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Exhibit 4.02
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
August 4, 1998, by and among IXC Internet Services, Inc., a Delaware corporation
("IXC"), Grumman Hill Investments III, L.P., a Delaware limited partnership
("Grumman Hill"), AppliedTheory Communications, Inc., a New York corporation
(the "Company"), ▇▇▇▇▇▇▇▇.▇▇▇, Inc. ("NYSERNet"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(collectively, the Management Stockholders") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇").
RECITALS:
WHEREAS, pursuant to the Stock Purchase Agreement, dated May 19,
1998, by and among IXC, Grumman Hill, the Company, NYSERNet and certain
stockholders of the Company (the "Stock Purchase Agreement"), IXC and Grumman
Hill are purchasing, and the Company and NYSERNet are selling, for the purchase
price and upon the terms and subject to the conditions of the Stock Purchase
Agreement, certain shares of common stock (the "Common Stock"), of the Company
(the "Initial Shares"), in the amounts as set forth on Exhibit A attached to the
Stock Purchase Agreement;
WHEREAS, Grumman Hill, IXC, the Management Stockholders and
▇▇▇▇▇▇▇▇ are entering into Option and Voting Agreements of even date herewith,
pursuant to which Grumman Hill and IXC may purchase certain shares of Common
Stock now or hereafter owned by the those stockholders (the "Option Shares");
and
WHEREAS, the parties desire in this Agreement to provide, with
respect to the Initial Shares, the Option Shares and any other shares that are
or may hereafter during the term of this Agreement become beneficially owned by
the parties hereto, for the granting to each of the parties hereto, the
registration rights set forth herein.
NOW, THEREFORE, in consideration of the premises and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
SECTION 1. Registration Rights.
1.1 Definitions. As used in this Section 1:
(a) The terms "register," "registered," and "registration" refer
to a registration effected by filing with the Securities and
Exchange Commission (the "SEC") a registration statement
("Registration Statement") in compliance with the Securities
Act of 1933, as amended (the "1933 Act"), and the declaration
or ordering by the SEC of the effectiveness of such
Registration Statement.
(b) The term "Registrable Securities" means (i) the Initial
Shares, (ii) the Option Shares and (iii) any other shares of
Common Stock that during the
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term of this Agreement are or become beneficially owned by a
party. The term "Registrable Securities" shall also include
any Common Stock issued as (or issuable upon the conversion or
exercise of any warrant, right, or other security that is
issued as) a dividend, stock split or other distribution with
respect to, or in exchange for, upon reclassification or in
replacement of, Registrable Securities. In the event of any
recapitalization by the Company, whether by stock split,
reverse stock split, stock dividend or otherwise, the number
of shares of Registrable Securities used throughout this
Agreement for various purposes shall be proportionately
increased or decreased. In the event that any shares that
would be deemed to be "Registerable Securities" become
eligible for resale under Rule 144(k) of the Securities Act of
1933, as amended or any successor thereto, without limitation
as to volume, are resold pursuant to Rule 144 or are covered
by an effective "shelf" registration statement, then said
shares shall no longer be deemed to be "Registerable
Securities."
1.2 Demand Registration. If the Company shall receive from any party (a
"Registering Party") a written request to register shares of
Registrable Securities (a "Demand"), the Company shall prepare and file
a Registration Statement under the 1933 Act covering the shares so
requested to be registered, and shall use its best efforts to cause as
expeditiously as possible such Registration Statement to become
effective; provided, however, that (i) at the time the Demand is made,
the Company shall have successfully completed an initial public
offering, and (ii) at least $10 million of Registrable Securities are
requested to be registered; provided, further, however, that if at the
time the request for registration is made, the Company is in the
process of registering securities under the 1933 Act for sale by it or
has pending or in process a material transaction, the disclosure of
which would, in the good faith judgment of the Board of Directors of
the Company, materially and adversely affect the Company, the Company
may defer the filing (but not the preparation) of the requested
Registration Statement (i) in the case of another registration
statement, for up to sixty (60) days, and (ii) in the case of a
material transaction, for up to thirty (30) days (but the Company shall
use its best efforts to resolve the transaction and file the
Registration Statement as soon as practicable). The Company shall be
required to register the Registrable Securities pursuant to this
Section 1.2 in response to any Demand by any Registering Party,
provided (i) only one Demand may be made by any Registering Party in
any six (6) month period and (ii) the Company shall not be required to
register the Registrable Securities more than once on registration
forms other than Form S-3 (or any substantially equivalent successive
form).
1.3 Piggy-Back Registrations. If (i) the Company proposes to file a
registration statement under the 1933 Act with respect to an offering
by the Company for its own account and/or for the account of any
stockholders of any shares of Common Stock (other than a registration
statement on Form S-4 or S-8 or successor forms thereto or filed in
connection with an exchange offer or an offering of securities solely
to the Company's existing stockholders), and (ii) the Board of
Directors of
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the Company shall approve of a "piggy-back registration" then the
Company shall in each case give written notice of such proposed filing
to each of ▇▇▇▇▇▇▇▇▇▇, NYSERNet, IXC and Grumman Hill (each, a
"Piggy-Back Registering Party") at least 30 days before the anticipated
filing date, and such notice shall offer (except as otherwise
contemplated by the penultimate sentence of this Section) each such
Piggy-Back Registering Party the opportunity to register such number of
shares of Registrable Securities as such Piggy-Back Registering Party
may request. The Company shall use its best efforts to cause the
managing underwriter or underwriters of a proposed underwritten
offering to permit such Piggy-Back Registering Party to include such
securities in such offering on the same terms and conditions as any
similar securities of the Company included therein. Notwithstanding the
foregoing, if the managing underwriter or underwriters of such offering
delivers a written opinion to the Company that the inclusion of such
Registrable Securities by a Piggy-Back Registering Party would
materially and adversely affect the success or offering price of, or
materially increase the consideration (including commission) to be paid
to the underwriter in connection with, such offering, then the amount
of securities to be offered for the account of such Piggy-Back
Registering Party shall be reduced to the extent necessary to reduce
the total amount of securities to be included in such offering to the
amount recommended by such managing underwriter; provided, that if
securities similar to those represented by the Registrable Securities
are being offered for the account of other persons as well as the
Company, if Registerable Securities owned by more than one Piggy-Back
Registering Party are being offered such reduction shall not represent
a greater fraction of the number of securities intended to be offered
by the Piggy-Back Registering Party than the fraction of similar
reductions imposed on such other persons other than the Company.
1.4 Expenses of Registration. All expenses incurred in connection with the
first two registrations effected pursuant to Section 1.2 and all
registrations effected the first two pursuant to Section 1.3,
including, without limitation, all registration, filing, listing and
qualification fees (including SEC, securities exchange, National
Association of Securities Dealers Inc. and blue sky fees and expenses),
printing expenses, escrow fees, fees and disbursements of counsel for
the Company, and expenses of any special audits and/or "cold comfort"
letters incidental to or required by such registration, fees and
disbursements of underwriters customarily paid by companies or sellers
of securities, and the reasonable fees and expenses of any special
experts retained by the Company in connection with the registration
shall be borne by the Company; provided, however, that the Company
shall not be required to pay underwriters' discounts or commissions
relating to Registrable Securities or any of the expenses for more than
two registrations under Section 1.2.
1.5 Holdback Agreement; Restrictions on Public Sale by the Company and
Others. Each of IXC, Grumman Hill, the Company, NYSERNet and the
stockholders party hereto agree, upon the request of the managing
underwriter or underwriters in an underwritten offering in which such
party is to participate as a Registering
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Party, not to effect any public or private offer, sale or distribution
of any securities of the Company of the same class as the securities
included in any registration statement, or any securities convertible
into or exchangeable or exercisable for such securities (except as part
of such registration or pursuant to registrations on Forms S-4 or S-8
or any successor form to such Forms), during the 90-day period
beginning on, the effective date of such registration statement.
1.6 Obligations of the Company. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC (but in any event within
seventy-five (75) days after the date of the Demand pursuant
to Section 1.2) a Registration Statement with respect to such
Registrable Securities (which, in the case of a Demand
registration pursuant to Section 1.2, shall be on a form
designated by the underwriters) and use its diligent best
efforts to cause such Registration Statement to become
effective, and keep such Registration Statement effective for
up to one hundred twenty (120) days or such longer period as
the Company may agree upon, or until the distribution has been
completed, whichever occurs first;
(b) prepare and file with the SEC such amendments and supplements
to such Registration Statement and the prospectus used in
connection with such Registration Statement as may be
necessary to keep such registration Statement effective as
provided in Section 1.6(a) and to comply with the provisions
of the 1933 Act with respect to the disposition of all
securities covered by such Registration Statement;
(c) furnish to a Registering Party such numbers of copies of the
Registration Statement, the prospectus, including a
preliminary prospectus, and of each amendment and supplement
(in each case, including all exhibits), in conformity with the
requirements of the 1933 Act, and such other documents as the
Registering Party may reasonably request in order to
facilitate the disposition of Registrable Securities owned by
the Registering Party;
(d) use its best efforts to register and qualify the securities
covered by such Registration Statement under such other
securities or Blue Sky laws of such jurisdictions in such
states as shall be reasonably necessary to facilitate an
orderly distribution of the Registrable Securities, provided
that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business in any
such jurisdiction in which, but for the requirements of this
Section 1.6d), it would not otherwise be obligated to be so
qualified in to file a general consent to service of process
in any such states or jurisdictions, but the Company ▇▇▇▇
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be required to consent to service of process in actions
arising out of or in connection with the sale of any
Registrable Securities;
(e) use its best efforts to cause such securities covered by such
Registration Statement to be registered with or approved by
such other governmental agencies or authorities of the United
States of America or any state thereof as may be necessary to
consummate the disposition of such securities;
(f) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement,
usual and customary in form, with the managing underwriter of
such offering and take such other actions as the underwriters
reasonably request in order to expedite or facilitate a
disposition of such securities;
(g) use its best efforts to cause all such securities covered by
such Registration Statement to be listed on any securities
exchange on which the Common Stock is then listed, and if the
Common Stock is not already so listed at such time, to use its
best efforts promptly to cause all such securities to be
listed on either the New York Stock Exchange or the American
Stock Exchange or to be included in the National Association
of Securities Dealers Automated Quotation System and to
provide a transfer agent and registrar for such securities
covered by such Registration Statement no later than the
effective date of such Registration Statement;
(h) use its best efforts to obtain a "cold comfort" letter or
letters from the Company's independent public accountants in
customary form and covering matters of the type customarily
covered by "cold comfort" letters;
(i) notify the Registering Party at any time when a prospectus
relating thereto is required to be delivered under the 1933
Act of the happening of any event as a result of which, or of
the Company becoming otherwise aware that, the prospectus
included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing, and at the request
of the Registering Party, prepare and furnish to the
Registering Party, a reasonable number of copies of an amended
or supplemental prospectus as may be necessary so that, as
thereafter delivered to the Registering Party of such
securities under the Registration Statement, such prospectus
shall not include an untrue statement of a material fact or a
misstatement of a material fact required to be stated therein
or necessary to make the statements therein not misleading in
light of the circumstances then existing;
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(j) make reasonably available for inspection by, and grant
reasonable access to officers and employees of Company to
answer questions of, representatives of the Registering Party,
by any underwriter participating in any disposition to be
effected pursuant to such Registration Statement and by any
attorney, accountant or other agent retained by the
Registering Party or any such underwriter, all pertinent
information such as financial and other records, pertinent
corporate documents and properties of the Company reasonably
requested by such persons in connection with the Registration
Statement;
(k) in the event of the issuance of any stop order suspending the
effectiveness of any registration statement or of any order
suspending or preventing the use of any prospectus or
suspending the qualification of any Restricted Stock for sale
in any jurisdiction, use its best efforts promptly to obtain
its withdrawal;
(l) 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 fiscal quarter beginning
after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder; and
(m) cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc. (the
"NASD") and in the performance of any due diligence
investigation by any Registering Party (including any
"qualified independent underwriter" that is required to be
retained in accordance with the rules and regulations of the
NASD).
Each Party agrees that, upon receipt of any notice from the
Company of the happening of any event described in Section 1.6(i), the
Registering Party will forthwith discontinue disposition of such securities
pursuant to such Registration Statement until the Registering Party's receipt of
the copies of the supplemental or amended prospectus contemplated by Section
1.6(i), and, as so directed by the Company, the Registering Party will deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies then in the Registering Party's possession, of the prospectus covering
such securities covered by such Registration Statement current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
period mentioned in Section 1.6(a) shall be extended by the number of days
during the period from the date of the giving of such notice pursuant to Section
1.6(i) and through the date when each seller of such securities covered by such
Registration Statement shall have received the copies of the supplemented or
amended prospectus contemplated by Section 1.6(i).
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1.7 Selection of Underwriter. The Company shall select, in its sole
discretion, the managing underwriter or underwriters with respect to
the related offering of its Common Stock.
1.8 Indemnification.
(a) The Company will, and does hereby undertake to, indemnify and
hold harmless the Registering Party, each of the Registering
Party's officers, directors and affiliates and each person
controlling the Registering Party, with respect to any
registration, qualification, listing or compliance effected
pursuant to this Section 1, and each underwriter, if any
(including any broker or dealer which may be deemed an
underwriter), and each person who controls any underwriter
(including any such broker or dealer), of the Registrable
Securities held by or issuable to the Registering Party,
against all claims, losses, damages, liabilities and expenses,
joint or several (or actions in respect thereto whether or not
a party thereto) ("Claims"), to which they may become subject
under the 1933 Act, the Securities Exchange Act of 1934, as
amended, (the "1934 Act"), or other federal, state or common
law, or otherwise, arising out of or based on (i) any untrue
statement (or alleged untrue statement) of a material fact
contained in any preliminary, final or summary prospectus,
offering circular, or other similar document or any amendment
or supplement thereto (including any related Registration
Statement, notification, or the like) incident to any such
registration, qualification, listing, or compliance, or
arising out of or based upon any omission (or alleged
omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or (ii) any violation or alleged violation by the
Company of any federal, state or common law, rule or
regulation applicable to the Company in connection with any
such registration, qualification, or compliance, and will
reimburse, as incurred, the Registering Party, each such
underwriter, and each such director, officer, affiliate and
controlling person, for any legal and any other expenses
reasonably incurred in connection with investigating or
defending such Claim (whether or not the indemnified party is
a party to any proceeding); provided that the Company will not
be liable in any such case to the extent that any such Claim
arises out of or is based on any untrue statement or omission
based upon written information furnished to the Company by an
instrument duly executed by the Registering Party or by such
underwriter and stated to be specifically for use therein.
Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the
Registering Party or any other indemnified party and shall
survive the transfer of such securities by the Registering
Party.
(b) The Registering Party will indemnify the Company, each of its
directors, and each officer who signs a Registration Statement
in connection
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therewith, and each person controlling the Company, each
underwriter, if any, and each person who controls any
underwriter, of the Company's securities covered by such a
Registration Statement, against all Claims, joint or several
(or actions in respect thereto whether or not a party
thereto), arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
such Registration Statement, preliminary, final or summary
prospectus, offering circular, or other document, or any
omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse, as
incurred, the Company, each such underwriter and each such
director, officer, partner and controlling person, for any
legal or any other expenses reasonably incurred in connection
with investigating or defending any such Claim (whether or not
the indemnified party is a party to any proceeding), in each
case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or
alleged omission) was made in such Registration Statement,
preliminary, final or summary prospectus, offering circular or
other document, in reliance upon and in conformity with
written information furnished to the Company by an instrument
duly executed by the Registering Party and stated to be
specifically for use therein. In no event shall the
Registering Party be required to contribute any amount (A) in
excess of the lesser of (i) that proportion of the total of
such Claims indemnified against equal to the proportion of the
total securities sold under such registration statement that
is being sold by the Registering Party or (ii) the net
proceeds received by the Registering Party from its sale of
securities under such registration statement and (B) for
amounts paid in settlement of any Claims if such settlement is
effected without the consent of the Registering Party, such
consent not to be unreasonably withheld.
(c) Promptly after the receipt by the indemnified party of a
notice of any claim, action, suit or proceeding of any third
party which is subject to indemnification hereunder, such
party (the "Indemnified Party") shall give written notice of
such claim to the party obligated to provide indemnification
hereunder (the "Indemnifying Party"), stating the nature and
basis of such claim and the amount thereof, to the extent
known. Failure of the Indemnified Party to give such notice
promptly shall not relieve the Indemnifying Party from any
liability which it may have on account of this indemnification
or otherwise, except to the extent that the Indemnifying Party
is materially prejudiced thereby (except that the Indemnifying
Party shall not be liable for any expenses incurred during the
period in which the Indemnified Party failed to give such
notice). The Indemnifying Party shall be entitled to
participate in the defense of and, if it so chooses, to assume
the defense of, or otherwise contest, such claim, action, suit
or proceeding with counsel selected by the Indemnifying Party
and reasonably satisfactory to the Indemnified Party;
provided, that, the
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Indemnified Party shall be entitled, to the extent it so
elects and at its sole cost and expense, to assume and control
the defense of any claim involving any equitable claim,
including, but not limited to, injunctive relief. Upon the
election by the Indemnifying Party to assume the defense of,
or otherwise contest, such claim, action, suit or proceeding,
the Indemnifying Party shall not be liable for any legal or
other expenses subsequently incurred by the Indemnified Party
in connection with the defense thereof, although the
Indemnified Party shall have the right to participate in the
defense thereof and to employ counsel, at its own expense.
Notwithstanding the foregoing, the Indemnifying Party shall be
liable for the reasonable fees and expenses of counsel
employed by the Indemnified Party, if, and only to the extent
that (i) the Indemnifying Party has not employed counsel (or
such counsel is not reasonably acceptable to the Indemnified
Party) to assume the defense of such action within a
reasonable time after receiving notice of the commencement of
the action, (ii) the employment of counsel and the amount
reimbursable therefor by the Indemnified Party has been
authorized in writing by the Indemnifying Party or (iii)
representation of the Indemnifying Party and the Indemnified
Party by the same counsel would, in the reasonable
determination of such Indemnified Party, constitute a conflict
of interest (in which case the Indemnifying Party will not
have the right to direct the defense of such action on behalf
of the Indemnified Party). The Parties shall use commercially
reasonable efforts to minimize damages from Claims by third
parties and shall act in good faith in responding to,
defending against, settling or otherwise dealing with such
Claims, notwithstanding any dispute as to liability as between
the Parties under this Section 1.8. The Parties shall also
cooperate in any such defense, give each other reasonable
access to all information relevant thereto and make employees
and other representatives available on a mutually convenient
basis to provide additional information and explanation of any
material provided in connection therewith. Whether or not the
Indemnifying Party shall have assumed the defense, the
Indemnifying Party shall not be obligated to indemnify the
other party hereunder for any settlement entered into without
the Indemnifying Party's prior written consent, which consent
shall not be unreasonably withheld or delayed.
(d) If the indemnification provided for in this Section 1.8 is for
any reason held by a court of competent jurisdiction to be
unavailable to an Indemnified Party in respect of any Claims
referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party thereunder, shall
contribute to the amount paid or payable by such Indemnified
Party as a result of such Claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Indemnifying Party and the Indemnified Party, or (ii) if the
allocation provided by clause (i)
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above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of
the Indemnifying Party and the Indemnified Party in connection
with the action or inaction which resulted in such Claims, as
well as any other relevant equitable considerations. In
connection with any registration of the Company's securities,
the relative benefits received by the Indemnifying Party and
the Indemnified Party shall be deemed to be in the same
respective proportions that the net proceeds from the offering
(before deducting expenses) received by the Indemnifying Party
and the Indemnified Party, in each case as set forth in the
table on the cover page of the applicable prospectus, bear to
the aggregate public offering price of the securities so
offered. The relative fault of the Indemnifying Party and the
Indemnified Party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the
Indemnifying Party or the Indemnified Party and the Parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Indemnifying Party and the Indemnified Party agree that it
would not be just and equitable if contribution pursuant to
the foregoing paragraph were determined by pro rata or per
capita allocation or by any other method of allocation which
does not take account of the equitable considerations referred
to in the immediately preceding paragraph.
(f) If the Registrable Securities are to be sold pursuant to any
underwritten public offering, the Company and each seller
shall enter into an underwriting agreement that contains,
among other things, customary representations, warranties,
covenants and indemnities relating to such offering.
(g) Indemnification similar to that specified herein (with
appropriate modifications) shall be given by the Company and
the Registering Party with respect to any required
registration or other qualification of securities under any
federal or state law or regulation or governmental authority
other than the 1933 Act.
(h) The obligations of the parties under this Section 1.8 shall be
in addition to any liabilities which any party may otherwise
have to any other party.
1.9 Information by the Registering Party. The Registering Party shall
furnish to the Company such information regarding the Registering Party
and the distribution proposed by the Registering Party as the Company
may reasonably request in writing and as shall be required in
connection with any registration, qualification, or compliance referred
to in this Section 1.
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1.10 Rule 144/Rule 144A Reporting. With a view to making available the
benefits of certain rules and regulations of the SEC which may permit
the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:
(a) at all times make and keep public information available, as
those terms are understood and defined in SEC Rule 144 and
Rule 144A or any similar or analogous rule promulgated under
the 1933 Act;
(b) file with the SEC, in a timely manner, all reports and other
documents required of the Company under the 1933 Act and 1934
Act; and
(c) so long as any Party owns any Registrable Securities, furnish
to such Party forthwith upon request: a written statement by
the Company as to its compliance with the reporting
requirements of said Rule 144 and Rule 144A of the 1933 Act,
and of the 1933 Act and the 1934 Act; a copy of the most
recent annual or quarterly report of the Company; and such
other reports and documents as such Party may reasonably
request in availing itself of any rule or regulation of the
SEC allowing it to sell any such securities without
registration.
SECTION 2. Miscellaneous.
2.1 Entire Agreement. This Agreement, the Stock Purchase Agreement and the
other agreements and documents referred to therein constitute the
entire agreement of the parties and supersede all prior written or oral
agreements, contemporaneous oral agreements, understandings and
negotiations between the parties with respect to the subject matter
hereof.
2.2 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York.
2.3 Amendments and Waivers. This Agreement may not be modified, amended or
waived except by written document specifically identifying this
Agreement and signed by the parties.
2.4 Headings. The headings included in this Agreement are for convenience
of the parties only and shall not affect the construction or
interpretation of this Agreement.
2.5 Notices. All notices hereunder shall be in writing and shall be given
to the respective parties by U.S. mail, personal delivery, or facsimile
transmission to their respective addresses as follows:
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If to the Company:
AppliedTheory Communications, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President and Treasurer
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to IXC:
IXC Internet Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Grumman Hill:
Grumman Hill Investments III, L.P.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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If to NYSERNet:
▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Assistant
Secretary/Assistant Treasurer
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Stockholders
At their respective addresses as
communicated to the Company
from time to time.
All such notices shall be deemed effective upon receipt.
2.6 Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns.
2.7 Remedies, Waivers. No failure or delay on the part of any party in the
exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. Any waiver or consent shall be
effective only in the specific instance and for this specific purpose
for which it was given. The parties to this Agreement acknowledge and
agree that the breach of any of the terms of this Agreement will cause
irreparable injury for which an adequate remedy at law is not
available. Accordingly, it is agreed that either party shall be
entitled to an injunction, restraining order or other equitable relief
to prevent breaches of this Agreement and to enforce specifically the
terms and provisions hereof in any court of competent jurisdiction in
the United States or any state thereof, without the requirement of
posting any bond. All rights and remedies existing under this Agreement
are cumulative to and not exclusive of, any rights or remedies
available under this Agreement or otherwise.
2.8 Severability. In the event that any provision of this Agreement or the
application of any provision hereof is declared to be illegal, invalid
or otherwise unenforceable by a court of contempt jurisdiction, such
provision shall be
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14
reformed, if possible, to the extent necessary to render it legal,
valid and enforceable, or otherwise deleted, and the remainder of this
Agreement shall not be affected except to the extent necessary to
reform or delete such illegal, invalid or unenforceable provision.
2.9 Termination. The provisions of this Agreement shall terminate and be of
no further effect upon (a) as to all Parties, upon the mutual consent
of the Parties and (b) as to a Party, such Party ceasing to own or have
rights to acquire Registrable Securities.
2.10 Further Assurances. Each party shall cooperate and take such action as
may be reasonably requested by the other party in order to carry out
the provisions and purposes of this Agreement and the transactions
contemplated hereby.
2.11 Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original, but which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed by their respective officers, duly authorized for such purpose, as
of the date first written above.
IXC INTERNET SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VP
GRUMMAN HILL INVESTMENTS III, L.P.
By: Grumman Hill Group LLC
--------------------------------
Its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
APPLIEDTHEORY COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President & CEO
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Asst. Sec/Treas
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STOCKHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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