Bain Capital Fund VI LP – ‘SC 13D’ on 2/20/01 re: US Lec LLC – EX-3

On:  Tuesday, 2/20/01, at 5:18pm ET   ·   Accession #:  927016-1-1009   ·   File #:  5-54177

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General Statement of Beneficial Ownership   —   Schedule 13D
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D      General Statement of Beneficial Ownership             14     60K 
 2: EX-1        Corporate Governance Agreement                        22     73K 
 3: EX-2        Limited Liability Company Agreement                   30    112K 
 4: EX-3        Registration Rights Agreement                         21     67K 

EX-3   —   Registration Rights Agreement

EX-3
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                                                                       EXHIBIT 3

REGISTRATION RIGHTS AGREEMENT 

          This Agreement is entered into as of April 11, 2000 by US LEC Corp., a
   Delaware corporation (the "Company"), and the Persons whose names are set
forth on the attached Schedule I (collectively, the "Investors").     

   A.   The Company and the Investors have entered into a Series A
   Convertible Preferred Stock Purchase Agreement, dated as of the same date
 as this Agreement (the "Purchase Agreement"), pursuant to the terms and
conditions of which (i) the Company is issuing and selling to the     
    Investors, and the Investors are purchasing from the Company, an aggregate
  of up to 200,000 shares of Series A Convertible Preferred Stock and (ii)
the Company is issuing an option (the "Option") to the Investors to   
purchase an aggregate of 100,000 shares of convertible preferred stock
  pursuant to the terms and conditions of an Option Agreement, dated as of
     the same date as this Agreement (the 200,000 shares of Series A Convertible
   Preferred Stock, the number of shares of convertible preferred stock (the
  "Option Stock") issued to the Investors upon the exercise of the Option,
and any shares of convertible preferred stock issued as preferential  
     dividends pursuant to the terms of the Series A Convertible Preferred Stock
and Option Stock are collectively referred to herein as the "Preferred
Shares").                                                             

   B.   The parties' execution and delivery of this Agreement is a
    condition of their respective obligations to close the Purchase Agreement.

The parties agree as follows:                               

1.   Definitions.                                                     

    Capitalized terms which are used in this Agreement without being
defined have the same meanings that they are given in the Purchase    
Agreement. In addition, the following terms have these meanings:      

        "Registrable Securities" means (i) any shares of Common Stock issued
    or issuable upon conversion of the Preferred Shares and (ii) any shares of
Common Stock issued or issuable (A) as a dividend or distribution in  
respect of, or (B), in exchange for or replacement of, or (C) upon    
    conversion or exercise of any warrant or other security issued or issuable
as a dividend or distribution in respect of or in exchange for or     
    replacement of, the Preferred Shares and any shares of Common Stock issued
or issuable upon conversion of the Preferred Shares. Any Registrable  
     Securities shall cease to be Registrable Securities (i) when they have been
distributed to the public pursuant to a offering registered under the 
 Securities Act or sold to the public through a broker, dealer or market
    maker in compliance with Rule 144 under the Securities Act (or any similar
     rule then in force) or repurchased by the Company or any Subsidiary or (ii)
     if and when they (or, in respect of issuable but not yet issued Registrable
  Securities, the underlying Preferred Shares or Common Stock) cease to be
held by an Investor, a Permitted                                      

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Transferee (as "Permitted Transferee" is defined in the Corporate     
  Governance Agreement) or a transferee to whom an Investor or a Permitted
    Transferee has transferred Registrable Securities with a value of at least
$50 million.                                                          

        "Registration Expenses" means all expenses incident to the Company's
performance of or compliance with this Agreement, including all       
registration and filing fees, fees and expenses of compliance with    
securities or blue sky laws, printing expenses, messenger and delivery
    expenses, fees and disbursements of custodians, and fees and disbursements
of counsel for the Company and all independent certified public       
accountants, underwriters (excluding discounts, commissions and       
underwriters' counsel fees) and other Persons retained by the Company.

   "Violation" means any of the following statements, omissions or
violations: (i) any untrue statement or alleged untrue statement of a 
material fact contained or incorporated by reference in a registration
    statement pursuant to this Agreement, including any related preliminary or
    final prospectus, any amendment or supplement, or any document filed under
    state securities or "blue sky" laws, (ii) the omission or alleged omission
 to state a material fact required to be stated in any such registration
  statement, prospectus, amendment, supplement or document or necessary to
make the statements in any such registration statement, prospectus,   
     amendment, supplement or document not misleading, or (iii) any violation or
   alleged violation by the Company of the Securities Act, the Exchange Act,
   any state securities law, or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law.         

2.   Demand Registrations.                                            

   2.1  General. On or at any time after the second anniversary of
-------                                           
Closing, holders of a majority of the Registrable Securities then     
     outstanding may request registration under the Securities Act of all or any
portion of their Registrable Securities. All registrations requested  
   pursuant to this Section 2.1 are referred to in this Agreement as "Demand
     Registrations." Holders of Registrable Securities then outstanding shall be
 limited to three Demand Registrations and each such Demand Registration
   must include an initial request to register Registrable Securities having
  an aggregate offering value of at least $20 million. In regard to Demand
Registrations:                                                        

           (a)  Each request for a Demand Registration shall specify the
approximate number of Registrable Securities requested to be
          registered. Within 10 Business Days after receipt of any request for a
     Demand Registration, the Company shall give written notice of the
         requested registration to all other holders of Registrable Securities
        and, subject to Section 2.2 below, shall include in the registration
    all Registrable Securities with respect to which the Company has
         received written requests for inclusion within 15 Business Days after
receipt of the Company's notice.                            

           (b)  A Demand Registration shall not be counted as one of the
 three permitted Demand Registrations unless (i) it has become
effective and (ii) the                                      

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         Persons making the request are able to register and sell at least 75%
of the Registrable Securities included in the registration. 

     (c)  The Company shall pay all Registration Expenses in
        connection with any Demand Registration whether or not it is counted
as one of the three permitted Demand Registrations.         

               (d)  Demand Registrations shall be on Form S-2 or Form S-3 or any
      similar short-form registration statement, if available. Otherwise
      Demand Registrations shall be on Form S-1 or any similar long-form
registration statement.                                     

          (e)  The Company shall have the right to select the managing
      underwriters in connection with an underwritten public offering of
        Registrable Securities, subject to the approval of a majority of the
holders of the Registrable Securities included in any Demand
       Registration which approval shall not be unreasonably withheld, and
       holders of a majority of the Registrable Securities included in any
    Demand Registration shall have the right to select a co-managing
     underwriter, subject to the Company's approval which shall not be
unreasonably withheld.                                      

          (f)  The holders of a majority of the Registrable Securities
          included in any Demand Registration shall have the right to select the
    investment banker(s) and manager(s) to administer an offering of
       Registrable Securities that is not an underwritten public offering,
     subject to the Company's approval which shall not be unreasonably
withheld.                                                   

          2.2  Priority on Demand Registrations. The Company will not include in
--------------------------------                  
any Demand Registrations any securities which are not Registrable     
   Securities without the prior written consent of the holders of a majority
  of the Registrable Securities included in such registration. If a Demand
Registration is an underwritten offering and the managing underwriters
advise the Company in writing that in their opinion the number of     
Registrable Securities and, if permitted hereunder, other securities  
     requested to be included in such offering exceeds the number of Registrable
Securities, and other securities, if any, that can be sold without    
  adversely affecting the marketability of the offering, the Company shall
     include in the registration (i) first, the number of Registrable Securities
  requested to be included which in the opinion of the underwriters can be
 sold without adversely affecting the marketability of the offering, pro
 rata among the respective holders thereof on the basis of the number of
  Registrable Securities owned by each such holder, and (ii) second, other
   securities requested to be included in such Demand Registration, pro rata
 among the holders of such securities on the basis of the number of such
securities owned by each such holder.                                 

       2.3  Restrictions on Demand Registrations. The Company shall not be
------------------------------------              
obligated to effect more than two Demand Registrations in any 12-month
period. The Company shall not be obligated to effect any Demand       
    Registration within 180 days after the effective date of a previous Demand
Registration or a previous registration in which                      

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    the holders of Registrable Securities were given piggyback rights pursuant
    to Section 3 and, in the case of a previous Demand Registration, were able
     to register and sell at least 75% of the Registrable Securities proposed to
  be included in such registration or, in the case of a previous Piggyback
Registration, were able to register and sell at least 50% of the      
  Registrable Securities proposed to be included in such registration. The
     Company may postpone for up to 90 days the filing or the effectiveness of a
     registration statement for a Demand Registration if a certificate signed by
  an executive officer of the Company is promptly furnished to the holders
   requesting the Demand Registration stating that the Board of Directors of
     the Company has determined that such a Demand Registration would reasonably
  be expected to have a material adverse effect on any proposal or plan by
the Company to engage in any acquisition of assets (other than in the 
  ordinary course of business) or any merger, consolidation, tender offer,
reorganization or similar transaction. In addition, the Company may   
  postpone for up to 180 days the filing of a registration statement for a
    Demand Registration if a certificate signed by an executive officer of the
Company is promptly furnished to the holders requesting the Demand    
Registration stating that the Company intends to file a registration  
  statement for a primary offering of its debt or equity securities within
    the next 60 days so long as the Company is at all times proceeding in good
faith to make such registration statement effective. In the event the 
filing or the effectiveness of a registration statement is postponed  
pursuant to this Section 2.3, the holders of Registrable Securities   
    initially requesting the Demand Registration shall be entitled to withdraw
     their request. If their request is withdrawn, the Demand Registration shall
not count as one of the three permitted Demand Registrations and the  
Company will pay all Registration Expenses in connection with such    
     registration. The Company may delay the filing or suspend the effectiveness
    of a Demand Registration pursuant to this Section 2.3 only once in any 12-
month period.                                                         

3.   Piggyback Registrations.                                         

    3.1  Right To Piggyback. After the first anniversary of Closing,
------------------                                
whenever the Company proposes to register any of its equity securities
    under the Securities Act (other than (i) pursuant to a Demand Registration
    or (ii) a registration on Form S-4 or Form S-8 or any successor or similar
     form) and the registration form to be used may be used for the registration
    of Registrable Securities (a "Piggyback Registration"), whether or not for
   sale for its own account, the Company shall give prompt written notice to
 all holders of Registrable Securities of its intention to effect such a
registration and shall include in the registration all Registrable    
    Securities with respect to which the Company has received written requests
for inclusion within 15 Business Days after receipt of the Company's  
  notice. Holders of Registrable Securities shall be entitled to unlimited
Piggyback Registrations for their Registrable Securities.             

      3.2  Piggyback Expenses.  The Registration Expenses of the holders
------------------                                
 of Registrable Securities shall be paid by the Company in all Piggyback
Registrations.                                                        

          3.3  Priority on Primary Registrations. If a Piggyback Registration is
---------------------------------                 
an underwritten primary registration on behalf of the Company, and the
   managing underwriters advise the Company in writing that in their opinion
the number of securities                                              

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     requested to be included in the registration exceeds the number that can be
 sold without adversely affecting the marketability of the offering, the
  Company shall include in the registration (i) first, the securities that
                           -----
the Company proposes to sell, (ii) second, the Registrable Securities 
      ------
requested to be included in the registration and any other securities 
  requested to be included in such registration by the holders thereof who
have been granted rights by the Company to participate in a Piggyback 
     Registration pari passu with the holders of Registrable Securities pursuant
   to Section 10.1, pro rata among the holders of the Registrable Securities
    and the holders of such other securities on the basis of the number of the
    Registrable Securities and such other securities owned by each holder, and
(iii) third, any other securities requested to be included in the     
-----                                                     
registration.                                                         

         3.4  Priority on Secondary Registrations. If a Piggyback Registration
-----------------------------------               
is an underwritten secondary registration on behalf of holders of the 
Company's securities (other than on behalf of holders of Registrable  
  Securities that have initiated a Demand Registration pursuant to Section
 2), and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in the
registration exceeds the number that can be sold without adversely    
   affecting the marketability of the offering, the Company shall include in
     the registration (i) first, the securities requested to be included therein
    by the holders requesting such registration and the Registrable Securities
  requested to be included in the registration, pro rata among the holders
thereof on the basis of the number of such securities and Registrable 
     Securities owned by each such holder, and (ii) second, any other securities
requested to be included in the registration.                         

   3.5  Other Registrations. If the Company has previously filed a
-------------------                               
   registration statement with respect to Registrable Securities pursuant to
   Section 2 or pursuant to this Section 3, and if the previous registration
     has not been withdrawn or abandoned, the Company shall not file or cause to
be effected any other registration of any of its equity securities or 
   securities convertible or exchangeable into or exercisable for its equity
    securities under the Securities Act (except on Form S-4 or Form S-8 or any
     successor or similar forms), whether on its own behalf or at the request of
 any holder or holders of its securities, until a period of at least 180
   days has elapsed from the effective date of the previous registration or,
if shorter, a period of at least 60 days has elapsed from the date all
securities covered by such registration have been disposed of.        

4.   Holdback Agreements.                                             

      4.1  Holders of Registrable Securities. Each holder of Registrable
---------------------------------                 
Securities shall not effect any public sale or distribution (including
 sales pursuant to Rule 144) of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for equity 
   securities of the Company, during the seven days prior to and the 120-day
  period beginning on the effective date of any Demand Registration or any
 underwritten Piggyback Registration in which Registrable Securities are
included (except as part of such underwritten offering), unless the   
underwriters managing the registered public offering otherwise agree. 

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 4.2  Company. The Company shall not effect any public sale or
-------                                           
   distribution of its equity securities, or any securities convertible into
or exchangeable or exercisable for such securities, during such period
prior to and following the effective date of any underwritten Demand  
    Registration or any underwritten Piggyback Registration as the Company and
the underwriters managing the offering may agree.                     

5.   Registration Procedures.                                         

      Whenever holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the  
  Company shall use its reasonable best efforts to effect the registration
     and the sale of such Registrable Securities in accordance with the intended
     method of disposition. In this regard, the Company will as expeditiously as
possible:                                                             

      (a)  prepare and file with the Commission a registration statement
 with respect to such Registrable Securities and use its reasonable best
efforts to cause the registration statement to become effective;      

          (b)  notify each holder of Registrable Securities of the effectiveness
   of each registration statement filed under this Agreement and prepare and
     file with the Commission any amendments and supplements to the registration
     statement and the prospectus that may be necessary to keep the registration
statement effective for a period of either (i) not less than 120 days 
 (subject to extension pursuant to Section 8.2), or if such registration
     statement relates to an underwritten offering, such longer period as in the
    opinion of counsel for the underwriters a prospectus is required by law to
be delivered in connection with sales of Registrable Securities by an 
  underwriter or dealer or (ii) such shorter period as will terminate when
all of the securities covered by such registration statement have been
   disposed of in accordance with the intended methods of disposition by the
    seller or sellers thereof set forth in such registration statement (but in
     any event not before the expiration of any longer period required under the
  Securities Act), and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such     
    registration statement until such time as all of such securities have been
   disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such registration statement;   

       (c)  furnish to each seller of Registrable Securities the number of
  copies of the registration statement, each amendment and supplement, the
prospectus included in the registration statement (including each     
preliminary prospectus) and any other documents that each seller may  
   reasonably request in order to facilitate the disposition of the seller's
Registrable Securities;                                               

    (d)  use its best efforts to register or qualify the Registrable
Securities under such other securities or blue sky laws of such       
  jurisdictions as any seller reasonably requests and do any and all other
  acts and things which may be reasonably necessary or advisable to enable
the seller to consummate the disposition in those jurisdictions of the
  Registrable Securities owned by the seller (but the Company shall not be
    required to (i) qualify generally to do business in any jurisdiction where
it would not otherwise be                                             

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required to qualify but for this subparagraph, (ii) subject itself to 
  taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);                                    

         (e)  notify each seller of Registrable Securities, at any time when a
   prospectus relating to those securities is required to be delivered under
    the Securities Act, of the happening of any event as a result of which the
prospectus included in the registration statement contains an untrue  
statement of a material fact or omits any fact necessary to make the  
 statements in the prospectus not misleading; and, at the request of any
seller, the Company shall prepare a supplement or amendment to the    
prospectus so that, when delivered to purchasers of the Registrable   
     Securities, the prospectus, as supplemented or amended, does not contain an
    untrue statement of a material fact or omit to state any fact necessary to
make the statements in the prospectus not misleading;                 

         (f)  cause all such Registrable Securities to be quoted on the Nasdaq
National Market System and listed on any other exchange on which the  
Company's shares of Common Stock are listed;                          

        (g)  provide a transfer agent and registrar for all such Registrable
     Securities not later than the effective date of the registration statement;

     (h)  enter into such customary agreements (including underwriting
    agreements in customary form) and take all other actions that holders of a
   majority of the Registrable Securities being sold or the underwriters, if
    any, reasonably request in order to expedite or facilitate the disposition
of the Registrable Securities;                                        

   (i)  make available for inspection by any seller of Registrable
  Securities, any underwriter participating in any disposition pursuant to
the registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other   
   records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, employees and independent accountants to
supply all information reasonably requested by any such seller,       
underwriter, attorney, accountant or agent in connection with the     
registration statement;                                               

     (j)  otherwise use its best efforts to comply with all applicable
     rules and regulations of the Commission, and make available to its security
    holders, as soon as reasonably practicable, an earnings statement covering
  the period of at least twelve months beginning with the first day of the
Company's first full calendar quarter after the effective date of the 
registration statement, which earnings statement shall satisfy the    
provisions of Section 11(a) of the Securities Act and Rule 158; and   

      (k)  in the event of the issuance of any stop order suspending the
  effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the        
    qualification of any securities included in the registration statement for
sale in any jurisdiction, use its reasonable best efforts promptly to 
obtain the withdrawal of such order.                                  

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6.       Registration Expenses.                               

              6.1 Payment by Company. All Registration Expenses shall be
------------------                  
        borne as provided in this Agreement, except that the Company shall, in
  any event, pay its internal expenses (including all salaries and
       expenses of its officers and employees performing legal or accounting
      duties), the expense of any annual audit or quarterly review and the
      expenses and fees for listing the securities to be registered on the
  Nasdaq National Market System or any other exchange on which the
Company's shares of Common Stock are listed.                  

       6.2 Fees of Counsel. In connection with each Demand
---------------                     
 Registration and each Piggyback Registration, the Company shall
 reimburse the holders of Registrable Securities included in the
       registration for the reasonable fees and disbursements of one counsel
   chosen by the holders of a majority of the Registrable Securities
included in such registration.                                

           6.3 Payment by Holders. To the extent that Registration
------------------                  
     Expenses are not required to be paid by the Company, each holder of
        securities included in any registration under this Agreement shall pay
   those Registration Expenses allocable to the registration of such
       holder's securities so included, and any Registration Expenses not so
       allocable shall be borne by all sellers of securities included in the
  registration in proportion to the aggregate selling price of the
securities to be so registered.                               

7.       Indemnification.                                     

         7.1 Indemnification by Company. The Company agrees to
--------------------------          
       indemnify, to the extent permitted by law, each holder of Registrable
         Securities, each Person who controls such holder (within the meaning of
   the Securities Act), and their respective partners, shareholders,
       trustees, members, officers and directors against all losses, claims,
   damages, liabilities and expenses caused by any Violation, except
       insofar as the Violation is caused by or contained in any information
        furnished in writing to the Company by the holder expressly for use in
        a registration statement, prospectus, amendment, supplement or related
        document or is caused by the holder's failure to deliver a copy of the
      registration statement or prospectus or any amendment or supplements
        after the Company has furnished the holder with a sufficient number of
        copies. In connection with an underwritten offering, the Company shall
    indemnify such underwriters, their officers and directors and each
  Person who controls such underwriters (within the meaning of the
      Securities Act) to the same extent provided in this Section 7.1 with
      respect to the indemnification of holders of Registrable Securities.

         7.2 Indemnification by Holder. In connection with any
-------------------------           
  registration statement pursuant to which a holder of Registrable
        Securities is selling Registrable Securities, the holder shall furnish
  to the Company in writing such information and affidavits as the
         Company reasonably requests for use in connection with the registration
    statement or prospectus and, to the extent permitted by law, shall
        indemnify the Company, its directors and any of its officers who signs
      such registration statement and each Person who controls the Company
(within the meaning of the Securities Act)                    

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         against any losses, claims, damages, liabilities and expenses resulting
     from any Violation to the extent that the Violation is caused by or
         contained in any information furnished in writing to the Company by the
      holder expressly for use in such registration statement, prospectus,
         amendment, supplement or related document. This obligation to indemnify
       shall be individual, not joint and several, for each holder and shall
      be limited to the net amount of proceeds received by the holder from
 the sale of Registrable Securities pursuant to the registration
statement.                                                    

                 7.3  Procedures. Any Person entitled to indemnification under
----------                        
   this Section 7 shall, promptly after the receipt of notice of the
      commencement of any action, investigation, claim or other proceeding
     against such indemnified party in respect of which indemnity may be
    sought from an indemnifying party under this Section 7, notify the
         indemnifying party in writing of the commencement thereof. The omission
         of any indemnified party so to notify an indemnifying party of any such
    action shall not relieve the indemnifying party from any liability
  which it may have to such indemnified party under this Section 7
   unless, and only to the extent that, such omission results in the
      indemnifying party's forfeiture of substantive rights or defenses or
         the indemnifying party is otherwise irrevocably prejudiced in defending
     such proceeding. In case any such action, claim or other proceeding
shall be brought against any indemnified party for which      
         indemnification is claimed pursuant to Section 7.1, and it shall notify
        the Company of the commencement thereof, the Company shall be entitled
to assume the defense thereof at its own expense, with counsel
        satisfactory to the Company; provided, that any such indemnified party
         may, at its own expense, retain separate counsel to participate in such
 defense. Notwithstanding the foregoing, in any action, claim or
proceeding in which both the Company, on the one hand, and an 
      indemnified party, on the other hand, is, or is reasonably likely to
        become, a party, such indemnified party shall have the right to employ
  separate counsel at the Company's expense and to control its own
     defense of such action, claim or proceeding if, (a) the Company has
         failed to assume the defense and employ counsel as provided herein, (b)
    the Company has agreed in writing to pay such fees and expenses of
      separate counsel or (c) in the reasonable opinion of counsel to such
     indemnified party, a conflict or likely conflict exists between the
    Company, on the one hand, and such indemnified party, on the other
         hand, that would make such separate representation advisable, provided,
         however, that the Company shall not in any event be required to pay the
    fees and expenses of more than one separate counsel (and if deemed
         necessary by such separate counsel, appropriate local counsel who shall
        report to such separate counsel). The Company agrees that it will not,
    without the prior written consent of an indemnified party, settle,
      compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding relating to the matters
      contemplated hereby (if such indemnified party is a party thereto or
      has been actually threatened to be made a party thereto) unless such
        settlement, compromise or consent includes an unconditional release of
         such indemnified party from all liability arising or that may arise out
      of such claim, action or proceeding. The Company shall not be liable
        for any settlement of any claim, action or proceeding effected against
        an indemnified party without the prior written consent of the Company.
  The rights accorded to indemnified parties hereunder shall be in
      addition to any rights that any indemnified party may have at common
law, by separate agreement or otherwise.                      

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                 7.4  Survival. The indemnification under this Section 7 shall
--------                          
         remain in full force and effect regardless of any investigation made by
   or on behalf of the indemnified party or any officer, director or
   controlling Person of the indemnified party and shall survive the
        transfer of securities. The Company and each holder subject to Section
       7.2 also agree to make such provisions as are reasonably requested by
        any indemnified party for contribution to the indemnified party in the
event that the Company's or such holder's indemnification is  
unavailable for any reason.                                   

8.       Participation in Underwritten Registration.          

                 8.1  Cooperation with Underwriters. No Person may participate
-----------------------------     
        in any underwritten registration pursuant to this Agreement unless the
   Person (i) agrees to sell securities on the basis provided in the
underwriting arrangements and (ii) completes and executes all 
questionnaires, powers of attorney, indemnities, underwriting 
agreements and other documents required under the terms of the
underwriting arrangements. In any event, however, no holder of
        Registrable Securities included in any underwritten registration shall
         be required to make any representations or warranties to the Company or
       the underwriters (other than representations and warranties regarding
    the holder and the holder's intended method of distribution) or to
 undertake any indemnification obligations to the Company or the
underwriters except as otherwise provided in Section 7.2.     

            8.2  Discontinuance of Dispositions. Each Person that is
------------------------------    
       participating in any registration hereunder agrees that, upon receipt
     of any notice from the Company of the happening of any event of the
  kind described in Section 5(e) above, such Person will forthwith
       discontinue the disposition of its Registrable Securities pursuant to
   the registration statement until such Person receives copies of a
    supplemented or amended prospectus as contemplated by such Section
5(e). In the event the Company shall give any such notice, the
 applicable time period mentioned in Section 5(b) during which a
        registration statement is to remain effective shall be extended by the
     number of days during the period from and including the date of the
     giving of such notice pursuant to this Section to and including the
 date when each seller of a Registrable Security covered by such
registration statement shall have received the copies of the  
  supplemented or amended prospectus contemplated by Section 5(e).

9.       Current Public Information.                          

                 The Company will timely file all reports required to be filed
       by it under the Securities Act and the Exchange Act and the rules and
      regulations adopted by the Commission thereunder, and will take such
       further action as any holder or holders of Registrable Securities may
       reasonably request, all to the extent required to enable such holders
    to sell Registrable Securities pursuant to Rule 144 adopted by the
       Commission under the Securities Act (as such rule may be amended from
      time to time) or any similar rule or regulation hereafter adopted by
   the Commission and pursuant to Form S-3 or any similar short form
        registration statement. Upon written request, the Company will deliver
        to such holders a written statement as to whether it has complied with
       such requirements. In addition, unless the Common Stock is listed for
trading on the New York Stock                                 

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       Exchange, the Company will continue to cause its Common Stock and any
    Common Stock issuable upon conversion of Purchaser Preferred Stock
    (including preferential dividends issued thereon) to be listed for
trading on the Nasdaq National Market System.                 

10.      Miscellaneous.                                       

                10.1 No Inconsistent Agreements. The Company shall not enter
--------------------------        
         into any agreement with respect to its securities which is inconsistent
   with or violates the rights granted to the holders of Registrable
      Securities in this Agreement. Without limiting the generality of the
         foregoing, until the initial holders of Registrable Securities cease to
         hold at least 25% of the Underlying Common Stock, the Company shall not
     grant to any Person, other than Affiliates of the Company as of the
      date hereof, the right to request the Company to register any equity
securities of the Company, or any securities convertible or   
         exchangeable into or exercisable for such securities, without the prior
 written consent of the holders of a majority of the Registrable
Securities. The Company may grant rights to other Persons to  
      participate in Piggyback Registrations, however, so long as (i) such
    rights are subordinate to the rights of the holders of Registrable
         Securities with respect to such Piggyback Registrations as set forth in
     Sections 3.3 and 3.4 of this Agreement or (ii) such rights are pari
     passu with the rights of the holders of Registrable Securities with
         respect to such Piggyback Registration as set forth in Sections 3.3 and
      3.4 of this Agreement and have been consented to by the holders of a
majority of the Registrable Securities.                       

        10.2 Notices. All notices, claims, demands and other
-------                           
         communications ("Notices") under this Agreement shall be in writing and
   sent by certified or registered mail, return receipt requested, a
        recognized overnight courier service, telecopier or personal delivery,
as follows:                                                   

(a)      if to the Company, to:             

    US LEC Corp.
           Transamerica Square
                       401 N. Tryon Street, Suite 1000
                       Charlotte, North Carolina 28202
                  Attention: General Counsel
                  Telecopier: (704) 319-3098

with a required copy to:                    

               Moore & Van Allen, PLLC
                        100 North Tryon Street, Floor 47
                            Charlotte, North Carolina 28202-4003
                     Attention: Barney Stewart III
                  Telecopier: (704) 331-1151

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(b)      if to the Investors, in care of:   

          Bain Capital, Inc.
        Two Copley Place
                   Boston, Massachusetts 02116
                Attention: Ian K. Loring
                  Telecopier: (617) 572-3274

                         and

                    Thomas H. Lee Partners, L.P.
                     75 State Street, 26/th/ 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 Notices shall be deemed to have been duly given: when delivered by
        hand, if personally delivered; when delivered by courier, if delivered
         by commercial overnight courier service; five Business Days after being
        deposited in the mail, postage prepaid, if mailed; and when receipt is
 acknowledged by the individual to whom the telecopy is sent, if
 telecopied. A party may change its address for purposes of this
Agreement by Notice in accordance with this Section 10.2.     

           10.3 Waiver. The rights and remedies of the Company and
------                            
       holders of Registrable Securities are cumulative and not alternative.
   Neither the failure nor any delay by the Company or any holder of
    Registrable Securities in exercising any right, power or privilege
        under this Agreement shall operate as a waiver of that right, power or
     privilege, and no single or partial exercise of any right, power or
       privilege shall preclude any other or further exercise of that right,
 power or privilege or the exercise of any other right, power or
      privilege. All waivers shall be in writing signed by the party to be
     charged with the waiver, and no waiver that may be given by a party
     shall be applicable except in the specific instance for which it is
given.                                                        

                 10.4 Amendment. This Agreement may not be amended except by a
---------                         
      written agreement signed by the Company and holders of a majority of
the Registrable Securities.                                   

                 10.5 Severability. If any provision of this Agreement is held
------------                      
    invalid or unenforceable by a court of competent jurisdiction, the
   other provisions of this Agreement shall remain in full force and
effect. Any provision of this Agreement which                 

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    is held invalid or unenforceable only in part shall remain in full
   force and effect to the extent not held invalid or unenforceable.

               10.6   Captions. The captions of sections of this Agreement
--------                      
        are for convenience only and shall not affect this the construction or
interpretation of this Agreement.                             

            10.7   Construction. All references in this Agreement to
------------                  
        "Section" or "Sections" refer to the corresponding section or sections
        of this Agreement. All words used in this Agreement shall be construed
    to be of the appropriate gender or number as the context requires.
    Unless otherwise expressly provided, the word" including" does not
limit the preceding words or terms.                           

                 10.8   Counterparts. This Agreement may be executed in one or
------------                  
       more counterparts, each of which shall be considered an original copy
   of this Agreement and all of which, when taken together, shall be
considered to constitute one and the same agreement.          

                10.9.  Entire Agreement. This Agreement supercedes all prior
----------------              
       agreements between the parties with respect to its subject matter and
    constitutes a complete and exclusive statement of the terms of the
   agreement between the parties with respect to its subject matter.

                 10.10  Governing Law. This Agreement shall be governed by the
--------------                
   Laws of the State of Delaware without regard to conflicts of laws
principles.                                                   

            10.11  Binding Effect. This Agreement shall apply to, be
--------------                
      binding in all respects upon and inure to the benefit of the parties
        and their respective successors and permitted assigns and transferees.

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       IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.                                    

        US LEC CORP.

                                By:_________________________________
                              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: ________________________________
         Name:
                            Title: Managing Director

                           THOMH. LEE EQUITY FUND IV, L.P.

                            By: THL Equity Advisors IV, LLC,
                       its general partner

                                 By: _________________________________
         Name:
          Title:

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                                       THOMAS H. LEE FOREIGN FUND IV-B, L.P.

                                    By:   THL Equity Advisors IV, LLC,
                                 its general partner

                                        By:___________________________________
             Name:
              Title:

                                     THOMAS H. LEE FOREIGN FUND IV, L.P.

                                    By:   THL Equity Advisors IV, LLC,
                                 its general partner

                                        By:___________________________________
             Name:
              Title:

                                 PUTNAM INVESTMENT HOLDINGS, LLC

                                        By:___________________________________
             Name:
              Title:

                                  1997 THOMAS H. LEE NOMINEE TRUST

                                        By:___________________________________
               Trustee

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    THOMAS H. LEE CHARITABLE
          INVESTMENT LIMITED PARTNERSHIP

By:                 
                    __________________________________
Name:         
Title:        

                 _____________________________________
David V. Harkins    

       THE HARKINS 1995 GIFT TRUST

                 By:__________________________________
Trustee       

                 _____________________________________
Scott A. Schoen     

                 _____________________________________
C. Hunter Boll      

                 _____________________________________
Scott M. Sperling   

                 _____________________________________
Anthony J. DiNovi   

                 _____________________________________
Thomas M. Hagerty   

                 _____________________________________
Warren C. Smith, Jr.

                 _____________________________________
Seth W. Lawry       

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                 _____________________________________
Kent R. Weldon      

                 _____________________________________
Terrence M. Mullen  

                 _____________________________________
Todd M. Abbrecht    

                 _____________________________________
Charles A. Brizius  

                 _____________________________________
Scott L. Jaeckel    

                 _____________________________________
Soren L. Oberg      

                 _____________________________________
Thomas R. Shepherd  

                 _____________________________________
Wendy L. Masler     

                 _____________________________________
Andrew D. Flaster   

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          ROBERT SCHIFF LEE 1988 IRREVOCABLE TRUST

     By:________________________________
Trustee                 

      ____________________________________
Stephen Zachary Lee           

      ____________________________________
    Charles W. Robins as Custodian for
Jesse Lee                     

      ____________________________________
    Charles W. Robins as Custodian for
Nathan Lee                    

      ____________________________________
Charles W. Robins             

      ____________________________________
James Westra                  

      ____________________________________
Adam A. Abramson              

      ____________________________________
Joanne M. Ramos               

      ____________________________________
P. Holden Spaht               

      ____________________________________
Nancy M. Graham               

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          ____________________________________
Gregory A. Ciongoli       

          ____________________________________
Wm. Matthew Kelly         

          ____________________________________
Kevin F. Sullivan         

          ____________________________________
Diane M. Barriere         

          ____________________________________
Kim H. Oakley             

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SCHEDULE 1  

Purchasers  

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------
                                                                       Number of Shares of Series A Preferred    
                                Name                                   Stock Purchased                           
                                ----                                   --------------                            
-----------------------------------------------------------------------------------------------------------------
                                                                                                                 
Bain Capital CLEC Investors, L.L.C.                                                                   100,000.00 
-----------------------------------------------------------------------------------------------------------------
Thomas H. Lee Equity Fund IV, L.P.                                                                     83,533.00 
-----------------------------------------------------------------------------------------------------------------
Thomas H. Lee Foreign Fund IV-B, L.P.                                                                   8,113.00 
-----------------------------------------------------------------------------------------------------------------
Thomas H. Lee Foreign Fund IV, L.P.                                                                     2,859.00 
-----------------------------------------------------------------------------------------------------------------
Putnam Investment Holdings, LLC                                                                         1,374.00 
-----------------------------------------------------------------------------------------------------------------
1997 Thomas H. Lee Nominee Trust/1/                                                                     1,099.00 
-----------------------------------------------------------------------------------------------------------------
Thomas H. Lee Charitable Investment Limited Partnership                                                   543.00 
-----------------------------------------------------------------------------------------------------------------
David V. Harkins                                                                                          294.00 
-----------------------------------------------------------------------------------------------------------------
Scott A. Schoen                                                                                           245.00 
-----------------------------------------------------------------------------------------------------------------
C. Hunter Boll                                                                                            245.00 
-----------------------------------------------------------------------------------------------------------------
Scott M. Sperling                                                                                         245.00 
-----------------------------------------------------------------------------------------------------------------
Anthony J. DiNovi                                                                                         245.00 
-----------------------------------------------------------------------------------------------------------------
Thomas M. Hagerty                                                                                         245.00 
-----------------------------------------------------------------------------------------------------------------
Warren C. Smith, Jr.                                                                                      245.00 
-----------------------------------------------------------------------------------------------------------------
Seth W. Lawry                                                                                             102.00 
-----------------------------------------------------------------------------------------------------------------
Kent R. Weldon                                                                                             68.00 
-----------------------------------------------------------------------------------------------------------------
Terrence M. Mullen                                                                                         54.00 
-----------------------------------------------------------------------------------------------------------------
Todd M. Abbrecht                                                                                           54.00 
-----------------------------------------------------------------------------------------------------------------
Robert Schiff Lee 1988 Irrevocable Trust                                                                   50.00 
-----------------------------------------------------------------------------------------------------------------
Stephen Zachary Lee                                                                                        50.00 
-----------------------------------------------------------------------------------------------------------------
Charles A. Brizius                                                                                         41.00 
-----------------------------------------------------------------------------------------------------------------
The Harkins 1995 Gift Trust                                                                                33.00 
-----------------------------------------------------------------------------------------------------------------
Thomas R. Shepherd                                                                                         29.00 
-----------------------------------------------------------------------------------------------------------------
Charles W. Robins as Custodian for Jesse Lee                                                               25.00 
-----------------------------------------------------------------------------------------------------------------
Charles W. Robins as Custodian for Nathan Lee                                                              25.00 
-----------------------------------------------------------------------------------------------------------------
Charles W. Robins                                                                                          20.00 
-----------------------------------------------------------------------------------------------------------------
James Westra                                                                                               20.00 
-----------------------------------------------------------------------------------------------------------------
Wendy L. Masler                                                                                            20.00 
-----------------------------------------------------------------------------------------------------------------
Andrew D. Flaster                                                                                          17.00 
-----------------------------------------------------------------------------------------------------------------
Scott L. Jaeckel                                                                                           15.00 
-----------------------------------------------------------------------------------------------------------------
Soren L.  Oberg                                                                                            15.00 
-----------------------------------------------------------------------------------------------------------------
Adam A. Abramson                                                                                           12.00 
-----------------------------------------------------------------------------------------------------------------
Joanne M. Ramos                                                                                            12.00 
-----------------------------------------------------------------------------------------------------------------
P. Holden Spaht                                                                                            12.00 
-----------------------------------------------------------------------------------------------------------------

_____________________________                                                   
/1/ For legal purposes, certificate should be issued to "State Street Bank as   
Trustee for 1997 Thomas H. Lee Nominee Trust"                                   

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                                                        [Enlarge/Download Table]
                                                                                                                 
-----------------------------------------------------------------------------------------------------------------
Nancy M. Graham                                                                                            12.00 
-----------------------------------------------------------------------------------------------------------------
Gregory A. Ciongoli                                                                                        12.00 
-----------------------------------------------------------------------------------------------------------------
Wm. Matthew Kelly                                                                                          12.00 
-----------------------------------------------------------------------------------------------------------------
Kevin F. Sullivan                                                                                           2.00 
-----------------------------------------------------------------------------------------------------------------
Diane M. Barriere                                                                                           2.00 
-----------------------------------------------------------------------------------------------------------------
Kim H. Oakley                                                                                               1.00 
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 13D’ Filing		Date		First		Last			Other Filings
Filed on:		2/20/01
		4/11/00		1					8-K
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