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EXHIBIT 10.9
STOCK OPTION AGREEMENT
AGREEMENT dated as of November 10, 1997 by and between AboveNet
Communications, Inc., a California corporation, with principal offices located
at 00 Xxxx Xxx Xxxxxxxx Xxxxxx, Xxxxx #0000, Xxx Xxxx, Xxxxxxxxxx 00000 (the
"Company"), and Xxxxxx Xxxxxx (the "Optionee").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company authorized the grant to
the Optionee of an option to purchase 700,000 shares of common stock of the
Company (the "Common Stock"), conditioned upon the Optionee's acceptance thereof
upon the terms and conditions set forth in this Agreement; and
WHEREAS, the Optionee desires to acquire said option on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter set forth, and for other good and valuable consideration,
the parties hereto hereby agrees as follows:
1. Grant of Option. The Company hereby grants to the Optionee, effective
as of the Hire Date, an option to purchase 700,000 shares of Common Stock at an
exercise price of $0.10 per share (the "Exercise Price"), subject to the terms
and conditions set forth herein.
2. Vesting. (a) Subject to Sections 2(b), 4, 7, 9 and 10 hereof, this
option may be exercised to purchase 700,000 shares of Common Stock in accordance
with the following schedule: up to twenty percent (20%) of the shares of Common
Stock underlying this option shall be purchasable as of the Hire Date (as such
term is defined in the Employment Agreement, dated the date hereof, between
Optionee and the Company (the " Employment Agreement")), and, commencing after
the Hire Date, one-thirty-sixth (1/36) of the remaining shares of Common Stock
underlying this option shall become purchasable on the last day of each month
measured from and after the date hereof. This option shall expire and no shares
of Common Stock may be purchased hereunder ten (10) years after the date hereof
and thereafter.
(b) Notwithstanding the provisions of Section 2(a) hereof, this
option shall become 100% immediately exercisable at any time after the Hire Date
(i) upon a Change in Control Date (as defined below) or (ii) if Optionee is
terminated without "Cause" (as such term is defined in the Employment Agreement)
or (iii) there is a "material breach by the Company" (as such term is defined in
the Employment Agreement). For purposes hereof, a Change in Control Date shall
mean the date of a Corporate Transaction (as such term is defined in the
Employment Agreement).
3. Nonqualified Option; Withholding Tax. This option shall not be deemed
an "Incentive Stock Option" under the Internal Revenue Code of 1986, as amended
(the "Code"). Accordingly, the Optionee acknowledges that, under existing laws
and regulations, exercise of
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this option may be a taxable event under the Code. In such event, the Optionee
will be subject to a withholding tax on the difference between the purchase
price of the shares and their fair market value on the date of exercise. Any
such tax shall be paid to the Company by the Optionee within five (5) business
days of receipt of a notice from the Company containing the amount thereof.
4. Exercise of Option. Subject to the terms and conditions set forth
herein, the Optionee may exercise this option at any time as to all or any of
the shares of Common Stock then purchasable in accordance with Section 2 hereof
by delivering to the Company written notice in the form attached hereto as
Exhibit A. Such notice shall specify:
(a) The number of whole shares of Common Stock to be purchased
together with payment in full of the aggregate option price of such shares,
provided that this option may not be exercised for fewer than one hundred (100)
shares of Common Stock or the number of shares of Common Stock underlying the
option that are exercisable pursuant to Section 2 hereof, whichever is smaller;
(b) The name or names in which the stock certificate or
certificates are to be registered;
(c) The address to which dividends, notices, reports, etc. are
to be sent; and
(d) The Optionee's social security number.
Such notice shall be accompanied by payment of the full purchase price
for the shares of Common Stock underlying the option which are being exercised.
The purchase price of the shares of Common Stock as to which the option is
exercised shall be paid in full in U.S. dollars, in cash, or by certified or
bank cashier's check payable to the order of the Company, free from all
collection charges. The purchase price for the shares of Common Stock covered by
this option may also be paid in shares of Common Stock owned by the Optionee
having a Fair Market Value (as hereinafter defined) on the date preceding
exercise equal to the aggregate purchase price, or in a combination of cash and
Common Stock. In addition, this option also may be exercised by delivery of a
properly executed exercise notice, together with irrevocable instructions to the
Company to withhold from the shares that would otherwise be issued upon exercise
that number of shares of Common Stock having a Fair Market Value equal to the
option exercise price. As is used herein, the "Fair Market Value" of a share of
Common Stock on any day means: (i) if the principal market for the Common Stock
is The New York Stock Exchange, any other national securities exchange or the
Nasdaq National Market, the closing sales price of the Common Stock on such day
as reported by such exchange or market, or on a consolidated tape reflecting
transactions on such exchange or market, or (ii) if the principal market for the
Common Stock is not a national securities exchange or the Nasdaq National Market
and the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System, the mean between the closing bid and the closing
asked prices for the Common Stock on such day as quoted on such system, or (iii)
if the Common Stock is not quoted on the National Association of Securities
Dealers Automated Quotations System, the mean between the highest bid and lowest
asked prices for the Common Stock on such day as reported by the National
Quotation Bureau, Inc.; provided that if clauses (i), (ii) and (iii) of this
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paragraph are all inapplicable, or if no trades have been made or no quotes are
available for such day, the Fair Market Value of the Common Stock shall be
determined, in good faith, by the Board of Directors of the Company by any
method which it deems to be appropriate. The determination of the Company shall
be conclusive as to the Fair Market Value of the Common Stock. The Optionee
shall not be entitled to any rights as a shareholder of the Company in respect
of any shares of Common Stock underlying this option until such shares of Common
Stock shall have been paid in full and issued to the Optionee.
5. Delivery of Stock Certificate. As soon as practicable after the
Company receives payment for shares of Common Stock covered by this option, it
shall deliver a certificate or certificates representing the shares of Common
Stock so purchased to the Optionee. Only one stock certificate will be issued
unless the Optionee otherwise requests in writing.
6. Nontransferability of Option. This option is personal to the Optionee
and during the Optionee's lifetime may be exercised only by the Optionee. This
option and the rights and privileges conferred hereby may not be transferred,
assigned, pledged or hypothecated in any way and shall not be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of this option or any right or
privilege conferred hereby, contrary to the provisions hereof, or upon the levy
of any attachment or similar process on the rights and privileges conferred
hereby, this option and the rights and privileges conferred hereby shall
immediately become null and void.
7. Effect of Termination of Employment. Subject to any provisions of
Section 3.3.2 of the Employment Agreement to the contrary, in the event that the
Optionee's employment as an employee of the Company and, if applicable, of each
direct or indirect subsidiary corporation (a "Subsidiary") of the Company
(hereinafter the "Optionee's employment") is terminated prior to the time that
this option has been fully exercised, this option shall be exercisable, as to
any remaining shares of Common Stock subject hereto, only to the extent the
option granted hereunder was exercisable pursuant to Section 2 hereof on the
date the Optionee's employment ceased, including under Section 2(b) hereof,
whether for cause, death, disability or any other reason, and the Optionee shall
have no right to exercise this option with respect to any shares of Common Stock
which shall not have vested pursuant to Section 2 hereof, as of the date the
Optionee's employment ceased.
8. No Right of Continued Employment. This option does not confer on the
Optionee any right to continue in the employ of the Company or any Subsidiary or
interfere in any way with the right of the Company or any Subsidiary to
determine the terms of the Optionee's employment.
9. Antidilution; Adjustment. (a) In case the Company shall at any time
after the date hereof and prior to the consummation of the initial public
offering (the "IPO") of the Company's securities registered under the Securities
Act of 1933, as amended (the "Act"), issue or sell any shares of Common Stock or
issue warrants, options or other securities convertible into, or exercisable or
exchangeable for, shares of Common Stock ("Convertible Securities") resulting in
Optionee owning less than 5% of the outstanding Common Stock (after giving
effect to the conversion or exercise of all then outstanding Convertible
Securities, including, but not limited to, outstanding warrants, preferred
stock, options, debt securities convertible into the
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Company's Common Stock and this option, but excluding the 110,000 shares of
Common Stock issuable to Optionee pursuant to that certain Notice of Stock
Option Grant dated as of the date hereof) (the "Ownership Interest"), then the
Optionee shall be granted the right to purchase a number of shares, at a price
of $0.10 per share, pursuant to the terms of this Agreement such that Optionee
shall be entitled to maintain an interest in the Company equal to Optionee's
then existing ownership interest in the Company. In addition, if, prior to an
IPO, any shares of Common Stock or Convertible Securities are issued or sold for
a consideration, or in the case of the issuance of Convertible Securities, an
exercise price or conversion price, per share less than the Exercise Price in
effect immediately prior to the issuance or sale of such securities, then
forthwith upon such issuance or sale, the Exercise Price shall be reduced to the
price determined by dividing (i) an amount equal to the sum of (a) the number of
shares of Common Stock outstanding (after giving effect to the conversion or
exercise of all Convertible Securities) immediately prior to such issuance or
sale multiplied by the then existing Exercise Price and (b) the aggregate amount
of the consideration, if any, received by the Company upon such issuance or sale
by (ii) the total number of shares of Common Stock outstanding (after giving
effect to the conversion or exercise of all Convertible Securities) immediately
after such issuance or sale. In no event shall the Exercise Price be adjusted
pursuant to this computation to an amount in excess of the Exercise Price in
effect immediately prior to such computation.
(b) In the event of a reorganization, recapitalization, stock
split, reverse stock split, stock dividend, combination of shares of the
Company, the number of shares covered by any unexercised portion of this option
and the related Exercise Price per share shall be adjusted proportionately.
10. Registration of Shares. (a) If, at any time prior to three years
after the ten-year term of the option granted hereunder and after the time
shares Common Stock of the Company are registered under the Act pursuant to an
underwritten public offering, the Company shall determine to file any
registration statement under the Act, covering any securities of the Company
(other than registration statements on Form S-8 (unless the shares purchasable
upon exercise of the option granted hereunder are eligible to be included in
such Form S-8) or S-4 or any other form not generally available for the
registration of securities for sale to the public) for its own account or for
the account of others, the Company shall advise the Optionee by written notice
at least 30 days prior to any filing, and shall, upon the request of the
Optionee, include in any such registration statement, or any such post-effective
amendment to a registration all of Registrable Securities (as hereinafter
defined) that the Optionee has requested in writing to be registered upon the
same terms and conditions as the securities otherwise being sold in such
registration; provided, however, that if the managing underwriter of such
registration, if any, advises the Company that the inclusion of any or all of
the Registrable Securities requested to be included in such registration would
interfere with the successful marketing (including pricing) of the shares
proposed to be registered by the Company, then the number of shares of Common
Stock proposed to be included in such registration by the Optionee shall be
eliminated or reduced pro rata among the persons requesting registration of
shares of Common Stock underlying options containing substantially similar
registration rights as contained in this Section 10 based upon the number shares
of Common Stock requested to be registered by such persons.
(b) As used herein, Registrable Securities shall mean any
Common Stock issuable upon the exercise of any options granted hereunder. All
costs and expenses of
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such registration statement shall be borne by the Company, except underwriting
discounts or commissions applicable to any of the securities sold and except the
legal fees and expenses of the Optionee incurred in connection therewith.
(c) Whenever pursuant to Section 10(a) hereof, a
registration statement relating to any of the Registrable Securities is filed
under the Act, amended or supplemented, the Company shall, to the extent
permitted by law, indemnify and hold harmless the Optionee against such losses,
claims, damages, liabilities or actions, joint or several, to which the Optionee
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions in respect thereof, arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any such registration statement or any preliminary prospectus or
final prospectus constituting a part thereof or any amendment or supplement
thereto, or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse the Optionee and underwriter for any
legal or other expenses reasonably incurred by the Optionee or underwriter in
connection with investigating or defending any such losses, claims, damages,
liabilities or actions; provided, however, that the Company will not be liable
in any such case to the extent that any such losses, claims, damages,
liabilities or actions arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in said
registration statement, said preliminary prospectus, said final prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished by the Optionee, for use in the preparation thereof.
(d) The Optionee shall indemnify and hold harmless the
Company, each of its directors, each of its officers and each person, if any,
who controls the Company within the meaning of the Act against any losses,
claims, damages, liabilities or actions, to which the Company or any such
director, officer of controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue or alleged untrue statement in any
preliminary prospectus, said final prospectus, or said amendment or supplement,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement therein not misleading in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in said registration statement, said preliminary
prospectus, said final prospectus or said amendment or supplement in reliance
upon and in conformity with written information furnished by the Optionee for
use in the preparation thereof, and shall reimburse the Company or any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such losses, claims, damages, liabilities or actions.
(e) Promptly after receipt by an indemnified party under
this Section 10 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice of the commencement
thereof; but the omission to so notify the indemnifying party shall not relieve
it from any liability which it may have to an indemnified party otherwise then
under this Section 10.
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(f) In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party, the indemnifying party shall not be liable to such
indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by such indemnified party in connection the defense
thereof, other than reasonable costs of investigation.
(g) To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under this Section 10 to the extent permitted by law, provided that (i)
no contribution shall be made under circumstances where the indemnifying party
would not have been liable for indemnification under the fault standards set
forth in this Section 10, (ii) no seller of Common Stock guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any seller of Common Stock who was not guilty of
such fraudulent misrepresentation and (iii) contribution by the Optionee shall
be limited in amount to the net amount of proceeds received by him or it from
the sale of the Registrable Securities.
(h) In connection with any underwritten public offering by
the Company of its equity securities pursuant to an effective registration
statement filed under the Act, including the Company's IPO, the Optionee shall
not directly or indirectly sell, make any short sale of, loan, hypothecate,
pledge, offer, grant or sell any option or other contract for the purchase of,
purchase any option or other contract for the sale of, or otherwise dispose of
or transfer, or agree to engage in any of the foregoing transactions with
respect to, any Common Stock acquired under this Agreement without the prior
written consent of the Company or its underwriters. Such restriction (the
"Market Stand-Off") shall be in effect for such period of time following the
date of the final prospectus for the offering as may be requested by the Company
or such underwriters. In no event, however, shall such period exceed 180 days.
In the event of the declaration of a stock dividend, a spin-off, a stock split,
an adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities which are by reason of such
transaction distributed with respect to any Common Stock subject to the Market
Stand-Off, or into which such Common Stock thereby become convertible, shall
immediately be subject to the Market Stand-Off. In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with respect to the
Common Stock acquired under this Agreement until the end of the applicable
stand-off period. The Company's underwriters shall be beneficiaries of the
agreement set forth in this Subsection (h). This Subsection (h) shall not apply
to Common Stock registered in the public offering under the Act. This Subsection
(h) shall terminate one (1) year after the Company's IPO.
(i) If the Company shall receive at any time after ninety
(90) days after the IPO, a written request from the Optionee that that the
Company file a registration statement on Form S-8 (including a resale
prospectus) covering the registration of all of the outstanding options then
held by the
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Optionee or any shares of Common Stock then held by the Optionee issued upon
exercise of the option granted hereunder, the Company shall use its best efforts
to effect the registration under the Act of all of such options.
(j) Optionee shall not be entitled to exercise any right
provided for in this Section 10 at such time as all Common Stock acquired under
this Agreement held by Optionee (and any affiliate of Optionee with whom
Optionee must aggregate its sales under Rule 144) can be sold in any three
(3)-month period without registration in compliance with Rule 144 of the Act.
11. Representations and Warranties of the Optionee. The Optionee
represents and warrants to the Company that:
(a) The Optionee is acquiring this option and will acquire
the shares of Common Stock purchasable hereunder for the Optionee's own account
and not with a view towards the distribution, resale, subdivision or
fractionalization thereof, and the Optionee has no present plans to enter into
any contract, undertaking, agreement or arrangement for distribution, resale,
subdivision or fractionalization of the shares of Common Stock purchased on
exercise of this option;
(b) The Optionee (i) has adequate means of providing for his
or her current needs and contingencies, (ii) has no need for liquidity in an
investment in the Common Stock underlying this option, (iii) can bear the
economic risk of losing his entire investment in the shares of Common Stock
underlying this option, (iv) does not have an overall commitment to investments
which are not readily marketable, that is, disproportionate to his or her net
worth, and the Optionee's investment in the Common Stock underlying this option
will not cause such investment to become disproportionate to his or her net
worth, (v) has such knowledge and experience in financial and business matters
that the Optionee is capable of evaluating the risks and merits of an investment
in the Company, and (vi) is not relying on the Company respecting the tax or
other economic considerations of an investment in the Common Stock purchasable
hereunder;
(c) In the Optionee's position with the Company, the
Optionee has had both the opportunity to ask questions and receive answers from
the officers and directors of the Company respecting the Company and an
investment in the shares of Common Stock purchasable hereunder and to obtain any
additional information to the extent the Company possesses or may possess such
information or can acquire it without unreasonable effort or expense; however,
no oral representations have been made or oral information furnished to the
Optionee or his or her representatives respecting an investment in the shares of
Common Stock purchasable hereunder;
(d) Anything in this Agreement to the contrary
notwithstanding, the Optionee hereby agrees that he or she shall not sell,
transfer by any means or otherwise dispose of the shares acquired by the
Optionee without registration under the Act and applicable state securities laws
unless (i) an exemption from the Act and applicable state securities laws is
available, and (ii) the Optionee has furnished the Company with notice of such
proposed transfer and the Company's legal counsel, in its reasonable opinion,
shall deem such proposed transfer to be so exempt;
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(e) The Optionee is aware that the Company shall place
stop-transfer orders with its transfer agent against the transfer of any shares
of Common Stock purchasable hereunder in the absence of registration under the
Act and applicable state securities laws unless the Optionee complies with the
provisions of Section 11(d) hereof; and
(f) Unless previously registered, the Optionee shall
represent and agree at the time of exercise that the shares of Common Stock
being acquired upon exercising this option are being acquired for investment,
and not with a view to the sale or distribution thereof, and shall make such
other representations as are deemed necessary or appropriate by the Company and
its counsel.
12. Right Of First Refusal.
(a) In the event that the Optionee proposes to sell, pledge
or otherwise transfer to a third party any Common Stock acquired under this
Agreement, or any interest in such Common Stock, the Company shall have the
right of first refusal (the "Right of First Refusal") with respect to all (and
not less than all) of such Common Stock. If the Optionee desires to transfer
Common Stock acquired under this Agreement, the Optionee shall give a written
transfer notice (the "Transfer Notice") to the Company describing fully the
proposed transfer, including the number of shares of Common Stock proposed to be
transferred, the proposed transfer price, the name and address of the proposed
transferee (the "Transferee") and proof satisfactory to the Company that the
proposed sale or transfer will not violate any applicable federal or state
securities laws. The Transfer Notice shall be signed both by the Optionee and by
the proposed Transferee and must constitute a binding commitment of both parties
to the transfer of the Common Stock. The Company shall have the right to
purchase all, and not less than all, of the Common Stock on the terms of the
proposal described in the Transfer Notice (subject, however, to any change in
such terms permitted under Subsection (b) below) by delivery of a notice of
exercise of the Right of First Refusal within 30 days after the date when the
Transfer Notice was received by the Company. The Company's rights under this
Subsection (a) shall be freely assignable, in whole or in part.
(b) If the Company fails to exercise its Right of First
Refusal within 30 days after the date when it received the Transfer Notice, the
Optionee may, not later than 90 days following receipt of the Transfer Notice by
the Company, conclude a transfer of the Common Stock subject to the Transfer
Notice on the terms and conditions described in the Transfer Notice, provided
that any such sale is made in compliance with applicable federal and state
securities laws and not in violation of any other contractual restrictions to
which the Optionee is bound. Any proposed transfer on terms and conditions
different from those described in the Transfer Notice, as well as any subsequent
proposed transfer by the Optionee, shall again be subject to the Right of First
Refusal and shall require compliance with the procedure described in Subsection
(a) above. If the Company exercises its Right of First Refusal, the parties
shall consummate the sale of the Common Stock on the terms set forth in the
Transfer Notice within 60 days after the date when the Company received the
Transfer Notice (or within such longer period as may have been specified in the
Transfer Notice); provided, however, that in the event the Transfer Notice
provided that payment for the Common Stock was to be made in a form other than
cash or cash equivalents paid at the time of transfer, the
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Company shall have the option of paying for the Common Stock with cash or cash
equivalents equal to the present value of the consideration described in the
Transfer Notice.
(c) In the event of the declaration of a stock dividend, the
declaration of an extraordinary dividend payable in a form other than stock, a
spin-off, a stock split, an adjustment in conversion ratio, a recapitalization
or a similar transaction affecting the Company's outstanding securities without
receipt of consideration, any new, substituted or additional securities or other
property (including money paid other than as an ordinary cash dividend) which
are by reason of such transaction distributed with respect to any Common Stock
subject to this Paragraph 12 or into which such Common Stock thereby become
convertible shall immediately be subject to this Paragraph 12. Appropriate
adjustments to reflect the distribution of such securities or property shall be
made to the number and/or class of the Common Stock subject to this Paragraph
12.
(d) Any other provision of this Paragraph 12
notwithstanding, in the event that the Stock is readily tradable on an
established securities market when the Optionee desires to transfer Common
Stock, the Company shall have no Right of First Refusal, and the Optionee shall
have no obligation to comply with the procedures prescribed by Subsections (a)
and (b) above.
(e) This Paragraph 12 shall not apply to (i) a transfer by
beneficiary designation, will or intestate succession or (ii) a transfer to the
Optionee's spouse, children or to a trust established by the Optionee for the
benefit of the Optionee or the Optionee's spouse, children or grandchildren,
provided in either case that the Transferee agrees in writing on a form
prescribed by the Company to be bound by all provisions of this Agreement. If
the Optionee transfers any Common Stock acquired under this Agreement, either
under this Subsection (e) or after the Company has failed to exercise the Right
of First Refusal, then this Paragraph 12 shall apply to the Transferee to the
same extent as to the Optionee.
(f) If the Company makes available, at the time and place
and in the amount and form provided in this Agreement, the consideration for the
Common Stock to be purchased in accordance with this Paragraph 12, then after
such time the person from whom such Common Stock are to be purchased shall no
longer have any rights as a holder of such Common Stock (other than the right to
receive payment of such consideration in accordance with this Agreement). Such
Common Stock shall be deemed to have been purchased in accordance with the
applicable provisions hereof, whether or not the certificate(s) therefor have
been delivered as required by this Agreement.
13. (a) Binding Successors. Subject to the provisions of Section
6 hereof, this Agreement shall be binding upon and inure to the benefit of each
party hereto and to the extent not prohibited herein, their respective heirs,
successors, assigns and representatives.
(b) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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(c) Waiver. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other or subsequent breach.
(d) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and may be modified or amended only by an instrument in writing signed by the
party against whom enforcement is sought.
(e) Notices. Any notice, demand, request or consent to be
given or served in connection herewith shall be in writing and shall be deemed
to have been given and received by the respective parties designated therein on
the day on which delivered by messenger to the receiving party at the address
set forth herein (or at such other address as such party shall specify to the
other parties in writing pursuant to this Section) or, if sent by certified or
registered mail, postage prepaid, return receipt requested, on the second day
after the day on which mailed to such party at such address.
(f) Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, as such laws
are applied to contracts entered into and performed in such state.
(g) Legends. All certificates evidencing Common Stock
purchased under this Agreement shall bear the following legend:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE
COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO
THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED
TRANSFER OF THE SHARES. THE SECRETARY OF THE COMPANY WILL UPON
WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER
HEREOF WITHOUT CHARGE."
All certificates evidencing Shares purchased under this Agreement in an
unregistered transaction shall bear the following legend (and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
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IN WITNESS WHEREOF, this Agreement has been executed by the
parties hereto as of the date first set forth above.
ABOVENET COMMUNICATIONS, INC.
By:
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Name: Xxxxxxx Xxxx
Title: Chief Executive Officer and
Member of the Board of Directors
OPTIONEE
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Xxxxxx Xxxxxx
Address of Optionee:
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
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(Date)
AboveNet Communications, Inc.
00 Xxxx Xxx Xxxxxxxx Xxxxxx, Xxxxx #0000
Xxx Xxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
In accordance with the Stock Option Agreement (the "Stock Option
Agreement") dated as of November 10, 1997 between me and AboveNet
Communications, Inc. ("the Company"), I wish to purchase _______ shares of
common stock of the Company.
I hereby certify that the representations I made in the Stock
Option Agreement are true and correct on and as of the date hereof.
As payment for my shares, enclosed is my check payable to
AboveNet Communications, Inc. in the amount of $_______ and/or securities of the
Company having a value of $______ as determined in accordance with the Stock
Option Agreement.
Kindly forward to me a stock certificate issued in my name at
your earliest convenience. I understand that delivery of the shares will take
approximately two weeks.
Very truly yours,
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(Signature)
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(Print name)
Address:
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Social Security No.
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E-1
