EXHIBIT 10.12
URSUS TELECOM FRANCE
Protocol of Agreement
of November 20, 1997
PROTOCOL OF AGREEMENT
Between the undersigned:
Ursus Telecom Corporation, a company subject to the laws of the State of Florida
(United States), headquartered at 000 Xxxxxxxx Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, XX 00000 XXX, and represented by Mr. Luca Giussani,
hereinafter referred to as "Ursus Telecom Corporation,"
As party of the first part,
And,
Central Call International, a limited liability company with capital in the
amount of 50,000 francs, headquartered at 000, xxx xx Xxxxxxxxx xx Xxxxx
(00000), registered in the Register of Commerce and Companies of Paris under the
number B 395 189 061, and represented by its manager, Xx. Xxxxxxxxx de
Beaurepaire,
hereinafter referred to as "Central Call,"
As party of the second part,
And,
Mondial Telecom, a limited liability company with capital in the amount of
55,000 francs, headquartered at 00, xxxxxxxxx Xxxxxxxx in Paris (75016), in the
process of being assigned a registration number in the Register of Commerce and
Companies of Paris following the transfer of the headquarters from Papeete to
Paris, and represented by its manager, Xx. Xxxx-Xxxxx Xxxxx,
hereinafter referred to as "Mondial Telecom,"
As party of the third part.
It being stipulated that "Party" signifies any one of the Parties to the present
protocol of agreement and that "Parties" refers indiscriminately to all the
Parties to the present protocol of agreement.
IT HAS PREVIOUSLY BEEN ESTABLISHED:
(A) Ursus Telecom Corporation, Central Call and Mondial Telecom each carry out
an activity related to the supply and marketing of telecommunications
services open to competition.
(B) Ursus Telecom Corporation, Central Call and Mondial Telecom have indicated
the desire to combine the experience they have acquired separately and to
establish a partnership that shall allow them to enhance and exploit their
complementarity to the greatest extent possible.
(C) The partnership between Ursus Telecom Corporation, Central Call and Mondial
Telecom shall take the form of a capitalistic alliance within Ursus Telecom
France, a limited liability company with capital in the amount of 50,000
francs, headquartered at 000, xxx xx Xxxxxxxxx xx Xxxxx (00000), registered
in the Register of Commerce and Companies of Paris under the number B 413
441 395, and whose articles of incorporation appear in Attachment 1 hereto,
it being clarified that to date, Ursus Telecom
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Corporation owns almost all the shares of capital stock (hereinafter "Ursus
Telecom France").
Consequently, Ursus Telecom Corporation, Central Call and Mondial Telecom
have agreed to enter into the present protocol of agreement that sets forth
the basic principles and terms of the partnership they have decided to
establish for the operation and development of Ursus Telecom France
(hereinafter the "Protocol"), with the stipulation that certain provisions
of the Protocol shall be reviewed, detailed and finalized in definitive
agreements that shall be entered into by the Parties or by the Parties and
Ursus Telecom France.
THIS HAVING BEEN ESTABLISHED, IT HAS BEEN AGREED AS FOLLOWS:
Article 0 - Xxxxxxxxxx xx Xxxxx Xxxxxxx Xxxxxx
1.1 Operation of Ursus Telecom France
Ursus Telecom France has and shall have as activity (i) the installation
and operation on French territory of telecommunications equipment set up or
used to supply the public with telecommunications services (ii) the supply
and marketing of all telecommunications services open to competition and
free enterprise, and (iii), subject to procurement of the authorizations
required by the French Postal and Telecommunications Code, the supply and
marketing of telecommunications services subject to prior government
authorization.
The Parties agree that the partnership that they have decided to establish
among themselves requires that operation of Ursus Telecom France begin as
soon as possible and no later than January 1, 1998, it being stipulated
that if, on this date, operation of Ursus Telecom France has not begun,
more particularly for reasons associated with the installation of the
technical equipment described in section 1.2 hereinafter, the Parties shall
meet to determine together and in good faith, a new date that, in any
event, may not result in extending the term of the Protocol as such is
stipulated in article 6 hereinafter.
1.2 Obligations of Ursus Telecom Corporation
Ursus Telecom Corporation binds itself to make available to Ursus Telecom
France, under the conditions and in accordance with the terms to be
stipulated in a definitive agreement between Ursus Telecom Corporation and
Ursus Telecom France, all the technical equipment, and primarily a switch
described in Attachment 2 to this protocol, that shall be indispensable to
the operation of Ursus Telecom France, the list whereof shall be
established in the aforementioned definitive agreement.
Ursus Telecom Corporation agrees to make the technical equipment mentioned
in the preceding paragraph available to Ursus Telecom France within a
sufficient time period so as to allow the start-up of operation of Ursus
Telecom France under the conditions described in section 1.1 above.
Ursus Telecom Corporation agrees to insure that the technical equipment
that it shall make available to Ursus Telecom France pursuant to the
present section complies with the legal and regulatory provisions in force
in France.
1.3 Relations between Ursus Telecom Corporation and Ursus Telecom France
Concomitant with the availability of the technical equipment as set forth
by the provisions of section 1.2 above, Ursus Telecom Corporation shall
enter into an agreement according to which Ursus Telecom
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Corporation owns almost all the shares of capital stock (hereinafter "Ursus
Telecom France").
Consequently, Ursus Telecom Corporation, Central Call and Mondial Telecom
have agreed to enter into the present protocol of agreement that sets forth
the basic principles and terms of the partnership they have decided to
establish for the operation and development of Ursus Telecom France
(hereinafter the "Protocol"), with the stipulation that certain provisions
of the Protocol shall be reviewed, detailed and finalized in definitive
agreements that shall be entered into by the Parties or by the Parties and
Ursus Telecom France.
THIS HAVING BEEN ESTABLISHED, IT HAS BEEN AGREED AS FOLLOWS:
Article 0 - Xxxxxxxxxx xx Xxxxx Xxxxxxx Xxxxxx
1.1 Operation of Ursus Telecom France
Ursus Telecom France has and shall have as activity (i) the installation
and operation on French territory of telecommunications equipment set up or
used to supply the public with telecommunications services (ii) the supply
and marketing of all telecommunications services open to competition and
free enterprise, and (iii), subject to procurement of the authorizations
required by the French Postal and Telecommunications Code, the supply and
marketing of telecommunications services subject to prior government
authorization.
The Parties agree that the partnership that they have decided to establish
among themselves requires that operation of Ursus Telecom France begin as
soon as possible and no later than January 1, 1998, it being stipulated
that if, on this date, operation of Ursus Telecom France has not begun,
more particularly for reasons associated with the installation of the
technical equipment described in section 1.2 hereinafter, the Parties shall
meet to determine together and in good faith, a new date that, in any
event, may not result in extending the term of the Protocol as such is
stipulated in article 6 hereinafter.
1.2 Obligations of Ursus Telecom Corporation
Ursus Telecom Corporation binds itself to make available to Ursus Telecom
France, under the conditions and in accordance with the terms to be
stipulated in a definitive agreement between Ursus Telecom Corporation and
Ursus Telecom France, all the technical equipment, and primarily a switch
described in Attachment 2 to this protocol, that shall be indispensable to
the operation of Ursus Telecom France, the list whereof shall be
established in the aforementioned definitive agreement.
Ursus Telecom Corporation agrees to make the technical equipment mentioned
in the preceding paragraph available to Ursus Telecom France within a
sufficient time period so as to allow the start-up of operation of Ursus
Telecom France under the conditions described in section 1.1 above.
Ursus Telecom Corporation agrees to insure that the technical equipment
that it shall make available to Ursus Telecom France pursuant to the
present section complies with the legal and regulatory provisions in force
in France.
1.3 Relations between Ursus Telecom Corporation and Ursus Telecom France
Concomitant with the availability of the technical equipment as set forth
by the provisions of section 1.2 above, Ursus Telecom Corporation shall
enter into an agreement according to which Ursus Telecom
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Corporation shall be responsible for the ordinary maintenance of said
equipment, nor including the supply of spare parts, for a renewable minimum
period of five (5) years, and shall supply Ursus Telecom France with
technical assistance during its use. It shall expressly be agreed, and
Central Call and Mondial Telecom hereby accept, that Ursus Telecom
Corporation shall collect an annual fixed compensation of sixty thousand
dollars US (60,000 $) in exchange for the services that it shall perform
under the aforementioned agreement, it being stipulated that this annual
fixed compensation paid by Ursus Telecom France shall be revised each year
in accordance with the terms that shall be stipulated in the agreement to
be signed by Ursus Telecom Corporation and Ursus Telecom France.
More generally, Ursus Telecom Corporation shall sign any agreements
necessary for the operation and development of Ursus Telecom France.
1.4 Obligations of Central Call and of Mondial Telecom
Central Call and Mondial Telecom agree to transfer to Ursus Telecom France,
under the conditions and in accordance with the terms that shall be set
forth in the definitive agreements signed by Central Call and Ursus Telecom
France, on the one hand, and by Mondial Telecom and Ursus Telecom France on
the other, all of their respective customers and the related files
connected with the supply and marketing in France of the telecommunications
services defined in section 1.1 above, as such customers shall be
described, with respect to Central Call and Mondial Telecom respectively,
in Attachment 3 and in Attachment 4 of this protocol of agreement.
Central Call and Mondial Telecom agree to pay Ursus Telecom Corporation any
amounts they may owe Ursus Telecom Corporation, as needed, no later than
the date set by the Parties in section 1.1 above.
Central Call and Mondial Telecom, as well as Xx. Xxxxxxxxx de Beaurepaire
and Xx. Xxxx-Xxxxx Xxxxx, these latter acting on their own behalf, bind
themselves with respect to Ursus Telecom Corporation as of the signing of
the Protocol, to establish the partnership covered by the Protocol as
exclusive, and, as a consequence, not to conduct any discussions or
negotiations, either by themselves or through their respective counsels,
for the purpose of entering into any agreements of any kind with any third
parties involving similar or related activities to those carried out by
Ursus Telecom France.
Central Call and Mondial Telecom, as well as Xx. Xxxxxxxxx de Beaurepaire
and Xx. Xxxx-Xxxxx Xxxxx, these latter acting on their own behalf, agree
with respect to Ursus Telecom Corporation as of the date this Protocol
shall be signed, not to carry out, directly or indirectly, in any manner
whatsoever, any activity likely to compete with the activities of Ursus
Telecom France, not to have any interest in or participate in any
investment, directly or indirectly, in any business likely to compete with
Ursus Telecom France for as long as Central Call and Mondial Telecom shall
be shareholders in Ursus Telecom France, pursuant to the provisions of
article 2 hereinafter and for a period of three (3) years after they have
ceased to be shareholders in Ursus Telecom France.
As a consequence of the provisions of the second and third paragraphs
above, Central Call and Mondial Telecom, as well as Xx. Xxxxxxxxx de
Beaurepaire and Xx. Xxxx-Xxxxx Xxxxx, these latter acting on their own
behalf, agree to offer first and as a priority to Ursus Telecom Corporation
and to Ursus Telecom France all projects involving activities similar or
related to those carried out by Ursus Telecom France, it being stipulated
that they may only be involved, directly or indirectly, in such activities
if the projects presented were previously rejected by Ursus Telecom
Corporation and by Ursus
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Telecom France within the framework of the provisions of article 3, section
3.2 (f) hereinafter.
Article 2 - Entry of Central Call and Mondial Telecom into the capital of
Ursus Telecom France
2.1 Increase of the capital stock of Ursus Telecom France
The Parties agree that the partnership that they decided to set up between
themselves involves the entry of Central Call and of Mondial Telecom into
the capital of Ursus Telecom France, that shall take the form of a capital
increase whereupon the holding of each of the Parties in the capital of
Ursus Telecom France shall be as follows:
- Ursus Telecom Corporation: fifty percent (50 %) plus two (2) shares of
capital stock;
- Central Call: twenty-five percent (25 %) less one (1)
share of capital stock;
- Mondial Telecom: twenty-five percent (25 %) less one (1)
share of capital stock.
These holdings were determined by the Parties in exchange for the
conventional appraisal of the contributions that each of them shall make to
Ursus Telecom France, under the conditions and in accordance with the terms
that the Parties shall set forth as soon as possible and no later than the
date set in article 2, section 2.2 above, as such contributions are defined
in article 1 above.
The increase of the capital stock of Ursus Telecom France, a part whereof,
or, if necessary, all thereof shall be reserved for Central Call and
Mondial Telecom, shall be accomplished through in-kind contributions or by
cash contributions.
Ursus Telecom Corporation shall insure that the manager of Ursus Telecom
France calls a general meeting of shareholders of Ursus Telecom France for
the purpose of voting on the capital increase described in the present
section no later than the date set by the Parties for the start of
operations of Ursus Telecom France, pursuant to the provisions of article
1, section 11 above.
Ursus Telecom Corporation binds itself with respect to Central Call and
Mondial Telecom, subject to the signing of a shareholders' agreement by the
Parties, as set forth by the provisions of article 5 hereinafter, to ratify
all the resolutions that shall appear on the agenda of the aforementioned
general meeting of shareholders relating to the increase in Ursus Telecom
France capital stock.
Central Call, Mondial Telecom and, as needed, Ursus Telecom Corporation
agree to subscribe all the new shares of capital stock that shall be issued
for their benefit at the time of the increase of Ursus Telecom France
capital, and to pay them up in full through in-kind and/or cash payments or
by compensation with sure, liquid and payable debts that they hold, should
the case arise, on Ursus Telecom France.
2.2 Effective date of the entry of Central Call and Mondial Telecom into the
capital of Ursus Telecom France
The entry of Central Call and Mondial Telecom into the capital of Ursus
Telecom France must take place no later than January 1, 1998, it being
stipulated that if, on this date, the increase in the capital
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stock of Ursus Telecom France has not been completed, the Parties shall
meet to determine a new date that, in any event, may not result in
extending the term of the Protocol, as such is stipulated in article 6
hereinafter.
2.3 Administration of Ursus Telecom France prior to the entry of Central Call
and Mondial Telecom into the capital of Ursus Telecom France
The Parties agree, and Ursus Telecom Corporation shall insure with respect
to Central Call and Mondial Telecom, that during the period between the
date the Protocol shall be signed and the date of entry of Central Call and
Mondial Telecom into the capital of Ursus Telecom France, Ursus Telecom
France shall conduct its activities, insofar as possible, with customary
and due diligence.
Additionally, Ursus Telecom Corporation guarantees Central Call and Mondial
Telecom that no significant strategic, financial, technical or commercial
decisions may be made during the period described in the preceding
paragraph without the prior cooperation of the Parties.
Article 3 - Functioning of Ursus Telecom France
3.1 Management of Ursus Telecom France
The Parties agree that as of the entry of Central Call and Mondial Telecom
into the capital of Ursus Telecom France under the conditions set forth by
the provisions of article 2 above, Ursus Telecom France shall be managed by
two co-managers who shall each have the same powers and who shall be
appointed by the general meeting of shareholders of Ursus Telecom France at
the proposal of Central Call and Mondial Telecom.
Ursus Telecom Corporation agrees to vote in favor of appointing the two
individuals, one proposed by Central Call and the other by Mondial Telecom,
as co-managers of Ursus Telecom France, it being stipulated that the first
two (2) co-managers shall be Xx. Xxxxxxxxx de Beaurepaire and Xx.
Xxxx-Xxxxx Xxxxx.
3.2 Ursus Telecom France management decisions
The Parties expressly agree that the powers of the co-managers shall be
limited by the articles of incorporation, and that they must receive the
prior authorization of the shareholder or shareholders, voting under the
conditions set forth by the articles of incorporation and representing the
majority of capital stock shares, for all of the following decisions:
(a) establishment of a subsidiary, opening of a secondary establishment or
of an agency, acquisition of a business, acquisition or subscription
of shares or of capital stock in another company and, more generally,
any acquisition of holdings, direct or indirect, in any legal entity
regardless of the type thereof;
(b) sale of a strategic asset of Ursus Telecom France, it being specified
that this term designates in a general manner any asset necessary for
the operation of Ursus Telecom France or that plays a significant part
in the valorization thereof;
(c) signing of any contract and/or modification of any contractual
relation, including the termination of any contract between Ursus
Telecom France and a co-manager or shareholder or a company in which a
co-manager or a shareholder is directly or indirectly involved;
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(d) commitment of Ursus Telecom France in projects involving the supply
and sale of telecommunications services subject to prior government
approval;
(e) commitment of Ursus Telecom France in projects that involve the
performance of activities other than those described in article 1
above;
(f) strategic decision or commitment of Ursus Telecom France in projects
that involve investments in excess of one hundred fifty thousand
francs (150,000 Frf);
(g) adoption of the annual budget and of the business plan provided for in
article 3, section 3.3 hereinafter;
(h) securities, endorsements, guarantees given or received by Ursus
Telecom France on its behalf or on behalf of third parties;
(i) endorsement of any loan in an amount greater than fifty thousand
francs (50,000 Frf.);
(j) granting by Ursus Telecom France of a loan or advance to a third
party;
(k) pledge of security collateral, mortgage or the granting of any other
security of any kind whatsoever involving the assets of Ursus Telecom
France.
The Parties expressly agree that the provisions of the present section
shall be integrated into the articles of incorporation of Ursus Telecom
France no later than at the time of the general meeting of shareholders
that must vote on the capital increase described in article 2, section 2.1
above.
3.3 Administration and financing of Ursus Telecom France
The Parties agree that Ursus Telecom France shall be managed on the basis
of an annual budget that shall be presented by the two (2) co-managers and
adopted in accordance with the conditions set forth by the provisions of
section 3.2 (g) above. The annual budget must, in particular, specify the
mode of functioning of Ursus Telecom France.
Additionally, the activities of Ursus Telecom France shall be developed in
accordance with a business plan prepared by the Parties at the start of
each fiscal period and revised on a regular basis.
Article 4 - Provisions pertaining to the sale and assignment of capital stock
shares
4.1 Right of pre-emption
Without prejudice to the enforcement of the provisions of the articles of
incorporation of Ursus Telecom France pertaining to the approval of new
shareholders, and excepting sales of capital stock shares that took place
pursuant to the provisions of section 4.3 hereinafter, any sale of shares
of capital stock contemplated by any of the Parties shall initiate the
right of pre-emption of the other Parties in proportion to the percentage
of shares that they own without taking into consideration the shares of the
Party who is contemplating selling.
The right of pre-emption must be exercised for all the shares offered for
sale by the Party wishing to sell and under the same conditions,
particularly as regards price, as those set forth for the sale initially
planned by said Party.
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4.2 Promise to sell shares of capital stock
Without prejudice to the enforcement of the provisions of the articles of
incorporation of Ursus Telecom France pertaining to the approval of new
shareholders and of those resulting from section 4.3 hereinafter, in the
event the major shareholder plans to sell all his shares of capital stock
to one or more third parties, Central Call and Mondial Telecom irrevocably
bind themselves, unless they exercise their right of preemption as
stipulated in section 4.1 above, to sell to the major shareholder or to the
third-party assignee(s) all the shares they own in the capital stock of
Ursus Telecom France, if the major shareholder and/or the third-party
assignee indicate their desire, under the same conditions, particularly as
regards price, as those set forth for the sale initially planned by the
major shareholder.
4.3 Purchase by Ursus Telecom Corporation of the shares owned by Central Call
and Mondial Telecom
In the event Ursus Telecom Corporation is offered on a regulated market or
stock exchange in the United States, Ursus Telecom Corporation agrees to
purchase all the shares of stock owned by Central Call and Mondial Telecom
in the capital of Ursus Telecom France, if these latter companies so
request, under the conditions and in accordance with the terms that shall
be set forth in a definitive agreement signed by the Parties no later than
at the time of the general meeting of shareholders called to vote on the
capital increase described in article 2, section 2.1 above.
The Parties hereby agree that the purchase by Ursus Telecom Corporation of
all the shares owned by Central Call and Mondial Telecom in the capital
stock of Ursus Telecom France shall take place in three (3) successive
installments each involving the purchase of thirty-three point thirty three
percent (33.33 %) of the shares of capital stock owned respectively by
Central Call and Mondial Telecom; the first purchase must take place on the
first anniversary of the initial offering of Ursus Telecom Corporation on a
regulated market or stock exchange in the United States, the second and
third being carried out respectively on the second and third anniversaries
of said initial offering.
Nevertheless, Central Call and Mondial Telecom shall have the right to
request that Ursus Telecom Corporation purchase the shares of stock that
they own in the capital of Ursus Telecom France either in two (2)
successive installments on the second and third anniversaries of the
initial offering of Ursus Telecom Corporation on a regulated market or
stock exchange in the United States, these purchases involving respectively
sixty-six point sixty-six percent (66.66%) and thirty-three point
thirty-three (33.33 %) of their shares of capital stock, or in a single
purchase on the third anniversary of said initial offering, involving one
hundred percent (100%) of their shares.
The Parties agree that payment for the shares purchased by Ursus Telecom
Corporation from Central Call and Mondial Telecom may be made in cash
and/or in Ursus Telecom Corporation shares. If payment for the shares of
capital stock is made in Ursus Telecom Corporation shares, the Parties
shall do their utmost to insure, as soon as possible and in compliance with
the applicable legal provisions, the possibility of offering said Ursus
Telecom Corporation shares for sale on the market.
The Parties also agree that the price of the shares of capital stock
purchased by Ursus Telecom Corporation from Central Call and Mondial
Telecom shall be determined on the basis of eight (8) months of Ursus
Telecom France revenues calculated according to the average of the three
(3) months of Ursus Telecom France revenues preceding any purchase made
under the conditions set forth in the present section.
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4.4 Purchase by Central Call and Mondial Telecom of the shares of capital stock
owned by Ursus Telecom Corporation
If Ursus Telecom Corporation has not been offered on a regulated market or
stock exchange in the United States three (3) years from the date the
Protocol shall be signed, Central Call and Mondial Telecom shall purchase
from Ursus Telecom Corporation, who hereby agrees to sell, a sufficient
number of shares of capital stock so that each shall own twenty-five
percent (25 %) of the capital stock of Ursus Telecom France plus one (1)
share of capital stock.
As soon as Central Call and Mondial Telecom each own twenty-five percent
(25 %) plus one (1) share of the capital stock of Ursus Telecom France, and
in the event Central Call and Mondial Telecom plan to sell all or part of
their shares of capital stock to one or more third parties. Central Call
and Mondial Telecom agree to purchase or to have purchased by the
third-party assignee(s) all the shares owned by Ursus Telecom Corporation,
if it so requests, under the same conditions, particularly as regards
price, as those set forth for the sale planned by Central Call and Mondial
Telecom.
Article 5 - Signing of a shareholder' agreement
The Parties agree to negotiate and sign, no later than the meeting of
shareholders that shall convene to vote on the capital increase described in
article 2, section 2.1 above, a shareholders' agreement that shall review,
detail and finalize all the provisions cited by articles 1,2,3 and 4 above.
Article 6 - Term
The Protocol shall be entered into for a period of five (5) months from the date
it is signed, unless this period shall be extended by mutual agreement of the
Parties.
Article 7 - Confidentiality
The Parties agree that the Protocol and its provisions are and shall remain
confidential, and that no disclosure or communication of information concerning
this Protocol may be made in any form whatsoever, without the express and prior
consent of each of the Parties, unless (i) said disclosure shall be made
mandatory by law or the regulations in force or (ii) said disclosure shall be
made in order to respond to requests issued by legal, administrative or stock
exchange authorities or (ii) insofar as said disclosure shall be necessary for
the completion of the transactions covered by the Protocol.
Article 8 - Entire Agreement
The Protocol expresses the entire and sole agreement of the Parties regarding
the provisions covered thereby. Consequently the Protocol supersedes and
replaces any contract, agreement, exchange of letters or verbal agreement that
may have occurred between the Parties prior to the date the Protocol was signed
and pertaining to the same purpose.
Article 9 - Attachments - Modification
9.1 Each of the Attachments shall be an integral part of the Protocol.
9.2 Any modification made to the Protocol may only result from an amendment
signed by the Parties.
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Article 10 - Costs
Each of the Parties shall pay its own costs, charges and other expenses of any
kind whatsoever connected with the negotiation, preparation and implementation
of the Protocol.
Article 11 - Notices
11.1 Any notice or communication of information issued under the Protocol shall
only be effective if it is made in writing and delivered in person or sent
by registered mail, return receipt requested, or by fax, this fax
transmittal must be confirmed the same day by registered letter, return
receipt requested. Said notice or communication shall be considered to have
been received by the recipient Party/Parties, for personal deliveries, on
the day of delivery, for a registered letter, return receipt requested, on
the date indicated on the acknowledgement of receipt and for faxes, on the
day the fax was sent.
11.2 All notices or information shall be sent to the addresses cited at the
beginning of this Protocol or to any address previously indicated by the
Party concerned to each of the other Parties in accordance with the terms
stipulated in section 11.1 above.
Article 12 - Applicable law - Disputes
12.1 The Protocol shall be subject in all its provisions to French law.
12.2 The Parties shall endeavor to settle by amicable arrangement and in good
faith any dispute that may arise among them in connection with the Protocol
and pertaining to the validity, interpretation, the performance and the
consequences thereof.
12.3 If settlement by amicable arrangement fails, any dispute between the
Parties in connection with the Protocol and pertaining to the validity,
interpretation, performance and the consequences thereof will be submitted
to the exclusive competence of the Commercial Court of Paris.
Executed in Paris on November 20, 1997,
in three (3) original copies.
[Signed]
-----------------------------
For Ursus Telecom Corporation
Mr. Luca Giussani
[Signed]
-----------------------------
For Central Call
Xx. Xxxxxxxxx de Beaurepaire
[Signed]
-----------------------------
For Mondial Telecom
Mr. Xxxx Xxxxx Xxxxx
ATTACHMENT 1
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Xxxxx Xxxxxxx Xxxxxx
A limited liability company with capitalization in the amount of 50,000 francs
Headquarters: 000, xxx xx Xxxxxxxxx 00000 Xxxxx
[Stamp - illegible]
ARTICLES OF INCORPORATION
The undersigned:
- Ursus Telecom Corporation, a company governed by the laws of the Sate of
Florida (United States), headquartered at 000 Xxxxxxxx Xxxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxx, XX 00000 XXX, and represented by Mr. Luca Giussani,
- Xx. Xxxxxxxxx de Beaurepaire, born November 5, 1941, of French nationality
and residing at 7, rue Villaret de Joyeuse in Paris (75017),
Have decided to form a limited liability company and have adopted the articles
of incorporation set forth hereinafter:
Article 1st - Form
A limited liability company governed by the laws and regulations in force, as
well as by the present articles of incorporation is formed between the owners of
the shares of capital stock created hereinafter and those that may be created
subsequently.
Article 2 - Purpose
The purpose of the Company shall be:
- the installation and operation on French territory of telecommunications
equipment set up or used to supply the public with telecommunications
services,
- the supply and marketing of all telecommunications services open to
competition and free enterprise,
- insofar as needed, and subject to procurement of the authorizations
required by the French Postal and Telecommunications Code, the supply and
marketing of telecommunications services subject to prior government
authorization,
- all directly or indirectly by means of the creation or new companies and
groups, contributions, limited partnerships, the subscription or purchase
of company shares or rights, mergers, alliances, or the acquisition or
granting in lease or lease-management of all assets and other rights,
- and generally, all industrial, commercial, financial, civil, personal or
real property transactions that may be directly or indirectly connected
with one of the purposes cited above or with any similar or related
purpose.
[sets of handwritten initials on all pages]
Article 3 - Name
The name of the Company shall be:
Ursus Telecom France
In all instruments and documents emanating from the Company, the company name
must be immediately preceded or followed by the words "a limited liability
company" or the initials "S.A.R.L." [Inc.] and the statement of the amount of
capital stock.
Article 4 - Headquarters
The main office shall be located at:
000, xxx xx Xxxxxxxxx 00000 Xxxxx
The main office may be transferred to any other location in the same department
or in a neighboring department by simple decision of its management subject to
ratification by the next Ordinary General Meeting, and anywhere else in France
pursuant to a vote of the Extraordinary General Meeting.
Article 5 - Term
The term of the Company shall be set at ninety-nine (99) years from the date of
its registration in the Register of Commerce and Companies, unless the company
shall be dissolved early or the term shall be extended.
Article 6 - Contributions
The undersigned make the following contributions to the Company:
Ursus Telecom Corporation, the cash amount of ....................49,900 francs,
Xx. Xxxxxxxxx de Beaurepaire, the cash amount of ....................100 francs,
i.e., a total of .................................................50,000 francs.
Which sum was deposited, prior to this date, in the account opened in the name
of the Company in formation at the Credit Lyonnais, Corporate Banking Center,
Xxxxx Xxxxxx, as witnessed by a certificate issued by said bank on June 20,
1997.
Article 7 - Capital stock
The capital stock shall be set at fifty thousand francs (50,000 Frf.).
It shall be divided into five hundred (500) shares of one hundred (100) francs
each, fully paid-up.
-2-
Article 8 - Shares of capital stock
The shares of capital stock shall be allocated as follows:
Ursus Telecom Corporation ...........................................499 shares,
Xx. Xxxxxxxxx de Beaurepaire ...........................................1 share,
[Total] equal to the number of shares making up the capital stock ...500 shares.
Article 9 - Demand accounts
In addition to their contributions, the partners may loan or make available to
the Company any amounts it may need. The conditions of withdrawal or repayment
of these amounts shall be determined either by collective decision of the
shareholders or by agreements between the management and the party concerned. If
the advance is made by a manager, the conditions shall be set by collective
decision of the shareholders. These agreements shall be subject to the audit
procedures for agreements between the Company and one of its managers or
shareholders.
Article 10 - Changes in capital stock
I - The capital stock may be increased, either through the creation of new
shares, or by increasing the par value of the existing shares, pursuant to an
extraordinary collective decision of the shareholders.
If the capital increase is carried out either in full or in part through
contributions in kind, the decision of the shareholders pertaining to the
capital increase must include the appraisal of each in-kind contribution,
published in a report attached to this decision and prepared by an appraiser
appointed by order of the Presiding Judge of the Commercial Court ruling at the
request of the management.
II - The capital stock may also be reduced pursuant to an extraordinary
collective decision of the shareholders, but in no case may it negatively impact
the equality of the shareholders.
The reduction of capital stock to an amount less than the legal minimum may only
be voted under the precedent condition of a capital increase intended to raise
it to an amount at least equal to the minimum amount of capital stock required
by law, unless the Company is being transformed into a company of another form.
Otherwise, any interested party may petition the court to dissolve the Company.
This dissolution may not be ordered if, on the date the court rules on the
issue, the situation has been regularized.
III - If the increase or decrease results in fractional shares, the shareholders
shall be responsible for carrying out any purchase or sale of allocation rights
or old shares to achieve the allocation of a whole number of new shares.
Article 11 - Subscription and representation of shares of capital stock
The shares of capital stock shall be subscribed in full by the shareholders and
fully paid-up, whether they represent in-kind or cash contributions.
The shares of capital stock may never be represented by negotiable instruments.
-3-
Ownership of the shares arises solely from the present articles of
incorporation, from subsequent instruments that may modify the capital stock,
and from sales and allocations that may be accomplished in due form. Ownership
of all the shares by a single shareholder will not result in the dissolution of
the Company, that will continue to exist with a single shareholder.
Article 12 - Rights and obligations of the shares of capital stock
Each share of capital stock confers upon its owner an equal right to the Company
profits, in the ownership of company assets and to the liquidation surplus. It
also gives the right to one vote in all shareholder votes and proceedings.
The shareholders shall only be liable with regard to third parties up to the
amount of their contribution.
Ownership of a share of capital stock carries with it by full right adherence to
the articles of incorporation and to the resolutions duly ratified by the
shareholders.
Article 13 - Indivisibility of the shares
The shares of capital stock shall be indivisible with respect to the Company.
The joint co-owners are required to appoint one among them to represent them
with respect to the Company. If no agreement is reached, the first co-owner
shall have the right to decide to take action and have the court appoint a
representative responsible for representing them.
Article 14 - Sale and transfer of partners' shares
I - Any sale of shares of capital stock must be recorded by a notarized
instrument or simple contract.
To be binding on the Company, it must receive notification thereof by process
served by a process server or be accepted by same in a notarized instrument.
Service may be replaced by delivering the original of the deed of sale to the
headquarters in exchange for a manager's certification of this delivery.
To be binding on third parties, it must also have been filed with the office of
the clerk of the court and noted in the Register of Commerce and Companies.
II - Shares of capital stock shall be freely transferable among shareholders.
III - Shares of capital stock may only be sold between spouses, ascendants or
descendants under the conditions and according to the procedure stipulated in
article 45 of the law of July 24, 1966, for sales to third parties.
IV - Shares of capital stock shall be freely transferrable through succession or
in the event of the liquidation of assets between spouses.
V - Shares of capital stock may only be sold to third parties outside the
Company with the consent of the majority of shareholders representing at least
three-fourths of the shares of capital stock.
When the Company consists of more than one shareholder, notice of the projected
sale shall be given to the Company and to each of the shareholders by a process
server or by registered letter, return receipt requested. Within eight days
after this notice, the management must call a meeting of shareholders to discuss
the projected sale of shares or consult the shareholders in writing regarding
said projected sale. The assignor will be notified regarding the Company's
decision, that need not be justified, by the management, by registered letter,
return receipt requested
-4-
If the Company does not indicate its decision within three months from the last
of the notices provided for in the present paragraph, consent for the sale shall
be considered to have been granted.
If the Company denied consent for the sale, the seller may, within eight days
from notice of this denial, indicate by registered letter, return receipt
requested, that he is abandoning the intended sale.
If the seller does not abandon this intended sale, the shareholders shall be
required to acquire or have acquired the shares at a price set by an expert
appraiser under the conditions set forth in article 1843-4 of the Civil Code
within three months from the denial of consent. At the request of the manager,
this time period may be extended once by order of the Presiding Judge of the
Commercial Court ruling on request.
The Company may also, with the consent of the selling shareholder, decide within
the same time period to purchase the shares at the price set under the
conditions cited above and to reduce its capital stock by the amount of the par
value of the seller's shares. A payment period, that shall not exceed two years,
may, upon justification, be granted to the Company by the Presiding Judge of the
Commercial Court ruling by summary order. The amounts owed shall bear interest
at the legal rate.
If none of the solutions have been implemented by the end of the time period,
the shareholder may complete the sale as initially planned.
The preceding provisions shall be applicable to all sales, including in the
event of a contribution in connection with a merger or a split or by way of an
allocation in kind to the liquidation of another company.
Article 15 - Claims of the joint-property spouse
If the joint-property spouse of a shareholder indicates his/her intention to
become a shareholder subsequent to a contribution of joint property made by said
shareholder to the Company or to an acquisition of shares of capital stock
completed by his/her spouse using joint property, this spouse may only acquire
the status of shareholder if he/she is approved by the majority of shareholders
representing at least three-fourths of the shares of capital stock. The spouse
will be notified concerning the decision of the shareholders by registered
letter, return receipt requested. Approval results either from notification of
the decision or from the failure to respond within two months from the notice
given by the spouse. In the event approval is denied, the shareholder spouse
retains this status for all the shares.
Article 16 - Sole shareholder
In the event all the shares of capital stock of a limited liability company
become owned by a single shareholder, the provisions of article 1844-5 of the
Civil Code pertaining to legal dissolution shall not applicable.
Article 17 - Management
I - The Company shall be administered by one or more managers; these shall be
individuals, whether shareholders or not, selected by the shareholders
representing more than half of the capital stock, with our without limitation to
the term of their mandate.
The manager(s) may receive compensation, that shall be set and may be modified
by an ordinary decision of the shareholders.
II - In relations with third parties, the manager(s) has/have the most extensive
powers possible to act in any circumstance on behalf of the Company, except for
those powers assigned expressly to the shareholders by law.
-5-
The Company shall be bound even by acts of the manager that do not fall within
the company purpose, unless it can be proven that the third party knew that the
act exceeded this purpose or that this party could not have been ignorant of
this fact considering the circumstances; publication of the articles of
incorporation alone shall not be sufficient to constitute this proof.
III - In relations between shareholders, the manager may perform any acts of
management in the interest of the Company.
IV - Managers shall be liable, individually and jointly, depending on the case,
to the Company or to any third parties, either for violations of legal or
regulatory provisions applicable to limited liability companies, or for
violations of the articles of incorporation, or for errors committed during
their management.
If several managers have cooperated in the same deeds, the court will determine
the contributing share of each when repairing the damage.
No decision of the Meeting may have the effect of terminating an action for
liability against the managers for errors committed in carrying out their
mandate.
Article 18 - Auditors
One or more Auditors may or must be appointed in accordance with the conditions
cited in article 64 of the law of July 24, 1966.
They shall be appointed for a term of six fiscal periods and perform their
duties in accordance with the conditions and with the effects provided for by
the legal and regulatory provisions in force.
Article 19 - Amendment between a manager or a shareholder and the company
The management or, if such exists, the Auditor, presents to the Meeting or
encloses with the documents sent to the shareholders in the case of a written
consultation, a report regarding the agreements signed by the Company and one of
its managers or shareholders.
The Meeting shall vote on this report, which must contain the following
information:
- a list of the agreements subject to the approval of the Meeting of
shareholders;
- the names of the managers of shareholders involved;
- the nature and the purpose of said agreements;
- the basic terms of these agreements, more particularly the indication of
the prices or rates used, of discounts or commissions granted, of payment
schedules granted, of interest stipulated, of securities granted and, as
necessary, any other indications that shall allow the shareholders to
assess the advantage involved in signing the agreements analyzed;
- the importance of supplies delivered or of services provided, as well as
the total of sums paid or received during the last fiscal period.
The manager or the shareholder involved may not take part in the voting, and his
shares shall not be taken into consideration for the calculation of the quorum
and of the majority.
Nevertheless, if there is no Auditor, the agreements signed by a manager who
shall be not a shareholder shall be subject to the prior approval of the
Meeting.
Agreements that are not approved nevertheless produce their effects on the
manager, and if warranted, on the contracting shareholder to bear individually
or jointly, depending on the case, the consequences of the contract that shall
be detrimental to the Company.
-6-
These provisions extend to agreements entered into with a company of which an
indefinitely liable shareholder, manager, director, chief executive officer,
member of the directory or of the supervisory board, shall be simultaneously a
manager or shareholder of the limited liability company.
These provisions shall not be applicable to agreements concerning customary
transactions entered into under normal conditions.
Under penalty of invalidating the contract, managers or shareholders other than
legal entities shall be prohibited from borrowing money from the Company in any
form whatsoever, from having it grant them an overdraft on a demand or other
type of account, and from having the company guarantee or secure their
obligations to third parties. This prohibition applies to spouses, ascendants
and descendants of managers or shareholders, as well as to any intermediaries
and to the legal representatives of shareholders that are legal entities.
Article 20 - Collective decisions
In the event there are multiple shareholders, collective decisions shall be
made, at management's choice, in a Meeting or by written consultation of the
shareholders. Nevertheless, a Meeting must be called to vote on the approval of
the annual accounts or at the request of one or more shareholders owning half of
the shares of capital stock or owning one quarter of the shares of capital stock
if they represent at least one quarter of the shareholders.
Shareholders shall be called to the Meetings by the management or, if this is
not the case, by the Auditor, if such exists, or, if this is not the case, by a
representative appointed by the court at the request of any shareholder. One or
more shareholders owning half of the shares of capital stock or, if they
represent at least one quarter of the shareholders, one quarter of the shares of
capital stock, may request that a Meeting be called.
Notice of the meeting shall be given by registered letter sent to the
shareholders at least fifteen days prior to the date of the meeting. This notice
contains the agenda for the Meeting drawn up by the author of the notice of
meeting. Any Meeting not duly called may be invalidated. Nevertheless, the
action for invalidation shall not be admissible when all the shareholders were
present or represented.
The Meeting of shareholders meets at the headquarters or at any other location
indicated in the notice of meeting. It shall be chaired by the manager or one of
the managers or, if neither of them is a shareholder, by the shareholder present
and willing who owns or represents the largest number of shares of capital
stock. If two shareholders who own or represent the same number of shares are
willing, the Meeting shall be chaired by the eldest.
All proceedings of the Meeting of shareholders shall be recorded in minutes
containing the required information, prepared and signed by the manager or
managers, and, as needed, by the chairman of the meeting.
In the case of a written consultation, the management shall send to each
shareholder, by registered mail, the text of the resolutions proposed as well as
the documents necessary for the shareholders' information.
The shareholders have fifteen days from the date of receipt of the draft of the
resolutions to transmit their vote to the management by registered mail. Any
shareholder who has not responded within the time period indicated above shall
be considered to have abstained.
In the event of a division of ownership, the voting right belongs to the
bare-owner, except for decisions involving the allocation of the outcome, in
which case it shall be reserved for the usufructuary.
-7-
The minutes shall be written in a numbered, initialed register or on separate
sheets that shall also be numbered and initialed, in accordance with the
prescribed conditions.
Copies or excerpts of the minutes of the meetings shall be validly certified
true by one single manager.
Article 21 - Ordinary collective decisions
Decisions of the shareholders that involve neither modifications to the articles
of incorporation nor the approval of a sale or changes in ownership of shares of
capital stock, subscription or allocation rights shall be considered to be
ordinary decisions.
Within six months following the end of each fiscal period, the shareholders
shall be called to a Meeting to approve the accounts of said fiscal period and
the allocation of the outcome.
Ordinary decisions shall be ratified by one or more shareholders representing
more than half of the shares of capital stock. If this majority is not met, the
decisions shall be made, upon a second consultation, by the majority of votes
cast, regardless of the number of voters.
Nevertheless, decisions pertaining to the appointment or to the dismissal of a
manager shall always be made by the absolute majority of shares of capital
stock, and the matter may not be settled by a second consultation and the simple
majority of votes cast.
Article 22 - Extraordinary collective decisions
Decisions concerning the modification of the articles of incorporation or the
approval of sales or changes in ownership of shares of capital stock,
subscription or allocation rights shall be considered to be extraordinary
decisions.
Extraordinary decisions shall only be valid if they were ratified:
- unanimously, in the case of a change in the Company's nationality, the
increase of a shareholder's obligation or the transformation of the Company
into a general partnership, a limited partnership, a partnership limited by
shares or into a civil company;
- by the majority of shareholders representing at least three-quarters of the
shares of capital stock, in the case of the approval of new shareholders or
the authorization to pledge shares as collateral;
- by the shareholders representing at least three-quarters of the shares for
all other extraordinary decisions.
Article 23 - Shareholders' right to information
All shareholders have a permanent right to information whose scope and methods
of practice shall be determined by the regulatory provisions in force.
Prior to any Meeting or written consultation, the shareholders have the right to
obtain any documents and information, that are sent to them or that are made
available to them in accordance with the conditions set by the legal and
regulatory provisions in force.
Article 24 Fiscal period - Company accounts
Each fiscal period lasts for one year, that shall begin on January 1 and ends on
December 31.
-8-
Exceptionally, the first fiscal period shall begin on the day of registration in
the Register of Commerce and Companies and shall end on December 31, 1998.
At the end of each fiscal period, the management shall prepare the inventory,
the annual accounts and notes and drafts a written management report. These
documents, as well as the text of the resolutions proposed and, as needed, the
Auditor's report, shall be sent to the shareholders in accordance with the
conditions and schedules set forth by the regulatory provisions. As of this
transmittal, any shareholder has the right to ask written questions to which the
management shall be required to respond during the Meeting.
A General Meeting called to vote on the accounts for the expired fiscal period
must be convened within six months after the end of the fiscal period or, in the
event of an extension, within the period set by decision of the court.
Article 25 - Allocation and distribution of profits
The General Meeting distributes the distributable profit as such shall be
defined by law among all the shareholders in proportion to the number of shares
owned by each.
It shall also determine the method of payment.
The General Meeting may decide to distribute sums withdrawn from the reserves
available to it by indicating expressly the reserve categories from which the
withdrawals were made. Nevertheless, dividends are, by priority, taken from the
distributable profit for the fiscal period.
The General Meeting may also decide to allocate distributable amounts to the
reserves and to the carry forward balance in full or in part.
No distribution may be made when shareholders' equity is or, as a result of this
distribution, would be less than the amount of capital plus reserves that the
law establishes as the limit for distribution.
Article 26 - Shareholders' equity less than half of the capital stock
If, as a result of losses recorded in the accounting documents, the
shareholders' equity in the Company falls to less than half of the capital
stock, the management must, within four months following the approval of the
accounts that disclosed this loss, consult the shareholders in order to decide
if the early dissolution of the Company is warranted.
If the dissolution is not declared, subject to the legal provisions pertaining
to the minimum capital in limited liability companies and within the time period
set by law, the capital must be reduced by an amount equal to the losses that
could not be applied to the reserves if the shareholders' equity has not once
again become at least equal to half of the capital stock within this period.
In any event, the decision of the General Meeting must be published in
accordance with legal and regulatory conditions.
If these requirements are not obeyed, any interested party may request that the
court dissolve the Company. This shall be also true if the Meeting was unable to
transact business validly.
Article 27 - Dissolution-Liquidation
The Company shall be dissolved when its term expires, unless this has been
extended, in the event its purpose has been completed or terminated, by court
decision on valid grounds.
-9-
Early dissolution may be decided upon at any time by the shareholders
representing three-quarters of the shares of capital stock.
The Company shall be in liquidation as soon as it shall be dissolved, regardless
of the reason.
The legal status of the Company continues to exist, for the purposes of the
liquidation, until the end of this liquidation. The dissolution of the Company
only produces its effects with respect to third parties from the date when it
shall be published in the Register of commerce and companies. The note "company
in liquidation," as well as the name of the liquidator or liquidators must
appear on all instruments and documents emanating from the Company.
Management duties shall be terminated by the dissolution of the Company. The
collective of shareholders shall retain its powers and determine the method of
liquidation; it shall appoint one or more liquidators, selected from among or
outside the shareholders, and determine their powers. The liquidation shall be
carried out in compliance with the law.
After redemption of all the shares of capital stock, the liquidation surplus
shall be distributed among the shareholders in proportion to the number of
shares belonging to each of them.
In the event all the shares are owned by a single shareholder, the dissolution
that may thereby arise shall result in the universal transfer of the assets,
without giving rise to liquidation.
Article 28 - Disputes
In the event of multiple shareholders, any disputes that may arise during the
term of the Company or during its liquidation among the shareholders or between
the Company and the shareholders pertaining to company affairs or to the
performance of these articles of incorporation shall be submitted to the
competent courts.
Executed in Paris on June 27, 1997
In as many copies as required by law
[Signed]
[Signed]
--------------------------
Ursus Telecom Corporation
[Signed]
--------------------------
Xxxxxxxxx xx Xxxxxxxxxxx
-00-
XXXXXXXXX XX. 0
TO THE
PROTOCOL OF AGREEMENT
of November 20, 1997
Between the undersigned:
Ursus Telecom Corporation, a company governed by the laws of the state of
Florida (United States), headquartered at 000 Xxxxxxxx Xxxxxxxxx Xxxx., Xxxxx
000, Xxxxxxx, XX 00000 XXX, and represented by Mr. Luca Giussani,
hereinafter referred to as "Ursus Telecom Corporation,"
As party of the first part,
And,
Central Call International, a limited liability company with capital in the
amount of 50,000 francs, headquartered at 000, xxx xx Xxxxxxxxx xx Xxxxx
(00000), registered in the Register of Commerce and Companies of Paris under the
number B 395 189 061, and represented by its manager, Xx. Xxxxxxxxx de
Beaurepaire,
hereinafter referred to as "Central Call,"
As party of the second part,
And,
Mondial Telecom, a limited liability company with capital in the amount of
55,000 francs, headquartered at 00, xxxxxxxxx Xxxxxxxx in Paris (75016), which
is in the process of being assigned a registration number in the Register of
Commerce and Companies of Paris following the transfer of its headquarters from
Papeete to Paris, and represented by its manager, Mr. Xxxx Xxxxx Xxxxx,
hereinafter referred to as "Mondial Telecom,"
As party of the third part.
It being specified that "Parties" indicates all the Parties indiscriminately,
and that "Party" indicates any one of the Parties to the present amendment No. 1
of the protocol of agreement dated November 20, 1997.
-1-
[handwritten initials at bottom of
all pages]
IT HAS BEEN PREVIOUSLY ESTABLISHED:
(A) On November 20, 1997, Ursus Telecom Corporation, Central Call and Mondial
Telecom entered into a protocol of agreement (hereinafter the "Protocol")
that sets forth the basic principles and terms of the partnership that the
Parties decided to establish between themselves for the operation and
development of Ursus Telecom France (as this term is defined in the
Protocol).
(B) Ursus Telecom Corporation, Central Call and Mondial Telecom have expressly
agreed in accordance with the Protocol that certain of its provisions shall
be reviewed, detailed and finalized in definitive agreements that must be
signed by the Parties or by the Parties and Ursus Telecom France.
(C) Ursus Telecom Corporation, Central Call and Mondial Telecom have
nevertheless indicated the desire to make certain modifications to the
Protocol for the purpose of facilitating the operation and development of
Ursus Telecom France, as well as the settlement of the definitive
agreements cited above.
(D) Consequently, and in compliance with the provisions of article 9, section
9.2 of the Protocol, Ursus Telecom Corporation, Central Call and Mondial
Telecom decided to sign the present amendment No. 1 to the Protocol
(hereinafter "Amendment No. 1").
THIS BEING ESTABLISHED, IT HAS BEEN AGREED AS FOLLOWS:
Article 1 - Operation of Ursus Telecom France
The Parties decide to modify the provisions of article 1, section 1.1,
second paragraph of the Protocol pertaining to the operation of Ursus
Telecom France.
The Parties therefore agree that the partnership that they decided to form
between themselves requires start-up of the operation of Ursus Telecom
France as soon as possible and no later than January 31, 1998, it being
specified that this date may in no case be postponed or delayed for any
reason whatsoever, except for a case of force majeure.
Article 2 - Obligations of Ursus Telecom Corporation
The Parties decide to modify and to complete the provisions of article 1,
section 1.2, first and second paragraphs of the Protocol pertaining to the
obligations of Ursus Telecom Corporation.
Ursus Telecom Corporation binds itself to make available to Ursus Telecom
France, under the conditions and in accordance with the terms that shall be
set forth in a definitive agreement between Ursus Telecom Corporation and
Ursus Telecom France, all the technical equipment, principally the switch
and the "groomers" described in Attachment 2 of the Protocol, that shall be
indispensable to the operation of Ursus Telecom France, a list whereof
shall be established in the aforementioned definitive agreement.
Ursus Telecom Corporation agrees to make the technical equipment cited in
the previous paragraph available to Ursus Telecom France within a
sufficient time period so as to allow the start-up of the operation of
Ursus Telecom France under the conditions described in article 1 above.
-2-
Article 3 - Obligations of Central Call and of Mondial Telecom
The Parties decide to modify and complete the provisions of article 1,
section 1.4, fourth and fifth paragraphs of the Protocol pertaining to the
non-competition obligations of Central Call and Mondial Telecom with
respect to Ursus Telecom Corporation and Ursus Telecom France.
Central Call and Mondial Telecom, as well as Xx. Xxxxxxxxx de Beaurepaire
and Xx. Xxxx-Xxxxx Xxxxx, these latter acting on their own behalf, bind
themselves with respect to Ursus Telecom Corporation, as of the arrival in
Paris of the technical equipment described in article 2 above and subject
to the provisions stipulated in the following paragraph, not to carry out,
directly or indirectly, in any manner whatsoever, any activity likely to
compete with the activities of Ursus Telecom France, not to be involved or
participate in any investment, directly or indirectly, in any business
likely to compete with Ursus Telecom France, for as long as Central Call
and Mondial Telecom shall be shareholders in Ursus Telecom France pursuant
to the provisions of article 2 of the Protocol and/or, if necessary, as
long as Xx. Xxxxxxxxx de Beaurepaire and/or Xx. Xxxx-Xxxxx Xxxxx shall be
shareholders in Ursus Telecom France or bound to Ursus Telecom France by an
employment contract.
As a consequence of the foregoing, Central Call and Mondial Telecom, as
well as Xx. Xxxxxxxxx de Beaurepaire and Xx. Xxxx-Xxxxx Xxxxx, these latter
acting on their own behalf, agree to offer first and on a priority basis to
Ursus Telecom Corporation and to Ursus Telecom France all projects
involving activities that are similar or related to those carried out by
Ursus Telecom France. Nevertheless, the Parties agree that Central Call and
Mondial Telecom, as well as Xx. Xxxxxxxxx de Beaurepaire and Xx. Xxxx-Xxxxx
Xxxxx, these latter acting on their own behalf, may have direct or indirect
interests in such activities if the projects presented were not previously
accepted in writing by Ursus Telecom Corporation and Ursus Telecom France
within thirty (30) days from notification of Ursus Telecom Corporation and
Ursus Telecom France concerning said projects by the Party or the Parties
concerned.
In the event Central Call and/or Mondial Telecom cease to be shareholders
in Ursus Telecom France and/or, if necessary, in the event Xx. Xxxxxxxxx de
Beaurepaire and/or Mr. Xxxx-Xxxxx Xxxxx xxxxx to be shareholders in Ursus
Telecom France or are no longer bound to Ursus Telecom France by an
employment contract, and for a period of one (1) year from the loss of the
status as shareholder and/or as employee of Ursus Telecom France, Central
Call and Mondial Telecom, as well as Xx. Xxxxxxxxx de Beaurepaire and Xx.
Xxxx-Xxxxx Xxxxx, these latter acting on their own behalf, agree to submit
to Ursus Telecom Corporation and to Ursus Telecom France all projects
involving activities in the area of the telecommunications industry in
France and to carry out such activities [only] if Ursus Telecom Corporation
and Ursus Telecom France have informed the Party or the Parties concerned
within thirty (30) days from submission of the aforementioned projects of
their intention not to become involved in said activities.
Central Call and Mondial Telecom, as well as Xx. Xxxxxxxxx do Beaurepaire
and Xx. Xxxx-Xxxxx Xxxxx, these latter acting on their own behalf, agree,
in the event Central Call and/or Mondial Telecom cease to be shareholders
in Ursus Telecom France and/or, should the occasion arise, in the event Xx.
Xxxxxxxxx de Beaurepaire and/or Xx. Xxxx-Xxxxx Xxxxx are not longer bound
to Ursus Telecom France by an employment contract, and for one (1) year
from the loss of status as shareholder and/or as employee of Ursus Telecom
France, not to hire or attempt to hire or even recruit any person employed
by Ursus Telecom France.
-3-
Article 4 - Effective date of the entry of Central Call and Mondial Telecom into
the capital of Ursus Telecom France
The Parties decide to modify the provisions of article 2, section 2.2 of
the Protocol pertaining to the effective date of the entry of Central Call
and Mondial Telecom into the capital of Ursus Telecom France as a result of
the modifications set forth in article 1 above.
Central Call and Mondial Telecom must purchase Ursus Telecom France capital
stock no later than January 31, 1998, it being specified that if on this
date the increase in Ursus Telecom France capital stock has not been
completed, the Parties shall meet to set a new date that, in any event, may
not result in extending the term of the Protocol as such is stipulated in
article 6 of the Protocol.
Article 5 - Purchase by Ursus Telecom Corporation of the capital stock owned by
Central Call and Mondial Telecom
The Parties decide to replace purely and simply the provisions of article
4, section 4.3 of the Protocol with the provisions of the present article 5
of Amendment No. 1.
In the event Ursus Telecom Corporation is offered on a regulated market or
stock exchange in the United States, Ursus Telecom Corporation agrees to
purchase all the stock shares owned by Central Call and Mondial Telecom in
the capital of Ursus Telecom France, and, if necessary, by Xx. Xxxxxxxxx de
Beaurepaire and Xx. Xxxx-Xxxxx Xxxxx, if these latter so request, under the
conditions and in accordance with the terms to be defined in a definitive
agreement signed by the Parties no later than the General Meeting of
Shareholders that shall meet to vote on the capital increase described in
article 2, section 2.1 of the Protocol.
The Parties hereby agree that the purchase by Ursus Telecom Corporation of
all the shares of stock owned by Central Call and Mondial Telecom and, if
necessary, by Xx. Xxxxxxxxx de Beaurepaire and Xx. Xxxx-Xxxxx Xxxxx, in the
capital of Ursus Telecom France shall take place in three (3) successive
installments each involving the purchase of thirty-three point thirty-three
percent (33.33%) of the shares owned by Central Call and Mondial Telecom
respectively, and, if necessary, by Xx. Xxxxxxxxx de Beaurepaire and Xx.
Xxxx-Xxxxx Xxxxx; the first instalment purchase must occur on the first
anniversary of the initial offering of Ursus Telecom Corporation on a
regulated market or stock exchange in the United States; the second and
third instalment purchase shall be completed on the second and third
anniversaries respectively of said initial offering.
Nevertheless, Central Call and Mondial Telecom, and, if necessary, Xx.
Xxxxxxxxx de Beaurepaire and Mr. Xxxx-Xxxxx Xxxxx, shall have the right to
request that Ursus Telecom Corporation purchase the shares of stock that
they own in the capital of Ursus Telecom France either in two (2)
successive installments on the second and third anniversaries of the
initial offering of Ursus Telecom Corporation on a regulated market or
stock exchange in the United States, each purchase involving respectively
sixty-six point sixty-six percent (66.66%) and thirty-three point
thirty-three percent (33.33%) of their shares of capital stock, or in a
single purchase on the third anniversary of said initial offering involving
one hundred percent (100%) of their shares of capital stock.
The Parties agree that in the event Ursus Telecom Corporation purchases the
shares of Ursus Telecom France capital stock owned by Central Call and
Mondial Telecom, and, if necessary, by Xx. Xxxxxxxxx de Beaurepaire and Mr.
Xxxx-Xxxxx Xxxxx, the price of said shares shall be determined in the
following manner.
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(i) The prime cost of all the shares of Ursus Telecom France owned by
Central Call and Mondial Telecom and, if necessary, by Xx. Xxxxxxxxx
de Beaurepaire and Mr. Xxxx-Xxxxx Xxxxx, shall be equal to three (3)
and one half months of Ursus Telecom France revenues, with the
stipulation that one (1) month of revenues shall correspond to the
average of Ursus Telecom France revenues for the months of February
1998, March 1998 and April 1998. The prime cost for all the shares of
Ursus Telecom France capital stock purchased by Ursus Telecom
Corporation under the conditions set forth in the preceding provisions
of the present article shall be paid in cash, and payment of this cost
by Ursus Telecom Corporation shall take place in advance within a
maximum of six (6) months from the initial offering of Ursus Telecom
Corporation on a regulated market or stock exchange in the United
States.
(ii) One or more price supplements for the shares of Ursus Telecom France
capital stock purchased by Ursus Telecom Corporation from Central Call
and Mondial Telecom and, if necessary, from Xx. Xxxxxxxxx de
Beaurepaire and Mr. Xxxx-Xxxxx Xxxxx, shall be determined at the time
of the purchase or purchases of said shares completed in accordance
with the aforementioned provisions of the present article. Each price
supplement due by virtue of said purchase or purchases shall
correspond to the percentage of the total value of Ursus Telecom
France represented by the shares of capital stock purchased. The total
value of Ursus Telecom France taken into consideration for the
determination of the price supplement or supplements for the
aforementioned shares shall be equal to eight (8) times the difference
between three (3) months of Ursus Telecom France revenues, with the
stipulation that one (1) month of revenues shall correspond to the
average of the three (3) months of Ursus Telecom France revenues
preceding the purchase or purchases of capital stock shares, and the
fraction of the prime cost paid by Ursus Telecom Corporation pursuant
to (i) above corresponding to the fraction of shares of capital stock
sold. The price supplement or supplements for all the shares of
capital stock of Ursus Telecom France purchased by Ursus Telecom
Corporation from Central Call and Mondial Telecom, and, if necessary
from Xx. Xxxxxxxxx de Beaurepaire and Mr. Xxxx-Xxxxx Xxxxx, shall be
paid in Ursus Telecom Corporation shares, and payment of this price
supplement or these price supplements by Ursus Telecom Corporation
shall take place at the time of the purchase or purchases of the
shares of capital stock; the Parties additionally agree to do their
utmost to insure, as soon as possible and in compliance with
applicable legal provisions, the possibility of offering the shares of
Ursus Telecom Corporation for sale on the market. Nevertheless, the
aforementioned price supplement or supplements may be paid in cash at
the sole discretion of Ursus Telecom Corporation. In this case, the
total value of Ursus Telecom France taken into consideration to
determine the price supplement or supplements for the shares purchased
shall be equal to five (5) and one half times the difference between
three (3) months of Ursus Telecom France revenues, with the
stipulation that one (1) month of revenues shall correspond to the
average of the three (3) months of Ursus Telecom France revenues
preceding the purchase or purchases of capital stock shares, and the
fraction of the prime cost paid by Ursus Telecom Corporation pursuant
to (i) above corresponding to the fraction of capital stock shares
purchased.
Article 6 - Costs
Each of the Parties shall bear its own costs, charges and other expenses of any
kind related to the negotiation, preparation and implementation of Amendment No.
1.
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Article 7 - Notices
Any notice or communication of information carried out under Amendment No. 1
shall only be effective if it is accomplished according to the conditions set
forth by the provisions of article 11 of the Protocol.
Article 8 - Scope of Amendment No. 1
Only the provisions of the Protocol that are expressly cited above are completed
or modified by Amendment No. 1.
Article 9 - Applicable law. Disputes
9.1 Amendment No. 1 shall be subject in all its provisions to French law.
9.2 The Parties shall endeavor to settle by amicable arrangement and in good
faith any disputes that may arise between them in connection with Amendment
No. 1 and pertaining to the validity, its performance and the consequences
thereof.
9.3 If settlement by amicable arrangement fails, any litigation between the
Parties related to Amendment No. 1 and regarding the validity,
interpretation, performance and the consequences thereof, shall be
submitted to the exclusive competence of the Court of Commerce of Paris.
Executed in Paris on January 6, 1998.
And signed in three (3) original copies.
--------------------------------
For Ursus Telecom Corporation
Mr. Luca Giussani
[Signed]
--------------------------------
For Central Call
Xx. Xxxxxxxxx de Beaurepaire
[Signed]
--------------------------------
For Mondial Telecom
Mr. Xxxx Xxxxx Xxxxx
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