EXHIBIT 10.2
FASTNET CORPORATION
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (the "AGREEMENT") is made as of the 3rd
day of August, 1999, between FASTNET Corporation, a Pennsylvania corporation
(the "COMPANY"), and the investors on EXHIBIT A hereto, each of which is herein
referred to as an "INVESTOR" and collectively, the "INVESTORS."
RECITALS
A. Concurrently with the execution and delivery of this Agreement, the
Company and the Investors are entering into a Series A Preferred Stock Purchase
Agreement whereby the Company is selling and the Investors are purchasing shares
of the Company's Series A Preferred Stock (the "PURCHASE AGREEMENT"). A
condition to the Investors' obligations under the Series A Preferred Stock
Purchase Agreement is that the Company and the Investors enter into this
Agreement. Capitalized terms used, but not defined herein shall have the
meanings given them in the Purchase Agreement.
B. By this Agreement, the Company and the Investors desire to provide
for certain registration and other rights as set forth herein.
AGREEMENT
The parties, intending to be legally bound, hereby agree as follows:
1. REGISTRATION RIGHTS.
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The terms "REGISTER," "REGISTERED," and "REGISTRATION"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933, as
amended (the "ACT"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "REGISTRABLE SECURITIES" means (i) the shares
of Common Stock issuable or issued upon conversion of the Series A Preferred
Stock issued or issuable pursuant to the Purchase Agreement (such shares of
Common Stock are collectively referred to hereinafter as the "STOCK"), and (ii)
any other shares of Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, the Stock; PROVIDED, HOWEVER, that the foregoing definition
shall exclude in all cases any Registrable Securities sold by a person in a
transaction in which his or her rights under this Agreement are not assigned.
Notwithstanding the foregoing, Common Stock or other securities
shall only be treated as Registrable Securities if and so long as (A) they have
not been sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, (B) have not been sold in a
transaction exempt from the registration and prospectus delivery requirements of
the Act under Section 4(1) thereof so that all transfer restrictions, and
restrictive legends with respect thereto, if any, are removed upon the
consummation of such sale; (C) may be sold pursuant to Rule 144(k) (or any
similar provision then in force) under the Act.
(c) The number of shares of "REGISTRABLE SECURITIES THEN
OUTSTANDING" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities;
(d) The term "HOLDER" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.13 hereof;
(e) The term "FORM S-3" means such form under the Act as in
effect on the date hereof or any successor form under the Act; and
(f) The term "SEC" means the Securities and Exchange
Commission.
1.2 REQUEST FOR REGISTRATION.
(a) If the Company shall receive at any time after the
earlier of (i) December 31, 2003 or (ii) nine (9) months after the effective
date of the first registration statement for a public offering of Common Stock
(other than a registration statement relating either to the sale of securities
to employees of the Company pursuant to a stock option, stock purchase or
similar plan or transactions under Rule 145 under the Act, a registration in
which the only stock being registered is Common Stock issuable upon conversion
of debt securities which are also being registered, or any registration on any
form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities) (an "Initial Public Offering"), a written request from
the Holders of at least twenty percent (20%) of the Registrable Securities then
outstanding that the Company file a registration statement (including but not
limited to registration statements on Form S-1 and Form SB-2) under the Act
covering the registration of at least twenty percent (20%) of the Registrable
Securities then outstanding then the Company shall, within ten (10) days of the
receipt thereof, give written notice of such request to all Holders and shall,
subject to the limitations of subsection 1.2(b), use commercially reasonable
efforts to effect as soon as practicable, and in any event within ninety (90)
days of the receipt of such request, the registration, firmly underwritten by an
underwriter of nationally recognized standing, under the Act of all Registrable
Securities which the Holders request to be registered within twenty (20) days of
the mailing of such notice by the Company in accordance with Section 4.5.
(b) The underwriter will be selected by a majority in
interest of the Holders initiating the registration request hereunder (the
"INITIATING HOLDERS") and shall be acceptable to the Company, in its sole
discretion. The right of any Holder to include his Registrable Securities in
such registration shall be conditioned upon such Holder's participation
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in such underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting (unless otherwise mutually agreed by a majority in interest
of the Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders. Notwithstanding any other provision of this Section 1.2, if the
underwriter advises the Company in writing that, in its opinion, that the number
of shares of Common Stock (including Registrable Securities requested to be
included in any registration under this Section 1.2) exceeds the number that can
be sold in such offering, at a price reasonably related to fair value, the
Company will include in such registration (i) first, any securities that the
Company desires to include on its own behalf, (ii) second, any Registrable
Securities, and (iii) third, any shares of Common Stock for which the Company
has received requests for inclusion from other securityholders of the Company
with contractual rights to include shares in such a registration, in each case
within each such group on a pro rata basis determined by reference to the total
number of securities sought to be included in such registration, PROVIDED,
HOWEVER, that if any securities are included in such registration on behalf of
the Company and any of the Registrable Securities requested by the Holders to be
included in such registration are not included, than such registration shall not
be deemed a registration pursuant to this Section 1.2, but rather, shall be
deemed a registration initiated pursuant to Section 1.3 hereof.
(c) Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
1.2, 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 shareholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period or periods aggregating not more than one hundred twenty (120) days
after receipt of the request of the Initiating Holders; PROVIDED, HOWEVER, that
the Company may not utilize this right more than once in any eighteen (18) month
period.
(d) In addition, the Company shall not be obligated to
effect, or to take any action to effect, any registration pursuant to this
Section 1.2:
(i) After the Company has effected two (2)
registrations pursuant to this Section 1.2;
(ii) During the period starting with the date the
Company receives a notice under Section 1.2(a) from the Initiating Holders for a
registration pursuant to Section 1.2 hereof, and ending on a date one hundred
eighty (180) days after the completion of the offering under a registration
under Section 1.2 hereof;
(iii) During the period starting with the date sixty
(60) days prior to the Company's good faith estimate of the date of filing of,
and ending on a date one hundred eighty (180) days after the completion of the
offering under a registration subject to
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Section 1.3 hereof; provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective; or
(iv) If the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.12 below.
1.3 COMPANY REGISTRATION. If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
Common Stock under the Act in connection with the public offering of such
securities solely for cash (other than the first registration statement for a
public offering of Common Stock, a registration relating solely to the sale of
securities to participants in a Company stock plan or a transaction covered by
Rule 145 under the Act, a registration in which the only stock being registered
is Common Stock issuable upon conversion of debt securities which are also being
registered, or any registration on any form which does not include substantially
the same information as would be required to be included in a registration
statement covering the sale of the Registrable Securities), the Company shall,
at such time, promptly give each Holder written notice of such registration.
Upon the written request of each Holder given within twenty (20) days after
mailing of such notice by the Company in accordance with Section 4.5, the
Company shall, subject to the provisions of Section 1.8, cause to be registered
under the Act all of the Registrable Securities that each such Holder has
requested to be registered.
1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use commercially reasonable
efforts to cause such registration statement to become effective, and, in the
case of any Holder's participation in any shelf registration pursuant to Rule
415 of the Act and Section 1.3 of this Agreement, and upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to one hundred twenty (120) days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement provided that, if such registration statement is
a shelf registration statement filed pursuant to Rule 415 of the Act and Section
1.3 of the Agreement, the obligations of the Company set forth in this
subsection shall only continue for up to one hundred twenty (120) days.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
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(d) Use commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in any such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included 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 the light of the circumstances then existing, provided
that, if such registration statement is a shelf registration statement filed
pursuant to Rule 415 of the Act and Section 1.3 of the Agreement, the
obligations of the Company set forth in this subsection shall only continue for
up to one hundred twenty (120) days.
(g) Cause all such Registrable Securities registered
pursuant to the rights granted hereunder to be listed on each securities
exchange on which similar securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.
(i) In the case of an underwritten public offering, use
commercially reasonable efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1, on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to this Section 1, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities.
1.5 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable
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Securities of any selling Holder that such Holder shall furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
The Company shall have no obligation with respect to any registration
requested pursuant to Section 1.2 or Section 1.12 of this Agreement if, as a
result of the application of the preceding sentence, the number of shares or
the anticipated aggregate offering price of the Registrable Securities to be
included in the registration does not equal or exceed the number of shares or
the anticipated aggregate offering price required to originally trigger the
Company's obligation to initiate such registration as specified in subsection
1.2(a) or subsection 1.12(b)(2), whichever is applicable.
1.6 EXPENSES OF DEMAND REGISTRATION. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders shall
be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses),
unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to such demand registration pursuant to Section 1.2.
1.7 EXPENSES OF COMPANY REGISTRATION. The Company shall bear and
pay all expenses, other than underwriting discounts and commissions, incurred in
connection with any registration, filing or qualification of Registrable
Securities with respect to the registrations pursuant to Section 1.3 for each
Holder (which right may be assigned as provided in Section 1.13), including
(without limitation) all registration, filing, and qualification fees, printers'
and accounting fees relating or apportionable thereto and the reasonable fees
and disbursements of one counsel for the selling Holders selected by them with
the approval of the Company, which approval shall not be unreasonably withheld.
1.8 UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares of the Company's capital stock
under Section 1.3, the Company shall not be required to include any of the
Holders' securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it (or by other persons entitled to select the underwriters), and then
only in such quantity as the underwriters determine in their sole discretion
will not jeopardize the success of the offering by the Company. If the total
amount of securities, including Registrable Securities, requested by
shareholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters
determine in their sole discretion will not jeopardize the success of the
offering (the securities so included to be apportioned first, pro rata among
Holders of Registrable Securities in proportion to the
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respective amounts of Registrable Securities held by such Holders and second,
pro rata among the other selling shareholders according to the total amount of
securities entitled to be included therein owned by each selling shareholder or
in such other proportions as shall mutually be agreed to by such selling
shareholders) but in no event shall (i) the amount of securities of the selling
Holders included in the offering be reduced below thirty percent (30%) of the
total amount of securities included in such offering, or (ii) notwithstanding
the preceding parenthetical or clause (i) above, any shares being sold by a
shareholder exercising a demand registration right similar to that granted in
Section 1.2 be excluded from such offering. For purposes of the preceding
parenthetical concerning apportionment, for any selling shareholder which is a
holder of Registrable Securities and which is a partnership or corporation, the
partners, retired partners and shareholders of such holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "SELLING
SHAREHOLDER," and any pro-rata reduction with respect to such "selling
shareholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling shareholder," as defined in this sentence.
1.9 DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.10 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any underwriter (as defined in the Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), against any losses, claims, damages, or liabilities (joint
or several) to which they may become subject under the Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"VIOLATION"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) 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, or (iii) any violation or alleged violation by the
Company of the Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Act, the Exchange Act or any state securities
law; and the Company will pay to each such Holder, underwriter or controlling
person, as incurred, 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 indemnity agreement contained
in this subsection 1.10(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in
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any such case for any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this subsection 1.10(b) exceed the net
proceeds from the offering received by such Holder, except in the case of
willful fraud by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
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(d) If the indemnification provided for in this
Section 1.10 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations; provided, that, in no event shall any contribution by
a Holder under this Subsection 1.10(d) exceed the net proceeds from the offering
received by such Holder, except in the case of willful fraud by such Holder. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) The obligations of the Company and Holders under this
Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
(f) The foregoing indemnity agreements of the Company and
Holders are subject to the condition that, insofar as they relate to any
Violation made in a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Securities and Exchange Commission at the
time the registration statement in question becomes effective or in the amended
prospectus filed with the Securities and Exchange Commission pursuant to its
Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity agreement shall not inure
to the benefit of any person if a copy of the Final Prospectus was furnished to
the indemnified party and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Act.
1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company shall:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Act, at all times after
ninety (90) days after the effective date of the first registration statement
filed by the Company for the offering of its securities to the general public so
long as the Company remains subject to the periodic reporting requirements under
Sections 13 or 15(d) of the Exchange Act;
(b) take such action, including the voluntary registration
of its Common Stock under Section 12 of the Exchange Act, as is necessary to
enable the Holders to utilize Form S-3 for the sale of their Registrable
Securities, such action to be taken as soon as
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practicable after the end of the fiscal year in which the first registration
statement filed by the Company for the offering of its securities to the general
public is declared effective;
(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 under
the Act (at any time after ninety (90) days after the effective date of the
first registration statement filed by the Company), the Act and the Exchange Act
(at any time after it has become subject to such reporting requirements), or
that it qualifies as a registrant whose securities may be resold pursuant to
Form S-3 (at any time after it so qualifies), and (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.
1.12 FORM S-3 REGISTRATION. In case the Company shall receive
from any Holder or Holders a written request or requests that the Company effect
a registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(b) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within fifteen (15) days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
1.12: (1) if Form S-3 is not available for such offering by the Holders; (2) if
the Holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than
$500,000; (3) 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 shareholders for such registration to be effected at such time,
in which event the Company shall have the right to defer the filing of the Form
S-3 registration statement for a period or periods aggregating not more than one
hundred twenty (120) days after receipt of the request of the Holder or Holders
under this Section 1.12; provided, however, that the Company shall not utilize
this right more than once in any eighteen (18) month period; (4) if the Company
has, within the twelve (12) month period preceding the date of such request,
already effected two (2) registrations on Form S-3 for the Holders pursuant to
this Section 1.12; or (5) in any particular jurisdiction in which the Company
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would be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with
registrations requested pursuant to Section 1.12, including (without limitation)
all registration, filing, qualification, printers' and accounting fees and the
reasonable fees and disbursements of one (1) counsel for the selling Holder or
Holders and counsel for the Company, but excluding any underwriters' discounts
or commissions associated with Registrable Securities, shall be borne by the
Company. Registrations effected pursuant to this Section 1.12 shall not be
counted as demands for registration or registrations effected pursuant to
Sections 1.2 or 1.3, respectively.
1.13 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee who is a partner or affiliate of the Holder, or to a transferee or
assignee who acquires at least ten percent (10%) of such Holder's shares of
Registrable Securities, provided that no such transferee or assignee is a
competitor of the Company as determined in good faith by the Company and Lucent
Technologies, Inc. InterNetworking Systems ("LUCENT"), and provided further that
the Company is, promptly after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; and provided,
further, that such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act. For the purposes of determining the number
of shares of Registrable Securities held by a transferee or assignee, the
holdings of transferees and assignees of a partnership who are partners or
retired partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) shall be aggregated together
and with the partnership; provided that all assignees and transferees who would
not qualify individually for assignment of registration rights shall have a
single attorney-in-fact for the purpose of exercising any rights, receiving
notices or taking any action under Section 1.
1.14 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
1.2 hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of his securities will not reduce the amount of the
Registrable Securities of the Holders which is included or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in Subsection
1.2(a) or within one hundred twenty (120) days of the effective date of any
registration effected pursuant to Section 1.2.
11
1.15 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be
entitled to exercise any right provided for in this Section 1 after the earlier
of (i) seven (7) years following the consummation of the sale of securities
pursuant to a registration statement filed by the Company under the Act in
connection with an Initial Public Offering.
1.16 MARKET-STANDOFF AGREEMENT.
(a) MARKET-STANDOFF PERIOD; AGREEMENT. In connection with
the Company's Initial Public Offering and upon request of the Company or the
underwriters managing such offering of the Company's securities, each Holder
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any securities of the Company without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company's initial public offering.
(b) LIMITATIONS. The obligations described in Section
1.16(a) shall apply only if all officers and directors of the Company and all
one-percent securityholders, enter into similar agreements, and shall not apply
to a registration relating solely to employee benefit plans, or to a
registration relating solely to a transaction pursuant to Rule 145 under the
Securities Act.
(c) STOP-TRANSFER INSTRUCTIONS. In order to enforce the
foregoing covenants, the Company may impose stop-transfer instructions with
respect to the securities of each Holder (and the securities of every other
person subject to the restrictions in Section 1.16(a)).
2. PUT RIGHT. If, prior to the Company's Initial Public Offering, a
competitor of Lucent, as determined in good faith by Lucent and the Company,
acquires equity securities of the Company that represents at least five percent
(5%) of the then issued and outstanding capital stock of the Company, calculated
on a fully-diluted basis, the Company shall give Lucent notice within ten (10)
days of such event ("PUT NOTICE"). To the extent permitted by law, Lucent may
sell back to the Company (i) within forty-five (45) days from the receipt of the
Put Notice (the "PUT DATE"), one-third (1/3rd) of the Series A Preferred Stock
owned by Lucent at the then Fair Market Value of such shares; (ii) on the first
anniversary of the Put Date, one-third (1/3rd) of the Series A Preferred Stock
owned by Lucent at the then Fair Market Value of such shares; and (iii) on the
second anniversary of the Put Date, the final one-third (1/3rd) of the Series A
Preferred Stock owned by Lucent at the then Fair Market Value of such shares. If
Lucent sells all of its shares of Series A Preferred Stock to the Company in
accordance with this provision, all remaining rights of Lucent under this
Agreement, the Purchase Agreement and the Co-Sale Agreement, dated as of the
date hereof, between the Company, the Investors and certain other parties, will
terminate. "FAIR MARKET VALUE" shall be as mutually agreed by the Company and
Lucent; PROVIDED, HOWEVER, that if the Company and Lucent are unable to mutually
agree upon the Fair Market Value, the Company and Lucent shall, within five (5)
days from the date that either party determines that they cannot agree jointly
retain a valuation firm satisfactory to each
12
of them. If the Company and Lucent are unable to agree on the selection of such
a firm within such five (5) day period, the Company and Lucent shall, within
twenty (20) days after expiration of such five day period, each retain a
separate independent valuation firm. If either the Company or Lucent fail to
retain such a valuation firm during such twenty (20) day period, then the
valuation firm retained by Lucent or the Company, as the case may be, shall
alone take the actions described below. Such firms shall determine within thirty
(30) days of being retained the Fair Market Value of a share of Series A
Preferred Stock and deliver their opinion in writing to the Company and to
Lucent as to the fair value. If such firms cannot jointly agree upon the Fair
Market Value, then, unless otherwise directed in writing by both the Company and
Lucent, such firms, in their sole discretion, shall choose another firm
independent of the Company and Lucent, which firm shall make such determination
and render such an opinion as promptly as practicable. In either case, the
determination so made shall be conclusive and binding on the Company and Lucent.
The Company and Lucent shall each pay for the respective fees and expenses of
each of their respective valuation firms for such determination. In the
determination of the Fair Market Value of a share of Series A Preferred Stock
there shall not be taken into consideration any premium for shares representing
control of the Company or any discount related to shares representing a minority
interest therein or related to any illiquidity or lack of marketability of
shares arising from restrictions on transfer under federal and applicable state
securities laws or otherwise.
3. COVENANTS OF THE COMPANY.
3.1 DELIVERY OF ANNUAL AND QUARTERLY FINANCIAL STATEMENTS. The
Company shall deliver to each Holder who holds not less than ten percent (10%)
of the outstanding shares of Registrable Securities:
(a) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company, an income statement
for such fiscal year, a balance sheet of the Company and statement of
shareholder's equity as of the end of such year, and a statement of cash flows
for such year, such year-end financial reports to be in reasonable detail,
prepared in accordance with generally accepted accounting principles ("GAAP"),
and audited and certified by an independent public accounting firm of nationally
recognized standing selected by the Company;
(b) as soon as practicable, but in any event within
forty-five (45) days after the end of each of the first three (3) quarters of
each fiscal year of the Company, an unaudited profit or loss statement and
statement of cash flows for such fiscal quarter and an unaudited balance sheet
as of the end of such fiscal quarter;
(c) The obligations of the Company to furnish financial
information pursuant to this Section 3.1 shall terminate upon the Company's
Initial Public Offering.
3.2 INSPECTION. The Company shall permit each Holder, and any
authorized representative thereof, to visit and inspect the properties of the
Company, including its corporate and financial records to the extent such
records, do not constitute trade secrets or other confidential information of
the Company, and to discuss its business, finances and accounts with
13
officers of the Company during normal business hours following reasonable notice
in a manner and subject to such reasonable procedures as the Company may
establish so as not to unreasonably interfere with the normal operations of the
Company.
3.3 BOARD MEETINGS. The Company shall permit one (1)
representative chosen by Lucent and acceptable to the Company to attend as an
observer all meetings of the Company's Board of Directors and of the committees
of the Board. The Company shall provide Lucent with such notice of and other
information with respect to such meetings as are provided to members of the
Board of Directors when as and such notice and information is provided to such
members. The Company shall promptly notify Lucent of the taking of any action by
written consent of the Board of Directors in lieu of a meeting thereof. All
matters discussed at any such meeting attended by Lucent's representative as
well as all notices and information provided to Lucent under Section 3.3 shall
constitute confidential information of the Company and shall be subject to the
Nondisclosure Agreement. Lucent's right to attend the Company's Board of
Directors meetings and to receive notices and information pursuant to this
Section 3.3 shall terminate upon the Company's Initial Public Offering.
3.4 RIGHT OF FIRST OFFER. Subject to the terms and conditions
specified in this Section 3.4, the Company hereby grants to each Holder a right
of first offer with respect to future sales by the Company of its Shares (as
hereinafter defined). Each time the Company proposes to offer any shares of, or
securities convertible into or exercisable for any shares of, any class of its
capital stock ("SHARES"), the Company shall first make an offering of such
Shares to the Holder in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail
("NOTICE") to the Holder stating (i) its bona fide intention to offer such
Shares, (ii) the number of such Shares to be offered, and (iii) the price and
terms, if any, upon which it proposes to offer such Shares.
(b) Within five (5) calendar days after delivery of the
Notice, the Holder may elect to purchase or obtain, at the price and on the
terms specified in the Notice, up to that portion of such Shares which equals
the proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion and exercise of all convertible or exercisable
securities then held, by the Holder bears to the total number of shares of
Common Stock then outstanding (assuming full conversion and exercise of all
outstanding convertible or exercisable securities).
(c) The Company may, during the sixty (60) day period
following the expiration of the period provided in subsection 3.4(b) hereof,
offer the remaining unsubscribed portion of the Shares to any person or persons
at a price not less than, and upon terms no more favorable to the offeree than
those specified in the Notice. If the Company does not enter into an agreement
for the sale of the Shares within such period, or if such agreement is not
consummated within sixty (60) days of the execution thereof, the right provided
hereunder shall be deemed to be revived and such Shares shall not be offered
unless first reoffered to the Holder in accordance herewith.
14
(d) The right of first offer in this paragraph 3.4(d) shall
not be applicable (i) to the issuance or sale of shares of Common Stock (or
options therefor) to employees, consultants and directors, pursuant to plans or
agreements approved by the Board of Directors, or (ii) to or after consummation
of the Company's Initial Public Offering, or (iii) to the issuance of securities
pursuant to the conversion or exercise of convertible or exercisable securities.
3.5 CONFIDENTIALITY AGREEMENT. The Company shall require all
employees, officers and consultants to execute and deliver a Confidentiality
Agreement in a form attached hereto as EXHIBIT B.
4. MISCELLANEOUS.
4.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties
(including transferees of any of the Series A Preferred Stock, or any Common
Stock issued upon conversion thereof).
4.2 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto shall be governed, construed and interpreted in accordance with
the laws of the State of New York, without giving effect to principles of
conflicts of laws.
4.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
4.5 NOTICES. Unless otherwise provided, any notice required or
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon delivery, when delivered personally or by overnight courier or sent by
telegram or fax, or three (3) days after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address as set forth below or on SCHEDULE A
hereto or as subsequently modified by written notice.
4.6 EXPENSES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
4.7 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any
15
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities and the Company. Notwithstanding the
foregoing, the parties hereto acknowledge that the Company may subsequently add
any purchasers of shares of the Company's Series A Preferred Stock under the
Purchase Agreement or an addendum thereto after the date of the Purchase
Agreement as a party to this Agreement as a Holder, which additional party shall
thereafter be bound by and entitled to the terms, benefits and conditions herein
by the execution of this Agreement on a signature page to this Agreement and by
attaching an addendum to EXHIBIT A.
4.8 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties shall renegotiate
such provision in good faith. If the parties cannot reach a mutually agreeable
and enforceable replacement for such provision, then (x) such provision shall be
excluded from this Agreement, (y) the balance of the Agreement shall be
interpreted as if such provision were so excluded and (z) the balance of the
Agreement shall be enforceable in accordance with its terms.
4.9 AGGREGATION OF STOCK. All shares of the Series A Preferred
Stock held or acquired by affiliated entities or persons shall be aggregated
together for the purpose of determining the availability of any rights under
this Agreement.
4.10 INJUNCTIVE RELIEF. Since any party's breach of this
Agreement may cause one or more other parties irreparable harm for which money
is inadequate compensation, each party hereto agrees that each other party will
be entitled to injunctive relief to enforce this Agreement, in addition to
damages and other available remedies.
[SIGNATURE PAGE FOLLOWS]
16
The parties have executed this Investor Rights Agreement as of the date
first above written.
COMPANY:
FASTNET CORPORATION
By: /s/ Xxxxx Xxx Xxxxx
--------------------------------------
Xxxxx Xxx Xxxxx
President and Chief Executive Officer
Address: Two Xxxxxxxx Place
Suite 130
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
INVESTORS:
LUCENT TECHNOLOGIES, INC.,
INTERNETWORKING SYSTEMS
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Xxxx Xxxxxxx
President
Address: 0000 Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000
H&Q YOU TOOLS INVESTMENT HOLDING, L.P.
By: H&Q Management Corp.
-------------------------------------
Its general partner
By: /s/ Xxxxxx Xxxxxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxxxxx
Title: Attorney-in-fact
Address: x/x Xxxxxxxxx & Xxxxx Xxxxxxxx
Xxxxxxx, X.X.X.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
EXHIBIT A
INVESTORS
INVESTORS NAME AND ADDRESS NUMBER OF SHARES
-------------------------- ----------------
Lucent Technologies, Inc. InterNetworking Systems 280,505
0000 Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000
H&Q You Tools Investment Holding, L.P. 140,252
x/x Xxxxxxxxx & Xxxxx Xxxxxxxx Xxxxxxx, X.X.X.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
EXHIBIT B
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (the "Agreement") is made effective as of
__________________, between You Tools Corporation/FASTNET, of 0000 Xxxxxxxx
Xxxxxx - Suite 000, Xxx Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000,
and __________________________________, of _______________________________,
______________________________________________.
In this Agreement, the party who owns the Confidential Information will be
referred to as ("The Company"), and a party to whom the Confidential Information
will be disclosed will be referred to as ("Employee").
The Company is engaged in the sales, installation, training, and provisioning of
Internet services and other Wide Area Networking activities. These include, but
are not limited to: direct digital connections, dial-up telephone connections,
World Wide Web (WWW) design and hosting, sales of network equipment and service,
training on Internet related topics, outsource and operation of customer remote
access equipment, and monitoring of Internet systems.
The Company's products are delivered in various fashions using both wire and
wireless methods. Employee is engaged in activities that require the knowledge
of Company proprietary and secret information. This information is needed by the
Employee to perform his/her duties while under the employ of the Company.
Employee has represented that Employee will protect the confidential material
and information which may be disclosed between The Company and Employee.
Therefore, the parties agree as follows:
I. CONFIDENTIAL INFORMATION. The term "Confidential Information" means any
information or material which is proprietary to The Company, whether or not
owned or developed by The Company, which is not generally known other than by
The Company, and which Employee may obtain through any direct contact with The
Company.
A. Confidential Information includes without limitation:
- business records and plans
- financial statements
- customer lists and records
- trade secrets
- technical information
- products
- inventions
- product design information
- pricing structure
- discounts
- costs
- computer programs and listings
- source code and/or object code
- copyrights and other intellectual property
- Passwords, both internal and external
- Customer confidential information
- Backup tapes
and other proprietary information.
B. Confidential Information does not include:
- matters of public knowledge that result from disclosure by
The Company
- information rightfully received by Employee from a third party
without a duty of confidentiality
- information independently developed by Employee
- information disclosed by operation of law
- information disclosed by Employee with the prior written consent
of The Company
and any other information that both parties agree in writing is not
confidential.
II. PROTECTION OF CONFIDENTIAL INFORMATION. Employee understands and
acknowledges that the Confidential Information has been developed or obtained by
The Company by the investment of significant time, effort and expense, and that
the Confidential Information is a valuable, special and unique asset of The
Company which provides The Company with a significant competitive advantage.
Therefore, Employee agrees to hold in confidence and to not disclose the
Confidential Information to any person or entity without the prior written
consent of The Company.
NO COPYING. Employee will not copy or modify any Confidential Information
without the prior written consent of The Company.
APPLICATION TO EMPLOYEES. Further, Employee shall not disclose any Confidential
Information to any employees of Employee, except those employees who are
required to have the Confidential Information in order to per form their job
duties in connection with the limited purposes of this Agreement. Each permitted
employee to whom Confidential Information is disclosed shall sign a
non-disclosure agreement substantially the same as this Agreement at the request
of The Company.
UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that Employee has
disclosed (or has threatened to disclose) Confidential Information in violation
of this Agreement, The Company shall be entitled to an injunction to restrain
Employee from disclosing, in whole or in part, the Confidential Information. The
Company shall not be prohibited by this provision from pursuing other remedies,
including a claim for losses and damages.
III. RETURN OF CONFIDENTIAL INFORMATION. Upon the written request of The
Company, Employee shall return to The Company all written materials containing
the Confidential Information. Employee shall also deliver to The Company written
statements
signed by Employee certifying that all materials have been returned within five
(5) days of receipt of the request.
IV. LIMITED LICENSE TO USE. Employee shall not acquire any intellectual
property rights under this Agreement except the limited right to use set out
above. Employee acknowledges that, as between The Company and Employee, the
Confidential Information and all related copyrights and other intellectual
property rights, are (and at all times will be) the property of The Company,
even if suggestions, comments, and/or ideas made by Employee are incorporated
into the Confidential Information or related materials during the period of this
Agreement.
V. GENERAL PROVISIONS. This Agreement sets forth the entire understanding of
the parties regarding confidentiality. Any amendments must be in writing and
signed by both parties. This Agreement shall be construed under the laws of the
State of Pennsylvania. This Agreement shall not be assignable by either party,
and neither party may delegate its duties under this Agreement, without the
prior written consent of the other party.
Information Owner:
You Tools Corporation/FASTNET
By:
--------------------------------------
Xxxxx X. Xxx Xxxxx
CEO
Recipient:
-------------------------------------------
By:
---------------------------------------
---------------------------------------
---------------------------------------
JOINDER TO INVESTOR RIGHTS AGREEMENT
This Joinder to Investor Rights Agreement is made as of the 12th day of
August, 1999 by and between FASTNET Corporation, a Pennsylvania corporation (the
"Company") and the investor identified on EXHIBIT A hereto (the "Purchaser").
BACKGROUND
The Company is a party to an Investor Rights Agreement dated as of
August 3, 1999 (the "Investor Rights Agreement") by and among the Company,
Lucent Technologies, Inc. InterNetworking Systems and H&Q You Tools Investment
Holding L.P. Capitalized terms used herein that are not defined have the
meanings ascribed thereto in the Investor Rights Agreement. The Investor Rights
Agreement sets forth certain registration and other rights of the Investors.
On the date hereof, the Company is selling an aggregate of 140,252 shares
of Series A Preferred Stock to the Purchaser ("Purchaser's Shares") pursuant to
a Purchase Agreement dated the date hereof (the "Purchase Agreement") between
the Company and the Purchaser. In connection with the sale of the Purchaser's
Shares, the Company and the Purchaser desire that the Purchaser be deemed to be
an "Investor" under the Investor Rights Agreement and be subject to the terms
and conditions thereof.
Under Section 3.7 of the Investor Rights Agreement, the Company is
authorized to add as parties to the Investor Rights Agreement purchasers of the
Series A Preferred Stock. The Purchaser acknowledges that the Company has
delivered a copy of the Investor Rights Agreement to him.
NOW, THEREFORE, in consideration of the sale of the Purchaser's Shares
pursuant to the Purchase Agreement, and intending to be legally bound hereby,
the parties hereto agree that the Purchaser is hereby joined as a party to the
Investor Rights Agreement and is deemed to be an "Investor" for all purposes
under the Investor Rights Agreement.
This Joinder to Investor Rights Agreement may be executed in multiple
counterparts, each of which shall constitute an original and all of which shall
constitute one and the same document.
[SIGNATURES ON FOLLOWING PAGE]
[SIGNATURE PAGE TO JOINDER TO INVESTOR RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Joinder to
Investor Rights Agreement as of the date first written above.
FASTNET CORPORATION
By: /s/ Xxxxx Xxx Xxxxx
------------------------------------
Name: Xxxxx Xxx Xxxxx
Title: President and Chief Executive
Officer
PURCHASERS:
/s/ Xxxxxx Xxxx
------------------------------------
Xxxxxx Xxxx
JOINDER TO INVESTOR RIGHTS AGREEMENT
This Joinder to Investor Rights Agreement is made as of the 12th day of
August, 1999 by and between FASTNET Corporation, a Pennsylvania corporation (the
"Company") and the investor identified on EXHIBIT A hereto (the "Purchaser").
BACKGROUND
The Company is a party to an Investor Rights Agreement dated as of August
3, 1999 (the "Investor Rights Agreement") by and among the Company, Lucent
Technologies, Inc. InterNetworking Systems and H&Q You Tools Investment Holding
L.P. Capitalized terms used herein that are not defined have the meanings
ascribed thereto in the Investor Rights Agreement. The Investor Rights Agreement
sets forth certain registration and other rights of the Investors.
On the date hereof, the Company is selling an aggregate of 35,063 shares of
Series A Preferred Stock to the Purchaser ("Purchaser's Shares") pursuant to a
Purchase Agreement dated the date hereof (the "Purchase Agreement") between the
Company and the Purchaser. In connection with the sale of the Purchaser's
Shares, the Company and the Purchaser desire that the Purchaser be deemed to be
an "Investor" under the Investor Rights Agreement and be subject to the terms
and conditions thereof.
Under Section 3.7 of the Investor Rights Agreement, the Company is
authorized to add as parties to the Investor Rights Agreement purchasers of the
Series A Preferred Stock. The Purchaser acknowledges that the Company has
delivered a copy of the Investor Rights Agreement to it.
NOW, THEREFORE, in consideration of the sale of the Purchaser's Shares
pursuant to the Purchase Agreement, and intending to be legally bound hereby,
the parties hereto agree that the Purchaser is hereby joined as a party to the
Investor Rights Agreement and is deemed to be an "Investor" for all purposes
under the Investor Rights Agreement.
This Joinder to Investor Rights Agreement may be executed in multiple
counterparts, each of which shall constitute an original and all of which shall
constitute one and the same document.
[SIGNATURES ON FOLLOWING PAGE]
[SIGNATURE PAGE TO JOINDER TO INVESTOR RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Joinder to
Investor Rights Agreement as of the date first written above.
FASTNET CORPORATION
By: /s/ Xxxxx Xxx Xxxxx
------------------------------------
Name: Xxxxx Xxx Xxxxx
Title: President and Chief Executive
Officer
PURCHASERS:
/s/ Xxxxx Xxxxx
------------------------------------
Everest Venture Partners I, L.P.
Xxxxx Xxxxx
Managing Partner
JOINDER TO INVESTOR RIGHTS AGREEMENT
This Joinder to Investor Rights Agreement is made as of the 12th day of
August, 1999 by and between FASTNET Corporation, a Pennsylvania corporation (the
"Company") and the investor identified on EXHIBIT A hereto (the "Purchaser").
BACKGROUND
The Company is a party to an Investor Rights Agreement dated as of August
3, 1999 (the "Investor Rights Agreement") by and among the Company, Lucent
Technologies, Inc. InterNetworking Systems and H&Q You Tools Investment Holding
L.P. Capitalized terms used herein that are not defined have the meanings
ascribed thereto in the Investor Rights Agreement. The Investor Rights Agreement
sets forth certain registration and other rights of the Investors.
On the date hereof, the Company is selling an aggregate of 70,126 shares of
Series A Preferred Stock to the Purchaser ("Purchaser's Shares") pursuant to a
Purchase Agreement dated the date hereof (the "Purchase Agreement") between the
Company and the Purchaser. In connection with the sale of the Purchaser's
Shares, the Company and the Purchaser desire that the Purchaser be deemed to be
an "Investor" under the Investor Rights Agreement and be subject to the terms
and conditions thereof.
Under Section 3.7 of the Investor Rights Agreement, the Company is
authorized to add as parties to the Investor Rights Agreement purchasers of the
Series A Preferred Stock. The Purchaser acknowledges that the Company has
delivered a copy of the Investor Rights Agreement to it.
NOW, THEREFORE, in consideration of the sale of the Purchaser's Shares
pursuant to the Purchase Agreement, and intending to be legally bound hereby,
the parties hereto agree that the Purchaser is hereby joined as a party to the
Investor Rights Agreement and is deemed to be an "Investor" for all purposes
under the Investor Rights Agreement.
This Joinder to Investor Rights Agreement may be executed in multiple
counterparts, each of which shall constitute an original and all of which shall
constitute one and the same document.
[SIGNATURES ON FOLLOWING PAGE]
[SIGNATURE PAGE TO JOINDER TO INVESTOR RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Joinder to
Investor Rights Agreement as of the date first written above.
FASTNET CORPORATION
By: /s/ Xxxxx Xxx Xxxxx
------------------------------------
Name: Xxxxx Xxx Xxxxx
Title: President and Chief Executive
Officer
PURCHASER:
ENTREPRENEURIAL INVESTMENT
CORPORATION
/s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
President
JOINDER TO INVESTOR RIGHTS AGREEMENT
This Joinder to Investor Rights Agreement is made as of the 12th day of
August, 1999 by and between FASTNET Corporation, a Pennsylvania corporation (the
"Company") and the investor identified on EXHIBIT A hereto (the "Purchaser").
BACKGROUND
The Company is a party to an Investor Rights Agreement dated as of August
3, 1999 (the "Investor Rights Agreement") by and among the Company, Lucent
Technologies, Inc. InterNetworking Systems and H&Q You Tools Investment Holding
L.P. Capitalized terms used herein that are not defined have the meanings
ascribed thereto in the Investor Rights Agreement. The Investor Rights Agreement
sets forth certain registration and other rights of the Investors.
On the date hereof, the Company is selling an aggregate of 140,252 shares
of Series A Preferred Stock to the Purchaser ("Purchaser's Shares") pursuant to
a Purchase Agreement dated the date hereof (the "Purchase Agreement") between
the Company and the Purchaser. In connection with the sale of the Purchaser's
Shares, the Company and the Purchaser desire that the Purchaser be deemed to be
an "Investor" under the Investor Rights Agreement and be subject to the terms
and conditions thereof.
Under Section 3.7 of the Investor Rights Agreement, the Company is
authorized to add as parties to the Investor Rights Agreement purchasers of the
Series A Preferred Stock. The Purchaser acknowledges that the Company has
delivered a copy of the Investor Rights Agreement to it.
NOW, THEREFORE, in consideration of the sale of the Purchaser's Shares
pursuant to the Purchase Agreement, and intending to be legally bound hereby,
the parties hereto agree that the Purchaser is hereby joined as a party to the
Investor Rights Agreement and is deemed to be an "Investor" for all purposes
under the Investor Rights Agreement.
This Joinder to Investor Rights Agreement may be executed in multiple
counterparts, each of which shall constitute an original and all of which shall
constitute one and the same document.
[SIGNATURES ON FOLLOWING PAGE]
[SIGNATURE PAGE TO JOINDER TO INVESTOR RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Joinder to
Investor Rights Agreement as of the date first written above.
FASTNET CORPORATION
By: /s/ Xxxxx Xxx Xxxxx
------------------------------------
Name: Xxxxx Xxx Xxxxx
Title: President and Chief Executive
Officer
PURCHASER:
X.X. XXXX CO. INC., AS NOMINEE
/s/ Xxxxxx X. Xxxx, Xx.
---------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
EXHIBIT A
SCHEDULE OF PURCHASERS
WITH RESPECT TO THE CLOSING UNDER THE PURCHASE AGREEMENT DATED AUGUST 12, 1999
PURCHASER'S NAME AND ADDRESS NUMBER OF SHARES AMOUNT
---------------------------- ---------------- ------
Xxxxxx Xxxx 140,252 $999,996.76
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
EXHIBIT A
SCHEDULE OF PURCHASERS
WITH RESPECT TO THE CLOSING UNDER THE PURCHASE AGREEMENT DATED AUGUST 12, 1999
PURCHASER'S NAME AND ADDRESS NUMBER OF SHARES AMOUNT
---------------------------- ---------------- ------
Everest Venture Partners I, L.P. 35,063 $249,999.19
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
EXHIBIT A
SCHEDULE OF PURCHASERS
WITH RESPECT TO THE CLOSING UNDER THE PURCHASE AGREEMENT DATED AUGUST 12, 1999
PURCHASER'S NAME AND ADDRESS NUMBER OF SHARES AMOUNT
---------------------------- ---------------- ------
Entreprenurial Investment Corporation 70,126 $499,998.38
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
EXHIBIT A
SCHEDULE OF PURCHASERS
WITH RESPECT TO THE CLOSING UNDER THE PURCHASE AGREEMENT DATED AUGUST 12, 1999
PURCHASER'S NAME AND ADDRESS NUMBER OF SHARES AMOUNT
---------------------------- ---------------- ------
X.X. Xxxx Co. Inc., as Nominee 140,252 $999,996.76
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
