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EXHIBIT 1.1
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT (this "Agreement") is entered into as of
_________, 1998, among CYBERNET INTERNET SERVICES INTERNATIONAL, INC., a
Delaware corporation (the "Company"), and BERLINER EFFEKTENBANK AG, a German
corporation ("BEB").
BACKGROUND
The Company proposes to issue and sell through BEB 1,500,000 shares
(the "Securities") of its common stock par value $ 0.001 per share ("Common
Stock") on a "best efforts, all-or-none" basis (the "Offering").
In furtherance of the foregoing, the Company and BEB hereby agree as
follows:
SECTION 1
SALE OF SECURITIES
The Company proposes to issue and sell the Securities to the public
through BEB, as underwriter, at an offering price of US$____ per share in
consideration for which the Company shall pay BEB, at the Closing (as defined
below), a commission equal to five percent (5 %) of the aggregate purchase price
of the Securities.
SECTION 2
PAYMENT AND DELIVERY
2.1. The Company hereby appoints BEB as its exclusive agent (subject
to BEB's right to designate selected dealers who may participate in the
Offering) for a period (the "Offering Period") of forty-five (45) days from the
date on which the Registration Statement (as hereinafter defined) becomes
effective (the "Effective Date"), to sell the Securities on a "best-efforts,
all-or-none" basis; provided however, the Company and BEB, by their mutual
written consent, may extend the Offering Period for an additional period of up
to thirty (30) days. The Company and BEB, at any time, may agree to terminate
the Offering prior to the end of the Offering Period. BEB, on the basis of the
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representations and warranties contained herein, and subject to the terms and
conditions set forth herein, accepts such appointment and agrees to use its best
efforts to find purchasers for the Securities. BEB, as agent for the Company,
shall offer the shares of Common Stock to the public at a price of US$ _______
per share. If, at or prior to the end of the Offering Period, subscriptions are
received aggregating more than the Securities, then BEB shall allocate the
Securities among the subscribers on a first come first served basis. In the
event the Offering is over subscribed the Company will sell up to an additional
300,000 shares in the Offering, on the same terms and at the same price.
2.2 Until all of the Securities have been subscribed and paid for,
all subscription amounts shall be deposited no later than noon on the business
day next following their receipt by BEB or any participating Selected Dealer (as
hereinafter defined), directly into a escrow account which shall be established
pursuant to an escrow agreement substantially in the form annexed hereto as
Exhibit A (the "Escrow Agreement")
2.3 Promptly after the Effective Date, (i) the Company shall
deliver to its transfer agent (the "Transfer Agent") certificates which will be
used to represent the Securities to be sold hereunder through BEB; and (ii) the
Company shall instruct the Transfer Agent to deliver a certificate evidencing
the Securities (or shall electronically transfer evidence of the Securities) to
Depositary Trust Company for deposit into the account of BEB's clearing firm
for the benefit of BEB on the Closing Date.
2.4 If all of the Securities are not sold within the Offering
Period, this Agreement automatically shall terminate, the Securities held by BEB
shall be returned to the Transfer Agent, and all amounts in the Escrow Account
shall be distributed in accordance with the Escrow Agreement.
2.5 If all of the Securities have been subscribed for and payment
therefor has been tendered prior to the expiration of the Offering Period, BEB
promptly shall give written notice (the "Notice") to the Company and the
Transfer Agent so indicating and setting forth (i) the amount of BEB's
commission, (ii) the time and date (which date shall be no later than
seventy-five (75) days after the Effective Date) on which the closing (the
"Closing") shall take place (the "Closing Date"), and (iii) a written statement
reflecting each subscription which identifies, among other things, the name and
address of each subscriber, the number of Securities allocated to each
subscriber, the
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amount tendered as payment therefor, and, if the provisions of Section 2.7 below
are applicable, the amount equal to the aggregate price of that number of
Securities for which such subscription is not being accepted. The Closing shall
take place at the offices of BEB, Xxxxxxxxxxxxxx 000, 00000 Xxxxxx, Xxxxxxx, or
at such other place as BEB and the Company shall agree.
2.6 At the Closing, (i) the escrow agent shall deliver and remit to
the Company from the escrow account the purchase price of such Securities, less
BEB's commission, and (ii) the Company shall instruct Depositary Trust Company
to deposit the Securities into the account of BEB's clearing firm for the
benefit of BEB. Upon receipt of the Securities, BEB shall deliver to each
purchaser certificates representing the Securities sold to each purchaser (or
shall electronically transfer evidence of ownership to each such purchaser).
2.7 If, prior to the end of the Offering Period, subscriptions are
received aggregating more than the Securities, then (i) BEB shall allocate the
Securities among the subscribers on a first come first served basis and (ii) the
escrow agent shall remit to those subscribers whose subscriptions are not being
accepted, in whole or in part, an amount of money equal to the price of that
number of Securities for which such subscription is not being accepted.
SECTION 3
OFFERING OF THE SECURITIES ON BEHALF OF THE COMPANY
3.1. In offering the Securities for sale, BEB shall offer the
Securities solely as agent for the Company, and such offering shall be made upon
the terms and subject to the conditions set forth in the Registration Statement
and Prospectus (each as hereinafter defined). BEB shall commence offering the
Securities for sale as agent for the Company as soon after the Effective Date as
BEB may deem advisable; provided, however, if BEB does not commence such
offering within three (3) business days after the Effective Date, it promptly
shall so advise the Company and the Securities and Exchange Commission (the
"Commission").
3.2. In accordance with the applicable provisions of the
Registration Statement (as hereinafter defined) and this Agreement, BEB may
offer and sell the Securities for the account of the Company through registered
dealers selected by BEB (the "Selected Dealers"), and may allow such concessions
(out of the underwriting commission) to the Selected Dealers as BEB may
determine. All
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sales by Selected Dealers shall be on behalf of the Company. BEB shall have
the authority to appoint Selected Dealers as agents for the Company; provided,
however, no Selected Dealer shall be appointed by BEB unless such Selected
Dealer has entered into a Selected Dealers Agreement in the form approved by the
Company. In no event shall Selected Dealers be agents or sub-agents of BEB.
Except as herein provided, the Company shall not appoint any other agents in
offering the Securities for sale.
3.3. BEB represents, warrants, and covenants that, as part of the
distribution of the Securities, it has not offered or sold, and will not, offer,
sell, or deliver, directly or indirectly, any of the Securities or distribute
any prospectus relating to the offering of the Securities within the United
States or to any U.S. Person (as defined below). In addition, BEB has agreed
that it will offer to sell Securities only in compliance with all relevant
requirements of any applicable laws. As used herein, the term "U.S. Person"
means any resident or national of the United States, any corporation,
partnership, or other entity created or organized in or under the laws of the
United States, or any estate or trust the income of which is subject to United
States income taxation regardless of the source of its income (other than the
foreign branch of any U.S. Person), and includes any United States branch of a
person other than a U.S. Person.
3.4. BEB agrees that (i) it will not offer or sell any Securities
to persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purpose of their businesses or otherwise in
circumstances which will not involve an offer to the public in the United
Kingdom within the meaning of the Public Offers of the Securities Regulations
1995 ("the Regulations"); (ii) it will comply with all applicable provisions of
the Financial Services Xxx 0000 and the Regulations with respect to anything
done by it in relation to the Securities in, from, or otherwise involving the
United Kingdom; and (iii) it will only issue or pass on to any person in the
United Kingdom any document received by it in connection with the offer of the
Securities if that person is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemption) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants that:
4.1. A registration statement (File No. 333-63755) on Form S-1
relating to the Offering, including a form of prospectus subject to completion,
copies of which have heretofore been delivered to BEB has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations promulgated thereunder by the
Commission (the "Rules and Regulations"), and has been filed with the Commission
under the Act. In addition, one or more amendments to such registration
statement may have been so filed. After the execution of this Agreement, (i) if
the Commission has declared such registration statement (as it may have been
amended) to be effective under the Act, then the Company, if required, will file
with the Commission a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall have
been filed, in such registration statement), with such changes or insertions as
are required by Rule 430A under the Act or permitted by Rule 424(b) under the
Act, and as has been furnished to and approved by BEB prior to the execution of
this Agreement; or (ii) if the Commission has not declared such registration
statement (as it may have been amended) to be effective under the Act, then the
Company will file with the Commission an amendment to such registration
statement, including a form of prospectus, a copy of which amendment has been
furnished to and approved by BEB prior to the execution of this Agreement. As
used in this Agreement, the term "Registration Statement" means such
registration statement, as amended at the time when it was or is declared
effective, including all financial schedules and exhibits thereto, and including
any information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectus (as defined below); the term "Preliminary Prospectus"
means each prospectus subject to completion, filed with such registration
statement or any amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement or any amendment
thereto at the time it was or is declared effective); and the term "Prospectus"
means the prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act, or, if no prospectus is required to be filed pursuant to said
Rule 424(b), such term means the Prospectus included in the Registration
Statement; except that if such registration statement or prospectus is amended
or such prospectus is supplemented after the effective date of such registration
statement and prior to the Closing Date, then the term "Registration Statement"
shall include such registration statement as so amended, and the term
"Prospectus" shall include such prospectus as so amended or supplemented, or
both, as the case may be.
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4.2. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
4.3. The Company and its subsidiaries as set forth in the Prospectus
(collectively, "Subsidiaries"), each has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, with full power and authority (corporate and other) to own or
lease its properties and to conduct its business as described in the Prospectus,
and is duly qualified to do business as a foreign corporation and is in good
standing as a foreign corporation in all other jurisdictions in which the nature
of its businesses or the character or location of its properties requires such
qualification, except where failure to so qualify will not materially affect the
Company's business, properties, or financial condition.
4.4. The authorized, issued, and outstanding capital stock of the Company
as of September 30, 1998 is as set forth in the Prospectus under the heading
"Capitalization", and the shares of issued and outstanding capital stock of the
Company set forth thereunder have been duly authorized, validly issued, and are
fully paid and non-assessable. Except as set forth in the Prospectus, no
options, warrants, or other rights to purchase, agreements or other obligations
to issue, or agreements or other rights to convert any obligation into, any
shares of capital stock of the Company have been granted or entered into by the
Company. The capital stock of the Company conforms to all statements relating
thereto contained in the Registration Statement and Prospectus.
4.5. The Securities are duly authorized, and when issued, delivered,
and paid for pursuant to this Agreement, shall be validly issued, fully paid and
non-assessable, and free of pre-emptive rights of any security holder of the
Company. Except as described in the Registration Statement, neither the filing
of the Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of the sale
or transfer of any shares of Common Stock.
4.6. This Agreement has been duly and validly authorized, executed,
and delivered by the Company. The Company has full power and lawful authority to
authorize, issue, and sell the Securities to be sold by it hereunder on the
terms and conditions set forth herein. No consent, approval, authorization, or
other order of any governmental authority is required in connection with
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the authorization, execution, and delivery of this Agreement or with
the authorization, issuance, and sale of the Securities, except as may be
required under the Act or state securities laws.
4.7. Except as described in the Prospectus, (i) neither the Company
nor its Subsidiaries are in violation, breach, or default of or under, and the
consummation of the transactions herein contemplated and the fulfilment of the
terms of this Agreement shall not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge, or encumbrance upon
any of the property or assets of the Company or its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement, or other
agreement or instrument to which the Company or its Subsidiaries are a party or
by which the Company or its Subsidiaries may be bound or to which any of the
property or assets of the Company or its Subsidiaries is subject; and (ii) the
consummation of the transactions contemplated herein and the fulfilment of the
terms of this Agreement shall not result in any violation of the provisions of
the articles of incorporation or the by-laws of the Company or its Subsidiaries,
or any statute, or any applicable order, rule, or regulation of any court,
regulatory authority, or other governmental body having jurisdiction over the
Company or its Subsidiaries.
4.8. Subject to the qualifications stated in the Prospectus, the
Company and its Subsidiaries have good and marketable title to all properties
and assets described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances, or restrictions, except such as are not materially
significant or important in relation to the business of the Company taken as a
whole. All of the material leases and subleases under which the Company or its
Subsidiaries are the lessor or sublessor of properties or assets, or under which
the Company or its Subsidiaries hold properties or assets as lessee or sublessee
as described in the Prospectus, are in full force and effect; except as
described in the Prospectus, neither the Company nor its Subsidiaries are in
default in any material respect with respect to any of the terms or provisions
of any of such leases or subleases, and no claim has been asserted by anyone
adverse to the rights of the Company or its Subsidiaries as lessor, sublessor,
lessee, or sublease under any of such leases or subleases; and the Company or
its Subsidiaries owns or leases all such properties described in the Prospectus
as are necessary to its operations as now conducted and, except as otherwise
stated in the Prospectus, as proposed to be conducted as set forth in the
Prospectus.
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4.9. Schitag Ernst & Young, AG and Ernst & Young, Wirtschaftsprufungs -
und Steuerberatungsgesellschaft MBH, have given their reports on certain
financial statements filed and to be filed with the Commission as a part of the
Registration Statement which are incorporated in the Prospectus; with respect
to the Company and its Subsidiaries, Schitag Ernst & Young, AG and Ernst &
Young, Wirtschaftsprufungs - und Steuerberatungsgesellschaft MBH, are
independent public accounting firms as required by the Act and the Rules and
Regulations.
4.10. The financial statements, together with related notes and
schedules, if any, set forth in the Prospectus and the Registration Statement
fairly present the financial position and results of operations and changes in
cash flow position of the Company and its Subsidiaries on the basis stated in
the Registration Statement at the respective dates and for the respective
periods to which they apply. Said statements and related notes and schedules
have been prepared in accordance with generally accepted accounting principles
applied on a basis which is consistent during the periods involved.
4.11. Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set forth in
or contemplated by the Prospectus (i) neither the Company nor its Subsidiaries
have incurred any liabilities or obligations, direct or contingent, not in the
ordinary course of business, or entered into any transaction not in the ordinary
course of business, which is material to the business of the Company or its
Subsidiaries; (ii) there has not been any change in the capital stock of the
Company or its Subsidiaries, any incurrence of short-term or long-term debt by
the Company or its Subsidiaries, any issuance of options, warrants, or other
rights to purchase the capital stock of the Company or its Subsidiaries, or any
adverse change or any development involving, so far as the Company can now
reasonably foresee, a prospective adverse change in the condition (financial or
other), net worth, results of operations, business, key personnel or properties
of the Company or its Subsidiaries which would be material to the business or
financial condition of the Company; and (iii) neither the Company nor its
Subsidiaries have become a party to, and neither the business nor the property
of the Company or its Subsidiaries have become the subject of, any material
litigation, whether or not in the ordinary of business.
4.12. Except as set forth in the Prospectus, there is not now
pending or threatened any action, suit, or proceeding in which the Company or
its Subsidiaries is a party, before or by any court or governmental agency or
body, which might result in any material adverse change in the condition
(financial or other), business, net worth, or properties of the Company or its
Subsidiaries, nor are
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there any pending or threatened actions, suits, or proceedings related to
environmental matters or discrimination on the basis of age, sex, religion, or
race; and no labour disputes involving the employees of the Company or its
Subsidiaries exist or are imminent which might be expected to adversely affect
the conduct of the business, property, or operations of the Company or its
Subsidiaries or the financial condition or results of operations of the Company
or its Subsidiaries.
4.13. Except as disclosed in the Prospectus, the Company and its
Subsidiaries have sufficient licenses, permits, and other governmental
authorizations currently required for the conduct of their business or the
ownership of their properties as described in the Prospectus and are in all
material respects complying therewith. In addition, except as otherwise
described in the Prospectus, the Company and its Subsidiaries own or possess
adequate rights to use all material patents, patent applications, trademarks,
service marks, trade-names, trademark registrations, service xxxx registrations,
copyrights, and licenses necessary for the conduct of such business, and have
not received any notice of conflict with the asserted rights of others in
respect thereof. To the Company's knowledge, none of the activities or
businesses of the Company or its Subsidiaries are in violation of, or cause the
Company or its Subsidiaries to violate, any law, rule, regulation, or order of
the United States or any state, county, or locality, or any agency or body of
the United States or any state, county, or locality, the violation of which
would have a material adverse impact upon the condition (financial or
otherwise), business, property, results of operations, or net worth of the
Company or its Subsidiaries.
4.14. Neither the Company nor its Subsidiaries, directly or
indirectly, (i) in violation of law, have made any contributions to any
candidate for political office or failed to disclose fully any such
contributions, or (ii) have made any payment to any state, federal, or foreign
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments or contributions required or allowed by
applicable law. The Company's internal accounting controls and procedures are
sufficient to cause the Company to comply in all material respects with the
Foreign Corrupt Practices Act of 1977, as amended.
4.15. All contracts and other documents of the Company and its
Subsidiaries which are, under the Rules and Regulations, required to be filed as
exhibits to the Registration Statement have been so filed.
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4.16. The Company and its Subsidiaries, directly or indirectly, have
not taken and shall not take any action designed to cause or result in, or which
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Securities hereby.
4.17. Except for the Subsidiaries, the Company has no subsidiaries
or investments in, and has not made any loans or advances to, any other
corporation, partnership, or other entity.
4.18. The Company has not entered into any agreement or
understanding pursuant to which any person, either directly or indirectly, is
entitled to compensation from the Company or any principal stockholders,
officers, or directors of the Company for services as a finder in connection
with the offering of Securities contemplated by this Agreement.
SECTION 5
COVENANTS OF THE COMPANY
The Company covenants and agrees with BEB that:
5.1. The Company shall use its best efforts to cause the
Registration Statement to become effective. If required, the Company shall file
the Prospectus and any amendment or supplement thereto with the Commission in
the manner and within the time period required by Rule 424(b) under the Act.
Upon notification from the Commission that the Registration Statement has become
effective, the Company shall so advise BEB. The Company, at no time, whether
before or after the Effective Date, shall file any amendment to the Registration
Statement or amendment or supplement to the Prospectus without first advising
BEB of such filing and without furnishing BEB with a copy thereof. No such
amendment or supplement shall be filed if BEB or BEB's counsel has objected in
writing to such filing or if such filing is not in compliance with the Act and
the Rules and Regulations. At the request of BEB, made any time prior to the
expiration of the Offering Period, the Company shall prepare and file with the
Commission, promptly upon BEB's request, any amendments or supplements to the
Registration Statement or Prospectus in compliance with the Act which, in BEB's
opinion, may be necessary or advisable in connection with the sale of the
Securities.
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5.2. As soon as the Company is advised thereof, the Company shall
advise BEB and confirm such advice in writing (i) of the receipt of any comments
of the Commission with respect to any filing in connection with the Registration
Statement or supplement to the Prospectus, (ii) of the effectiveness of any
post-effective amendment to the Registration Statement, (iii) of the filing of
any supplement to the Prospectus or any amended Prospectus, (iv) of any request
made by the Commission for amendment of the Registration Statement, for
supplementing of the Prospectus, or for additional information with respect
thereto, or (v) of the issuance (or threat thereof) by the Commission or any
state or regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement or any order preventing or
suspending the use of any Preliminary Prospectus or suspending the qualification
of the Securities for offering in any jurisdiction, or of the institution of any
proceedings for any of such purposes. The Company shall use its best efforts to
prevent the issuance of any such order and, if issued, to obtain the lifting
thereof as soon as possible.
5.3. The Company has caused to be delivered to BEB copies of each
Preliminary Prospectus, and the Company has consented and hereby consents to the
use of such copies for the purposes permitted by the Act. The Company authorizes
BEB and the Selected Dealers (collectively, the "Dealers") to use the Prospectus
in connection with the sale of the Securities for such period as, in the opinion
of counsel to BEB, the use thereof is required to comply with the applicable
provisions of the Act and the Rules and Regulations. If, at any time within such
period as a Prospectus is required under the Act to be delivered in connection
with sales by any of the Dealers, (i) it shall be necessary to amend or
supplement the Prospectus to comply with law or with the Rules and Regulations,
or (ii) any event happens of which the Company has knowledge and which
materially affects the Company or the securities of the Company, or which, in
the opinion of counsel for the Company or counsel for BEB, should be set forth
in an amendment to the Registration Statement or an amendment or supplement to
the Prospectus in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is required to be delivered to
a purchaser of the Securities, not then misleading in any material respect, then
the Company promptly will notify BEB and forthwith prepare and furnish to BEB
copies of such amended Registration Statement or Prospectus or of such
supplement to be attached to the Prospectus, in such quantities as BEB may
reasonably request, in order that the Registration Statement and Prospectus, as
so amended or supplemented, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements in the Registration Statement and Prospectus, in the light of the
circumstances
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under which they are made, not misleading in any material respect. The
preparation and furnishing of any such amendment or supplement to the
Registration Statement or Prospectus shall be without expense to BEB.
5.4. The Company shall comply with the Act, the Rules and
Regulations, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder, in connection with
the offering and issuance of the Securities.
5.5. On the Effective Date and at all times subsequent thereto up to
the Closing Date, (i) the Registration Statement and Prospectus shall conform in
all material respects to the requirements of the Act and the Rules and
Regulations; and (ii) neither the Registration Statement nor the Prospectus
shall include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make statements
therein not misleading; provided, however, the Company makes no representations,
warranties, or agreements as to information contained in or omitted from the
Registration Statement of Prospectus in reliance upon, and in conformity with,
information furnished to the Company by or on behalf of BEB.
5.6. The Company shall use its best efforts (i) to cause a
registration statement under the Exchange Act to be declared effective
concurrently with the completion of the Offering and shall notify BEB, in
writing, immediately upon the effectiveness of such registration statement, and
(ii) if requested by BEB, to obtain and keep current a listing in the Standard &
Poor's Corporation Records, Standard and Poor's Monthly Stock Guide, and Xxxxx'x
Industrial OTC Manual, and to have the Company listed in such reports for a
period of not less than ten (10) years from the Closing Date.
5.7. For so long as the Company is a reporting company under either
Section 12(g) or 15(d) of the Exchange Act, the Company, at its expense, shall
furnish to its stockholders an annual report (including financial statements
audited by independent public accountants) in reasonable detail and, at its
expense, shall furnish to BEB during the period ending five (5) years from the
date hereof, (i) as soon as practicable after the end of each fiscal year, a
balance sheet of the Company and any of its subsidiaries, as of the end of such
fiscal year, together with statements of income, surplus, and cash flow of the
Company and any subsidiaries for such fiscal year, all in reasonable detail and
accompanied by a copy of the certificate or report thereon of independent
accountants; (ii) as soon as practicable after the end of each of the first
three (3) fiscal quarters of each fiscal year, consolidated
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summary financial information of the Company for each such quarter in reasonable
detail; (iii) as soon as they are available, a copy of all reports (financial or
other) mailed to security holders; (iv) as soon as they are available, a copy of
all reports and financial statements furnished to or filed with the Commission
or any securities exchange or automated quotation system on which any class of
securities of the Company is listed, except such reports and financial
statements which may have been granted "confidential treatment" under the
Exchange Act or under any other applicable law, rule, or regulation; and (v)
such other information as BEB, from time to time, may request, but only to the
extent such information is not material, non-public information. In the event
the Company has an active subsidiary or subsidiaries, such financial statements
referred to above will be on a consolidated basis to the extent the accounts of
the Company and its subsidiary or subsidiaries are consolidated in reports
furnished to its stockholders generally.
5.8. The Company shall comply with all periodic reporting and proxy
solicitation requirements under the Exchange Act.
5.9. The Company shall deliver to BEB on or before the Closing Date
two (2) signed copies of the Registration Statement, including all financial
statements and exhibits filed therewith and all amendments thereto, and shall
deliver to BEB such number of conformed copies of the Registration Statement,
including such financial statements (but without exhibits) and all amendments
thereto, as BEB may request. The Company shall deliver to or upon the order of
BEB from time to time until the Effective Date, as many copies of any
Preliminary Prospectus filed with the Commission prior to the Effective Date as
BEB may request. The Company shall deliver to BEB on the Effective Date and
thereafter for so long as a Prospectus is required to be delivered under the
Act, as many copies of the Prospectus, in final form or as thereafter amended or
supplemented, as BEB from time to time may request.
5.10. The Company shall apply the net proceeds from the sale of the
Securities for the purposes set forth in the Prospectus under the heading "Use
of Proceeds", and shall file such reports with the Commission with respect to
the sales of the Securities and the application of the proceeds therefrom as may
be required under the Act.
5.11. Upon the Effective Date, the Company shall make all filings
required, including registration under the Exchange Act, to obtain the listing
of the Common Stock on the Xxxx Xxxxx xx
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listings for at least ten (10) years from the date of this Agreement. With
respect to the listing of the Common Stock on the Neue Markt at the Frankfurt
Stock Exchange the Company shall cause its stockholders, who are currently part
of or related to the management of the Company, not to sell or offer to sell
their shares or shares held in their names in the Company for a period of six
months beginning on the first day on which shares of the Company's common stock
are traded on the Neue Markt. The Stockholders subject to the restrictions set
forth in the previous sentence are the following person:
Xxxxxxx Xxxx, Xxxxxx Xxxx, Cybermind AG, Xxxxxx Xxxxxx, Xx.
Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxxx Xxxxxxxx, Xxxx Xxxxxxxxxxx, Xxxx
Xxxxxx, Xxxx Xxxxxxxx, Xxxxxx Xxxxxx and Xxxxx Xxxx.
5.13. The Company shall not take, directly or indirectly, any action
designed to, or which constitutes, or which might reasonably be expected to
cause or result in the stabilization or manipulation of the price of the
Securities.
5.14. The Company shall not effect a change in its accounting firm,
except to a internationally recognized accounting firm, for a period of five (5)
years from the Effective Date without the prior written consent of BEB.
5.15. During the Offering Period and for a twenty-five (25) day
period thereafter, the Company shall not issue press releases or engage in other
publicity without the prior written consent of BEB which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, the Company may issue such
press releases to comply with its obligations under applicable securities laws.
5.16. On the Closing Date, all transfer or other taxes (including
franchise, capital stock, or other tax, other than income taxes, imposed by any
jurisdiction), if any, which are required to be paid in connection with the sale
and transfer of the Securities through BEB hereunder shall have been fully paid
or provided for by the Company and all laws imposing such taxes will have been
fully complied with.
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SECTION 6
CONDITIONS TO THE OBLIGATIONS OF BEB
The obligations of BEB to act as agent of the Company hereunder, to
find purchasers for the Securities, and to consummate the transactions
contemplated on the Closing Date, are subject to the accuracy of (as of the date
hereof and as of the Closing Date) and compliance with the covenants,
representations and warranties of the Company contained herein, the performance
by the Company of its obligations hereunder, and the following conditions:
6.1. BEB shall have received notice of the effectiveness of the
Registration Statement not later than 9:30 a.m., New York time, on the day
following the date of this Agreement, or at such later time or on such later
date as to which BEB may agree in writing; on or prior to the Closing Date, no
stop order denying or suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that or a similar purpose shall
have been instituted or shall be pending or, to BEB's knowledge or to the
knowledge of the Company, shall be contemplated by the Commission; and any
request on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of BEB. If required, the Prospectus
shall have been filed with the Commission in the manner and within the time
period required by Rule 424(b) under the Act.
6.2. Prior to the Effective Date and again on and as of the Closing
Date, BEB shall have received a letter from Schitag Ernst & Young, Deutsche
Allgemeine Treuhand AG, independent public accountants for the Company,
substantially in the form approved by BEB, which sets forth for the period from
the last unaudited balance sheet included in the Registration Statement to a
date not more than five (5) business days prior to the date of such letter (i)
changes in the Company's capital stock, (ii) changes in the Company's net
assets, and (iii) changes in the Company's long term debt.
6.3. At the Closing Date, (i) the representations and warranties of
the Company contained in this Agreement shall be true and correct with the same
effect as if made on and as of the Closing Date, and the Company shall have
performed all of its obligations hereunder and satisfied all the conditions on
its part to be satisfied at or prior to the Closing Date; (ii) the Registration
Statement, the Prospectus, and any amendments or supplements thereto shall
contain all statements which are required to be stated therein in accordance
with the Act and the Rule and Regulations and shall
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conform to the requirements thereof in all material respects, and neither the
Registration Statement, the Prospectus, nor any amendment or supplement thereto
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; (iii) since the respective dates as of which information
is given, there shall have been no material adverse change, or any development
involving a prospective material adverse change, in the business, properties,
condition (financial or otherwise), results of operations, capital stock,
long-term or short-term debt, or general affairs of the Company from that set
forth in the Registration Statement and the Prospectus, except changes which the
Registration Statement and Prospectus indicate might occur after the Effective
Date, and the Company shall not have incurred any material liabilities or
entered into any agreement not in the ordinary course of business, other than as
referred to in the Registration Statement and Prospectus; (iv) except as set
forth in the Prospectus, no action, suit, or proceedings, at law or in equity,
shall be pending or threatened against the Company which would be required to be
set forth in the Registration Statement, and no proceedings shall be pending or
threatened against the Company before or by any commission, board, or
administrative agency, in the United States or elsewhere, wherein an
unfavourable decision, ruling, or finding would materially and adversely affect
the business, property, condition (financial or otherwise), results of
operations, or general affairs of the Company, and (v) on the Closing Date, BEB
shall have received a certificate, signed by the principal financial officer of
the Company and by either the Chairman of the Board or the President of the
Company, dated as of the Closing Date, evidencing compliance with the provisions
of this Section 6.3.
6.4. All proceedings taken at or prior to the Closing Date in
connection with the issuance and sale of the Securities shall be satisfactory in
form and substance to BEB and BEB shall have been furnished with all such
documents, certificates, and opinions as BEB may reasonably request in
connection with this transaction in order to evidence the accuracy and
completeness of any of the representations, warranties, or statements of the
Company, or its compliance with any of the covenants or conditions contained
herein.
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SECTION 7
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
The obligation of the Company to sell and deliver the Securities is
subject to the following conditions:
7.1. The Registration Statement shall have become effective no later
than 9:30 a.m., New York time, on the day following the date of this Agreement,
or on such later date as the Company and BEB may agree in writing.
7.2. At the Closing Date, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued under the
Act, and no proceedings therefor shall have been initiated or threatened by the
Commission.
SECTION 8
INDEMNIFICATION
8.1. The Company agrees to indemnify and hold harmless BEB against
any losses, claims, damages, or liabilities (which, for all purposes of this
Agreement, shall include, but shall not be limited to, all reasonable costs of
defense and investigations and all reasonable attorneys' fees and disbursements)
(collectively, "Liabilities"), to which BEB may become subject under the Act or
otherwise, and shall reimburse, as incurred, BEB for any legal or other expenses
reasonably incurred in connection with investigating, defending against, or
appearing as a third party witness in connection with any Liabilities, insofar
as such Liabilities (or actions in respect thereof) (i) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or (ii) arise out of or are
based upon the omission or alleged omission to state in the Registration
Statement, any Preliminary Prospectus, the Prospectus, any amendment or
supplement thereto, a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, the Company
shall not be liable in any such case to the extent, but only to the extent, that
any such Liability arises out of or is based upon an untrue statement, an
alleged untrue statement, an omission, or an alleged omission, made in reliance
upon and in conformity with information furnished to the Company by or on behalf
of BEB for use in the
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preparation of the Registration Statement, any Preliminary Prospectus, the
Prospectus, any amendments or supplement thereto. This indemnity will be in
addition to any liability which the Company may otherwise have.
8.2. BEB will indemnify and hold harmless the Company, each of its
directors, each nominee for director named in the Prospectus (if any), each of
its officers who have signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of the Act, against any
Liabilities to which the Company or any such director, nominee, officer, or
controlling person may become subject under the Act or otherwise, insofar as
such Liabilities (or actions in respect thereof) arise out of or are based upon
(i) a breach of the provisions of Sections 3.3 and 3.4 hereof, or (ii) any
untrue statement, or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, BEB shall be liable only to the extent that such untrue statement,
alleged untrue statement, omission, or alleged omission contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, was made in reliance upon and in conformity
with information furnished to the Company by BEB for use in the preparation
thereof. This indemnity will be in addition to any liability which BEB may
otherwise have.
8.3. If, after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, a claim in respect thereof is to be
made against the indemnifying party under this Section 8, then such indemnified
party promptly shall notify the indemnifying party in writing of the
commencement thereof; however, the omission to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party, subject to the
provisions stated herein, shall be entitled to participate in, and to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party. After notice from the indemnifying party to such indemnified
party of its election to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently
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incurred by such indemnified party in connection with the defense thereof, other
than for reasonable costs of investigation. The indemnified party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such separate counsel shall not be
at the expense of the indemnifying party if the indemnifying party has assumed
the defense of the action with counsel reasonably satisfactory to the
indemnified party; provided, however, the fees and expenses of such separate
counsel shall be at the expense of the indemnifying party if (i) the employment
of such separate counsel has been specifically authorized in writing by the
indemnifying party, or (ii) the defendants in any such action include both the
indemnified and the indemnifying party, and the indemnified party reasonably has
concluded that (1) there may be a conflict between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action, or (2) there may be legal defences available to the indemnified
party and/or other indemnified parties which are different from or additional to
those available to the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
indemnified party or parties). It is understood, however, that the indemnifying
party, in connection with any one such action, or in connection with any
separate but substantially similar or related action in the same jurisdiction
arising out of the same general allegations or circumstances, shall not be
liable for the fees and expenses of more than one such separate counsel for the
indemnified party in all such actions, which counsel shall be designated in
writing by the indemnified party. No settlement of any action against an
indemnified party shall be made without the consent of the indemnified party,
which consent shall not be unreasonably withheld.
SECTION 9
COST AND EXPENSES.
9.1. Whether or not the sale of the Securities through BEB is
consummated, the Company shall pay all costs and expenses incident to the
performance of this Agreement by the Company including, but not limited to: the
fees and expenses of counsel to the Company and of the Company's accountants;
the costs and expenses incident to the preparation, printing, filing, and
distribution under the Act of the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto), each
Preliminary Prospectus, and the Prospectus, as amended or supplemented; the cost
of printing and furnishing to BEB copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus, this Agreement,
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any fees relating to the listing of the Securities on the Neue Markt at the
Frankfurt Stock Exchange or any other securities exchange; the cost of printing
the certificates representing the Securities; the fees of the transfer agent;
and the cost of publication of a "tombstone" of the Offering. The Company shall
pay any and all taxes (including any transfer, franchise, capital stock, or
other tax imposed by any jurisdiction) on sales through BEB hereunder. The
Company also shall pay all costs and expenses incident to the furnishing of any
amended Prospectus or any supplement to be attached to the Prospectus as called
for in Section 5.1 of this Agreement.
9.2. If the transactions contemplated hereby are not consummated by
reason of any action of BEB (except an action based upon the Company's breach of
any covenant, representation, or warranty contained herein, or because any other
condition to BEB's obligations hereunder which is required to be fulfilled by
the Company is not fulfilled), the Company shall be liable for the out-of-pocket
expenses of BEB up to $25,000, including the legal fees of, and disbursements
incurred by, BEB's counsel.
9.3. If the transactions contemplated hereby are not consummated by
reason of a breach by the Company of any covenant, representation, or warranty
herein, or (ii) if the Registration Statement is not declared effective by the
Commission within six (6) months after the date of the filing of the
Registration Statement with the Commission, and the Company elects to
discontinue the Offering through BEB, then the Company shall be liable for all
out-of-pocket expenses of BEB actually incurred (including the legal fees of and
disbursements incurred by BEB's counsel) in connection with the Offering.
9.4. Except as set forth in the Prospectus, (i) no person, directly
or indirectly, is entitled to compensation from the Company, BEB or any other
person for services as a finder in connection with the Offering, and (ii) the
Company agrees to indemnify and hold harmless BEB against any Liabilities to
which BEB may become subject, insofar as such Liabilities (or actions in respect
thereof) arise out of or are based upon the claim of any person (other than an
employee of the party claiming indemnity) or entity that he or it is entitled to
a finder's fee in connection with the Offering by reason of such person's or
entity's influence or prior contact with the indemnifying party.
SECTION 10
TERMINATION
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10.1. BEB may terminate this Agreement, except for Sections 8, 9 and
11.1, at any time prior to the Closing Date, if, in its sole judgement, it is
impracticable to offer for sale or to enforce contracts made by BEB for the sale
of the Securities hereunder by reason of (i) the Company having sustained a
material loss, whether or not insured, by reason of fire, earthquake, flood,
accident, or other calamity, or from any labour dispute or court or government
action, order, or decree, (ii) trading in securities on the New York Stock
Exchange or the American Stock Exchange having been suspended or limited, (iii)
material governmental restrictions having been imposed on trading in securities
generally (not in force and effect on the date hereof), (iv) a banking
moratorium having been declared by German state authorities, (v) an outbreak of
major international hostilities, or other national or international calamity
having occurred, (vi) a pending or threatened legal or governmental proceeding
or action relating generally to the Company's business, or a notification having
been received by the Company of the threat of any such proceeding or action,
which could materially adversely affect the Company; (vii) except as
contemplated by the Prospectus, the Company being merged or consolidated into,
or acquired by another company or group, or the existence of a binding legal
commitment for the foregoing, or any other material change of ownership or
control occurs; (viii) the passage of any act or measure by the Congress of the
United States or by any state legislative body of similar impact, or the
adoption of any orders, rules, or regulations by any governmental body,
authoritative accounting institute or board, or any governmental executive,
which is reasonably believed by BEB to have a material impact on the business,
financial condition, or financial statements of the Company or any subsidiary of
or successor to the Company; (ix) any material adverse change in the financial
or securities markets, beyond normal market fluctuations, having occurred since
the date of this Agreement, or (x) any material adverse change having occurred,
since the respective dates as of which information is given in the Registration
Statement and Prospectus, in the earnings, business prospectus, or general
condition of the Company, financial or otherwise, whether or not arising in the
ordinary course of business.
10.2. If, at the Closing Date, any of the conditions provided for in
Section 6 shall not have been fulfilled, BEB may terminate this Agreement and
all of its obligations hereunder, by notifying the Company of such termination,
in writing or by telefax, at or prior to the Closing Date.
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10.3. If BEB elects to terminate this Agreement as provided in this
Section 10, the Company promptly shall be notified by BEB by telephone or
telefax, followed by confirmation by letter.
SECTION 11
MISCELLANEOUS
11.1. The respective indemnities, agreements, representations,
warranties, and other statements of and by the Company and BEB, and the
undertakings set forth in or made pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation made by or on behalf of
BEB, the Company or any of its officers or directors or any controlling person,
and shall survive delivery of and payment of the Securities and the termination
of this Agreement.
11.2. Each of the parties hereto will cooperate with the other and
execute and deliver to the other party hereto such other instruments and
documents and take such other actions as may be reasonably requested from time
to time by the other party hereto as necessary to carry out, evidence, and
confirm the intended purposes of this Agreement.
11.3. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
11.4. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
arrangements and understandings, both written and oral, expressed or implied,
with respect thereto.
11.5. It is the desire and intent of the parties that the provisions
of this Agreement be enforced to the fullest extent permissible under the law
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, will be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it will, as to such
jurisdiction, be so
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narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
11.6. All notices and other communications required or permitted
under to this Agreement must be in writing and will be deemed given if sent by
personal delivery, fax with electronic confirmation of delivery,
internationally-recognized overnight courier company that is able to provide
proof or receipt of delivery, or registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as may be specified by like notice):
If to BEB: Berliner Effektenbank AG
Attention: Xx. Xxxxx Xxxxxxx
Xxxxxxxxxxxxxx 000, 00000 Xxxxxx, Xxxxxxx
Tel: 49-30-89 02 13 00
Fax: 49-30-89 02 13 99
If to the Company: Cybernet Internet Services International, Inc.
Attention: Xx. Xxxxxxx Xxxx, President
Xxxxxx-Xxxxxx-Xxxx 00, 00000 Xxxxxx, Xxxxxxx
Tel: 49-89-99 31 50
Fax: 49-89-99 3151 99
With a copy to: Powell, Goldstein, Xxxxxx & Xxxxxx, LLP
Attention: Xxxxxx X. Xxxx
0000 Xxxxxxxxxxxx Xxxxxx, X. X. - Xxxxx 000 Xxxxx
Xxxxxxxxxx, X.X. 00000
Tel: 000-000-0000
Fax: 000-000-0000
All such notices and other communications will be deemed to have
been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of a fax, when the party sending such fax has
received electronic confirmation of its delivery, (iii) in the case of delivery
by internationally-recognized overnight courier, on the business day following
dispatch and (iv) in the case of mailing, on the third business day following
mailing.
11.7. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.
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11.8. None of the provisions of this Agreement is or will be
construed as for the benefit of or enforceable by any person not a party to this
Agreement.
11.9. This Agreement may not be assigned by any party, by operation
of law or otherwise.
11.10. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed therein, without regard to conflicts of laws principles.
11.11. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against any party. Any reference to any
federal, state, local, or foreign statute or law will be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context requires
otherwise. The parties intend that each representation, warranty, and covenant
contained herein will have independent significance. If any party has breached
any representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty, or covenant relating to
the same subject matter (regardless of the relative levels of specificity) which
the party has not breached will not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
11.12. This Agreement may be executed in one or more counterparts,
all of which will be considered one and the same agreement and will become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
11.13. This Agreement may be executed by delivery of executed
signature pages by fax and such fax execution will be effective for all
purposes.
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Cybernet Internet Services International, Inc.
By:
-------------------
Name: Xx. Xxxxxxx Xxxx
Title: President
Berliner Effektenbank XX Xxxxxxxx Effektenbank AG
By:
------------------------- By:
Name: Xxxxx Xxxxxxx --------------------------
Title: Vorstand Name: Xx. Xxxxxxxx Xxxxx
Title: Vorstand
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ESCROW AGREEMENT
THIS AGREEMENT is made the _____ day of ____________, 1998, among Berliner
Effektenbank AG, a German company (the "Underwriter" or the "Company's Agent"),
Cybernet Internet Services International, Inc., a Delaware corporation (the
"Company) and _________, (the "Escrow Agent") for the benefit of the Investors
(as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Underwriter is selling to non-US persons (the
"Investors") shares of common stock of the Company pursuant to an offering (the
"Offering") registered with the Securities and Exchange Commission of the United
States of America (the "Commission") and delivering a prospectus as required by
the Commission to such Investors; and
WHEREAS, the Investors are directed in the Prospectus to execute a
subscription agreement and send the purchase price of the shares of common stock
to the Escrow Agent pending the completion of the Offering and delivery of the
shares thereof.
WHEREAS, the Escrow Agent is a German notary public, accredited by the
German government and insured and the Escrow Agent has agreed to serve as
escrow agent for the purchase price to be received from the Investors.
NOW, THEREFORE, in consideration of the promises made herein and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. RECEIPT OF FUNDS. The Escrow Agent shall receive from
each of the Investors check or wired funds in an amount
equal to the price of each share of common stock
multiplied by the number of shares purchased by the
Investor.
2. INVESTMENT OF THE FUNDS. The Escrow Agent agrees to
invest the funds received by the Investors as follows:
a. The funds shall be held for the sole benefit of the
Investors,
b. The funds shall be invested in one of the following:
(i) obligations guaranteed as to principal by the
full faith and credit of the United States
Government, or
(ii) money market funds registered with the
Commission under the Investment Company Act
of 1940, or
(iii) insured deposits in banks insured by the
Federal Deposit Insurance Corporation.
c. Interest earned on the deposited funds shall be paid
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to the investor if, and only if, the funds
are released to the Investors pursuant to Section
3(b) below.
3. DISPOSITION OF FUNDS. Until the occurrence of one or
more of the following events, the funds held in escrow
will be held by the Escrow Agent, and thereafter
delivered only as follows:
a. to the Company or its agent, the
Underwriter, if the Escrow Agent has
received a signed representation from the
Company, together with evidence acceptable
to the Escrow Agent, that the Company has
satisfied the conditions imposed by Rule 419
of the Regulations S-K of the Commission, or
b. to the Investor, if the Escrow Agent has not
received the notice set forth above within
45 days of the effective date of the
Offering unless the Offering has been
extended for an additional 30 days pursuant
to the Registration Statement.
4. LIMITATIONS OF LIABILITY. The foregoing instructions are
subject to the following provisions that are expressly approved by the parties
hereto:
4.1. Depository duty. The Escrow Agent will be
liable as a depository only, and will not be responsible for the sufficiency or
accuracy of the form, execution, or validity of any document delivered to it
hereunder or any description of the property or other thing contained therein or
the identity, authority, or rights of the persons executing or delivering, or
purporting to execute or deliver, any such document. The Escrow Agent's duties
hereunder are limited to the safekeeping and the delivery of the escrow funds
and interest accrued thereon in accordance with this Agreement.
4.2. Standard of care. The Escrow Agent will
not be liable for any act or omission done in good faith, or for any claim,
demand, loss, or damage made or suffered by any party to this Agreement, unless
it arose through or was caused by the Escrow Agent's willful misconduct or gross
negligence.
4.3. Reliance. The Escrow Agent shall in all
cases be entitled to rely upon and be fully protected in acting or in
refraining from acting under this Agreement in accordance with any and all
written notices, demands, directions, orders, or other documents received by it
in accordance with this Agreement and believed by it to be genuine and correct
and to have been signed or sent by the proper person.
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4.4. Modification. This Agreement is the only
agreement binding on the Escrow Agent relating to the escrow funds and the
interest earned thereon, and the Escrow Agent may rely absolutely on it to the
exclusion of any and all other agreements between any of the parties hereto.
5. MISCELLANEOUS. It is further agreed as follows:
5.1. Time. Time is of the essence of this
Agreement.
5.2. Notice. All notices or communications
required or permitted under this Agreement shall be in writing and shall be
deemed duly given if in writing and delivered personally, or sent by reliable
overnight delivery service, each method with written receipt or other evidence
of delivery requested, to the following addresses (or such other addresses as
may be designated in writing):
(a) if to the Company:
Cybernet Internet Services International,
Inc.
Xxxxxx-Xxxxxx Xxxx 00
00000 Xxxxxx, Xxxxxxx
Attention: Xxxxxxx Xxxx
and with a copy to: Xx. Xxxxxx Xxxxxx
Besner Xxxxxxxx Xxxxx
Xxxxxxxxxxxxx 00
00000 Xxxxxx, Xxxxxxx
(b) if to the Underwriter:
Berliner Effektenbank AG
Xxxxxxxxxxxxxxx 000
00000 Xxxxxx, Xxxxxxx
Attention: Xx. Xxxxx Xxxxxxx
(c) if to Escrow Agent:
The date of such notice shall be the date it is received by the party it is
addressed to.
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5.3. Binding effect. This Agreement shall be
binding on, and inure to the benefit of, the parties and their respective
heirs, personal representatives, successors and permitted assigns.
5.4 Governing Law. This Agreement is made
pursuant to and shall be governed, construed and enforced in all respects and
for all purposes by and in accordance with the laws of the Federal Republic of
Germany.
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30
IN WITNESS WHEREOF, this Agreement has been executed and delivered
on the date written above.
CYBERNET INTERNET SERVICES INTERNATIONAL, INC:
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
BERLINER EFFEKTENBANK AG
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Receipt of these instructions is acknowledged and accepted this _____ day of
_______________, 1998.
------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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