EXHIBIT 2.2
STOCK PURCHASE AGREEMENT dated as of May 1, 2002,
between BEVERAGE ASSOCIATES (BAC) CORP., a British Virgin
Islands corporation ("BAC" or "Seller") and COMPANHIA DE
BEBIDAS DAS AMERICAS - AMBEV, a Brazilian corporation
("AmBev" or "Purchaser").
WHEREAS Purchaser desires to purchase from Seller, and Seller
desires to sell to Purchaser, 230,920,000 issued and outstanding Class A
shares (the "Initial Shares") of Quilmes Industrial (Quinsa) Societe Anonyme,
a Luxembourg corporation ("Quinsa" or the "Company");
WHEREAS Seller and Purchaser desire to provide for the future
exchange of the remaining 373,520,000 Class A shares of the Company owned by
Seller or its affiliates as of the Initial Closing Date (the "Remaining
Shares" and, collectively with the Initial Shares, the "Shares"), upon the
terms and subject to the conditions set forth herein; and
WHEREAS certain terms used in this Agreement are defined in Section
8.06(b) or Schedule 1.04 and all other capitalized terms used herein and not
otherwise defined have the meanings assigned to them in the Share Exchange
Agreement dated as of the date hereof between AmBev and Quinsa (the "Share
Exchange Agreement").
Accordingly, the parties hereby agree as follows:
ARTICLE I
Purchase and Sale of
Initial Shares; the Exchange; Closings
SECTION 1.01. Purchase and Sale of the Initial Shares. On the terms
and subject to the conditions of this Agreement, at the Initial Closing (as
defined in Section 1.02), Seller shall sell, transfer and deliver or cause to
be sold, transferred and delivered to Purchaser, and Purchaser shall purchase
from Seller, the Initial Shares for an aggregate purchase price of
U.S.$346,380,000 (the "Purchase Price"), payable as set forth below in
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Section 1.03. The purchase and sale of the Initial Shares is referred to in
this Agreement as the "Initial Share Purchase". Notwithstanding anything in
this Agreement to the contrary, Purchaser shall be entitled to withhold from
the Purchase Price otherwise payable pursuant to this Agreement to Seller such
amounts as are required to be withheld with respect to the making of such
payment under any applicable tax withholding requirements under any provision
of national, state, local or foreign tax law; provided that such amounts shall
be deemed to have been paid to Seller for purposes of this Agreement.
SECTION 1.02. Initial Closing Date. The closing of the Initial Share
Purchase (the "Initial Closing") shall take place at the offices of Cravath,
Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m. on
the second business day following the satisfaction (or, to the extent
permitted, the waiver by the parties entitled to the benefits thereof) of the
conditions set forth in Article VI, or at such other place, time and date as
shall be agreed between Seller and Purchaser. The date on which the Initial
Closing occurs is referred to in this Agreement as the "Initial Closing Date".
SECTION 1.03. Transactions to be Effected at the Initial Closing. At
the Initial Closing:
(a) Seller shall sell and transfer to Purchaser and shall deliver to
Purchaser (i) share transfer forms relating to the Initial Shares being sold
by it as required by Luxembourg law, (ii) evidence of the registration of
AmBev as holder of such Initial Shares in the share register of Quinsa or, as
the case may be, in any shareholder register or account of Quinsa held by a
professional depository of securities within the meaning of the Luxembourg law
of August 1, 2001 on transfer of securities and (iii) such other documents as
Purchaser or its counsel may reasonably request to demonstrate satisfaction of
the conditions and compliance with the covenants set forth in this Agreement.
(b) Purchaser shall deliver to Seller (i) payment, by wire transfer
to a bank account designated in writing by Seller (such designation to be made
at least two business days prior to the Initial Closing Date), in immediately
available funds in an amount equal to the
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Purchase Price and (ii) such other documents as Seller or its counsel may
reasonably request to demonstrate satisfaction of the conditions and
compliance with the covenants set forth in this Agreement.
SECTION 1.04. The Exchange. (a) Seller's Option to Effect the
Exchange. BAC shall have the option (the "Seller's Option"), exercisable on
any Seller Option Date, to effect the Exchange by Seller delivering written
notice to AmBev of BAC's desire to so effect the Exchange within the notice
period set forth in the definition of Seller Option Date. Such option is
exercisable in whole and not in part.
(b) AmBev Option to Effect the Exchange. AmBev shall have the option
(the "AmBev Option") exercisable on any AmBev Option Date, to effect the
Exchange by delivering written notice to Seller of AmBev's desire to so effect
the Exchange within the notice period set forth in the definition of AmBev
Option Date. Such option is exercisable in whole and not in part.
(c) Change of Control. Notwithstanding the foregoing, in the event
of a Change of Control of AmBev, (i) if such Change of Control occurs before
April 2005, BAC may accelerate the exercise of the Sellers Option so that the
Exchange will occur on the date of consummation of the Change of Control and
(ii) if such Change of Control occurs on or after April 2005, the Option Date
shall be deemed to occur automatically on the 30th day prior to the
consummation of the Change of Control, without delivery of any notice of
exercise by either BAC or Purchaser. Promptly after becoming aware of any
Change of Control or any circumstances that reasonably could be expected to
lead to a Change of Control, AmBev shall deliver to Seller a written notice of
such Change of Control or circumstances. Not later than 10 business days after
receiving such notice, BAC will deliver to AmBev a written notice specifying
whether or not the Sellers Option will be exercised, in the case of a Change
of Control occurring before April 2005, and if so, or if the Change of Control
is occurring on or after April 2005, specifying whether the First Stage
Applicable Multiple applicable to such Exchange will be (a) the First Stage
Formula Multiple or (b) 8.0; provided that if Sellers fail to specify the
First Stage Applicable Multiple, the First Stage Applicable Multiple
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will be 8.0. Notwithstanding the other provisions of this Section 1.04 and of
Schedule 1.04, in the event of the exercise of the Sellers Option upon a
Change of Control of AmBev occurring before April 2005 or in the event of a
Change of Control occurring on or after April 2005:
(i) the Option Date shall be the 30th day prior to consummation of
the Change of Control;
(ii) all of the transactions contemplated in Section 1.04(d) and (e)
shall take place simultaneously and both the First Stage Closing Date and
the Second Stage Closing Date will occur on the date of consummation of
the Change of Control;
(iii) the measurement period for determining each of AmBev's First
Stage EBITDA, Quinsa's First Stage EBITDA, AmBev's Second Stage EBITDA
and Quinsa's Second Stage EBITDA shall be the four full fiscal quarters
preceding the Option Date relating to the Change of Control;
(iv) the date as of which each of AmBev's First Stage Net Debt,
Quinsa's First Stage Net Debt, AmBev's Second Stage Net Debt and Quinsa's
Second Stage Net Debt are calculated shall be the last day of the most
recent fiscal quarter ended prior to the Option Date relating to the
Change of Control;
(v) the measurement period for each of AmBev's First Stage Preferred
ADR Price and AmBev's Second Stage Preferred ADR Price shall be the 90
days prior to the 30 days prior to the first public announcement of any
of the following: (w) the Change of Control, (x) the solicitation or
initiation by AmBev or its controlling shareholders of any plans or
proposals that led to the Change of Control, (y) the entry into an
agreement with respect to the Change of Control, or (z) the fact that
discussions or negotiations were taking place with respect to the Change
of Control; and
(vi) in any Exchange resulting from any Change of Control as to
which BAC exercises the acceleration right described in this Section
1.04(c) and any Exchange resulting from a Change of Control that
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occurs on or after April 2005 to which the provisions of this Section
1.04(c) apply, AmBev shall satisfy its obligations under this Section
1.04 and Schedule 1.04 (x) with respect to any class of AmBev shares that
will continue to be listed and traded on a securities exchange after
consummation of the Change of Control, by delivering to BAC the number of
AmBev shares of such class required to be delivered in the Exchange, and
(y) with respect to any class of AmBev shares that will not continue to
be listed and traded on a securities exchange after consummation of the
Change of Control, by delivering to BAC the type and amount of
securities, cash or other property that would have been received by BAC
had BAC been the holder of the number of AmBev shares of such class
required to be delivered in the Exchange at the time of consummation of
the Change of Control.
(d) Transactions to be Effected at the First Stage Closing Date. At
the First Stage Closing Date:
(i) BAC shall sell and transfer to AmBev and shall deliver to AmBev
(A) share transfer forms as required by Luxembourg law with respect to
75% of the BAC Exchange Shares, (B) evidence of the registration of AmBev
as holder of 75% of the BAC Exchange Shares in the share register of
Quinsa, or as the case may be, in any share register or account of Quinsa
held by a professional depository of securities within the meaning of the
Luxembourg law of August 1, 2001, on transfer of securities, and (C) such
other documents as AmBev or its counsel may reasonably request to
demonstrate satisfaction of the conditions and compliance with the
covenants set forth in this Agreement; and
(ii) AmBev shall issue and transfer to the entity described in
Section 5.08 the First Stage AmBev Shares and shall deliver to Seller (A)
any share transfer forms required by Brazilian law with respect to the
First Stage AmBev Shares, (B) evidence of the registration of the First
Stage AmBev Shares in the name of BAC or the entity described in Section
5.08 , as applicable, and (C) shall deliver such other documents as
Seller or its counsel may reasonably request to demonstrate satisfaction
of the conditions
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and compliance with the covenants set forth in this Agreement.
(e) Transactions to be Effected at the Second Stage Closing Date. At
the Second Stage Closing Date:
(i) BAC shall sell and transfer to AmBev and shall deliver to AmBev
(A) Share transfer forms as required by Luxembourg law, with respect to
all of the BAC Exchange Shares not delivered to AmBev on the First Stage
Closing Date, (B) evidence of the registration of AmBev as holder of such
BAC Exchange Shares in the share register of Quinsa, or as the case may
be, in any share register or account of Quinsa held by a professional
depository of securities within the meaning of the Luxembourg law of
August 1, 2001 on transfer of securities, and (C) such other documents as
AmBev or its counsel may reasonably request to demonstrate satisfaction
of the conditions and compliance with the covenants set forth in this
Agreement; and
(ii) AmBev shall sell and transfer to the entity described in
Section 5.08 the Second Stage AmBev Shares and shall deliver to Seller
(A) any share transfer forms required by Brazilian law with respect to
the Second Stage AmBev Shares, (B) evidence of the registration of the
Second Stage AmBev Shares in the name of BAC or the entity described in
Section 5.08, as applicable, and (C) such other documents as Seller or
its counsel may reasonably request to demonstrate satisfaction of the
conditions and compliance with the covenants set forth in this Agreement.
(f) At each of the First Stage Closing Date and Second Stage Closing
Date, AmBev and Seller will enter into an agreement, dated as of such date,
with respect to the Exchange to be effected on such date pursuant to which (i)
AmBev will provide representations to BAC relating to AmBev, the shares to be
exchanged by it and the Exchange, consistent with Sections 4.01, 4.02, 4.03,
4.04 and 4.09 and (ii) BAC will provide representations to AmBev relating to
the Company, the BAC Exchange Shares and the Exchange consistent with Sections
2.01, 2.02, 2.03, 2.04 and 2.05.
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(g) Notwithstanding the requirement that AmBev and Seller enter into
the agreements contemplated by Section 1.04(f) and make the representations
contemplated thereby, the obligations of the parties hereto to effect the
Exchange on the First Stage Closing Date and the Second Stage Closing Date
shall be subject only to satisfaction, as of such First Stage Closing Date or
Second Stage Closing Date, as the case may be, of the following conditions:
(i) The Initial Closing shall have occurred;
(ii) All Consents (including, without limitation, the authorizations
required pursuant to the Antitrust Laws) of, or declarations or filings
with, or expiration of waiting periods imposed by, any Governmental
Entity necessary for the consummation of the transactions to be effected
on such First Stage Closing Date or Second Stage Closing Date, as the
case may be, shall have been obtained or filed or shall have occurred;
(iii) No Applicable Law or injunction enacted, entered, promulgated,
enforced or issued by any Governmental Entity or other legal restraint or
prohibition preventing consummation of the transactions to be effected on
such First Stage Closing Date or Second Stage Closing Date, as the case
may be, shall be in effect;
(iv) The parties shall have performed or complied in all material
respects with all obligations and covenants required by Section 5.03;
(v) With respect to AmBev's obligations, (A) BAC shall have good and
marketable title to all of the Remaining Shares free and clear of any
Liens and, with respect to BAC's obligations, upon delivery thereof to
BAC on such First Stage Closing Date or such Second Stage Closing Date in
accordance with the provisions of this Agreement, the First Stage AmBev
Shares or the Second Stage AmBev Shares, as the case may be, will be duly
authorized, validly issued and free of preemptive rights and Seller will
obtain good and valid title thereto free and clear of any Liens and (B)
the shareholders of Purchaser shall have approved
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the issuance of the First Stage AmBev Shares or the Second Stage AmBev
Shares, as the case may be.
(h) Exchange Shares. The number and type of shares to be delivered
pursuant to Section 1.04(d) and (e) shall be determined pursuant to, and terms
used in this Section 1.04 and not otherwise defined herein are defined in,
Schedule 1.04.
(i) Quinsa Business Between First Stage Closing Date and Second
Stage Closing Date. Notwithstanding any other provision of this Agreement or
any other Operative Agreements to the contrary, during the period beginning on
the First Stage Closing Date and ending on the Second Stage Closing Date,
AmBev will cause the businesses of the Company and its subsidiaries to be
conducted in the usual, regular and ordinary course in substantially the same
manner as previously conducted. In addition (and without limiting the
generality of the foregoing), except as otherwise expressly agreed in writing
by BAC, during such period, AmBev shall not permit the Company or any of its
subsidiaries to do any of the following:
(i) incur or assume any liabilities, obligations or indebtedness for
borrowed money or guarantee any such liabilities, obligations or
indebtedness, other than in the ordinary course of business and
consistent with past practice;
(ii) pay, loan or advance any amount to, or sell, transfer or lease
any of its assets to, or enter into any agreement or arrangement with any
of AmBev's affiliates (other than the Company and its subsidiaries);
(iii) acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof (other than transactions among the
Company and its subsidiaries);
(iv) make or incur any capital expenditure, including the
acquisition of material assets (but excluding purchases of inventory in
the ordinary course of business) that materially exceed, in the
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aggregate, the amount thereof contemplated in the most recent annual
budget approved by the Company's board of directors; and
(v) sell, lease, license or otherwise dispose of any of its assets
that are material, individually or in the aggregate, to the Company and
its subsidiaries, except inventory and obsolete or excess equipment sold
in the ordinary course of business consistent with past practice.
(j) Adjustment Upon Changes in Capitalization, etc. In the event of
any change in AmBev's or Quinsa's share capital by reason of a share dividend,
split-up, subdivision or combination of shares or any recapitalization,
reclassification, reorganization, consolidation, merger or similar
transaction, or any similar change affecting AmBev's ADRs (evidencing American
Depositary Shares, the "AmBev ADRs") representing AmBev's common shares or
preferred shares (including a change in the number of shares underlying the
AmBev ADRs), the type and number of shares subject to the Exchange and the
formulas and components of the formulas in this Section 1.04 and in Schedule
1.04 shall be adjusted appropriately to reflect such change.
(k) Right to Receive AmBev ADRs. In connection with the Exchange,
BAC shall have the right to elect, at the time of delivery of notice of the
exercise by BAC of the Seller's Option, within 10 business days following
delivery of notice of the exercise by AmBev of the AmBev Option, or within 10
business days following the Option Date relating to a Change of Control, to
receive either the number of AmBev Shares to be issued to BAC in the Exchange
or AmBev ADRs (evidencing American Depositary Shares) representing such number
of AmBev Shares. In the absence of such election, Seller shall receive AmBev
ADRs.
(l) Adjustments for Corporate Transactions. In the event of material
acquisitions or other corporate transactions that would have a material effect
on the result of the application of the valuation formulas set forth in this
Section 1.04 and Schedule 1.04 on the Exchange, the parties will discuss in
good faith any necessary or appropriate adjustments.
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(m) Notwithstanding anything to the contrary in this Section 1.04,
if the Exchange occurs after a Change of Control of AmBev to which the
provisions of Section 1.04(c)(vi) did not apply, AmBev (or its successor)
shall satisfy its obligations under this Section 1.04 and Schedule 1.04 (x)
with respect to any class of AmBev shares that will continue to be listed and
traded on a securities exchange after consummation of the Exchange, by
delivering to BAC the number of AmBev shares of such class required to be
delivered in the Exchange, and (y) with respect to any class of AmBev shares
that will not continue to be listed and traded on a securities exchange after
consummation of the Exchange, by delivering to BAC the type and amount of
securities, cash or other property that would have been received by BAC had
BAC been the holder of the number of AmBev shares of such class required to be
delivered in the Exchange (determined as of the Option Date regardless of the
date on which the Change of Control occurs) at the time of consummation of the
Change of Control, together with interest on the cash portion of such
consideration from the date of the Change of Control to the date of the
consummation of the Exchange, at a rate per annum equal to one-month LIBOR
plus 3%.
ARTICLE II
Representations and Warranties
Relating to Seller and the Shares
Seller represents and warrants to Purchaser as follows:
SECTION 2.01. Organization, Standing and Power. BAC is duly
organized, validly existing and in good standing (to the extent recognized by
the laws of the jurisdiction in which it is organized) under the laws of the
jurisdiction in which it is organized and has full power (corporate or
otherwise) and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to own, lease or
otherwise hold its properties and assets, including the Shares, and to conduct
its businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in
the aggregate, have not had or would not
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reasonably be expected to have a material adverse effect (a) on the business,
assets, condition (financial or otherwise) or results of operations of BAC and
its subsidiaries, taken as a whole, (b) on the ability of BAC to perform its
obligations under this Agreement and the other Operative Agreements to which
is, or is specified to be, a party or (c) on the ability of BAC to consummate
the Initial Share Purchase, the Exchange and the other transactions
contemplated hereby and by the other Operative Agreements (collectively, the
"Transactions") to which is, or is specified to be a party, (a "Seller
Material Adverse Effect"). BAC and the entity described in Section 5.08
hereto, if any, have delivered, or will have delivered by Closing, to
Purchaser true and complete copies of its charter documents, articles of
incorporation, by-laws or other constituent documents, in each case as amended
through the date of delivery.
SECTION 2.02. Authority; Execution and Delivery; Enforceability. BAC
has full power and authority to execute this Agreement, the Shareholders
Agreement, the AmBev Shareholders Agreements, the Registration Rights
Agreement and the other agreements and instruments to be executed and
delivered in connection with or as contemplated by this Agreement, the Share
Exchange Agreement or such other agreements or instruments (the "Operative
Agreements") to which it is, or is specified to be, a party and to consummate
the Transactions, except as set forth in Schedule 2.02. The execution and
delivery by BAC of this Agreement and the other Operative Agreements to which
it is, or is specified to be, a party and the consummation by BAC of the
Transactions have been duly authorized by all necessary action (corporate or
otherwise), except as set forth in Schedule 2.02. BAC has duly executed and
delivered this Agreement and prior to the Initial Closing will have duly
executed and delivered each Operative Agreement specified to be delivered on
or before the Initial Closing to which it is, or is specified to be, a party,
and this Agreement constitutes, and each other Operative Agreement to which it
is, or is specified to be, a party will as of the Initial Closing constitute,
its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to the effects of applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and equitable
principles of general applicability.
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SECTION 2.03. No Conflicts; Consents; Liabilities. The execution and
delivery by BAC of this Agreement do not, the execution and delivery by BAC of
each Operative Agreement to which it is, or is specified to be, a party will
not, and the consummation of the Transactions and compliance by BAC with the
terms hereof and thereof will not contravene, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, require the consent of
any person under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under, or result in the creation of any
mortgages, liens, security or other interests, charges, easements, leases,
subleases, covenants, rights of way, options, claims, restrictions or
encumbrances of any kind (collectively, "Liens") upon any of the properties or
assets of BAC under, any provision of (a) the charter documents, by-laws or
other organizational documents of BAC, if applicable, (b) any contract, lease,
license, indenture, agreement, commitment or other legally binding arrangement
(a "Contract") to which BAC is a party or by which any of its properties or
assets are bound or (c) any judgment, order or decree ("Judgment") or statute,
law (including common law), ordinance, rule or regulation ("Applicable Law")
applicable to BAC or its properties or assets, other than, in the case of
clauses (b) and (c) above, any such items that, individually or in the
aggregate, have not had or would not reasonably be expected to have a Seller
Material Adverse Effect, except as set forth in Schedule 2.03. Except as set
forth in Schedule 2.03, no consent, approval, license, permit, order or
authorization ("Consent") of, or registration, declaration or filing with, any
national, state, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a "Governmental Entity"),
is required to be obtained or made by or with respect to BAC in connection
with the execution, delivery and performance of this Agreement or any other
Operative Agreement to which BAC is, or is specified to be, a party or the
consummation of the Transactions to be consummated by BAC, Quinsa or its
subsidiaries, other than (A) compliance with and filings under any applicable
antitrust laws (collectively, the "Antitrust Laws") or
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(B) compliance with and filings under the Securities Exchange Act of 1934 (the
"Exchange Act") and the securities laws of Luxembourg.
SECTION 2.04. The Shares. BAC, has good and valid title to the
Shares, free and clear of all Liens, other than any Lien contemplated by this
Agreement or the other Operative Agreements. Neither BAC nor any of its
affiliates (or any direct or indirect owner of any interest in BAC or any
affiliates of such owner) owns, directly or indirectly, any Outstanding Quinsa
Capital Stock (as defined in the Share Exchange Agreement) other than the
Shares and no more than 3,000,000 Class A Shares and 2,000,000 Class B Shares.
Assuming Purchaser has the requisite power and authority to be the lawful
owner of the Initial Shares, upon delivery to Purchaser at the Initial Closing
of (i) an executed counterpart of the share transfer forms relating to the
Initial Shares being sold by seller required by Luxembourg law, (ii) evidence
of the registration of AmBev as holder of the Initial Shares in the
shareholder register of Quinsa or, as the case may be, in any shareholder
register or account of Quinsa held by a professional depository of securities
within the meaning of the Luxembourg law of August 1, 2001 on transfer of
securities and (iii) upon BAC's receipt of the Purchase Price, good and valid
title to the Initial Shares will pass to Purchaser, free and clear of any
Liens, other than those arising from acts of Purchaser or its affiliates.
Other than pursuant to the Operative Agreements, such Initial Shares are not
subject to any voting trust agreement.
SECTION 2.05. Securities Act. The shares when acquired by BAC
pursuant to the Exchange will be acquired for investment only and not with a
view to any public distribution thereof, and BAC will not offer to sell or
otherwise dispose of such shares so acquired by it in violation of any of the
registration requirements of the Securities Act of 1933 (the "Securities
Act").
SECTION 2.06. Brokers or Finders. No agent, broker, investment
banker or other firm or person retained, directly or indirectly, by or on
behalf of BAC or their affiliates is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement, except Xxxxxxx Sachs & Co.,
80% of whose
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fees and expenses will be paid by BAC and the remaining 20% of which will be
paid by the Company as provided in the Share Exchange Agreement.
ARTICLE III
Representations and Warranties
Relating to the Company; BAC
BAC represents and warrants to Purchaser that: (i) each of the
representations and warranties of the Company set forth in Article III of the
Share Exchange Agreement is true and correct. Since the date of its formation
BAC has not engaged in any business or activity other than the ownership and
disposition of the shares of the Company and any activities reasonably
incidental thereto and has not created, incurred or permitted to exist any
debt or other monetary liability to third parties.
ARTICLE IV
Representations and Warranties of Purchaser
Purchaser represents and warrants to Seller as follows:
SECTION 4.01. Organization, Standing and Power. Purchaser is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full power (corporate or
otherwise) and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to own, lease or
otherwise hold its properties and assets and to conduct its business as
presently conducted, other than such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
aggregate, have not had or would not reasonably be expected to have a material
adverse effect (a) on the business, assets, condition (financial or otherwise)
or results of operations of Purchaser and its subsidiaries, taken as a whole,
(b) on the ability of Purchaser to perform its obligations under this
Agreement and the other Operative Agreements to which it is, or is specified
to be, a party or (c) on the ability of Purchaser
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to consummate the Transactions (a "Purchaser Material Adverse Effect").
Purchaser and its subsidiaries are each duly qualified and in good standing to
do business as a foreign corporation in each jurisdiction in which the conduct
or nature of its business or the ownership, leasing or holding of its
properties makes such qualification necessary, except such jurisdictions where
the failure to be so qualified or in good standing, individually or in the
aggregate, have not had or would not reasonably be expected to have a
Purchaser Material Adverse Effect.
SECTION 4.02. Capital Stock of Purchaser and its Subsidiaries. As of
the date hereof and as of the Initial Closing Date, the authorized capital
stock of Purchaser consists of 30,000,000,000 shares, without par value. As of
the date hereof, there are 16,073,048,830 common shares, without par value
("Common Shares"), and 23,668,349,614 preferred shares, without par value
("Preferred Shares") (and 337,148,482 Common Shares and 1,378,503,148
Preferred Shares held in treasury) issued and outstanding (the "Purchaser
Capital Stock"). Except for the Purchaser Capital Stock and as set forth on
Schedule 4.02, there are no shares of capital stock or other equity or voting
securities of Purchaser issued, reserved for issuance or outstanding. The
Purchaser Capital Stock and any other equity or voting securities of the
Purchaser are, and upon issuance of the First Stage AmBev Shares, and Second
Stage AmBev Shares (the "AmBev Exchange Shares"), the AmBev Exchange Shares
will be, duly authorized, validly issued, fully paid and nonassessable and
free of preemptive rights, with no personal liability attaching to ownership
thereof and will not be subject to or issued in violation of any purchase
option, call option, right of first refusal, preemptive right, subscription
right or any similar right under any provision of any national, state, local
or foreign law, the charter documents or by-laws of Purchaser or its
subsidiaries or any Contract to which Purchaser is a party or otherwise bound.
At the First Stage Closing Date and the Second Stage Closing Date, subject to
the compliance with the terms and conditions contained in this Agreement, BAC
will obtain good and valid title to the respective AmBev Exchange Shares free
and clear of any Liens. All the outstanding shares of capital stock of each
subsidiary of Purchaser have been duly authorized and validly issued and are
fully paid and nonassessable and free of preemptive rights, with no personal
liability
16
attaching to ownership thereof. There are not any bonds, debentures, notes or
other indebtedness of Purchaser having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which holders of Purchaser Capital Stock may vote ("Voting Purchaser Debt").
Except as set forth in Schedule 4.02, there are not any options, warrants,
rights, convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind (collectively, "Rights") to which
Purchaser or any of its subsidiaries is a party or by which any of them is
bound (a) obligating Purchaser or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock of or other equity interests in, or any security convertible or
exercisable for or exchangeable into any capital stock of or other equity
interest in, Purchaser or of any of its subsidiaries or any Voting Purchaser
Debt, (b) obligating Purchaser or any of its subsidiaries to issue, grant,
extend or enter into any such Rights or (c) that give any person the right to
receive any economic benefit or right similar to or derived from the economic
benefits and rights accruing to holders of Purchaser Capital Stock. As of the
date of this Agreement, there are not any outstanding contractual obligations
of Purchaser or any of its subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of Purchaser or any of its subsidiaries.
SECTION 4.03. Authority; Execution and Delivery; and Enforceability.
Purchaser has full power and authority to execute this Agreement and the
Operative Agreements to which it is, or is specified to be, a party and to
consummate the Transactions, except as set forth in Schedule 4.03. The
execution and delivery by Purchaser of this Agreement and the other Operative
Agreements to which it is, or is specified to be, a party and the consummation
by Purchaser of the Transactions have been duly authorized by all necessary
action (corporate or otherwise), except as set forth in Schedule 4.03.
Purchaser has duly executed and delivered this Agreement and prior to the
Initial Closing will have duly executed and delivered each Operative Agreement
specified to be delivered on or before the Initial Closing to which it is, or
is specified to be, a party, and this Agreement constitutes, and each such
17
Operative Agreement to which it is, or is specified to be, a party will as of
the Initial Closing Date constitute, its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to the effects of
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability.
SECTION 4.04. No Conflicts; Consents. The execution and delivery by
Purchaser of this Agreement do not, the execution and delivery by Purchaser of
each Operative Agreement to which it is, or is specified to be, a party will
not, and the consummation of the Transactions and compliance by Purchaser with
the terms hereof and thereof will not contravene, conflict with, or result in
any violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any Liens upon any of the properties or
assets of Purchaser or any of its subsidiaries under, any provision of (a) the
charter documents or by-laws of Purchaser or any of its subsidiaries, (b) any
Contract to which Purchaser or any of its subsidiaries is a party or by which
any of their respective properties or assets is bound or (c) any Judgment or
Applicable Law applicable to Purchaser or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (b) and
(c) above, any such items that, individually or in the aggregate, have not had
or would not reasonably be expected to have a Purchaser Material Adverse
Effect, except as set forth in Schedule 4.04. Except as set forth in Schedule
4.04, no Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect to
Purchaser or any of its subsidiaries in connection with (i) the execution,
delivery and performance of this Agreement or any other Operative Agreement or
the consummation of the Transactions, other than (A) compliance with and
filings under the Antitrust Laws, (B) compliance with and filings under the
Exchange Act and the securities laws of Brazil or (C) any required Brazilian
Central Bank registration.
18
SECTION 4.05. Private Offering. Assuming the representations of BAC
contained in Section 2.05 are true and correct, the sale, exchange and
delivery of the shares of Purchaser pursuant to the Exchange will be exempt
from the registration and prospectus delivery requirements of the Securities
Act.
SECTION 4.06. SEC Documents. (a) Purchaser has filed all reports,
schedules, forms, statements and other documents required to be filed by
Purchaser with the Securities and Exchange Commission ("SEC") since January 1,
2001 pursuant to Sections 13(a) and 15(d) of the Exchange Act (the "Purchaser
SEC Documents").
(b) As of its respective date, each Purchaser SEC Document complied
in all material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Purchaser SEC Document, and did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
SECTION 4.07. Absence of Certain Changes or Events. Except as
disclosed in the Purchaser SEC Documents filed and publicly available prior to
the date of this Agreement since December 31, 2001, Purchaser has conducted
its business only in the ordinary course consistent with past practice, and
during such period there has not been:
(a) any event, change, effect or development that, individually or
in the aggregate, have had or would reasonably be expected to have a
Purchaser Material Adverse Effect, other than events, changes, effects
and developments relating to the economy in general or to the Purchaser's
industry in general and not specifically relating to the Purchaser or any
of its subsidiaries;
(b) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to
any Purchaser Capital Stock or any repurchase for value by Purchaser of
any Purchaser Capital Stock or Rights; or
19
(c) any issuance, split, combination or reclassification of any
Purchaser Capital Stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in
substitution for shares of Purchaser Capital Stock;
(d) any change in accounting methods, principles or practices by
Purchaser or any of its subsidiaries materially affecting the
consolidated assets, liabilities or results of operations of Purchaser,
except insofar as may have been required by a change in GAAP.
SECTION 4.08. Financial Statements. Schedule 4.08 sets forth the
Purchaser's audited consolidated balance sheet, statement of operations and
statement of sources and uses of funds for the year ended December 31, 2001,
(the "Financial Statements"). The Financial Statements have been prepared in
conformity with Brazilian generally accepted accounting principles
consistently applied (except in each case as described in the notes thereto)
and on that basis fairly present, in all material respects the financial
position of Purchaser and its subsidiaries and the results of their operations
and their cash flows as of the dates and for the periods indicated thereof.
SECTION 4.09. Securities Act. The Shares to be acquired by Purchaser
pursuant to the Initial Share Purchase and the Exchange, when acquired, will
be acquired for investment only and not with a view to any public distribution
thereof, and Purchaser shall not offer to sell or otherwise dispose of such
Shares so acquired by it in violation of any of the registration requirements
of the Securities Act.
SECTION 4.10. Brokers or Finders. No agent, broker, investment
banker or other firm or person retained, directly or indirectly, by or on
behalf of Purchaser or its affiliates is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection with any
of the transactions contemplated by this Agreement, except Lazard Freres & Co.
LLC, 80% of whose fees and expenses will be paid by Purchaser and the
remainder of which will be paid by the Southern Companies as provided in the
Share Exchange Agreement.
20
SECTION 4.11. Financing. Purchaser has, or will have prior to the
Initial Closing, sufficient cash, available lines of credit or other sources
of immediately available funds to enable it to make payment of the Purchase
Price and any other amounts to be paid hereunder.
ARTICLE V
Covenants
SECTION 5.01. Covenants Relating to Conduct of Business. Seller
shall not, and shall not permit the Company or any of its subsidiaries, and
Purchaser shall not, and shall not permit any of its subsidiaries, to take any
action that would, or that could reasonably be expected to, result in any of
the conditions set forth in Article VI not being satisfied, except as may be
required in connection with or as a result of general economic conditions,
political or governmental or regulatory actions, changes or developments in
monetary policy (including currency devaluations), and inflation or regulatory
developments in Argentina, Brazil or any of the other jurisdictions in which
the Company, Purchaser or their respective subsidiaries conduct business.
SECTION 5.02. No Solicitation; Transfer Restrictions. (a) From the
date of this Agreement until the consummation of the purchase and sale of the
Initial Shares (the "Exclusivity Period"), Seller shall not, and shall not
permit its affiliates to, directly or indirectly, or authorize or permit any
officer, director or employee of it or its affiliates or any investment
banker, attorney, accountant or other representative (the "BAC
Representatives") of it or its affiliates to, (i) solicit, initiate or
encourage any other Quinsa bid, (ii) enter into any agreement with respect to
any other Quinsa bid, (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take
any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any other Quinsa
bid or (iv) disclose any intention or plan inconsistent with the foregoing;
provided that Seller may comply, to the extent required by the opinion of
their counsel, with any order of any court of competent jurisdiction, the
21
Luxembourg stock exchange or supervisory authority thereof, administrative
agency or commission or other governmental authority or instrumentality or as
expressly required by any applicable law or regulation adopted after the date
hereof. Notwithstanding the foregoing, during the Exclusivity Period, Seller
may, and may permit Quinsa and the BAC Representatives to discuss with
Heineken NV and its affiliates ("Heineken"), Heineken's rights under contracts
among Heineken, BAC and Quinsa that are in effect as of the date of this
Agreement and enter into discussions, negotiations and agreements relating to
the resolution of these rights; provided that Seller will not, and will not
permit Quinsa or the BAC Representatives to, enter into any agreement with
Heineken that is inconsistent with the transactions contemplated by this
Agreement or any of the other Operative Agreements. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth
in the preceding sentence by any BAC Representative, whether or not such
person is purporting to act on behalf of Seller or otherwise, shall be deemed
to be a breach of this agreement by Seller. Seller shall, and shall cause its
affiliates to, promptly advise AmBev orally and in writing of any other Quinsa
bid or any inquiry with respect to or which could lead to any other Quinsa bid
and the identity of the person making any such other Quinsa bid or inquiry.
The term "other Quinsa bid" shall mean any proposal for a merger or other
business combination, sale of securities, sale of substantial assets, joint
venture or similar transaction involving Quinsa or any of its subsidiaries.
(b) Except as provided in Sections 5.08 and 5.09, Seller shall not
sell, transfer, pledge, assign or otherwise dispose of (including by gift) or
permit any Lien to exist on (collectively, "Transfer"), or consent to or
permit any Transfer of, any of the Shares or any interest therein, or enter
into any Contract, option or other arrangement with respect to the Transfer
(including any profit sharing or other derivative arrangement) of any of the
Shares or any interest therein, to any person other than Purchaser or its
designee; provided that BAC and its affiliates may Transfer to any of its or
their affiliates or any Family Member (as defined in the Shareholders
Agreement) an interest in BAC or its affiliates so long as such Transfer does
not involve a direct Transfer of any Shares.
22
SECTION 5.03. Reasonable Best Efforts. (a) On the terms and subject
to the conditions of this Agreement and Section 5.03(b), each party shall use
its reasonable best efforts to cause the Initial Closing, the First Stage
Closing and the Second Stage Closing (each, a "Closing") to occur, including
taking all reasonable actions necessary to comply promptly with all legal
requirements that may be imposed on it or any of its affiliates with respect
to each Closing.
(b) Seller and Purchaser shall, and Seller shall cause the Company
to, as promptly as practicable, but in no event later than five business days
following the execution and delivery of this Agreement and the Option Date, if
necessary, make the necessary filings and submissions with the applicable
antitrust authorities under the Antitrust Laws (the "Antitrust Authorities")
required for the Transactions and any supplemental information requested in
connection therewith pursuant to the Antitrust Laws. Any such filings and
submissions and supplemental information shall be in substantial compliance
with the requirements of the Antitrust Laws. BAC and Purchaser shall furnish
to the other, and BAC shall cause the Company to furnish to Purchaser, such
information and reasonable assistance as the other may request in connection
with its preparation of any filing or submission that is necessary under the
Antitrust Laws. Seller and Purchaser (i) shall keep each other apprised of the
status of any communications with, and any inquiries or requests for
additional information from, the Antitrust Authorities, (ii) shall comply
promptly with any such inquiry or request and (iii) shall promptly provide any
supplemental information requested in connection with the filings made
hereunder pursuant to the Antitrust Laws. Any such supplemental information
shall be in substantial compliance with the requirements of the Antitrust
Laws. BAC and Purchaser shall use their reasonable best efforts to obtain any
clearance required under the Antitrust Laws for the consummation of each
Closing; provided that neither BAC nor Purchaser shall be obligated to comply
with any conditions to approval required by the Antitrust Authorities pursuant
to the Antitrust Laws that would be burdensome or unduly expensive within the
meaning of Section 7.01(a)(v).
(c) Each party shall, and shall cause its affiliates to, use its
reasonable best efforts (at its own
23
expense) to obtain as soon as practicable, and to cooperate in obtaining as
soon as practicable, all consents from third parties and Governmental Entities
necessary or appropriate to permit the consummation of each Closing.
SECTION 5.04. Expenses; Transfer Taxes. (a) Subject to Sections 2.06
and 4.10 of this Agreement, whether or not the Initial Closing takes place,
and except as set forth in the next sentence, in paragraph (b) below or in
Article VIII, all costs and expenses incurred in connection with this
Agreement and the Operative Agreements and the Transactions, including all
costs and expenses incurred pursuant to Section 5.03, shall be paid by the
party incurring such expense. Notwithstanding the foregoing, it is expressly
understood and agreed that (i) the Company will pay 20% (which the parties
agree are expenses attributable to the Share Exchange Agreement) and BAC shall
pay the remainder of the fees and expenses of Xxxxx Xxxx & Wardwell, Elvinger,
Hoss & Prussen and Xxxxxxx Xxxx and that BAC shall pay any other fees and
expenses incurred in connection with the Transactions and (ii) the Southern
Companies shall pay 20% and AmBev shall pay the remainder of the fees and
expenses of Cravath, Swaine & Xxxxx, Xxxxxxx Mussnich & Aragao and Bonn
Xxxxxxx Xxxxxxxx.
(b) All taxes and fees applicable to the transfers of the Shares
shall be paid by Seller and all transfer taxes and fees applicable to the
transfers of the BAC Exchange Shares shall be paid by AmBev. Each party shall
use reasonable efforts to avail itself of any available exemptions from any
such taxes or fees, and to cooperate with the other parties in providing any
information and documentation that may be necessary to obtain such exemptions.
SECTION 5.05. Publicity. From the date hereof through the Initial
Closing Date, no public release or announcement concerning the transactions
contemplated hereby shall be issued by any party or its affiliates without the
prior consent of the other party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by
applicable United States or foreign laws, rules or regulations or the rules of
any United States or foreign securities exchange or supervisory authority
thereof, in which case the party required to make the release or announcement
shall use all reasonable
24
efforts to allow the other party reasonable time to comment on such release or
announcement in advance of such issuance; provided, however, that each party
may make internal announcements to its respective employees that are
consistent with the parties' prior public disclosures regarding the
transactions contemplated hereby after reasonable prior notice to and
consultation with the other.
SECTION 5.06. Further Assurances. From time to time, as and when
requested by any party, each party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions (subject to Section
5.03), as such other party may reasonably deem necessary or desirable to
consummate the transactions contemplated by this Agreement.
SECTION 5.07. Share Exchange Agreement; Shareholders Agreements;
Registration Rights Agreement. BAC agrees to cause the Company to comply with
the terms of the Share Exchange Agreement. Each of AmBev and BAC agrees to
execute and deliver, and BAC agrees to cause the Company to execute and
deliver, on or prior to the Initial Closing Date, the Shareholders Agreement
and the Registration Rights Agreement. Each of AmBev and BAC agrees to execute
and deliver, and AmBev agrees to cause the AmBev Control Group (as defined in
the AmBev Shareholders Agreement) to execute and deliver, on or prior to the
Initial Closing Date, an AmBev Governance Agreement, governed by the laws of
Brazil (the "AmBev Governance Agreement") containing the provisions set forth
in Articles III and IV of the form of AmBev shareholders agreement attached as
Exhibit A hereto (the "Model AmBev Shareholders Agreement") and an AmBev Share
Transfer Agreement, governed by the laws of the State of New York (the "AmBev
Share Transfer Agreement" and, together with the AmBev Governance Agreement,
the "AmBev Shareholders Agreements") containing the remaining provisions set
forth in the Model AmBev Shareholders Agreement; provided that each of the
AmBev Shareholders Agreements shall provide that it becomes effective only
upon the consummation of the First Stage Exchange.
SECTION 5.08. Transfer of Remaining Shares. Seller shall have the
right but not the obligation to Transfer all the Shares to a special purpose
entity, and cause the Company to register such entity as the holder of
25
the Shares in the shareholder register of the Company. After any Shares are
Transferred to it, any such special purpose entity, (a) will not engage in any
business or activity other than the ownership and disposition of the Shares in
accordance with this Agreement and the other Operative Agreements and any
activities reasonably incidental thereto; (b) will not create, incur or permit
to exist any debt or other monetary liability to third parties or any Lien
upon any of the Shares except for Liens for the benefit of Purchaser; (c) will
not liquidate or dissolve, or merge into or consolidate with, or sell or
otherwise transfer any of its assets to, any other person. Prior to the
Initial Closing, any such entity shall become party to this Agreement and BAC
or any such entity shall enter into appropriate custody, escrow or pledge
agreements for the benefit of Purchaser, with terms and conditions reasonably
satisfactory to Purchaser, to assure delivery of the BAC Exchange Shares to
Purchaser free and clear of all Liens and as otherwise required by Sections
1.04(d)(i) and 1.04(e)(i).
SECTION 5.09. Deposit of Class A Shares in Trust. Prior to the
Initial Closing Date, 60,000,000 Class A Shares of the Company shall be
irrevocably deposited in trust by BAC with a trustee and under a trust
agreement reasonably acceptable to Purchaser and BAC and Purchaser shall
receive evidence of the registration of such shares in the name of the trustee
in the share register of the Company. The trust agreement will provide that
the trustee will vote such shares only in accordance with instructions of both
Purchaser and BAC and providing for the release of Class A Shares from the
trust agreement on a periodic basis as necessary to maintain equivalence
between the total number of voting Quinsa shares held by BAC outside of the
trust agreement and the total number of voting Quinsa shares held by AmBev.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation. The obligation
of Purchaser to purchase and pay for the Initial Shares and the obligation of
Seller to sell the Initial Shares to Purchaser is subject to the
26
satisfaction or waiver on or prior to the Initial Closing Date of the
following conditions:
(a) Governmental Approvals. All Consents (including, without
limitation, the authorizations required pursuant to the Antitrust Laws) of, or
declarations or filings with, or expirations of waiting periods imposed by,
any Governmental Entity necessary for the consummation of the Transactions
shall have been obtained or filed or shall have occurred.
(b) No Injunctions or Restraints. No Applicable Law or injunction
enacted, entered, promulgated, enforced or issued by any Governmental Entity
or other legal restraint or prohibition preventing the consummation of the
Transactions shall be in effect.
SECTION 6.02. Conditions to Obligation of Purchaser. The obligation
of Purchaser to purchase and pay for the Initial Shares is subject to the
satisfaction of (or waiver by Purchaser), on or prior to the Initial Closing
Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of BAC in this Agreement and the other Operative Agreements to
which it is a party shall be true and correct in all respects (as if they were
not qualified as to materiality) as of the Initial Closing Date as though made
on the Initial Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all respects on
and as of such earlier date), with only such exceptions as would not be
reasonably expected to have, individually or in the aggregate, a Seller
Material Adverse Effect or a Quinsa Material Adverse Effect, as the case may
be. Purchaser shall have received a certificate signed by an authorized
officer of Seller to such effect.
(b) Performance of Obligations of Seller. Seller and the Company
shall have performed or complied in all material respects with all obligations
and covenants required by this Agreement and the Operative Agreements to which
it is a party to be performed or complied with by it on or prior to Initial
Closing Date, and Purchaser shall
27
have received a certificate signed by an authorized officer of Seller to such
effect.
(c) Opinion of Counsel. Purchaser shall have received opinions dated
the Initial Closing Date of (i) Xxxx Xxxxx Xxxxxxx Xxxxxxx & Xxxxxxxx, United
States counsel to Seller, substantially in the form of Exhibit B, (ii)
Elvinger, Hoss & Prussen, Luxembourg counsel to BAC and the Company,
substantially in the form of Exhibit C, (iii) Marval, X'Xxxxxxx & Mairal,
Argentine counsel to Seller, substantially in the form of Exhibit D and (iv)
Xxxxxx Westwood & Riegels, British Virgin Islands counsel to BAC and the
entity described in Section 5.08, substantially in the form of Exhibit E.
(d) Other Documents. BAC shall have furnished to Purchaser such
other documents relating to corporate existence and authority and such other
matters as Purchaser or its counsel may reasonably request.
(e) Directors. On the Initial Closing Date, BAC shall have taken the
actions necessary to cause Purchaser's nominees to be elected to the Board of
Directors of the Company and its subsidiaries in accordance with the
Shareholders Agreement, effective upon the consummation of the Initial
Closing.
(f) Shareholders Agreement. BAC shall have executed and delivered on
or prior to the Initial Closing Date a Shareholders Agreement, substantially
in the form attached as Exhibit F hereto (the "Shareholders Agreement").
(g) AmBev Shareholders Agreements. BAC shall have executed and
delivered on or prior to the Initial Closing Date the AmBev Shareholders
Agreements.
(h) Share Exchange Agreement; Consummation. The transactions
required to be consummated by the Share Exchange Agreement on the Closing (as
such term is defined therein) shall have been consummated or shall be
consummated simultaneously with the Initial Closing.
(i) Registration Rights Agreement. BAC shall have executed and
delivered on or prior to the First Stage Closing a Registration Rights
Agreement, substantially in
28
the form attached as Exhibit G hereto (the "Registration Rights Agreement").
SECTION 6.03. Conditions to Obligation of Seller. The obligation of
Seller to sell the Initial Shares is subject to the satisfaction (or waiver by
Seller) on or prior to the Initial Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Purchaser made in this Agreement and the Operative Agreements
shall be true and correct in all respects (as if they were not qualified as to
materiality), except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct in all respects, on and as of such
earlier date), with only such exceptions as would not reasonably be expected
to have, individually or in the aggregate, a Purchaser Material Adverse
Effect. Seller shall have received a certificate signed by an authorized
officer of Purchaser to such effect.
(b) Performance of Obligations of Purchaser. Purchaser shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement and the Operative Agreements to be
performed or complied with by Purchaser on or prior to the Initial Closing
Date, and Seller shall have received a certificate signed by an authorized
officer of Purchaser to such effect.
(c) Opinion of Purchaser's Counsel. Seller shall have received
opinions dated the Initial Closing Date of (i) Cravath, Swaine & Xxxxx, United
States counsel to Purchaser, substantially in the form of Exhibit H, and (ii)
Xxxxxxx, Mussnich and Aragao, Brazilian counsel to Purchaser, substantially in
the form of Exhibit I.
(d) Other Documents. Purchaser shall have furnished to Seller such
other documents relating to corporate existence and authority and such other
matters as Seller or its counsel may reasonably request.
29
(e) Shareholders Agreement. Purchaser shall have executed and
delivered on or prior to the Initial Closing Date the Shareholders Agreement.
(f) AmBev Shareholders Agreement. Purchaser shall have executed and
delivered on or prior to the Initial Closing Date the AmBev Shareholders
Agreements.
(g) Share Exchange Agreement; Consummation. The transactions
required to be consummated by the Share Exchange Agreement on the Closing (as
such term is defined therein) shall have been consummated or shall be
consummated simultaneously with the Initial Closing.
SECTION 6.04. Registration Rights Agreement. Purchaser shall have
executed and delivered on or prior to the First Stage Closing the Registration
Rights Agreement.
SECTION 6.05. Frustration of Closing Conditions. Neither Purchaser
nor Seller may rely on the failure of any condition set forth in this Article
VI to be satisfied if such failure was caused by such party's failure to act
in good faith or to use its reasonable best efforts to cause the Closing to
occur as required by Section 5.03.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. (a) Notwithstanding anything to the
contrary in this Agreement, this Agreement may be terminated and the
Transactions abandoned at any time prior to the Initial Closing:
(i) by mutual written consent of BAC and Purchaser;
(ii) by BAC if any of the conditions set forth in Sections 6.01 or
6.03 shall have become incapable of fulfillment, and shall not have been
waived by BAC;
(iii) by Purchaser if any of the conditions set forth in Sections
6.01 or 6.02 shall have become incapable of fulfillment, and shall not
have been waived by Purchaser;
30
(iv) by BAC or Purchaser, if the Initial Closing does not occur on
or prior to April 30, 2003; or
(v) by BAC or Purchaser if, in its reasonable opinion, compliance
with any conditions to approval required by the Antitrust Authorities
pursuant to the Antitrust Laws would be burdensome or unduly expensive;
provided, however, that prior to such termination BAC or Purchaser, as
the case may be, shall have used its reasonable best efforts to negotiate
an arrangement acceptable to it with the Antitrust Authorities for
satisfying such request or condition;
provided, however, that the party seeking termination pursuant to clause (ii),
(iii) or (iv) or (v) is not then in material breach of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
For purposes of Section 7.01(a)(v), a condition required by the Antitrust
Authorities shall be burdensome or unduly expensive only if (i) in the case of
BAC, such condition seeks (A) to prohibit or limit the ownership or operation
by Quinsa or any of its respective subsidiaries of any material portion of the
business or assets of Quinsa and its subsidiaries, taken as a whole (as if the
Transactions had been completed), or to compel Quinsa or any of its
subsidiaries to dispose of or hold separate any material portion of the
business or assets of Quinsa and its subsidiaries, taken as a whole (as if the
Transactions had been completed) or (B) to prohibit Quinsa or any of its
subsidiaries from effectively controlling in any material respect the business
or operations of Quinsa and its subsidiaries, taken as a whole (as if the
Transactions had been completed) and (ii) in the case of Purchaser, such
condition seeks (A) to prohibit or limit the ownership or operation by
Purchaser or any of its subsidiaries of a material portion of the business or
assets thereof, or to compel Purchaser and its subsidiaries to dispose of or
hold separate any material portion of the business or assets thereof, taken as
a whole (as if the Transactions had been completed), or (B) to impose
limitations on ability of Purchaser to acquire or hold, or exercise full
rights of ownership of, the Shares, including the right to vote the
31
Shares on all matters properly presented to the shareholders of Quinsa.
(b) In the event of termination by Seller or Purchaser pursuant to
this Section 7.01, written notice thereof shall forthwith be given to the
other and the Transactions shall be terminated, without further action by any
party. If the Transactions are terminated as provided herein:
(i) each party shall return all documents and other material
received from the other or the Company relating to the Transactions,
whether so obtained before or after the execution hereof; and
(ii) all confidential information received by Purchaser with respect
to the business of the Company and the Subsidiaries or by Seller or the
Company with respect to the business of Purchaser and its subsidiaries
shall be treated in accordance with the Confidentiality Agreements, which
shall remain in full force and effect for a period of one year from the
date of termination notwithstanding the termination of this Agreement.
SECTION 7.02. Effect of Termination. If this Agreement is terminated
and the Transactions are abandoned as described in Section 7.01, this
Agreement, except for the provisions of (a) Section 5.04 relating to certain
expenses, (b) Section 2.06 and 4.10 relating to finder's fees and broker's
fees, (c) Section 7.01 and this Section 7.02, (d) Section 5.05 relating to
publicity and (e) Article VIII. Nothing in this Section 7.02 shall be deemed
to release any party from any liability for any breach by such party of the
terms and provisions of this Agreement or to impair the right of any party to
compel specific performance by any other party of its obligations under this
Agreement.
SECTION 7.03. Liquidated Damages. Notwithstanding anything to the
contrary contained elsewhere in this Agreement or the other Operative
Agreements, if the First Stage Closing or the Second Stage Closing do not
occur solely because of the failure of the condition set forth in Section
1.04(g)(v)(B) to be satisfied (provided that such failure is not due to the
32
effect of any Applicable Law or injunction enacted, entered, promulgated,
enforced or issued by any Governmental Entity or other legal restraint or
prohibition preventing the satisfaction of such condition), then the Seller
shall be entitled to receive and retain from Purchaser (without payment of any
consideration by BAC), as liquidated damages representing Seller's sole and
exclusive remedy for all damage claims relating to this Agreement, the Initial
Shares. Upon delivery to Seller of the Initial Shares in satisfaction of such
liquidated damages, Purchaser shall have no further liability to Seller, in
contract, tort or otherwise, for claims relating to this Agreement.
SECTION 7.04. Amendments and Waivers. (a) This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. By an instrument in writing, Purchaser, on the one hand, or
BAC, on the other hand, may waive compliance by the other with any term or
provision of this Agreement that such other party was or is obligated to
comply with or perform.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or future exercise thereof or
the exercise of any other right, power or privilege.
ARTICLE VIII
General Provisions
SECTION 8.01. Survival. The representations and warranties in this
Agreement and in any certificate delivered pursuant hereto shall survive the
Initial Closing and shall terminate upon the first anniversary of the Initial
Closing Date; provided, however, that (i) the provisions of Sections 2.04 and
4.02 shall survive the Second Stage Closing without limit as to time, (ii) the
representations and warranties contemplated by Section 1.04(f) (other than
those in Sections 2.04 and 4.02) shall terminate on the first anniversary of
the Second Stage Closing Date and (iii) if either party gives notice to the
other of any action, suit or proceeding or any claim in
33
connection with the Transactions that is pending or threatened as of the
expiration of the one-year period after the Initial Closing Date or the Second
Stage Closing as the case may be, such representations and warranties shall
survive until the resolution of such action, suit, proceeding or claim.
SECTION 8.02. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by any party
(including by operation of law in connection with a merger or consolidation of
such party) without the prior written consent of the other party hereto.
Notwithstanding the foregoing, (a) Purchaser may assign its right to purchase
or acquire the Shares to an affiliate of Purchaser without the prior written
consent of any other party and (b) upon any Transfer permitted by Section
5.08, the special purpose entity described therein shall automatically and
without further action by or on behalf of any party hereto be deemed to have
been assigned (and to have assumed) all of the rights and obligations
hereunder of BAC, it being understood that Seller agrees to cause any such
special purpose entity to execute and deliver any documents reasonably
requested by Purchaser or its counsel to effect or evidence such assignment
(and the assumption, including, without limitation, in the case of such
special purpose entity, a counterpart of this Agreement); provided, however,
that no assignment shall limit or affect the assignor's obligations hereunder.
Any attempted assignment in violation of this Section shall be void.
SECTION 8.03. No Third-Party Beneficiaries. This Agreement is for
the sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.
SECTION 8.04. Attorney Fees. A party in breach of this Agreement
shall, on demand, indemnify and hold harmless the other party for and against
all reasonable out-of-pocket expenses, including legal fees, incurred by such
other party by reason of the enforcement and protection of its rights under
this Agreement. The payment of such expenses is in addition to any other
relief to which such other party may be entitled.
34
SECTION 8.05. Notices. All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be delivered
by hand or sent by fax or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or fax, or if mailed, three days after mailing (one business
day in the case of express mail or overnight courier service), as follows:
(a) if to Purchaser,
Companhia de Bebidas das Americas -- AmBev
Xxxxxxx Xxxxx Xxxxxx Xxxxxx, 000-Xxxxx F, 6(degree)
andar
05801-900 Sao Paulo
Brazil
Attention of Xxxxxx Xxxxx
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention of Xxxxx Xxxxxxx; and
(b) if to BAC,
Societe International de Finance
Lowenstrasse
Zurich, Xxxxxxxxxxx 00 XX-0000
Xxxxxxxxx of Giovanni Pasqualotti
With a copy to:
Xxxx Xxxxx Xxxxxxx Xxxxxxx & Xxxxxxxx
Xxxxx Castle
00 Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention of Xxxx Xxxxxxx
35
With a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxx Xxxx.
SECTION 8.06. Interpretation; Exhibits and Schedules; Certain
Definitions. (a) The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any matter set forth in any provision,
subprovision, section or subsection of any Schedule shall, unless the context
otherwise manifestly requires, be deemed set forth for all purposes of the
Schedules. All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein, shall have the meaning as defined in this
Agreement. When a reference is made in this Agreement to a Section, Exhibit or
Schedule, such reference shall be to a Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated.
36
(b) For all purposes hereof:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person and, in the case of an
individual, (i) upon the death of such individual, such individual's
executors, administrators or testamentary trustees, (ii) such individual's
spouse, parents, siblings or descendants or such parents', siblings' or
descendants' or such parents', siblings' or descendants' spouses, (iii) a
trust the beneficiaries of which include only such individual or any of the
relatives of such individual specified in clause (ii), (iv) any affiliate of
such individual and (v) any affiliate of the persons listed in (i), (ii) or
(iii).
"including" means including, without limitation.
"person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Entity or other
entity.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more
of the equity interests of which) is owned directly or indirectly by such
first person or by another subsidiary of such first person.
The following terms are defined in the Section set forth opposite
the term:
Terms Section
----- -------
AmBev preamble
AmBev ADRs 1.04(j)
AmBev Exchange Shares 4.02
AmBev Governance Agreement 5.07
AmBev Option 1.04(b)
AmBev Share Transfer Agreement 5.07
AmBev Shareholders Agreements 5.07
Antitrust Authorities 5.03(b)
Antitrust Laws 2.03
Applicable Law 2.03
37
BAC preamble
BAC Representatives 5.02(a)
Closing 5.03(a)
Common Shares 4.02
Company preamble
Consent 2.03
Contract 2.03
Debt Factors 1.04(c)
Exchange Act 2.03
Exclusivity Period 5.02(a)
Financial Statements 4.08
Governmental Entity 2.03
Heineken 5.02(a)
Initial Closing 1.02
Initial Closing Date 1.02
Initial Share Purchase 1.01
Initial Shares preamble
Judgment 2.03
Liens 2.03
Model AmBev Shareholders Agreement 5.07
Operative Agreements 2.02
Preferred Shares 4.02
Prospective Transferee 5.02(b)
Purchase Price 1.01
Purchaser preamble
Purchaser Capital Stock 4.02
Purchaser Material Adverse Effect 4.01
Purchaser SEC Documents 4.06(a)
Quinsa preamble
Registration Rights Agreement 6.02(i)
Remaining Shares preamble
Rights 4.02
SEC 4.06(a)
Securities Act 2.05
Seller preamble
Seller Material Adverse Effect 2.01
Seller's Option 1.04(a)
Share Exchange Agreement preamble
Shareholders Agreement 6.02(f)
Shares preamble
Transactions 2.01
Transfer 5.02(b)
Voting Purchaser Debt 4.02
38
SECTION 8.07. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties. An
executed counterpart of this Agreement delivered by fax shall be deemed to be
an original and shall be as effective for all purposes as delivery of a
manually executed counterpart.
SECTION 8.08. Entire Agreement. This Agreement and the Operative
Agreements contain the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to such subject matter. None of the
parties shall be liable or bound to any other party in any manner by any
representations, warranties or covenants relating to such subject matter
except as specifically set forth herein or in the Operative Agreements.
SECTION 8.09. Severability. If any provision of this Agreement (or
any portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other
provision hereof (or the remaining portion thereof) or the application of such
provision to any other persons or circumstances.
39
SECTION 8.10. Arbitration. (a) Any and all differences,
controversies and disputes of any nature whatsoever arising out of or relating
to this Agreement or any Operative Agreement, including without limitation any
dispute relating to its validity, interpretation, performance or termination,
shall be referred to three arbitrators, all of which shall be appointed by the
Court of Arbitration of the International Chamber of Commerce. The arbitrators
shall proceed according to the Rules of Arbitration of the International
Chamber of Commerce. The arbitration proceedings shall be conducted in the
English language and the seat of the arbitration shall be New York City
(United States of America). The arbitrators appointed in connection herewith
shall be knowledgeable of New York laws and fluent in the English language.
(b) All submissions and awards in relation to arbitration under this
Agreement shall be made in English, and all arbitration proceedings and all
pleadings shall be in English. Witnesses not fluent in English may give
evidence in their native tongue (with appropriate translation). Original
documents in a language other than English shall be submitted as evidence in
English translation accompanied by the original or true copy thereof.
(c) The procedural rules governing arbitration hereunder shall be
established by the arbitrators; provided that (i) each party may call upon the
other party to supply the arbitrators with documents in such other party's
control relevant to the dispute; (ii) each party shall be entitled to present
the oral testimony of witnesses as to fact and expert witnesses; (iii) each
party shall be entitled to question directly any witnesses who present
testimony to the arbitrators; and (iv) at the request of any party, a written
transcript in English shall be made of each hearing before the arbitrators and
shall be furnished to the parties. The arbitrators may, at the request of any
party, order provisional or conservatory measures.
(d) Each party participating in such arbitration shall pay its own
legal fees and expenses incurred in connection with the arbitration and the
expense of any witness produced by it. The cost of any stenographic record and
all transcripts thereof shall be pro-rated equally among all parties ordering
copies and shall be paid
40
by the parties directly to the reporting agency. All other expenses of the
arbitration, including required traveling and other expenses and fees of the
arbitrators and the expenses of any witness or the cost of any proof produced
at the request of the arbitrators, shall be borne as determined by the
arbitrators.
(e) Any award shall be final and not subject to appeal and the
parties waive all challenge to any award of the arbitrators under this Section
8.10. Any award may be entered or presented by any of the parties for
enforcement in any court of competent jurisdiction sitting in New York, New
York, and the parties hereby consent to the jurisdiction of such court solely
for purposes of enforcement of any award. Each party further agrees that
service of any process, summons, notice or document in the manner provided for
notices in Section 8.05 shall be effective service for purposes of any such
enforcement action.
SECTION 8.11. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
41
IN WITNESS WHEREOF, Seller and Purchaser have duly executed this
Agreement as of the date first written above.
BEVERAGE ASSOCIATES (BAC)
CORP.,
by /s/ Xxxxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Chairman of the
Board of Directors
COMPANHIA DE BEBIDAS DAS
AMERICAS-AMBEV,
by /s/ Xxxxxx Xxxxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxx Xxxxxx
Title: Attorney-in-fact
by /s/ Xxxxxxx X. Xxxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx Xxxxx
Title: Attorney-in-fact
Schedule 1.04
I. FIRST STAGE
(1) "AmBev's First Stage Equity Value" means AmBev's First
Stage Preferred ADR Price multiplied by AmBev's First Stage ADR
Equivalent Shares Outstanding.
(a)"AmBev's First Stage Preferred ADR Price" means the
weighted average (based on the ADR daily trading volume)
of AmBev's Preferred ADR Price over the 90-day period
preceding the Option Date.
(b) "AmBev's First Stage ADR Equivalent Shares
Outstanding" means (i) the number of AmBev's total common
and preferred shares outstanding, on a fully diluted
basis, on the business day prior to the Option Date
divided by (ii) the number of shares represented by each
AmBev ADR.
(2) "AmBev's First Stage Enterprise Value" means AmBev's
First Stage Equity Value plus AmBev's First Stage Net Debt.
(a)"AmBev's First Stage Net Debt" means the sum (without
duplication) of the product of the Net Debt of each of
AmBev's subsidiaries multiplied by the percentage direct
or indirect ownership that AmBev owns in such subsidiaries
as of the day prior to the Option Date plus any Net Debt
at the AmBev level, in each case as reflected on the March
31 balance sheet of AmBev and such subsidiaries prior to
the Option Date.
(3) "First Stage Applicable Multiple" means , subject to
Section 1.04(c) either (a) the First Stage Formula Multiple or
(b) 8.0, as elected by BAC at the time of the exercise of
Seller Option or within 10 business days following the exercise
of the AmBev Option.
a)"AmBev's First Stage EBITDA" means the sum (without
duplication) of the product of the EBITDA of each
operating company that AmBev
2
holds a direct or indirect economic participation in (1)
multiplied by the percentage direct or indirect ownership
that AmBev owns in such operating company as of the day
prior to the Option Date plus 100% of the EBITDA at the
AmBev level, in each case for the fiscal year preceding
the year of the First Stage Closing Date; provided that if
AmBev makes an acquisition during such fiscal year, the
acquired person's EBITDA for the 12-month period
representing such fiscal year shall be included, on a pro
forma basis, as though AmBev had made such acquisition on
the first day of such fiscal year; and provided further
that if AmBev makes a disposition during such fiscal year,
the EBITDA associated with the disposed asset for the
12-month period representing such fiscal year shall be
excluded, on a pro forma basis, as though AmBev had made
such disposition on the first day of such fiscal year.
b)"First Stage Formula Multiple" means AmBev's First Stage
Enterprise Value divided by AmBev's First Stage EBITDA.
(4) "Quinsa's First Stage Enterprise Value" means the
First Stage Applicable Multiple multiplied by Quinsa's First
Stage EBITDA.
a) "Quinsa's First Stage EBITDA" means the sum (without
duplication) of the product of the EBITDA of each
operating company that Quinsa holds a direct or indirect
economic participation in multiplied by the percentage
direct or indirect ownership that Quinsa owns in such
operating company as of the day prior to the Option Date
plus 100% of the EBITDA at the Quinsa level, in each case
for the fiscal year preceding the year of the First Stage
Closing Date; provided that if Quinsa makes an
___________________
(1) Assuming, for all references in this Section 1.04 to the financial
position of any direct or indirect subsidiaries of AmBev or Quinsa that
such subsidiaries have audited financials that are reconciled to U.S.
GAAP.
3
acquisition during such fiscal year, the acquired person's
EBITDA for the 12-month period representing such fiscal
year shall be included, on a pro forma basis, as though
Quinsa had made such acquisition on the first day of such
fiscal year; and provided further that if Quinsa makes a
disposition during such fiscal year, the EBITDA associated
with the disposed asset for the 12-month period
representing such fiscal year shall be excluded, on a pro
forma basis, as though Quinsa had made such disposition on
the first day of such fiscal year.
(5) "Quinsa's First Stage Equity Value" means (a) Quinsa's
First Stage Enterprise Value minus (b) Quinsa's First Stage Net
Debt.
a) "Quinsa's First Stage Net Debt" means the sum (without
duplication) of the product of the Net Debt of each of
Quinsa's subsidiaries multiplied by the percentage direct
or indirect ownership that Quinsa owns in such
subsidiaries as of the day prior to the Option Date plus
any Net Debt at the Quinsa level, in each case as
reflected on the March 31 balance sheet of Quinsa and such
subsidiaries prior to the Option Date.
(6) "BAC's First Stage Equity Value" means (a) Quinsa's
First Stage Equity Value divided by Quinsa's First Stage Shares
Outstanding multiplied by (b) the number of BAC Exchange
Shares.
a)"Quinsa's First Stage Shares Outstanding" means the
total number of Quinsa's shares outstanding, on a fully
diluted basis, as of the last business day prior to the
Option Date.
(7) "Preferred Shares Issued to BAC in the First Stage"
means, the number of Preferred Shares determined pursuant to
the following formula:
(BAC's First Stage Equity Value x 0.599621 x 0.9207)
Number of Preferred = ---------------------------------------------------------------- X 0.75
Shares AmBev's First Stage Preferred Share Price
4
a) "AmBev's First Stage Preferred Share Price" means
AmBev's First Stage Preferred ADR Price divided by
the number of shares represented by each AmBev ADR.
(8) "Common Shares Issued to BAC in the First Stage"
means, the number of Common Shares determined pursuant to the
following formula:
(BAC's First Stage Equity Value x 0.40037901 x the
Number of Common Applicable Percentage for Common Stock) x 0.9207
Shares = ---------------------------------------------------------- x 0.75
AmBev's First Stage Preferred Share Price
(9) "First Stage AmBev Shares" means Preferred Shares
Issued to BAC in the First Stage and Common Shares Issued to
BAC in the First Stage.
5
II. SECOND STAGE
(1) "AmBev's Second Stage Equity Value" means AmBev's
Second Stage Preferred ADR Price multiplied by AmBev's Second
Stage ADR Equivalent Shares Outstanding.
a) "AmBev's Second Stage Preferred ADR Price" means the
weighted average (based on the ADR daily trading volume)
of AmBev's Preferred ADR Price over the 90-day period
preceding the Second Stage Closing Date.
b) "AmBev's Second Stage ADR Equivalent Shares
Outstanding" means (i) the number of AmBev's total shares
outstanding, on a fully diluted basis, on the business day
preceding the Second Stage Closing Date divided by (ii)
the number of shares represented by each AmBev ADR.
(2) "AmBev's Second Stage Enterprise Value" means AmBev's
Second Stage Equity Value plus AmBev's Second Stage Net Debt.
a) "AmBev's Second Stage Net Debt" means sum (without
duplication) of the product of the Net Debt of each of
AmBev's subsidiaries multiplied by the percentage direct
or indirect ownership that AmBev owns in such subsidiaries
as of the day prior to the Option Date plus any Net Debt
at the AmBev level, in each case as reflected on the March
31 balance sheet of AmBev and such subsidiaries of the
year in which the Second Stage Closing Date occurs.
(3) "AmBev's Second Stage EBITDA Multiple" means AmBev's
Second Stage Enterprise Value divided by AmBev's Second Stage
EBITDA.
a)"AmBev's Second Stage EBITDA" means the sum (without
duplication) of the product of the average EBITDA of each
operating company that AmBev holds a direct or indirect
economic participation in multiplied by the percentage
6
direct or indirect ownership that AmBev owns in such
operating company as of the day prior to the Option Date
plus 100% of the EBITDA at the AmBev level, in each case
for the two fiscal years preceding the year of the Second
Stage Closing Date; provided that if AmBev makes an
acquisition during such period, the acquired person's
EBITDA for the 24-month period representing such fiscal
years shall be included, on a pro forma basis, as though
AmBev had made such acquisition on the first day of such
period; and provided further that if AmBev makes a
disposition during such period, the EBITDA associated with
the disposed asset for the 24-month period representing
such fiscal years shall be excluded, on a pro forma basis,
as though AmBev had made such disposition on the first day
of such period.
(4) "Second Stage Applicable Multiple" means, either (a)
AmBev's Second Stage EBITDA Multiple, if BAC chose the First
Stage Formula Multiple for purposes of the First Stage
Applicable Multiple or (b) 8.0, if BAC chose 8.0 for purposes
of the First Stage Applicable Multiple.
(5) "Quinsa's Second Stage Enterprise Value" means the
Second Stage Applicable Multiple multiplied by Quinsa's Second
Stage EBITDA.
a) "Quinsa's Second Stage EBITDA" means the sum (without
duplication) of the product of the average EBITDA of each
operating company that Quinsa holds a direct or indirect
economic participation in multiplied by the percentage
direct or indirect ownership that Quinsa owns in such
operating company as of the day prior to the Option Date
plus 100% of the EBITDA at the Quinsa level, in each case
for the two fiscal years preceding the year of the Second
Stage Closing Date; provided that if Quinsa makes an
acquisition during such period, the acquired person's
EBITDA for the 24-month period representing such fiscal
years shall be included, on a pro forma basis, as though
Quinsa had made such acquisition on the first
7
day of such period; and provided further that if Quinsa
makes a disposition during such period, the EBITDA
associated with the disposed asset for the 24-month period
representing such fiscal years shall be excluded, on a pro
forma basis, as though Quinsa had made such disposition on
the first day of such period.
(6) "Quinsa's Second Stage Equity Value" means (a)
Quinsa's Second Stage Enterprise Value minus (b) Quinsa's
Second Stage Net Debt.
a) "Quinsa's Second Stage Net Debt" means the sum (without
duplication) of the product of the Net Debt of each of
Quinsa's subsidiaries multiplied by the percentage direct
or indirect ownership that Quinsa owns in such
subsidiaries as of the day prior to the Option Date plus
any Net Debt at the Quinsa level, in each case as
reflected on the March 31 balance sheet of Quinsa and such
subsidiaries of the year in which the Second Stage Closing
Date occurs.
(7) "BAC's Second Stage Equity Value" means (a) Quinsa's
Second Stage Equity Value divided by Quinsa's Second Stage
Shares Outstanding multiplied by (b) the number of BAC Exchange
Shares.
a) "Quinsa's Second Stage Shares Outstanding" means the
number of Quinsa's shares outstanding, on a fully diluted
basis, as of the business day preceding the Second Stage
Closing Date.
(8) "Preferred Shares Issued to BAC in the Second Stage"
means the number of Preferred Shares determined pursuant to the
following formula set forth below; provided, however, that in
no event will Seller have to return shares to AmBev; and
provided further that in no event shall the number of Preferred
Shares Issued to BAC in the Second Stage exceed 66.67% of the
number of Preferred Shares Issued to BAC in the First Stage.
8
(BAC's Second Stage Equity Value x 0.599621 x 0.9207) Preferred Shares
Number of Preferred = --------------------------------------------------------- - Issued to BAC in
Shares AmBev's Second Stage Preferred Share Price the First Stage
a)"AmBev's Second Stage Preferred Share Price" means, the
weighted average (based on the ADR daily trading volume)
of AmBev's Preferred ADR Price over the 90-day period
preceding the Second Stage Closing Date divided by the
number of shares represented by each AmBev ADR.
(9) "Common Shares Issued to BAC in the Second Stage"
means the number of Preferred Shares determined pursuant to the
formula set forth below; provided, however, that in no event
will Seller have to return shares to AmBev; and provided
further that in no event shall the number of Common Shares
Issued to BAC in the Second Stage exceed 66.67% of the number
of Common Shares Issued to BAC in the First Stage
(BAC's Second Stage Equity Value x 0.40037901 x the Applicable
Number of Common Percentage for Common Shares x 0.9207) Common Shares
Shares ----------------------------------------------------------------- - Issued to BAC in the
= AmBev's Second Stage Preferred Share Price First Stage
(10) "Second Stage AmBev Shares" means Preferred Shares
Issued to BAC in the Second Stage and Common Shares
Issued to BAC in the Second Stage.
9
III. DEFINITIONS
(1) "AmBev's ADR Equivalent Shares Outstanding" means (a) AmBev's
total shares outstanding, on a fully diluted basis divided by (b) the number
of shares represented by each ADR.
(2) "AmBev's ADRs" means the American Depositary Receipts
(evidencing American Depositary Shares) representing AmBev's Preferred Shares.
(3) "AmBev Control Group" means the Braco Group, individually or
together with Fundacao Antonio e Xxxxxx Xxxxxxxxx Instituicao Nacional de
Beneficiencia and/or any of its affiliates.
(4) "AmBev Option Date" means, subject to Section 1.04(c) and
1.04(m), any business day in April of any year, beginning in April 2009,
designated as such by AmBev upon not less than 30 days' prior written notice
to BAC.
(5) "AmBev's Preferred ADR Price" means the closing price of AmBev's
ADRs on the New York Stock Exchange.
(6) "Applicable Percentage for Common Shares" means 80%, provided
that if Seller elected 8.0 as the First Stage Applicable Multiple, the
Applicable Percentage for Common Shares shall be 100%.
(7) "BAC Exchange Shares" means all, but not less than all, of the
Remaining Shares, after deducting any Remaining Shares sold to AmBev by BAC
prior to the date of the exercise of the Sellers' Option or the AmBev Option
or the Exchange contemplated by Section 1.04(c) as the case may be.
(8) "Braco Group" means, any one or more of Braco S.A., Empresa de
Administracao e Participacoes S.A. - ECAP, Xxxxxx Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxxxxx Xxxxxxx Sicupira or their respective affiliates.
(9) "Change of Control" means any person or group other than the
AmBev Control Group shall acquire, directly or indirectly, beneficial
ownership (as defined in Rule 13-d under the United States Securities and
10
Exchange Act of 1934) of a majority of the voting shares of AmBev.
(10) "EBITDA" means, for any person for any period, the aggregate
amount of the consolidated gross profit of such person for such period
(determined in accordance with United States GAAP and as reflected in such
person's audited financial statements for such period) minus the aggregate
amounts of the consolidated selling, general and administrative expenses
(including direct distribution expenses) of such persons for such period
(determined in accordance with United States GAAP) plus the aggregate amount
of the consolidated depreciation and amortization expenses of such person for
such period (determined in accordance with United States GAAP).
(11) "Exchange" means the transfer by Sellers to AmBev of the BAC
Exchange Shares in exchange for (i) the Common Shares Issued to BAC in the
First Stage, (ii) the Preferred Shares Issued to BAC in the First Stage, (iii)
the Common Shares Issued to BAC in the Second Stage and (iv) the Preferred
Shares Issued to BAC in the Second Stage.
(12) "First Stage Closing Date" means, subject to Section 1.04(c)
and 1.04(m), the 15th day after the Option Date; provided that, (i) if such
day is not a business day the First Stage Closing Date shall be the next
succeeding business day and (ii) if, as of such day, any of the conditions to
the Exchange set forth in Section 1.04(f) shall not be satisfied, the First
Stage Closing Date shall be the first business day after such conditions are
satisfied.
(13) "First Stage Exchange" means the exchange of the BAC Exchange
Shares for the First Stage AmBev Shares occurring on the First Stage Closing
Date.
(14) "Net Debt" means, for any date and for any person, the excess
of (a) the sum of (i) total consolidated Debt and (ii) the aggregate amount of
consolidated accounts payable as of such date (determined in accordance with
United States GAAP) with respect to currency swap agreements, currency future
or option contracts or other similar agreements (determined in accordance with
United States GAAP) over (b) the sum of (i) the aggregate amount of
consolidated cash, cash
11
equivalents and marketable securities of such person as of as of such date
(determined in accordance with United States GAAP) and (ii) the aggregate
amount of consolidated accounts receivable as of such date (determined in
accordance with United States GAAP) with respect to any such currency swap
agreements, currency future or option contracts or other similar agreements
(determined in accordance with United States GAAP).
(15) "Option Date" means, subject to Section 1.04(c) and 1.04(m),
either (a) the Seller Option Date or (b) the AmBev Option Date, as applicable.
(16) "Preferred Shares" means the preferred shares, without par
value, of AmBev.
(17) "Second Stage Closing Date" means, subject to Section 1.04(c)
and 1.04(m), the first anniversary of the First Stage Closing Date or, if such
anniversary is not a business day, the next succeeding business day.
(18) "Second Stage Exchange" means the exchange of the Second Stage
AmBev Shares occurring on the Second Stage Closing Date.
(19) "Seller Option Date" means, subject to Section 1.04(c) and
1.04(m), any business day in April of any year beginning in April 2003;
designated as such by BAC upon not less than 30 days prior written notice to
AmBev.
EXHIBIT A
SHAREHOLDERS AGREEMENT dated as of [ ],
200[ ], among BRACO S.A., a Brazilian corporation
("Braco"), EMPRESA DE ADMINISTRACAO E PARTICIPACOES
S.A. ECAP, a Brazilian corporation ("ECAP"), FUNDACAO
ANTONIO E XXXXXX XXXXXXXXX INSTITUICAO NACIONAL DE
BENEFICIENCIA (the "Xxxxxxxxx Foundation"), BEVERAGE
ASSOCIATES (BAC) CORP., a British Virgin Islands
corporation ("BAC"), and COMPANHIA DE BEBIDAS DAS
AMERICAS-AMBEV, a Brazilian corporation ("AmBev" or
the "Company").
WHEREAS, Braco, ECAP, and the Xxxxxxxxx Foundation and their Permitted
Transferees (collectively, the "AmBev Control Group") own [ ]% of the common
shares of the Company;
WHEREAS, pursuant to a Stock Purchase Agreement dated as of May 1,
2002 (the "Stock Purchase Agreement"), between the Company and BAC, BAC will
acquire a number of common shares and preferred shares of AmBev determined in
accordance with the Stock Purchase Agreement in exchange for all the Remaining
Shares (as defined in the Stock Purchase Agreement);
WHEREAS, the parties hereto desire to provide for certain rights and
obligations of BAC in connection with transfers of AmBev common shares by the
AmBev Control Group and certain rights of BAC with respect to the governance and
management of the Company.
Accordingly, the parties hereby agree as follows:
Article I
Definitions
Section 1.01. Definitions. (a) For purposes of this Agreement, the
following terms shall have the following meanings:
"AmBev common shares" means the common shares of the Company.
"BAC Shareholder" means BAC and Permitted Transferees.
"Brazilian corporation law" means Brazilian Federal law no. 6.404/76
as amended from time to time, or any other law that supersedes the same.
"By-laws" means the estatutos sociais, as amended through [ ], of the
Company.
"Members" means the ultimate beneficial owners of the shares of BAC on
May 1, 2002.
"Permitted Transferee" means, (1) with respect to any BAC Shareholder,
(a) any Member or (b)(i) upon the death of any Member, such Member's executors,
administrators or testamentary trustees, (ii) any Member's spouse, parents,
siblings or descendants or such parents', siblings' or descendants' spouses,
(iii) a trust the beneficiaries of which include only a Member or any of the
relatives of such Member specified in clause (b)(ii), (iv) any affiliate of such
Member and (v) any affiliate of the persons listed in clauses (b)(i), (ii) or
(iii); and (2)
2
with respect to any member of the AmBev Control Group, any affiliate of such
person; provided in each instance that each such transferee (unless already a
party hereto) agrees in a written instrument acceptable to the AmBev Control
Group and the Company to be bound by the provisions of this Agreement as if such
transferee were an original signatory hereto.
"Rights" means, in respect of any AmBev common shares, any right,
warrant, option or other security, directly or indirectly, to purchase,
subscribe for or otherwise acquire, or which is convertible into or exercisable
or exchangeable for, or which represents an interest in, AmBev common shares.
"Shareholders" means the AmBev Control Group and the BAC Shareholders,
collectively.
"Transfer", as to any AmBev common shares means to, directly or
indirectly, sell, or in any other way transfer, assign, pledge, distribute,
contribute to the legal capital of another company, encumber or otherwise
dispose of, or permit any Lien to exist on such shares or any Rights in respect
of such shares, either voluntarily or involuntarily and with or without
consideration.
(b) Certain other terms used in this Agreement are defined in Section
6.06(b).
Article II
Transfer Provisions
Section 2.01. Transfers by BAC Shareholders. (a) No BAC Shareholder
shall Transfer any AmBev common shares (including any Rights to purchase,
subscribe for or otherwise acquire AmBev common shares) held by it now or
hereafter held other than in accordance with the provisions of this Article II.
Any purported Transfer by a BAC Shareholder of AmBev common shares not in
accordance with the provisions of this Article II shall be deemed null and void
and shall not be given effect or recognition by the Company. No BAC Shareholder
shall Transfer any of the AmBev common shares owned by it for securities or
other property except to a Permitted Transferee or pursuant to Section 2.03 or
Section 2.04.
(b) Any BAC Shareholder may Transfer AmBev common shares to any other
BAC Shareholder without compliance with the provisions of Section 2.02.
Section 2.02. Rights of First Refusal. (a) No BAC Shareholder shall
Transfer any of the AmBev common shares owned by it (except to a Permitted
Transferee) for consideration other than cash (including deferred payments of
cash) and then only if the BAC Shareholder desiring to make the Transfer
(hereinafter referred to as the "Transferor") shall have first offered to sell
such AmBev common shares to Braco and ECAP (collectively, the " Offerees") as
contemplated by this Section 2.02, and such offers shall not have been accepted.
(b) Offer by Transferor. Copies of the Transferor's offer shall be
given to the Offerees and shall consist of an offer to sell to the Offerees, all
of the shares then proposed to be transferred by the Transferor (the "Subject
Shares") pursuant to a bona fide written offer of a third party for payment in
cash, to which copies shall be attached a statement of intention to Transfer to
such third party, the name and address of the prospective third-party
transferee,
3
the number of Subject Shares involved in the proposed Transfer, and the material
terms of such Transfer (including price and payment
terms).
(c) Acceptance of Offer. Within forty-five (45) days after the receipt
of the offer described in Section 2.02(b), the Offerees may elect to purchase
all, but not less than all, of the Subject Shares by giving notice thereof to
the Transferor and to the Company. The Offerees shall purchase the Subject
Shares pro rata among themselves (based on the number of AmBev common shares
then owned by each such Offeree) or as they shall otherwise agree upon among
themselves. The Offerees shall also have a right of oversubscription such that
if any other such Offeree declines to purchase its pro rata portion of the
Subject Shares, the oversubscribers shall, among themselves, have the right to
purchase up to the balance of the Subject Shares. Such right of oversubscription
shall be exercised by an oversubscriber in its notice by stating its desire to
purchase more than its pro rata portion. If as a result thereof such
oversubscriptions exceed the total number of Subject Shares available in respect
of such oversubscription privilege, the oversubscribers shall be cut back with
respect to their oversubscription on a pro rata basis (based on the number of
AmBev shares held by each such Offeree at the time the offer is received) or as
they shall otherwise agree among themselves. Within ten (10) days after receipt
of notice from the Offerees electing to purchase the Subject Shares the Company
shall inform each such Offeree of the amount of shares each such Offeree is
entitled to purchase in accordance with this Section 2.02(c) and the date for
the closing of the purchase.
(iii) The closing of the purchase of the Subject Shares shall be as
soon as practicable but in any event not later than, thirty (30) days after the
notice referred to in clause (c).
(d) Purchase Price. The purchase price per share for the Subject
Shares shall be the price per share offered to be paid by the prospective
transferee described in the offer, which price shall be paid in cash or, if so
provided in the offer of the prospective transferee, cash plus deferred payments
of cash in the same proportions, and with the same terms of deferred payment as
therein set forth.
(e) Closing of Purchase. The closing of the purchase shall take place
at a mutually agreeable location and the purchase price, to the extent comprised
of cash, shall be paid at the closing, and cash equivalents and documents
evidencing any deferred payments of cash permitted pursuant to Section 2.02(d)
above shall be delivered at the closing. At the closing, the Transferor shall
deliver to the purchaser(s) any required instruments of transfer for the Subject
Shares to be sold and shall pay any required transfer taxes.
(f) Release from Restriction; Termination of Rights. If the offer to
sell is not accepted by the Offerees, the Transferor may make a bona fide
Transfer to the prospective transferee named in the statement attached to the
offer on terms no more favorable to the Transferor than those set forth in the
offer, provided that the transferee agrees, in writing, to be bound by the
provisions of this Agreement to which the Transferor is subject. If the
Transferor shall fail to make such Transfer within seventy-five (75) days
following the expiration of the time provided for above the election by the
Offerees or, in the event the Offerees revoke an election to purchase the
Subject Shares pursuant to Section 2.02(c), within seventy-five (75) days of the
date of such notice of revocation, such Shares shall again become subject to all
the restrictions of this Section 2.02.
(g) Public Market Transactions. Notwithstanding the above provisions
of this Section 2.02, the following provisions shall apply to any proposed sale
by the BAC Shareholders of AmBev common shares in the public market pursuant to
ordinary trading activity or an underwritten public offering (but shall not
apply to block trades or other
4
prearranged transactions that are the functional equivalent of privately
negotiated sales). Prior to selling any AmBev common shares in the public
market, the BAC Shareholders shall first offer Braco and ECAP the opportunity to
purchase such shares for a cash price equal to the Market Price (as defined
below) as of the date such offer is delivered to Braco and ECAP; provided that,
if the BAC Shareholders propose to sell the AmBev common shares in a registered
public offering, the price at which such AmBev common shares shall be offered to
Braco and ECAP shall be determined by reference to the Market Price as of the
fifth business day prior to the date on which any registration statement or
prospectus relating to such public offering is declared effective or otherwise
approved by applicable governmental authorities (the "Pre-Offering Market
Price"). Braco and ECAP shall have a period of five business days to either
accept or reject the BAC Shareholders' offer to sell at such price. If Braco or
ECAP accepts the offer, the closing of the sale and purchase shall occur on the
fifth business day after the expiration of the 5-business day period referred to
in the preceding sentence. If Braco and ECAP decline the offer, the BAC
Shareholders shall have the right to sell the AmBev common shares subject to
such offer for cash either (i) in open market transactions or (ii) pursuant to
such underwritten public offering at the public offering price determined by
such BAC shareholders and the underwriters within 15 business days after the
expiration of such 5-business day period, provided the price is no more than 5%
less than the Market Price offered to Braco and ECAP, in the case of trades in
the open market, or 10% less than the Pre-Offering Market Price offered to Braco
and ECAP, in the case of an underwritten public offering. In connection with any
proposed underwritten public offering, the BAC Shareholders may also offer to
sell the shares proposed to be sold in such public offering to Braco and ECAP
before commencement of the registration process, for a cash price equal to the
Market Price as of the date such offer is delivered to Braco and ECAP. If Braco
and ECAP decline to purchase the shares, and thereafter, when the BAC
Shareholders again offer to sell such shares in connection with such public
offering to Braco and ECAP at the Pre-Offering Market Price as provided above,
if the Pre-Offering Market Price is equal to or higher than the Market Price
offered to Braco and ECAP prior to the commencement of the registration process,
and Braco and/or ECAP accept such offer at the Pre-Offering Market Price, then
Braco and/or ECAP, as the case may be, shall reimburse the BAC Shareholders for
the Registration Expenses (as defined in the Registration Rights Agreement
between the Company and BAC) incurred in connection with such registration. The
term "Market Price" means, as of any date of determination, the weighted average
closing price of AmBev's common shares on the BOVESPA or on any other securities
exchange upon which the AmBev common shares (or American Depositary Shares
representing such shares on a per-common share equivalent basis) may, at such
time, be traded, as specified by the BAC Shareholders, over the 15 trading days
ending on the day prior to such date.
(h) Limitations. The provisions of this Section 2.02 shall not apply
to sales pursuant to Section 2.03 or 2.04 or Transfers to Permitted Transferees.
Section 2.03. BAC Shareholders' Tag-Along Rights. (a) If Braco and/or
ECAP, individually or together (individually, a "Selling Shareholder" and
collectively, the "Selling Shareholders"), intends to Transfer in a single
transaction or a series of related transactions (other than to any of their
respective affiliates; provided in each instance that each such transferee
agrees in a writing to be bound by the provisions of this Agreement as if such
transferee were an original signatory hereto) AmBev common shares owned by such
Selling Shareholder, such Selling Shareholder shall notify the BAC Shareholders
(for purposes of this Section 2.03, the "Tag-Along Shareholder(s)"), in writing,
of such proposed Transfer and its terms and conditions. Within ten (10) business
days following the date of such notice, each Tag-Along Shareholder shall notify
the Selling Shareholder if it elects to participate in such Transfer.
Notwithstanding the foregoing, the Tag-Along Shareholder(s) shall be permitted
to participate in such Transfer only at such time as (i) Braco and/or ECAP shall
have Transferred or shall propose to Transfer AmBev common shares, in a single
5
transaction or a series of related transactions, in an amount equal to (or
convertible into) more than fifty percent (50%) of the AmBev common shares owned
by Braco and ECAP on the date of the Initial Closing (as defined in the Stock
Exchange Agreement) (the "Initial Threshold"), or (ii) a majority of the
outstanding shares of Braco and ECAP shall have been Transferred or is proposed
to be Transferred.
(b) Any Tag-Along Shareholder that fails to notify the Selling
Shareholder within such ten (10) business day period shall be deemed to have
waived its rights hereunder. Each Tag-Along Shareholder that so notifies the
Selling Shareholder shall have the right to sell, at the same price and on the
same terms and conditions as the Selling Shareholder, an amount of AmBev common
shares equal to the number of AmBev common shares the third party actually
proposes to purchase multiplied by a fraction, the numerator of which shall be
the number of AmBev common shares owned by such Tag-Along Shareholder and the
denominator of which shall be the aggregate number of AmBev common shares owned
by the Selling Shareholders plus each Tag-Along Shareholder exercising its
rights under this Section 2.03 and each shareholder exercising tag-along rights
with the Selling Shareholders pursuant to any other agreement with the Selling
Shareholders.
(c) If a Tag-Along Shareholder does not elect to participate in a
Transfer in accordance with Section 2.03(a) above, the Selling Shareholder may
make a bona fide Transfer to the prospective transferee named in the notice
provided by such Selling Shareholder in accordance with the material terms of
such proposed Transfer.
(d) At the closing, each Tag-Along Shareholder that elects to
participate in a Transfer shall deliver to the purchaser any required
instruments of transfer and or other documents and shall pay any required
transfer taxes.
Section 2.04. Braco's and ECAP's Drag-Along Right. (a) If, at any time
and from time to time, Braco and/or ECAP, individually or together (for purposes
of this Section 2.04, the "Transferring Shareholders"), wish to Transfer in a
bona fide arm's-length sale all or any portion of their AmBev common shares to
any Person or Persons who are not affiliates of such Shareholders (for purposes
of this Section 2.04, the "Proposed Transferee"), and such sale constitutes a
Transfer of AmBev common shares in an amount equal to more than 50% of the AmBev
common shares (on a fully diluted basis) then issued and outstanding, then the
Transferring Shareholders shall have the right (for purposes of this Section
2.04, the "Drag-Along Right") to require each BAC Shareholder to sell to the
Proposed Transferee all or a portion of such BAC Shareholder's AmBev common
shares (including any Rights) for the same per share consideration, in the same
pro rata portion (as described below) and on the same terms and conditions as
proposed to be received by the Transferring Shareholders (less, in the case of
Rights, the exercise price for such Rights) then held by such BAC Shareholder.
Each BAC Shareholder agrees to take all steps necessary to enable such BAC
Shareholder to comply with the provisions of this Section 2.04 to facilitate the
Transferring Shareholders' exercise of a Drag-Along Right. The "pro rata
portion" each BAC Shareholder shall be required to sell under this Section 2.04
shall be equal to the number of AmBev common shares actually issued to and owned
by such BAC Shareholder (or which such Shareholder shall have the Right to
acquire) multiplied by a fraction, the numerator of which shall be the number of
AmBev common shares (or Rights) the Transferring Shareholders wish to Transfer
and the denominator of which shall be the aggregate number of AmBev common
shares issued to and beneficially owned by the Transferring Shareholders (or
which the Transferring Shareholders shall have the Right to acquire).
(b) To exercise a Drag-Along Right, the Transferring Shareholders
shall give each BAC Shareholder a written notice (for purposes of this Section
2.04, a "Drag-Along Notice") containing (1) the name and address of the Proposed
Transferee and (2) the proposed
6
purchase price, terms of payment and other material terms and conditions of the
Proposed Transferee's offer. If the proposed purchase price consists in whole or
in part of consideration other than cash, the Transferring Shareholders shall
provide such information relating to such consideration as the BAC Shareholders
may reasonably request in order to evaluate such non-cash consideration. Each
BAC Shareholder shall have the right, as a condition to the sale pursuant to the
Drag-Along Right, to receive all documentation relating to the sale pursuant to
the Drag-Along Right at least ten (10) days prior to the consummation of the
sale or within three business days after such later time as the Transferring
Shareholders shall have first received such information. Each BAC Shareholder
shall thereafter be obligated to sell such BAC Shareholder's pro rata portion of
Shares (including any Rights held by such Shareholder), provided that the sale
to the Proposed Transferee is consummated within 90 (ninety) days of delivery of
the Drag-Along Notice. If the sale is not consummated within such 90-day period,
then each BAC Shareholder shall no longer be obligated to sell such BAC
Shareholder's AmBev common shares pursuant to that specific Drag-Along Right but
shall remain subject to the provisions of this Section 2.04.
Section 2.05. Preemptive Subscription Right. If at any time after the
date hereof, the Company proposes to issue AmBev common shares the BAC
Shareholders shall be entitled to the preemptive rights set forth in Article 171
of the Brazilian corporation law, and such issuance shall be conducted in
accordance with the provisions thereof.
Article III
Governance and Management of the Company
Section 3.01. Board of Directors. The BAC Shareholders shall have the
right to nominate a number of directors of AmBev proportionate to their
percentage ownership of the total outstanding AmBev common shares; provided,
that the BAC Shareholders shall have the right to nominate at least one director
and the AmBev Control Group will vote all of its AmBev shares to elect such
director(s) nominated by the BAC Shareholders, as long as the BAC Shareholders
continue to own at least 90% of the AmBev common shares acquired by them on the
First Stage Closing Date, in the case of elections of directors occurring on or
after the First Stage Closing Date but before the Second Stage Closing Date, or
at least 90% of the aggregate AmBev common shares acquired by them on the First
Stage Closing Date and Second Stage Closing Date, for elections of directors
occurring on or after the Second Stage Closing Date. The directors nominated by
the BAC Shareholders are referred to as the "BAC Directors".
Section 3.02. Committees The BAC Director(s) shall be appointed to any
committee of the Board created to oversee the Company's operations in Argentina,
Bolivia, Chile, Paraguay and Uruguay.
Section 3.03. Removal; Vacancies. Any BAC Director may only be removed
by a vote of the shareholders at a general meeting following a recommendation to
that effect by the BAC Shareholders, and the AmBev Control Group agrees to vote
at the general meeting all the AmBev common shares owned by it in favor of such
removal or suspension. If a vacancy occurs because of the death, disability,
resignation or removal of a BAC Director, the BAC Shareholders shall nominate,
and the AmBev Control Group shall use reasonable best efforts to cause the Board
to elect, a successor to serve until the next general meeting of shareholders.
Section 3.04. Meetings of Directors. (a) Approval Requirements. So
long as the BAC Shareholders own at least 90% of the AmBev common shares
acquired by them on the First Stage Closing Date, in the case of actions taken
after the First Stage Closing
7
Date but before the Second Stage Closing Date, or at least 90% of the aggregate
AmBev common shares acquired by them on the First Stage Closing Date and Second
Stage Closing Date, for actions taken on or after the Second Stage Closing Date,
the AmBev Control Group shall instruct its appointed Board members not to
approve any of the matters specified in Section 4.01 without the affirmative
vote of the BAC Directors.
SECTION 3.05. Southern Cone Operations. The BAC Directors shall have
the right to propose the chief executive of Southern Cone operations appointed
by the Board.
Article IV
Special Majority Provisions
Section 4.01. Special Majority Provisions. For so long as the BAC
Shareholders own 90% of the AmBev common shares acquired by them on the First
Stage Closing Date, in the case of actions taken after the First Stage Closing
Date but before the Second Stage Closing Date, or at least 90% of the aggregate
AmBev common shares acquired by them on the First Stage Closing Date and Second
Stage Closing Date, for actions taken on or after the Second Stage Closing Date,
the AmBev Control Group shall vote its AmBev common shares and shall instruct
its appointed Board members so as to cause the Company not to, and not to permit
any of its subsidiaries to, take, and cause the Board not to approve, any of the
actions specified below without the affirmative written consent or vote of the
BAC Directors, in the case of action by the Board, and the affirmative vote of
the BAC Shareholders, in the case of any action taken at a meeting of
shareholders:
a. delisting of the Company;
b. filing for bankruptcy, liquidation or dissolution of the Company or
any of its significant subsidiaries;
c. transactions with either the Company's or the AmBev Control Group's
affiliates (other than transactions between the Company and its
subsidiaries or between subsidiaries of the Company) outside the
ordinary course of business or inconsistent with past practice,
involving, in any one transaction or series of transactions with the
same affiliate, more than US$5 million in the aggregate;
d. material changes in accounting principles, except when required by law
or the applicable regulations;
e. changes in dividend policy from the minimum mandatory statutory
dividend defined in the By-laws as of the date of this Agreement; and
f. any amendments to the Company's By-laws adversely affecting the rights
of the BAC Shareholders.
Article V
Additional Covenants
Section 5.01. Information Rights. Each BAC Shareholder shall be
entitled to receive, and the AmBev Control Group shall cause the Company to
provide to each such BAC Shareholder as promptly as practicable after such
information is available (i) quarterly consolidated unaudited financial
statements and reports of the Company, (ii) consolidated annual audited
financial statements and reports of the Company, and (iii) such
8
other information relating to the business, affairs, prospects or condition
(financial or otherwise) of the Company as is available to the Company and which
legally may be disclosed that such BAC Shareholder may reasonably request.
Section 5.02. Further Assurances. From time to time, as and when
requested by any party, each party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions as such other party may
reasonably deem necessary or desirable to further assure or give effect to the
provisions of this Agreement.
Section 5.03. Exchange of Common Shares for Preferred. If at any time
the BAC Shareholders desire to exchange all or any portion of their AmBev common
shares for AmBev preferred shares, Braco agrees to consider such request in good
faith and to use reasonable efforts to accommodate such desire, provided that
Braco shall not be obligated to exchange any AmBev preferred shares it may own
or expend any funds.
Article VI
General Provisions
Section 6.01. Effective Date; Termination. This Agreement shall be
effective as of the consummation of the First Stage Exchange (as defined in the
Stock Purchase Agreement). The provisions of Articles III and IV of this
Agreement shall terminate whenever the BAC Shareholders own less than 90% of the
AmBev common shares acquired by them on the First Stage Closing Date, at any
time after the First Stage Closing Date but before the Second Stage Closing
Date, or less than 90% of the aggregate AmBev common shares acquired by them on
the First Stage Closing Date and Second Stage Closing Date, at any time on or
after the Second Stage Closing Date. The remaining provisions of this Agreement
shall terminate when the BAC Shareholders no longer own any AmBev common shares.
Section 6.02. Specific Performance. The Shareholders hereto agree that
the obligations imposed on them in this Agreement are special, unique and of an
extraordinary character, and that in the event of breach by any Shareholder
damages would not be an adequate remedy, and each of the other Shareholders
shall be (i) entitled to specific performance, including, in the case of Article
III and IV, pursuant to Article 118 of the Brazilian corporation law in addition
to any damages or any other remedy to which it may be entitled as well as (ii)
to have applied by the chairman of any Board meeting and/or of the shareholders'
meeting, as the case may be, the provisions of paragraphs 8 and 9 of said
Article 118. The Shareholders further agree to waive any requirement for the
securing or posting of any bond in connection with the obtaining of any such
injunctive or other equitable relief.
Section 6.03. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by any party
(including by operation of law in connection with a merger or consolidation of
such party) without the prior written consent of the other parties hereto,
except that all Permitted Transferees shall be entitled to the benefits and be
bound by and subject to the terms hereof. Any attempted assignment in
violation of this Section 6.03 shall be void.
Section 6.04. No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto, the Permitted Transferees and such assigns, any
legal rights hereunder.
9
Section 6.05. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by fax or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or fax, or if mailed, three days after mailing (one business
day in the case of express mail or overnight courier service), as follows:
(i) if to the Company,
[
]
Attention:
with a copy to:
[
]
Attention: ;
(ii) if to Braco, ECAP or the Xxxxxxxxx Foundation,
[
]
Attention:
with a copy to:
[
]
Attention: ; and
(iii) if to the BAC Shareholders,
[
]
Attention:
with a copy to:
[
]
Attention:
10
Section 6.06. Interpretation; Exhibits and Schedules; Certain
Definitions. (a) The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. All Exhibits and Schedules annexed hereto or referred to herein
are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein, shall have the meaning as defined in this Agreement.
When a reference is made in this Agreement to a Section, Exhibit or Schedule,
such reference shall be to a Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated.
(b) For all purposes hereof:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person. For the purposes of this
definition, control shall mean the direct or indirect participation superior to
fifty percent (50%) of the voting capital of a person, entitling the holder to
cast the majority of votes in decisions taken in any shareholders meetings, as
well as the power to elect the majority of the directors or other administrators
in such meeting.
"including" means including, without limitation.
"person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, governmental agency or body or other
entity.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person or by another subsidiary of such first person.
Section 6.07. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties. An executed
counterpart of this Agreement delivered by fax shall be deemed to be an original
and shall be as effective for all purposes as delivery of a manually executed
counterpart.
Section 6.08. Entire Agreement. This Agreement, together with the
Share Exchange Agreement, the Stock Purchase Agreement and the Operative
Agreements, contains the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to such subject matter, provided,
however, that it (i) shall not supersede or modify any other shareholders'
agreement executed by and among shareholders of the Company, and (ii) except as
expressly set forth in this Agreement, shall not be deemed to extend any rights
or obligations granted pursuant to other agreements to the signatories hereof.
None of the parties shall be liable or bound to any other party in any manner by
any representations, warranties or covenants relating to such subject matter
except as specifically set forth herein.
Section 6.09. Severability. If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other
11
provision hereof (or the remaining portion thereof) or the application of such
provision to any other persons or circumstances.
Section 6.10. Registration. This Agreement (to the extent governed by
Brazilian law) shall be (i) filed and kept in the Company's headquarters and
(ii) registered with the depositary agent of the AmBev common shares, which
depositary agent shall observe and enforce its provisions. The depositary agent
shall include in the registry of the shares held by the BAC Shareholders, and in
the respective share certificates, the following paragraph:
"The shares represented by this Certificate (or by this registration,
as the case may be) shall not be sold, transferred, assigned, pledged,
or encumbered and the rights of the holder of such shares are subject
to the terms and conditions of a Shareholders' Agreement dated as of
[...], 2002 and filed with the company's headquarters, as such
agreement may be amended, modified or supplemented from time to time."
Section 6.11. Intervening Parties. The Company executes this Agreement
for the purpose of consenting to all its terms and conditions, and hereby
declares to have filed the Agreement in its headquarters, and undertakes to
observe and enforce its provisions in accordance with the Brazilian corporation
law. The Company undertakes, further, to send immediate notice to the
shareholders in case it becomes aware of any agreement, fact or omission that
can entail violation to this Agreement, as well as to take all the necessary
actions to maintain this Agreement in full force and effect. The Company shall
not be bound by any amendment hereof unless such amendment is filed with the
Company. Pursuant to article 118, Paragraph 9 of the Brazilian corporation law,
the Parties hereto appoint as their representatives before the Company, the same
individuals referred to in Section 6.03 above.
Section 6.12. Arbitration. (a) Any and all differences, controversies
and disputes of any nature whatsoever arising out of or relating to this
Agreement, including without limitation any dispute relating to its validity,
interpretation, performance or termination, shall be referred to three
arbitrators, one of them appointed by the claimants, another appointed by the
defendants and the third one appointed by the Court of Arbitration of the
International Chamber of Commerce. The arbitrators shall proceed according to
the Rules of Arbitration of the International Chamber of Commerce. The
arbitration proceedings shall be conducted in the English language and the seat
of the arbitration shall be New York, New York. The arbitrators appointed in
connection herewith shall be knowledgeable in the laws of the Federative
Republic of Brazil and fluent in the English language.
(b) All submissions and awards in relation to arbitration under this
Agreement shall be made in English, and all arbitration proceedings and all
pleadings shall be in English. Witnesses not fluent in English may give evidence
in their native tongue (with appropriate translation). Original documents in a
language other than English shall be submitted as evidence in English
translation accompanied by the original or true copy thereof.
(c) The procedural rules governing arbitration hereunder shall be
established by the arbitrators; provided that (1) each party may call upon the
other party to supply the arbitrators with documents in such other party's
control relevant to the dispute; (2) each party shall be entitled to present the
oral testimony of witnesses as to fact and expert witnesses; (3) each party
shall be entitled to question directly any witnesses who present testimony to
the arbitrators; and (4) at the request of any party, a written transcript in
English shall be made of each hearing before the arbitrators and shall be
furnished to the parties. The arbitrators may, at the request of any party,
order provisional or conservatory measures; provided that to the extent
necessary to prevent irreparable damage any party may petition any court of
competent
12
jurisdiction for a preliminary injunction, temporary restraining order or other
interim equitably relief pending the appointment of the arbitrators in
accordance with Section 6.12(a) and action by the arbitrators upon any request
for provisional or conservatory measures.
(d) Each party participating in such arbitration shall pay its own
legal fees and expenses incurred in connection with the arbitration and the
expense of any witness produced by it. The cost of any stenographic record and
all transcripts thereof shall be pro-rated equally among all parties ordering
copies and shall be paid by the parties directly to the reporting agency. All
other expenses of the arbitration, including required traveling and other
expenses and fees of the arbitrators and the expenses of any witness or the cost
of any proof produced at the request of the arbitrators, shall be borne as
determined by the arbitrators.
(e) Any award shall be final and not subject to appeal and the parties
waive all rights to challenge any award of the arbitrators under this Section
6.12. Any award may be entered or presented by any of the parties for
enforcement in any court of competent jurisdiction sitting in New York, New
York, and the parties hereby consent to the jurisdiction of such court solely
for purposes of enforcement of any award. Each party further agrees that service
of any process, summons, notice or document in the manner provided for notices
in Section 6.05 shall be effective service for purposes of any such enforcement
action.
Section 6.13. Governing Law. The provisions of Articles III and IV of
this Agreement shall be governed by and construed in accordance with the
internal laws of the Federative Republic of Brazil and the provisions of the
remainder of this Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
13
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
BRACO S.A.,
by
--------------------------
EMPRESA DE ADMINISTRACAO E
PARTICIPACOES S.A. B ECAP,
by
--------------------------
BEVERAGE ASSOCIATES (BAC) CORP.,
by
--------------------------
COMPANHIA DE BEBIDAS DAS
AMERICAS-AMBEV,
by
--------------------------
by
--------------------------
FUNDACAO ANTONIO E XXXXXX XXXXXXXXX
INSTITUICAO NACIONAL DE BENEFICIENCIA,
by
--------------------------
EXHIBIT F
SHAREHOLDERS AGREEMENT dated as of [ ],
200[], among QUILMES INDUSTRIAL (QUINSA) SOCIETE
ANONYME, a Luxembourg corporation (the "Company"),
COMPANHIA DE BEBIDAS DAS AMERICAS-AMBEV, a
Brazilian corporation ("AmBev"), and BEVERAGE
ASSOCIATES (BAC) CORP., a British Virgin Islands
corporation [or the entity described in Section
5.08 of the Stock Purchase Agreement] ("BAC").
WHEREAS AmBev and the Company are parties to a Share Exchange
Agreement dated as of May 1, 2002 (the "Share Exchange Agreement"), pursuant
to which AmBev has, on the date hereof, contributed to the Company or one of
its subsidiaries all the shares of capital stock of the subsidiaries of AmBev
which manufacture, market, sell or distribute beer in Argentina, Uruguay,
Paraguay and Bolivia in exchange for the issuance by the Company to AmBev of
26,388,914 Class B shares, without par value ("Class B Shares"), of the
Company;
WHEREAS AmBev and BAC are parties to a Stock Purchase Agreement
dated as of May 1, 2002 (the "Stock Purchase Agreement"), pursuant to which
AmBev has, on the date hereof, purchased from BAC 230,920,000 Class A shares,
without par value ("Class A Shares"), of the Company;
WHEREAS AmBev and BAC have also agreed in the Stock Purchase
Agreement to provide for the future exchange of the remaining 373,520,000
Class A Shares of the Company owned by BAC on the date of the Stock Purchase
Agreement (the "Remaining Shares"), for shares of AmBev, upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Company, AmBev, BAC and [Escrow Agent] have entered
into an escrow agreement (the "Escrow Agreement") dated as of the date hereof
pursuant to which the [Escrow Agent] agrees to hold the Remaining Shares in
escrow until the occurrence of certain events described therein; and
WHEREAS the Company, AmBev, BAC and [Trustee] have entered into a
trust agreement (the "Voting Trust Agreement") dated as of the date hereof
pursuant to which BAC has deposited 60,000,000 Class A Shares with the
[Trustee] in trust and the [Trustee] is required to vote
2
such shares only upon the instruction of both BAC and AmBev.
WHEREAS the parties hereto desire to provide for certain rights and
restrictions with respect to the governance and management of the Company and
certain restrictions upon the direct or indirect sale, assignment, transfer,
pledge or other disposition of the Remaining Shares.
Accordingly, the parties hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. (a) For purposes of this Agreement, the
following terms shall have the following meanings:
"Articles" means the Co-ordinated Articles of Incorporation, as
amended through [June 8, 2001], of the Company.
"BAC Shares" means any shares of BAC.
"Family Member" means any Member and any affiliate (as defined in
the Stock Purchase Agreement) thereof.
"Lien" means any mortgage, lien, pledge, security or other interest,
charge, covenant, option, claim, restriction or encumbrance of any kind or
nature whatsoever.
"Member" means the ultimate beneficial owners of the shares of BAC
on the date of the Stock Purchase Agreement.
"Permitted Transfer" means (a) in the case of the Remaining Shares,
any Transfer to AmBev and (b) in the case of BAC Shares, Transfers to AmBev,
any Member or Family Member.
"Requisite Percentage" means (a) in the case of AmBev, 40% or more
of the Voting Interest and (b) in the
3
case of BAC, 40% or more of the Voting Interest, provided that (i) if BAC's
percentage share of the Voting Interest is reduced to less than 50% as a
result of the Transfer of Remaining Shares to AmBev, then BAC shall be deemed
not to have the Requisite Percentage and (ii) for purposes of determining
whether BAC owns the Requisite Percentage, BAC shall be deemed to own all
Remaining Shares held by the [Trustee] from time to time under the Voting
Trust Agreement.
"Rights" means, in respect of any security, any right, warrant,
option or other security which, directly or indirectly, represents the right
to purchase or acquire, or is convertible into or exercisable or exchangeable
for, or otherwise represents an interest in, such security.
"Shareholders" means AmBev and BAC, collectively.
"Shares" means the Remaining Shares and the BAC Shares,
collectively.
"Transfer", as to any Shares means to sell, or in any other way
transfer, assign, pledge, distribute, encumber or otherwise dispose of, or
permit any Lien to exist on such Shares or any Rights in respect of such
Shares, either voluntarily or involuntarily and with or without consideration.
"Voting Interest" means the aggregate number of votes entitled to be
cast at any meeting of shareholders of the Company by all the Voting Shares of
the Company owned by the Shareholders. For the purposes of determining BAC's
percentage of the Voting Interest, BAC shall be deemed to own all Remaining
Shares held by the [Trustee] from time to time under the Voting Trust
Agreement.
"Voting Shares" means the Class A Shares, the Class B Shares and any
other shares of the Company having a right to vote at any meeting of
shareholders.
(b) Terms used herein and not otherwise defined have the meanings
assigned thereto in the Stock Purchase Agreement.
4
ARTICLE II
Restrictions Relating to the Shares
SECTION 2.01. No Transfer of Remaining Shares. BAC shall not, and
shall not permit the Members or any affiliate thereof to, directly or
indirectly, Transfer, or permit the Transfer of, the Remaining Shares or any
BAC Shares or any Rights in respect of the Remaining Shares or the BAC Shares,
except for Permitted Transfers (it being understood that a Transfer of BAC
Shares to Permitted Transferees will not be deemed to be an indirect Transfer
of Remaining Shares).
SECTION 2.02. Legends on Share Certificates. BAC shall be the
registered holder of the Remaining Shares and the shareholders of BAC shall
hold all BAC Shares in certificated form or book-entry form. Each certificate
representing, or the share registry in respect of, the Remaining Shares or BAC
Shares, and any certificate issued, or any entry in the share registry made,
upon any Permitted Transfer (other than to AmBev), shall bear the following
legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE (OR BY THIS
REGISTRATION, AS THE CASE MAY BE) ARE SUBJECT TO RESTRICTIONS ON
TRANSFER IN ACCORDANCE WITH THE TERMS OF A SHAREHOLDERS' AGREEMENT
DATED AS OF [ ], 200[ ], AS THE SAME MAY BE AMENDED OR MODIFIED FROM
TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICE OF THE ISSUER OF THESE SHARES. NO REGISTRATION OF TRANSFER OF
SUCH SHARES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS SUCH
RESTRICTIONS ARE COMPLIED WITH."
SECTION 2.03. Stop Transfer. (a) BAC shall not register the Transfer
of any BAC Shares, unless the transfer is permitted by Section 2.01.
(b) The Company and BAC agree that any purported Transfer of
Remaining Shares or BAC Shares not permitted by Section 2.01 shall be deemed
null and void and shall not be given effect or recognition by the Company or
BAC.
5
SECTION 2.04. No Acquisition of Company Shares. Except as provided
in Article III, (i) BAC will not directly or indirectly, purchase or otherwise
acquire, after the date hereof, any Class A Shares or Class B Shares, (ii) BAC
will not permit any Family Member to, directly or indirectly, purchase or
otherwise acquire, after the date hereof, more than 500,000 Class A Shares or
more than 500,000 Class B Shares and (iii) BAC will not, and will not permit
any Family Member to, directly or indirectly, purchase or otherwise acquire
any other shares of capital stock of the Company (or any interest in, or
Rights in respect of, any Class A Shares or Class B Shares (other than those
permitted to be acquired pursuant to clause (ii)) or any other shares) except
by way of share dividends or distributions on the Remaining Shares or as a
result of a Permitted Transfer.
SECTION 2.05. Transfer of Shares Owned by AmBev. Until the Second
Stage Closing Date, (i) AmBev shall not, and shall not permit any of its
affiliates to, directly or indirectly Transfer or permit the Transfer (to any
person other than an affiliate of AmBev) of, any of the Class A Shares and
Class B Shares held by AmBev (including, without limitation the Class B Shares
issued pursuant to the Share Exchange Agreement) as of the date of this
Agreement, or (ii) create, assume or suffer to exist any Lien on any of the
Class A Shares owned by AmBev as of the date of this Agreement. Until the
Second Stage Closing Date, each certificate representing, or the share
registry in respect of such Class A Shares and any certificate issued or any
entry in the share registry made upon any Transfer of any such Class A Shares
to an affiliate of AmBev shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE (OR BY THIS
REGISTRATION, AS THE CASE MAY BE) ARE SUBJECT TO RESTRICTIONS ON
TRANSFER IN ACCORDANCE WITH A SHAREHOLDERS AGREEMENT DATED AS OF [
], 200_, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO TIME, A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE
ISSUER OF THESE SHARES. NO REGISTRATION OF TRANSFER OF SUCH SHARES
AND NO PLEDGE, LIEN OR ENCUMBRANCE THEREON WILL BE MADE OR RECORDED
ON THE BOOKS OF THE ISSUER OR IN ANY REGISTRY UNLESS SUCH
RESTRICTIONS ARE COMPLIED WITH.
6
ARTICLE III
Preferential Purchase Rights
SECTION 3.01. AmBev's Preemptive Rights. (a) Until AmBev shall have
acquired, after the date hereof, an aggregate of 12 million Class B Shares (as
adjusted as provided in Section 3.04), whether under Sections 3.01 or 3.02, in
addition to the Class B Shares acquired by AmBev on the date hereof and the
Remaining Shares to be acquired by AmBev pursuant to the Exchange, the Company
shall not issue, sell or exchange, or agree to issue, sell or exchange, any
Class B Shares or Rights in respect of Class B Shares unless the Company shall
have first offered to sell such Class B Shares or Rights to AmBev, at a price
and on such other material terms and conditions as shall have been specified
by the Company to AmBev in a written notice. Any such notice shall constitute
an irrevocable offer to sell to AmBev such Class B Shares or Rights, which
offer shall remain open for a period of 30 days from the date it is delivered
to AmBev. If AmBev shall not notify the Company of its acceptance of the
Company's offer and agreement to purchase all the Class B Shares or Rights
offered by the Company, the Company may, within the 90 days following the
expiration of the 30-day period mentioned above (or, in the case of a public
offering of such Class B Shares in any jurisdiction or any other sale which
requires regulatory approval in any jurisdiction, within 10 days following the
first date on which such Class B Shares may lawfully be sold), sell any or all
the Class B Shares or Rights not accepted by AmBev to any other person, but
only on terms and conditions (including price) in all material respects no
more favorable to the purchasers and no less favorable to the Company than
those set forth in the notice to AmBev. Any Class B Shares or Rights not so
purchased by AmBev or any other person may not be sold or otherwise disposed
of until they are again offered to AmBev in accordance with the provisions of
this Section 3.01(a).
(b) In addition to AmBev's rights under Section 3.01(a), if the
Company at any time proposes to effect a capital increase through the issue of
shares or Rights of any class or series, AmBev will have the right to
subscribe for its "proportionate percentage" of such shares or Rights. For
purposes of the preceding sentence, AmBev's "proportionate percentage" shall
be the proportion
7
(expressed as a percentage) of the total economic interest in the Company
represented by the shares of the Company owned by AmBev (on a fully diluted
basis) immediately prior to such issuance.
(c) This Section 3.01 and Section 3.05 shall not apply to (i) any
issuance of Class B Shares to employees of the Company or any subsidiary of
the Company pursuant to employee benefit plans or arrangements approved by the
Board of Directors (and shareholders, if required) of the Company (including
upon exercise of stock options or any purchase of Class B Shares pursuant to
the terms of any such plan or arrangement), (ii) any issuance of Class B
Shares in connection with the conversion of Class A Shares to Class B Shares
and (iii) any issuance of Class B Shares in connection with any bona fide
merger, acquisition or similar transaction approved by the Board of Directors
and shareholders of the Company.
(d) For purposes of this Section 3.01 and Section 3.02, any shares
in QIB acquired by AmBev or its affiliates under Section 5.09 of the Share
Exchange Agreement, whether or not exchanged for Class B Shares as permitted
by such Section 5.09 shall be treated as an acquisition by AmBev of the number
of Class B Shares for which such QIB Shares may be exchanged in accordance
with such Section 5.09.
SECTION 3.02. Third Party Shares. The Company will not, directly or
indirectly, purchase any shares of capital stock of the Company (or any Rights
in respect of any such shares) or shares (or any Rights in respect of any such
shares) of QIB (collectively, "Third Party Shares") until the earlier of (a)
the second anniversary of the date of this Agreement or (b) the date on which
AmBev shall have acquired (or been deemed to have acquired pursuant to Section
3.01(d)) an aggregate of 12 million Class B Shares (as adjusted as provided in
Section 3.04), whether under Sections 3.01 or 3.02, in addition to the Class A
Shares acquired by AmBev on the date hereof and the Remaining Shares to be
acquired by AmBev pursuant to the Exchange; provided that, notwithstanding the
foregoing, the Company shall have a right to acquire from Heineken the QIB
shares held by Heineken in accordance with the terms of the Company's
agreements with Heineken so long as the Company shall have first offered to
AmBev the right to acquire such
8
QIB shares on the terms set forth in such agreement and AmBev shall not have
accepted such offer. If, after the second anniversary of the date of this
Agreement, AmBev has not yet acquired (or been deemed to have acquired
pursuant to Section 3.01(d)) an additional 12 million Class B Shares (as
adjusted as provided in Section 3.04), the Company may acquire Third Party
Shares provided it first offers AmBev the opportunity to acquire such Third
Party Shares, to the extent of the difference between 12 million and the
additional Class B Shares previously acquired (or been deemed to have acquired
pursuant to Section 3.01(d)) by AmBev. If AmBev declines the opportunity to
purchase such Third Party Shares, the Company may acquire them, but only on
terms and conditions (including price) no less favorable to the sellers and no
more favorable to the Company than those offered to AmBev. Any Third Party
Shares not acquired by AmBev or the Company may not subsequently be acquired
by the Company unless AmBev is first offered the opportunity to acquire them
to the extent required by, and in accordance with, the provisions of this
Section 3.02.
SECTION 3.03. No Further Purchases by AmBev. Other than the
Remaining Shares, AmBev shall not acquire any additional Class A Shares or any
interest therein. After AmBev has acquired (or been deemed to have acquired
pursuant to Section 3.01(d)) an additional 12 million Class B Shares (as
adjusted as provided in Section 3.04), AmBev shall not purchase or otherwise
acquire any Third Party Shares. As among the parties to this Agreement, only
the Company may thereafter purchase or otherwise acquire any Third Party
Shares.
SECTION 3.04. Adjustments Upon Changes in Capitalization. For
purposes of Sections 3.01, 3.02 and 3.03, the 12 million Class B Shares to be
purchased by AmBev shall be appropriately adjusted to give effect to any share
dividend, split-up, subdivision or combination of shares or any
recapitalization, reclassification, reorganization, consolidation, merger or
similar transaction involving the Company.
SECTION 3.05. BAC's Preemptive Rights. After AmBev has acquired 12
million Class B Shares (adjusted as provided in Section 3.04) as provided in
Sections 3.01 and 3.02 and subject to Section 3.01(c), if the Company at any
time proposes to effect a capital increase through the
9
issue of shares or Rights of any class or series, BAC will have the right to
subscribe for its "proportionate percentage" of such shares or Rights. For
purposes of the preceding sentence, BAC's "proportionate percentage" shall be
the proportion (expressed as a percentage) of the total economic interest in
the Company represented by the shares of the Company owned by BAC (on a fully
diluted basis) immediately prior to such issuance and any shares held under
the Voting Trust Agreement.
ARTICLE IV
Governance and Management of the Company
SECTION 4.01. Number of Directors. The number of directors
constituting the board of directors of the Company (the "Company Board") and
the boards of directors of the subsidiaries of the Company (a "Subsidiary
Board" and together with the Company Board, the "Boards" and each, a "Board")
shall be fixed from time to time by each Board or the shareholders at a
general meeting, as applicable, in accordance with their respective charter
documents or By-laws or the applicable law, provided that so long as AmBev and
BAC each have the Requisite Percentage the number of directors constituting
the Company Board shall be an even number (initially 10).
SECTION 4.02. Nomination of Directors. The composition of each Board
shall be determined in accordance with the following provisions:
(a) For so long as AmBev and BAC each have the Requisite Percentage,
each of AmBev and BAC shall have the right to nominate 50% of the directors
(and their respective alternates) constituting the Company Board and, in the
case of each Subsidiary Board, 50% of the number of directors (and their
respective alternates) that BAC is entitled to nominate under such
subsidiary's charter documents or by-laws, any existing shareholders agreement
or applicable law;
(b) If either AmBev or BAC has less than the Requisite Percentage,
then each of AmBev and BAC shall have the right to nominate a number of
directors proportionate to their percentage share of the Voting Interest,
10
determined by multiplying their percentage share of the Voting Interest by the
number of directors constituting the entire Board (or, in the case of any
Subsidiary Board, the number of directors BAC is entitled to nominate) and
rounding upward or downward to the nearest whole number. In the circumstances
contemplated in this clause (b), the number of directors constituting each
entire Board shall be fixed at such number, subject to the limitations
contained in the charter documents or by-laws of the Company or the applicable
subsidiary, as will result in AmBev's and BAC's representation on each Board
being as close to proportional as possible; and
(c) Notwithstanding the foregoing, upon the occurrence of the Second
Stage Closing Date, all rights of BAC to nominate directors shall terminate
immediately, the directors nominated by BAC shall resign effective upon the
Second Stage Closing Date and, as promptly as practicable thereafter,
including by means of calling a shareholders' meeting, each Board shall be
reconstituted to include only directors nominated or approved by AmBev,
subject to the rights of any other shareholders under any subsidiary's charter
or By-laws or any existing shareholders agreement to nominate directors.
SECTION 4.03. Election of Directors. At each annual or extraordinary
general meeting of shareholders called for the purpose, among other things, of
electing directors of the Company or its subsidiaries, as the case may be, the
Shareholders shall vote all of their shares of the Company owned by them or
their affiliates in favor of the election to each Board of the nominees of
AmBev and BAC nominated in accordance with Section 4.02 and against the
election of persons nominated in opposition to such nominees.
SECTION 4.04. Committees. Any committee of each Board shall be
comprised of directors nominated by AmBev and BAC in, as nearly as
practicable, the same proportion as the representation of the nominees of
AmBev and BAC on each entire Board.
SECTION 4.05. Removal; Vacancies. Each director shall serve until
his or her death, disability, resignation or removal. Subject to applicable
law, a director may only be removed by a vote of the Shareholders at a general
11
meeting following a recommendation to that effect by the Shareholder who
nominated the director, and each Shareholder agrees to vote at the general
meeting all the Shares owned by it in favor of such removal or suspension. If
a vacancy occurs because of the death, disability, resignation or removal of a
director, the Shareholder who nominated the director shall nominate, and each
Board shall elect, a successor to serve until the next general meeting of
shareholders.
SECTION 4.06. Meetings of Directors.
(a) Regular Meetings. Unless otherwise decided by a majority of the
entire Company Board, the Company Board shall hold regular meetings monthly at
such times as may be from time to time fixed by resolution of the Company
Board, and no notice (other than the resolution) need be given as to regularly
scheduled meeting. Special meetings of the Company Board may be called and
held at any time upon the call of either Co-Chairmen of the Board or at least
two members of the entire Company Board, by notice to each director at least
three business days before the meeting. Reasonable efforts shall be made to
ensure that each director actually receives timely notice of any such special
meeting. An annual meeting of the Company Board shall be held without notice
immediately following the annual general meeting of the Company.
(b) Telephonic Meetings. Any or all of the directors may participate
in a meeting of any Board by means of telephone, videoconference or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting by such means shall
constitute presence in person at such meeting.
(c) Written Consents. Any action required or permitted to be taken
at a meeting of any Board may be taken by unanimous written consent of all the
directors to the extent permitted by Luxembourg law.
(d) Quorum and Approval Requirements. So long as each Board is
composed of directors nominated in accordance with Section 4.02(a), the
presence in person or by proxy of at least a majority of the directors
constituting the entire Board, including at least three
12
AmBev Directors and three BAC Directors, shall be necessary to constitute a
quorum for the transaction of business by each Board and the affirmative vote
of a majority of the directors shall be required for any action of each Board,
except for those actions which, pursuant to Section 5.01, when applicable,
require the affirmative vote of the AmBev Directors and the BAC Directors. So
long as the Board is composed of directors nominated in accordance with
Section 4.02(b), the presence in person or by electronic means of at least a
majority of the directors constituting the entire Board, including at least
two AmBev Directors and two BAC Directors, shall be necessary to constitute a
quorum for the transaction of business by each Board and the affirmative vote
of a majority of the directors shall be required for any action of each Board
except for those actions which, pursuant to Section 5.02, Section 5.03 or
Section 5.04, when applicable, require the affirmative vote of the AmBev
Directors or the BAC Directors, as the case may be.
(e) Election of Co-Chairmen. For so long as AmBev and BAC each have the
Requisite Percentage, each of AmBev and BAC shall have the right to elect a
Co-Chairman of the Company Board. For so long as AmBev and BAC each have the
Requisite Percentage, AmBev and BAC shall jointly appoint a Chairman of each
Subsidiary Board.
SECTION 4.07. Compensation of Directors. The Company may continue
the Board compensation policy adopted by resolution dated [ ]. All directors
will share equally in any compensation paid to directors in their capacity as
such.
SECTION 4.08. Replacement of CEO. Each of the AmBev Directors and
the BAC Directors shall have the right to cause the Board to replace the
Company's chief executive officer in the event of "significant under
performance" versus the agreed upon operating targets over a period of two
consecutive fiscal years. For each fiscal year, the Board and the chief
executive officer will agree upon a set of operating targets for such fiscal
year and the weight to be assigned to each target. "Significant under
performance" means a weighted grade of less than 70% over each of two
consecutive fiscal years (reasonably adjusted to reflect any materially
adverse effect on the business of the Company and its subsidiaries arising as
a result of
13
general economic conditions, political or governmental or regulatory actions,
changes or developments in monetary policy (including currency devaluations)
or inflation in Argentina or any of the other jurisdictions in which the
Company and its subsidiaries conduct business or any merger, material
acquisition or divestiture or other extraordinary corporate transaction).
SECTION 4.09. Articles and By-laws. The Company and each Shareholder
shall take or cause to be taken all lawful action necessary to ensure at all
times that the Articles of the Company or the charter documents or By-laws of
its subsidiaries (subject to the existing rights of shareholders of each
subsidiary) are not at any time inconsistent with, and to the greatest extent
possible under the applicable laws give effect to, the provisions of this
Agreement, it being understood that in the event of any conflict between this
Agreement and the Articles, charter documents or By-laws, the Articles,
charter documents or By-laws, as applicable, shall control.
SECTION 4.10. Springing Proxy. Each Shareholder agrees that in the
event that it is not present in person or by proxy at a duly called meeting of
the shareholders of the Company, it shall be deemed to have granted to the
other Shareholder who is so present at such meeting a proxy to vote all of its
shares in such other Shareholder's discretion in accordance with the
provisions of the Shareholders Agreement. The Shareholders agree to execute
separate proxies, powers of attorney or other instruments conforming to the
requirements of Luxembourg law to evidence and give effect to the foregoing
proxy.
SECTION 4.11. Exercise of Company's Rights. (a) If the Company or
any of its subsidiaries has asserted any rights, claims or defenses under any
of its agreements or under applicable law against AmBev or any of its
affiliates or if the BAC Directors determine that the Company could reasonably
be expected to have any unasserted rights, claims or defenses under any of its
agreements or under applicable law against AmBev or any of its affiliates, any
decision of the Board with regard to such rights, claims or defenses or with
regard to any proceeding at which such rights, claims or defenses are
asserted, shall be determined solely by the BAC Directors on behalf of the
Company and its subsidiaries.
14
(b) If the Company or any of its subsidiaries has asserted any
rights, claims or defenses under any of its agreements or under applicable law
against BAC or any of its affiliates or if the AmBev Directors determine that
the Company could reasonably be expected to have any unasserted rights, claims
or defenses under any of its agreements or under applicable law against BAC or
any of its affiliates, any decision of the Board with regard to such rights,
claims or defenses or with regard to any proceeding at which such rights,
claims or defenses are asserted, shall be determined solely by the AmBev
Directors on behalf of the Company and its subsidiaries.
SECTION 4.12. Appointment of Officers. (a) The Chief Executive
Officer of the Company shall nominate and the Company Board shall have the
right to approve the appointment of the executive officers of the Company and
the general manager (or other chief officer) of each operating subsidiary of
the Company.
(b) The chief executive officer of the Company shall have the right
to appoint all officers of each subsidiary of the Company (other than the
general manager (or other chief officer) of each operating subsidiary) without
the approval of the Company Board or the applicable Subsidiary Board.
ARTICLE V
Protective Provisions
SECTION 5.01. First Threshold Protective Provisions. For so long as
each of AmBev and BAC owns the Requisite Percentage, the Company shall not,
and shall not permit any of its subsidiaries to, take, and neither the Company
Board nor any committee of the Company Board nor any Subsidiary Board shall
approve, any of the actions specified on Schedule I without the affirmative
written consent or vote of a majority of the AmBev Directors and a majority of
the BAC Directors, in the case of action by the Company Board or any
Subsidiary Board, and the affirmative vote of AmBev and BAC, in the case of
any action taken at a meeting of shareholders.
15
SECTION 5.02. Second Threshold Protective Provisions. In the event
that either AmBev or BAC owns less than the Requisite Percentage but more than
30% of the Voting Interest, the Company shall not, and shall not permit any of
its subsidiaries to, take, and neither the Company Board nor any committee of
the Company Board nor any Subsidiary Board shall approve, any of the actions
specified on Schedule II, without the affirmative written consent or vote of
the AmBev Directors or the BAC Directors, as the case may be, in the case of
action by the Company Board or any Subsidiary Board, and the affirmative vote
of AmBev or BAC, as the case may be, in the case of any action taken at a
meeting of shareholders. The provisions of this Section 5.02 shall terminate
immediately upon the First Stage Closing Date.
SECTION 5.03. Third Threshold Protective Provisions. In the event
that either AmBev or BAC owns less than 30% of the Voting Interest but at
least 15% of the Voting Interest, the Company shall not, and shall not permit
any of its subsidiaries to, take, and neither the Company Board nor any
committee thereof nor any Subsidiary Board shall approve, any of the actions
specified on Schedule III without the affirmative written consent or vote of
the AmBev Directors or the BAC Directors, as the case may be, in the case of
action by the Company Board or any Subsidiary Board, and the affirmative vote
of AmBev or BAC, as the case may be, in the case of any action taken at a
meeting of shareholders. The provisions of this Section 5.03 shall terminate
immediately upon the Second Stage Closing Date.
SECTION 5.04. Other Protective Provisions. In addition, so long as
either AmBev or BAC owns one-third or more of the Voting Interest, the
affirmative vote of AmBev or BAC, as the case may be, shall be required to
approve any capital increase of the Company.
16
ARTICLE VI
Representations and Warranties
SECTION 6.01. Representations and Warranties of the Parties. Each
party hereby represents and warrants to each other party as follows:
(a) Execution and Delivery; Enforceability. This Agreement has been
duly and validly executed and delivered by such party and constitutes the
legal, valid and binding obligation of such party, enforceable against it in
accordance with its terms.
(b) No Conflicts. The execution and delivery by such party of this
Agreement do not, and the consummation of the transactions contemplated hereby
and compliance with the terms hereof will not, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration of
any obligation, or to increased, additional, accelerated or guaranteed rights
or entitlements of any person under, or result in the creation of any Lien
upon any of the shares of the Company or BAC owned by such party under, any
provision of (i) any note, bond, mortgage, indenture, deed of trust, license,
lease, contract, commitment, agreement or arrangement binding upon such party
or any of its properties or assets or (ii) any applicable laws or any
judgments, orders or decrees of any court or governmental agency or body.
(c) Legal Proceedings. There are no judgments, orders or decrees of
any kind against such party that are unpaid or unsatisfied, nor is there any
legal action, suit or other legal or administrative proceeding pending,
threatened or reasonably anticipated that could be filed against such party,
that would adversely affect the ability of such party to perform its
obligations under this Agreement.
(d) Bankruptcy or Insolvency. Such party has not filed or commenced,
or suffered or submitted to the filing or commencement of, any bankruptcy or
insolvency proceeding under applicable law.
17
SECTION 6.02. Representations and Warranties of BAC. BAC represents
and warrants to AmBev that, as of the date of this Agreement:
(a) BAC owns directly, and has good and valid title to, all the
Remaining Shares, free and clear of all Liens.
(b) None of the Members or any Family Members owns, directly or
indirectly, any shares of the Company other than the Remaining Shares owned by
BAC and no more than 3,000,000 Class A Shares and 2,000,000 Class B Shares.
ARTICLE VII
Additional Covenants
SECTION 7.01. Information Rights. Each director shall be entitled to
receive as promptly as practicable after such information is available (i)
quarterly consolidated unaudited financial statements and reports of the
Company, (ii) consolidated annual audited financial statements and reports of
the Company, and (iii) such other information relating to the business,
affairs, prospects or condition (financial or otherwise) of the Company as is
available to the Company that such director may reasonably request.
SECTION 7.02. Restrictions on BAC's Activities. BAC covenants and
agrees: (a) not to engage in any other business or activity other than the
ownership and disposition of the Remaining Shares in accordance with this
Agreement, the Stock Purchase Agreement, the Escrow Agreement and any
activities reasonably incidental thereto; (b) not to create, incur or permit
to exist any Debt or other monetary liability to third parties other than the
Members and their permitted transferees or any Lien upon any of the Remaining
Shares except for Liens for the benefit of AmBev; and (c) not to liquidate or
dissolve, or merge into or consolidate with, or sell or otherwise Transfer all
or substantially all of its assets to, any other person.
SECTION 7.03. Non-Petition Covenant. BAC covenants and agrees that
it will not institute any
18
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any bankruptcy, insolvency or similar law.
SECTION 7.04. Investment Opportunities. (a) Subject to Section
7.04(d), during the period from the Initial Closing through the tenth
anniversary of the date of this Agreement, AmBev will not, and will not permit
any of its subsidiaries (other than the Company and its subsidiaries) to,
acquire, directly or indirectly, any equity or other ownership interest in, or
any substantial assets of, any business involving the manufacture, marketing,
sale or distribution of beverages in Argentina, Paraguay, Uruguay, or Bolivia,
other than through the Company or one or more of its subsidiaries.
(b) Subject to Section 7.04(d), during the period from the Initial
Closing until the Second Stage Closing Date, AmBev will not, and will not
permit any of its subsidiaries to, acquire, directly or indirectly, any equity
or other ownership interest in, or any substantial assets of, any beverage or
beverage-related business involving the manufacture, marketing, sale or
distribution of beverages in Peru or Chile without first offering to the
Company and its subsidiaries the opportunity to make such acquisition. If an
acquisition opportunity in Peru or Chile should arise, AmBev and BAC will (i)
cause to be called, within 30 days of a request therefor by either BAC or
AmBev, a meeting of the Company Board to consider the opportunity, (ii) cause
to be presented at such meeting a complete description of the acquisition
opportunity, including, without limitation, the price proposed to be paid and
all other material terms and conditions thereof, (iii) cause management of the
Company to present at such meeting its recommendation as to whether the
Company and its subsidiaries should pursue the acquisition and, if so, how the
acquisition should be financed by the Company and its subsidiaries, and (iv)
if the Company's management recommends that the Company pursue the acquisition
and that the acquisition should be financed, in whole or in part, through the
issuance of the Company's capital stock, cause an investment banking firm of
recognized international standing selected by the chief executive officer of
the Company and approved by the Company Board, (x) to determine the fair value
of the Company and its subsidiaries, as a whole and, based thereon, the cash
price per Class B share
19
that should be paid by a person unaffiliated with the Company in connection
with a purchase of such shares from the Company; provided that, if the
investment banking firm specifies a range for such per share price, the per
share price determined by such banker shall be deemed to be the midpoint in
the range specified by the investment banking firm (the "Fair Per Share
Price") and (y) to present to the Company Board at such meeting a written
report of its conclusions. If any AmBev Director votes against pursuit of such
an acquisition opportunity by the Company and its subsidiaries, then, subject
to Section 7.04(c), AmBev and its subsidiaries (other than the Company and its
subsidiaries) shall not thereafter pursue the opportunity or make the proposed
acquisition. If the Company Board determines not to pursue the acquisition
opportunity but no AmBev Director votes against pursuit thereof, then AmBev
and its subsidiaries will have the right, for a period of 12 months from the
date on which the Board determines not to pursue the acquisition opportunity,
to negotiate and consummate such acquisition on terms no more favorable to
AmBev and its subsidiaries than those offered to the Company. If AmBev fails
to consummate such acquisition during such 12-month period, the provisions of
this Section 7.04 shall again apply to any other acquisition opportunity
subject hereto.
(c) If the Company determines to pursue an acquisition of any
capital stock or assets of any business involving the manufacture, marketing,
sale or distribution of beverages in Peru, AmBev shall either (i) contribute
to the Company cash equal to 50% of the aggregate cash consideration agreed to
be paid by the Company for such stock or assets in exchange for the number of
Class B shares of the Company determined as set forth below or (ii) pay 50% of
the cash consideration agreed to be paid by the Company directly to the person
or persons from whom such stock or assets are being acquired in exchange for a
50% ownership interest in such stock or assets. If AmBev elects to make the
contribution contemplated by clause (i) above, AmBev shall be entitled to
receive the number of Class B shares determined by dividing the aggregate cash
contribution required to be made by AmBev by the Fair Per Share Price. If
AmBev elects to pay the consideration contemplated by clause (ii) above, AmBev
and the Company shall enter into a shareholders agreement with respect to the
acquired company or acquisition vehicle containing
20
corporate governance provisions substantially identical to Articles IV and V
of this Agreement.
(d) Notwithstanding the other provisions of this Section 7.04, AmBev
and its subsidiaries will not be required to offer to the Company and its
subsidiaries an opportunity to acquire, and will not be prohibited from
acquiring, directly or indirectly, any equity or other ownership interest in,
or any substantial assets of, any person if the primary business of such
person is not the manufacture, marketing, sale or distribution of beverages in
Argentina, Paraguay, Uruguay, Bolivia, Peru or Chile.
(e) Nothing in this Section 7.04 shall be deemed to require any
AmBev Director or AmBev to approve any such acquisition.
SECTION 7.05. Further Assurances. From time to time, as and when
requested by any party, each party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions as such other party may
reasonably deem necessary or desirable to further assure or give effect to the
provisions of this Agreement.
ARTICLE VIII
General Provisions
SECTION 8.01. Survival; Termination. The representations and
warranties in this Agreement and in any certificate delivered pursuant hereto
shall survive the execution and delivery of this Agreement. This Agreement
shall terminate upon the earlier of (i) the consummation of the Second Stage
Exchange (as defined in the Stock Purchase Agreement) and (ii) the expiration
of 20 years from the date of this Agreement (or if applicable, the maximum
period permitted under applicable law).
SECTION 8.02. Specific Performance. The Shareholders hereto agree
that the obligations imposed on them in this Agreement are special, unique and
of an extraordinary character, and that in the event of breach by any
Shareholder damages would not be an adequate remedy,
21
and each of the other Shareholders shall be entitled to specific performance
and injunctive and other equitable relief to the extent permitted by
applicable law in addition to any damages or any other remedy to which it may
be entitled, at law or in equity. The Shareholders further agree to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief.
SECTION 8.03. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by any party
(including by operation of law in connection with a merger or consolidation of
such party) without the prior written consent of the other parties hereto. Any
attempted assignment in violation of this Section 8.03 shall be void.
SECTION 8.04. No Third-Party Beneficiaries. This Agreement is for
the sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.
SECTION 8.05. Notices. All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be delivered
by hand or sent by fax or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or fax, or if mailed, three days after mailing (one business
day in the case of express mail or overnight courier service), as follows:
(i) if to the Company,
[
]
Attention: [ ]
with a copy to:
[
]
22
Attention: [ ];
(ii) if to AmBev,
Companhia de Bebidas das Americas -- AmBev
Xxxxxxx Xxxxx Xxxxxx Xxxxxx, 000-Xxxxx F, 6(degree) andar
00000-000 Xxx Xxxxx
Xxxxxx
Attention: [ ]
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx; and
(iii) if to BAC,
[
]
Attention: [ ]
with a copy to:
[
]
Attention: [ ].
SECTION 8.06. Interpretation; Exhibits and Schedules; Certain
Definitions. The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All Exhibits and Schedules annexed hereto or
referred to herein are hereby
23
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein, shall have the meaning as defined in this
Agreement. When a reference is made in this Agreement to a Section, Exhibit or
Schedule, such reference shall be to a Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated.
SECTION 8.07. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties. An
executed counterpart of this Agreement delivered by fax shall be deemed to be
an original and shall be as effective for all purposes as delivery of a
manually executed counterpart.
SECTION 8.08. Entire Agreement. This Agreement, together with the
Escrow Agreement, the Stock Purchase Agreement and the other Operative
Agreements contemplated therein, along with the Schedules and Exhibits
thereto, contain the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to such subject matter. None of the
parties shall be liable or bound to any other party in any manner by any
representations, warranties or covenants relating to such subject matter
except as specifically set forth herein or in such other Operative Agreements.
SECTION 8.09. Severability. If any provision of this Agreement (or
any portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other
provision hereof (or the remaining portion thereof) or the application of such
provision to any other persons or circumstances.
SECTION 8.10. Arbitration. (a) Any and all differences,
controversies and disputes of any nature whatsoever arising out of or relating
to this Agreement,
24
including without limitation any dispute relating to its validity,
interpretation, performance or termination, shall be referred to three
arbitrators, all of which shall be appointed by the Court of Arbitration of
the International Chamber of Commerce. The arbitrators shall proceed according
to the Rules of Arbitration of the International Chamber of Commerce. The
arbitration proceedings shall be conducted in the English language and the
seat of the arbitration shall be New York City (United States of America). The
arbitrators appointed in connection herewith shall be knowledgeable in the
laws of the State of New York and fluent in the English language.
(b) All submissions and awards in relation to arbitration under this
Agreement shall be made in English, and all arbitration proceedings and all
pleadings shall be in English. Witnesses not fluent in English may give
evidence in their native tongue (with appropriate translation). Original
documents in a language other than English shall be submitted as evidence in
English translation accompanied by the original or true copy thereof.
(c) The procedural rules governing arbitration hereunder shall be
established by the arbitrators; provided that (1) each party may call upon the
other party to supply the arbitrators with documents in such other party's
control relevant to the dispute; (2) each party shall be entitled to present
the oral testimony of witnesses as to fact and expert witnesses; (3) each
party shall be entitled to question directly any witnesses who present
testimony to the arbitrators; and (4) at the request of any party, a written
transcript in English shall be made of each hearing before the arbitrators and
shall be furnished to the parties. The arbitrators may, at the request of any
party, order provisional or conservatory measures; provided that to the extent
necessary to prevent irreparable damage any party may petition any court of
competent jurisdiction for a preliminary injunction, temporary restraining
order or other interim equitable relief pending the appointment of the
arbitrators in accordance with Section 8.10(a) and action by the arbitrators
upon any request for provisional or conservatory measures.
(d) Each party participating in such arbitration shall pay its own
legal fees and expenses incurred in
25
connection with the arbitration and the expense of any witness produced by it.
The cost of any stenographic record and all transcripts thereof shall be
pro-rated equally among all parties ordering copies and shall be paid by the
parties directly to the reporting agency. All other expenses of the
arbitration, including required traveling and other expenses and fees of the
arbitrators and the expenses of any witness or the cost of any proof produced
at the request of the arbitrators, shall be borne as determined by the
arbitrators.
(e) Any award shall be final and not subject to appeal and the
parties waive all rights to challenge any award of the arbitrators under this
Section 8.10. Any award may be entered or presented by any of the parties for
enforcement in any court of competent jurisdiction sitting in New York, New
York, and the parties hereby consent to the jurisdiction of such court solely
for purposes of enforcement of any award. Each party further agrees that
service of any process, summons, notice or document in the manner provided for
notices in Section 8.05 shall be effective service for purposes of any such
enforcement action.
SECTION 8.11. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State, except to the
extent that the internal governance of the Company is governed by the laws of
Luxembourg or the internal governance of any subsidiary of the Company is
governed by the laws of the jurisdiction in which such subsidiary is
organized, in which case the laws of Luxembourg or such jurisdiction, as the
case may be, shall apply to such matter of internal governance.
26
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
QUILMES INDUSTRIAL (QUINSA) SOCIETE ANONYME,
by
______________________________
COMPANHIA DE BEBIDAS DAS
AMERICAS-AMBEV,
by
______________________________
BEVERAGE ASSOCIATES (BAC) CORP.,
by
______________________________
SCHEDULE I
First Threshold Protective Provisions
(a) Operating Issues:
(i) approval of annual operating and capital budgets and any amendments and
deviations therefrom, exceeding US$5,000,000 in the case of expense items or
US$15,000,000 in the case of balance sheet items;
(ii) approval of capital expenditures or lease commitments exceeding
US$15,000,000, which were not included in the budget previously approved;
(iii) entering into any material and/or multi-year contracts or other
commitments exceeding US$5,000,000 in the aggregate, including, without
limitation, licensing of trademarks or technology;
(iv) entering into any business outside of beverages or outside South America;
and
(v) increases or decreases in product pricing (x) of more than 5% on a
cumulative basis, monitored on a monthly basis, if the annual inflation rate
in Argentina is up to 15% and (y) of more than 5% on a cumulative basis in
real terms (i.e., adjusted for inflation), monitored on a monthly basis, if
the annual inflation rate in Argentina is higher than 15%.
(vi) approval of annual operating targets referred to in Section 4.08.
(b) Management Compensation:
Changes in senior management overall compensation and variable compensation
policy of the Company, it being contemplated that the Company's and its
subsidiaries' compensation scheme will be gradually adapted to AmBev's
compensation scheme in terms of base salary, bonus and stock ownership
plan(s), during a period of 5 years.
(c) Capital Structure:
(i) issuances, repurchases and any reduction in the number of outstanding
shares, options, warrants or rights to acquire shares in (x) the Company or
(y) the Company's
28
subsidiaries when such issuance, repurchase or reduction is not contemplated
by the approved budget, in the case of the Company's subsidiaries in excess of
US$15,000,000 in the aggregate per year or US$ 5,000,000 in any instance;
(ii) the incurrence of debt or guarantees that would on a pro forma basis
result in net debt to EBITDA ratio to exceed 2.5x and EBITDA to interest
expense ratio to be lower than 5.0x, provided that in the event of a material
acquisition, these ratios will be adjusted for a period of [ ] months
following the date of such acquisition to 5.0x for the net debt to EBITDA
ratio and 2.5x for the EBITDA to interest expense ratio;
(iii) the granting of liens or mortgages in excess of US$15,000,000;
(iv) changes in dividend policy or shareholders' distribution policy; and
(v) delisting of the Company.
(d) Mergers and Acquisitions:
(i) merger or sale of the Company or any significant subsidiary;
(ii) any material asset sales or spin-offs exceeding US$15,000,000; and
(iii) material acquisitions of businesses or assets located in Argentina,
Paraguay, Uruguay or Bolivia, which were not contemplated in the budget
previously approved.
(e) Other Consent Rights:
(i) transactions with either AmBev, or the Company's or AmBev's affiliates,
other than transactions on an arms'-length basis;
(ii) change of the external auditors;
(iii) any material changes in accounting principles or policies;
(iv) institution of litigation and similar proceedings outside of the ordinary
course of business and waivers of
29
material rights or settlement of litigation outside of the ordinary course of
business;
v) changes in the charter or by-laws of the Company or its significant
subsidiaries; and
(vi) filing for bankruptcy, liquidation or dissolution of the Company or any
of its significant subsidiaries.
SCHEDULE II
Second Threshold Protective Provisions
(a) delisting of the Company;
(b) filing for bankruptcy, liquidation or dissolution of the Company or any of
its significant subsidiaries;
(c) transactions with either AmBev, or the Company's or AmBev's affiliates,
outside the ordinary course of business or other than on an arms'-length
basis;
(d) any material changes in accounting principles or policies that would have
an adverse effect on any component of the valuation formulas in Schedule 1.04
of the Stock Purchase Agreement;
(e) changes in the charter or by-laws of the Company that would have an
adverse effect on BAC's rights under this Agreement;
(f) the incurrence of debt or guarantees that would on a pro forma basis
result in net debt to EBITDA ratio to exceed 2.5x and EBITDA to interest
expense ratio to be lower than 5.0x, provided that in the event of a material
acquisition, these ratios will be adjusted for a period of [ ] months
following the date of such acquisition to 5.0x for the net debt to EBITDA
ratio and 2.5x for the EBITDA to interest expense ratio;
(g) acquisitions and divestitures outside the beverage industry;
(h) change of the external auditors to any firm other than an internationally
recognized public accounting firm; and
(i) changes in dividend policy or shareholders' distribution policy.
SCHEDULE III
Third Threshold Protective Provisions
(a) delisting of the Company;
(b) filing for bankruptcy, liquidation or dissolution of the Company or any of
its significant subsidiaries;
(c) transactions with either AmBev, or the Company's or AmBev's affiliates,
outside the ordinary course of business or other than on an arms'-length
basis;
(d) any material changes in accounting principles or policies that would have
an adverse effect on any component of the valuation formulas in Schedule 1.04
of the Stock Purchase Agreement; and
(e) changes in the charter or by-laws of the Company that would have an
adverse effect on BAC's rights under this Agreement.
EXHIBIT G
REGISTRATION RIGHTS AGREEMENT dated as of [ ], 20[ ],
among Beverage Associates (BAC) Corp., a British Virgin
Islands corporation ("BAC")and Companhia de Bebidas das
Americas-AmBev, a Brazilian corporation (the "Company").
R E C I T A L S
WHEREAS, pursuant to the terms of the Stock Purchase Agreement dated as
of May 1, 2002, by and among the Company and BAC (the "Purchase Agreement"),
BAC and the Company have agreed, among other things, to provide for the future
exchange (the "Exchange") of certain shares of Quilmes Industrial (Quinsa)
Societe Anonyme for shares of the Company (the "Company Exchange Shares");
WHEREAS, the Company has agreed to grant BAC and the Holders (as
hereinafter defined) certain registration rights with respect to the Company
Exchange Shares or American Depositary Shares representing common or preferred
shares of the Company (collectively, the "Company Exchange Shares"); and
WHEREAS, the Company and BAC desire to define the registration rights of
BAC and the Holders on the terms and subject to the conditions herein set
forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
ARTICLE I
Definitions
As used in this Agreement, the following terms have the meanings set
forth below:
"Commission" shall mean the United States Securities and Exchange
Commission or any other United States federal agency at the time administering
the Securities Act;
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended;
2
"Family Member" means any Member and any affiliate thereof;
"Holder" shall mean BAC or any Member or Family Member who holds
Registrable Securities;
"Member" means the ultimate beneficial owners of the shares of BAC on the
date of the Purchase Agreement;
"Person" shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency
or political subdivision thereof;
"register", "registered" and "registration" shall mean a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act (and any post-effective amendments filed or required to be
filed) and the declaration or ordering of effectiveness of such registration
statement;
"Registrable Securities" shall mean (a) Company Exchange Shares acquired
by any Holder pursuant to the Exchange and (b) any common or preferred shares
of the Company issued as a dividend or other distribution with respect to, or
in exchange for or in replacement of, the Company Exchange Shares;
"Registration Expenses" shall mean all expenses incurred by the Company
in connection with any registration pursuant to Section 2.01, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and expenses and
the expense of any special audits incident to or required by any such
registration;
"Securities Act" shall mean the United States Securities Act of 1933, as
amended; and
"Selling Expenses" shall mean all underwriting discounts, income or
transfer taxes if any, and selling commissions applicable to the sale of
Registrable Securities and all fees and disbursements of counsel for BAC, the
Holders and the Company.
3
ARTICLE II
Registration Rights
SECTION 2.01. Request for Registration. On any date after the date on
which the Company Exchange Shares have been issued to BAC but not later than
the fifth anniversary thereof, if the Company shall receive from BAC a written
request that the Company effect any registration with respect to the
Registrable Securities owned by the Holders (which request shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition thereof), the Company will as soon as practicable, use
all reasonable efforts to effect such registration (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act) as may be so reasonably requested and as would permit or
facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request; provided that the
Company shall not be obligated to effect, or take any action to effect, any
such registration pursuant to this Agreement:
(a) During the period between March 1 and June 30 of each year, to
the extent that the Company has not filed the periodic reports required to be
filed before June 30 of each year pursuant to Section 12 or 15(d) of the
Exchange Act;
(b) If the Company has previously effected a registration at the
request of BAC within 180 days prior to BAC's request for registration
pursuant to this Section 2.01;
(c) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(d) After the Company has effected three (3) such registrations on
behalf of the Holders (the "Registrations"), pursuant to this Agreement and,
subject
4
to the provisions below, such registrations have been declared or ordered
effective and the sales of such Registrable Securities shall have closed;
provided that any requested registration commenced that is subsequently
withdrawn at the request of BAC (unless such withdrawal is due to adverse
market conditions) shall count towards the Registrations;
(e) If the Registrable Securities requested by BAC to be registered
pursuant to such request do not represent at least 30% of the total
Registrable Securities held by the Holders as of the date of this Agreement;
(f) If at any time (i) while a registration statement relating to a
registration is effective, the Company provides written notice to BAC that the
Company has determined, in its reasonable business judgment, that it would be
materially disadvantageous to the Company (because the sale of Registrable
Securities covered by such registration statement or the disclosure of
information therein or in any related prospectus or prospectus supplement
would materially interfere with or otherwise adversely affect in any material
respect any acquisition, financing, corporate reorganization or other material
transaction or event, circumstance or development involving the Company (a
"Disadvantageous Condition")) for sales of Registrable Securities under such
registration statement to be permitted, the Company may on one occasion during
any six-month period refrain from maintaining current the prospectus contained
in such registration statement for a reasonable period of time specified in
such notice or until such Disadvantageous Condition no longer exists (notice
of which the Company shall promptly deliver to BAC) but in no event for more
than 90 days; and (ii) the Company provides written notice to BAC that the
Company has determined, in its reasonable business judgment, that it would be
materially disadvantageous to the Company (because of a Disadvantageous
Condition) for such a registration statement to be maintained effective, or to
be filed or to become effective, and setting forth in general terms the
reasons for such determination, the Company shall be entitled to cause such
registration statement to be withdrawn or the effectiveness of such
registration statement to be terminated, or, in the event no registration
statement has been filed, the Company shall be entitled to not file such
registration statement, for a reasonable period of time specified in the
notice of the
5
Disadvantageous Condition or until such Disadvantageous Condition no longer
exists (notice of which the Company shall promptly deliver to BAC) but in no
event for more than 90 days.
Upon receipt by BAC of any notice from the Company of a
Disadvantageous Condition, the Holders shall immediately discontinue use of
the prospectus and any prospectus supplement under such registration statement
and shall suspend sales of Registrable Securities for the period of time
specified in the notice of the Disadvantageous Condition or until such
Disadvantageous Condition no longer exists but in no event for more than 90
days. Furthermore, if so directed by the Company by such notice, the Holders
will deliver to the Company all copies then in its possession of the
prospectus and prospectus supplements then covering such Registrable
Securities at the time of receipt of such notice. In the event that the
Company makes an election under this Section 2.01, the Holders agree to keep
confidential the fact of such election and any information provided by the
Company in connection therewith. In the event any registration statement in
respect of a registration requested by BAC pursuant to Section 2.01(f) is
withdrawn or the effectiveness of such registration statement is terminated,
or a registration statement is not filed in respect of such request, in each
case pursuant to this Section 2.01(f), then BAC shall have the right to
withdraw its request for such registration at any time following receipt of
any notice from the Company of a Disadvantageous Condition, and, if the BAC so
withdraws its request, the Holders shall be deemed not to have used one of
their rights to request a registration under this Agreement and shall continue
to have such right.
SECTION 2.02. Other Shareholders. The registration statement filed
pursuant to the request of BAC may, subject to the provisions of Section 2.05
below, include other securities of the Company that are not Registrable
Securities which are held by Persons who, by virtue of agreements with the
Company or otherwise, are entitled to include their securities in any such
registration ("Other Shareholders").
SECTION 2.03. Underwriting. If the Holders intend to distribute the
Registrable Securities by means of an underwriting, BAC shall so advise the
Company as a part of its request made pursuant to Section 2.01. If Other
6
Shareholders request to include other securities of the Company as part of the
registration, BAC shall offer to include the securities of such Other
Shareholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2.05. BAC and
the Company shall (together with all Other Shareholders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by BAC and
reasonably acceptable to the Company.
Notwithstanding any other provision of this Article II, if such
representative advises BAC in writing that marketing factors (including
pricing) require a limitation on the number of shares to be underwritten, the
securities of the Company held by Other Shareholders shall first be excluded
from such registration to the extent so required by such limitation, before
any Registrable Securities are excluded. No Registrable Securities or any
other securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration. If any Other
Shareholder who has requested inclusion in such registration as provided above
disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company, the underwriter and BAC.
The securities so withdrawn shall also be withdrawn from registration. If the
underwriter has not limited the number of Registrable Securities or other
securities to be underwritten, the Company and officers and directors of the
Company may include its or their securities for its or their own account in
such registration if the representative so agrees and if the number of
Registrable Securities and other securities which would otherwise have been
included in such registration and underwriting will not thereby be limited.
SECTION 2.04. Form S-3 or Form F-3. Notwithstanding anything to the
contrary in Section 2.01, so long as the Company qualifies for registration on
Form S-3 or F-3 for secondary sales, any request for registration by BAC shall
be a request for registration on Form S-3 or F-3, and shall be subject to the
conditions and limitations set forth in Section 2.01.
SECTION 2.05. Company Registration. (a) Inclusion in Registration. If the
Company shall determine to register
7
any of its equity securities either for its own account or for the account of
Other Shareholders, other than a registration relating solely to employee
benefit plans, or a registration relating solely to a Commission Rule 145
transaction, or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as
would be required to be included in a registration statement covering the sale
of Registrable Securities, the Company will:
(i) promptly give BAC a written notice thereof (which shall include a
list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other state
securities laws); and
(ii) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written
request made by BAC within fifteen (15) days after receipt of the
written notice from the Company described in Section 2.05(a)(i)
above, except as set forth in Section 2.05(b)(ii) below. Such
written request may specify all or a part of the Holders' respective
Registrable Securities.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise BAC as a part of the written notice given pursuant to
Section 2.05(b)(i). In such event, the right of each of the Holders to
registration pursuant to this Section 2.05 shall be conditioned upon such
Holders' participation in such underwriting and the inclusion of such Holders'
Registrable Securities in the underwriting to the extent provided herein. The
Holders whose shares are to be included in such registration shall (together
with the Company and the Other Shareholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
underwriting by the Company. Notwithstanding any other provision of this
Section 2.05, if such representative determines that marketing factors
(including pricing) require a limitation on the number of shares to be
underwritten, the representative may (subject to the limitations and the
allocation priority set forth below)
8
limit the number of Registrable Securities to be included in, or exclude the
Registrable Securities from, the registration and underwriting. The Company
shall immediately advise all holders of securities of the Company requesting
registration of such limitation or exclusion. In the case of a limitation, the
number of shares of such securities that are entitled to be included in the
registration and underwriting shall be allocated in the following manner: The
securities of the Company held by officers, directors and Other Shareholders
of the Company (other than Registrable Securities and other than securities
held by holders who by contractual right demanded such registration
("Demanding Holders")) shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a limitation
on the number of shares is still required, the number of shares that may be
included in the registration and underwriting by each of the Holders and
Demanding Holders shall be reduced, on a pro rata basis (based on the number
of shares held by each such Holder), by such minimum number of shares as is
necessary to comply with such limitation. If any of the Holders or any
officer, director or Other Shareholder disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
SECTION 2.06. No Assignment. The registration rights set forth in this
Article II may not be assigned, in whole or in part, to any transferee of
Registrable Securities, other than a Member or a Family Member.
SECTION 2.07. Expenses of Registration. All Registration Expenses and
Selling Expenses incurred in connection with any registration, qualification
or compliance pursuant to this Article II shall be borne by BAC; provided that
in connection with any registration pursuant to Section 2.05, the Company
shall be responsible for the Registration Expenses incurred in connection with
any such registration and BAC shall be responsible for the Holders'
proportionate share of the Selling Expenses.
SECTION 2.08. Registration Procedures. In the case of each registration
effected by the Company pursuant to Article II, the Company will keep BAC
advised in writing as
9
to the initiation of each registration and as to the completion thereof. At
BAC's expense, the Company will:
(a) keep such registration effective for a period of one hundred
twenty (120) days or until BAC has completed the distribution described in the
registration statement relating thereto, whichever first occurs; provided,
however, that (i) such 120-day period shall be extended for a period of time
equal to the period during which BAC is prohibited from selling any securities
included in such registration as a result of a Disadvantageous Condition; and
(ii) in the case of any registration of Registrable Securities on Form S-3 or
F-3 which are intended to be offered on a continuous or delayed basis, such
120-day period shall be extended until all such Registrable Securities are
sold, provided that Rule 415, or any successor rule under the Securities Act,
permits an offering on a continuous or delayed basis, and provided further
that applicable rules under the Securities Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a post-effective
amendment which includes any prospectus required by Section 10(a) of the
Securities Act or reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference in the registration statement of such
information included in periodic reports filed pursuant to Section 12 or 15(d)
of the Exchange Act;
(b) furnish such number of prospectuses and other documents incident
thereto as BAC from time to time may reasonably request;
(c) notify BAC at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing; and
(d) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters or, if such securities are not being sold through
underwriters, on the date that the registration
10
statement with respect to such securities becomes effective, (i) an opinion,
dated as of such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given
to underwriters in an underwritten public offering, addressed and reasonably
satisfactory to the underwriters, if any, and to BAC and (ii) a letter, dated
as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering addressed and reasonably satisfactory to the underwriters, if any,
and if permitted by applicable accounting standards, to BAC.
SECTION 2.09. Indemnification.
(a) The Company will indemnify BAC and each Holder, each of its
officers and directors, and each person controlling BAC or such Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, with respect to each registration which has been effected pursuant to
this Article II, and each underwriter, if any, and each person who controls
any underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration under which the Registrable Securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or the Exchange Act or any rule
or regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse BAC and each Holder, each of
its officers, directors and partners, and each person controlling BAC or such
Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred (as
incurred) in connection with investigating and defending any such claim, loss,
damage, liability or action; provided, however, that the
11
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company
by BAC, any Holder or any underwriter and stated to be specifically for use
therein.
(b) BAC and each Holder will indemnify the Company, each of its
directors and officers and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each Other Shareholder and
each of their officers and directors, and each person controlling such Other
Shareholder within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any registration
under which the Registrable Securities were registered under the Securities
Act, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof made by BAC or such Holder in writing, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements by BAC or such Holder
therein not misleading, and will reimburse the Company and such Other
Shareholders, directors, officers, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action,
in each case to the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) is made in
such registration statement, prospectus, offering circular or other document
in reliance upon and in conformity with written information furnished to the
Company by BAC or such Holder and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this Section 2.09
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has knowledge of any claim as to which indemnity may be sought, and
shall permit the
12
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom; provided that counsel for the Indemnifying Party, who
shall conduct the defense of such claim or litigation, shall be approved by
the Indemnified Party (whose approval shall not unreasonably be withheld) and
the Indemnified Party may participate in such defense at such party's expense
(unless the Indemnified Party shall have reasonably concluded that there may
be a conflict of interest between the Indemnifying Party and the Indemnified
Party in such action, in which case the fees and expenses of counsel shall be
at the expense of the Indemnifying Party), and provided further that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 2.09
unless the Indemnifying Party is materially prejudiced thereby. No
Indemnifying Party, in the defense of any such claim or litigation shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably
request in writing and as shall be reasonably required in connection with the
defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 2.09 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
13
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering contemplated
by this Agreement are in conflict with the foregoing provisions, the
provisions in such underwriting agreement shall control.
(f) The foregoing indemnity agreement of the Company, BAC and the
Holders is subject to the condition that, insofar as they relate to any loss,
claim, liability or damage made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter, BAC or any Holder if a copy of the Final
Prospectus was furnished to the underwriter and was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities Act.
SECTION 2.10. Information by BAC and the Holders. BAC and the Holders
shall furnish to the Company such information regarding BAC and the Holders
and the distribution proposed by BAC and the Holders as the Company may
reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Article II.
SECTION 2.11. Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit
the sale of restricted securities to the public without registration, the
Company agrees to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144");
14
(b) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and
(c) so long as BAC or any Holder owns any Registrable Securities,
furnish to BAC or such Holder upon 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 BAC or such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Holders to sell any such securities
without registration.
SECTION 2.12. Termination. The registration rights set forth in this
Article II shall not be available to any Holder if all of the Registrable
Securities then owned by such Holder could be sold in any 90-day period
pursuant to Rule 144.
ARTICLE III
General Provisions
SECTION 3.01. Assignment. Subject to Section 2.06, this Agreement and the
rights and obligations hereunder shall not be assignable or transferable by
any party (including, in the case of the Holders, by operation of law in
connection with a merger or consolidation of any Holder) without the prior
written consent of the other party hereto.
SECTION 3.02. No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.
SECTION 3.03. Attorney Fees. A party in breach of this Agreement shall,
on demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees, incurred by such
other party by reason of the enforcement and protection of its rights under
this Agreement. The payment
15
of such expenses is in addition to any other relief to which such other party
may be entitled.
SECTION 3.04. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by fax or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or fax, or if mailed, three days after mailing (one business
day in the case of express mail or overnight courier service), as follows:
(a) if to the Company,
[
]
Attention of ;
with a copy to:
[
]
Attention of ; and
(b) if to BAC or any Holder,
[
]
Attention of .
SECTION 3.05. Interpretation; Exhibits and Schedules; Certain
Definitions. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Capitalized terms used but not otherwise defined herein shall
have the meaning as defined in the Purchase Agreement. When a reference is
made in this Agreement to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated.
SECTION 3.06. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been
16
signed by each of the parties and delivered to the other parties. An executed
counterpart of this Agreement delivered by fax shall be deemed to be an
original and shall be as effective for all purposes as delivery of a manually
executed counterpart.
SECTION 3.07. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. None of the parties shall be liable or bound
to any other party in any manner by any representations, warranties or
covenants relating to such subject matter except as specifically set forth
herein.
SECTION 3.08. Severability. If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other
provision hereof (or the remaining portion thereof) or the application of such
provision to any other persons or circumstances.
SECTION 3.09. Arbitration.
(a) Any and all differences, controversies and disputes of any
nature whatsoever arising out of or relating to this Agreement, including
without limitation any dispute relating to its validity, interpretation,
performance or termination, shall be referred to three arbitrators, all of
which shall be appointed by the Court of Arbitration of the International
Chamber of Commerce. The arbitrators shall proceed according to the Rules of
Arbitration of the International Chamber of Commerce. The arbitration
proceedings shall be conducted in the English language and the seat of the
arbitration shall be New York City (United States of America). The arbitrators
appointed in connection herewith shall be knowledgeable of New York laws and
fluent in the English language.
(b) All submissions and awards in relation to arbitration under this
Agreement shall be made in English, and all arbitration proceedings and all
pleadings shall be in English. Witnesses not fluent in English may give
evidence in their native tongue (with appropriate
17
translation). Original documents in a language other than English shall be
submitted as evidence in English translation accompanied by the original or
true copy thereof.
(c) The procedural rules governing arbitration hereunder shall be
established by the arbitrators; provided that (i) each party may call upon the
other party to supply the arbitrators with documents in such other party's
control relevant to the dispute; (ii) each party shall be entitled to present
the oral testimony of witnesses as to fact and expert witnesses; (iii) each
party shall be entitled to question directly any witnesses who present
testimony to the arbitrators; and (iv) at the request of any party, a written
transcript in English shall be made of each hearing before the arbitrators and
shall be furnished to the parties. The arbitrators may, at the request of any
party, order provisional or conservatory measures.
(d) Each party participating in such arbitration shall pay its own
legal fees and expenses incurred in connection with the arbitration and the
expense of any witness produced by it. The cost of any stenographic record and
all transcripts thereof shall be pro-rated equally among all parties ordering
copies and shall be paid by the parties directly to the reporting agency. All
other expenses of the arbitration, including required traveling and other
expenses and fees of the arbitrators and the expenses of any witness or the
cost of any proof produced at the request of the arbitrators, shall be borne
as determined by the arbitrators.
(e) Any award shall be final and not subject to appeal and the
parties waive all challenge to any award of the arbitrators under this Section
3.09. Any award may be entered or presented by any of the parties for
enforcement in any court of competent jurisdiction sitting in New York, New
York, and the parties hereby consent to the jurisdiction of such court solely
for purposes of enforcement of any award. Each party further agrees that
service of any process, summons, notice or document in the manner provided for
notices in Section 3.04 shall be effective service for purposes of any such
enforcement action.
SECTION 3.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal
18
laws of the State of New York applicable to agreements made and to be
performed entirely within such State, without regard to the conflicts of law
principles of such State.
19
IN WITNESS WHEREOF, BAC and the Company have duly executed this Agreement
as of the date first written above.
BEVERAGE ASSOCIATES (BAC) CORP.,
by
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Name:
Title:
COMPANHIA DE BEBIDAS DAS AMERICAS-AMBEV,
by
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Name:
Title:
by
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Name:
Title:
