Exhibit 10.14
SECURITYHOLDERS' AGREEMENT
THIS SECURITYHOLDERS' AGREEMENT is made as of March 1, 1999, between
Carrier1 International S.A., a Luxembourg SOCIETE ANONYME (the "Company"),
Carrier One, LLC, a Delaware limited liability company ("Carrier One"), and each
of the other securityholders from time to time a party hereto (together with
Carrier One, the "Securityholders"). Capitalized terms used but not otherwise
defined herein are defined in SECTION 10 hereof or in the Securities Purchase
Agreement referred to below.
The Company and the Securityholders desire to enter into this Agreement
for the purposes, among others, of (i) assuring continuity of the management and
ownership of the Company and (ii) limiting the manner and terms of which
Securityholder Securities may be transferred. The execution and delivery of this
Agreement is a condition to certain Securityholders' purchase of certain
Purchased Securities, as defined in, and pursuant to, the Securities Purchase
Agreement (as amended from time to time, the "Securities Purchase Agreement"),
dated as of March 1, 1999, among the Company, Carrier One and each of the
Purchasers (as defined therein).
NOW THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement, intending to be legally
bound, hereby agree as follows:
Section 1. RESTRICTIONS ON TRANSFER OF MANAGEMENT SECURITIES. (a) IN
GENERAL. No Management Holder shall sell, transfer, assign, pledge or otherwise
dispose of (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) any direct or indirect interest in (a
"Transfer") such Management Holder's Management Securities without the prior
written consent of the Board, except pursuant to or as is permitted by (i)
SECTIONS 4 AND 7 hereof, and (ii) a pledge of Management Securities in favor of
the Company to secure obligations owing to the Company; PROVIDED in each case
that the applicable requirements of SECTIONS 1(c), 2, and 3 (if any) are also
satisfied; and PROVIDED FURTHER that invested Management Securities (including,
without limitation, options which have not yet become exercisable) may not be
transferred in any event. Notwithstanding obtaining the required approval of the
Board, all Transfers of Management Securities for which Board approval is
required shall be subject to compliance with the provisions of SECTION 1(b)
hereof.
(b) RIGHT OF FIRST REFUSAL. If one or more Management Holders desires to
Transfer (the Securityholder(s) proposing the Transfer being referred to in
this SECTION 1(b) as the "Transferring Securityholders") all or a portion of
his Management Securities the Transferring Securityholders shall first comply
with the following terms and conditions:
(i) The Transferring Securityholders shall first deliver to Carrier One
or its transferee who becomes a party to this Agreement from time to time
(collectively referred to in this SECTION 1(b) as the "Offerees" and each as an
"Offeree") a written notice (the "Notice of Proposed Transfer") specifying the
name and address of the proposed transferee of the Management Securities
(hereinafter sometimes referred to as the "Proposed Purchaser"), the type and
total number of such Management Securities which the Transferring
Securityholders then desire to transfer to said Proposed Purchaser (the "Offered
Securities"), all of the terms, including the purchase price (which shall be
payable only in cash), upon which the Transferring Securityholders propose to
transfer the Offered Securities to the Proposed Purchaser, and stating that the
Offerees shall have the right to purchase the Offered Securities at the price
and in accordance with the terms and provisions specified in such Notice of a
Proposed Transfer.
(ii) The Offerees shall have the option, for the thirty (30) consecutive
day period commencing on the date the Offerees receive the Notice of Proposed
Transfer, to purchase all of the Offered Securities at the price and terms
specified in the Notice of Proposed Transfer. The Offerees must give written
notice of their election to the Offeror during such 30-day period.
(iii) Each Offeree shall have the right (but not the obligation) to
purchase that number of the Offered Securities as shall be equal to the number
of Offered Securities multiplied by a fraction, the numerator of which shall be
the number of Securityholder Securities then owned by such Offeree and the
denominator of which shall be the aggregate number of Securityholder Securities
then owned by all of the Offerees. The amount of such Offered Securities that
each Offeree is entitled to purchase under this SECTION 1(b) shall be referred
to as its "Pro Rata Fraction."
(iv) The Offerees shall have a right of oversubscription such that if
any Offeree fails to elect to purchase its full Pro Rata Fraction of the Offered
Securities, the remaining Offerees shall have the right to purchase up to the
balance of such remaining Offered Securities not so purchased. The Offerees may
exercise such right of oversubscription by electing to purchase more than their
Pro Rata Fraction of the Offered Securities, but such election must be made in
the initial election notice given pursuant to clause (ii) above. If, as a result
thereof, such oversubscriptions
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exceed the total number of the Offered Securities available in respect to
such oversubscription privilege, the oversubscribing Offerees shall be cut
back with respect to oversubscriptions on a pro rata basis in accordance with
their respective Pro Rata Fractions or as they may otherwise agree among
themselves.
(v) If the Offerees have not elected to purchase all of the Offered
Securities, then the Transferring Securityholder shall have the right, until the
expiration of ninety (90) consecutive days commencing on the first day
immediately following the expiration of the 30-day period specified in paragraph
(ii) above, to Transfer the Offered Securities to the Proposed Purchaser at the
price and terms specified in the Notice of Proposed Transfer. If for any reason
the Offered Securities are not Transferred to the Proposed Purchaser within such
period and at such stated price and on such stated terms, the right to Transfer
in accordance with the Notice of Proposed Transfer shall expire and the
provisions of this Agreement shall continue to be applicable to the Offered
Securities but the Transferring Securityholder shall have the right, at any time
thereafter and subject to again deliver a new Notice of Proposed Transfer
complying with this SECTION 1(b).
(vi) The purchase price for the Offered Securities to be paid by the
Offerees or the Proposed Purchaser shall be the price set forth in the Notice of
Proposed Transfer.
(vii) The Offerees purchasing the greatest percentage of the Offered
Securities shall set the place, time and date for the closing of the purchase of
the Offered Securities, which closing shall not be more than 20 days after the
first day immediately following the expiration of the 30-day period specified in
paragraph (ii) above; provided, however, such date for closing shall be extended
as reasonably necessary for the Company, the Offerees and the Transferring
Securityholders, as the case may be, to obtain the consent, approval or other
authorization of any Governmental Entity required for such Transfer. The
purchase price of the Offered Securities shall, unless otherwise agreed in
writing by the parties to such transaction, be paid in cash, by certified check
or wire transfer of funds at the date of the closing. At the closing, the
Offerees shall deliver the consideration required by clause (vi) above, and the
Transferring Securityholder shall deliver an assignment of the Offered
Securities and other instruments reasonably satisfactory to the Offerees and
their counsel.
(c) INDIRECT TRANSFERS. No Management Holder that is not an individual
(a "Restricted Holder") shall permit the issuance of additional interests in
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such Restricted Holder or any Transfer of any interest of any Indirect Owner in
such holder.
(d) MARKET STANDOFF. To the extent not inconsistent with applicable
law, no Management Holder shall effect any sale or distribution (including
sales pursuant to Regulation S or Rule 144 under the Securities Act) of
Management Securities, or any securities, options or rights convertible into
or exchangeable or exercisable for such securities, during the 10 day period
prior to and the 180 day period after the date of the closing of a sale
pursuant to an effective registration statement under the Securities Act of
1933, as amended, or the date of the closing of a public offering or private
offering accompanied by listing of any Securityholder Securities within or
outside of the United States, of Securityholder Securities, whether for the
account of the Company or Carrier One or its transferees, unless (in any such
case) the underwriter managing the registered public offering or the Board
agrees in writing otherwise.
(e) TERMINATION OF RESTRICTIONS. The restrictions set forth in
paragraphs (a), (b) and (c) of this SECTION 1 shall continue with respect to
each Management Security until (i) the Company's Securityholder Securities are
listed on the Luxembourg, New York, London or American Stock Exchange or are
quoted on the NASDAQ National Market System or SEAQ or EASDAQ, or listed or
quoted on other European national stock exchanges or, at the initiative of the
Company, over-the-counter market of any jurisdiction, (ii) Trading Volume equals
or exceeds the number of Securityholder Securities then held by Carrier One and
its transferees, (iii) the Securityholder Securities have an average closing
price per share for the prior eight week period exceeding 250% of Carrier One's
cost per Securityholder Security and (iv) the Securityholder Securities held by
Carrier One and its transferees are not subject to lock-up or escrow provisions
and are freely tradable (the "Active Market Event").
Section 2. ADDITIONAL RESTRICTIONS ON TRANSFER. (a) RESTRICTED
SECURITIES. The Securityholder Securities have not been registered under the
Securities Act nor under any other applicable securities laws and regulations in
any jurisdiction and, therefore, in addition to the other restrictions on
Transfer contained in this Agreement, cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
then available and may only be sold outside of the United States subject to
compliance with any applicable securities laws and regulations. Pursuant to the
Articles, any transfer of the Securityholder Securities requires the approval of
the Board.
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(b) OPINION OF COUNSEL. No Securityholder may Transfer any
Securityholder Securities (except pursuant a Public Sale or, in the case of
Carrier One and its transferees, to an Affiliate or such Affiliates' Affiliate,
or pursuant to SECTION 1(a)(i) and (ii)) without first delivering to the Company
(unless waived by the Board) an opinion of counsel (reasonably acceptable in
form and substance to the Board) that no registration, qualification or other
approval under the Securities Act or any other applicable securities laws and
regulations of jurisdictions outside of the United States, is required in
connection with such Transfer.
Section 3. TRANSFER. Prior to Transferring any Management Securities
(other than pursuant to SECTIONS 4 and 7 or pursuant to a Public Sale), the
Transferring Management Holder shall cause the prospective Transferee to be
bound by this Agreement, and any other agreements executed by all or
substantially all of the Management Holders (collectively, the "Other
Agreements"). Any Transfer or attempted Transfer of any Management Securities
in violation of any provisions of this Agreement shall be void, and the
Company shall not record such Transfer on its books or treat any purported
Transferee of such Management Securities as the owner of such securities for
any purpose.
Section 4. SALE OF THE COMPANY; PLEDGE TO SECURE FINANCING. (a) In the
event the Board approves a Sale of the Company, each Securityholder shall
promptly take all necessary or desirable action within such Person's control
(including, without limitation, the removal and election of directors,
attendance at members' and shareholders' meetings in person or by proxy for the
purposes of obtaining a quorum and the execution of written consents in lieu of
meetings) such that any proposal, resolution or other matter relating to the
implementation of such Sale of the Company shall be implemented and if the
Securityholders are entitled to vote on any such matter, whether by law, under
the Articles or otherwise, all of the Securityholder Securities and any other
securities of the Company over which such Securityholder has control shall (if
permitted to vote) be voted in favor of such Sale of the Company.
(b) Each Securityholder will consent to and raise no objections against
a Sale of the Company approved by the Board. If at any such Sale of the Company
structured as a sale of securities, or in the event of any Sale of the LLC, then
Carrier One may, at its sole discretion, elect to purchase or have its
Affiliates or other designee or designees (which may include the Company)
purchase the Management Securities. In such event, each Management Holder shall
sell the Securityholder Securities and any other securities of the Company held
by him or it to Carrier One or its designee on the terms and conditions approved
by the Board. Each Securityholder
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shall promptly take all action necessary and
desirable in connection with the consummation of a Sale of the Company or a Sale
of the LLC, including, without limitation, the waiver of all appraisal rights
available to any such Securityholder under applicable law. Each Securityholder
will bear his or its pro rata share (based upon the number of Securityholder
Securities held by him or it on a fully diluted basis) of the cost of any sale
of equity securities pursuant to such a Sale of the Company or the Sale of the
LLC to the extent such costs are incurred for the benefit of all Securityholders
and are not otherwise paid by the Company or the acquiring party. Costs incurred
by Securityholders on their own behalf will not be considered costs of the
transaction hereunder.
(c) In the event the Board requests that the Securityholders pledge
their Securityholder Securities to secure financing to be provided to the
Company and/or one or more of its Subsidiaries ("Company Financing"), each
Securityholder shall promptly take all necessary or desirable action with
such Person's control, including executing any and all documents requested by
the Board, to pledge the Securityholder Securities held by him or it to
secure such Company Financing; provided, however, the terms of the Company
Financing shall not require that a Securityholder be personally liable for
such Financing and recourse against any Securityholder for such Company
Financing (absent the consent of such Securityholder) shall be limited to the
Securityholder Securities pledged to secure the Company Financing and the
terms and conditions of the pledge to be made by each Securityholder shall be
substantially the same.
Section 5. BOARD COMPOSITION. (a) From and after the date hereof, and
until the provisions of this SECTION 5 cease to be effective, each
Securityholder shall vote all of its Securityholder Securities and any other
voting securities of the Company over which such Securityholder has voting
control and shall take all other necessary or desirable actions within its
control (whether in its capacity as a Securityholder, stockholder, director,
member of a board committee or officer of the Company, or otherwise, and
including, without limitation, attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Company shall take all necessary or desirable actions within
its control (including, without limitation, calling special Board and
Securityholder meetings), so that for so long as Stig Johansson is employed by
the Company or a Subsidiary, Stig Johansson shall be elected to the Board. It is
further agreed that each of Xxxxxxx Xxxxx, Xxxxxx X. Xxxxx, Xxxx Van Ophem and
Xxxx Xxxxxx shall have the right to notice of, and the right to attend and
participate in (but not vote at) the meetings of the Board for so long as he is
employed by the Company or a Subsidiary.
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(b) The Company shall pay the reasonable out-of-pocket expenses incurred
by each director and observer in connection with attending (i) the meetings of
the Board, any Sub Board and any committees thereof and (ii) any other meetings
at the request of any Company or any of its Subsidiaries. So long as any
director designated pursuant to SECTION 5 serves on the Board or any Sub Board,
and for six years thereafter, the constituent documents of the Company and each
of its Subsidiaries, as appropriate, shall provide for indemnification and
exculpation of directors to the fullest extent permitted under applicable law.
(c) No director, officer, employee or Securityholder of the Company, nor
any such Person's spouse, sibling, parent, child or any spouse thereof (each, a
"Family Member"), or any corporation, partnership, trust or other entity in
which such Person, or any Family Member of such Person, is the holder of a
majority of the outstanding capital stock thereof, shall enter into any
transaction, with the Company or its Subsidiaries, including any contract,
agreement or other arrangement, unless
(i) the material facts as to such Person's interest and as to the contract or
transaction are disclosed or are known to the Board or any committee thereof and
the Board or such committee in good faith authorizes the contract or transaction
by the affirmative vote of a majority of the disinterested directors; or
(ii) the contract or transaction is fair to the Company or its Subsidiary, as
the case may be, as of the time it is authorized, approved or ratified by the
Board, any committee thereof or the Securityholders.
(d) The provisions of this SECTION 5 shall terminate upon the initial
Public Sale of Securityholder Securities.
Section 6. PREEMPTIVE RIGHTS. (a) Except for (i) issuances of Shares to
the employees of the Company and its Subsidiaries pursuant to the Option
Agreements and pursuant to any other plan or arrangement approved by the Board,
(ii) issuances of Shares pursuant to a Public Sale, (iii) the issuance of Shares
to Carrier One pursuant to the Securities Purchase Agreement, if the Company
authorizes the issuance or sale of any Shares or any securities including any
options, warrants or rights to acquire any Shares, and (iv) issuances of Shares
to the holders of Warrants under the Euro Warrant Agreement and Dollar Warrant
Agreement entered into between Carrier1 International S.A. and Chase Manhattan
Bank, respectively signed on or about February 19, 1999, the Company shall first
by written notice offer
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to sell to Carrier One a portion of such Securityholder Securities or other
securities equal to the quotient determined by dividing (1) the number of
Securityholder Securities held Carrier One by (2) the total number of
outstanding Securityholder Securities. Carrier One or its designees shall be
entitled to purchase such securities at the most favorable price and on the
most favorable terms as such securities are to be offered to any other Person.
(b) In order to exercise its purchase rights hereunder, Carrier One or
its designees must within 30 days after receipt of written notice from the
Company describing in reasonable detail the securities being offered, the
purchase price thereof, the payment terms and its percentage allotment, deliver
a written notice to the Company describing its election hereunder.
(c) Upon expiration of the offering period described above, the Company
shall be entitled to sell such securities which Carrier One or its designees has
not elected to purchase during the 90 days following such expiration on terms
and conditions no more favorable to the purchasers thereof than those offered to
Carrier One. Any securities offered or sold by the Company after such 90-day
period must be reoffered to Carrier One pursuant to the terms of this SECTION 6.
(d) Each of the parties to this Agreement agrees to vote its Shares and
to waive its pre-emptive rights under the Articles of the Company, if required,
so as to give effect to the rights of Carrier One under this SECTION 6,
including the right to designate purchasers of Shares. The right of Carrier One
under this SECTION 6 shall terminate upon the consummation of the initial Public
Sale by the Company.
(e) In the event that the holders of a majority of the Shares of the
Company proposes the issuance of Shares by the Company in a Public Sale, each of
the parties to this Agreement shall vote its Shares in favor of such Public Sale
and related capital increase and amendment to the Articles and shall waive any
pre-emptive rights which it may have in respect of such sale and increase.
Section 7. CONFIDENTIALITY, NONCOMPETITION AND NONSOLICITATION
COVENANTS. (a) Each Management Holder acknowledges that in the course of
providing services to the Company and its Subsidiaries, such Management Holder
will become familiar with the trade secrets, Confidential Information and other
intellectual property concerning Carrier One, the Company and its Subsidiaries.
No Management Holder shall, in any manner, whether directly or indirectly, use
for his own benefit or the benefit of any other Person, nor disclose, divulge,
render or offer, any Confidential Information, except on behalf of Carrier One,
the Company or its
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Subsidiaries in the course of the proper performance of his duties under any
employment agreement between such Management Holder and Carrier One, the
Company or any of its Subsidiaries. Each Management Holder acknowledges and
agrees that any and all such Confidential Information will be received and
held by him in a confidential capacity.
(b) Each Management Holder acknowledges that in the course of
providing services to Carrier One, the Company and its Subsidiaries, (i) the
services of the Management Holder shall be of special, unique and
extraordinary value to Carrier One, the Company and its Subsidiaries and (ii)
Carrier One, the Company and the Subsidiaries' ability to accomplish their
purposes and to successfully compete in the marketplace depend substantially
on the skills and expertise of the Management Holder. Each Management Holder
acknowledges and agrees that, given the interconnected nature of the
international telecommunications network businesses of Carrier One, the
Company and its Subsidiaries, Carrier One, the Company and its Subsidiaries
would be irreparably damaged if such Management Holder were to not devote
substantially all of his business time and efforts to the business and
affairs of Carrier One, the Company and its Subsidiaries during the term of
any employment contract with Carrier One, the Company or any of its
Subsidiaries or were to provide directly or indirectly similar services to
any person competing with Carrier One, the Company or any of its Subsidiaries
or were to engage in a similar a business other than as specifically
permitted by this SECTION 7. Accordingly, in further consideration of the
compensation to be paid by Carrier One, the Company or its Subsidiaries to
such Management Holder, the issuance of options to purchase equity in the
Company, and to induce Carrier One to enter into the Securities Purchase
Agreement, each Management Holder agrees, from and after the date hereof and
during the applicable Non-Compete Period, that he will not, singly, jointly,
or as an employee, agent or partner of any partnership or as an officer,
agent, employee, director, stockholder (except of not more than two percent
(2%) of the outstanding stock of any company listed on a national securities
exchange or actively traded in the over the counter market) or investor in
any other corporation or entity, or as a consultant, advisor, or independent
contractor to any such partnership, corporation or entity, or in any other
capacity, directly, indirectly or beneficially, in any jurisdiction in which
Carrier One, the Company or its Subsidiaries is operating:
(i) own, manage, operate, join, control, or participate in the ownership,
management, operation, or control of, or work for (as an employee, agent,
consultant, advisor or independent contractor), or permit the use of his name
by, or provide financial or other assistance to, or be connected in any
manner with, any person, partnership, corporation, or entity which is in the
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international long distance telecommunications business or which otherwise is
in direct or indirect competition with any business conducted by Carrier One,
the Company or any of the Subsidiaries on the date hereof or at any time
during the applicable Non-Compete Period;
(ii) induce or attempt to induce any person who, on the date hereof or at any
time during the applicable Non-Compete Period, is an employee of Carrier One,
the Company or any of the Subsidiaries, to terminate his or her employment
with such company; or
(iii) induce or attempt to induce any person, business, or entity which is a
supplier, distributor, or customer of Carrier One, the Company or any of the
Subsidiaries or which otherwise is a contracting party with Carrier One, the
Company or any of the Subsidiaries, as of the date hereof or at any time
during the applicable Non-Compete Period, to terminate or modify any written
or oral agreement or understanding with Carrier One, the Company or any of
the Subsidiaries.
Each Management Holder acknowledges and agrees that the limitations set forth
in this SECTION 7 are reasonable with respect to scope, duration and area and
are properly required for the protection of the legitimate business interests
of Carrier One, the Company and its Subsidiaries. Each Management Holder
agrees that the covenants set forth in this SECTION 7 shall be enforced to
the fullest extent permitted by law. Accordingly, if in any judicial or
similar proceeding a court or any similar judicial body shall determine that
such covenant is unenforceable because it covers too extensive a geographical
area or survives too long a period of time, or for any other reason, then the
parties intend that such covenant shall be deemed to cover only such maximum
geographical area and maximum period of time and shall otherwise be deemed to
be limited in such manner as will permit enforceability by such court or
similar body. In the event of a breach or violation by any Management Holder
of this SECTION 7, the Non-Compete Period with respect to such Management
Holder shall be extended for the number of days in the period from the date
of such breach or violation through and including the date that such breach
or violation has been fully cured or ceases.
(c) SPECIFIC PERFORMANCE. Each Management Holder agrees that his
breach of the provisions of SECTION 7(a) or (b) above will cause irreparable
damage to Carrier One and the Company and that the recovery by Carrier One
and the Company of money damages will not constitute an adequate remedy for
such breach. Accordingly, each Management Holder agrees that the provisions
of SECTIONS 7(a)
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and (b) above may be specifically enforced against such Management Holder in
addition to any other rights or remedies available to Carrier One and the
Company and its Subsidiaries on account of any such breach, and each
Management Holder expressly waives the defense in any equitable proceeding
that there is an adequate remedy at law for any such breach. Each Management
Holder agrees that if the provisions of SECTIONS 7(a) and (b) for any reason
cannot be specifically enforced against such Management Holder for the entire
Non-Compete Period which is applicable, then Management Holder agrees that
Carrier One and the Company will be entitled to recover an amount for each
breach of the provisions of SECTIONS 7(a) and (b) equivalent to 30% of his
annual base salary earned with Carrier One, the Company or any of its
Subsidiaries or in his new position, whichever is higher; PROVIDED, HOWEVER,
that (i) payment of such amount shall not relieve such Management Holder from
observing the prohibitions contained in SECTIONS 7(a) and (b) and (ii) the
Company is entitled to be indemnified in full for damages.
Section 8. RIGHT OF CO-SALE
8.1 CO-SALE RIGHT. In the event that a Securityholder or Securityholders
(collectively, the "Transferor") proposes to, directly or indirectly, Transfer
(in a single transaction or a series of related transactions) Securityholder
Securities representing 50% or more of the outstanding Securityholder Securities
then held by all Securityholders (the "Transferor Securities") to any Person for
value (the "Transferee"), the remaining Securityholders (the "Remaining
Securityholders") shall have a right of co-sale (the "Right of Co-Sale") to sell
their pro rata share of the number of Securityholder Securities represented by
the Transferor Securities (the "Right of Co-Sale Pro Rata Share") on the same
terms and at the same time as the Transferor, all as described in this SECTION
8.
8.2 RIGHT OF CO-SALE PRO RATA SHARE. The Right of Co-Sale Pro Rata Share
for each Remaining Securityholder shall be that proportion which the number of
Securityholder Securities held by such Securityholder bears to the aggregate
number of Securityholder Securities held by all Securityholders. Each Remaining
Securityholder shall have the right to sell that number of Securityholder
Securities held by such Securityholder to the Transferee (or, upon the
unwillingness of any Transferee to purchase directly from such Securityholder,
to the Transferor simultaneously with the closing of the sale by the Transferor
to the Transferee) up to its respective Right of Co-Sale Pro Rata Share
determined as of the date the Transfer Notice (as defined below) is delivered to
the such Securityholder, upon the terms and subject to the conditions pursuant
to which the Transferor sells its Transferor Securities to the Transferee.
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8.3 MECHANICS OF SALE. (a) EXERCISE BY THE SECURITYHOLDER. If the
Transferor proposes to Transfer any Transferor Securities in a transaction
subject to this SECTION 8, then it shall promptly notify, or cause to be
notified, the Remaining Securityholders, in writing, of each such proposed
Transfer (the "Transfer Notice").
Such Transfer Notice shall set forth: (i) the name of the Transferee and the
number of Securityholder Securities proposed to be Transferred, and (ii) the
proposed amount and form of consideration and terms and conditions of payment
offered by the Transferee (the "Transferee Terms"). The Right of Co-Sale may be
exercised by the Remaining Securityholders delivering a written notice to the
Transferor (the "Co-Sale Notice") within fifteen (15) calendar days following
receipt of the Transfer Notice. The Co-Sale Notice shall state the number of
Securityholder Securities that such Remaining Securityholder wishes to include
in such Transfer to the Transferee, which number may not exceed its Right of
Co-Sale Pro Rata Share. Upon the giving of a Co-Sale Notice, a Securityholder
shall be irrevocably obligated to sell the number of Securityholder Securities
set forth in its Co-Sale Notice to the Transferee on the Transferee Terms.
(b) ASSIGNMENT OF INTEREST. If a Securityholder exercises its Co-Sale
Rights, then the Transferor shall assign to such Securityholder as much of its
interest in the agreement of sale with the Transferee as such Securityholder
shall be entitled to, and such Securityholder shall be obligated to provide the
same representations, warranties and covenants to the Transferee as the
Transferor under such agreement of sale. To the extent that any Transferee
prohibits such assignment or otherwise refuses to purchase Securityholder
Securities from a Securityholder exercising its Right of Co-Sale hereunder, then
the Transferor shall not sell to such Transferee any Transferor Securities
unless and until, simultaneously with such sale, the Transferor shall purchase
such Securityholder Securities from such Securityholder for the same
consideration per unit or share and on the same terms and subject to the same
conditions as the proposed Transfer described in the Transfer Notice.
(c) FAILURE TO EXERCISE RIGHT OF CO-SALE; ADDITIONAL TRANSFERS. If no
Securityholder elects to exercise its Right of Co-Sale, then the Transferor may
not later than 120 days following delivery to the Remaining Securityholders of
the Transfer Notice conclude a Transfer of not less than all of the Transferor
Securities covered by the Transfer Notice on such terms and subject to
conditions not more favorable to the Transferor than those described in the
Transfer Notice. Any proposed Transfer of more Securityholder Securities by the
Transferor shall again be subject to the Right of Co-Sale and shall require
compliance by the Transferor with the procedures described in this SECTION 8.
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8.4 EXCEPTIONS TO RIGHT OF CO-SALE. The Right of Co-Sale shall not apply
to Transfers to Affiliates of a Securityholder or to an Indirect Owner of
Carrier One. The provisions of this SECTION 8 shall terminate upon an initial
public offering of Securityholder Securities.
8.5 (a) CERTAIN RIGHTS OF CO-SALE IN RELATION TO CARRIER ONE. In the
event that Carrier One owns a majority of the outstanding shares of the
Company and a holder or holders of LLC Securities (collectively, the "LLC
Transferor") proposes to, directly or indirectly, transfer (in a single
transaction or a series of related transactions) LLC Securities (the "LLC
Transfer Securities") representing 50% or more of the outstanding LLC
Securities then held by all holders of LLC Securities to any Person for
value, the Management Holders shall have a right (the "LLC Right of Co-Sale")
to sell, and to cause Carrier One (or its designee) to purchase, at the
Adjusted Per Share Price (as defined below) a number of Management Securities
which bears the same proportion to all outstanding Management Securities that
the number of LLC Transfer Securities bears to all LLC Securities multiplied
by the fraction of the Company's outstanding shares that are owned by Carrier
One (the "LLC Right of Co-Sale Pro Rata Share") at the same time as the sale
of LLC Transfer Securities by the LLC Transferor, all as described in this
SECTION 8.5.
(b) MECHANICS OF LLC SALE; EXERCISE BY THE SECURITYHOLDER. If the LLC
Transferor proposes to Transfer any LLC Transferor Securities in a transaction
subject to this SECTION 8.5, then Carrier One shall promptly notify, or cause to
be notified, the Management Holders in writing of such proposed Transfer (the
"LLC Transfer Notice"). The LLC Transfer Notice shall set forth: (i) the number
of LLC Securities proposed to be Transferred and the number of outstanding LLC
Securities, (ii) the proposed amount of consideration per LLC Security (the "LLC
Per Share Price") and terms and conditions of payment received by the LLC
Transferor, and (iii) the proposed Adjusted Per Share Price. The LLC Right of
Co-Sale may be exercised by the Management Holders delivering a written notice
to Carrier One (the "LLC Co-Sale Notice") within fifteen (15) calendar days
following receipt of the LLC Transfer Notice. The LLC Co-Sale Notice shall state
the number of Securityholder Securities that such Management Holder wishes to
include in such Transfer to Carrier One (or its designee), which number may not
exceed its LLC Right of Co-Sale Pro Rata Share. Upon the giving of a LLC Co-Sale
Notice, a Management Holder shall be irrevocably obligated to sell, and Carrier
One shall be irrevocably obligated to purchase, or cause the purchase of, the
number of Management Securities set forth in its LLC Co-Sale Notice to Carrier
One at the Adjusted Per Share Price.
13
(c) ADJUSTED PER SHARE PRICE. For the purposes of this SECTION 8.5, the
"Adjusted Per Share Price" shall be the value of each Securityholder Security
determined on the basis of the LLC Per Share Price (after adjustment to take
into account the differences between the total share capital of Carrier One and
the total share capital of the Company, the cash value of any non-cash portion
of the LLC Per Share Price, the total number of Securityholder Securities held
by Carrier One, the total outstanding number of LLC Securities, any assets or
liabilities of Carrier One other than Securityholder Securities, and any other
matters which Carrier One determines in good faith is relevant to such
calculation), as determined in good faith by Carrier One.
(d) EXCEPTIONS TO RIGHT OF CO-SALE. The LLC Right of Co-Sale shall
not apply to Transfers to Affiliates of a Securityholder, Transfers between
Institutional Investors or to partners of an Institutional Investor. The
provisions of this SECTION 8.5 shall terminate upon any initial public
offering or listing of Securityholder Securities.
Section 9. UBTI. Notwithstanding anything to the contrary expressed or
implied in this Agreement, the Company shall use its best efforts to ensure that
the Company does not engage in any transactions which will cause any member of
Carrier One (or any partner or member of any such member) which is exempt from
income taxation under Section 501(a) of the United States International Revenue
Code of 1986, as amended (the "Code"), to recognize unrelated business taxable
income as defined in Sections 512 and 514 of the Code as a result of its
investment in the Company; provided, that with respect to any action taken or
omitted to be taken by the Company's management without the express written
authorization of the Board such best efforts obligation of the Company shall be
deemed satisfied by the delivery to the Company's management of an advice
memorandum in a form prepared or approved by Primus Capital Fund IV Limited
Partnership and Primus Executive Fund Limited Partnership.
Section 10. CERTAIN DEFINITIONS.
"AFFILIATE" shall mean, with respect to any Person (the "First Person"),
any other Person directly or indirectly controlling, controlled by or under
direct or indirect common control with the First Person and shall include (a)
any Person who is a director or directly or indirectly the beneficial owner of
at least 10% of the
14
then outstanding capital stock or other equity securities of the First Person
and (b) any Person of which the First Person or an Affiliate (as defined in
clause (a) above) of the First Person shall, directly or indirectly, either
beneficially own at least 10% of the then outstanding equity securities or
constitute at least a l0% equity participant. For purposes of this
definition, "control" means, as applied to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"BOARD" means the Company's Board of Directors or a committee thereof
to which any relevant decision has been duly delegated, as applicable.
"CARRIER ONE" means Carrier One, LLC, a Delaware limited liability
company.
"CAUSE" means with respect to a particular Management Holder (i) a
breach by such Management Holder of any employment agreement between Carrier
One, the Company or any of its Subsidiaries and such Management Holder, (ii)
any act of dishonesty, embezzlement, unauthorized use or disclosure of
Confidential Information, intellectual property, or trade secrets, common law
fraud or other fraud with respect thereto by such Management Holder, (iii)
the commission by such Management Holder of a felony, a crime involving moral
turpitude or any other act causing material harm to Carrier One, the
Company's or any of the Subsidiaries' standing or reputation, (iv) such
Management Holder's willful and continued failure to perform his duties to
Carrier One, the Company or any Subsidiary as reasonably requested by the
Board, (v) such Management Holder's willful misconduct or gross negligence,
or (vi) the willful commission by such Management Holder of an act which (a)
constitutes unfair competition with Carrier One, the Company or any of the
Subsidiaries, (b) induces any other employee to leave the employ of Carrier
One, the Company or any of the Subsidiaries or (c) induces any customer of
Carrier One, the Company or any of the Subsidiaries to breach or terminate a
contract with Carrier One, the Company or any of the Subsidiaries.
"COMPANY" means Carrier1 International S.A., a Luxembourg SOCIETE
ANONYME, and any corporation into which it is converted or merged into.
"CONFIDENTIAL INFORMATION" means all information, in any form or medium,
that relates to the business, products, services, research or development of
Carrier One, the Company or any of the Subsidiaries, and its and their suppliers
or
15
customers, including: (a) compilations of data (whether in whole or in part)
and all analyses, processes, methods, techniques, systems, formulae,
research, records, reports, manuals, documentation and models relating
thereto; (b) computer software, documentation and databases (whether existing
or in various stages of research and development); (c) identities of and
information about Carrier One, the Company's and the Subsidiaries' suppliers
and customers and their confidential information, suppliers and customers;
(d) inventions, designs, developments, devices, methods and processes
(whether or not reduced to practice); (e) internal business information,
including, without limitation, information relating to strategic and staffing
plans and practices (including information with respect to potential
acquisition targets), marketing, promotional and sales plans, practices or
programs, training practices and programs, cost and pricing structure, and
accounting and business methods; (f) all copyrightable works; and (g) all
similar or related information. Notwithstanding the immediately foregoing
sentence, the term "Confidential Information" shall not include information
with respect to a particular Management Holder which (i) becomes generally
available to the public other than as a result of disclosure by such
Management Holder, or (ii) becomes available to such Management Holder on a
non-confidential basis from a source other than Carrier One, the Company or
the Subsidiaries, or (iii) which is generally known in the telecommunications
industry and pertains to activities or business not specific to Carrier One,
the Company or any of the Subsidiaries. Information shall not be deemed to be
excluded from the meaning of "Confidential Information" merely because
individual portions or components of such information are publicly known or
available.
"CONSENTS" means all filings, notices, licenses, consents,
authorizations, accreditations, waivers, approvals and the like.
"GOVERNMENTAL ENTITY" means Luxembourg or any other nation, any state
or other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government
including any international regulatory or trade body.
"INDIRECT OWNER" means with respect to each Person which is (i) a
corporation or any similar entity, each shareholder and each Indirect Owner
of such shareholder; (ii) a limited liability company or any similar entity,
each member and each Indirect Owner of such member; (iii) a partnership
(whether limited or general) or similar entity, each partner and each
Indirect Owner of such partner; and (iv) a trust or any similar entity, each
beneficiary who has the legal right (or whose spouse has the present legal
right) to demand a distribution of the trust's interest and each Indirect
Owner of such beneficiary or such beneficiary's spouse (whether in such
beneficiary's
16
capacity as a beneficiary, trustee or otherwise and whether by revocation or
amendment of such trust or otherwise).
"INSTITUTIONAL INVESTOR" means Providence Equity Partners L.P.,
Providence Equity Partners II L.P., Primus Capital Fund IV Limited
Partnership and Primus Executive Fund Limited Partnership, and their
respective successors and assigns.
"LLC SECURITIES" means (i) the units of any class issued by Carrier
One, (ii) any options, warrants or other rights to purchase or acquire any
units and (iii) any other equity securities issued from time to time by
Carrier One.
"MANAGEMENT HOLDER" means each of Stig Johansson, Xxxxxxx Xxxxx,
Xxxxxx X. Xxxxx, Xxxx van Ophem, Xxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxx,
Xxxxxx Xxxxxxx, Xxxxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxx
Xxxxxxxxx, Jan van Veldhoven, Xxxxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxxxx,
Xxxx Xxxx, Xxx Xxxxxx, Harm Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxx
Xxxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxxxxxxxx
Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxxxxxxxxx, Xxxxx
Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxx
Xxxxx, Gertfried Xxxx, Xxxxxx Xxxxxx, Xxxxxxx XxXxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxx Xxxxxxxx, Xxxx Xxxxxxxxxxx and, if so designated, any Additional
Securityholder pursuant to SECTION 23, if applicable, and their respective
successors and assigns.
"MANAGEMENT SECURITIES" means Securityholder Securities held by
Management Holders.
"NON-COMPETE PERIOD" shall mean with respect to a particular
Management Holder, the period commencing on the date of this Agreement and
continuing:
(i) if such Management Holder's employment is terminated by Carrier One, the
Company or any of its Subsidiaries for Cause or by such Management Holder
voluntarily, until the end of the eighteenth month after the date of such
termination; or
(ii) if such Management Holder's employment is terminated by Carrier One, the
Company or any of its Subsidiaries not for Cause, until the earlier of (x) the
end of the eighteenth month after the date of such termination or (y) for so
long as Carrier One, the Company or any of its Subsidiaries
17
continues payment of such Holder's base salary (at the annual rate in effect
prior to such termination.
"OPTION AGREEMENTS" shall mean the Option Agreements between the
Company or one or more of its Subsidiaries and each Management Holder and any
other Person who becomes a party in accordance with the terms thereof.
"PUBLIC SALE" means any sale of Securityholder Securities in a public
offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 adopted
under the Securities Act, or made pursuant comparable procedures under any
other applicable securities laws and regulations in any non-U.S. jurisdiction.
"REGISTRATION RIGHTS AGREEMENT" has the meaning given such term in
the Securities Purchase Agreement.
"RELATED AGREEMENTS" means the Articles, the Securities Purchase
Agreement, the Registration Rights Agreement and the Option Agreements.
"SALE OF THE COMPANY" or "SALE OF THE LLC" shall mean a single
transaction or group of related transactions between the Company and/or the
Securityholders and/or the direct or indirect members or Shareholders of the
Securityholder and any Person or group of related Persons pursuant to which
such Person or group of related Persons will (i) acquire Securityholder
Securities or equity securities of Carrier One, as the case may be,
possessing the voting power to elect a majority of the Board of Directors of
the relevant company, (ii) consummate a merger or consolidation as a result
of which the Securityholders who own Securityholder Securities or other
voting securities or the members or shareholders of Carrier One who own
voting equity securities of Carrier One prior to such transaction(s) shall
own less than 50% of the voting securities of the surviving Person or its
parent or (iii) acquire (by sale, merger, consolidation or similar event) all
or substantially all of the Company's assets or the assets of Carrier One, as
applicable, (determined on a consolidated basis) including by way of a
transfer of shares of one or more Subsidiaries.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIES PURCHASE AGREEMENT" has the meaning given such term in
the recitals.
18
"SECURITYHOLDER" has the meaning provided in the recitals, and shall
include any Additional Securityholder pursuant to SECTION 23, and their
respective successors and assigns.
"SECURITYHOLDER SECURITIES" means (i) any Shares purchased or otherwise
acquired by any Securityholder, (ii) any options, warrants or other rights to
purchase or otherwise acquire any Shares (whether granted by the Company or a
third party) and (iii) any equity securities issued or issuable or convertible
into or exchangeable for, directly or indirectly to any of the Shares or other
securities referred to in clause (i) and (ii) above by way of a dividend or
split or exchange or in connection with a combination of Shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular Securityholder Securities, such securities shall cease to be
Securityholder Securities when they have been disposed of in a Public Sale (and
otherwise in compliance with the applicable provision of this Agreement) or
repurchased by the Company or a Subsidiary.
"SUBSIDIARY" has the meaning given such term in the Securities Purchase
Agreement.
"TRADING VOLUME" shall mean the average weekly trading volume of
Securityholder Securities over the preceding 13-week period annualized.
Section 11. AMENDMENT AND WAIVER. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or any Securityholder unless such modification,
amendment or waiver is approved in writing by the holders of at least a majority
of the Securityholder Securities then in existence, it being understood that
such approval shall be binding upon all Securityholders; provided, that no such
amendment or action which materially adversely affects any one Securityholder,
as such, vis-a-vis the other Securityholders, as such, shall be effective
against the first Securityholder without the prior written consent of such
Securityholder. The failure of any party to enforce any of the provisions of
this Agreement shall in no way be construed as a waiver of such provisions and
shall not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
Section 12. REPRESENTATIONS AND WARRANTIES OF THE SECURITYHOLDERS. Each
Securityholder represents and warrants (as to itself but not as to any other
party) upon becoming a party hereto as follows:
19
(a) INVESTMENT INTENT; SOPHISTICATED INVESTOR. Such Securityholder
(A) is acquiring the Securityholder Securities for purposes of investment and
without a view toward distribution thereof in violation of applicable
securities laws, (B) is a sophisticated investor for purposes of applicable
U.S. federal and state securities laws and regulations, (C) acknowledges that
the Securityholder Securities have not been listed on any exchange nor
registered or qualified under the Securities Act or applicable state
securities laws or any other applicable securities laws and regulations in
any non-U.S. jurisdiction, may not be transferred absent such registration or
qualification or the availability of an exemption from registration or
qualification and (D) acknowledges that the Securityholder Securities are
speculative and illiquid and may only be transferred in compliance with all
applicable securities laws and regulations and with the approval of the Board
of Directors of the Company, and such Securityholder is in a position to bear
the risks associated therewith; provided that nothing contained in this
SECTION 12 shall prevent any Securityholder or its direct or indirect
transferee from transferring such securities in compliance with Rule 144 or
Regulation S of the Securities Act or comparable provisions of applicable
securities laws and regulations in a non-U.S. jurisdiction, and in accordance
with the provisions of the Registration Rights Agreement and this Agreement.
(b) NO BROKER'S OR FINDER'S FEES. Such Securityholder is not
obligated to pay any broker's or finder's fees in connection with the
consummation of the transactions contemplated by the Securities Purchase
Agreement by reason of any arrangement made by the Securityholder or any of
its affiliates.
(c) AUTHORIZATION; NO BREACH. The execution, delivery and performance of
this Agreement and the other Related Agreements to which such Securityholder is
a party have been duly authorized by or on behalf of such Securityholder. Each
Related Agreement to which such Securityholder is a party constitutes a valid
and binding obligation of such Securityholder, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, liquidation, reorganization,
moratorium, fraudulent transfer, or other similar laws affecting creditor's
rights generally from time to time in effect and subject, as to enforceability,
to general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law. The execution and delivery by
such Securityholder of each Related Agreement to which it is a party, and the
fulfillment of and compliance with the respective terms hereof and thereof by
such Securityholder, do not and will not (a) conflict with or result in a breach
of the terms, conditions or provisions of, (b)
20
result in a violation of, or (c) require any Consent that has not been
obtained or made of, from, with or to, any Person pursuant to, the
constituent documents of such Securityholder, or any material agreement,
instrument or other documents, or any applicable material requirement of law
to which such Securityholder of any Affiliate is bound or to which any of
such Persons or its assets is subject.
(d) RECORD OWNER; PROXY. Such Securityholder (i) is or will become the
record owner of the number of Securityholder Securities notified to or agreed
with the Company on or prior to the date hereof and (ii) is not a party to any
proxy, voting trust
or other agreement which is inconsistent with, conflicts with or violates any
provision of this Agreement. No Securityholder shall grant any proxy or become
party to any voting trust or other agreement which is inconsistent with,
conflicts with or violates any provision of this Agreement.
(e) LITIGATION. There is no action, suit, proceeding or investigation
pending, or to the best of knowledge of the Securityholder, currently
threatened, against or by such Securityholder which questions the validity of
this Agreement or any of the Related Agreements or the right of such
Securityholder to enter into any of them, or to consummate the transactions
contemplated hereby or thereby, or which might result, either individually or in
the aggregate, in any material adverse change in the assets, condition, affairs
or prospects of the Company or its Subsidiaries, financially or otherwise, nor
is such Securityholder aware that there is any basis for the foregoing. The
foregoing includes, without limitation, actions pending or threatened (or any
basis therefor known to such Securityholder) involving the prior employment of
Securityholder, or the existing or prior consulting relationships of
Securityholder, the use by such Securityholder in connection with the business
of the Company and its Subsidiaries of any information or techniques allegedly
proprietary to any of such Securityholder's prior employers or any of the
entities with which they have had or do have a consulting relationship, or their
obligations under any agreements with prior employers or under prior existing
consulting agreements. Such Securityholder has never been convicted of, plead
guilty or plead NOLO CONTENDERE to any crime other than a misdemeanor traffic
violation and during the past five years has not been a party to any civil
litigation.
Section 13. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
21
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of any other provision of
this Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had not been contained herein.
Section 14. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be
enforceable by the Company and its successors and permitted assigns and the
Securityholders and any subsequent holders of Securityholder Securities which
become a party to this Agreement and the respective successors and permitted
assigns of each of them, so long as they hold Securityholder Securities.
Carrier One may assign all or any portion of its rights or obligations under
this Agreement to any Affiliate or member of Carrier One, any Institutional
Investor or any partner of an Institutional Investor which acquires
Securityholder Securities. The Company may not assign any of its obligations
under this Agreement (other than in connection with a merger, consolidation
or other form or reorganization permitted by other sections of this
Agreement) without the written consent of the Persons holding not less than a
majority of the outstanding Securityholder Securities.
Section 15. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
Section 16. REINCORPORATION, MERGER, ETC. If Carrier One shall
determine that the Company should reincorporate in another jurisdiction,
merge with or into another entity, transfer substantially all of its assets
to another entity or participate in any other corporate reorganization or
readjustment (any such transaction a "REORGANIZATION"), Securityholder shall
take such actions as may be requested by Carrier One or the Company to effect
such a Reorganization; PROVIDED that Securityholder shall not be required to
take such actions unless Securityholder's proportionate interest in the
assets and earnings of any entity that results from such Reorganization is
the same (except for de minimis differences) as such Securityholder's
interest in the assets and earnings of the Company immediately prior to such
Reorganization.
Section 17. REMEDIES. Each party to this Agreement shall be entitled
to enforce its rights under this Agreement specifically, to recover damages
by reason
22
of any breach of any provision of this Agreement and to exercise all other
rights existing in its favor. The parties hereto agree and acknowledge that
money damages would not be an adequate remedy for any breach of the
provisions of the Agreement and that the Company or any Securityholder may in
its sole discretion apply to any court of law or equity or competent
jurisdiction for specific performance and/or injunctive relief (without
posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
Section 18. NOTICES. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed first class
mail (postage prepaid) or sent by reputable overnight courier service
(charges prepaid) or sent by telecopy to the Company at the address set forth
below and to any other recipient at the address indicated on the Schedule
attached hereto or at such address or to the attention of such other Person
as the recipient party has specified by prior written notice to the sending
party. Notices shall be deemed to have been given hereunder when delivered
personally, when answer back is confirmed and sent by telecopy, three days
after deposit in the U.S. mail and one day after deposit with a reputable
overnight courier service.
Carrier1 International S.A.
x/x Xxxxxxx Xxxxxxxxxxxxx XxxX
Xxxxxxxxxxxxxx
0000 Xxxxxx, Xxxxxxxxxxx
Attention:
Facsimile: 01/ 000 00 00
Telephone: 01/ 000 00 00
With a copy to:
Carrier One, LLC
000 Xxxxx Xxxxxx
00 Xxxxxxx Xxxxx
Xxxxxxxxxx XX 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Section 19. GOVERNING LAW; JURISDICTION. (a) This Agreement shall be
governed by, and construed in accordance with, the laws of Luxembourg, without
giving effect to any choice of law or conflict of law rules or provisions that
would cause the application of the laws of any jurisdiction other than
Luxembourg.
23
(b) The courts of England have jurisdiction to hear and decide any suit,
action or proceedings, and to settle any disputes, which may arise out of or in
connection with this Agreement (respectively, "PROCEEDINGS" and "DISPUTES") and
for this purpose each party irrevocably submits to the jurisdiction of the
Courts of England.
(c) Paragraph (b) above does not prevent any party to this Agreement from
taking proceedings relating to Proceedings or Disputes in any other courts with
jurisdiction.
(d) Each party irrevocably waives any objection which it might at any time
have to the courts of England being nominated as the forum to hear and decide
any Proceedings and to settle any disputes and agrees not to claim that the
courts of England are not a convenient or appropriate forum.
Section 20. DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. Reference to any agreement,
document or instrument means such agreement, document or instrument as
amended or otherwise modified from time to time in accordance with the terms
thereof and, if applicable, hereof. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specified herein, the term "or" has the
inclusive meaning represented by the term "and/or" and the term "including"
is not limiting. All references as to "Sections", "Subsections", "Articles",
"Schedules" and "Exhibits" shall be to Sections, Subsections, Articles,
Schedules and Exhibits, respectively, of this Agreement unless otherwise
specifically provided.
Section 21. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
Section 22. NO THIRD PARTY BENEFICIARIES. This Agreement is not intended
to confer any rights or remedies upon any Person other than the parties hereto
and their successors and permitted assigns.
24
Section 23. COMPLETE AGREEMENT. This Agreement, the Related Agreements,
those documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations by
or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
Section 24. ADDITIONAL SECURITYHOLDER. Notwithstanding the terms of
SECTION 11, an Additional Purchaser (as defined in ARTICLE XII of the Securities
Purchase Agreement) may become a party to this Agreement and shall be bound by
the terms of this Agreement upon agreement between the Company, Carrier One and
such Additional Purchaser, in which case (I) this Agreement hereof shall be
amended to reflect such Additional Purchaser as Securityholder (the "Additional
Securityholder") by a separate letter agreement signed by the Company, Carrier
One and such Additional Purchaser without further notice to the Management
Holders, and (II) where such additional Securityholder is an employee of Carrier
One, the Company and/or its Subsidiaries, such Additional Securityholder shall
be deemed to be included in the term Management Holder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
25
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
CARRIER1 INTERNATIONAL S.A.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
Name:
Title:
CARRIER ONE, LLC
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
Name:
Title:
26
/s/ Kees van Ophem
-------------------------
Kees van Ophem
[Signature page to Securityholders' Agreement]
27
/s/ Xxxx Xxxxxx
-------------------------
Xxxx Xxxxxx
[Signature page to Securityholders' Agreement]
27
/s/ Xxxxxx Xxxxx
-------------------------
Xxxxxx Xxxxx
[Signature page to Securityholders' Agreement]
27
/s/ Xxxxxx Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx
[Signature page to Securityholders' Agreement]
27
/s/ Xxxxx Xxxxxxx
-------------------------
Xxxxx Xxxxxxx
[Signature page to Securityholders' Agreement]
27
/s/ Xxxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx
[Signature page to Securityholders' Agreement]
27
/s/ Stig Johansson
-------------------------
Stig Johansson
[Signature page to Securityholders' Agreement]
27
