REGISTRATION RIGHTS AGREEMENT
This Agreement is entered into as of April 11, 2000 by US LEC Corp., a
Delaware corporation (the "Company"), and the Persons whose names are set forth
on the attached Schedule I (collectively, the "Investors").
A. The Company and the Investors have entered into a Series A
Convertible Preferred Stock Purchase Agreement, dated as of the same date as
this Agreement (the "Purchase Agreement"), pursuant to the terms and conditions
of which (i) the Company is issuing and selling to the Investors, and the
Investors are purchasing from the Company, an aggregate of up to 200,000 shares
of Series A Convertible Preferred Stock and (ii) the Company is issuing an
option (the "Option") to the Investors to purchase an aggregate of 100,000
shares of convertible preferred stock pursuant to the terms and conditions of an
Option Agreement, dated as of the same date as this Agreement (the 200,000
shares of Series A Convertible Preferred Stock, the number of shares of
convertible preferred stock (the "Option Stock") issued to the Investors upon
the exercise of the Option, and any shares of convertible preferred stock issued
as preferential dividends pursuant to the terms of the Series A Convertible
Preferred Stock and Option Stock are collectively referred to herein as the
"Preferred Shares").
B. The parties' execution and delivery of this Agreement is a condition
of their respective obligations to close the Purchase Agreement.
The parties agree as follows:
1. DEFINITIONS.
Capitalized terms which are used in this Agreement without being
defined have the same meanings that they are given in the Purchase Agreement. In
addition, the following terms have these meanings:
"REGISTRABLE SECURITIES" means (i) any shares of Common Stock issued or
issuable upon conversion of the Preferred Shares and (ii) any shares of Common
Stock issued or issuable (A) as a dividend or distribution in respect of, or
(B), in exchange for or replacement of, or (C) upon conversion or exercise of
any warrant or other security issued or issuable as a dividend or distribution
in respect of or in exchange for or replacement of, the Preferred Shares and any
shares of Common Stock issued or issuable upon conversion of the Preferred
Shares. Any Registrable Securities shall cease to be Registrable Securities (i)
when they have been distributed to the public pursuant to a 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) or repurchased by the Company or any Subsidiary or
(ii) if and when they (or, in respect of issuable but not yet issued Registrable
Securities, the underlying Preferred Shares or Common Stock) cease to be held by
an Investor, a Permitted Transferee (as "Permitted Transferee" is defined in the
Corporate Governance Agreement) or a transferee to whom an Investor or a
Permitted Transferee has transferred Registrable Securities with a value of at
least $50 million.
"REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with this Agreement, including all registration and
filing fees, fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, fees and disbursements of
custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts,
commissions and underwriters' counsel fees) and other Persons retained by the
Company.
"VIOLATION" means any of the following statements, omissions or
violations: (i) any untrue statement or alleged untrue statement of a material
fact contained or incorporated by reference in a registration statement pursuant
to this Agreement, including any related preliminary or final prospectus, any
amendment or supplement, or any document filed under state securities or "blue
sky" laws, (ii) the omission or alleged omission to state a material fact
required to be stated in any such registration statement, prospectus, amendment,
supplement or document or necessary to make the statements in any such
registration statement, prospectus, amendment, supplement or document not
misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law, or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law.
2. DEMAND REGISTRATIONS.
2.1 GENERAL. On or at any time after the second anniversary of Closing,
holders of a majority of the Registrable Securities then outstanding may request
registration under the Securities Act of all or any portion of their Registrable
Securities. All registrations requested pursuant to this Section 2.1 are
referred to in this Agreement as "Demand Registrations." Holders of Registrable
Securities then outstanding shall be limited to three Demand Registrations and
each such Demand Registration must include an initial request to register
Registrable Securities having an aggregate offering value of at least $20
million. In regard to Demand Registrations:
(a) Each request for a Demand Registration shall specify the
approximate number of Registrable Securities requested to be
registered. Within 10 Business Days after receipt of any request for a
Demand Registration, the Company shall give written notice of the
requested registration to all other holders of Registrable Securities
and, subject to Section 2.2 below, shall include in the registration
all Registrable Securities with respect to which the Company has
received written requests for inclusion within 15 Business Days after
receipt of the Company's notice.
(b) A Demand Registration shall not be counted as one of the
three permitted Demand Registrations unless (i) it has become effective
and (ii) the Persons making the request are able to register and sell
at least 75% of the Registrable Securities included in the
registration.
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(c) The Company shall pay all Registration Expenses in
connection with any Demand Registration whether or not it is counted as
one of the three permitted Demand Registrations.
(d) Demand Registrations shall be on Form S-2 or Form S-3 or
any similar short-form registration statement, if available. Otherwise
Demand Registrations shall be on Form S-1 or any similar long-form
registration statement.
(e) The Company shall have the right to select the managing
underwriters in connection with an underwritten public offering of
Registrable Securities, subject to the approval of a majority of the
holders of the Registrable Securities included in any Demand
Registration which approval shall not be unreasonably withheld, and
holders of a majority of the Registrable Securities included in any
Demand Registration shall have the right to select a co-managing
underwriter, subject to the Company's approval which shall not be
unreasonably withheld.
(f) The holders of a majority of the Registrable Securities
included in any Demand Registration shall have the right to select the
investment banker(s) and manager(s) to administer an offering of
Registrable Securities that is not an underwritten public offering,
subject to the Company's approval which shall not be unreasonably
withheld.
2.2 PRIORITY ON DEMAND REGISTRATIONS. The Company will not include in
any Demand Registrations any securities which are not Registrable Securities
without the prior written consent of the holders of a majority 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, that
can be sold without adversely affecting the marketability of the offering, the
Company shall include in the registration (i) FIRST, the number of Registrable
Securities requested to be included which in the opinion of the underwriters can
be sold without adversely affecting the marketability of the offering, pro rata
among the respective holders thereof on the basis of the number of Registrable
Securities owned by each such holder, and (ii) SECOND, other securities
requested to be included in such Demand Registration, pro rata among the holders
of such securities on the basis of the number of such securities owned by each
such holder.
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2.3 RESTRICTIONS ON DEMAND REGISTRATIONS. The Company shall not be
obligated to effect more than two Demand Registrations in any 12-month period.
The Company shall not be obligated to effect any Demand Registration within 180
days after the effective date of a previous Demand Registration or a previous
registration in which the holders of Registrable Securities were given piggyback
rights pursuant to Section 3 and, in the case of a previous Demand Registration,
were able to register and sell at least 75% of the Registrable Securities
proposed to be included in such registration or, in the case of a previous
Piggyback Registration, were able to register and sell at least 50% of the
Registrable Securities proposed to be included in such registration. The Company
may postpone for up to 90 days the filing or the effectiveness of a registration
statement for a Demand Registration if a certificate signed by an executive
officer of the Company is promptly furnished to the holders requesting the
Demand Registration stating that the Board of Directors of the Company has
determined that such a Demand Registration would reasonably be expected to have
a material adverse effect on any proposal or plan by the Company to engage in
any acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer, reorganization or similar transaction. In
addition, the Company may postpone for up to 180 days the filing of a
registration statement for a Demand Registration if a certificate signed by an
executive officer of the Company is promptly furnished to the holders requesting
the Demand Registration stating that the Company intends to file a registration
statement for a primary offering of its debt or equity securities within the
next 60 days so long as the Company is at all times proceeding in good faith to
make such registration statement effective. In the event the filing or the
effectiveness of a registration statement is postponed pursuant to this Section
2.3, the holders of Registrable Securities initially requesting the Demand
Registration shall be entitled to withdraw their request. If their request is
withdrawn, the Demand Registration shall not count as one of the three permitted
Demand Registrations and the Company will pay all Registration Expenses in
connection with such registration. The Company may delay the filing or suspend
the effectiveness of a Demand Registration pursuant to this Section 2.3 only
once in any 12-month period.
3. PIGGYBACK REGISTRATIONS.
3.1 RIGHT TO PIGGYBACK. After the first anniversary of Closing,
whenever the Company proposes to register any of its equity securities under the
Securities Act (other than (i) pursuant to a Demand Registration or (ii) a
registration on Form S-4 or Form S-8 or any successor or similar form) and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), whether or not for sale for its own
account, the Company shall give prompt written notice to all holders of
Registrable Securities of its intention to effect such a registration and shall
include in the registration all Registrable Securities with respect to which the
Company has received written requests for inclusion within 15 Business Days
after receipt of the Company's notice. Holders of Registrable Securities shall
be entitled to unlimited Piggyback Registrations for their Registrable
Securities.
3.2 PIGGYBACK EXPENSES. The Registration Expenses of the holders of
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
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3.3 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 the registration exceeds the number that
can be sold without adversely affecting the marketability of the offering, the
Company shall include in the registration (i) first, the securities that the
Company proposes to sell, (ii) second, the Registrable Securities requested to
be included in the registration and any other securities requested to be
included in such registration by the holders thereof who have been granted
rights by the Company to participate in a Piggyback Registration pari passu with
the holders of Registrable Securities pursuant to Section 10.1, pro rata among
the holders of the Registrable Securities and the holders of such other
securities on the basis of the number of the Registrable Securities and such
other securities owned by each holder, and (iii) third, any other securities
requested to be included in the registration.
3.4 PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of the Company's
securities (other than on behalf of holders of Registrable Securities that have
initiated a Demand Registration pursuant to Section 2), and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in the registration exceeds the number that
can be sold without adversely affecting the marketability of the offering, the
Company shall include in the registration (i) first, the securities requested to
be included therein by the holders requesting such registration and the
Registrable Securities requested to be included in the registration, pro rata
among the holders thereof on the basis of the number of such securities and
Registrable Securities owned by each such holder, and (ii) second, any other
securities requested to be included in the registration.
3.5 OTHER REGISTRATIONS. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 2 or pursuant to this Section 3, and if the previous registration has
not been withdrawn or abandoned, the Company shall 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-4 or Form S-8 or any successor or similar
forms), whether on its own behalf or at the request of any holder or holders of
its securities, until a period of at least 180 days has elapsed from the
effective date of the previous registration or, if shorter, a period of at least
60 days has elapsed from the date all securities covered by such registration
have been disposed of.
4. HOLDBACK AGREEMENTS.
4.1 HOLDERS OF REGISTRABLE SECURITIES. Each holder of Registrable
Securities shall not 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 equity securities of the
Company, during the seven days prior to and the 120-day period beginning on the
effective date of any Demand Registration or any underwritten Piggyback
Registration in which Registrable Securities are included (except as part of
such underwritten offering), unless the underwriters managing the registered
public offering otherwise agree.
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4.2 COMPANY. The Company shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during such period prior to and
following the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration as the Company and the underwriters managing
the offering may agree.
5. REGISTRATION PROCEDURES.
Whenever holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
shall use its reasonable best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition. In this regard, 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 reasonable best efforts to
cause the registration statement to become effective;
(b) notify each holder of Registrable Securities of the effectiveness
of each registration statement filed under this Agreement and prepare and file
with the Commission any amendments and supplements to the registration statement
and the prospectus that may be necessary to keep the registration statement
effective for a period of either (i) not less than 120 days (subject to
extension pursuant to Section 8.2), or if such registration statement relates to
an underwritten offering, such longer period as in the opinion of counsel for
the underwriters a prospectus is required by law to be delivered in connection
with sales of Registrable Securities by an underwriter or dealer or (ii) such
shorter period as will terminate when all of the securities covered by such
registration statement have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement (but in any event not before the expiration of any longer
period required under the Securities Act), and to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such registration statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities the number of
copies of the registration statement, each amendment and supplement, the
prospectus included in the registration statement (including each preliminary
prospectus) and any other documents that each seller may reasonably request in
order to facilitate the disposition of the seller's Registrable Securities;
(d) use its best efforts to register or qualify the 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 the seller to consummate the
disposition in those jurisdictions of the Registrable Securities owned by the
seller (but the Company shall 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 subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
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(e) notify each seller of Registrable Securities, at any time when a
prospectus relating to those securities is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in the registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements in the
prospectus not misleading; and, at the request of any seller, the Company shall
prepare a supplement or amendment to the prospectus so that, when delivered to
purchasers of the Registrable Securities, the prospectus, as supplemented or
amended, does not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements in the prospectus not
misleading;
(f) cause all such Registrable Securities to be quoted on the Nasdaq
National Market System and listed on any other exchange on which the Company's
shares of Common Stock are listed;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of the registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all other actions that 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 the
Registrable Securities;
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to the
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, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with the registration statement;
(j) otherwise use its best efforts to comply with all applicable rules
and regulations of the 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; and
(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 securities included in the registration statement for sale in any
jurisdiction, use its reasonable best efforts promptly to obtain the withdrawal
of such order.
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6. REGISTRATION EXPENSES.
6.1 PAYMENT BY COMPANY. All Registration Expenses shall be borne as
provided in this Agreement, except that the Company shall, in any event, pay its
internal expenses (including all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review and the expenses and fees for listing the securities
to be registered on the Nasdaq National Market System or any other exchange on
which the Company's shares of Common Stock are listed.
6.2 FEES OF COUNSEL. In connection with each Demand Registration and
each Piggyback Registration, the Company shall reimburse the holders of
Registrable Securities included in the registration for the reasonable fees and
disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities included in such registration.
6.3 PAYMENT BY HOLDERS. To the extent that Registration Expenses are
not required to be paid by the Company, each holder of securities included in
any registration under this Agreement shall pay those Registration Expenses
allocable to the registration of such holder's securities so included, and any
Registration Expenses not so allocable shall be borne by all sellers of
securities included in the registration in proportion to the aggregate selling
price of the securities to be so registered.
7. INDEMNIFICATION.
7.1 INDEMNIFICATION BY COMPANY. The Company agrees to indemnify, to the
extent permitted by law, each holder of Registrable Securities, each Person who
controls such holder (within the meaning of the Securities Act), and their
respective partners, shareholders, trustees, members, officers and directors
against all losses, claims, damages, liabilities and expenses caused by any
Violation, except insofar as the Violation is caused by or contained in any
information furnished in writing to the Company by the holder expressly for use
in a registration statement, prospectus, amendment, supplement or related
document or is caused by the holder's failure to deliver a copy of the
registration statement or prospectus or any amendment or supplements after the
Company has furnished the holder with a sufficient number of copies. In
connection with an underwritten offering, the Company shall 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
provided in this Section 7.1 with respect to the indemnification of holders of
Registrable Securities.
7.2 INDEMNIFICATION BY HOLDER. In connection with any registration
statement pursuant to which a holder of Registrable Securities is selling
Registrable Securities, the holder shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with the registration statement or prospectus and, to the extent
permitted by law, shall indemnify the Company, its directors and any of its
officers who signs such registration statement 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 Violation to the extent
that the Violation is caused by or contained in any information furnished in
writing to the Company by the holder expressly for use in such registration
statement, prospectus, amendment, supplement or related document. This
obligation to indemnify shall be individual, not joint and several, for each
holder and shall be limited to the net amount of proceeds received by the holder
from the sale of Registrable Securities pursuant to the registration statement.
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7.3 PROCEDURES. Any Person entitled to indemnification under this
Section 7 shall, promptly after the receipt of notice of the commencement of any
action, investigation, claim or other proceeding against such indemnified party
in respect of which indemnity may be sought from an indemnifying party under
this Section 7, notify the indemnifying party in writing of the commencement
thereof. The omission of any indemnified party so to notify an indemnifying
party of any such action shall not relieve the indemnifying party from any
liability which it may have to such indemnified party under this Section 7
unless, and only to the extent that, such omission results in the indemnifying
party's forfeiture of substantive rights or defenses or the indemnifying party
is otherwise irrevocably prejudiced in defending such proceeding. In case any
such action, claim or other proceeding shall be brought against any indemnified
party for which indemnification is claimed pursuant to Section 7.1, and it shall
notify the Company of the commencement thereof, the Company shall be entitled to
assume the defense thereof at its own expense, with counsel satisfactory to the
Company; provided, that any such indemnified party may, at its own expense,
retain separate counsel to participate in such defense. Notwithstanding the
foregoing, in any action, claim or proceeding in which both the Company, on the
one hand, and an indemnified party, on the other hand, is, or is reasonably
likely to become, a party, such indemnified party shall have the right to employ
separate counsel at the Company's expense and to control its own defense of such
action, claim or proceeding if, (a) the Company has failed to assume the defense
and employ counsel as provided herein, (b) the Company has agreed in writing to
pay such fees and expenses of separate counsel or (c) in the reasonable opinion
of counsel to such indemnified party, a conflict or likely conflict exists
between the Company, on the one hand, and such indemnified party, on the other
hand, that would make such separate representation advisable, provided, however,
that the Company shall not in any event be required to pay the fees and expenses
of more than one separate counsel (and if deemed necessary by such separate
counsel, appropriate local counsel who shall report to such separate counsel).
The Company agrees that it will not, without the prior written consent of an
indemnified party, settle, compromise or consent to the entry of any judgment in
any pending or threatened claim, action or proceeding relating to the matters
contemplated hereby (if such indemnified party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of such indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding. The Company shall not be liable for any settlement of any claim,
action or proceeding effected against an indemnified party without the prior
written consent of the Company. The rights accorded to indemnified parties
hereunder shall be in addition to any rights that any indemnified party may have
at common law, by separate agreement or otherwise.
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7.4 SURVIVAL. The indemnification under this Section 7 shall 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 the
indemnified party and shall survive the transfer of securities. The Company and
each holder subject to Section 7.2 also agree to make such provisions as are
reasonably requested by any indemnified party for contribution to the
indemnified party in the event that the Company's or such holder's
indemnification is unavailable for any reason.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATION.
8.1 COOPERATION WITH UNDERWRITERS. No Person may participate in any
underwritten registration pursuant to this Agreement unless the Person (i)
agrees to sell securities on the basis provided in the underwriting arrangements
and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of the underwriting arrangements. In any event, however, no holder of
Registrable Securities included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding the holder and
the holder's intended method of distribution) or to undertake any
indemnification obligations to the Company or the underwriters except as
otherwise provided in Section 7.2.
8.2 DISCONTINUANCE OF DISPOSITIONS. Each Person that is participating
in any registration hereunder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 5(e)
above, such Person will forthwith discontinue the disposition of its Registrable
Securities pursuant to the registration statement until such Person receives
copies of a supplemented or amended prospectus as contemplated by such Section
5(e). In the event the Company shall give any such notice, the applicable time
period mentioned in Section 5(b) during which a registration statement is to
remain effective shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to this Section to
and including the date when each seller of a Registrable Security covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 5(e).
9. CURRENT PUBLIC INFORMATION.
The Company will timely file all reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder, and will take such further action as any
holder or holders of Registrable Securities may reasonably request, all to the
extent required to enable such holders to sell Registrable Securities pursuant
to Rule 144 adopted by the Commission under the Securities Act (as such rule may
be amended from time to time) or any similar rule or regulation hereafter
adopted by the Commission and pursuant to Form S-3 or any similar short form
registration statement. Upon written request, the Company will deliver to such
holders a written statement as to whether it has complied with such
requirements. In addition, unless the Common Stock is listed for trading on the
New York Stock Exchange, the Company will continue to cause its Common Stock and
any Common Stock issuable upon conversion of Purchaser Preferred Stock
(including preferential dividends issued thereon) to be listed for trading on
the Nasdaq National Market System.
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10. MISCELLANEOUS.
10.1 NO INCONSISTENT AGREEMENTS. The Company shall not 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.
Without limiting the generality of the foregoing, until the initial holders of
Registrable Securities cease to hold at least 25% of the Underlying Common
Stock, the Company shall not grant to any Person, other than Affiliates of the
Company as of the date hereof, 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. The Company may grant
rights to other Persons to participate in Piggyback Registrations, however, so
long as (i) such rights are subordinate to the rights of the holders of
Registrable Securities with respect to such Piggyback Registrations as set forth
in Sections 3.3 and 3.4 of this Agreement or (ii) such rights are pari passu
with the rights of the holders of Registrable Securities with respect to such
Piggyback Registration as set forth in Sections 3.3 and 3.4 of this Agreement
and have been consented to by the holders of a majority of the Registrable
Securities.
10.2 NOTICES. All notices, claims, demands and other communications
("Notices") under this Agreement shall be in writing and sent by certified or
registered mail, return receipt requested, a recognized overnight courier
service, telecopier or personal delivery, as follows:
(a) if to the Company, to:
US LEC Corp.
Transamerica Square
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
with a required copy to:
Xxxxx & Xxx Xxxxx, PLLC
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx III
Telecopier: (000) 000-0000
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(b) if to the Investors, in care of:
Xxxx Capital, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx X. Xxxxxx
Telecopier: (000) 000-0000
and
Xxxxxx X. Xxx Partners, L.P.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxx
Telecopier: (000) 000-0000
with a required copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Telecopier: (000) 000-0000
All Notices shall be deemed to have been duly given: when delivered by hand, if
personally delivered; when delivered by courier, if delivered by commercial
overnight courier service; five Business Days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is acknowledged by the individual
to whom the telecopy is sent, if telecopied. A party may change its address for
purposes of this Agreement by Notice in accordance with this Section 10.2.
10.3 WAIVER. The rights and remedies of the Company and holders of
Registrable Securities are cumulative and not alternative. Neither the failure
nor any delay by the Company or any holder of Registrable Securities in
exercising any right, power or privilege under this Agreement shall operate as a
waiver of that right, power or privilege, and no single or partial exercise of
any right, power or privilege shall preclude any other or further exercise of
that right, power or privilege or the exercise of any other right, power or
privilege. All waivers shall be in writing signed by the party to be charged
with the waiver, and no waiver that may be given by a party shall be applicable
except in the specific instance for which it is given.
10.4 AMENDMENT. This Agreement may not be amended except by a written
agreement signed by the Company and holders of a majority of the Registrable
Securities.
10.5 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by a court of competent jurisdiction, the other provisions of
this Agreement shall remain in full force and effect. Any provision of this
Agreement which is held invalid or unenforceable only in part shall remain in
full force and effect to the extent not held invalid or unenforceable.
12
10.6 CAPTIONS. The captions of sections of this Agreement are for
convenience only and shall not affect this the construction or interpretation of
this Agreement.
10.7 CONSTRUCTION. All references in this Agreement to "Section" or
"Sections" refer to the corresponding section or sections of this Agreement. All
words used in this Agreement shall be construed to be of the appropriate gender
or number as the context requires. Unless otherwise expressly provided, the
word" including" does not limit the preceding words or terms.
10.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original copy of this
Agreement and all of which, when taken together, shall be considered to
constitute one and the same agreement.
10.9. ENTIRE AGREEMENT. This Agreement supercedes all prior agreements
between the parties with respect to its subject matter and constitutes a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter.
10.10 GOVERNING LAW. This Agreement shall be governed by the Laws of
the State of Delaware without regard to conflicts of laws principles.
10.11 BINDING EFFECT. This Agreement shall apply to, be binding in all
respects upon and inure to the benefit of the parties and their respective
successors and permitted assigns and transferees.
13
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
US LEC CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
XXXX CAPITAL CLEC INVESTORS, L.L.C.
By: Xxxx Capital Fund VI, L.P.,
its Administrative Member
By: Xxxx Capital Partners VI, L.P.,
its General Partner
By: Xxxx Capital Investors VI, Inc.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
XXXXXX X. XXX EQUITY FUND IV, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Xxxxxxx X. XxXxxx
-------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
14
XXXXXX X. XXX FOREIGN FUND IV-B, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Xxxxxxx X. XxXxxx
-------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Managing Director
XXXXXX X. XXX FOREIGN FUND IV, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
XXXXXX INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Director
1997 XXXXXX X. XXX NOMINEE TRUST
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Trustee
XXXXXX X. XXX CHARITABLE INVESTMENT L.P.
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Name: Xxxxxx X. Xxx
Title: President
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
XXXXX X. XXXXXXX
15
THE HARKINS 1995 GIFT TRUST
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Trustee
/s/ Xxxxx X. Xxxxxx
-------------------------------------
XXXXX X. XXXXXX
/s/ X. Xxxxxx Xxxx
-------------------------------------
X. XXXXXX XXXX
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
XXXXX X. XXXXXXXX
/s/ Xxxxxxx X. XxXxxx
-------------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------
XXXXXX X. XXXXX, XX.
/s/ Xxxx X. Xxxxx
-------------------------------------
XXXX X. XXXXX
/s/ Xxxx X. Xxxxxx
-------------------------------------
XXXX X. XXXXXX
/s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
XXXXXXXX X. XXXXXX
16
/s/ Xxxx X. Xxxxxxxx
-------------------------------------
XXXX X. XXXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxxx Xxxxxxx
-------------------------------------
XXXXX XXXXXXX
/s/ Xxxxx Xxxxx
-------------------------------------
XXXXX XXXXX
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
XXXXXX X. XXXXXXXX
/s/ Xxxxx X. Xxxxxx
-------------------------------------
XXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
XXXXXX X. XXXXXXX
XXXXXX XXXXXX XXX 1988 IRREVOCABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Trustee
/s/ Xxxxxxx Xxxxxxx Xxx
-------------------------------------
XXXXXXX XXXXXXX XXX
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
XXXXXXX X. XXXXXX AS CUSTODIAN FOR
XXXXX XXX
17
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
XXXXXXX X. XXXXXX AS CUSTODIAN FOR
XXXXXX XXX
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxx Xxxxxx
-------------------------------------
XXXXX XXXXXX
THL-CCI INVESTORS LIMITED
PARTNERSHIP
By: THL Investment Management Corp.,
its general partner
By:
-------------------------------------
Name:
Title:
/s/ Xxxx X. Xxxxxxxx
-------------------------------------
XXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxx
-------------------------------------
XXXXXX X. XXXXX
/s/ X. Xxxxxx Spaht
-------------------------------------
X. XXXXXX XXXXX
/s/ Xxxxx X. Xxxxxx
-------------------------------------
XXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
XXXXXXX X. XXXXXXXX
/s/ Wm. Xxxxxxx Xxxxx
-------------------------------------
WM. XXXXXXX XXXXX
18
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
XXXXX X. XXXXXXXX
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
XXXXX X. XXXXXXXX
/s/ Xxx X. Xxxxxx
-------------------------------------
XXX X. XXXXXX
19
