SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 1)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
US LEC Corp.
- --------------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
90331S 10 9
- --------------------------------------------------------------------------------
(CUSIP Number)
Richard T. Aab
c/o US LEC Corp.
401 North Tryon Street, Suite 1000
Charlotte, North Carolina 28202
(704) 319-1000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
April 11, 2000
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. SEE Rule 13d-1(a) for other parties to whom copies are sent.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act.
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<S> <C> <C> <C> <C>
CUSIP NO.: 90331S 10 9 Page 2 of 9 Pages
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1 NAME OF REPORTING PERSON
Richard T. Aab
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [x]
(b) [ ]
- ------------------- --------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- --------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
- ------------------- --------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- ------------------- --------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ------------------- ----------- --------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
17,153,445
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
0
----------- --------------------------------------------------------------------------------------
EACH REPORTING 9 SOLE DISPOSITIVE POWER
8,799,945
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PERSON WITH 10 SHARED DISPOSITIVE POWER
4,309,500
- ------------------- --------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,153,445
- ------------------- --------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ------------------- --------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.3%
- ------------------- --------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- ------------------- --------------------------------------------------------------------------------------------------
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CUSIP NO.: 90331S 10 9 Page 3 of 9 Pages
- ------------------- --------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Joyce M. Aab
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [x]
(b) [ ]
- ------------------- --------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- --------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
- ------------------- --------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- ------------------- --------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ------------------- ----------- --------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
0
----------- --------------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
0
----------- --------------------------------------------------------------------------------------
EACH REPORTING 9 SOLE DISPOSITIVE POWER
0
----------- --------------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
4,309,500
- ------------------- --------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,309,500
- ------------------- --------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.7%
- ------------------- --------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- ------------------- --------------------------------------------------------------------------------------------------
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CUSIP NO.: 90331S 10 9 Page 4 of 9 Pages
- ------------------- --------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
Tansukh V. Ganatra
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [x]
(b) [ ]
- ------------------- --------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- --------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
- ------------------- --------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- ------------------- --------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ------------------- ----------- --------------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
0
----------- --------------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
0
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EACH REPORTING 9 SOLE DISPOSITIVE POWER
4,044,000
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PERSON WITH 10 SHARED DISPOSITIVE POWER
0
- ------------------- --------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,044,000
- ------------------- --------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.4%
- ------------------- --------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- ------------------- --------------------------------------------------------------------------------------------------
Page 5 of 9 Pages
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EXPLANATORY NOTE: Richard T. Aab, Melrich Associates, L.P. (a New York
limited partnership controlled by Mr. Aab and his wife, Joyce M. Aab)
("Melrich"), Tansukh V. Ganatra, and Super STAR Associates Limited Partnership
(a Georgia limited partnership controlled by Mr. Ganatra) ("Super STAR")
(collectively, the "Class B Stockholders") are the sole record holders of all
outstanding shares of Class B Common Stock issued by US LEC Corp. (the
"Company"). Shares of Class B Common Stock are convertible on a one-for-one
basis into shares of the Company's Class A Common Stock, at the option of the
holder or automatically in certain circumstances. Each Class B Stockholder has
entered into a Second Amended and Restated Stockholders Agreement, dated as of
April 10, 2000 (the "Class B Stockholders Agreement"), pursuant to which, among
other things, the parties agreed to grant to Mr. Aab an irrevocable proxy to
vote all of their shares of Class B Common Stock. As a result of the Class B
Stockholders Agreement, Mr. Aab may be deemed, for the purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to have
formed a "group" with Mrs. Aab and Mr. Ganatra. This Amendment No. 1 is being
filed as a result of the Class B Stockholders entering into the Class B
Stockholders Agreement and a Voting and Tag Along Agreement, dated April 11,
2000 (the "Voting Agreement"), by and among the Class B Stockholders and
affiliates of Bain Capital, Inc. ("Bain") and Thomas H. Lee, L.P. ("THL")
(collectively, the "Investors") in connection with the Company's sale of 100,000
shares of its Series A Convertible Preferred stock to each of Bain and THL (the
"Preferred Stock Transaction").
ITEM 1. SECURITY AND ISSUER
This statement relates to the Class A Common Stock of US LEC Corp., a
Delaware corporation (the "Company"). The principal executive offices of the
Company are located at 401 North Tryon Street, Suite 1000, Charlotte, North
Carolina 28202.
ITEM 2. IDENTITY AND BACKGROUND
(A) - (C) AND (F) This statement is being filed on behalf of Richard T.
Aab, Joyce M. Aab, and Tansukh V. Ganatra (the "Reporting Persons") as a result
of the Class B Stockholders entering into the Class B Stockholders Agreement and
the Voting Agreement, as more fully described under Items 3 and 5.
Mr. Aab, a United States citizen, is the Chairman of the Company. His
address is c/o US LEC Corp., 401 North Tryon Street, Suite 1000, Charlotte,
North Carolina 28202,.
Mrs. Aab, a United States citizen, is the wife of Mr. Aab. Her address
is c/o US LEC Corp., 401 North Tryon Street, Suite 1000, Charlotte, North
Carolina 28202.
Mr. Ganatra, a United States citizen, is the Chief Executive Officer
and Vice Chairman of the Company. His address is c/o US LEC Corp., 401 North
Tryon Street, Suite 1000, Charlotte, North Carolina 28202.
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Page 6 of 9 Pages
(d) AND (e) During the last five years, the Reporting Persons have not
(i) been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
further violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violations with respect to such
laws.
ITEM 4. PURPOSE OF TRANSACTION
All shares of Class B Common Stock held by the Reporting Persons were
acquired in connection the formation of the Company or its predecessors, equity
contributions prior to the registration of the Class A Common Stock under
Section 12(g) of the Exchange Act ("Registration") and in open market or
privately negotiated transactions since Registration. All shares of Class A
Common Stock and Class B Common Stock acquired by the Reporting Persons have
been acquired for general investment purposes.
The Reporting Persons may from time to time seek to increase, reduce or
dispose of their investment in the Company in open market or privately
negotiated transactions or otherwise. The determination to effect any such
transactions will depend on, among other things, the market price of the
Company's securities, availability of funds, borrowing costs, market conditions,
tax considerations, developments affecting the Company and the Reporting
Persons, other opportunities available to the Reporting Persons and other
considerations. As a result of the sole voting power held by Mr. Aab with
respect to 100% of the Class B Common Stock and 78,175 shares of Class A Common
Stock, Mr. Aab controls the Company. From time to time, Mr. Aab or one or more
of the other Reporting Persons may hold discussions with third parties or with
management of the Company in which the Reporting Person may suggest or take a
position with respect to potential changes in the operations, management or
capital structure of the Company. Such suggestions or positions may relate to
one or more of the transactions specified in clauses (a) through (j) of Item 4
of Schedule 13D. Except as set forth above, the Reporting Persons do not have
any present plans or proposals that relate to or would result in any of the
actions required to be described in Item 4 of Schedule 13D. Each of the
Reporting Persons may, at any time, review or reconsider his or her position
with respect to the Company and formulate plans or proposals with respect to any
of such matters, but has no present intention of doing so.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(A)-(B) Mr. Aab beneficially owns 17,153,445 shares of Class A Common
Stock. This amount includes (i) 8,480,770 shares of Class A Common Stock
issuable upon conversion of an equal number of shares of Class B Common Stock,
61,995 shares of Class A Common Stock held of record by Global Vista
Communications, LLC, a limited liability controlled by Mr. Aab, and 16,180
shares of Class A Common Stock held of record by Mr. Aab as to which Mr. Aab has
sole voting and dispositive power; (ii) 4,309,500 shares of Class A Common Stock
issuable upon conversion of an equal number of shares of Class B Common Stock
held of record by Melrich, of
<PAGE>
Page 7 of 9 Pages
which Mr. and Mrs. Aab are the sole general partners and as to which Mr. and
Mrs. Aab share dispositive power and Mr. Aab has sole voting power pursuant to
the Class B Stockholders Agreement; and (iii) 294,000 shares issuable upon
conversion of an equal number of shares of Class B Common Stock held of record
by Mr. Ganatra and 3,750,000 shares issuable upon conversion of an equal number
of shares of Class B Common Stock held of record by Super STAR, as to which Mr.
Aab has sole voting power pursuant to the Class B Stockholders Agreement. Mr.
Aab beneficially owns 62.3% of the Class A Common Stock, an amount which assumes
conversion of the 16,834,270 shares of Class B Common Stock held of record by
Mr. Aab, Melrich, Mr. Ganatra, and Super STAR.
Mrs. Aab beneficially owns 4,309,500 shares of Class A Common Stock
issuable upon conversion of an equal number of shares of Class B Common Stock
held of record by Melrich and as to which Mr. and Mrs. Aab share dispositive
power. Mrs. Aab beneficially owns 28.7% of the Class A Common Stock, an amount
which assumes conversion of the 4,309,500 shares of Class B Common Stock held of
record by Melrich.
Mr. Ganatra beneficially owns 4,044,000 shares of Class A Common Stock.
This amount includes 294,000 shares issuable upon conversion of an equal number
of shares of Class B Common Stock held of record by Mr. Ganatra directly and
3,750,000 shares issuable upon conversion of an equal number of shares of Class
B Common Stock held of record by Super STAR. Mr. Ganatra holds sole dispositive
power with respect to these shares. Mr. Ganatra beneficially owns 27.4% of the
Class A Common Stock, an amount which assumes conversion of the 4,044,000 shares
of Class B Common Stock held of record by Mr. Ganatra and Super STAR.
(c) No transactions by the Class B Stockholders have been effected
within the last 60 days other than the elective conversion by Mr. Aab of 241,000
shares of Class B Common Stock into an equal number of shares of Class A Common
Stock on March 20, 2000.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP WITH RESPECT TO
SECURITIES OF THE ISSUER
THE CLASS B STOCKHOLDERS AGREEMENT. The Reporting Persons own all of
the issued and outstanding shares of Class B Common Stock and are parties to the
Class B Stockholders Agreement, pursuant to which Melrich, Ganatra and Super
STAR have agreed to vote their shares of Class B Common Stock in the same manner
as Mr. Aab and granted to him an irrevocable proxy to vote their shares of Class
B Common Stock. Upon Mr. Aab's death or incapacity, the proxy held by him will
terminate and the parties to the Class B Stockholders Agreement will then be
obligated to vote their shares of Class B Common Stock in the same manner as Mr.
Ganatra and grant to Mr. Ganatra an irrevocable proxy to vote their shares of
<PAGE>
Page 8 of 9 Pages
Class B Common Stock. The voting and proxy provisions of the agreement terminate
upon the the last to occur of the death or incapacity of Mr. Aab or Mr. Ganatra.
The Class B Stockholders Agreement also provides that if a party
proposes to sell or otherwise transfer shares of Class B Common Stock to anyone
other than a Permitted Transferee (as defined in the Company's Restated
Certificate of Incorporation) or to convert such shares into Class A Common
Stock, the other holders of Class B Common Stock would have a right to acquire
the shares of Class B Common Stock that are proposed to be sold, transferred, or
converted.
THE VOTING AGREEMENT. The holders of Series A Preferred Stock are
entitled to elect two directors of the Company ("Investor Directors") for so
long as they own at least 30% of the Class A Common Stock issued or issuable
upon conversion of the Series A Preferred Stock (the "Underlying Common Stock"),
and one director for so long as they own less than 30% but more than 20% of the
Underlying Common Stock. In connection with the Preferred Stock Transaction, the
Class B Stockholders entered into the Voting Agreement. Pursuant to the Voting
Agreement, at any time when the Class B Stockholders are entitled to vote on the
election of Investor Directors, they must vote in favor of the election of any
Investor Director nominated in accordance with the agreements governing the
Preferred Stock Transaction. In addition, the Class B Stockholders agreed not to
transfer for value any shares of the Company's common stock if, as a result of
such transfer, a Change of Control (as defined in the Certificate of Designation
of the Series A Preferred Stock) would occur, unless certain conditions have
been met. Under the Voting Agreement, the Class B Stockholders also granted to
the Investors the right to participate in certain sales of the Company's common
stock to third parties.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1: Joint Filing Agreement of Richard T. Aab, Joyce M.
Aab, and Tansukh V. Ganatra pursuant to Rule
13d-1(k)*
Exhibit 2: Second Amended and Restated Class B Stockholders
Agreement, dated as of April 10, 2000, by and among
the Class B Stockholders
Exhibit 3 Voting and Tag Along Agreement, dated as of April 11,
2000 by and among the Class B Stockholders and the
Investors
-----------
* Incorporated by reference to Exhibit 1 of the statement on
Schedule 13D filed by the Reporting Persons on June 11, 1998.
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Page 9 of 9 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 12, 2000
/s/ Richard T. Aab
----------------------
Richard T. Aab
/s/ Joyce M. Aab
----------------------
Joyce M. Aab
/s/ Tansukh V. Ganatra
----------------------
Tansukh V. Ganatra
SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
THIS SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this
"Agreement"), dated as of the 10th day of April, 2000, is by and among RICHARD
T. AAB, a resident of Pittsford, New York ("Aab"), MELRICH ASSOCIATES, L.P., a
New York limited partnership ("Melrich"), TANSUKH V. GANATRA, a resident of
Charlotte, North Carolina ("Ganatra"), and SUPER STAR ASSOCIATES LIMITED
PARTNERSHIP, a Georgia limited partnership ("Super STAR"). Aab, Melrich, Ganatra
and Super STAR are sometimes referred to individually as a "Stockholder" and
collectively as the "Stockholders."
BACKGROUND:
-----------
A. US LEC Corp., a Delaware corporation (the "Corporation"), has
Seventeen Million Seventy-Five Thousand Two Hundred Seventy-Two (17,075,272)
shares of authorized Class B Common Stock, par value $.01 per share ("Class B
Common"), of which Sixteen Million Eight Hundred Thirty-Four Thousand Two
Hundred Seventy (16,834,270) shares are currently issued and outstanding (as
defined in Section 6, the "Shares").
B. The Stockholders own and hold of record the following Shares:
STOCKHOLDER NUMBER OF SHARES
----------- ----------------
Richard T. Aab 8,480,770
Melrich Associates, L.P. 4,309,500
Tansukh V. Ganatra 294,000
Super STAR Associates
Limited Partnership 3,750,000
C. The Stockholders believe that it is in their best interest to enter
into specific agreements concerning the disposition, conversion and voting of
the Shares.
D. Concurrently with the execution of this Agreement, the Corporation
and affiliates of Bain Capital, Inc. and Thomas H. Lee Partners, L.P. (the
"INVESTORS") are entering into a Preferred Stock Purchase Agreement (the
"PURCHASE AGREEMENT") which provides for, among other things, the purchase by
the Investors of 200,000 shares of the Corporation's Series A Convertible
Preferred Stock for an aggregate purchase price of $200,000,000.
E. The Stockholders believe the transactions contemplated by the
Purchase Agreement are in the best in of the Corporation and will be of direct
benefit to them by providing the Corporation with additional capital to expand
and diversify its telecommunications business and potentially increase the value
of the Shares.
<PAGE>
F. As an inducement to the Investors to enter into the Purchase
Agreement, and the other agreements contemplated by the Purchase Agreement, the
Class B Stockholders are willing to enter into and be bound by this Agreement
pursuant to which the Stockholders agree to amend and restate certain provisions
concerning the disposition, conversion and voting of the Shares contained in the
Amended and Restated Shareholders Agreement, dated January 1, 1998, and the
irrevocable proxy executed in connection therewith, both of which shall be
superceded in their entirety by this Agreement and the irrevocable proxies in
the forms attached hereto as Exhibit A and Exhibit B.
Accordingly, in consideration of the premises and of the mutual
covenants and agreements contained herein, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Stockholders do hereby agree as follows:
1. VOTING OF THE SHARES
(a) For so long as Aab is living and not Incapacitated (as
defined below), each Stockholder other than Aab shall vote all of his,
hers or its Shares (whether now owned or hereafter acquired), whether
for directors or for any other purpose, in the same manner as Aab.
(b) For so long as Aab is living and not Incapacitated, each
Stockholder other than Aab shall give his, hers or its irrevocable
proxy to Aab, contemporaneously with the execution and delivery of this
Agreement and hereafter from time to time at the request of Aab, by
executing and delivering to Aab an irrevocable proxy in the form of the
proxy attached hereto as Exhibit A. Aab shall vote the Shares to elect
one (1) designee of Ganatra and one (1) designee of Aab as Class B
Directors (as defined in the Restated Certificate of the Corporation
(the "Certificate")).
(c) If Aab shall die or become Incapacitated prior to such
time as Ganatra dies or becomes Incapacitated, the irrevocable proxy
granted pursuant to Section 1(b) of this Agreement shall terminate and,
for so long as Ganatra is living and not Incapacitated, each
Stockholder other than Ganatra shall vote all of his, hers or its
Shares (whether now owned or hereafter acquired), whether for directors
or for any other purpose, in the same manner as Ganatra.
(d) If Aab shall die or become Incapacitated prior to such
times as Ganatra dies or becomes Incapacitated, for so long as Ganatra
is living and not Incapacitated, each Stockholder other than Ganatra
shall give his, hers or its irrevocable proxy to Ganatra, and
thereafter from time to time at the request of Ganatra, by executing
and delivering to Ganatra an irrevocable proxy in the form of proxy
attached hereto as Exhibit B.
(e) If, at any time subsequent to becoming Incapacitated, Aab
shall cease being Incapacitated, Sections 1(a) and (b) of this
Agreement shall again become operative as if this Agreement had been
executed and delivered at such time and the irrevocable proxy given
pursuant to Section 1(d) shall terminate.
2. Offer Upon Elective Conversion. If any Stockholder desires to effect
an elective conversion of any Shares (whether now owned or hereafter acquired)
into shares of Class A Common Stock of the Corporation ("Class A Common"), as
provided for in the Restated
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<PAGE>
Certificate, the Stockholder shall first submit to all other Stockholders a
written notice of the Stockholder's intent to convert his, her or its Shares
into Class A Common, along with an offer to sell or exchange all or part of the
Shares proposed to be converted, pursuant to this Section 2 (the "Conversion
Notice"). Each Conversion Notice shall constitute dual, binding offers by the
offering Stockholder to (A) sell all or part of such Shares for cash (the "Cash
Offer") or (B) exchange all or part of such Shares for an equal number of shares
of Class A Common (the "Exchange Offer").
(a) The offered Shares shall be allocated among the other
Stockholders on the basis of the percentage of Shares then owned by
them (excluding Shares owned by the offering Stockholder). Each offeree
Stockholder shall have the right to purchase (by cash or exchange of
shares of Class A Common) all or part of his, her or its allocated
portion of the offered Shares.
(b) Within ten (10) days of delivery of the Conversion Notice,
each offeree Stockholder shall provide written notice to the offering
Stockholder and all other Stockholders of his, her or its election to
consider acceptance of either the Cash Offer or the Exchange Offer and,
if he, she or it intends to consider a Cash Offer, the expiration date
for the six month period referred to in subsection (c)(ii) below (if
applicable). An election by an offeree Stockholder to consider the Cash
Offer shall automatically terminate the Exchange Offer to such
Stockholder and an election by an offeree Stockholder to consider the
Exchange Offer shall automatically terminate the Cash Offer to such
Stockholder.
(c) For those offeree Stockholders electing to consider the
Cash Offer (the "Cash Offerees"), the Cash Offer shall continue to be a
binding offer of the offering Stockholder to sell until the later of,
(i) the expiration of thirty (30) days after delivery of the Conversion
Notice or (ii) 5:00 p.m. on the first business day subsequent to the
expiration of the six month period following consummation, by any Cash
Offeree, of any transaction treated as a nonexempt sale under Section
16(b) of the Securities Exchange Act of 1934, as amended (the later of
such times is referred to herein as the "Cash Offer Expiration Date").
If any Cash Offeree does not purchase all of his, her or its allocated
portion of the offered Shares on or before the Cash Offer Expiration
Date, the offering Stockholder shall give written notice to the other
Cash Offerees, and such other Cash Offerees shall have an additional
ten (10) days from the delivery of such notice to elect to purchase
such declined Shares at the same price and upon the same terms
previously offered to the declining Cash Offeree (and the Cash Offer
shall continue to be a binding offer with respect to such declined
shares until the expiration of such additional ten (10) day period).
Any such Shares shall be allocated to the remaining Cash Offeree(s) on
the basis of the percentage of Shares owned by them (excluding Shares
owned by the offering Stockholder, the declining Cash Offeree(s), and
the Exchange Offeree(s), as defined below).
(d) For those offeree Stockholders electing to consider the
Exchange Offer (the "Exchange Offerees"), the Exchange Offer shall
continue to be a binding offer of the offering Stockholder to exchange
Shares for an equal number of shares of Class A Common until the
expiration of thirty (30) days after delivery of the Conversion Notice
(the "Exchange Offer Expiration Date"). If any Exchange Offeree does
not exchange all of his, her or its allocated share of the offered
Shares on or before the Exchange Offer Expiration Date, the offering
Stockholder shall give written notice to the other Exchange Offerees,
and such other Exchange Offerees shall have an additional ten (10) days
from the delivery of
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<PAGE>
such notice to elect to acquire such declined Shares upon the same
terms previously offered to the declining Exchange Offeree (and the
Exchange Offer shall continue to be a binding offer with respect to
such declined Shares until the expiration of such additional ten (10)
day period). Any such Shares shall be allocated to the remaining
Exchange Offeree(s) on the basis of the percentage of Shares owned by
them (excluding Shares owned by the offering Stockholder, the declining
Exchange Offeree(s), and the Cash Offeree(s)).
(e) Purchase Price Payable by Cash Offerees. The cash purchase
price of each Share for purposes of this Section 2 shall be the average
of the closing prices of a share of Class A Common for the ten (10)
trading days immediately following the date on which Conversion Notice
is given by the offering Stockholder, as reported in The Wall Street
Journal or other reporting services acceptable to all parties hereto.
If at the time the purchase price is to be determined, shares of the
Class A Common are not publicly traded, the purchase price shall be
determined as follows:
( 8 x EBITDA
--------------
Per Share Purchase Price = .75 x Total A&B )
Where EBITDA = The Corporation's
earnings before interest,
taxes, depreciation and
amortization as shown on
the most recent
consolidated year end
financial statements of the
Corporation.
and Total A&B = Total issued and
outstanding shares of
the Corporation's Class A
Common and Class B Common
at the time the purchase
price is determined.
(f) Terms of Purchase and Payment for Cash Offerees. If any
Cash Offeree elects to purchase Shares in accordance with this Section
2, the purchase must be consummated at the principal office of the
Corporation in the State of North Carolina on the last day the Cash
Offer remains binding (or at such other time and place as may otherwise
be acceptable to the selling Stockholder and the purchasing
Stockholder). Payment of the purchase price of the Shares shall be made
at closing by wire transfer of immediately available funds to an
account designated by the selling Stockholder or by certified check
payable to the selling Stockholder. Upon tender of the purchase price,
the selling Stockholder shall deliver to the purchasing Stockholder one
or more certificates representing all Shares being purchased, duly
endorsed over to the purchaser or accompanied by duly executed stock
powers. The Stockholders shall cause the Corporation to cooperate with
selling and purchasing Stockholders in connection with such offers and
closing, including, but not limited to, providing appropriately
denominated certificates on a timely basis.
If, pursuant to this Section 2, the Cash Offer Expiration Date
occurs on a date which is subsequent to the thirtieth (30th) day
subsequent to delivery of the Conversion Notice, then on the thirtieth
day subsequent to delivery of the Conversion Notice, the Cash Offerees
(other than those who have, prior to such date either purchased their
allocated portion of the offered Shares or have notified the offering
Stockholder of their decision not to purchase their allocated share of
the offered Shares) shall submit a non-refundable deposit (by wire
transfer of immediately available funds to an account designated by the
offering Stockholder
4
<PAGE>
or by certified check payable to the offering Stockholder) to the
offering Stockholder in an amount equal to twenty-five percent (25%) of
the purchase price of such Stockholder's share of offered Shares (not
previously purchased or declined). In the event that a Cash Offeree who
has submitted a deposit does not purchase his, her or its allocated
portion of the offered Shares on or before the Cash Offer Expiration
Date, his, her or its deposit shall be forfeited.
(g) Terms of Closing for Exchange Offerees. If any Exchange
Offeree elects to accept the Exchange Offer in accordance with this
Section 2, the exchange must be consummated at the principal office of
the Corporation in the State of North Carolina on the last day on which
the Exchange Offer remains binding (or at such other time or place as
may otherwise be acceptable to the selling Stockholder and the
purchasing Stockholder). At the closing, the accepting Exchange
Offerees shall deliver to the selling Stockholder one or more
certificates representing all shares of Class A Common being exchanged,
duly endorsed over to the selling Stockholder or accompanied by duly
executed stock powers, and the selling Stockholder shall deliver to the
Exchange Offerees one or more certificates representing all Shares
being exchanged, duly endorsed over to the accepting Exchange Offerees
or accompanied by duly executed stock powers. The Stockholders shall
cause the Corporation to cooperate with the participating Stockholders
in connection with such exchange and closing, including, but not
limited to, providing appropriately denominated certificates on a
timely basis.
3. Transfer of Shares. The Stockholders hereby agree that, unless all
of the other Stockholders give their written consent thereto, no Stockholder
shall make a voluntary transfer or otherwise dispose of (as defined in Section
6(c) herein) any of his, her or its Shares, whether now owned or hereafter
acquired, to any party other than another Stockholder, except that such Shares
may be transferred to a Permitted Transferee (as defined in Article IV of the
Certificate), but only if, simultaneously with the transfer of such Shares, such
Permitted Transferee becomes a signatory to this Agreement as a "Stockholder"
(by executing and delivering to all other Stockholders a signature page by which
he, she or it agrees without condition to be bound by this Agreement as a
"Stockholder," and provides an address for the giving of notices, and executes
and delivers to Aab or Ganatra, as applicable, an irrevocable proxy as required
by Section 1 of this Agreement.
4. Divorce or Legal Separation of a Stockholder
(a) Notwithstanding anything herein to the contrary, if a
spouse of a Stockholder has received Shares as a Permitted Transferee
(as defined in Article IV of the Certificate) and such spouse is
subsequently no longer legally married to or is legally separated from
such Stockholder, then such Stockholder shall have an option to
purchase any or all of such Shares (by cash payment or exchange). The
option shall constitute a binding offer of the spouse to sell any or
all of the Shares to the Stockholder at the same price per share and
upon the same terms as is provided in Section 2 hereof, except that the
cash purchase price shall be determined based on the closing prices of
a share of Class A Common for the ten (10) trading days immediately
following the date of the legal separation or divorce of such spouse
and Stockholder and the option shall extend from the date of the
divorce or legal separation until the applicable expiration date
(excluding the additional ten day periods) provided in Section 2
(calculated by using the date of the divorce or legal separation rather
than the date of delivery of the Conversion Notice).
5
<PAGE>
(b) If such Stockholder does not purchase all such Shares of
his or her spouse pursuant to the option described in (a), then (i)
such Stockholder shall give written notice (a "Divorce Notice") to all
other Stockholders, and (ii) the other Stockholders shall have an
option to acquire all or part of the declined Shares. This option shall
constitute a binding offer of such spouse to sell all or part of the
Shares to the other Stockholders at the same price per share and upon
the same terms as provided in Section 2 hereof, except that the cash
purchase price shall be determined based on the closing prices of a
share of Class A Common for the ten (10) trading days immediately
following the date of the legal separation or divorce of such spouse
and Stockholder. The option shall confer upon each such other
Stockholder the right to purchase (by cash payment or exchange) his,
her or its allocated portion of the declined Shares (allocated pro rata
based on the Shares owned by all Stockholders other than the spouse and
the declining Stockholder), and shall extend, with regard to each
Stockholder, from the delivery of the Divorce Notice to such other
Stockholder until the applicable expiration date (including but not
limited to the additional ten day periods) provided in Section 2
(calculated by using the date of the delivery of the Divorce Notice
rather than the date of delivery of the Conversion Notice).
5. Endorsement on Stock Certificate. The Stockholders shall use their
best efforts to cause each certificate representing Shares at any time owned by
any Stockholder to bear the following legend prominently displayed thereon:
"THE SHARES REPRESENTED BY THIS CERTIFICATE, AND THE TRANSFER
HEREOF, ARE SUBJECT TO THE TERMS AND PROVISIONS OF THAT CERTAIN AMENDED
AND RESTATED STOCKHOLDERS AGREEMENT DATED AS OF JANUARY 1, 1998, AS
AMENDED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM ANY
STOCKHOLDER OWNING SHARES OF CLASS B COMMON STOCK UPON REQUEST."
6. Certain Interpretations and Definitions. As used in this
Agreement:
(a) "Stockholder" or "Stockholders" means stockholders of the
Corporation who are parties to this Agreement as provided on page 1
hereof, and any successor in interest or transferee of any Shares of
such Stockholder who purchased shares in accordance with this
Agreement.
(b) "Shares" means any outstanding shares of Class B Common
Stock of the Corporation now owned (as shown in the Background recitals
hereto) or hereafter acquired by any Stockholder, any shares of Class B
Common Stock distributed with respect to any such shares in a stock
split, stock dividend or other recapitalization or reorganization, and
any other outstanding shares of the Corporation that otherwise become
subject to this Agreement by written agreement among the parties.
(c) The terms "transfer", "dispose of" and/or "disposition",
when used with respect to shares, mean and include any sale,
assignment, transfer, conveyance, gift, encumbrance, pledge,
hypothecation, equitable distribution or other disposition of Shares
(whether voluntary, involuntary, or otherwise), including permitting a
levy or attachment on the Shares.
6
<PAGE>
(d) An "involuntary" transfer or disposition of shares means
(i) a testamentary or intestate transfer or disposition made incident
to the death of a Stockholder, (ii) a transfer made in connection with
the divorce or separation of a Stockholder pursuant to a property
settlement agreement that is filed for public record, or (iii) a
transfer made pursuant to an order issued by a court of competent
jurisdiction in connection with the involuntary bankruptcy of, or the
appointment of a receiver for, a Stockholder.
(e) A "voluntary" transfer or disposition of Shares refers to
any transfer or disposition other than an involuntary transfer or
disposition.
(f) "Incapacitated" means under any one or more of the
following circumstances: (i) during any period that the individual is
legally incompetent as determined by a court of competent jurisdiction;
(ii) during any period beginning when two physicians licensed to
practice medicine certify in writing that, in their opinion, the
individual, as a result of illness, age or other cause, no longer has
the capacity to act prudently or effectively in financial affairs and
continuing until two such physicians (whether or not those making the
initial determination) certify in writing that, in their opinion, the
individual's capacity is restored; or (iii) during any period that a
person (other than such individual) has evidence that the individual is
absent without explanation or is being detained against his will under
circumstances in which he does not have the capacity to act prudently
or effectively in financial affairs.
7. Term. The term of this Agreement shall commence on the date hereof
and shall continue in effect until January 1, 2010. Thereafter, this Agreement
shall automatically renew for successive one (1) year terms unless all of the
Stockholders then holding Shares elect to terminate this Agreement as of the end
of the then current term (initial or renewal). Notwithstanding the foregoing,
Section 1 hereof shall be of no further force or effect upon the last to occur
of:
(a) The death or Incapacity of Aab; or
(b) The death or Incapacity of Ganatra.
8. Notices. Any and all notices, consents, offers, acceptances or other
communications made hereunder must be in writing and shall be deemed given and
delivered when delivered personally or by courier service, provided evidence of
receipt is obtained, or three (3) days after mailing if mailed by registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows (or to such other address that the parties may from time to time
designate in a writing sent to all other parties of this Agreement in the manner
required by this Section 8, except that any such change of address notice shall
only be effective upon receipt):
(a) if to Richard T. Aab:
200 Meridian Centre, Suite 140
Rochester, New York 14618
(b) if to Melrich Associates L.P.:
200 Meridian Centre, Suite 140
Rochester, New York 14618
7
<PAGE>
(c) if to Tansukh V. Ganatra:
6523 Ashdale Place
Charlotte, North Carolina 28215
(d) if to Super STAR Associates Limited Partnership:
6523 Ashdale Place
Charlotte, North Carolina 28215
(e) Copies of any such correspondence shall also be sent
to:
US LEC Corp.
401 North Tryon Street, Suite 1000
Charlotte, North Carolina 28202
Attention: General Counsel
and
Moore & Van Allen, PLLC
100 North Tryon Street, Floor 47
Charlotte, North Carolina 28202-4003
Attention: Barney Stewart III
9. Severability. If any such provision of this Agreement shall be
invalid or unenforceable for any reason, the other provisions shall continue to
be effective and binding and this Agreement shall be construed as if the invalid
or unenforceable provision were omitted. If any provision of this Agreement is
unenforceable after a certain period of years from the date hereof due to the
requirements of any state laws, the remainder of the Agreement shall remain
enforceable and binding in accordance with its terms.
10. Binding Effect. This Agreement shall be binding upon the
Stockholders, and their respective heirs, legal representatives, executors,
administrators, successors and permitted assigns. Any rights given or duties
imposed upon the estate of a deceased Stockholder shall inure to the benefit of
and be binding upon the legal representative of such deceased Stockholder's
estate in his or her fiduciary capacity.
11. Entire Agreement, Amendment, Waiver. This Agreement contains the
entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes any and all other agreements, either written or oral,
among the parties hereto regarding the same subject matter. The provisions of
this Agreement may be amended, modified or waived only as provided for herein or
on unanimous written consent of the Stockholders. A written waiver provided
pursuant to this Section 11 shall be effective only in the specific instance and
for the specific purpose for which given. No failure or delay on the part of any
Stockholder in the exercise of any right, power or privilege hereunder shall
operate as a waiver of any such right, power or privilege nor shall any such
failure or delay preclude any other or further exercise hereof.
8
<PAGE>
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
13. Captions. The captions herein are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
of this Agreement nor any provisions hereof.
14. Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of Delaware.
15. Arbitration.
(a) Any dispute, controversy, difference or claim arising out
of, relating to or in connection with this Agreement, any transaction
hereunder, or the breach hereof shall be decided by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, except as otherwise agreed by
the parties. Any such arbitration shall be conducted on the earliest
possible date and conducted in Charlotte, North Carolina. The arbiter's
award shall be final and binding on the parties hereto and judgment
upon the award may be entered in any court having jurisdiction thereof.
Expenses in the arbitration shall be apportioned between the parties by
the arbiter. The arbitration award may include reasonable attorneys'
fees from the other party. No action, regardless of form, arising out
of this Agreement may be brought more than three (3) years after the
cause of action for such action has accrued.
(b) Notwithstanding subsection (a), either party may, if it
believes that it requires or is entitled to injunctive relief, file a
civil action in any court having jurisdiction seeking injunctive
relief. Any claim or demand for monetary damages shall, however, be
governed exclusively by the provisions for arbitration set forth in
subsection (a).
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement under seal as of the date first above written.
/s/ Richard T. Aab
----------------------------------------------
Richard T. Aab
MELRICH ASSOCIATES, L.P.
By: /s/ Richard T. Aab
-------------------------------------
Richard T. Aab, General Partner
By: /s/ Joyce M. Aab
-------------------------------------
Joyce M. Aab, General Partner
T. V. Ganatra
----------------------------------------------
Tansukh V. Ganatra
SUPER STAR ASSOCIATES
LIMITED PARTNERSHIP
By: T. V. Ganatra
-------------------------------------
Tansukh V. Ganatra, General Partner
10
<PAGE>
EXHIBIT A
to
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
APPOINTMENT OF IRREVOCABLE PROXY
The undersigned stockholder of US LEC CORP., a Delaware corporation
(the "Corporation"), does hereby constitute and appoint RICHARD T. AAB ("Aab")
as his, her or its proxy with full power of substitution, for and on its behalf
to attend all meetings of stockholders of such Corporation and to act, vote and
execute consents with respect to all shares of Class B Common Stock of the
Corporation owned by the undersigned stockholder, as fully and to the same
extent as the undersigned stockholder might do itself. This proxy is irrevocable
and is coupled with an interest, having been executed in connection with that
certain Amended and Restated Stockholders Agreement dated as of April __, 2000
to which Aab and the undersigned are among the parties (the "Stockholders
Agreement"). This appointment of proxy shall continue in full force and effect
during the period specified in the Stockholders Agreement.
This the ____ day of , 2000.
-----------------------
By:
---------------------------------
Name:
-------------------------------
<PAGE>
EXHIBIT B
to
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
APPOINTMENT OF IRREVOCABLE PROXY
The undersigned stockholder of US LEC CORP., a Delaware corporation
(the "Corporation"), does hereby constitute and appoint TANSUKH V. GANATRA
("Ganatra") as his, her or its proxy with full power of substitution, for and on
its behalf to attend all meetings of stockholders of such Corporation and to
act, vote and execute consents with respect to all shares of Class B Common
Stock of the Corporation owned by the undersigned stockholder, as fully and to
the same extent as the undersigned stockholder might do itself. This proxy is
irrevocable and is coupled with an interest, having been executed in connection
with that certain Amended and Restated Stockholders Agreement dated as of April
__, 2000 to which Ganatra and the undersigned are among the parties (the
"Stockholders Agreement"). This appointment of proxy shall continue in full
force and effect during the period specified in the Stockholders Agreement.
This the day of , .
----- ----------------------- --------
By:
-------------------------------
Name:
-----------------------------
VOTING AND TAG ALONG AGREEMENT
This Voting AND TAG ALONG Agreement (this "Agreement") is made and
entered into as of April 11, 2000, by and among the persons whose names are set
forth on the attached Schedule I (collectively, the "Investors") and Richard T.
Aab ("Aab"), Melrich Associates, L.P., a New York limited partnership
("Melrich"), Tansukh V. Ganatra ("Ganatra") and Super STAR Associates Limited
Partnership, a Georgia limited partnership ("Super STAR"). Aab, Melrich, Ganatra
and Super STAR are collectively referred to herein as the "Class B
Stockholders."
STATEMENT OF PURPOSE
A. The Class B Stockholders own and hold of record the following shares
of Class B Common Stock, par value $0.01 per share ("Class B Common Stock"),
issued by US LEC Corp., a Delaware corporation (the "Company"), which constitute
all of the issued and outstanding shares of Class B Common Stock:
CLASS B NUMBER
STOCKHOLDERS OF SHARES
----------------------- -----------------
Aab 8,480,770
Melrich 4,309,500
Ganatra 294,000
Super STAR 3,750,000
-----------------
Total 16,834,270
=================
B. The Class B Stockholders have entered into a Second Amended and
Restated Stockholders Agreement, of even date herewith (the "Stockholders
Agreement"), pursuant to which, among other things, Melrich, Ganatra and Super
STAR (i) agreed to vote all of their shares of Class B Common Stock in the same
manner as Aab and (ii) granted to Aab an irrevocable proxy, with full power of
substitution, for and on their behalf to attend all meetings of stockholders of
the Company and to act, vote and execute consents with respect to all of their
shares of Class B Common Stock, which proxy continues in full force and effect
for the period specified in the Stockholders Agreement (the "Irrevocable
Proxy").
C. The Board of Directors of the Company has designated a new series of
Series A Convertible Preferred Stock (the "Preferred Stock") pursuant to a
Certificate of Designation (the "Designation") amending the Company's Restated
Certificate of Incorporation (as so amended and as further amended from time to
time, the "Restated Certificate").
D. Concurrently with the execution of this Agreement, the Company and
the Investors are entering into a Preferred Stock Purchase Agreement (the
"Purchase Agreement") which provides for (i) the purchase by the Investors of an
aggregate of 200,000 shares of the Preferred Stock, (ii) the issuance of an
option to the Investors (the "Option") to purchase up to an aggregate of 100,000
shares of the Company's Series B Convertible Preferred Stock (the "Option
Preferred Stock") having the terms set forth in the Series B Certificate of
Designation (the "Option Designation") attached as an exhibit to the Option
Agreement (as defined in the Purchase Agreement) and (iii) a Corporate
Governance Agreement which obligates the
<PAGE>
Company to take certain actions in connection with the Purchase Agreement (the
"Corporate Governance Agreement").
E. Shares of the Preferred Stock and shares of Option Preferred Stock,
when issued under the Option Agreement, will be convertible into shares of the
Company's Class A Common Stock, par value $.01 per share ("Class A Common
Stock"). "Common Stock" means any Class A Common Stock, Class B Common Stock or
any other class of common stock created by the Company. "Subject Common Stock"
means any Common Stock now or hereafter held by the Class B Stockholders.
F. As an inducement to the Investors to enter into the Purchase
Agreement, the Class B Stockholders are willing to enter into and be bound by
this Agreement pursuant to which, among other things, the Class B Stockholders
grant to the Investors, certain tag-along rights and voting agreements with
respect to the shares of Subject Common Stock upon the terms set forth herein.
Now, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereby agree as follows:
1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CLASS B
STOCKHOLDERS. The Class B Stockholders hereby represent, warrant and covenant to
the Investors as follows:
(a) Ownership of and Proxy Held With Respect to the Class B
Shares. Aab owns and holds of record 8,480,770 shares of Class B Common
Stock and holds an irrevocable proxy with respect to the 4,309,500
shares of Class B Common Stock owned and held of record by Melrich,
294,000 shares of Class B Common Stock owned and held of record by
Ganatra and 3,750,000 shares of Class B Common Stock owned and held of
record by Super STAR.
(b) Authority; No Conflict. This Agreement has been duly
executed and delivered by the Class B Stockholders and constitutes the
legal, valid and binding obligation of each of them, enforceable
against each of them in accordance with its terms, except as limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors'
rights generally and (ii) general principles of equity, regardless of
whether asserted in a proceeding in equity or at law. Neither the
execution and delivery of this Agreement nor the performance by the
Class B Stockholders of the obligations contemplated hereby will result
in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction
of any kind to which a Class B Stockholder is a party or bound or to
which the shares of Subject Common Stock are subject. Performance by
the Class B Stockholders of the obligations contemplated hereby will
not violate, or require any consent, approval, or notice under, any
provision of any judgment, order, decree, statute, law, rule or
regulation applicable to the Class B Stockholders or the shares of
Subject Common Stock.
2
<PAGE>
(c) Investors' Reliance. The Class B Stockholders understand
and acknowledge that the Investors are entering into the Purchase
Agreement in reliance upon the Class B Stockholders' execution and
delivery of this Agreement.
2. ADDITIONAL DOCUMENTS
The Class B Stockholders hereby covenant and agree to execute and
deliver any additional documents necessary or desirable, in the reasonable
opinion of the Investors, to carry out the intent of this Agreement.
3. AGREEMENT TO VOTE FOR DIRECTORS
(a) If, pursuant to the Restated Certificate, the Class B
Stockholders are authorized to vote on a proposal to elect one or more
Investor Directors (as defined in the Corporate Governance Agreement)
presented at any meeting of stockholders of the Company, the Class B
Stockholders shall vote each share of Subject Common Stock as to which
they hold voting power in favor of the election of any Investor
Director at such meeting and any adjournment thereof.
(b) If, pursuant to the Restated Certificate, the Class B
Stockholders are authorized to vote on a proposal to elect one or more
persons as directors to the Board (as defined in the Corporate
Governance Agreement) presented at any meeting of stockholders of the
Company called upon (i) the exercise by the Investor Agents (as defined
in the Corporate Governance Agreement) of a remedy they are entitled to
exercise pursuant to Section 3.4 of the Corporate Governance Agreement,
or (ii) the exercise by the Permitted Owners (as defined in the
Corporate Governance Agreement) of any rights they are entitled to
exercise under Section 5 of the Designation and the Option Designation,
the Class B Stockholders shall vote each share of Subject Common Stock
as to which they hold voting power in favor of the election of such
persons as directors as may be designated or nominated by the Investor
Agents or Permitted Owners, as applicable (including any Investor
Directors as defined in the Corporate Governance Agreement); provided
that the Class B Stockholders shall not be required to vote their
shares of Subject Common Stock in favor of more than such number of
persons so designated or nominated who, upon their election, would then
constitute (together with any incumbent Investor Directors) a majority
of the members of the Board.
4. POTENTIAL CHANGE OF CONTROL TRANSFERS
The Class B Stockholders agree not to Transfer for value any
shares of Subject Common Stock if, as a result of such Transfer, a Change of
Control (as defined in the Designation and the Option Designation) would occur
unless either (i) the outstanding shares of Preferred Stock and Option Preferred
Stock have been converted into Class A Common Stock prior to such Change of
Control or (ii) the Company is legally able, and has the resources necessary, to
comply with the provisions of Section 5.1(b) of the Designation and the Option
Designation upon the exercise by the holders of Preferred Stock and Option
Preferred Stock of their rights to require the Company to redeem the Preferred
Stock and Option Preferred Stock.
3
<PAGE>
5. TAG ALONG RIGHTS
No Class B Stockholder (each such stockholder, a "Prospective
Selling Class B Stockholder") shall Transfer for value (a "Sale") any shares of
Common Stock ("Shares") to any Person (a "Prospective Buyer") except in
compliance with this Section 5. Any attempted Sale of Shares not in compliance
with this Section 5 shall be null and void, and the Company shall not in any way
give effect to any such impermissible Sale.
(a) Notice. A written notice (the "Tag Along Notice") shall be
furnished by the Prospective Selling Class B Stockholders to the
Company, and to each Permitted Owner of the Underlying Common Stock (as
defined in the Corporate Governance Agreement) known to them based on
the records maintained by the Company (each, a "Tag Along Holder") at
least ten Business Days (as defined in the Purchase Agreement) prior to
such Sale. The Tag Along Notice shall include:
(i) The material terms of the proposed Sale,
including the number of Shares to be purchased from the
Prospective Selling Class B Stockholders, the percentage of
the total number of Shares held by the Prospective Selling
Class B Stockholders or their Affiliates (as defined in the
Purchase Agreement) which such number of Shares constitutes
(the "Tag Along Sale Percentage"), the maximum and minimum per
share purchase price (which maximum price shall not be more
than 110% of the minimum price) and the name and address of
the Prospective Buyer; and
(ii) An invitation to each Tag Along Holder to make
an offer to include in the proposed Sale to the Prospective
Buyer an additional number of Shares (not in any event to
exceed the Tag Along Sale Percentage of the total number of
shares of Underlying Common Stock held by such Tag Along
Holder) owned by such Tag Along Holder, on the same terms and
conditions, with respect to each Share sold, as the
Prospective Selling Class B Stockholders shall sell each of
their Shares.
(b) Exercise. Within ten Business Days after the effectiveness
of the Tag Along Notice, each Tag Along Holder desiring to make an
offer to include Shares in the proposed Sale (each a "Participating
Seller" and, together with the Prospective Selling Class B
Stockholders, collectively, the "Tag Along Sellers") shall send a
written offer (the "Tag Along Offer") to the Prospective Selling Class
B Stockholders, with a copy to the Company, specifying the number of
Shares (not in any event to exceed the Tag Along Sale Percentage of the
total number of shares of Underlying Common Stock held by such
Participating Seller) which such Participating Seller desires to have
included in the proposed Sale. Each Tag Along Holder who does not
accept the Prospective Selling Class B Stockholders' invitation to make
an offer to include Shares in the proposed Sale shall be deemed to have
waived all of its rights with respect to such Sale, and the Tag Along
Sellers shall thereafter be free to sell to the Prospective Buyer, at a
per share price no greater than the maximum per share price set forth
in the Tag Along Notice and on other principal terms which are not
materially more favorable to the Tag Along Sellers than those set forth
in the Tag Along Notice, without any further obligation to such
non-accepting Tag Along Holder.
4
<PAGE>
(c) Irrevocable Offer. The offer of each Participating Seller
contained in its Tag Along Offer shall be irrevocable, and, to the
extent such offer is accepted, such Participating Seller shall be bound
and obligated to sell in the proposed Sale on the same terms and
conditions, with respect to each Share sold, as the Prospective Selling
Class B Stockholders, up to such number of Shares as such Participating
Seller shall have specified in its Tag Along Offer; provided, however,
that if the principal terms of the proposed Sale change with the result
that the per share price shall be less than the minimum per share price
set forth in the Tag Along Notice or the other principal terms shall be
materially less favorable to the Tag Along Sellers than those set forth
in the Tag Along Notice, each Participating Seller shall be permitted
to withdraw the offer contained in its Tag Along Offer and shall be
released from its obligations thereunder.
(d) Reduction of Shares Sold. The Prospective Selling Class B
Stockholders shall attempt to obtain the inclusion in the proposed Sale
of the entire number of Shares which the Tag Along Sellers requested to
have included in the Sale (as evidenced in the case of the Prospective
Selling Class B Stockholders by the Tag Along Notice and in the case of
each Participating Seller by such Participating Seller's Tag Along
Offer). In the event the Prospective Selling Class B Stockholders shall
be unable to obtain the inclusion of such entire number of Shares in
the proposed Sale, the number of Shares to be sold in the proposed Sale
shall be allocated among the Tag Along Sellers in proportion, as nearly
as practicable, to the respective number of Shares which each Tag Along
Seller requested to be included in the proposed Sale.
(e) Additional Compliance. If (i) prior to consummation, the
terms of the proposed Sale shall change with the result that the per
share price to be paid in such proposed Sale shall be greater than the
maximum per share price set forth in the Tag Along Notice or the other
principal terms of such proposed Sale shall be materially more
favorable to the Tag Along Sellers than those set forth in the Tag
Along Notice, the Tag Along Notice shall be null and void, and it shall
be necessary for a separate Tag Along Notice to be furnished, and the
terms and provisions of this Section 5 separately complied with, in
order to consummate such proposed Sale pursuant to this Section 5;
provided, however, that in the case of such a separate Tag Along
Notice, the applicable period to which reference is made in Sections
5(a) and 5(b) shall be five Business Days and (ii) the Prospective
Selling Class B Stockholders have not completed the proposed Sale by
the end of the 90th day following the date of the effectiveness of the
Tag Along Notice, each Participating Seller shall be released from its
obligations under its Tag Along Offer, the Tag Along Notice shall be
null and void, and it shall be necessary for a separate Tag Along
Notice to be furnished, and the terms and provisions of this Section 5
separately complied with, in order to consummate such proposed Sale
pursuant to this Section 5, unless the failure to complete such
proposed Sale resulted from any failure by any Participating Seller to
comply with the terms of this Section 5.
(f) Excluded Transactions. Notwithstanding the foregoing, the
Class B Stockholders shall not be obligated to comply with the
foregoing provisions of this Section 5 and none of the Permitted Owners
shall have any right of participation pursuant to the terms of this
Section 5, or otherwise, in each case, with respect to any Sale of
Shares:
5
<PAGE>
(i) by a Class B Stockholder to another Class B
Stockholder or to a Permitted Transferee who agrees to be
bound by this Agreement as a Class B Stockholder;
(ii) in a public offering of Common Stock with
respect to which holders of Registrable Securities (as defined
in the Registration Rights Agreement) have piggyback
registration rights pursuant to the Registration Rights
Agreement (as defined in the Purchase Agreement); or
(iii) if, after giving effect to such Sale, the Class
B Stockholders and their Permitted Transferees will continue
to own in the aggregate not less than 85% of the shares of
Subject Common Stock held by the Class B Stockholders as of
the date of this Agreement.
(g) Further Assurances. Each Participating Seller, whether in
its capacity as a Participating Seller, stockholder, officer or
director of the Company, or otherwise, shall take or cause to be taken
all such actions as may be necessary or reasonably desirable in order
expeditiously to consummate each Sale pursuant to this Section 5 and
any related transactions, including, without limitation, executing,
acknowledging and delivering consents, assignments, waivers and other
documents or instruments; furnishing information and copies of
documents; filing applications, reports, returns, filings and other
documents or instruments with governmental authorities; and otherwise
cooperating with the Prospective Selling Class B Stockholders and the
Prospective Buyer; provided, however, that Participating Sellers shall
be obligated to become liable in respect of any representations,
warranties, covenants, indemnities or otherwise to the Prospective
Buyer solely to the extent provided in the immediately following
sentence. Without limiting the generality of the foregoing, each
Participating Seller agrees to execute and deliver such agreements as
may be reasonably specified by the Prospective Selling Class B
Stockholders, to which such Prospective Selling Class B Stockholders
will also be party, including, without limitation, agreements to (A)
make individual representations, warranties, covenants and other
agreements as to the unencumbered title to its Shares and the power,
authority and legal right to sell such Shares and the absence of any
adverse claim with respect to such Shares and (B) be liable (whether by
purchase price adjustment, indemnity payments or otherwise) in respect
of representations, warranties, covenants and agreements in respect of
the Company and its subsidiaries; provided, however, that, except with
respect to individual representations, warranties, covenants,
indemnities and other agreements of Participating Sellers of the type
described in clause (A) above, the aggregate amount of such liability
shall not exceed the lesser of (x) such Participating Seller's pro rata
portion of any such liability, to be determined in accordance with such
Participating Seller's portion of the total number of Shares included
in such Sale or (y) the proceeds to such Participating Seller in
connection with such Sale; and provided, further, that with respect to
individual representations, warranties, covenants, indemnities and
other agreements of Participating Sellers of the type described in
clause (A) above, the aggregate amount of such liability shall not
exceed the proceeds to such Participating Seller in connection with
such Sale.
(h) Sale Process. The Prospective Selling Class B Stockholders
shall, in their sole discretion, decide whether or not to pursue,
consummate, postpone or abandon any
6
<PAGE>
proposed Sale and the terms and conditions thereof. No Prospective
Selling Class B Stockholder or any Affiliate of any Prospective Selling
Class B Stockholder shall have any liability to any other holder of
Shares arising from, relating to or in connection with the pursuit,
consummation, postponement, abandonment or terms and conditions of any
proposed Sale except to the extent such Prospective Selling Class B
Stockholder shall have failed to comply with the provisions of this
Section 5.
(i) Expenses. All reasonable costs and expenses incurred by
the Prospective Selling Class B Stockholders or the Company in
connection with any proposed Sale pursuant to this Section 5 (whether
or not consummated), including without limitation all attorneys fees
and expenses, all accounting fees and charges and all finders,
brokerage or investment banking fees, charges or commissions, shall be
paid by the Prospective Selling Class B Stockholders. The reasonable
costs and expenses incurred by the Participating Sellers in connection
with any proposed Sale pursuant to this Section 5 (whether or not
consummated) including, without limitation, all attorneys fees and
expenses, all accounting fees and charges and all finders, brokerage or
investment banking fees, charges or commissions, shall be paid by the
Participating Seller(s).
(j) Closing. The closing of a Sale pursuant to the Section 5
shall take place at such time and place as the Prospective Selling
Class B Stockholders shall specify by notice to each Participating
Seller. At the closing of any Sale under this Section 5, each
Participating Seller shall deliver the certificates evidencing the
Shares to be sold by such Participating Seller, duly endorsed, or with
stock (or equivalent) powers duly endorsed, for transfer with signature
guaranteed, free and clear of any liens or encumbrances, with any stock
(or equivalent) transfer tax stamps affixed, against delivery of the
applicable consideration.
(k) Termination. The provisions of this Section 5 shall
terminate and have no further force or effect immediately after the
Permitted Owners cease to hold at least 20% of the Underlying Common
Stock.
6. SUBJECT COMMON STOCK; TRANSFERS TO PERMITTED TRANSFEREES
(a) Subject Common Stock. The Class B Stockholders agree that
any shares of Subject Common Stock held or owned by them, or with
respect to which they otherwise acquire beneficial ownership after the
execution of this Agreement, including, without limitation, in the
event of any stock split, stock dividend, recapitalization or other
change in the capital structure of the Company affecting the Subject
Common Stock, shall be subject to the terms and conditions of this
Agreement to the same extent as if such shares constituted the shares
of Subject Common Stock issued and outstanding as of the date hereof.
(b) Transfers to Permitted Transferees. The Class B
Stockholders agree that this Agreement and the obligations hereunder
shall be binding upon any Permitted Transferee (as defined in the
Restated Certificate) to which legal or beneficial ownership of any
shares of Subject Common Stock shall pass, whether by operation of law
or otherwise. No transfer of the legal or beneficial ownership of such
shares to a Permitted Transferee shall be valid unless such Permitted
Transferee agrees to be bound by this Agreement as a "Class B
Stockholder."
7
<PAGE>
7. MISCELLANEOUS
(a) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, then the remainder
of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
(b) Binding Effect and Assignment. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns (including any Permitted Transferees); provided, however,
except as otherwise specifically provided herein, neither this
Agreement nor any of the rights, interests or obligations of the Class
B Stockholders may be assigned by the Class B Stockholders without the
prior written consent of the Permitted Owners holding a majority of the
Underlying Common Stock.
(c) Amendments and Modification. This Agreement may not be
modified, amended, altered or supplemented except upon the execution
and delivery of a written agreement executed by the Class B
Stockholders and Permitted Owners holding a majority of the Underlying
Common Stock.
(d) Specific Performance; Injunctive Relief. The parties
hereto acknowledge that the Investors will be irreparably harmed and
that there will be no adequate remedy at law for a violation of any of
the covenants or agreements of the Class B Stockholders set forth
herein. Therefore, it is agreed that, in addition to any other remedy
or remedies that may be available to the Investors upon any such
violation, the Investors shall have the right to enforce such covenants
and agreements by specific performance, injunctive relief or by any
other means available to the Investors at law or in equity without
posting any bond and without proving that monetary damages would be
inadequate.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder ("Notices") shall be in writing and sent by
certified or registered mail, return receipt requested, a recognized
overnight courier service, telecopier or personal delivery, as follows:
8
<PAGE>
(i) if to any Class B Stockholder:
Richard T. Aab
Melrich Associates, L.P.
Tansukh V. Ganatra
Super STAR Associates Limited Partnership
c/o US LEC Corp.
Transamerica Square
401 N. Tryon Street, Suite 1000
Charlotte, North Carolina 28202
Attention: General Counsel
Telecopier: (704) 319-3098
with required copies to:
Richard T. Aab
29 Woodstone Rise
Pittsford, NY 14534
Tansukh V. Ganatra
6523 Ashdale Place
Charlotte, North Carolina 28215
US LEC Corp.
Transamerica Square
401 N. Tryon Street, Suite 1000
Charlotte, North Carolina 28202
Attention: General Counsel
Telecopier: (704) 319-3098
and
Moore & Van Allen, PLLC
100 North Tryon Street, Floor 47
Charlotte, North Carolina 28202-4003
Attention: Barney Stewart III
Telecopier: (704) 331-1151
(ii) if to the Investors:
Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Attention: Ian K. Loring
Telecopier: (617) 572-3274
and
9
<PAGE>
Thomas H. Lee Partners, L.P.
75 State Street, 26th Floor
Boston, Massachusetts 02109
Attention: Anthony J. DiNovi
Telecopier: (617) 227-3514
with a required copy to:
Ropes & Gray
One International Plaza
Boston, Massachusetts 02110-2624
Attention: Philip J. Smith
Telecopier: (617) 951-7050
All such Notices shall be deemed to have been duly given: when
delivered by hand, if personally delivered; when delivered by courier,
if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is acknowledged by the individual to whose attention the
telecopy is sent, if telecopied. A party may change its address for
purposes of this Agreement by Notice in accordance with this Section
7(e).
(f) Governing Law. The laws of the State of Delaware
(irrespective of its choice of laws, rules or principles) will govern
the validity of this Agreement, the construction of its terms and the
interpretation and enforcement of the rights and duties of the parties
hereto.
(g) Entire Agreement. This Agreement and the Purchase
Agreement contain the entire understanding of the parties with respect
to the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
(h) Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but which together
shall constitute one and the same agreement.
(i) Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or
interpretation of this Agreement.
(j) Definition of Transfer. For purposes of Sections 4 and 5
of this Agreement, a "Transfer" means any sale, assignment or other
disposition of any Shares to any other Person, whether directly,
indirectly, voluntarily, involuntarily, by operation of law, pursuant
to judicial process or otherwise; provided that the term "Transfer"
shall not include the pledge or granting of a security interest in the
Shares or the subsequent disposition of any of such Shares upon the
exercise by the pledgee or secured party, in accordance with its
customary practices, of its rights upon a default with respect to any
obligation owed to such pledgee or secured party by a Class B
Stockholder.
10
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
CLASS B STOCKHOLDERS:
/s/ Richard T. Aab
--------------------------------------------
Richard T. Aab
MELRICH ASSOCIATES, L.P.
By: /s/ Richard T. Aab
-----------------------------------
Richard T. Aab, General Partner
By: /s/ Joyce M. Aab
-----------------------------------
Joyce M. Aab, General Partner
/s/ T. V. Ganatra
--------------------------------------------
Tansukh V. Ganatra
SUPER STAR ASSOCIATES LIMITED PARTNERSHIP
By: /s/ T. V. Ganatra
-----------------------------------
Tansukh V. Ganatra, General Partner
11
<PAGE>
US LEC CORP.
By: /s/ Michael K. Robinson
-----------------------------------
Name: Michael K. Robinson
Title: Executive Vice President and
Chief Financial Officer
BAIN CAPITAL CLEC INVESTORS, L.L.C.
By: Bain Capital Fund VI, L.P.,
its Administrative Member
By: Bain Capital Partners VI, L.P.,
its General Partner
By: Bain Capital Investors VI, Inc.,
its general partner
By: /s/ Michael A. Krupka
-----------------------------------
Name: Michael A. Krupka
Title: Managing Director
THOMAS H. LEE EQUITY FUND IV, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Anthony J. DiNovi
-----------------------------------
Name: Anthony J. DiNovi
Title: Managing Director
THOMAS H. LEE FOREIGN FUND IV-B, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Anthony J. DiNovi
-------------------------------------
Name: Anthony J. DiNovi
Title: Managing Director
12
<PAGE>
THOMAS H. LEE FOREIGN FUND IV, L.P.
By: THL Equity Advisors IV, LLC,
its general partner
By: /s/ Scott M. Sperling
-----------------------------------
Name: Scott M. Sperling
Title: Managing Director
PUTNAM INVESTMENTS, INC.
By: /s/ William H. Woolverton
-----------------------------------
Name: William H. Woolverton
Title: Managing Director
1997 THOMAS H. LEE NOMINEE TRUST
By: /s/ Gerald Wheeler
-----------------------------------
Trustee
THOMAS H. LEE CHARITABLE INVESTMENT L.P.
By: /s/ Thomas H. Lee
-----------------------------------
Name: Thomas H. Lee
Title: President
/s/ David V. Harkins
--------------------------------------
DAVID V. HARKINS
THE HARKINS 1995 GIFT TRUST
By: /s/ Sheryll J. Harkins
-----------------------------------
Trustee
/s/ Scott A. Schoen
--------------------------------------
SCOTT A. SCHOEN
13
<PAGE>
/s/ C. Hunter Boll
--------------------------------------
C. HUNTER BOLL
/s/ Scott M. Sperling
--------------------------------------
SCOTT M. SPERLING
/s/ Anthony J. DiNovi
--------------------------------------
ANTHONY J. DINOVI
/s/ Thomas M. Hagerty
--------------------------------------
THOMAS M. HAGERTY
/s/ Warren C. Smith, Jr.
--------------------------------------
WARREN C. SMITH, JR.
/s/ Seth W. Lawry
--------------------------------------
SETH W. LAWRY
/s/ Kent R. Weldon
--------------------------------------
KENT R. WELDON
/s/ Terrence M. Mullen
--------------------------------------
TERRENCE M. MULLEN
/s/ Todd M. Abbrecht
--------------------------------------
TODD M. ABBRECHT
/s/ Charles A. Brizius
--------------------------------------
CHARLES A. BRIZIUS
/s/ Scott Jaeckel
--------------------------------------
SCOTT JAECKEL
/s/ Soren Oberg
--------------------------------------
SOREN OBERG
14
<PAGE>
/s/ Thomas R. Shepherd
--------------------------------------
THOMAS R. SHEPHERD
/s/ Wendy L. Masler
--------------------------------------
WENDY L. MASLER
/s/ Andrew D. Flaster
--------------------------------------
ANDREW D. FLASTER
ROBERT SCHIFF LEE 1988 IRREVOCABLE TRUST
By: /s/ Charles W. Robins
-----------------------------------
Trustee
/s/ Stephen Zachary Lee
--------------------------------------
STEPHEN ZACHARY LEE
/s/ Charles W. Robins
--------------------------------------
CHARLES W. ROBINS AS CUSTODIAN FOR
JESSE LEE
/s/ Charles W. Robins
--------------------------------------
CHARLES W. ROBINS AS CUSTODIAN FOR
NATHAN LEE
/s/ Charles W. Robins
--------------------------------------
CHARLES W. ROBINS
/s/ James Westra
--------------------------------------
JAMES WESTRA
15
<PAGE>
THL-CCI INVESTORS LIMITED
PARTNERSHIP
By: THL Investment Management Corp.,
its general partner
By:
-----------------------------------
Name:
Title:
/s/ Adam A. Abramson
--------------------------------------
ADAM A. ABRAMSON
/s/ Joanne M. Ramos
--------------------------------------
JOANNE M. RAMOS
/s/ P. Holden Spaht
--------------------------------------
P. HOLDEN SPAHT
/s/ Nancy M. Graham
--------------------------------------
NANCY M. GRAHAM
/s/ Gregory A. Ciongoli
--------------------------------------
GREGORY A. CIONGOLI
/s/ Wm. Matthew Kelly
--------------------------------------
WM. MATTHEW KELLY
/s/ Kevin F. Sullivan
--------------------------------------
KEVIN F. SULLIVAN
/s/ Diane M. Barriere
--------------------------------------
DIANE M. BARRIERE
/s/ Kim H. Oakley
--------------------------------------
KIM H. OAKLEY
16
