Document:

Observation Rights Agreement

 Exhibit 10.16 
 NEUTRAL TANDEM, INC. 
 1 South Wacker Drive 
 Suite 200 
 Chicago, IL 60606 
 February 2, 2006 
 Montagu Newhall
Global Partners II, L.P. 
 c/o Montagu Newhall Associates, Inc. 
 100 Painters Mill Road, Suite 700 
 Owings Mills, Maryland 21117 
  

	 	Re:	Observation Rights 

 Ladies and Gentlemen: 
 This letter will confirm our agreement that effective upon the purchase by you and two of your affiliated entities (collectively, the “Montagu
Entities”) of 477,487 shares of Series C Convertible Preferred Stock of Neutral Tandem, Inc. (the “Company”), and for so long as the Montagu Entities (or entities affiliated with the Montagu Entities) continue to own
50% of such shares, you will be entitled to the following board observation rights, in addition to rights to certain non-public financial information, inspection rights and other rights that you may be entitled to pursuant to the Stock Purchase
Agreement and Second Amended and Restated Stockholders’ Agreement among the Company and the investor parties thereto, each dated as of the date hereof: 
 The Company shall permit one representative of the Montagu Entities (the “Observer”) to attend all meetings of the Board of Directors in a non-voting observer capacity (except as expressly provided
herein), which observation right shall include the ability to participate in discussions of the Board of Directors, and shall provide such representative with copies of all notices, minutes, written consents, and other materials that it provides to
members of the Board of Directors, at the time it provides them to such members. The observation right must be exercised in person. Observer agrees, on behalf of itself and any representative exercising the observation rights set forth herein, that
so long as it shall exercise its observation right (i) it shall hold in strict confidence all information and materials that it may receive or be given access to in connection with meetings of the Board of Directors and to act in a fiduciary
manner with respect to all information so provided (provided that this shall not limit its ability to discuss such matters with its officers, directors or legal counsel, as necessary), and (ii) the Board of Directors may withhold from it
certain information or material furnished or made 

 
available to the Board of Directors or exclude it from certain confidential “closed sessions” of the Board of Directors if the furnishing or
availability of such information or material or its presence at such “closed sessions” would jeopardize the Company’s attorney-client privilege or if the Board of Directors otherwise reasonably so requires. 
 The rights described herein shall terminate and be of no further force or effect upon the earliest to occur of (a) the closing of a public offering
of shares of the Company’s capital stock pursuant to a registration statement filed by the Company under the Securities Act of 1933 which has become effective thereunder, (b) such time as the Company becomes required to file reports with
the Securities and Exchange Commission under Sections 12(g) or 15(d) of the Securities Exchange Act of 1934, or (c) such time as the Montagu Entities (or entities affiliated with the Montagu Entities) hold, in the aggregate, less than
238,744 shares of the Series C Convertible Preferred Stock purchased by the Montagu Entities on the date hereof. 
 [remainder of page
intentionally left blank] 

			
	 Very truly yours,

	
	 NEUTRAL TANDEM, INC.

		
	 By:
	 	 /s/ Robert M. Junkroski

	 Name:
	 	Robert M. Junkroski
	 Title:
	 	CFO

  

			
	 ACKNOWLEDGED AND AGREED:

	
	 Montagu Newhall Global Partners II, L.P.

		
	 By:
	 	 /s/ Kevin Campbell

	 Name:
	 	Kevin Campbell
	 Title:
	 	Partner

 [signature page to Montagu Observation Rights Letter]Observation Rights Agreement

 EXHIBIT 10.17 
 NEUTRAL TANDEM, INC. 
 1 South Wacker Drive 
 Suite 200 
 Chicago, IL 60606 
 February 2, 2006 
 Wasatch Small Cap
Growth Fund 
 Wasatch Ultra Growth Fund 
 Wasatch Global
Science & Technology Fund 
 c/o Wasatch Funds, Inc. 
 150 Social Hall Avenue, 4th Floor 
 Salt Lake City, Utah 84111 
  

	 	Re:	Observation Rights 

 Ladies and Gentlemen: 
 This letter will confirm our agreement that effective upon the purchase by you (collectively, the “Wasatch Entities”) of 318,325 shares
of Series C Convertible Preferred Stock of Neutral Tandem, Inc. (the “Company”), and for so long as the Wasatch Entities (or entities affiliated with the Wasatch Entities) continue to own 50% of such shares, you will be
entitled to the following board observation rights, in addition to rights to certain non-public financial information, inspection rights and other rights that you may be entitled to pursuant to the Stock Purchase Agreement and Second Amended and
Restated Stockholders’ Agreement among the Company and the investor parties thereto, each dated as of the date hereof: 
 The Company
shall permit one representative of the Wasatch Entities (the “Observer”) to attend all meetings of the Board of Directors in a non-voting observer capacity (except as expressly provided herein), which observation right shall include
the ability to participate in discussions of the Board of Directors, and shall provide such representative with copies of all notices, minutes, written consents, and other materials that it provides to members of the Board of Directors, at the time
it provides them to such members. The observation right must be exercised in person. Observer agrees, on behalf of itself and any representative exercising the observation rights set forth herein, that so long as it shall exercise its observation
right (i) it shall hold in strict confidence all information and materials that it may receive or be given access to in connection with meetings of the Board of Directors and to act in a fiduciary manner with respect to all information so
provided (provided that this shall not limit its ability to discuss such 

 
matters with its officers, directors or legal counsel, as necessary), and (ii) the Board of Directors may withhold from it certain information or
material furnished or made available to the Board of Directors or exclude it from certain confidential “closed sessions” of the Board of Directors if the furnishing or availability of such information or material or its presence at such
“closed sessions” would jeopardize the Company’s attorney-client privilege or if the Board of Directors otherwise reasonably so requires. 
 The rights described herein shall terminate and be of no further force or effect upon the earliest to occur of (a) the closing of a public offering of shares of the Company’s capital stock pursuant to a
registration statement filed by the Company under the Securities Act of 1933 which has become effective thereunder, (b) such time as the Company becomes required to file reports with the Securities and Exchange Commission under
Sections 12(g) or 15(d) of the Securities Exchange Act of 1934, or (c) such time as the Wasatch Entities (or entities affiliated with the Wasatch Entities) hold, in the aggregate, less than 159,163 shares of the Series C Convertible
Preferred Stock purchased by the Wasatch Entities on the date hereof. You may, from time to time, instruct the Company in writing to not provide you any material non-public information regarding the Company that you may otherwise be entitled to
received under the terms of this letter agreement. The Company agrees to use its reasonable best efforts to comply with such instruction. You may subsequently revoke such instruction. After revoking the instruction, you will be entitled to any
information that you were originally entitled to under this letter agreement. 
 The Wasatch Entities will be entitled to receive immediate
notice (in no event later than 24 hours) from the Company of any stock split, stock dividend, recapitalization or similar event related to the Company’s capital stock and the effect of such event on the number of shares of capital stock of the
Company owned by the Wasatch Entities. 
 [remainder of page intentionally left blank] 

			
	 Very truly yours,

	
	 NEUTRAL TANDEM, INC.

		
	 By:
	 	 /s/ Robert M. Junkroski

	 Name:
	 	Robert M. Junkroski
	 Title:
	 	CFO

 ACKNOWLEDGED AND AGREED: 
  

			
	WASATCH FUNDS, INC.
	 for Wasatch Small Cap Growth Fund,
 Wasatch
Ultra Growth Fund, and
 Wasatch Global Science & Technology Fund

		
	 By:
	 	Wasatch Advisors, Inc.
		 	Their Investment Adviser
		
	 By:
	 	 /s/ Angela M. Palmer

	 Name:
	 	Angela M. Palmer
	 Title:
	 	Vice President

 [signature page to Wasatch Observation Rights Letter]Restricted Stock Agreement

 EXHIBIT 10.18 
 NEUTRAL TANDEM, INC. 
 RESTRICTED STOCK AGREEMENT 
 This Agreement is made as of November 8, 2004 (the “Effective Date”), by and between Neutral Tandem, Inc., a Delaware corporation (the
“Company”), and David Lopez (the “Stockholder”). 
 WHEREAS, the Stockholder concurrently herewith is
becoming the holder of an aggregate of 85,000 shares (the “Shares”) of the common stock, par value $0.001 per share, of the Company (“Common Stock”); 
 WHEREAS, it is desired that the Stockholder continue his association with the Company for a reasonable period of time in order to retain the Shares.

 NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 1. Term of Agreement. This
Agreement shall expire on the earlier of (i) the date on which the Applicable Percentage (as defined below) is zero, (ii) the date on which the Company consummates its Purchase Option (as defined below) in full, or (iii) the date on
which the Purchase Option expires. 
 2. Purchase Option. 
 (a) General. In the event the Stockholder’s employment with the Company is terminated for any reason, with or without Cause (as defined
below), prior to September 30, 2008, the Company shall have the right and option (the “Purchase Option”) to purchase from the Stockholder, for a sum of $0.001 per share (as adjusted for any stock split, recapitalization or
similar event, the “Option Price”), all of the Unvested Shares (as defined below). For purposes of this Agreement, employment with the Company shall mean full-time employment with the Company or with a parent, subsidiary or
successor of the Company. 
 (b) Acceleration Upon Change in Control. Notwithstanding Section 2(a) hereof, if during the term of
the Purchase Option there is a Corporate Transaction (as defined below), then immediately prior to the occurrence of such event, the Purchase Option shall lapse with respect to 50% of the Shares that would be deemed Unvested Shares subject to the
Purchase Option on the date of the occurrence of such event, except to the extent the Purchase Option is to be assigned to the successor corporation (or its parent company) in connection with such Corporate Transaction. To the extent the Purchase
Option remains in effect following a Corporate Transaction, it shall apply to the new capital stock or other property (including cash paid other than as a regular cash dividend) received in exchange for the Shares on consummation of the Corporate
Transaction, but only to the extent the Shares are at the time covered by the Purchase Option. Appropriate adjustments shall be made to the price per share payable upon the exercise of the Purchase Option to reflect the effect of the Corporate
Transaction upon the Company’s capital structure; provided, that the aggregate Option Price shall remain the same. Notwithstanding the foregoing, in the event that (x) the Stockholder’s employment with the 

  

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Company is terminated for any reason other than for Cause or by the Stockholder voluntarily (which shall not include a Constructive Termination (as defined
below)) during the 60-day period immediately prior to the consummation of the Corporate Transaction, or (y) a successor corporation assumes the Purchase Option in connection with a Corporate Transaction and the either (1) the Stockholder
is not employed by the successor corporation, or (2) within 12 months of the effective date of the Corporate Transaction the Stockholder’s employment with such successor corporation is terminated for any reason other than for Cause or by
the Stockholder voluntarily (which shall not include a Constructive Termination), then immediately prior to the occurrence of such event, the Purchase Option shall lapse with respect to 50% of the Shares that would be deemed Unvested Shares subject
to the Purchase Option on the date of the occurrence of such event. 
 (c) Acceleration Upon Death or Disability. Upon the occurrence
of the death or Disability (as defined below) of the Stockholder, the Purchase Option shall lapse with respect to those Unvested Shares that would have ceased to become Unvested Shares upon the Vesting Date next succeeding the date of death or the
first date of Disability. 
 (d) Certain Definitions. 
 (i) “Applicable Percentage” shall initially be 100%, shall be reduced to 75% on September 30, 2005, 50% on September 30, 2006, 25% on September 30, 2007, and shall be zero on
September 30, 2008. 
 (ii) “Cause” means (i) conviction of any felony or any crime involving moral turpitude or
dishonesty; (ii) participation in a fraud or material act of dishonesty against the Company; (iii) willful and material breach of any Company policy that may be implemented after the effective date of this Agreement for which termination
of employment is provided as a remedy or is determined in good faith by the Board of Directors to be an appropriate remedy; (iv) intentional, material damage to the Company’s property; (v) material breach of the Stockholder’s
Proprietary Information and Inventions Agreement with the Company; or (vi) willful misfeasance or nonfeasance of duty by the Stockholder that materially injures the reputation, business or business relationships of the Company. Physical or
mental disability shall not constitute “Cause”. 
 (iii) “Constructive Termination” means (i) any material
reduction in the Stockholder’s salary or aggregate benefits in effect at the time of the Corporate Transaction; (ii) a material diminution of the role or responsibilities of the Stockholder with the Company; or (iii) a requirement
that the Stockholder relocate outside of 50 miles of the business address of the Company office where the Stockholder is resident at the time of the Corporate Transaction. 
 (iv) “Corporate Transaction” means any one or more of the following events: (1) any consolidation or merger of the Company with or
into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than 50% of the Company’s voting
power immediately after such consolidation, merger or reorganization; provided, that a Corporate Transaction shall not include one involving only (x) a change in the state of incorporation of the Company, (y) a merger of the Company
with or into a wholly owned subsidiary of the Company, or (z) a merger, reorganization or consolidation, in which the beneficial owners of the Company’s capital stock as constituted immediately prior to such transaction hold no less than a
majority of the voting power of the resulting entity), (2) any transaction or series of related transactions in which in excess of 50% of the Company’s voting 

  

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power is transferred, or (3) a sale, lease or other disposition of all or substantially all of the assets of the Company. 
 (v) “Disability” means an inability to perform employment duties (as determined in good faith by the Board of Directors) due to a
physical or mental disability that continues for more than 120 consecutive days. 
 (vi) “Unvested Shares” means the total
number of Shares multiplied by the Applicable Percentage at the time the Purchase Option becomes exercisable by the Company. 
 (vii)
“Vesting Date” means any date on which the Applicable Percentage is to be reduced. 
 3. Exercise of Purchase Option and
Closing. 
 (a) Notice of Exercise. The Company may exercise the Purchase Option by delivering or mailing to the Stockholder (or
his estate), within 60 days after the termination of the Stockholder’s employment with the Company, a written notice of exercise of the Purchase Option. Such notice shall specify the number of Shares to be purchased. If and to the extent the
Purchase Option is not so exercised by the giving of such a notice within such 60-day period, the Purchase Option shall automatically expire and terminate effective upon the expiration of such 60-day period. 
 (b) Mechanics of Exercise of Purchase Option. Within 10 days after his receipt of the Company’s notice of the exercise of the Purchase Option
pursuant to Section 3(a) above, the Stockholder (or his estate) shall tender to the Company at its principal offices the certificate or certificates representing the Shares which the Company has elected to purchase in accordance with the terms
of this Agreement, duly endorsed in blank or with duly endorsed stock powers attached thereto, all in form suitable for the transfer of such Shares to the Company. Upon its receipt of such certificate or certificates, the Company shall deliver or
mail to the Stockholder a check in the amount of the aggregate Option Price therefor. 
 (c) Effect on Rights as Stockholder. After
the time at which any Shares are required to be delivered to the Company for transfer to the Company pursuant to Section 3(b) above, the Company shall not pay any dividend to the Stockholder on account of such Shares or permit the Stockholder
to exercise any of the privileges or rights of a stockholder with respect to such Shares, but shall, in so far as permitted by law, treat the Company as the owner of such Shares. 
 (d) Payment of Option Price. The Option Price may be payable, at the option of the Company, in cancellation of all or a portion of any outstanding
indebtedness of the Stockholder to the Company, by wire transfer of immediately available funds or in cash (by check) or any combination of the foregoing. 
 (e) Fractional Shares. The Company shall not purchase any fraction of a Share upon exercise of the Purchase Option, and any fraction of a Share resulting from a computation made pursuant to Section 2 of
this Agreement shall be rounded to the nearest whole Share (with any one-half Share being rounded upward). 
  

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 4. Restrictions on Transfer. The Stockholder shall not sell, assign, transfer, pledge, hypothecate
or otherwise dispose of, by operation of law or otherwise (collectively, “Transfer”) any Shares, or any interest therein, that are subject to the Purchase Option, except that the Stockholder may Transfer such Shares to or for the
benefit of any spouse, child or grandchild, or to a trust for their benefit; provided, that such Shares shall remain subject to this Agreement (including without limitation the restrictions on Transfer set forth in this Section 4 and the
Purchase Option) and such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this Agreement. 
 5. Effect of Prohibited Transfer. The Company shall not be required to (i) transfer on its books any of the Shares which shall have been
Transferred in violation of any of the provisions set forth in this Agreement, or (ii) treat as owners of such Shares or to pay dividends to any transferee to whom any such Shares shall have been so Transferred. 
 6. Noncompetition Obligations. The Stockholder and the Company acknowledge that (i) the Company has developed goodwill, going concern value,
customer and client relationships and confidential information that are valuable property rights of the Company and that the Stockholder will have access to and knowledge concerning such rights, which if used other than for the benefit of the
Company could significantly injure the Company; and (ii) the Company is engaged the operation of telecommunication hubs and switching systems, transmission and switching of voice, data, audio, video and information via telephone, wireless and
cable networks (the “Business”). Accordingly, and in consideration of the mutual promises contained herein, the Stockholder covenants that, during the period commencing on the Effective Date and terminating on the six-month
anniversary of the date of termination of the Stockholder’s employment (the “Restrictive Period”), the Stockholder shall not, without the prior written consent of the Company, directly or indirectly, in the Stockholder’s
individual capacity or on behalf of any other individual, partnership, corporation, limited liability company or any other entity (collectively “Person”), Compete with the Company or any of its respective successors or assigns. For
purposes of this Section 6, “Compete” shall mean: (i) to engage in business activities identical or substantially similar to the Business as engaged in by the Company at any time during the one-year period preceding the
date of termination of the Stockholder’s employment (a “Competitive Business”) hereunder within the geographic limits of those standard metropolitan statistical areas in the United States within which the Company has engaged in
the Business during the one-year period preceding the date of termination of the Stockholder’s employment (the “Territory”); (ii) to assist any Person (whether in a financial, managerial, employment, advisory or other
capacity or as a stockholder or owner, or by the provision of information) to engage in a Competitive Business within the Territory; or (iii) to own any interest in or to organize a corporation, partnership or other business or organization
which engages in a Competing Business within the Territory. 
 7. Escrow. The Shares shall be registered in the Stockholder’s
name, but the certificate evidencing such Shares shall be retained by the Company during the term of the Purchase Option; provided, that the Stockholder shall have the right to receive a certificate evidencing any portion of the Shares no
longer subject to any Purchase Option, in which event the Company shall continue to retain a certificate evidencing any Shares still subject to a Purchase Option. The Stockholder shall execute a stock power, in blank, with respect to the Shares and
deliver the same to the Company concurrently with his execution and delivery of this Agreement. 
  

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 8. Restrictive Legend. All certificates representing Shares subject to the Purchase Option shall
have affixed thereto a legend in substantially the following form, in addition to any other legends that may be required under federal or state securities laws, or otherwise: 
 THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND AN OPTION TO PURCHASE SET FORTH IN A CERTAIN STOCK
RESTRICTION AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED OWNER OF THESE SHARES (OR HIS PREDECESSOR IN INTEREST), AND SUCH AGREEMENT IS AVAILABLE FOR INSPECTION WITHOUT CHARGE AT THE OFFICE OF THE SECRETARY OF THE CORPORATION. 
 9. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. 
 10. Waiver. Any provision for the benefit of the Company contained in this Agreement may be waived, either generally or in any particular instance, by the Board of Directors of the Company. 
 11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and the Stockholder and their respective heirs,
executors, administrators, legal representatives, successors and assigns, subject to the restrictions on Transfer set forth in Section 4 of this Agreement. 
 12. Notice. All notices required or permitted hereunder shall be in writing and deemed effectively given upon personal delivery or five days after deposit in the United States Post Office, by registered or
certified mail, postage prepaid, addressed, in the case of the Company to the President at the Company’s principal office, or in the case of the Stockholder at the address shown beneath his signature to this Agreement, or at such other address
or addresses as either party shall designate to the other in accordance with this Section 12. 
 13. Entire Agreement. This
Agreement constitutes the entire agreement between the parties, and supersedes all prior agreements and understandings, relating to the subject matter of this Agreement. 
 14. Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Stockholder. 
 15. Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State of Delaware,
without regard to laws relating to conflicts of laws. 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above
written. 
  

			
	NEUTRAL TANDEM, INC.
		
	By:	 	 /s/ Ronald W. Gavillet

	Name:	 	Ronald W. Gavillet
	Title:	 	Vice President
	
	STOCKHOLDER:
	
	 /s/ David Lopez

	David Lopez

  

			
	Address:	 	  

		 	  

		 	  

  

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