EXHIBIT 99.2
PROMISSORY NOTE AND RESTRICTED STOCK AGREEMENT
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December 15, 2000 $ 437,500.00
Stephen A. Hurly ("Maker") hereby promises to pay to the order of
FASTNET Corp. (the "Company"), the principal amount of $437,500.00 together with
interest thereon calculated from the date hereof in accordance with the
provisions of this promissory note. Capitalized terms used herein and not
otherwise defined shall have the meanings given to them in the Agreement or the
Company's Equity Compensation Plan.
1. PAYMENT OF INTEREST. Interest shall accrue on the
outstanding principal amount of this Note as well as on all accrued but unpaid
interest at a rate (the "Rate") equal to the LIBOR as listed in the Wall Street
Journal from time to time plus one percent (1%). Interest shall accrue and be
payable when principal on the Note is payable under Section 2. Payments of
principal and interest shall be made in lawful money of the United States of
America to the holder of this Note at the Company's address provided in
accordance with this Note.
2. PAYMENT ON NOTE.
(a) TERM. Subject to Section 2(b) below, the entire
principal amount of this Note and all accrued but unpaid interest thereon shall
be due and payable on December 1, 2005.
(b) MANDATORY PREPAYMENTS. Notwithstanding anything
in Section 2(a) to the contrary, but subject to the provisions of Section 4, the
Maker shall make the following mandatory prepayments:
In the event Maker receives any net cash proceeds (A) in
connection with his ownership of the Shares or (B) relating to any other
transaction or series of transactions in which Maker sells any of the Shares, or
in the event that (x) Maker terminates his employment with the Company; or (y)
the Company terminates Maker's employment with the Company for any reason, Maker
shall prepay any and all amounts owed pursuant to this Note within 12 months by
applying all of such payment first, to any accrued interest and second, to any
principal then outstanding.
(c) OPTIONAL PREPAYMENTS. Maker may, at any time and
from time to time without premium or penalty, prepay the entire outstanding
principal amount of the Note; provided that any prepayment will be accompanied
by a payment of accrued interest on the portion being prepaid.
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(d) RIGHT OF OFFSET. The Company shall be entitled to
offset any amounts owed to the Company by the Maker, now existing or hereinafter
arising, pursuant to this Note against any amounts payable by the Company to the
Maker.
3. COLLATERAL. The amounts due under this Note are secured by
a pledge of all of the Company's Common Stock sold by the Company and held by
the Maker at any such time as any amounts are due and owing to the Company by
the Maker hereunder, and the payment of the principal amount and accrued
interest under this Note is subject to certain offset rights possessed by the
Company. In addition, Maker shall pledge personal assets of Maker as additional
security in an amount equal to $109,375.00, with such assets to be reasonably
satisfactory to the Company.
4. EVENTS OF DEFAULT.
(a) DEFINITION. For purposes of this Note, an Event
of Default shall be deemed to have occurred if:
(i) Maker fails to pay when due, the full amount
of any principal or interest payment; or
(ii) Maker makes an assignment for the benefit of
creditors or admits in writing his inability to pay debts generally as they
become due; or an order, judgment or decree is entered adjudicating Maker
bankrupt or insolvent; or any order for relief with respect to Maker is entered
under the Federal Bankruptcy Code; or Maker petitions or applies to any tribunal
for the appointment of a custodian, trustee, receiver or liquidator of any
substantial part of Maker's assets, or commences any proceeding relating to
Maker under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction; or any
such petition or application is filed, or any such proceeding is commenced,
against Maker and either (A) Maker by any act indicates his approval thereof,
consent thereto or acquiescence therein or (B) such petition, application or
proceeding is not dismissed within 60 days;
(iii) Maker's employment with the Company is
terminated for Cause.
(b) CONSEQUENCES OF EVENTS OF DEFAULT. If an Event of
Default has occurred the aggregate principal amount of the Note (together with
all accrued interest thereon and all other amounts payable in connection
therewith) shall become immediately due and payable without any action on the
part of the Company, and Maker shall immediately pay to the Company all amounts
due and payable with respect to the Note. Further,
(i) Maker, or Maker's successors and assigns,
hereby waives diligence, presentment, protest and demand and notice of protest
and demand, dishonor and nonpayment of this Note, and expressly agrees that this
Note, or any payment hereunder, may be extended from time to time and that the
Company may accept security for this Note or release security for this Note, all
without in any way affecting the liability of Maker hereunder.
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(ii) In the event that Maker fails to pay any
amounts due hereunder when due, Maker shall pay to the Company, in addition to
such amounts due, all costs of collection, including reasonable attorneys fees.
5. RESTRICTED STOCK.
(a) RESTRICTIONS. Maker agrees and acknowledges that
the shares acquired by Maker with the proceeds of this loan (the "Shares") shall
be subject to vesting as follows: twenty-five percent of the Shares shall be
immediately vested as of the first day of employment and the remainder of the
Shares shall vest pro rata as of the last day of each calendar month over the 36
month period commencing on the first day of employment, provided that Maker
remains in the active service of the Company as of the relevant vesting date.
Notwithstanding the above, in the event that Maker is (i) terminated without
Cause; or (ii) Maker resigns under circumstances in which Maker's employment
position is changed in manner that does not provide for a high level executive
position and taking into consideration factors such as whether the salary and
benefits, taken as a whole, are comparable, and whether such employment requires
unreasonable relocation, and, in either case, at the time of termination, no
Change in Control as defined in the Company's Equity Compensation Plan has
occurred, Maker's vesting in the Shares shall be increased by: crediting to
Maker of an additional 12 months of vested shares or the balance of any unvested
shares provided under this agreement as long as that number of shares does not
exceed what would be 12 months of vesting, solely for purposes of this Section
5(a).
(b) MANDATORY SALE OF RESTRICTED SHARES. In the event
that Maker's employment with the Company is terminated for any reason, Maker
shall offer to sell all unvested Shares to the Company, and the Company shall
purchase such Shares, for the amount paid by Maker for such Shares plus interest
on such amount accrued at the rate specified in Section 1.
(c) CHANGE IN CONTROL. Notwithstanding Section 5(a),
the above (A) in the event that a Change in Control 50% of Maker's then unvested
Shares shall become vested as of the date on which the Change in Control event
closes, with the remaining Shares to become vested monthly on a pro rata basis
so that all remaining shares are completely vested on the first anniversary of
the Change in Control event, provided that Maker is actively employed by the
Company on the vesting date; and (B) in the event that (a) Maker has been
terminated without Cause; or (b) Maker resigns under circumstances in which
Maker's employment position is changed in manner that does not provide for a
high level executive position and taking into consideration factors such as
whether the salary and benefits, taken as a whole, are comparable, and whether
such employment requires unreasonable relocation, then all Shares shall become
immediately vested.
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5. AMENDMENT AND WAIVER. Except as otherwise expressly
provided herein, the provisions of this Note may be amended and Maker may take
any action herein prohibited, or omit to perform any act herein required to be
performed by Maker, only if Maker has obtained the written consent of the
Company.
6. CANCELLATION. After all principal and accrued interest at
any time owed on this Note has been paid in full, this Note shall be surrendered
to Maker for cancellation and shall not be reissued.
7. PLACE OF PAYMENT. Payments of principal and interest are to
be delivered to the Company at the following address:
FASTNET Corporation
Two Courtney Place---Suite 130
Bethlehem, PA 18017
or to such other address or to the attention of such other person as specified
by prior written notice to Maker.
8. USURY LAWS. It is the intention of the Company and Maker to
conform strictly to all applicable usury laws now or hereafter in force, and any
interest payable under this Note shall be subject to reduction to the amount not
in excess of the maximum legal amount allowed under the applicable usury laws as
now or hereafter construed by the courts having jurisdiction over such matters.
If the maturity of this Note is accelerated by reason of an election by the
Company resulting from an Event of Default, voluntary prepayment by Maker or
otherwise, then earned interest may never include more than the maximum amount
permitted by law, computed from the date hereof until payment, and any interest
in excess of the maximum amount permitted by law shall be canceled automatically
and, if theretofore paid, shall at the option of the Company either be rebated
to Maker or credited on the principal amount of this Note, or if this Note has
been paid, then the excess shall be rebated to Maker. The aggregate of all
interest (whether designated as interest, service charges, points or otherwise)
contracted for, chargeable, or receivable under this Note shall under no
circumstances exceed the maximum legal rate upon the unpaid principal balance of
this Note remaining unpaid from time to time. If such interest does exceed the
maximum legal rate, it shall be deemed a mistake and such excess shall be
canceled automatically and, if theretofore paid, rebated to Maker or credited on
the principal amount of this Note, or if this Note has been repaid, then such
excess shall be rebated to Maker.
9. GOVERNING LAW. This Note is made under and governed by the
internal law, not the laws of conflicts, of the State of Delaware.
[Signatures appear on following page(s)]
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IN WITNESS WHEREOF, Maker has executed and delivered this Promissory Note and
Restricted Stock Agreement as of the date above.
/s/ Stephen A. Hurly
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STEPHEN A. HURLY
Acknowledged and agreed to
by FASTNET Corporation solely
for purposes of Section 5 of
this Promissory Note and Restricted
Stock Agreement
FASTNET CORPORATION
By: /s/ Stanley F. Bielicki
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Stanley F. Bielicki
Title: Chief Financial Officer
