AGREEMENT
This agreement (the "Agreement") is made as of the 6th day of August 1997
by and between Transroll Navegacao S.A., a Brazilian corporation ("TRN") and NPR
Holding Corporation, a Delaware corporation ("NPR", TRN and NPR sometimes
individually entitled a "Party," or collectively, the "Parties").
W I T N E S S E T H :
WHEREAS, the Parties are desirous of forming a joint venture (the "Joint
Venture") to provide common carrier services in the Trade as hereinafter defined
and of forming a joint venture company (the "Company") to manage and operate the
Joint Venture and to provide containerships to transport cargoes in the Trade,
and
WHEREAS, TRN is a corporation equipped with infrastructure and port
facilities suitable for supporting common carrier services in the Trade and has
owned, chartered or operated vessels in common carrier services to and from
ports and points in South America, and
WHEREAS, NPR is a corporation equipped with infrastructure and port
facilities suitable for supporting common carrier services in the Trade and has
owned, chartered or operated vessels in common carrier services to and from
ports and points in North America, Puerto Rico and the Caribbean Islands.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE I
OBJECTIVE OF THE AGREEMENT
1.1 The objective of the Parties is to provide, through the Company, a
regular, complete and efficient common carrier service to the Trade.
1.2 A further objective of the Parties shall be steady growth in the volume
of cargoes carried in the Trade such that vessels of increasing capacity shall
be required. This growth is intended to lead, within three (3) to four (4) years
from commencement of service in the Trade, to utilization of vessels of three
thousand (3,000) to four thousand (4,000) TEU capacity. As is more further
detailed in Article 5.3 hereof, to the extent that the Company has not acquired
its own vessels, each Party shall have the right to provide up to one-half of
the vessel capacity as is deemed suitable by the Board of Directors, which the
Company shall require in order to service the Trade, and, in the event that one
Party chooses not to exercise this right, the other Party shall have the right
to provide all of the Company's vessel capacity requirement; provided, however,
that such vessels shall be container vessels capable of servicing the needs of
the Trade.
1.3 The Company shall use in the Trade the port facilities in South America
owned, operated or managed by TRN and shall use in the Trade the port facilities
in North America and the Caribbean Islands owned, operated or managed by NPR, at
rates and levels of service as set forth in Article 3.2(c) hereof.
ARTICLE 2
THE TRADE
2.1 This Agreement shall cover the carriage of cargo between any port or
point in North America, Central America and the Caribbean Islands (the "Northern
Points"), on the one hand, and any port or point within Brazil, Argentina,
Uruguay and Paraguay (the "Southern Points") on the other hand (the "Core
Trade"), as well as such other ports or points agreed to by the Parties from
time to time (the "Non-Core Trade," and collectively with the Core Trade, the
"Trade"). The Trade shall not include Brazilian or United States coastwise trade
or Mercosur common carrier services in South America.
-2-
ARTICLE 3
COMMITMENT OF THE PARTIES
3.1 Neither Party or its affiliates, directly or indirectly, shall operate
or enter into any other agreement, venture, space or slot charter arrangement,
rationalization or other cooperative arrangement relating to carriage of cargo
in the Trade without the prior written agreement of the Parties.
3.2 The Parties shall cause agreements as set forth below to be finalized
and executed within thirty (30) calendar days of the date hereof; provided,
however, that no disagreement over the terms thereof shall constitute grounds to
void or otherwise render unenforceable this Agreement.
(a) General Agency Agreement. TRN shall provide to the Company in the
Southern Points, and NPR shall provide to the Company in the Northern
Points, general agency services, including, without limitation, marketing,
freight bookings, cargo documentation, third party connecting carrier
services and account handling. Fees for such agency services shall be paid
upon an agreed percentage. Such percentage shall apply both to the services
rendered by TRN and by NPR. The Parties agree that before the appointment
of any new sub-agents to service the Trade in Central America or the
Caribbean Islands, the identity of such sub-agents and the terms of their
agency contract shall be submitted to the Board of Directors of the Company
for prior approval.
(b) Connecting Carrier Services, TRN and NPR shall render ocean
connecting carrier services to the Company at rates to be calculated and
established annually on or prior to December 1 of the year immediately
preceding the year for which such rates will be effective and which shall
be based upon the lower of (i) the lowest net rates that they charge their
most
-3-
favored clients and (ii) market rates (e.g. in the event a vessel which is
operating in a protected trade is providing connecting carriage to a
non-restricted cargo, market rates shall apply).
(c) Terminal Serviccs. Any terminal or other cargo facility located in
a port serviced by the Trade which is owned or operated, either wholly or
partly, by a Party or one of its affiliates, shall be utilized by the
Company. Such owning or operating Party shall provide the highest level of
service at the lowest net rates that it charges its most favored clients;
provided, however, that such services and costs are not materially worse
than those available from the principal competitors at the relevant port.
To the extent a Party's terminal does not provide services to third
parties, the rate charged to the Company shall be an amount equal to such
Party's direct costs plus a portion of that terminal's administrative
expenses to be agreed, excluding corporate overhead.
(d) Container Interchange Agreement. TRN, NPR and the Company shall
enter into a Container Interchange Agreement to optimize utilization of the
serviceable equipment, subject to the best interest of the Parties and the
Company. The Parties shall calculate and establish semi-annually in advance
the equipment interchange rates. Such rates shall, for the first year, be
established in August and December 1997; thereafter semi-annually in June
and December. The rates shall be based upon the lower of (i) the aggregate
average cost of each Party's respective equipment category or (ii) the
market rate for such equipment. Equipment positioning costs shall be based
upon the actual pro-rata costs of each Party as calculated and
established semi-annually in advance. The direct, actual cost of equipment
maintenance shall be passed through to the Company, whether the maintenance
is performed by a Party or a third party. In addition, the Party performing
the maintenance shall be entitled
-4-
to receive from the Company compensation at a rate to be agreed. Both
Parties shall be so compensated at the same rate. As an alternative, but
only if agreed by both Parties, a maintenance allocation for each piece of
equipment may be established and charged to the Company by the Party
responsible for maintenance.
(e) Intermodal Agreement. TRN shall provide to the Company in South
America, and NPR shall provide to the Company in North America, Central
America and the Caribbean Islands intermodal and other operating services
relating to inland transportation and delivery of cargo. Such services,
when obtained from a third party, shall be passed through at the best net
rate achievable. When the services are provided by a Party, they shall be
provided at the lowest net rate that such Party charges its most favored
clients.
3.3 With respect to the services identified in Article 3.2, (with the
exception of the equipment positioning and maintenance costs referenced in
Article 3.2(d)), as well as any other services which either Party may arrange or
provide in connection with activities in the Trade, the following principles
shall govern:
- Services, when obtained from a third party, shall be passed through
to the Company at the best net rate achievable by the providing Party,
based upon both Parties' total aggregate purchasing capability from the
provider.
- Services, when provided directly by a Party or its shareholders,
shall be passed to the Company at the lowest cost or net rate that it
charges its most favored clients.
- Any rebates, commissions, bonuses or similar benefits obtained by a
Party in connection with services or equipment provided to the Company
shall be passed by such Party to the Company.
-5-
3.4 The Parties agree that it is in their mutual interest, as well as in
the interest of the Company, to work with the current information systems of
each Party in order to facilitate and enhance performance under this Agreement.
To that end, both Parties shall make available to each other and to the Company
their own respective non-proprietary information systems software at no charge,
and shall provide access to and utilization of their respective systems at
marginal cost. With respect to proprietary systems software, neither Party shall
object to the other Party's purchase at its own cost of such software from the
provider. The Parties shall each designate one individual who shall be available
to work with the other Party's designee so that each Party may become familiar
with and fully understand the other's systems and so that a common system may be
achieved at the earliest possible date. Any knowledge of a Party's non-Joint
Venture related business gained from access to such systems shall be treated by
the other Party as Confidential Information within the meaning of Article 13
hereof.
3.5 Upon the request of an officer(s) of a Party, representatives of such
Party including its duly appointed accountants, shall have such access to the
books and records of the other Party as is necessary to verify compliance with
this Agreement, including, without limitation, that amounts charged hereunder
comply with the provisions of this Agreement. Such access shall be upon
reasonable notice and conducted in a manner that shall cause as little
disruption as possible to the activities and affairs of the other Party.
ARTICLE 4
THE COMPANY
4.1 The name of the Company shall be Transroll Navieras Express, Inc.
(doing business as "TNX").
-6-
4.2 The Company will be a Liberian corporation having its registered
address at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx.
4.3 The Company will be authorized to issue one hundred (100) registered no
par shares.
4.4 The initial capital of the Company will be one million U.S. Dollars
(U.S.$1,000,000), which shall be subscribed 50.01% by TRN and 49.99% by NPR.
Promptly upon funding, which shall occur within ten (10) business days of the
issuance by the Republic of Liberia of the Company's Certificate of
Incorporation, fully paid shares shall be issued to the subscribers. A quorum
for any vote taken at a shareholder's meeting shall be seventy-five percent
(75%). When a quorum is present or represented at a shareholder meeting, the
vote of the holders of at least seventy-five percent (75%) of the issued and
outstanding capital stock of the Company shall decide any question brought
before such meeting.
4.5 The initial working capital of the Company shall be five million U.S.
Dollars (U.S.S5,000,000), one million ($1,000,000) of which shall be contributed
as stated in Article 4.4, and the balance of which shall be the subject of loans
in equal amounts from TRN and NPR on terms as appear in the form of Promissory
Note to be mutually agreed.
4.6 The By-Laws of the Company shall provide that at the first meeting of
the shareholders (which shall occur during August, 1997) and at each annual
meeting thereafter, the shareholders shall elect a Board of Directors consisting
of four (4) members. Two (2) of the Directors shall be nominated by TRN and two
(2) by NPR. Each Party agrees to vote its shares in favor of the nominees of the
other Party. The By-Laws will provide that a majority of the Directors must be
present in person, by proxy, or by conference telephone or video conferencing
for a quorum to exist and every decision or action of the Board shall require
the affirmative vote of a majority of all of the Directors. The By-Laws shall
provide for the election of a President, a Vice President, a Treasurer and a
Secretary at the initial meeting of the shareholders, the President to be the
nominee of one Party and the Vice President the
-7-
nominee of the other Party. At each annual meeting of the shareholders
thereafter, the Party which did not nominate the then-presiding President shall
have the right, but not the obligation, to nominate a new President, and the
Board of Directors shall vote to have such nominee assume the role of President
upon conclusion of the meeting. Upon such event, the other Party shall have the
right to nominate the Vice President.
4.7 The Directors of the Company shall serve without compensation, but
shall be reimbursed for their reasonable transportation, subsistence and out of
pocket expenses directly related to attendance at Board meetings. Officers and
employees of the Company shall be compensated as determined from time to time by
the Board of Directors.
4.8 In the event that the Board of Directors fail to resolve an issue
designated by a Party in writing as critical, such Party shall thereafter have
the right to provide a written notice of termination. The Company will continue
to operate the Joint Venture and Trade in due course for at least three (3)
years from the date of receipt by the other Party of such termination notice in
order to enable the Parties to develop other services individually or with
others.
ARTICLE 5
VESSELS
5.1 Initially, the Company will time charter from independent third parties
five (5) vessels to be used exclusively to maintain the common carrier services
in the Trade. Such vessels will be operationally suitable for service in the
Trade. The time charters will each be for periods not in excess of one (1) year,
unless the Parties otherwise agree. It is recognized by the Parties that, as a
start-up operation, the Company may require guaranties or other forms of
financial security established in favor of the vessel providers in order to
successfully obtain the above-referenced charters. It is agreed that in the
event such security is requested, each Party shall provide corporate guaranties
or other security in equal amounts up to one million five
-8-
hundred thousand dollars (U.S.$1,500,000). The Company shall remunerate each
Party by paying an annual fee equal to one and one-half percent (1.5%) of its
portion of the total amount of security outstanding.
5.2 As cargo volume in the Trade expands and the Company otherwise decides
to replace and/or vary the size and number of vessels in the service, such
replacement and/or additional tonnage shall be acquired pursuant to Board
approval, and according to the following alternatives:
(a) By the Company's acquisition of its own vessels.
(b) By chartering-in, at market rates, vessels owned or
controlled by a Party, provided such vessels are container vessels capable
of servicing the needs of the Trade.
(c) By chartering-in tonnage from third-party vessel providers only in
the event that neither Party is prepared to provide container vessels in
accordance with sub-paragraph (b) above.
5.3 (a) The Parties agree that, as a primary objective, the Company
shall seek to acquire its own vessels for service in the Trade. To that
end, the Company promptly shall conduct a review and study of its likely
tonnage requirements in future years and the possible benefits of
establishing a newbuilding program.
(b) At any time after commencement of service in the Trade, a Party may
submit a proposal for a newbuilding program to the Board of Directors of
the Company. Within thirty (30) days of receipt of such proposal, the Board
of Directors shall determine whether the Company (i) is interested in
pursuing the proposed newbuilding program and (ii) whether the Company is
capable of meeting the financial requirements of such program, and shall
provide written notice of its determination to the Parties. If the Board of
Directors does not affirmatively vote in favor of the newbuilding program,
the program shall not be pursued by the Company; however, it
-9-
is agreed that such vote shall not constitute a critical issue within the
meaning of Article 4.8 hereof. Rather, the Party proposing the newbuilding
program shall have rights as hereafter set forward in this Article.
(c) In the event that the Company is not interested in pursuing the
program, the Party which had submitted the proposal is thereafter entitled
to pursue such program on its own, and shall have the option to proceed as
follows:
(i) Such Party may provide written notice to the Board of
Directors of the Company of its intention to construct newbuilding(s)
which notice shall include the specific characteristics of the
vessel(s) to be built, the identity of the shipyard and the estimated
date of delivery of the new vessel(s).
(ii) Within thirty (30) days of receipt of such notice, the
Company shall advise the providing-Party whether it shall utilize any
or all of the capacity of the new vessel(s) Any commitment to acquire
capacity shall be for a minimum period of five (5) years from the date
of delivery of the new vessel(s), and shall be set forth on a year by
year basis (e.g. 1,500 TEU slots for year xxx, 0,000 TEU slots for year
two, the entire vessel for year three, etc.).
(iii) Acquisition of capacity on the new vessel(s) may be by
demise, time or space charter, or any other means mutually agreed;
provided, however, that the rates charged shall always be at prevailing
market rates as determined annually in advance. Determination of market
rates in the case of time and space charters shall be based upon the
full systems costs (i.e. charter hire, bunkers and port costs divided
by total vessel TEU capacity) for vessels with a capacity equivalent to
that which the Company requires and has agreed to acquire from the
providing-Party (e.g. in the event the Company requires two thousand
(2,000) TEU slots, and, in order to fulfill that requirement, a
providing-Party makes available two thousand (2,000) slots on a three
thousand
-10-
(3,000) TEU vessel, the rate that the Company shall pay for the slots
shall be based upon the fall systems costs of a two thousand (2,000)
TEU vessel).
(iv) Acquisition by the Company of capacity from a
providing-Party shall be consistent with Article 1.2 hereof.
Specifically, a providing-Party has the right to provide one-half of
the tonnage required by the Company, and the right to provide all of
the tonnage in the event the other Party chooses not to exercise its
right. Failure to exercise this right does not preclude a Party from
future exercise of the right, however, it can only do so consistent
with the Company's commitments to the first providing-Party and any
third-party vessel providers.
(v) Any capacity on the new vessel(s) which the Company declines
to acquire is available to be marketed by the providing-Party to other
carriers in the Trade or otherwise ("Excess Capacity"); provided,
however, that such Party shall not violate its obligations under
Article 17 hereof. The Parties agree that the providing-Party shall
provide notice to the Company of its intention to make Excess Capacity
available to a third-party. The notice shall set forth the net rate and
term to which such third-party has agreed. The Company shall have an
option to acquire such Excess Capacity at the same rate and for the
same term as agreed by the third-party; provided, however, such option
must be exercised in writing within seven (7) days of receipt by the
Company of the aforesaid notice.
ARTICLE 6
FISCAL MATTERS
6.1 The President of the Company shall be responsible for the submission to
the Parties of annual capital and operating budgets and an annual operating and
capital plan at
-11-
least thirty (30) days before the commencement of the Company's fiscal year as
determined by the Board of Directors.
6.2 The profits of the Company, determined by United States Generally
Accepted Accounting Principles, shall be distributed to the Parties quarterly,
but the Board of Directors may withhold from such distributions a reasonable
amount as determined by the Board for reinvestment in the Joint Venture and to
provide against contingencies. The Company shall be audited annually by such
internationally recognized accounting firm as the Parties may agree. In addition
to its other auditing functions, the auditor shall certify whether there has
been material compliance with the terms of this Agreement.
ARTICLE 7
START-UP EXPENSES
7.1 Each Party shall bear its own legal, accounting and other fees and
expenses related to initiating the Joint Venture. Whether or not the Agreement
shall be consummated, the Parties will share on a 50/50 basis the charges of the
Republic of Liberia in relation to the formation of the Company.
ARTICLE 8
RESTRICTIONS ON TRANSFER OF SHARES
8.1 Except as to affiliates and except in accordance with Article 15.6,
neither TRN nor NPR shall, directly or indirectly, sell, assign, transfer,
charge or otherwise encumber any part or all of their shares or voting interest
in the Company, without offering to the other Party and any of its affiliates
(i) a right of first refusal to acquire such shares at the price actually
offered by a bona fide offeror; and (ii) the right to put all of its share in
the Company to the bona fide offeror at that same price. Any attempted transfer
without such offers having been
-12-
made shall be void. Shares issued by the Company shall bear a legend that any
transfer thereof is subject to this provision.
ARTICLE 9
COVENANTS
9.1 Subject to the provisions of this Agreement, TRN and NPR hereby
covenant with each other as follows.
9.2 Each Party shall use its best efforts to further the purposes of the
Joint Venture and of the Trade.
9.3 Each Party shall take all actions that are necessary to cause the
formation of the Company as provided herein and such other actions as required
of such Party by the provisions of this Agreement.
9.4 The Parties shall cooperate with each other in preparing, filing and
taking any other actions necessary with respect to any application, request or
actions which are or may be necessary to obtain the consent of any government
or third party to the transactions contemplated by this Agreement or which are
or may be necessary or helpful in order to accomplish said transactions,
including required filings with the Federal Maritime Commission.
9.5 In recognition of the continuing problem of the unwitting carriage of
illicit narcotics ("Contraband") aboard commercial ocean-going vessels, the
Parties agree to exercise the highest degree of care and diligence to prevent or
detect the smuggling of Contraband on board the vessels, in cargo or equipment
carried on board the vessels.
-13-
ARTICLE 10
REPRESENTATIONS OF TRN
10.1 TRN is a corporation duly organized, validly existing, and in good
standing under the laws of Brazil, with the requisite power to enter into and
perform its obligations under this Agreement in accordance with its terms.
10.2 TRN has the full right, power, and authority to execute and deliver
this Agreement and to perform its terms. TRN has taken all required corporate
actions to approve and adopt this Agreement. This Agreement is a duly
authorized, valid and binding agreement of TRN enforceable against it in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
10.3 Neither the execution, delivery or performance by TRN of this
Agreement, nor compliance by TRN with the terms and provisions thereof will (i)
contravene any provision of any law, statute, rule or regulation or any order,
writ, injunction or decree of any court or governmental instrumentality
applicable to it, (ii) conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any lien upon any of the property or assets of TRN pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement, contract or instrument to which TRN is a party or by which it
or any of its property or assets is bound or to which it may be subject or
(iii) violate any provision of the Articles of Incorporation or By-Laws or
partnership agreements (or analogous organizational documents) or any amendments
thereto of TRN.
10.4 No authorizations, consents or approvals of or filings with any
governmental agencies or authorities are required in connection with the
execution, delivery and performance of this Agreement by TRN.
-14-
ARTICLE 11
REPRESENTATIONS OF NPR
11.1 NPR is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, with the requisite power to
enter into and perform its obligations under this Agreement in accordance with
its terms.
11.2 NPR has the full right, power and authority to execute and deliver
this Agreement and to perform its terms. NPR has taken all required corporate
actions to approve and adopt this Agreement. This Agreement is a duly
authorized, valid and binding agreement of NPR enforceable against it in
accordance with its terms, subject as to enforcement to bankruptcy, insolvency,
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
11.3 Neither the execution, delivery or performance by NPR of this
Agreement, nor compliance by NPR with the terms and provisions thereof will (i)
contravene any provision of any law, statute, rule or regulation or any order,
writ, injunction or decree of any court or governmental instrumentality
applicable to it, (ii) conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any lien upon any of the property or assets of NPR pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement, contract or instrument to which NPR is a party or by which it
or any of its property or assets is bound or to which it may be subject or (iii)
violate any provision of the Articles of Incorporation or By-Laws or partnership
agreements (or analogous organizational documents) or any amendments thereto of
NPR. The Parties recognize that NPR requires certain waivers from one or more
lenders in connection with execution of this Agreement. Obtaining such waivers
is not a condition to the validity or
-15-
enforceability of this Agreement. NPR warrants that it shall obtain such waivers
by April 1, 1998.
11.4 No authorizations, consents or approvals of or filings with any
governmental agencies or authorities are required in connection with the
execution, delivery and performance of this Agreement by NPR.
ARTICLE 12
CONDITIONS
12.1 The obligations of the Parties hereunder are subject to the
fulfillment or waiver of the following conditions.
12.2 Each of the representations set forth herein shall have been true and
correct in all material respects as of the date when made, and shall be deemed
to be made again on and as of the date any obligations are required to be
performed and shall be true and correct in all material respects on such date;
and the Parties each shall have performed and complied in all material respects
with all covenants and agreements required by this Agreement to be performed or
complied with by it.
12.3 Neither of the Parties (a) shall be subject to any restraining order
or injunction restraining or prohibiting any of the transactions contemplated
hereby or (b) shall have received written notice from any governmental authority
of its intention to institute any action or proceeding to restrain or enjoin or
nullify this Agreement or the transactions contemplated hereby.
12.4 All approvals, orders and consents under any federal, state, local or
foreign statute, ordinance, law or regulation necessary to consummate the
transactions contemplated hereby shall have been obtained and be in full force
and effect.
-16-
ARTICLE 13
ADDITIONAL COVENANTS
13.1 The Parties shall use any and all information relating to the Joint
Venture or the Trade otherwise not available to the general public
("Confidential Information") only for purposes of the Joint Venture formed
hereby and (i) shall, and shall cause its and their respective officers,
directors, employees, attorneys, accountants and Agents (collectively, "Agents")
to keep secret and retain in strictest confidence any and all Confidential
Information, and shall not disclose such Confidential Information; and (ii)
shall cause its Agents not to disclose such Confidential Information to any
other person, firm or entity, except for such disclosures as may be required by
law or legal process. Any press release (excluding routine discussions with the
press) concerning the formation or operation of the Joint Venture must be
approved by each of the Parties prior to release.
ARTICLE 14
TERMINATION
14.1 This Agreement may be terminated under the following circumstances:
(a) by the mutual written agreement of the Parties; or
(b) in accordance with the provisions of Article 4.8 hereof, or
(c) by a Party not in default upon the failure by the other Party
hereto to perform any material obligation required to be performed by such Party
pursuant to the terms of this Agreement, which failure shall continue for a
period of 30 days following written notice of such failure from the Party
seeking to terminate this Agreement, or
(d) by TRN or NPR if any court of competent jurisdiction or other
governmental body shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
Company from acting as
-17-
contemplated herein and such order, decree, ruling or other action shall have
become final and non-appealable; or
(e) by TRN in the event of (i) the filing by NPR of a voluntary
petition or answer seeking reorganization, arrangement, liquidation, appointment
of a receiver or custodian, or any other relief under the relevant bankruptcy
laws or under any other act or law pertaining to insolvency or debtor relief; or
(ii) the filing of an involuntary petition against NPR or NPR seeking
reorganization, arrangement, liquidation, appointment of a receiver or
custodian, or any other relief under relevant bankruptcy laws or any other act
or law pertaining to insolvency or debtor relief, and either the continuance of
any of the foregoing for 60 days undismissed, unbonded or undischarged, or
within such 60-day period, the entry of an order for relief under relevant
bankruptcy laws or any other act or law pertaining to insolvency or debtor
relief, or
(f) by NPR in the event of: (i) the filing by TRN of a voluntary
petition or answer seeking reorganization, arrangement, liquidation, appointment
of a receiver or custodian, or any other relief under the relevant bankruptcy
laws, or under any other act or law pertaining to insolvency or debtor relief,
or (ii) the filing of an involuntary petition against TRN seeking
reorganization, arrangement, liquidation, appointment of a receiver or
custodian, or any other relief under the relevant bankruptcy laws or any other
act or law pertaining to insolvency or debtor relief, and either the continuance
of any of the foregoing for 60 days undismissed, unbonded or undischarged, or
within such 60-day period, the entry of an order relief under the relevant
bankruptcy laws or any other act or law pertaining to insolvency or debtor
relief.
14.2 Upon the termination of this Agreement, the Company shall be
liquidated and all assets of the Company and of the Joint Venture, determined by
independent audit, shall be distributed proportionally to TRN and NPR.
-18-
ARTICLE 15
GENERAL PROVISIONS
15.1 This Agreement is set forth in the English language, which text
shall be official. This Agreement shall be signed and delivered by the Parties
in one or more copies of the official text. Each such copy signed and delivered
by the Parties shall be in an official original having equal force and effect
with each other such copy duly signed and delivered by the Parties.
15.2 Any dispute arising out of or in connection with this Agreement
shall be settled by arbitration in accordance with the rules of the New York
Society of Maritime Arbitrators, Inc. Such arbitration shall be entrusted to a
panel of three (3) arbitrators, one of whom shall be appointed by TRN, another
by NPR, and the third shall be appointed by the arbitrators nominated by the
Parties. The arbitrators shall state the reasons for their award. They shall
determine the costs of the proceedings and their allocation between the Parties.
The arbitrators shall make an award of attorneys' fees.
15.3 This Agreement will be governed by and construed in accordance
with the laws of the State of New York (without giving effect to conflict of law
principles thereof). The Parties agree to submit to the jurisdiction and venue
of the United States District Court for the Southern District of New York for
matters relating to compelling arbitration and confirming or vacating
arbitration awards issued pursuant to Article 15.2 hereof.
15.4 Neither Party shall be liable for special, consequential or
punitive damages, including, but not limited to, loss of profit or business
opportunity, provided such damages were not caused by intentional or willful
breach and/or misconduct of a Party.
15.5 This Agreement may only be amended in whole or in part by an
agreement in writing duly signed and delivered by both TRN and NPR. This
Agreement constitutes the entire Agreement between the Parties and shall
supersede all prior agreements and expressions of intention between the Parties.
On and after the effective date of this Agreement, neither Party
-19-
shall be bound by any preliminary correspondence or expression of intention or
by anything not in a writing signed by the Party to be bound thereby.
15.6 Except as provided in Article 21, this Agreement may not be
assigned by either Party, whether voluntarily, involuntarily or by operation or
law without the prior written consent of the other Party given as an amendment
of this Agreement. A sale of all or a majority of the shares of NPR shall not
constitute a violation of this provision, provided that, in connection with such
sale, the provisions of Article 15.9 shall govern.
15.7 The Parties intend that the Company's business will be conducted
so as not to subject the profits of the Joint Venture to taxation in the United
States. Each Party shall be solely responsible for, and shall indemnify the
Company from and against, any taxes (and any related interest, penalties and
additions to tax) imposed upon a Party in connection with any dividends or other
distributions paid to it by the Company.
15.8 All notices, requests, demands and other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing (which shall include notice by telecopy or like transmission) and
shall be deemed given (i) on the day it is delivered when delivered personally
against receipt (or if that day is a Saturday or a Sunday or is not a day on
which commercial banks are open for business in the city specified in the
address for notice provided by the recipient (a "Local Business Day"), or if
delivered after the close of business on a Local Business Day, on the first
following day that is a Local Business Day), (ii) on the day it is received when
sent by internationally recognized air courier, or (iii) on the day when
transmittal confirmation is received if sent by telecopy (or if that day is not
a Local Business Day, or if after the close of business on a Local Business
Day, on the first following day that is a Local Business Day), to the recipient
Party at the address indicated for such Party below (or to such other address as
the recipient Party may have specified by notice given to the other Party hereto
pursuant to this provision):
-20-
If to the Company: Care of:
Xx. Xxxxxxxxx Xxxxxxxx
000 Xxxxxx 000/000 Xxxxxxx
Xxx xx Xxxxxxx, XX Xxxxxx
00.00.000.0000
00.00.000.0000 (fax)
Attn: Executive Vice President
If to TRN: Av, Almirante Barrosso and Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle
139 Grupos 201/201 Xxxxxxx 000 Xxxx Xxxxxx
Xxx xx Xxxxxxx, XX Xxxxxx Xxx Xxxx, XX 00000
00.00.000.0000 212.696.6161
00.00.000.0000 (fax) 000.000.0000 (fax)
Attn: Executive Vice President
If to NPR: X.X. Xxx 0000 and White & Case
000 Xxxxxxxx Xxxxxx 0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx, XX 00000 Xxx Xxxx, XX 00000
908.225.2121 212.819.8200
Attn: President 000.000.0000 (fax)
15.9 It is agreed that if, in connection with any sale of all or a
majority of the shares of NPR on or prior to the 12 month anniversary of the
date hereof, Xxxxxx Xxxxxx and Xxxxxx X'Xxxxxxx do not enter into employment
arrangements with the buyer of such shares pursuant to which each of such
persons' employment arrangements are at least as favorable to such persons as
such persons' current arrangements with NPR with respect to term, incentive
compensation and level of management responsibilities then TRN may object to
such new employment arrangements within ten (10) days of the closing of the
acquisition of such shares. NPR shall be obligated to notify TRN in writing
prior to the closing of the current terms of Xx. Xxxxxx' and Xx. X'Xxxxxxx'x
employment as well as the arrangements between the buyer and Xx. Xxxxxx and Xx.
X'Xxxxxxx. In the event that TRN objects to such new arrangements, the Company
shall continue to operate the Joint Venture and Trade for at least thirty (30)
days following the buyer's acquisition of such shares. In the event that after
such 30-day period, TRN determines, in its discretion, that Xx. Xxxxxx or Xx.
X'Xxxxxxx do not have employment arrangements with the buyer at least as
favorable with respect to term incentive compensation
-21-
and level of management responsibilities as their prior arrangements with NPR,
then TRN shall have six (6) months to find a new joint venture partner with whom
to operate the Joint Venture and Trade or to decide whether to operate in the
Trade on its own. In either case, TRN shall have the right to purchase all of
NPR's interest in the Joint Venture at a purchase price equal to NPR's aggregate
investment plus interest on such investment at a rate of fifteen percent (15%)
compounded annually. All other amounts owed to NPR by the Company shall be
repaid at the time of such purchase. For purposes of this article, "aggregate
investment" shall mean the original price paid by NPR for its shares in the
Company, plus any outstanding loans made by NPR to the Company.
ARTICLE 16
SUBSIDIARIES AND AFFILIATES
16.1 Whenever in this Agreement, TRN or NPR is used, the terms shall
include the affiliates and subsidiaries of both. For the purposes of this
Agreement, neither BT Capital Partners, Inc. nor any of its affiliates
(excluding NPR and any entity in which NPR has a direct or indirect ownership
interest or any entity which is under its direct or indirect common control)
shall be considered an affiliate of NPR.
16.2 For the purposes of this Agreement, the, term "Affiliate" shall
mean an entity that is directly or indirectly controlling or controlled by or
under direct or indirect common control of such Party.
-22-
ARTICLE 17
NON-COMPETITION
17.1 Each of the Parties shall covenant and agree that during the term
of the Agreement, other than as contemplated in the Agreement or with the prior
consent of the other Party, they shall not directly or indirectly:
(a) at any time wholly own, have a material ownership interest in,
manage, operate, join or control, or participate in, alone or with any other
person, the ownership, management, operation or control of any business, firm,
corporation or other entity which engages in any common carrier liner service
which directly competes with the Trade. For purposes of this provision,
"material ownership" shall mean ownership, directly or indirectly, of more than
one (1) percent of the total equity of a publicly traded company (including
voting and non-voting participation) and any interest in a privately held
company;
(b) disclose any nonpublic information with respect to the Company,
except as required by law or legal process;
(c) solicit any customer (actual or potential) of the Company to
conduct its business with a competing business or otherwise interfere with such
customer relationship; and
(d) solicit any employee of the Company to work directly or indirectly
in direct competition with the Trade.
ARTICLE 18
FORCE MAJEURE
18.1 Neither Party shall be deemed responsible with respect to its
failure to perform any term (except the payment of amounts due) or condition of
this Agreement if such failure, wholly or partly, is due to an event of Force
Majeure, such as, but not limited to, war (whether declared or not), civil
commotion, invasion, rebellion, sabotage, hostilities, strikes, labor disputes,
other work stoppages, governmental (national, state, prefectural, municipal or
other),
-23-
regulations or controls taken or issued in sovereign capacity, or actions of
God. Any Party claiming an event of Force Majeure shall exercise all reasonable
endeavors to remedy the consequences of such event. Upon termination of such
Force Majeure event causing a Party's failure to perform its obligations under
this Agreement, such Party shall as soon as possible resume its performance of
its obligations according to the terms and conditions of this Agreement. When an
event of Force Majeure is of such a nature that (i) the objectives of this
Agreement are substantially impaired, and (ii) the affected Party's performance
is substantially impaired for more than 180 consecutive days, the Party whose
performance has not been impaired shall have the right to issue a Notice of
Termination.
ARTICLE 19
NO WAIVER
19.1 Except as specifically provided in this Agreement, no failure or
delay on the part of either Party in exercising any right, power or remedy
hereunder and no course of dealing between the Parties shall operate as a waiver
by either party of any such right, power or remedy; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
Except to the extent otherwise expressly provided in this Agreement, all
rights, powers and remedies provided hereunder are cumulative and not exclusive
of any rights, powers or remedies provided by law or otherwise. Except as
required by this Agreement, no notice or demand upon either Party in any case
shall entitle such Party to any other or future notice or demand in similar or
other circumstances or constitute a waiver of the right of either Party to take
any other or further action in any such circumstances without notice or demand.
-24-
ARTICLE 20
SEVERABILITY OF PROVISIONS
20.1 The invalidity, illegality or unenforceability of any one or more
of the provisions of this Agreement shall in no way affect or impair the
validity and enforceability of the remaining provisions thereof.
ARTICLE 21
ASSIGNMENT AND GUARANTEES
21.1 The Parties agree that each may assign, at any time after the
date hereof, its rights and obligations under this Agreement to a designated
company which shall be a wholly-owned subsidiary of the respective Party. In
addition, the Parties agree that NPR may obligate TRN to assign its rights and
obligations under this Agreement to a designated company, the direct and
indirect shareholders of which are all (a) non-U.S. citizens and (b)
shareholders of TRN, or subsidiaries or affiliates of TRN shareholders.
21.2 In consideration of this Agreement, NPR Holding Corporation
hereby unconditionally and irrevocably guarantees, as primary obligor, in the
event of default by its designated company ("NPR's Designee") hereunder, to
discharge, on demand, all obligations and liabilities of NPR's Designee pursuant
to this Agreement and to indemnify the Company and TRN against all losses,
damages, costs and expenses that may be incurred by the Company by reason of any
default on the part of NPR's Designee in performing and observing the agreements
and provisions on NPR's part contained herein.
21.3 In consideration of this Agreement, TRN hereby unconditionally
and irrevocably guarantees, as primary obligor, in the event of default by its
designee ("TRN's Designee") hereunder, to discharge, on demand, all obligations
and liabilities of TRN's Designee pursuant to this Agreement and to indemnify
the Company and NPR against all losses, damages, costs
-25-
and expenses that may be incurred by the Company by reason of any default on the
part of TRN's Designee in performing and observing the agreements and
provisions on TRN's part contained herein.
IN WITNESS WHEREOF, this Agreement has been signed on behalf of
Transroll Navegacao S.A. and on behalf of NPR Holding Corporation by their duly
authorized representatives as of the date first above written.
TRANSROLL NAVEGACAO S.A.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Title: Vice President
NPR HOLDING CORPORATION
By: /s/ Xxxxxx X. X'Xxxxxxx
-------------------------------------
Title: Exec VP
-26-