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EXHIBIT 10.36
SHAREHOLDERS AGREEMENT
entered into by and between
Raiffeisen Rechenzentrum Ges.m.b.H having its registered offices at 1020 Vienna,
Xxxxxxxxxxxxxx 00-00 (hereinafter referred to as "RRZ")
and
AboveNet Communications, Inc.
having its registered office at
00 X. Xxx Xxxxxxxx Xxxxxx, #0000, Xxx Xxxx, XX 00000
(hereinafter referred to as "AboveNet")
(hereinafter collectively also referred to as "Parties")
as follows:
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TABLE OF CONTENTS
I. FORMATION OF THE COMPANY
Section 1 Shareholder Structure of the Company
Section 2 Subscription Right
Section 3 Non-Equity Contributions
II. RELATIONSHIP BETWEEN THE PARTIES
Section 4 Scope
Section 5 Articles of Association, By-Laws, Company Business Policy
Section 6 Transformation to Aktiengesellschaft; Option Pool
Section 7 Management Board
Section 8 Shareholders Committee
Section 9 Right of First Refusal
Section 10 Put Options
Section 11 Transfer, Redemption and Encumbrance of Shares
Section 12 Competition Clause
Section 13 Inspection of Books
Section 14 Above Net Stock Option Plan
III. General Terms
Section 15 Term of the Shareholders Agreement
Section 16 Confidentiality
Section 17 Costs
Section 18 General
Section 19 Applicable Law, Arbitration
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EXHIBITS
Exhibit ./1 RRZ Service Agreement
Exhibit ./2 License, Connectivity and Marketing Agreement with
AboveNet
Exhibit ./3 Articles of Association of AboveNet Austria GmbH
Exhibit ./4 By-laws for the Managing Director
Exhibit ./5 By-Laws for the Shareholders Committee
Exhibit ./6 List of Affiliates
Exhibit ./7 Business Plan
PREAMBLE
(1) RRZ and AboveNet will form AboveNet Communications GmbH (in the following
referred to as "the Company" or "AboveNet Austria GmbH"), a joint venture
for the purpose of establishing a co-branded Internet Service Exchange.
(2) This Shareholders Agreement shall govern the formation of the Company (I.)
and the relationship between the Parties (II.).
Therefore, it is agreed as follows:
I. FORMATION OF THE COMPANY
SECTION 1
SHAREHOLDER STRUCTURE OF THE COMPANY
(1) ESTABLISHMENT OF THE COMPANY: RRZ and AboveNet shall establish AboveNet
Communications GmbH with a nominal share capital of [*] that will be fully
paid in cash by all Parties upon formation of the Company. Each Party will
hold a 50% share [*] in the Company.
(2) PARTICIPATION AND OWNERSHIP STRUCTURE: The Parties have informed each
other of their current group structure and the intended structure of their
respective shareholding in the
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Company and undertake to keep each other informed in writing of any future
ownership changes thereof at all times.
SECTION 2
SUBSCRIPTION RIGHT
(1) SUBSCRIPTION RIGHT: The Parties shall have the right (but not an
obligation) to participate in any increase of the Company's share capital
and/or other future financing, if any, in proportion to their respective
shareholding in order to maintain their original ownership rights,
respectively (hereinafter referred to as "Subscription Right").
(2) WAIVER OF SUBSCRIPTION RIGHT: If a Party fails to participate in any
particular capital increase, it waives its subscription right with respect
to that capital increase irrevocably and without consideration for the
benefit of the other Party.
SECTION 3
NON-EQUITY CONTRIBUTIONS
CONTRIBUTIONS: In addition to the equity contributions described in Clause 1
para 1 hereunder, the Parties will provide the following non-equity
contributions to the Company:
(a) RRZ:
RRZ will make the non-equity contributions and provide the services
specified in and in accordance with the provisions of the RRZ Service
Agreement (Exhibit ./1).
(b) AboveNet:
AboveNet will provide to the Company a license in the form of the
License, Connectivity and Marketing Agreement (hereinafter "Licence
Agreement") attached hereto as Exhibit ./2.
The License Agreement will inter alia provide for termination clauses;
the Company's rights under the License Agreement shall inter alia terminate (i)
in the case of termination of this Agreement by AboveNet other than for cause,
effective 12 (twelve) months after the termination date or (ii) in the case of
termination of this Agreement by RRZ or termination of this Agreement by
AboveNet for cause, within 60 (sixty) days following termination. In each case
the Company shall pay royalties pursuant to License Agreement from the day the
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termination notice is received until the effective date of termination. The
Licence Agreement will furthermore provide for termination clauses for the event
that a competitor of AboveNet acquires influence on RRZ or any of its Affiliates
directly or indirectly. The Company's rights under the RRZ Service Agreement
(Exhibit ./1) shall terminate (i) in the case of termination by RRZ, effective
12 (twelve) months after the termination date within one year or (ii) in the
case of termination by AboveNet within 60 (sixty) days following termination. In
each case the Company shall have the right to use the facility under the same
terms and conditions as applicable immediately prior to such termination once
termination is declared from the day the termination notice is received until
the effective date of termination.
II. RELATIONSHIP BETWEEN THE PARTIES
SECTION 4
SCOPE
Part II of this Shareholder Agreement shall become effective as soon as the
notarial deed establishing AboveNet Austria GmbH is duly executed by the Parties
or their duly empowered representatives.
SECTION 5
ARTICLES OF ASSOCIATION, BY-LAWS, COMPANY BUSINESS POLICY
(1) ARTICLES OF ASSOCIATION: The Company shall have Articles of Association in
accordance with Exhibit ./3. The shareholder meeting shall issue by-laws
for the Managing Director in accordance with Exhibit ./4 and for the
Shareholders Committee in accordance with Exhibit ./5.
(2) ARM'S LENGTH TRANSACTIONS: All of the Company's transactions, in
particular with companies that are affiliated with or related to the
parties AboveNet and RRZ must be made at arm's length. The Company will
also solicit and conclude transactions with companies that are not related
to AboveNet and RRZ.
(3) AFFILIATES: The term affiliated company shall be defined as any Company or
person which is controlled by, controls or is under common control with
the entities of AboveNet or RRZ (hereinafter referred to as "Affiliate").
A list of current AboveNet and RRZ Affiliates is attached hereto as
Exhibit ./6. Exhibit ./6 will be updated at least quarterly and a copy
thereof provided to the other Party, respectively without delay.
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SECTION 6
TRANSFORMATION TO AKTIENGESELLSCHAFT; OPTION POOL
(1) AboveNet shall have the right to request the transformation of the Company
from a Gesellschaft mit beschrankter Haftung (GmbH) into an
Aktiengesellschaft (AG) at any time after 24 months after the registration
of the Company in the Commercial Register. Upon receipt of such request
the Parties shall take all necessary - corporate - measures to execute the
transformation, including but not limited to shareholders' resolutions,
adaptation of corporate agreements like the Articles of Association and
this Shareholders Agreement.
(2) After the transformation of the Gesellschaft mit beschrankter Haftung
(GmbH) to an Aktiengesellschaft (AG), an Option Pool (which will not be
less than 5% or more than 10% of the total equity based upon the initial
valuation) will be reserved for future issuances of options to employees.
The number of shares reserved under the Option Pool may not be increased
until the Company's initial public offering unless such increase is
unanimously approved by the Shareholders Committee. Options will be
granted at fair market value on date of grant, which cannot be before the
date of employment.
(3) At the time AboveNet exercises its right to request the transformation to
an AG, the terms and conditions of a future IPO shall be discussed.
Provided the Parties agree to such stock exchange listing, the Parties
shall undertake to cooperate in the preparation and completion of an
initial public offering as necessary, such as cooperate in the
preparation and disclosure of information; disclosure of relevant
provisions of this agreement; the disclosure of key data and analyses and
other relevant information as necessary; the timing of the public
offering; and a coordination of time frames and procedures among the
Parties.
In the event of an IPO, Parties shall also discuss in good faith
appropriate amendments to the Articles of Association and this Agreement
to conform with the requirements for a Company with public shareholders.
SECTION 7
MANAGEMENT BOARD
(1) APPOINTMENT RIGHT: The Company's Management shall consist of one Managing
Director, who shall be appointed for an initial term of two years;
appointments for
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consecutive terms of up to three years are possible. Moreover, each of the
Parties may request premature termination/recall of the Managing Director
due to failure by the Managing Director to achieve annual business targets
set forth in the business plan agreed to by the parties in connection with
the formation of the Company, for the first three business years and later
from time to time, at least three months before the end of a business year
for the following business year.
(2) REPORTING: The Managing Director shall submit (i) to the Shareholders
Committee and (ii) to AboveNet and RRZ respectively, monthly, quarterly
and annual written financial statements and reports on the business
development of the Company and the status in achieving monthly, quarterly
and annual business targets, respectively in a format and on recurring due
dates notified to the Managing Director by the Shareholders Committee from
time to time. Such (financial) statements and reports will inter alia be
integrated into the consolidated reports of the Parties to the
authorities, including in the case of AboveNet, the SEC. Therefore
AboveNet and RRZ shall inter alia receive (i) quarterly financial
statements done in accordance with US GAAP within 15 days after quarters
end and (ii) audited annual financial statements within 30 days after year
end in accordance with US GAAP.
SECTION 8
SHAREHOLDERS COMMITTEE
(1) ESTABLISHMENT: The Company has a Shareholders Committee, established
pursuant to Clause 8 hereof.
(2) COMPOSITION: The Shareholders Committee shall consist of five members,
four of which are nominated by the Parties pursuant to Clause 8.3 hereof
and elected by the Shareholders Meeting pursuant to Clause 8.4, and one of
which is elected by the Shareholders Meeting. After the transformation
into an AG, the Shareholders Committee shall consist of seven members,
four of which are nominated by the Parties pursuant to Clause 8.3 hereof
and elected by the Shareholders Meeting pursuant to Clause 8.4, and three
of which are elected by the Shareholders Meeting.
(3) NOMINATION: The Parties agree that AboveNet shall have the right to
nominate two members, and RRZ shall have the right to nominate two members
of the Shareholders Committee. The Parties shall exercise this right
pursuant to Clause 8.6 hereof.
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(4) ELECTION: The Shareholders Meeting elects the members of the Shareholders
Committee. Each Party shall vote for the election of candidates nominated
pursuant to Clause 8.3 hereof. The members of the Shareholders Committee
nominated pursuant to Clause 8.3 shall be elected by three quarters of the
votes cast. The other members shall be elected by unanimous vote.
(5) REPLACEMENT AND REMOVAL: If one Party should wish to replace a member of
the Shareholders Committee nominated by it, then the other Party shall
vote for the removal of such member and the election of the new member to
be nominated by the Party that nominated the removed member, regardless of
whether the removal is for or without cause. Each Party may also remove
members of the Shareholders Committee nominated by it without immediately
replacing them. If the Chairman is removed as Shareholders Committee
member, such person shall be replaced immediately.
(6) NOMINATION AND REMOVAL NOTICES: The nomination and removal rights pursuant
to this Clause shall be exercised by notice to the other Party, sent by
registered mail with a notice period of four weeks before the Shareholders
Meeting, in which such appointment or removal is to be resolved. The
Company shall be timely notified to ensure that the agenda can be set
accordingly.
(7) TERM: Election shall be for two year periods. Shareholders Committee
members may be re-elected. If a member of the Shareholders Committee
resigns from the Shareholders Committee prior to the expiry of the term
and should an election take place to replace this member, the term of the
newly elected Shareholders Committee member shall coincide with the expiry
of term of the Shareholders Committee member who has prematurely resigned.
(8) MATTERS TO BE DECIDED BY SHAREHOLDERS COMMITTEE: The Shareholders
Committee shall pass resolutions on all matters to be decided by
shareholders resolution or voted on by the Shareholders Meeting or
provided for in the by-laws for the Managing Director from time to time
and any other matters set forth in this Agreement.
(9) MATTERS REQUIRING SHAREHOLDERS COMMITTEE'S APPROVAL: The following
management measures and matters to be resolved by Shareholders
Resolution/Shareholders Meeting shall require the approval of the
Shareholders Committee:
1. any merger or acquisition transaction;
2. any sale, transfer, pledge or other disposition of any assets of the
Company;
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3. after transformation into an AG: redemption or repurchase of any
outstanding shares of the Company;
4. entering into any transaction, agreement, or arrangement (or modify
any existing arrangement) with any shareholder of the Company, except
for ordinary course of business transactions between the affiliates of
the shareholders which have a value of less than USD 20,000 (twenty
thousand), and except for transactions under the Service and License
Agreements;
5. making any Capital expenditures other than approved as part of the
Business Plan attached hereto;
6. in case of transformation into an AG: issuing any stock or other
securities with rights equal to or senior to AboveNet's and/or the
Parties' securities, other than in a public offering which (i) raises
at least USD 10,000,000 (Dollars ten million) for the Company at a
pre-money valuation of at least USD 60,000,000 (Dollars sixty million)
if such offering is on an Austrian exchange or EASDAQ or (ii) raises
at least USD 20,000,000 (Dollars twenty million) for the Company at a
pre-money valuation of at least USD 125,000,000 (Dollars one hundred
twenty five million) if the offering is on the NASDAQ National Market;
7. entering into any compensation arrangements with senior management; 8.
settling any claims or litigation (other than monetary settlements
under USD 5,000);
9. incurring or guaranteeing debt;
10. after transformation into an AG: issuing more than an agreed upon
number of options to employees;
11. paying dividends or making other distributions to shareholders;
12. amending any of Company's Articles of Association;
13. appointing and recalling a managing director or making any material
change in the management or the nature of the business of the Company;
14. modifying the 4-year Business Plan, including any changes in the
pricing that would negatively affect the average price per megabit of
bandwidth;
15. deciding on arbitration experts;
16. selection and appointment of auditors, which shall be from among the
leading international accountancy firms;
17. after transformation into an AG: deciding on terms for the initial
public offering of the Company's shares
18. the transformation of the Gesellschaft mit beschrankter Haftung (GmbH)
into an Aktiengesellschaft (AG);
19. after transformation into an AG: the increase of the number of shares
reserved under the Option Pool before the Company's initial public
offering pursuant to Clause 6.2 hereof;
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20. consenting to the pledge or other encumbrance of shares in the
Company.
(10) MAJORITY REQUIREMENTS AND PARTIES VETO RIGHT. Resolutions of the
Shareholders Committee are (in principle) adopted by four fifths of the
votes cast, if the Shareholders Committee has five members. After an
increase of the number of Shareholders Committee members to seven members,
resolutions are adopted by five sevenths of the votes cast. In the case of
written vote pursuant to Clause 8.15 hereof, the members of the
Shareholders Committee shall notify the Company as to whether they will
vote in favor of or against any item on the agenda within ten business
days after receipt of a written summary of all of the material terms of
the proposed action. If a member of the Shareholders Committee votes
against the resolution of a proposed action, the issue shall be subject to
an additional voting. In case of Clause 8.9.16 AboveNet shall have the
right to nominate the auditor; the other Parties shall consent to such
auditor and may exercise their veto right only if the nominated auditor
(i) is not affiliated with AboveNet's US auditors and/or (ii) is not from
among the leading international accountancy firms. The auditor for the
first business year shall be Deloitte & Touche Vienna. In case of Clause
8.9.14, resolutions are adapted unanimously. RRZ shall have the right to
request revisions of the Business Plan if market conditions have
materially changed, or if the growth rate of the market is materially
different to the anticipated growth rate of the market. Such request may
be made no more than once in a business year for the following business
year. In this case AboveNet agrees to negotiate in good faith revisions to
the targets set forth in the business plan for a particular business year
and to vote to approve such negotiated revisions.
(11) INFLUENCE ON CORPORATE BODIES OF THE COMPANY: The Parties agree that they
will (i) instruct the Shareholders' representatives and their proxies to
exercise their voting rights in Shareholders Resolutions/Shareholders
Meetings pursuant to the resolutions of the Shareholders Committee and
(ii) exercise their influence on the Managing Director of the Company that
the business of the Company be conducted pursuant to the resolutions of
the Shareholders Committee. In case shareholders' representatives and
their proxies do not exercise their voting rights in shareholders
resolutions/shareholders' meetings in accordance with the resolutions of
the Shareholders Committee, shareholders resolutions passed contrary to
resolutions of the Shareholders Committee shall be reversed in
resolutions/shareholders' meeting to be passed/called as soon as possible.
(12) QUORUM: The Shareholders Committee constitutes a quorum if four
Shareholders Committee members are present in the case of a Shareholders
Committee constituted with five members, and if six members are present in
the case of a Shareholders
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Committee constituted with seven members. Members of Shareholders
Committee may issue written voting proxies (fax sufficient) to other
Members.
(13) CALLING OF MEETINGS: The Shareholders Committee meetings shall be convened
by the Chairman, which Chairman shall be one of the AboveNet appointees to
the Shareholders Committee, to be determined by AboveNet, or, failing him,
by any other member of the Shareholders Committee to the address last made
known. The minimum advance notice shall be 30 (thirty) business days. A
meeting may be called by registered letter, telegram, telefax, or via
electronic means.
(14) MINUTES: The Chairman of the Shareholders Committee shall procure that
minutes of the Shareholders Committee shall be taken, in which at least
the agenda, the members present and the result of any voting shall be
reflected. Such minutes shall be signed by the Chairman of the
Shareholders Committee and shall be made available to the Parties without
undue delay.
(15) WRITTEN RESOLUTIONS: Unless one of the Parties objects in writing to this
manner of passing the resolution within one week from receipt of a
proposed resolution, all resolutions of the Shareholders Committee may be
adopted by written consent. The Chairman of the Shareholders Committee
shall coordinate the voting by written consent and shall provide the
Members of the Shareholders Committee with the result of the written vote
without undue delay.
(16) REMUNERATION FOR EXTERNAL SHAREHOLDER COMMITTEE MEMBERS: Members of the
Shareholders Committee nominated by the Shareholders pursuant to Clause
8.3 hereof shall have no claim to remuneration or reimbursement for
expenses for Shareholder Committee meetings. External members of the
Shareholders Committee shall be entitled to reimbursement of expenses and
an attendance fee to be determined by the Shareholders' Meeting from time
to time.
SECTION 9
RIGHT OF FIRST REFUSAL
(1) RIGHT OF FIRST REFUSAL: All current and future (see Clause 18.2)
shareholders in the Company grant the Parties a right of first refusal and
subscription right (hereinafter referred to as the "Right of First
Refusal") to the shares in the Company.
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(2) CASE OF RIGHT OF FIRST REFUSAL: If one or more of the shareholders intend
to sell his (their) share(s) in the Company or parts thereof (hereinafter
referred to as the "Share" or the "Shares") to third parties against
payment or gratuitously or sell them in another manner or assign them to
third party(ies) against payment or gratuitously (e.g. by way of in-kind
contribution), the other shareholders shall be entitled to of a Right of
First Refusal with respect to such Shares. The shareholder proposing the
sale shall immediately offer the Shares to the (other) Party(ies) in
proportion to their respective shareholdings for exercise of the Right of
First Refusal. Transfers by the shareholders to Affiliates (other than a
third party that acquirers AboveNet) shall be subject to the other
Parties' consent, which shall not be unreasonably withheld, and shall, in
the case of consent, not constitute transfer to third parties.
(3) PRESENTATION OF OFFER: If a shareholder proposes a transfer that is
subject to the Right of First Refusal , the shareholder(s) proposing to
sell its (their) share(s) shall be obligated to present to the other
Party(ies) the purchase or sale offer, alienation or acquisition offer or
the corresponding legal transaction concluded as condition precedent by
transmitting a certified copy of the document which must contain the
entire conditions of the legal transaction (in particular however not
limited to the identity of the proposed acquirer, the nominal value of the
share(s) to be transferred, remuneration and conditions of payment).
(4) EXERCISE OF RIGHT OF FIRST REFUSAL: The Party(ies) have the right to
exercise the Right of First Refusal within a deadline of 20 (twenty)
business days as of notification pursuant to para 3 by offering to take
over the share(s) to be transferred at the same price and on substantially
the same terms (other than the form of consideration) as offered by the
proposed acquiror.
(5) CASH OR MARKETABLE SECURITIES CONSIDERATION: If the proposed acquiror has
offered cash consideration or marketable securities, the Parties shall
have the right to pay as consideration cash, or in the case of AboveNet,
cash and/or AboveNet stock valued at the current stock market rate
(valuation) or a combination of cash and stock, at its own election. The
shareholders shall not be entitled to transfer their shares for any
consideration other than cash or marketable securities without the
unanimous consent of the other shareholders.
In the event that AboveNet chooses stock as the form of consideration, the
stock shall, at the sole option of AboveNet, be either (i) tradable on
NASDAQ at the time of the closing of the acquisition or (ii) AboveNet
shall agree to use its all reasonable efforts to register the shares with
the U.S. Securities and Exchange Commission (the "SEC") for resale
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within 90 (ninety) days of the closing, subject to AboveNet's right to
extend such 90 (ninety) day period if it has material non-public
information, the disclosure of which would have an adverse effect on
AboveNet or its stockholders. If the shares are registered prior to the
closing, the number of shares to be issued shall be determined by dividing
the valuation of the Company by the value of one AboveNet share (based
upon the average closing price of AboveNet stock over the ten trading days
ending three trading days prior to the closing). If the closing price of
the AboveNet stock on the day prior to the day it becomes tradable on
NASDAQ is less than the value of one share of AboveNet stock (based upon
the average closing price of the AboveNet stock over the ten trading days
ending three trading days prior to the closing), AboveNet will provide the
shareholders at AboveNet's option, cash or additional shares AboveNet
stock with a value sufficient to compensate them for such decrease.
(6) Registration of Shares:
(a) Registration of Shares. If the shares of AboveNet common stock (the
"Common Shares") are not registered with the U.S. Securities and
Exchange Commission (the "SEC") prior to the Closing, AboveNet
shall, within 30 days after the Closing Date, file with the SEC a
registration statement under the Securities Act covering the resale
to the public by the shareholders of the Common Shares (the
"Registration Statement"). AboveNet shall use reasonable efforts to
cause the Registration Statement to be declared effective by the SEC
as soon as practicable. AboveNet shall use its reasonable efforts,
subject to subsection (b) below, to cause the Registration Statement
to remain effective for until the earlier of (i) 120 days from the
effective date of the Registration Statement (the "Selling Period")
or (ii) such time as all of the Common Shares covered by the
Registration Statement have been sold pursuant thereto.
(b) Limitations on Registration Rights.
(i) AboveNet may, at any time, delay the filing or effectiveness
of the Registration Statement or suspend the Registration
Statement after effectiveness and may further, by written
notice to the shareholders, require that shareholders
immediately cease sales of the Common Shares during the
Selling Period in the event that, and for so long as, AboveNet
determines that the existence of any fact or the happening of
any event (including without limitation pending negotiations
relating to, or the consummation of, a transaction or the
occurrence of any other event) would require additional
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disclosure of material information by AboveNet in the
Registration Statement the confidentiality of which AboveNet
has a business purpose to preserve or which fact or event
would render AboveNet unable to comply with SEC requirements
(in either case, a "Suspension Event").
(ii) If AboveNet delays or suspends the Registration Statement or
requires Investor to cease sales of shares pursuant to Section
b.i above, AboveNet shall, as promptly as practicable
following the termination of the circumstance which entitled
AboveNet to do so, take such actions as may be necessary to
file or reinstate the effectiveness of the Registration
Statement and/or give written notice to Investor authorizing
Investor to resume sales pursuant to the Registration
Statement. If as a result thereof the prospectus included in
the Registration Statement has been amended to comply with the
requirements of the Securities Act, AboveNet shall enclose
such revised prospectus with the notice to shareholder given
pursuant to this Section b.ii, and shareholders shall make no
offers or sales of shares pursuant to the Registration
Statement other than by means of such revised prospectus.
(iii) In the case of any Suspension Event occurring prior to and
delaying the filing of the Registration Statement, AboveNet
shall file the Registration Statement in accordance with
Section b.ii above and shall be required to keep the
Registration Statement effective until the earlier of (i) such
time as all of the shares offered thereby have been disposed
of in accordance with the intended methods of distribution set
forth in the Registration Statement or (ii) 120 days plus an
extended period equal to the number of days during which any
such suspension was in effect.
(c) Registration Procedures.
(i) In connection with the filing by AboveNet of the Registration
Statement, AboveNet shall furnish to the shareholders copies
of the prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act and
such additional copies as are reasonably requested by the
shareholders.
(ii) AboveNet shall use its best efforts to register or qualify the
Common Shares covered by the Registration Statement under the
securities laws of such states as the shareholders shall
reasonably request; provided, however, that AboveNet shall not
be required in connection with this Section c.ii to
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qualify as a foreign corporation or execute a general consent
to service of process in any jurisdiction.
(iii) If AboveNet has delivered final prospectuses to the
shareholders and after having done so the prospectus is
amended to comply with the requirements of the US Securities
Act of 1933, as amended, AboveNet shall promptly notify the
shareholders and, if requested by AboveNet, the shareholders
shall immediately cease making offers or sales of shares under
the Registration Statement and return all prospectuses to
AboveNet. AboveNet shall promptly provide the shareholders
with revised prospectuses and, following receipt of the
revised prospectuses, the shareholders shall be free to resume
making offers and sales under the Registration Statement.
(iv) AboveNet shall pay the expenses incurred by it in complying
with its obligations under this Section -, including all
registration and filing fees, exchange listing fees, fees and
expenses of counsel for AboveNet, and fees and expenses of
accountants for AboveNet, but excluding (i) any brokerage
fees, selling commissions or underwriting discounts incurred
by Investor in connection with sales under the Registration
Statement and (ii) the fees and expenses of any counsel
retained by the shareholders.
(d) Requirements of Shareholders. AboveNet shall not be required to
include any Common Shares in the Registration Statement unless each
shareholder furnishes to AboveNet in writing such information
regarding the shareholder and the proposed sale of Common Shares by
the shareholder as AboveNet may reasonably request in writing in
connection with the Registration Statement or as shall be required
in connection therewith by the SEC or any state securities law
authorities.
(7) DUE DATE OF REMUNERATION: The remuneration shall be due within 30 (thirty)
days following the conclusion of the proceeding pursuant to para 2 through
4, the remuneration pursuant to para 5 shall be due within 30 (thirty)
days as of determination of the remuneration under subpara 5 hereof. In
case of default in payment, default interests in the amount of 4 (four)
percent over the discount rate (Basiszinssatz) as fixed by decree from
time to time shall be paid.
(8) NON-EXERCISE OF RIGHT OF FIRST REFUSAL: If the Party(ies) choose(s) not to
exercise the Right of First Refusal in a particular case, the
shareholder(s) obligated to the preemptive sale may sell, alienate, or
transfer the Shares as to which the right of first refusal
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within 6 (six) months following notification of the Right of First
Refusal, however - in case of a sale or a transfer to a third party - only
to the disclosed third party and in all cases of Right of First Refusals
only subject to the provisions and conditions exactly as disclosed
pursuant to para 3. If the shareholder(s) obligated to the preemptive sale
does not alienate or transfer the Shares subject to the Right of First
Refusal within this deadline, the Right of First Refusal shall cease to
exist for the case in question yet shall in general continue to exist.
(9) STATEMENTS AND NOTIFICATIONS: All statements and notifications according
to the above provisions shall be made by certified airmail letter or
courier mail or personally delivered. Unless expressly provided otherwise,
all of the deadlines mentioned in the above provisions shall be counted as
of five business days after dispatch (date of the postal stamp).
SECTION 10
PUT OPTIONS
(1) PUT OPTION 1: RRZ hereby irrevocably offers to buy and accept from
AboveNet the shares in the Company ("Put Option 1"). This option may only
be exercised with respect to all shares, and may not be exercised
partially.
(2) EXERCISE OF PUT OPTION: Put Option 1 may be exercised by AboveNet (i) if,
without AboveNet's prior written approval, nominal capital of the Company
is sold by RRZ to a third party or parties in a single transaction or a
series of related transactions, and such third party(ies) does (do) not
offer to purchase all of AboveNet's shares in the Company on the same
terms as shares are being purchased from other shareholders or (ii) a
direct or indirect competitor of Above Net acquires direct or indirect
ownership of RRZ. In case of (i) AboveNet may demand as its purchase price
the higher of the price per share being offered by the third party and the
remuneration determined under Clause 10 subpara 3 below and in case of
(ii) the remuneration shall be determined under Clause 10 subpara 3 below.
AboveNet shall exercise its Put Option within 20 (twenty) business days
after written notification by RRZ or the Company, respectively, from the
closing of the transaction or transactions.
(3) DETERMINATION OF REMUNERATION: If no agreement on the amount of
consideration for the Shares can be reached within 14 (fourteen) days
following the Effective Date, the price shall be the fair market value as
determined by a certified Austrian auditing and tax consultancy company or
by a certified Austrian auditor and tax consultant mutually
17
agreed upon by AboveNet and RRZ (hereinafter referred to as "the
Arbitration Expert"). If AboveNet and RRZ cannot agree to an arbitration
expert within 14 (fourteen) days, each shall select an expert and have the
price evaluated. If the two evaluations are more than 20 (twenty) % apart,
an Arbitration Expert shall be appointed upon application by one of the
shareholders by the President of the Vienna Chamber of Certified
Accountants. The arbitration opinion by this expert shall be binding upon
the respective Parties. The costs for the Arbitration Expert shall be
borne by both Parties, whereby AboveNet shall pay one half, and RRZ the
other half.
(4) DECLARATION OF ACCEPTANCE: The declaration of acceptance of the offer
under the Put Option shall be timely and properly made provided AboveNet
exercises the Put Option and thereby accepts the offer hereunder in the
form of a the written, duly signed acceptance declaration to RRZ. The sale
and assignment of the Shares shall be deemed concluded upon service of an
original copy of the Notarial Acceptance Deed to RRZ.
(5) EFFECTIVE DATE: The effective date for the sale and transfer shall be the
day on which the respective written acceptance declarations are delivered
to RRZ (hereinafter referred to as "Effective Date").
(6) PAYMENT DUE DATE: Purchase Price shall be due and payable to AboveNet
within thirty (30) business days from (i) the Effective Date and (ii) in
case of Art 10.3 the service of the arbitrator's opinion (10.3),
respectively.
(7) PUT OPTION 2: AboveNet hereby irrevocably offers to buy and accept from
RRZ the shares in the Company ("Put Option 2"). This option may only be
exercised with respect to all shares, and may not be exercised partially
(8) EXERCISE OF PUT OPTION 2: Put Option 2 may be exercised by RRZ if, without
RRZ's prior written approval, nominal capital of the Company is sold by
AboveNet to a third party or parties in a single transaction or a series
of related transactions, and such third party(ies) does (do) not offer to
purchase all of RRZ's shares in the Company on the same terms as shares
are being purchased from other shareholders. In such case RRZ may demand
as the purchase price for their shares the higher of the the price per
share being offered by the third party and the remuneration shall be
determined under Clause 10 subpara 9 below. RRZ shall exercise its Put
Option within 20 (twenty) business days after written notification by
AboveNet or the Company, respectively, from the closing of the transaction
or transactions.
18
(9) DETERMINATION OF REMUNERATION: If no agreement on the amount of
consideration for the Shares can be reached within 4 (four) weeks
following receipt of the termination notice by the remaining
shareholder(s), the fair market value of the shares shall be determined by
a certified Austrian auditing and tax consultancy company or by a
certified Austrian auditor and tax consultant mutually agreed upon by
AboveNet and RRZ (hereinafter referred to as "the Arbitration Expert"). If
AboveNet and RRZ cannot agree to an arbitration expert within 14
(fourteen) days, each shall select an expert and have the price evaluated.
If the two evaluations are more than 20 (twenty) % apart, an Arbitration
Expert shall be appointed upon application by one of the shareholders by
the President of the Vienna Chamber of Certified Accountants. The
arbitration opinion by this expert shall be binding upon the respective
Parties. The costs for the Arbitration Expert shall be shared by the
Parties, whereby AboveNet shall pay 50% and RRZ shall pay 50%.
(10) DECLARATION OF ACCEPTANCE: The declaration of acceptance of the offer
under the Put Option shall be timely and properly made provided RRZ
exercises the Put Option and thereby accepts the offer hereunder in the
form of a the written, duly signed acceptance declaration to AboveNet. The
sale and assignment of the Shares shall be deemed concluded upon service
of an original copy of the Notarial Acceptance Deed to AboveNet.
(11) EFFECTIVE DATE: The effective date for the sale and transfer shall be the
day on which the respective written acceptance declarations are delivered
to AboveNet (hereinafter referred to as "Effective Date").
(12) FORM OF CONSIDERATION. AboveNet shall be entitled to pay the Purchase
Price in either cash or shares of AboveNet stock. In the event that
AboveNet chooses stock as the form of consideration, the stock shall, at
the sole option of AboveNet, be either (i) tradable on NASDAQ at the time
of the closing of the acquisition or (ii) AboveNet shall agree to use its
all reasonable efforts to register the shares with the U.S. Securities and
Exchange Commission (the "SEC") for resale within 90 (ninety) days of the
closing, subject to AboveNet's right to extend such 90 (ninety) day period
if it has material non-public information, the disclosure of which would
have an adverse effect on AboveNet or its stockholders. If the shares are
registered prior to the closing, the number of shares to be issued shall
be determined by dividing the valuation of the Company by the value of one
AboveNet share (based upon the average closing price of AboveNet stock
over the ten trading days ending three trading days prior to the closing).
If the closing price of the AboveNet stock on the day prior to the day it
becomes tradable on NASDAQ is less than
19
the closing value of one share of AboveNet stock (based upon the average
closing price of the AboveNet stock over the ten trading days ending three
trading days prior to the closing), AboveNet will provide the shareholders
at AboveNet's option, cash or additional shares AboveNet stock with a
value sufficient to compensate them for such decrease.
(13) REGISTRATION OF SHARES. If AboveNet chooses stock as the form of
consideration the provisions of Clause 9 subpara 6 shall apply.
(14) PAYMENT DUE DATE: Purchase Price shall be due and payable to RRZ within
thirty (30) business days from (i) the Effective Date and (ii) in case of
Art 10.9 the service of the arbitrator's opinion (10.9), respectively.
SECTION 11
TRANSFER, REDEMPTION AND ENCUMBRANCE OF SHARES
(1) TRANSFER OF SHARES: No shares of the company may be transferred without
the approval of the Shareholders Meeting where an approval by 90 % of the
outstanding shares is required, which approval shall not be unreasonably
withheld, especially since the Parties are protected under the Right of
First Refusal and the Call Options. Transfers of shares in the Company by
the shareholders to Affiliates shall be subject to the other Parties'
consent, which shall not be unreasonably withheld, and shall, in the case
of consent, not constitute transfer to third parties.
(2) REDEMPTION OF SHARES: After the transformation of the Company into an AG,
the Company shall not have the right to redeem the Company's shares under
any circumstances, except that if the holders of 90 % of the outstanding
shares (including the shares held by AboveNet) agree to such redemption.
(3) RESTRICTIONS ON ENCUMBRANCE: Shares may only be pledged or otherwise
encumbered with the consent of the Shareholders Committee. If such consent
is given, it is only valid if the pledgee concluded an agreement with the
other Shareholders which grants such other Shareholders the rights
provided for in this Agreement, particularly the right of first refusal.
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SECTION 12
COMPETITION CLAUSE
(1) NON-COMPETITION: Without the consent of the Company to be given by
unanimous resolution of the Shareholders, the Parties may neither engage
in the Company's line of business (co-location and connectivity services)
nor acquire participations in companies that provide such services (such
as Frontier, Exodus, Concentric, EUNet, PSI, AtHome, or Telekabel) in
Austria. The members of the corporate bodies of the Company may not engage
in any activities, self-employed or employed, including but not limited to
accepting a position as managing or supervising body (e.g. shareholder
committee, supervisory board), doing business for their own or for another
persons account, or acquiring direct or indirect (e.g. through trustees)
participations in a company that engages in the same line of business in
Austria, as personally liable shareholders or through a capital interest
of any kind.
(2) TERM: The competition clause shall be valid for the term of this Agreement
and a period of one year thereafter and shall be limited to the territory
of Austria. The one year post-termination prohibition shall not apply in
case of termination for cause, to the Party terminating for cause or in
the event of a termination under Clause 15.3 hereunder.
(3) SUSPENSION/TERMINATION: AboveNet and Affiliates shall not be bound (i)
during suspension or following expiration of the exclusivity under the
License Agreement (Exhibit./3) or following termination of the License
Agreement itself and/or (ii) if any Affiliate of RRZ breaches this Clause
12.
(4) AFFILIATES: The competition clause applies to the Parties and to all
Affiliates. It will not qualify as a violation of this non-compete
provision if affiliates from Raiffeisen Upper Austria, Salzburg, Carinthia
or Tyrol engage in competitive activities. In such case, AboveNet (and
Affiliates) shall not be bound by the non-compete clause in the named
area.
(5) EXEMPTION WITH REGARD TO NETWAY: RRZ shall transfer all existing
outsourcing businesses provided to Netway to the Company on a best price
guarantee (i.e. the Company will charge the lowest price it charges other
customers with comparable space and bandwidth requirements), and will not
provide co-location services and (i.e. in combination with) Internet
Connectivity services in this area to Netway or any other company. RRZ
shall procure that Netway will not expand its co-location services and not
competete with the Company unless all those services are outsourced to the
Company and all related connectivity is purchased exclusively from the
Company. Additionally, RRZ will procure that Netway will purchase a
minimum of 75% of its entire connectivity
21
needs from the Company, provided that the Company offers competitive
prices at comparable quality and purchase volume levels. A transition
period of one year will apply to allow the completion of existing supplier
agreements, provided however, that upon termination of any such agreement,
it will not be renewed and be replaced with services from the Company
until the condition of this paragraph is fulfilled. If this clause 12.5 is
violated, AboveNet shall have the right to terminate the exclusivity of
the license agreement, and shall no longer be bound by the competition
provisions in this section 12 .
(6) EMPLOYEES: The Company shall procure that each of the key employees of the
Company shall enter into agreement not to compete with the Company during
their employment by the Company and for one year thereafter, subject to
continuation of salary payment for that one-year period. This provision
shall not apply if the Company is sold and the individuals are employed
with the acquirer.
(7) SOLICITATION OF EMPLOYEES: AboveNet and RRZ shall not solicit or employ
any employees of the Company without written consent of the Company,
except for employees who have been dismissed for other than cause
(Entlassung).
SECTION 13
INSPECTION OF BOOKS
All shareholders shall have the right to inspect upon appropriate notice through
their (authorized) representatives the Company's general books and records and
to obtain photocopies of such books and records at all times.
SECTION 14
ABOVENET STOCK OPTION PLAN
AboveNet intends to grant options to purchase AboveNet stock to employees of the
Company subject to applicable accounting and legal issues from time to time and
subject to separate option agreements to be concluded between AboveNet and the
beneficiary.. The aggregate number of options to be granted shall be for up to
100,000 shares over four years (up to 15,000 shares in year 1, up to 20,000 in
year 2, up to 25,000 shares in year 3, and up to 40,000 shares in year 4),
unless the Company is acquired by a third party prior to such time, upon
achievement of the revenue, net income and EBITDA targets in the Business Plan
attached
22
hereto as Exhibit ./7 for the prior year. If the Company fails to meet such
targets in any year, no options will be issued. Within 60 days from the end of
the business year, the Company's auditors (currently Deloitte & Touche) shall
determine whether the Company succeeded or failed to meet the targets in the
Business Plan. The exercise price for the options shall be the fair market value
of the AboveNet stock on the date the options are issued.
III. GENERAL TERMS
SECTION 15
TERM OF THE SHAREHOLDERS AGREEMENT
(1) TERM: This Shareholders Agreement is concluded for an indefinite term.
(2) DISSOLUTION: This Agreement shall be binding upon the Parties thereto
until both Parties agree to dissolve the Agreement by unanimous written
resolution, or if in case of (a) and (b) one of the Parties and in case
(d) the non-breaching Party gives written notice of termination in case of
(a) dissolution or liquidation of the Company;
(b) initiation of insolvency proceedings over the assets of the Company,
Above Net, or RRZ;
(c) an exercise of the Put Option under Clause 10; or
(d) a material breach by one of the Parties of any material obligation
of the License Agreement or the Agreement hereunder;
whereupon all rights and obligations under this Agreement shall
immediately expire, unless a term of this Agreement expressly provides for
a survival period.
(3) EXIT AND EXIT PENALTY: The Parties may furthermore terminate this
Agreement as of the end of any calendar quarter by providing the Company
with at least three months prior written notice pursuant to Art 11 of the
Articles of Association. Such termination notice must be sent by
registered letter accompanied by telefax sent the same day to the Company
and the other Party (i) If the effective date of termination is within the
first 24 (twenty four) months following registration of the Company,
23
however, the exiting Party shall be subject to payment of a penalty of USD
5,000,000 (five million) to the other Party. Additionally, the Party
terminating shall lose its equity capital provided and all investments
made. The remaining Party shall have the right to request from the exiting
Party the assignment of the exiting Party's shares for a nominal transfer
price of ATS 1 (one Austrian Shilling) within a notice period of four
weeks following receipt of termination notice; such request must be by
registered letter accompanied by telefax sent the same day to the exiting
Party. Should the remaining Party choose not to exercise such right, the
Company shall be liquidated as of the effective date of termination of the
Agreement . The Parties undertake to vote for the liquidation of the
Company requiring unanimous vote of the shareholders' meeting. (ii) If the
effective date if termination is after the first 24 (twenty-four) months
following the registration of the Company in the Companies' Register, no
Termination Penalty shall apply. The remaining Party shall have the right
to request from the exiting Party the assignment of the exiting Party's
shares within a notice period of four weeks following receipt of
termination notice; such request must be by registered letter accompanied
by telefax sent the same day to the exiting Party. The transfer price
shall be the fair market value of the shares as agreed between the Parties
and failing such agreement on the amount of consideration for the Shares,
it shall be determined by an Arbitration Expert who shall be appointed
pursuant to the Rules described under Clause 10 above.
(4) "ABOVENET" NAME: The parties acknowledge that neither RRZ nor the Company
has any rights to the use of the name "AboveNet" or to any goodwill
associated therewith save to the extent provided in the Licence Agreement.
Thus, leaving further rights under the Licence Agreement unaffected, in
case of loss of exclusivity under the Licence Agreement and/or if at any
time AboveNet and/or its Affiliates cease to hold any shares in the
Company, RRZ and the Company shall procure that the Company shall cease to
use the name AboveNet for any purpose and shall take such steps as are
necessary to remove such name from the registered corporate name of the
Company and RRZ and its Affiliates shall not thereafter use or suffer to
be used the name of AboveNet in connection with the operation of the
Business.
(5) EFFECTS: The validity of this Agreement shall also be applicable to all
Shares acquired by the Parties in the future by way of purchase, in the
course of capital increases or in any other manner.
24
SECTION 16
CONFIDENTIALITY
(1) CONFIDENTIAL INFORMATION: Each Party hereto undertakes for itself and for
its Affiliates the fulfillment by which of this obligation it guarantees,
to keep confidential the following information regarding the business
operations of the Company or any of its subsidiaries and to prevent the
passing on of this confidential information to third parties:
(a) any information that is specifically marked as "Confidential";
(b) information which the management of the Company or either of the
Parties has requested in writing to be kept confidential;
(c) information which by its nature must be kept confidential in order
to prevent adverse consequences to the business of the Company;
(d) information relating to the contents of this Agreement and its
Exhibits.
(2) LIMITATION ON THE FLOW OF INFORMATION: The Parties shall endeavor to give
access to said confidential information only to such persons who are
either bound by professional duty of confidentiality or who require
knowledge of the information as employees, representatives, authorized
persons, advisors, officers or directors of the respective Party or one of
their Affiliated Companies for orderly conduct of business of the Party
concerned. The Party shall also require the recipients of the information
to undertake to keep the confidential information secret.
(3) DURATION OF OBLIGATION: The obligation of this Clause shall continue to be
in force even after a Party shall have ceased to be a partner to this
Agreement or a Shareholder of the Company.
(4) INFORMATION NOT TO BE KEPT SECRET: For the purpose of this Clause the
following information shall not be considered to be confidential:
(a) information already the public domain;
(b) information which becomes known through no fault of the disclosee;
(c) information which becomes known independently of the disclosure;
25
(d) information which is necessary to be disclosed in the course of a
stock exchange listing of the Company or under the rules of the SEC
or the Nasdaq National Market;
(e) information the disclosure of which is in the justified interest of
one of the Parties in the course of the sale of his participation in
the Company; the Party shall require the recipients of the
information to undertake to keep the confidential information
secret.
Nothing herein shall be construed as preventing a Party from disclosing
confidential information where it is under a duty, under applicable law,
regulation, court or administrative decision to make such disclosure, such
as, in case of AboveNet, in public filings with the SEC.
(5) WAIVER: The Company hereby waives for itself any right to keep
confidential any matters which are to be disclosed under this Agreement by
members of the Management Board of the Company to the Parties.
SECTION 17
COSTS
(1) All costs resulting from negotiating and drafting this Agreement,
including, but not limited to, legal, accountancy and financial advisors
fees, shall be borne by such Party where they occurred and shall not be
reimbursable by the other Party or the Company.
(2) No stamp duties and transfer taxes should arise in connection with the
conclusion of this Agreement.
SECTION 18
GENERAL
(1) ENTIRE AGREEMENT: This Agreement and the documents referred to in this
Agreement contain the entire agreement between the Parties relating to the
transactions contemplated by this Agreement and supersede any previous
agreements between the Parties (if any) relating to these transactions.
26
(2) EFFECTS ON THIRD PARTIES: This agreement shall be binding upon each of the
parties and their respective successors and assignees. The validity of
this Agreement shall also be applicable to all Shares acquired in the
future by way of purchase or in any other manner. Any acquirers of shares
in the future shall be obliged to enter into this agreement. The Parties
intend to seek a third shareholder for AboveNet Austria GmbH to increase
the market potential for named Company. Following accession of such third
Shareholder, the participation quotas is expected to be one third for each
shareholder. Parties agree to amend this Shareholders Agreement in case of
(i) the accession of parties different from the Parties to the
Shareholders Agreement and/or (ii) transformation of AboveNet Austria GmbH
into an AG and/or (iii) the establishment of a supervisory board and/or
(iv) an IPO of AboveNet Austria GmbH being in preparation.
(3) INTERPRETATION: Clause and subsection headings in this Agreement are for
ease of reference only and do not affect the substance of any provision.
Words denoting the singular include the plural and vice versa, words
denoting any one gender include all genders. All references to a statutory
provision shall be construed as including references to any statutory
modification or re-enactment thereof (whether before or after the date of
this Agreement) for the time being in force.
(4) MODIFICATIONS TO AGREEMENT: This Agreement and its Exhibits shall not be
amended orally and shall not be modified or discharged, in whole or in
part, otherwise than by an instrument in writing signed by all Parties
hereto or their successors or assignees.
(5) NO THIRD PARTY BENEFICIARIES: This Agreement shall inure to the benefit
of, and be binding upon, each of the Parties and their respective
successors and assignees, subject to the provision of this Agreement, but
shall not inure to the benefit of any third party. Except as expressly
provided for under this Agreement, none of the rights and obligations
under this Agreement may be assigned or transferred to third parties
without the prior written consent of the other Party.
(6) SEVERABILITY AND INVALIDITY: Should any provisions of this Agreement be or
become wholly or partly invalid or unenforceable, this will not affect the
validity or enforceability of the remaining provisions. The invalid or
unenforceable provisions shall be substituted by a valid or enforceable
provision which in its essential purpose comes as close as possible to the
invalid or unenforceable provision; the same applies mutatis mutandis to
any gaps in this Agreement.
27
(7) WAIVERS: The failure of any Party to enforce or to exercise, at any time
or for any period of time any right or remedy arising pursuant to or under
this Agreement does not constitute, and shall not be construed as, a
waiver of such right or remedy and shall in no way affect that Party's
right to enforce or exercise it later, provided that such right is not
time barred or precluded. Any waiver to this effect must be in writing.
(8) EXHIBITS: All exhibits to this Agreement are an integral part of this
Agreement as if fully set forth herein. All references herein to an
exhibit shall be deemed to be references to a clause of this Agreement
unless the context shall otherwise require.
(9) NOTICES: All notices required or permitted by this Agreement shall be in
writing, be given by an authorized representative of the relevant Party
and shall be sent to the recipient via registered mail and telefax to the
address set forth below or an address to be provided by the relevant Party
in writing and via registered mail under reference to this Clause to the
other Party:
If to RRZ:
Raiffeisen Rechenzentrum Ges.m.b.H
attn: Xx. Xxxxxx Hell
Mr. Wilfried Pruschak
1020 Vienna, Xxxxxxxxxxxxxx 00-00
If to AboveNet:
AboveNet Communications, Inc.
attn: Xx. Xxxxxx X. Xxxxxx
Dr. Xxxx Xxxxxxx
00 X. Xxx Xxxxxxxx Xxxxxx, #0000, Xxx Xxxx, XX 00000
(10) COUNTERPARTS: This Agreement is executed in two counterparts, each of
which shall be deemed an original and both of which together shall
constitute one and the same instrument.
(11) LANGUAGE: This Agreement has been produced in the English language and the
negotiations relating to this Agreement were conducted in English; any
translations are for working purposes only and have no influence on the
interpretation of this Agreement.
28
(12) ANNOUNCEMENTS: No announcement concerning this Agreement or its subject
matter or any ancillary matter shall be made by any Party except as
permitted herein or as required by law without the prior written approval
of the other Parties such approval not to be unreasonably withheld or
delayed.
SECTION 19
APPLICABLE LAW, ARBITRATION
(1) APPLICABLE LAW: The validity, interpretation and performance of this
Agreement shall be governed by the laws of the Republic of Austria,
excluding the rules regarding choice of law and excluding the United
Nations Convention on Contracts for the international sale of goods.
(2) ARBITRATION CLAUSE: Any disputes arising out of or in connection with this
Agreement, including disputes on its conclusion, binding effect, amendment
and termination shall be finally settled by a three-person Arbitration
Tribunal under the Rules of Arbitration of the International Chamber of
Commerce (ICC). AboveNet and RRZ shall each nominate one arbitrator, who
shall be confirmed by the Court of Arbitration of the International
Chamber of Commerce. If one Party fails to nominate an arbitrator within
four weeks after the institution of the arbitration proceedings, the Court
of Arbitration shall appoint such arbitrator. The third arbitrator shall
be appointed jointly by the arbitrators and confirmed by the Court of
Arbitration. If the two arbitrators fail to agree on the appointment of
the chairman within four weeks of confirmation, the chairman shall be
appointed by the Court of Arbitration.
(3) PLACE, LANGUAGE: The place of the arbitration shall be Vienna, the
language of the arbitration proceedings shall be English without
translation. The Arbitral Tribunal has to decide in the award which party
has to bear the costs of the arbitration (or in what proportions the costs
shall be borne by the Parties) including the fees of counsel having
assisted the Parties.
(4) INJUNCTIVE RELIEF:: The Parties hereto agree that, in addition to any and
all other remedies that may be available under this Agreement and its
Exhibits, each Party shall be entitled for the enforcement of its claims
to injunctive relief as may be granted by a court of competent
jurisdiction.
29
Vienna, this
-----------------------------------------
For Raiffeisen Rechenzentrum Ges.m.b.H
-----------------------------------------
For AboveNet Communications, Inc.
-----------------------------------------
For AboveNet Communications GmbH, joining the Agreement and signing with respect
to Clauses which shall bind the Company, e.g. Arts 5/2, 12/6.
