NON-TRANSFERABLE WARRANT
This Warrant is issued as of August 4, 1997, by US LEC L.L.C., a Delaware
limited liability company (the "Company"), to Xxxxx Xxxx, a resident of
Charlotte, North Carolina (the "Holder").
1. Issuance of Warrant. For and in consideration of the Holder's employment
with the Company, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company hereby grants to the
Holder the right to purchase and acquire, at the times and subject to the
conditions hereinafter set forth, 110 non-voting units ("Non-Voting Units") of
ownership interest in the Company for the Exercise Price (as hereinafter
defined). In the event the Company merges with and into any other entity such
that the Company is not the surviving entity, the Holder shall be entitled to
purchase that number of shares or other equity interests of the surviving entity
that the Holder would have been entitled to receive as a result of the merger
had the Holder exercised its rights under this Warrant prior to such merger.
2. Exercise; Term. Subject to the terms and conditions hereinafter set
forth, the Holder shall be entitled to purchase and acquire up to 110 Non-Voting
Units (in minimum increments of 5 Non-Voting Units at a time) at any time and
from time to time from the date of this Warrant until 5:00 p.m. E.S.T., on
August 4, 2000. The Holder shall exercise its rights to purchase Non-Voting
Units under this Warrant by providing written notice of exercise to the Company
at the following address: 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: Chairman, or such other address as the Company shall
designate in a written notice to the Holder. In addition, the Holder shall
deliver to the Company this Warrant (or any replacement warrant issued by the
Company pursuant to Paragraph 3 below), an executed copy of the signature page
of the Operating Agreement of the Company (but only with respect to the first
exercise of the Warrant), and a certified check representing payment to the
Company of the aggregate Exercise Price of the Non-Voting Units to be purchased.
The exercise by the Holder of any rights granted hereunder shall be
conditioned on the continued employment of the Holder by the Company at the time
of any such exercise. In addition, the exercise of this Warrant shall be
conditioned on compliance with all applicable laws and regulations, including,
without limitation, obtaining all requisite approvals, if any, which may then be
required under applicable law.
This Warrant, and all rights of the Holder to purchase or acquire
Non-Voting Units hereunder, shall expire automatically and without any further
action by the Company at 5:00 p.m. E.S.T., on August 4, 2000, or upon
termination of the Holder's employment with the Company, whichever is sooner.
3. Effect of Exercise. The exercise of this Warrant (or any replacement
warrant issued by the Company as provided herein), shall become effective on the
first day of the month immediately following the month in which notice of
exercise is given to the Company. Upon the
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exercise of this Warrant or any replacement warrant the Company shall, as
promptly as practicable, deliver to the Holder a certificate or certificates
representing the number of Non-Voting Units purchased by the Holder. If this
Warrant shall be exercised with respect to less than all of the Non-Voting Units
to which the Holder is entitled to purchase hereunder, the Holder shall be
entitled to receive a replacement warrant covering the number of Non-Voting
Units in respect of which this Warrant shall not have been exercised, which new
warrant shall in all other respects be identical to this Warrant.
4. Exercise Price. The exercise price (the "Exercise Price") per each Unit
purchased pursuant to the terms of this Warrant shall be FOUR THOUSAND TWO
HUNDRED EIGHTY-FIVE DOLLARS ($4,285.00).
5. No Transfer Rights. Neither this Warrant nor the Non-Voting Units have
been registered under the Securities Act of 1933, as amended ("Securities Act"
or any state securities laws "Blue Sky Laws"). This Warrant has been acquired
for investment purposes and not with a view to distribution or resale and may
not be pledged, hypothecated, sold, made subject to a security interest, or
otherwise transferred (voluntarily or involuntarily) without (a) the prior
written consent of the Company and (b) (i) an effective registration statement
for such Warrant under the Securities Act and such applicable Blue Sky Laws, or
(ii) an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to the Company and its counsel, that registration is not required
under the Securities Act or under any applicable Blue Sky Laws. Any attempted
transfer of this Warrant in violation of this Paragraph 5. shall render this
Warrant null and void and of no further force and effect. In addition, any
Non-Voting Units issued upon the exercise of this Warrant shall be subject to
the restrictions on transfer set forth in the Operating Agreement of the
Company, and shall bear substantially the following legend:
THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE. THE
UNITS HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY AND ITS COUNSEL TO THE EFFECT THAT THE
PROPOSED TRANSACTION DOES NOT INVOLVE A VIOLATION OF
THE SECURITIES ACT OF 1933, AS AMENDED.
THE UNITS REPRESENTED BY THIS CERTIFICATE, AND THE
TRANSFER HEREOF, ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THAT CERTAIN OPERATING AGREEMENT DATED
JANUARY 1, 1997, AS AMENDED FROM TIME TO TIME, A COPY
OF WHICH IS ON FILE IN THE PRINCIPAL OFFICE OF THE
COMPANY.
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6. Additional Actions. The Holder and the Company agree to execute such
other documents and instruments as counsel for the Company reasonably deems
necessary to effect the compliance of the issuance of this Warrant and any
Non-Voting Units issued upon exercise hereof with applicable federal and state
securities laws.
7. Governing Law. This Warrant shall be governed by the laws of the State
of North Carolina applicable to agreements made entirely within the State of
North Carolina.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first above written.
COMPANY:
US LEC L.L.C.,
a Delaware limited liability company
By: ______________________________
Xxxxxxx X. Aab, Chairman
HOLDER: __________________________
_________________________________
Xxxxx Xxxx
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