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EXHIBIT 10.3
SHELF REGISTRATION RIGHTS AGREEMENT
SHELF REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
April 12, 2001, by and among Net2000 Communications, Inc., a Delaware
corporation, with headquarters located at 0000 Xxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxx
00000 (the "Company"), and the undersigned stockholders (each, a "Stockholder"
and collectively, the "Stockholders").
WHEREAS, in connection with the Securities Purchase Agreement by and
among the Company and the other parties thereto dated as of March 27, 2001 (the
"Securities Purchase Agreement"), the Company has agreed, upon the terms and
subject to the conditions of the Securities Purchase Agreement, to issue and
sell to the Buyers (as defined in the Securities Purchase Agreement) (i) shares
of the Series D Convertible Pay in Kind Preferred Stock, which will be
convertible into shares of the Company's common stock, par value $.01 per share
(the "Common Stock") in accordance with the terms of the Company's Certificate
of Designations for Series D Convertible Pay in Kind Preferred Stock, and (ii)
warrants to purchase shares of Common Stock.
WHEREAS, to induce the Buyers to execute and deliver the Securities
Purchase Agreement, each Stockholder has agreed to enter into a lock-up
agreement with respect to shares of Common Stock owned by such Stockholder.
WHEREAS, to induce the Stockholders to execute and deliver such lock-up
agreements, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Stockholders hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Investor" means a Stockholder, any transferee or assignee
thereof (subject to Section 9) to whom a Stockholder assigns its rights under
this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and any
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transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.
(b) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a governmental or any department or agency thereof.
(c) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the United States Securities and Exchange Commission (the "SEC").
(d) "Registrable Securities" means (i) the shares of Common Stock
beneficially owned by a Stockholder as of the date hereof, (ii) shares of Common
Stock issued or issuable upon exercise of the warrants issued pursuant to the
Warrant Agreement, dated as of July 30, 1999, between the Company and Nortel
Networks Inc. (the "Nortel Warrant Agreement"), (iii) any additional shares of
Common Stock acquired by a Stockholder which are treated as "control shares" by
virtue of such Stockholder's status as an "affiliate" of the Company within the
meaning of such terms under the 1933 Act and (iv) any other shares of capital
stock issued as a dividend or other distribution (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as a dividend or other distribution) with respect to, or in exchange for, or in
replacement of, all such shares of Common Stock described in clauses (i), (ii)
and (iii); provided, however, that Registrable Securities shall not include any
shares of Common Stock that are, at the relevant time, "Registrable Securities"
under the Registration Rights Agreement of even date herewith, by and among the
Company, the Stockholders and the other parties thereto.
(e) "Registration Statement" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement.
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2. REGISTRATION.
(a) Shelf Registration. The Company shall file with the SEC a
registration statement covering all of the Registrable Securities owned by the
Investors, for an offering to be made on a continuous basis pursuant to Rule 415
under the 1933 Act and shall use its best efforts to cause such registration
statement to be declared effective by the SEC within 180 days after the date
hereof. Such registration statement shall be on the appropriate form, and shall
otherwise comply as to form in all material respects with the requirements of
the 1933 Act and the rules and regulations promulgated thereunder, permitting
registration of such Registrable Securities for resale by each Investor in the
manner designated by it.
(b) "Piggy Back" Registrations.
(i) If the Company shall determine to register any of its
securities, either for its own account or the account of a security holder or
holders exercising their registration rights, other than a registration relating
solely to employee benefit plans, or a registration on any registration form
which does not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(A) Promptly give to each holder of Registrable Securities written
notice thereof (which shall include the number of shares the Company or other
security holder proposes to register and, if known, the name of the proposed
underwriter); and
(B) Use its best efforts to include in such registration all the
Registrable Securities specified in a written request or requests, made by any
Holder within ten (10) days after the date of delivery of the written notice
from the Company described in clause (A) above. If the underwriter advises the
Company that marketing considerations require a limitation on the number of
shares offered pursuant to any registration statement, then the Company may
offer all of the securities it proposes to register for its own account or the
maximum amount that the underwriter considers saleable and such limitation on
any remaining securities that may, in the opinion of the underwriter, be sold
will be imposed in the following manner: first, any securities to be included by
the Company in such offering or by an "Investor" pursuant to the Registration
Rights Agreement of even date herewith shall be included in such offering;
second any remaining securities that may be included in such offering shall be
included on a pro rata basis
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among the Investors hereunder and the "Stockholders" under that certain
Registration Rights Agreement, dated as of July 7, 2000 by and among the Company
and the parties thereto who request to include shares in such registration
statement according to the number of Registrable Securities or other shares each
such shareholder requested to be included in such registration statement; and
third, any securities requested to be included by any other shareholder with
piggyback registration rights shall be included.
(ii) The Company shall select the underwriter, if any, for an
offering made pursuant to this Section 2(b); provided that such underwriter must
be reasonably acceptable to the holders of a majority of the Registrable
Securities being registered in such offering.
(c) Legal Counsel. Subject to Section 5 hereof, each Investor shall
have the right to select one legal counsel to review any offering pursuant to
this Section 2. The Company shall reasonably cooperate with such legal counsel
in performing the Company's obligations under this Agreement.
(d) [Intentionally Omitted]
(e) Sufficient Number of Shares Registered. Subject to Section 3(s),
in the event the number of shares available under a Registration Statement filed
pursuant to this Section 2 is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement, the Company
shall amend the Registration Statement, or file a new Registration Statement (on
the short form available therefor, if applicable), or both, so as to cover the
remainder of such Registrable Securities as of the trading day immediately
preceding the date of the filing of such amendment or new Registration
Statement, in each case, as soon as practicable, but in any event not later than
fifteen (15) days after the necessity therefor arises. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.
3. RELATED OBLIGATIONS.
The Company will use its best efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:
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(a) The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities and use its
best efforts to cause such Registration Statement relating to the Registrable
Securities to become effective within 180 days after the date hereof. Subject to
Section 3(s), the Company shall keep the Registration Statement effective at all
times until the earliest of (i) the date as of which all of the Investors may
sell all of the Registrable Securities covered by such Registration Statement
without restriction pursuant to Rule 144(k) (or successor thereto) promulgated
under the 1933 Act and the Company shall have removed any restrictive legend on
all of the Registrable Securities, (ii) the date on which the Investors shall
have sold all the Registrable Securities covered by such Registration Statement
and (iii) the date that is three years after the effective date of the
Registration Statement (the "Registration Period"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein not misleading. The term "best efforts" shall mean, among
other things, that the Company shall submit to the SEC, within two (2) business
days after the Company learns that no review of a particular Registration
Statement will be made by the staff of the SEC or that the staff has no further
comments on the Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than 48 hours after the submission of such request.
(b) Subject to Section 3(s), the Company shall prepare and file with
the SEC such amendments (including post-effective amendments) and supplements to
a Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form
10-Q or Form 8-K or any analogous report under
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the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company
shall have incorporated such report by reference into the Registration
Statement, if applicable, or shall file such amendments or supplements with the
SEC on the same day on which the 1934 Act report is filed which created the
requirement for the Company to amend or supplement the Registration Statement.
(c) The Company shall (i) permit legal counsel for each Investor to
review and comment upon (A) the Registration Statement at least seven (7) days
prior to its filing with the SEC and (B) all other Registration Statements and
all amendments and supplements to all Registration Statements (except for Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K and any similar or successor reports) within a reasonable number of days
prior to their filing with the SEC, and (ii) not file any Registration Statement
or amendment or supplement thereto in a form to which legal counsel for an
Investor reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without the prior approval of each Investor, which consent
shall not be unreasonably withheld. The Company shall furnish to legal counsel
for each Investor, without charge, (i) any correspondence from the SEC or the
staff of the SEC to the Company or its representatives relating to any
Registration Statement, (ii) promptly after the same is prepared and filed with
the SEC, one copy of any Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits and (iii) upon the effectiveness of any
Registration Statement, one copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto. The Company shall
reasonably cooperate with legal counsel for each Investor in performing the
Company's obligations pursuant to this Section 3.
(d) The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (i)
promptly after the same is prepared and filed with the SEC, at least one copy of
such Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, all
exhibits and each preliminary prospectus, (ii) upon the effectiveness of any
Registration Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor
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may reasonably request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
(e) Subject to Section 3(s), the Company shall use its best efforts
to (i) register and qualify, unless an exemption from registration and
qualification applies, the resale by Investors of the Registrable Securities
covered by a Registration Statement under such other securities or "blue sky"
laws of all the states in the United States, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
each Investor who holds Registrable Securities of the receipt by the Company of
any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the securities
or "blue sky" laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threatening of any proceeding for such
purpose.
(f) The Company shall notify each Investor in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, as a result of which the prospectus included in a Registration Statement,
as then in effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and, subject to Section 3(s), promptly prepare
a supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver ten (10) copies of such supplement or
amendment to each Investor (or such other number of copies as such Investor may
reasonably request). The Company shall also promptly notify each Investor in
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writing (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and when a Registration Statement or any
post-effective amendment has become effective (notification of such
effectiveness shall be delivered to each Investor by facsimile on the same day
of such effectiveness and by overnight mail), (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus or
related information, and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
(g) Subject to Section 3(s), the Company shall use its best efforts
to prevent the issuance of any stop order or other suspension of effectiveness
of a Registration Statement, or the suspension of the qualification of any of
the Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify each Investor who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
(h) [Intentionally Omitted]
(i) Following reasonable advance notice, the Company shall make
available, during normal business hours, for inspection by (i) any Investor,
(ii) its legal counsel and (iii) one firm of accountants or other agents
retained by the Investors (collectively, the "Inspectors"), all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request;
provided, however, that each Inspector shall agree to hold in strict confidence
and shall not make any disclosure (except to an Investor) or use of any Record
or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
under the 1933 Act, (b) the release of such Records is ordered pursuant to a
final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement of which the
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Inspector has knowledge. Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Company
and allow the Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential.
(j) The Company shall hold in confidence and not make any disclosure
of information concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
such Investor and allow such Investor, at the Investor's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
(k) The Company shall use its best efforts either to (i) cause all
the Registrable Securities covered by a Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all the Registrable Securities covered by the
Registration Statement on the Nasdaq National Market, or (iii) if, despite the
Company's best efforts to satisfy the preceding clause (i) or (ii), the Company
is unsuccessful in satisfying the preceding clause (i) or (ii), to secure the
inclusion for quotation on The Nasdaq Small Cap Market for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register with the National Association of
Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).
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(l) The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.
(m) The Company shall provide a transfer agent and registrar of all
such Registrable Securities not later than the effective date of the
Registration Statement.
(n) Subject to Section 3(s), if requested by an Investor, the
Company shall (i) as soon as practicable incorporate in a prospectus supplement
or post-effective amendment such information as an Investor requests to be
included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being offered or sold, the purchase price being
paid therefor and any other terms of the offering of the Registrable Securities
to be sold in such offering; (ii) as soon as practicable make all required
filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) as soon as practicable, supplement or make
amendments to any Registration Statement if reasonably requested by an Investor
of such Registrable Securities.
(o) The Company shall use its best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities.
(p) The Company shall make generally available to its security
holders as soon as practical, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the 0000 Xxx) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.
(q) The Company shall otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder. As of the date hereof, the Company is qualified for
registration on Form S-3 for resales. The Company shall
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use its best efforts to remain qualified for registration on Form S-3 or any
comparable or successor form for resales.
(r) Within two (2) Business Days after a Registration Statement
which covers Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.
(s) Notwithstanding anything to the contrary herein, at any time
after the Registration Statement has been declared effective by the SEC, the
Company may delay the disclosure of material non-public information concerning
the Company the disclosure of which at the time is not, in the good faith
opinion of the Board of Directors of the Company and its counsel, in the best
interest of the Company and, in the opinion of counsel to the Company, otherwise
required (a "Grace Period"); provided, that the Company shall promptly (i)
notify the Investors in writing of the existence of material non-public
information giving rise to a Grace Period (provided that in each notice the
Company will not disclose the content of such material non-public information to
the Investors) and the date on which the Grace Period will begin, and (ii)
notify the Investors in writing of the date on which the Grace Period ends; and,
provided further, that no Grace Period shall exceed 25 consecutive days and
during any 365 day period such Grace Periods shall not exceed an aggregate of 60
days and the first day of any Grace Period must be at least two trading days
after the last day of any prior Grace Period (an "Allowable Grace Period"). For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the holders receive the notice referred to
in clause (i) and shall end on and include the later of the date the holders
receive the notice referred to in clause (ii) and the date referred to in such
notice. The second sentence of Section 3(a), and the provisions of Sections
3(b), 3(e), 3(g) and 3(n) hereof shall not be applicable during the period of
any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the second sentence of Section 3(a), and the provisions
of Sections 3(b), 3(e), 3(g) and 3(n) hereof with respect to the information
giving rise thereto unless such material non-public information is no longer
applicable.
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(t) If an Investor wishes to sell Registrable Securities, such
Investor may (but shall not be required to) deliver to the designated
representative of the Company a written notice (a "Shelf Resale Notice") of such
Investor's good faith present intention to sell, transfer or otherwise dispose
of some or all of such Investor's Registrable Securities, and the number of
Registrable Securities such Holder proposes to sell, transfer or otherwise
dispose of. Upon receipt of each Shelf Resale Notice, the Company shall, as soon
as practicable but in no event later than the next business day after receipt of
such Shelf Resale Notice, either (i) provide a notice of a Grace Period pursuant
to Section 3(s) of this Agreement or (ii) give written notice (a "Company Shelf
Response") to the Investor who gave such Shelf Resale Notice that the prospectus
relating to the Registration Statement is current and that the Registrable
Securities covered by the Shelf Resale Notice may be resold within five business
days after receipt of such Company Shelf Response. If the Company does not
respond within such six business hours, it shall be deemed to have given a
Company Shelf Response. All notices pursuant to this section shall be provided
by facsimile or electronic mail delivery and confirmed by direct telephonic
communication with the designated person. If the Company delivers (or is deemed
to have delivered) a Company Shelf Response pursuant to clause (ii) of the
foregoing sentence, the Company may not issue a notice of a Grace Period
pursuant to Section 3(s) until five business days after delivery (or deemed
delivery) of such Company Shelf Response.
4. OBLIGATIONS OF THE INVESTORS.
(a) At least seven (7) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each Investor
in writing of the information the Company requires from each such Investor if
such Investor elects to have any of such Investor's Registrable Securities
included in such Registration Statement. It shall be a condition precedent to
the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.
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(b) Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from such Registration Statement.
(c) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(g) or the
first sentence of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in connection with any sale of Registrable Securities with respect
to which (i) an Investor has entered into a contract for sale prior to the
Investor's receipt of a notice from the Company of the happening of any event of
the kind described in Section 3(g) or the first sentence of 3(f) and for which
the Investor has not yet settled; provided that such Investor has delivered a
prospectus in connection with such sale prior to receiving such notice from the
Company or (ii) an Investor has entered a sell order within five business days
after delivery (or deemed delivery) of a Company Shelf Response.
5. EXPENSES OF REGISTRATION.
All reasonable expenses incurred in connection with registrations,
filings or qualifications pursuant to Sections 2 and 3, including, without
limitation, all registration, listing and qualifications fees, printers and
accounting fees, and reasonable fees and disbursements of counsel for the
Company shall be paid by the Company; provided that each Investor shall be
responsible for the discounts and commissions relating to its sales through
broker-dealers and/or underwriters.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
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(a) To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the directors,
officers, partners, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the 1933 Act or the 1934
Act (each, an "Indemnified Person"), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys'
fees, amounts paid in settlement or expenses, joint or several, (collectively,
"Claims") incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered ("Blue Sky Filing"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registrable Securities pursuant to a Registration Statement or
(iv) any material violation of this Agreement (the matters in the foregoing
clauses (i) through (iv) being, collectively, "Violations"). Subject to Section
6(c), the Company shall reimburse the Indemnified Persons, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification
15
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any such person from
whom the person asserting any such Claim purchased the Registrable Securities
that are the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by the Company
pursuant to Section 3(d), and the Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use giving rise to a
violation and such Indemnified Person, notwithstanding such advice, used it;
(iii) shall not be available to the extent such Claim is based on a failure of
the Investor to deliver or to cause to be delivered the prospectus made
available by the Company, including a corrected prospectus, if such prospectus
or such corrected prospectus, as the case may be, was timely made available by
the Company pursuant to Section 3(d); and (iv) shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement each Person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act (each an
"Indemnified Party"), against any Claim or Indemnified Damages to which any of
them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar
as such Claim or Indemnified Damages arise out of or are based upon any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written
16
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6(c), such
Investor will reimburse, after written notice to the Investor, any reasonable
legal or other expenses reasonably incurred by an Indemnified Party in
connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) and the agreement
with respect to contribution contained in Section 7 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does
not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or
17
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in
the immediately preceding sentence shall be selected by the Investors holding at
least two-thirds (2/3) in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprized at all times as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.
(d) The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
(e) The indemnity agreements contained herein shall be in addition
to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying
18
party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no person involved in the sale of Registrable Securities which person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 0000 Xxx) in connection with such sale shall be entitled to contribution
from any person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1934 Act so long as the Company
remains subject to such requirements and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement, if true,
by the Company that it has complied with the reporting requirements of Rule 144
and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company,
19
and (iii) such other information as may be reasonably requested to permit the
investors to sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of Registrable Securities
(provided such transferee is a limited partner or member of such Investor, is a
fund affiliated or under common control with such Investor, or acquires
Registrable Securities equal to or greater than 25% of the Registrable
Securities held by such Investor if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such transfer or
assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such securities
by the transferee or assignee is restricted under the 1933 Act and applicable
state securities laws; and (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and each of the Investors. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement.
11. MISCELLANEOUS.
(a) A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives
20
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the basis
of instructions, notice or election received from the registered owner of such
Registrable Securities.
(b) Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Net2000 Communications, Inc.
0000 Xxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone:
Facsimile: 000-000-0000
Attention: General Counsel
With a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
Commerce Park III
Suite 610
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxxxx
If to a Stockholder, to its address and facsimile number set forth on
the Schedule of Stockholders attached hereto, with copies to such Stockholder's
representatives as set forth on the Schedule of Stockholders, or to such other
address and/or facsimile number and/or to the attention of such other person as
the recipient party has specified by written notice given to each other party
five (5) days prior to the effectiveness of such change. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender's
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C)
21
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of Delaware, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of Delaware or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Delaware. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in the State
of Delaware, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
22
(e) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof (including, without limitation, (i) the registration
rights provisions of the Second Amended and Restated Investor Rights Agreement,
dated as of November 4, 1998, by and among the Company, the Stockholders and the
other parties thereto and (ii) the registration rights provisions of the Nortel
Warrant Agreement, which shall have been terminated by execution of the letter
agreement in the form attached hereto as Exhibit B).
(f) Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.
(g) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in identical counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) [Intentionally Omitted]
(k) The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
23
(l) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
(m) [Intentionally Omitted]
[REMAINDER OF DOCUMENT INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: STOCKHOLDERS:
NET2000 COMMUNICATIONS, INC.
By:
----------------------------
Name:
Title:
NORTEL NETWORKS INC.
By:
---------------------------
Name:
Title:
CARLYLE U.S. VENTURE PARTNERS,
L.P.
By: TCG Ventures, L.L.C., its
General Partner
By: TC Group, L.L.C., its Sole
Member
By: TCG Holdings, L.L.C., its
Managing Member
By:
---------------------------
Name:
Title:
25
CARLYLE VENTURE COINVESTMENT,
L.L.C.
By: TCG Ventures, L.L.C., its
Managing Member
By: TC Group, L.L.C., its Sole
Member
By: TCG Holdings, L.L.C., its
Managing Member
By:
---------------------------
Name:
Title:
CARLYLE VENTURE PARTNERS, L.P
By: TCG Ventures, Ltd., its
General Partner
By: TCG Ventures, L.L.C., its
Sole Shareholder
By: TC Group, L.L.C., its Sole
Member
By: TCG Holdings, L.L.C., its
Managing Member
By:
---------------------------
Name:
Title:
C/S VENTURE INVESTORS, L.P.
By: TCG Ventures, Ltd., its
Managing General Partner
By: TCG Ventures, L.L.C., its
Sole Shareholder
By: TC Group, L.L.C., its Sole
Member
By: TCG Holdings, L.L.C., its
Managing Member
By:
---------------------------
Name:
Title:
26
PNC CAPITAL CORP.
By:
---------------------------
Name:
Title:
WOOD STREET PARTNERS I
By:
---------------------------
Name:
Title:
27
SCHEDULE OF STOCKHOLDERS
Investor Address Investor's Legal
Investor's Name and Facsimile Number Address and Facsimile
--------------- -------------------- ---------------------
NORTEL NETWORKS INC. MAIL STOP 991 15 A40
0000 XXXXXXXX XXXX.
XXXXXXXXXX, XXXXX 00000-0000
ATTN: XXXXXXXX X. XXXXX
DIRECTOR, CUSTOMER FINANCE
TELEPHONE: 000-000-0000
TELECOPY: 000-000-0000
(WITH A COPY TO)
MAIL STOP 468/05/B40
0000 XXXXXXXX XXXX.
XXXXXXXXXX, XXXXX 00000-0000
ATTN: XXXXXXXX XXX
DIRECTOR, LOAN ADMINISTRATION
TELEPHONE: 000-000-0000
TELECOPY: 000-000-0000
CARLYLE VENTURE c/o THE CARLYLE GROUP XXXXXX & XXXXXXX
COINVESTMENT, L.L.C. 0000 XXXXXXXXXXXX XXXXXX, XX 000 00XX XXXXXX, XX
XXXXX 000 XXXXX XXXXXXXXXX, XX 00000
XXXXXXXXXX, XX 00000 FAX: 000-000-0000
FAX: (000) 000-0000 ATTENTION: XXXXXX X. XXXXXX
ATTENTION: XXXXXX XXXXXX
C/S VENTURE INVESTORS, L.P. c/o THE CARLYLE GROUP XXXXXX & XXXXXXX
0000 XXXXXXXXXXXX XXXXXX, XX 000 00XX XXXXXX, XX
XXXXX 000 XXXXX XXXXXXXXXX, XX 00000
XXXXXXXXXX, XX 00000 FAX: 000-000-0000
FAX: (000) 000-0000 ATTENTION: XXXXXX X. XXXXXX
XXXXXXX VENTURE c/o THE CARLYLE GROUP XXXXXX & XXXXXXX
PARTNERS, L.P. 0000 XXXXXXXXXXXX XXXXXX, XX 000 00XX XXXXXX, XX
XXXXX 000 XXXXX XXXXXXXXXX, XX 00000
XXXXXXXXXX, XX 00000 FAX: 000-000-0000
FAX: (000) 000-0000 ATTENTION: XXXXXX X. XXXXXX
WOOD STREET PARTNERS I 000 XXXXXXX XXXXXX
00XX XXXXX
XXXXXXXXXX, XX 00000
PNC CAPITAL CORP. 000 XXXXXXX XXXXXX
00XX XXXXX
XXXXXXXXXX, XX 00000
28
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn:
Re: Net2000 Communications, Inc.
Ladies and Gentlemen:
We are counsel to Net2000 Communications, Inc., a Delaware corporation
(the "Company"), and have represented the Company in connection with that
certain Registration Rights Agreement (the "Registration Rights Agreement")
entered into by and among the Company and the stockholders named therein
(collectively, the "Stockholders") pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement) under the Securities Act of 1933, as amended (the
"1933 Act"). In connection with the Company's obligations under the Registration
Rights Agreement, on ___________, 200_, the Company filed a Registration
Statement on Form _____ (File No. 333-_____________) (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") relating to
the Registrable Securities which names each of the Stockholders as a selling
stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or to our knowledge threatened by, the SEC and the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.
29
Very truly yours,
[ISSUER'S COUNSEL]
By:
-------------------------------
cc: [LIST NAMES OF HOLDERS]
30
EXHIBIT B
April 12, 2001
Nortel Networks Inc.
GMS 991 15 A40
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000-0000
Re: Warrant Agreement between NET2000 Communications, Inc.
("NET2000") and Nortel Networks Inc. ("Nortel Networks")
Gentlemen:
Reference is made to that certain Warrant Agreement dated as of July 30,
1999 (the "Warrant Agreement") between NET2000 and Nortel Networks. Reference is
made to that certain Shelf Registration Rights Agreement dated as of March __,
2001 (the "Shelf Registration Rights Agreement") between NET2000, Nortel
Networks and the other parties thereto. The Shelf Registration Rights Agreement
includes as "Registrable Securities" thereunder all "Warrant Shares" issuable
pursuant to the Warrant Agreement.
This letter agreement sets forth our agreement that, on the effective
date of the Shelf Registration Rights Agreement, Nortel Networks' rights under
Section 6. Demand Registration Rights of the Warrant Agreement shall terminate
and be superceded by the rights granted to Nortel Networks under the Shelf
Registration Rights Agreement.
References, if any, in the Warrant Agreement relating to registration
rights shall be interpreted to be references to the registration rights granted
under the Shelf Registration Rights Agreement.
The agreements set forth above shall be limited precisely as written and
are provided solely to address the provisions set forth in Section 6. Demand
Registration Rights of the Warrant Agreement. The agreements set forth above do
not constitute, nor should they be construed as, a waiver of compliance by
NET2000 with respect to any other term, provision or condition of the Warrant
Agreement or any other instrument or agreement referred to therein.
31
If the foregoing evidences our agreement, please execute below and
return one original of this letter agreement to the undersigned.
Sincerely,
NET2000 COMMUNICATIONS, INC.
By: /s/
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Accepted and agreed as of
the date first above written:
NORTEL NETWORKS INC.
By: /s/
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
