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EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
November 23, 1998, between Allied Riser Communications Holdings, Inc., a
Delaware corporation (the "Company"), EGI-ARC Investors, L.L.C., a Delaware
limited liability company ("EGI"), Telecom Partners II, L.P., a Delaware limited
partnership ("TP"), Crescendo World Fund, LLC, a Delaware limited liability
company, Eagle Ventures WF, LLC, a Minnesota limited liability company,
Crescendo III, L.P., a Delaware limited partnership (together with Crescendo
World Fund, LLC and Eagle Ventures WF, LLC, "Crescendo"), and Xxxxxxxx Equity
Group, LLC, a California limited liability company ("Xxxxxxxx"). Collectively,
EGI, TP, Crescendo and Xxxxxxxx are referred to herein as the "Investors."
The Company and EGI are parties to a Series A-2 Preferred Stock and
Common Stock Investment Agreement of even date herewith, and the Company and
each of the Investors (other than EGI) are parties to separate Series A-1
Preferred Stock and Common Stock Investment Agreements of even date herewith
(collectively, the "Investment Agreements"). In order to induce the Investors to
enter into the Investment Agreements, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the Closing under the Investment Agreements.
Unless otherwise provided in this Agreement, capitalized terms used herein shall
have the meanings set forth in paragraph 8 hereof.
The parties hereto agree as follows:
1. Demand Registrations.
(a) Requests for Registration. At any time after the third
anniversary of the Closing under the Investment Agreements or such earlier time
as the Company has completed a public offering of its equity securities under
the Securities Act, the holders of at least 33% of the Registrable Securities
may request registration under the Securities Act of all or part of their
Registrable Securities on Form S-1 or any similar long-form registration
("Long-Form Registrations"), and the holders of at least 33% of the Registrable
Securities may request registration under the Securities Act of 1933, as amended
(the "Securities Act") of all or part of their Registrable Securities on Form
S-2 or S-3 or any similar short-form registration ("Short-Form Registrations")
if available. 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. Within ten days after
receipt of any such request, the Company will give written notice of such
requested registration to all other holders of Registrable Securities and will
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within 15 days
after the receipt of the Company's notice. All registrations requested pursuant
to this paragraph 1(a) are referred to herein as "Demand Registrations".
(b) Long-Form Registrations. The holders of Registrable
Securities will be entitled to request two Long-Form Registrations in which the
Company will pay all Registration Expenses ("Company-paid Long-Form
Registrations") and two Long-Form Registrations in which the holders of
Registrable Securities will pay their share of the Registration Expenses as set
forth in paragraph 5 hereof. A registration will not count as one of the
permitted Long-Form Registrations until it has become effective, and neither the
last nor any subsequent Company-paid Long-Form Registration will count as one of
the permitted Long-Form Registrations unless the holders of Registrable
Securities are able to register and sell at least 90% of the Registrable
Securities requested to be included in such registration; provided that in any
event the Company
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will pay all Registration Expenses in connection with any registration initiated
as a Company-paid Long-Form Registration whether or not it has become effective.
(c) Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to paragraph 1(b), the holders of Registrable
Securities will be entitled to request an unlimited number of Short-Form
Registrations in which the Company will pay all Registration Expenses. 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 Securities Exchange Act of 1934, as amended, the
Company will use its best efforts to make Short-Form Registrations available for
the sale of Registrable Securities.
(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 holders of at least 50% of
the Registrable Securities included in such registration. 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 (in an orderly manner in such offering
within a price range acceptable to the holders of a majority of the Registrable
Securities initially requesting registration), the Company will include in such
registration prior to the inclusion of any securities which are not Registrable
Securities the number of Registrable Securities requested to be included which
in the opinion of such underwriters can be sold in an orderly manner within the
price range of such offering, pro rata among the respective holders thereof on
the basis of the amount of Registrable Securities owned by each such holder. Any
Persons other than holders of Registrable Securities who participate in Demand
Registrations which are not at the Company's expense must pay their share of the
Registration Expenses as provided in paragraph 5 hereof.
(e) Restrictions on Long-Form Registrations. The Company may
postpone for up to 90 days the filing or the effectiveness of a registration
statement for a Demand Registration if the Company and the holders of a majority
of the Registrable Securities agree that such Demand Registration would
reasonably be expected to have an adverse effect on any proposal or plan by the
Company or any of its Subsidiaries to engage in any acquisition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or similar transaction; provided that in such event, the holders of
Registrable Securities initially requesting such Demand Registration will be
entitled to withdraw such request and, if such request is withdrawn, such Demand
Registration will not count as one of the permitted Demand Registrations
hereunder and the Company will pay all Registration Expenses in connection with
such registration.
(f) Selection of Underwriters. The holders of a majority of
the Registrable Securities included in any Demand Registration initially
requesting registration will have the right to select the investment banker(s)
and manager(s) to administer the offering, subject to the Company's approval
which will not be unreasonably withheld.
(g) Other Registration Rights. Except as provided in this
Agreement, the Company will not grant to any Persons the right to request the
Company to register any equity securities of the Company, or any securities
convertible or exchangeable into or exercisable for such securities, without the
prior written consent of the holders of a majority of the Registrable
Securities; provided that the Company may grant rights to other Persons to
participate in Piggyback Registrations (as defined below) so long as such rights
are subordinate to the rights of
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the holders of Registrable Securities with respect to such Piggyback
Registrations and request registrations so long as the holders of Registrable
Securities are entitled to participate in any such registrations with such
Persons pro rata on the basis of the number of shares owned by each such holder.
2. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to
register any of its securities under the Securities Act (other than pursuant to
a Demand Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
will give prompt written notice (in any event within three business days after
its receipt of notice of any exercise of demand registration rights other than
under this Agreement) to all holders of Registrable Securities of its intention
to effect such a registration and will include in such registration all
Registrable Securities with respect to which the company has received written
requests for inclusion therein within 15 days after the receipt of the Company's
notice. Notwithstanding the foregoing, the Piggyback Registration rights set
forth in this Section 2 shall not be applicable to any registration statements
on Form S-4 or on Form S-8, or on any successor forms thereto.
(b) Piggyback Expenses. The Registration Expenses of the
holders of Registrable Securities will be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the Company, the Company will include in such
registration first, the securities the Company proposes to sell, second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of the number of
shares owned by each such holder, and third, other securities requested to be
included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in an orderly manner
in such offering within a price range acceptable to the holders initially
requesting such registration, the Company will include in such registration
first, the securities requested to be included therein by the holders requesting
such registration, second, the Registrable Securities requested to be included
in such registration, pro rata among the holders of such Registrable Securities
on the basis of the number of shares owned by each such holder, and third, other
securities requested to be included in such registration.
(e) Selection of Underwriters. If any Piggyback Registration
is an underwritten offering, the selection of investment banker(s) and
manager(s) for the offering must be approved by the holders of a majority of the
Registrable Securities included in such Piggyback Registration. Such approval
will not be unreasonably withheld or delayed.
(f) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
paragraph 1 or pursuant to this paragraph 2, and if such previous registration
has not been withdrawn or abandoned, the
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Company will not file or cause to be effected any other registration of any of
its equity securities or securities convertible or exchangeable into or
exercisable for its equity securities under the Securities Act (except on Form
S-8 or any successor form), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least six months has
elapsed from the effective date of such previous registration.
3. Holdback Agreements.
(a) Each holder of Registrable Securities agrees not to effect
any public sale or distribution (including sales pursuant to Rule 144) of equity
securities of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and the 90-day
period beginning on the effective date of any underwritten Demand Registration
or any underwritten Piggyback Registration in which Registrable Securities are
included (except as part of such underwritten registration), unless the
underwriters managing the registered public offering otherwise agree.
(b) The Company agrees not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 90-day period beginning on the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration (except as part
of such underwritten registration or pursuant to a registration on Form S-8 or
any successor form), unless the underwriters managing the registered public
offering otherwise agree, and to cause each holder of at least 2% (on a
fully-diluted basis) of its Common Stock, or any securities convertible into or
exchangeable or exercisable for Common Stock, purchased from the Company at any
time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such securities during such period (except as
part of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
4. Registration Procedures. Whenever the holders of Registrable
Securities have 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 Securities and Exchange
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 the holders of a majority of the Registrable Securities covered by
such registration statement copies of all such documents proposed to be filed,
which documents will be subject to the review of such counsel);
(b) prepare and file with the Securities and Exchange
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
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
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(c) furnish to each seller of Registrable Securities 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
owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company will not be required
to qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, subject itself to
taxation in any such jurisdiction or consent to general service of process in
any such jurisdiction);
(e) notify each seller of such Registrable Securities, 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 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;
(f) 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 National Association of
Securities Dealers ("NASD") automated quotation system and, if listed on the
NASD automated quotation system, use its best efforts to secure designation of
all such Registrable Securities covered by such registration statement as a
"Nasdaq national market" security within the meaning of Rule 11Aa2-1 of the
Securities and Exchange 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
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation,
effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller 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 such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
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(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
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; and
(k) permit any holder of Registrable Securities which holder,
in its sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included, provided that such material
shall be furnished under such circumstances as shall cause it to be subject to
the indemnification provisions provided pursuant to paragraph 6 hereof; and
(l) 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 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.
(m) 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;
(n) 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 the holders of a
majority of the Registrable Securities being sold reasonably request (provided
that such Registrable Securities constitute at least 10% of the securities
covered by such registration statement);
If any such registration or comparable statement refers to any holder
by name or otherwise as the holder of any securities of the Company and if its
sole and exclusive judgment, such holder is or might be deemed to be a
controlling person of the Company, such holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory to
such holder and presented to the Company in writing, to the effect that the
holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such holder; provided that with respect to this
clause (ii) such holder shall furnish to the Company an opinion of counsel to
such effect, which opinion and counsel shall be reasonably satisfactory to the
Company.
5. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
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accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement, except
that the Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the NASD
automated quotation system.
(b) In connection with each Demand Registration and each
Piggyback Registration, the Company will reimburse the holders of Registrable
Securities covered by such registration for the reasonable fees and
disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities initially requesting such registration.
(c) To the extent Registration Expenses are not required to be
paid by the Company, each holder of securities included in any registration
hereunder will pay those Registration Expenses allocable to the registration of
such holder's securities so included, and any Registration Expenses not so
allocable will be borne by all sellers of securities included in such
registration in proportion to the aggregate selling price of the securities to
be so registered.
6. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted
by law, each holder of Registrable Securities, its officers and directors and
each Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by 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, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder 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 the holders of
Registrable Securities.
(b) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder will furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, will indemnify 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 or affidavit so
furnished in writing by such holder; provided that the obligation to indemnify
will be individual to each holder and will be limited to
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the net amount of proceeds received by such holder 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
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) If the indemnification provided for in this Section 6 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage, liability or expense referred to
herein, 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, claim, damage, liability 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, claim,
damage, liability or expense, as well as any other relevant equitable
considerations. 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 or alleged 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 indemnification provided for under this Agreement will
remain in full force and effect regardless of 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.
7. 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 questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
8. Definitions.
"Common Stock" means the common stock, no par value, of the Company.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a government entity or any department, agency or political
subdivision thereof.
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"Registrable Securities" means (i) any Common Stock issued pursuant to
the Investment Agreements, (ii) any Common Stock issued upon the conversion of
any Series A Preferred Stock issued pursuant to the Investment Agreements, (iii)
any Common Stock issued or issuable with respect to the securities referred to
in clauses (i) and (ii) by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization, and (iv) any other shares of Common Stock held by
Persons holding securities described in clauses (i) to (iii), inclusive, above.
As to any particular Registrable Securities, such securities will cease to be
Registrable Securities when they have been distributed to the public pursuant to
an offering registered under the Securities Act or sold to the public through a
broker, dealer or market maker in compliance with Rule 144 under the Securities
Act (or any similar rule then in force). For purposes of this Agreement, a
Person will be deemed to be a holder of Registrable Securities whenever such
Person has the right to acquire directly or indirectly such Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected.
"Series A Preferred Stock" means the Series A-1 Preferred Stock and the
Series A-2 Preferred Stock, $0.0001 par value per share, issued pursuant to the
Investment Agreements.
"Subsidiary" means with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a partnership, association or other business entity, a
majority of the partnership or other similar ownership interest thereof is at
the time owned or controlled, directly or indirectly, by any Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest in a
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of partnership, association or other business
entity gains or losses or shall be or control the managing director or general
partner of such partnership, association or other business entity.
9. Miscellaneous.
(a) Selection of Investment Bankers. Except as otherwise
provided herein in connection with Demand Registrations, the selection of
investment banker(s) and manager(s) for any public offering or private sale by
the Company of its securities must be approved by the holders of a majority of
the Registrable Securities, which approval will not be unreasonably withheld.
(b) No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the holders of Registrable Securities in
this Agreement.
(c) Adjustments Affecting Registrable Securities. The Company
will not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would materially and
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).
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(d) Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(e) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Company and holders of a majority of the
Registrable Securities.
(f) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(g) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(h) Counterparts; Facsimile. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Agreement. This Agreement may be executed by
facsimile.
(i) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(j) Governing Law. The corporate law of the State of Delaware
will govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity and
interpretation of this Agreement and the exhibits and schedules hereto will be
governed by the internal law, and not the law of conflicts, of the State of
Delaware.
(k) Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable express courier
service (charges prepaid) or mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid. Such notices, demands and
other communications will be sent to the parties hereto at the following
addresses:
-10-
11
If to the Company: Allied Riser Communications Holdings, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: President
and
Allied Riser Communications Holdings, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Chief Financial Officer
with a copy to: Xxxxxx & Xxxxxxx, L.L.P.
000 X. Xxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx
If to EGI: EGI-ARC Investors, L.L.C.
c/o EGI Corporate Investments
Xxx Xxxxx Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
(000) 000-0000
Attn: Xxxxxx Xxxxxxxxxxx
Xxxxxxx X. Xxxxx III
with a copy to: Xxxxxxxxx & Xxxxxxxxxxx, P.C.
Xxx Xxxxx Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxx Xxxxxxxxx
If to TP: Telecom Partners II, L.P.
0000 Xxxxxx Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxx
with a copy to: Holland & Xxxx LLP
000 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
-11-
12
If to Crescendo: x/x Xxxxxxxxx Xxxxxxx Management, LLC
000 Xx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx
with a copy to: Xxxxxxxx & Xxxxxx
0000 Xxxxx Xxxxxx Tower
000 X. 0xx Xx.
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx
If to Xxxxxxxx: Xxxxxxxx Equity Group, LLC
c/o Xxxxxx Xxxxxxx
0000 Xxxxxxx Xxxx Xxxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxxx
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * *
-12-
13
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ALLIED RISER COMMUNICATIONS HOLDINGS,
INC.
By: /s/Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
EGI-ARC INVESTORS, L.L.C.
By: GAMI Investments, Inc.
Its: Managing Member
By: /s/Xxx Xxxxxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxxxxx
Title: Vice President
TELECOM PARTNERS II, L.P.
By: Telecom Management II, L.L.C.,
Its: General Partner
By: /s/Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Member
14
CRESCENDO WORLD FUND, LLC
By: Crescendo Ventures World Fund, LLC
Its: Managing Member
By: /s/Xxxxxxx X. Xxxxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Partner
EAGLE VENTURES WF, LLC
By: /s/Xxxxxxx X. Xxxxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
CRESCENDO III, L.P.
By: Crescendo Ventures III, LLC
Its: General Partner
By: /s/Xxxxxxx X. Xxxxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Partner
XXXXXXXX EQUITY GROUP, LLC
By: /s/Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President and Managing Member
