Exhibit 10.4
SHAREHOLDERS AGREEMENT AMONG THE SHAREHOLDERS OF FIRSTMARK
COMMUNICATIONS FRANCE SAS
In Paris, as of 21 January 2000
BETWEEN
(a) THE ONE PARTY,
FIRSTMARK COMMUNICATIONS EUROPE, S.A., a Company validly incorporated and
existing under and pursuant to the laws of Luxembourg, with registered
address in Xxx xx Xxxx Xxxxx, 0, X-0000, Xxxxxxxxxx, and entered in the
Companies Register under number B65610 (hereinafter, "FMCE").
FMCE is represented in this act by Xx. Xxxxx Xxxxxx Xxxxxxx, of legal age,
with Passport number 000000000, with professional address in Xxxxxxx
Square House, 10-12, Xxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx, in
his capacity as attorney of the same.
(b) THE OTHER PARTY,
SUEZ LYONNAISE DES EAUX, a SOCIETE ANONYME with share capital of
1,970,199,490 Euros whose head-office is at 00 xxxxxx xx xx Xxxxxxx, 00000
Nanterre, and registered at the Commercial and Corporate Registry of
Nanterre under number B 542 062 559 (hereinafter "AAA").
AAA is represented by Xx. Xxxxxxx Xxxxxx, duly authorized.
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(c) THE OTHER PARTY,
GROUPE ARNAULT S.A., a SOCIETE ANONYME with share capital of 317,045,600
Francs whose head-office is at 00, xxxxxx Xxxxxxxxx, 00000 Xxxxx, and
registered at the Commercial and Corporate Registry of Paris under number
B 887 180 867 (hereinafter "BBB").
BBB is represented in this act by Xxxxxxx Xxxxxx, duly authorized.
(d) THE OTHER PARTY,
RALLYE S.A., a SOCIETE ANONYME with share capital of 557,319,600 Francs,
whose head-office is at 00, xxx xx Xxxxxxxx Xxxxx-Xxxxxx, 00000 Xxxxx, and
registered at the Commercial and Corporate Registry of Paris under number
B 054 500 574 (hereinafter "CCC")
CCC is represented in this act by Xx. Xxxxxx Savart, duly authorized.
(e) THE OTHER PARTY,
PONTHIEU VENTURES, a SOCIETE ANONYME with share capital of 3,040,380
Euros, whose head-office is at 00 xxxxxx xxx Xxxxxx-Xxxxxxx, 00000 Xxxxx,
and registered at the Commercial and Corporate Registry of Paris under
number B 382 304 350 (hereinafter "DDD")
DDD is represented in this act by Xx. Xxxxxx Savart, duly authorized.
(f) THE OTHER PARTY,
BANQUE POUR L'EXPANSION INDUSTRIELLE SA (Banexi SA), a SOCIETE ANONYME
with a share capital of 95,775,456 euros, whose head office is at 0,
Xxxxxxxxx Xxxxxxxxx, 00000 Xxxxx, and registered at the Commercial and
Corporate Registry of Paris under number B 000 000 000, represented by
Xxxx-Xxxxxxx Xxxxxxxx, duly empowered, for the purposes hereof.
BNP EUROPE TELECOM AND MEDIA FUND II L.P. (BNP ETMF II L.P.), represented
by its General Partner, General Business Finance and Investment Ltd (GBFI
Ltd), a limited
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liability company residing at Grand Cayman (Cayman Islands) c/x Xxxxxx and
Calder, X/X XXX 000, Xxxxxx Xxxxx Xxxxx Xxxxxx Xxxxxx and registered under
number 89453, represented by Xxxx-Xxxxxxx Xxxxxxxx, duly empowered, for
the purposes hereof.
NATIO VIE DEVELOPPEMENT (NVD), FCPR managed by the management company BNP
Private Equity SA, SOCIETE ANONYME with a share capital of 3,000,000 euros
whose head office is at 00, xxx Xxxxxxxx, 00000 Xxxxx, and registered at
the Commercial and Corporate Registry of Paris under number B 000 000 000,
represented by Xxxx-Xxxxxxx Xxxxxxxx, duly empowered for the purposes
hereof.
BANEXI S.A., BNP ETMF II L.P. and NVD hereinafter together referred to as
"EEE". EEE is represented in this act by Xx. Xxxx-Xxxxxxx Xxxxxxxx, duly
authorized.
FMCE, AAA, BBB, CCC, DDD, and EEE may likewise be referred to individually
herein as a "PARTY" or "SHAREHOLDER" and jointly as the "PARTIES" or
"Shareholders";
And FMCF, a French company incorporated under the legal form of a SOCIETE A
RESPONSABILITE LIMITEE on July 27, 1998, and converted into the legal form of a
SOCIETE PAR ACTIONS SIMPLIFIEE pursuant to a decision of the sole partner
thereof made on January 13, 2000, entered in the Lyon Companies Register under
the number 419 678 826, with registered address in Lyon, 69003, 1 Boulevard
Xxxxxx Xxxxx, (hereinafter, "FMCF").
THEY DECLARE
I. That up to the date of this Agreement FMCE is the sole shareholder of
the company FMCF, a French company incorporated under the legal form of
a SOCIETE A RESPONSABILITE LIMITEE on July 27, 1998, and has been
converted into the legal form of a SOCIETE PAR ACTIONS SIMPLIFIEE
pursuant to a decision of the sole partner thereof made on January 13,
2000, entered in the Lyon Companies Register under the number 419 678
826, with registered address in Lyon, 69003, 1 Boulevard Xxxxxx Xxxxx.
II. The business purpose of FMCF is (i) the construction, deployment,
marketing and operation of telecommunications local-loop access
networks and systems in France utilising broadband wireless local loop
technology, ADSL, and any other broadband local access technology, (ii)
the application for and obtaining of all necessary licenses,
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approvals and permits in relation to the foregoing; (iii) the leasing
of sites for the operation of the business described in (i) above; (iv)
the provision and marketing of information and telecommunication
services, including without limitation voice telephony, video, data and
Internet services and (v) the training and development of employees and
consultants in relation to the foregoing (hereinafter, the "BUSINESS OF
FMCF") and FMCF is and will be as long as this Shareholders Agreement
is in force the sole vehicle for the access business of FMCE and its
Affiliates in France.
III. That as part of its strategy of implementation of the Business of FMCF:
(i) FMCF has been granted:
(i.1) a license to establish and operate an experimental
public local radio loop network and to provide a
public telephone service issued by the French
Minister in charge of telecommunications under
articles L33-1 and L34-1 of the Post and
Telecommunication Code, dated October 19, 1998
(published in the "JOURNAL OFFICIEL DE LA REPUBLIQUE
FRANCAISE" dated November 8, 1998) and modified by an
"ARRETE" dated November 26, 1999 (published in the
"JOURNAL OFFICIEL DE LA REPUBLIQUE FRANCAISE" dated
December 23, 1999);
(i.2) an allocation of frequencies in the 27,5 - 29,5 GHz
frequency band for a local radio loop experimentation
by decision nDEG.98-1012 of the French
Telecommunications Regulatory Authority ("ART") dated
December 4, 1998, extended by Decision nDEG.99-1164
dated December 24, 1999.
IV. That the French Secretary of State for Industry has published a notice on
November 30, 1999 launching, on proposal of the ART, separate public calls
for tenders for awarding licenses related to:
(i) local radio loop networks in the 3,5 GHz and 26 GHz
frequency band across the metropolitan territory,
(ii) local radio loop networks in the 26 GHz frequency
band in each of the regions of the metropolitan territory,
(iii) local radio loop networks in the overseas
territories,
and, consequently, the Parties have decided that FMCF should formulate
the
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appropriate tenders, in the calls described in (i) and (ii) above
for a national license and a maximum of 22 regional licenses, excluding
the tender for overseas territories, and present whatever documents
that might be necessary and/or required by the relevant bidding
conditions, with the aim of it being awarded the said licenses in any
of the competitions described in (i) and (ii) above (hereinafter, the
"TENDERS").
V. That the Parties acknowledge the possibilities for expansion of their
own businesses and of the Business of FMCF in France that any future
collaboration between them could entail, and in this regard they share
the view that their respective activities could be strengthened by
sharing their infrastructure, technology, business experience, human
potential and other resources on appropriate economic terms.
VI. That the Parties are interested in actively participating in the French
telecommunications sector and in this regard they have entered into the
capital of FMCF in the terms and conditions set out in this
Shareholders Agreement and that all of the Parties are interested in
implementing and developing the Business Plan of FMCF as defined in
Clause II 5 (ix) h) below. A sample summary of the entire Business Plan
is attached as SCHEDULE 1. The Parties reciprocally acknowledge the
sufficient capacity of the others in this act and they agree to enter
into the capital of FMCF in accordance with the following.
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CLAUSES
I. OBJECT OF THIS AGREEMENT
1. The object of this Agreement consists of establishing:
(i) the terms and conditions under which each of the Parties hereby enters
into the capital of FMCF; and
(ii) the bases and scope of collaboration by the Parties so that FMCF might
successfully:
(ii.1) - be awarded a national license for establishment and
operation of a public network for broadband radio access (3,5
and 26 GHz), the provision of public telephone service and the
frequency allocation connected to it; or some numbers of
- 22 regional licenses for the establishment and operation of a
public network for broadband radio access in the band in 26
GHz, the provision of public telephone service and the
frequency allocation connected to it,
hereinafter, the "LICENSES"; and
(ii.2) develop its strategy of implementation in France and achieve
its immediate aim of becoming a leading company in the sector.
2. For the purpose of exercising any Shareholders rights to representation
on the Board of Directors or any other corporate organs, the shares
held by any Affiliate (as defined in Clause II 10.4 hereinbelow) of a
Party and/or by any investment fund referred to in Clause II 10.4 which
is managed or advised by such Party or any Affiliate of such Party,
shall be considered to be held by a single shareholder.
3. The Parties hereby agree that FMCF shall be converted from A SOCIETE
PAR ACTIONS SIMPLIFIEE into a SOCIETE ANONYME at the earliest
opportunity.
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II. INCORPORATION OF THE PARTIES INTO THE CAPITAL OF FMCF
1. SUBSCRIPTION OF CAPITAL INCREASE OF FMCF
FMCE has agreed, as the sole shareholder of FMCF, to vote the necessary
resolutions by FMCF ("FMCF'S RESOLUTION") at the latest on 31 January
2000 :
(i) to increase the capital of FMCF up to 1,000,000 Euros
in order for Parties to subscribe for it (the
"INITIAL CAPITAL PRICE");
(ii) to elect the Directors in accordance with Clause II
5.
2. FUNDING
2(a) Funding Commitments
The Parties shall subscribe for and fully pay the capital increase in
FMCF on the date hereof, in the following proportions and shall sign a
letter of financial undertaking to be delivered to the ART in
connection with the Tenders complying with the model attached as
SCHEDULE II.2 (A) of this Agreement committing themselves to contribute
the needed capital of FMCF and provide the needed shareholder funding
to FMCF:
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SHAREHOLDER % OF CAPITAL IN
FMCF AFTER INCREASE
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FMCE 34%
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AAA 18%
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BBB 18%
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CCC 10%
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DDD 10%
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EEE 10%
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2 (b) Initial Funding
FMCE represents and warrants that the statement of income and
expenditures attached hereto as SCHEDULE II.2 (B) shows all
expenditures actually incurred on behalf of FMCF until 31 December 1999
and all expenses expected to be incurred on behalf of FMCF until 31
July 2000 (together the "INITIAL EXPENSES") as part of the budgeted
pre-license costs until the date on which the Licenses are definitively
awarded.
FMCE further represents and warrants that no expenses or liabilities
have been incurred on behalf of FMCF, other than those referred to in
the previous paragraph, and that there exist no actual or potential
liabilities (including liabilities for unpaid taxes or social
contributions, or liabilities arising from any actual, pending or
threatened litigation) other than the Initial Expenses. Based on the
said representations and warranties of FMCE, the Parties hereby
undertake to provide funding to FMCF in the amount of 5,000,000 Euros
(including their contribution of 1,000,000 Euros to the capital of FMCF
referred to above) for the purpose of funding the Initial Expenses.
The Parties have agreed that the amount of the Initial Expenses
incurred on behalf of FMCF and to be covered by the initial funding
provided by the Parties to FMCF (including the initial capital
contribution of 1,000,000 Euros), shall not exceed 5,000,000 Euros. Any
excess of actual Initial Expenses over such amount shall be entirely
funded by FMCE and FMCF shall have no liability therefor.
2 (c) Additional Funding
The Parties acknowledge that, in order to finance the Business of FMCF,
additional funding of FMCF to the capital subscribed by each Party will
be required. Accordingly, the Parties agree that to the extent that
FMCF determines (in accordance with the terms hereof) that the Business
of FMCF should be financed through capital and other cash contributions
from the Shareholders, the Parties will contribute such capital and
cash contributions pro rata with their respective holdings in FMCF,
subject to the following:
(i) such a resolution being agreed to in a Shareholders Meeting on a
proposal from the Board of Directors adopted with the objection or
abstention of a maximum of 1 member of the Board; and
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(ii) subject to the provisions of (iii) below, in an aggregate amount,
based on the number of licenses actually granted to FMCF, not to
exceed 250 million EUROS (such amount representing the portion of
the financing requirements of FMCF to be funded by FMCF's
shareholders if FMCF is awarded a national license, in accordance
with the Business Plan), and in such cases the Parties shall make
their contributions within sixty (60) days of the call for such
contribution being made by FMCF.
Where in the case of any capital contribution decided on by FMCF
which does not involve the aggregate capital and other shareholder
contributions of the Parties exceeding 250 million Euros, any
Party fails to contribute its proportionate share of such
contribution, within sixty (60) days of the call for such
contribution being made by FMCF (a "Defaulting Party"), then (i)
such Defaulting Party shall have a further period of fifteen (15)
days (the "Additional Period") within which to make its
contribution, together with interest thereon for the period from
the date on which the call is made by FMCF at 10% per annum and
(ii) where the Defaulting Party has not made its contribution as
aforesaid within the Additional Period, all Parties which have
contributed their proportionate share of such contribution
("Non-Defaulting Parties") shall, notwithstanding anything to the
contrary in Clauses II 10.1 and II 10.2, be entitled on first
demand, made within sixty (60) days from the end of the Additional
Period, to acquire all or any portion of the shares of a
Defaulting Party in FMCF at a price equal to the lesser of the
nominal value and the book value of such shares. Each
Non-Defaulting Party shall be entitled to acquire that portion of
a Defaulting Party's shares that is equal to the ratio which such
Non-Defaulting Party's shares in FMCF represents with respect to
the total shares in FMCF held by all Non-Defaulting Parties. Where
any Non-Defaulting Party does not exercise its rights hereunder to
the full extent thereof, any available shares of any Defaulting
Party may be acquired by any other Non-Defaulting Party
("Acquiring Non-Defaulting Party") pro rata with respect to the
shares held by all Acquiring Non-Defaulting Parties in FMCF, until
all Defaulting Parties' shares which any Non-Defaulting Party
wishes to acquire have been acquired.
(iii)the Parties may decide to increase the capital contributions
required from the Parties over and above 250 million Euros
provided that the Parties do so by means of a resolution being
agreed in a Shareholders Meeting on a proposal from the Board of
Directors adopted with the objection or abstention of maximum 1
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member of the Board.
If after the aggregate capital and other shareholder
contributions, including all shareholder advances on current
account, of the Parties to FMCF have reached 250 million Euros any
Party decides not to make its any additional contributions voted
by FMCF in accordance herewith, the participation of such Party in
FMCF will be diluted accordingly based on a valuation of FMCF
which is the greater of (i) the aggregate of all capital and cash
contributions made by the Parties to FMCF, and (ii) the fair
market value of FMCF as determined by an expert.
3. PREFERENTIAL SUBSCRIPTION RIGHTS
Each Shareholder shall have a preferential subscription right to
purchase such new participations as FMCF may from time to time
issue. The Parties agree to not unreasonably oppose their waiver
of such preferential rights and therefore allow the entry in the
capital of FMCF of a new shareholder, in the event of the issuance
of options or securities, as compensation to employees (provided,
such compensation does not exceed 10% of the issued and
outstanding fully diluted share capital after giving effect to
such issuance), exercisable for, common stock and provided the
Shareholders Meeting, approves a resolution in this sense on a
proposal from the Board of Directors adopted with the objection or
abstention of a maximum of 1 member of the Board.
4. SHAREHOLDERS MEETINGS: QUORA AND MAJORITIES
(i) The quorum to validly hold any Meeting of Shareholders shall
be that provided by law.
(ii) Notice for Meetings of Shareholders, procedures for
resolutions at such meetings and any other necessary rules
with respect thereto shall be as provided in FMCF's Articles
of Association or by law ("LOI XXXX.00-000 XX 00 XXXXXXX
0000 XXX XXX SOCIETES COMMERCIAlES"), (hereinafter, the
"LAW").
(iii) Shareholders shall be entitled to exercise their rights to
vote by proxy at Meetings of Shareholders as provided by the
Law.
(iv) Whenever FMCF, the Shareholders Meeting, or the Board of
Directors is
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required to take or refrain from taking an action under this
Agreement, the Parties hereby undertake to cause the
relevant corporate body of FMCF to cause FMCF to take or
refrain from taking all such actions.
(v) Resolutions of the Meetings of Shareholders which by Law
require a qualified majority shall only be adopted on a
proposal of the Board of Directors adopted with the
objection or abstention of maximum 2 members of the Board.
5. BOARD OF DIRECTORS: APPOINTMENT OF MEMBERS, QUORA AND MAJORITIES
(i) FMCF shall have a Board of Directors (hereinafter, the "BOARD")
consisting initially of eleven (11) directors, (hereinafter each
individually, a "DIRECTOR" and collectively, the "DIRECTORS").
(ii) Based on the shareholding set out in Clause II 2(a) above, FMCE
shall be entitled to nominate 4 Directors, AAA and BBB shall each
be entitled to nominate 2 Directors and CCC, DDD and EEE shall
each be entitled to nominate 1 Director.
For so long as FMCE has a percentage participation of more than
20% but no greater than 34% it shall be entitled to designate 4
Directors, if its percentage participation is more than 15% but
no greater than 20% it shall be entitled to designate 3
Directors ; if its percentage participation is more than 10%
but no greater than 15% it shall be entitled to designate 2
Directors ; if its percentage participation is 5% or more but
no greater than 10%, it shall be entitled to 1 Director. FMCE
shall be entitled to designate an additional Director for each
additional 9% participation it holds over and above 34%. All
members of the Board not designated by FMCE shall be agreed and
designated exclusively by the other Parties, provided that each
such other Shareholder shall in all cases be entitled to
designate 1 Director if it has a percentage participation of at
least 5%.
(iii) Directors may at any time be removed, without compensation, with
or without cause, by the Shareholders Meeting provided that the
Directors appointed to replace the removed Directors shall be
designated by the Party which designated the removed Director or
its successor.
(iv) The term of office of a Director shall be three (3) years.
Directors shall be eligible to serve successive terms. If at any
time a Shareholder ceases to be entitled pursuant to the
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provisions hereof to be represented by the number of Directors
which represent such Shareholder on the Board, the necessary
number of Directors designated by such Shareholder shall
immediately resign so that following such resignation(s) the
Shareholder shall only be represented by the number of Directors
to which it is entitled.
(v) The Board shall select one Director as Chairman who shall act as
such at meetings of the Board and Meetings of Shareholders. Such
Director shall in all cases be counted as an FMCE designated
Director for the purpose of FMCE's entitlement to Board
representation hereunder.
(vi) Meetings of the Board shall take place at such times as may be
required by Law or as requested by the Chairman or three (3)
Directors, with a minimum of one each calendar quarter (such
regular meetings to be held with at least 15 days prior notice) at
such place, within or out of France, as shall be specified by the
Chairman. For all other meetings and unless otherwise agreed in
writing by all the Directors, at least five (5) day's prior notice
in writing shall be given, which notice shall indicate the agenda
to be considered at the meeting.
(vii) In order to have a quorum at meetings of the Board at least two
thirds (2/3) of the members of the Board must be present or
represented.
(viii) Directors shall be entitled to participate and exercise their
rights to vote in the meetings of the Board, either by attending
the meetings in person or by proxy to another Director. Each
Director, including the Chairman, shall have one vote.
(ix) Save as otherwise provided in this Agreement, any questions
arising at any meeting of the Board shall be decided by a majority
of votes of the Directors present or represented. Where any
provision of this Agreement provides that the approval of a
specific number of Directors is required for a measure to be
adopted or approved, the number shall be calculated taking into
account the Directors present or represented at the relevant
meeting. The Board shall take the following actions or pass
resolutions in respect of any of the matters listed below if and
only if there is an objection or abstention of a maximum of 2
members of the Board:
a) the granting of credits, loans or any other financing to
third parties, that exceeds the limits or amounts previously
established and approved by the Board;
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b) the entering into any deed or transaction that has as an
objective the guarantee of debts or liabilities in charge of
any person or assume the obligation to indemnify any other
person of any liability or obligation in which it may incur;
c) the purchase, sale, lease or encumbrance of real estate
through sale agreements or in any other manner, or the
entering into, altering or modifying the terms or any lease
or other contract concerning real estate and that such
amount exceeds the limits previously established and
approved by the Board;
d) the entering into, transferring, modifying, cancelling or
termination of any license agreement, technical assistance
agreement, technical or administrative services agreement or
any other similar agreements in which FMCF is a party;
e) the incurring by FMCF of any borrowing or any other
indebtedness or liability in the nature of borrowing which
in aggregate exceed 10 million EUROS in any one year
provided always that such indebtedness or liability is
outside the scope of the Business Plan or exceeds the limits
previously established by the Board;
f) the creation of any mortgage, charge or other encumbrance
over any asset of FMCF and the giving of any guarantee by
FMCF other than in the ordinary course of business;
g) the disposal (including the lease to a third party) or
acquisition of assets or the making of capital or operating
expenditures by FMCF in any financial year, in an aggregate
annual amount, or with an aggregate book value, market value
or sale value, computed on an annual basis, in excess of 5
Million Euros or which would exceed by at least 5 % the
corresponding amounts approved in the Business Plan.
h) the approval and amendment or substitution of FMCF's
business plan (as approved by the Parties on the date hereof
and that will be presented for each of the Licenses, the
"BUSINESS PLAN"). For the purposes of this Agreement,
Business Plan shall mean FMCF's 5-year base financial model
with respect to the national license and those of the
twenty-two (22) regional licenses referred to in Recital IV
above awarded to FMCF, as agreed and approved by the
Parties, and to be reviewed and approved annually or as
required by material and unforeseen changes in the Business
of FMCF. Such Business Plan shall comprise a financial plan
setting out cash flow charts, income and expenses
statements, balance sheet, profit and loss forecasts and
financing proposals using capital or borrowings, it being
understood that any change in the Business Plan must not
alter the financial commitments undertaken by the Parties
or, as the case may be, their respective direct or indirect
shareholders and given to the ART in connection with the
Tenders;
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i) the making of any interconnection or other agreements with
long distance operators where the value of any such contract
or the total annual value of such contracts is at least five
million (5,000,000) Euros;
j) the declaration or distribution of any dividend or other
payment out of the distributable profits of FMCF;
k) the incurring by FMCF of any borrowing or any other
indebtedness or liability in the nature of borrowing which
in aggregate would exceed by at least 5 % the corresponding
amounts approved in the Business Plan;
l) the instigation or settlement of any litigation or
arbitration proceedings by FMCF where the amount claimed
exceeds 1 million EUROS;
m) the election of the General Manager as defined in Clause II
7.
(x) The Board shall take the actions or pass the resolutions in
respect of any of the matters listed below if and only if there is
an objection or abstention of a maximum of 1 member of the Board:
a) the acceptance of any substantial amendments to the terms or
conditions of any of the Licenses;
b) the execution, amendment, termination or waiver of any
provision of any agreement made by FMCF with any of the
Parties (or any Affiliate of any Party), or Liberty Surf or
with FMCE or with an Affiliate of FMCE or an Affiliate of
FMCI or FirstMark Holdings or with, directly or indirectly,
any director, officer, employee, inspector of FMCF or FMCE
or with relatives of the Parties (or any of their
Affiliates) or any other company in which directly or
indirectly such Parties (or any of their Affiliates),
directors, officers, employees, inspectors or relatives
participate (such Parties being hereunder referred to as
"INVOLVED PARTIES");
In any decision of the Board involving approval of a
contract referred to in paragraph b) above, the Directors
designated by the Involved Party or Parties shall not
take part in the vote.
c) the reimbursement of expenses related to Clause 9 (i) of
this Agreement;
d) the entry of any new shareholder (whether as a result of an
increase in capital, a Transfer or otherwise) except where
any other specific provisions of this Agreement governing
the entry of such shareholder apply and except in the case
of entry of shareholders pursuant to the operation of stock
option plan approved pursuant to Clause II 3, provided that
where such proposed new shareholder is presented for
approval by FMCE in the context of a Transfer by FMCE to
such proposed new shareholder and such new shareholder is
not accepted, the Parties
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which rejected such proposed new shareholder shall be
obliged within 15 days of the non acceptance of such new
shareholder to purchase the interest which such new
shareholder would have acquired from FMCE, on the same terms
and conditions as those agreed between FMCE and such
proposed new shareholder and notified to the Board.
"Affiliate" as used in the present Agreement shall have the meaning ascribed
thereto in Clause II 10.4 hereinbelow.
The foregoing restrictions shall terminate upon an initial public offering of
equity securities of FMCF.
6. BOARD COMMITTEES
The Board shall form from their members the following subcommittees:
6.1 COMPENSATION COMMITTEE
(i) The Compensation Committee shall be responsible for providing
recommendations to the Board for all significant human resources
activities, and shall be consulted by the General Manager (as defined
in Clause II 7 below) in the terms stated in such Clause, for any
proposal to the Board in connection with compensation to employees or
consultants including without limitation fringe benefits, stock or
other form of equity or participation, the fixing of the Directors'
compensation, as the case may be, together with the compensation of
the senior executives and of any employee of FMCF whose emoluments
exceed 100,000 EUROS;
(ii) The Compensation Committee shall be comprised of five (5) Directors,
one (1) appointed by FMCE, one (1) appointed by AAA, one (1) appointed
by BBB and two (2) appointed collectively by CCC, DDD and EEE.
(iii) Recommendations of the Compensation Committee shall be approved by a
majority of votes of the Compensation Committee Members present or
represented by proxy by another Compensation Committee Member.
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6.2 AUDIT COMMITTEE
(i) The Audit Committee shall be responsible for:
- reviewing and proposing to the Board any contract to be
entered into by FMCF for an amount exceeding 5 million
EUROS;
- reviewing and proposing to the Board the formalization,
ratification, variation, termination, repudiation or
performance of (or the setting of consideration or
issuing of approvals under) any contract between FMCF and
any Involved Party;
- carrying out and/or reviewing the results of internal
audits;
- reviewing the quarterly reports before presentation to
the Parties;
- proposing to the Shareholders Meetings or Board Meetings,
whichever is competent, INTER ALIA:
* the appointment of external auditors which
initially the Parties agree to be Xxxxxx Xxxxxxxx;
* a change of the tax year;
* the distribution of dividends or amounts on account
of dividends;
* the application by FMCF for suspension of
payments or bankruptcy, and the proposal for the
approval of arrangements in the course of such
proceedings;
* the taking of any action, transaction or event
which differs materially from or conflicts
materially with the Business Plan;
* the taking of any action, transaction or event or
series of similar actions, transactions or events
different from or in conflict with FMCF's budget
in a total amount, over a financial year, of or
in excess of 5% of the budget;
* the taking of any action, transaction or event
which may have a materially adverse effect on the
financial performance, or which would cause
unreasonable detriment to the public standing and
reputation of FMCF;
- reviewing any proposal by the management to make any variation
to the FMCF annual budget (or the adoption of a new budget),
FMCF's Business Plan (or the adoption of any new Business
Plan, or the renewal of the Business Plan).
(ii) The Audit Committee shall be represented by six (6) Directors. One
(1) member shall be appointed by FMCE, one (1) by AAA, one (1) by
BBB one (1)
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by CCC, one (1) by DDD and one (1) by EEE.
(iii) Recommendations and proposals of the Audit Committee shall be
approved by a majority of votes of the Audit Committee members
present or represented by proxy by another Audit Committee member.
7. GENERAL MANAGER
(i) FMCF shall be managed on a day to day basis by the General Manager,
who shall not act as a MANDATAIRE SOCIAL, according to French law,
and who will consult his business decisions with the Chairman, the
Compensation Committee, the Audit Committee and/or the Board as
appropriate.
(ii) The General Manager shall be elected by the Board, by the majority
as set out in Clause II 5 (ix) and with the prior approval of FMCE.
The General Manager may at any time be removed, with or without
cause, by the Board, by a simple majority of the Board or by the
unanimous vote of all Board members (other than those appointed by
FMCE).
(iii) The period of election of the General Manager shall be determined
by the Board. The period of election of the General Manager shall
not exceed five (5) years and shall expire when his successor is
elected, provided that if no period is fixed by the Board, the
period of election of the General Manager shall automatically be
five (5) years. The General Manager shall be eligible to serve
successive periods.
(iv) The General Manager will act as a senior executive employee of FMCF
with limited powers of attorney as decided by the Board from time
to time and pursuant to a senior executive agreement.
8. ACCOUNTING
(i) The accounting period of FMCF shall be the twelve-month period
commencing the 1st day of January and ending on the 31st day of
December.
(ii) A balance sheet, a profit and loss statement and a cash flow
statement shall be submitted by FMCF to each Party on an annual
basis, with enough time for the
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Parties to review them and in any event within ninety (90) days
after the end of each fiscal year. Such statements shall be
audited at the expense of FMCF by Xxxxxx Xxxxxxxx or such other
auditor as may subsequently be appointed from time to time, as
FMCF's auditors.
(iii) FMCF shall deliver to each Party monthly unaudited financial
statements (including profit and loss, balance sheet and cash flow
statements) within thirty (30) days after the end of each period
with comparisons to the prior year and budget for that period.
(iv) FMCF shall submit to each Party quarterly and annual management
projections, the 5-year Business Plan and annual budgets prior to
the start of each calendar year.
(v) Any Party shall have the right to inspect or arrange for
independent audits to be carried out in respect of the books and
records of FMCF upon reasonable notice and during the regular
business hours of FMCF.
The audited balance sheet as of 30 November 1999 of FMCF is attached as SCHEDULE
2.
The provisions of paragraphs (ii), (iii) and (iv) shall inure to the benefit of
each Party as long as such Party owns at least 2% of the shares of FMCF.
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9. REIMBURSEMENT OF EXPENSES
(i) The Parties agree to cause FMCF to reimburse each Party for
all reasonable and documented costs and expenses incurred by
such Party or any of its Affiliates (and Liberty Surf) in
respect of works carried out in relation to the business and
operations of FMCF in accordance with the provisions of Clause
II 5 (x) provided such costs and expenses have been budgeted
and expressly approved by the Board of FMCF prior to incurring
in the same and are determined on an arm's length basis. Each
Party shall submit quarterly statements to FMCF for
reimbursement, and such reimbursement shall be made by FMCF
within thirty (30) days after receipt of such quarterly
statements so long as such statements do not exceed the
initially approved budget.
(ii) FMCF shall not reimburse to the Parties any other costs or
expenses different to those expressly referred to in Clause II
9 (i) above. Consequently, each Party shall support all costs
and expenses in which it incurs except for those referred to
in Clause II 9 (i) above.
10. TRANSFER OF PARTICIPATIONS
The Parties agree, as a personal and binding obligation, that they
will take any and all actions required under corporate or contractual
rules to allow for timely and strict compliance with the terms of this
Clause. The Parties declare that they have full knowledge of certain
restrictions to participations in the share capital and voting rights
in companies to which licenses have been granted, according to French
telecommunications regulations. In addition, the Parties have the full
knowledge that any modification of the respective participation of
each shareholder of FMCF shall be subject to a prior notification of
such modification to the relevant French authority in order for the
authority to be able to verify the consistency of such modification
with the terms and conditions of the Licenses.
The Parties agree to fully comply with all regulations applicable
to transfer of participations.
10.1 RESTRICTIONS ON THE TRANSFER OF PARTICIPATIONS
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(i) Unless otherwise expressly approved by all of the other
Parties, no Party may Transfer (as defined below) any
participations or any interest or right therein prior to the
obtention by FMCF of any of the Licenses, and thereafter
except in compliance with the terms and conditions of this
Agreement, including without limitation, satisfaction of the
following conditions:
a) no Transfer shall be made other than pursuant to a
written BONA FIDE firm and unconditional offer by a third
party to acquire any or all of the participations by
means of a Transfer from a Party (hereinafter, the "THIRD
PARTY OFFER");
b) no Transfer shall be made where the transferring Party
and transferee agree in connection therewith that the
transferor shall exercise any residual powers in respect
of the participations so transferred; and
c) the transferee, whether or not such transferee is an
Affiliate of the transferor or any Party, must sign a
document pursuant to which it becomes subject to, and
bound by, the obligations of the transferring Party under
this Agreement, including, but not limited to, all of the
restrictions on transferability of such participations.
(ii) Any Transfer in contravention of any of the provisions of this
Clause shall be void and of no effect, and the Parties agree
that they shall always cause their representatives in the
governing bodies of FMCF to take any action conducive to
rejecting or not recognizing said Transfer.
(iii) The Parties recognize that Transfers of their shares are
subject to restrictions during the period commencing on the
date of the submission to the ART and ending five (5) years
following the award to FMCF of the earliest to be awarded of
the Licenses as follows:
as from the date of submission of the application for the
Licenses, but subject to a Party's right at all times to
transfer its participations to Affiliates, or otherwise as
set out in Clause II 10.4 and to the exercise of the right
of Non Defaulting Parties as set out in Clause II 2c(ii),
no Party may transfer any participations of FMCF or any
interest or right therein until the date falling thirty
(30) months from the date of awarding of the earliest of
the Licenses and for the subsequent period of thirty (30)
months, subject to certain exemptions set out in Clause II
11(viii), no Party may transfer any participations of FMCF
or any interest or right therein unless (i) such transfer
is to another of the
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Parties, (ii) such transfer(s) do(es) not exceed 50% of the
Transferring Shareholder's initial participation in the share
capital of FMCF as mentioned in Clause II 2 (a), and (iii) for
a total percentage within this thirty (30) month period which,
in respect of each Party, shall not exceed 5% of FMCF capital.
The Parties agree that in order to carry out any transfer
between two Parties during such thirty (30) month period, they
shall address prior notification to the relevant French
authorities.
For the purpose of this Agreement, Transfer means, in respect of a
participation, any sale, conveyance, assignment, exchange or other
transfer of a participation, whether voluntary or involuntary, but
excluding any indirect sale or transfer pursuant to a merger or
consolidation of or sale of a majority or more of the equity interests
in a Party, except where the primary purpose of such merger,
consolidation or sale of equity interests is to circumvent the
restrictions of this Clause.
10.2 RIGHT OF FIRST REFUSAL
(i) Except in the case of a transfer pursuant to Clause II 10.4
below and Clause II 2 c (ii) above and provided that at the
relevant time FMCE is the principal shareholder of FMCF, if a
Party other than FMCE (hereinafter the "TRANSFERRING
SHAREHOLDER") desires to Transfer any or all of its
participations to any person (a "THIRD PARTY"), it shall promptly
give to FMCE written notice thereof. Such notice shall be
accompanied by a true and complete copy of the Third Party Offer
and an offer in writing from the Transferring Shareholder first
to sell such participations to FMCE (hereinafter the "SHAREHOLDER
OFFER"). FMCE shall have a thirty (30) day period to accept or
reject the Shareholder Offer in its entirety. In case of
acceptance of the Shareholder Offer the Parties hereby undertake
to perform any and all actions required to allow FMCE to acquire
the participations included in the Shareholder Offer, including,
without limitation, waiving any first refusal right to which,
pursuant to French law or FMCF's by-laws, they might be entitled.
Should FMCE reject the Shareholder Offer, it shall give written
notice of such rejection to the Transferring Shareholder and to
FMCF and, in such case, the Transferring Shareholder shall offer
the Shareholder Offer to the rest of the Parties, including FMCE,
in proportion to their stake in the capital of FMCF.
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(ii) FMCF shall immediately inform the rest of the Parties of the
Shareholder Offer and the rest of the Parties may accept, in
proportion to their stake in FMCF, or reject the Shareholder
Offer within thirty (30) days from the receipt thereof. If the
Shareholder Offer is not accepted by a Party by means of a notice
in writing delivered to the Transferring Shareholder within the
aforementioned period, it shall be deemed to have been rejected
by such Party, in which case the Transferring Shareholder shall
inform in writing the rest of the Parties who have accepted the
Shareholder Offer who shall have the right to increase the amount
of participations to which they were entitled by another notice
(the "Notice") in writing delivered to the Transferring
Shareholder within a new thirty (30) day period from receipt of
such notice from the Transferring Shareholder. Where the demand
for participations pursuant to the Notices exceeds the available
participations, each Party having delivered a Notice shall have
the right to acquire that proportion of available participations
that is equal to the proportion that such Party's participations
bears to the aggregate of participations held by all Parties who
have delivered a Notice.
(iii) Acceptance of the Shareholder Offer:
a) If any or all of the Parties (other than the Transferring
Shareholder) accept the Shareholder Offer, they shall pay a
purchase price per participation subject to the Shareholder
Offer equal to the purchase price per participation (or cash
equivalent thereof) set forth in the Third Party Offer.
b) Purchase by the Parties and Transfer by the Transferring
Shareholder of the participations shall occur on a mutually
agreeable date, time and place within thirty (30) days
following acceptance of the Shareholder Offer by the relevant
Parties, or such later date on which any governmental
approvals required for such purchase and Transfer have been
obtained, it being understood that the Transferring
Shareholder shall take all actions and make all filings
necessary in connection with any required governmental
approvals.
c) The Parties shall, at their election, pay for the
participations at the time of purchase or pursuant to the same
terms and conditions contained in the Third Party Offer.
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(iv) Following expiration of the periods mentioned in paragraph (ii),
if the Shareholder Offer has not been totally accepted, the
Transferring Shareholder may Transfer all the participations which
are the subject of the Third Party Offer to the Third Party at the
same terms and conditions as those contained in the Third Party
Offer, provided that if within thirty (30) days after the
expiration of the periods referred to in paragraph (ii), the
Transfer has not occurred, the Transferring Shareholder shall
follow the procedure set out in paragraphs (i) to (iv) of this
Clause II 10.2 prior to any Transfer thereof.
10.3 EFFECT OF TRANSFER
In the event of a Transfer of participations, the transferee shall,
automatically from the moment of such Transfer, be subject to, and
bound by, the obligations of the Transferring Shareholder under this
Agreement, including, but not limited to, all of the restrictions on
transferability of such participations, and upon the execution and
delivery by such transferee of a written adhesion to this Agreement,
such transferee shall have and assume all of the rights of the
Transferring Shareholder relating to the participations so transferred.
10.4 INTRA-GROUP TRANSFER OF PARTICIPATIONS
10.4.1 Except as provided for in Clause II 10.4.2, any Party shall be entitled
to Transfer, subject to notification to the relevant French
authorities, any or all of the participations held by it to any
Affiliate as defined below provided that the following conditions are
met:
(i) the Affiliate shall become a party to this Agreement as any
condition of any such transfer;
(ii) if the Affiliate ceases, during the term of this Agreement, to
be an Affiliate of such Party, the participation of such
Affiliate shall, at such time, be acquired by such Party or
any Affiliate of such Party;
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"Affiliate" shall mean, with respect to any Party:
- any legal person in which such Party holds directly or
indirectly more than 50 % of the share capital or voting
rights, or
- any legal person which holds directly or indirectly more than
50 % of the share capital or voting rights in such Party, or
- any legal person in which more than 50 % of the share capital
or voting rights are held directly or indirectly by a legal
person referred to in the immediately preceding paragraph.
provided however that CCC shall be entitled to transfer without any
restriction other than those required following the notification to the
French authority, up to ten (10%) per cent of CCC's participation to
one or more persons who are, at the date hereof, employees of CCC or of
any Affiliate of CCC.
10.4.2 In addition to the provisions of Clause II 10.4.1
(i) BBB, DDD and EEE shall be entitled to transfer, without any
restriction other than those required following the
notification to the relevant French authorities, any
participation to any investment fund which is managed or
advised by BBB, DDD or EEE or any Affiliate of BBB, DDD or EEE
respectively,
(ii) BBB shall, in addition, be entitled to transfer without any
restriction other than those required following the
notification to the relevant French authorities a total
participation not exceeding 25% of its participation as set
out in Clause II-2(a) to Liberty Surf as long as BBB or an
Affiliate of BBB continues to own a substantial percentage of
the share capital and voting rights of Liberty Surf ,provided
that, in any case, Kingfisher shall not be entitled (even if
it is at the relevant time an Affiliate of Liberty Surf) to
become a shareholder of FMCF unless it receives the prior
approval of the Board of Directors by unanimous vote.
10.4.3 Any transfer made in accordance with Clauses II-10.4.1 or II-10.4.2 are
subject to the prior condition that the transferee signs an adhesion
contract to this Agreement undertaking to be bound by it to the same
extent as the Transferring Shareholder would have been bound had the
transfer not been effected.
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10.5 TAG-ALONG RIGHT
(i) Except in the case of a Transfer pursuant to Clause II-10.4 above, if FMCE
desires to transfer any or all of its participations to any person (a "THIRD
PARTY"), it shall promptly give the other Parties written notice thereof.
Such notice shall be accompanied by a true and complete copy of the Third
Party Offer and a written, firm and unconditional undertaking from the Third
Party (hereinafter the "TAG-ALONG OFFER") to purchase, on the same terms and
conditions as those contained in the Third Party Offer, a number of
participations held by other Party that bears the same proportion to the
number of participations held by such Party on a fully diluted basis as the
number of participations proposed to be transferred by FMCE bears to the
number of participations held by FMCE on a fully diluted basis; provided
however, that in the event that (i) at any time and for any reason, FMCE
wishes to Transfer any participations in FMCF and as a result of such
transfer, the total participation of FMCE in FMCF would be less than 20 %, or
FMCE would cease to be the largest shareholder in FMCF or (ii) FMCE holds
more than 50% of the participations in FMCF and desires to Transfer any
participations in FMCF to a Third Party, and as a result of such transfer,
FMCE would no longer have more than 50% of the shares of FMCF, then in either
of such cases the Tag-Along Offer shall be for all of the participations held
by the other Parties. Each such other Party may accept or, reject the
Tag-Along Offer within thirty (30) days from the receipt of written notice of
the Tag-Along Offer. If the Tag-Along Offer is not accepted by the notice in
writing delivered to FMCE and the Third Party within the aforementioned
period, it shall be deemed to have been rejected.
(ii) Acceptance of the Tag-Along Offer:
(a) If a Party (the "Accepting Party") accepts the Tag-Along
Offer, the Third Party shall pay a purchase price per participation for
the participations sold by such Party equal to the purchase price per
participation set forth in the Third Party Offer.
(b) Purchase by the Third Party and transfer by the Accepting
Party shall occur at the time and place of closing of the sale of
participations by FMCE pursuant to the Third Party Offer or, if later,
at the registered office of FMCF on a mutually agreeable date
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and time within thirty (30) days following acceptance of the Tag-Along
Offer by the Accepting Party.
(c) The Third Party shall pay for the participations as provided
in the Third Party Offer, at the latest, at the time of the purchase
pursuant to the preceding clause (b).
10.6 NO OTHER RESTRICTIONS
Provided that all applicable conditions set forth in this Clause have
been complied with, no Party shall oppose or in any other way obstruct,
any Transfer of another Shareholder's participations.
10.7 Notwithstanding any other provision of this Clause 10, the restrictions
in sub Clauses II-10.1, II-10.2 and II-10.5 shall not apply to any
pledge of participations or any interests and right therein in
connection with a BONA FIDE financing transaction or any foreclosure
upon such pledge by or on behalf of the secured party or parties,
provided always that in any such financing transaction and that in any
documentation evidencing such transaction it be so stated, the rights
of the foreclosing creditor are subject the right of first refusal of
FMCE as set out in Clause II-10.2 or to the approval right of the other
Parties under the provisions of Clause II-5 (x) d.
11. VOLUNTARY CONVERSION AND LIQUIDITY RIGHTS
FMCE accords the other Parties hereto, the following conversion and
liquidity rights in consideration of their investment in FMCF:
(i) Prior to filing in the United States of America a registration
statement under the Securities Act of 1933 of the United States of
America, as amended (or similar document under the laws of another
jurisdiction), for an initial public offering of common equity
securities (hereinafter, an "IPO") of FMCE or its successor or any
direct or indirect holding company for shares of FMCE or such
successor or any affiliate of FMCE (hereinafter, the "ISSUER"),
the Issuer will deliver to the Parties a notice (hereinafter, the
"IPO NOTICE") of its intention to effect an IPO. The IPO Notice
will include the Issuer's good faith estimate of the anticipated
gross proceeds to the Issuer and the anticipated per share
offering price for the IPO. Upon receipt by the Parties of an IPO
Notice each Party shall be entitled to
-26-
exercise the Conversion Option as described below.
(ii) Upon execution of one or more agreements for the Transfer (as
hereinabove defined) (hereinafter, a "SALE") of any shares in the
Issuer as a result of which the Issuer would at any time cease to
be controlled directly or indirectly by the shareholders who at
the date hereof control the Issuer directly or indirectly
(hereinafter, a "SALE AGREEMENT"), the Issuer shall deliver to the
Parties a notice (hereinafter, the "SALE NOTICE") of the execution
of the Sale Agreement. Upon receipt by the Parties of a Sale
Notice, each Party shall be entitled to exercise the Conversion
Option as described below. The Sale Notice will include the
consideration per share to be received by the Issuer pursuant to
the Sale Agreement and other material terms of the Sale Agreement,
and, in such case, and provided a Party has exercised its
Conversion Option pursuant to the terms of this Clause II-11, such
Party shall have a tag-along right on the same financial terms in
respect of all of its shares in the Issuer resulting from such
conversion, to be exercised on the same terms and conditions,
MUTATIS MUTANDIS, as those set out in Clause II-10.5.
(iii)If no IPO Notice or Sale Notice has previously been delivered to
the Parties, by notice in writing to the Issuer at any time within
30 days after the fifth anniversary of the earliest award of any
of the Licenses (hereinafter, the "FIVE YEAR OPTION"), each Party
shall have a Conversion Option and a Put Option as described
below.
(iv) For the purposes hereof, the "CONVERSION OPTION" is the option to
exchange, based on the Fair Market Values of the Issuer and FMCF
at the date of the exercise of the Conversion Option , all, but
not less than all, of the respective participations of the Parties
for a number of shares of common equity securities of the Issuer
in accordance with the modalities set out in (vi) below and
subject to the provisions of subparagraph (vii) (b) below and the
Put Option is the right of a Party , to obtain that the Issuer
purchase all but not less than all of such Party's shares in FMCF
for a price payable in cash, based on the Fair Market Value of
FMCF at the date of exercise of the Put Option , and calculated in
accordance with the modalities set out in (vii) below and subject
to the provisions of subparagraph (vii) (b) below.
Each of the Parties may exercise the Conversion Option or the Put
Option for their respective participations at any time within the
above referred period of thirty (30)
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days, independently of whether the rest of the Parties exercise
the Conversion Option or the Put Option for their participations.
(v) The only Parties that may exercise the Conversion Option or Put
Option will be those in respect of which the Issuer receives
written notice of the intention of each of them to exercise
(hereinafter, a "CONVERSION/PUT NOTICE") within 15 days of receipt
of an IPO Notice or Sale Notice or within 30 days after the fifth
anniversary of the date of the earliest award of any of the
Licenses (hereinafter, the "CONVERTING/PUTTING PARTIES"). An
election to exercise the Conversion or Put Option by any Party
shall be irrevocable, provided that any of the Converting Parties
may revoke their Conversion/Put Notice (i) in the case of an IPO,
if the IPO is not consummated within 4 months from the date of the
IPO Notice, or the gross proceeds to the Issuer and the price per
common share are not at least 80% of the respective minimum
amounts referenced in the IPO Notice and (ii) in the case of a
Sale, if the Sale is not consummated within nine months from the
date of the Sale Notice.
(vi) The Parties hereby agree that the common shares received by the
Parties pursuant to the exercise of the Conversion Option as a
result of the IPO Notice may be subject to certain restrictions
upon the issuance of the shares by the Issuer imposed solely by
the underwriters thereof or applicable law. Such restrictions will
be the same for the Parties, FirstMark Holdings L.L.C.
(hereinafter, "HOLDINGS") and any subsidiaries of Holdings which
own shares of capital stock of the Issuer, provided that nothing
in this Agreement is intended to restrict the Parties ability to
sell common shares of the Issuer following the date that is two
years after the consummation of the IPO or Sale unless a
subsequent public offering constrains Holdings' ability to sell
common shares of the Issuer, in which event the Parties will agree
to such further restrictions for up to six months.
(vii)Within thirty (30) days after the delivery by the last of the
Parties of the Conversion Notice, (i) the Converting Party, if
there is only one, shall select and, if there are several
Converting Parties, the Converting Parties shall jointly select,
one appraiser and (ii) the Issuer shall appoint another
(hereinafter, the "APPRAISERS"), selected from among the leading
international investment banks, and FMCF shall use its best
efforts to provide the Appraisers with all relevant information in
a timely manner.
-28-
(a) Within sixty (60) days after the delivery by each of the Parties of
the Conversion Notice, the Converting Parties shall deliver to the
Issuer, their Appraiser's written estimate of the Fair Market Value
of the Issuer and the Fair Market Value of FMCF and the Issuer shall
deliver to the Converting Parties its Appraiser's written estimate
of the Fair Market Value of the Issuer and the Fair Market Value of
FMCF assuming in all cases referred to in this paragraph (vii) that
both the Issuer and FMCF are listed companies.
(b) The Fair Market Value of the Issuer and the Fair Market Value of
FMCF shall be determined in accordance with the following rules:
- should the estimates of both Appraisers be the same figure for
the Fair Market Value of the Issuer and the same figure for the
Fair Market Value of FMCF, such figures shall be selected as the
Fair Market Values;
- should the estimates of both Appraisers differ by no more than
10% in respect of the Fair Market Value of the Issuer, or the
Fair Market Value of FMCF, as the case may be, the average figure
of such two estimates shall be selected as the Fair Market Value;
- should the estimates of both Appraisers differ by more than 10%
in respect of the Fair Market Value of the Issuer, or the Fair
Market Value of FMCF, as the case may be, a third appraiser
(hereinafter, the "THIRD APPRAISER") shall be jointly appointed
by the Appraisers. Such Third Appraiser shall be selected from
among the leading international investment banks. The Third
Appraiser shall, within thirty (30) days after its appointment,
deliver to the Converting Parties, the Issuer and the Appraisers
its written estimate of the Fair Market Value of the Issuer or
the Fair Market Value of FMCF, as the case may be;
- should the estimate of the Third Appraiser exceed the higher of
the estimates of the Appraisers, such higher estimate of the
Appraisers shall be selected as the Fair Market Value;
- should the estimate of the Third Appraiser be lower than the
lowest of the estimates of the Appraisers, such lower estimate of
the Appraisers shall be selected as the Fair Market Value; or
- should the estimate of the Third Appraiser be a figure between
those of the estimates of the Appraisers, the estimate of the
Third Appraiser shall be selected as the Fair Market Value.
-29-
(c) The Converting Parties shall be deemed to have hereby
engaged and agreed to pay equally the fees and expenses of
the Appraiser appointed jointly by them. The Issuer shall
pay the fees and expenses of its Appraiser and the
Converting Parties and the Issuer shall pay equally (50-50)
the fees and expenses of the Third Appraiser.
(d) The failure by the Converting Parties or by the Issuer to
appoint their respective Appraisers, or the failure by any
of the Appraisers to deliver their written estimates of the
Fair Market Value on the periods referred to in (b) above,
shall imply that the estimate delivered by the other
Appraiser shall be selected as the Fair Market Value.
(e) The failure by any of the Appraisers to appoint the Third
Appraiser on the period referred to in (b) above, shall
imply that the estimate delivered by the other Appraiser
shall be selected as the Fair Market Value.
The Fair Market Value determined in accordance with the foregoing
procedure shall be binding on the Parties in all events and for
all purposes.
(viii) Should an IPO occur prior to the elapse of the period ending
thirty (30) months after the date of the earliest awarding of the
Licenses, as referred to in Clause II-10.1 (iii) the number of
shares of the Issuer to be received as a result of the exercise of
the Conversion Option pursuant to this Clause shall be determined
in accordance with the provisions of Clause II-11 (vii) at the
time on which the IPO is effectively carried out. However, the
Parties shall not be entitled to convert effectively their shares
in FMCF until such thirty (30) month period has elapsed. The
Parties agree that in case of exercise of the Conversion Option
within or after the initial thirty (30) month period as referred
to in Clause II-10.1 (iii), the restrictions to transfer of
participations within the second subsequent thirty (30) month
period as referred to in Clause II-10.1 (iii) shall not apply; it
being understood that the exercise of the Conversion Option and
the effective completion of the conversion may not alter the
financial commitments undertaken by the Parties.
III. SCOPE OF COLLABORATION OF THE PARTIES
12. SUPPORT FOR FMCF
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The Parties will use their best efforts to collaborate in the bidding
procedures that FMCF might take part in, playing an active role in the
preparation of the tenders to be presented therein and in the
monitoring of them until the award(s) is made and, very particularly,
in everything to do with the Tenders and the obtaining of the
License(s).
13. PHASE PRIOR TO THE AWARDING OF THE LICENSES
From the date of this Agreement up to the date on which any of the
Licenses is awarded, and notwithstanding the general collaboration
commitment set down in Clause 12 above, the Parties will use their best
efforts on appropriate economic terms in particular, though without
this constituting any limitation, to:
(i) collaborate actively with FMCF and with its advisers
in preparing the Tenders and in gathering together and
producing whatsoever documents and/or material that might be
required by the French Administration;
(ii) provide their assistance and support in whatsoever
steps that FMCF might need to carry out before the competent
authorities for the obtaining of the Licenses;
(iii) place at the disposal of FMCF the technical and human
means, infrastructure, technology and other resources required
by FMCF so that it might attain its immediate objective of
being awarded the Licenses.
(iv) to provide as Shareholders of FMCF, in a due form and
time, all the documentation that will be necessary to obtain
the Licenses.
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14. PHASE SUBSEQUENT TO THE AWARDING OF THE LICENSES
If FMCF is finally awarded any of the Licenses, and notwithstanding the
general collaboration commitment set down in Clause III-12 above, the
Parties will use their best efforts on appropriate economic terms, and
subject to any constraints which may result from any agreements or
commitments which may have been made by any Party or any Affiliate of
any Party, in particular, though without this constituting any
limitation, to:
(i) collaborate actively in the "TIME TO MARKET"
strategies of FMCF, that is, the launching on the market of
the various products and services of FMCF in order to
accelerate and cut down as much as possible the time for the
proper implementation of those products and services and the
start-up of the Business of FMCF;
(ii) collaborate actively in the strategies of operation,
marketing and distribution of the wireless local-loop products
and services provided by FMCF at any moment.
15. PROVISIONS APPLICABLE TO THE FRENCH PARTIES
For the purposes hereof, the expression "FRENCH PARTIES" shall mean
AAA, BBB, CCC, DDD, EEE, and any of their Affiliates and any party
covered by Clause II-10.4.2.
The following provisions shall apply to French Parties to the
exclusion of any other provisions applicable to the shareholders of
FMCF:
a) From the date hereof until final decisions have been made by
the French authorities in respect of the WLL licenses which
are the object of the ART Invitation (the "Application
Period"), none of the French Parties will participate directly
as an investor in any group or consortium, other than the
FMCF, which is responding to the ART Invitation (an
"ALTERNATIVE CONSORTIUM"), provided however that such
undertaking shall cease to be effective should FMCF not make a
bid for at least one national WLL
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license or at least 10 regional WLL licenses in response to
the ART Invitation;
b) Any French Party shall be entitled to invest in any entity
other than FMCF, which provides any form of broadband activity
(whether by WLL or by any other method or methods) in France
(an "ALTERNATIVE PROVIDER"), provided however that (i) if FMCF
is awarded a national WLL license, no individual (natural
person) who represents a French Party on the Board of
Directors, of FMCF shall be on the Board of Directors, whether
as a member or as the permanent representative of a member, of
any Alternative Provider which is also the holder of a
national or a regional WLL license and (ii) if FMCF is awarded
one or more regional WLL licenses, no individual (natural
person) who represents a French Party on the board of
directors of FMCF shall be on the board of directors, whether
as a member or a permanent representative of a member, of any
Alternative Provider which holds a WLL license in any region
for which a WLL license is awarded to and is exploited by FMCF
except with the agreement of FMCF and (iii) it shall not hold
any interest greater than thirty-four (34%) per cent (or, if
less, any interest which, pursuant to a shareholders'
agreement, accords it blocking rights at shareholders'
meetings) in any entity other than FMCF whose principal
activity is the provision of WLL services in France (a
"COMPETITOR ENTITY"), and (iv) it shall from time to time
provide FMCF with information on the extent of its investment
in any Competitor Entity.
c) Except and only to the extent specifically prohibited or
limited by the operation of paragraphs a) and b) above,
nothing in the present Agreement shall be interpreted as
limiting in any manner the right of any French Party to make
any financial investment at any time in any entity whatsoever.
16. COMMERCIAL CO-OPERATION
FMCF and FMCE shall supply products and provide services at pricing conditions
applying the Most Favoured Nation Clause across Europe, to any Party or any of
its Affiliates and also toLiberty Surf.
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IV. MISCELLANEOUS
17. CONFIDENTIALITY
17.1 CONFIDENTIAL INFORMATION
For the purposes of this Agreement, Confidential Information means any
information relating to the Business of FMCE, FirstMark Holdings FMCF
or entities in which FMCE is the largest shareholder disclosed to the
Parties or their representatives orally, in writing or other tangible
or intangible form including, without limitation, discoveries, ideas,
concepts, know-how, techniques, designs, specifications, drawings,
blueprints, diagrams, models, samples, flow charts, computer programs,
diskettes, marketing plans, financial plans, business plans, names of
customers or suppliers and other technical, financial or business
information.
Confidential Information shall not include any information that:
(i) was known by the Parties free of any obligation to keep it
confidential prior to its disclosure by FMCE or FMCF;
(ii) is independently developed by the Parties other than in
connection with this Agreement and the transactions
contemplated hereby;
(iii) is publicly available when received or which later becomes so
available through no fault of the Parties, but only from the
date that such information becomes so available; or
(iv) was disclosed to the Parties by a third party who, to the
Parties' knowledge after due inquiry, is not prohibited from
disclosing such information by virtue of a nondisclosure
obligation to FMCE or FMCF.
17.2 CONFIDENTIALITY
Each of the Parties shall use any Confidential Information obtained by
it only in connection with its investment in FMCF. Each of the Parties
shall hold the Confidential Information in confidence and shall
disclose the Confidential Information only to their
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respective employees, agents and contractors who have a need to know
such information to accomplish this purpose and who have agreed to be
bound by the terms and conditions of this Clause. None of the Parties
shall disclose the Confidential Information to any other person without
the prior written consent of FMCE or FMCF, as the case may be. Each of
the Parties shall require their employees, agents and contractors to
use the same degree of care to protect the confidentiality of the
Confidential Information as they use with respect to similar
information of the respective Party.
Any disclosure of Confidential Information of direct relevance to FMCE
such as business plans, operations, strategies (including but not
limited to marketing, pricing or financing strategies) relating to FMCE
wireless local-loop and other related activities shall require the
prior written consent of FMCE.
17.3 UNAUTHORIED DISCLOSURE
If any of the Parties becomes aware of any unauthorised disclosure,
loss or misuse of the Confidential Information, they shall promptly
notify FMCE or FMCF, as the case may be.
17.4 DISCLOSURE REQUIRED BY LAW
If any of the Parties is required to disclose the Confidential
Information (as defined in Clause II-17.1 above) by a competent
judicial or administrative body pursuant to applicable law or
regulation, they shall promptly notify FMCE or FMCF, as the case may
be, so that FMCE or FMCF, as the case may be, may seek a protective
order or other appropriate remedy. In the event that no such protective
order or other remedy is obtained, the relevant Party shall furnish
only that portion of the Confidential Information that it is advised by
counsel is legally required and shall exercise all reasonable efforts
to obtain reliable assurance that confidential treatment will be
accorded to the Confidential Information.
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17.5 NO RIGHTS OR LICENSES
This Agreement does not give any of the Parties any rights by license
or otherwise to any of the Confidential Information.
17.6 SURVIVAL
The Parties' obligations under this Clause shall remain in full force
and effect for a period of one (1) year after the date of termination
of this Agreement.
17.7 RETURN OR DESTRUCTION OF CONFIDENTIAL INFORMATION
On a written request from FMCE or FMCF, as the case may be, should it
be in relation to Confidential Information relating to FMCE as
described in 17.2 above, and, in any event, on termination of this
Agreement, each of the Parties shall promptly and at their own expense
either return to FMCF or to FMCE as instructed, or destroy the
Confidential Information (including all copies thereof), depending on
the instructions of FMCE or FMCF, as the case may be, except as
otherwise required by applicable law.
17.8 REMEDIES
Each of the Parties acknowledges that the breach or threatened breach
of this Clause may result in irreparable injury to FMCF and/or FMCE and
that, in addition to its other remedies, FMCF and/or FMCE shall be
entitled to injunctive relief to restrain any actual or threatened
breach of this Agreement. Each of the Parties hereby waives any
requirement for the posting of a bond or other security in connection
with the granting to FMCF or FMCE of such injunctive relief.
18. COMMUNICATION POLICY
The Shareholders agree that no public announcement by the Shareholders
regarding the project contemplated herein, will occur without the
express and unanimous approval of the Shareholders.
Such provision shall be enforced until official announcement by ART of
the WLL Licenses. Such policy shall also be communicated to the
management team by the
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Chairman.
19. REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants as follows:
(i) the Party is a company duly organised and validly existing
under the laws of its jurisdiction of incorporation, with full
powers to carry out the business which it carries out and
proposes to carry out for the purposes of this Agreement;
(ii) the Party has the full legal right, power and authority to
execute and deliver this Agreement and to perform all of its
obligations hereunder;
(iii) this Agreement has been duly authorised, executed and
delivered by the Party and the obligations of the Party
contained therein constitute valid and legally binding
obligations of the Party, enforceable against the Party in
accordance with their terms;
(iv) the execution, delivery and performance of this Agreement and
the compliance with its terms does not, and shall not result
in a violation of the Party's charter or of any provision
contained in any other agreement or instrument to which the
Party is a party or by which the Party or any of its assets
are affected or any statute, law, rule, regulation, judgement,
award, decree or order applicable to the Party or any of its
assets; and
(v) no consent, approval or authorisation of, or declaration,
filing or registration with, any governmental or regulatory
authority, or any other person or entity, is required to be
made or obtained by the Party, in connection with the
execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby, save for
the declarations to be filed by the non-French resident
Parties with the relevant French foreign investment
authorities.
Each Party warrants to the other Parties that each of such
representations is true and correct in all material respects as of the
date of this Agreement and that none of them omits any matter the
omission of which makes any of such representations misleading.
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FMCE represents and warrants that as of the date hereof, FirstMark
Holdings LLC is not subject to any restrictions on the transfer of
Participations it holds indirectly in FMCF, which would or could
prevent or impair FMCE's ability to fully and completely perform all
its obligations pursuant to this Agreement.
20. TERM AND TERMINATION
20.1 TERM
This Agreement shall continue in effect until:
(i) the termination by any Party, if none of the Licenses has been
awarded to FMCF by December 31, 2000, in which case the
Agreement shall terminate for that Party and shall continue to
be valid and binding between the remaining Parties; or
(ii) automatically in respect of that Party (or its affiliate)
which ceases to own any participations, in which case the
Agreement shall continue to be valid and binding between the
remaining Parties.
Notwithstanding the foregoing, the provisions relating to
Confidentiality (Clause IV-17), Exclusivity and Non-competition (Clause
III-15) , shall remain in effect for the term specified therein.
20.2 EFFECT OF TERMINATION
The termination of this Agreement shall not in any way operate to
impair or destroy any of the rights or remedies of any Party, or to
relieve any Party of its obligations to comply with any of the
provisions of this Agreement, which shall have accrued prior to the
effective date of termination.
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21. INDEMNIFICATION
21.1 LIMITATION ON PARTIES' LIABILITY
Except as required by applicable law, the debts, obligations and
liabilities of FMCF, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of FMCF, and
none of the Parties, Directors or officers of FMCF shall be obligated
personally for any such debt, obligation or liability of FMCF solely by
reason of being a shareholder, director, officer or participating in
the management of FMCF. The failure of FMCF to observe any formalities
or requirements relating to the exercise of its powers or management of
its business or affairs under applicable law or this Agreement shall
not be grounds for imposing personal liability on the Parties for
liabilities of FMCF.
21.2 SURVIVAL
The provisions of this Clause IV-21 shall survive the termination of
this Agreement and the dissolution and liquidation of FMCF.
22. ASSIGNMENT
This Agreement shall be binding and shall operate for the benefit of
the Parties and their respective beneficiaries and assignees.
Notwithstanding the above, except as provided for in Clause II-10.4
above, the contractual position (rights and obligations) of each of the
signatory Parties to this Agreement shall not be able to be assigned to
a third party without prior express consent in writing from the
signatory Parties to it that are not affected by the assignment of
contractual position that it is wished to carry out.
An exception to the above is made for the case of assignments of
contractual position made by signatory Parties to this Agreement in
favor of Affiliates, according to the definition of this contained in
Clause II-10.4 above.
The efficacy of assignments of contractual position made by the
signatory Parties to this Agreement in conformity with the provisions
contained in this Clause shall in all
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cases be subject to the express written acceptance from the assignee of
the terms and conditions set down herein.
23. ENTIRE AGREEMENT
This Agreement, together with the documents referred to herein and the
Schedules hereto, constitutes the entire agreement of the Parties with
respect to the subject matter contained herein and supersedes all prior
understandings and negotiations between them, whether written or oral.
24. PARTIAL NULLITY
If any provision of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions set forth herein shall not in any way be
affected or impaired; provided, however, that in such case the Parties
agree to use their best efforts to achieve the purpose of the invalid
provision through a new, legally valid and enforceable provision.
25. NOTICES
Any notice, instruction or other communication to be given under this
Agreement to a Party shall be in writing. Such notice, instruction or
communication shall be deemed to have been duly given when it shall be
delivered by hand or sent by airmail, telex or facsimile to the Party
to which it is required or permitted to be given at such Party's
address specified below or at such other address as such Party shall
have designated by notice to the Party giving such notice, instruction
or other communication.
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For FMCE:
To the attention of: General Counsel
0, xxx Xxxx Xxxxxx
X-0000 Xxxxxxxxxx
Fax: x(000) 00 00 00 00 00
To FirstMark Communications International LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
For AAA:
To the attention of: Xxxxxxx Xxxxxx
0 xxx x'Xxxxxx
00000 Xxxxx
Fax: 00 00 00 00 00
For BBB:
To the attention of: Xxxxxxx Xxxxxx
00 xxxxxx Xxxxxxxxx
00000 Xxxxx
Fax: 00 00 00 00 00
For CCC:
To the attention of: Xxxxxx Xxxxxx
00 xxx xx Xxxxxxxx Xxxxx-Xxxxxx
00000 Xxxxx
Fax: 00 00 00 00 00
For DDD:
To the attention of: Xxxxxx Xxxxx Latinier
00 xxxxxx xxx Xxxxxx-Xxxxxxx
00000 xxxxx
Fax: 00 00 00 00 00
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For EEE:
- Banque pour l'expansion industrielle
00 xxx Xxxxxxxx
00000 Xxxxx
Fax : 00 00 00 00 00
To the attention of: Xxxx-Xxxxxxx Xxxxxxxx
- BNP Private Equity
00 xxx Xxxxxxxx
00000 Xxxxx
To the attention of: Xxxx-Xxxxxxx Xxxxxxxx
- BNP EUROPE TELECOM and MEDIA
FUND 2, LP (EMTF 2, LP
CICB Financial Street
Georgetown, X/X Xxx 000, Xxxxx Xxxxxx
Xxxxxx Xxxxxxx, Xxxxxxx Xxxx Indies
Fax : 00 0 000 000 0000
To the attention of Xxxxxx Xxxxxxxxx
26. HEADINGS
The headings to the covenants and Clauses of this Agreement have been
included strictly for reasons of convenience and they in no way affect
or prejudice the interpretation of the content of them.
27. ENGLISH LANGUAGE
This Agreement has been executed in the English language and if any
translation is made hereof, the English version only shall bind the
Parties hereto.
All documents to be furnished or communications to be given or made
under this Agreement shall be in the English language or, if in
another language, shall be accompanied by a translation into English
duly certified, which translation shall be the
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governing version between the Parties.
28. GOVERNING LAW AND RESOLUTION OF DISPUTES
This Agreement will be governed by the laws of France without giving
effect to principles of conflicts of laws that would result in
application of the law of another jurisdiction.
Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach, termination or invalidity thereof, shall be
settled by the Parties within the thirty (30) day period following the
receipt by the last one of parties of a written notice pointing out the
existence of such dispute, controversy, claim, breach, termination or
invalidity. Should the parties not reach an agreement in the thirty
(30) day period referred to above, the Parties agree to submit the
relevant issue to arbitration. The arbitration shall be in accordance
with the Rules of Conciliation and Arbitration of the International
Chamber of Commerce, except that in the event of any conflict between
those rules and any arbitration provisions of this Agreement, the
provisions of this Agreement shall govern.
There shall be three arbitrators appointed by the Geneva, Switzerland
office of the International Chamber of Commerce in accordance with said
Rules. The arbitration, including the making of the award, shall take
place in Geneva, Switzerland. The arbitration shall be conducted in the
English language and the award, and the reasons supporting it, shall be
written in English.
All decisions of the arbitral tribunal shall be final and binding on
the Parties and may be entered against them in a court of competent
jurisdiction. When affixing the cost of arbitration in its award, any
costs, fees or taxes incidental to enforcing the arbitral award shall,
to the maximum extent permitted by law, be borne by the Party resisting
such enforcement.
AND AS PROOF OF CONFORMITY with the foregoing, the Parties sign this Agreement
along with its Schedules, in 10riginals and for a sole effect, in the place and
on the date stated in the heading.
FIRSTMARK COMMUNICATIONS EUROPE,
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S.C.A.
BY:
/s/ Xxxxx Xxxxxx Xxxxxxx
-------------------------------
SIGNED: XX XXXXX XXXXXX XXXXXXX
SUEZ-LYONNAISE DES EAUX FIRSMARK COMMUNICATIONS
BY: FRANCE SAS
BY:
/s/ /s/
------------------------------- -------------------------------
SIGNED: SIGNED:
GROUPE ARNAULT SA BANEXI SA
BY: BY:
/s/ /s/
----------------------------- -------------------------------
SIGNED: SIGNED:
RALLYE SA BNP EUROPE TELECOM AND MEDIA
FUND II L.P.
BY: BY:
/s/ /s/
---------------------------------- -------------------------------
SIGNED: SIGNED:
PONTHIEU VENTURES SA NATIO VIE DEVELOPPEMENT
BY: BY:
/s/ /s/
--------------------------------- -------------------------------
SIGNED: SIGNED:
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