Exhibit 10.31
CERTIFIED TRANSLATION FROM GERMAN
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STOCK PURCHASE AGREEMENT
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between
Xx Xxxx Xxxx, residing in Xxxxxxxxxxx 000, 0000 Xxxxxx, Xxxxxxxxxxx
Xx Xxxxx Xxxxx, residing in Xxxxxxxx. 00, 0000 Xxxxxx, Xxxxxxxxxxx
- in the following referred to as the "Sellers", individually or
collectively -
and
Cybernet Internet Services International, Inc.
a corporation incorporated under the law of Delaware, U.S.A.
Xxxxxx-Xxxxxx-Ring 19-23, 00000 Xxxxxx
- in the following referred to as the "Buyer" -
the following
STOCK PURCHASE AGREEMENT
is signed:
PRELIMINARY REMARK
The Sellers hold all stock in the Sunweb Internet Services Internet SIS AG (in
the following referred to as "Sunweb AG") which is based in Zurich and has a
registered and liberalized stock capital totalling CHF 500,000.00 (Swiss francs,
five hundred thousand), which - prior to the closing - will be increased to CHF
1,100,000.00 (Swiss Francs, one million one hundred thousand), divided into
1,100 registered shares of stock at CHF 1,000.00 (in the following referred to
as "Sunweb stock").
The Sellers intend to sell the Sunweb stock to the Buyer and the Buyer intends
to acquire the Sunweb stock from the Sellers
according to the terms and conditions of this Stock Purchase Agreement (in the
following referred to as "Agreement"), with 560 shares of the Sunweb stock to be
sold immediately and 540 shares of Sunweb stock to be sold for a specified
period of time as put and call options by way of unilateral statements by the
Sellers or the Buyer.
SECTION 1
SALE AND PURCHASE OF 560 SHARES OF SUNWEB STOCK
1.1 Sale and purchase. The Sellers hereby sell to the Buyer and the Buyer
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hereby buys from the Sellers a total of 560 shares of Sunweb stock, i.e.:
Xx Xxxx Xxxx 280 shares of Sunweb stock
Xx Xxxxx Xxxxx 280 shares of Sunweg stock
1.2 Remuneration. At the closing (as stated in 2.1 below) the Sellers shall
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receive a remuneration for the sale and transfer of the 560 shares of
Sunweb stock of CHF 1,477,000 (Swiss francs, a million four hundred forty-
six thousand) and 25,000 shares of common stock with a par value of US$
0.001 of the Buyer's (in the following referred to as "Cybernet stock").
The 25,000 shares of Cybernet stock will be issued to the pooling trustee
(as stated in section 2.2. b) below), i.e. 12,500 shares of Cybernet stock
in favour of Xxxx Xxxx and 12,500 shares of Cybernet stock in favour of
Xxxxx Xxxxx.
1.3 Transfer of Stock, Payment. At the closing 560 shares of Sunweb stock will
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be transferred and surrendered from the Sellers to the Buyer. The Buyer
will transfer and surrender i) 25,000 shares of Cybernet stock to the
pooling trustee and ii) the Sellers will be handed a cheque for CHF
1,477,000 (Swiss francs, a million four hundred forty-six thousand).
1.4 Funding of Sunweb AG. At the closing the Buyer shall sign an agreement with
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Sunweb AG for the funding of further investments, working capital and
liabilities by the Buyer (in the following referred to as "funding"). The
amount of funding is governed by a business plan, which Sunweb AG and the
Buyer shall establish prior to the closing, and is granted as a loan
bearing an interest rate of (8%) per year.
SECTION 2
CLOSING OF 560 SHARES OF SUNWEB STOCK
2.1 Closing. To perform the transactions provided for in this Agreement
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concerning the 560 shares of Sunweb stock, on March 31, 1999, or on some
other mutually agreed date, a closing (in the following referred to as
"closing") shall be held in the Buyer's office rooms (in the following
referred to as "closing date").
2.2 Closing Criteria for the Buyer. To perform the transactions contemplated by
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this Agreement, the Sellers shall meet the criteria below at the closing:
a) Transactions. The Sellers shall transfer and surrender 560 shares of
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Sunweb stock to the Buyer. The Sellers have issued all statements
required for the transfer of Sunweb stock to become effective.
b) Pooling Trust Agreement. The Sellers signed a pooling trust agreement
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(in the following referred to as "pooling trust agreement") with Xx
Xxxxxxx Xxxxxxx, lawyer and notary, (in the following referred to as
pooling trustee) according to Exhibit 1to the effect that the 25,000
shares of Cybernet stock are held by the pooling trustee for the
Sellers and thus may not be sold until released by the pooling trustee.
The release by the pooling trustee shall be performed in the order of
thirty-three percent (33%) one year after the closing date, in the
order of further thirty-three percent (33%) two years after the closing
date and in the order of the remaining thirty-four percent (34 %) three
years after the closing date.
c) Consents and Approvals. All approvals or consents from third parties
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required for the performance of transactions have been obtained.
d) Representations and Warranties. The representations and warranties of
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Sellers contained in this Agreement will be true, correct and complete
as of the closing date.
e) No Action. No suit, action, temporary injunction or other action
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before any court or regulatory authority will be pending or threatened
which would obstruct consummation of any of the transactions
contemplated by this Agreement, cause any of the transactions
contemplated by this Agreement to be rescinded following consummation
or adversely affect the assets
or the operation of Sunweb AG or of Sunweb GmbH (as stated under 5.1
below).
f) Due Diligence Review. The Buyer completed the diligence review of
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Sunweb AG and Sunweb GmbH which had to be completed by March 31, 1999
to his satisfaction.
g) Business Plan. Sunweb AG and the Buyer will have established the
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business plan ("business plan")by March 31, 1999.
h) Employment Agreements with Xxxx Xxxx and Xxxxx Xxxxx. Sunweb AG
executed Employment Agreements with Xx Xxxx Xxxx and Xx Xxxxx Xxxxx
which run for at least three years providing for a basic salary of CHF
150,000 each and a management bonus of up to CHF 30,000 per year of
30,000 options to Cybernet stock at the price valid on the day
preceding the signing of this Agreement plus another 15,000 shares of
options to Cybernet stock in early 2000, if Sunweb AG realizes turnover
proceeds of more than CHF 4,000,000 (four million) in the fiscal year
from January 1 to December 31, 1999 i) realizing the profit defined in
the business plan or ii) not exceeding the loss.
i) Framenet GmbH Agreements. All agreements of Framenet GmbH, the subject
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of which are the services of Sunweb AG or Sunweb GmbH, have been
transferred to Sunweb AG or Sunweb GmbH. Where this is not possible,
new equivalent agreements were signed by Sunweb AG.
2.3 Buyer's Criteria for the Sellers. The Sellers require that, at the closing,
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the Buyer meet the following criteria for the performance of the
transactions contemplated by this Agreement:
a) Transactions. The Buyer shall i) transfer and hand over 25,000 shares
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of Cybernet stock to the pooling trustee and i) a cheque for CHF
1,477,000 to the Sellers. The Buyer made all representations required
for the transfer of Cybernet shares.
b) Consents and Approvals. All third party consents or approvals required
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to perform the transactions have been received.
c) Warranties. The Buyer's warranties contained in this Agreement are
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correct and complete as of the closing date.
d) No Action. No suit, action, temporary injunction or other action
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before any court or regulatory authority will be pending or threatened
which would obstruct consummation of any of the transactions
contemplated by this Agreement, cause any of the transactions
contemplated by this Agreement to be rescinded following consummation
or adversely affect the assets or the business of the Buyer.
e) Due Diligence Review. The Sellers completed the diligence review of
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Sunweb AG and Sunweb GmbH which had to be completed by March 31, 1999
to their satisfaction.
g) Employment Agreements with Xxxx Xxxx and Xxxxx Xxxxx. Sunweb AG
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executed Employment Agreements with Xx Xxxx Xxxx and Xx Xxxxx Xxxxx
which run for at least three years providing for a basic salary of CHF
150,000 each and a management bonus of up to CHF 30,000 per year of
30,000 options to Cybernet stock at the price valid on the day
preceding the signing of this Agreement plus another 15,000 shares of
options to Cybernet stock in early 2000, if Sunweb AG realizes
turnover proceeds of more than CHF 4,000,000 (four million) in the
fiscal year from January 1 to December 31, 1999 i) realizing the
profit defined in the business plan or ii) not exceeding the loss.
h) Funding. Sunweb AG and the Buyer signed an Agreement governing the
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funding.
2.4 Board of Directors of Sunweb AG. Immediately after the closing, Xx Xxxxxx
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Duelli will resign his post as Member of the Board of Directors of Sunweb
AG and will appoint Xx Xxxxxxx Xxxx as a Member of the Board of Directors
of Sunweb AG.
SECTION 3
SALE AND PURCHASE OF 540 SHARES OF SUNWEB STOCK
3.1 Purchase and Sale. In accordance with the put option of sections 3.2 and
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3.3 below the Sellers hereby sell a total of 540 shares of Sunweb stock to
the Buyer, i.e.
Xx Xxxx Xxxx 270 shares of Sunweb stock
Xx Xxxxx Xxxxx 270 shares of Sunweb stock
3.2 Sellers' Put Option. The Sellers may produce the put option in accordance
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with section 3.1 above by a written statement to the Buyer. The written
statement shall be submitted to the Sellers within one month after receipt
of the financial statement of Sunweb AG (as specified under section 3.5
below) for the years 1999, 2000 or 2001 ending December 31. Prior to the
receipt of the relevant financial statement of Sunbweb AG by the Sellers,
the put option may not be produced.
3.3 The Buyer's Call Option. The Buyer may produce the put option according to
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section 3.1 above by a written statement to the Buyer. The written
statement shall be submitted to the Sellers within one month after receipt
of the financial statement of Sunweb AG (as stated in section 3.5 below) by
December 31, 2001. Prior to receipt of the financial statement of Sunweb AG
for the year ending December 31, 2001 by the Sellers, the put option cannot
be produced.
3.4 Remuneration. For the option closing (as indicated in section 4.1 below),
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the Sellers, as remuneration for the sale and transfer of 540 shares of
Sunweb stock, receive a number of Cybernet stock to be determined according
to 3.5 below. The Cybernet stock is issued to the pooling trustee, i.e.
fifty percent (50%) of the Cybernet stock in favour of Xxxx Xxxx and fifty
percent (50%) of Cybernet stock in favour of Xxxxx Xxxxx.
3.5 Stock Formula. The remuneration is based on the relevant financial
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statement of Sunweb AG for the fiscal year ending December 31, which
precedes an efficient option statement according to the preceding section
3.2 or 3.3. The relevant financial statement shall be produced and audited
in accordance with the General Accepted Accounting Principles (in the
following referred to as "GAAP"). Subsidiaries of Sunweb AG shall be
included according to the GAAP consolidation principles. The turnover
proceeds specified in the relevant financial statement shall - dependent
upon the net profit or net loss (before income taxes) - be multiplied by a
factor
determined in the scheme attached to exhibit 2. This basic price will then
have to be multiplied by 49% to account for the whole enterprise, resulting
in the equivalent of the 540 shares of Sunweb stock. This equivalent shall
be divided by the price of the Cybernet stock. The closing price at the
Frankfurt Stock Exchange which immediately follows receipt of a valid
option statement according to sections 3.2 or 3.3 above by the Sellers or
the Buyer shall be the qualifying price. The number of Cybernet stock
established in this way constitutes the remuneration for the 540 shares of
Sunweb stock according to section 3.4 above.
3.6 Transfer of Stock. At the option closing 540 shares of Sunweb stock shall
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be transferred and handed over from the Sellers to the Buyer. The Buyer
shall transfer and hand over the number of shares of Cybernet stock
determined according to section 3.5 above to the pooling trustee.
3.7 Securing the Option Exercise. At the closing date the Sellers, in order to
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safeguard their option exercise, shall transfer their 540 shares of Sunweb
stock to Xx Xxxxxxx Xxxxxxx, lawyer and notary (in the following referred
to as "escrow" agent") with the irrevocable instruction to handle
exclusively the 540 shares of Sunweb stock according to the requirements of
this Agreement.
SECTION 4
CLOSING OF 540 SHARES OF SUNWEB STOCK
4.1 Option Closing. The parties shall hold a closing (in the following referred
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to as "closing" )in the office rooms of the Buyer's to complete the
transactions provided in this Agreement concerning the 540 shares of Sunweb
stock. The option closing shall take place on a day agreed jointly by the
parties (in the following referred to as "option closing date"), in any
case within one month after occurrence of the put option according to
section 3.2. or 3.3 above.
4.2 Buyer's Criteria for the Option Closing. The Sellers shall meet the
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following Buyer's criteria in order to perform the transactions
contemplated by this Agreement.
a) Transactions. The escrow agent shall transfer and hand over 540 shares
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of Sunweb stock to the Buyer. The escrow agent shall make all the
necessary
statements to make the transfer of Sunweb activities successful.
b) Pooling Trust Agreement. The Sellers signed a pooling trust agreement
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with the pooling trustee in accordance with exhibit 1, to the effect
that the number of shares of Cybernet stock determined according to
section 3.5 above are held on behalf of the Buyers and thus Cybernet
shares of stock may not be sold until released by the pooling trustee.
The release by the pooling trustee shall be based on a volume of
thirty-three percent (33%) one year after the option closing date, to
be followed by a volume of another thirty-three percent (33%) two
years after the option closing date and the remaining volume of
thirty-four percent (34%) three years after the option closing date.
c) Consents and Approvals. All consents and approvals by third parties
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required to complete the transactions have been received.
d) No Action. No suit, action, temporary injunction or other action before
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any court or regulatory authority will be pending or threatened which
would obstruct consummation of any of the transactions contemplated by
this Agreement, cause any of the transactions contemplated by this
Agreement to be rescinded following consummation or adversely affect
the assets or the operation of Sunweb AG or its subsidiaries.
4.3 Sellers' Criteria for the Option Closing. To perform the transactions
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provided for in this Agreement, the Buyer shall meet the Sellers' criteria
below at the closing:
a) Transactions. The Buyer shall transfer and surrender the number of
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Cybernet shares of stock determined according to section 3.5 to the
pooling trustee. The Buyer has issued all statements required for the
transfer of Cybernet shares of stock to become effective.
b) Consents and Approvals. All third party approvals and consents required
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for the performance of transactions have been obtained.
c) No Action. No suit, action, temporary injunction or other action before
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any court or regulatory authority will be pending or threatened which
would obstruct consummation of any of the transactions contemplated by
this Agreement, cause any of the transactions contemplated by this
Agreement to be rescinded
following consummation or adversely affect the assets or the operation
of Sunweb AG.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers represent and warrant to the seller:
5.1 Corporate Organization and Good Standing. The corporation was duly
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incorporated under the laws of Switzerland on October 7, 1998 via public
charter issued by the notary lic. iur. Xxxxxxx Xxxxxxx (document No.
55/1998) and registered in the Commercial Register of the Canton of Zurich,
corporation number CH-020.3.021.274 -6 on November 13, 1998. Sunweb AG has
been validly existing with by-laws as of October 7, 1998 (document No.
55/1998 of the notary lic. iur. Xxxxxxx Xxxxxxx); these by-laws are
complete, there are no subsidiary agreements concerning the corporate
organization and standing, except for the stockholders' binding agreement
of October 8, 1998. Profit distributions have not been performed and
decided since the establishment of the corporation. With the exception of
Sunweb GmbH ("Sunweb GmbH") - registered in the Commercial Register of the
Canton of Zurich, corporation number CH-020.4.018.318-8, the shares of
which amount to a par value of CHF 20,000 in total and are held by Sunweb
AG - Sunweb AG has no subsidiaries.
5.2 Capital Structure. The entire authorized capital stock of Sunweb AG is CHF
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500,000.00 and will be increased to CHF 1,100,000.00 prior to the closing
and will then be divided up into 1100 shares of par value common stock of
CHF 1,000 each. Sunweb AG neither issued any other shares of stock nor any
other shares nor rights to Sunweb AG nor is it under a duty to issue stock
or other shares or rights to Sunweb AG. The Sunweb shares of stock are
validly issued, fully paid and are not subject to any obligations calling
for additional payments. The Sunweb shares of stock are not subject to any
strains, subquotas, restrictions on disposal nor any other strings. The
Sellers are entitled to unlimited disposal of Sunweb stock.
5.3 Interim Financial Statements. Attached as Exhibit 3 are the interim
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financial statements of Sunweb AG as of December 31, 1998 and of Sunweb
GmbH of December 31, 1998 (the interim financial statements).These interim
financial statements are true and complete to the personal knowledge of the
Sellers and correctly reflect the financial position and the business
results of Sunweb AG and Sunweb GmbH as of the respective dates and for the
specified period of time to the personal knowledge of the Sellers.
The market value of the individual assets corresponds at least to their
balance sheet value. Sunweb AG and Sunweb GmbH have no other liabilities,
nor any threatened ones than those shown or covered by reserves. Sunweb AG
and Sunweb GmbH are the owners of the assets contained in the interim
financial statements and of the assets acquired since the respective date,
except for those sold after the respective date in the course of correct
business transactions. Sunweb AG and Sunweb GmbH own these assets which are
without limitation and free from the rights of third parties.
5.4 No Material Adverse Effect on Business. In the period leading up to the
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closing date no material adverse effect of the operations of Sunweb AG and
Sunweb GmbH shall occur. In the period leading up to the closing date
Sunweb AG and Sunweb GmbH will exclusively engage in normal business
affairs.
5.5 Filings, Consents and Approvals. In order to sign this Agreement and to
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perform the transactions provided in this Agreement and to continue to
manage the affairs of Sunweb AG and Sunweb GmbH, no filings, consents or
approvals other than those shown in Exhibit 4 are required.
5.6 Noncontravention. Neither the signing of this Agreement nor the execution
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of the transaction provided in this Agreement will:
1) Cause a material adverse effect on the operation of Sunweb AG and
Sunweb GmbH, their assets or their agreements with third parties.
2) Violate any provisions of the certificate of incorporation or the
by-laws of Sunweb GmbH; or
2) Violate any law or other provisions or any orders from courts or
regulatory authorities.
5.7 Litigation. Sunweb AG and Sunweb GmbH are not party to any litigation. To
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the Sellers' knowledge there are not any disputes threatened.
5.8 Material Agreements. All material agreements concerning Sunweb AG and
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Sunweb GmbH are attached in Exhibit 5 as true and complete photocopies.
With the exception of the agreements attached as exhibit 5, Sunweb AG and
Sunweb GmbH are not party to
1) Agreements governing the purchase, sale, leasing or rent of material
assets;
2) Long-term debt relationships of any kind, particularly no rental or
licensing agreements;
3) Agreements with profit- or turnover-related remuneration, royalties
etc. or commercial agents' or similar agreements;
4) Employment or consulting agreements;
5) Loan or credit arrangements and guaranties, sureties or similar
obligations. Sunweb AG and Sunweb GmbH are not liable for any
sureties covering third party obligations;
6) Agreements or obligations concerning the restriction of the
operation of Sunweb AG or Sunweb GmbH;
7) Agreements or commitments outside the ordinary course of business;
8) Agreements concerning a joint venture, the establishment of a
corporation or comparable agreements; or
9) Agreements to act on behalf of Sunweb AG.
The agreements attached as Exhibit 5 are valid and there are no material
violations concerning the agreements attached as Exhibit 5. Agreement
terminations or cancellations by third parties, in particular with respect
to the signing and execution of this Agreement are not to be expected.
5.9 Intellectual Property. Exhibit 6 contains a true and complete list of the
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intellectual property ("intellectual property") which is owned and used by
Sunweb AG and Sunweb GmbH. Exhibit 6 further contains true and complete
copies of all licensing agreements connected to the intellectual property,
in as far as Sunweb AG or Sunweb GmbH are the licensor or licensee. The use
of intellectual property by Sunweb AG or Sunweb GmbH, in particular after
signing and executing this Agreement, does not violate the rights of any
third parties. With the exception of the agreements shown as Exhibit 6,
Sunweb AG and Sunweb GmbH have no obligations to pay licensing fees.
5.10 Permissions by Regulatory Authorities. Sunweb AG and Sunweb GmbH have
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received all permissions under public and private law as well as
franchises and/or licences to conduct their operations as is currently
being done. There are no procedures, neither against Sunweb AG nor against
Sunweb GmbH, before administrative authorities or investigative procedures
by authorities pending or to be expected.
5.11 Taxes. Sunweb AG and Sunweb GmbH filed all income tax returns correctly
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and as scheduled and paid all due taxes or established adequate reserves
for taxes. Apart from those, Sunweb AG and Sunweb GmbH have no arrears in
taxes and carry no tax risk. The payments payable to staff members for
taxes or social services were correctly determined, charged and
transferred.
5.12 Employees. Exhibit 7 contains true and complete copies including the names
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and addresses of all employment and consulting agreements signed with
Sunweb AG and Sunweb GmbH. Further employments, other agreements, pension
plans or pension assurances, shop agreements or obligations from
operations do not exist. Employees' vacation entitlements dating from the
period before January 1, 1999 do not exist.
5.13 Insurance Policies. Set forth in Exhibit 8 is a true and complete list of
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all insurance policies of Sunweb AG and Sunweb GmbH.
5.14 Agreements with Stockholders. Except for the agreements listed in Exhibit
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9 there are no agreements or contracts between Sunweb GmbH and the Sellers
or persons close to them and affiliated enterprises respectively.
SECTION 6
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers:
6.1 Corporation. The Buyer is a corporation duly incorporated under the law of
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the State of Delaware, validly existing and in Good Standing. Except for
Cybernet Internet-Dienstleistungen AG, Germany, its subsidiaries and Vianet
Telekommunikation AG, Osterreich, the Buyer has no subsidiaries.
6.2 Capitalization. The entire authorized share capital consists of 50,000,000
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shares of common stock with a par value of USD 0.001 and 50,000,000 shares
of preferred stock. At the moment of signing this Agreement, of the shares
of common stock, 119,062,138 are issued and outstanding, of the shares of
preferred stock, 6,360,000. According to the Buyer's stock option plan, at
the moment of signing this Agreement approximately 700,000 options are
issued.
6.3 Corporate Rights. In terms of his corporate situation the Buyer is entitled
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and authorized to sign this Agreement and execute the transactions included
in this Agreement. The Board of Directors of the Buyer has consented to the
conclusion of this Agreement and to the transactions to be executed under
this Agreement.
6.4 (Interim) Financial Statements. Exhibit 10 contains the audited financial
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statements of the Buyer for the years ending December 31, 1996 and 1997
(the "financial statements") and a non-audited interim financial statement
for the period ending September 30, 1998 (the "interim financial
statement"). The (interim) financial statements are in accordance with GAAP
and present fairly the financial condition of the Buyer as of the
respective dates indicated. In the period from September 30, 1998 to the
closing date no material adverse effect on the Buyer's operations have
occurred. In the period from September 30, 1998 to the closing date the
Buyer has exclusively engaged in the normal conduct of affairs.
6.5 Noncontravention. The signing of this Agreement and the performance of the
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transaction provided in this Agreement will:
1) Have no material adverse effect on the Buyer's operations, his
assets or his agreements with third parties;
2) Violate provisions of the articles or certificate of incorporation
or of the by-laws of the Buyer
Or
3) Violate any law or any other provision or regulation of any court
or governmental or regulatory authority;
6.6 Litigation. The Buyer is not party to any dispute. And the Buyer does not
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know of any disputes threatened.
6.7 Filings, Consents and Approvals. Except for any filings required by
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applicable laws and those shown in Exhibit 11, no filings, consents or
approvals are required for the Buyer's signing of this Agreement and his
consummation of the transactions contemplated by this Agreement.
SECTION 7
LEGAL CONSEQUENCES OF WARRANTY VIOLATIONS
7.1 Restitution in Kind or Compensation. Whenever warranties, representations,
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obligations or agreements are misrepresented or violated, the party which
violated or misrepresented the warranties, assurances, obligations or
agreements contained in this Agreement shall place the other party -
including Sunweb AG or Sunweb GmbH, if a misrepresentation or violation was
committed by the Sellers -in the position the other party, if necessary
Sunweb AG or Sunweb GmbH, would hold, had the warranty or representation
been right or had it not been violated or had the obligations been
fulfilled. At the other party's discretion this duty of restitution shall
be performed by way of restitution in kind or by compensation.
7.2 Indemnification from Liabilities. Regardless of the provision of the
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preceding section 1. The Sellers shall indemnify Sunweb AG and Sunweb GmbH
in respect of claims from liabilities in connection with misrepresentations
or violations of the preceding warranties or representations.
7.3 Statute of Limitations. The parties may raise any claims arising from the
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preceding items 7.1 and 7.2 within one year from the closing date,
furthermore claims from the performance of an external tax audit with
Sunweb AG or Sunweb GmbH within six months from the receipt of the valid
advice based on such an external tax audit. To meet
the deadline, it will suffice, if the other party is informed in writing
about the claims. After receipt of such a communication, a one-year period
of limitation shall start.
7.4 Legal Claims. By the regulation of the preceding sections 7.1 to 7.3 any
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legal claims will neither be restricted nor excluded.
SECTION 8
SELLERS' PROHIBITION OF COMPETITION
8.1 Object and Length of Prohibition of Competition. The Sellers undertake to
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refrain - for the period of three years from the closing date - from
engaging in any competition in the existing area of activity, both in terms
of space and subject matter, of Sunweb AG and Sunweb GmbH, with it or the
Buyer, particularly from directly or indirectly participating in
competitive enterprises, from entering in the services of a competitive
enterprise or promoting such an enterprise directly or indirectly by advice
or action. An area of activity in terms of space, as defined by this
prohibition of competition are the Federal Republic of Germany, Austria and
Switzerland, subject matter, as defined by this prohibition of competition
are telecommunication services and solutions. Compliance with the
prohibition of competition shall be deemed performed after payment of the
purchase price. The capital interest in enterprises quoted on the stock
exchange, as far as participation is less than one percent (1%) will not be
affected by the above prohibition of competition.
8.2 Legal Consequences of Violations. In the event of any violation of the
---------------------------------
above prohibition of competition the Seller who commits the violation shall
pay a contractual penalty of CHF 100,000 to the Buyer. If the violation is
continued by the Seller despite a written warning notice, a contractual
penalty of CHF 20,000.00 shall be paid for each further fraction of a month
of violation. The Buyer's rights to compensation of any further damage and
to refraining from any conduct contrary to the regulation shall not be
affected.
SECTION 9
MISCELLANEOUS
9.1 Several Buyers. Any statements made in connection with this Agreement by
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the Sellers vis-a-vis the Buyer can only be made by producing an effect on
all Sellers. For the commitments arising from this Agreement the Sellers
are liable collectively.
9.2 Effectiveness of Representations. Each party may rely on the
---------------------------------
representations and warranties of the other party. This rule shall apply
regardless of the audits made or omitted by one party.
9.3 Termination. This Agreement may be terminated prior to the closing under
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the following conditions exclusively.
1) By mutual agreement of the parties.
2) By the Buyer, if there has been a breach of any material
representation, warranty, commitment or agreement set forth in this
Agreement that is not remedied within ten business days after
notice of such breach is given by the Buyer.
3) By the Sellers, if there has been a breach of any material
representation, warranty, commitment or agreement set forth in this
Agreement that is not remedied within ten business days after
notice of such breach is given by the seller.
4) By the Buyer or the Sellers, if the closing is not concluded later
than June 30, 1999, unless the parties fail to extend this deadline
with mutual agreement. However, the party responsible for the
failure to meet the deadline, is unable to terminate this
Agreement.
5) By the Buyer or Sellers, if any permanent injunction or other order
of a governmental entity of competent authority preventing the
consummation of the transactions contemplated by this Agreement has
become final and nonappealable.
9.4 Effect of Termination. In the event of the termination of this Agreement as
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provided in section 9.3, this Agreement will be of no further effect. This
does not apply to claims for compensation of one party against the other
party according to section 7 above. Upon termination of this Agreement each
party will, upon request by either
party, surrender all documents, work papers and documents. This does not
apply to cases where compensation claims have to be raised.
9.5 Mutual Assistance. The parties shall provide mutual assistance to the best
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of their abilities, also after the closing date, after the take-over of the
operations of Sunweb AG and Sunweb GmbH. Furthermore, the Sellers and the
Buyer are committed to give all information and participate in all
transactions and legal acts as are required to execute this Agreement. The
Sellers shall refrain from any action that could have an adverse effect on
the right of Sunweb AG or Sunweb GmbH to conduct the corporation "Sunweb",
with or without additions.
9.6 Costs and Fees. Each party shall bear its costs and fees incurred in
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connection with this Agreement, in particular those related to advisers.
9.7 Public Announcements. Any public announcements in connection with this
---------------------
Agreement shall exclusively be given by mutual agreement of the parties.
9.8 Confidentiality. The parties are committed to observe absolute secrecy
----------------
concerning the conclusion and the contents of this Agreement, unless the
furnishing of such information is required by law or the provisions of this
Agreement.
9.10 Written Form. Any amendments to this Agreement must be made in writing.
------------
9.11 Entire Agreement. This Agreement, the exhibits attached hereto and the
-----------------
other transaction documents contain the entire agreement between the
parties with respect to the subject matter thereof. This Agreement
supersedes all written and oral declarations of intent given by the parties
in connection with any contract negotiations, even if such declarations
deviate from the contents of this Agreement.
9.12 Severability. In the event that any provision of this Agreement would be
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or would become fully or partially invalid or unenforceable, the remaining
provisions in the Agreement will not be affected. The invalid or
unenforceable provision shall be deemed to be replaced by an agreed
provision that comes as close as possible to the purpose of the invalid and
unenforceable provision, in particular in terms of the desired economic
purpose. The same shall apply to any gap in this Agreement.
9.13 Notices. All notices or communications in connection with this Agreement
--------
shall be made in writing and will be deemed given if sent by post,
courier, personal delivery or fax (to be followed by despatch by post,
courier or personal delivery) to the following addresses.
To the Sellers: Sunweb Internet Services XX
Xxxxxxxxxxxx 000,
XX-0000 Xxxxxx
Phone: 00-0-0000000
Fax: 00-0-0000000
With a copy to: lic. iur. Xxxxxxx Xxxxxxx
Xxxxxxxx 00, Xxxxxxx 0000,
XX-0000 Xxx
Phone: 00-00-000000
Fax: 00-00-0000000
To the Buyer: Cybernet Internet Services International, Inc.
Attn. Xx Xxxxxxx Xxxx
Xxxxxx-Xxxxxx-Xxxx 00-00,
X-00000 Xxxxxx
Phone: 00-00-000000
Fax: 00-00-00000000
With a copy to: Besner Xxxxxxxx Xxxxx
Attn. Xx. Xxxxxx Xxxxxx
Xxxxxxxxxxxxx. 00
X-00000 Xxxxxx
Phone: 00-00-0000000
Fax: 00-00-00000000
9.14 Headings. The headings contained in this Agreement are for reference
---------
purposes only and will not affect in any way the meaning or interpretation
of this Agreement.
9.15 Assignment. The Agreement may not be assigned by any party without the
-----------
consent of the other party.
9.16 Governing Law, Jurisdiction. This Agreement shall be governed by Swiss
----------------------------
law, unless the application of other law is mandatory. The place of
jurisdiction for all disputes, if correctly agreed, shall be Zurich.
9.17 Signing and Faxing of Counterparts. This Agreement may also become
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effective, by signing the Agreement's signature page and exchanging it by
fax (to be followed by despatch by post, courier or personal delivery).
Zurich/Munich, this day of February 19, 1999
SELLERS: BUYER:
Cybernet Internet Services International,
Inc.
/s/ Xxxx Xxxx /s/ Xxxxxxx Xxxx
--------------------- -----------------------
(Xxxx Xxxx) (Xxxxxxx Xxxx)
President
/s/ Xxxxx Xxxxx
--------------------- -----------------------
(Xxxxx Xxxxx)
Exhibits
Exhibit 1 Sample of Pooling Trust Agreement
Exhibit 2 Multiple Scheme
Exhibit 3 Financial Statements Sunweb AG and Sunweb GmbH
Exhibit 4 Filings, Consents and Approvals for the Sellers
Exhibit 5 Material Agreements of Sunweb AG and Sunweb GmbH
Exhibit 6 Intellectual Property of Sunweb AG and Sunweb GmbH
Exhibit 7 Employment Agreements of Sunweb AG and Sunweb GmbH
Exhibit 8 List of Insurance Policies of Sunweb AG and Sunweb GmbH
Exhibit 9 Agreements between Sunweb AG and Stockholders or
Persons Close and/or Affiliated Enterprises
Exhibit 10 Financial Statements of the Buyer (Prospectus)
Exhibit 11 Filings, Consents and Approvals for the Buyer
