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EXHIBIT 10.13
EXECUTION COPY
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SHAREHOLDERS AGREEMENT
AMONG
XXXX CANADA INTERNATIONAL (ESPELHO SUL) LIMITED,
VELOCOM CAYMAN BRASIL HOLDINGS,
QUALCOMM DO BRASIL LTDA.
AND
BV INTERATIVA HOLDINGS
DATED AS OF MARCH 22, 2000
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TABLE OF CONTENTS
PAGE
Article I. Definitions and Interpretation.........................................................................1
Section 1.1 Defined Terms ...................................................................................1
Section 1.2 Interpretation ..................................................................................6
Article II. Interativa............................................................................................6
Section 2.1 Capitalization of Interativa ....................................................................6
Section 2.2 Initial Contributions of Shareholders to Interativa .............................................6
Section 2.3 Increases in Capital ............................................................................7
Section 2.4 Mechanism for Funding Cash Calls ................................................................7
Section 2.5 Funding Obligations .............................................................................7
Section 2.6 Preemptive Rights ...............................................................................8
Section 2.7 Purposes ........................................................................................9
Article III. Representations, Warranties And Covenants............................................................9
Section 3.1 Representations and Warranties ..................................................................9
Section 3.2 Covenants Regarding the Foreign Corrupt Practices Act ..........................................10
Article IV. Accounting Matters...................................................................................11
Section 4.1 Books and Accounting Records ...................................................................11
Section 4.2 Access .........................................................................................11
Section 4.3 Auditor ........................................................................................12
Section 4.4 Internal Audits ................................................................................12
Section 4.5 Interests of the Companies .....................................................................12
Section 4.6 Distributions of Excess Cash ...................................................................12
Section 4.7 Funding Policy .................................................................................12
Section 4.8 Business Plan ..................................................................................12
Section 4.9 Annual Tax Return ..............................................................................12
Section 4.10 Related Party Transactions ....................................................................12
Section 4.11 Financial Information .........................................................................13
Article V. Board and Shareholder Meetings........................................................................13
Section 5.1 Appointments to the Board of Directors of Interativa ...........................................13
Section 5.2 Rights Regarding Appointment of Directors ......................................................14
Section 5.3 Chairman .......................................................................................14
Section 5.4 Frequency of Board Meetings; Location; Notice; Agenda; Attendance of Alternates;
Committees .................................................................................15
Section 5.5 Quorum and Voting Requirements for Board Meetings ..............................................16
Section 5.6 Quorum and Voting Requirements for Shareholder Meetings ........................................19
Section 5.7 Officers .......................................................................................21
Section 5.8 Related Party Agreements .......................................................................21
Article VI. Restrictions On Transfer And Encumbrance.............................................................21
Section 6.1 Encumbrance of Shares ..........................................................................21
Section 6.2 Transfers Subject to Restrictions ..............................................................21
Section 6.3 Right of First Negotiation .....................................................................22
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Page
Section 6.4 Right of First Refusal .........................................................................23
Section 6.5 Transfers to Affiliates ........................................................................25
Section 6.6 Expenses .......................................................................................25
Section 6.7 Further Assurances .............................................................................25
Section 6.8 Closing of Any Transfer ........................................................................25
Section 6.9 Restrictive Legend .............................................................................26
Article VII. Further Covenants and Agreements....................................................................26
Section 7.1 Management of the Companies ....................................................................26
Section 7.2 Shareholders Agreement Controls ................................................................26
Article VIII. Confidentiality....................................................................................27
Section 8.1 General ........................................................................................27
Section 8.2 Disclosure Required by Law or Court Order ......................................................28
Section 8.3 Use of Confidential Information ................................................................28
Article IX. Termination; Liquidation.............................................................................28
Section 9.1 Term of Agreement ..............................................................................28
Section 9.2 Termination by Unanimous Consent ...............................................................28
Section 9.3 Termination on Bankruptcy or Liquidation .......................................................28
Section 9.4 Liquidation ....................................................................................29
Article X. Governing Law; Arbitration............................................................................29
Section 10.1 Law ...........................................................................................29
Section 10.2 Arbitration ...................................................................................29
Section 10.3 Waiver of Jury Trial ..........................................................................32
Article XI. Miscellaneous........................................................................................32
Section 11.1 Notices .......................................................................................32
Section 11.2 Assignment ....................................................................................34
Section 11.3 Entire Agreement ..............................................................................34
Section 11.4 Headings ......................................................................................34
Section 11.5 Section References ............................................................................34
Section 11.6 Amendments; Waivers ...........................................................................34
Section 11.7 Third-Party Rights ............................................................................34
Section 11.8 Rights and Remedies ...........................................................................34
Section 11.9 Further Assurances ............................................................................34
Section 11.10 Transfer Taxes; Recording Fees ...............................................................34
Section 11.11 No Consequential Damages .....................................................................35
Section 11.12 Expenses of Negotiation ......................................................................35
Section 11.13 Relationship Among the Shareholders; Relationship between Interativa and the
Shareholders ...............................................................................35
Section 11.14 Voting .......................................................................................35
Section 11.15 No Brokers ...................................................................................35
Section 11.16 News Releases ................................................................................36
Section 11.17 Compliance with Transaction Documents ........................................................36
Section 11.18 Counterparts .................................................................................36
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SHAREHOLDERS AGREEMENT
This Shareholders Agreement (this "Agreement") dated as of March 22,
2000 among Xxxx Canada International (Espelho Sul) Limited, a British Virgin
Islands Company ("BCI"), VeloCom Cayman Brasil Holdings, a Cayman Islands
company ("VeloCom"), QUALCOMM do Brasil Ltda, a Brasilian sociedade de
responsibilidade limitada ("QUALCOMM") and BV Interativa Holdings, a Cayman
Islands Company ("Interativa").
RECITALS
WHEREAS, BCI and VeloCom each owns 45% of the issued and outstanding
capital stock of Interativa;
WHEREAS, QUALCOMM owns 10% of the issued and outstanding capitalized
stock of Interativa;
WHEREAS, Interativa owns 99.9% of BV Interativa Ltda., a Brasilian
sociedade de responsibilidade limitada ("Interativa Brasil").
WHEREAS, pursuant to the terms of the Purchase Agreement (as defined
below), Interativa Brasil purchased, on the Closing Date (as defined below),
100% of the issued and outstanding capital stock of BR Home Shopping Internet
S.A., a Brasilian sociedade anonima ("BRHS"), from its shareholders; and
WHEREAS, the Shareholders wish to set forth the terms and conditions of
the operation of Interativa and its Subsidiaries (as defined below), including
BRHS and Interativa Brasil (the "Interativa Subsidiaries").
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements, and upon the terms and subject to the
conditions hereinafter set forth, the parties hereto agree as follows:
AGREEMENTS
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to the singular and plural forms of the terms defined).
"Acceptance Period" shall have the meaning set forth in Section 6.4(d)
hereof.
"Adjusted Valuation Price" shall have the meaning set forth in Section
6.4(e) hereof.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by or under common Control with
such Person.
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"Agreement" shall mean this Shareholders Agreement, including all
exhibits, annexes and schedules hereto.
"Annual Audit Report" shall have the meaning set forth in Section 4.3
hereof.
"Articles" shall have the meaning set forth in Section 5.1 hereof.
"BCI" shall have the meaning set forth in the Recitals hereof.
"Board" shall mean the board of directors of each of the Companies as
the context requires.
"Bona Fide Offer" shall have the meaning specified in Section 6.4(c)
hereof.
"Bona Fide Shares" shall have the meaning specified in Section 6.4(d)
hereof.
"BRHS" shall have the meaning set forth in the Recitals hereof.
"Business Day" shall mean a day of the year on which banks are not
required or authorized to close in Montreal, Canada; New York, New York or Sao
Paulo, Brasil.
"Cash Call Notice" shall mean a written notice for a Contribution sent
in accordance with Article II hereof.
"Chairman" shall have the meaning specified in Section 5.3 hereof.
"Chief Executive Officer" shall mean the chief executive officer of
Interativa, who shall be appointed by BCI and VeloCom.
"Closing Date" shall mean March 17, 2000.
"Companies" shall mean Interativa and the Interativa Subsidiaries.
"Company Act" means the New Brazilian Company Law, Law No. 6404 of
December 15, 1976, as amended from time to time, and any successor or
replacement legislation thereof.
"Confidential Information" shall have the meaning specified in Section
8.1(b) hereof.
"Contribution" shall mean any capital contribution and/or Shareholder
loan made pursuant to Section 2.2 or Section 2.3 hereof.
"Control" is possessed by a Person over another Person (such other
Person the "subject Person") if such Person (alone or in combination with one or
more Related Parties and/or Affiliates), (i) holds shares or possesses rights
that assure it the majority of votes in resolutions in a general meeting of
shareholders and the power to elect a majority of the subject Person's members,
directors and officers; or (ii) holds shares or possesses rights
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either directly or indirectly through the control of other subject Person(s)
that assure its prevalence in corporate resolutions and the power to elect the
majority of the subject Person's directors and officers; or (iii) satisfies the
definitions of "control" set forth in articles 116 and 243(2) of the Company Act
or any successor or replacement legislation thereof or (iv) has the power
otherwise to cause the direction of the management of the subject Person and
"Controlling" or "Controlled" have corresponding meanings.
"Defaulting Shareholder" shall mean any Shareholder that causes an
Event of Default.
"Demand" shall have the meaning set forth in Section 10.2(c) hereof.
"Dispute" shall have the meaning set forth in Section 10.2(a) hereof.
"Dollars" or "US$" shall mean the lawful currency of the United States
of America.
"Event of Default" shall mean the occurrence, by or with respect to any
Shareholder, of (i) the violation or breach of any of the Material Provisions of
this Agreement which has not been remedied after a period of twenty (20)
Business Days following the receipt by the Defaulting Shareholder of a written
notice of such violation or breach (unless a different delay to remedy the Event
of Default is specifically expressed in this Agreement); (ii) the voluntary
filing of a petition or judgment declaring bankruptcy or insolvency, or the
voluntary liquidation, dissolution or winding-up; or (iii) the making of any
arrangement with all or substantially all of such Party's creditors; provided,
however, that the failure of any Shareholder to make any capital contribution
other than as set forth in Section 2.2 shall not constitute an Event of Default.
"Excess Shares" shall have the meaning set forth in Section 2.6(c)
hereof.
"Experts" shall have the meaning set forth in Section 6.4(e) hereof.
"Final Payment" shall have the meaning specified in Section 2.3(c) of
the Purchase Agreement.
"First Refusal Notice" shall have the meaning set forth in Section
6.4(b).
"Floor Price" shall have the meaning set forth in Section 6.3(c)
hereof.
"Foreign Corrupt Practices Act" shall mean the Foreign Corrupt
Practices Act of the United States of America (15 U.S.C.A. Section 78dd) and any
successor statute or legislation.
"Foreign Official" means (i) an officer or employee of the government
of the Federative Republic of Brasil or any political subdivision, department,
agency or instrumentality thereof, (ii) a Person acting in an official capacity
for or on behalf of any such government or department, agency or
instrumentality, (iii) a member or official of a political party in the
Federative Republic of Brasil or (iv) a candidate for political office in the
Federative Republic of Brasil.
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"GAAP" shall mean generally accepted accounting principles in effect in
a particular jurisdiction, consistently applied.
"ICC" shall have the meaning set forth in Section 10.2(c) hereof.
"Indemnitor" shall have the meaning set forth in Section 11.15(b)
hereof.
"Interativa" shall have the meaning set forth in the Recitals hereof.
"Interativa Brasil" shall have the meaning set forth in the Recitals
hereof.
"Interativa Subsidiaries" shall have the meaning set forth in the
Recitals hereof.
"Lending Shareholders" shall have the meaning set forth in Section
2.3(b) hereof.
"Lien" shall mean any pledge, mortgage, lien, security interest or
other encumbrance.
"Loss" shall mean any loss, damage, claim, obligation, liability or
expense, including, without limitation, reasonable attorneys' fees and costs of
litigation whether threatened or pending.
"Material Provisions" shall mean Section 2.2, Section 3.1, Section 3.2,
Section 5.5, Section 5.6, Section 6.2, Section 6.3, Section 6.4, and Article
VIII.
"Negotiation Period" shall have the meaning set forth in Section 6.3(b)
hereof.
"Nonlending Shareholder" shall have the meaning set forth in Section
2.3(b) hereof.
"Nontransferring Shareholder" shall mean, with respect to any transfer
of Shares in accordance with this Agreement, any Shareholder that is not a
Transferring Shareholder.
"Observer" shall have the meaning set forth in Section 5.1(b) hereof.
"Offer Notice" shall have the meaning set forth in Section 6.3(a)
hereof.
"Offered Shares" shall have the meaning set forth in Section 6.3(a)
hereof.
"Officer" shall mean an officer of Interativa appointed by BCI and
VeloCom.
"Ownership Percentage" of any Shareholder shall mean, at any time, a
percentage equal to the product of (i) 100% multiplied by (ii) a fraction, the
numerator of which is the number of Shares owned by such Shareholder at such
time and the denominator of which is the aggregate number of all issued and
outstanding Shares at such time.
"Parent Shareholder" means Xxxx Canada International Inc., VeloCom Inc.
and XXXXXXXX Xxxxxxxxxxxx.
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"Parties" shall mean the parties to this Agreement as of the date
hereof and from time to time.
"Person" shall mean an individual, a corporation, a partnership, a
trust, an unincorporated organization, a government or any agency or political
subdivision thereof.
"Preemptive Offer" shall have the meaning set forth in Section 2.6(c).
"Preemptive Period" shall have the meaning set forth in Section 2.6(d)
hereof.
"Proportionate Amount" shall have the meaning set forth in Section
2.6(a) hereof.
"Pro Rata Portion" shall have the meaning set forth in Section 6.3(b)
hereof.
"Purchase Agreement" shall mean the Purchase Agreement dated March 3,
2000 among Interativa Brasil, BRHS and the Shareholders of BRHS.
"QUALCOMM" shall have the meaning set forth in the Recitals of this
Agreement.
"Related Party" with respect to any individual means any Person related
by blood (up to the fourth degree), marriage or adoption (or formerly related by
marriage) to such individual, including, without limitation, spouses, in-laws,
parents, grandparents, children, grandchildren, aunts, uncles, great-aunts,
great-uncles, nieces, nephews, great-nieces and great-nephews.
"Representative" shall mean, with respect to any Person, any director,
officer, employee, consultant, advisor or agent of such Person.
"Rules" shall have the meaning set forth in Section 10.2(c) hereof.
"Schedule of Authorities" shall have the meaning set forth in Section
5.5(b)(xiii).
"Shareholders" shall mean BCI, VeloCom and QUALCOMM and any other
Person who is the owner of any Shares and is a party to this Agreement.
"Shares" shall mean the issued and outstanding shares of Interativa,
par value US$1.00 per share.
"Subsidiary" shall mean, with respect to any Person, another Person
controlled directly or indirectly by such Person or in which such Person owns,
directly or indirectly, a ten percent (10%) or more equity interest. For the
purposes of this definition, "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of an entity, whether through the ownership of voting securities or
otherwise.
"Transaction Documents" shall mean this Agreement and the Purchase
Agreement.
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"Transferring Shareholder" shall mean any Shareholder that desires to
transfer Shares.
"Valuation Price" shall have the meaning set forth in Section 6.4(e)
hereof.
"VeloCom" shall have the meaning set forth in the Recitals of this
Agreement.
Section 1.2 Interpretation.
(a) Certain Terms. In this Agreement, (i) any reference to an
agreement or document shall mean such agreement or document, including any
schedules and exhibits thereto, as the same may be supplemented, amended or
modified from time to time in accordance with its terms, (ii) the term "days"
shall mean calendar days and (iii) in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from but
excluding" and the words "until" and "to" mean "to and including."
(b) Calculation of Interest. Interest applicable to any amount
payable hereunder shall be calculated for the actual number of days elapsed on
the basis of a year consisting of three hundred and sixty (360) days and shall
be compounded semi-annually, to the extent permitted by applicable law.
ARTICLE II.
INTERATIVA
Section 2.1 Capitalization of Interativa. As of the date hereof, the
issued and outstanding capital stock of Interativa, a Cayman Islands company, is
comprised of nine million, one hundred thirty nine thousand four hundred and
twenty-five (9,139,425) Shares, par value US$1.00 per Share; of which (i) BCI
owns four million, one hundred twelve thousand, seven hundred and forty-one
(4,112,741) Shares (representing 45% of such issued and outstanding capital
stock); (ii) VeloCom owns four million, one hundred twelve thousand, seven
hundred and forty-one (4,112,741) Shares (representing 45% of such issued and
outstanding capital stock); and (iii) QUALCOMM owns nine hundred thirteen
thousand, nine hundred and forty-three (913,943) Shares (representing 10% of
such issued and outstanding capital stock).
Section 2.2 Initial Contributions of Shareholders to Interativa.
(a) As of the date of this Agreement, the Shareholders have
contributed nine million, one hundred thirty nine thousand four hundred and
twenty-five Dollars (US$ 9,139,425.00) as follows: each of BCI and VeloCom has
contributed four million, one hundred twelve thousand, seven hundred and
forty-one Dollars (US$ 4,112,741.00), and QUALCOMM has contributed nine hundred
thirteen thousand, nine hundred and forty-three Dollars (US$ 913,943.00).
(b) Subject to and upon the terms and conditions set forth in
this Agreement, each Shareholder agrees to make on the date the Final Payment is
due under
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the Purchase Agreement, capital contributions and/or Shareholder loans to
Interativa in proportion to its Ownership Percentage in Interativa to fund the
amount of the Final Payment.
(c) Within thirty (30) days after the Closing Date, the
Management of BRHS will present a business plan, for the first year of BRHS's
operations, to the Board of Interativa, which business plan will include the
proposed first stage funding commitment of Interativa. The Shareholders and the
Board of Interativa will use their best efforts to approve such business plan,
with such revisions deemed necessary by the Board of Interativa within sixty
(60) days after the Closing Date.
Section 2.3 Increases in Capital.
(a) The capital of Interativa may be increased from time to
time as authorized by the Interativa Board in order to fund anticipated cash
needs of Interativa. The Shareholders shall have preemptive rights in respect of
all such increases in capital in proportion to their Ownership Percentages in
Interativa as set forth in Section 2.6 hereof. Each Shareholder shall vote its
Shares in favor of such increase in capital in order to implement the vote of
the Interativa Board taken in accordance with Section 5.5 hereof.
(b) The amount of Shareholder loans made by each Shareholder
to Interativa shall be in proportion to such Shareholder's Ownership Percentage,
provided, however, that if any Shareholder fails to make a loan in the amount of
its Ownership Percentage (a "Nonlending Shareholder"), the Shareholders that
make loans ("Lending Shareholders") shall have the right to make additional
loans (totaling the amount of the loan not made by the Nonlending Shareholder),
each in the proportion its Ownership Percentage bears to the total Ownership
Percentage of the Lending Shareholders.
Section 2.4 Mechanism for Funding Cash Calls. If the Interativa Board
authorizes a Contribution, Interativa shall send a Cash Call Notice to each of
the Shareholders calling for Contributions from such Shareholder. Each
Contribution (or portion thereof) required to be made by any such Shareholder
shall be payable by such Shareholder in the form of a capital contribution
and/or a Shareholder loan to Interativa (which form shall be the same for all
Shareholders) as determined by the Interativa Board and specified in the Cash
Call Notice. Each Contribution made pursuant to this Agreement shall be payable
by the Shareholders in cash, in Dollars, on the date specified in the Cash Call
Notice, by wire transfer to the account or accounts of Interativa as specified
in such Cash Call Notice.
Section 2.5 Funding Obligations. Except as provided in Section 2.2
hereof, no Shareholder shall have any obligation pursuant to this Agreement to
make any capital contributions or Shareholder loans to Interativa. Failure by a
Shareholder to subscribe to its Proportionate Amount of any Contribution (other
than pursuant to Section 2.2) shall result in a dilution of its Ownership
Percentage and shall not constitute an Event of Default hereunder.
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Section 2.6 Preemptive Rights.
(a) Each Shareholder shall have preemptive rights, as
described below, to subscribe in proportion to its respective Ownership
Percentage in Interativa (its "Proportionate Amount") for any additional Shares
of Interativa that may be issued (including Shares to be issued pursuant to a
Cash Call Notice) to satisfy Interativa's anticipated cash needs.
(b) Any new Shares of Interativa from time to time to be
created, or Shares already authorized but not issued, shall, before they are
issued to satisfy Interativa's anticipated cash needs, be offered to each
Shareholder in its respective Proportionate Amount.
(c) Every offer regarding preemptive rights (each a
"Preemptive Offer") shall be made in writing by Interativa to each Shareholder,
shall be accompanied by forms of application for use by each such Shareholder in
applying for its Proportionate Amount or for any lesser number of Shares, and
for any Shares in excess of its Proportionate Amount, to which it is prepared to
subscribe ("Excess Shares"), and shall specify:
(i) the aggregate number and type (including all
material terms) of Shares that Interativa proposes to allot;
(ii) the terms (including the price per Share and
terms of payment) on which Interativa proposes to allot the Shares;
(iii) each Shareholder's Proportionate Amount.
(d) Every Preemptive Offer shall be open for acceptance in
whole or in part for a period of thirty (30) days from the date of its delivery
(the "Preemptive Period"). An acceptance of an offer shall only be valid to the
extent that payment in full or an irrevocable commitment to pay for the Shares
accepted, on the terms set forth in the Preemptive Offer, accompanies the
acceptance. The payment for the Excess Shares subscribed shall be made as
specified in the Preemptive Offer, and failure to comply therewith shall
preclude such Shareholder from subscribing for such Excess Shares.
(e) At the expiration of the Preemptive Period, Interativa
shall allot the Shares in the following manner:
(i) each Shareholder shall be allotted its
Proportionate Amount or such lesser number of Shares that it has accepted;
(ii) if the number of unaccepted Shares is less than
the number of Shares for which excess applications have been made, the
unaccepted Shares shall be allotted (as nearly as may be) in proportion to the
number of Shares held by each of the Shareholders that subscribed to Excess
Shares at the date of the Preemptive Offer; and
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(iii) if the number of unaccepted Shares is equal to
or greater than the number of Shares for which excess applications have been
made, a Shareholder who has applied for Excess Shares shall be allotted the
number of Excess Shares for which it applied.
(f) The resolution of the Board authorizing the increase of
the share capital pursuant to Section 2.3 shall provide that if the entire share
capital increase is not subscribed to by the Shareholders, the share capital
increase may be decreased to the amount actually subscribed.
(g) If the Shares shall not be capable, without division into
fractions, of being offered to or divided among the Shareholders in the
proportions above-mentioned, the same shall be offered to or divided among the
Shareholders to achieve a distribution as close as possible to such proportions,
and any balance shall be offered to or divided among the subscribing
Shareholders in such manner as may be determined by the subscribing
Shareholders.
Section 2.7 Purposes. Unless the Shareholders otherwise unanimously
agree, the businesses to be engaged in by Interativa shall be providing Internet
access and value added services, including, without limitation: web hosting; web
development; file transfer protocol; telenet; electronic mail; Usenet
newsgroups; applications development, delivery and hosting; content; domain name
registration and maintenance; electronic commerce and services; colocation
services; portal development and maintenance; event hosting; and IP delivered
services.
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.1 Representations and Warranties. Each Party represents to
the others that:
(a) It is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, with full power and
authority to own, lease and operate the assets held or used by it to conduct its
business as currently conducted. It has the power and authority to enter into
this Agreement and the other Transaction Documents to which it is a party and to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and the other Transaction Documents to which it is a party and
the consummation of the transactions provided for hereby and thereby have been
duly authorized by all necessary action of the governing body of such Party, and
no other proceeding on the part of such Party is necessary to authorize the
execution or delivery of this Agreement and the other Transaction Documents to
which it is a party or the consummation of any of the transactions contemplated
hereby or thereby. This Agreement and the other Transaction Documents to which
it is a party have been duly executed and delivered by such Party and constitute
a legal, valid and binding obligation of such party, enforceable against it in
accordance with the terms set forth herein or therein, subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws affecting creditors' rights generally and, subject as to
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enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(b) The execution and delivery of this Agreement and the
Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Certificate of Incorporation, Memorandum
and Articles of Incorporation, Bylaws, or any other constituent document of such
Party, (ii) violate, conflict with or result in the breach or termination of, or
otherwise give any other Person the right to accelerate, renegotiate or
terminate or receive any payment, or constitute a default, event of default or
an event which with notice, lapse of time, or both, would constitute a default
or event of default, under the terms of any material contract to which such
Party is a party or is bound, (iii) result in the creation of any material liens
upon any of their respective properties, or (iv) constitute a violation by any
such Party of any applicable law.
(c) It has (i) read and fully understands this Agreement and
the Transaction Documents to which it is a party, (ii) consulted with
independent counsel to the extent it deemed necessary prior to its execution of
this Agreement and the Transaction Documents to which it is a party and (iii)
received a copy of the Foreign Corrupt Practices Act and understands its
requirements.
(d) That (i) it has not taken any action that is or could be
deemed to be a violation of the Foreign Corrupt Practices Act if taken by a
party subject thereto in respect of any of the Companies or any of the
transactions contemplated by the Transaction Documents, (ii) it is not aware of
any action or conduct that could be deemed to be a violation of the Foreign
Corrupt Practices Act if taken by a party subject thereto in respect of any of
the Companies or any of the transactions contemplated by the Transaction
Documents, and (iii) neither it nor its Affiliates nor any of its managers,
officers, directors, employees, shareholders, members, agents or Representatives
(including the managers, officers, directors, employees, shareholders, members,
agents or Representatives of its Affiliates) has offered, given, paid,
authorized the payment of, or promised, directly or indirectly, any money, gift,
promise or other thing of value to any Foreign Official (or to any other Person
while knowing it will be offered, given or promised to a Foreign Official) for
any purpose including, by way of example but not limitation, influencing any act
or decision of such Person acting in his, her or its official capacity, or
inducing such Person to do or omit to do any action in violation of lawful duty,
inducing such Person to use his, her or its influence with the Government to
affect or influence any act or decision of such Government or instrumentality,
in order to assist any of the Companies or the Parties to obtain or retain
business for or with, or in directing business to, any Person, or for any other
improper purpose.
Section 3.2 Covenants Regarding the Foreign Corrupt Practices Act.
(a) From and after the date hereof, each of the Shareholders
shall not, and shall cause its respective Affiliates and all of its and their
officers, managers, directors, employees, shareholders, members, agents and
Representatives not to (i) take any action which is or could be deemed to be a
violation of the Foreign Corrupt Practices Act if taken
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by a party subject thereto in respect of any of the Companies, or (ii) offer,
give, pay, promise to pay, or authorize the payment directly or indirectly, of
any money, gift or other thing of value to any Foreign Official (or to any other
Person while knowing it will be offered, given or promised to a Foreign
Official) for the purpose of influencing any act or decision of such Person in
their official capacity, inducing such Person to do or to omit to do any act in
violation of their lawful duties, or inducing such Person to use their influence
with the government of the Federative Republic of Brasil or any instrumentality
thereof to affect or influence any act or decision of such government or
instrumentality, in order to assist any of the Companies or any of the
Shareholders to obtain or retain business for or with, or in directing business
to, any Person, or for any other improper purpose.
(b) The Shareholders hereby covenant and agree to cause the
Companies to maintain their records and accounts in reasonable detail to
accurately reflect their transactions and asset dispositions. In addition, the
Shareholders hereby covenant and agree to cause the Companies to maintain a
system of internal accounting controls to ensure that (i) transactions are
executed in accordance with their respective management's authorization, (ii)
transactions are recorded to permit the preparation of financial statements in
conformity with applicable GAAP, (iii) access to their respective assets
requires their respective management's authorization, and (iv) the recorded
accountability for their respective assets shall be compared with their
respective existing assets at reasonable intervals.
(c) The Shareholders agree that the Companies shall comply
with laws of the countries in which they operate and with the laws of the United
States of America and Canada applicable to each such Company's operations,
including, without limitation, the Foreign Corrupt Practices Act.
(d) The Shareholders agree that the Companies shall establish
internal education programs to the reasonable satisfaction of the Shareholders
and to ensure compliance by the Companies and by their employees and
consultants, with applicable legal requirements.
ARTICLE IV.
ACCOUNTING MATTERS
Section 4.1 Books and Accounting Records. The Companies will provide,
at the Companies' expense, reasonable information and assistance to the
Shareholders to conform financial statements of the Companies to Canadian or
United States GAAP, including information on the book value of assets and
inflation adjustments, and to enable compliance by the Shareholders with
Canadian and United States requirements for financial, regulatory and tax
reporting purposes.
Section 4.2 Access. Each Shareholder and its designated Representatives
shall have access to the books, records and property of the Companies during the
course of normal business hours.
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Section 4.3 Auditor. The independent auditor(s) of the Companies shall
be determined by VeloCom and BCI (so long as each holds at least twenty percent
(20%) of the issued and outstanding Shares). The Companies' independent
auditor(s) shall perform an annual year-end audit of the consolidated financial
statements of each of the Companies and present each such audit in a report to
the Board of Interativa (the "Annual Audit Report") in accordance with United
States and Canadian GAAP.
Section 4.4 Internal Audits. Each Shareholder, on reasonable notice to
the management of the Companies, has the right during normal office hours,
subject to the confidentiality provisions contained in Article VIII hereof, at
its sole cost and expense, to conduct an annual audit of the Companies and the
results of their operations.
Section 4.5 Interests of the Companies. The rights described in
Sections 4.1, 4.2 and 4.4 shall be exercised in a manner to further the
interests of the Companies and not to harm unduly the operations of the
Companies.
Section 4.6 Distributions of Excess Cash.
(a) The Shareholders shall cause the Companies to distribute
all excess cash to the extent permitted under applicable law and any debt
instrument to which the Companies are subject, unless reasonable business
practice dictates otherwise, and shall take all necessary action to effect such
distributions.
(b) The Shareholders agree that distributions shall be made by
Interativa to the Shareholders in proportion to their respective Ownership
Percentages.
Section 4.7 Funding Policy. The financing policy and financing
requirements of the Companies shall be from time to time established by the
Board of Interativa in accordance with the provisions of this Agreement. In all
cases, the Companies will first seek to obtain favorable financing, such as
multilateral agencies (e.g., IFC), high yield bonds, or other forms of
non-recourse debt.
Section 4.8 Business Plan. The business plan for each of the Companies
shall be approved by the Board of Interativa and revised from time to time (in
accordance with the provisions of this Agreement) for the Companies to take into
account any new factors which affect the respective business plan.
Section 4.9 Annual Tax Return. Interativa shall provide a copy of its
and the Interativa Subsidiaries' annual tax returns, within one month of their
filing, to each Shareholder.
Section 4.10 Related Party Transactions. Each of the Companies shall,
on a quarterly basis, produce and distribute to each Shareholder a list of
transactions between (i) such Company, on the one hand, and (ii) any of BCI,
VeloCom and/or Affiliates of either BCI or VeloCom, on the other hand, occurring
in such quarter, setting forth the type of transaction and the amount of
consideration received or paid by such Company from or to such Affiliate.
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Section 4.11 Financial Information. Each of the Interativa Subsidiaries
which are operating companies, including but not limited to BRHS, shall, within
five (5) days after the end of each month, or such other date as may be mutually
agreed, produce and deliver to each Shareholder a monthly report outlining key
financial data and key operating data and shall also provide on a timely basis
such other information and assistance as requested to:
(a) conform financial statements to Canadian and US GAAP,
including information on the book value of assets and inflation adjustments;
(b) enable compliance with Canadian and US requirements for
financial, securities law and tax reporting purposes;
(c) enable compliance on a quarterly basis with obligations in
relation to the preparation and announcement of financial results and other
financial information of Affiliates, tax and any regulatory filings; and
(d) enable on a monthly basis an appropriate accounting and
management reporting for the investment therein.
ARTICLE V.
BOARD AND SHAREHOLDER MEETINGS
Section 5.1 Appointments to the Board of Directors of Interativa.
(a) As of the date hereof, the Interativa Memorandum and
Articles of Incorporation (the "Articles") provides for a Board comprised of
four (4) principal directors and four (4) alternate directors, who shall be
appointed for terms of one (1) year and until their successors are qualified.
Each of VeloCom and BCI (so long as it holds (directly or indirectly) twenty
percent (20%) or more of the issued and outstanding Shares of Interativa) shall
be entitled to designate two (2) principal directors and two (2) alternate
directors to the Interativa Board.
(b) Each of QUALCOMM, Xxxxxx X.X. and Xxxxxx Sao Paulo S.A.
shall be entitled to designate one representative (each an "Observer") to attend
and observe all meetings of Interativa's Board and all committees thereof
(whether in person, telephonic or otherwise) in a non-voting observer capacity.
QUALCOMM, Xxxxxx X.X., and Vesper Sao Paulo S.A. may each appoint an alternate
Observer. The Observers shall be entitled to receive all notices and information
forwarded by Interativa to its directors and copies of the minutes of all
meetings; provided, however, that Interativa may require the Observers and any
alternates appointed by Xxxxxx X.X. and Xxxxxx Sao Paulo S.A. to execute a
nondisclosure/confidentiality agreement prior to disclosing confidential
information to such Observers or alternates.
(c) If at any time QUALCOMM acquires (directly or indirectly,
excluding Shares held by VeloCom) more than ten percent (10%) of the issued and
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outstanding Shares of Interativa, if QUALCOMM so requests, it shall be entitled
to appoint one director and one alternate to the Board.
Section 5.2 Rights Regarding Appointment of Directors.
(a) The Shareholders shall take all necessary action
including, to the extent practicable, the calling of a meeting of the Board of
Interativa or the calling of a meeting of the Shareholders of Interativa in
order to effect the appointments of directors set forth in Section 5.1, to elect
the director or directors nominated by any Shareholder and/or to remove the
director or directors previously appointed by any Transferring Shareholder, in
each case, pursuant to the terms of Section 5.1 and this Section 5.2.
(b) Each Shareholder shall have the sole and exclusive right
to remove, with or without cause, the principal directors (and alternate
directors) appointed by it to the Board of Interativa and the sole and exclusive
right to appoint replacements for any principal director (or alternate director)
appointed by it.
Section 5.3 Chairman.
(a) Designation. The Interativa Board shall designate one of
its members as chairman of the Board (the "Chairman") for a term of one (1)
calendar year. VeloCom shall have the right to designate the initial Chairman
and thereafter VeloCom and BCI (so long as it holds (directly or indirectly)
twenty percent (20%) or more of the issued and outstanding Shares of Interativa)
shall alternate appointing the Chairman every year. The Shareholders shall
consult with each other prior to designating the Chairman.
(b) Powers. Subject to the provisions of the Interativa
constituent documents, the Chairman of Interativa shall have the following
powers:
(i) To call, propose and prepare the agenda for and
preside over all meetings of the Shareholders and of the Board of Interativa.
(ii) To cause to be carried out and implemented the
resolutions of meetings of the Shareholders and of the Board of Interativa.
(iii) Subject to prior approval by the Board of
Interativa, to sign the Annual Audit Report to be presented at the annual
meeting of Shareholders.
(iv) To adjourn any meeting of Shareholders or of the
Board of Interativa.
(v) To make any public announcement on behalf of
Interativa required by its constituent documents, applicable law or otherwise.
The Shareholders agree the Chairman shall have the power to cast only
one vote at any Board meeting and, therefore, he or she shall not have the power
to cast an additional vote in the event of a tie vote at any Board meeting.
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Section 5.4 Frequency of Board Meetings; Location; Notice; Agenda;
Attendance of Alternates; Committees.
(a) Frequency of Board Meetings. Unless the Interativa Board
shall otherwise agree, meetings of the Interativa Board shall occur every other
month. In addition, the Interativa Board shall meet at such additional times as
any director may reasonably request. The Chairman shall issue a notice pursuant
to Section 5.4(c) hereof for such meeting within five (5) days of the receipt by
the Chairman of a request by any director to hold such a meeting.
(b) Location of Board Meetings. At least once each year, the
meeting of the Board of Interativa will be held in person in the Cayman Islands.
All other meetings of the Board of Interativa shall be held in such locations as
agreed on by the Interativa Board. If permissible under applicable law,
Interativa Board meetings, other than the annual meeting held in the Cayman
Islands, may be held telephonically.
(c) Notice. Meetings of the Board of Interativa shall occur
upon at least ten (10) days' prior written notice by the Chairman to each of the
directors (or in the absence of such notice by the Chairman on the provision of
such notice by any director) and Observers; provided, however, that if any
director notifies the Chairman in writing within five (5) days of receipt of
such notice that he/she will be unable to attend such meeting, then the Chairman
shall reschedule such meeting to the next available date mutually agreeable to
the directors, but in no event later than ten (10) days following the originally
scheduled date. Only one such rescheduling shall be permitted by the directors
appointed by any Shareholder in respect of any meeting. Unless otherwise
unanimously agreed by the Shareholders or by the director(s) appointed by each
Shareholder, no matter may be voted on at any Interativa Board meeting unless
the notice of such Board meeting clearly sets forth such matter to be voted on.
(d) Agenda. The agenda of any Interativa Board meeting shall
include any item proposed by any director or the Observer appointed by QUALCOMM
to be placed thereon.
(e) Alternates. Unless otherwise agreed by the Interativa
Board, the alternate (if any) of any director or Observer may only attend an
Interativa Board meeting if director or Observer for whom he/she is an alternate
is not in attendance at such meeting. Further, no alternate director (i) may
request additional Board meetings pursuant to Section 5.4(a) or (ii) shall be
entitled to notice pursuant to Section 5.4(c), and (iii) may not propose
additional agenda items pursuant to Section 5.4(d), unless such principal
director is absent and the alternate director is acting in such principal
director's stead.
(f) Committees. The Interativa Board may, after consultation
with the Observer appointed by QUALCOMM, delegate its duties and
responsibilities as it considers appropriate to such individuals and/or
committees as it designates. QUALCOMM shall have the right to have an Observer
participate in the activities of all committees appointed by the Interativa
Board.
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(g) Information. Each of the directors on the Interativa Board
(including principal directors and alternate directors) and the Observer
appointed by QUALCOMM shall be entitled to receive a copy of any proposed budget
or business plan of Interativa at least five (5) days prior to any meeting at
which the Interativa Board will discuss such budget or business plan.
Section 5.5 Quorum and Voting Requirements for Board Meetings.
(a) Quorum. The presence of a majority of the directors
entitled to vote on a given matter, including the presence of at least one (1)
director appointed by each of BCI and VeloCom if both are entitled to vote, and
one (1) director appointed by QUALCOMM if QUALCOMM is entitled to appoint, and
has appointed, a director pursuant to the terms of Section 5.1(c), shall
constitute a quorum for duly convened meetings of the Interativa Board (so long
as BCI and VeloCom, as the case may be, owns (directly or indirectly) at least
twenty percent (20%) of the issued and outstanding Shares); provided, however,
that if no quorum is reached at a meeting of the Board at which a majority of
the directors are present, a second meeting of the Board may be called with at
least five (5) days advance written notice, and the presence of a majority of
the directors of the Board (with or without the presence of the directors
appointed by BCI or VeloCom, or QUALCOMM, if applicable) shall constitute a
quorum for such second meeting of the Board.
(b) Vote. Actions of the Board of Interativa shall be taken by
either: (i) the affirmative vote of a majority of the directors entitled to vote
on a matter or (ii) the unanimous written consent of all of the directors
entitled to vote on a matter; provided, however, that with respect to the
matters referred to below, the affirmative vote of the directors appointed by
Shareholders entitled to vote holding an aggregate of 70% or more of the Shares
at any meeting when a quorum is present, including the affirmative vote of at
least one (1) of the directors appointed by each of VeloCom and BCI (so long as
BCI and VeloCom, as the case may be, owns (directly or indirectly) at least
twenty percent (20%) of the issued and outstanding Shares), shall be required:
(i) the submission to the general meeting of
Shareholders of the establishment of, or any decision on the application or
utilization of, any special reserves, provisions or retentions for the Companies
not in the ordinary course of business, and application or utilization of the
same (except for mandatory reserves established by law or specifically set out
in the constituent documents of the Companies);
(ii) all contracts between any Company and any
Shareholder, director or Officer of any Company, or any Affiliate of a
Shareholder of any Company or of a director or Officer of any Company (provided,
however, that no director appointed by the Shareholder involved in such
transaction (whether directly or indirectly) shall be entitled to vote on such
matter);
(iii) any capital expenditures (including
acquisitions or leases and the selection of the supplier of major equipment) and
capital dispositions by any Company not provided for in the most recent approved
business plan exceeding
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US$5,000,000 in any transaction or series of related transactions during any
given fiscal year, except if such capital expenditures are specifically included
and identified in a capital budget approved by the Board of Interativa;
(iv) the incurring of any indebtedness, or the
issuance of any guarantees or letters of comfort or other debt instruments, by
any Company, not provided for in the most recent approved business plan in
excess of 5% of the net assets of such Company or the forgiveness of any
material indebtedness of any Company or the forgiveness of any loan made by any
Company;
(v) the transfer of surplus moneys to the general
reserves of any Company and the declaration and payment of dividends by any
Company;
(vi) the imposition or creation of any lien,
debenture, mortgage, pledge or other form of encumbrance on any assets of any
Company exceeding the equivalent of US$5,000,000, or the entering into any
agreement or arrangement that would contractually restrict any Company's ability
to make distributions or pay dividends;
(vii) the entering into by any Company of
partnerships or joint ventures, or the purchase or sale by any Company of shares
or other securities of any other Person, or the participation by any Company in
any Persons or any other businesses;
(viii) establishment of any committee of the Board of
any Company, and the granting of advisory authority or discretion to any such
committee not otherwise provided for under this Agreement;
(ix) the terms and extent of any authority to be
delegated to the management of any Company with respect to the borrowing and/or
placement of funds by any Company;
(x) the granting of special authority or powers to
the Chairman of any Board;
(xi) establishment of each Company's compensation
policy and remuneration of executive Officers;
(xii) the hiring or firing of designated key
employees of each Company;
(xiii) establishment of a schedule of authorities
(the "Schedule of Authorities") for each Company which shall set forth, among
other things, general and special powers of attorney and signing authority of
the Chief Executive Officer and other Officers, including authority to sign, on
such Company's behalf, cheques and contracts; and the approval of any matters
beyond the limits covered by such Schedule of Authorities;
(xiv) the settlement of any litigation or arbitration
proceedings to which any Company is a party in an amount in excess of the
equivalent of US$100,000;
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(xv) the approval of any material amendments to the
initial business plan for the Companies and the approval, at the first meeting
of the Board of Interativa each year, of an annual business plan and any
material amendments to an existing business plan and the approval of operating
budgets and capital budgets or any revisions thereto. If the Board of Interativa
does not agree upon an annual business plan at its first meeting each year, the
previously approved business plan for the prior fiscal year as adjusted for
Brasilian inflation if necessary (using the IGP-M published by Fundacao Xxxxxxx
Xxxxxx or any successor index) shall be effective until an annual business plan
is approved;
(xvi) the adoption of the financing policy and
financing requirements of the Companies and any material amendment of the terms
of, or any action proposed to be taken to resolve any default under, any
financing agreement or the establishment of terms and conditions of any
Shareholder loans made to any Company;
(xvii) any transfer or the grant, amendment or
termination of any license in respect of, any technology, copyright, patent,
trademark, industrial design or other intellectual property of any Company;
(xviii) the adoption or deletion of trademarks, trade
names or other symbols to identify each Company;
(xix) the sale of any assets of any Company having a
value in excess of the greater of the equivalent of $1 million or 5% of any
Company's assets outside of the ordinary course of business or outside of an
approved business plan;
(xx) applying for a license or any other governmental
authorization not required in the ordinary course of business or entering into a
new business or market not contemplated by an approved business plan;
(xxi) the proposed private offering or an initial
public offering of any Company or the taking of any action which would cause any
Company to come under the supervision of the Brasilian securities authorities;
(xxii) the hiring or termination of senior management
of each Company; and
(xxiii) causing any Company to take any of the
actions set forth in (i) to (xxii) above or any action set forth in Section
5.6(b);
provided, however, that in the event that any Shareholder is a Defaulting
Shareholder and the directors appointed by such Shareholder resign or are
removed pursuant to this Agreement, the actions set forth in (i) to (xxiii)
above shall not require the affirmative vote of the directors appointed by such
Defaulting Shareholder until such time, if any, as such director is reappointed.
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Section 5.6 Quorum and Voting Requirements for Shareholder Meetings.
(a) Frequency; Quorum and Notice for Interativa. Meetings of
the Shareholders of Interativa shall be held at least annually. In addition, the
Shareholders of Interativa shall meet at such additional times as any
Shareholder holding at least 10% of the issued and outstanding Shares of
Interativa may request. Upon receipt of such request, the Chairman of Interativa
shall call a meeting of Shareholders of Interativa, such meeting to be held
within twenty (20) days of the receipt of such request.
(i) In connection with meetings of the Shareholders
of Interativa, on a first call for such meetings, the presence in person or by
proxy of holders of a majority of the issued and outstanding Shares of
Interativa (including the presence of Representatives of BCI and VeloCom, as the
case may be, so long as such party holds, directly or indirectly, at least
twenty percent (20%) of the issued and outstanding Shares, respectively, of
Interativa) shall constitute a quorum at any duly convened ordinary meeting of
the Shareholders of Interativa; provided, however, if no quorum is reached at a
duly called meeting of the Shareholders, a second call may be made with at least
five (5) days advance written notice, and the presence in person or by proxy of
the holders of a majority of the issued and outstanding Shares of Interativa
(with or without the presence of Representatives of BCI or VeloCom) shall
constitute a quorum for such second meeting of the Shareholders of Interativa.
(ii) Meetings of the Shareholders of Interativa shall
occur upon at least ten (10) days' prior written notice by the Chairman to each
of the Shareholders; provided, however, that if any Shareholder notifies the
Chairman in writing within five (5) days of receipt of such notice that it will
be unable to attend such meeting, then the Chairman shall reschedule such
meeting to the next available date mutually agreeable to the Shareholders, but
in no event later than ten (10) days following the originally scheduled date.
Unless otherwise unanimously agreed by the Shareholders, no matter may be voted
on by the Shareholders at any Shareholder meeting unless the notice of such
meeting clearly sets forth such matter to be voted on.
(b) Vote in Shareholder Meetings of Interativa. Except as
otherwise required by law, actions of the Shareholders of Interativa at
Shareholder meetings shall be taken by either (i) the affirmative vote of the
holders of a majority of the issued and outstanding Shares at any meeting when a
quorum is present or (ii) the unanimous written consent of all Shareholders;
provided, however, that with respect to the matters referred to below, the
affirmative vote of the holders of 70% of the issued and outstanding Shares,
including the affirmative vote of each of VeloCom and BCI (so long as BCI and
VeloCom, as the case may be, owns (directly or indirectly) at least twenty
percent (20%) of the issued and outstanding Shares), and the affirmative vote of
QUALCOMM if QUALCOMM owns (directly or indirectly, excluding Shares held by
VeloCom) at least twenty percent (20%) of the issued and outstanding Shares, at
any duly convened meeting when a quorum is present of Shareholders of Interativa
shall be required for:
(i) any material change in any Company's accounting
or reporting practices and standards;
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(ii) approval of the audited balance sheet and profit
and loss account of each Company and any report or statement accompanying such
balance sheet and profit and loss account;
(iii) any creation or issue of shares or securities
and increase, reduction or other alteration of the authorized share capital of
any Company;
(iv) any amendment of the constituent documents of
any Company, other than ministerial amendments;
(v) any voluntary liquidation, dissolution and/or
winding-up of any Company, the filing of a petition in bankruptcy and any
amalgamation, merger, corporate reorganization, consolidation, restructuring or
recapitalization of any Company;
(vi) any change in the nature or nationality of any
Company, any change in the name or corporate identity (including the logo) of
any Company, or any change in the objects, corporate purpose or nature or scope
of the business of any Company;
(vii) the redemption, purchase or cancellation of any
shares of any Company, or any other securities of any Company, by any Company;
(viii) the establishment of a policy for the
declaration, payment, recommendation, reserve or set-aside of any distribution
or dividend (whether in cash or in kind) on any shares of any Company;
(ix) the appointment of, and any subsequent change
in, any Company's auditors;
(x) any change in the fiscal year of any Company;
(xi) any change of the head office or registered
office location and legal address of any Company;
(xii) the establishment of, or any decision on the
application or utilization of, any special reserves, provisions or retentions
not in the ordinary course of business, and application or utilization of the
same (except for mandatory reserves established by law or specifically set out
in the constituent documents of the particular Company);
(xiii) any variation of any rights attached to any
shares of any Company;
(xiv) the sale of all or substantially all of the
assets of any Company (including, without limitation, the shares of capital
stock of any of the Interativa Subsidiaries); and
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(xv) any equity capital increase at any Company in
excess of that set forth in such Company's approved business plan.
provided, however, that in the event any Shareholder is a Defaulting
Shareholder, the actions set forth in (i) - (xv) above shall not require the
affirmative vote of such Defaulting Shareholder until such time, if any, as such
Defaulting Shareholder is no longer in default of its obligations under this
Agreement.
(c) Agenda. The agenda for all meetings of the Shareholders of
Interativa shall include any item proposed by BCI or VeloCom to be placed
thereon.
Section 5.7 Officers. BCI and VeloCom, together, shall have the right
to appoint the Chief Executive Officer and, in consultation with the Chief
Executive Officer, other Officers of Interativa, (so long as each of BCI and
VeloCom owns (directly or indirectly) at least twenty percent (20%) of the
issued and outstanding Shares).
Section 5.8 Related Party Agreements. All agreements between Xxxxxx
X.X. and Xxxxxx Sao Paulo S.A., on the one hand, and any of the Companies on the
other, shall be submitted to the Interativa Board for review to ensure they are
made on an arms length basis.
ARTICLE VI.
RESTRICTIONS ON TRANSFER AND ENCUMBRANCE
Section 6.1 Encumbrance of Shares. Either Shareholder may, without
obtaining the other Shareholder's consent, pledge a security interest in such
Shareholder's Shares in connection with any financing solely implemented by such
Shareholder; provided, however, (i) that the secured parties to which such
pledge is granted shall be institutional lenders (including bondholders) , (ii)
in the event that such secured parties, through a foreclosure or otherwise,
become the holders of the Shares, any transfers by such secured parties of such
Shares or other interests shall be subject to the transfer restrictions set
forth herein and (iii) such secured parties shall agree to be bound by this
Agreement; and provided, further, that in the event that the Shareholder
desiring to so pledge its interests is unable, using its commercially reasonable
efforts, to obtain the agreement of the secured parties to the provisions
described in clause (ii) above, the other Shareholders shall in good faith
cooperate with the pledging Shareholder and its lenders to reach a mutually
satisfactory resolution.
Section 6.2 Transfers Subject to Restrictions.
(a) Restrictions. Except as set forth in this Agreement or
unless the Shareholders shall otherwise agree, a Shareholder shall not transfer
any Shares that it owns unless such transfer complies with all the requirements
of this Agreement. If a Shareholder transfers any of its Shares without
complying with the requirements of this Agreement, then such transfer shall be
null and void and such Shares shall not be registered in the name of the party
or parties to whom the Shares are to be transferred. Unless the Shareholders
shall otherwise agree, any transferee of Shares pursuant to this Agreement shall
take and hold
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such Shares subject to this Agreement and to all obligations and restrictions
upon the Transferring Shareholder set forth in this Agreement and, in the event
such transferee is not a Shareholder, such transferee shall become a party to
this Agreement pursuant to agreements and instruments in form and substance
reasonably satisfactory to the Nontransferring Shareholder. As used in this
Article VI and elsewhere in this Agreement with respect to any Shares,
"transfer" shall mean and include any sale, exchange, gift and any other
disposition of any kind (other than any disposition referred to in Section 6.1,
but including the exercise of any remedies relating to any Lien), whether
voluntary or involuntary, affecting title to, interest in or possession of any
shares.
(b) Prior Notification. Upon the commencement of formal
commercial negotiations involving the direct or indirect transfer of any Shares
(including the transfer of any shares in any Affiliate that directly or
indirectly holds Shares), each Shareholder agrees to notify the other
Shareholders.
Section 6.3 Right of First Negotiation.
(a) Offer Notice. Except as provided in Section 6.4, no
Shareholder shall transfer, offer to transfer, or accept an offer to transfer,
any Shares unless the Transferring Shareholder shall have provided a written
notice to each of the other Shareholders of such Shareholder's desire to
transfer Shares (the "Offer Notice") which: (i) sets forth such Transferring
Shareholder's intention to transfer some or all of its Shares (the "Offered
Shares"); (ii) specifies the consideration to be received by such Transferring
Shareholder in exchange for such Offered Shares; and (iii) indicates the number
of Shares that such Transferring Shareholder proposes to transfer.
(b) Right of Negotiation. Upon receipt of the Offer Notice in
accordance with Section 6.3(a), each Nontransferring Shareholder shall have
thirty (30) days (the "Negotiation Period") within which to negotiate with the
Transferring Shareholder regarding the terms of the sale of such Nontransferring
Shareholder's "Pro Rata Portion" of the Offered Shares. A Nontransferring
Shareholder's Pro Rata Portion of any Offered Shares will be equal to the number
of shares obtained by multiplying the total number of Offered Shares by a
fraction, the numerator of which shall be the number of Shares owned by such
Nontransferring Shareholder and the denominator of which shall be the total
number of Shares outstanding, excluding the Offered Shares. If an agreement is
reached, the electing Nontransferring Shareholder and the Transferring
Shareholder (or its relevant Affiliate) shall, as promptly as practicable, but
in no event later than thirty (30) days from the date of termination of the
Negotiation Period, prepare and enter into the documentation necessary to
provide for such transfer (including, if necessary, any modification or
amendment to this Agreement). If less than all of the Offered Shares are
purchased by the Nontransferring Shareholders, the remaining Offered Shares
shall be reoffered by the Transferring Shareholder to the Nontransferring
Shareholder(s) that purchased their full Pro Rata Portion of the Offered Shares
upon the terms set forth in this Section, except that such Nontransferring
Shareholders must exercise their purchase rights within two (2) Business Days
after receipt of such reoffer. If the Nontransferring Shareholders do not elect
to purchase all of the Offered Shares or if the necessary documents to effect
the transfer of any of the Offered Shares are not completed within
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thirty (30) days of the Negotiation Period, then the Transferring Shareholder
shall be free to consummate the transfer of the Offered Shares at or above the
Floor Price (as defined below). If the Transferring Shareholder (or its relevant
Affiliate) does not consummate the transfer of the Offered Shares at or above
the Floor Price within one hundred twenty (120) days from the end of the
Negotiation Period, then the Offer Notice shall be deemed to be canceled, and
any subsequent attempt by the Transferring Shareholder (or its relevant
Affiliate) to transfer the Offered Shares must comply with all of the provisions
of this Article VI.
(c) Floor Price. The "Floor Price" for any given Negotiation
Period shall be equal to either (A) if an agreement was reached concerning a
price, the greater of (i) the price contained in the Offer Notice, and (ii) the
highest price agreed upon by the Transferring Shareholder and any
Nontransferring Shareholder during the relevant Negotiation Period, or (B) if no
agreement was reached concerning a price, the last price offered by the
Transferring Shareholder to any Nontransferring Shareholder during the
Negotiation Period.
Section 6.4 Right of First Refusal.
(a) Limitations. No Shareholder will sell any Shares for a
price below the Floor Price except in accordance with this Section 6.4.
(b) Bona Fide Offer. The Transferring Shareholder must obtain
a Bona Fide Offer from a third party and must, within five (5) days of its
receipt, provide a copy of the Bona Fide Offer to each of the Nontransferring
Shareholders and to the Chief Executive Officer, along with a notice ("First
Refusal Notice") that shall contain the following representations:
(i) that the Transferring Shareholder is willing and
able to accept the Bona Fide Offer on its terms;
(ii) that the Bona Fide Offer complies with the terms
of this Agreement;
(iii) the names of the principal registered and
beneficial shareholders (if available), officers and directors, and any other
available information regarding the financial capacity, of the third party; and
(iv) that the price stated in the Bona Fide Offer is
the total consideration to be paid for the Bona Fide Shares, and that the
Transferring Shareholder is not a party to or the beneficiary of any other
agreements that would have the effect of reducing such consideration.
(c) Transfer of Control. For purposes of this Article VI, a
Bona Fide Offer for the transfer of control (as defined in the definition of
Affiliate) of: (i) any Shareholder; (ii) any direct or indirect parent of such
Shareholder up to, but not including, the Parent Shareholder of such
Shareholder; or (iii) an Affiliate of such Shareholder having
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acquired Shares pursuant to Section 6.5, to a transferee that is not an
Affiliate of any of the parties in 6.4(c)(i) through (iii) above, shall be
deemed to be a Bona Fide Offer to sell the Shares held by such Shareholder, and
(ii) "Bona Fide Offer" shall mean an unconditional (other than customary closing
conditions such as receipt of governmental approvals and legal opinions and
accuracy of representations and warranties) cash offer, payable on the date of
the proposed transfer, from a Person who (A) is not an Affiliate of the
Shareholder receiving such offer, (B) has furnished financial information, if
requested by any Shareholder, to demonstrate that such Person has the financial
capacity to make a purchase pursuant to the offer, (C) is permitted to make such
purchase under applicable law and (D) agrees to assume the obligations of the
Transferring Shareholder under this Agreement pursuant to Section 6.2(a). A Bona
Fide Offer pursuant to this Section 6.4(c) shall be deemed to have been made at
the Valuation Price, as determined pursuant to Section 6.4(e).
(d) Mechanics. Upon receipt of the First Refusal Notice in
accordance with Section 6.4(b), each Nontransferring Shareholder shall have an
irrevocable and exclusive option, but not the obligation, to purchase its Pro
Rata Portion of the Shares covered by the Bona Fide Offer (the "Bona Fide
Shares") for the same aggregate cash consideration and on the same terms and
conditions as are specified in the Bona Fide Offer. Such option may be exercised
by any Nontransferring Shareholder only if it provides written notice of its
election to exercise such option to the other Shareholders, including the
Transferring Shareholder, on or prior to the 30th day after the delivery of the
First Refusal Notice (such 30-day period shall be referred to as the "Acceptance
Period"). The electing Nontransferring Shareholder and the Transferring
Shareholder (or its relevant Affiliate) shall, as promptly as practicable, but
in no event later than ninety (90) days from the end of the Acceptance Period,
prepare and enter into the documentation necessary to provide for such transfer
(including, if necessary, any modification or amendment to this Agreement). If
less than all of the Bona Fide Shares are purchased by the Nontransferring
Shareholders, the remaining Bona Fide Shares shall be reoffered by the
Transferring Shareholder to the Nontransferring Shareholder(s) that purchased
their full Pro Rata Portion of the Bona Fide Shares upon the terms set forth in
this paragraph, except that such Nontransferring Shareholders must exercise
their purchase rights within two (2) Business Days after receipt of such
reoffer. If the Nontransferring Shareholders do not elect to purchase the Bona
Fide Shares, then the Transferring Shareholder shall be free to consummate the
transfer of all, but not less than all, of the Bona Fide Shares only in
accordance with the terms of the Bona Fide Offer. If the Transferring
Shareholder (or its relevant Affiliate) does not consummate the transfer of the
Bona Fide Shares in accordance with the terms of the Bona Fide Offer within
ninety (90) days from the end of the Acceptance Period, then the Bona Fide Offer
shall be deemed to be canceled, and any subsequent attempt by the Transferring
Shareholder (or its relevant Affiliate) to transfer the Bona Fide Shares must
comply with all of the provisions of this Article VI.
(e) Valuation Price. For purposes of establishing the purchase
price of the Shares to be transferred pursuant to Section 6.4(c), Interativa
shall engage two independent and internationally recognized accounting or
investment banking firms (the "Experts"). The Experts shall confirm in writing
to the Chief Executive Officer that they do not have a conflict of interest with
the Transferring Shareholder. Following receipt
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by the Chief Executive Officer of such written confirmation, the Experts shall
be engaged by Interativa, and shall be directed to determine the fair market
value per Share as a going concern of Interativa as a whole without taking into
account any minority discount or control premium and taking into account the
different subscription and redemption values, as the case may be, of each class
of Shares (the "Valuation Price") within thirty (30) days following their
acceptance of the engagement. The Experts shall deliver their written
determination of the Valuation Price to the Chief Executive Officer and the
Shareholders. If the higher of the Valuation Prices, as determined by the
Experts, is within five percent (5%) of the other, the "Adjusted Valuation
Price" shall be the average of the two Valuation Prices. If the higher of the
Valuation Prices is not within five percent (5%) of the other, a third Expert
shall determine the Adjusted Valuation Price. The Adjusted Valuation Price shall
be the average of the closest two among the three Valuation Prices. The Chief
Executive Officer shall deliver a copy of such written determination of the
Adjusted Valuation Price to the Transferring Shareholder and each of the other
Shareholders. Such written determination shall be final and binding on
Interativa and all Shareholders.
Section 6.5 Transfers to Affiliates. Notwithstanding the provisions of
this Article VI, a Transferring Shareholder may transfer its Shares to any
Affiliate at any price if: (i) such Transferring Shareholder has provided thirty
(30) days' prior written notice of such transfer to each of the Nontransferring
Shareholders; (ii) such Affiliate is not in receivership, bankruptcy,
insolvency, dissolution, liquidation or any similar proceeding; and (iii) the
Transferring Shareholder agrees, pursuant to instruments in form and substance
reasonably satisfactory to the Nontransferring Shareholders, to remain liable,
as a guarantor, for compliance by the transferee with all of the obligations of
the Transferring Shareholder under this Agreement, unless the transferee, in the
reasonable assessment of the Nontransferring Shareholders, has sufficient
financial capacity to assume such obligations. If, pursuant to this Section 6.5,
any Transferring Shareholder has transferred Shares to an Affiliate of such
Transferring Shareholder, then prior to permitting such Affiliate to cease being
an Affiliate, the Transferring Shareholder shall cause such Affiliate to
transfer the Shares to such Transferring Shareholder or to another Affiliate of
such Transferring Shareholder.
Section 6.6 Expenses. Each Shareholder transferring any Shares pursuant
to this Article VI shall bear its own expenses incurred in connection with such
transaction.
Section 6.7 Further Assurances. Each of the Shareholders shall do, and
shall cause Interativa to do, all things necessary to consummate the
transactions contemplated by this Article VI as promptly as practicable,
including, without limitation, entering into agreements and instruments with
third parties, obtaining governmental approvals and providing, subject to
Article VIII, information concerning the Companies.
Section 6.8 Closing of Any Transfer. The closing of any transfer of
Shares contemplated by this Article VI shall take place as promptly as
practicable after the execution of all necessary agreements and instruments
providing for such transfer but in no event later than thirty (30) days from the
date of such execution (subject to the receipt of any necessary governmental
approvals and the expiration of any waiting period under applicable law), at
such time and place as the parties to such agreements and instruments
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may agree. At such closing, the Transferring Shareholder shall transfer to the
transferee(s) full right, title and interest in and to the Shares transferred,
free and clear of all Liens and shall deliver to each transferee certificates or
instruments representing the Shares transferred, duly endorsed for transfer or
accompanied by appropriate share transfer powers duly endorsed or accompanied by
all necessary documents and under applicable law; and the transferee(s) shall
deliver to the Transferring Shareholder, in full payment of the purchase price
of the Shares purchased, the cash consideration offered, payable by wire
transfer of immediately available funds to the account(s) of the Transferring
Shareholder designated by the Transferring Shareholder in writing not less than
three (3) Business Days prior to the closing of such transfer and shall execute
any instruments or other documents reasonably requested by the Nontransferring
Shareholders evidencing the transferee's agreement to be bound by the provisions
of this Agreement.
Section 6.9 Restrictive Legend. As soon as practicable after the
execution of this Agreement, the Shareholders shall cause Interativa to include
on all certificates evidencing the Shares the following restrictive legend:
"The sale, assignment, transfer, pledge, mortgage,
hypothecation, encumbrance or other disposition of the Shares
evidenced by this certificate, or any interest in the Shares,
is restricted by the terms of the Shareholders Agreement dated
as of March 22, 2000. No such sale, assignment, transfer,
pledge, mortgage, hypothecation, encumbrance or other
disposition shall be effective unless and until the terms and
conditions of such Shareholders Agreement shall have been
complied with in full."
ARTICLE VII.
FURTHER COVENANTS AND AGREEMENTS
Section 7.1 Management of the Companies. Each Shareholder shall use its
reasonable commercial efforts to ensure that the management and operation of the
Companies shall be subject to the terms, conditions and obligations set forth in
this Agreement.
Section 7.2 Shareholders Agreement Controls. To the extent permitted by
law, the terms of this Agreement shall be binding on each Shareholder and its
Affiliates that become subject hereto notwithstanding any of the terms of such
entities' respective organizational documents.
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ARTICLE VIII.
CONFIDENTIALITY
Section 8.1 General.
(a) Confidentiality Obligation. In the event Confidential
Information is disclosed to any Shareholder or any Affiliate or Representative
of such Shareholder, each such Shareholder or Affiliate or Representative shall
exercise at least the same degree of care in preventing the disclosure of such
Confidential Information to any third party, other than any other Affiliate or
Representative of such Shareholder, as such Shareholder or Affiliate or
Representative exercises in maintaining the confidentiality of its own
confidential proprietary information; provided, however, that such Shareholder
or Affiliate or Representative shall limit disclosure of such Confidential
Information to only the Shareholder or those Affiliates and Representatives of
such Shareholder who have a need to know the same in connection with
implementing, monitoring or otherwise carrying out the operation or management
of the Companies, or advising the Shareholder in connection therewith, and who
have been advised of and agree to comply with the restrictions upon such
Confidential Information set forth in this Agreement and may disclose such
Confidential Information (i) in connection with a proposed transfer of Shares
provided that any potential transferee executes a confidentiality agreement
containing the restrictions set forth in this Article VIII, (ii) in connection
with any disclosure necessary to comply with U.S., Canadian or other applicable
tax reporting requirements or (iii) as required to comply with applicable law or
applicable exchange rules. The restrictions set forth in this Section 8.1(a)
shall remain in effect until two (2) years after the date on which this
Agreement terminates pursuant to Article IX, or such earlier date as may be
provided in this Agreement.
(b) Definition of Confidential Information. For purposes of
this Agreement, "Confidential Information" shall mean (i) any technical
information that is proprietary to any Company, any Shareholder or any of their
respective Affiliates and disclosed in writing and marked "Confidential" in
connection with the implementation or carrying out of the operation and
management of the Companies and/or (ii) any financial, tax-related or commercial
information of any Company, any Shareholder or any of their respective
Affiliates that is disclosed during the term of this Agreement, provided that
Confidential Information shall not include any information so disclosed if:
(i) the recipient of such information shall have had
knowledge of such information prior to the date on which such recipient received
it from any Company, any Shareholder or any of their respective Affiliates;
(ii) such information shall have entered the public
domain through no fault of such recipient; or
(iii) such recipient shall have learned of such
information from a third party in such a manner that such recipient reasonably
believed that such third party was authorized to disclose such information.
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Section 8.2 Disclosure Required by Law or Court Order. If any recipient
of Confidential Information (including any Affiliate or Representative of a
Shareholder permitted to receive such information pursuant to Section 8.1(a)) is
required by order of any competent authority to disclose any Confidential
Information supplied to it by any other Person, the recipient required to make
such disclosure shall promptly notify the other Person or Persons involved so
that such Person or Persons may seek an appropriate protective order and/or
waive the required recipient's compliance with Section 8.1(a). If such
protective order or other remedy is not obtained, then the recipient or
recipients so required to disclose Confidential Information will furnish only
that portion of such Confidential Information that, in its reasonable judgment,
is legally required.
Section 8.3 Use of Confidential Information. During the term of this
Agreement, any Confidential Information disclosed to a Person permitted to
receive such information pursuant to Section 8.1(a) (or any Affiliate or
Representative of such Person permitted to receive such information pursuant to
such Section) may be used by such recipient only in connection with
implementing, monitoring or otherwise carrying out the operation or management
of any Company and in connection with the resolution of any dispute between the
Parties. Each Shareholder and its Affiliates shall be permitted to provide
potential investors and lenders with Confidential Information so long as such
investors and lenders execute appropriate confidentiality agreements. Nothing in
this Agreement shall be construed to grant any additional rights in or licenses
to such Confidential Information. Upon the termination of this Agreement, each
Company and each Party (and its Affiliates) shall have the right to use its own
Confidential Information and shall not have the right to use another Party's or
Person's Confidential Information. The rights and obligations of the
Shareholders under this Section 8.3 shall survive the termination of this
Agreement.
ARTICLE IX.
TERMINATION; LIQUIDATION
Section 9.1 Term of Agreement. If not terminated earlier pursuant to
Sections 9.2 or 9.3, this Agreement shall terminate on the earlier to occur of
(i) the date there is only a single Shareholder of the Shares or (ii) the
fiftieth anniversary of the date hereof; provided that any claim for breach of
this Agreement that is the subject of arbitration pursuant to Section 10.2
hereof shall survive the termination of this Agreement. Notwithstanding anything
to the contrary herein, the provisions set forth in Sections 3.1 and 3.2,
Sections 4.1 and 4.2, Sections 6.6, 6.7 and 6.9, Article VIII, Article IX,
Article X and Article XI shall continue after the termination of this Agreement
in accordance with the terms set forth therein or until the expiration of the
statute of limitations (if not so specified) unless the Parties otherwise agree.
Section 9.2 Termination by Unanimous Consent. This Agreement may be
terminated at any time by the written consent of all of the Parties hereto.
Section 9.3 Termination on Bankruptcy or Liquidation. This Agreement
shall automatically terminate on the voluntary or involuntary bankruptcy or
dissolution of Interativa unless one or more of the remaining Shareholders who
holds at least a majority of the Shares votes to continue the existence of
Interativa.
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Section 9.4 Liquidation. In the event that this Agreement is terminated
pursuant to Sections 9.1, 9.2 or 9.3 and the Board and the Shareholders
determine to liquidate Interativa in accordance with the constituent documents
of Interativa, the Shareholders shall take such actions as are necessary to
dissolve and liquidate Interativa in accordance with applicable law and the
following requirements:
(a) Third Party Liquidator. The Board shall appoint a
third-party liquidator reasonably acceptable to the Shareholders who shall use
reasonable commercial efforts to sell or otherwise liquidate, or make a
custodian arrangement for, the assets of Interativa, either as going concerns or
as separate items; provided, however, that, subject to applicable law, each
Shareholder may bid for and purchase the assets of Interativa to be sold or
disposed of by the Board or such third-party liquidator. The Board or such
third-party liquidator shall seek to maximize the proceeds received for such
assets and shall use all reasonable efforts to obtain the best prices for such
assets. The Shareholders shall be bound by the terms of any sale or disposition
effected by the Board or any such third-party liquidator;
(b) Distribution of Proceeds. Subject to applicable law, after
the payment of all amounts owed by Interativa to any Person and the
establishment of such cash reserves as the Board or such third-party liquidator
determines to be reasonably necessary to fund any contingent or foreseeable
liability or obligation of any of the Companies, the Board or such third-party
liquidator shall distribute the proceeds of liquidation in the following order:
(A) first, to the payment of creditors of Interativa, (B) second, to the payment
of the Board's or such third-party liquidator's reasonable expenses in
liquidating Interativa; and (C) third, pro rata to the Shareholders in
proportion to their respective Ownership Percentages; and
(c) Continuing Liabilities. Each Shareholder shall remain
liable with respect to any commitment or obligation incurred by it prior to such
termination in connection with this Agreement or any other agreement related to
the business of Interativa (unless otherwise expressly specified therein),
including any breach of this Agreement.
ARTICLE X.
GOVERNING LAW; ARBITRATION
Section 10.1 Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A., WITHOUT REGARD TO
ITS PRINCIPLES REGARDING CONFLICT OF LAWS (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Section 10.2 Arbitration.
(a) Nature of the Dispute. Any dispute arising out of or
relating to this Agreement, including, without limitation, the interpretation of
any provision of this Agreement or the breach, termination or invalidity of this
Agreement (a "Dispute") shall be settled exclusively and finally by arbitration
if not otherwise settled pursuant to Section
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10.2(b). It is specifically understood and agreed that any Dispute may be
submitted to arbitration irrespective of the magnitude thereof, the amount in
controversy or whether such Dispute would otherwise be considered justifiable or
ripe for resolution by a court.
(b) Dispute Procedure. In the event a Dispute arises between
the Parties regarding the application or interpretation of any provisions of
this Agreement, the aggrieved Party shall promptly notify the other Party of the
Dispute in writing. If the Parties shall have failed to resolve the Dispute
within thirty (30) days after delivery of such written notice, each of the
Parties shall nominate a senior officer of its management to meet at a mutually
agreed upon location, to resolve the Dispute. Should the Parties be unable to
resolve the Dispute to their mutual satisfaction within thirty (30) days after
such nomination, each Party shall have the right to pursue the resolution of
such Dispute in accordance with the provisions set forth below.
(c) Arbitration Procedure. The Parties agree to settle all
Disputes by arbitration in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce in effect at the time of
the arbitration, excluding any such rules relating to the posting of security
for costs (the "Rules"), except as the Rules may be modified by this Agreement.
(i) A Party desiring to submit a Dispute to
arbitration hereunder shall file a demand for arbitration with the International
Chamber of Commerce (the "ICC") at its office in New York, New York (a
"Demand"). A copy of the Demand shall be sent to all other Parties at the same
time. The arbitration proceeding shall be conducted by a panel of three
arbitrators. Within ten (10) days after a Demand has been made by a Party, each
Party shall appoint one arbitrator. Within twenty (20) days after the Demand has
been made, the two arbitrators shall choose a third arbitrator who shall act as
chairperson of the arbitral proceedings. If the two arbitrators chosen by the
Parties do not agree upon a third arbitrator within twenty (20) days after the
filing of the Demand, then upon the application of any Party thereto, the third
arbitrator shall be appointed by the ICC.
(ii) Following the appointment of the arbitrators,
each of the Parties shall have the right to mail to the other Party (with a copy
to the arbitrators) a written request for the production of certain identified
documents or of all documents in possession of the other Parties relevant to any
claims or counterclaims in the arbitration. Within ten (10) days of receipt of
any such request, the receiving Parties may make written objection to the
requesting Party (with a copy to the arbitrators) to all or part of such
request, on the ground that it is unduly burdensome, that the documents
requested are irrelevant or privileged, or that such documents are equally
available to the requesting Party. The arbitrators shall rule on the validity of
any such objections and the parties shall produce documents in accordance with
such order. The documents requested shall be delivered within fifteen (15) days
of receipt of such request, unless the arbitrators otherwise direct.
(iii) The site of the Dispute resolution shall be in
the city of New York, New York, U.S.A. The Parties shall diligently and
expeditiously proceed with arbitration. Upon the conclusion of any hearing, the
Parties shall have thirty (30) days to
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submit written briefs in support of their respective positions. The arbitrators
shall be instructed to render a written decision within thirty (30) days after
the filing of such briefs, subject to any reasonable delay due to unforeseen
circumstances.
(iv) Except to the extent the Parties' remedies may
be limited by the terms of this Agreement, the arbitrators shall be empowered to
award any remedy available under the laws of New York, including monetary
damages (but excluding any punitive, consequential, special or incidental
damages). The award of the arbitrators shall be in writing with reasons for such
award and signed by the arbitrators.
(v) To the extent possible, the arbitrators in the
arbitration proceeding provided for herein should be individuals experienced in
the internet, investment and finance industries and competent to pass on the
matters presented for arbitration, but such arbitrators shall have no interest
in or prior connection with any of the Parties, and shall be impartial toward
each Party at the time of their selection.
(vi) The parties to the arbitration shall share
equally the compensation and expenses of the arbitrators as well as all fees
imposed by the ICC including, but not limited to, transcripts, hearing room
rentals, filing fees, and administrative costs. The prevailing party shall be
entitled to recover from the other party its costs, expenses and reasonable
legal fees.
(vii) Each of the Parties recognizes and affirms that
in the event of breach by any of them of any of the provisions of this
Agreement, money damages alone may be inadequate and an adequate remedy at law
may not exist. Accordingly, each of the Parties agrees that any Party shall have
the right, in addition to any other rights and remedies existing in its favor,
to enforce its rights and the obligations of any other Party under this
Agreement not only by an action or actions for damages, but also by an action or
actions for specific performance, injunction and/or other equitable relief in
order to enforce or prevent any violations of the provisions of this Agreement.
In accordance with the foregoing, each Party hereby waives any claim or defense
that the other Party has or may have an adequate remedy at law.
(d) Binding Decision and Award. Any decision or award of the
arbitral tribunal shall be final and binding upon the parties to the arbitration
proceeding. The Parties hereby waive to the extent permitted by law any rights
to appeal or to review of such award by any court or tribunal. The Parties agree
that the arbitral award may be enforced against the parties to the arbitration
proceeding or their assets wherever they may be found and that a judgment upon
the arbitral award may be entered in any court having jurisdiction thereof.
(e) Waiver of Immunity. To the extent that each Party has or
hereinafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or is property, it hereby irrevocably waives such immunity in respect of its
obligations under this Agreement.
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Section 10.3 Waiver of Jury Trial. Each Party hereby irrevocably waives
all right to trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement.
ARTICLE XI.
MISCELLANEOUS
Section 11.1 Notices.
(a) Addresses. All notices, requests, consents or other
communications required or permitted hereunder shall be in writing, shall be
sent by personal delivery, nationally recognized overnight courier service or
facsimile, to the following address:
If to BCI, to:
Xxxx Canada International (Espelho Sul) Limited
Arawak Xxxxxxxx
Road Town, Tortola
British Virgin Islands
Attention: Secretary
with a copy to:
Xxxx Canada International Inc.
0000 xx xx Xxxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
HSB 448
Facsimile No. (000) 000-0000
Attention: Vice President, Law and Corporate Secretary
If to VeloCom, to:
VeloCom Cayman Brasil Holdings
c/x Xxxxxx and Calder
P.O. Box 309
Xxxxxx House
South Church Street, Xxxxxx Town
Grand Cayman, Cayman Islands
Telephone: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxx Xxxx
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with a copy to:
VeloCom Inc.
0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: General Counsel
and:
Holland & Xxxx LLP
0000 X. Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
If to QUALCOMM, to::
c/o XXXXXXXX Xxxxxxxxxxxx
0000 Xxxxxxxxx Xx.
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: President
with a copy to:
the same address
Attn: Legal Department
Facsimile No.: (000) 000-0000
and:
QUALCOMM do Brasil Ltda.
Av. Eng. Xxxx Xxxxxx Xxxxxxx, 550, 8th Andar
Sao Paulo, Brasil
Attn: President
Facsimile No. (000) 0000-0000
or to such other person or address as the addressee may have previously advised
in writing as provided herein.
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(b) Effectiveness. Any notice delivered pursuant to Section
11.1(a) shall be deemed to have been given on receipt, if received during normal
business hours on a Business Day, and if not so received, on the next following
Business Day.
Section 11.2 Assignment. Except as set forth in this Agreement, no
rights or obligations under this Agreement shall be assigned by any Shareholder
without the prior written consent of the other Shareholder; provided, however,
that any Transferring Shareholder may, upon written notice to the other
Shareholder, assign all of its rights under this Agreement to (i) any Affiliate
pursuant to Section 6.5 and (ii) any permitted transferee under Article VI
(other than an Affiliate) in connection with a transfer of Shares pursuant to
such Article.
Section 11.3 Entire Agreement. This Agreement sets forth the entire
understanding and agreement between the Shareholders as to matters covered
herein and therein and supersedes any prior understanding, agreement or
statement (written or oral) of intent.
Section 11.4 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect, in any way, the meaning or
interpretation of this Agreement.
Section 11.5 Section References. All references to Articles and
Sections herein are to the Articles and Sections of this Agreement unless
otherwise specified.
Section 11.6 Amendments; Waivers. To be binding, any amendment of this
Agreement must be effected by an instrument in writing signed by all of the
Shareholders. No further formalities by the Shareholders shall be required to
amend this Agreement. Rights hereunder shall not be waived, except pursuant to a
writing signed by the Shareholders against which enforcement of the waiver is
sought.
Section 11.7 Third-Party Rights. It is the intention of the
Shareholders that Interativa be a third party beneficiary of this Agreement with
the right to enforce, on its own behalf, any right or obligation hereunder. This
Agreement is not intended to confer any benefits upon, or create any rights in
favor of, any other Person or entity other than the Shareholders and Interativa.
Section 11.8 Rights and Remedies. Except as provided in Article X and
Section 11.11, the rights and remedies granted under this Agreement shall not be
exclusive but shall be in addition to all other rights and remedies available
under law or equity.
Section 11.9 Further Assurances. Each Shareholder shall take such
additional action and shall coordinate with the other parties hereto, as may be
reasonably necessary to effectuate this Agreement and the transactions
contemplated hereby.
Section 11.10 Transfer Taxes; Recording Fees. Interativa shall pay any
stamp duty, transfer taxes, sales taxes, recording taxes or fees or similar
governmental charges or
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taxes (but not income, gift or other such taxes) payable in connection with the
execution of this Agreement.
Section 11.11 No Consequential Damages. Notwithstanding anything to the
contrary contained in this Agreement, in no event shall any Shareholder be
liable to any other Shareholder, to Interativa or to any Interativa Subsidiary
for any special, punitive, incidental or consequential damages.
Section 11.12 Expenses of Negotiation. Each of the Shareholders shall
bear its own expenses incurred in connection with the preparation and
negotiation of this Agreement and the Transaction Documents.
Section 11.13 Relationship Among the Shareholders; Relationship between
Interativa and the Shareholders.
(a) Relationship Between Interativa and Shareholders. The
relationship of the Shareholders to Interativa shall be that of shareholders,
except as otherwise may be provided in any other written agreement between or
among one or more of the Shareholders and Interativa and in no event shall any
Shareholder owe any fiduciary duty or similar duty to the other Shareholder in
its capacity as a shareholder of Interativa. No Shareholder shall act as an
agent for or on behalf of Interativa, except as specifically is provided in any
other written agreement between Interativa and such Shareholder. Each
Shareholder shall conduct its affairs with regard to third parties so as to
avoid the appearance or creation of any other or greater relationship between
the Shareholders and Interativa.
(b) Contracts Outside the Scope of this Agreement. Any
agreement entered into by a Shareholder which violates any provision of this
Agreement or is otherwise outside the scope of this Agreement shall not be
binding on the other Shareholders or on Interativa and only the Shareholder
entering into such agreement shall be subject to any liability which might arise
therefrom.
Section 11.14 Voting. Each Shareholder shall vote its Shares at any
Board or Shareholder meeting of Interativa so as to implement, and shall cause
directors appointed by it to implement, the provisions of this Agreement.
Section 11.15 No Brokers.
(a) Each Shareholder represents and warrants to the other
Shareholder that all negotiations relating to this Agreement and the
transactions contemplated hereby have been carried on without the intervention
of any Person acting on behalf of any Shareholders in such manner as to give
rise to a valid claim against Interativa or any Shareholders for any broker's or
finder's fee or similar compensation in connection with the transactions
contemplated by this Agreement.
(b) Each Shareholder (the "Indemnitor") hereby agrees to
indemnify and hold harmless the other Shareholder from any Loss that such other
Shareholder incurs as a result of or arising out of any claim by any Person for
any broker's or finder's fees or
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similar compensation demands made by such Person against the Indemnitor in
connection with the transactions contemplated by this Agreement.
Section 11.16 News Releases. Each Shareholder agrees to use its
reasonable efforts to ensure that no public release or announcement concerning
the operation of Interativa and the transactions contemplated by this Agreement
shall be issued by such Shareholder without providing the other Shareholder with
an opportunity to comment. Each Shareholder shall exercise reasonable care in
not disseminating any information relating to Interativa to the news media
without the prior consent of the other Shareholder.
Section 11.17 Compliance with Transaction Documents. The Shareholders
shall comply and shall cause their Affiliates to comply with the provisions of
each of the Transaction Documents to which they are a party. No transfer of any
interest in Interativa by any Shareholder shall relieve such Shareholder of its
obligations under any of the Transaction Documents to which it is a party unless
expressly agreed to by the other parties to such Transaction Documents.
Section 11.18 Counterparts. This Agreement may be executed in any
number of counterparts each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. This Agreement
shall become effective when such counterparts have been executed by and
delivered to each Party. Delivery by facsimile of an executed counterpart of
this Agreement shall be deemed to be delivery of an original counterpart of this
Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.
XXXX CANADA INTERNATIONAL (ESPELHO SUL) LIMITED
By:
--------------------------------------------
Name:
Title:
VELOCOM CAYMAN BRASIL HOLDINGS
By:
--------------------------------------------
Name:
Title:
QUALCOMM DO BRASIL LTDA.
By:
--------------------------------------------
Name:
Title:
BV INTERATIVA HOLDINGS
By:
--------------------------------------------
Name:
Title:
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