PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT, dated as of April 30,
1999 (this "AGREEMENT"), between KMC TELECOM HOLDINGS, INC., a Delaware
corporation (the "COMPANY"), and FIRST UNION INVESTORS, INC., a North Carolina
corporation ("FIRST UNION").
WHEREAS, pursuant to the terms of a Securities Purchase Agreement of
even date herewith (the "PURCHASE AGREEMENT") between the Company and First
Union, the Company has agreed to issue and sell to First Union a unit (the
"SERIES E UNIT"), consisting of 35,000 shares of the Company's Series E Senior
Redeemable, Exchangeable, PIK Preferred Stock (the "SERIES E PREFERRED STOCK")
and 94,513 warrants (each, a "WARRANT" and collectively, the "WARRANTS"), each
Warrant initially entitling the holder thereof to purchase 0.471756 shares of
Common Stock (as defined below) of the Company at an exercise price of $.01 per
Common Share (as defined below);
WHEREAS, the Company and First Union wish to set forth their agreement
with respect to certain rights and obligations regarding the registration of
shares of the Preferred Stock.
In consideration of the foregoing and of the mutual agreements
contained herein and in the Purchase Agreement, the Company and the Purchaser
hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Affiliate" means, with respect to any Person, (i) each Person that,
directly or indirectly, owns or controls, whether beneficially or as a trustee,
guardian or other fiduciary, 25% or more of the capital stock having ordinary
voting power in the election of directors of such Person, (ii) each Person that
controls, is controlled by or is under common control with such Person or any
Affiliate of such Person, or (iii) each of such Person's executive officers and
directors. For the purpose of this definition, "control" of a Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"Board of Directors" means the board of directors of the Company from
time to time.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the common stock, par value $.01 per share, of
the Company.
"Company" has the meaning specified in the recitals to this Agreement.
"Demand Holder" has the meaning specified in Section 2.1.
"Demand Registrations" has the meaning specified in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Fully Diluted Basis" means at any date as of which the number of
shares of Common Stock is to be determined, on a basis including all shares of
Common Stock outstanding at such date and the maximum shares of Common Stock
issuable in respect of Common Stock Equivalents (giving effect to the then
current respective conversion prices) and other rights to purchase (directly or
indirectly) shares of Common Stock or Common Stock Equivalents, outstanding on
such date, to the extent such rights to convert, exchange or exercise thereunder
are presently exercisable. For purposes of this definition, "Common Stock
Equivalents" means any security or obligation which is by its terms convertible
into shares of Common Stock and any option, warrant or other subscription or
purchase right with respect to Common Stock.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotations System.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, fund, unincorporated
association or organization or government or other agency or political
subdivision thereof.
"Purchase Agreement" has the meaning specified in the recitals.
"Registrable Securities" means the shares of Series E Preferred Stock
issued and sold to First Union under the Purchase Agreement.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
all Commission and stock exchange or NASD registration and filing fees and
expenses, fees and expenses of compliance with securities or blue sky laws
(including without limitation reasonable fees and disbursements of counsel for
the underwriters in connection with blue sky qualificaitons of the Registrable
Securities), rating agency fees, printing expenses, messenger, telephone and
delivery expenses, the fees and expenses incurred in connection with the listing
of the securities to be registered on each securities exchange or national
market system on which similar securities issued by the Company are then listed,
fees and disbursements of counsel for the Company and all independent certified
public accountants (including the expenses of any annual audit, special audit
and "cold comfort" letters required by or incident to such performance and
compliance), securities laws liability insurance (if the Company so desires),
the fees and disbursements of underwriters (including without limitation all
fees and expenses of any "qualified independent underwriter" required by the
rules of the NASD) customarily paid by issuers or sellers of securities (but not
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including any underwriting discounts or commissions attributable to the sale of
Registrable Securities by the sellers of Registrable Securities), the reasonable
fees of counsel selected pursuant to Section 2.4(b) hereof by First Union in
connection with each such registration, the reasonable fees and expenses of any
special experts retained by the Company in connection with such registration,
fees and expenses of other persons retained by the Company.
"Registration Notice" has the meaning specified in Section 2.1(a).
"Registration Statement" means a registration statement filed pursuant
to the Securities Act.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Series E Preferred Stock" has the meaning specified in the recitals
to this Agreement.
"Series E Unit" has the meaning specified in the recitals to this
Agreement.
2. DEMAND REGISTRATION RIGHTS.
(a) RIGHT TO DEMAND. At any time and from time to time after October
__, 1999, First Union (referred to in this Section 2 as the "Demand Holder") may
request the Company to register its Registrable Securities in the manner set
forth herein by written notice (the "REGISTRATION NOTICE") to the Company only
if a disposition of the Registrable Securities may not, in the opinion of the
Demand Holder, be effected in the public marketplace (as opposed to a private
transaction under the Securities Act) at equally favorable net terms to the
Demand Holder without registration of such shares under the Securities Act. In
the event that the Company receives a Registration Notice, the Company shall
effect a registration under the Securities Act of the number of Registrable
Securities determined in accordance with Section 2.1(c) on Form S-1 or any
similar long-form registration ("LONG-FORM REGISTRATIONS") or on Form S-2 or S-3
or any similar short-form registration ("SHORT-FORM REGISTRATIONS") if
available. All registrations requested pursuant to this Section 2.1(a) are
referred to herein as "Demand Registrations".
(b) NUMBER OF DEMAND REGISTRATIONS. First Union will be entitled to
obtain up to two (2) Long-Form Registrations and two (2) Short-Form
Registrations. A registration will not count as a Long-Form Registration or
Short-Form Registration, as the case may be, until such Demand Registration has
become effective and unless the Demand Holder is able to register and sell at
least 66 2/3% of the Registrable Securities requested to be included in such
registration. Demand Registrations will be Short-Form Registrations whenever the
Company is permitted to use any applicable short form. After the Company has
become subject to the reporting requirements of the Exchange Act, the Company
will use its best efforts to make Short-Form Registrations available for the
sale of Registrable Securities. The Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to this Section 2.1(b)
(including the Company's internal costs in proceeding on such request, as
reasonably determined by the Company's Board of Directors) if the registration
request is subsequently withdrawn, unless the Demand Holder agrees to treat the
withdrawn request as a registration undertaken pursuant to this Section 2.1(b);
PROVIDED, that if the Demand Holder withdraws a request as a result of a
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material adverse change in the condition, business or prospects of the Company
or in the market for the Company's securities from that known to the Demand
Holder at the time of its request, the Company, and not the Demand Holder, shall
be required to pay all the expenses relating to the proposed registration and
such request shall not be treated as a registration for purposes of this Section
2.1(b).
(c) DEMAND REGISTRATIONS. Within (a) 75 days after the Company
receives a Registration Notice with respect to the first offer for sale of
Shares pursuant to an effective registration statement filed by the Company
under the Securities Act or (b) within 45 days after the Company receives a
Registration Notice with respect to any other demand registration, the Company
shall file with the Commission a registration statement under the Securities Act
for such Demand Registration. The Company shall use its best efforts to cause
the Demand Registration to be declared effective under the Securities Act as
soon as is practical after filing, and once effective, the Company shall cause
such Demand Registration to remain effective for such time period as is
specified in such request, but for no time period longer than the period ending
on the earlier of (i) the one-year anniversary of the effective date of such
Demand Registration, (ii) the date on which all Registrable Securities have been
sold pursuant to the Demand Registration or (iii) the date as of which there are
no longer any Registrable Securities in existence. Each request for a Demand
Registration shall specify the approximate number of Registrable Securities
requested to be registered and the anticipated per share price range for such
offering.
(d) PRIORITY ON DEMAND REGISTRATIONS. The Company will not include in
any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the Demand Holder. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold therein without adversely affecting the marketability of the
offering, the Company will include in such registration, (i) first, the
Registrable Securities requested to be included in such registration; and (ii)
second, other securities, if any, requested to be included in such registration,
pro rata among the holders of such other securities, on the basis of the number
of shares of other securities owned by each such holder and requested to be
included therein.
(e) RESTRICTIONS ON DEMAND REGISTRATIONS. The Company will not be
obligated to effect any Demand Registration within six months after the
effective date of a previous Demand Registration. If at the time of any request
to register Registrable Securities pursuant to Section 2.1 hereof, the Company
is engaged, or has fixed plans to engage within 90 days of the time of the
request, in a registered public offering or is engaged in any activity which, in
the good faith determination of the Board of Directors, would be adversely
affected by the requested registration to the material detriment of the Company,
then the Company may at its option direct that such request be delayed for a
period not in excess of 60 days from the effective date of such offering, or the
date of commencement of such other material activity, as the case may be, such
right to delay a request to be exercised by the Company not more than once
within any twelve month period.
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(f) SELECTION OF UNDERWRITERS. In the case of a Demand Registration,
the Company shall have the right to select the investment banker or bankers,
underwriters and managers to administer the offering; PROVIDED, HOWEVER, that
such investment banker or bankers, underwriters and managers shall be
satisfactory to the Demand Holder.
2.2. HOLDBACK AGREEMENTS.
(a) First Union agrees not to effect any public sale or distribution
(including sales pursuant to Rule 144 under the Securities Act) of equity
securities, including, without limitation, the Common Stock, of the Company, or
any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and the 180-day period beginning on
the effective date of any Demand Registration for a public offering to be
underwritten on a firm commitment basis (except as part of such underwritten
registration), unless the investment bankers or underwriters managing the public
offering otherwise agree.
(b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, including, without limitation, the Common
Stock, or any securities convertible into or exchangeable or exercisable for
such securities, during the seven days prior to and during the 180-day period
beginning on the effective date of any underwritten Demand Registration (except
as part of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree, and (ii) to use best efforts to
cause each holder of at least 5% (on a Fully Diluted Basis) of its equity
securities, including, without limitation, Common Stock, or any securities
convertible into or exchangeable or exercisable for such securities, purchased
from the Company at any time after the date of this Agreement (other than in a
registered public offering or distribution) to agree not to effect any public
sale or distribution (including sales pursuant to Rule 144 under the Securities
Act) of any such securities during such period (except as part of such
underwritten registration), unless the underwriters managing the public offering
or distribution otherwise agree.
2.3. REGISTRATION PROCEDURES. Whenever First Union has requested that
any Registrable Securities be registered pursuant to this Agreement, the Company
will use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will furnish to the counsel selected by First Union copies of all
such documents proposed to be filed);
(b) subject to Section 2.3 (e) , prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than six months and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
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accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to First Union such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions of
the United States of America as First Union reasonably requests and do any and
all other acts and things which may be reasonably necessary or advisable to
enable First Union to consummate the disposition in such jurisdictions of the
Registrable Securities (provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
(i.e., service of process which is not limited solely to securities law
violations) in any such jurisdiction);
(e) notify First Union, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
any such seller, the Company will promptly prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading; PROVIDED, that upon not less than five days, notice to
First Union, the Company may defer the filing of an amendment or withdraw an
amendment or may defer the effectiveness of an amendment or the preparation of a
supplement if the Board of Directors determines, in good faith, that such
amendment or supplement, or the disclosure of any information in connection
therewith, would have a material adverse affect upon the Company or its
subsidiaries; and PROVIDED, FURTHER, that the Company may not defer the filing
of any such amendment or supplement for more than 30 days;
(f) use its best efforts to cause all such Registrable Securities to
be listed on each securities exchange on which similar securities issued by the
Company are then listed and, if not so listed, to be listed on the NASDAQ and,
if listed on the NASDAQ, use its best efforts to secure designation of all such
Registrable Securities covered by such registration statement as a "national
market system security" within the meaning of Rule 11Aa2-1 of the Commission or,
failing that, to secure NASDAQ authorization for such Registrable Securities
and, without limiting the generality of the foregoing, to arrange for at least
two market makers to register as such with respect to such Registrable
Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as First Union or
the underwriters, if any, reasonably request in order to expedite or facilitate
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the disposition of such Registrable Securities (including, without limitation,
effecting a stock split or a combination of shares);
(i) make available, subject to any confidentiality agreements
reasonably requested by the Company, for inspection by First Union any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by First Union or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by any First Union, such underwriter, attorney, accountant or agent in
connection with such registration statement;
(j) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and, if required, make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any equity securities, including, without limitation, the Common stock, included
in such registration statement for sale in any jurisdiction, the Company will
use its reasonable best efforts promptly to obtain the withdrawal of such order;
(1) use its best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities; and
(m) obtain a "cold comfort" letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by "cold comfort" letters as First Union reasonably
requests; and
It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Agreement in respect of the securities which
are to be registered at the request of First Union that First Union shall
furnish to the Company such information regarding the securities held by First
Union and the intended method of disposition thereof as the Company shall
reasonably request in connection with such registration.
2.4. REGISTRATION EXPENSES.
(a) Except as otherwise expressly provided in this Agreement, all
Registration Expenses will be borne by the Company.
(b) Except as otherwise expressly provided in this Agreement, in
connection with each Demand Registration, the Company will reimburse First Union
for the reasonable fees and disbursements of one counsel chosen by First Union.
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2.5. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless, to the full
extent permitted by law, First Union, its officers and directors and each Person
who controls First Union (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses arising out of or based upon
any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse First Union, such director, officer or
controlling person for any legal or other expenses reasonably incurred by First
Union, such director, officer or controlling person in connection with the
investigation or defense of such loss, claim, damage, liability or expense,
except insofar as the same are contained in any information furnished in writing
to the Company by First Union expressly for use therein or by First Union's
failure to deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto after the Company has furnished First Union
with a sufficient number of copies of the same. In connection with an
underwritten offering, the Company will indemnify such underwriters, their
officers and directors and each Person who controls such underwriters (within
the meaning of the securities Act) to the same extent as provided above with
respect to the indemnification of First Union.
(b) In connection with any registration statement in which First Union
is participating, First Union will furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the full extent permitted by
law, will indemnify and hold harmless the Company, its directors and officers
and each Person who controls the Company (within the meaning of the Securities
Act) against any losses, claims, damages, liabilities and expenses resulting
from any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information so furnished in writing by First Union; PROVIDED,
that the obligation to indemnify will be limited to the net amount of proceeds
received by First Union from the sale of Registrable Securities pursuant to such
registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
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indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement will be in
addition to any liability the indemnifying party may otherwise have and without
prejudice to any other right or remedy the indemnified party may otherwise have,
which will remain in full force and effect regardless of any omission to give
notice (except to the extent such omission effects the ability of the
indemnifying party to defend such claim) or any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
2.6. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all customary
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements; PROVIDED, that First Union shall not be required to make any
representations or warranties to the Company or the underwriters other than
representations and warranties regarding First Union and First Union's intended
method of distribution.
3. MISCELLANEOUS.
3.1. NOTICES. All notices or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telecopied or
sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally, telecopied or sent by
certified, registered or express mail or, if mailed, five days after the date of
deposit in the United States mail, as follows:
(a) if to the Company:
KMC Telecom Holdings, Inc.
0000 Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Chief Financial Officer
Telecopier No: (000) 000-0000
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with a copy to:
Xxxxxx Xxxx & Xxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
Telecopier No: (000) 000-0000/7899
if to First Union:
First Union Investors, Inc.
1 First Union Center
5th Floor
000 Xxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxx Xxxxxxx, III
Telecopier No: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, LLP
Bank of America Corporate Center
Suite 4200
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No: (000) 000-0000
Any party may by notice given in accordance with this Section 3.1
designate another address or person for receipt of notices hereunder.
3.2. AMENDMENT AND WAIVER.
(a) No failure or delay on the part of any party hereto in exercising
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the parties hereto at law, in equity or
otherwise.
(b) Any amendment, supplement or modification of or to any provision
of this Agreement, any waiver of any provision of this Agreement, and any
consent to any departure by any party from the terms of any provision of this
Agreement, shall be effective, (i) only if it is made or given in writing and
signed by the parties and (ii) only in the specific instance and for the
specific purpose for which made or given.
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3.3. SPECIFIC PERFORMANCE. The parties hereto intend that each of the
parties have the right to seek damages or specific performance in the event that
any other party hereto fails to perform such party's obligations hereunder.
Therefore, if any party shall institute any action or proceeding to enforce the
provisions hereof, any party against whom such action or proceeding is brought
hereby waives any claim or defense therein that the plaintiff party has an
adequate remedy at law.
3.4. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
3.5. SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
3.6. ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
3.7. TERM OF AGREEMENT. The provisions of this Agreement shall become
effective upon the execution hereof and shall terminate as provided herein.
3.8. VARIATIONS IN PRONOUNS. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
3.9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW THEREOF.
3.10. FURTHER ASSURANCES. Each of the parties shall, and shall cause
their respective Affiliates to, execute such instruments and take such action as
may be reasonably required or desirable to carry out the provisions hereof and
the transactions contemplated hereby.
3.11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, heirs,
legatees and legal representatives. This Agreement is not assignable except in
connection with a transfer of Shares in accordance with this Agreement.
3.12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed, or have cause to be
executed, this Agreement on the date first written above.
KMC TELECOM HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
_____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
FIRST UNION INVESTORS, INC.
By: /s/ Xxxxxx Xxxxxx
____________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
