<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 23, 1999
CARRIER1 INTERNATIONAL, S.A.
----------------------------------
(Exact name of registrant as specified in its charter)
Luxembourg 98-0199626
- ------------------ ----------------- -------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
L-8009, Strassen, Route d'Arlon 3, Luxembourg
-----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 011 41-1 297 2600
N/A
------------------------------------------------------------------------
(Former name or former address, if changed since last report)
- --------------------------------------------------------------------------------
ITEM 5. OTHER EVENTS.
<PAGE>
Carrier1 International, S.A., a Luxembourg societe anonyme (the
"Company"), has entered into an expansion of a previously announced joint
venture among the Company, several entities related to The Carlyle Group,
iaxis B.V., Providence Equity Partners III L.P. and Providence Equity
Operating Partners III L.P. for the formation of Hubco S.A., a Luxembourg
societe anonyme ("Hubco").
Hubco was formed to build carrier co-location facilities to be
marketed by Hubco as IT Mega Centers. Other partners in the venture include
Providence Equity Partners. The Company has committed $23.25 million to this
$155 million project, to be funded over the next 18 months, to develop these
facilities. The Company and another network operator also will serve as
strategic anchor tenants in these facilities, which will be connected to the
Company's networks.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) EXHIBITS.
10.1 Shareholders Agreement, dated as of November 23,
1999, among the Carlyle entities named therein, iaxis
B.V., Carrier1 International S.A., Providence Equity
Partners III, L.P., Providence Equity Operating
Partners III, L.P., and Hubco S.A.*
10.2 Registration Rights Agreement, dated as of November
23, 1999, among the Carlyle entities named therein,
iaxis B.V., Carrier1 International S.A., Providence
Equity Partners III, L.P., Providence Equity
Operating Partners III, L.P., and Hubco S.A.*
10.3 Strategic Anchor Tenant Agreement, dated as of
November 23, 1999, between Carrier1 International
S.A. and Hubco S.A.*
* Portions subject to a confidential treatment request
SIGNATURES
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CARRIER1 INTERNATIONAL S.A.
(Registrant)
By: /s/ Kees Van Ophem
-----------------------------------
Name: Kees Van Ophem
Title: Vice President, Purchase and
General Counsel
Date: 4.1.2000
<PAGE>
EXHIBIT 10.1 CONFIDENTIAL TREATEMENT
REQUESTED BY
CARRIER1 INTERNATIONAL S.A.
EXECUTION COPY
================================================================================
SHAREHOLDERS AGREEMENT
dated as of
November 23, 1999
among
The Carlyle entities named herein,
iaxis B.V.,
Carrier1 International S.A.,
Providence Equity Partners III L.P.,
Providence Equity Operating Partners III L.P.
and
Hubco S.A.
================================================================================
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I.DEFINITIONS.............................................................................................1
Section 1.1 Definitions............................................................................1
Section 1.2 Other Definitional Provisions..........................................................9
ARTICLE II.ORGANIZATION AND CAPITALIZATION.......................................................................10
Section 2.1 Formation of the Company..............................................................10
Section 2.2 Name..................................................................................10
Section 2.3 Purpose...............................................................................10
Section 2.4 Registered Office.....................................................................10
Section 2.5 Share Capital.........................................................................11
Section 2.6 Share Register........................................................................11
Section 2.7 Additional Capital Contributions......................................................12
Section 2.8 New Capital...........................................................................12
Section 2.9 Formation of Local Operating Companies................................................14
Section 2.10 Use of Capital........................................................................14
Section 2.11 Payment to iaxis carrier services ltd.................................................15
Section 2.12 Payments to Shareholders..............................................................15
Section 2.13 Conditions to the Effectiveness of this Agreement.....................................15
Section 2.14 Conditions to the Initial Capital Contributions.......................................15
Section 2.15 Conditions to Additional Capital Contributions........................................16
ARTICLE III.MANAGEMENT AND ADMINISTRATION........................................................................17
Section 3.1 Board of Directors of the Company.....................................................17
Section 3.2 Requirements for Board Action.........................................................19
Section 3.3 Officers..............................................................................21
Section 3.4 Shareholders'Meetings.................................................................22
Section 3.5 Accounting, Record Keeping and Reporting..............................................24
Section 3.6 Business Plan.........................................................................26
Section 3.7 Deposits and Withdrawals of Funds.....................................................26
Section 3.8 Voting................................................................................26
ARTICLE IV.TRANSFER AND ASSIGNMENT...............................................................................26
Section 4.1 Transfer of Securities................................................................26
Section 4.2 Right of First Refusal................................................................28
Section 4.3 Tag-Along Rights......................................................................30
Section 4.4 Drag-Along Rights.....................................................................32
Section 4.5 Liquidity Rights......................................................................34
Section 4.6 Involuntary Transfers.................................................................36
Section 4.7 Liability of Transferor...............................................................36
Section 4.8 Transfers to a Competitor of the Company..............................................36
Section 4.9 Prohibited Transfers..................................................................37
Section 4.10 Expenses in Connection with Transfers.................................................37
ARTICLE V.REPRESENTATIONS AND WARRANTIES.........................................................................37
Section 5.1 Representations and Warranties........................................................37
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VI.CONFIDENTIALITY; SATISFACTION OF CONDITIONS...........................................................38
Section 6.1 Confidentiality.......................................................................38
Section 6.2 Satisfaction of Conditions............................................................39
ARTICLE VII.DEFAULTS, TRIGGER EVENTS AND REMEDIES................................................................39
Section 7.1 Defaults..............................................................................39
Section 7.2 Trigger Events........................................................................40
Section 7.3 Actions Upon Default..................................................................40
Section 7.4 Option of Non-Defaulting Shareholders to Purchase Common Shares.......................41
ARTICLE VIII.DEADLOCK............................................................................................43
Section 8.1 Deadlock..............................................................................43
ARTICLE IX.TERMINATION AND DISSOLUTION...........................................................................43
Section 9.1 Termination...........................................................................43
Section 9.2 Winding-up............................................................................43
ARTICLE X.MISCELLANEOUS..........................................................................................44
Section 10.1 After-Acquired Common Shares..........................................................44
Section 10.2 Rights of Transferees and Transferors; Requirement to Become a Party..................44
Section 10.3 Termination on Qualified Public Offering..............................................44
Section 10.4 Owner of Common Shares................................................................44
Section 10.5 Tax Elections.........................................................................44
Section 10.6 Conflict of Terms.....................................................................44
Section 10.7 Legend................................................................................44
Section 10.8 Notices...............................................................................45
Section 10.9 Applicable Law........................................................................45
Section 10.10 Arbitration...........................................................................45
Section 10.11 Amendment.............................................................................46
Section 10.12 Assignment............................................................................46
Section 10.13 Expenses..............................................................................46
Section 10.14 Specific Enforcement..................................................................46
Section 10.15 Headings..............................................................................46
Section 10.16 Entire Agreement......................................................................46
Section 10.17 Waivers...............................................................................46
Section 10.18 Severability..........................................................................47
Section 10.19 No Third Party Beneficiaries..........................................................47
Section 10.20 Public Statements.....................................................................47
Section 10.21 Execution in Counterparts.............................................................47
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES:
<S> <C>
Schedule 1 Subscription of Common Shares
Schedule 2 Capital Commitments
Schedule 3 Addresses for Notices
EXHIBITS:
Exhibit A Articles of Incorporation
Exhibit B Employment Term Sheet
Exhibit C Reserved
Exhibit D iaxis Assignment Agreement
</TABLE>
iii
<PAGE>
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT, dated as of November 23, 1999,
among (i) the entities whose names appear under the heading "Carlyle" on the
signature pages hereof (collectively referred to as "Carlyle"), (ii) iaxis B.V.,
a corporation organized under the laws of the Netherlands ("iaxis"), (iii)
Carrier1 International S.A., a Luxembourg Societe Anonyme ("Carrier1"), (iv)
Providence Equity Partners III, L.P., a limited partnership organized under the
laws of Delaware, and Providence Equity Operating Partners III, L.P., a limited
partnership organized under the laws of Delaware, (collectively referred to as
"Providence"), and (v) Hubco S.A. a Luxembourg Societe Anonyme (the "Company").
W I T N E S S E T H:
WHEREAS, in connection with the establishment of the Company
and the parties' desire to develop, own and operate the Company Business, the
parties hereto desire to set forth certain understandings regarding the
relationship (a) between the Company and the Shareholders and (b) among the
Shareholders;
WHEREAS, the operation of the Company is dependent on the
network and technical expertise of the Shareholders;
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants and agreements hereinafter set forth, which the parties
hereto agree is good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 DEFINITIONS. As used herein, the following terms shall have the
following meanings:
"ACQUIROR" shall have the meaning set forth in Section 4.5(a).
"ADDITIONAL CAPITAL CONTRIBUTION" shall mean, with respect to
any Shareholder, any contribution by such Shareholder to the Company in
accordance with the terms of Section .7.
"ADDITIONAL SHARES" shall have the meaning set forth in
Section 4.3(d).
"AFFILIATE" shall mean, with respect to any Person, any other
Person which directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with, such Person; provided that the
Company shall not be treated as an Affiliate of any Shareholder. For purposes of
this Agreement, the term "control" (and the derivative terms "controlling" and
"controlled") shall mean the possession, directly or indirectly, of the power to
elect or cause the election of a majority of the directors or managers of a
Person, whether through
<PAGE>
the ownership of voting securities, by contract or otherwise; PROVIDED that (i)
beneficial ownership of [*] or more of the Voting Stock of a Person shall be
deemed to be control and (ii) the general partner of a limited partnership and
the managing member of a limited liability company shall be deemed to control
such limited partnership or limited liability company, as the case may be.
"AFFILIATE AGREEMENT" shall mean any agreement executed by the
Company or a Subsidiary of the Company (a) to which a Shareholder, or any
Affiliate thereof is also a party or (b) in which a Shareholder, or any
Affiliate thereof has a substantial financial interest.
"AGREEMENT" shall mean this Shareholders Agreement, as further
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"ARTICLES OF INCORPORATION" shall mean the Articles of
Incorporation of the Company substantially in the form of Exhibit A.
"AUCTION" shall have the meaning set forth in Section 4.5(a).
"AUCTIONEER" shall have the meaning set forth in Section
4.5(c).
"BOARD OF DIRECTORS" shall have the meaning set forth in
Section 3.1(a).
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in London or New York City are
authorized or obligated by law or executive order to close.
"BUSINESS PLAN" shall mean the business plan for the Company
adopted pursuant to Section 3.6, as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"CAPITAL CALL DATE" shall mean each Business Day on which the
Shareholders are requested by the Company to make an Additional Capital
Contribution to the Company, which Business Day (a) shall be specified by the
Company in a Capital Call Notice delivered by the Company to each of the
Shareholders and (b) shall be no less than fifteen (15) Business Days from the
date of delivery of such Capital Call Notice by the Company.
"CAPITAL CALL NOTICE" shall mean a written notice requesting
that Additional Capital Contributions be made by the Shareholders to the
Company, which notice shall (a) be delivered by the Company to each Shareholder,
(b) call for contributions to the Company by the Shareholders of all or a
portion of their Additional Capital Contributions, (c) specify the Capital Call
Date on which such Additional Capital Contributions are to be made and (d)
specify the account of the Company to which the Additional Capital Contributions
should be made available, all in accordance with Section 2.7.
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
2
<PAGE>
"CAPITAL COMMITMENT" shall mean, with respect to each
Shareholder, the sum of its Initial Capital Contribution and its "Maximum
Additional Capital Commitments" as set forth on Schedule 2.
"CAPITAL CONTRIBUTION" shall mean, with respect to any
Shareholder, any contribution by such Shareholder to the Company in accordance
with the terms of Section 2.7 or Section 2.8.
"CAPITAL EXPENDITURE" shall mean for any period, with respect
to the Company, any expenditure by the Company or any Subsidiary thereof for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) which should be capitalized under U.S. GAAP on
a consolidated balance sheet of the Company and any Subsidiaries thereof.
"CAPITAL STOCK" shall mean: (i) in the case of a corporation,
corporate stock; (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited); and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"CARRIER INVESTORS" shall mean each of iaxis and Carrier1.
"CASH EQUIVALENTS" shall have the meaning set forth in Section
4.2(g).
"CHAIRMAN OF THE BOARD" shall have the meaning set forth in
Section 3.1(d).
"CLOSING DATE" shall mean the date on which the Initial
Capital Contribution is funded.
"COMMISSION" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"COMMON SHARES" shall mean (a) the $2.00 par value common
stock of the Company, (b) any security or other instrument (i) received as a
dividend on, or other payment made to holders of, such stock (or any security or
other instrument referred to in this definition) or (ii) issued in connection
with a split of such stock (or any security or other instrument referred to in
this definition) or as a result of any exchange or reclassification of such
stock (or any security or other instrument referred to in this definition),
reorganization, recapitalization, consolidation or merger, (c) any option,
warrant or right to acquire such stock (or any security or other instrument
referred to in this definition) and (d) any security or other instrument
exchangeable for, or convertible into, such stock (or any security or other
instrument referred to in this definition).
"COMPANY" shall have the meaning set forth in the preamble
hereto.
"COMPANY BUSINESS" shall have the meaning set forth in Section
2.3.
3
<PAGE>
"COMPETITOR" means any Person, directly or indirectly, engaged
(whether by way of ownership, (other than as a holder of not in excess of [*] of
the outstanding voting shares of any publicly traded company) or, as a provider
of services or otherwise) in a Restricted Business.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in
Section 6.1.
"DEADLOCK" shall have the meaning set forth in Section 8.1.
"DEADLOCK NOTICE" shall have the meaning set forth in Section
8.1.
"DEFAULT NOTICE" shall have the meaning set forth in Section
7.1.
"DEFAULTED SHARES" shall have the meaning set forth in Section
7.4(a).
"DEFAULTING SHAREHOLDER" shall mean, as of any date of
determination, any Shareholder as to which an Event of Default shall have
occurred and be continuing.
"DIRECTOR" shall have the meaning set forth in Section
3.1(a).
"DIRECTOR DESIGNEES" shall have the meaning set forth in
Section 3.1(a).
"DOLLARS" and "$" shall mean the lawful currency of the United
States of America.
"DRAG-ALONG NOTICE" shall have the meaning set forth in
Section 4.4(b).
"DRAG-ALONG NOTICE DATE" shall have the meaning set forth in
Section 4.4(b).
"DRAG-ALONG SALE" shall have the meaning set forth in Section
4.4(a).
"DRAG-ALONG SALE DATE" shall have the meaning set forth in
Section 4.4(b).
"EMPLOYMENT AGREEMENT" shall have the meaning set forth in
Section 2.14(d).
"EVENT OF DEFAULT" shall have the meaning set forth in Section
7.1.
"FAIR MARKET VALUE" shall mean with respect to any asset or
property other than Common Shares, the price that could be negotiated in an
arms-length free market transaction, for cash, between a willing seller and a
willing buyer, as determined by the Board of Directors of the Company acting in
good faith.
"FAIR MARKET VALUE OF COMMON SHARES" shall have the meaning
set forth in Section 4.5(f).
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
4
<PAGE>
"FISCAL QUARTER" shall mean each fiscal quarter comprising a
portion of any Fiscal Year.
"FISCAL YEAR" shall mean the accounting year of the Company
commencing each year on January 1 and ending on the following December 31, or
such other accounting year as the Company may from time to time adopt. The
Fiscal Year may differ from the Company's taxable year.
"FULLY SUBSCRIBED SHAREHOLDER" shall have the meaning set
forth in Section 2.8(e).
"FURTHER CAPITAL NOTICE" shall have the meaning set forth in
Section 2.8(e).
"GRANDFATHERED PROPERTY" shall have the meaning given such
term in the Strategic Anchor Tenant Agreements.
"IAXIS ASSIGNMENT AGREEMENT" shall have the meaning set forth
in Section 2.14(e).
"INDEBTEDNESS" shall mean, for any Person, all indebtedness of
such Person (i) for borrowed money or for the deferred purchase price of
property or services, (ii) which is evidenced by any note, bond, debenture or
similar instrument or (iii) which consists of a lease of property by such Person
that, in conformity with U.S. GAAP, should be accounted for as a capital lease
on a balance sheet of such Person, and includes all guarantees or similar
contingent obligations of such Person in respect of Indebtedness of another
Person.
"INDEPENDENT ACCOUNTANTS" shall mean such internationally
recognized accounting firm as may be selected from time to time by the Board of
Directors.
"INDEPENDENT APPRAISER" shall have the meaning set forth in
Section 4.2(d).
"INITIAL CAPITAL CONTRIBUTION" shall have the meaning set
forth in Section 2.5(b).
"INITIATING SHAREHOLDERS" shall have the meaning set forth in
Section 4.4(a).
"INVOLUNTARY TRANSFER NOTICE" shall have the meaning set forth
in Section 4.6.
"MANAGEMENT DIRECTOR" shall have the meaning set forth in
Section 3.1(a).
"MANAGEMENT SHAREHOLDERS AGREEMENT" shall have the meaning set
forth in Section 2.14(d).
"MARKETABLE SECURITIES" shall have the meaning set forth in
Section 4.2(g).
"NEW CAPITAL" shall have the meaning set forth in Section
2.8(a).
"NEW CAPITAL NOTICE" shall have the meaning set forth in
Section 2.8(c).
"NON-DEFAULTING SHAREHOLDER" shall have the meaning set forth
in Section 7.1(c).
5
<PAGE>
"NON-VOTING SHARES" shall have the meaning set forth in
Section 2.5(a).
"NOTICE" shall have the meaning set forth in Section 4.2(a).
"NOTICE DATE" shall have the meaning set forth in Section
4.3(c).
"OFFEREE" shall have the meaning set forth in Section 4.2(a).
"OFFEREE ELECTION NOTICE" shall have the meaning set forth in
Section 4.2(b).
"OFFEREE ELECTION NUMBER" shall have the meaning set forth in
Section 4.2(b).
"OFFERED SHARES" shall have the meaning set forth in Section
4.2(a).
"OFFEROR" shall have the meaning set forth in Section 4.2(a).
"OFFICERS" shall have the meaning set forth in Section 3.3(a).
"OTHER HOLDERS" shall have the meaning set forth in Section
4.3(a).
"PERMITTED TRANSFEREE" shall have the meaning set forth in
Section 4.1(b).
"PERSON" shall mean any individual, partnership, joint
venture, corporation, limited liability company, limited duration company,
limited life company, association, trust or other enterprise.
"PRINCIPAL EXECUTIVE OFFICER" shall mean any of the President,
the Chief Executive Officer, the General Counsel, the Chief Financial Officer,
the Chief Operating Officer and each Senior Vice President (or the equivalent
thereof) of the Company.
"PRO RATA SHARE" shall have the meaning set forth in Section
4.2(b).
"PURCHASE NOTICE" shall have the meaning set forth in Section
4.2(b).
"QUALIFIED PUBLIC OFFERING" shall mean a firm commitment
underwritten public offering (underwritten by an underwriter or underwriters of
recognized national or international standing) in which Common Shares are
approved for listing on the New York Stock Exchange, the NASDAQ National Market,
the London Stock Exchange or the Frankfurt Stock Exchange, covering the offer
and sale of Common Shares for the account of the Company in which the aggregate
public offering price (before deduction of underwriters' discounts and
commissions) equals or exceeds $50,000,000 and the public offering price per
share of which equals or exceeds three (3) times the Subscription Price per
share, before deduction of underwriters' discounts and commissions (such price
per share of Common Shares to be appropriately adjusted to reflect adjustments
for stock-splits, stock dividends, recapitalizations or other similar
transactions after the Closing Date).
"REGISTER" shall mean the Register of Shareholders of the
Company.
6
<PAGE>
"REGISTERED OFFICE" shall have the meaning set forth in
Section 2.4.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration
Rights Agreement, dated as of the date hereof, by and among the Shareholders and
the Company, as the same shall be amended from time to time.
"REQUIRED SALE" shall have the meaning set forth in Section
4.5(c).
"REQUIRED SALE CLOSING DATE" shall have the meaning set forth
in Section 4.5(e).
"REQUIRED SALE NOTICE" shall have the meaning set forth in
Section 4.5(e).
"RESTRICTED BUSINESS" shall mean
[*]
"SALE NOTICE" shall have the meaning set forth in Section
4.3(c).
"SECTION 4.5 MINIMUM PRICE" shall have the meaning set forth
in Section 4.5(b).
"SECTION 4.5 NOTICE" shall have the meaning set forth in
Section 4.5(b).
"SECTION 4.5 OFFER" shall have the meaning set forth in
Section 4.5(b).
"SECTION 4.5 OFFER PERIOD" shall have the meaning set forth in
Section 4.5(b).
"SECTION 4.5 SELLER" shall have the meaning set forth in
Section 4.5(a).
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
7
<PAGE>
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING SHAREHOLDER" shall have the meaning set forth in
Section 4.3(a).
"SHARE CAPITAL DEPOSIT" shall have the meaning set forth in
Section 2.5(a).
"SHARE PERCENTAGE" shall mean, at any time with respect to any
Shareholder, the percentage which the number of Common Shares owned by such
Shareholder then constitutes of the aggregate number of Common Shares then
outstanding.
"SHAREHOLDER" shall mean each of Carlyle, iaxis, Providence
and Carrier1, upon the execution by each of this Agreement, and each other
Person, if any, that hereafter becomes a party to this Agreement after becoming
a shareholder of the Company. A Shareholder that transfers all of its Common
Shares in the Company in accordance with the provisions of this Agreement shall
cease to be a Shareholder.
"SHAREHOLDERS' ALLOTMENT" shall have the meaning set forth in
Section 4.3(a).
"SHAREHOLDERS' SHARES" shall have the meaning set forth in
Section 4.3(a).
"SPACE" shall have the meaning given such term in the
Strategic Anchor Tenant Agreements.
"SPECIAL PURPOSE SHAREHOLDER" shall have the meaning set forth
in Section 4.1(e).
"STRATEGIC ANCHOR TENANT AGREEMENTS" shall mean those certain
Strategic Anchor Tenant Agreements by and among the Company, on the one hand,
and iaxis and Carrier1, on the other hand, dated as the date hereof, as the same
shall be amended from time to time.
"SUBSCRIPTION NOTICE" shall have the meaning set forth in
Section 2.8(d).
"SUBSCRIPTION PRICE" shall mean, with respect to the Common
Shares subscribed by each initial Shareholder, the amount listed by such initial
Shareholder for such Common Shares as set forth on Schedule 1 under the heading
"Total Purchase Price."
"SUBSIDIARY" shall mean, as to any person, (a) any corporation
more than [*] of whose stock of any class or classes having by terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person and/or one or
more Subsidiaries of such person and (b) any partnership, association, joint
venture, limited liability
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
8
<PAGE>
company or other entity in which such person and/or one or more Subsidiaries of
such person have more than a [*] equity interest therein.
"SUPERMAJORITY BOARD APPROVAL" shall have the meaning set
forth in Section 3.2(b).
"SUPERMAJORITY SHAREHOLDER APPROVAL" shall have the meaning
set forth in Section 3.4(f).
"TAG-ALONG NOTICE" shall have the meaning set forth in Section
4.3(d).
"TAG-ALONG SALE" shall have the meaning set forth in Section
4.3(a).
"TAG-ALONG SALE DATE" shall have the meaning set forth in
Section 4.3(c).
"TERMINATION EVENT" shall have the meaning set forth in
Section 9.1.
"THIRD PARTY" shall have the meaning set forth in Section
4.4(a).
"THIRD PARTY PROPOSAL" shall have the meaning set forth in
Section 4.4(f).
"TRANSACTION DOCUMENTS" shall mean, collectively, this
Agreement, the Strategic Anchor Tenant Agreements, the Registration Rights
Agreement, the Employment Agreements, the Management Shareholders Agreement, the
iaxis Assignment Agreement and each other agreement entered into by any party
hereto or any Affiliate thereof pursuant to or in connection with this
Agreement.
"TRANSFER" shall have the meaning set forth in Section 4.1(a).
"TRIGGERING NOTICE" shall have the meaning set forth in
Section 8.1.
"U.S. GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from time to time as of the
relevant date of determination.
"VOTING STOCK" of any Person as of any date shall mean the
Capital Stock of such Person that is at the time entitled to vote in the
election of the Board of Directors of such Person.
Section 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined
in this Agreement shall have the defined meanings when used in any other
document made or delivered pursuant hereto.
(b) The words "hereof," "herein," "hereto" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
9
<PAGE>
any particular provision of this Agreement, and Article, Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(d) Except as otherwise specified herein, each reference in
this Agreement to a Transaction Document shall be deemed (i) to include all
exhibits, annexes, schedules or other attachments thereto and (ii) to refer to
such Transaction Document as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms and the terms of this
Agreement.
(e) Each reference in this Agreement to a Person shall be
deemed to include such Person's permitted successors and assigns.
(f) The use of the word "including" in this Agreement means
"including, without limitation."
ARTICLE II.
ORGANIZATION AND CAPITALIZATION
Section 2.1 FORMATION OF THE COMPANY. The Company was
incorporated under the laws of Luxembourg on November 19, 1999. Subject to the
terms and conditions hereof and the Articles of Incorporation, the Shareholders
have established the Company as a Societe Anonyme under the laws of Luxembourg.
The Shareholders have taken, or have caused to be taken, all such actions as may
be required under the laws of Luxembourg in connection with the formation of the
Company on the terms and conditions set forth herein, and the Shareholders agree
to take, or cause to be taken, all such actions as may be required under the
laws of Luxembourg in connection with the continuation of the Company on the
terms and conditions set forth herein. The Company shall have an unlimited
duration unless terminated or dissolved earlier in accordance with the terms of
this Agreement.
Section 2.2 NAME. The name of the Company shall be "Hubco
S.A."
Section 2.3 PURPOSE. The Company's business shall be,
directly or through Subsidiaries, the acquisition, leasing, development, active
full-service operation and provision of facilities in Europe for the purpose of
housing telecommunications and/or data equipment and all business related or
reasonably incidental thereto, and the Company may take any and all actions
necessary, appropriate or consistent therewith (collectively, the "Company
Business"). The Company shall not engage in any business other than the Company
Business unless the Board of Directors, by Supermajority Board Approval, and the
Shareholders, by Supermajority Shareholder Approval, grant their approval to
engage in such other business.
Section 2.4 REGISTERED OFFICE. The address of the Company's
registered office in Luxembourg shall be 3 Bd Prince Henri, L-1724 Luxembourg
(the "Registered Office"). The Company's Registered Office may be changed at any
time by a vote of the Board of Directors in accordance with Section 3.2(a).
10
<PAGE>
Section 2.5 SHARE CAPITAL.
(a) Each party acknowledges that upon the formation of the
Company, Carrier1 contributed $10,000 to satisfy the minimum share capital
deposit (the "Share Capital Deposit") required by Luxembourg law. Promptly
after the execution of this Agreement, the Shareholders shall cause to be
approved and filed an amendment to the Articles of Incorporation, and shall
take or cause to be taken all other actions necessary to create a class of
stock of the Company, par value $2.00 per share, without any voting rights,
except as may be required by Luxembourg law ("Non-Voting Shares"). To the
extent required by Luxembourg law, Non-Voting Shares shall have the right to
receive preferential dividends at a rate equal to 0.1% of its par value and a
liquidation preference equal to $.01 per share.
(b) Except as set forth in Section 2.5(c) below and subject to
Section 2.14, each Shareholder agrees to pay to the Company the Subscription
Price (as to each Shareholder, its "Initial Capital Contribution") by wire
transfer of immediately available funds to such account or accounts as the
Company shall have designated in writing, less any amounts previously paid by
such Shareholder as part of the Share Capital Deposit, and in consideration
therefor the Company shall issue to each Shareholder the number of Common Shares
set forth opposite such Shareholder's name on Schedule 1.
(c) Upon the request of Carlyle and Providence, the Parties
agree to form a Gibraltar limited liability company or corporation or an entity
organized in such other jurisdiction as Carlyle and Providence may in good faith
determine to be suitable ("Gibraltarco"). Subject to Section 2.14, and in lieu
of Section 2.5(b), each Shareholder agrees to pay to Gibraltarco its Initial
Capital Contribution. At the time selected by Carlyle and Providence, each
Shareholder shall contribute its shares in Gibraltarco to the Company in
exchange for the issuance by the Company to such Shareholder of the same number
of Common Shares. Upon the request of Carlyle and Providence, the parties will
follow the procedures set forth in this Section 2.5(c) for any Additional
Capital Contributions.
(d) All Common Shares shall be identical and shall entitle the
holders thereof to the same rights and privileges. The Shareholders shall have
no personal liability for the debts or liabilities of the Company and shall not
be required to contribute to the assets of the Company on a winding up of the
business of the Company.
Section 2.6 SHARE REGISTER.
(a) All Common Shares will be issued in registered form only.
All issued Common Shares shall be registered in the Register which shall be kept
by the Secretary of the Company or by one or more persons designated for such
purpose by the Secretary of the Company and the Register shall contain the name
of each shareholder of the Company, its address including its country of
residence or elected domicile, the number of Common Shares held by it,
11
<PAGE>
the amount paid or agreed to be considered as paid on the Common Shares, the
date on which each Shareholder was entered into the Register and the date at
which any Shareholder ceased to be a member for one year after such Shareholder
was entered into the Register.
(b) Transfer of Common Shares shall be made in accordance with
the terms of this Agreement and the Articles of Incorporation, and shall be
effected by written instrument of transfer to be inscribed in the Register, such
instrument to be dated and signed by the transferor and the transferee or by
persons holding suitable powers of attorney to act therefor. The Board of
Directors shall accept and enter into the Register any Transfer effected in
accordance with the terms of this Agreement and the Articles of Incorporation
and pursuant to an agreement or agreements between the transferor and the
transferee, true and complete copies of which shall have been delivered to the
Company.
(c) Every Shareholder must provide the Secretary of the
Company with an address to which all notices and announcements from the Company,
the Board of Directors or other Shareholders may be sent. Such address will also
be entered in the Register. Any Shareholder may, at any time, change its address
as entered in the Register by means of a written notification to the Registered
Office and, for so long as the Registered Office and principal place of business
are not the same address, also by written notification to the principal place of
business or to such other address as may be set by the President from time to
time.
Section 2.7 ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Each Shareholder agrees to make Additional Capital
Contributions in cash from time to time to the Company in an aggregate amount
not to exceed the amount set forth opposite its name under the heading "Maximum
Additional Capital Commitments" on Schedule 2. At any time and from time to time
after the date hereof, on any Capital Call Date, subject to the fulfillment of
the conditions set forth in Section 2.15, each Shareholder shall contribute to
the Company such portion of its unfunded Additional Capital Contributions as
shall be specified by the Company in the Capital Call Notice delivered with
respect to such Capital Call Date; provided, however, that in no event shall any
Shareholder be required to make capital contributions in excess of its Capital
Commitment.
(b) In delivering a Capital Call Notice, the Company (i) will
call for Additional Capital Contributions from all Shareholders simultaneously
and pro rata in accordance with each Shareholder's Share Percentage and (ii)
will call only for such Additional Capital Contributions as are approved
pursuant to Section 3.2(b)(x).
(c) Additional Capital Contributions by the Shareholders shall
be made in Dollars by wire transfer of immediately available funds to the
account of the Company specified in the relevant Capital Call Notice. No
Shareholder shall be entitled to any interest or compensation by reason of its
Additional Capital Contributions or by reason of serving as a Shareholder. No
Shareholder shall be required to lend any funds to the Company.
Section 2.8 NEW CAPITAL.
12
<PAGE>
(a) In the event that the Company from time to time requires
capital in addition to the aggregate Capital Commitments and the Board of
Directors approves pursuant to Section 3.2(b)(x) the raising of additional
capital ("New Capital") by the Company, and such issuance satisfies the other
requirements of Luxembourg law, each Shareholder shall have the preferential
right to subscribe to such New Capital in proportion to its Share Percentage as
of the date of the notice described in Section 2.8(c).
(b) The Shareholders acknowledge and agree that upon the
written request of any Shareholder, the Board of Directors shall promptly
determine, in its sole discretion, whether or not to approve the issuance of New
Capital and the terms of such New Capital.
(c) Promptly following a decision of the Board of Directors to
issue New Capital, the Company shall provide to each Shareholder a written
notice (a "New Capital Notice") specifying the total amount of the New Capital
proposed to be issued and the amount and terms of such New Capital for which
each Shareholder is entitled to subscribe.
(d) For a period of thirty (30) days following the date of the
New Capital Notice, each Shareholder may elect by written notice to the Company
(a "Subscription Notice") to subscribe for all or any portion of that amount of
New Capital for which the Shareholder is entitled to subscribe as set forth in
the New Capital Notice.
(e) At the end of such thirty (30) day period, (i) the Company
shall give to each Shareholder written notice of which Shareholders have
subscribed for New Capital and the amount of such New Capital for which each
such Shareholder has subscribed and (ii) in the event that any Shareholder does
not subscribe for the full amount of New Capital for which such Shareholder is
entitled to subscribe, the Company shall give to each Shareholder that had
subscribed for the full amount of New Capital for which it was entitled to
subscribe (a "Fully Subscribed Shareholder") written notice (a "Further Capital
Notice") specifying the amount of such unsubscribed New Capital. For a period of
fifteen (15) days from the date of any Further Capital Notice, each Fully
Subscribed Shareholder may elect, by giving a Further Subscription Notice to the
Company, to subscribe for all or any portion of the additional unsubscribed New
Capital, which shall be allocated in the following order of priority: first,
ratably to the Fully Subscribed Shareholders in accordance with each Fully
Subscribed Shareholder's Share Percentage, to the extent the Fully Subscribed
Shareholders have elected to do so and second, if any Fully Subscribed
Shareholders have subscribed for more unsubscribed New Capital than has been
allocated pursuant to the clause first above, ratably to such Fully Subscribed
Shareholders in accordance with the unfulfilled subscriptions of such Fully
Subscribed Shareholders.
(f) Each Subscription Notice shall constitute a binding
commitment of the Shareholder giving such notice to purchase from the Company
the amount of New Capital set forth therein, at the price, by the date and on
the terms and conditions set forth in the New Capital Notice or the Further
Capital Notice, as the case may be, and shall be enforceable by the Company
against the subscribing Shareholder.
(g) After completion of the procedure set forth in Section
2.8(e), the Company may issue any New Capital not subscribed for by the
Shareholders pursuant to this Section 2.8 to
13
<PAGE>
any other Person; provided that such issuance shall have first been approved by
the Shareholders as required by Section 3.4(f)(iv).
(h) Contemporaneously with the delivery to the Company of the
New Capital, the Company shall, and the Shareholders agree to take all actions
necessary to cause the Company to, execute all certificates, instruments,
amendments and other documents and take such other actions as are reasonably
necessary or desirable to issue the New Capital.
(i) The number of Common Shares to be issued in connection
with such New Capital shall be determined by the Board of Directors promptly
following the approval by the Shareholders in accordance with Section 3.4(f)(iv)
of a decision to issue New Capital.
(j) The preferential rights of the Shareholders in this
Section 2.8 shall not apply with respect to issuance of options, warrants or
other rights to purchase Common Shares pursuant to an employee incentive plan
approved by Supermajority Board Approval of the Board of Directors.
Section 2.9 FORMATION OF LOCAL OPERATING COMPANIES. From time
to time, the Board of Directors in accordance with Section 3.2 and the Business
Plan may cause the Company to establish local operating companies to conduct the
Company Business within particular countries. The Shareholders agree to cause
the Company to form such Subsidiaries in a manner that permits such Subsidiaries
to be treated as partnerships or disregarded entities for United States federal
income tax purposes and conduct its business operations through such
Subsidiaries and branches so as to minimize the overall tax burden to the
Shareholders collectively.
Section 2.10 USE OF CAPITAL. Capital will be used for
purposes as the Board of Directors shall determine in accordance with Section
3.2.
14
<PAGE>
Section 2.11 PAYMENT TO IAXIS CARRIER SERVICES LTD.
Concurrently with the payment of the Subscription Price by iaxis, the Company
shall cause one or more of its Subsidiaries to pay [*] to iaxis carrier services
ltd. and [*] to iaxis for services rendered to such Subsidiaries in connection
with the identification, analysis and selection of facilities, and iaxis shall
enter into, and cause iaxis carrier services ltd. to enter into, and the Company
or its designated Subsidiary shall enter into, the iaxis Assignment Agreement.
Section 2.12 PAYMENTS TO SHAREHOLDERS. Concurrently with the
payment of the Subscription Price by the Shareholders and in recognition of
services performed by the Shareholders or their Affiliates in connection with
the formation of the Company: (a) the Company shall pay to each of the
Shareholders (or their designees) a transaction fee equal to [*] of the
Subscription Price for such Shareholder and (b) each of the Shareholders (or
their designees) shall be reimbursed by the Company for reasonable expenses
(with written documentation showing reasonable detail of such expenses), not to
exceed [*] incurred in drafting and negotiating the Transaction Documents and
forming the Company. At the time a Shareholder makes an Additional Capital
Contribution, the Company shall pay such Shareholder (or its designees) a
transaction fee equal to [*] of such Additional Capital Contribution.
Section 2.13 CONDITIONS TO THE EFFECTIVENESS OF THIS
AGREEMENT. This Agreement shall become effective upon its execution by
Shareholders whose Capital Commitments collectively constitute at least [*] of
the aggregate amount of all Capital Commitments set forth on Schedule 2, even if
not executed by one or more Persons whose names appear on the signature pages
hereof. No Person whose name appears on the signature pages hereof and who does
not execute this Agreement on the date hereof shall have the right to execute
this Agreement at any later date.
Section 2.14 CONDITIONS TO THE INITIAL CAPITAL CONTRIBUTIONS.
The obligations of each of the Shareholders to make its Initial Capital
Contribution are subject to the fulfillment of the following conditions:
(a) Such Shareholder shall have received copies of the
Company's Articles of Incorporation and resolutions of the Board of Directors,
approving the execution and delivery of the Transaction Documents and the
transactions contemplated hereby, including, without limitation, the
authorization and issuance of the Common Shares on the terms set forth herein.
(b) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted or entered by any governmental body,
agency or by any court with jurisdiction over the transactions contemplated
herein with requisite authority, to prohibit or unduly delay consummation of the
acquisition of the Common Shares contemplated by this Agreement.
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
15
<PAGE>
(c) Such Shareholder shall have received such opinions from
counsel for the Company and from counsel to the other Shareholders as such
Shareholder may reasonably request.
(d) Thor Geir Ramleth shall have executed and delivered an
employment and non-competition agreement and assignments of proprietary
information (the "Employment Agreement") substantially in the form of the term
sheet attached as Exhibit B, and a management shareholders agreement (the
"Management Shareholders Agreement") containing the terms set forth in Exhibit
B, and Ken Davies shall have executed and delivered an employment agreement in a
form reasonably satisfactory to the Shareholders, provided, however, that the
foregoing condition may be waived by Shareholders that would, after giving
effect to the Initial Capital Contributions, hold at least [*] of the
outstanding Common Shares held by all Shareholders.
(e) iaxis shall have executed and delivered an assignment
agreement with respect to the assets described therein (the "iaxis Assignment
Agreement") substantially in the form attached hereto as Exhibit D.
(f) The Company shall have obtained directors' and officers'
insurance in amounts and on terms in form and substance reasonably satisfactory
to the Investors,
(g) Since the date of this Agreement, there shall not have
been any material adverse change, either individually or in the aggregate, with
respect to the business, financial condition, operations, assets, liabilities,
personnel or prospects of the Company and to the knowledge of the Company there
shall not have occurred any event which could reasonably be expected to result
in such a material adverse change.
(h) The Articles of Incorporation shall have been amended to
authorize a class of Non-Voting Shares.
Section 2.15 CONDITIONS TO ADDITIONAL CAPITAL CONTRIBUTIONS.
The obligations of each of the Shareholders to make any Additional Capital
Contribution are subject to the fulfillment of the following conditions:
(a) Each Shareholder shall have fully funded its Initial
Capital Contribution.
(b) The Capital Call Notice for such Additional Capital
Contribution shall have been approved by the Board of Directors in accordance
with Section 3.2(b)(x).
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted or entered into by any governmental
body, agency or by any court with jurisdiction over the transactions
contemplated herein with requisite authority, to prohibit or
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
16
<PAGE>
unduly delay consummation of the acquisition of the Common Shares contemplated
by this Agreement.
ARTICLE III.
MANAGEMENT AND ADMINISTRATION
Section 3.1 BOARD OF DIRECTORS OF THE COMPANY.
(a) The Company shall be managed by a board of directors (the
"Board of Directors") consisting of eight (8) directors (each, a "Director").
Three (3) of the initial Directors shall be nominated by Carlyle, two (2) of the
initial Directors shall be nominated by Providence, one (1) of the initial
Directors shall be nominated by iaxis, and one (1) of the initial Directors
shall be nominated by Carrier1. One (1) of the initial Directors (the
"Management Director") shall be the Chief Executive Officer or, in his absence,
such other Principal Executive Officer elected by Supermajority Shareholder
Approval. Directors nominated by a Shareholder shall be referred to as such
Shareholder's "Director Designees." In the event that a Shareholder:
(i) ceases to own at least 10% of the Common Shares
outstanding at any time,
(ii) becomes a Defaulting Shareholder, or
(iii) Transfers Common Shares as provided in Section
4.8,
then, in any such case, such Shareholder shall have no right to nominate
Director Designee(s).
(b) Each of the Shareholders hereby agrees to vote in favor of
the Director Designees of each other Shareholder (provided that such Shareholder
has made timely payment of its Initial Capital Contribution) for positions on
the Board of Directors. The Director Designees of Carlyle shall initially be:
Frank Yeary, Gabe Finke and Brooke Coburn. The Director Designees of Providence
shall initially be: Glenn Creamer and Alexander Evans. The Director Designee of
iaxis shall initially be Abteen Sai. The Director Designee of Carrier1 shall be
Terje Nordahl. The Management Director shall be Thor Geir Ramleth. Each
Shareholder agrees not to take any action to remove a Director Designee other
than in accordance with (i) the following sentence, (ii) Section 3.1(a) if a
Shareholder ceases to own at least 10% of the Common Shares outstanding, (iii)
Section 4.8 or (iv) Section 3.1(a) if a Shareholder becomes a Defaulting
Shareholder. As soon as practicable after receipt of a written request from a
Shareholder to remove a Director Designee of such Shareholder, the other
Shareholders agree to take, or cause to be taken by their Director Designees,
all appropriate action to effect the removal of such Director Designee. Upon the
removal of a Director Designee pursuant to the preceding sentence or the
resignation or death of a Director Designee, the Shareholder nominating such
Director Designee shall designate a replacement Director Designee, and the other
Shareholders agree to take, or cause to be taken by their respective Director
Designees, as soon as practicable after receipt of such designation, all
appropriate action to effect the election of such replacement Director Designee.
Directors of Subsidiaries of the Company shall be appointed in a similar manner.
17
<PAGE>
(c) Except as necessary to remove a Director in accordance
with Section 3.1(a), each Shareholder shall vote against or withhold consent
from any proposal to amend the Articles of Incorporation in order to change the
composition or character of the Board of Directors as set forth in this Section
3.1.
(d) A Chairman of the Board of Directors (the "Chairman of the
Board") shall be elected by Supermajority Board Approval. The Chairman of the
Board shall preside over meetings of the Board of Directors but shall otherwise
have no additional voting or other rights in his capacity as such, including in
connection with any matters submitted to or voted upon by the Board of
Directors. In the absence of the Director then serving as Chairman of the Board
at any meeting of the Board of Directors, (A) the Chairman of the Board for such
meeting shall be the Director nominated by a majority of the Directors present
at such meeting, and (B) the Board of Directors may continue to act in
accordance with the terms of this Agreement.
(e) Each Director shall serve for a term of the duration set
forth in the Articles of Incorporation or, if earlier, until the date of death,
resignation or removal of such Director in accordance with this Agreement or the
date upon which the Shareholder that nominated such Director ceases to be a
Shareholder (or reduces its interest such that it is no longer entitled to
Director Designees and is required to remove such Director Designees as a
result); provided that, in the event that a Director dies, resigns or is removed
prior to the end of the scheduled term of such Director, the initial term for
any Director which replaces such Director on the Board of Directors shall be the
remaining scheduled term of such Director.
(f) Any Director may resign by giving notice in writing to the
Secretary of the Company at the Registered Office. The Secretary of the Company
will give written notice to all the Shareholders.
(g) Directors may participate in a meeting of the Board of
Directors by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear and speak to
each other, and such participation in a meeting will constitute presence in
person at the meeting; provided that all actions approved by the Directors at
any such meeting will be reduced to writing in the form of resolutions by the
Secretary of the Company.
(h) Except as otherwise may be determined by Supermajority
Board Approval or as otherwise provided in this Agreement, the Company shall not
pay compensation to, or reimburse expenses (other than reasonable out-of-pocket
travel expenses) of, the Directors.
(i) The Board of Directors shall hold regular meetings not
less than quarterly at such time and place as shall be determined by the Board
of Directors. Special meetings of the Board of Directors may be called at any
time by any Director. Except as otherwise determined by the Board of Directors,
all special and regular meetings of the Board of Directors shall be held at the
principal office of the Company. No notice shall be required with respect to any
regular meeting of the Board of Directors. Prior notice of any special meeting
shall be given by the Company at least five (5) Business Days before the date of
such meeting. Notice of any meeting need not be given to any Director who shall
submit, either before or after the meeting, a signed
18
<PAGE>
waiver of notice. Attendance of a Director at a meeting shall constitute a
waiver of notice of such meeting, except when the Director attends the meeting
for the express purpose of objecting at the beginning thereof to the transaction
of any business because the meeting is not properly called or convened. Notice
of any adjourned meeting, including the place, date and time of the new meeting,
shall be given to all Directors not present at the time of the adjournment, as
well as to the other Directors.
(j) To the extent practicable, a reasonably detailed agenda
shall be supplied to each Director reasonably in advance of each meeting of the
Board of Directors, together with appropriate documentation with respect to
agenda items calling for action by the Board of Directors, to inform adequately
the Directors regarding matters to come before the Board of Directors. Any
Director wishing to place a matter on the agenda for any meeting of the Board of
Directors may do so by communicating with the Chairman of the Board sufficiently
in advance of the meeting so as to permit timely dissemination to all Directors
of information with respect to the agenda items. Each Shareholder (treating
Carlyle for this purpose as a single Shareholder) shall also have the right to
designate up to two (2) persons who shall have observer status (but no vote) at
meetings of the Board of Directors, and such observers shall be permitted to
attend all regular, special or other meeting of the Company's Board of Directors
and of the board of directors of the Subsidiaries of the Company and in this
respect shall, upon prior reasonable request, be given copies of all notices,
minutes, consents and other materials that the Company or such Subsidiary
provides to its directors. Each observer may participate in any and all
discussions of matters brought to the Board of Directors of the Company and its
subsidiaries. The Company shall and shall cause each of its subsidiaries to
allow observers to attend such meetings by means of conference call or other
communications equipment utilized by any other person participating in such
meetings.
Section 3.2 REQUIREMENTS FOR BOARD ACTION.
(a) Except as provided in Section 3.2(b) or mandatorily
required by the laws of Luxembourg, all actions taken by the Board of Directors
shall require the unanimous written consent of Directors (excluding Directors
appointed by any Shareholder to which the final sentence of Section 3.1(a)
applies) or the approval of a majority of all Directors by action taken at a
meeting which has been duly called and at which a quorum was present.
(b) In addition to such other actions requiring Supermajority
Board Approval as specified elsewhere in this Agreement, the following actions
shall require the unanimous written consent of all Directors or the approval of
a majority of the Directors present and entitled to vote on such actions at a
meeting which has been duly called and at which a quorum was present, which
majority shall include, subject to Section 7.3(d), at least one (1) Director
Designee of each of at least two (2) Shareholders holding Common Shares, in the
aggregate, equal to or greater than 55% of the outstanding Common Shares at such
time held by all Shareholders ("Supermajority Board Approval"), provided,
however, that with respect to clauses (vi) and (vii) below such majority shall
not include Directors nominated by interested Shareholders:
19
<PAGE>
(i) the incurrence or refinancing of Indebtedness by
the Company or any of its Subsidiaries in excess
of [*] in aggregate principal amount;
(ii) the approval of any material change to, or
material deviation from, the Business Plan or the
approval of the adoption of a new Business Plan;
(iii) the making of any payment to an Affiliate of any
Shareholder (other than payments made in
accordance with the terms of contractual
obligations entered into in accordance with the
terms hereof or pursuant to an approved Affiliate
Agreement);
(iv) acquisitions or sales of assets by the Company and
its Subsidiaries, with a purchase price or Fair
Market Value in excess of [*] per year in the
aggregate or which are otherwise determined by the
Board of Directors to be material to the business
of the Company and its Subsidiaries;
(v) the execution of any Affiliate Agreement (or the
amendment or extension thereof) or the approval of
any transaction or series of related transactions
between the Company or any of its Subsidiaries and
a Shareholder, or an Affiliate of a Shareholder,
other than transactions whose terms are expressly
provided for in the Transaction Documents, or
transactions, involving less than [*] individually
or [*] in the aggregate per Shareholder, entered
into in the ordinary course of business on terms
no less favorable to the Company or its
Subsidiaries than would be available in an
arms-length transaction;
(vi) with respect to any Affiliate Agreement that by
its terms allows the parties to elect to take any
action thereunder (as would occur, by way of
example, with an Affiliate Agreement that is
automatically renewable after a specified event or
circumstance or period of time, unless the parties
otherwise agree), any election by the Company to
take any action or not to exercise any such right
under such Affiliate Agreement and any
determination of whether a default has occurred
and whether and what actions should be taken in
respect thereof and the exercise of any right or
option;
(vii) any filing of a voluntary petition in bankruptcy
or reorganization or for the adoption of an
arrangement or an admission seeking the
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
20
<PAGE>
relief therein provided under any existing or
future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization, or relief
of debtors;
(viii) the election, appointment or removal of any
Principal Executive Officer of the Company or the
implementation or amendment of any compensation
arrangement for any Principal Executive Officer;
(ix) the making of Capital Expenditures in excess of
those set forth in the then current Business Plan;
(x) the issuance of any Capital Call Notice or New
Capital Notice;
(xi) the transfer of any ownership interest in any
Subsidiary of the Company to any Person other than
a wholly-owned Subsidiary of the Company;
(xii) a material change in the nature of the Company
Business;
(xiii) any implementation or material amendment to
executive compensation or material employee
benefit programs; and
(xiv) the admission of new Investors.
(c) Each Shareholder agrees to notify each other Shareholder
of any Affiliate Agreement to which it or any of its Affiliates will be party.
(d) Any action approved by the Board of Directors may be taken
by any authorized officer of the Company on behalf of the Company and any action
so taken shall bind the Company. Except as otherwise provided herein, no
Shareholder or Director or any other Person shall have the authority to bind the
Company.
(e) For purposes of this Agreement, a quorum will be deemed to
be present at a duly called meeting of the Board of Directors if at least five
(5) Directors are present at such meeting. Each Shareholder agrees not to cause
its Director Designees to avoid any meeting of the Board of Directors for the
purpose of frustrating a quorum of the Board of Directors.
Section 3.3 OFFICERS.
(a) The officers of the Company (the "Officers") shall consist
of a President, a Vice President, a Chief Financial Officer, and such other
officers as the Board of Directors shall deem necessary from time to time. Each
Officer shall hold office until such Officer resigns or is removed.
(b) The Board of Directors, by Supermajority Board Approval,
shall elect all Principal Executive Officers. Any Director may at any time call
a special meeting of the Board of Directors to vote upon the dismissal of any
Principal Executive Officer if such Director, in his or
21
<PAGE>
her reasonable business judgment (or the reasonable business judgment of the
Shareholder appointing such Director), believes that such Principal Executive
Officer should be dismissed. Following any such dismissal, the succeeding
Principal Executive Officer shall be elected by the Board of Directors by
Supermajority Board Approval.
(c) The President shall be the primary operating officer of
the Company and shall be responsible for the general and executive management
and daily administration of the operations and business of the Company in
accordance with the terms and conditions of this Agreement, the Business Plan
then in effect and the Articles of Incorporation (but subject to Section
3.2(b)). The President of the Company shall also carry into effect all orders
and resolutions of the Board of Directors.
(d) The Chief Financial Officer shall, subject to the terms
and conditions hereof, oversee and be responsible for financial matters
pertaining to the Company and its obligations under this Agreement, shall
oversee the preparation of financial statements for the Company and the delivery
of such financial information to Shareholders as is required by Section 3.5 and
discharge such other duties as are set forth herein or as may from time to time
be delegated to the Chief Financial Officer by the Board of Directors or the
President. The Chief Financial Officer shall present reports on the financial
condition of the Company from time to time to the President and, upon request of
any Director, at any specified meeting of the Board of Directors.
(e) All other officers shall have such duties as may from time
to time be delegated to them by the Board of Directors or the President of the
Company.
(f) The Board of Directors, by Supermajority Board Approval,
may establish and fund a compensation plan for the President, the Chief
Financial Officer and other officers of the Company specified by the President
of the Company and approved by the Supermajority Board Approval of the Board of
Directors. Such plan shall provide for such compensation of such officers,
including any signing bonuses, base salary, incentive bonuses and severance, as
shall be determined by the Board of Directors by Supermajority Board Approval.
Section 3.4 SHAREHOLDERS' MEETINGS.
(a) The annual general meeting of Shareholders shall be held,
in accordance with Luxembourg law, in Luxembourg at the Registered Office, or at
such other place as may be specified in the notice of meeting, on the first
Friday in the month of April in each year. If such day is not a Business Day in
Luxembourg, the annual general meeting shall be held on the next following
Business Day in Luxembourg. All meetings other than annual general meetings
shall be called special general meetings.
(b) All special general meetings of Shareholders may be held
at such times as may be determined by vote of the Board of Directors and
specified in the notice of meeting for such meetings. Any Shareholder, or
Shareholders together, holding not less than 15% of the issued and outstanding
Common Shares (so long as it is not a Defaulting Shareholder) may at any time
request the Board of Directors to call a special general meeting of
Shareholders. The request
22
<PAGE>
must state the purpose of the meeting, must be signed by the requesting
Shareholder(s) and deposited at the Registered Office. The Board of Directors
shall call a special general meeting of Shareholders immediately following
receipt of any such request. If the Board of Directors fail to convene a special
general meeting thirty-five (35) days from the date of deposit of the request,
the requesting Shareholder(s) may convene a special general meeting in
accordance with Luxembourg law. Each notice of meeting shall specify the purpose
or purposes of the meeting and the matters to be considered at such meeting, and
all other such information as may be required by Luxembourg law.
(c) Written notice of the place, date and time of every
meeting of Shareholders, whether annual or special, shall be given by registered
mail to each Shareholder not less than fifteen (15) days nor more than sixty
(60) days prior to the date of such meeting unless (i) such notice is waived in
writing by all the Shareholders and (ii) all Shareholders are present or
represented at such meeting. At any meeting so called, the Shareholders shall
transact only such business as was specified in the notice for such meeting and
any other business which all Shareholders determine is prudent.
(d) A quorum of the Shareholders (without which a vote of the
Shareholders on any matter may not be held) will consist of Shareholders either
in person or by proxy holding more than 50% of the issued and outstanding Common
Shares (excluding the Common Shares of any Shareholder which is a Defaulting
Shareholder). Each Shareholder agrees not to avoid any meeting for the purpose
of frustrating a quorum of the Shareholders.
(e) Subject to Section 3.4(f) and any mandatory provisions of
Luxembourg law, all actions which are required by such law to be taken or
approved by the Shareholders shall require the approval of Shareholders holding
more than 50% of the issued and outstanding Common Shares (excluding the Common
Shares of any Defaulting Shareholder) by affirmative vote at a meeting of
Shareholders held pursuant to this Section 3.4. Shareholders may vote upon and
approve the matters described in Section 3.4(f).
(f) The following actions shall require the approval of two
(2) or more Shareholders holding at least 55% (or more if so required by
Luxembourg law) of the outstanding Common Shares held by all Shareholders
(excluding the Common Shares of any Defaulting Shareholder) by affirmative vote
at a meeting of Shareholders held pursuant to this Section 3.4 ("Supermajority
Shareholder Approval"):
(i) any material change in the nature of the Company
Business;
(ii) any issuance, purchase or redemption by the
Company of any securities, including Common
Shares, of the Company, or any change, increase or
reduction in the equity capitalization of the
Company;
(iii) subject to the provisions of Section 4.4 and
Section 4.5, any merger or consolidation of the
Company with or into any other Person or of any
Person other than a Subsidiary of the Company,
with or into
23
<PAGE>
the Company, the sale of all or substantially all
of the assets of the Company or any material
Subsidiary, the dissolution, liquidation,
reorganization or recapitalization of the Company
or any similar extraordinary corporate action or
transaction involving the Company;
(iv) any issuance, purchase or redemption by the
Company of any securities, including Common Shares
other than as expressly provided for herein, of
the Company, or any change, increase or reduction
in the capitalization of the Company; the
declaration or payment of any dividends or any
other distribution, directly or indirectly, on
account of any Capital Stock of the Company, now
or hereafter outstanding, except for dividends or
any other distribution on any Capital Stock
pursuant to the terms of such Capital Stock as
previously approved by Supermajority Board
Approval;
(v) any amendment or other modification of the
Articles of Incorporation, except as required by
Section 10.7.
Section 3.5 ACCOUNTING, RECORD KEEPING AND REPORTING.
(a) The books and records of the Company and Subsidiaries
shall be kept in accordance with U.S. GAAP, consistently applied, and, to the
extent required by law, shall also be kept (separately if necessary) in
accordance with generally accepted accounting principles as observed in
Luxembourg. The Company and Subsidiaries shall keep books, records and accounts
with respect to (i) all sums of money received and expended by the Company and
Subsidiaries and the matters in respect of which the receipt and expenditure
take place, (ii) all sales and purchases of goods by the Company and
Subsidiaries and (iii) the assets and liabilities of the Company and
Subsidiaries.
(b) The accounts of the Company and Subsidiaries shall be
audited by the Independent Accountants. The annual financial statements of the
Company and Subsidiaries shall be audited in accordance with U.S. GAAP.
(c) The books of account of the Company and Subsidiaries,
together with a copy of this Agreement and the Articles of Incorporation, shall
be kept and maintained at the Registered Office of the Company. A duplicate copy
of such items shall also be kept and maintained at the principal place of
business of the Company. If the records of account are kept at someplace outside
Luxembourg, there shall be kept at an office of the Company in Luxembourg such
records as will enable the Directors to ascertain with reasonable accuracy the
financial position of the Company at the end of each three month period. So long
as it holds at least 10% of the Common Shares outstanding at such time, each of
the Shareholders, through their respective authorized representatives, shall
have the right at such Shareholder's expense to visit and inspect any of the
operations and any of the properties and assets of the Company and Subsidiaries,
including the books of account of the Company and Subsidiaries, and to make
copies and take extracts therefrom, and to discuss its affairs, finances and
accounts with its officers and
24
<PAGE>
the Independent Accountants all at such reasonable times and as often as may be
reasonably requested; provided that each Shareholder agrees not to, and to cause
its representatives not to, disclose such information except as otherwise agreed
to by the Shareholders or as required by law. A Shareholder also may disclose
such information to the limited extent necessary to evaluate the business
relationship herein described and to take the steps contemplated by this
Agreement (including without limitation, Article IV, so long as any potential
purchaser executes a confidentiality agreement agreeing to the provisions set
forth in Article VI of this Agreement). Moreover, any two (2) Shareholders
holding at least 30% of the Common Shares outstanding shall have the right (but
not more than once in any twenty-four month period) to have a "private audit" of
the books and records conducted at reasonable times and after reasonable notice
to the Company for any purpose reasonably related to such Shareholder's interest
in the Company, but any such private audit shall be at the expense of the
Shareholder requesting it, and shall not be paid out of Company funds. A
"private audit" shall entail the review of the work papers of the Company's
auditors for the two most recent audit periods, and in-person consultation with
the auditors, but shall not entail consultation with management or any
disruption of management's normal business activities.
(d) As soon as practicable following the end of each Fiscal
Year, the Board of Directors shall cause to be prepared for the Company and
Subsidiaries and shall deliver to the Shareholders not later than ninety (90)
days following the end of such Fiscal Year a statement of the results of
operations for the Fiscal Year, a balance sheet as at the end of such Fiscal
Year, a statement of retained earnings or deficit and a statement of cash flows
for such Fiscal Year, together with all other documents prescribed under
Luxembourg law and all schedules and footnotes thereto and an audit report
thereon of the Independent Accountants. Such financial statements shall comply
with U.S. GAAP consistently applied on a basis consistent with prior years
(except as indicated in the notes thereto) and, to the extent required by law, a
separate set shall be prepared that also complies with GAAP as observed in
Luxembourg.
(e) As soon as practicable after the end of each month and
Fiscal Quarter the Company shall cause to be prepared and the Company shall
deliver to each Shareholder not later than forty-five (45) days following the
end of such month or Fiscal Quarter, as the case may be, (i) unaudited monthly
or quarterly financial statements comparable to those in Section 3.5(d) prepared
in accordance with U.S. GAAP applied on a basis consistent with the audited
financial statements of the company, subject to changes from audit and year-end
adjustments and without the footnotes thereto, together with a certificate of
the Chief Financial Officer to such effect, and (ii) an operating report for the
Company for such period, which report shall detail, among other things, revenue
generated in such period, expenses incurred in such period, compared to the
Business Plan then in effect, and pertinent operating data.
(f) Under the direction of the Board of Directors, the Company
shall prepare and file, or shall cause to be prepared, as applicable, all
reports prescribed by any governmental authority having jurisdiction over the
Company.
(g) In addition to the reports described above, the Company
shall furnish such other financial and supporting information to each
Shareholder and the Board of Directors in such detail and with such frequency as
the Board of Directors may reasonably require and shall furnish
25
<PAGE>
to each Shareholder all such financial information as such Shareholder shall
require to prepare United States federal income tax returns and make United
States federal income tax elections.
(h) Notwithstanding the foregoing provisions of this Section
3.5, if (i) any Shareholder or group of Shareholders transfers its Common Shares
representing less than [*] of the outstanding Common Shares to a Competitor or
(ii) any Shareholder loses its right to appoint Director Designees as set forth
in Section 4.8, then such Shareholders or their transferees, as the case may be,
shall be entitled only to the information set forth in Section 3.5(d) and the
information set forth in Section 3.5(e) for the relevant fiscal period.
Section 3.6 BUSINESS PLAN. Within thirty (30) days after the
date of this Agreement, the Shareholders shall use reasonable efforts to agree
upon a preliminary Business Plan. The Shareholders shall endeavor in good faith
to complete a final Business Plan to be presented to the Board of Directors not
later than [*]. Prior to approval of a final Business Plan, no expenditures or
commitments shall be made by the Company in excess of [*] individually or [*] in
the aggregate without Supermajority Board Approval. Except as set forth in the
preceding sentence, no expenditure shall be incurred by or on behalf of the
Company which is not contemplated, either specifically or generally, by the
Business Plan then in effect. The Business Plan may be amended or modified by
the Board of Directors by Supermajority Board Approval.
Section 3.7 DEPOSITS AND WITHDRAWALS OF FUNDS. Funds of the
Company shall be deposited in such banks or other depositories as shall be
designated from time to time by the Board of Directors. All withdrawals from any
such depository shall be made only as authorized by the Board of Directors and
shall be made only by check, wire transfer, debit memorandum or other written
instruction.
Section 3.8 VOTING. In order to effectuate the provisions of
this Agreement, each Shareholder hereby agrees, subject to compliance with
applicable law, that when any action or vote is required by this Agreement to be
taken by such Shareholder or by a Director, such Shareholder agrees to use its
reasonable best efforts to call, or cause the appropriate officers and directors
to call, a special or annual meeting of Shareholders or Directors, as
applicable, to effectuate such Shareholder action as required by this Agreement.
Each Shareholder agrees to use its reasonable best efforts to vote or cause the
vote of its Shares in a manner consistent with, and to effect, the terms of this
Agreement.
ARTICLE IV.
TRANSFER AND ASSIGNMENT
Section 4.1 TRANSFER OF SECURITIES.
(a) Except as expressly permitted by Section 4.1(b), no
Shareholder shall, directly or indirectly, sell (whether by involuntary or
judicial sale or otherwise), transfer, create,
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
26
<PAGE>
incur, assume or suffer to exist a lien on, grant a security interest in,
pledge, hypothecate, assign, give or otherwise (voluntarily or by operation of
law) dispose of (any such act is hereinafter referred to as a "Transfer") any
Common Shares to any Person.
(b) A Shareholder may (i) transfer any Common Shares or any
interest therein or any rights to purchase Common Shares hereunder to an
Affiliate of such Shareholder, (ii) pledge any or all Common Shares or grant
a security interest therein to secure indebtedness of the Shareholder owing
to a bank or other financial institution, provided that any such bank or
other financial institution pursuant to this clause (ii) shall acquire only a
security interest in the Common Shares entitling such bank or other financial
institution only to the proceeds from any sale of the Common Shares in
accordance with the terms of this Agreement and shall not acquire title to
the Common Shares or any other rights incident thereto, and, in the case of
any foreclosure on the Common Shares by such bank or other financial
institution, the pledgee shall be considered an "Offeror" (as defined in
Section 4.2 below) and shall not be permitted to consummate the foreclosure
without complying with the provisions of Section 4.2 or (iii) subject to the
provisions of Section 4.2, Transfer any Common Shares to any Person (any such
transferee pursuant to clause (i), (ii) or (iii) above or Section 4.1(d)
below shall be referred to herein as a "Permitted Transferee"); PROVIDED,
HOWEVER, notwithstanding anything to the contrary contained in this
paragraph, no Transfer shall be made to any Person pursuant to clause (iii)
above prior to [*] without a Supermajority Shareholder Approval of the
non-transferring Shareholders.
(c) In the event a Transfer of any Common Shares has taken
place in violation of the provisions of this Agreement, the Board of Directors
shall refuse to register such Transfer in the Register and such Transfer shall
be void and of no effect, and no distribution of any kind shall be paid by the
Company to the transferee in respect of such Common Shares (all such dividends
and distributions being deemed waived), and the voting rights, if any, of such
Common Shares on any matter whatsoever shall remain vested in the transferor
during the period commencing with such transferor's initial noncompliance and
ending when compliance shall have occurred.
(d) The provisions of this Section 4.1 shall not apply to (i)
Transfers to a family member of a Shareholder or to trusts for the benefit of
such persons or Shareholder so long as such Shareholder retains control over the
right to vote or dispose of any Common Shares so Transferred, and such
transferee family members or trusts agree to be bound by this Agreement; (ii)
Transfers between any Shareholder and any of its Affiliates or by Providence or
any of its Affiliates of not more than [*] of the Common Shares held by
Providence and its Affiliates at any time to Primus Venture Partners IV Limited
Partnership or any Affiliates thereof ("Primus"), PROVIDED THAT such transferee
Affiliate, or Primus, as the case may be, agrees to be bound by this Agreement,
and (iii) any Transfer in connection with a public offering pursuant to the
Registration Rights Agreement or pursuant to Rule 144 under the Securities Act.
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
27
<PAGE>
(e) The provisions of this Section 4.1 shall apply to any
transfer of any capital stock or other equity securities of any Shareholders or
other Person where substantially all of such Shareholders' or other Person's
assets are directly or indirectly composed of Common Shares ("Special Purpose
Shareholders").
Section 4.2 RIGHT OF FIRST REFUSAL.
(a) Prior to any Shareholder making any Transfer in accordance
with Section 4.1(b)(iii), such Shareholder (the "Offeror") shall provide written
notice (the "Notice") to the other Shareholders (each, an "Offeree"), which
notice shall set forth (i) confirmation that such Offeror intends to Transfer
all or certain of its Common Shares in a bona fide transaction with a third
party in accordance with Section 4.1(b)(iii), (ii) the name and address of each
proposed transferee or purchaser and such other information as is reasonably
requested by the other Shareholders, (iii) the number of Common Shares proposed
to be Transferred (the "Offered Shares"), (iv) the proposed amount and form of
consideration to be paid for the Offered Shares, provided that in no event shall
any non-cash consideration consist of anything other than Cash Equivalents or
Marketable Securities (each as defined in Sections 4.2(g) or (h)) or other
securities reasonably subject to valuation by an Independent Appraiser (as
defined in Section 4.2(d)) and (v) all other material terms of the proposed
Transfer.
(b) Each Offeree may elect to buy all or any portion of the
Offered Shares at the price and upon the terms and conditions set forth in the
Notice. Each Offeree shall make such election by delivery of a written notice
(the "Offeree Election Notice") to the Offeror within thirty (30) days of the
date of receipt of the Notice by the Offerees, which Offeree Election Notice
shall constitute the binding agreement of each Offeree to purchase the number of
Offered Shares set forth in the Offeree Election Notice (the "Offeree Election
Number") at the price and upon the terms and conditions set forth in the Notice.
If more than one (1) Offeree shall send an Offeree Election Notice and the
aggregate Offeree Election Numbers equal or exceed the number of Offered Shares,
then each Offeree shall be entitled to (i) its pro rata share (the "Pro Rata
Share"), based upon the relative interests in the Common Shares, on a fully
diluted basis, held by all Offerees, of the Offered Shares, to the extent the
Offerees have elected to do so and (ii) its pro rata share based on the
unfulfilled Offeree Election Numbers of the remaining Offered Shares and the
Offeree Election Notice shall be deemed to be an election to purchase such
Common Shares. The Offeror shall deliver written notice thereof (the "Purchase
Notice") to each Offeree who has submitted an Offeree Election Notice. The
Purchase Notice shall state the number of Offered Shares to be acquired by each
such Offeree and the closing date for such transaction, which date shall not be
less than thirty (30) days from the date of delivery of the Purchase Notice to
all such Offerees. At such closing, each such Offeree shall deliver to such
Offeror, or to such other person as such Offeror may request, by wire transfer
of immediately available funds, the amount of the purchase price (as calculated
below) of the Offered Shares to be purchased by such Offeree, to be held in
escrow against delivery of the instruments of transfer properly endorsed in
blank, and the corresponding certificate(s) representing all such Offered
Shares. If any Offeree shall fail to deliver such purchase price, then the other
Offerees may purchase, pro rata, the Offered Shares to have been purchased by
such Offeree by wire transfer of immediately available funds of the purchase
price for such additional Offered Shares, to be held in escrow against delivery
of the instruments of transfer properly endorsed in blank, and the corresponding
certificate(s)
28
<PAGE>
representing all such Offered Shares. Upon receipt of payment for all of the
Offered Shares, such Offeror shall deliver instruments of transfer properly
endorsed in blank and the corresponding certificates representing all such
Offered Shares to the respective Offerees.
(c) If an Offeree Election Notice is not received by such
Offeror from any Offeree within the period specified in paragraph (b) of this
Section 4.2, or if the Offerees elect to purchase less than all of the Offered
Shares or fail to deliver the purchase price of the Offered Shares in accordance
with the terms hereof, the Offeror shall have the right to Transfer the Common
Shares specified in the Notice to the proposed purchaser or transferee in
accordance with the terms of this Agreement, but only at a price and upon terms
and conditions no less favorable to the Offeror than those stated in the Notice
and only if such sale occurs on a date within ninety (90) days from the date of
the Notice.
(d) For purposes of calculating the purchase price of any such
Transfer, if any portion of the consideration is neither cash nor Marketable
Securities, the Fair Market Value of such consideration shall be determined, at
the expense of the Offeror, by an internationally recognized independent
valuation consultant or appraiser (an "Independent Appraiser") (with experience
evaluating such type of property) selected by the Offeror and reasonably
satisfactory to Offerees holding a majority of the Common Shares held by such
Offerees.
(e) The closing of the transactions contemplated by this
Section 4.2 shall occur at the principal place of business of the Company unless
otherwise agreed by the parties to such transaction.
(f) If the Offerees do not exercise their rights to purchase
the Offered Shares, and the Offeror shall not have sold the Offered Shares in
accordance with Section 4.2(c) before the expiration of the 90-day period
described in Section 4.2(c), then the Offeror may not sell the Offered Shares
without again complying with this Section 4.2.
(g) For purposes of these Sections 4.2 and 4.3, the following
terms shall have the following meanings:
"CASH EQUIVALENTS" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within (1) year
from the date of acquisition thereof, (ii) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof, in
each case maturing within one (1) year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating
obtainable from any of Standard & Poor's Corporation, Moody's Investors
Service, Inc., or Duff & Phelps Credit Rating Co. or (iii) commercial
paper maturing not more than one (1) year from the date of issuance
thereof and, at the time of acquisition, having the highest rating
obtainable from Standard & Poor's Corporation or Moody's Investors
Service, Inc.; and
"MARKETABLE SECURITIES" shall mean securities that
are (i) (A) securities of or other interests in any Person that are
traded on a U.S. national securities exchange or
29
<PAGE>
reported on the NASDAQ National Stock Market or (B) debt securities on
market terms of an issuer that has debt or equity securities that are
so traded or so reported on and in which securities a U.S. nationally
recognized securities firm has agreed to make a market and (ii) not
subject to restrictions on transfer as a result of any applicable
contractual provisions or the provisions of the U.S. Securities Act of
1933, as amended (or, if subject to such restrictions under such Act,
are also subject to registration rights reasonably acceptable to the
Person receiving such securities).
(h) For purposes of this Agreement, the Independent Appraiser
shall use the following for valuation: (i) Cash Equivalents, the face amount
thereof, (ii) Marketable Securities, the last reported sale price thereof on the
principal market on which such Securities are traded on the last full trading
day prior to the determination and (iii) any other assets or property, the price
at which a willing seller would sell and a willing buyer would buy such assets
or property having full knowledge of the facts, and assuming each party acts on
an arm's-length basis with the expectation of concluding the purchase and sale
within a reasonable time.
Section 4.3 TAG-ALONG RIGHTS.
(a) If any holder of Common Shares (the "Selling
Shareholder"), at any time or from time to time, enters into an agreement
(whether oral or written) to Transfer any Common Shares in accordance with
Section 4.1(b)(iii) (a "Tag-Along Sale"), then each Shareholder other than the
Selling Shareholder (the "Other Holders") shall have the right, but not the
obligation, to participate in such Tag-Along Sale by selling the number of
Common Shares respectively owned by such Other Holder as calculated in the
following manner. Such Common Shares owned by the Other Holders are hereinafter
referred to collectively as the "Shareholders' Shares." The number of Common
Shares that the Other Holders shall be entitled to include in such Tag-Along
Sale (the "Shareholders' Allotment") shall equal the product (rounded down to
the nearest whole share) of (i) the total number of Common Shares proposed to be
Transferred pursuant to the Tag-Along Sale or such greater number of shares that
the proposed purchaser in the Tag-Along Sale shall agree to purchase or
otherwise acquire, times (ii) a fraction, the numerator of which shall equal the
aggregate number of Shareholders' Shares on the date of the Sale Notice (as
defined below), and the denominator of which shall equal the sum of (A) the
aggregate number of Common Shares owned by the Selling Shareholder on the date
of the Sale Notice plus (B) the aggregate number of Shareholders' Shares on the
date of the Sale Notice. For purposes of this Section 4.3, the number and price
of Common Shares shall be calculated on a fully diluted basis. Any such sales by
the Other Holders shall be on the same terms and conditions as the proposed
Tag-Along Sale by the Selling Shareholder.
(b) Notwithstanding the foregoing, this Section 4.3 shall not
apply to any transfer to a Shareholder pursuant to Section 4.2(b) hereof.
(c) The Selling Shareholder shall promptly provide each of the
Other Holders and the Company with written notice (the "Sale Notice") not less
than thirty (30) days prior to the proposed date of the Tag-Along Sale (the
"Tag-Along Sale Date"). In order to facilitate the prompt delivery of the Sale
Notice, the Company hereby covenants to provide the Selling Shareholder
participating in a Tag-Along Sale access to the Register of the Company. Each
Sale
30
<PAGE>
Notice shall set forth (i) the name and address of each proposed transferee or
purchaser of Common Shares in the Tag-Along Sale, (ii) the name and address of
the Selling Shareholder and the number of Common Shares proposed to be
transferred by such Selling Shareholder, (iii) the proposed amount and form of
consideration to be paid for such Common Shares and the terms and conditions of
payment offered by each proposed transferee or purchaser, (provided, that in no
event shall any non-cash consideration consist of anything other than Cash
Equivalents or Marketable Securities or other securities reasonably subject to a
valuation by an Independent Appraiser) (iv) the number of Shareholders' Shares
held of record as of the close of business on the date of the Sale Notice (the
"Notice Date") by the Other Holders to whom the notice is sent, (v) the
aggregate number of Common Shares held of record as of the Notice Date by the
Selling Shareholder, (vi) the number of Shareholders' Shares in the
Shareholders' Allotment, (vii) confirmation that the proposed purchaser or
transferee has been informed of the "Tag-Along Rights" provided for herein and
has agreed to purchase Common Shares in accordance with the terms hereof, and
(viii) the Tag-Along Sale Date.
(d) Each Other Holder who wishes to participate in the
Tag-Along Sale shall provide written notice (or oral notice confirmed in
writing) (the "Tag-Along Notice") to the Selling Shareholder and the Company not
less than twenty (20) days prior to the Tag-Along Sale Date. The Tag-Along
Notice shall set forth the number of Common Shares that such Other Holder elects
to include in the Tag-Along Sale, which shall not exceed the product of (x) the
Shareholders' Allotment times (y) a fraction, the numerator of which is equal to
the aggregate number of Shareholders' Shares owned of record as of the Notice
Date by such Other Holder and the denominator of which is the aggregate number
of Shareholders' Shares owned of record by all of the Other Holders as of the
Notice Date. The Tag-Along Notice shall also specify the aggregate number of
additional Common Shares owned of record as of the Notice Date by such Other
Holder, if any, which such Other Holder desires also to include in the Tag-Along
Sale ("Additional Shares") in the event there is an undersubscription for the
entire Shareholders' Allotment. In the event there is an undersubscription by
the Other Holders for the entire Shareholders' Allotment, the Selling
Shareholder participating in the Tag-Along Sale shall apportion the unsubscribed
Shareholders' Shares to Other Holders whose Tag-Along Notices specified an
amount of Additional Shares, which apportionment shall be on a pro rata basis
among such Other Holders in accordance with the number of Additional Shares
specified by all such Other Holders in their Tag-Along Notices.
(e) The Company shall determine the aggregate number of Common
Shares to be sold by each participating Other Holder or in any given Tag-Along
Sale in accordance with the terms hereof, and the Tag-Along Notices given by the
Other Holders shall constitute their binding agreements to sell such shares at
the price and on the terms and conditions applicable to such sale.
(f) If a Tag-Along Notice is not received by the Selling
Shareholder participating in the Tag-Along Sale from an Other Holder prior to
the twenty (20) day period specified above, the Selling Shareholder shall have
the right to Transfer the number of Common Shares specified in the Sale Notice
to the proposed purchaser or transferee without any participation by such Other
Holder (subject to the right of Other Holders to sell Additional Shares in the
event of an undersubscription as described above), but only at a price and upon
terms and
31
<PAGE>
conditions no more favorable to the Selling Shareholder than those stated in
such Sale Notice and only if such sale occurs on a date within ninety (90) days
of the Tag-Along Sale Date.
(g) The provisions of this Section 4.3 shall apply to any
transfer of any capital stock or other equity securities of any Special Purpose
Shareholder.
(h) If the Other Holders do not exercise their rights to sell
any Common Shares, and the Selling Shareholder shall not have sold such Shares
in accordance with Section 4.3 before the expiration of the 90-day period, then
the Selling Shareholder may not sell such Shares without again complying with
this Section 4.3.
Section 4.4 DRAG-ALONG RIGHTS.
(a) Notwithstanding any other provision hereof, if any
Shareholders (other than any Defaulting Shareholder) holding 55% or more of the
issued and outstanding Common Shares held by Shareholders (other than Common
Shares held by any Defaulting Shareholders) (the "Initiating Shareholders")
agree to sell (a "Drag-Along Sale") 100% of the aggregate number of Common
Shares then held by the Initiating Shareholders to any person who is not an
Affiliate of the Initiating Shareholders (a "Third Party"), other than a sale in
connection with a public offering pursuant to the Registration Rights Agreement,
then upon the demand of the Initiating Shareholders, the other Shareholders
hereby agree to sell to such Third Party 100% of the Common Shares then held by
them, at a price per share and on terms and conditions no less favorable to such
other Shareholders than those on which the Initiating Shareholders have agreed
to sell their Common Shares to such Third Party, provided, however, that no
Shareholder shall be required to accept any consideration for its Common Shares
other than cash, Cash Equivalents or Marketable Securities.
(b) Prior to making any Drag-Along Sale, the Initiating
Shareholders shall promptly provide each Shareholder with written notice (the
"Drag-Along Notice") not more than ninety (90) days nor less than thirty (30)
days prior to the proposed date of the Drag-Along Sale (the "Drag-Along Sale
Date"). The Drag-Along Notice shall set forth: (i) the name and address of the
Third Party, (ii) the proposed amount and form of consideration to be paid per
share and the terms and conditions of payment offered by the Third Party
(provided that in no event shall any such non-cash consideration consist of
anything other than Cash Equivalents or Marketable Securities), (iii) the number
of shares of Common Shares held of record as of the close of business on the
date of the Drag-Along Sale Notice (the "Drag-Along Notice Date") by the
Initiating Shareholders, (iv) confirmation that the Initiating Shareholders are
selling 100% of the aggregate number of shares of Common Shares then held by
them to a Third Party, and (v) the Drag-Along Sale Date.
(c) On the Drag-Along Sale Date, each Shareholder shall
deliver an instrument of transfer and the corresponding certificate or
certificates for all of its Common Shares, duly endorsed for transfer with
signatures guaranteed, to such Third Party in the manner and at the address
indicated in the Drag-Along Sale Notice and the Initiating Shareholders shall
cause each Shareholder's pro rata share of the purchase price, less such
Shareholder's pro rata share of
32
<PAGE>
expenses incurred by the Company or the Initiating Shareholders on behalf of the
Shareholders in connection with such Transfer, to be paid to such Shareholder.
(d) The provisions of this Section 4.4 shall apply regardless
of the form of consideration received in the Drag-Along Sale; provided, however,
that if the Initiating Shareholders have agreed to sell any Common Shares for
non-cash consideration other than Marketable Securities, the proposed
purchaser's offer shall include (or, at its option, the Initiating Shareholders
may otherwise provide) an option for the Shareholder to participate in such
Drag-Along Sale and to select as consideration for its sale either its pro rata
share of such non-cash consideration or cash in the amount of the Fair Market
Value of such non-cash consideration, which Fair Market Value shall be
determined by an internationally recognized independent valuation consultant or
appraiser (with experience evaluating such type of property) to be selected by
the Initiating Shareholders and reasonably satisfactory to the Shareholders
holding a majority of the outstanding shares of Common Shares then held by
Shareholders requesting the appraisal.
(e) Any Shareholder who participates in the Drag-Along Sale
and receives its proportionate share of the purchase price therefrom who fails
to deliver an instrument of transfer properly endorsed in blank and
corresponding certificate or certificates for all of its Common Shares as
described in this Section 4.4, hereby appoints the President of the Company as
its duly appointed attorney-in-fact to execute an instrument of transfer and a
suitable indemnity in respect of the missing certificate(s) for its Common
Shares. Furthermore, after the closing of such Drag-Along Sale, such Shareholder
shall for all purposes be deemed no longer to be a shareholder of the Company,
shall have no voting rights, shall not be entitled to any dividends or other
distributions in respect of the Company's Shares held by it (all such dividends
and distributions being deemed waived), shall have no other rights or privileges
granted to shareholders under this or any future agreement and, in the event of
liquidation of the Company, its rights with respect to any consideration it
would have received if it had complied with this Section 4.4, if any, shall be
subordinate to the rights of any equity holder.
(f) In the event that a proposal is made by a Third Party for
a merger or consolidation involving all of the Company's Shares or any of the
Company's Subsidiaries or to purchase all or substantially all of the Company's
assets (a "Third Party Proposal") and the Initiating Shareholders approves in
writing such Third Party Proposal, each Shareholder agrees to vote or give
written consent, or to cause its Director Designees to vote or give written
consent, in favor of such Third Party Proposal approved by the Initiating
Shareholders; provided that the other Shareholders shall not be required to take
any such action unless the price per share, and other terms and conditions of
such proposal, shall be no less favorable to the other Shareholders than those
applicable to the Initiating Shareholders; provided, further, that (i) no
Shareholder shall be required to make any representation, covenant or warranty
in connection with the Third Party Proposal, other than as to its ownership and
authority to transfer, free of liens, claims and encumbrances, the shares of
Common Shares proposed to be transferred by it and the absence of conflicts with
agreements and laws applicable to such Shareholder, (ii) no Shareholder shall be
required to accept any consideration for its Common Shares other than cash, Cash
Equivalents or Marketable Securities, (iii) no Shareholder shall be required to
provide or be subject to any post-closing indemnification unless it is pro rata
with respect to all Shareholders (except with respect
33
<PAGE>
to claims that relate specifically to such Shareholder) and limited in amount
and duration to an escrow, the terms of which have been agreed to by the
Initiating Shareholders and the Third Party, and (iv) no Shareholder shall be
required to be a party to any non-compete or similar provision.
Section 4.5 LIQUIDITY RIGHTS.
(a) Following the [*] anniversary of the date hereof, in
the event the Company has not completed a Qualified Public Offering, any
Shareholder holding more than 10% of the Common Shares outstanding at such
time held by Shareholders (a "Section 4.5 Seller"), may require the Company
(provided the Company, by vote of a majority of disinterested Directors, does
not exercise its right to either (i) acquire or (ii) cause a third party to
acquire, all but not less than all of the Common Shares held by the Section
4.5 Seller and its Affiliates pursuant to paragraph (b) below), to conduct,
pursuant to the auction process set forth below (the "Auction") a sale of the
Company, whether by means of a sale of all or substantially all of the Common
Shares of the Company, a merger, a sale of all or substantially all of the
assets of the Company, or other business combination transaction to a third
party not affiliated with the Shareholder exercising the Section 4.5 Offer
(the "Acquiror").
(b) A Section 4.5 Seller may initiate an Auction by delivering
written notice to the Company and each other Shareholder (the "Section 4.5
Notice"), which shall (i) contain an offer (the "Section 4.5 Offer") by the
Section 4.5 Seller to the Company to sell all, but not less than all, of the
Common Shares held by the Section 4.5 Seller to the Company, to the extent
permitted by Luxembourg law, or a third party identified by a majority of
disinterested Directors of the Company for the Fair Market Value of the Common
Shares (the "Section 4.5 Minimum Price") during the Section 4.5 Option Period
(as defined below) and (ii) shall set forth the Section 4.5 Minimum Price, as
determined in accordance with Section 4.5(f). Each other Shareholder shall have
a period of twenty (20) days after receipt of the Section 4.5 Offer to notify
the Company in writing that it also makes a Section 4.5 Offer on the same terms
as the original Section 4.5 Offer. All sales of Common Shares pursuant to the
Section 4.5 Offers shall be consummated contemporaneously at the offices of the
Company on a mutually satisfactory business day as soon as practicable, but in
any event not later than sixty (60) days after the delivery of the original
Section 4.5 Offer (the "Section 4.5 Offer Period"). The delivery of certificates
or other instruments evidencing such Common Shares duly endorsed for transfer
shall be made on such date against payment of the purchase price for such Common
Shares. The Company or third party purchaser shall bear all costs and expenses
incurred in connection with a Section 4.5 Sale. If any such purchase is not
consummated in accordance with this Section 4.5, including without limitation
due to failure by the Company or third party purchaser to pay the purchase
price, such Section 4.5 Offer shall be deemed to have not been accepted by the
Company.
(c) If the Company, acting by a majority vote of disinterested
Directors, or another Person shall not have purchased all of the Section 4.5
Offered Common Shares for not less than the Section 4.5 Minimum Price prior to
the expiration of the Section 4.5 Offer Period or if the Company, acting by a
majority vote of disinterested Directors, shall have rejected the Section 4.5
Offer, the Company shall at the election of the Section 4.5 Seller either (i)
retain an
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
34
<PAGE>
investment banking firm of recognized international standing reasonably
satisfactory to each Shareholder (the "Auctioneer") to conduct the Auction on
behalf of the Company or (ii) cause the Company to be sold in such other manner
as the Section 4.5 Seller may elect with the consent of a Supermajority
Shareholder Approval (which may include the Section 4.5 Seller). If the Company
is to be sold by Auction, the Auction shall be conducted pursuant to bidding
procedures that are (i) determined by the Auctioneer in its sole discretion, and
(ii) uniformly applicable and applied to all interested parties who are
identified by the Auctioneer or are otherwise invited to participate in the
Auction for the submission and evaluation of proposals. The Company shall
provide the Auctioneer with all reasonable assistance requested by the
Auctioneer to consummate the Auction. All Shareholders shall have the right to
submit a bid pursuant to the Auction for the outstanding Common Shares of the
Company not held by them and have such bid evaluated on a basis no more or less
favorable than that afforded to other participants in the Auction; provided that
for so long as any Shareholder shall wish to have its bid considered pursuant to
the Auction, such Shareholder and its representatives on the Board shall be
recused from all information received or considered by the Company or the Board
with respect to the Auction or the Board with respect to the Auction or the
results thereof. The Acquiror shall be identified by the Auctioneer at the
conclusion of the Auction; provided, that the bid by such Acquiror shall be
satisfactory to the Section 4.5 Seller, and the sale of such assets or capital
shares of the Company to such Acquiror shall constitute the "Required Sale."
(d) If the Required Sale is by means of a sale of all or
substantially all of the issued and outstanding Common Shares of the Company,
then the Required Sale shall constitute a Drag-Along Sale for purposes of
Section 4.4 and the provisions of Section 4.4 shall be applicable to such
Required Sale, without regard to the requirement set forth in Section 4.4 that
Initiating Shareholders hold 55% or more of the Common Shares, as if the Section
4.5 Seller had all of the rights of the Initiating Shareholder thereunder to
require the other Shareholders to participate in such Required Sale, provided,
however, that if the Required Sale shall not be consummated, all of the
provisions of this Section 4.5 shall then be reinstated.
(e) If the Required Sale is other than by means of a sale of
the outstanding Capital Stock of the Company, then the Company shall deliver a
written notice (the "Required Sale Notice") to each Shareholder setting forth in
detail the terms of the proposed Required Sale and the proposed closing date of
the Required Sale, which proposed date (the "Required Sale Closing Date") shall
be the later of (i) a Business Day not less than fifteen (15) or more than sixty
(60) days after such Required Sale Notice is delivered to the Shareholders, or
(ii) the fifth day following the receipt of all regulatory or third party
consents and approvals, if any, applicable to such Required Sale. Each
Shareholder will (x) take all such actions, including, without limitation,
voting in favor of such proposed sale and waiving any appraisal, dissenter or
similar rights under applicable law, as may be requested by the first initial
Section 4.5 Seller to carry out the purposes of this Section 4.5 and (y) execute
all documents reasonably requested by the initial Section 4.5 Seller provided,
that (i) no Shareholder shall be required to make any representation, covenant
or warranty in connection with the Required Sale, other than as to its ownership
and authority to transfer, free of liens, claims and encumbrances, the Common
Shares proposed to be transferred by it and the absence of conflicts with
agreements and laws applicable to such Shareholder, (ii) no Shareholder shall be
required to accept any consideration for its Common Shares other than cash,
35
<PAGE>
Cash Equivalents or Marketable Securities, (iii) no Shareholder shall be
required to provide or be subject to any post-closing indemnification unless it
is pro rata with respect to all Shareholders (except with respect to claims that
relate specifically to such Shareholder) and limited in amount and duration to
an escrow and (iv) no Shareholder shall be required to be a party to any
non-compete or similar provision. The Required Sale shall be consummated at the
offices of the Company (or such other location selected by the Initiating
Shareholders) on the Required Sale Closing Date. The Company (or its
shareholders, on a pro rata basis) will bear all costs and expenses incurred in
connection with the Required Sale to the extent such costs and expenses are not
otherwise paid by the Acquiror. If the Required Sale shall not be consummated
within ninety (90) days of the mailing of the Section 4.5 Notice, all of the
provisions of this Section 4.5 shall then be reinstated.
(f) "FAIR MARKET VALUE OF COMMON SHARES" shall mean, for
purposes of this Section 4.5, the fair market value of each Common Share as
determined in accordance with the procedures set forth in Section 7.4.
Section 4.6 INVOLUNTARY TRANSFERS. In the event any or all of
a Shareholder's Common Shares are transferred involuntarily, directly or
indirectly, by operation of law or otherwise, such Shareholder shall give
written notice (an "Involuntary Transfer Notice") promptly after receiving
knowledge thereof, and in any case within fifteen (15) days of such involuntary
Transfer, to the other Shareholders, with a copy to the transferee, stating the
fact that the involuntary Transfer occurred, the reason therefor, the date of
such Transfer, the name and address of the transferee and the number of Common
Shares acquired by such transferee.
Section 4.7 LIABILITY OF TRANSFEROR. In the event that any
Shareholder proposes to make a Transfer permitted under this Article IV, such
Shareholder shall cause the transferee, prior to such Transfer, to execute one
or more instruments pursuant to which the transferee adopts and agrees to be
bound as a Shareholder to this Agreement and such transferring Shareholder shall
be released from the obligations (except for Article VI) hereunder (including
its commitment under Section 2.7) with respect to the interest represented by
the transferred Common Shares assumed by the transferee and, until the
transferee executes said instrument(s), such transfer shall not be valid and
effective and the transferor shall remain fully liable for the acts, omissions
or defaults of the transferee with respect to the interest represented by the
proposed transferred Common Shares and the provisions of this Agreement, as if
the transferor were still a party hereto; provided, however, that the
Non-Initiating Shareholder in a Drag-Along Sale shall not have any duty under
this Section 4.7. No Transfer shall relieve the transferor of responsibility for
its own acts, omissions or defaults.
Section 4.8 TRANSFERS TO A COMPETITOR OF THE COMPANY.
(a) If a Shareholder or Shareholders holding less than [*] of
the Common Shares outstanding Transfers Common Shares to a Competitor prior to a
Qualified Public
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
36
<PAGE>
Offering, then without further action, such Common Shares shall automatically,
and without any action on the Company's part, be converted into an equal number
of Non-Voting Shares, and such Shareholder shall have no further right to
designate Director Designee(s).
(b) If any Carrier Investor (i) becomes an Affiliate of a
Person that, at the time of such Carrier Investor becoming such an Affiliate, is
a Competitor or (ii) sells all or substantially all of its assets to a
Competitor, then without further action, the Common Shares then held by such
Carrier Investor shall automatically, and without any action on the Company's
part, be converted into an equal number of Non-Voting Shares, and such
Shareholder shall have no further right to designate a Director Designee. As
used in this Section 4.8(b), "Affiliate" shall not include any Person under
common control with a Carrier Investor by virtue of Carlyle or Providence
controlling such Person.
(c) If a Competitor acquires more than [*] of the Capital
Stock of a Carrier Investor or has the right to appoint at least one director or
manager of a Carrier Investor, such Shareholder shall have no further right to
designate a Director Designee.
(d) If a Carrier Investor shall commit an "Opt-Out Default"
under its Strategic Anchor Tenant Agreement prior to November 23, 2000, such
Shareholder shall have no further right to designate a Director Designee.
Section 4.9 PROHIBITED TRANSFERS. Notwithstanding anything in
this Article IV to the contrary, no Shareholder may transfer its Common Shares
and the Company may not purchase any Common Shares or effect any other
transaction pursuant to this Article IV (i) prior to the receipt of any
necessary governmental approvals or in violation of applicable law or (ii) in
violation of any of the provisions of the Articles of Incorporation. In the
event any governmental approvals are required for any Transfer or other
transaction under this Article IV, the Shareholders shall cooperate to obtain
such approvals.
Section 4.10 EXPENSES IN CONNECTION WITH TRANSFERS. Except in
connection with a Transfer by a non-Initiating Shareholder pursuant to Section
4.4, each Shareholder shall reimburse the Company on a pro rata basis for all
reasonable expenses incurred by the Company in connection with any Transfer
proposed or effectuated by such Shareholder.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 REPRESENTATIONS AND WARRANTIES. Each Shareholder
represents and warrants to each of the other parties hereto as of the date
hereof as follows:
(a) It is duly organized and validly existing under the laws
of the jurisdiction of its organization and has all requisite power and
authority to own, lease and operate its properties, to
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
37
<PAGE>
to carry out its business as it is now being conducted and to perform its
obligations hereunder, and under its constituent documents, and to consummate
the transactions contemplated hereby and thereby.
(b) The execution, delivery and performance of this Agreement
and the other documents referenced herein to which it is or is to be a party
have been authorized by all necessary action, and do not and will not: (i)
require any authorization, consent or approval that has not been given or
obtained of it or any governmental authority, (ii) violate any law, rule,
regulation, order, or decree presently in effect and having applicability to it,
(iii) violate any of its organizational documents, (iv) violate any permit,
concession, grant, franchise, license or other governmental authorization,
approval, judgment, order or decree, or any mortgage, agreement, deed of trust,
indenture or any other instrument to which it is a party or by which it is bound
or any of its properties or assets are bound or which is otherwise applicable to
it or (v) create or impose any liens, mortgages, pledges, claims, security
interests, charges or encumbrances or obligations to create a lien, charge,
pledge or mortgage.
(c) This Agreement is the legal and binding obligation of such
party, enforceable against such party in accordance with its terms, and any
other document referenced herein to which it is or is to be a party, when duly
executed and delivered by the parties thereto, will be the legal and binding
obligation of such party enforceable against such party in accordance with its
terms.
(d) There is no litigation pending or, to its knowledge,
threatened to which it or any of its Affiliates is a party which, if adversely
determined, would have a material adverse effect on the ability of such
Shareholder to perform its obligations hereunder.
(e) All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried out without the intervention
of any Person acting on behalf of such party in a manner that could give rise to
any valid claim against the Company or any other party for any brokerage or
finder's commission, fee or similar compensation.
ARTICLE VI.
CONFIDENTIALITY; SATISFACTION OF CONDITIONS
Section 6.1 CONFIDENTIALITY. If any Shareholder or the
Company has disclosed proprietary confidential information and trade secrets
("Confidential Information") to any other Shareholder or Shareholders in
connection with the transactions contemplated in this Agreement, each other
Shareholder agrees not to disclose any such Confidential Information to any
third party except to officers, directors, employees and advisors of a
Shareholder who need to know such Confidential Information for the purpose and
to the limited extent necessary to evaluate the business relationship herein
described and to take the steps contemplated by this Agreement (including
without limitation, Article IV, so long as any potential purchaser executes a
confidentiality agreement agreeing to the provisions set forth in this Article
VI). All extracts, digests, and copies of such Confidential Information shall be
maintained under strict control by its recipient. The term "Confidential
Information" shall not include such portions of the Confidential Information
which (i) is generally available to the public or has become, after the time of
38
<PAGE>
discovery, part of the public domain by publication or otherwise through no
fault of the receiving party, (ii) was, prior to the time of disclosure, already
known to the receiving party and was not acquired, directly or indirectly, from
the disclosing party or its representatives, (iii) is, after the time of
disclosure, independently developed by the receiving party and not as a result
of disclosure of the Confidential Information by the disclosing party to the
receiving party, (iv) is, after the time of disclosure, acquired in good faith
without any restriction of confidentiality from a third party who is under no
secrecy obligation to the disclosing party with respect thereto which is known
to the receiving party or (v) is no longer treated as confidential by the
disclosing party. The provisions of this Article VI shall be also binding upon
each shareholder of any Special Purpose Shareholder.
Section 6.2 SATISFACTION OF CONDITIONS. Each Shareholder
shall cause to be satisfied all conditions to the Initial Capital Contributions
to the extent in the control of such Shareholder.
ARTICLE VII.
DEFAULTS, TRIGGER EVENTS AND REMEDIES
Section 7.1 DEFAULTS. If any Shareholder:
(a) commits a material breach of its obligations under this
Agreement, including its obligations under Section 2.7, which is not cured
within ten (10) Business Days after written notice thereof; or
(b) shall (i) default on any material Indebtedness which is
not cured within sixty (60) days, have any material indebtedness accelerated or
fail generally to pay its debts as they become due, (ii) admit in writing its
inability to pay its debts generally as they become due, (iii) commence a
voluntary bankruptcy or insolvency case or proceeding, (iv) consent to, or
acquiesce in, the institution of a bankruptcy or an insolvency proceeding
against it or the entry of a judgment, decree or order for relief against it in
an involuntary case or proceeding, (v) apply for, consent to or acquiesce in the
appointment of or taking possession by a custodian or its business or of any
part of its property, (vi) make a general assignment for the benefit of its
creditors or (vii) take any corporate action in furtherance of or to facilitate,
conditionally or otherwise, any of the foregoing; or
(c) shall be subject to a judgment, decree or order of court
of competent jurisdiction which (i) is for relief against it in an involuntary
bankruptcy or insolvency case, (ii) appoints a custodian of its business or for
any part of its property or (iii) orders the winding-up or liquidation of its
affairs; and such judgment, decree or order shall remain unstayed and in effect
for a period of thirty (30) consecutive days; or any bankruptcy or insolvency
petition or application shall be filed, or any bankruptcy case or insolvency
proceeding shall be commenced against it and such petition, application, case or
proceeding is not dismissed within sixty (60) days,
then in the case of any event described in the foregoing subclauses (a), (b) or
(c) (each an "Event of Default") such Shareholder shall for the purposes hereof
be deemed a "Defaulting
39
<PAGE>
Shareholder." Shareholders which are not Defaulting Shareholders shall for the
purposes hereof be deemed "Non-Defaulting Shareholders," and any Non-Defaulting
Shareholder may (and the Company shall) serve notice (a "Default Notice") on a
Defaulting Shareholder of the occurrence of an Event of Default.
Each Shareholder agrees that with respect to the payment of
its Additional Capital Contributions, time is of the essence, that any Event of
Default by any Shareholder would cause injury to the Company and to the other
Shareholders and that the amount of damages caused by any such injury would be
extremely difficult to calculate. Accordingly, the Shareholders agree that upon
any Event of Default by a Shareholder at any time, all of the succeeding
provisions of this Article VII shall apply.
Section 7.2 TRIGGER EVENTS.
(a) If any Carrier Investor (i) becomes an Affiliate of a
Person that, at the time of such Carrier Investor becoming such an Affiliate, is
a Competitor or (ii) sells all or substantially all of its assets to a
Competitor, then, within 45 days after such event, each of the other
Shareholders shall have the right to exercise the remedies of Non-Defaulting
Shareholders under Section 7.4, treating such Carrier Investor as if it were a
Defaulting Shareholder.
(b) If any Carrier Investor (i) becomes an Affiliate of a
Person that, at the time of such Carrier Investor becoming such an Affiliate, is
a Competitor or (ii) sells all or substantially all of its assets to a
Competitor and an Event of Default occurs with respect to such Carrier Investor
under Section 7.1(a) caused by the failure of such Carrier Investor to satisfy
its obligations under Section 2.7, then in lieu of all other remedies hereunder,
each of the other Shareholders shall have the right to exercise the remedies of
Non-Defaulting Shareholders under Section 7.4 (computing the 45 day period
referred to in Section 7.4 from the date of the Event of Default), treating such
Carrier Investor as if it were a Defaulting Shareholder, but at a price per
Common Share equal to the lesser of Fair Market Value as calculated under
Section 7.4 or the Subscription Price.
(c) As used in this Section 7.2, "Affiliate" shall not include
any Person under common control with a Carrier Investor by virtue of Carlyle or
Providence controlling such Person.
Section 7.3 ACTIONS UPON DEFAULT.
(a) In the case of a default described by Section 7.1(a) that
is not a default caused by the failure to fund an Additional Capital
Contribution required pursuant to Section 2.7, the Defaulting Shareholder shall
have forty-five (45) days after the receipt of a Default Notice within which to
remedy the breach. During such forty-five (45) day period, the Shareholders
shall use their commercially reasonable efforts to resolve the matter to their
mutual satisfaction.
(b) In the case of a default described by Section 7.1(a) that
is a default caused by the failure to fund an Additional Capital Contribution
required pursuant to Section 2.7, the Defaulting Shareholder shall have ten (10)
Business Days after the designated Capital Call Date
40
<PAGE>
for such Additional Capital Contribution to fund such Additional Capital
Contribution. If, after such ten (10) day period, the Defaulting Shareholder has
not funded its required Additional Capital Contribution, (i) the Company shall
promptly notify each Non-Defaulting Shareholder of such failure and (ii) any
Non-Defaulting Shareholder shall have the right (but not the obligation), upon
five (5) days prior written notice to the Defaulting Shareholder, to fund its
Pro Rata Share of the unfunded portion of such Additional Capital Contribution
within thirty (30) Business Days after the designated Capital Call Date for such
Additional Capital Contribution. Amounts contributed by a Non-Defaulting
Shareholder pursuant to this Section 7.3(b) shall not be, and shall not be
deemed to be, in respect of or in satisfaction of its Capital Commitment
hereunder.
(c) In the case of a default described by Section 7.1(b) or
Section 7.1(c), in the case of a default described by Section 7.1(a) that is
not a default caused by the failure to fund an Additional Capital
Contribution required pursuant to Section 2.7 if at the end of the applicable
forty-five (45) day period the Defaulting Shareholder has not remedied the
default or the matter has not otherwise been settled to the satisfaction of
the Non-Defaulting Shareholders, or in the case of a default described by
Section 7.1(a) that is a default caused by the failure to fund an Additional
Capital Contribution required pursuant to Section 2.7 if at the end of the
applicable ten (10) day period the Defaulting Shareholder has not funded the
required Additional Capital Contribution, the Non-Defaulting Shareholders
upon the vote of Non-Defaulting Shareholders holding a majority of the Shares
held by all Non-Defaulting Shareholders, shall have the right, at their
option, to do any one or more of the following:
(i) seek monetary damages from the Defaulting
Shareholder, but only to the extent of the Common
Shares owned by the Defaulting Shareholder, valued
at Fair Market Value as described in Section 7.4;
(ii) exercise their purchase option pursuant to Section
7.4; or
(iii) seek specific enforcement of the Defaulting
Shareholder's covenants or obligations under this
Agreement or other equitable remedy.
(d) In addition to the remedies set forth above, in the case
of a default described in Section 7.1, the Director Designees of the Defaulting
Shareholder shall not vote or count in determining a quorum or majority for the
conduct of any business, and the Common Shares held by such Defaulting
Shareholders shall automatically, and without any action on the Company's part,
be converted into an equal number of Non-Voting Shares.
Section 7.4 OPTION OF NON-DEFAULTING SHAREHOLDERS TO PURCHASE
COMMON SHARES.
(a) In addition to the remedies set out in Section 7.3, the
Non-Defaulting Shareholders or, at the election of the Non-Defaulting
Shareholders, the Company may, within forty-five (45) days of their being so
entitled pursuant to Sections 7.3(c)(iii), notify the Defaulting Shareholder of
their election to purchase on a pro rata basis, the Common Shares or Non-Voting
41
<PAGE>
Shares (collectively, "Defaulted Shares") owned by the Defaulting Shareholder
for a price in cash equal to the Fair Market Value of such Defaulted Shares at
the end of the most recently ended Fiscal Quarter, which price may be paid
either in cash or by delivery of such Non-Defaulting Shareholder's non-recourse
negotiable promissory note, which shall be secured by a pledge of the Defaulted
Shares purchased from the Defaulting Shareholder, bear interest at 12% per
annum, have a maturity of two (2) years and be subject to mandatory prepayment
upon the occurrence of any secondary public offering or sale of the Company,
whether structured as a sale of stock, merger, recapitalization, sale of all or
substantially all the assets of the Company or otherwise. The Defaulting
Shareholder shall have a period of forty-five (45) days after receipt of such
notice to solicit offers from third parties to purchase for cash or Marketable
Securities such Defaulted Shares and the provisions of Section 4.2 shall apply
with respect to such offer, MUTATIS MUTANDIS. If the Defaulting Shareholder does
not present such an all-cash offer within forty-five (45) days after delivery of
the notice from the Non-Defaulting Shareholders, the Non-Defaulting Shareholders
shall be entitled to proceed with the purchase of the Defaulted Shares on the
terms and conditions set forth in this Section 7.4.
(b) If the Non-Defaulting Shareholders elect to purchase the
Defaulted Shares owned by the Defaulting Shareholder pursuant to this Section
7.4, the Shareholders will attempt in good faith to determine the Fair Market
Value (on a going concern basis) of the Company and the Defaulted Shares. If the
Shareholders cannot agree on a valuation within thirty (30) days after any
Shareholder exercises its rights under this Section 7.4, then Non-Defaulting
Shareholder holding a majority of Defaulted Shares held by Non-Defaulting
Shareholders will retain an internationally known investment banking firm with
relevant experience to make an independent valuation of the Fair Market Value
(on a going concern basis) of the Company and the Defaulted Shares. The fees and
expenses of such investment banking firm will be borne by the Defaulting
Shareholder. The Defaulting Shareholder shall have the right to retain an
internationally known investment banking firm to make an independent valuation
of the Fair Market Value (on a going concern basis) of the Company and the
Defaulted Shares. The fees and expenses of such investment banking firm shall be
borne by the Defaulting Shareholder.
(c) Each valuation of the Company and Defaulted Shares
pursuant to this Section 7.4 shall take into account all of the relevant facts
and circumstances related to the Company at that time (including the price a
willing buyer would pay and a willing seller would accept in an arms-length
transaction), and shall be completed within one month after the relevant
investment banking firm is retained.
(d) If two investment banking firms are retained pursuant to
Section 7.4(b) and the Fair Market Values of the Company and the Defaulted
Shares as determined by such investment banking firms differ by an amount which
is less than or equal to 10%, the Fair Market Value of the Company and the
Defaulted Shares shall be the average of such valuations. If the Fair Market
Values of the Company and the Defaulted Shares as determined by such investment
banking firms differ by an amount which is greater than 10%, such investment
banking firms shall select a third internationally recognized investment banking
firm to determine the Fair Market Value (on a going concern basis) of the
Company and the Defaulted Shares, the fees and expenses of which will be borne
by the Shareholders in accordance with their respective Share Percentages. If
the Fair Market Value of the Company and the Defaulted Shares as determined by
such third
42
<PAGE>
investment banking firm is between the Fair Market Values determined by the
other two investment banking firms, the Fair Market Value of the Company and the
Defaulted Shares shall be the value determined by such third investment banking
firm. If the Fair Market Value of the Company and the Defaulted Shares as
determined by such third investment banking firm is greater than or equal to the
higher of the Fair Market Values of the Company and the Defaulted Shares as
determined by the other two investment banking firms or is less than or equal to
the lower of the Fair Market Values of the Company and the Defaulted Shares as
determined by such other investment banking firms, the Fair Market Value of the
Company and the Defaulted Shares shall be the valuation of the first two firms
which is nearest, in absolute terms, to the valuation of the third investment
banking firms.
ARTICLE VIII.
DEADLOCK
Section 8.1 DEADLOCK. If at any time there is a dispute or
disagreement which results in a Deadlock (as defined below), any Shareholder may
notify each other Shareholder that a Deadlock has occurred (a "Deadlock
Notice"). Each Shareholder agrees that upon delivery or receipt of a Deadlock
Notice, it will use all reasonable efforts to resolve such Deadlock within
fifteen (15) days of the date of the Deadlock Notice. If such Deadlock is not
resolved within such fifteen (15) day period, then any Shareholder may, by
notice to the other Shareholders (the "Triggering Notice"), call a Shareholders
Meeting for the purpose of voting on the matter which is the subject of the
Deadlock. After such Shareholders Meeting, each of the Shareholders shall cause
its Director Designees to vote in favor of any action which received
Supermajority Shareholder Approval at such Shareholders Meeting. "Deadlock"
means, at any time the Board of Directors has an even number of Directors, any
matter requiring approval of the Board of Directors shall not have been approved
by a majority of the Directors but instead shall have been approved by one-half
of the Directors.
ARTICLE IX.
TERMINATION AND DISSOLUTION
Section 9.1 TERMINATION. This Agreement shall terminate upon
the occurrence of any of the following events (each a "Termination Event"):
(a) by final, nonappealable court or other governmental order;
or
(b) by unanimous vote of the Shareholders.
Section 9.2 WINDING-UP. Promptly after the occurrence of a
Termination Event, the Shareholders shall seek to sell all of the issued and
outstanding Common Shares to a buyer or buyers (which may include a Shareholder
or an Affiliate of a Shareholder) in accordance with the Auction provisions of
Section 4.5; provided that all Common Shares shall be sold to such buyer or
buyers at an identical price and on identical terms.
43
<PAGE>
ARTICLE X.
MISCELLANEOUS
Section 10.1 AFTER-ACQUIRED COMMON SHARES. All of the
provisions of this Agreement shall apply to all Common Shares now owned or which
may be issued or Transferred hereafter to, or owned by, any Shareholder.
Section 10.2 RIGHTS OF TRANSFEREES AND TRANSFERORS;
REQUIREMENT TO BECOME A PARTY. Except as set forth in Sections 3.5(h) and 4.8,
if a Shareholder transfers any or all of its Common Shares to any Permitted
Transferee or other Person in compliance with this Agreement, such transferee
shall have the same rights hereunder (including, without limitation, if such
transferee has acquired 100% of such Shareholder's shares, the right to
designate Directors pursuant to Section 3.1) as are given to, and shall be
subject to the same obligations as are imposed upon the Shareholder by the terms
hereof with respect to the Common Shares that are the subject of the Transfer.
If the Shareholder transfers 100% of its Common Shares, such Shareholder shall
cease to have any rights hereunder. No Transfer shall be in compliance with this
Agreement or effective unless made in compliance with Section 4.7.
Section 10.3 TERMINATION ON QUALIFIED PUBLIC OFFERING. The
provisions of Sections 2.7, 2.8, 3.1, 3.6, Article IV, Article VII, Article
VIII, and Section 9.2 hereof shall terminate immediately prior to the closing of
a Qualified Public Offering.
Section 10.4 OWNER OF COMMON SHARES. The Person in whose name
Common Shares are registered in the Register may be treated as the owner thereof
for all purposes, including without limitation, for the giving of notices under
this Agreement.
Section 10.5 TAX ELECTIONS. The Shareholders agree that
Gibraltarco and all of the Company's subsidiaries shall elect to be treated as
partnerships or disregarded as entities separate from their owners for United
States federal income tax purposes, except to the extent that Carlyle and
Providence mutually agree otherwise. Carlyle is hereby authorized to execute and
file on behalf of all such entities such filings, elections, and declarations as
may be necessary to effectuate such elections.
Section 10.6 CONFLICT OF TERMS. In the event that the terms
of this Agreement and the terms of any of the Articles of Incorporation differ,
the Shareholders shall take, and shall cause the Company and its Board of
Directors to take, such steps as are necessary to amend the applicable Articles
of Incorporation to reflect the terms of this Agreement, so far as permitted by
law. Until such time as the Articles of Incorporation have been amended to
reflect the terms of this Agreement, the terms of this Agreement shall prevail
as between the Shareholders, so far as permitted by law. If any such amendment
is not permitted by law, the applicable Memorandum of Articles of Incorporation
shall prevail.
Section 10.7 LEGEND. So long as the provisions of Article IV
of this Agreement remain in effect and a Qualified Public Offering has not
occurred, all certificates evidencing Common Shares shall be endorsed with the
following legend:
44
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS, AND THE SALE OR OTHER TRANSFER
THEREOF, OR ANY INTEREST THEREIN, MAY BE MADE ONLY IN A
TRANSACTION NOT SUBJECT TO, OR PURSUANT TO AN EXEMPTION FROM,
THE REGISTRATION REQUIREMENTS OF SUCH ACT. THE SALE, TRANSFER,
PLEDGE OR OTHER ENCUMBRANCE OF DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO AND RESTRICTED
BY A SHAREHOLDERS AGREEMENT DATED AS OF NOVEMBER 23, 1999, AS
IT MAY BE AMENDED FROM TIME TO TIME IN ACCORDANCE WITH THE
PROVISIONS THEREOF (THE "AGREEMENT"), WHICH CONTAINS
RESTRICTIONS ON TRANSFER, RIGHTS OF FIRST REFUSAL, TAG-ALONG
AND DRAG-ALONG PROVISIONS. COPIES OF THE AGREEMENT MAY BE
OBTAINED FROM THE SECRETARY OF THE COMPANY.
Section 10.8 NOTICES. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
air courier or facsimile transmission to the persons and addresses set forth on
Schedule 3 hereto. All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; three business
days after being timely dispatched delivery prepaid, if by air courier; and when
receipt acknowledged, if sent by facsimile transmission. Any of the addresses
listed in Schedule 3 may be changed by notice made in accordance with this
subsection.
Section 10.9 APPLICABLE LAW. This Agreement is governed by
and shall be construed in accordance with the laws of New York (except to the
extent the laws of Luxembourg are mandatorily applicable).
Section 10.10 ARBITRATION. The Shareholders agree that any
dispute arising out of or in connection with this Agreement or the transactions
contemplated hereby shall be finally settled by arbitration. The Shareholders
shall negotiate in good faith and use all reasonable efforts to agree upon a
resolution of any dispute after receipt of written notice of such dispute from a
Shareholder. If the Shareholders cannot agree on an amicable settlement within
sixty (60) days from written submission of the matter by one Shareholder to
another, the matter shall be submitted to arbitration. The Shareholder invoking
arbitration shall appoint one arbitrator, the other Shareholder shall appoint
one arbitrator, and the two arbitrators so appointed shall select a third
arbitrator. In the event such arbitrators cannot agree upon a third arbitrator,
a third arbitrator shall be selected in accordance with the international rules
as then in effect of the American Arbitration Association. The decision of two
of the three arbitrators so appointed as to the validity of any claim shall be
conclusive and binding upon the parties to this Agreement. Any such arbitration
shall be held in New York, New York under the international rules as then in
effect of the American Arbitration Association; provided that the arbitrators
shall not have the
45
<PAGE>
powers of AMIABLE COMPOSITEURS or EX AEQUO ET BONO. Notwithstanding Section
10.9, any arbitration and this Section 10.10 shall be governed by Title 9
(Arbitration) of the United States Code. The parties hereto intend that this
Agreement and any interpretation, construction or enforcement hereof by the
arbitrators will be governed by the specific terms of this Agreement. The
official language of any such arbitration will be English. Each party to any
such arbitration shall pay its own expenses; provided that the fees, costs and
expenses of the third arbitrator shall be borne equally by the Shareholder
invoking arbitration, on the one hand, and the other Shareholders, on the other
hand.
Section 10.11 AMENDMENT. No amendment, modification, waiver,
change or addition hereto shall be effective or binding on any party hereto
unless the same is in writing and signed by the Company and Shareholders
representing 90% of the Common Shares then outstanding; provided that no such
amendment shall discriminate against any particular Shareholder without such
Shareholder's consent.
Section 10.12 ASSIGNMENT. Except as set forth in Section 10.2
and subject to compliance with Section 4.7, the provisions of this Agreement
shall be binding upon and shall inure to the benefit of the Shareholders and
their respective heirs, successors and permitted assigns.
Section 10.13 EXPENSES. Except as set forth herein, each of
the Shareholders shall be responsible for and pay all expenses, costs and fees
incurred or assumed by such Shareholder in connection with the preparation,
negotiation and execution of this Agreement, compliance herewith and the
consummation of the transactions contemplated hereby.
Section 10.14 SPECIFIC ENFORCEMENT. Each of the parties
hereto acknowledges and agrees that (a) monetary damages would be an inadequate
remedy for a breach of any of the provisions of this Agreement, (b) in addition
to being entitled to exercise all of their rights granted by law or this
Agreement, including recovery of damages, the other parties shall therefore be
entitled to specific performance of its rights under this Agreement and (c) in
the event of any action for specific performance it shall waive the defense that
a remedy at law would be adequate.
Section 10.15 HEADINGS. The headings of this Agreement are
for reference only and shall not be deemed to form part of the text.
Section 10.16 ENTIRE AGREEMENT. This Agreement and the other
documents or instruments referred to herein when delivered, or required to be
delivered in connection herewith, constitute the entire agreement among the
Shareholders and supersede all prior agreements and undertakings, oral or
written, among them or between any of them with respect to the subject matter
hereof.
Section 10.17 WAIVERS. Any waiver, express or implied, by any
Shareholder of any right hereunder or of any failure to perform or breach hereof
by any other Shareholder shall not constitute or be deemed a waiver of any other
right hereunder or of any other failure to perform or breach hereof by any
Shareholder, whether of a similar or dissimilar nature, unless the same is in
writing and signed by each Shareholder.
46
<PAGE>
Section 10.18 SEVERABILITY. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of its other provisions. Following the determination
that any provision of this Agreement is unenforceable, the Shareholders shall
negotiate in good faith a new provision that, as far as legally possible, most
nearly reflects the intent of the Shareholders and that restores this Agreement
as nearly as possible to its original intent and effect.
Section 10.19 NO THIRD PARTY BENEFICIARIES. This Agreement is
solely for the benefit of the Shareholders and the Company, and their respective
successors and permitted assigns, and this Agreement shall not otherwise be
deemed to confer upon or give to any other third party any right, claim, cause
of action, or other interest herein.
Section 10.20 PUBLIC STATEMENTS. The parties shall not issue
any public announcement or statement with respect to this Agreement or the
transaction contemplated hereby without the consent of the other parties hereto,
except as may be required by law in which case the affected party shall use its
best efforts to obtain the prior consent of the other parties hereto.
Section 10.21 EXECUTION IN COUNTERPARTS. This Agreement may
be executed in one or more counterparts and by one or more parties to any
counterpart, each of which shall be deemed an original and all of which together
shall constitute one and the same agreement.
47
<PAGE>
IN WITNESS WHEREOF, the Shareholders have entered into this
Agreement as of the day and year first above written.
HUBCO S.A.
By: /s/ Thor Geir Ramleth
-------------------------------
Name: Thor Geir Ramleth
Title: CEO
PROVIDENCE EQUITY PARTNERS III L.P.
By: Providence Equity Partners
III L.L.C., its general partner
By: /s/Glenn M. Creamer
--------------------------
Name: Glenn M. Creamer
Title: Managing Director
PROVIDENCE EQUITY OPERATING PARTNERS
III L.P.
By: Providence Equity Partners
III L.L.C, its general partner
By: /s/Glenn M. Creamer
---------------------------
Name: Glenn M. Creamer
Title: Managing Director
S-1
<PAGE>
CARRIER1 INTERNATIONAL S.A.
By: /s/ Stig Johansson
-------------------------------
Name: Stig Johansson
Title: Chairman of the Board
By: /s/ Thomas J. Wynne
-------------------------------
Name: Thomas J. Wynne
Title: Director
iaxis B.V.
By: /s/ Abteen Sai
-------------------------------
Name: Abteen Sai
Title: Director
S-2
<PAGE>
"CARLYLE"
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-3
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-4
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-5
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-6
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-7
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-8
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-9
<PAGE>
SCHEDULE 1
SUBSCRIPTIONS OF INITIAL CAPITAL
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
SUBSCRIPTION PRICE NUMBER OF PERCENTAGE TOTAL
PER SHARE COMMON SHARES PURCHASE PRICE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[*] [*] [*] [*] [*]
---------------------------------------------------------------------------------
</TABLE>
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
i
<PAGE>
SCHEDULE 2
CAPITAL COMMITMENTS
(IN $ MILLIONS)
<TABLE>
<CAPTION>
MAXIMUM
ADDITIONAL CAPITAL
COMMITMENTS CAPITAL
INITIAL CAPITAL COMMITMENTS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[*] [*] [*] [*]
-------------------------------------------------------------
-------------------------------------------------------------
</TABLE>
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
ii
<PAGE>
SCHEDULE 3
ADDRESSES FOR NOTICES
<TABLE>
<CAPTION>
<S> <C>
Carlyle: The Carlyle Group
520 Madison Avenue
41st Floor
New York, NY 10022
USA
Attn: Brooke Coburn
Tel: (212) 381-4900
Fax: (212) 381-4901
iaxis B.V.: iaxis B.V.
iaxis limited
7th Floor
200 Grays Inn Road
London, WC1X 8NP
United Kingdom
Attn: Abteen Sai
Tel: 44-0207-422-3000
Fax: 44-0207-422-3001
Carrier1: Carrier1 International S.A.
Militarstrasse 36
CH-8004 Zurich
Switzerland
Attn: Terje Nordhal
Tel: (411) 297-2600
Fax: (411) 297-2601
Providence: Providence Equity Partners III L.P.
Kennedy Center Plaza
900 Fleet Center
Providence, RI 02903
USA
Attn: Alexander Evans
Tel: (401) 751-1700
Fax: (401) 751-1790
</TABLE>
iii
<PAGE>
EXHIBIT A
ARTICLES OF INCORPORATION
iv
<PAGE>
HUBCO S.A.
Societe anonyme
Siege social: Luxembourg
CONSTITUTION DE SOCIETE DU 19 NOVEMBRE 1999
In the year one thousand nine hundred and ninety-nine on the nineteenth of
November
Before us Maitre Gerard LECUIT, notary residing in Hesperange
There appeared the following:
1. CARRIER1 INTERNATIONAL S.A., with registered office at avec siege social
L - 8009 Strassen 3, route d'Arlon, Luxembourg
2. CARLYLE INTERNATIONAL PARTNERS II, L.P., Cayman Islands Limited
Partnership, located at c/o Coutts & Co (Cayman) LTD, PO BOX 707, Grand
Cayman, Cayman Islands, British West Indies.
Both here represented by Maitre Laurent LAZARD, attorney-at-law, residing in
Luxembourg, by virtue of two proxies given on November 18th, 1999.
Which proxies shall be signed "ne varietur" by the mandatories of the
appearing parties and the undersigned notary and shall be attached to the
present deed to be filed at the same time.
Such appearing parties, in the capacity in which they act, have requested the
notary to inscribe as follows the articles of association of a societe
anonyme which they form between themselves:
TITLE I. - DENOMINATION, REGISTERED OFFICE, OBJECT, DURATION
- ------------------------------------------------------------
Article 1.-
There is hereby established a societe anonyme under the name of HUBCO S.A.
Article 2.-
The registered office of the corporation is established in Luxembourg.
If extraordinary political or economic events occur or are imminent, which
might interfere with the normal activity at the registered office, or with
easy communication between this office and abroad, the registered office may
be declared to have been
<PAGE>
2
transferred abroad provisionally until the complete cessation of these
abnormal circumstances.
Such decision, however, shall have no effect on the nationality of the
corporation. Such declaration of the transfer of the registered office shall
be made and brought to the attention of third parties by the organ of the
corporation which is best situated for this purpose under such circumstances.
Article 3.-
The corporation is established for an unlimited period.
Article 4.-
The corporation shall have as its business purpose the holding of
participations, in any form whatsoever, in Luxembourg and foreign companies,
the acquisition by purchase, subscription, or in any other manner as well as
the transfer by sale, exchange or otherwise of stock, bonds, debentures,
notes and other securities of any kind, the possession, the administration,
the development and the management of its portfolio.
The corporation may participate in the establishment and development of any
financial, industrial or commercial enterprises and may render any assistance
by way of loan, guarantees or otherwise to its subsidiaries or affiliated
companies. The corporation may borrow in any form and proceed to the issuance
of bonds.
In general, it may take any controlling and supervisory measures and carry
out any financial, movable or immovable, commercial and industrial operation
which it may deem useful in the accomplishment and development of its purpose.
TITLE II. - CAPITAL, SHARES
- --------------------------
Article 5.-
The corporate capital is set at be forty thousand United States Dollars
(40,000.- USD) divided into twenty thousand (20,000) shares of two United
States Dollars (2 USD) each.
The shares may be created at the owner's option in certificates representing
single shares or in certificates representing two or more shares.
The shares are in registered or bearer form, at the shareholder's option.
<PAGE>
3
The corporation may, to the extent and under the terms permitted by law,
purchase its own shares.
TITLE III.-MANAGEMENT
- ---------------------
Article 6.-
The corporation is managed by a Board of Directors composed of eight (8)
members, either shareholders or not, who are appointed for a period not
exceeding six years by the general meeting of shareholders which may at any
time remove them.
The number of directors, their term and their remuneration are fixed by the
general meeting of the shareholders.
Article 7.-
The Board of Directors will elect from among its members a chairman.
The Board of Directors convenes upon call by the chairman, as often as the
interest of the corporation so requires. It must be convened each time two
directors so request.
Article 8.-
The Board of Directors is invested with the broadest powers to perform all
acts of administration and disposition in compliance with the corporate object.
All powers not expressly reserved by law or by the present articles of
association to the general meeting of shareholders fall within the competence
of the Board of Directors. The Board of Directors may pay interim dividends
in compliance with the legal requirements.
Article 9.-
The corporation will be bound in any circumstances by the signature of two
directors or by the sole signature of the managing director, unless special
decisions have been reached concerning the authorised signature in case of
delegation of powers or proxies given by the Board of Directors pursuant to
article 10.- of the present articles of association.
Article 10.-
The Board of Directors may delegate its power to conduct the daily management
of the corporation to one or more directors, who will be called managing
directors.
<PAGE>
4
It may also commit the management of all the affairs of the corporation or of
a special branch to one or more managers, and give special powers for
determined matters to one or more proxyholders, selected from its own members
or not, either shareholders or not.
Article 11.-
Any litigations involving the corporation either as plaintiff or as
defendant, will be handled in the name of the corporation by the Board of
Directors, represented by its chairman or by the director delegated for this
purpose.
TITLE IV.- SUPERVISION
- ----------------------
Article 12.-
The corporation is supervised by one or several statutory auditors,
appointed by the general meeting of shareholders which will fix their number
and their remuneration, as well as the term of their office, which must not
exceed six years.
TITLE V.- GENERAL MEETING
- -------------------------
Article 13.-
The annual meeting will be held in Luxembourg at the place specified in the
convening notices on the 31st of March at 10.00 o'clock and for the first
time in the year 2001.
If such day is a legal holiday, the general meeting will be held on the next
following business day.
TITLE VI.- ACCOUNTING YEAR, ALLOCATION OF PROFITS
- -------------------------------------------------
Article 14.-
The accounting year of the corporation shall begin on the first of January
and shall terminate on the thirty first of December of each year, with the
exception of the first accounting year, which shall begin on the date of the
formation of the corporation and shall terminate on the 31st of December 2000.
Article 15.-
After deduction of any and all of the expenses of the corporation and the
amortizations, the credit balance represents the net profits of the
corporation. Of the net profits, five
<PAGE>
5
percent (5,00%) shall be appropriated for the legal reserve; this deduction
ceases to be compulsory when the reserve amounts to ten percent (10,00%) of
the capital of the corporation, but it must be resumed until the reserve is
entirely reconstituted if, at any time, for any reason whatsoever, it has
been touched.
TITLE VII.-DISSOLUTION, LIQUIDATION
- -----------------------------------
Article 16.-
The corporation may be dissolved by a resolution of the general meeting of
shareholders. If the corporation is dissolved, the liquidation will be
carried out by one or more liquidators, physical or legal persons, appointed
by the general meeting of shareholders which will specify their powers and
fix their remunerations.
TITLE VIII.-GENERAL PROVISIONS
- ------------------------------
Article 17.-
All matters not governed by these articles of association are to be construed
in accordance with the law of August 10th 1915 on commercial companies and
the amendments hereto.
SUBSCRIPTION
The articles of association having thus been established, the parties
appearing declare to subscribe the whole capital as follows:
1. CARRIER I INTERNATIONAL S.A. 19,999 shares
2. CARLYLE INTERNATIONAL PARTNERS II, L.P. 1 share
------
TOTAL 20,000 shares
All the shares have been paid up to the extent of twenty five (25%) by
payment in cash, so that the amount of ten thousand United States Dollars
(10,000.-USD) is now available to the corporation, evidence thereof having
been given to the notary.
STATEMENT
The undersigned notary states that the conditions provided for in article 26
as amended of the law of August 10th 1915 on commercial companies have been
observed.
<PAGE>
6
COSTS
The aggregate amount of the costs, expenditures, remunerations or expenses,
in any form whatsoever, which the corporation incurs or for which it is
liable by reason of its organisation, is approximately eighty thousand
Luxembourg francs (80,000 Luf).
EXTRAORDINARY GENERAL MEETING
The above named persons, representing the entire subscribed capital and
considering themselves as duly convoked, have immediately proceeded to hold
an extraordinary general meeting.
Having first verified that it was regularly constituted, they have passed the
following resolutions by unanimous vote:
1.-The number of directors is fixed at eight (8) and the number of auditors
at one (1).
2.-The following are appointed directors:
Frank YEARY, company director
Gabe FINKE, company director
Brooke COBURN, company director
Glenn CREAMER, company director
Alexander EVANS, company director
Terje NORDHAL, company director
Thor Geir RAMLETH, company director
Abteen SAI, company director
3.-The statutory auditor will be appointed at a subsequent shareholders
meeting
4.-Their terms of office will expire after the annual meeting of shareholders
of the year 2001
5.-The registered office of the company is established in Luxembourg, 3,
Boulevard Prince Henri L-1724 Luxembourg.
WHEREOF, the present notarial deed was drawn up in Hesperange
<PAGE>
7
The document having been read to the persons appearing, all of whom are known
to the notary by their surnames, Christian names, civil status and
residences, the said persons appearing signed together with the notary
the present deed.
The undersigned notary, who understands and speaks English, states herewith
that on request of the above appearing persons, the present deed is worded
in English, followed by a French translation. On request of the same
appearing persons and in case of divergences between the English and the
French text, the English version will prevail.
L'an mil neuf cent quatre-vingt dix-neuf, le dix-neuf novembre
Pardevant Maitre Gerard LECUIT, notaire de residence a Hesperange
ONT COMPARU
1. CARRIER I INTERNATIONAL S.A., avec siege social L - 8009 Strassen 3,
route d'Arlon, Luxembourg.
2. CARLYLE INTERNATIONAL PARTNERS II, L.P., Cayman Islands Limited
Partnership, etablie a c/o Coutts & Co (Cayman) LTD, PO BOX 707, Grand
Cayman, Cayman Islands, British West Indies.
Toutes deux ici representees par Maitre Laurent LAZARD, avocat, demeurant a
Luxembourg, en vertu de deux procurations donnees le 18 novembre 1999
Lesquelles deux predites procurations apres avoir ete paraphees ne varietur
resteront annexees au present acte pour etre soumises avec lui aux formalites
de l'enregistrement.
Lesqeuls comparants, es-qualites qu'ils agissent, ont requis le notaire
instrumentaire de dresser acte constitutif d'une societe anonyme qu'ils
declarent constituer entre eux et dont ils ont arrete les statuts comme suit:
TITRE I. - DENOMINATION, SIEGE SOCIAL, OBJET, DUREE
- ---------------------------------------------------
Article 1er.-
Il est forme une societe anonyme sous le denomination de HUBCO S.A..
Article 2.-
Le siege de la societe est etabli a Luxembourg.
<PAGE>
8
Au cas ou des evenements extraordinaires d'ordre politique ou economique, de
nature a compromettre l'activite normale au siege social ou la communication
aisee de ce siege avec l'etranger se produiront ou seront imminents, le
siege social pourra etre declare transfere provisoirement a l'etranger,
jusqu'a cessation complete de ces circonstances anormales.
Une telle decision n'aura aucun effet sur la nationalite de la societe. La
declaration de transfert du siege sera faite et portee a la connaissance des
tiers par l'organe de la societe qui se trouvera le mieux place a cet effet
dans les circonstances donnees.
Article 3.-
La societe est constituee pour une duree indeterminee.
Article 4.-
La societe a pour objet la prise de participations, sous quelque forme que
ce soit, dans des entreprises luxembourgeoises ou etrangeres, l'acquisition
par achat, souscription ou de toute autre maniere, ainsi que l'alienation par
vente, echange ou de toute autre maniere de titres, obligations, creances,
billets et autres valeurs de toutes especes, la possession, l'administration,
le developpement et la gestion de son portefeuille.
La societe peut participer a la creation et au developpement de n'importe
quelle entreprise financiere, industrielle ou commerciale et preter tous
concours, que ce soit par des prets, garanties ou de toute autre maniere a
des societes filiales ou affiliees. La societe peut emprunter sous toutes les
formes et proceder a l'emission d'obligations.
D'une facon generale, elle peut prendre toutes mesures de controle et de
surveillance et faire toutes operations financieres, commerciales et
industrielles qu'elle jugera utiles a l'accomplissement ou au developpement
de son objet.
TITRE II.- CAPITAL, ACTIONS
- ---------------------------
Article 5.-
Le capital social est fixe a quarante mille United States Dollars
(40,000.-USD) divise en vingt mille (20,000) actions de deux United States
Dollars (2.-USD) Les actions sont nominatives ou au porteur, au choix de
l'actionnaire.
Les actions de la societe peuvent etre creees, au choix du proprietaire, en
titres unitaires ou en certificats representatifs de plusieurs actions.
<PAGE>
9
La societe peut proceder au rachat de ses propres actions sous les conditions
prevues par la loi.
Le capital pourra etre augmente ou reduit dans les conditions legales
requises.
TITRE III.-ADMINISTRATION
- --------------------------
Article 6.-
La societe est administree par un conseil compose de huit membres,
actionnaires ou non, nommes pour un terme qui ne peut exceder six ans, par
l'assemblee generale des actionnaires, et toujours revocables par elle.
Le nombre des administrateurs ainsi que leur remuneration et la duree de leur
mandat sont fixes par l'assemblee generale de la societe.
Article 7.-
Le conseil d'administration choisit parmi ses membres un president.
Le conseil d'administration se reunit sur la convocation du president, aussi
souvent que l'interet de la societe l'exige. Il doit etre convoque chaque
fois que deux administrateurs le demandent.
Article 8.-
Le conseil d'administration est investi des pouvoirs les plus etendus pour
faire tous actes d'administration et de disposition qui rentrent dans
l'objet social.
Il a dans sa competence tous les actes qui ne sont pas reserves expressement
par la loi et les statuts a l'assemblee generale. Il est autorise a verser
des acomptes sur dividendes aux conditions prevues par la loi.
Article 9.-
La societe est engagee en toutes circonstances par les signatures conjointes
de deux administrateurs, ou par la signature d'un administrateur-delegue,
sans prejudice des decisions a prendre quant a la signature sociale en cas de
delegation de pouvoirs et mandats conferes par le conseil d'administration en
vertu de l'article 10.-des statuts.
Article 10.-
Le conseil d'administration peut deleguer la gestion journaliere de la
societe a un ou plusieurs administrateurs qui prendront la denomination
d'administrateurs-delegues.
<PAGE>
10
Il peut aussi confier la direction de l'ensemble ou de telle partie ou
branche speciale des affaires sociales a un ou plusieurs directeurs, et
donner des pouvoirs speciaux pour des affaires determinees a un ou plusieurs
fondes de pouvoirs, choisis dans ou hors son sein, actionnaires ou non.
Article 11.-
Les actions judiciaires, tant en demandant qu'en defendant, sont suivies au
nom de la societe par le conseil d'administration, poursuites et diligences de
son president ou d'un administrateur delegue a ces fins.
TITRE IV.-SURVEILLANCE
- ----------------------
Article 12.-
La societe est surveillee par un ou plusieurs commissaires nommes par
l'assemblee generale, qui fixe leur nombre et leur remuneration, ainsi que la
duree de leur mandat, qui ne peut exceder six ans.
TITRE V.-ASSEMBLEE GENERALE
- ---------------------------
Article 13.-
L'assemblee generale annuelle se reunit de plein droit le 31 mars a 10.00
heures a Luxembourg au siege social ou a tout autre endroit a designer par
les convocations, et pour la premiere fois en 2001.
Si ce jour est un jour ferie legal, l'assemblee generale a lieu le premier
jour ouvrable suivant.
TITRE VI.-ANNEE SOCIALE, REPARTITION DES BENEFICES
- --------------------------------------------------
Article 14.-
L'annee sociale commence le 1 er janvier et finit le 31 decembre de chaque
annee.
Exceptionnellement, le premier exercice social comprendra tout le temps a
courir de la constitution de la societe jusqu'au 31 decembre 2000.
Article 15.-
<PAGE>
11
L'excedent favorable du bilan, defalcation faite des charges sociales et des
amortissements, forme le benefice net de la societe. Sur ce benefice, il est
preleve cinq pour cent (5%) pour la formation du fonds de reserve legale; ce
prelevement cesse d'etre obligatoire lorsque la reserve aura atteint le
dixieme du capital social, mais devrait toutefois etre repris jusqu'a
entiere reconstitution, si a un moment donne et pour quelque cause que ce
soit, le fonds de reserve avait ete entame.
Le solde est a la disposition de l'assemblee generale.
TITRE VII. - DISSOLUTION, LIQUIDATION
- -------------------------------------
Article 16.-
La societe peut etre dissoute par decision de l'assemblee generale.
Lors de la dissolution de la societe, la liquidation s'effectuera par les
soins d'un ou de plusieurs liquidateurs, personnes physiques ou morales,
nommes par l'assemblee generale qui determine leurs pouvoirs et leurs
emoluments.
TITRE VIII. - DISPOSITIONS GENERALES
- ------------------------------------
Article 17.-
Pour tous les points non specifies dans les presents statuts, les parties se
referent et se soumettent aux dispositions de la loi luxembourgeoise du 10
aout 1915 sur les societes commerciales et de ses lois modificatives.
SOUSCRIPTION
Les statuts de la societe ayant ete ainsi arretes, les comparants declarent
souscrire le capital comme suit:
1. CARRIER 1 INTERNATIONAL S.A. 19,999 actions
2. CARLYLE INTERNATIONAL
PARTNERS II, L.P. 1 action
------
TOTAL 20,000 ACTIONS
Toutes les actions ont ete liberees a concurrence de vingt-cinq (25)% par des
versements en especes, de sorte que la somme de dix mille United States
Dollars (10,000 USD) se trouve des a present a la disposition de la societe
ainsi qu'il en a ete justifie au notaire instrumentaire.
<PAGE>
12
DECLARATION
Le notaire soussigne declare avoir verifie l'existence des conditions
enumerees a l'article 26 de la loi sur les societes commerciales, et en
constate expressement l'accomplissement.
ESTIMATION DES FRAIS
Le montant des frais, depenses, remunerations ou charges, sous quelque forme
que ce soit, qui incombent a la societe ou qui sont mis a sa charge a raison
de sa constitution, s'eleve a approximativement quatre-vingts mille francs
luxembourgeois (80,000 Flux).
ASSEMBLEE GENERALE EXTRAORDINAIRE
Les comparants prequalifies, representant la totalite du capital souscrit, se
considerant comme dument convoques, se sont ensuite constitues en assemblee
generale extraordinaire.
Apres avoir constate que la presente assemblee est regulierement constituee,
ils ont pris a l'unanimite les resolutions suivantes:
1. Le nombre des administrateurs est fixe a huit (8) et celui des
commissaires a un (1).
2. Ont ete appeles aux fonctions d'administrateur:
Frank, YEARY, administrateur
Gabe FINKE, administrateur
Brooke COBURN, administrateur
Glenn CREAMER, administrateur
Alexander EVANS, administrateur
Terje NORDHAL, administrateur
Thor Geir RAMLETH, administrateur
Abteen SAI, administrateur
3. Une prochaine assemblee des actionnaires designera le commissaire:
4. Les mandats des administrateurs expireront a l'issue de l'assemblee
generale qui se tiendra en 2001
5. Le siege social de la societe est fixe au 3, Boulevard Prince Henri L-1724
Luxembourg.
Dont acte, fait et passe a Hesperange, date qu'en tete des presentes.
<PAGE>
13
Lecture faite aux comparants, tous connus du notaire instrumentant par noms,
prenoms, etats et demeures, lesdits comparants ont signes avec le notaire le
present acte.
Le notaire soussigne, qui comprend et parle l'anglais, declare qu'a la
demande des comparants, le present acte est redige en anglais suivi d'une
version francaise et qu'en cas de divergence entre le texte anglais et le
texte francais, le texte anglais prevaudra.
Copie certifiee conforme
a l'original
[Seal]
<PAGE>
EXHIBIT B
EMPLOYMENT TERM SHEET
[*]
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
v
<PAGE>
EXHIBIT C
RESERVED
vi
<PAGE>
EXHIBIT D
IAXIS ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT AGREEMENT
This Assignment Agreement, (the "AGREEMENT"), is entered into
as of _______, 1999 by and between iaxis B.V., a corporation organized under the
laws of the Netherlands ("iaxis B.V."), iaxis carrier services ltd., an Isle of
Man corporation ("iaxis ltd."), and [name of Hubco subsidiary], a _____
organized under the laws of ______ (the "Company") and a wholly-owned subsidiary
of Hubco, S.A., a Luxembourg Societe Anonyme ("Hubco").
RECITALS
A. On November 23, 1999, Hubco, together with the other
parties named therein, entered into a Shareholders Agreement (the "Shareholders
Agreement").
B. iaxis B.V. and iaxis ltd. desire to assign certain assets
to the Company as contemplated by Section 2.11 of the Shareholders Agreement.
C. All capitalized terms not defined herein shall have the
meaning given them in the Shareholders Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. iaxis B.V. and iaxis ltd. hereby cause to be assigned,
transfered and conveyed to the Company and its successors and assigns, effective
as of the date hereof, all of their or their subsidiaries' estate, right, title
and interest (both legal and equitable) in and to the following (collectively
referred to as the "Assigned Assets"):
(a) any agreement, heads of agreement, letter of intent,
contract, purchase order or other contractual or pre-contractual understanding,
lease or agreement, whether oral or written, related to the buildings identified
on Exhibit A hereto (the "Buildings"), including without limitation, the
agreements set forth on Exhibit A [to be finalized prior to closing], true and
correct copies of which are attached hereto,
(b) any permit, license, franchise, approval, certificate,
privilege, immunity, consent or other authorization issued or authorized or
required to be issued by any governmental body or any other Person related to
the Buildings,
vii
<PAGE>
(c) all of their and their Affiliates' copyrights, patents,
trademarks, technology rights and licenses, trade secrets, trade dress,
franchises, know-how, inventions, designs, specifications, plans, drawings,
files, business records and intellectual property rights related to the
Buildings, and
(d) any other rights or property, tangible or intangible,
acquired or held for use in connection with the Buildings by iaxis.
2. From and after the date of this Agreement, upon request of
the Company, iaxis B.V. and iaxis ltd. shall duly execute, acknowledge, deliver
and perform all further acts, deeds, assignments, transfers, conveyances, powers
of attorney, and assurances that may be required to convey to and vest title in
the Company, its successors and assigns, and protect the Company's right, title
and interest in and enjoyment of all the assets intended to be assigned,
transferred, and conveyed pursuant to this Agreement.
3. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. This
Agreement may be signed in one or more counterparts and all counterparts so
executed shall constitute one agreement.
4. Each of iaxis B.V. and iaxis ltd. hereby represents and
warrants that (i) the Assigned Assets are free and clear of any lien, claim or
encumbrance, (ii) the execution and delivery by it of this Agreement and the
performance of its obligations hereunder will not (A) conflict with or violate
or cause a breach under any agreement to which it is a party or by which the
Assigned Assets are bound, (B) violate the intellectual property rights of any
other party or (C) require the consent of any Person or governmental authority.
5. This Assignment Agreement shall be construed and
interpreted and the rights of the parties determined in accordance with the law
of the State of New York.
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered as of the date first written above.
iaxis B.V.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
viii
<PAGE>
iaxis carrier services ltd.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ix
<PAGE>
[Insert Name of Hubco Subsidiary]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
x
<PAGE>
EXHIBIT A
Schedule of iaxis Properties
with Lock-out Extensions
[*]
[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION.
xi
<PAGE>
EXHIBIT 10.2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
By and Among
The Carlyle entities named herein,
iaxis B.V.,
Carrier1 International S.A.,
Providence Equity Partners III L.P.,
Providence Equity Operating Partners III L.P.
and
Hubco S.A.
November 23, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
1. Demand Registrations...............................................1
2. Piggyback Registrations............................................3
3. Holdback Agreements................................................4
4. Other Public Offers; Registration And Public Offer Procedures......5
5. Registration Expenses.............................................10
6. Indemnification...................................................11
7. Participation In Underwritten Registrations.......................14
8. Rule 144 Reporting................................................15
9. Definitions.......................................................15
10. Miscellaneous.....................................................17
i
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made as of November 23,
1999, by and among (i) the entities whose names appear under the heading
"Carlyle" on the signature pages hereof (collectively referred to as "Carlyle"),
(ii) iaxis B.V., a corporation organized under the laws of the Netherlands
("iaxis"), (iii) Carrier1 International S.A., a Luxembourg Societe Anonyme
("Carrier1"), (iv) Providence Equity Partners III L.P., a limited partnership
organized under the laws of Delaware, Providence Equity Operating Partners III
L.P., a limited partnership organized under the laws of Delaware ("collectively
referred to as "Providence"), and (v) Hubco S.A., a Luxembourg Societe Anonyme
(the "Company").
WITNESSETH:
WHEREAS, the Investors hold securities issued by the Company,
subject to the provisions of the Shareholders Agreement, dated as of the date
hereof, among the Company and the Investors;
WHEREAS, the Company and the Investors anticipate that equity
securities of the Company (or American depositary receipts or shares
representing interests in such securities) will eventually be offered by means
of an underwritten public offering within the United States, possibly in
connection with a listing on the New York Stock Exchange or another exchange in
the United States, as well as by public or private offerings outside the United
States;
WHEREAS, the Company and the Investors wish to provide for
certain registration and other rights with respect to the securities of the
Company;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and for 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:
1. DEMAND REGISTRATIONS.
(a) IPO: DEMAND REGISTRATIONS. (i) Prior to November 23, 2001, the
Company shall not register for sale to the public any of its Equity Securities
without the prior consent of Investors holding at least 55% of the Equity
Securities of the Company on a fully-diluted basis. (ii) At any time after
November 23, 2001, Investors holding at least 10% of the Equity Securities of
the Company on a fully-diluted basis ("Initiating Holders") may request that the
Company make an IPO. In the event that the Initiating Investors make such
request, then the Company agrees that it will undertake and effect such IPO as
soon as is reasonably practicable. (iii) At any time after the closing of an
IPO, any Investor may request registration under the Securities Act of 1933, as
amended (the "Securities Act"), of (A) all or any portion of such Investor's
Registrable Securities on Form S-1 or any similar long-form registration (each a
"Long-Form Registration"), and (B) all or any portion of such Investor's
Registrable Securities on Form S-3 (including pursuant to Rule 415 under the
Securities Act) or any similar short-form registration (each a "Short-Form
Registration") if available, in each case, as provided in Section 1(b) or 1(c)
hereof. (iv) All registrations requested pursuant to this Section 1(a) are
referred to herein as "Demand Registrations." Each request for a Demand
Registration shall specify the number of Registrable
<PAGE>
Securities requested to be registered for such offering. Within ten (10) days
after receipt of the request for a Demand Registration, the Company will send
written notice (the "Notice") of such request and its intention to comply
therewith to all Investors and, subject to Section 1(d) the Company will include
in such Demand Registration all Registrable Securities of such Investors as to
which the Company received written requests within twenty (20) days of the date
of the Notice.
(b) LONG-FORM REGISTRATIONS. Initiating Holders shall be entitled to
request two (2) Long-Form Registrations; provided, however, that the Company
shall not be obligated to effect a Long-Form Registration pursuant to this
Section 1(b) if the anticipated aggregate offering price of the Registrable
Securities to be sold is less than $25 million. The Company shall pay all
Registration Expenses with respect to each Long-Form Registration. A
registration shall not count as one of the permitted Long-Form Registrations
until it has become effective and Investors are able to register and sell at
least 90% of the Registrable Securities requested to be included in such
registration by such Investors, provided that in any event the Company shall pay
all Registration Expenses in connection with any registration initiated as a
Long-Form Registration regardless of whether it has become effective. All
Long-Form Registrations shall be underwritten registrations.
(c) SHORT-FORM REGISTRATIONS. In addition to the Long-Form
Registrations provided pursuant to Section 1(b), Initiating Holders shall be
entitled to request up to three (3) Short-Form Registrations per year in which
the Company shall pay all Registration Expenses; provided, however, that the
Company shall not be obligated to effect a Short-Form Registration pursuant to
this Section 1(c) if the anticipated aggregate offering price of the Registrable
Securities to be sold is less than $10 million or if Investors have made a
request for a Short-Form Registration which has become effective within the
prior 180 days. Notwithstanding anything contained herein to the contrary,
Demand Registrations shall be Short-Form Registrations whenever the Company is
permitted to use any applicable short form. The Company shall use its best
efforts to make Short-Form Registrations on Form S-3 available for the sale of
Registrable Securities after the Company has become subject to the reporting
requirement of the Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act"). If the Company is qualified to and, pursuant to the request of
an Investor, has filed with the Securities and Exchange Commission (the
"Commission") a registration statement under the Securities Act on Form S-3
pursuant to Rule 415 under the Securities Act (the "Required Registration"), the
Company shall use its best efforts to cause the Required Registration to be
declared effective under the Securities Act as soon as practicable after filing,
and once effective, the Company shall cause such Required Registration to remain
effective for a period ending on the earlier of (i) 180 days after the effective
date, or (ii) the date on which all Registrable Securities held by such
Investors and included in such Required Registration have been sold pursuant to
the Required Registration (the "Effective Period"). Upon the request of a
majority of the Initiating Holders, the Company shall include in the prospectus
with respect to a Short-Form Registration such additional information as
reasonably requested by a majority of the Initiating Holders or the underwriter
for any such offering.
(d) PRIORITY ON DEMAND REGISTRATIONS. If the managing underwriters
advise the Company and each of the Investors in writing that in their opinion
the number of Registrable Securities to be included in an underwritten offering
exceeds the number of Registrable
2
<PAGE>
Securities which can be sold in an orderly manner in such offering within a
price range acceptable to the Company or marketing factors require a limitation
on the number of Registrable Securities to be underwritten on behalf of the
Company, then the Company shall include in such registration the number of
Registrable Securities requested to be included which in the opinion of such
underwriters can be sold in or during the time of such offering without such
interference or affect on the price (the "Demand Registration Cutback") as
follows: first the Registrable Securities requested to be included by the
Investors, pro rata among the Investors requesting to participate in such Demand
Registration on the basis of the number of Registrable Securities each Investor
has requested to be included in the Demand Registration; and second the Equity
Securities proposed to be sold by the Company for its own account or any other
holder of Equity Securities. If as a result of a Demand Registration Cutback the
Investor initially requesting the Demand Registration is not allowed to include
at least 90% of its Registrable Securities requested to be registered, then such
registration shall not count as one of such Investor's Demand Registrations.
(e) RESTRICTIONS ON DEMAND REGISTRATIONS. The Company shall not be
obligated to effect any Demand Registration within 180 days after the effective
date of a previous Demand Registration. The Company shall be entitled to
postpone, for a reasonable period of time not in excess of 90 days after its
receipt of an initial request for a Demand Registration pursuant to this
Agreement, the filing of any registration statement if at the time it received
such request, the Board of Directors determines, in its reasonable business
judgment, that such registration and offering would be reasonably expected to
have a material adverse effect on any financing, acquisition, corporate
reorganization or other material transaction or development involving the
Company, provided that the Company shall only be entitled to one such
postponement in any 12-month period. The Company shall give each of the
Investors prompt written notice of such postponement. In the event of such
postponement, the Company shall comply with such request for Demand Registration
as soon as practicable (and in any event within 90 days after its receipt of the
initial request for such Demand Registration) after it shall determine, in its
reasonable business judgment, that such registration and offering will not
interfere with the matters described in the second sentence of this Section
1(e). If the Company shall postpone the filing of any registration statement,
any Investor shall have the right to withdraw its request for such registration
by giving notice to the Company. In the event that any Investor withdraws its
request in the foregoing manner, such request shall not be counted for purposes
of determining the number of registrations to which such Investor is entitled
pursuant to Section 1.
(f) SELECTION OF UNDERWRITERS. The Company will have the right to
select the investment banker(s) and manager(s) to administer any offering
including Registrable Securities held by the Investors (which, if necessary will
include a "qualified independent underwriter" within the meaning of the rules of
the National Association of Securities Dealers, Inc. (a "QIU")), subject to the
approval of the Investors holding a majority of the Registrable Securities
included in such offering, which will not be unreasonably withheld.
2. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. Whenever the Company proposes to register any
of its Equity Securities (including any proposed registration of the Company's
Equity Securities by any third party) under the Securities Act whether or not
for sale for its own account (other than
3
<PAGE>
pursuant to a registration on Form S-4 or S-8 or any successor or similar forms)
and the registration form to be used may be used for the registration of
Registrable Securities held by any Investor (a "Piggyback Registration"), the
Company shall give prompt written notice to the Investors of its intention to
effect such a registration and shall include in such registration, subject to
sections 2(c) and (d), all Registrable Securities held by the Investors with
respect to which the Company has received written requests for inclusion therein
within ten (10) business days after the receipt of the Company's notice.
(b) PIGGYBACK EXPENSES. The Registration Expenses of the Investors
shall be paid by the Company in all Piggyback Registrations.
(c) PRIORITY ON PRIMARY REGISTRATIONS. If the managing underwriters
advise the Company and each Investor requesting registration in writing that in
their opinion the number of Equity Securities that holders of Equity Securities
propose to sell therein, (the "Other Equity Securities"), plus the number of
Equity Securities to be underwritten on behalf of the Company (the "Company
Equity Securities"), exceeds the maximum number of Equity Securities specified
by the managing underwriters that may be distributed without adversely affecting
the price, timing or distribution of the Company Equity Securities, then the
Company shall include in such registration such maximum number of Equity
Securities requested to be included as follows: first the Company Equity
Securities, second the Registrable Securities requested to be included in such
registration by the Investors pro rata among the Investors requesting to
participate in the Piggyback Registration on the basis of the number of
Registrable Securities each Investor has requested to be included in the
Piggyback Registration, and third the Equity Securities requested to be included
in such registration by any other holder of Equity Securities.
(d) SELECTION OF UNDERWRITERS. If any Piggyback Registration is an
underwritten offering, the selection of investment banker(s) and manager(s) for
the offering (which, if necessary, will include a QIU) must be approved by the
Investors holding a majority of the Registrable Securities included in the
offering.
(e) OTHER REGISTRATIONS. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its Equity Securities under the
Securities Act (except on Form S-8 or any successor form), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of at least 180 days has elapsed from the effective date of such previous
registration.
3. HOLDBACK AGREEMENTS.
(a) If requested in writing by the underwriters for the IPO or any
other Public Offer of Equity Securities of the Company, each Investor shall
agree not to effect any sale or transfer (including sales pursuant to Rule 144
or Regulation S) of Equity Securities during a period of not more than 180 days
beginning on the effective date of the registration statement relating to such
IPO, in the case of a public offering in the United States, or beginning on the
date the offering is closed, in the case of any other Public Offer outside the
United States (except, in each case, pursuant to such offering); provided,
however, that all Persons entitled to
4
<PAGE>
registration rights with respect to Equity Securities of the Company who are not
parties to this Agreement, all Persons holding in excess of five percent (5%) of
the capital stock of the Company on a fully diluted basis and all executive
officers and directors of the Company shall have also agreed not to sell or
transfer their Equity Securities under the terms set forth in this Section 3(a).
(b) The Company (i) agrees not to effect any public sale or
distribution of its Equity Securities during the 10 days prior to and during the
180-day period beginning on the effective date of any (u) underwritten Demand
Registration, (v) underwritten Piggyback Registration (except as part of such
underwritten registration or pursuant to a registration on Form S-8 or any
successor form), (w) post-effective amendment of a Required Registration
pursuant to which an underwritten offering is to be effected so long as at least
180 days have elapsed since the end of the previous lock-up period pursuant to
this clause (w) unless (in any such case) the underwriter managing the
registered public offering otherwise agrees, or (x) preliminary or final
prospectus, offering memorandum or circular or other offering document in
respect of any other Public Offer of Equity Securities and (ii) agrees to cause
each holder of its Equity Securities purchased from the Company at any time
after the date of this Agreement (other than in a registered public offering) to
agree not to effect any or distribution (including sales pursuant to Rule 144 or
Regulation S) of any such securities during such period (except as part of such
underwritten registration, if otherwise permitted, and, in the case of an
underwritten Piggyback Registration, as part of such underwritten registration
or pursuant to a registration on Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree.
4. OTHER PUBLIC OFFERS; REGISTRATION AND PUBLIC OFFER PROCEDURES.
(a) Prior to, concurrently with or following a US Public Offer,
Initiating Holders may determine to proceed with a Public Offer, to the extent
permitted by applicable law, accompanied by listings on one or more exchanges or
over-the-counter markets and applications for qualification of Equity Securities
to be traded on SEAQ International, PORTAL or a similar system. If Initiating
Holders so request, the Company and the Investors shall co-operate with each
other and take such measures as may be necessary in the reasonable judgment of
Initiating Holders (including, in the case of the Investors, voting their Equity
Securities) in order to permit such offerings to be completed and such related
actions to be taken in compliance with all applicable laws and regulations and
the rules of any exchange in which the Equity Securities are or are to be
listed, including any of the measures listed in Section 4 or any comparable
measures applicable to such offerings and related actions. It is the parties'
intention that the respective rights and obligations of the Company and the
Investors with respect to such offerings shall be equivalent, insofar as legally
permitted and reasonably practicable in light of the customary market practice
applicable to such offerings, to those set forth in this Agreement with respect
to registration of Registrable Securities in the U.S., and that, if any such
offering is proposed by Initiating Holders, the parties shall negotiate in good
faith such amendments to this Agreement as Initiating Holders may reasonably
request to better define such rights and obligations in such connection.
5
<PAGE>
(b) Whenever Initiating Holders shall have requested that any
Registrable Securities be registered in accordance with Section 1 or 2 of this
Agreement or otherwise offered by means of a Public Offer, and in the case of a
US Public Offer, the Company shall:
(i) use its best efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
possible:
(A) prepare and file with the Commission a registration
statement with respect to such Registrable Securities as
would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are
specified by the Initiating Holders, together with all or
such portion of the Registrable Securities of any
Investor(s) joining the request of the Initiating Holders as
are specified in a written request received by the Company
within twenty (20) days after the written Notice from the
Company set forth in Section 1(a) is mailed or delivered;
(B) use its best efforts to cause such registration
statement to become effective (provided that within a
reasonable time before filing a registration statement or
prospectus or any amendments or supplements thereto, the
Company shall furnish to counsel selected by the Investors
participating in such registration copies of all such
documents proposed to be filed, which documents shall be
subject to the review and comment of such counsel);
(C) notify in writing each Investor requesting registration
of its Registrable Securities of the effectiveness of each
registration statement filed hereunder and prepare and file
with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration
statement effective for a period of either (i) not less than
180 days or such longer period specified in Section 1(c)
(subject to extension pursuant to Section 7(b)), or, if such
registration statement relates to an underwritten offering,
such longer period as (in the opinion of counsel for the
underwriters) a prospectus is required by law to be
delivered in connection with sales of Registrable Securities
by an underwriter or dealer, or (ii) such shorter period as
will terminate when all of the securities covered by such
registration statement during such period have been disposed
of in accordance with the intended methods of disposition by
the seller or sellers thereof set forth in such registration
statement (but in any event not before the expiration of any
longer period required under the Securities Act), and to
comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement until such time as all of such
securities have
6
<PAGE>
been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in
such registration statement subject to the time limits set
forth herein;
(D) furnish to each Investor requesting registration of its
Registrable Securities such number of copies of such
registration statement, each amendment and supplement
thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such
other documents as such Investor may reasonably request in
order to facilitate the disposition of its Registrable
Securities;
(ii) in the case of a US Public Offer or any other Public Offer:
(A) use its best efforts to register or qualify such
Registrable Securities as would permit or facilitate the
sale and distribution of all or such portion of such
Registrable Securities as are specified by the Initiating
Holders, together with all or such portion of the
Registrable Securities of any Investor(s) joining the
request of the Initiating Holders as are specified in a
written request received by the Company within twenty (20)
days after written notice from the company set forth above
is mailed or delivered under such other securities or blue
sky laws of such jurisdictions as such Investor reasonably
requests and do any and all other acts and things which may
be reasonably necessary or advisable to enable any Investor
to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Investor (provided that
the Company shall not be required to (i) qualify generally
to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph,
(ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service or process in any such
jurisdiction);
(B) notify each Investor requesting registration of its
Registrable Securities or inclusion thereof in a Public
Offer, at any time when a prospectus, offering circular or
memorandum or other offering document relating thereto is
required to be delivered under the Securities Act or other
applicable law, upon discovery that, or upon the discovery
of the happening of any event as a result of which the
prospectus, offering circular or memorandum or such other
document contains an untrue statement of a material fact or
omits to state a material fact necessary to make the
statements therein not misleading in the light of the
circumstances under which they were made, and, at the
request of any Investor, the Company shall promptly furnish
to such Investor, as the case may be, a reasonable number of
copies of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers
7
<PAGE>
of such Registrable Securities, such prospectus or other
document shall not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein not misleading in the light of the
circumstances under which they were made;
(C) (i) cause all such Registrable Securities to be listed
on each securities exchange on which similar securities
issued by the Company are then listed; if such listing is
then permitted under the rules of such exchange, or (ii) if
such listing is not practicable, secure designation of such
securities as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 under the Exchange Act
or, failing that, to secure NASDAQ authorization for such
Registrable Securities, and, without limiting the foregoing,
to arrange for at least two market makers to register as
such with respect to such Registrable Securities with the
NASD;
(D) provide a transfer agent and registrar for all such
Registrable Securities and a CUSIP number for all such
Registrable Securities not later then the effective date of
such registration statement;
(E) enter into such customary agreements and depositary or
custodial arrangements (including underwriting and deposit
agreements in customary form) and take all such other
actions, including without limitation, participating in road
shows, analyst teleconferences and other marketing efforts
as any Investors participating in such registration or the
underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of the Registrable
Securities being sold;
(F) make available for inspection by any Investor requesting
inclusion of its Registrable Securities in such Public Offer
or other Public Offer, any participating underwriter and any
attorney, accountant or other agent retained by such
Investor or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees and
independent accountants to supply all information reasonably
requested by such Investor, underwriter, attorney,
accountant or agent in connection with such registration
statement and assist and, at the request of any
participating underwriter, cause such officers or directors
to participate in presentations to prospective purchasers;
and to undertake all such other customary selling efforts as
any participating underwriter reasonably requests in order
to expedite or facilitate such disposition
8
<PAGE>
(G) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission or any
comparable authority in any foreign jurisdiction and any
exchange on which Equity Securities are or are to be listed,
and make available to its Shareholders, as soon as
reasonably practicable, an earnings statement covering the
period of at least twelve months beginning with the first
day of the Company's first full calendar quarter after the
effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder or, in the case
of a Public Offer any other financial statements or data of
the Company which may be required to be provided by
applicable law or the rules and regulations of any such
non-U.S. authority or exchange;
(H) permit any holder of Registrable Securities, which
holder might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of
such registration or comparable statement or prospectus,
offering circular or memorandum or other offering document
and to require the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included;
(I) make every reasonable effort to prevent the issuance of
any stop order suspending the effectiveness of a
registration statement, of any order suspending or
preventing the use of any prospectus, offering circular or
memorandum or other offering document or suspending the
qualification of any securities included in such
registration statement or other document for sale or trading
in any jurisdiction, and, in the event of any such order,
use its best efforts promptly to obtain the withdrawal of
such order;
(J) use its best efforts to cause any such registration
statement, prospectus, offering circular or memorandum or
other offering document and, if required, Registrable
Securities covered by such registration statement or other
document to be registered with, qualified or approved by
such other governmental authorities or exchanges on which
Equity Securities of the Company are or are to be listed as
may be necessary to enable the Investors to consummate the
disposition of their Registrable Securities;
(K) obtain one or more comfort letters, dated the effective
date of such registration statement (and, if such
registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement,
final prospectus, offering circular or memorandum or other
offering document), from the Company's independent public
accountants in customary form and covering
9
<PAGE>
such matters of the type customarily covered by comfort
letters as any Investor reasonably requests;
(L) obtain an opinion of counsel for the Company experienced
in securities law matters, dated the effective date of the
registration statement (and, if such registration includes
an underwritten public offering, the date of closing under
the underwriting agreement) satisfactory in form and
substance to each Investor and, in the case of an
underwritten public offering, the managing underwriter; and
(M) use reasonable efforts to cause certificates for the
Registrable Securities covered by such registration
statement, final prospectus, offering circular or memorandum
or other offering document to be delivered by the holders
thereof to the underwriters in such denominations and
registered in such names as the underwriters may request.
(N) cooperate and assist in any filings to be made with the
National Association of Securities Dealers, Inc. (the
"NASD").
5. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, listing fees, registrars' and transfer agents' fees, and
expenses of compliance with securities or blue sky laws (including, without
limitation, legal expenses of underwriters' counsel in connection therewith),
printing expenses, travel expenses, filing expenses, messenger and delivery
expenses, fees and disbursements of custodians, depositories, fees and
disbursements of counsel of the Company and fees and disbursements of all
independent certified public accountants, underwriters including, if necessary,
a QIU (excluding discounts and commissions) and other Persons retained by the
Company, or the Investors (all such expenses being herein called "Registration
Expenses") shall be borne and paid by the Company. The Company shall, in any
event, pay its internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit or quarterly review, the expense of any
liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities issued by the
Company are then listed or on the NASD automated quotation system (or any
successor or similar system).
(b) In connection with each Demand Registration and each Piggyback
Registration (or comparable proceeding with respect to a Public Offer outside
the U.S.), the Company shall reimburse the reasonable fees and disbursements of
one special counsel for all of the Investors participating in such registration
which counsel shall be selected by the Investors holding a majority of the
Registrable Securities included in the offering.
(c) In connection with each Demand Registration and each Piggyback
Registration (or comparable proceeding with respect to a Public Offer outside
the U.S.), the Investors participating in such registration shall bear and pay
all underwriting discounts and
10
<PAGE>
selling commissions applicable to the sale of their Registrable Securities
included in such registration or Public Offer.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless, to the fullest
extent permitted by law, each Investor and its affiliates, its and their
respective officers, directors, agents and employees and each Person who
controls any Investor or any of its affiliates (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities, joint or
several, together with reasonable costs and expenses (including reasonable
attorney's fees), to which such indemnified party may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon (i) any untrue or alleged untrue
statement of material fact contained (A) in any registration statement
preliminary or final prospectus, offering circular or memorandum or other
offering document for any Public Offer or any amendment thereof or supplement
thereto, or (B) in any application or other document or communication (in this
Section 6 collectively called an "application") executed by or on behalf of the
Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify any securities covered by
such registration statement or to obtain approval of any preliminary or final
prospectus, offering circular or memorandum or other offering document under the
"blue sky" or other securities laws or listing regulations thereof, or (ii) any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse each Investor, each such director, officer and controlling Person for
any legal or any other expenses incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged omission,
made in such registration statement, any such preliminary or final prospectus or
offering circular or memorandum or other offering document or any amendment or
supplement thereto, or in any application, in reliance upon, and in conformity
with, written information prepared and furnished to the Company by such Investor
expressly for use therein or by the Investor's failure to deliver a copy of the
registration statement, prospectus, offering circular or memorandum or
comparable document or any amendments or supplements thereto after the Company
has furnished such Investor with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of an Investor.
(b) In connection with any registration statement or the preparation
of any preliminary or final prospectus, offering circular or memorandum or other
offering document for a Public Offer in which any Investor is participating,
such Investor will furnish to the Company in writing such information and
affidavits as the Company reasonably requests (and is customarily provided by
selling stockholders) for use in connection with any such registration
statement, prospectus offering circular or memorandum or other offering document
and, to the fullest extent permitted by law, will indemnify and hold harmless
the other Investors holding
11
<PAGE>
Registrable Securities and the Company, and their respective directors,
officers, agents and employees and each other Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities, joint or several, together with reasonable costs and expenses
(including reasonable attorney's fees), to which such indemnified party may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (i) any untrue or
alleged untrue statement of material fact contained in the registration
statement, preliminary or final prospectus, offering circular or memorandum or
other offering document or any amendment thereof or supplement thereto or in any
application, or (ii) any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
made in such registration statement, any such prospectus or offering circular or
memorandum or other offering document or any amendment or supplement thereto, or
in any application, or reliance upon and in conformity with written information
prepared and furnished to the Company by the Investors, expressly for use
therein (The Company and the Investors hereby acknowledge and agree that, unless
otherwise expressly agreed to in writing by such Investors, the only information
furnished or to be furnished to the Company for use in any registration
statement or prospectus relating to the Registrable Securities or in any
amendment, supplement or preliminary materials associated therewith are
restatements specifically relating to (a) transactions between such Investor and
its Affiliates, on the one hand, and the Company, on the other hand, (b) the
beneficial ownership of shares of Common Stock by such Investor and its
affiliates and (c) the name and address if such Investor. If any additional
information about such Investor or the plan of distribution (other than for an
underwritten offering) is required by law to be disclosed in any such document,
then such Investor shall not unreasonably withhold its agreement referred to in
the immediately preceding sentence of this Section 6(b).) Such Investors will
reimburse the Company and each such other indemnified party for any legal or any
other expenses incurred by them in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided, however, that
the obligation to indemnify will be individual to such Investor, and will be
limited to the net amount of proceeds received by each Investor from the sale of
its Registrable Securities pursuant to such registration statement or in such
Public Offer.
(c) Any Person entitled to indemnification under this Agreement shall
notify promptly the indemnifying party in writing of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Section 6, but the failure of any indemnified party to
provide such notice shall not relieve the indemnifying party of its obligations
under the preceding subparagraphs of this Section 6, except to the extent, but
only to the extent to which, the indemnifying party is materially prejudiced
thereby and shall not relieve the indemnifying party from any liability which it
may have to any indemnified party otherwise than under this Section 6. In case
any action or proceeding is brought against an indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, unless in the reasonable
opinion of outside counsel to the indemnified party a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, to assume the defense thereof jointly with any other indemnifying party
similarly notified, to the extent that it chooses, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party that it so chooses, the indemnifying party shall
not be liable to such
12
<PAGE>
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that (i) if the indemnifying party
fails to take reasonable steps necessary to defend diligently the action or
proceeding within 20 days after receiving notice from such indemnified party
that the indemnified party believes it has failed to do so, or (ii) if such
indemnifying party reasonably shall have concluded that there may be one or more
legal defenses available to such indemnified party which are not available to
the indemnifying party; or (iii) if representation of both parties by the same
counsel is otherwise inappropriate under applicable standards of professional
conduct, then, in any such case, the indemnified party shall have the right to
assume or continue its own defense as set forth above (but with no more than one
firm of counsel for all indemnified parties in each jurisdiction, except to the
extent any indemnified party or parties reasonably shall have concluded that
there may be legal defenses available to such party or parties which are not
available to the other indemnified parties or to the extent representation of
all indemnified parties by the same counsel is otherwise inappropriate under
applicable standards of professional conduct) and the indemnifying party shall
be liable for any expenses therefor.
(d) No indemnifying party shall, without the written consent of each
indemnified party (which consent shall not be unreasonably withheld), effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim without any payment or consideration provided or obligation incurred by
any indemnified party, and (B) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(e) If the indemnification provided for in this Section 6 is
unavailable to or is insufficient to hold harmless an indemnified party under
the provisions above in respect to any losses, claims, damages, or liabilities
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative fault of the Company and the Investors participating in the
registration statement, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative fault referred to in clause (i) above but also the
relative benefit of the Company and the Investors participating in the
registration statement or the Public Offer in connection with the statement or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and each Investor participating in the registration statement or
the Public Offer shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received and retained by
each such participating party bear to the total net proceeds from the offering
(before deducting expenses). The relative fault of the Company and each Investor
participating in the registration statement or the Public Offer shall be
determined by reference to, among other things, whether the untrue or alleged
omission to state a material fact relates to information supplied by the Company
or an Investor participating in the
13
<PAGE>
registration statement or the Public Offer and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Investors agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Investor shall be required
to contribute pursuant to this Section 6 any amount in excess of the sum of (i)
any amounts paid pursuant to Section 6(b) and (ii) net proceeds received and
retained by such Investor from the sale of its Registrable Securities covered by
the registration statement filed pursuant hereto or otherwise included in a
Public Offer, it being understood that insofar as such net proceeds have been
distributed by any Investor to its partners, stockholders, or members, the
amount of such Investor's contribution hereunder shall be limited to the net
proceeds which it actually recovers from its partners, stockholders, or members
based upon their relative fault and that to the extent that such Investor has
not distributed such net proceeds, the amount of such Investor's contribution
hereunder shall be limited by the percentage of such net proceeds which
corresponds to the percentage equity interests in such Investor held by those of
its partners, stockholders, or members who have been determined to be at fault.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentations.
(f) The indemnification and contribution by any such party provided
for under this Agreement shall be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant to
law or contract and will remain in full force and effect regardless of any
investigation made or omitted by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and will
survive the transfer of securities.
(g) The indemnification and contribution required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
(a) No Person may participate in any registration or other Public
Offer hereunder which is underwritten unless such Person (i) agrees to sell such
Person's securities on the basis provided in any underwriting arrangements
approved by the Person or Persons entitled hereunder to approve such
arrangements, (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements, and (iii) furnishes such
information regarding such Person as the Company may reasonably request and as
shall be required in connection with such registration; provided that no
Investor shall be required in their respective capacities as stockholders and/or
14
<PAGE>
controlling persons to make any representations or warranties to the Company or
the underwriters (other than representations and warranties regarding such
Investor and such Investor's intended method of distribution) or to undertake
any indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in Section 6.
(b) Each Person that is participating in any registration or other
Public Offer hereunder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 4(b), such Person
will forthwith discontinue the disposition of its Registrable Securities
pursuant to the registration statement, or such Public Offer until such Person's
receipt of the copies of a supplemented or amended prospectus, offering circular
or memorandum or other offering document, as applicable, as contemplated by such
Section 4(b). In the event the Company shall give any such notice, the
applicable time period mentioned in Section 4(b)(i)(C) during which a
Registration Statement is to remain effective shall be extended by the number of
days during the period from and including date of the giving of such notice
pursuant to this Section to and including the date when any Investor
participating in the offering shall have received the copies of the supplemental
or amended prospectus, offering circular or memorandum or other offering
document, as applicable, contemplated by Section 4(b).
8. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of
Registrable Securities to the public without registration, the Company agrees at
all times after the Company has filed a registration statement with the
Commission pursuant to the requirements of either the Securities Act or the
Exchange Act to use its best efforts to: (a) make and keep public information
regarding the Company available as those terms are understood and defined in
Rule 144 under the Securities Act; (b) file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act at any time after it has become
subject to such reporting requirements; and (c) so long as any Investor owns any
Registrable Securities, furnish to such Investor forthwith upon written request
a written statement by the Company as to its compliance with the reporting
requirements of Rule 144, and of the Securities Act and the Exchange Act, a copy
of the most recent annual or quarterly report of the Company, and such other
reports and documents so filed as such Investor may reasonably request in
availing itself of any rule or regulation of the Commission allowing a holder to
sell any such securities without registration.
9. DEFINITIONS.
"AGREEMENT" shall mean this Registration Rights Agreement, as further
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"BOARD" means the Board of Directors of the Company.
"COMMISSION" has the meaning set forth in Section 1(c).
"COMMON SHARES" means the common shares, par value $2.00 per share, of
the Company.
15
<PAGE>
"COMPANY" means Hubco S.A., a Luxembourg Societe Anonyme, or any
company or other entity into which Hubco S.A. is converted or merged into or
which becomes the direct or indirect owner of all the Equity Securities of Hubco
S.A.
"COMPANY EQUITY SECURITIES" has the meaning set forth in Section 2(c).
"DEMAND REGISTRATION" has the meaning set forth in Section 1(a).
"DEMAND REGISTRATION CUTBACK" has the meaning set forth in Section
1(d).
"EFFECTIVE PERIOD" has the meaning set forth in Section 1(c).
"EQUITY SECURITIES" means (i) the Common Shares, (ii) any warrants,
options or other rights to subscribe for or to acquire, directly or indirectly
(whether pursuant to any division or split of Common Shares or other interests
in the Company or in connection with a combination, exchange, reorganization,
recapitalization, reclassification, merger, consolidation or other business
combination transaction involving the Company or otherwise), any Common Shares
or other equity interests in the Company, (iii) any Common Shares or other
equity interests in the Company or any bonds, notes, debentures or other
securities convertible into or exchangeable for, directly or indirectly (whether
pursuant to a Common Share split or Common Share division or in connection with
a combination, exchange, reorganization, recapitalization, reclassification,
merger, consolidation or other business combination transaction involving the
Company or otherwise), any Common Shares or other equity interests of the
Company, and (iv) any interests in any of the foregoing, including any American
or Global Depositary receipts or shares representing any of the Equity
Securities referred to in clauses (i) to (iii) above, in each case outstanding
at any time.
"INITIATING HOLDERS" shall mean any Investor or Investors who in the
aggregate hold not less than twenty-five percent (25%) of the outstanding
Registrable Securities.
"IPO" means the initial underwritten public offering of any Equity
Securities within the United States.
"LONG-FORM REGISTRATION" has the meaning set forth in Section 1(a).
"NOTICE" has the meaning set forth in Section 1(a).
"OTHER EQUITY SECURITIES" has the meaning set forth in Section 2(c).
"PERSON" shall mean any individual, partnership, joint venture,
corporation, limited liability company, limited duration company, limited life
company, association, trust or other enterprise or a government, including any
agency thereof.
"PIGGYBACK REGISTRATION" has the meaning set forth in Section 2(a).
"PUBLIC OFFER" means any underwritten public offering of any Equity
Securities in any jurisdiction in Europe or any underwritten private offering or
series of private offerings in
16
<PAGE>
one or more jurisdictions of Equity Securities in Europe which is accompanied by
a listing of the Equity Securities on the London Stock Exchange or the Frankfurt
Stock Exchange.
"QIU" has the meaning set forth in Section 1(f).
"REGISTRABLE SECURITIES" means, at any time, (i) the Shares issued and
outstanding at such time, (ii) Shares issued upon the conversion of or exchange
of any Equity Securities, (iii) any Equity Securities issued or issuable,
directly or indirectly, with respect to the securities referred to in clauses
(i) or (ii) above by way of a dividend or split or in connection with a
combination, exchange, reorganization, recapitalization, reclassification,
merger, consolidation or other business combination transaction.
"REGISTRATION EXPENSES" has the meaning set forth in Section 5.
"REQUIRED REGISTRATION" has the meaning set forth in Section 1(c).
"SECURITIES ACT" has the meaning set forth in Section 1(a).
"SECURITIES EXCHANGE ACT" has the meaning set forth in Section 1(c).
"SHAREHOLDERS AGREEMENT" means that certain Shareholders Agreement
dated as of the date hereof among the Company and the Investors, as amended,
modified or supplemented from time to time.
"SHORT-FORM REGISTRATION" has the meaning set forth in Section 1(a).
"US PUBLIC OFFER" means any underwritten public offering of any Equity
Securities within the United States.
10. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENT. The Company shall not grant
registration rights to any other Person without the consent of Investor holding
at least 55% of the Registrable Securities outstanding at such time. The Company
shall not hereafter enter into any agreement with respect to its Equity
Securities which is inconsistent with or violates the rights granted to the
Investors in this Agreement.
(b) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. Except as otherwise
permitted herein, after an IPO or other Public Offer the Company shall not take
any action, or permit any change to occur, with respect to its Equity Securities
which would adversely affect the ability of any of the Investors to include
their Registrable Securities in a registration or other Public Offer undertaken
pursuant to this Agreement or which would materially and adversely affect the
marketability of such Registrable Securities in any such registration or other
Public Offer (including, without limitation, effecting a split or a combination
of its Equity Securities).
(c) REMEDIES. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The
17
<PAGE>
parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any party may
in its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
(d) AMENDMENTS AND WAIVERS. No modification to or amendment of any
provision of this Agreement shall be effective against the Company or any
Investor unless such modification or amendment is approved in writing by the
Company and Investors holding 90% of the Registrable Securities then
outstanding. No waiver of the rights and obligations hereunder of the parties
hereto shall be effective unless such waiver is in writing and duly executed and
delivered by each Investor. The failure of any party hereto 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.
(e) SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto. In
addition, whether or not any express assignment has been made, the provisions of
this Agreement which are for the benefit of the purchasers or holders of any
type of Registrable Securities are also for the benefit of, and enforceable by,
any subsequent holder of Registrable Securities. Notwithstanding the foregoing,
in order to obtain the benefit of this Agreement, any subsequent holder of
Registrable Securities must execute a counterpart to this Agreement, thereby
agreeing to be bound by the terms hereof.
(f) SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
(h) DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement. 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 Section,
Subsections, Articles, Schedules and Exhibits, respectively, of this Agreement
unless otherwise specifically provided.
(i) GOVERNING LAW. The corporate law of Luxembourg shall govern all
issues and questions concerning the relative rights of the Company and the
Investors. All other issues and questions concerning the construction, validity,
interpretation and enforcement of this
18
<PAGE>
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of New York of any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York. In
furtherance of the foregoing, the internal law of the State of New York shall
control the interpretation and construction of this Agreement (and all schedules
and exhibits hereto), even though under the jurisdiction's choice of law or
conflict of law analysis, the substantive law of some other jurisdiction would
ordinarily apply.
(j) SUBMISSION TO JURISDICTION. Each of the parties hereby (A) submits
to the jurisdiction of any state or federal court sitting in the State and
County of New York, Borough of Manhattan, in any action arising out of or
relating to this Agreement, and (B) agrees that it will not initiate any action
arising out of or relating to this Agreement in any court other than any state
or federal court sitting in the State and County of New York, Borough of
Manhattan.
(k) ARBITRATION. The Investors agree that any dispute arising out of
or in connection with this Agreement or the transactions contemplated hereby
shall be submitted to arbitration. The Investors shall negotiate in good faith
and use all reasonable efforts to agree upon a resolution of any dispute after
receipt of written notice of such dispute from a Shareholder. If the Investors
cannot agree on an amicable settlement within sixty (60) days from written
submission of the matter by one Investor to another, the matter shall be
submitted to arbitration. The Investor invoking the arbitration shall select one
arbitrator, the other Investor shall appoint one arbitrator, and the two
arbitrators so appointed shall select a third arbitrator. In the event such
arbitrators cannot agree upon a third arbitrator, a third arbitrator shall be
selected in accordance with the rules as then in effect of the American
Arbitration Association. The decision of two of the three arbitrators so
appointed as to the validity of any claim shall be conclusive and binding upon
the parties to this Agreement. Any such arbitration shall be held in New York,
New York under the international rules as then in effect of the American
Arbitration Association; provided that the arbitrators shall not have the powers
of AMIABLE COMPFITEUR or EX AEQUO ET BONO. The parties hereto intend that this
Agreement and any interpretation, construction or enforcement hereof by the
arbitrators will be governed by the specific terms of this Agreement. The
official language of any such arbitration will be English. Each party to any
such arbitration shall pay its own expenses; provided that the fees costs and
expenses of the third arbitrator shall be borne equally by the Investor invoking
arbitration, on the one hand, and the other Investors, on the other hand.
(l) NOTICES. Any notices or other communications required to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (i)
upon delivery, if by hand; (ii) three (3) Business Days after mailing, if sent
by registered or certified mail, postage prepaid, return receipt requested;
(iii) one (1) Business Day after mailing, if sent via overnight courier; or (iv)
upon transmission, if sent by telex or facsimile except that if such notice or
other communication is received by telex or facsimile after 5:00 p.m. on a
Business Day at the place of receipt, it shall be effective as of the following
Business Day. All notices and other communications hereunder shall be given as
follows:
19
<PAGE>
(A) If to the Company, to it at:
Hubco S.A.
3 Bd Prince Henri
L-1724 Luxembourg
Luxembourg
Attn: Geir Ramleth
(B) If to Carlyle, to it at:
The Carlyle Group
520 Madison Avenue
New York, NY 10022
USA
Attn: Brooke Coburn
Tel: (212) 381-4900
Fax: (212) 381-4901
(C) If to iaxis, to it at:
iaxis B.V.
iaxis limited
7th Floor
200 Grays Inn Road
London, WC1X 8NP
United Kingdom
Attn: Abteen Sai
Tel: (44) 0207-422-3000
Fax: (44) 0207-422-3001
20
<PAGE>
(D) If to Carrier1, to it at:
Carrier1 International S.A.
Militarstrasse 36
CH-8004 Zurich
Switzerland
Attn: Terje Nordahl
Tel: (411) 297-2600
Fax: (411) 297-2600
(E) If to Providence, to it at:
Providence Equity Partners III L.P.
Kennedy Center Plaza
900 Fleet Center
Providence, RI 02903
USA
Attn: Alexander Evans
Tel: (401) 751-1700
Fax: (401) 751-1790
Any party may change its address for receiving notice by written
notice given to the other names above in the manner provided above.
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
HUBCO S.A.
By: /s/ Thor Geir Ramleth
-------------------------------
Name: Thor Geir Ramleth
Title: CEO
PROVIDENCE EQUITY PARTNERS III L.P.
By: Providence Equity Partners
III L.L.C., its general partner
By: /s/Glenn M. Creamer
--------------------------
Name: Glenn M. Creamer
Title: Managing Director
PROVIDENCE EQUITY OPERATING PARTNERS
III L.P.
By: Providence Equity Partners
III L.L.C, its general partner
By: /s/Glenn M. Creamer
---------------------------
Name: Glenn M. Creamer
Title: Managing Director
S-1
<PAGE>
CARRIER1 INTERNATIONAL S.A.
By: /s/ Stig Johansson
-------------------------------
Name: Stig Johansson
Title: Chairman of the Board
By: /s/ Thomas J. Wynne
-------------------------------
Name: Thomas J. Wynne
Title: Director
iaxis B.V.
By: /s/ Abteen Sai
-------------------------------
Name: Abteen Sai
Title: Director
S-2
<PAGE>
"CARLYLE"
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-3
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-4
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-5
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-6
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-7
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-8
<PAGE>
[*]
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
S-9
<PAGE>
EXHIBIT 10.3 CONFIDENTIAL TREATMENT
REQUESTED BY
CARRIER1 INTERNATIONAL S.A.
================================================================================
EXECUTION COPY
STRATEGIC ANCHOR TENANT AGREEMENT
BETWEEN
CARRIER1 INTERNATIONAL S.A.
AND
HUBCO S.A.
NOVEMBER 23, 1999
===============================================================================
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
<PAGE>
STRATEGIC ANCHOR TENANT AGREEMENT
THIS STRATEGIC ANCHOR TENANT AGREEMENT (the "Agreement") is
made as of this 23d day of November, 1999 (the "Effective Date"), between HUBCO
S.A., a Luxembourg Societe Anonyme ("HUBCO"), and Carrier1 International S.A., a
Luxembourg Societe Anonyme ("Strategic Anchor Tenant").
RECITALS
A. An Affiliate of Strategic Anchor Tenant, along with other
entities, has jointly formed HUBCO to acquire, develop and operate a
pan-European network of carrier hotel/collocation facilities ("Facilities")
which will be located in the countries and cities more particularly described in
Exhibit A;
B. Strategic Anchor Tenant desires that its local subsidiaries
(each a "Strategic Anchor Tenant Subsidiary") shall lease from local
subsidiaries of HUBCO (each a "HUBCO Subsidiary") space in the Facilities, as
such space is generally described in Exhibit A (each such space a "Space" and
such spaces collectively the "Spaces"), wherein a HUBCO Subsidiary will deliver
to each Strategic Anchor Tenant subsidiary each Space as either Raw Space,
Conditioned Space, or a combination of Raw Space and Conditioned Space (as such
types of space are described in Exhibit B and in the Construction Agreement (as
defined in Section 4.2 below), respectively), and will render certain managed
services to each such Space as such services are preliminarily described in
Exhibit C (the "Shared Services"), and HUBCO has agreed, through its HUBCO
Subsidiaries, to lease to certain Strategic Anchor Tenant Subsidiaries each
Space and provide to each Space the Shared Services, upon the terms and subject
to the conditions set forth herein and in the Leasing Term Sheet ("Leasing Term
Sheet") attached as Exhibit D and more particularly described in Section 2.2(d)
below;
C. HUBCO, the parent company of the HUBCO Subsidiaries, will
deliver a guaranty, more particularly described in Section 7.6 below, with
respect to the obligations of each HUBCO Subsidiary under this Agreement and
under each Final Tenancy Agreement;
D. Strategic Anchor Tenant, the parent company of the
Strategic Anchor Tenant Subsidiaries, will deliver a guaranty, more particularly
described in Section 7.6 below, with respect to the obligations of each
Strategic Anchor Tenant Subsidiary under this Agreement and under each Final
Tenancy Agreement; and
E. Strategic Anchor Tenant and HUBCO desire to enter into an
agreement setting forth the basic terms and conditions of the development,
construction, lease and operation of the Facilities and Spaces.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises and
the mutual covenants and agreements hereinafter set forth, which the parties
agree is good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
<PAGE>
ARTICLE 1.
DEFINITIONS
1.1 Unless otherwise defined herein, when used herein, the following terms
shall have the following meanings:
"ACCEPTANCE CRITERIA" means the acceptance criteria set forth in
Section 8.2(a).
"ACCEPTANCE TESTING" has the meaning set forth in Section 8.1.
"ACCEPTANCE TESTING SPECIFICATIONS" has the meaning set forth in
Section 8.2(a).
"ADDITIONAL CAPITAL COSTS" means [*]
"AFFILIATE" means, with respect to any Person, any other Person
which directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, such Person; provided that
HUBCO shall not be treated as an Affiliate of any Shareholder (as defined in
the Shareholders Agreement). For purposes of this Agreement, the term
"control" (and the derivative terms "controlling" and "controlled") shall
mean the possession, directly or indirectly, of the power to elect or cause
the election of a majority of the directors or managers of a Person, whether
through the ownership of voting securities, by contract or otherwise;
PROVIDED that (i) beneficial ownership of [*] or more of the Voting Stock (as
defined in the Shareholders Agreement) of a Person shall be deemed to be
control and (ii) the general partner of a limited partnership and the
managing member of a limited liability company shall be deemed to control
such limited partnership or limited liability company, as the case may be.
"AGREEMENT" has the meaning set forth in the Preamble.
"CARLYLE" has the meaning given such term in the Shareholders
Agreement.
"CERTIFICATE OF PROVISIONAL ACCEPTANCE" means a certificate issued by
Strategic Anchor Tenant in accordance with Section 8.4(c) to HUBCO
certifying that a Space is Ready for Provisional Acceptance.
"COMMENCEMENT DATE" has the meaning set forth in Section 4.2(c).
"COMMISSIONING REPORT" means a written report from HUBCO demonstrating
that a Space is Ready for Provisional Acceptance.
"COMPETITOR" means any Person, directly or indirectly, engaged
(whether by way of ownership, as a provider of services or otherwise) in a
Restricted Business.
"CONDITIONED SPACE" means Raw Space having such additional
improvements and modifications outlined in the Construction Agreement.
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
2
<PAGE>
"CONNECTIVITY" means access to redundant high-speed fiber optic
networks operated by Strategic Anchor Tenant as applicable.
"CONSTRUCTION AGREEMENT" has the meaning set forth in Section 4.2(a).
"DATE OF PROVISIONAL ACCEPTANCE" means the date of a Certificate of
Provisional Acceptance.
"DEFICIENCY" means an instance of a failure to conform to the
Acceptance Criteria.
"DOLLARS" or "US$" means United States dollars.
"EFFECTIVE DATE" has the meaning set forth in the Preamble.
"ELECTIVE LEASED SPACE" has the meaning set forth in Section 3.2(a).
"FACILITY" has the meaning set forth in the Recitals.
"FACILITY DECISION NOTICE" has the meaning set forth in Section
2.4(a).
"FINAL TENANCY AGREEMENT" has the meaning set forth in Section 2.2(d).
"GRANDFATHERED PROPERTY" shall mean:
[*]
"HUBCO" has the meaning set forth in the Preamble.
"HUBCO GUARANTY" has the meaning set forth in Section 7.6.
"HUBCO SUBSIDIARY" has the meaning set forth in the Recitals.
"INVITEE" means any invitee, agent, employee, subtenant licensee,
assignee, contractor or invitee of any such other person or entity.
"LAND" means the land upon which each Facility sits and the land
surrounding each Facility which is appurtenant to or services each Facility.
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
3
<PAGE>
"LEASING TERM SHEET" means the Leasing Term Sheet attached as Exhibit
D and more particularly described in Section 2.2(d).
"MINIMUM SPACE OBLIGATION" has the meaning set forth in Section 3.1.
"MOST FAVORED NATION LEASING RATE" has the meaning set forth in
Section 3.3.
"OPT OUT" has the meaning set forth in Section 2.4.
"PERSON" means any natural person or corporation, limited liability
company, general partnership, limited partnership, venture, trust, business
trust, estate or other entity.
"PROJECT CLOSE-OUT" means the date that (i) all permits and approvals
for operation of any Facility have been obtained; (ii) all contractors,
subcontractors, suppliers, architects and others who perform work have been paid
in full; (iii) the Date of Provisional Acceptance has occurred and (iv) all
punchlist items have been completed.
"PROVIDENCE" has the meaning given such term in the Shareholders
Agreement.
"PUNCH LIST" has the meaning set forth in Section 8.4(a).
"RAW SPACE" means Space having the specifications outlined in Exhibit
B.
"READY FOR PROVISIONAL ACCEPTANCE" means (i) with respect to
Conditioned Space:
(a) such Space is complete in all material respects, except for a
Punch List, reasonably agreed to between HUBCO and Strategic Anchor Tenant,
listing the items of the Work not yet completed, and
(b) the results of Acceptance Testing of such Conditioned Space
demonstrate that such Conditioned Space has satisfied the Acceptance Criteria;
and (ii) with respect to any Raw Space, such Space has been delivered to
Strategic Anchor Tenant and meets the specifications outlined in Exhibit B.
"RESTRICTED BUSINESS" shall mean [*]
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
4
<PAGE>
"ROLLOUT SCHEDULE" means the list of Scheduled RFS Dates for each
Space in each city as set forth in Exhibit A. The Rollout Schedule may be
amended from time to time, by Supermajority Board Approval (as defined in the
Shareholders Agreement), which Supermajority Board Approval shall include the
vote of at least one Director Designee (as defined in the Shareholders
Agreement) nominated by a Person that shall have entered into a Strategic Anchor
Tenant Agreement (as defined in the Shareholders Agreement) or any other Person
which has signed an agreement substantially similar to this Agreement.
"SCHEDULED RFS DATE" means, with respect to each Space, the date set
forth in Exhibit A with respect to such Space, as any such date may be extended
for and during the period of any delay described in Section 9.14 or by agreement
of the parties. The Scheduled RFS Dates shall only apply to the
ready-for-service dates for Raw Space.
"SHARED SERVICES" means the managed services preliminarily outlined in
Exhibit C. The Shared Services may be modified from time to time, prospectively
on a Facility-by-Facility basis for any newly acquired Facility.
"SHAREHOLDERS" has the meaning set forth in the Shareholders
Agreement.
"SHAREHOLDERS AGREEMENT" means that certain Shareholders' Agreement,
dated November 23, 1999, by and among HUBCO and the other parties thereto.
"SPACE" has the meaning set forth in the Recitals.
"STRATEGIC ANCHOR TENANT" has the meaning set forth in the Preamble,
and where the context so requires, shall include the Strategic Anchor Tenant
Subsidiary.
"STRATEGIC ANCHOR TENANT GUARANTY" has the meaning set forth in
Section 7.6.
"STRATEGIC ANCHOR TENANT SUBSIDIARY" has the meaning set forth in the
Recitals.
"SUPPLIES" means any and all materials, plant, machinery, equipment,
hardware and items supplied by HUBCO under this Agreement.
"TERM" has the meaning set forth in Section 2.1.
"TOTAL LEASED SPACE" has the meaning set forth in Section 3.2(b).
"TOTAL PROJECT COST" means the sum of (i) the purchase price paid by
HUBCO to purchase the Facility and all direct costs related to the acquisition
of the Facility, and (ii) improvement and development costs incurred by HUBCO
through Project Close-out to prepare the Facility and construct any initial
improvements to the Facility and related on-site paving, landscaping and utility
lines, including without limitation infrastructure costs and associated fees
required to develop the Space; labor and materials to construct any initial
improvements; permit fees, sales taxes and fees payable to contractors;
5
<PAGE>
project landscaping, including related design fees and permits; water, gas and
electrical hookup fees and related miscellaneous costs; builder's risk
insurance; a prorated share of property tax assessed during the construction
period (beginning upon acquisition and ending on the Date of Provisional
Acceptance); reasonable expenses incurred by HUBCO in managing the construction
process, including air fare, hotels and car rentals; HUBCO's average cost of
coverage for liability insurance during the construction period; services for
verification of compliance with city ordinances and other laws; brokerage
commissions for the acquisition of the Facility; and imputed interest at
[*] percent on actual costs incurred by HUBCO (imputed interest begins to
accrue on actual cost as and when incurred up to the Date of Provisional
Acceptance).
"TRANSFER" has the meaning set forth in Section 9.2(b).
"WORK" means all activities and services necessary to be
performed or provided in developing, planning, engineering, designing,
manufacturing, procuring, constructing, delivering, and testing each Space in
accordance with the terms hereof until each Space is Ready for Provisional
Acceptance.
1.2 Unless otherwise defined herein, all terms used herein which
are commonly used in the terrestrial telecommunications industry shall have
the meanings commonly given such terms in the industry.
ARTICLE 2.
LEASE OF SPACES
2.1 TERM. This Agreement shall be effective as of the date hereof and
shall terminate on the earlier of: (i) the [*] anniversary of the date
hereof or (ii) the termination of this Agreement pursuant to Article 6 (the
"Term").
2.2 AGREEMENT TO LEASE SPACES.
(a) HUBCO agrees to lease, through its HUBCO Subsidiaries, the
Spaces and provide the Shared Services to each Strategic Anchor Tenant
Subsidiary (if such Shared Services are elected by Strategic Anchor Tenant) and
Strategic Anchor Tenant hereby agrees to lease and accept such Spaces and
HUBCO's provision of the Shared Services (as applicable) on the terms and
conditions of this Agreement and on the terms and conditions contained in the
Leasing Term Sheet (attached as Exhibit D and further defined below). Strategic
Anchor Tenant shall elect, by written notice to HUBCO within twenty-one (21)
days after the acquisition date of the subject Facility, to have the Space it
will lease be delivered as Raw Space or Conditioned Space or a combination of
the two types of space. The parties agree that the terms and conditions of each
Final Tenancy Agreement (as defined below) shall be substantially as set forth
in the Leasing Term Sheet (as defined below), except for modifications which are
necessary to make any business terms enforceable under the local law of each
country where such Space is located (such modifications "Local Law
Modifications").
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
6
<PAGE>
(b) A HUBCO Subsidiary and a Strategic Anchor Tenant
Subsidiary shall execute and deliver each applicable Final Tenancy Agreement as
soon as reasonably practicable after (i) the purchase or lease of the Facility
where the subject Space will be located and (ii) all Local Law Modifications
have been made to the applicable Leasing Term Sheet.
(c) A Strategic Anchor Tenant Subsidiary shall pay to
the applicable HUBCO Subsidiary the rental charges outlined in Sections 3.2(b)
and 3.3(a) and (b) below. All other terms and conditions with respect to the
payment of rental charges shall be substantially as set forth in the Leasing
Term Sheet. Strategic Anchor Tenant shall pay its pro rata share of the
operating expenses and taxes chargeable to the Facility as more particularly
described in the Leasing Term Sheet.
(d) A final tenancy agreement ("Final Tenancy
Agreement") for each Facility shall be executed substantially in the form of the
Leasing Term Sheet. The term of each Final Tenancy Agreement shall be [*].
(e) The parties acknowledge that HUBCO may lease (as
opposed to purchasing) all or a portion of a Facility and in turn may sublease a
Space within such leased Facility to Strategic Anchor Tenant. The parties hereby
acknowledge and agree to negotiate in good faith such amendments to this
Agreement or the Leasing Term Sheet, as any of the parties may reasonably
request, to reflect and better define the respective rights and obligations of
the parties in a context where HUBCO leases a Facility and subsequently (through
a HUBCO Subsidiary) subleases a Space therein to Strategic Anchor Tenant.
2.3 AGREEMENT TO PROVIDE CONNECTIVITY.
(a) Strategic Anchor Tenant shall provide connectivity
to a high-speed fiber optic network on commercially reasonable terms to each
Facility in which it leases a Space within [*] months after the Date of
Provisional Acceptance for each such Facility. Strategic Anchor Tenant shall
also provide Connectivity to Strategic Anchor Tenant's own high speed fiber
optic networks for each Facility in which it leases a Space. Such provision of
Connectivity shall be on commercially reasonable terms on a best efforts basis
and shall be provided within [*] months after the Date of Provisional
Acceptance of the applicable Space. Strategic Anchor Tenant shall provide
sufficient capacity (including upgrading connections if necessary) to prevent
service degradation as telecommunications traffic increases through a Facility.
(b) Strategic Anchor Tenant may elect to satisfy its
obligations under Section 2.3(a) by jointly undertaking to provide such
Connectivity with another strategic anchor tenant which has signed a strategic
anchor tenant agreement. Notwithstanding any such joint undertaking, Strategic
Anchor Tenant shall remain liable and responsible for its obligations under
Section 2.3(a).
2.4 OPTION TO DECLINE TO LEASE SPACES AND PROVIDE CONNECTIVITY.
(a) As HUBCO develops, acquires or leases new
Facilities consistent with the Rollout Schedule, HUBCO shall promptly notify
Strategic Anchor Tenant (such notice a "Facility Decision
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
7
<PAGE>
Notice") of any upcoming meeting of the Board of Directors of HUBCO wherein the
acquisition or lease of particular facility will be submitted for Board
approval. Strategic Anchor Tenant may decline, in writing and within the later
of (i) [*] days of receiving a Facility Decision Notice and (ii) [*]
after the approval of the Board of Directors of HUBCO of such acquisition or
lease, on a rolling basis, to lease a Space in, and provide Connectivity to, any
Facility in any city on the Rollout Schedule (such declination an "Opt Out" and
such notice an "Opt Out Notice"), provided, however Strategic Anchor Tenant may
only Opt Out of up to [*] (the "Default Threshold") of the Facilities owned
and or operated by HUBCO at the time of the applicable Facility Decision Notice.
The number of Facilities of which Strategic Anchor Tenant may Opt Out under this
Section 2.4 shall be rounded down to the nearest whole number of Facilities.
(b) If Strategic Anchor Tenant Opts Out of a particular
Facility Strategic Anchor Tenant shall not receive the Most Favored Nation
Leasing Rate in such Facility or any other benefits accruing to Strategic Anchor
Tenant pursuant to this Agreement or a Final Tenancy Agreement.
(c) In the event Strategic Anchor Tenant delivers to
HUBCO a number of Opt Out Notices greater than the Default Threshold (such
action an "Opt Out Default"), HUBCO may, in its sole discretion, either (a)
terminate this Agreement with respect to Spaces leased by Strategic Anchor
Tenant at the time of the Opt Out Default and reprice the leasing rates for all
Space leased by Strategic Anchor Tenant at the time of the Opt Out Default to
the prevailing market rate for comparable space in the applicable Facility
leased at a comparable volume or (b) continue to hold Strategic Anchor Tenant
liable for all of its obligations (and Strategic Anchor Tenant shall enjoy all
of its rights) under this Agreement. The provisions of this Section 2.4(c) shall
be the sole remedy of HUBCO in the case of an Opt Out Default, except as
provided in the Shareholders Agreement.
2.5 STRATEGIC ANCHOR TENANT MARKETING AND SALES COMMITMENT.
Strategic Anchor Tenant commits to use its respective sales
and marketing personnel to market and sell HUBCO's carrier hotel/collocation
products and services (collectively, the "Products") in conjunction with
Strategic Anchor Tenant's bandwidth services. HUBCO, in its sole and absolute
discretion, shall determine the pricing points upon which any Products may be
sold, except for Strategic Anchor Tenant sale decisions relating to Strategic
Anchor Tenant's Minimum Space Obligation. To compensate Strategic Anchor Tenant
for marketing and selling the Products, HUBCO will pay a market-level commission
(the "Resale Commission") for each such transaction. The parties hereby agree to
negotiate in good faith within [*] days of the execution of this Agreement,
an agreement setting forth the terms and conditions of Strategic Anchor Tenant's
marketing and sale of the Products, including, without limitation, an
appropriate Resale Commission.
2.6 ACQUISITION OF STRATEGIC ANCHOR TENANT.
If a Competitor acquires more than [*] of the equity
interest of Strategic Anchor Tenant, or Strategic Anchor Tenant sells [*]
of its assets or HUBCO stock (such actions each an "Acquisition"), Strategic
Anchor Tenant must inform HUBCO of such Acquisition by written notice within
[*] days of such Acquisition. HUBCO, in its sole discretion but within
[*] days after receipt of written notice from
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
8
<PAGE>
Strategic Anchor Tenant of such Acquisition, may (i) terminate this Agreement
solely with respect to Spaces not leased by Strategic Anchor Tenant at the time
of an Acquisition and reprice the leasing rates for all Space leased by
Strategic Anchor Tenant at the time of such Acquisition to the prevailing market
rate for comparable space leased in the applicable Facility at a comparable
volume or (ii) continue to hold Strategic Anchor Tenant liable for all of its
obligations (and Strategic Anchor Tenant shall enjoy all of its rights) under
this Agreement. The provisions of this Section 2.6 shall be the sole remedy of
HUBCO in the case of an Acquisition except as provided in the Shareholders
Agreement.
ARTICLE 3.
SPACE REQUIREMENTS
3.1 MINIMUM OBLIGATION TO LEASE SPACE.
Strategic Anchor Tenant shall lease Space in each Facility on
the Rollout Schedule upon the Date of Provisional Acceptance, subject only to
the provisions of this Article 3 and the "opt-out" provisions of Section 2.4
above. Any Space leased by Strategic Anchor Tenant in a Facility shall have a
minimum interior square footage equal to the lesser of [*] square feet or
[*] of the total interior square footage of the Facility (the "Minimum
Space Obligation"). The Strategic Anchor Tenant shall lease an amount of space
equal to its Minimum Space Obligation at the Most Favored Nation Leasing Rate
(as defined in Section 3.3 below) for such Facility.
3.2 ELECTIVE LEASED SPACE.
(a) In the event that any Facility has less than
[*] total rentable square feet, and Strategic Anchor Tenant is leasing its
Minimum Space Obligation in such Facility, Strategic Anchor Tenant may elect to
lease additional interior space in the Facility up to an amount equal to the
difference between [*] square feet and its Minimum Space Obligation in that
Facility (the "Elective Leased Space").
(b) Any Elective Leased Space shall be leased by
Strategic Anchor Tenant at [*] (the "Third Party Rate"). Until such time as a
Facility has at least one non-Strategic Anchor Tenant leasing space
comparable to Raw Space, the leasing rate for Raw Space leased by Strategic
Anchor Tenant will be the Most Favored Nation Leasing Rate. The Most Favored
Nation Leasing Rate shall apply only to the lease of Elective Leased Space up
to [*] square feet of Space. Each square foot of Space leased above [*]
square feet shall be priced at a market rate to be negotiated by the parties.
The Minimum Space Obligation for Strategic Anchor Tenant plus any Elective
Leased Space leased by Strategic Anchor Tenant shall be referred to
collectively as the "Total Leased Space" for Strategic Anchor Tenant with
respect to a particular Facility.
(c) Notwithstanding any of the foregoing in this
Section 3.2, no Strategic Anchor Tenant may lease an amount of Elective Leased
Space which will cause Strategic Anchor Tenant's Total Leased Space to be
greater than [*] of the total square footage of the applicable Facility
without the prior
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
9
<PAGE>
approval of a majority of the disinterested directors of the board of HUBCO.
Strategic Anchor Tenant does not receive such prior approval with respect to its
request for a certain amount of Elective Leased Space, Strategic Anchor Tenant
may: (i) elect to lease only its Minimum Space Obligation; or (ii) elect to
lease the amount of Elective Leased Space which, when added to Strategic Anchor
Tenant's Minimum Space Obligation, will total [*] of the total square
footage of the applicable Facility (its "Maximum Unilateral Election"); or (iii)
elect to lease an amount of Elective Leased Space which is less than its Maximum
Unilateral Election.
(d) Notwithstanding any of the foregoing, the amount of
Elective Leased Space for Strategic Anchor Tenant under Subsection 3.2(c)(iii)
above must be elected in increments of [*] square feet.
3.3 MOST FAVORED NATION LEASING RATES.
(a) The annual per square foot rental charge to
Strategic Anchor Tenant for the first [*] years of the term of each Final
Tenancy Agreement for each Space shall be [*] (the "Variable Rate"). The
Variable Rate shall be determined according to the chart attached as Exhibit F.
The first calculation of the Variable Rate shall occur on the Commencement Date
for each Space and shall be recalculated on the anniversary of each Commencement
Date thereafter.
(b) In addition to the rent payable pursuant to Section
3.3(a), Strategic Anchor Tenant shall pay its prorated share of any Additional
Capital Costs, amortized at the Variable Rate over the longer of (x) the useful
life of the item included in Additional Capital Costs and (y) the remaining term
of the applicable Final Tenancy Agreement, as it may be extended or renewed, in
either case, not to exceed an amortization period of [*] years.
(c) The Most Favored Nation Rates calculated in
subsections 3.3(a) and (b) herein do not include taxes charged directly to
Strategic Anchor Tenant by a municipality or other similar entity, sales,
excise, value added or similar taxes or any of the common charges set forth in
the Leasing Term Sheet.
3.4 NONCOMPETE.
Subject only to Sections 2.6, 3.5 and 6.2, Strategic Anchor
Tenant and its Affiliates shall not, during the Term, operate, manage or acquire
any equity interest in or assets of any Restricted Business; provided, however,
Strategic Anchor Tenant and its Affiliates may (A) acquire not more than
[*] of the capital stock of a Restricted Business; (B) operate, manage or
acquire any equity interest in any Person that derives not more than [*] of
its revenues from a Restricted Business or (C) own or lease a Grandfathered
Property, provided further that this restriction shall not apply to Affiliates
of Strategic Anchor Tenant if such Affiliate qualifies as an Affiliate solely by
reason of common control with Providence or Carlyle.
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
10
<PAGE>
3.5 HUBCO RIGHT OF FIRST REFUSAL ON FUTURE SPACE REQUIREMENTS.
If Strategic Anchor Tenant requires carrier hotel/collocation
facilities in any location, HUBCO will have a right of first refusal to provide
such facilities on terms consistent with those set forth in this Article 3.
Strategic Anchor Tenant shall notify HUBCO of its needs in a written notice
which sets forth: (i) the city (or the region of such city) where Strategic
Anchor Tenant needs space; (ii) the amount of square footage requested, (iii)
the requested delivery date for such additional facilities, and (iv) if
applicable, the material terms offered to Strategic Anchor Tenant by any third
party for the development of such a facility (such notice a "ROFR Notice").
HUBCO will notify Strategic Anchor Tenant of whether HUBCO intends to provide
the additional facilities requested within [*] days of receiving the ROFR
Notice. If HUBCO declines to provide such facilities in the city requested, with
the amount of square footage needed and by the requested delivery date and, if
Strategic Anchor Tenant has received a third party offer, upon the material
terms set forth in such third party offer, Strategic Anchor Tenant will be free
to develop its own carrier hotel/collocation facilities in such city, on the
express condition that Strategic Anchor Tenant (i) develops facilities no larger
than the square footage requested in the ROFR Notice and in the location set
forth in such ROFR Notice; (ii) executes and enters into a binding agreement to
develop such facilities within [*] days of HUBCO's declination of the
opportunity to provide the additional facilities requested by Strategic Anchor
Tenant on terms no less favorable in the aggregate to Strategic Anchor Tenant
than those set forth in the third party offer, if any, and (iii) if the facility
contains more than [*] square feet of rentable space, offers to HUBCO the
right to lease space comparable to Raw Space in such additional facilities in an
amount equal to the lesser of (x) [*] of the total rentable area of such
facility and (y) [*] square feet, at a rate per square foot not more than
the lowest rate per square foot paid by any other tenant in such facility.
3.6 RELOCATION.
HUBCO reserves the right, at HUBCO's sole cost, to change the
location or configuration of the Space, provided however, that HUBCO shall not
arbitrarily or discriminatorily require such changes. HUBCO and Strategic Anchor
Tenant shall work in good faith to minimize any disruption in Strategic Anchor
Tenant's use of the Space that may be caused by such changes in location or
configuration of the Space.
3.7 RIGHT TO MATCH.
If at any time after the Effective Date of this Agreement
HUBCO enters into another strategic anchor tenant agreement covering the same
subject matter as this Agreement (such agreement a "Third Party Agreement") then
Strategic Anchor Tenant shall have the right to elect to amend and restate this
Agreement so that the terms and conditions of this Agreement conform in their
entirety with the terms and conditions of the Third Party Agreement. If
Strategic Anchor Tenant makes the election outlined in the foregoing sentence,
Strategic Anchor Tenant shall not have the right to conform this Agreement with
only selected provisions of the Third Party Agreement but must amend and restate
this Agreement to conform with the Third Party Agreement in its entirety.
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
11
<PAGE>
ARTICLE 4.
CONSTRUCTION
4.1 TECHNICAL SPECIFICATIONS FOR FACILITIES.
(a) Each Facility shall be engineered in accordance
with general technical specifications applicable to each Facility as are
established by HUBCO with the approval of Strategic Anchor Tenant, such approval
not to be unreasonably withheld, conditioned or delayed (the "Technical
Specifications"). The Technical Specifications may be amended from time to time
with the approval of Strategic Anchor Tenant, such approval not to be
unreasonably withheld, conditioned or delayed. The parties hereby agree to
negotiate, draft and establish, in good faith and within [*] days of the
execution of this Agreement, the Technical Specifications. If Strategic Anchor
Tenant requests HUBCO's consent to a modification of a Technical Specification,
such consent shall not be unreasonably withheld.
(b) As necessary, HUBCO, in its reasonable discretion,
may make modifications to the Technical Specifications required to ensure
building code compliance or to comply with engineering specifications or
modifications required by any governmental or semi-governmental agency or review
board.
(c) HUBCO shall provide sufficient access for cabling
from the entrance facilities of each Facility to each Space and to other points
of interconnection in the Facility, subject to generally applicable rules and
regulations promulgated by HUBCO from time to time.
4.2 CONSTRUCTION OF SPACES.
(a) In consideration of the mutual promises and
covenants herein between the parties, HUBCO will design and construct the
collocation infrastructure of each Space pursuant to the tenant-specific design
and construction specifications and Work to be established by the parties in
accordance with this Section. The parties hereby agree to negotiate and draft,
in good faith and within [*] days of the execution of this Agreement, a
construction agreement (the "Construction Agreement"). The Construction
Agreement may be amended from time to time with the approval of Strategic Anchor
Tenant, such approval not to be unreasonably withheld, conditioned or delayed.
(b) If this Agreement is terminated by HUBCO pursuant
to the terms herein prior to the execution of all of the Final Tenancy
Agreements, Strategic Anchor Tenant shall, pro rata, promptly reimburse HUBCO
for all of its reasonable expenses incurred with respect to the design and
construction of each Space for which a Final Tenancy Agreement has not been
executed. HUBCO shall send to Strategic Anchor Tenant invoices reasonably
detailing such expenses.
(c) The commencement date for each Space under each
Final Tenancy Agreement (each such date, a "Commencement Date") shall be the
Date of Provisional Acceptance for such Space.
(d) Within [*] days of the Effective Date of this
Agreement, representatives of the parties to this Agreement shall meet to
discuss the network deployment plans of Strategic Anchor Tenant.
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
12
<PAGE>
During such meeting the parties, in good faith, shall attempt to agree upon
revisions to the Rollout Schedule to reflect a revised set of Scheduled RFS
Dates For Space based upon Strategic Anchor Tenant's network deployment plan.
The parties also hereby agree to meet periodically (such meetings to occur no
less frequently than once every [*] days) to share new developments
relevant to each parties' obligations under this Agreement.
ARTICLE 5.
DEFAULT
5.1 DEFAULT BY STRATEGIC ANCHOR TENANT.
(a) With respect to all payments required to be made by
Strategic Anchor Tenant hereunder or under a Final Tenancy Agreement, including,
without limitation, payment of the leasing rates and all other amounts payable
by Strategic Anchor Tenant hereunder or thereunder, if Strategic Anchor Tenant
fails to make any payment by the date such payment is due and payable hereunder
or thereunder, such unpaid amount shall bear interest until paid at a rate equal
to the rate set forth in Section 5.3. In the event any amount or amounts due and
payable hereunder remain unpaid for a period of [*] days after written
notice thereof from HUBCO to Strategic Anchor Tenant and Strategic Anchor Tenant
Subsidiary, Strategic Anchor Tenant shall be in default hereunder or thereunder.
(b) With respect to all of its other obligations
hereunder or under a Final Tenancy Agreement, if Strategic Anchor Tenant fails
to perform a material nonpayment obligation or any representation or warranty
made by Strategic Anchor Tenant herein or therein shall prove to be untrue in
any material respect and, in each case, such breach shall continue for a period
of [*] days after HUBCO shall have given Strategic Anchor Tenant written
notice of such breach, Strategic Anchor Tenant shall be in default hereunder or
thereunder unless Strategic Anchor Tenant shall have cured such breach or such
breach is otherwise waived in writing by HUBCO within such [*] days;
provided, however, that where such breach cannot reasonably be cured within such
[*] period and is susceptible to cure, if Strategic Anchor Tenant shall
proceed promptly to cure the same and prosecute such cure with due diligence,
the time for curing such failure shall be extended for such period of time as
may be necessary to complete such cure, up to a maximum of [*].
(c) Strategic Anchor Tenant shall be in default
hereunder if (i) Strategic Anchor Tenant shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or (ii) an involuntary case or other proceeding shall be commenced
against Strategic Anchor Tenant seeking liquidation,
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
13
<PAGE>
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of sixty (60) days; or (iii) an order for relief shall be entered against
Strategic Anchor Tenant.
5.2 DEFAULT BY HUBCO.
(a) With respect to its obligation to complete the
construction, installation and satisfactory Acceptance Testing by the Scheduled
RFS Date for a particular Space pursuant to Article 8 herein, HUBCO shall be in
default under this Agreement, subject to delays because of Force Majeure, if (i)
the Date of Provisional Acceptance with respect to any Space has not occurred
within [*] days after the Scheduled RFS Date for such Space (a "Delivery
Default") or (ii) HUBCO has failed to execute an agreement for the acquisition
or lease of a Facility in a particular city within [*] months prior to the
Scheduled RFS Date for a Space (whether such Space is Raw Space or Conditioned
Space) in such city (an "Acquisition Default") and such failure continues for a
period of [*] days after Strategic Anchor Tenant shall have given HUBCO
written notice of such failure.
(b) With respect to HUBCO's other obligations
hereunder, or under a Final Tenancy Agreement in the event that HUBCO shall fail
to perform a material obligation or any representation or warranty made by HUBCO
herein shall prove to be untrue in any material respect and, in each case, such
breach shall continue for a period of [*] days after Strategic Anchor
Tenant shall have given HUBCO written notice of such breach, HUBCO shall be in
default hereunder or thereunder unless HUBCO shall have cured such breach or
such breach is otherwise waived in writing by Strategic Anchor Tenant within
such [*] days; PROVIDED HOWEVER, that where such breach cannot reasonably
be cured within such [*] period and is susceptible to cure, if HUBCO shall
proceed promptly to cure the same and prosecute such cure with due diligence,
the time for curing such breach shall be extended for such period of time as may
be necessary to complete such cure, up to a maximum of [*] days.
(c) HUBCO shall be in default hereunder if (i) HUBCO
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or (ii) an involuntary case or other
proceeding shall be commenced against HUBCO seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or (iii) an order
for relief shall be entered against HUBCO.
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
14
<PAGE>
5.3 DEFAULT RATE.
If Strategic Anchor Tenant fails to make any payment under
this Agreement when invoiced and due, such amount shall accrue interest from the
date such payment is due until it is paid, such interest to be payable along
with the amount due on the date the underlying payment is made, compounded
monthly at a rate per annum equal to the prime rate of interest published by The
Wall Street Journal plus [*] or, if lower, the highest percentage allowed
by New York or local law.
ARTICLE 6.
TERMINATION FOR DEFAULT
6.1 TERMINATION BY HUBCO.
(a) Upon any default by Strategic Anchor Tenant
(excluding any Opt Out Default), after notice thereof from HUBCO and the
expiration of any applicable cure period hereunder, HUBCO may (a) terminate this
Agreement in its entirety and/or (b) subject to the limitations of Article 7,
pursue the remedies specifically provided in this Agreement or otherwise
available at law or in equity against Strategic Anchor Tenant.
(b) If this Agreement is terminated by HUBCO pursuant
to this Article 6, Strategic Anchor Tenant shall pay, in addition to any other
damages payable pursuant to Section 6.3, the total of (i) the reasonable cost of
settling and paying claims arising out of the termination of Work under the
contracts and orders which are properly chargeable to the terminated portion of
this Agreement; and (ii) the reasonable costs of settlement including
accounting, legal, clerical and other expenses necessary for the preparation of
settlement claims and supporting data with respect to the terminated portion of
this Agreement and for termination and settlement of contracts thereunder,
together with reasonable storage, transportation and other costs incurred in
connection with the protection, preservation and disposition of property proper
to this Agreement.
6.2 TERMINATION BY STRATEGIC ANCHOR TENANT
(a) Upon any default by HUBCO (excluding any Delivery
Default or Acquisition Default), after notice thereof from Strategic Anchor
Tenant, Strategic Anchor Tenant may (a) terminate this Agreement in its
entirety, and/or (b) subject to the limitations of Article 7, pursue the
remedies specifically provided in this Agreement or otherwise available at law
or in equity.
(b) Upon any Delivery Default by HUBCO, Strategic
Anchor Tenant may terminate this Agreement solely with respect to the Space
which was not delivered prior to [*] days after the Scheduled RFS Date for
such Space subject to delays caused by Force Majeure. This Agreement shall
remain in full force and effect with respect to any other Space(s) remaining to
be delivered pursuant to this Agreement.
(c) Upon any Acquisition Default by HUBCO, Strategic
Anchor Tenant may terminate this Agreement by written notice to HUBCO within
[*] days after such Acquisition Default and
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
15
<PAGE>
solely with respect to the Space which is the subject of the Acquisition
Default. If a portion of this Agreement is terminated pursuant to this Section,
the Agreement shall remain in full force and effect with respect to any other
Space(s) remaining to be delivered pursuant to this Agreement.
(d) If this Agreement is terminated by Strategic Anchor
Tenant as a result of a Delivery Default, HUBCO shall pay, in addition to any
other damages payable pursuant to Section 6.3 below, the reasonable costs of
settlement, including accounting, legal, clerical and other expenses necessary
for the preparation of settlement claims and supporting data with respect to the
terminated portion of this Agreement and for termination and settlement of
contracts thereunder, together with reasonable storage, transportation and other
costs incurred in connection with the protection, preservation and disposition
of property proper to this Agreement.
6.3 NO RELIEF.
Regardless of any termination of this Agreement as a result of
a default neither party shall be relieved from any liability for damages or
otherwise which may have been incurred by reason of any breach of this
Agreement.
ARTICLE 7.
LIMITATION OF LIABILITY
7.1 NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE
CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY OF ITS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS (OR INVITEES OR ANY OTHER PERSON OR
ENTITY) FOR ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL
DAMAGES, WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH, SUCH
PARTY'S FAILURE TO PERFORM ITS RESPECTIVE OBLIGATIONS OR BREACH OF ITS
RESPECTIVE REPRESENTATIONS HEREUNDER, INCLUDING, BUT NOT LIMITED TO, LOSS OF
USE, PROFITS OR REVENUE, COST OF CAPITAL, COST OF REPLACEMENT SERVICES OR
RESTORATION (WHETHER ARISING OUT OF TRANSMISSION INTERRUPTIONS OR PROBLEMS, ANY
INTERRUPTION OR DEGRADATION OF SERVICE OR OTHERWISE), OR CLAIMS OF CUSTOMERS, IN
EACH CASE WHETHER OCCASIONED BY ANY CONSTRUCTION, RECONSTRUCTION, RELOCATION,
REPAIR OR MAINTENANCE PERFORMED BY, OR FAILED TO BE PERFORMED BY, THE OTHER
PARTY OR ANY OTHER CAUSE WHATSOEVER, WHETHER ARISING UNDER CONTRACT OR TORT,
INCLUDING BREACH OF CONTRACT, BREACH OF WARRANTY, ACTIVE, PASSIVE OR IMPUTED
NEGLIGENCE, OR STRICT LIABILITY, ALL CLAIMS WITH RESPECT TO WHICH SUCH SPECIAL,
INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES ARE HEREBY SPECIFICALLY
AND EXPRESSLY DISCLAIMED, EXCLUDED AND WAIVED.
7.2 HUBCO'S MAXIMUM AGGREGATE LIABILITY TO STRATEGIC ANCHOR
TENANT HEREUNDER, INCLUDING BUT NOT LIMITED TO MISTAKES, OMISSIONS,
INTERRUPTIONS, DELAYS OR ERRORS, OR OTHER DEFECTS, SHALL BE LIMITED TO A
PRORATED REFUND OF THE CHARGES PAID BY STRATEGIC ANCHOR TENANT FOR THE USE OF
THE SPACE HEREUNDER. THE EXTENSION OF SUCH A REFUND SHALL BE THE SOLE REMEDY OF
STRATEGIC ANCHOR TENANT AND THE SOLE LIABILITY OF HUBCO UNDER THIS AGREEMENT.
16
<PAGE>
7.3 Strategic Anchor Tenant shall indemnify, protect, defend and
hold harmless HUBCO, its Affiliates, partners, members, employees, agents and
independent contractors from and against all costs, damages, claims, liabilities
and expenses (including reasonable attorneys' fees) (collectively, "Costs")
suffered by or claimed against HUBCO or any of its partners, directors,
shareholders, members, employees, agents or independent contractors, directly or
indirectly, to the extent arising out of: (a) Strategic Anchor Tenant's use and
occupancy of the Space, use of the common areas of a Facility or the Land or the
business with respect to each conducted therein, (b) the condition of the Space
or any occurrence or happening in the Space from a cause under the control of
Strategic Anchor Tenant, (c) any act or omission of Strategic Anchor Tenant or
any Invitee of Strategic Anchor Tenant, (d) any default by Strategic Anchor
Tenant in the observance or performance of any of the terms, covenants or
conditions of this Agreement on Strategic Anchor Tenant's part to be observed or
performed, including failure to surrender the Space upon the expiration or
earlier termination of the Term (as defined in the Leasing Term Sheet), or (e)
any entry by Strategic Anchor Tenant or any Invitee of Strategic Anchor Tenant
in the Space, applicable Facility or upon the Land prior to the Commencement
Date; provided, however, the foregoing obligation of Strategic Anchor Tenant
shall only apply to the extent the Costs are (i) not covered by insurance
carried or required to be carried by HUBCO pursuant to the applicable Final
Tenancy Agreement or otherwise and (ii) not the result of the gross negligence
or willful misconduct of HUBCO.
7.4 HUBCO shall indemnify, protect, defend and hold harmless
Strategic Anchor Tenant, its Affiliates, partners, directors, shareholders,
employees, agents and independent contractors from and against all Costs
suffered by or claimed against Strategic Anchor Tenant or any of its partners,
directors, shareholders, employees, agents and independent contractors, directly
or indirectly, to the extent arising from the negligence of HUBCO, its
contractors or employees, in connection with the construction, operation,
management, maintenance and repair of the common areas of the Facilities,
provided, however, the foregoing obligation of HUBCO shall only apply to the
extent the Costs are not covered by insurance carried or required to be carried
by Strategic Anchor Tenant pursuant to the applicable Final Tenancy Agreement or
otherwise and provided the same are not the result of the gross negligence or
willful misconduct of Strategic Anchor Tenant.
7.5 Strategic Anchor Tenant shall not have the right to offset or
deduct any amount allegedly owed to Strategic Anchor Tenant pursuant to any
claim against HUBCO from any rental fee or other sum payable to HUBCO. Strategic
Anchor Tenant's sole remedy for recovering upon such claim shall be to institute
an independent action against HUBCO.
7.6 GUARANTIES.
In consideration of the mutual promises and covenants herein
between the parties (i) HUBCO shall deliver to Strategic Anchor Tenant a
guaranty with respect to the obligations of each HUBCO subsidiary under this
Agreement and under each Final Tenancy Agreement (the "HUBCO Guaranty"); and
(ii) Strategic Anchor Tenant shall deliver to HUBCO a guaranty with respect to
the obligations of each Strategic Anchor Tenant Subsidiary under this Agreement
and under each Final Tenancy Agreement (the "Strategic Anchor Tenant Guaranty"
and, together with the HUBCO Guaranty, the "Guaranties"). The parties hereby
agree to negotiate and draft, in good faith and within the earlier of:
17
<PAGE>
(i) [*] days after the execution of this Agreement or (ii) prior to the
execution of the first Final Tenancy Agreement, the Guaranties.
ARTICLE 8.
ACCEPTANCE AND TESTING
8.1 OVERVIEW.
Acceptance testing shall be conducted for each Space
("Acceptance Testing") pursuant to the provisions of this Article 8.
Notwithstanding the foregoing, no Acceptance Testing shall be conducted on a
Space delivered as Raw Space. A Space delivered as Raw Space shall be deemed
Ready for Provisional Acceptance upon its delivery.
8.2 ACCEPTANCE TESTING.
(a) Acceptance Testing shall be performed by HUBCO or a
HUBCO Subsidiary in accordance with Acceptance Testing specifications (the
"Acceptance Testing Specifications") and criteria for accepting Space
("Acceptance Criteria") to be established by HUBCO in consultation with
Strategic Anchor Tenant. The parties hereby agree to negotiate, draft and
establish, in good faith and within [*] days of the execution of this
Agreement, the Acceptance Testing Specifications and Acceptance Criteria. The
Acceptance Testing Specifications and Acceptance Criteria may be amended from
time to time with the approval of Strategic Anchor Tenant, which approval shall
not be unreasonably withheld, conditioned or delayed.
(b) Strategic Anchor Tenant and its designated
representatives may observe, at their own expense, HUBCO's tests and review the
test results. Strategic Anchor Tenant may request HUBCO to conduct and/or may
itself conduct any additional tests to demonstrate compliance with the
provisions of this Agreement and the Acceptance Criteria, PROVIDED such
additional tests are conducted in a manner designed to minimize any interference
with, or delay in, HUBCO's construction thereof or completion of HUBCO's
Acceptance Testing. If such additional tests do demonstrate that the provisions
of this Agreement (including the Acceptance Criteria) have been complied with,
then Strategic Anchor Tenant shall be responsible for paying the costs of such
additional tests, and any delay beyond HUBCO's schedule for completion of its
tests caused by such process shall be a Force Majeure. If, however, such
additional tests demonstrate that the provisions of this Agreement or the
Acceptance Criteria have not been complied with, then it shall be HUBCO's
responsibility to pay the costs of such additional tests, and any delay caused
by such process shall not be a Force Majeure.
(c) Strategic Anchor Tenant shall not unreasonably
withhold, condition or delay its issuance of a Certificate of Provisional
Acceptance.
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
18
<PAGE>
(d) HUBCO agrees that the Date of Provisional
Acceptance of each Space will occur by the Scheduled RFS Date for such Space.
8.3 NOTICE OF ACCEPTANCE OR REJECTION.
(a) Within [*] days after receipt by Strategic
Anchor Tenant of a Commissioning Report, Strategic Anchor Tenant must provide to
HUBCO one of the following:
(i) issuance of a Certificate of Provisional
Acceptance; or
(ii) notice of rejection of the Space in its existing
condition and a written explanation of its reasons for
rejection which rejection shall only be based upon Strategic
Anchor Tenant's reasonable determination that the Space has
Deficiencies.
If Strategic Anchor Tenant fails to respond with such notification
within [*] days, then the Date of Provisional Acceptance of the
Space shall be deemed to be the date occurring [*] days after such
Commissioning Report was received by Strategic Anchor Tenant.
(b) On receipt of a notice from Strategic Anchor Tenant
pursuant to Section 8.3(a)(ii) above, HUBCO shall be entitled within [*]
business days after receipt thereof to address any disputes and explain any
discrepancies to Strategic Anchor Tenant. Unless Strategic Anchor Tenant, for
good cause, rejects such explanation, it shall issue a new notice pursuant to
Section 8.3(a) above, which shall be deemed to have been issued on the date of
the original notice.
(c) In case of rejection, and if the explanation by
HUBCO pursuant to Section 8.3(b) above is not accepted, for good cause, by
Strategic Anchor Tenant, HUBCO shall within [*] business days after notice
from Strategic Anchor Tenant deliver a proposed corrective action plan
(including estimates of the time required for resolution) and shall promptly
carry out the necessary corrective actions and effect the necessary tests to
establish that the corrective action satisfies the Acceptance Criteria
("Retesting"). After receipt by Strategic Anchor Tenant of the new Commissioning
Report describing the corrective action and the results of Retesting, Strategic
Anchor Tenant will be granted a new period of [*] days to analyze the new
Commissioning Report according to the provisions of Section 8.3(a) and any new
notice by Strategic Anchor Tenant shall apply from the date Strategic Anchor
Tenant receives such new Commissioning Report.
8.4 PROVISIONAL ACCEPTANCE.
(a) The Certificate of Provisional Acceptance may have
annexed to it a list of any items agreed to be completed under the Construction
Agreement which are still outstanding and are to be corrected by HUBCO (such
list a "Punch List").
(b) HUBCO shall, as soon as reasonably practicable,
correct, at its sole cost and expense (such costs and expenses to be included in
Total Project Costs), such Deficiencies and complete
- ---------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
19
<PAGE>
the Work indicated so as to comply in all material respects with the
requirements of this Agreement, PROVIDED Strategic Anchor Tenant allows HUBCO
the necessary access to the Space as HUBCO needs to correct such Deficiencies
and complete the Work. HUBCO shall give Strategic Anchor Tenant reasonable
notice of its requirement for such access.
ARTICLE 9.
MISCELLANEOUS
9.1 SURVIVAL.
The representations and warranties and covenants of each of
the parties contained in this Agreement shall survive until the execution and
delivery of the last Final Tenancy Agreement.
9.2 SUCCESSORS AND PERMITTED ASSIGNS; ASSIGNMENT.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, and to the extent applicable heirs, executors,
administrators and legal representatives.
(b) Except as provided in Section 9.2(c), Strategic
Anchor Tenant shall not, without the prior consent of HUBCO, assign this
Agreement or its rights under any Final Tenancy Agreement (any such actions or
similar actions a "Transfer"). HUBCO's consent to a Transfer shall not be
unreasonably withheld. In no event, however, shall HUBCO be required to consent
to a Transfer to a Competitor. Any Transfer made without HUBCO's prior consent
shall, at HUBCO's option, be null, void and of no effect, and shall at HUBCO's
option, constitute a default under this Agreement and the applicable Final
Tenancy Agreement. HUBCO's consent to any Transfer shall not be construed (i) as
a waiver or release of Strategic Anchor Tenant's liability for the performance
of any obligation to be performed under this Agreement or the applicable Final
Tenancy Agreement, or (ii) as relieving Strategic Anchor Tenant from the
obligation of obtaining HUBCO's prior consent to any subsequent Transfer.
(c) Notwithstanding Section 9.2(b), Strategic Anchor
Tenant shall have the right at any time, and from time to time, with the consent
of HUBCO (which shall not be unreasonably withheld or delayed), to collaterally
assign to a financial institution or similar entity the leasehold interest and
estate created in a Space by way of a collateral assignment of lease and to
collaterally assign its rights under this Agreement.
9.3 NOTICES.
All notices, requests and other communications hereunder shall
be deemed to have been duly delivered, given or made to or upon any party hereto
if in writing and delivered by hand against receipt, or by certified or
registered mail, postage prepaid, return receipt requested, or to a courier who
guarantees next business day delivery or sent by telecopy (with confirmation),
to such party at its address set forth below or to such other address as such
party may at any time, or from time to time, direct by notice given in
accordance with this Section 9.3.
20
<PAGE>
if to HUBCO:
HUBCO S.A.
--------------------------------------------
--------------------------------------------
Fax:
----------------------------------------
Attention:
----------------------------------
if to Strategic Anchor Tenant:
Carrier1 International S.A.
Militarstrasse 36
CH-8004 Zurich, Switzerland
Fax: 011-411-297-2601
Attention: Terje Nordahl
The date of delivery of any such notice, request or other communication shall be
the earlier of (i) the date of actual receipt or (ii) three business days after
such notice, request or other communication is sent if sent by certified or
registered mail, (iii) if sent by courier who guarantees next business day
delivery the business day next following the day such notice, request or other
communication is actually delivered to the courier or (iv) the day actually
telecopied.
9.4 AMENDMENTS AND WAIVERS.
(a) Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by each party to this Agreement, or in the case of a
waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
9.5 GOVERNING LAW; SEVERABILITY.
THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAW OF NEW YORK, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR
PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT
TO THE LAW OF ANOTHER JURISDICTION. If any provision of this Agreement or its
application to any Person or circumstance is held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provision to other Persons or circumstances is not affected and such provision
shall be enforced to the greatest extent permitted by law.
9.6 ARBITRATION.
The parties agree that any dispute arising out of or in
connection with this Agreement or the transactions contemplated hereby shall be
submitted to arbitration. The parties shall negotiate in good faith and use all
reasonable efforts to agree upon a resolution of any dispute after receipt of
written notice of such dispute from another party. If the parties in dispute
cannot agree on an amicable settlement within
21
<PAGE>
sixty (60) days from written submission of the matter by one party to another,
the matter shall be submitted to arbitration. The party invoking arbitration
shall select one arbitrator, the other party shall appoint one arbitrator, and
the two arbitrators so appointed shall select a third arbitrator. In the event
such arbitrators cannot agree upon a third arbitrator, a third arbitrator shall
be selected in accordance with the rules as then in effect of the American
Arbitration Association. The decision of two of the three arbitrators so
appointed as to the validity of any claim shall be conclusive and binding upon
the parties in dispute. Any such arbitration shall be held in New York, New York
under the international rules as then in effect of the American Arbitration
Association; provided that the arbitrators shall not have the powers of AMIABLE
COMPOSITEURS or EX AEQUO ET BONO. Notwithstanding Section 9.5, any arbitration
provided for hereunder and this Section 9.6 shall be governed by Title 9
(Arbitration) of the United States Code. The parties hereto intend that this
Agreement and any interpretation, construction or enforcement hereof by the
arbitrators will be governed by the specific terms of this Agreement. The
official language of any such arbitration will be English. Each party to any
such arbitration shall pay its own expenses; provided that the fees, costs and
expenses of the third arbitrator shall be borne equally by the party invoking
arbitration, on the one hand, and the other party in dispute, on the other hand.
9.7 EXPENSES.
All expenses incurred by any party hereto in connection with
the negotiation, preparation and consummation of this Agreement and the
transactions contemplated hereby shall be borne by such party except as
otherwise expressly provided in any provision of this Agreement.
9.8 COUNTERPARTS; EFFECTIVENESS.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signature
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received counterparts hereof signed
by all of the other parties hereto.
9.9 HEADINGS.
The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
9.10 ENTIRE AGREEMENT.
This Agreement, the Exhibits attached (or to be attached)
hereto and the agreements, documents and instruments contemplated hereby,
constitute the entire agreement between the parties with respect to the subject
matter hereof, and supersede all prior agreements and understandings, whether
oral or written, between or among any of the parties hereto with respect to the
subject matter hereof.
9.11 INTERPRETATION.
In any dispute concerning the construction or interpretation
of any provision of this Agreement or any ambiguity thereof, there shall be no
presumption that the Agreement or any provision hereof be construed against the
party who drafted this Agreement.
22
<PAGE>
9.12 FURTHER ASSURANCES.
In connection with this Agreement and the transactions
contemplated hereby, each party shall execute and deliver any additional
documents and instruments and perform any additional acts that may be necessary
or appropriate to effectuate and perform the provisions of this Agreement and
such transactions.
9.13 NO THIRD PARTY BENEFICIARIES.
This Agreement does not provide and is not intended to provide
any third party (including but not limited to customers of HUBCO or Strategic
Anchor Tenant) with any remedy, claim, liability, reimbursement, cause of
action, or any other right.
9.14 FORCE MAJEURE.
(a) Neither party hereto shall be responsible for any
loss, damage, delay or failure of performance resulting directly or indirectly
from any cause which is beyond its reasonable control and which prevents such
party from performing any material obligation ("Force Majeure"), including but
not limited to: acts of God or of the public enemy; acts or failures to act of
any governmental authority, including without limitation any delay in obtaining,
or failure to obtain, any permits or other governmental authorizations, unless
resulting from any bad faith, gross negligence or willful misconduct of such
party; war or warlike operations, civil war or commotion, mobilizations or
military call-up, and acts of similar nature; revolution, rebellions, sabotage,
and insurrections or riots; fires, floods, epidemics quarantine restrictions;
strikes, and other labor actions; freight embargoes; unworkable weather; acts or
omissions of transporters; or damage caused by other construction activity such
as building of roads and railroads; PROVIDED that the following shall not, in
and of themselves, constitute Force Majeure: (i) a loss by HUBCO or any
subcontractor of employees (other than by reason of Force Majeure), (ii) strikes
and other labor actions involving HUBCO's or any subcontractor's own work force
not part of a general strike, (iii) the unavailability of any raw materials or
components, unless such raw materials or components are generally unavailable in
the marketplace or are unavailable by reason of Force Majeure.
(b) If any such Force Majeure causes an increase in the
time or costs required for performance of any of its duties or obligations,
HUBCO shall be entitled to an equitable extension of time for completion of the
performance of its obligations and an equitable adjustment in the annual rental
charges to be paid pursuant to Section 3.3 above and the applicable Final
Tenancy Agreement.
(c) Each party shall inform the other party promptly
with written notification, and in all cases within fourteen (14) days of
discovery and knowledge, of any occurrence covered under this Section 9.14 and
shall use its reasonable efforts to minimize such additional delays. In the case
of a notification by HUBCO, HUBCO shall promptly provide an estimate of the
anticipated time required to complete the Work.
(d) Within thirty (30) days after receipt of such a
notice from either party, the other party may provide a written response.
(e) Every forty-five (45) days during the period of
Force Majeure, the parties shall meet and review the circumstances surrounding
the Force Majeure, including, without limitation, the anticipated date of
recommencing the Work.
(f) Force Majeure shall not excuse the late payment of
money.
23
<PAGE>
9.15 REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS.
(a) Each party represents and warrants that:
(i) it is duly organized and validly existing under
the laws of the jurisdiction of its organization and has the
corporate power and authority and the legal right to own and
operate its property, to lease the property it operates and to
conduct the business in which it is currently engaged;
(ii) it has the corporate power and authority and the
legal right to execute and deliver, and to perform its
obligations under, this Agreement, and has taken all necessary
corporate action to authorize its execution, delivery and
performance of this Agreement;
(iii) this Agreement constitutes a legally valid and
binding obligation of such party enforceable in accordance
with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting the enforcement of
creditors' rights generally, general equitable principles and
an implied covenant of good faith and fair dealing;
(iv) the execution, delivery and performance of this
Agreement will not violate any provision of any law, rule or
regulation or any lease, agreement or instrument applicable to
such party or to which any of its property is subject and will
not result in or require the creation or imposition of any
lien on any of the properties or revenues of such party
pursuant to any law, rule or regulation or any lease,
agreement or instrument applicable to such party or to which
any of its property is subject; and
(v) except for applicable permits, no consent or
authorization of, filing with, or other act by or in respect
of, any arbitrator or governmental authority and no consent of
any other person (including, without limitation, any
stockholder or creditor of such party) is required in
connection with the execution, delivery, performance, validity
or enforceability of this Agreement, except in each case those
that have been made or obtained.
24
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement as of the date first set forth above.
HUBCO S.A.
By: /s/ THOR GEIR RAMLETH
----------------------------------------
Name: THOR GEIR RAMLETH
------------------------------------
Title: CEO
-----------------------------------
CARRIER1 INTERNATIONAL S.A.
By: /s/ STIG JOHANSSON
-----------------------------------------
Name: STIG JOHANSSON
-----------------------------------
Title: CHAIRMAN OF THE BOARD
----------------------------------
By: /s/ THOMAS WYNNE
-----------------------------------------
Name: THOMAS WYNNE
-----------------------------------
Title: DIRECTOR
----------------------------------
25
<PAGE>
EXHIBIT A
ROLLOUT SCHEDULE
[*]
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
<PAGE>
EXHIBIT B
SPECIFICATIONS FOR RAW SPACE
[*]
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
2
<PAGE>
EXHIBIT C
OUTLINE OF SHARED SERVICES
[*]
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
3
<PAGE>
EXHIBIT D
LEASING TERM SHEET
THIS LEASING TERM SHEET IS SUBJECT TO CONTRACT AND FINAL
APPROVAL BY THE BOARD OF DIRECTORS OF HUBCO.
1. Rent: As per the Agreement.
The Rent payable to HUBCO is intended to be a net
rent, net of all additional costs and expenses.
Additional Rent shall be included, as described
below. Rent is due and payable beginning on the
Commencement Date for each Space. Notwithstanding the
foregoing, provided that Strategic Anchor Tenant
occupies no more than [*] of the Space,
Strategic Anchor Tenant shall receive (i) a discount
of [*] on the Rent for the first [*] after
the Commencement Date and (ii) a discount of [*]
on the Rent for the [*] after the Commencement
Date.
Rent excludes VAT which is payable by Strategic
Anchor Tenant. Additional Rent will include VAT and
any penalties imposed if Strategic Anchor Tenant's
activities do not allow HUBCO to recover VAT.
2. Premises: Tenant's pro rata share of the Facility shall be
equal to the total rentable area of the Space
divided by the total rentable area (excluding
common areas) of the Facility. Total rentable area of
the Facility will include exterior, interior or roof
areas used for generator pads, HVAC equipment and
other equipment. So long as it is contiguous, the
location of the Space within the Facility shall be in
HUBCO's sole discretion.
3. Lease Start: Commencement Date
4. Term: [*]
5. Renewals: Tenant shall have [*] options to renew with [*]
prior written notice. The rent per square foot for
any such renewal period shall be equal to [*] of
the average rent per square foot paid by other
tenants in such facility for comparable size space
with features comparable to Raw Space.
6. Termination: Tenant shall waive any termination rights granted by
local law (e.g. triennial rights).
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
4
<PAGE>
7. Expenses: [*]
8. Utilities: Utility charges for Raw Space shall be (i)
billed directly by the utility provider (ii)
sub-metered, or (iii) allocated on a pro rata basis
by leased area, as applicable. Charges for Shared
Services shall be determined at a later date.
9. Escalations: [*]
10. Payments: Quarterly in advance, including Additional
Rent, paid by direct deposit, without the need for
notice. After the [*] following the due date,
late penalties will apply.
11. Security: For Raw Space, the security deposit shall
be, at the option of Strategic Anchor Tenant, either
(i) a pledge to HUBCO of a number of HUBCO common
shares equal to [*] rent divided by the
Subscription Price (as defined in the Shareholders
Agreement) for such shares or (ii) cash or a letter
of credit equal to [*] Rent, in each case plus
Additional Rent payable upon signature of lease. For
Conditioned Space: To be determined. If Luxembourg
law does not permit HUBCO to effectively benefit from
a pledge of its owns shares, the parties will attempt
to pledge the same number of HUBCO shares to the
other Shareholders, pro rata, so that the other
Shareholders receive the same economic benefit as a
pledge of HUBCO shares directly to HUBCO.
12. Major Repairs: Any major repairs shall be amortized at the
Variable Rate over the longer of the useful life
of the repair or the remaining years of the
Term. [*]
13. Alterations: With HUBCO's consent, not to be unreasonably
withheld. At end of the Term, at HUBCO's option,
the Space shall (i) be restored to its original
state, at the expense of Tenant, or (ii) remain in
its altered state without reimbursement or
compensation to Tenant.
14. Final Tenancy
Agreement: Standard tenancy agreement as modified to conform
to terms herein, the Agreement and the local law of
the jurisdiction where the Facility is located.
15. Assignment: As provided for in the Agreement. Strategic Anchor
Tenant may sublease all or a portion of the Space.
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
5
<PAGE>
16. Liability of
HUBCO
Subsidiary: The liability of HUBCO Subsidiary shall be the same
as the liability of HUBCO provided for in the
Agreement, except that it shall be limited in scope
to the applicable Facility for which HUBCO Subsidiary
is the landlord.
17. Holdover Rent: The greater of: [*] of Rent or the fair market
rent for the Space with other standard holdover
provisions.
18. Arbitration: As provided in the Agreement.
19. Insurance: [*]
20. Commissions: [*]
21. Environmental: [*]
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
6
<PAGE>
EXHIBIT E1
GRANDFATHERED PROPERTIES
[*]
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
7
<PAGE>
EXHIBIT E2
CITIES FOR GRANDFATHERED PROPERTIES
[*]
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
8
<PAGE>
EXHIBIT F
CALCULATION OF VARIABLE RATE
[*]
- ----------------------
*: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
9
