Exhibit 99.2
PATHNET, INC.
1015 31st Street, N.W.
Washington, D.C. 20007
August 5, 1998
To the Holders of Registrable Securities:
Reference is made to the Warrant Registration Rights Agreement, dated
as of April 8, 1998, by and among Pathnet, Inc., a Delaware corporation (the
"Company"), Merrill Lynch & Company, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Bear, Stearns & Co. Inc., TD Securities (USA) Inc. and Salomon
Brothers Inc (collectively the "Initial Purchasers") and the other signatories
thereto, as amended and supplemented to date (the "Agreement"). Capitalized
terms not otherwise defined herein shall have the meanings ascribed to such
terms in the Agreement.
On May 5, 1998, the Company notified Holders of Registrable Securities
pursuant to Section 2.2(a) of the Agreement that it intended to file with the
Securities and Exchange Commission a Registration Statement on Form S-1 in order
to register under the Securities Act of 1933, as amended, a public offering (the
"Offering") of shares of its common stock, par value $.01 per share (the "Common
Stock"). Such Registration Statement has been filed with the Securities and
Exchange Commission but has not yet been declared effective.
Pursuant to Section 2.2 of the Agreement, notwithstanding the use by
the Company of its reasonable efforts to cause the managing underwriter of the
proposed Offering (a) to permit the Registrable Securities requested to be
included in the Offering to be included in the Registration Statement on the
same terms and conditions as the shares of Common Stock included therein, and
(b) to permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof, the managing
underwriter of the proposed Offering has informed the Company and, by the
attached copy of its letter, hereby notifies you, that in its opinion the total
number of Registrable Securities which the Company intends to include in the
Offering is such that participation in the Offering by Holders of Registrable
Securities would materially and adversely affect the success of the Offering,
including the price at which the Common Stock could be sold. As a result of this
determination, the Company has decided not to include any Registrable
Securities, including those of Holders who responded to the Company's May 5,
1998 notice, in the Offering.
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If you have any questions, please feel free to forward written
inquiries to the Secretary at the Company's address above.
PATHNET, INC.
By: /s/ Michael A. Lubin
------------------------
Michael A. Lubin
Vice President, General Counsel
and Secretary
MORGAN STANLEY
MORGAN STANLEY & CO.
INCORPORATED
1585 BROADWAY
NEW YORK, NEW YORK 10036
(212) 761-4000
July 22, 1998
To the Holders of Registrable Securities:
Reference is made to the Warrant Registration Rights Agreement dated as
of April 8, 1998 (the "Agreement"), among Pathnet, Inc., a Delaware corporation
(the "Company"), Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc., TD Securities (USA)
Inc. and Salomon Brothers Inc (together with Merrill Lynch, the "Initial
Purchasers") and the other signatories thereto. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to such terms in the Agreement.
We are acting as managing underwriter for the Company's proposed
initial public offering (the "Offering") of common stock, par value $.01 per
share (the "Common Stock"). We understand that, in accordance with the terms of
the Agreement, you have delivered to the Company written notice of your interest
in exercising your piggy-back registration rights under the Agreement in
connection with the Offering.
Pursuant to Section 2.2(b) of the Agreement, we hereby notify you that,
in our opinion, the total number of Registrable Securities which the Company
intends to include in the Offering is such that participation in the Offering by
holders of the Registrable Securities would materially and adversely affect the
success of the Offering, including the price at which the Common Stock could be
sold. Pursuant to Section 2.2(b), the Company is required to include in such
registration only the amount of securities which it is so advised should be
included in such registration. As a result of our determination as set forth in
this notice, it is our understanding that the Company does not intend to include
any Registrable Securities in the Offering. Please note that this notice does
not affect any other right you may have under the Agreement.
Please contact Marc Montagner at (212) 761-4349 if you have any
questions with respect to this notice.
MORGAN STANLEY
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Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
J.P. MORGAN SECURITIES INC.
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ M. Montagner
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Name: M. Montagner
Title: Principal
cc: David Schaeffer (Pathnet, Inc.)