Amendment to Employment and Stockholders Agreements among PF.Net Communications, Inc., PF.Net Corp., and Various Parties (May 10, 2000)

Summary

This agreement amends the employment terms for John Warta and Stephen Irwin with PF.Net Corp., limiting their roles to typical director activities and restricting them from capital raising, change of control transactions, and public communications unless authorized by the board. Their compensation and benefits remain unchanged. The agreement also modifies the Stockholders Agreement, waiving certain approval rights of PF Telecom, Koch, and Odyssey regarding senior management employment decisions, which will now require only a majority board vote. All parties have agreed to these changes as of May 10, 2000.

EX-10.27 31 ex-10_27.txt EXHIBIT 10.27 Exhibit 10.27 EXECUTION COPY PF.Net Communications, Inc. PF.Net Corp. 1625 B Street Washougal, Washington 98671 May 10, 2000 PF Telecom Holdings, LLC Attn: John Warta 1701 Broadway Street, Suite 358 Vancouver, WA 98663 Koch Telecom Ventures, Inc. Attn: George Damiris 4111 East 37th Street North Wichita, KS 67220 Odyssey Investment Partners, LLC Attn: Brian Kwait 280 Park Avenue, 38th Floor New York, NY 10017 Mr. John Warta P.O. Box 2010 Vancouver, WA ###-###-#### Mr. Stephen Irwin 15 Eisenhower Drive Cresskill, NJ 07626 UBS Capital 299 Park Avenue New York, NY 10171 Gentlemen: Reference is made to that certain Employment Agreement effective as of November 1, 1999 by and between PF.Net Corp., a Delaware corporation (the "Company"), and John Warta, and to that certain Employment Agreement effective as of November 1, 1999 by and between the Company and Steve Irwin (collectively, the "Employment Agreements"). As we have discussed and agreed, pursuant to Section 1.2 of each of the Employment Agreements, a majority of the Board of Directors of the Company may, in its sole discretion, modify the employment duties of each of Messrs. Warta and Irwin, respectively, in such manner as it deems appropriate. As we have further discussed and agreed, a majority of the Board of Directors of the Company has determined to so modify the duties of each of Messrs. Warta and Irwin in the manner set forth below. On and following the date hereof, unless expressly directed by either the Chairman of the Board of Directors or a majority of the Board of Directors of the Company in writing, each of Messrs. Warta and Irwin agrees that he will engage only in activities typically performed by other directors of the Company. Without limiting the foregoing, each of Messrs. Warta and Irwin agrees that he will not (1) engage in activities relating to capital raising or change of control transactions on behalf of, or in connection with, the Company or any of its affiliates, or (2) make any public statement, issue any press release or otherwise publicly convey information related to the Company. The Company acknowledges that, except as may expressly be authorized by the Board of Directors from time to time, no individual director of the Company is authorized to engage in the foregoing activities. For purposes of the foregoing, "affiliate" shall have the meaning set forth in Rule 405 of the Securities Act of 1933, as amended. Notwithstanding the foregoing, the compensation and benefits for which Messrs. Warta and Irwin are eligible under the terms of their respective Employment Agreements shall not be reduced. Reference is also made to that certain Stockholders Agreement (the "Stockholders Agreement") entered into as of October 29, 1999 by and among PF.Net Communications, Inc., formerly known as PF.Net Holdings, Limited ("PF.Net Communications"), John Warta, Karen Irwin, Treg Ventures, LLC, Koch Telecom Ventures, Inc. ("Koch"), PF Telecom Holdings, LLC ("PF Telecom"), GLW Ventures LLC, Georgiana Warta, Odyssey Coinvestors, LLC, Odyssey Investment Partners Fund, LP ("Odyssey"), UBS Capital II LLC, UBS Warburg, LLC (formerly known as Warburg Dillon Reed LLC), Credit Suisse First Boston and Lucent Technologies Inc., as amended through the date hereof. On and following the date hereof, PF Telecom, Koch and Odyssey each agrees to waive any and all of its rights under Section 4(a)(vi) of the Stockholders Agreement to require the PF Telecom Directors, the Koch Directors and the Odyssey Directors (each as defined in the Stockholders Agreement), respectively, each voting as a group, to approve any transaction relating to the employment or termination of any member of senior management of PF.Net Communications or any of its Subsidiaries (as defined in the Stockholders Agreement). Each of PF Telecom, Koch and Odyssey further agrees that the employment or termination of any member of senior management of PF.Net Communications or any of its Subsidiaries, other than any relative or Affiliate of any PF Telecom Holder (each as defined in the Stockholders Agreement), will require the approval of a majority of the Board of Directors, without regard to whether such action has been approved by any one or more members of any of the aforementioned groups. The foregoing shall not affect the parties' rights and obligations under Section 4(d) of the Stockholders Agreement. This letter will constitute an amendment to each of the Employment Agreements and to the Stockholders Agreement. 2 Please acknowledge your agreement with and acceptance of the above by signing below and returning one executed copy to me. Very Truly yours, /s/ Muzzafar Mirza Muzzafar Mirza Chairman of the Board PF.Net Communications, Inc. PF.Net Corp. Agreed and accepted by John Warta, as of the date first above written. Signature: /s/ JOHN WARTA ------------------------------------------------ Agreed and accepted by Stephen Irwin, as of the date first above written. Signature: /s/ STEPHEN IRWIN ------------------------------------------------ Agreed and accepted by PF Telecom Holdings, LLC, as of the date first above written. By: /s/ JOHN WARTA ------------------------------------------------ Name: John Warta Title: Chairman and Chief Executive Officer Agreed and accepted by Koch Telecom Ventures, Inc., as of the date first above written. By: /s/ GEORGE DAMIRIS ------------------------------------------------ Name: George Damiris Title: Vice-President Agreed and accepted by Odyssey Investment Partners Fund, LP, as of the date first above written. By: Odyssey Capital Partners, LLC, its general partner By: /s/ MUZZAFAR MIRZA ---------------------------------------- Name: Muzzafar Mirza Title: Managing Member 3 Agreed and accepted by UBS Capital II, LLC, as of the date first above written. By: /s/ MARC UNGER /s/ MICHAEL GREENE ------------------------------------------------- Name: Marc Unger Michael Greene Title: Attorney-in-Fact Attorney-in-Fact 4