) For purposes of this Agreement, "Confidential Information" shall mean ------------------------ all confidential and proprietary information of Employer and/or its Affiliates, including, without limitation, confidential and proprietary information that is derived from or regarding reports, investigations, experiments, research, trade secrets, work in progress, web site drawing, designs, plans, proposals, requests for proposals, bids, codes, marketing and sales programs, acquisition targets or strategies, information regarding subscribers or web site viewers, client lists, client mailing lists, supplier lists, financial projections, cost summaries, payor information, pricing formulae, marketing studies relating to prospective business opportunities and all other confidential and proprietary materials or information prepared for or by Employer and/or any of its Affiliates. For purposes of this Agreement, Confidential Information shall not include and Employee's obligations under this Section 3.1 shall not extend to (i) information which is generally available to the public, (ii) information obtained by Employee from Persons not under agreement to maintain the confidentiality of the same, and (iii) information which is required to be disclosed by law or legal process (after giving Employer prior written notice thereof and an opportunity to contest such disclosure). 3.2 Inventions and Other Matters. ----------------------------- (a) Employee agrees that all, inventions, discoveries or improvements made during the period of Employee's employment with Employer, including, without limitation, computer software (including source code, operating systems and specifications, data, data bases, files documentation and other materials related thereto), HTML or other scripts, web site designs, art work, visual images, programming code and programs, processes, uses, apparatuses, specialized information relating in any way to or that is useful in the business or products of Employer or Employer's actual or demonstrably anticipated research or development, designs or compositions of any kind that Employee, individually or with others, may originate or develop while employed by Employer (collectively, "Inventions"), belong to and shall be the sole property of Employer and ---------- constitute and shall constitute works specially ordered or commissioned as "works made for hire" under the United States Copyright Act and other applicable law. Without limiting the foregoing, Employee hereby assigns and transfers to Employer all rights of whatever nature that Employee may have, including, without limitation, any patent, trade secret, trademark or service mark rights (and any goodwill appurtenant thereto), any rights of publicity and any right, title and interest in any copyright and any right that may affix under any copyright law now or hereinafter in force and effect in the United States of America or in any other country or countries, in and to any Invention. Employee acknowledges and agrees that Employer shall have the royalty-free right to use in its businesses, and to make and sell products, processes, programs, systems designs, methods, formulas, apparatus, techniques, and services derived from any Inventions (whether or not patentable or copyrightable), as well as all improvements thereof or know-how related thereto. The provisions of this Section 3.2 shall survive termination of this Agreement for any reason. -8- (b) For purposes of this Agreement, an Invention shall be deemed to have been "made during the period of Employee's employment" if, during such period, the Invention was conceived, in part or in whole, or first actually reduced to practice. Employee agrees that any patent, copyright or trade mark application (i) covering intellectual property that relates to services performed by Employee hereunder or that is applicable to those products or services of Employer that were within the scope of Employee's responsibilities hereunder, and (ii) that is filed by or for the benefit of Employee or any of his Affiliates within one year after termination of Employee's employment shall be presumed to relate to an Invention made during the term of his employment and Employee shall have the burden of proof to prove otherwise. (c) This Section 3.2 shall not apply to an Invention for which no equipment, supplies, facilities or Confidential Information (as defined below) of Employer was used and that was developed entirely on Employee's own time, unless (i) the invention relates or is applicable to the services performed by Employee hereunder or that is applicable to those services or products of Employer that were within the scope of Employee's responsibilities hereunder, or (ii) results from any work relating to the Business that was performed, caused to be performed, or supervised by Employee for or on behalf of Employer. (d) Employee agrees, without further consideration, to (i) promptly disclose each such Invention to Employer, to Employee's immediate supervisor and to such other individuals as Employer may direct, (ii) execute and to join others in executing such applications, assignments and other documents as may be necessary or convenient to vest in Employer, or its designee, full title to each such Invention and as may be necessary or convenient to obtain United States and foreign patents and copyrights thereon, to the extent Employer may so choose in its sole discretion, (iii) testify in any legal proceeding relative to such Invention whenever requested to do so by Employer, and (iv) furnish all facts relating to such Inventions or the history thereof. (e) Employee agrees that he will not at any time, except as authorized or directed by Employer, publish or disclose any information or knowledge concerning any Inventions. 3.3 Non-Competition. ---------------- (a) Employer and Employee recognize that Employee has been retained to occupy a position of trust that constitutes part of the professional, management and executive staff of Employer. Employee, for and in consideration of the payments, rights and benefits provided herein, agrees that so long as he is employed by Employer and, if Employer terminates Employee's employment for Cause or if Employee terminates his employment with Employer for any reason other than pursuant to an Involuntary Termination, for a period of one year thereafter, Employee shall not (i) work or act as an officer or director of or compensated consultant to, (ii) assist, (iii) own, directly or through any Affiliate or joint venture, a 10% or greater interest in, or (iv) make a financial investment (other than a passive, economic investment), whether in the form of equity or debt, in any business that is directly competitive with the Business in the United States, Latin America or in any other market in which Employer is conducting the Business at the time Employee's employment with Employer is terminated. -9- (b) Notwithstanding the foregoing, nothing herein shall prohibit Employee from holding ten percent (10%) or less of any class of voting securities of any entity whose equity securities are listed on a national securities exchange or regularly traded in the over-the-counter market and for which quotations are readily available on the National Association of Securities Dealers Automated Quotation system. (c) If Employer terminates Employee's employment for Cause or if Employee terminates his employment with Employer for any reason other than pursuant to an Involuntary Termination, for a period of one year thereafter, Employee shall promptly notify Employer of each employment or agency relationship entered into by Employee, and each corporation, proprietorship or other entity formed or used by Employee, the business of which is directly competitive with the Business. The provisions of this Section 3.3 shall survive termination of this Agreement for any reason. 3.4 Non-Solicitation and Non-Interference. -------------------------------------- (a) Employee acknowledges that Employer has invested substantial time and effort in assembling its present staff of personnel. Employee agrees that so long as he is employed by Employer and for a period of one year thereafter, Employee shall not, directly or indirectly, employ, solicit for employment, or advise or recommend to any other Person that such other Person employ or solicit for employment, any of Employer's employees or recommend to any employee of Employer that he/she cease to be employed by Employer; provided that the -------- ---- restrictions set forth in the immediately preceding sentence shall not apply to any solicitation directed at the public in general e.g., advertisements in publications of general circulation, etc. or to inquiries for employment that were unsolicited, directly or indirectly, by Employee. (b) Employee acknowledges that all customers of Employer, which Employee has serviced or hereafter services during Employee's employment by Employer and all prospective customers from whom Employee has solicited or may solicit business while in the employ of Employer, shall be solely the customers of Employer. Employee agrees that so long as he is employed by Employer and for a period of one year thereafter, Employee shall not either directly or indirectly solicit business, as to products or services competitive with the Business, from any of Employer's customers with whom Employee had contact during his employment with Employer. (c) Employee agrees that so long as he is employed by Employer and for a period of one year thereafter, Employee shall not, directly or indirectly, (i) intentionally disrupt or attempt to disrupt or terminate any relationship between Employer and any of its Business suppliers, clients or employees, or (ii) disparage, malign or discredit the name or reputation of Employer to any customers, clients or suppliers of the Business. Employee agrees that during such one year period, he will not influence or attempt to influence any of the customers or clients of Employer to cease doing business with Employer. 3.5 Restrictions Reasonable. Employee agrees that the restrictions ----------------------- contained in Sections 3.3 and 3.4 are reasonable as to time and geographic scope because of the nature of the Business and Employee agrees, in particular, that the geographic scope of this restriction is -10- reasonable because companies in the same industry as the Business compete on an international basis. Employee acknowledges that Employer is in direct competition with all other companies that provide services and products similar to the Business products and services throughout the United States and Latin America and, because of the nature of the Business, Employee expressly agrees that the covenants contained in Sections 3.3 and 3.4 cannot reasonably be limited to any smaller geographic area. The provisions of Sections 3.3 and 3.4 shall survive termination of this Agreement for any reason. 3.6 Prior Obligations. Employee represents and warrants that (a) ----------------- Employee has no obligation of confidence or other commitments to any previous employer or any others that conflict with this Agreement or restrict Employee's field of activities, and (b) no other agreement to which Employee is subject will conflict with, prevent, be breached by, interfere with or in any manner affect the terms and conditions of this Agreement. 3.7 Injunctive Relief. Employee acknowledge that damages would be an ----------------- inadequate remedy for Employee's breach of any of the provisions of Sections 3.1, 3.2, 3.3 and/or 3.4 of this Agreement, and that breach of any of such provisions will result in immeasurable and irreparable harm to Employer. Therefore, in addition to any other remedy to which Employer may be entitled by reason of Employee's breach or threatened breach of any such provision, Employer shall be entitled to seek and obtain a temporary restraining order, a preliminary and/or permanent injunction, or any other form of equitable relief from any court of competent jurisdiction restraining Employee from committing or continuing any breach of such Section, without the necessity of posting a bond. It is further agreed that the existence of any claim or cause of action on the part of Employee against Employer, whether arising from this Agreement or otherwise, shall in no way constitute a defense to the enforcement of the provisions of Sections 3.1, 3.2, 3.3 and/or 3.4 of this Agreement. ARTICLE IV MISCELLANEOUS 4.1 Notices. All notices and other communications hereunder shall be in ------- writing and shall be deemed given (a) when made, if delivered personally, (b) three business days after being mailed by certified or registered mail, postage prepaid, return receipt requested, or (c) two business days after delivery to a reputable overnight courier service, to the parties, their successors in interest or their assignees at the following addresses, or at such other addresses as the parties may designate by written notice in the manner aforesaid: To Employer: IFX Corporation C/o IFX Communications Ventures Inc. 15050 N.W. 79 Court Suite 200 Miami Lakes, Florida 33016 Attention: President -11- To Employee, to his home address as recorded in the payroll records of Employer from time to time. 4.2 Governing Law. This Agreement shall be governed as to its validity ------------- and effect by the internal laws of the State of Florida, without regard to its rules regarding conflicts of law. 4.3 Agreement To Arbitrate. ----------------------- (a) Employer and Employee agree that any disputes that arise between Employee and Employer (or any of Employer's officers, directors, stockholders, supervisors, employees, agents, Affiliates or successors), excluding disputes arising out of Section 3.1, 3.2, 3.3 or 3.4, that cannot be resolved informally shall be decided by submission of the dispute to binding arbitration before a sole neutral arbitrator who is a retired federal judge pursuant to the American Arbitration Association Commercial Arbitration Rules governing such proceedings, and not by a lawsuit or by resort to court process, except as specifically set forth below. Both parties acknowledge and agree that they are giving up their respective constitutional rights to have any such dispute decided in a court of law before a jury, and instead are accepting the use of the arbitration process. This Section 4.3(a) applies to any and all disputes, including, by way of -------------------- example only and not limited to, disputes regarding termination of Employee's - ------------------------------- employment; discrimination and unlawful harassment of any kind (including, without limitation, claims arising under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. (S)2000(e) et seq. and the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. (S)621, et seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. (S)12101 et seq.; the Family and Medical Leave Act of 1993, 29 U.S.C. (S)2612 et seq.; and all applicable state and local anti-discrimination laws and constitutional provisions); disputes arising under any other applicable federal, state or local labor statutes, regulations or orders; disputes regarding assault and battery; negligent supervision; defamation; invasion of privacy; wages and overtime; and disputes regarding the formation and enforceability of this Section 4.3(a). The following types of disputes are excluded from the scope of coverage of this Section 4.3(a): (i) workers' compensation claims by Employee for on-the-job injuries; and (ii) any and all claims by Employer against Employee, including claims for injunctive relief, arising out of Employee's breach or threatened breach of Section 3.1, 3.2, 3.3 or 3.4 of this Agreement. (b) General Rules of Arbitration. Either party shall have the right to ---------------------------- have counsel represent him/it at the arbitration hearing and in pre-arbitration proceedings. Pre-arbitration discovery shall be permitted in accordance with the Federal Rules of Civil Procedure, except that (i) there shall be no limit on the number of depositions that may be noticed by either party, and (ii) in connection with any pre-arbitration disclosure of expert testimony in accordance with Rule 26(a)(2), the timing of the expert disclosure shall be set by the arbitrator. (c) Authority of Arbitrator. The arbitrator shall have the authority to ----------------------- (i) resolve any discovery disputes that arise between the parties; (ii) resolve any dispute relating to the interpretation, applicability or enforceability of this Section 4.3; and (iii) entertain a motion to dismiss and a motion for summary judgment, applying the standards governing such motions under Federal Rule Of Civil Procedure 12(b)(6) and Rule 56. The arbitrator is required to render -12- his decision in writing, with an opinion stating the bases of his decision. Either party has the right to file a post-arbitration brief, which shall be considered by the arbitrator. (d) Payment of Costs and Fees. Each party shall bear its own costs and ------------------------- attorneys' fees incurred in connection with the arbitration. The arbitrator shall have the discretion to award costs to the prevailing party. The arbitrator's fees shall be borne equally by the parties. Each party shall post his or its portion of the arbitrator's anticipated fee prior to the commencement of the arbitration. (e) Appeals. Either side shall have the right to appeal the arbitrator's ------- decision by applying to a Court (as defined in Section 4.4) for an order vacating the award for any of the reasons set forth in 9 U.S.C. (S)10, or on the basis that the arbitrator has made a mistake of law or fact. The arbitration decision shall stand if it is supported by substantial evidence. 4.4 Jurisdiction; Service of Process. Each of the parties hereto agrees -------------------------------- that any action or proceeding initiated or otherwise brought to judicial proceedings by either Employee or Employer concerning the subject matter of this Agreement that is not subject to Section 4.3, shall be litigated in the United States District Court for Dade County, Florida or, in the event such court cannot or will not exercise jurisdiction, in the state courts of the State of Florida covering Miami, Dade County, Florida (the "Courts"). Each of the ------ parties hereto expressly submits to the jurisdiction and venue of the Courts. Each party hereto waives any claim that the Courts are an inconvenient forum or an improper forum based on lack of venue or jurisdiction. Each party shall bear its own costs and attorneys' fees incurred in connection with any such actions or proceedings. 4.5 Successors and Assigns. This Agreement shall be binding upon and ---------------------- shall inure to the benefit of (a) the heirs, executors and legal representatives of Employee, upon Employee's death or incapacity, and (b) any successor of Employer, and any such successor shall be deemed substituted for Employee or Employer, as the case may be, under the terms hereof for all purposes; provided, -------- however, that any such assignment shall not relieve Employer from its - ------- obligations hereunder. As used in this Agreement, "successor" shall include any Person that at any time, whether by purchase, merger, consolidation or otherwise, directly or indirectly acquires a majority of the assets, business or stock of Employer. 4.6 Integration. This Agreement, the Plan and any option agreement ----------- Employee will be required to execute, constitute the entire agreement between the parties with respect to all matters covered herein, including but not limited to the parties' employment relationship and Employee's entitlement to compensation, commissions and benefits from Employer or any of its Affiliated companies and/or the termination of Employee's employment. This Agreement supersedes all prior oral or written understandings and agreements relating to its subject matter and all other business relationships between Employer and/or its Affiliated companies. 4.7 No Representations. No Person has made or has the authority to make ------------------ any representations or promises on behalf of any of the parties which are inconsistent with the representations or promises contained in this Agreement, and this Agreement has not been executed in reliance on any representations or promises not set forth herein. -13- 4.8 Amendments. This Agreement may be modified only by a written ---------- instrument executed by the parties that is designated as an amendment to this Agreement. 4.9 Counterparts. This Agreement is being 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. 4.10 Severability and Non-Waiver. Any provision of this Agreement (or --------------------------- portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. 4.11 Voluntary and Knowledgeable Act. Employee represents and warrants ------------------------------- that he has been represented by independent legal counsel of his own choosing and that he has read and understands each and every provision of this Agreement and has freely and voluntarily entered into this Agreement. 4.12 Late Payments. If the Employer fails to pay any amount provided ------------- under this Agreement or any other plan or program sponsored by Employer when due, the Employer shall pay interest on such amount at a rate equal to (i) the highest rate of interest charged by the Employer's principal lender plus 200 basis points, or (ii) in the absence of such a lender, 300 basis points over the prime commercial lending rate announced by Harris Trust and Savings Bank on the date such amount is due or, if no such rate shall be announced on such date, the immediately prior date on which Harris Trust and Savings Bank announced such a rate; provided, however, that if the interest rate determined in accordance with this Section exceeds the highest legally-permissible interest rate, then the interest rate shall be the highest legally-permissible interest rate. IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first above written. EMPLOYER: IFX CORPORATION By: /s/ Michael Shalom ------------------------------------- Name: Michael Shalom Title: Chief Executive Officer Dated as of January 1, 2000 -14- EMPLOYEE: /s/ Joel Eidelstein -------------------------------- Joel Eidelstein Dated as of January 1, 2000 -15- EXHIBIT A TO EMPLOYEE AGREEMENT (Joel Eidelstein) Option Grants ------------- A. Each Option granted to Employee pursuant to this Employment Agreement shall be subject to, and exercisable in accordance with, the terms and conditions set forth in the Plan. B. Each Option granted pursuant to this Employment Agreement shall be granted as of January 1, 2000 (the "Option Date") and shall be evidenced by a standard option agreement between IFX and Employee in a form approved by the Compensation Committee of the Board of Directors of IFX containing the following terms: Amount Exercise Price Vesting Period ------ -------------- -------------- 300,000 $8.75 3 year vesting based on the following schedule: 34% on the first-year anniversary 8.25% quarterly after the first year -16- EX-10.5 10 0010.txt STOCK OPTION AGREEMENT-EIDELSTEIN Exhibit 10.5 IFX CORPORATION STOCK OPTION AGREEMENT THIS STOCK OPTION AGREEMENT (the "Agreement") is dated as of November --------- 10, 1998 (the "Grant Date") and is entered into between IFX CORPORATION, a ---------- Delaware corporation ("IFX"), and JOEL M. EIDELSTEIN ("Optionee"). In --- -------- consideration of the mutual promises and covenants made herein, the parties hereby agree as follows: 1. Defined Terms. Capitalized terms not otherwise defined herein -------------- shall have the same meaning ascribed to them in the Plan. 2. Grant of Option. --------------- (a) Subject to the terms and conditions of the IFX 1998 Stock Option and Incentive Compensation Plan (the "Plan"), a copy of which is attached ---- hereto and incorporated herein by this reference, IFX grants to Optionee an option (the "Option") to purchase 300,000 shares (the "Shares") of IFX's common ------ ------ stock, $.02 par value (the "Common Stock"), at a price equal to $3.00 per share ------------ (the "Option Price"). The Option Price has been determined by the Compensation ------------ Committee of the Board of Directors of IFX (the "Committee"), acting in good --------- faith, to be in excess of 150% of the fair market value of the Common Stock on the Grant Date. (b) The Option is intended to qualify as an incentive stock option as defined in, and will be subject to, Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and all provisions of this ---- Agreement are to be construed in conformity with this intention. The failure of all or any portion of the Option to qualify as an incentive stock option under Section 422 of the Code shall not render invalid the Option or any portion of the Option that fails to so qualify. 3. Term. Except as otherwise provided herein, the Option shall be ---- valid for a term commencing on the Grant Date and ending 10 years after the Grant Date (the "Termination Date"). ---------------- (a) Option Rights Upon Termination of Employment. If Optionee ceases to be employed by IFX or any of its subsidiaries or affiliates (collectively, the "Subsidiaries") for any reason other than death or for ------------ "Cause" (as defined in the Plan), the Option shall be exercisable at any time prior to the earlier of the termination date or the date three months after the date of termination of employment. (b) Option Rights Upon Termination for Cause. If Optionee's ---------------------------------------- employment with IFX and/or its Subsidiaries is terminated for Cause, any unexercised portion of the Option immediately shall be cancelled and thereafter may not be exercised and Optionee shall forfeit all rights to any unexercised portion of the Option. (c) Option Rights Upon Death of Optionee. Following the death of ------------------------------------ Optionee, the Option may be exercised by Optionee's personal representative or by the distributee to whom Optionee's rights under the Option shall pass by will or by the laws of descent and distribution, at any time prior to the earlier of the Termination Date or the date six months after the date of Optionee's death. 4. Vesting. ------- (a) Standard Vesting. The Option may only be exercised to the ---------------- extent vested. Any vested portion of the Option may be exercised at any time in whole or from time to time in part. Vesting shall commence on the Grant Date and Optionee shall vest in the Option according to the following schedule (each date set forth below, a "Vesting Date"): ------------ Cumulative Percentage of Vesting Date Option Vested ------------ ------------- Grant Date 25% January 1, 1999 50% January 1, 2000 75% January 1, 2001 100% Optionee must be employed by IFX or any Subsidiary on (a) the Grant Date, in order to vest in any portion of the Option, and (b) on any Vesting Date, in order to vest in the portion of the Option set forth in the chart above that vests on such Vesting Date. No portion of the Option shall vest between Vesting Dates; if Optionee ceases to be employed by IFX or any Subsidiary, then any portion of the Option that is scheduled to vest on any Vesting Date after the date Optionee's employment is terminated automatically shall be forfeited as of the termination of employment. If Optionee's employment with IFX or any Subsidiary is terminated for any reason, any portion of the Option which is not then vested shall be immediately forfeited; provided, however, that a transfer or reassignment of Optionee from IFX to any Subsidiary, or vice versa, shall not ---- ----- constitute a termination of employment for purposes of this Agreement. (b) Vesting Upon Change of Control. Notwithstanding the ------------------------------ provisions of Section 4(a) or anything contained in this Agreement or in the Plan to the contrary, upon a Change in Control (as hereinafter defined) the entire amount of the Option shall become 100% vested and immediately exercisable. For purposes of this Agreement, "Change in Control" means the ----------------- occurrence of any one of the following events: (i) any consolidation, merger or other similar transaction involving the Company, if the Company is not the continuing or surviving corporation, or which contemplates that all or substantially all of the business and/or assets of the Company will be controlled by another corporation; (ii) any sale, lease, exchange or transfer (in one transaction or series of related -2- transactions) of all or substantially all of the assets of the Company; (iii) approval by the shareholders of the Company of any plan or proposal for the liquidation or dissolution of the Company, unless such plan or proposal is abandoned within 60 days following such approval; (iv) the acquisition by any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), or two or more persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the outstanding shares of voting stock of the Company; provided, however, -------- ------- that for purposes of the foregoing, "person" excludes Lee S. Casty, International Technology Investments, LC or any of their affiliates; or (v) if, during any period of 24 consecutive calendar months commencing on the date of this Agreement, those individuals (the "Continuing Directors") who either (i) were directors of the Company on -------------------- the first day of each such period, or (ii) subsequently became directors of the Company and whose actual election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the board of directors of the Company, cease to constitute a majority of the board of directors of the Company. 5. Procedure for Exercise. Exercise of the Option or a portion ---------------------- thereof shall be effected by the giving of written notice to IFX in accordance the Plan and payment of the pro rata portion of the Option Price for the number of Shares to be acquired pursuant to the exercise. 6. Payment for Shares. Payment of the Option Price (or portion ------------------ thereof) shall be made in cash or by such other method as may be permitted by the Committee in accordance with the provisions of the Plan. No Shares shall be delivered upon exercise of the Option until full payment has been made and all applicable withholding requirements satisfied. 7. Options Not Transferable and Subject to Certain Restrictions. The ------------------------------------------------------------ Option may not be sold, pledged, assigned or transferred in any manner without the prior consent of the Committee, which may be given or withheld in its sole discretion, other than by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order as defined in Section 414(p) of the Code. During Optionee's lifetime, the Option may be exercised only by the Optionee, a permitted assignee or by a legally authorized representative. In the event of Optionee's death, the Option may be exercised by the distributee to whom Optionee's rights under the Option shall pass by will or by the laws of descent and distribution. 8. Acceptance of Plan. Optionee hereby accepts and agrees to be bound ------------------ by all the terms and conditions of the Plan. 9. No Right to Employment. Nothing herein contained shall confer upon ---------------------- Optionee any right to continuation of employment by IFX or any Subsidiary, or interfere with the right of IFX or any Subsidiary to terminate at any time the employment of Optionee. Nothing contained herein shall confer any rights upon Optionee as a shareholder of IFX, unless and until Optionee -3- actually receives Shares. 10. Compliance with Securities Laws. The Option shall not be ------------------------------- exercisable and Shares shall not be issued pursuant to exercise of the Option unless the exercise of the Option and the issuance and delivery of Shares pursuant thereto shall comply with all relevant provisions of law including, without limitation, the Securities Act of 1933, as amended (the "Securities ---------- Act"), the Securities Exchange Act of 1934, as amended, the rules and - --- regulations promulgated thereunder, and the requirements of any stock exchange upon which Common Stock may then be listed, and shall be further subject to the approval of counsel for IFX with respect to such compliance. If, in the opinion of counsel for IFX, a representation is required to be made by Optionee in order to satisfy any of the foregoing relevant provisions of law, IFX may, as a condition to the exercise of the Option, require Optionee to represent and warrant at the time of exercise that the Shares to be delivered as a result of such exercise are being acquired solely for investment and without any present intention to sell or distribute such Shares. 11. Adjustments. Subject to the sole discretion of the Board of ----------- Directors, IFX may, with respect to any unexercised portion of the Option, make any adjustments necessary to prevent accretion, or to protect against dilution, in the number and kind of shares covered by the Option and in the applicable exercise price thereof in the event of a change in the corporate structure or shares of IFX; provided, however, that no adjustment shall be made for the issuance of preferred stock of IFX or the conversion of convertible preferred stock of IFX. For purposes of this Section 11, a change in the corporate structure or shares of IFX includes, without limitation, any change resulting from a recapitalization, stock split, stock dividend, consolidation, rights offering, spin-off, reorganization or liquidation, and any transaction in which shares of Common Stock are changed into or exchanged for a different number or kind of shares of stock or other securities of IFX or another entity. 12. No Other Rights. Optionee hereby acknowledges and agrees that, --------------- except as set forth herein, no other representations or promises, either oral or written, have been made by IFX, any Subsidiary or anyone acting on their behalf with respect to Optionee's right to acquire any shares of Common Stock, stock options or awards under the Plan, and Optionee hereby releases, acquits and forever discharges IFX, the Subsidiaries and anyone acting on their behalf of and from all claims, demands or causes of action whatsoever relating to any such representations or promises and waives forever any claim, demand or action against IFX, any Subsidiary or anyone acting on their behalf with respect thereto. 13. Severability. Any provision of this Agreement (or portion thereof) ------------ that is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section 13, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. 14. Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties concerning the subject matter hereof and supersedes all prior and contemporaneous agreements, oral or written, between IFX and Optionee relating to Optionee's entitlement to stock options, Common Stock or similar benefits, under the Plan or otherwise. -4- 15. Amendment. This Agreement may be amended and/or terminated at any --------- time by mutual agreement of IFX and Optionee. 16. Governing Law. The construction and operation of this Agreement are -------------- governed by the laws of the State of Delaware (without regard to its conflict of laws provisions). [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -5- This Agreement has been executed as of the date first written above. IFX CORPORATION By: /s/ Colleen M. Downes ------------------------- Colleen M. Downes, Chief Financial Officer /s/ Joel M. Eidelstein Joel M. Eidelstein Social Security Number -6- EX-10.6 11 0011.txt EMPLOYMENT AGREEMENT-SHALOM Exhibit 10.6 ------------ EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of January 1, 2000 by and between IFX CORPORATION, a Delaware corporation ("IFX" and, collectively with its subsidiaries, "Employer"), and MICHAEL SHALOM ("Employee"). W I T N E S S E T H: -------------------- WHEREAS, Employer is in the business of acquiring, developing and maintaining Internet access and related services in Latin America and other non- U.S. jurisdictions (the "Business"); WHEREAS, Employer desires to continue to employ Employee to oversee all management and day-to-day operations as Chief Executive Officer of Employer, and Employee desires to continue such employment, on the terms and subject to the conditions set forth herein; WHEREAS, Employer believe it would be in the best interest of Employer to have Employee's terms of employment set forth in a written agreement; WHEREAS, Employee also desires to have a written agreement and to have the option to acquire an additional equity interest in Employer; and WHEREAS, Employee has had an opportunity to review the terms and conditions of this Agreement, to negotiate the terms hereof and to engage legal counsel on his behalf if he so desires. NOW THEREFORE, in consideration of Employer's continued employment of Employee, the terms, conditions and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee and Employer, intending to be legally bound, hereby agree as follows: ARTICLE I DEFINITIONS 1.1 Terms Defined Herein. Except as otherwise herein expressly provided, the following terms and phrases shall have the meanings set forth below: "Affiliate" means (a) in the case of an entity, any Person who or which, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any specified Person or (b) in the case of an individual, such individual's spouse, children, grandchildren or parents or a trust primarily for the benefit of any of the foregoing. "Cause" means (a) the willful and continued failure by Employee to substantially perform his duties under this Agreement (other than any failure resulting from Employee's death or incapacity due to physical or mental illness) for five days after written demand for substantial performance is delivered by Employer which specifically identifies the manner in which Employer believes Employee has not substantially performed his duties, (b) the commission by Employee of theft, embezzlement, fraud or misappropriation of funds against Employer or the willful engaging by Employee in other misconduct which is materially injurious to Employer, (c) the willful violation by Employee of Section 3.1, 3.2, 3.3 or 3.4 of this Agreement or (d) the conviction of Employee of a felony involving fraud, dishonesty or moral turpitude. Notwithstanding anything to the contrary contained herein, none of the following events shall be treated as "cause." (i) bad judgment, (ii) negligence, (iii) any act or omission that Employee believed in good faith to have been in or not opposed to the interests of the Company, or (iv) any act or omission of which any member of the Board who is not a party to such act or omission has had actual knowledge for at least 12 months. "Change in Control" means the occurrence of any one of the following events: (a) any consolidation, merger or other similar transaction involving IFX, if IFX is not the continuing or surviving corporation, or which contemplates that all or substantially all of the business and/or assets of IFX will be controlled by another corporation; (b) any sale, lease, exchange or transfer (in one transaction or series of related transactions) of all or substantially all of the assets of IFX; (c) approval by the stockholders of IFX of any plan or proposal for the liquidation or dissolution of IFX, unless such plan or proposal is abandoned within 60 days following such approval; (d) the acquisition by any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the outstanding shares of voting stock of IFX; provided, however, that for purposes of the foregoing, "person" excludes Lee S. Casty, International Technology Investments, LC or any of their Affiliates, any underwriter purchasing shares of IFX with the intent of reselling them, or any sale to GEM (or its affiliates); or (e) if, during any period of 24 consecutive calendar months commencing on the date of this Agreement, those individuals (the "Continuing Directors") who either (i) were directors of IFX on the first day of each such period, or (ii) subsequently became directors of IFX and whose actual election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the board of directors of IFX, cease to constitute a majority of the board of directors of IFX. "Common Stock" means shares of common stock, par value $.02 per share, of IFX. "Disability" means disability as defined in Employer's disability insurance plan then in effect. "Involuntary Termination" means if Employer terminates Employee for any reason other than Cause or if Employee terminates his employment with Employer (a) within 30 days after Employer materially reduces Employee's duties and responsibilities hereunder; (b) within five days after Employer's receipt of written notice from Employee that Employer is in material breach of its obligations under this Agreement, which material breach has not been cured during -2- such five-day period; (c) the failure to nominate or elect Employee as President, Chief Executive Officer or Chief Operating Officer of IFX; (d) causing or requiring Employee to report to anyone other than the Board; (e) assignment of duties materially inconsistent with his position and duties described in this Agreement; (f) the failure of IFX to assign this Agreement to a successor to IFX or the failure of a successor to IFX to explicitly assume and agree to be bound by this Agreement; (g) requiring Employee to be principally located at any office or location more than 50 miles from IFX's current office in Miami Lakes, Florida; or (h) a termination of employment by Employee for any reason or no reason during the 30-day period commencing 12 months after a Change in Control; provided, however, that in the event such breach is curable but Employer is unable to cure such breach within such five-day period, then any such breach shall not be deemed to justify Employee's "Involuntary Termination" hereunder so long as Employer is diligently and in good faith pursuing a cure and such breach is cured no later than 30 days following receipt of the foregoing written notice from Employee. Any reasonable good faith determination by Employee that any of the foregoing has occurred shall be conclusive and binding for all purposes hereunder. "Person" means any individual, partnership, corporation, limited liability company, joint venture, trust, firm, association, unincorporated organization or other entity. "Plan" means the IFX Corporation 1998 Stock Option and Incentive Plan, as amended. ARTICLE II TERMS OF EMPLOYMENT 2.1 Employment; Scope of Duties. (a) Employer hereby continues to employ Employee as President of Employer to act as chief operating officer of Employer and to manage and oversee all day- to-day operations of Employer, and Employee hereby accepts such employment with Employer. In performing his duties hereunder, Employee shall report solely to, and shall be subject to the supervision of, the Board of Directors. (b) Employee shall devote his best efforts and full business time and attention to the performance of services for Employer in accordance with the terms hereof. During the Term (as defined in Section 2.4), Employee shall not engage in any other business or professional activities, either on a full-time or part-time basis, as an employee, consultant or in any other capacity, whether or not he receives any compensation therefor, without the prior written consent of Employer's Board of Directors; provided, however, that nothing herein shall prevent Employee from (i) making and managing personal investments consistent with Section 3.3 of this Agreement, (ii) from engaging in community and/or charitable activities, so long as such activities, either singly or in the aggregate, do not interfere with the proper performance of Employee's responsibilities to Employer, or (iii) being involved as an officer, director, employee or consultant of Telcom.Net, Inc., Software Brokers of America, Inc. a/k/a INTCOMEX and/or its affiliates, and International Technology Investments, LC, or any subsidiary or Affiliate of Employer (including but not limited to Tutopia.com, Inc. and Facilito, Inc.). 2.2 Compensation. -3- (a) As compensation for Employee's services hereunder during the Term, Employer shall pay to Employee (the "Salary"), (i) during the first year of the Term, $225,000 per year and (ii) during the second year of the Term, $250,000, less applicable income tax withholdings. The Salary shall be payable in equal biweekly installments in accordance with Employer's customary compensation policies. If, during the term of this Agreement, the Employee should be prevented from performing his duties by reason of Disability, amounts payable by Employer hereunder shall be reduced by the amounts payable under the Employer's disability insurance policy. (b) In addition to the Salary, Employer will pay an annual cash bonus to Employee of $50,000. For the first year of the Term, the bonus shall be paid within 30 days of the Employer obtaining 600,000 user registrations for its Web services. For years after the first year, the Employer and Employee agree to jointly establish the criteria upon which the bonus will be paid. (c) In addition to the Salary, Employee shall be granted Options as shown on Exhibit A hereto. The Options shall be evidenced by a standard option agreement between Employer and Employee in a form approved by the Compensation Committee of the Board of Directors of Employer . 2.3 Employee Benefits. (a) Employee shall be entitled to such paid holidays and vacation time as is consistent with Employer's standard holiday and vacation policy for executive employees of Employer. (b) Subject to Employer's rules, policies and regulations as in effect from time to time (and subject to applicable eligibility requirements, including a minimum employment period), Employee shall be entitled to (i) group life insurance, disability or accident, death or dismemberment insurance, (ii) medical and/or dental insurance program; provided that regardless of the payment for other employees, Employee's premiums for himself and his family shall be paid in full by Employer and shall be for a preferred provider plan or similar plan, (iii) 401(k) benefit plan, if and when Employer establishes such a plan, (iv) other employee benefits that Employer may, in its sole discretion, make generally available to employees of Employer of the same level and responsibility as Employee, (v) all cell phone bills (provided that substantially all calls are made for business related to the Employer, (vi) a car allowance of $750 per month, (vii) high-speed internet access from Employee's principal residence. 2.4 Term. Employee's employment pursuant to this Agreement shall commence on the date hereof and shall continue in effect for three years from the date hereof unless otherwise terminated in accordance with Section 2.5. Commencing on the first anniversary of the date hereof, if on or before that date, Employer has not delivered to Employee or Employee has not delivered to Employer, written notice that the Term will not be extended, the Term shall automatically be extended each day by one day, until a date which is two years following the first date, if any, that Employer delivers to Employee or Employee delivers to Employer, as the case may be, such a written notice. The period of time during which Employee remains employed by Employer pursuant to this Section 2.4 is referred to herein as the "Term." 2.5 Termination of Employment. -4- (a) Disability. (i) If during the term of this Agreement, the Employee should be prevented from performing his duties by reason of Disability for a continuous period greater than 180 days, Employer may terminate the Employee's employment hereunder by giving written notice thereof to the Employee, effective on the date set forth in the notice (which date shall be not less than 15 business days after the notice is given). For purposes hereof, a continuous period of incapacity shall not be deemed interrupted until the Employee returns to substantially full time work for a period of at least 30 days. (ii) If termination of employment results or occurs due to Disability under this Section 2.5(a), Employee shall receive no other compensation hereunder; provided, however, that until Employee receives disability insurance payments under Employer's disability insurance coverage, Employee shall receive his Salary. All Options held by Employee under the Plan (or any successor thereto) shall vest immediately upon the date of termination for Disability. (b) Death. (i) In the event of the Employee's death during the term of this Agreement, the Employee's employment hereunder shall be deemed terminated as of the date of the Employee's death. Employee's family shall be entitled to receive fully paid health and dental insurance coverage for one year after Employee's death and all Options held by Employee under the Plan or any successor thereto shall vest immediately. (c) Cause. (i) This Agreement and the Employee's employment hereunder may be terminated at any time by the Company for Cause. (ii) If the Employee's employment is terminated by the Company for Cause or Employee terminates his employment other than by reason of death, Disability or an Involuntary Termination, Employee shall be entitled to no additional payments hereunder and Employee's Options shall be treated as required under the Plan. (iii) Employer may not terminate Employee's employment for Cause unless the following procedures are followed or waived by Employee: (A) no fewer than 60 days prior to the proposed date of termination, the Employer provides Employee with written notice (the "Notice of Consideration") of its intent to consider termination of Employer's employment for Cause, including a detailed description of the specific reasons which form the basis for such consideration; (B) for a period of not less than 30 days after the date of Notice of Consideration is provided, Employer shall have the opportunity to appear before the Board, with or without legal -5- representation, at a date and time specified in the Notice of Consideration, to present arguments and evidence on his own behalf; and (C) following the presentation to the Board as provided in Section 2.5(c)(iii)(B) above or Employee's failure to appear before the Board at such date and time specified in the Notice of Consideration (which date shall not be less than 30 days after the date the Notice of Consideration is provided), Employee may be terminated for Cause only if (x) the Board, by the affirmative vote of all of its members (excluding Employee if he is a member of the Board, and any other member of the Board reasonably believed by the Board to be involved in the events leading the Board to terminate Employee for Cause), determines that the actions or inactions of Employee specified in the Notice of Termination occurred, that such actions or inactions constitute Cause, and that Employee's employment should accordingly be terminated for Cause; and (y) the Board provides Employee with a written determination (a "Notice of Termination for Cause") setting forth in specific detail the basis of such Termination of Employment, which Notice of Termination for Cause shall be consistent with the reasons set forth in the Notice of Consideration. (D) Unless Employer establishes both (i) its full compliance with the substantive and procedural requirements of this Section 2.5(c) prior to a Termination of Employment for Cause, and (ii) that Employee's action or inaction specified in the Notice of Termination for Cause did occur and constituted Cause, any Termination of Employment shall be deemed an Involuntary Termination for all purposes of this Agreement. (d) Involuntary Termination. In the event of an Involuntary Termination, Employee shall receive the following: (i) immediately after the Date of Termination, a lump-sum amount in immediately available funds equal to the sum of Executive's accrued but unpaid Salary and a pro-rated portion of the bonus paid to Employee during the prior year; (ii) immediately after the Date of Termination, a lump-sum amount in immediately available funds equal to the product of the number of whole and fractional years included in the period from the Date of Termination until the end of the Term (the "Severance Period") multiplied by the sum of Employee; annualized Salary for the current year plus bonus for the prior year; (iii) the continuation of the benefits (or, if such benefits are not available, the after-tax economic equivalent thereof) specified in Section 2.3(b) to which Employee is entitled as of the Date of Termination for the entire duration of the Severance Period or, at the election of Employee, an immediate lump-sum cash payment equal to the value of such benefits; provided that with respect to any benefit to be provided on an insured basis, such value shall be the present value of the premiums expected to be paid for such coverage, and with respect to other benefits, such value shall be the present value of the expected net cost to the Company of providing such benefits; (iv) All options held by Employee under the Plan or any successor thereto shall vest immediately; and -6- (v) All contractual restrictions on the transfer, sale or pledge of the common stock held by the Employee (or his Affiliates) will be immediately extinguished and released. (e) Termination After a Change of Control. If a Termination without Cause or an Involuntary Termination occurs within two years after a Change of Control, then Executive shall receive the payments required by Section 2.5(d), except that for purposes of Section 2.5(d)(ii), Executive shall receive three (3.0) times the sum of: i) Employee's annualized Salary in the year of the Change of Control and ii) the highest bonus received to Employee from the Company in the year of the Change of Control or any prior year. (f) Other Termination Benefits. In addition to any amounts or benefits payable upon a Termination of Employment hereunder, Executive shall, except as otherwise specifically provided herein, be entitled to any payments or benefits provided hereunder or under the terms of any plan, policy or program of the Company or as otherwise required by applicable law. ARTICLE III COVENANTS AND AGREEMENTS 3.1 Records and Confidential Data. (a) Employee acknowledges that, in connection with the performance of his duties hereunder, Employer and its Affiliates will make available to Employee, and/or Employee will have access to, certain Confidential Information (as defined below) of Employer and its Affiliates. Employee acknowledges and agrees that any and all Confidential Information learned or obtained by Employee during the course of his employment by Employer or otherwise, whether developed by Employee alone or in conjunction with others or otherwise, shall be and is the property of Employer and its Affiliates. Employee shall keep all Confidential Information confidential and shall not use any Confidential Information in any manner other than in connection with Employee's discharge of his duties hereunder. (b) Following the first to occur of the termination of Employee's employment hereunder, or as soon as reasonably possible after Employer's written request, Employee shall return to Employer all written Confidential Information which has been provided to Employee and Employee shall destroy all copies of any analyses, compilations, studies or other documents prepared by Employee or for Employee's use containing or reflecting any Confidential Information. Within five business days after receipt of such request by Employee, Employee shall, upon written request of Employer, deliver to Employer a notarized document certifying that such written Confidential Information has been returned or destroyed in accordance with this Section 3.1(b). (c) For purposes of this Agreement, "Confidential Information" shall mean all confidential and proprietary information of Employer and/or its Affiliates, including, without limitation, confidential and proprietary information that is derived from or regarding reports, investigations, experiments, research, trade secrets, work in progress, web site drawing, designs, plans, proposals, requests for proposals, bids, codes, marketing and sales programs, acquisition -7- targets or strategies, information regarding subscribers or web site viewers, client lists, client mailing lists, supplier lists, financial projections, cost summaries, payor information, pricing formulae, marketing studies relating to prospective business opportunities and all other confidential and proprietary materials or information prepared for or by Employer and/or any of its Affiliates. For purposes of this Agreement, Confidential Information shall not include and Employee's obligations under this Section 3.1 shall not extend to (i) information which is generally available to the public, (ii) information obtained by Employee from Persons not under agreement to maintain the confidentiality of the same, and (iii) information which is required to be disclosed by law or legal process (after giving Employer prior written notice thereof and an opportunity to contest such disclosure). 3.2 Inventions and Other Matters. (a) Employee agrees that all, inventions, discoveries or improvements made during the period of Employee's employment with Employer, including, without limitation, computer software (including source code, operating systems and specifications, data, data bases, files documentation and other materials related thereto), HTML or other scripts, web site designs, art work, visual images, programming code and programs, processes, uses, apparatuses, specialized information relating in any way to or that is useful in the business or products of Employer or Employer's actual or demonstrably anticipated research or development, designs or compositions of any kind that Employee, individually or with others, may originate or develop while employed by Employer (collectively, "Inventions"), belong to and shall be the sole property of Employer and constitute and shall constitute works specially ordered or commissioned as "works made for hire" under the United States Copyright Act and other applicable law. Without limiting the foregoing, Employee hereby assigns and transfers to Employer all rights of whatever nature that Employee may have, including, without limitation, any patent, trade secret, trademark or service mark rights (and any goodwill appurtenant thereto), any rights of publicity and any right, title and interest in any copyright and any right that may affix under any copyright law now or hereinafter in force and effect in the United States of America or in any other country or countries, in and to any Invention. Employee acknowledges and agrees that Employer shall have the royalty-free right to use in its businesses, and to make and sell products, processes, programs, systems designs, methods, formulas, apparatus, techniques, and services derived from any Inventions (whether or not patentable or copyrightable), as well as all improvements thereof or know-how related thereto. The provisions of this Section 3.2 shall survive termination of this Agreement for any reason. (b) For purposes of this Agreement, an Invention shall be deemed to have been "made during the period of Employee's employment" if, during such period, the Invention was conceived, in part or in whole, or first actually reduced to practice. Employee agrees that any patent, copyright or trade mark application (i) covering intellectual property that relates to services performed by Employee hereunder or that is applicable to those products or services of Employer that were within the scope of Employee's responsibilities hereunder, and (ii) that is filed by or for the benefit of Employee or any of his Affiliates within one year after termination of Employee's employment shall be presumed to relate to an Invention made during the term of his employment and Employee shall have the burden of proof to prove otherwise. -8- (c) This Section 3.2 shall not apply to an Invention for which no equipment, supplies, facilities or Confidential Information (as defined below) of Employer was used and that was developed entirely on Employee's own time, unless (i) the invention relates or is applicable to the services performed by Employee hereunder or that is applicable to those services or products of Employer that were within the scope of Employee's responsibilities hereunder, or (ii) results from any work relating to the Business that was performed, caused to be performed, or supervised by Employee for or on behalf of Employer. (d) Employee agrees, without further consideration, to (i) promptly disclose each such Invention to Employer, to Employee's immediate supervisor and to such other individuals as Employer may direct, (ii) execute and to join others in executing such applications, assignments and other documents as may be necessary or convenient to vest in Employer, or its designee, full title to each such Invention and as may be necessary or convenient to obtain United States and foreign patents and copyrights thereon, to the extent Employer may so choose in its sole discretion, (iii) testify in any legal proceeding relative to such Invention whenever requested to do so by Employer, and (iv) furnish all facts relating to such Inventions or the history thereof. (e) Employee agrees that he will not at any time, except as authorized or directed by Employer, publish or disclose any information or knowledge concerning any Inventions. 3.3 Non-Competition. (a) Employer and Employee recognize that Employee has been retained to occupy a position of trust that constitutes part of the professional, management and executive staff of Employer. Employee, for and in consideration of the payments, rights and benefits provided herein, agrees that so long as he is employed by Employer and, if Employer terminates Employee's employment for Cause or if Employee terminates his employment with Employer for any reason other than pursuant to an Involuntary Termination, for a period of one year thereafter, Employee shall not (i) work or act as an officer or director of or compensated consultant to, (ii) assist, (iii) own, directly or through any Affiliate or joint venture, a 10% or greater interest in, or (iv) make a financial investment (other than a passive, economic investment), whether in the form of equity or debt, in any business that is directly competitive with the Business in the United States, Latin America or in any other market in which Employer is conducting the Business at the time Employee's employment with Employer is terminated. (b) Notwithstanding the foregoing, nothing herein shall prohibit Employee from holding ten percent (10 %) or less of any class of voting securities of any entity whose equity securities are listed on a national securities exchange or regularly traded in the over-the-counter market and for which quotations are readily available on the National Association of Securities Dealers Automated Quotation system. (c) If Employer terminates Employee's employment for Cause or if Employee terminates his employment with Employer for any reason other than pursuant to an Involuntary Termination, for a period of one year thereafter, Employee shall promptly notify Employer of each employment or agency relationship entered into by Employee, and each corporation, proprietorship or other entity formed or used by Employee, the business of which is directly -9- competitive with the Business. The provisions of this Section 3.3 shall survive termination of this Agreement for any reason. 3.4 Non-Solicitation and Non-Interference. (a) Employee acknowledges that Employer has invested substantial time and effort in assembling its present staff of personnel. Employee agrees that so long as he is employed by Employer and for a period of one year thereafter, Employee shall not, directly or indirectly, employ, solicit for employment, or advise or recommend to any other Person that such other Person employ or solicit for employment, any of Employer's employees or recommend to any employee of Employer that he/she cease to be employed by Employer; provided that the restrictions set forth in the immediately preceding sentence shall not apply to any solicitation directed at the public in general e.g., advertisements in publications of general circulation, etc. or to inquiries for employment that were unsolicited, directly or indirectly, by Employee. (b) Employee acknowledges that all customers of Employer, which Employee has serviced or hereafter services during Employee's employment by Employer and all prospective customers from whom Employee has solicited or may solicit business while in the employ of Employer, shall be solely the customers of Employer. Employee agrees that so long as he is employed by Employer and for a period of one year thereafter, Employee shall not either directly or indirectly solicit business, as to products or services competitive with the Business, from any of Employer's customers with whom Employee had contact during his employment with Employer. (c) Employee agrees that so long as he is employed by Employer and for a period of one year thereafter, Employee shall not, directly or indirectly, (i) intentionally disrupt or attempt to disrupt or terminate any relationship between Employer and any of its Business suppliers, clients or employees, or (ii) disparage, malign or discredit the name or reputation of Employer to any customers, clients or suppliers of the Business. Employee agrees that during such one year period, he will not influence or attempt to influence any of the customers or clients of Employer to cease doing business with Employer. 3.5 Restrictions Reasonable. Employee agrees that the restrictions contained in Sections 3.3 and 3.4 are reasonable as to time and geographic scope because of the nature of the Business and Employee agrees, in particular, that the geographic scope of this restriction is reasonable because companies in the same industry as the Business compete on an international basis. Employee acknowledges that Employer is in direct competition with all other companies that provide services and products similar to the Business products and services throughout the United States and Latin America and, because of the nature of the Business, Employee expressly agrees that the covenants contained in Sections 3.3 and 3.4 cannot reasonably be limited to any smaller geographic area. The provisions of Sections 3.3 and 3.4 shall survive termination of this Agreement for any reason. 3.6 Prior Obligations. Employee represents and warrants that (a) Employee has no obligation of confidence or other commitments to any previous employer or any others that conflict with this Agreement or restrict Employee's field of activities, and (b) no other agreement -10- to which Employee is subject will conflict with, prevent, be breached by, interfere with or in any manner affect the terms and conditions of this Agreement. 3.7 Injunctive Relief. Employee acknowledge that damages would be an inadequate remedy for Employee's breach of any of the provisions of Sections 3.1, 3.2, 3.3 and/or 3.4 of this Agreement, and that breach of any of such provisions will result in immeasurable and irreparable harm to Employer. Therefore, in addition to any other remedy to which Employer may be entitled by reason of Employee's breach or threatened breach of any such provision, Employer shall be entitled to seek and obtain a temporary restraining order, a preliminary and/or permanent injunction, or any other form of equitable relief from any court of competent jurisdiction restraining Employee from committing or continuing any breach of such Section, without the necessity of posting a bond. It is further agreed that the existence of any claim or cause of action on the part of Employee against Employer, whether arising from this Agreement or otherwise, shall in no way constitute a defense to the enforcement of the provisions of Sections 3.1, 3.2, 3.3 and/or 3.4 of this Agreement. ARTICLE IV MISCELLANEOUS 4.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given (a) when made, if delivered personally, (b) three business days after being mailed by certified or registered mail, postage prepaid, return receipt requested, or (c) two business days after delivery to a reputable overnight courier service, to the parties, their successors in interest or their assignees at the following addresses, or at such other addresses as the parties may designate by written notice in the manner aforesaid: To Employer: IFX Corporation C/o IFX Communications Ventures, Inc. 15050 N.W. 79 Court Suite 200 Miami Lakes, Florida 33016 Attention: President To Employee, to his home address as recorded in the payroll records of Employer from time to time. 4.2 Governing Law. This Agreement shall be governed as to its validity and effect by the internal laws of the State of Florida, without regard to its rules regarding conflicts of law. 4.3 Agreement To Arbitrate. (a) Employer and Employee agree that any disputes that arise between Employee and Employer (or any of Employer's officers, directors, stockholders, supervisors, employees, agents, Affiliates or successors), excluding disputes arising out of Section 3.1, 3.2, 3.3 or 3.4, that cannot be resolved informally shall be decided by submission of the dispute to binding -11- arbitration before a sole neutral arbitrator who is a retired federal judge pursuant to the American Arbitration Association Commercial Arbitration Rules governing such proceedings, and not by a lawsuit or by resort to court process, except as specifically set forth below. Both parties acknowledge and agree that they are giving up their respective constitutional rights to have any such dispute decided in a court of law before a jury, and instead are accepting the use of the arbitration process. This Section 4.3(a) applies to any and all disputes, including, by way of example only and not limited to, disputes regarding termination of Employee's employment; discrimination and unlawful harassment of any kind (including, without limitation, claims arising under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. (S)2000(e) et seq. and the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. (S)621, et seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. (S)12101 et seq.; the Family and Medical Leave Act of 1993, 29 U.S.C. (S)2612 et seq.; and all applicable state and local anti-discrimination laws and constitutional provisions); disputes arising under any other applicable federal, state or local labor statutes, regulations or orders; disputes regarding assault and battery; negligent supervision; defamation; invasion of privacy; wages and overtime; and disputes regarding the formation and enforceability of this Section 4.3(a). The following types of disputes are excluded from the scope of coverage of this Section 4.3(a): (i) workers' compensation claims by Employee for on-the-job injuries; and (ii) any and all claims by Employer against Employee, including claims for injunctive relief, arising out of Employee's breach or threatened breach of Section 3.1, 3.2, 3.3 or 3.4 of this Agreement. (b) General Rules of Arbitration. Either party shall have the right to have counsel represent him/it at the arbitration hearing and in pre-arbitration proceedings. Pre-arbitration discovery shall be permitted in accordance with the Federal Rules of Civil Procedure, except that (i) there shall be no limit on the number of depositions that may be noticed by either party, and (ii) in connection with any pre-arbitration disclosure of expert testimony in accordance with Rule 26(a)(2), the timing of the expert disclosure shall be set by the arbitrator. (c) Authority of Arbitrator. The arbitrator shall have the authority to (i) resolve any discovery disputes that arise between the parties; (ii) resolve any dispute relating to the interpretation, applicability or enforceability of this Section 4.3; and (iii) entertain a motion to dismiss and a motion for summary judgment, applying the standards governing such motions under Federal Rule Of Civil Procedure 12(b)(6) and Rule 56. The arbitrator is required to render his decision in writing, with an opinion stating the bases of his decision. Either party has the right to file a post-arbitration brief, which shall be considered by the arbitrator. (d) Payment of Costs and Fees. Each party shall bear its own costs and attorneys' fees incurred in connection with the arbitration. The arbitrator shall have the discretion to award costs to the prevailing party. The arbitrator's fees shall be borne equally by the parties. Each party shall post his or its portion of the arbitrator's anticipated fee prior to the commencement of the arbitration. (e) Appeals. Either side shall have the right to appeal the arbitrator's decision by applying to a Court (as defined in Section 4.4) for an order vacating the award for any of the reasons set forth in 9 U.S.C. (S)10, or on the basis that the arbitrator has made a mistake of law or fact. The arbitration decision shall stand if it is supported by substantial evidence. -12- 4.4 Jurisdiction; Service of Process. Each of the parties hereto agrees that any action or proceeding initiated or otherwise brought to judicial proceedings by either Employee or Employer concerning the subject matter of this Agreement that is not subject to Section 4.3, shall be litigated in the United States District Court for Dade County, Florida or, in the event such court cannot or will not exercise jurisdiction, in the state courts of the State of Florida covering Miami, Dade County, Florida (the "Courts"). Each of the parties hereto expressly submits to the jurisdiction and venue of the Courts. Each party hereto waives any claim that the Courts are an inconvenient forum or an improper forum based on lack of venue or jurisdiction. Each party shall bear its own costs and attorneys' fees incurred in connection with any such actions or proceedings. 4.5 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of (a) the heirs, executors and legal representatives of Employee, upon Employee's death or incapacity, and (b) any successor of Employer, and any such successor shall be deemed substituted for Employee or Employer, as the case may be, under the terms hereof for all purposes; provided, however, that any such assignment shall not relieve Employer from its obligations hereunder. As used in this Agreement, "successor" shall include any Person that at any time, whether by purchase, merger, consolidation or otherwise, directly or indirectly acquires a majority of the assets, business or stock of Employer. 4.6 Integration. This Agreement, the Plan and any option agreement Employee will be required to execute, constitute the entire agreement between the parties with respect to all matters covered herein, including but not limited to the parties' employment relationship and Employee's entitlement to compensation, commissions and benefits from Employer or any of its Affiliated companies and/or the termination of Employee's employment. This Agreement supersedes all prior oral or written understandings and agreements relating to its subject matter and all other business relationships between Employer and/or its Affiliated companies. 4.7 No Representations. No Person has made or has the authority to make any representations or promises on behalf of any of the parties which are inconsistent with the representations or promises contained in this Agreement, and this Agreement has not been executed in reliance on any representations or promises not set forth herein. 4.8 Amendments. This Agreement may be modified only by a written instrument executed by the parties that is designated as an amendment to this Agreement. 4.9 Counterparts. This Agreement is being 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. 4.10 Severability and Non-Waiver. Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that -13- the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. 4.11 Voluntary and Knowledgeable Act. Employee represents and warrants that he has been represented by independent legal counsel of his own choosing and that he has read and understands each and every provision of this Agreement and has freely and voluntarily entered into this Agreement. 4.12 Late Payments. If the Employer fails to pay any amount provided under this Agreement or any other plan or program sponsored by Employer when due, the Employer shall pay interest on such amount at a rate equal to (i) the highest rate of interest charged by the Employer's principal lender plus 200 basis points, or (ii) in the absence of such a lender, 300 basis points over the prime commercial lending rate announced by Harris Trust and Savings Bank on the date such amount is due or, if no such rate shall be announced on such date, the immediately prior date on which Harris Trust and Savings Bank announced such a rate; provided, however, that if the interest rate determined in accordance with this Section exceeds the highest legally-permissible interest rate, then the interest rate shall be the highest legally-permissible interest rate. IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first above written. EMPLOYER: IFX CORPORATION By: /s/ Joel Eidelstein ------------------- Name: Joel Eidelstein Title: President Dated as of January 1, 2000 EMPLOYEE: /s/ Michael Shalom ------------------ Michael Shalom Dated as of January 1, 2000 -14- EXHIBIT A TO EMPLOYEE AGREEMENT (Michael Shalom) Option Grants ------------- A. Each Option granted to Employee pursuant to this Employment Agreement shall be subject to, and exercisable in accordance with, the terms and conditions set forth in the Plan. B. Each Option granted pursuant to this Employment Agreement shall be granted as of January 1, 2000 (the "Option Date") and shall be evidenced by a standard option agreement between IFX and Employee in a form approved by the Compensation Committee of the Board of Directors of IFX containing the following terms: Amount Exercise Price Vesting Period ------ -------------- -------------- 20,000 $8.75 3 year vesting, based on the following schedule: 34% on the first-year anniversary 8.25% quarterly after the first year -15- EX-10.7 12 0012.txt AMENDMENT EMPLOYMENT AGREEMENT-LEKACH Exhibit 10.7 ------------ April 1, 2000 Zalman Lekach Re: Revisions to Employment Agreement dated as of May 24, 1999 Dear Salo: IFX Corporation ("IFX") and you entered into an Employment Agreement dated as of May 24, 1999 (the "Employment Agreement"). The incentive compensation provisions in the Employment Agreement are no longer appropriate due to a change in IFX's marketing strategy that was not anticipated at the time the Employment Agreement was entered into. This letter will set forth our agreement with respect to changes in the Employment Agreement and your consideration for agreeing to these changes. All capitalized terms not otherwise defined herein shall be as defined in the Employment Agreement. 1. Your Base Salary, effective as of the date hereof, i.e., April 1, 2000, is $185,000 per year and shall be increased to $200,000 per year on December 1, 2000. You shall not receive any additional Bonus Compensation as defined in Section 4(b) of the Employment Agreement. In lieu of any such Bonus Compensation you will receive the option grants and payment described in paragraphs 3 and 4 hereof. 2. The following options previously granted to you remain in effect under the terms and conditions described in the Employment Agreement:
- ------------------------------------------------------------------------------------------------- Grant Date Number of Shares Vesting Date Exercise Price Per Share - ---------- ---------------- ------------ ------------------------ ($) --- - -------------------------------------------------------------------------------------------------- January 1, 2000 19,225 December 31, 2000 8.75 - -------------------------------------------------------------------------------------------------- December 1, 1999 12,500 34% on the first-year 20.00 anniversary 8.25% quarterly after the first year - -------------------------------------------------------------------------------------------------- October 1, 1999 19,134 September 30, 1999 8.75 - -------------------------------------------------------------------------------------------------- July 1, 1999 8,308 June 30, 1999 8.75 - -------------------------------------------------------------------------------------------------- May 24, 1999 15,000 34% on the first-year 15.00 anniversary 8.25% quarterly after the first year - -------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------
3. In addition, you are also granted an option to purchase 300,000 shares of IFX Common Stock at an exercise price of $8.75 per share. The vesting schedule is as follows: 34% on March 31, 2000; and 8.25% quarterly there after. 4. On or before July 1, 2000, you shall receive a payment of $125,000. Such payment may be made in cash or shares of IFX Common Stock, at the sole discretion of IFX. If payment is made with IFX Common Stock, such shares will be priced at the average of the closing price for the IFX Common Stock for the five business days prior to July 1, 2000. 5. Section 6(f) of the Employment Agreement is hereby deleted. 6. Except as amended hereby, the Employment Agreement shall otherwise remain in full force and effect. Please sign where indicated below to indicate your agreement with the terms hereof. Sincerely, IFX Corporation /s/ Joel Eidelstein ------------------- By: Joel Eidelstein Title: President Agreed as of April 1, 2000: /s/ Zalman Lekach - ----------------- Zalman Lekach 2 EX-10.8 13 0013.txt STOCK OPTION AGREEMENT-LEKACH Exhibit 10.8 ------------ IFX CORPORATION NON-QUALIFIED STOCK OPTION AGREEMENT THIS STOCK OPTION AGREEMENT (the "Agreement") is dated as of January 1, --------- 2000 (the "Grant Date") and is entered into between IFX CORPORATION, a Delaware ---------- corporation ("IFX"), and Zalman Lekach ("Optionee"). In consideration of the --- -------- mutual promises and covenants made herein, the parties hereby agree as follows: 1. Defined Terms. Capitalized terms not otherwise defined herein shall ------------- have the same meaning ascribed to them in the IFX Corporation 1998 Stock Option and Incentive Compensation Plan (the "Plan"). As noted herein, certain ---- capitalized terms used herein have the same meanings ascribed to them in that certain Employment Agreement dated May 24, 1999 between IFX and Optionee (the "Employment Agreement"). -------------------- 2. Grant of Option. --------------- (a) Subject to the terms and conditions of the Plan, a copy of which is attached hereto and incorporated herein by this reference, IFX grants to Optionee an option (the "Option") to purchase the following shares (the ------ "Shares") of IFX's common stock, $.02 par value (the "Common Stock"), at the per ------ ------------ share price set forth below (the "Option Price"): ------------
Number Of Option Accrual Date Options Vesting Date Strike Price December 31, 1999 19,225 December 31, 2000 $ 8.75 September 30, 1999 19,134 September 30, 2000 $ 8.75 June 30, 1999 8,308 June 30, 2000 $ 8.75 May 24, 1999 15,000 33% per year $15.00 December 1, 1999 (Year 2000 Grant) 12,500 33% per year $20.00 --------- 74,167 =========
(b) The Option is not intended to qualify as an incentive stock option described in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). All provisions of this Agreement are to be construed in conformity ---- with this intention. 3. Term; Termination. ----------------- (a) Standard Term. Except as otherwise provided herein, the Option ------------- shall be valid for a term commencing on the Grant Date and ending 10 years after the Grant Date (the "Termination Date"). ---------------- (b) Rights Upon Termination of Employment. If Optionee ceases to be ------------------------------------- employed by IFX or any of its subsidiaries (collectively, the "Subsidiaries") ------------ for any reason other than (i) for "Cause" (as defined herein), (ii) Optionee's death, (iii) termination by Optionee of his employment without Good Reason (as defined in the Employment Agreement) or (iv) Optionee's Permanent Disability (a defined in the Employment Agreement), the Option (vested or unvested) shall become 100% vested and shall be exercisable at any time prior to date three months after the date of termination of Optionee's employment; provided, however, that if the average -------- ------- of the closing bid and ask price of the Common Stock, as reported by the Nasdaq SmallCap Market System (or any other exchange on which the Common Stock is then listed or admitted to unlisted trading privileges), equals or exceeds the Option Price for each of the five trading days after the date Optionee's termination of employment becomes effective, then the Option must be exercised prior to the date 90-days after the expiration of such five (5) day period, or else it will be forfeited by Optionee. (c) Rights Upon Termination for Cause. If Optionee's employment with --------------------------------- IFX and/or its Subsidiaries is terminated for Cause, or Optionee terminates his employment without Good Reason, the Option shall be immediately cancelled, no portion of the Option may be exercised thereafter and Optionee shall forfeit all rights to the Option. The term "Cause" shall have the meaning given to the term "Cause" in the Employment Agreement; provided, however, that (i) if at any time Optionee's employment with IFX or any Subsidiary is not governed by an employment agreement, then the term "Cause" shall have the meaning given to such term in the Plan, and (ii) "Cause" shall exclude Optionee's death or Permanent Disability. (d) Rights Upon Death/Disability of Optionee. If Optionee's ---------------------------------------- employment with IFX and/or its Subsidiaries is terminated as a result of (i) Optionee's death, the Option may be exercised at any time prior to the earlier of the Termination Date or the date six months after the date of Optionee's death, or (ii) Optionee's Permanent Disability, the Option may be exercised at any time prior to the earlier of the Termination Date or the date six months after the date of Optionee's employment is terminated as a result of Optionee's Permanent Disability; provided, however, that if the average of the closing bid -------- ------- and ask price of the Common Stock, as reported by the Nasdaq SmallCap Market System (or any other exchange on which the Common Stock is then listed or admitted to unlisted trading privileges), equals or exceeds the Option Price for each of the five trading days after the date of Optionee's death or the date Optionee's employment is terminated as a result of Optionee's Permanent Disability, then the Option must be exercised prior to the earlier of the Termination Date or the date 90-days after the expiration of such five (5) day period, or else it will be forfeited by Optionee. 4. Vesting. ------- (a) Standard Vesting. The Option may only be exercised to the extent ---------------- vested. Any vested portion of the Option may be exercised at any time in whole or from time to time in part. Vesting shall commence on the first anniversary of the Grant Date and Optionee shall vest in the Option according to the schedule (each date set forth below, a "Vesting Date") set forth in paragraph 2 ------------ hereof. Optionee must be employed by IFX or any Subsidiary on any Vesting Date, in order to vest in the portion of the Option set forth in the chart above that vests on such Vesting Date. No portion of the Option shall vest between Vesting Dates; if Optionee ceases to be employed by IFX or any Subsidiary, then any portion of the Option that is scheduled to vest on any Vesting Date after the -2- date Optionee's employment is terminated automatically shall be forfeited as of the date of Optionee's termination of employment. For purposes of this Section 4, a transfer or reassignment of Optionee from IFX to any Subsidiary, or vice ---- versa, shall not constitute a termination of employment for purposes of this - ----- Agreement. (b) Vesting Upon Change in Control. Notwithstanding the provisions of ------------------------------ Section 4(a) or anything contained in this Agreement or in the Plan to the contrary, upon a Change in Control, as defined in the Employment Agreement, the Option shall become 100% vested and immediately exercisable as of the effective date of the Change in Control. In addition, if requested by Optionee in a writing delivered to IFX within 15 days prior to the effective date of a Change in Control, IFX shall either repurchase, or cause the surviving corporation to repurchase, the Option from Optionee within the period beginning five business days before and ending five business days after the effective date of the Change in Control. For purposes of such repurchase, the price per share shall equal the average of the average closing bid and ask prices of the Common Stock for each of the 20 trading days ending on and including the date Optionee delivered his written request for repurchase to IFX. 5. Procedure for Exercise. Exercise of the Option or a portion thereof ---------------------- shall be effected by the giving of written notice to IFX in accordance the Plan and payment of the pro rata portion of the Option Price for the number of Shares to be acquired pursuant to the exercise. 6. Payment for Shares. Payment of the Option Price (or portion thereof) ------------------ shall be made in cash or by such other method as may be permitted by the Compensation Committee of the Board of Directors (the "Committee") in accordance --------- with the provisions of the Plan. No Shares shall be delivered upon exercise of the Option until full payment has been made and all applicable withholding requirements satisfied. Shares must be free of any restrictions and must be delivered to Optionee within 15 days of full payment. 7. Options Not Transferable and Subject to Certain Restrictions. The ------------------------------------------------------------ Option may not be sold, pledged, assigned or transferred in any manner without the prior consent of the Committee, which may be given or withheld in its sole discretion, other than by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order as defined in Section 414(p) of the Code. During Optionee's lifetime, the Option may be exercised only by the Optionee, a permitted assignee or by a legally authorized representative. In the event of Optionee's death, the Option may be exercised by the distributee to whom Optionee's rights under the Option shall pass by will or by the laws of descent and distribution. 8. Acceptance of Plan. Optionee hereby accepts and agrees to be bound by ------------------ all the terms and conditions of the Plan 9. No Right to Employment. Nothing herein contained shall confer upon ---------------------- Optionee any right to continuation of employment by IFX or any Subsidiary, or interfere with the right of IFX or any Subsidiary to terminate at any time the employment of Optionee. Nothing contained herein shall confer any rights upon Optionee as a shareholder of IFX, unless and until Optionee actually receives Shares. -3- 10. Compliance with Securities Laws. The Option shall not be exercisable ------------------------------- and Shares shall not be issued pursuant to exercise of the Option unless the exercise of the Option and the issuance and delivery of Shares pursuant thereto shall comply with all relevant provisions of law including, without limitation, the Securities Act of 1933, as amended (the "Securities Act"), the Securities -------------- Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which Common Stock may then be listed, and shall be further subject to the approval of counsel for IFX with respect to such compliance11. No Other Rights. Optionee hereby --------------- acknowledges and agrees that, except as set forth herein, no other representations or promises, either oral or written, have been made by IFX, any Subsidiary or anyone acting on their behalf with respect to Optionee's right to acquire any shares of Common Stock, stock options or awards under the Plan, and Optionee hereby releases, acquits and forever discharges IFX, the Subsidiaries and anyone acting on their behalf of and from all claims, demands or causes of action whatsoever relating to any such representations or promises and waives forever any claim, demand or action against IFX, any Subsidiary or anyone acting on their behalf with respect thereto. 11. Severability. Any provision of this Agreement (or portion thereof) ------------ that is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section 13, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. 12. Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties concerning the subject matter hereof and supersedes all prior and contemporaneous agreements, oral or written, between IFX and Optionee relating to Optionee's entitlement to stock options, Common Stock or similar benefits, under the Plan or otherwise. 13. Amendment. This Agreement may be amended and/or terminated at any --------- time by mutual agreement of IFX and Optionee. 14. Governing Law. The construction and operation of this Agreement are ------------- governed by the laws of the State of Delaware (without regard to its conflict of laws provisions). [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -4- This Agreement has been executed as of the date first written above. IFX CORPORATION By: /s/ Jose Leiman -------------------- Jose Leiman, Chief Financial Officer /s/ Zalman Lekach ----------------------- Zalman Lekach Social Security Number -5- Number of Number of Grant Date Options 6/12/00 Excercise Options Description Through 3-31 Grant price 30-Jun-00 Name: Joel Eidelstein November 1, 1998 300,000 - $3.00 300,000 Joel Eidelstein January 1, 2000 128,924 171,076 $8.75 300,000 Jose Leiman July 1, 1999 15,000 - $15.00 15,000 Jose Leiman July 1, 1999 33,333 - $12.00 33,333 Jose Leiman July 1, 1999 33,333 - $15.00 33,333 Jose Leiman July 1, 1999 33,334 - $18.00 33,334 Jose Leiman December 1, 1999 12,500 - $20.00 12,500 Jose Leiman January 1, 2000 42,975 57,025 $8.75 100,000 Mike Shalom January 1, 2000 12,892 17,108 $8.75 30,000 Zalman Lekach January 1, 2000 19,225 - $8.75 19,225 Zalman Lekach July 1, 1999 8,308 - $8.75 8,308 Zalman Lekach May 24, 1999 15,000 - $15.00 15,000 Zalman Lekach October 1, 1999 19,134 - $8.75 19,134 Zalman Lekach December 1, 1999 12,500 - $20.00 12,500 Zalman Lekach January 1, 2000 128,924 171,076 $8.75 300,000 -7- EX-10.9 14 0014.txt EMPLOYMENT AGREEMENT-LEIMAN Exhibit 10.9 ------------ EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of June 26, 1999, by and between IFX CORPORATION, a Delaware corporation ("IFX" and, collectively with its subsidiaries, "Employer"), and JOSE LEIMAN ("Employee"). W I T N E S S E T H: ------------------- WHEREAS, Employer desires to employ Employee on the terms and subject to the conditions set forth herein; and WHEREAS, Employee has had an opportunity to review the terms and conditions of this Agreement, to negotiate the terms hereof and to engage legal counsel on his behalf if he so desires. NOW THEREFORE, in consideration of Employer's employment of Employee, the terms, conditions and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee and Employer, intending to be legally bound, hereby agree as follows: 1. Employment. Employer hereby agrees to employ Employee and Employee ---------- agrees to accept such employment upon the terms and conditions herein set forth. 2. Employment Period. ----------------- (a) The term of employment hereunder shall commence on July 1, 1999, and shall expire on June 30, 2001. 3. Position and Duties. ------------------- (a) Position. Employee hereby agrees to serve as the Chief Financial -------- Officer of IFX. Employee shall devote his best efforts and full business time and attention to the performance of services to Employer in accordance with the terms hereof and as may reasonably be requested by the Board of Directors of Employer (the "Board") or a person or persons designated by the Board. Employer shall retain full direction and control of the means and methods by which Employee performs the above services. (b) Other Activities. During the Employment Period, Employee shall ---------------- not engage in any other business or professional activities, either on a full- time or part-time basis, as an employee, consultant or in any other capacity, whether or not he receives any compensation therefor, without the prior written consent of the Board; provided, however, that nothing herein shall prevent Employee from making and managing personal investments consistent with Sections 10 and 11 of this Agreement, or engaging in professional Bar Association or Accounting Association activities so long as such activities, either singly or in the aggregate, do not interfere with the proper performance of his duties and responsibilities to Employer. 4. Compensation. ------------ (a) Base Salary. Employer shall pay to Employee salary at the rate of ----------- US$ 225,000 per year for the period from the date hereof through June 30, 2001 (the "Base Salary"). Payments of Base Salary shall be made in accordance with Employer's generally applicable compensation policies and shall be net of applicable tax withholdings. (b) Bonus Compensation. In addition to Base Salary, Employee shall ------------------ be entitled to receive bonus compensation based on the discretion of the Board Of Directors. (the "Bonus Compensation"). (c) Holidays and Vacation Time. Employee shall be entitled to such -------------------------- paid holidays as are consistent with Employer's policy for executive employees with respect to such matters as of the date hereof. Employee is entitled to four (4) weeks of paid vacation per year, accruable monthly, but shall not be entitled to carry-over into a following year any unused vacation time accrued at year end. (d) Other Benefits. Subject to Employer's rules, policies and -------------- regulations as in effect from time to time (and subject to applicable eligibility requirements, including a minimum employment period), Employee shall be entitled to all other rights and benefits for which Employee may be eligible under any: (i) group life insurance, disability or accident, death or dismemberment insurance, (ii) medical and/or dental insurance program (90-day minimum employment period, for which Employer will reimburse the COBRA expenses of Employee), (iii) 401(k) benefit plan, or (iv) other employee benefits that Employer may, in its sole discretion, make generally available to employees of Employer of the same level and responsibility as Employee; provided, however, that nothing herein shall obligate Employer to establish or maintain any of such benefits or benefit plans. In addition, the Employee agrees that the Employee's participation in the benefit programs described herein in this Section 4(d) shall be at the Employee's discretion and the cost associated with such participation will be reduced from the Base Salary. (e) Life and Other Insurance. Subject to Employee meeting applicable ------------------------ underwriting criteria, Employer will provide term life and such other types of insurance for Employee as shall be agreed upon between Employee and Employer from time to time. (f) Sign-on Bonus. Employer and Employee agree to negotiate in good ------------- faith to determine whether Employee is entitled to a sign-on bonus. 5. Participation in Stock Plan. --------------------------- (a) Stock Plan Benefits. Subject to Employer's rules, policies and ------------------- regulations as in effect from time to time (and subject to applicable eligibility requirements, including minimum employment period), Employee will be eligible to receive certain benefits under the IFX Corporation 1998 Stock Option and Incentive Plan or any other stock option plan adopted by IFX (the "Stock Plan"). Employer represents that the shares to be issued under the Stock Plan and on exercise of the options described below have been or will be registered under a Form S-8 filed with the SEC. Benefits under the Stock Plan will be granted in the sole and absolute discretion of the committee administering the Stock Plan and shall be subject to the terms of the Stock Plan, as the same may from time-to-time be amended and/or modified. In addition, the Employee shall receive the stock options described below in this Section 5. (b) Restrictions on Stock Plan Benefits. No options or other benefits ----------------------------------- shall be granted to Employee under the Stock Plan unless, in Employer's judgment based on the advice of its legal counsel, such issuance complies with applicable state and federal securities laws, and other laws and regulations related thereto. All such Stock Plan benefits shall be subject to Employee signing such option agreements or other instruments that Employer deems to be necessary or appropriate and to such other restrictions as are required by the Stock Plan and/or applicable law. (c) Employee Stock Option Package. The Employee shall receive the ----------------------------- following IFX stock options under the Stock Plan, which shall be exercisable at: a) the strike price of US$12 (the "Strike Price") multiplied by b) a multiple (the "Multiple") as described herein. Description Number Of Options Multiple Year 1 Options 25,000 1.00 Year 2 Options 25,000 1.25 Year 3 Options 25,000 1.50 Year 4 Options 25,000 1.75 In the absence of a Triggering Event, the stock options issued under this Section 5(c) will vest in accordance with the following schedule: Description Vesting Period Year 1 Options 12 months from start of employment Year 2 Options 24 months from start of employment Year 3 Options 36 months from start of employment Year 4 Options 48 months from start of employment Any unvested stock options granted pursuant to this Section 5(c) will become fully vested upon the occurrence of any one of the following triggering events (the "Triggering Events"): (i) employment is terminated by Employer other than for Cause (as defined herein), (ii) Employee terminates employment with Good Reason (as defined herein), (iii) a Change in Control (as defined herein), (iv) the term of employment hereunder expires on June 30, 2001 and a new employment agreement is not entered into by the parties, or (v) death or disability of Employee. On the occurrence of a Triggering Event other than a Change of Control, Employee's options, while vested, may not be exercised any sooner than such options would have been exercisable in the absence of such Triggering Event. On the occurrence of a Change of Control, Employee's options shall vest and be exercisable effective prior to the Change of Control. The stock options will automatically adjust the number of shares subject to options in the event of a stock dividend, split-up, conversion, exchange, reclassification or substitution. Any unexercised options will be forfeited by Employee in the event that Employee is terminated for Cause (but not if Employee voluntarily terminates with or without Good Reason). 6. Termination of Employment. ------------------------- (a) Permanent Disability. In the event of the Permanent Disability -------------------- (as defined below) of Employee, the Company, in its sole discretion, may elect either (i) to the extent feasible consistent with Employee's mental and physical condition and consistent with applicable law, to reassign Employee to other duties within the Company that Employee is able to perform despite his Permanent Disability at the compensation and benefit levels commensurate with Employee's reassigned duties, unless that compensation level is less than the amount payable in the event of a termination pursuant to the following sentence, or (ii) to terminate this Agreement and Employee's employment hereunder. In the event that the Company elects to terminate Employee as provided in clause (ii) above, the Company shall, subject to following sentence, pay to Employee (A) within sixty (60) days after the date of such termination, all amounts of Base Salary accrued pursuant to Section 4 above prior to the date of such termination, and (B) compensation on the basis of 65% of the then current Base Salary for the first ninety (90) days of such Permanent Disability and, thereafter, compensation on the basis of 50% of the then current Base Salary through the end of the Permanent Disability period. This benefit may be provided by the Company to Employee through the purchase of a disability insurance policy that is contingent upon the insurability of Employee. Notwithstanding the foregoing, all payments hereunder shall end upon the earlier to occur of Executive's attaining the age of sixty-five (65) and the cessation of such Permanent Disability (whether as a result of recovery, rehabilitation, death or otherwise), and, thereafter, the Company shall have no further obligations to Employee under this Agreement. Additionally, if prior to the termination of the Company's obligation to make payments to Employee pursuant to this Section 6(a) Employee receives compensation for services rendered, whether as an employee or otherwise, such compensation shall reduce the payments due under this Section 6(a), dollar for dollar. Employee shall promptly inform the Company of all such compensation received by him on a monthly basis during such period. (b) Death. In the event of Employee's death, the Company shall pay to ----- Employee's personal representative (on behalf of Employee's estate), within sixty (60) days after the Company receives written notice of such representative's appointment, all amounts of Base Salary accrued pursuant to Section 4 above as of the date of Employee's death and any amounts payable pursuant to Section 5(c)(vi), which payment shall constitute full and complete satisfaction of the Company's obligations hereunder except for any additional payments subsequently due with respect to the exercise of options granted pursuant to Section 5. Employee's dependents shall also be entitled to any continuation of health insurance coverage rights, if any, under applicable law. (c) Termination for Cause or Voluntary Termination Without Good ----------------------------------------------------------- Reason. The Company may in its sole discretion terminate this Agreement and - ------ Employee's employment with the Company for Cause (as defined in Section 7(a) below) at any time with 30 days advance notice to Employee. If Employee's employment is terminated for Cause, or if Employee Voluntarily Terminates (as defined in Section 7(b) below) his employment with the Company without Good Reason (as defined in Section 7(c) below), the Company shall promptly pay to Employee all amounts of Base Salary accrued pursuant to Section 4 above through the date of termination (but not Bonus Compensation), whereupon the Company shall have no further obligations to Employee under this Agreement. Employee and his dependents shall also be entitled to any continuation health insurance coverage rights, if any, under applicable law. Without waiving any rights the Company or any of its affiliates may have hereunder or otherwise, the Company hereby expressly reserves its right to proceed against Employee for damages in connection with any claim or cause of action that the Company may have arising out of or related to Employee's employment hereunder. In the event the Company terminates Employee's employment for Cause or Employee voluntarily terminates his employment without Good Reason, all unvested options and other awards granted to Employee under the Stock Plan, as Bonus Compensation or otherwise shall be cancelled and forfeited by Employee. (d) Termination Without Cause; Voluntary Termination With Good ---------------------------------------------------------- Reason. Subject to the penultimate sentence of this paragraph, the Company may - ------ terminate this Agreement and Employee's employment with the Company without Cause at any time, with or without notice, for any reason or no reason (and no reason need be given). Employee may terminate this Agreement and Voluntarily Terminate his employment with the Company with Good Reason upon thirty (30) days' prior written notice to the Company, provided that the Company does not correct the circumstances giving Employee Good Reason during such thirty (30) day period. In the event Employee's employment with the Company is terminated pursuant to this Section 6(d): (i) the Company shall immediately pay to Employee in a lump sum all amounts of Base Salary for the entire length of the Term, (ii) Employee shall be relieved of his obligations under Sections 1 and 3 hereof, and (iii) Employee shall be free to seek other employment subject to the terms of Sections 8, 9, 10 and 11 hereof. Employee and his dependents shall also be entitled to any continuation health insurance coverage rights, if any, under applicable law. (e) Termination Obligations. ----------------------- (i) Employee hereby acknowledges and agrees that all personal property and equipment furnished to or prepared by Employee in the course of or incident to his employment by the Company, belongs to the Company and shall be promptly returned to the Company upon termination of the Employee's employment. The term "personal property" includes, without limitation, all books, manuals, records, reports, notes, contracts, requests for proposals, bids, lists, blueprints, and other documents, or materials, or copies thereof (including computer files), and all other proprietary information relating to the business of the Company or any of its affiliates. Following termination, Employee will not retain any written or other tangible material containing any proprietary information of the Company or any of its affiliates. (ii) Upon termination of the Employment Period, Employee shall be deemed to have resigned from all offices and directorships then held with the Company and each of its affiliates. (iii) The representations and warranties contained herein made by either Employer and Employee and Employee's obligations under Sections 6(e), 8, 9, 10 and 11 shall survive termination of the Employment Period and the expiration of this Agreement. (iv) If the common Closing price of the stock of Employer (or any successor to Employer) equals or exceeds 100% of the exercise price of any options granted pursuant to Section 4(b) hereof for 5 consecutive trading days after the termination of Employee's employment, any options held by Employee must be exercised within 90 days after the end of such 5 day period. Any options which are not exercised at the end of such 90 day period will be forfeited by Employee. (f) Change of Control. In the event of a Change of Control (as ----------------- defined below), an amount equal to Employee's Base Salary shall be multiplied by a factor of 2 and shall be paid by Employer (or its permitted successors) in one lump-sum within 30 days after the effective date of the Change of Control. In addition, if so requested by Employee in writing at least 15 days prior to the effective date of the Change of Control, Employer (or its permitted successors) will either repurchase Employee's options within five (5) business days after the effective date of the Change of Control or will cause employee's options to be so repurchased at fair market value (as determined by Employer's regular outside accounting firm). Employer will give Employee reasonable notice of any pending Change of Control (to the extent feasible under applicable securities laws) in the event that Employee is not then employed by Employer. 7. Definitions. For the purposes of this Agreement the following terms ----------- and phrases shall have the following meanings: (a) "Business" shall mean the acquisition of internet service -------- providers in Latin America. (b) "Cause". The Company shall have "Cause" to terminate the ----- Employee's employment under this Agreement upon (a) the willful and continued failure by the Employee to substantially perform his duties under this Agreement (other than any failure resulting from the Employee's incapacity due to physical or mental illness) for one hundred twenty (120) days after written demand for substantial performance is delivered by the Company specifically identifying the manner in which the Company believes the Employee has not substantially performed his duties, or (B) the willful engaging by the Employee in criminal misconduct (including embezzlement and criminal fraud) which is materially injurious to the Company, or (C) the willful violation by the Employee of Sections 8, 9, 10 or 11 of this Agreement, provided that the violation results in material injury to the Company, or (D) the conviction of the Employee of a felony. For purposes of this paragraph, no act, or failure to act, by the Employee shall be considered "willful" unless done or permitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the interest of the Company. The Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of a majority of the Board of the Company at a meeting of the Board called and held for such purposes (after a reasonable notice to the Employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of conduct set forth above in clause (A), (B), (C), or (D) and specifying the particulars of the conduct in detail. (c) "Change of Control" shall mean: (i) the dissolution or ----------------- liquidation of the Employer, (ii) either A) the occurrence of a merger or consolidation, B) a transaction in which the Employer becomes a subsidiary of another corporation, and in either case, in which the voting securities of the Employer which are outstanding immediately prior thereto do not continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting securities of the Employer or such surviving entity immediately after such merger or consolidation, (iii) such time that Lee S. Casty and his affiliates and International Technology Investments, LC ("ITI") and its affiliates own less than one-third of the outstanding voting securities of the Employer (determined as if the option held by ITI were exercised), (iv) an acquisition by a person or entity of voting securities of the Employer entitling such person to the same voting power (or greater voting power) as held by Lee S. Casty and ITI combined (determined as if the option held by ITI were exercised); or (v) the sale of all or substantially all of the assets of the Employer. (d) "Good Reason" shall mean, with respect to a Voluntary ----------- Termination, if (i) such Voluntary Termination promptly follows a permanent material reduction of Employee's duties and responsibilities or a permanent change in Employee's duties and responsibilities such that Employee's duties and responsibilities are materially inconsistent with the type of duties and responsibilities of Employee in effect immediately prior to such reduction or change, (ii) such Voluntary Termination promptly follows a material reduction in Employee's benefits if such reduction results in Employee's receiving benefits which are, in the aggregate, less than the benefits received by other comparable employees of the Company generally, (iii) the Company is in material breach of its payment obligations under this Agreement, which breach has not been cured within fifteen (15) days following the Company's receipt of written notice thereof, (iv) the Company is in violation of federal, state, or foreign law or regulation which has or could reasonably, if publicly disclosed, materially adversely affect the Company or the business reputation of the Company, unless Employee is principally responsible for such violation of law, and such violation has not been cured within sixty (60) days following the Company's receipt of written notice thereof, or (v) the Board of Directors of the Company otherwise determines that a Voluntary Termination by Employee is for "Good Reason" under the circumstances then prevailing. (e) "Permanent Disability" shall have the meaning set forth in -------------------- Section 22(e)(3) of the Internal Revenue Code of 1986, as amended. (f) "Voluntary Termination" (including "Voluntarily Terminates") --------------------- shall mean the termination by Employee of his employment by the Company by voluntary resignation or any other means other than death, retirement or Permanent Disability and other than simultaneous with or following termination for Cause or an event which, whether or not known to the Company at the time of such Voluntary Termination by such Executive, would constitute Cause. 8. Records and Confidential Data. ----------------------------- (a) Employee acknowledges that, in connection with the performance of his duties during the term of this Agreement, the Company and its affiliates will make available to Employee, and/or Employee will have access to, certain Confidential Information (as defined below) of the Company and its affiliates. Employee acknowledges and agrees that any and all Confidential Information learned or obtained by Employee during the course of his employment by the Company or otherwise (including, without limitation, information that Employee obtained through or in connection with his ownership of equity interests in, or services as a director of, the Company), whether developed by Employee alone or in conjunction with others or otherwise, shall be and is the property of the Company and its affiliates. (b) The Confidential Information shall be kept confidential by Employee unless disclosure is required by government regulation, subpoena or other legal process, shall not be used in any manner which is detrimental to the Company or any of its affiliates, shall not be used other than in connection with Employee's discharge of his duties hereunder, and shall be safeguarded by Employee from unauthorized disclosure. (c) Following the first to occur of the termination of this Agreement or Employee's termination hereunder, as soon as possible after the Company's written request, Employee shall return to the Company all written Confidential Information which has been provided to Employee and Employee shall destroy all copies of any analyses, compilations, studies or other documents prepared by Employee or for Employee's use containing or reflecting any Confidential Information. Within five (5) business days of the receipt of such request by Employee, Employee shall, upon written request of the Company, deliver to the Company a notarized document certifying that such written Confidential Information has been returned or destroyed in accordance with this Section 8(c). (d) For the purposes of this Agreement, "Confidential Information" shall mean all confidential and proprietary information of the Company and/or its affiliates, including, without limitation, information derived from reports, investigations, experiments, research, trade secrets, work in progress, drawing, designs, plans, proposals, requests for proposals, bids, codes, marketing and sales programs, client lists, client mailing lists, medical, psychological, academic and other records and reports, supplier lists, financial projections, cost summaries, payor information, pricing formulae, marketing studies relating to prospective business opportunities and all other concepts, ideas, materials, or information prepared for performed for or by the Company and/or any of its affiliates. For purposes of this Agreement, the Confidential Information shall not include and Employee's obligations under this Section 8 shall not extend to (i) information which is generally available to the public, (ii) information obtained by Employee from third persons not under agreement to maintain the confidentiality of the same and (iii) information which is required to be disclosed by law or legal process (after giving the Company prior written notice thereof and an opportunity to contest such disclosure). Without in any way limiting the foregoing, "Confidential Information" also includes all information relating to any options or other awards granted to Employee, pursuant to the Stock Plan or otherwise, including the amount of any such award, the exercise price and the rate of vesting thereof. (e) Employee hereby acknowledges that each subsidiary and affiliate of Employer is expressly made a third party beneficiary hereto for purposes of protecting its rights and interests hereunder. 9. Inventions and Other Matters. ---------------------------- (a) Employee agrees that all ideas, inventions, discoveries or improvements made during the period of Employee's employment with Employer, including, without limitation, new machines, devices, computer software (including source code, operating systems and specifications, data, data bases, files documentation and other materials related thereto), programs, processes, uses, apparatuses, specialized information relating in any way to or that is useful in the business or products of Employer or Employer's actual or demonstrably anticipated research or development, designs or compositions of any kind that Employee, individually or with others, may originate or develop while employed by Employer (collectively, "Inventions"), shall belong to and be the sole property of Employer and shall constitute works specially ordered or commissioned as "works made for hire" under the United States Copyright Act and other applicable law. Without limiting the foregoing, Employee hereby assigns and transfers to Employer all rights of whatever nature that Employee may have, including, without limitation, any patent, trade secret, trademark or service mark rights (and any goodwill appurtenant thereto), any rights of publicity and any right, title and interest in any copyright and any right that may affix under any copyright law now or hereinafter in force and effect in the United States of America or in any other country or countries, in and to any Invention. Employee acknowledges and agrees that Employer shall have the royalty-free right to use in its businesses, and to make and sell products, processes, programs, systems designs, methods, formulas, apparatus, techniques, and services derived from any Inventions (whether or not patentable or copyrightable), as well as all improvements thereof or know-how related thereto. (b) For purposes of this Agreement, an Invention shall be deemed to have been "made during the period of Employee's employment" if, during such period, the Invention was conceived, in part or in whole, or first actually reduced to practice. Employee agrees that any patent, copyright or trade mark application filed by or for the benefit of Employee or any of his affiliates within a year after termination of Employee's employment shall be presumed to relate to an Invention made during the term of his employment and Employee shall have the burden of proof to prove otherwise. (c) This Section 9 shall not apply to an Invention for which no equipment, supplies, facilities or Confidential Information (as defined below) of Employer was used and that was developed entirely on Employee's own time, unless (i) the invention relates in any way to or is useful in the business or products of Employer, or Employer's actual or demonstrably anticipated research or development, or (ii) results from any work performed by Employee for or on behalf of Employer. (d) Employee agrees, without further consideration, to (i) promptly disclose each such Invention to Employer, to Employee's immediate supervisor and to such other individuals as Employer may direct, (ii) execute and to join others in executing such applications, assignments and other documents as may be necessary or convenient to vest in Employer, or its designee, full title to each such Invention and as may be necessary or convenient to obtain United States and foreign patents and copyrights thereon, to the extent Employer may so choose in its sole discretion, (iii) testify in any legal proceeding relative to such Invention whenever requested to do so by Employer, and (iv) furnish all facts relating to such Inventions or the history thereof. (e) Employee agrees that he will not at any time, except as authorized or directed by Employer, publish or disclose any information or knowledge concerning any Inventions unless disclosure is required by government regulation, subpoena or other legal process. 10. Non-Competition. --------------- (a) Employer and Employee recognize that Employee has been retained to occupy a position that constitutes part of the professional, management and executive staff of Employer, whose duties will include the formulation and execution of management policy. Employee, for and in consideration of the payments, rights and benefits provided herein, agrees that so long as he is employed by Employer and, if Employer terminates his employment for Cause or if Employee voluntarily terminates without Good Reason his employment with Employer, for a period of one (1) year thereafter, Employee shall not (i) work, (ii) assist, (iii) own any interest, directly or indirectly and whether individually or as a joint venturer, partner, member, officer, director, shareholder, consultant, employee or otherwise, in or (iv) make a financial investment, whether in the form of equity or debt, in any business that is substantially competitive with the Business. (b) Notwithstanding the foregoing, nothing herein shall prohibit Employee from holding five percent (5%) or less of any class of voting securities of any entity whose equity securities are listed on a national securities exchange or regularly traded in the over-the-counter market and for which quotations are readily available on the National Association of Securities Dealers Automated Quotation system. In addition, after the termination of Employee's employment with Employer for any reason, nothing herein shall be deemed to prohibit Employee from working with or owning an interest in a professional services firm such as an accounting firm or law firm as long as Employee does not directly or in a supervisory capacity provide services to any business that is substantially competitive with the Business. (c) If Employee is terminated for Cause or voluntarily terminates employment without Good Reason, then upon the termination of Employee's employment with Employer, and for one (1) year thereafter, Employee shall immediately notify Employer of each employment or agency relationship entered into by Employee, and each corporation, proprietorship or other entity formed or used by Employee, the business of which is directly in competition with the Business. The provisions of this Section 10 shall survive termination of this Agreement for any reason. (d) Employee agrees that the restrictions contained in this Section 10 are reasonable as to time and geographic scope. Employee acknowledges that Employer is in direct competition with all other companies that provide services and products similar to Employer's products and services throughout the United States, Latin America and other markets in which Employer may be conducting the Business at the time Employee's employment with Employer is terminated, and because of the nature of the Business, Employee agrees that the covenants contained in this Section 10 cannot reasonably be limited to any smaller geographic area. 11. Non-Solicitation and Non-Interference. ------------------------------------- (a) Employee acknowledges that Employer has invested substantial time and effort in assembling its present staff of personnel. Employee agrees that so long as he is employed by Employer and, if Employer terminates his employment for Cause or if Employee voluntarily terminates without Good Reason his employment with Employer, for a period of one (1) year thereafter, Employee shall not either directly or indirectly employ, solicit for employment, or advise or recommend to any other person that such other person employ or solicit for employment, any of Employer's employees. (b) Employee acknowledges that all customers of Employer, which Employee has serviced or hereafter services during Employee's employment by Employer and all prospective customers from whom Employee has solicited or may solicit business while in the employ of Employer, shall be solely the customers of Employer. Employee agrees that so long as he is employed by Employer and, if Employer terminates his employment for Cause or if Employee voluntarily terminates without Good Reason his employment with Employer, for a period of one (1) year thereafter, Employee shall not either directly or indirectly solicit business, as to products or services competitive with the Business of Employer, from any of Employer's customers with whom Employee had contact during his employment with Employer. (c) Employee agrees that so long as he is employed by Employer and, if Employer terminates his employment for Cause or if Employee voluntarily terminates without Good Reason his employment with Employer, for a period of one (1) year thereafter, Employee shall not either directly or indirectly interfere with any relationship between Employer and any of its suppliers, clients or employees. Employee agrees that during such one (1) year period, he will not influence or attempt to influence any of the customers or clients of Employer not to do business with Employer. (d) Employee agrees that the restrictions contained in this Section 11 are reasonable as to time and geographic scope because of the nature of the Business and Employee agrees, in particular, that the geographic scope of this restriction is reasonable because companies in the same industry as the Business compete on a nationwide basis. Employee acknowledges that Employer is in direct competition with all other companies that provide services and products similar to Employer's products and services on an outsourced basis throughout the United States, Latin America and other markets in which Employer may be conducting the Business at the time Employee's employment with Employer is terminated and, because of the nature of the Business, Employee expressly agrees that the covenants contained in this Section 11 cannot reasonably be limited to any smaller geographic area. 12. Employment Relationship. The relationship between Employer and ----------------------- Employee is and shall be specifically limited to an employer/employee relationship. As a result, nothing contained in this Agreement or relating to any past, present or future relationship between Employee and Employer (employment or otherwise) shall be construed as creating any partnership, joint venture, trustee/beneficiary or other type of fiduciary or business relationship between the parties. 13. Prior Obligations. Employee represents and warrants that (a) Employee ----------------- has no obligation of confidence or other commitments to any previous employer or any others that conflict with this Agreement or restrict Employee's field of activities, and (b) no other agreement to which Employee is subject will conflict with, prevent, be breached by, interfere with or in any manner affect the terms and conditions of this Agreement. 14. Dedication Of Services. Subject to the provisions of Section 3(b) ---------------------- hereof, Employee agrees that while employed with Employer, Employee shall devote his entire productive time, ability and attention to the business of Employer during Employer's normal business hours. Employee further agrees that during his employment by Employer, Employee will not, without Employer's prior written consent, directly or indirectly engage in any employment, consulting, or other activity which would conflict with Employee's duties and obligations to Employer. 15. Jurisdiction; Service of Process. Each of the parties hereto agrees -------------------------------- that all any action or proceeding initiated or otherwise brought to judicial proceedings by either Employee or Employer concerning the subject matter of this Agreement shall be litigated in the United States District Court for the Southern District of Florida or, in the event such court cannot or will not exercise jurisdiction, in the state courts of the State of Florida (the "Courts"). Each of the parties hereto expressly submits to the jurisdiction and venue of the Courts and consents to process being served in any suit, action or proceeding of the nature referred to above either (a) by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to his or its address as set forth herein (subject to notice of change as set forth below) or (b) by serving a copy thereof upon such party's authorized agent for service of process (to the extent permitted by applicable law, regardless whether the appointment of such agent for service of process for any reason shall prove to be ineffective or such agent for service of process shall accept or acknowledge such service); provided that, to the extent lawful and practicable, written notice of said service upon said agent shall be mailed by registered or certified mail, postage prepaid, return receipt requested, to the party at his or its address as set forth herein. Each party hereto agrees that such service, to the fullest extent permitted by law, (i) shall be deemed in every respect effective service of process upon him or it in any such suit, action or proceeding and (ii) shall be taken and held to be valid personal service upon and personal delivery to him or it. Each party hereto waives any claim that the Courts are an inconvenient forum or an improper forum based on lack of venue or jurisdiction. Each party shall bear its own costs and attorneys' fees incurred in connection with any such actions or proceedings. 16. Injunctive Relief. Employee acknowledge that damages would be an ----------------- inadequate remedy for Employee's breach of any of the provisions of Sections 8, 9, 10 and/or 11 of this Agreement, and that breach of any of such provisions will result in immeasurable and irreparable harm to Employer. Therefore, in addition to any other remedy to which Employer may be entitled by reason of Employee's breach or threatened breach of any such provision, Employer shall be entitled to seek and obtain a temporary restraining order, a preliminary and/or permanent injunction, or any other form of equitable relief from any court of competent jurisdiction restraining Employee from committing or continuing any breach of such Sections, without the necessity of posting a bond. It is further agreed that the existence of any claim or cause of action on the part of Employee against Employer, whether arising from this Agreement or otherwise, shall in no way constitute a defense to the enforcement of the provisions of Sections 8, 9, 10 and/or 11 of this Agreement. 17. Indemnification. Employer agrees to indemnify Employee against --------------- liabilities, expenses, and losses that may arise by reason of the Employee's status as an officer and to advance expenses incurred as a result of any suit, action, claim or proceeding, whether civil, criminal, investigative, or administrative, against Employee. In addition, Employer agrees to maintain in full force and effect, at its own expense, adequate insurance coverage protecting the Employee and holding the Employee harmless against liabilities, expenses, and losses arising from any suit, action, claim or proceeding, whether civil, criminal, investigative, or administrative, made or asserted against the Employee resulting from the Employee's actions in his official capacity. The provisions of this Section 17 shall survive termination of this Agreement for any reason. 18. Miscellaneous. ------------- (a) Notices. All notices and other communications hereunder shall be ------- in writing and shall be deemed given (i) when made, if delivered personally, (ii) three (3) days after being mailed by certified or registered mail, postage prepaid, return receipt requested, or (iii) two (2) days after delivery to a reputable overnight courier service, to the parties, their successors in interest or their assignees at the following addresses, or at such other addresses as the parties may designate by written notice in the manner aforesaid: To Employer: IFX Corporation 200 West Adams Street Chicago, Illinois 60606 Attention: President To Employee, to his home address as recorded in the payroll records of Employer from time to time, unless another address has been provided to Employer in writing by Employee. (b) Governing Law. This Agreement shall be governed as to its ------------- validity and effect by the internal laws of the State of Florida, without regard to its rules regarding conflicts of law. (c) Successors and Assigns. This Agreement shall be binding upon and ---------------------- shall inure to the benefit of (i) the heirs, executors and legal representatives of Employee, upon Employee's death or Permanent Disability and (ii) any successor of Employer. As used in this Agreement, "successor" shall include any person, firm, corporation or other business entity that at any time, whether by purchase, merger, consolidation or otherwise, directly or indirectly acquires a majority of the assets, business or stock of Employer. (d) Integration. This Agreement (together with any option agreement ----------- Employer may require Employee to execute in order to avail himself/herself of any Stock Plan benefits specifically contemplated herein and any agreement to release and hold harmless Employer executed concurrently herewith) constitutes the entire agreement between the parties with respect to all matters covered herein, including but not limited to the parties' employment relationship and Employee's entitlement to compensation, commissions and benefits from Employer or any of its affiliated companies and/or the termination of Employee's employment. This Agreement supersedes all prior oral or written understandings and agreements relating to its subject matter and all other business relationships between Employer and/or its affiliated companies. (e) No Representations. No person or entity has made or has the ------------------ authority to make any representations or promises on behalf of any of the parties which are inconsistent with the representations or promises contained in this Agreement, and this Agreement has not been executed in reliance on any representations or promises not set forth herein. Specifically, no promises, warranties or representations have been made by anyone on any topic or subject matter related to Employee's relationship with Employer or any of its executives or employees, including but not limited to any promises, warranties or representations regarding future employment, compensation, commissions and benefits, any entitlement to stock, stock rights, Stock Plan benefits, profits, debt and equity interests in Employer or any of its affiliated companies or regarding the termination of Employee's employment. In this regard, Employee agrees that no promises, warranties or representations shall be deemed to be made in the future unless they are set forth in writing and assigned by an authorized representative of Employer. (f) Amendments. This Agreement may be modified only by a written ---------- instrument executed by the parties that is designated as an amendment to this Agreement. (g) Counterparts. This Agreement is being 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. (h) Severability and Non-Waiver. Any provision of this Agreement (or --------------------------- portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by Employer shall be implied by Employer's forbearance or failure to take action. (i) Attorneys Fees. In the event that any action or proceeding is -------------- commenced by any party hereto for the purpose of enforcing any provision of this Agreement, the parties to such action, proceeding or arbitration may receive as part of any award, settlement, judgment, decision or other resolution of such action or proceeding, whether or not reduced to a court judgment, their costs and reasonable attorneys fees as determined by the person or body making such award, settlement, judgment, decision or resolution. (j) Voluntary and Knowledgeable Act. Employee represents and warrants ------------------------------- that Employee has read and understands each and every provision of this Agreement and has freely and voluntarily entered into this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. EMPLOYER: IFX CORPORATION By: /s/ Joel Eidelstein ------------------- Name: Joel Eidelstein Title: President EMPLOYEE: /s/ Jose Leiman ------------------- Jose Leiman EX-10.10 15 0015.txt AMENDED & RESTATED STOCK PURCHASE AGMT-CASTY Exhibit 10.10 AMENDED AND RESTATED STOCK PURCHASE AGREEMENT This Amended and Restated Stock Purchase Agreement (the "Agreement") dated as of June , 2000 between IFX ONLINE, INC., a Delaware corporation ("Company") and LEE CASTY, a resident of Illinois ("Purchaser"), amends and restates in its entirety the Stock Purchase Agreement (the "Prior Agreement") dated as of February 23, 2000 between Company and Purchaser. WHEREAS, as of the date of the Prior Agreement, (i) Company held 2,736,925 shares of Class A Convertible Preferred Stock (the "Yupi Preferred Stock") of Yupi Internet, Inc. ("Yupi") convertible into the Common Stock, par value $0.01 per share of Yupi (the "Yupi Common Stock"), at the option of Company, (ii) Company was in need of funds to provide additional working capital for its operations, and (iii) a registration statement for the initial public offering of Yupi Common Stock had been filed with the Securities and Exchange Commission; WHEREAS, pursuant to the Prior Agreement, Purchaser purchased from Company for an aggregate cash purchase price of $5,000,000, a number of shares of Yupi Common Stock based on the value of such shares on an initial public offering of stock or certain other events, which value in the absence of an initial public offering might not be determined until February 24, 2001; WHEREAS, as of the date of this Agreement there has been no public offering of the Yupi Common Stock; and WHEREAS, Company and Purchaser agree that the Prior Agreement needs to be clarified with respect to events occurring if there is no initial public offering of Yupi Common Stock and no change in control of Yupi prior to February 24, 2001. NOW THEREFORE, the parties hereto agree as follows: 1. Definitions. ----------- "Allocation Date" means for each of the Purchaser Shares, the earlier of --------------- five business days after (i) the end of the Holding Period; (ii) the date of the sale of each such Purchaser Share, except for any sales pursuant to Sections 5 and 6 of this Agreement, and (iii) the Purchaser -2- "collars" a Purchaser Share or enters into any other transaction that effectively locks in his profits on the such Purchaser Share (i.e., a "short against the box"). (c) "Holding Period" means the period from February 23, 2000 until -------------- February 24, 2001. (d) "IPO" means the earlier of (i) the closing date of the initial --- public offering of shares of Yupi Common Stock; and (ii) the closing date of a change of control of Yupi (including (A) the sale of a controlling interest by the current holders of Yupi of the outstanding shares of Yupi stock, (B) the sale of all or substantially all of the assets of Yupi, or (C) a merger of Yupi with another entity if the current holders of Yupi do not have a controlling interest in the surviving entity. (e) "IPO Price" means (i) in the event of an initial public offering --------- on or before August 23, 2000, the purchase price per share of Yupi Common Stock as shown on the final prospectus for the initial public offering; (ii) if there has been no initial public offering by August 23, 2000, and (A) there has been a change of control of Yupi on or before August 23, 2000, the lesser of (1) the effective per share consideration paid by the purchaser in the change of control and (2) $700 million divided by the fully diluted number of shares of Yupi Common Stock issued and outstanding on the business day after the change in control, or (B) there has been no change of control of Yupi on or before August 23, 2000, 50% of the purchase price per share received by Yupi in a Private Sale of any securities of Yupi (including Yupi Common Stock) convertible into or exchangeable for Yupi Common Stock that was most recently completed prior to the date on which the IPO Price is being determined; or (iii) in the event of a sale of the Company's shares of Yupi Common Stock which triggers Purchaser's rights under Section 6 (whether or not Purchaser chooses to exercise such rights) and for which the Company does not exercises its rights under Section 5, 70% of the net price Purchaser is entitled to receive from such sale for the Purchaser Shares that he has the right to sell. "Market Value" means (i) if there is no IPO, 90% of the purchase price ------------ per share received by Yupi in a Private Sale of any securities of Yupi (including Yupi Common Stock) convertible into or exchangeable for Yupi Common Stock that was most recently completed prior to the date on which Market Value is being determined; or (ii) if there is an IPO or the Purchaser now holds Recapitalization Securities, the average of the last reported sales price of the Yupi Common Stock or Recapitalization Securities on the NASDAQ Stock Market or on any national or regional securities exchange on which such securities are listed or admitted to unlisted trading privileges, as reported for each of the 10 consecutive trading days ending on the 10th trading date prior to any determination date, or (if such Yupi Common Stock or Recapitalization Securities are not so listed or admitted) the last reported sales price reported by the National Association of Securities Dealers, Inc. Automated Quotations, Inc., or (if such Recapitalization Securities are -3- not so listed or quoted) at such price determined by Company's Board of Directors, in good faith.(g). (h) "Private Sale" means a bona fide, arms' length sale by Yupi of its ------------ securities to one or more purchasers, which sale is effected without registration under the Securities Act of 1933, as amended (the "Securities ---------- Act"), pursuant to an exemption from registration provided by Section 4(2) of - --- the Securities Act, Regulation D or Rule 144A promulgated under the Securities Act, or another provision of the Securities Act or any rule or regulation promulgated by the Securities and Exchange Commission; provided, however, that a -------- ------- Private Sale excludes issuances of Yupi Common Stock or other securities, or grants of options or warrants to acquire Yupi Common Stock or other securities (and the issuance of Yupi Common Stock or other securities upon exercise of the same), to employees, directors or consultants of Yupi pursuant to any equity incentive, bonus or other compensatory plan. (i) "Purchaser Shares" means the shares of Yupi Preferred Stock ---------------- purchased by Purchaser pursuant to Section 2 of this Agreement. (j) "Recapitalization Securities" means any securities issued in --------------------------- exchange for Yupi Preferred Stock or Yupi Common Stock as a result of a tender offer, exchange offer, business combination or other similar event relating to Yupi. "Sales Price" means the price per share of each Purchaser Share sold by ----------- Purchaser or if the Purchaser has not sold all or any of the Purchaser Shares on or before the Allocation Date, the Market Value per share on the Allocation (l) Date; provided, however, that if Purchaser "collars" any of the Purchaser Shares or enters into any other transaction that effectively locks in his profits on such Purchaser Shares (i.e., a "short against the box"), such transaction shall determine the Sales Price of such Purchaser Shares for all purposes hereunder. (m) "Yupi Common Stock" means the common stock, par value $.01 per ----------------- share of Yupi. (n) "Yupi" means Yupi Internet, Inc., a Florida corporation. ---- 2. Purchase. Pursuant to the Prior Agreement, Purchaser has purchased from -------- Company for $5,000,000 in cash, 500,000 shares of Yupi Preferred Stock for the Purchase Price per share of $10.00. 3. Adjustment of Share Amount. Upon the earlier of (i) August 23, 2000, if -------------------------- there has been no sale pursuant to Section 5 hereof, and (ii) the IPO, if the IPO Price is greater than the Purchase Price, then Purchaser shall transfer to Company, or if the IPO Price is less than the Purchase Price, then Company shall transfer to Purchaser; the amount of shares of Yupi Common Stock -4- equal to the difference between (i) 500,000 and (ii) $5,000,000 divided by the IPO Price. The number of shares to be returned by Purchaser to Company or distributed from Company to Purchaser shall be equitably adjusted in the event of a stock split by Yupi (or a change in the conversion ratio with respect to the Preferred Stock) or any other similar transaction from and after the date of this Agreement. 4. Allocation of Sales Price. The Sales Price for each share of Yupi Common ------------------------- Stock acquired by Purchaser pursuant to this Agreement and not sold by Purchaser pursuant to Sections 5 and 6 hereof shall be allocated on its Allocation Date as follows: (a) if the Sales Price is less than 250% of the IPO Price, then Purchaser may retain the entire Sales Price; (b) if the Sales Price is 250% or more of the IPO Price, then Purchaser shall pay in cash to Company, the amount determined by multiplying 0.25 by the Sales Price minus 250% of the IPO Price; and (c) if the Sales Price is 300% or more of the IPO Price, then Purchaser shall pay in cash to Company (in addition to the amount payable pursuant to Section 4(b), the amount determined by multiplying 0.25 the Sales Price minus 300% of the IPO Price. 5. Drag-Along Rights. If there has been no IPO and the Company enters into ----------------- an agreement (including an agreement in principle) to sell 50% or more of its shares of Yupi Common Stock to any purchaser or group of purchasers in a single arms-length transaction or related series of arms-length transactions with an independent third party or group of independent third parties, the Company may require that the Purchaser sell all of its Purchaser Shares to such purchaser or group of purchasers at a net price and on terms and conditions the same as those on which the Company has agreed to sell its shares of Yupi Common Stock; provided, however, that, notwithstanding the foregoing, the Company shall not be - -------- ------- entitled to require the Purchaser to sell his Purchaser Shares if the contemplated transaction would result in a rate of return for the Purchaser on his $5,000,000 investment of less than 30%, unless the Company makes a cash payment to the Purchaser in such amount as to provide the Purchaser with a rate of return on his investment of 30%. The Company shall give prompt notice to the Purchaser that Company has entered into an agreement of the type described in this Section 5. 6. Tag-Along Rights. If prior to an IPO, the Company enters into an ---------------- agreement (including an agreement in principle) to sell 50% or more of its shares of Yupi Common Stock to any purchaser or group of purchasers in a single arms-length transaction or related series of arms-length transactions with an independent third party or group of independent third parties, the Company shall permit Purchaser to sell the same percentage of his Purchaser Shares that Company is selling to such purchaser or group of purchasers at a net price and on -5- terms and conditions the same as those on which the Company has agreed to sell its shares of Yupi Common Stock. The Company shall give prompt notice to the Purchaser that Company has entered into an agreement of the type described in this Section 6. 7. Execution of Documents. Each of Company and Purchaser agrees to execute ---------------------- and deliver such documents, instruments and agreements, and do and take such actions, as the other party, purchasers pursuant to Sections 5 and 6 hereof, Yupi or Yupi's transfer agent reasonably requires or may request in order to effect the transfer of such Yupi Common Stock pursuant to this Agreement. 8. Notices. Unless otherwise specifically provided herein, any notice or ------- other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, telexed or sent by United States mail and shall be deemed to have been given when delivered in person, upon receipt of telecopy or telex or three (3) business days after deposit in the United States mail, registered or certified, with postage prepaid and properly addressed. For the purpose hereof, the addresses of Company and Purchaser (until notice of a change thereof is delivered as provided in this Section 8) shall be as follows: If to Company, to: If to Purchaser, to: ----------------- ------------------- IFX Corporation Lee Casty 15050 NW 79 CT French American Securities, Inc. SUITE 200 707 Skokie Blvd., 5th Floor Miami Lakes, FL 33016160 Northbrook, IL 60062 Attn: President 9. Applicable Law. This Agreement shall be governed by the laws of the -------------- State of Illinois in all respects (without reference to conflicts of law principles), including matters of construction, validity and performance, and that none of its terms or provisions may be waived, altered, modified or amended except as Purchaser may consent thereto in writing duly signed for and on its behalf. 10. Indemnification. The Company agrees to indemnify and hold Purchaser --------------- harmless against any losses, claims, damages or liabilities (including reasonable attorney's fees) to which Purchaser becomes subject in connection with any matter referred to in this Agreement or arising out of the matters contemplated by this Agreement; provided, however, that this indemnification shall not be applicable to any of such losses, claims, damages or liabilities which arise out of Purchaser's negligence or misconduct. -6- 11. Jurisdiction and Venue. Company and Purchaser hereby agree that all ---------------------- actions or proceedings initiated by either Company or Purchaser and arising directly or indirectly out of this Agreement which are brought pursuant to judicial proceedings shall be litigated in United States Federal or state courts located in Chicago, Illinois (the "Courts"). Company and Purchaser expressly submit and consent in advance to such jurisdiction, agree that service of summons and complaint or other process or papers may be made by registered or certified mail addressed to Company and Purchaser, and hereby waive any claim that any of the Courts is an inconvenient forum or an improper forum based on lack of venue. 12. Assignability. This Agreement is assignable by either party so long as ------------- the assignee is reasonable acceptable to the other party and the assignee agrees to accept the terms and conditions of this Agreement. IN WITNESS WHEREOF, Company and Purchaser have executed and delivered this Agreement as of the day and year and the place first above written. IFX ONLINE, INC., a Delaware corporation By: /s/ Joel Eidelstein ------------------------------ Name: Joel Eidelstein Title: President /s/ Lee Casty ---------------------------------- Lee Casty -7- EX-10.11 16 0016.txt DIRECTOR'S STOCK OPTION AGREEMENT Exhibit 10.11 ------------- IFX CORPORATION DIRECTORS OPTION AGREEMENT THIS DIRECTORS OPTION AGREEMENT (the "Agreement") is entered into as of June 12, 2000 between IFX CORPORATION, a Delaware corporation (the "Company"), and _____________ ("Optionee"), a director of the Company. In consideration of the mutual promises and covenants made herein, the parties hereby agree as follows: 1. Grant of Option. Subject to the terms and conditions of the IFX --------------- Directors Stock Option Plan (the "Plan"), which is incorporated herein by this reference, the Company grants to Optionee an option (the "Option") to purchase six hundred (_____) shares (the "Shares") of the Company's common stock, $.02 par value ("Common Stock") at an exercise price of $______ per share (the "Option Price"). The Option may be exercised at any time in whole or from time to time in part beginning six months after the date of this Agreement. The Option is not intended to qualify as an incentive stock option described in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). All provisions of this Agreement are to be construed in conformity with this intention. 2. Term. Except as provided below, the Option shall be valid for a term ---- commencing on the date hereof (the "Option Date") and ending on the earliest of: (a) 10 years from the Option Date; (b) the date one year after the Optionee's death; or (c) the date that Optionee's membership on the Board of Directors is terminated for Cause (as defined in the Plan). 3. Procedure for Exercise. Exercise of the Option or a portion thereof ---------------------- shall be effected by the giving of written notice to the Company in accordance with Section 9 of the Plan and payment of the Option Price, or applicable pro --------- rata portion thereof, for the number of Shares to be acquired pursuant to the exercise. 4. Payment for Shares. Payment of the Option Price for any Shares ------------------ purchased pursuant to the Option shall be made in cash or by such other method as may be permitted by the Committee administering the Plan in accordance with the provisions of Section 9 of the Plan. No Shares shall be delivered upon --------- exercise of the Option until full payment has been made and all applicable withholding requirements satisfied. 5. Options Not Transferable and Subject to Certain Restrictions. The ------------------------------------------------------------ Option is not transferable, voluntarily or involuntarily, other than by will or the laws of descent and distribution; provided, however, that the Compensation Committee, in its discretion, may permit the Option to be transferrable by the Optionee to a member of Optionee's immediate family or to family trusts, partnerships and other entities comprised solely of the Optionee or members of the Optionee's immediate family. 6. Acceptance of Plan. Optionee hereby accepts and agrees to be bound by ------------------ all the terms and conditions of the Plan. 7. Compliance with Securities Laws. The Option shall not be exercisable ------------------------------- and Shares shall not be issued pursuant to exercise of the Option unless the exercise of the Option and the issuance and delivery of Shares pursuant thereto shall comply with all relevant provisions of law including, without limitation, the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which Common Stock may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. If, in the opinion of counsel for the Company, a representation is required to be made by Optionee in order to satisfy any of the foregoing relevant provisions of law, the Company may, as a condition to the exercise of the Option, require Optionee to represent and warrant at the time of exercise that the Shares to be delivered as a result of such exercise are being acquired solely for investment and without any present intention to sell or distribute such Shares. 8. No Other Rights. Optionee hereby acknowledges and agrees that, except --------------- as set forth herein, no other representations or promises, either oral or written, have been made by the Company or anyone acting on its behalf with respect to Optionee's right to acquire any stock options or other awards under the Plan, and Optionee hereby releases, acquits and forever discharges the Company and anyone acting on its behalf of and from all claims, demands or causes of action whatsoever relating to any such representations or promises and waives forever any claim, demand or action against the Company or anyone acting on its behalf with respect thereto. 9. References. Capitalized terms not otherwise defined herein shall have ---------- the same meaning ascribed to them in the Plan. 10. Governing Law. The construction and operation of this Agreement are ------------- governed by the laws of the State of Delaware (without regard to its conflict of laws provisions). [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -2- Executed as of the date first written above. THE COMPANY: ----------- IFX CORPORATION By:____________________________ OPTIONEE: -------- _______________________________ _______________________________ Social Security Number -3- Name Grant Date Number of Shares Exercise - -------------------------------------------------------------------- related to Option Price - ----------------------------------------------------------------- Burton J. Meyer 11/9/99 600 $17.25 George A. Myers 11/9/99 600 $17.25 -4- EX-99.1 17 0017.txt PRESS RELEASE DATED JUNE 16, 2000 EXHIBIT 00.1 EXHIBIT 99.1 IFX CORP.- A PREEMINENT PROVIDER OF LATIN AMERICAN INTERNET SERVICES - SECURES $25 MILLION OF FUNDING FROM UBS CAPITAL AMERICAS TO FURTHER EXPAND ITS LEADING GEOGRAPHIC PRESENCE AND CORPORATE PRODUCT OFFERING Miami, fl (June 16, 2000) -- IFX Corporation ("IFX") (Nasdaq: FUTR; ---- http://www.ifxcorp.com) - the company with the most extensive Latin American pan-regional coverage for providing Internet-based products and services, announced today it has secured a $25 million round of private equity financing from UBS Capital Americas III, L.P. (UBS Capital Americas). This financing is in addition to the $20 million secured by Tutopia.com, a subsidiary of IFX Corp. "We are extremely pleased to have secured this equity financing from such a prestigious partner as UBS Capital Americas," said Mike Shalom, CEO of IFX Corp. "This financing demonstrates UBS Capital Americas' belief in our business model and our management team. In addition, we are pleased that both Charles Moore and Mark Lama, principals with UBS Capital Americas, have agreed to join the IFX Board of Directors. Both gentlemen bring years of experience in the telecommunications and Latin American marketplace " Mark Lama, Principal of UBS Capital Americas commented " We are excited about our investment in IFX - they have created a top quality pan-regional network and have proven the strength of their regional and in-country local management teams. This financing enables them to continue building and upgrading the network and to strengthen direct sales and marketing efforts in order to maintain their leadership position in the Latin American internet marketplace." Mike Shalom said "This financing will allow us to move at a fast speed in our next stage of growth enhancing what we have established to date. Over the past year, we have acquired 25 ISP operations and have implemented the latest Lucent, Nortel, Cisco, Akamai and Sun equipment. In addition, we have integrated these assets into a unified network - under our Unete subsidiaries - and have implemented a real time billing system customized for each country's various regulatory and tax requirements." Commenting on the use of proceeds, Shalom added, "The market for corporate internet infrastructure services in Latin America is expected to reach $15.5 billion in 2003, up from $4 billion in 1999. The UBS Capital Americas investment helps to position IFX and its Unete brand to compete in this rapidly growing market. The proceeds will be used in part to further the integration of our information systems infrastructure, to increase marketing activities and expand our direct sales force to service the small and medium enterprise market in the region. Our market-leading geographic presence will expand further by increasing the number of company-owned POPS in the region. We will also continue to broaden our value-added service offerings to our growing corporate customers." IFX, under its Unete (www.unete.com) brand, is a leader in providing a broad range of value-added Internet products and services to the small and medium sized business marketplace in Latin America. Offerings include region-wide wholesale and private label Internet access, dedicated fixed wireline and wireless Internet access, unlimited dial-up roaming access to Unete's POPs throughout the region, web design, web-hosting and co-location, dial-up LAN services as well as VPN services, e-commerce solutions and full technical support. The Unete network provides pan Latin-American coverage in 15 countries including Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Uruguay Venezuela and the United States. The closing of the financing is subject to customary conditions. About IFX Corp. IFX (www.ifxcorp.com) is a Miami-based Internet company that has created the most extensive pan-regional platform for providing Internet-based products and services throughout Latin America. IFX has subsidiaries in fifteen countries.. Under its Unete (www.unete.com) brand, IFX services small and medium sized businesses and provides network services. Tutopia.com, the consumer focused brand, is a leader in providing free pan-regional Internet access as well as content. IFX also has holdings in other Latin American Internet businesses, namely Yupi Internet Inc. ("Yupi") (http://www.yupi.com), Facilito.com Inc ------------------- (http://www.facilito.com), and ePagos.com, Inc. ("ePagos") - ------------------------ (http://www.ePagos.com). - ---------------------- About UBS Capital Americas UBS Capital Americas has in excess of $2.5 billion of private equity under management. It currently manages UBS Capital Americas II, a $1.0 billion fund dedicated to North America, and UBS Capital Americas III, a $500 million fund dedicated to Latin America. Both funds focus on emerging growth companies in a variety of industries including telecommunications, Internet and technology. UBS Capital Americas is managed out of New York City, with offices in Buenos Aires, Argentina and Sao Paolo, Brazil. This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the growth in IFX's Latin American network and IFX's expansion strategy in the Latin American region. These statements reflect IFX's current views with respect to future events and financial performance. Such forward- looking statements are subject to certain risks and uncertainties that could cause actual events or results to differ materially from those indicated from such forward-looking statements. The potential risk factors include, among others, IFX's limited operating history and experience in the free Internet business, IFX's ability to attract significant additional financing and continue to incur losses and negative cash flow from operations, and risks associated with international expansion, especially in Latin America. Additional risk factors that could affect IFX's financial results are set forth in IFX's reports and documents filed from time to time with the Securities and Exchange Commission. Local telephone communication charges may apply in some jurisdictions even to free Internet access service. This press release and prior releases are available on IFX Corporation website at http://www.ifxcorp.com SOURCE: IFX Corporation EX-99.2 18 0018.txt PRESS RELEASE DATED JUNE 16, 2000 EXHIBIT 00.2 EXHIBIT 99.2 TUTOPIA.COM - THE LEADING FREE ACCESS PROVIDER IN SPANISH-SPEAKING LATIN AMERICA - - RECEIVES COMMITMENT FOR $20 MILLION LEAD BY UBS CAPITAL AMERICAS TUTOPIA SURPASSES 850,000 REGISTERED USERS, MARKING A SIGNIFICANT MILESTONE IN FREE INTERNET ACCESS IN LATIN AMERICA. Miami, fl (June 16, 2000) -- Tutopia.com, Inc. (www.tutopia.com), a subsidiary of IFX Corporation (NASDAQ:FUTR) and the first company to launch free internet access pan-regionally in Latin America, announced today it has received a commitment for $20 million of private equity financing led by UBS Capital Americas III, L.P. ("UBS Capital Americas"). This funding is in addition to the $25 million secured by Tutopia.com's parent company IFX Corp. "At this time, we are proud to announce that Tutopia has surpassed 850,000 registered users, marking a significant milestone in free Internet access in Latin America. This financing commitment is a testament to UBS Capital Americas's confidence in Tutopia's business model, particularly our ability to create value from our user-base." said Joel Eidelstein, CEO of Tutopia.com. "According to Yankee Group, the Latin American market is expected to double next year to reach 25.5 million users, primarily due to the introduction of free access. Tutopia plans to use the proceeds of this investment to continue to expand its service offerings, to increase marketing and sales activities and for general corporate purposes." Charles Moore, Principal of UBS Capital Americas commented "We are excited about our investment in Tutopia.com and joining their Board of Directors. We are impressed with their results to date - in only 6 months post-launch they achieved their 12-month user goals - and created a unique model to make free access a revenue-generating business in Latin America. In addition to generating revenue from banner ad sales, Tutopia has an impressive list of strategic partners that purchase the exclusive right to place their content offerings on the Tutopia home page. Tutopia has also secured a notable list of bundling and distribution agreements with market leaders in the Computer and Retail industries." Jack Bursztyn, President of Tutopia.com commented, "With fast connections, data security, reliable service, "best of the net" content and local entertainment news, our users are now spending about one-quarter of a billion minutes online per month. Our content partners, which include leading e-companies such as Loquesea.com, Patagon.com, Deremate.com, Despegar.com and Laborum.com, are witnessing a large generation of traffic to their sites emanating from the Tutopia home page." Tutopia is the free access provider with the largest geographic coverage - currently available in over 36 cities in ten countries in the region, with more planned to come online in the coming months. Tutopia is offered in Argentina, Brazil, Chile, Colombia, El Salvador, Guatemala, Honduras, Mexico, Panama and Venezuela. In addition to its unlimited and easy-to-use free Internet access, Tutopia offers free web based calendar and address books, web based and/or POP3 e-mail access, e-mail forwarding, 15MB of e-mail storage space and email customer support. The service is available in Spanish, Portuguese and English. The closing of the financing is subject to antitrust approvals related to the investment, the negotiation of definitive documents, the ability to meet certain conditions to closing, and customary conditions for closing such investments. About IFX Corp. IFX (www.ifxcorp.com) is a Miami-based Internet company that has created the most extensive pan-regional platform for providing Internet-based products and services throughout Latin America. IFX has subsidiaries in fifteen countries. Under its Unete (http://www.unete.com) brand, IFX services small and medium sized businesses and provides network services. Tutopia.com (http://www.tutopia.com), the consumer focused brand, is a leader in providing free pan-regional Internet access as well as content. IFX also has holdings in other Latin American Internet businesses, namely Yupi Internet Inc. (``Yupi'') (http://www.yupi.com), Facilito.com Inc (http://www.facilito.com), and - -------------------- ----------------------- ePagos.com, Inc. (``ePagos'') (http://www.ePagos.com). --------------------- About UBS Capital Americas UBS Capital Americas has in excess of $2.5 billion of private equity under management. It currently manages UBS Capital Americas II, a $1.0 billion fund dedicated to North America, and UBS Capital Americas III, a $500 million fund dedicated to Latin America. Both funds focus on emerging growth companies in a variety of industries including telecommunications, Internet and technology. UBS Capital Americas is managed out of New York City, with offices in Buenos Aires, Argentina and Sao Paolo, Brazil. This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the growth in IFX's Latin American network and IFX's expansion strategy in the Latin American region. These statements reflect IFX's current views with respect to future events and financial performance. Such forward- looking statements are subject to certain risks and uncertainties that could cause actual events or results to differ materially from those indicated from such forward-looking statements. The potential risk factors include, among others, IFX's limited operating history and experience in the free Internet business, IFX's ability to attract significant additional financing and continue to incur losses and negative cash flow from operations, and risks associated with international expansion, especially in Latin America. Additional risk factors that could affect IFX's financial results are set forth in IFX's reports and documents filed from time to time with the Securities and Exchange Commission. Local telephone communication charges may apply in some jurisdictions even to free Internet access service. This press release and prior releases are available on IFX Corporation website at http://www.ifxcorp.com -----END PRIVACY-ENHANCED MESSAGE-----