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Exhibit 3.2
MULTI-ACCESS PORTAL JOINT VENTURE AGREEMENT
BETWEEN VODAFONE AIRTOUCH PLC, VODAFONE EUROPEAN PORTAL
LTD., VIVENDI S.A., CANAL PLUS S.A. AND VIVENDI NET S.A.
This agreement is entered into on 16 May 2000 by and between:
(1) Vodafone AirTouch Plc (hereafter referred to as "VODAFONE"), a
corporation organized and existing under the laws of England and
Wales;
(2) Vodafone European Portal Limited (hereinafter referred to as "VEP"), a
corporation organized under the laws of the England and Wales;
(3) Vivendi S.A. (hereafter referred to as "VIVENDI"), a corporation
organized and existing under the laws of France, acting on its own
behalf and, together with Canal+S.A., on behalf of Vivendi Net S.A.;
(4) Canal + S.A. (hereafter referred to as "CANAL+"), a corporation
organized and existing under the laws of France, acting on its own
behalf and, together with Vivendi, on behalf of Vivendi Net S.A.; and
(5) Vivendi Net S.A. (hereafter referred to as "VNET"), a corporation
currently being created, to be organized and exist under the laws of
Belgium, represented jointly by Vivendi and Canal+ for purposes of the
signature of this Joint Venture Agreement.
RECITALS
A. The Vodafone group is a leading worldwide provider of mobile telephony
services. VEP is a wholly owned subsidiary of Vodafone and was created
for the development and delivery of certain regionally focused
European wide mobile Internet content.
B. Vivendi and Canal+ (of which Vivendi is the largest shareholder)
constitute together one of Europe's leading communications, Pay-TV and
multimedia content and services group. Vnet (a 50/50 Vivendi and
Canal+ joint venture company currently being created) will combine
under a common structure the Internet-based activities of Vivendi and
Canal+. The Vivendi Parties' participation in the Company (as defined
below) shall be held directly or indirectly through Vnet.
C. The Parties agree to enter into a 50/50 strategic joint venture to
develop and operate a Horizontal Portal and to conduct the Business in
accordance with the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and mutual covenants herein set
forth, the Parties agree as follows:
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1. CREATION, PURPOSE AND SCOPE OF THE JOINT VENTURE
1.1 PURPOSE, THE HORIZONTAL PORTAL AND THE CONDUCT OF THE COMPANY'S
BUSINESS
The Vodafone Group Parties and the Vivendi Group Parties hereby agree
to enter into a strategic joint venture, under and subject to the
terms and conditions of this Joint Venture Agreement and establish the
Company, with the purpose of undertaking, through the Company and any
Local Subsidiaries, the development, marketing, maintenance and
provision of a multi-access Horizontal Portal and related Web-Based
Services accessible by users of any and all Access Devices through any
Delivery System in the Territory, as further detailed herein, in order
inter alia (i) to serve as a strategic differentiator for the Parties'
Controlled and Minority Operators, such differentiation being a key
success factor in acquiring and retaining customers for such
Operators, and (ii) to create value for the Company.
1.2 CERTAIN DEFINITIONS
For purposes of this Joint Venture Agreement the following words and phrases
shall have the following meanings:
(a) "ACCESS DEVICE" means any type of appliance, machine or device that
can be used to connect to the Internet and/or any Web-Based Services
(including without limitation personal computers, handheld computers,
televisions and monitors, paging devices, personal data appliances,
mobile and fixed telephones);
(b) "ACCESS SERVICES" shall mean the provision by any Person of a
connection to an Web-Based Services gateway or server from an Access
Device.
(c) "ACCESS PROVIDER" shall mean any Person providing Access Services to
end users in the Territory;
(d) "ARTICLES" means the articles of association of the Company set out in
Annex 1.2(d) as the same may be amended from time to time in
accordance with this Joint Venture Agreement.
(e) "BOARD" means the board of directors of the Company from time to time;
(f) "BUSINESS" shall have the meaning given to it in Clause 1.3.1.
(g) "COMPANY" means the company created hereunder and registered in
England and Wales to operate, directly or through the Local
Subsidiaries, the Business; unless otherwise expressly stated herein
or unless the context otherwise so requires, the Company includes the
relevant Local Subsidiary or Subsidiaries;
(h) "COMPETING OPERATOR" shall mean (i) with regard to a Mobile Telco,
another Mobile Telco operating in the same country within the
Territory, (ii) with regard to a Fixed Telco, another Fixed Telco
operating in the same country in the Territory; and (iii) with regard
to a Pay-TV, another Pay-TV operating in the same country within the
Territory.
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(i) "CONTROL" with respect to any Person, shall be deemed to exist if such
Person holds (directly or indirectly) more than fifty (50) per cent of
the voting share capital of that other company or entity, or has the
power to appoint more than half of the board of directors of that
company or entity and "CONTROLLED" shall be construed accordingly.
(j) "CONTROLLED OPERATORS " as of any date, shall mean the Parties (to the
extent that they are themselves Operators) and the Operators
Controlled by any one or more of the Parties as of such date (a list
of such entities as of the date hereof, together with the
corresponding voting share capital held in each such Controlled
Operator by any one or more of the Parties, is set forth in Annex
1.2(j) hereto);
(k) "CONTENT" shall mean web-based information, games, works and any other
products (including e-commerce products including, without limitation,
auction sites and electronic retailers/exchanges) which contain any
combination of the following in digital form or such other forms as
may become available in the future: text, graphics, video, sound,
still images or the like.
(l) "CONTENT AND/OR SUPPORT SERVICES SUPPLIER" shall mean any entity
(including the Company itself) which may supply Content and/or Support
Services to the Company;
(m) "CONTROLLED CONTENT AND/OR SUPPORT SERVICES SUPPLIERS" as of any date
shall mean the Parties (to the extent that they are themselves Content
and/or Support Services Suppliers) and the Content and/or Support
Services Suppliers Controlled by any one or more of the Parties as of
such date.
(n) "DEED OF ADHERENCE" means a deed substantially in the form set out in
Annex 1.2(n);
(o) "DEFAULT HORIZONTAL PORTAL" shall have the meaning given to the term
in Clause 1.3.2 hereof.
(P) "DELIVERY SYSTEM" shall mean any method of electronically transmitting
or electronically broadcasting data, including any existing or future
means of electronic distribution or telecommunication, or any
combination of such means, whether narrowband, broadband or broadcast
(including without limitation POTS, ISDN, DSL, cable, fiber optics and
satellite, GSM, UMTS or other mobile technology) through any existing
or future protocols and/or standards, or any combination of such
protocols and standards, whether proprietary or publicly available
(including without limitation radio, television, telephony and
Internet and Internet derivative protocols and standards including
wireless applications protocols (WAP)).
(q) "DILUTED SHAREHOLDER" shall have the meaning given to the term in
Clause 3.2(c);
(r) "DIRECTORS" means the Vnet Directors and the VEP Directors, and
"DIRECTOR" shall mean any one of them as the context requires;
(s) "FIXED TELCO" shall mean any fixed line, whether dial-up or broadband
(e.g. DSL, fiber optic cable) telecommunications operator authorized
by the relevant regulatory authorities in one or more jurisdictions
within the Territory, as of the date hereof or in the future, to offer
to customers in the Territory transmission of voice services and/or
transmission of data services under the current technical standards or
under
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any other standard or protocol that may be authorized in the future by
such regulatory authorities);
(t) "FIXED TELCO AGREEMENTS" shall mean the agreements to be entered into
between the Controlled Fixed Telcos and the Company, pursuant to which
the MAP shall appear as the Default Horizontal Portal on the relevant
Access Device, the other principal terms and conditions of which shall
be based on the Operator Agreements Term Sheet, and which will also
serve as a guideline for the Company's negotiations with Minority
Operators and third party Operators involved in fixed line
telecommunications;
(u) "FUNCTIONALITIES" include the following web-based services: chat,
e-mail, instant messaging, message boards, personal address books,
calendar and scheduling functions, online transactions, search engines
and e-commerce facilitators.
(v) "GATEWAY SERVICES" shall mean the provision by any Person of a
connection from the Company's Web-Based Services gateway or server to
the Internet;
(w) "GROUP OF PARTIES" means the Vodafone Group Parties and/or the Vivendi
Group Parties, as the context requires;
(x) "GROUP COMPANY" means with respect to any Party, any company in which
such Party either directly or indirectly owns more than fifty (50) per
cent of the voting share capital of that other company or entity, or
has the power to appoint more than half of the board of directors of
that company or entity.
(y) "HORIZONTAL PORTAL" shall mean a uniformly branded Internet gateway or
Web-Based Service that primarily acts as an aggregator and facilitator
of Content and Functionalities without focusing on one particular
subject and/or theme (for the avoidance of doubt, a national or
multinational scope/area shall not constitute a particular subject or
theme for the purposes of this definition) that may be available
across one or more different Access Devices;
(z) "INTERNET" shall be deemed to include the Internet and any successor
thereto.
(aa) "WEB-BASED SERVICES" means any Content and or Functionalities
available on the Internet and/or accessible through Internet protocols
and standards and not initiated in a broadcast (i.e. not individually
addressed) mode, regardless of the means of transmission including
without limitation xDSL, cable and satellite.
(bb) "JOINT VENTURE AGREEMENT" means this agreement;
(cc) "LAUNCH DATE" shall mean the first date on which MAP becomes
accessible on-line to users of any Access Device (but not necessarily
all Access Devices) irrespective of the Delivery System used by the
end-user to connect to the Internet, in any part of the Territory but
not necessarily in all of the Territory, as promptly thereafter
acknowledged and confirmed by the Parties to each other in writing;
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(dd) "LOCAL SUBSIDIARIES" means any subsidiaries (as such term is defined
in s.736 of the Companies Xxx 0000 as amended by s.144 of the
Companies Act 1989) of the Company from time to time;
(ee) "MAP" means the multi-access Horizontal Portal developed, marketed and
provided by the Company directly or through the Local Subsidiaries.
(ff) "MINORITY OPERATORS" and "MINORITY CONTENT AND/OR SUPPORT SERVICES
SUPPLIERS" as of any date, shall respectively mean Operators (a list
of such entities as of the date hereof is set forth in Annex 1.2(j)
hereto) and Content and/or Support Services Suppliers in which one or
more Parties hold (directly or indirectly), as of any such date, an
equity interest, other than the Controlled Operators and the
Controlled Content and/or Support Services Suppliers;
(gg) a "MOBILE TELCO" shall mean any mobile or wireless telecommunications
operator offering (under license from the competent regulatory
authorities in one or more jurisdictions within the Territory) mobile
or wireless transmission of voice and/or of data services to customers
in the Territory under the current technical standards or under any
other standard or protocol that may be authorized in the future by
such regulatory authorities).
(hh) "MOBILE TELCO AGREEMENTS" shall mean the agreements to be entered into
between the Controlled Mobile Telcos and the Company, pursuant to
which the MAP shall appear as the exclusive Default Horizontal Portal
on the handsets or other relevant Access Devices, which together with
the other principal terms and conditions of the Mobile Telco
Agreements are set forth in the relevant Operator Agreements Term
Sheet and which will also serve as a guideline for the Company's
negotiations with Minority Operators and third party Operators
involved in mobile telecommunications;
(ii) "OPERATORS " shall mean Mobile Telcos, Fixed Telcos, Pay-TVs and
Access Providers;
(jj) "OPERATOR AGREEMENTS" shall mean the Mobile Telco Agreements, the
Fixed Telco Agreements, the Pay-TV Agreements and other agreements
with the same fundamental objective entered into between the Company
and other Access Providers;
(kk) "OPERATOR AGREEMENTS TERM SHEETS" shall mean the term sheets attached
in Annexes 1.2(kk)(a) and 1.2(kk)(b) hereto setting forth the
principal terms of the Mobile Telco Agreements and of the Pay-TV
Agreements, respectively;
(ll) "PARTIES" means Vodafone, VEP, Vivendi, Canal+ and Vnet (each
individually "a Party");
(mm) "PAY-TV" shall mean any company delivering, by any means of
transmission, including cable and satellite, consumer (as opposed to
professional) television services in substantially scrambled and/or
encrypted digital (or any successor thereto) form to
customers/subscribers in the Territory in a manner capable of being
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descrambled or decrypted by individually addressable decoders or
equivalent or successor form of devices where a fee is paid or payable
to such company directly by such subscribers/customers for the right
to view and/or participate in such television services (including
pay-per-view, video-on-demand and near video-on-demand).
(nn) "PAY-TV AGREEMENTS" shall mean the agreements to be entered into
between the Controlled Pay-TVs and the Company, pursuant to which the
MAP shall appear as the exclusive Default Horizontal Portal on the
television monitors, which together with the other principal terms and
conditions of the Pay-TV Agreements are set forth in the relevant
Operator Agreements Term Sheet and which will also serve as a
guideline for the Company's negotiations with Minority Pay-TVs and
third party Pay-TVs;
(oo) "PERMITTED TRANSFEREE" means an entity in which either Vodafone, or
Vivendi and/or Vnet (provided, in the case of Vnet, there has been no
change of control of the Vnet Shareholder, as such term is defined in
Clause 3.6.4) hold, directly or indirectly, all legal and beneficial
interests, as the case may be.
(pp) "PERSON" means any individual person and any entity, whether
incorporated or unincorporated;
(qq) "PRIMARY SERVICES" shall have the meaning specified in Clause 1.3.3;
(rr) "RENDEZVOUS DATE" has the meaning given to the term in Clause
1.4.4(a);
(ss) "RESERVED ACTIVITIES" shall have the meaning given to it in Clause
1.3.5 ;
(tt) "SHAREHOLDER" shall mean the Vnet Shareholder and the VEP Shareholder.
(uu) "SHAREHOLDERS" shall mean the Vnet Shareholder and the VEP Shareholder
collectively.
(VV) "SUPPORT SERVICES" includes software, business solutions, technology,
hosting, hardware, infrastructure, network services and other similar
services necessary for the Company to conduct the Business.
(ww) "SIGNIFICANT MATTERS" means the matters set out in Clause 3.3.2;
(xx) "TERRITORY" means the countries of the European Union (as of the date
hereof), Norway, Switzerland, Iceland, the Baltic states, Poland,
Czech Republic, Slovakia, Hungary, the countries of the former
Yugoslavia, Bulgaria, Romania, Malta and Cyprus.
(yy) "VEP DIRECTORS" means the directors appointed by the VEP Shareholder
from time to time in accordance with Clause 3.3.1(b);
(zz) "VEP SHARES" shall mean all Company shares held from time to time by
the VEP Shareholder;
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(aaa) "VERTICAL PORTAL" shall mean a uniformly branded Web-Based Service
offering Content and Functionalities related to one particular subject
or theme (for the avoidance of doubt, a national or multinational
scope/area shall not constitute a particular subject or theme for the
purposes of this definition) that may be available across one or more
different Access Devices.
(bbb) "VEP SHAREHOLDER" shall mean VEP and all Permitted Transferees who
hold VEP Shares, as a group;
(ccc) "VGPIS" means the Vodafone Global Platform Internet Services;"
(ddd) VNET DIRECTORS" means the directors appointed by the Vnet Shareholder
from time to time in accordance with Clause 3.3.1(b);
(eee) "VNET SHARES" shall mean all Company shares held from time to time by
the Vnet Shareholder;
(fff) "VNET SHAREHOLDER" shall mean Vnet and all Permitted Transferees who
hold Vnet Shares, as a group;
(ggg) "VIVENDI GROUP PARTIES" means Vivendi, Canal+ and Vnet.
(hhh) "VODAFONE GROUP PARTIES" means Vodafone and VEP.
1.3 SCOPE OF BUSINESS OF THE COMPANY; RESERVED ACTIVITIES; RESTRICTIONS ON
SCOPE OF BUSINESS
1.3.1 The scope of the business of the Company to be established by the Parties
pursuant to Article 3 hereof (the "BUSINESS") shall be to conduct (directly or
through one or more Local Subsidiary) the activities set forth in paragraphs
(a) through -(e) below:
(a) ownership, design, development, operation, management,
maintenance, marketing, and/or provision of a Horizontal Portal
to be distributed through Operators in the Territory;
(b) the development and provision, in connection with and through
the Horizontal Portal, of the Primary Services ; and
(c) the provision and management of Gateway Services; and
(d) the provision of Access Services but only to the extent
permitted under Clause 1.3.7 hereof.
(e) any other activities related thereto or in furtherance thereof
as may be decided by the Board from time to time.
1.3.2 The MAP will be characterised by a uniquely and uniformly branded front
page, which will be the first page that appears on the user's Access Device
upon connection to the Internet as further described in the Operator Agreements
Term Sheets (the "DEFAULT HORIZONTAL PORTAL").
1.3.3 The primary functions of the Company's Horizontal Portal will be to
provide users accessing the Internet (independently of the Access Device used)
with the following services ("PRIMARY SERVICES"):
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(a) a single e-mail address with instant messaging enabling the
user to be alerted to and access e-mails from all Access
Devices;
(b) Internet-related chat,;
(c) a general purpose search engine facility to allow the user to
search for any site on the Internet;
(d) e-commerce functionalities that operate across a broad
variety of Internet sites in order to facilitate the
selection and execution of transactions
(e) hyper-text link references or similar mechanisms that allow
the user to access, from the Horizontal Portal, Vertical
Portals or other Content and services created and provided by
either the Company, the Parties or third parties (including
third parties related to one or more Parties);
(f) Horizontal Portal-specific personalisation tools to permit
users to configure their front pages according to their
particular requirements;
(g) aggregation into the MAP of Content including Vertical
Portals such as news, weather, business and financial news,
travel, horoscopes, education, health, games and location
specific guides such as restaurants and hotels;
(h) provision of web-base directory inquiry services.
1.3.4 The Parties anticipate that the Company will initially derive its
revenue from advertising and the provision of Content (including
commissions on e-commerce transactions).
1.3.5 RESERVED ACTIVITIES.
The ownership, design, development, operation, management and/or maintenance
(through any type of equity or quasi-equity interest) of any Horizontal Portal
shall be the "RESERVED ACTIVITIES" of the Company and the Parties' obligations
with respect thereto are set forth in Clauses 1.3.6 and 1.3.7 below.
1.3.6 EXCLUSIVITY UNDERTAKINGS OF THE PARTIES WITH REGARD TO THE RESERVED
ACTIVITIES.
(a) The following undertakings of the Parties shall apply to each Party
only within the Territory commencing as of the date of signature of
this Joint Venture Agreement (subject to clause 2.8) and for as long
as such Party holds directly or indirectly shares in the Company and
for a period of six (6) months thereafter and unless the other Group
of Parties agrees to otherwise in writing:
(i) except as otherwise specifically provided in Clause 2
hereof with respect to IOL, Omnitel 2000 and
(i)France,and in Clause 1.3.6(a)(iii); each Party
shall refrain from, and shall cause each of its Group
Companies to refrain from, conducting any Reserved
Activities in the Territory, other than through the
Company;
(ii) each Party shall not and shall cause each of its
Group Companies not to acquire (including by way of
creation, or by direct or indirect means), without
the written consent of the other Group of Parties, an
interest, or any security entitling the holder to so
acquire an interest (for purposes of this Clause
1.3.6, an "INTEREST"), in any entity primarily
involved in conducting, in the Territory, any of the
Reserved Activities, other than Interests
constituting less than five per cent (5%) of the
issued share
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capital and carrying less than five per cent (5%) of
the voting rights exercisable at general meetings,
of the aforementioned entity;
(iii) except as otherwise specifically provided for in
Clause 2.2.1 with respect to the indirect disposal
of the AOL interest by exchanging it for a minority
interest in AOL Compuserve Europe to be sold upon
the latter's initial public offering, if a Party or
any of its Group Companies acquires an Interest of
five per cent (5%) or more of the issued share
capital and carrying five per cent (5%) or more of
the voting rights exercisable at general meetings in
any entity (the "ACQUIRED COMPANY") not primarily
conducting any of the Reserved Activities in the
Territory, but nevertheless directly or indirectly
conducting any such Reserved Activities in the
Territory, the Company shall have the right
(exercisable within six months of the completion of
the acquisition of the aforementioned Interest upon
the sole vote of the Shareholder that was not
involved in such acquisition ) to require that such
Reserved Activities of the Acquired Company be
treated as if such Activities were Relevant Assets
to be dealt with according to the same procedures
and standards as those set forth in Clauses 2.3
through 2.10 (provided that, for purposes of this
Clause 1.3.6.(a)(iii), Transfer Date shall mean
twelve months after the completion of the
acquisition by the relevant Party of the
aforementioned Interest); in the event that the
Company does not exercise the above right within
such six month period, the Party shall have the
right to maintain its Interest in the Acquired
Company in question and shall not be deemed to be in
breach of this Clause 1.3.6 with respect thereto;
(iv) and each Party shall not and shall cause each of its
Group Companies not, directly or indirectly, to
enter into any agreements with any third parties for
the provision of Functionalities, Content and/or
Support Services in the Territory, the sole purpose
of which is to resell such Functionalities, Content
and/or Support Services to the Company.
(b) For purposes of Section 1.3.6(a), an entity shall be deemed to
conduct any of the Reserved Activities in the Territory if (i)
the services provided by such entity in connection with the
Reserved Activities are principally designed or tailored for use
specifically by customers located in the Territory, and/or (ii)
such services are specifically marketed or otherwise specifically
promoted within the Territory, and/or (iii) an agreement is
entered into with any Operator in the Territory for the provision
of such services to such Operator's customers in the Territory.
1.3.7 RESTRICTIONS ON THE COMPANY'S SCOPE OF BUSINESS.
The Company shall not engage in, and the Parties shall exercise their
rights hereunder and as Shareholders to prevent the Company from
engaging in, the following activities (for the avoidance of doubt, the
Parties (and/or their respective Group Companies) shall be free to
engage in such activities outside the Company):
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(a) Voice telephony and related retail billing, except that MAP
may offer voice over Internet or voice over IP accessible
only from the television and/or the PC (but not from Mobile
Access Devices) and only if so determined by the Board in its
discretion;
(b) Data telephony and related retail billing (time, QOS, data
usage), including fax and SMS, except for, and subject to
Clause 1.4.3(d) below, agreements with third parties for the
provisioning of any necessary network and data transport
capabilities required to provide the Access Services.
(c) Access Services other than (i) Access Services from
television Access Devices, and (ii) subject to the Company's
compliance with Clause 1.4.3(d) hereof in the relevant
country, Access Services from Access Devices using a
fixed-line connection;
(d) Management of subscriber database in respect of Operators
subscribers for customer relationship management purposes;
(e) the provision of corporate and corporate end-user customers
with closed user group facilities, intranet and extranet
applications;
(f) Network customer care;
(g) SIM Card Payments and billing where the SIM Card is used as
an e-wallet or where the charges are included on the Mobile
phone xxxx;
(h) Provision of localisation capability;
(i) Bearer mediation and selection of most appropriate bearer for
content;
(j) Provision of customers with terminal equipment; and
(k) Delivery of movies, audiovisual programming and/or sports
events intended primarily for consumption in a continuous and
uninterrupted fashion from the beginning to end to any Access
Device, including without limitation television, pay-per-view
and video-on-demand.
1.3.8 RESTRICTIONS RELATED TO THE BUSINESS OF THE OPERATOR AND THE COMPANY
IN THE CONTEXT OF AN OPERATOR AGREEMENT
As further described in the Operator Agreements Term Sheets, so long as an
Operator Agreement is in force between any Controlled Operator and the
Company:
(a) MAP shall be the exclusive Default Horizontal Portal for customers
of such Operator ; except as set forth below:
Exceptions :
(i) Corporate business where the Operator's corporate
customer provisions the participants of such corporate
customer's users or closed user group but not in any way
the customers of such corporate customer and where the
Operator facilitates access to the corporate customer's
web site, intranet or extranet; in such case, the
Operator shall be free to place the corporate
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customer's web site, intranet or extranet as the first
page provided that MAP appears on the SIM card on the
second most prominent default position and the Operator
otherwise complies with paragraphs (t), (u), (v) and (y)
below;
(ii) Wholesale customers where the Operator is obliged for
regulatory reasons to enable the wholesale customer to
resell airtime and services and to rebrand the service
under its own identity; in such cases, the Operator shall
use its best efforts to comply with the obligations in
paragraphs (t) through (y) below;
(iii) Third party resellers who have the facility to
reconfigure the terminal in terms of the setting of the
Default Horizontal Portal; in such cases, the Operator
shall use its best efforts to comply with the obligations
in paragraphs (t) through (y) below;
(iv) Entities with retail customers of such a significant size
and scale that the forfeiting of business with such
entities would cause the Operator to miss its business
plan targets by a material margin or to lose a material
share of its market, and where it is clearly demonstrated
that the reconfiguration of the Access Device in favour
of such entities own Internet portal is a decisive factor
in enabling the Operator to secure such business; in such
cases, the Operator shall comply with the following:
Operators' obligations in connection with such exceptions
(t) to inform the Company's Board promptly and in writing
every time it avails itself of any of the foregoing
exceptions;
(u) to market and promote the MAP in preference to any
competing Horizontal Portal in accordance with its such
Operator's undertakings under this Joint Venture
Agreement and, specifically, in accordance with the
relevant Operator Agreements Term Sheet;
(v) to place MAP as the Default Horizontal Portal throughout
all its owned distribution channels and to seek the
placement of MAP as the Default Horizontal Portal on
third party distribution channels;
(w) in situations where it is not possible to achieve the
placement of MAP as the Default Horizontal Portal, to
facilitate a co-branding arrangement between the Company
and the entity with retail customers in conformity with
an agreed set of guidelines (in particular, should the
entity with retail customers in question wish to develop
its own default portal, the Operator shall consult with
the Company to assess whether such default portal can be
integrated within MAP such as to provide a customized
co-branded Default Horizontal Portal;
(x) in situations where neither the placement of the MAP
portal as the default portal nor the co-branding of the
MAP portal with the entity with retail customers is
possible, to ensure that the entity with retail
customers' own branded portal contains a reasonably
prominent hypertext link on the entity with retail
customers' front page to the MAP portal and that on the
SIM card MAP is only one link down from the entity with
retail customers' own portal.
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(y) under no circumstances to permit the displacement of the
MAP portal in favour of any competing Horizontal Portals
including but not limited to Yahoo, AOL, MSN,
Free-serve, Libertysurf, Wanadoo, Club-Internet.
(b) such Operator shall not distribute to its customers any
Web-Based Services including e-mail address, general Internet
search engine, general Internet e-commerce facilitation service
or Internet instant messaging service other than the services
described in Clause 1.3.7 and any of the services on the
Operator Site in accordance with Clause 8.5 of the Operator
Agreement Term Sheets and Clause (c) below, in all the foregoing
cases other than through MAP; for the avoidance of doubt, the
Operator may be a Content and/or Support Services Supplier
subject to all the terms and conditions with respect to Content
and/or Support Services Suppliers provided for in this Joint
Venture Agreement.
(c) For the avoidance of doubt, nothing contained herein shall
prevent the Operator from maintaining its Internet site
containing the information related to the Operator and its
products and services, as well as its own in-house intranet and
electronic mail system.
1.3.9 ACTIVITIES IN WHICH THE COMPANY, ANY PARTY OR ANY OPERATOR MAY
PARTICIPATE:
For the avoidance of doubt, nothing herein shall be deemed to prevent
the Company, any Party or any Operator from:
(a) providing customer care or customer profiling for their
respective customer bases;
(b) co-marketing and promotion of the Company's Horizontal Portal
Business; and/or
(c) systems integration and technical interfaces between the
Company and the Operator.
(d) web-based directory inquiry services.
1.4 CERTAIN RELATED PARTY AGREEMENTS
1.4.1 [Number reserved]
1.4.2 Undertakings of the Parties regarding relations between the Company
and the Controlled and Minority Operators
(a) Each Party hereby undertakes as follows:
(i) To use whatever rights it may have in accordance with and
subject to applicable law and regulations, governing charters
and shareholder agreements, if any, to cause its Controlled
Operators to (x) enter into Operator Agreements with the
Company (or the relevant Local Subsidiary), in accordance
with Clause 1.4.4, as soon as possible, but no later than 30
June
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2000 in the case of SFR and Vodafone UK, no later than six
months from the date hereof for Mannesmann Mobilfunk ("D2"),
no later than nine months from the date hereof or such other
period as may be agreed by the Parties in the case of Omnitel
Pronto Italia ("OMNITEL"), and no later than twelve months
for the other Controlled Operators, and (y) conduct the
renegotiation of the revenue sharing terms provided for in
Clause 1.4.4 hereunder in good faith and, prior to the
expiration of such Operator Agreements' contractual terms, to
conduct good faith negotiations with the Company in view of
the timely renewal of such agreements in accordance with the
provisions of this Joint Venture Agreement; and
(ii) subject to Clause 1.4.2(a)(i), and together with the other
Parties, to cause the Company to enter into the
aforementioned agreements with the Controlled Operators
within the timeframe described above, and, prior to the
expiration thereof, to conduct good faith negotiations with a
view to the timely renewal of such agreements in accordance
with the provisions of this Joint Venture Agreement.
(b) The provisions of Clause 1.4.2(a) shall apply in such countries where
more than one Controlled and/or Minority Operator operates
(irrespective of whether such Operators are Competing Operators or
not), unless the Board decides that it is in the best interest of the
Company not to enter into Operator Agreements with more than one
Competing Controlled and/or Minority Operator in that particular
country, in which case each Party shall cause the Company to enter
into an Operator Agreement with the Controlled or Minority Operator
designated by the Board.
(c) Each Party hereby undertakes, in respect of any Minority Operator in
which it has a stake, to promptly use best efforts to assist in
establishing contacts with, and commencing discussions between, the
Company and such Minority Operator, with the purpose of entering into
Operator Agreements.
(d) The Company may, in such countries within the Territory in which no
Controlled Operator or Minority Operator exists, enter into Operator
Agreements with third party Operators, as may be decided by the Board
from time to time.
(e) For the avoidance of doubt, until the expiration of the time periods
described in Clause 1.4.2(a) above, each Party hereby undertakes to:
(i) use whatever rights it may have in accordance with and
subject to applicable law and regulation, governing charters
and shareholder agreements, if any, to keep its Controlled or
Minority Operators from entering into any agreement with
third parties by virtue of which such Operators would be
required or entitled to place another Horizontal Portal as
their Default Horizontal Portal.
(ii) cause the Company not to enter into Operator Agreements with
any third party Competing Operator in those countries within
the Territory in which a Controlled Operator or a Minority
Operator operates; for the avoidance of doubt, the preceding
sentence shall in no way be deemed to relieve or limit in any
way the Parties' obligations under Clause 1.4.2(a) above;
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(iii) The foregoing paragraphs (i) and (ii) shall apply MUTATIS
MUTANDIS in respect of the period preceding renewal of the
Operator Agreements at their expiration;
(f) Failure by any Party to cause Controlled Operators to enter into an
Operator Agreement with the Company within the timeframe set forth in
Clause 1.4.2(a) shall not constitute a material breach of this Joint
Venture Agreement provided that such Party used whatever rights it had
(subject to the provisions of Clause1.4.2(a)) to cause such Controlled
Operators to enter into the relevant Operator Agreement.
(g) Failure by any Party to comply with its obligations under this Clause
1.4.2(a) shall constitute a material breach of this Joint Venture
Agreement.
(h) Without prejudice to the rights and remedies of any Party in respect
of a material breach by the other Parties, in the event that an
Operator Agreement is not entered into and/or renewed with the Company
in accordance with the time frame and other provisions of Clause
1.4.2(a), the Company (providing that there has been no breach by the
Party not holding an interest in the relevant Operator of its
obligations under Clause 1.4.2(a)(ii)) shall be free to enter into
Operator Agreements or other similar arrangements with third party
Operators in the corresponding country with respect to the
corresponding Access Device.
(i) If, notwithstanding the relevant Party's having complied with its
respective obligations under this Joint Venture Agreement, an Operator
Agreement is not entered into between the Company and a particular
Controlled Operator in accordance with the time frame and other
provisions of Clause 1.4.2(a), the Company shall be free to enter into
Operator Agreements or other similar arrangements with third party
Operators in the corresponding country with respect to the
corresponding Access Device, and the Controlled Operator shall be free
to enter into an Operator Agreement or other similar arrangements with
a third party Horizontal Portal in the corresponding country.
(j) If any Telco which is as of the date hereof a competitor of Vodafone
in the United Kingdom and/or in Belgium were to become a Controlled or
a Minority Operator of the Vivendi Group Parties, the Company shall
enter into agreements with the aforementioned Controlled or Minority
Operator similar to the Telco Agreements, provided that such
Controlled or Minority Operator may not (i) be granted the right to
use the Brand, (ii) be granted the right to offer its subscribers the
MAP as Default Horizontal Portal, nor (iii) be offered terms and
conditions more favourable than those granted to the Vodafone
Controlled or Minority Operators in those countries.
1.4.3 Undertakings of the Parties regarding preferred supplier relations
between the Company and the Controlled and Minority Content and/or
Support Services Suppliers
(a) Each Party hereby undertakes (i) together with the other Parties
to cause the Company, promptly upon a decision having been made
by the Company to aggregate into MAP a particular type of
Content, or to request the provision of Support Services, to
first offer the Controlled Content and/or Support Services
Suppliers that have such particular type of Content or of
Support Services, if any, the right to supply as a preferred
supplier the aforementioned Content or Support Services to the
Company on an arm's length basis and (ii) to use
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whatever rights it may have under applicable law and the
respective governing charters, subject to shareholders
agreements, if any, to cause its Controlled Content and/or
Support Services Suppliers to provide the Company the Content or
the Support Services thus required, on an arm's length basis.
(b) Each Party hereby undertakes to use whatever rights it may have
under applicable law, the respective governing charters and
shareholders agreements, if any, to cause its Controlled and
Minority Content and/or Support Services Suppliers to promptly
(i) offer the Company the right to aggregate into MAP (on
preferred supplier and arm's length basis) any Content, or (ii)
provide the Company (on preferred supplier and arm's length
basis) any Support Services which such Controlled or Minority
Content and/or Support Services Suppliers may from time to time
develop or hold the right to distribute, before offering or
providing them to any other Person or entity involved in a
Horizontal Portal business in the Territory. For the avoidance
of doubt, the Company shall have no obligation, however, to
purchase any Content and/or Support Services from the Content
and/or Support Services Suppliers.
(c) Subject to the provisions of Clause 1.4.3(a) and 1.4.3(b), the
Company may enter into agreements with third party Content
and/or Support Services Suppliers.
(d) Each Party hereby undertakes together with the other Parties to
cause the Company, promptly upon a decision having been made by
the Company with respect to a particular country within the
Territory to provide (x) Gateway Services or (y) Access Services
from (i) television Access Devices, or (ii) Access Devices using
a fixed-line connection, to first offer, on an arms length
basis, to outsource the provision of such Gateway Services
and/or Access Services to such Controlled or Minority Operators,
or to such Controlled or Minority Support Service Suppliers as
may be capable of providing such Gateway Services and/or Access
Services.
1.4.4 Renegotiation of the Operator Agreements' revenue sharing terms
With regard to the revenue sharing terms in each one of the Operator
Agreements, each Party hereby undertakes (i) to proceed as set forth
hereunder, (ii) together with the other Parties to cause the Company
to proceed as set forth hereunder, and (iii) to use whatever rights it
may have under and subject to applicable law and regulations, the
relevant governing charters, and shareholder agreements, if any, to
cause its Controlled Operators and Minority Operators to proceed as
set forth hereunder, if and as applicable:
(a) On the second anniversary of the Launch Date (the "RENDEZVOUS
DATE"), the Company's Board shall convene in order to conduct
a country by country review of the revenue sharing terms
initially agreed upon in each one of the Operator Agreements
entered into with the Controlled Operators and the Minority
Operators, in order to agree, on an Operator Agreement by
Operator Agreement basis, on the revenue sharing terms which
shall apply to each such Operator Agreement from the period
beginning six months after the Rendezvous Date onwards. The
purpose of the aforementioned review shall be to ensure that
(i) the economic equilibrium agreed to between the parties to
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such Operator Agreement at the time of the latter's signing
is preserved as fairly as possible, and (ii) the revenue
sharing terms of such Operator Agreement reflect market
conditions prevailing in the relevant country at the
Rendezvous Date.
(b) In conducting the aforementioned review, the Board
shall follow the guidelines set forth below:
(i) the Parties' intention in entering into this Joint
Venture is twofold:
1. to create value for the Controlled and Minority
Operators;
2. to create value for the Shareholders (including
by way of a future initial public offering of the
Company);
No revision of the revenue sharing terms of the
Operators Agreements should undermine this dual
objective;
(ii) the Gross Margin Split (as defined in the relevant
Operator Agreements Term Sheet ) should be adjusted
to take into account any fundamental imbalances in
the revenue sharing terms of the Operator Agreement
for either one of the Operator Agreement's parties
with regard to the revenue sharing terms initially
agreed to by them, resulting, inter alia, from (x) a
fundamental change in the cost structure of MAP
and/or of the Operator in question (which fundamental
change shall, for the avoidance of doubt, not include
any change brought about as a result of the impact of
UMTS license amortization costs), (y) a fundamental
change in the revenue structure of MAP and/or of the
Operator in question (as a result, for example, of
new market conditions producing a significant shift
in the balance between basic access and airtime
revenues, on the one hand, and internet related
revenues, the gross margin of which is shared by the
Company, on the other hand), or (z) a fundamental
change in the pricing practices of the competitors of
the Company (or the relevant Local Subsidiary) and/or
of the Operator in question;
(iii) for the avoidance of doubt, any revenue generated by
virtue of Operator Agreements with third party
Operators shall remain with MAP(to be available for
distribution as dividends subject to Clause 3.8(c))
and shall not in any way be factored into the
calculation of the Gross Margin Split between the
Company and any Controlled or Minority Operator,
(iv) the Company's pricing policy with respect to the
different services rendered by MAP to its users
(whether on a retail or on a business to business
basis) shall be competitive with prevailing market
practices and levels in the corresponding national
market;
(v) the Operators' pricing policy with respect to
services provided to the Company shall be competitive
with prevailing market practices and levels in the
corresponding national market.
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(vi) For the avoidance of doubt, the fact that a
Controlled Operator holds an equity participation in
a Local Subsidiary will not be taken into account in
the renegotiation of the revenue sharing terms
provided for under Clause 1.4.4 hereof.
(c) The Parties shall procure that management of the Company
shall provide the Company's Board members in a timely fashion
with all necessary and appropriate, country-specific
information required by the Board to conduct the
aforementioned review.
(d) The Parties shall procure that at the outcome of the review
process, the Board shall give the Company's management
country-by-country mandates within which the Company's
management shall conduct the corresponding revenue sharing
renegotiation with each of the Controlled or Minority
Operators.
(e) In the event that an agreement on the revenue sharing terms
for any particular Operator Agreement is not reached by the
Company's Board within four months from the Rendezvous Date,
the deadlock procedure set forth under section 3.3.1(i) below
shall be triggered, and the Chief Executive Officers' shall
attempt to reach an agreement. This may include the use of a
set of recommendations to be prepared and proposed to them by
an independent expert. Should no agreement be forthcoming
within six months from the Rendezvous Date, either party to
the particular Operator Agreement over which a disagreement
persists shall thereafter be free to terminate such Operator
Agreement by giving the other party a three month prior
written notice to that effect. Upon such termination in
accordance with the terms hereof, the Company shall be free
to enter into Operator Agreements or other similar
arrangements with third party Operators in the corresponding
country, and the obligations set out in Clause 1.3.8 shall no
longer apply to the relevant Operator.
1.5 BRAND AND DOMAIN NAMES
1.5.1 The Brand
(a) The Company's business shall be conducted under the trademark
and brand name VIZZAVI (hereafter referred to as the
"BRAND"), the exact typeface and casing of which shall be as
described in Annex 1.5.1 hereto, and which shall only be
modified or changed with the consent of Vodafone and the Vnet
Shareholder (it being understood that in the event of a
change in the MAP trademark, logo or Brand (including the
exact typeface and casing) requested by Vodafone to bring
about coherence with the Vodafone trademark or Brand outside
the Territory, the Vnet Shareholder shall act reasonably and
without undue delay in granting or withholding its consent
and with due consideration for Vodafone's objective of a
global brand. All rights and interests in and to the Brand
within the Territory shall belong to the Company,
irrespective of whether one or more of the Parties to this
Joint Venture Agreement divest or reduce their stake in the
Company's share capital. All rights and interests in and to
the Brand outside the Territory shall belong to Vodafone and
Vodafone shall be the sole registered owner thereof outside
the Territory.
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(b) For the avoidance of doubt, no royalties or any other type of
fee or compensation shall be due (i) by any of the Vodafone
Group Parties to the Company for use of the Brand outside the
Territory, nor (ii) by the Company or any Local Subsidiary to
Vodafone for use of the Brand in the Territory.
(c) Each Party agrees to ensure that there is at all times during
which it is bound by this Joint Venture Agreement
coordination between the Company and Vodafone with a view to
maintaining coherence in the use of the Brand by the Company
within the Territory and by Vodafone outside of the Territory
with regard to presentation, positioning, advertising,
promotion and brand values, it being acknowledged that
neither Vodafone nor the Company shall be required to adopt
presentation, position, advertising, promotion and/or brand
value practices or policies unilaterally adopted by the other
with which it does not agree.
(d) The Parties agree to cause the Company to not modify or
change the Brand, the logo and/or the initial casing and
typeface of either as set forth in Annex 1.5.1(a) hereto
without the consent of Vodafone.
(e) Subject to Clause 1.5.1(a), should Vodafone decide to modify
or change the Brand, the logo and/or the initial casing and
typeface of either outside the Territory, and should the
Company, after following the coordination procedure set forth
in paragraph (c) above, decide against implementing similar
modifications or changes to the Brand within the Territory,
the Company shall be under no obligation to effect such
modifications or changes.
(f) The Parties and Vodafone undertake to cause, promptly after
the incorporation of the Company, an agreement to be signed
between the Company and Vodafone, pursuant to which,
(i) if the Brand ceases to be used throughout the
Territory for a period of three months by the Company
, or by any successor of the Company , to designate a
Horizontal Portal, Vodafone shall be entitled to
purchase all rights and interest in and to the Brand
in the Territory, at a price equivalent to fifty
percent (50%) of the fair market value of such rights
and interests, reduced by any such value attributable
to a spill over into the Territory of Vodafone's
marketing efforts outside the Territory in connection
with the Brand, and
(ii) If Vodafone ceases all use of the Brand to designate
a Horizontal Portal outside the Territory for a
period of three months, the Company shall be entitled
to purchase all rights and interest in and to the
Brand outside the Territory, at a price equivalent to
one hundred percent (100%) of the fair market value
of such rights and interests outside the Territory,
reduced by any such value attributable to a spill
over outside the Territory of the Company's marketing
efforts within the Territory in connection with the
Brand.
1.5.2 Exclusive branding
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The Parties agree that the Company shall (i) conduct business
exclusively under the Brand, and (ii) subject to Clause 1.5.3 below,
shall require that the Controlled Operators (other than as provided
for in Clause 1.4.2(h) above) market MAP exclusively under the Brand.
1.5.3 Co-Branding
The Company may from time to time as may be decided by the Board enter
into co-branding agreements with the Operators and the Content and/or
Support Service Suppliers within the Territory. Any such co-branding
arrangement shall require that the third party use the Brand only in
accordance with the procedures agreed upon between the Company and
Vodafone.
1.5.4 Rights to related domain names
With respect to domain names, the Parties agree as follows:
(a) The Company shall register (to the extent registrable from
time to time) and renew from time to time the domain name
XXXXXXX.xxx (in any and all casings, if relevant) with a view
to holding all rights and interest in and to such domain name
on a worldwide basis.
(b) Vodafone shall register (to the extent registrable from time
to time) and renew from time to time the domain name
XXXXXXX.xxx (in any and all casings, if relevant) with a view
to holding all rights and interest in and to such domain name
on a worldwide basis. Vodafone shall ensure that its home
page at XXXXXXX.xxx shall contain prominent PC portal
hypertext links to at least the Company's main European home
page (whether it be at XXXXXXX.xxx or at any other address)
and to the Company's specific domain names for France,
Germany, Italy, Spain and the United Kingdom. With respect to
Access Devices other than the PC and to hypertext links to
other countries, Vodafone and the Company will agree and
co-ordinate mutually acceptable hyperlinks from Vodafone's
XXXXXXX.xxx web site to the Company's web sites.
(c) The Company shall register (to the extent registrable from
time to time) and renew from time to time all country
specific VIZZAVI domain names (in any and all casings, if
relevant) (e.g. XXXXXXX.xx, XXXXXXX.xx, XXXXXXX.xx.xx) within
the Territory with a view to holding all rights and interest
in and to such country specific domain names on a worldwide
basis. Vodafone shall register (to the extent registrable
from time to time) and renew from time to time all such
country specific VIZZAVI domain names (in any and all
casings, if relevant) in such major countries outside the
Territory as shall be reasonably necessary or appropriate
with a view to holding all rights and interest in and to such
country specific domain names on a worldwide basis.
1.5.5 Vodafone shall take, with respect to the Brand in such major countries
outside the Territory and to the domain name XXXXXXX.xxx and such
country specific domain names outside the Territory as shall be
reasonably necessary or appropriate, and the Parties shall, with
respect to the Brand within the Territory and to the domain names
XXXXXXX.xxx and the country specific domain names within the
Territory, cause the
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Company to take: all actions as are necessary or appropriate to
preserve and protect ownership of the Brand and the domain names in
question including without limitation keeping all registrations
thereof (assuming registrable) current and policing and enforcing
their respective ownership rights as against third party infringers.
1.6 RELATIONS BETWEEN THE COMPANY AND VGPIS
1.6.1 The Parties hereby agree to cause the Company to use its best efforts
to use the global mobile internet platform technology (i.e. the
network architecture, systems and software) adopted by VGPIS, provided
that (x) such technology satisfies the appropriate technical and
time-to-market specifications reasonably required by the Company for
the operation of the Company's Horizontal Portal, and (y) the
technology is provided to the Company on arms' length basis.
1.6.2 The Parties hereby agree to cause the Company, and Vodafone hereby
agrees to cause VGPIS, to use all reasonable efforts to provide a
seamless environment for the user between MAP and VGPIS's mobile
portal.
1.6.3 The Parties hereby agree, that VGPIS shall be entitled to the benefit
of Clause 1.4.3(a) as a Controlled Content and/or Support Services
Supplier, and shall be bound by the obligations of Clause 1.4.3.(b) as
a Controlled Content and/or Support Services Supplier, with respect to
any Content and/or Support Services available through VGPIS's mobile
portal.
1.6.4 All the undertakings set forth in this Clause 1.6 shall apply for as
long as Vodafone (or a wholly owned entity of Vodafone) operates
VGPIS.
1.6.5 Each Party agrees to ensure that there is at all times during which it
is bound by this Joint Venture Agreement coordination between the
Company and Vodafone with a view to maintaining coherence in the look
and feel between the MAP (as it appears on mobile telephony handsets
or other wireless devices) and VGPIS with due consideration for
Vodafone's objective of a global look and feel, subject always to the
need to develop and adapt MAP to the specificities of the different
Access Devices and the different local markets within the Territory,
it being acknowledged that neither Vodafone nor the Company shall be
required to adopt a mobile telephony look and feel unilaterally
adopted by the other with which it does not agree.
1.7 RELATIONS BETWEEN VNET AND VGPIS
The Parties hereby agree that Vnet shall be entitled to receive from
VGPIS the preferred supplier treatment accorded by the Company to the
Controlled Content and/or Support Services Suppliers, under equivalent
terms and conditions as those set forth in Clauses 1.4.3(a) and
1.4.3(b) with respect to Content and/or Support Services relevant for
VGPIS.
1.8 POSSIBLE JOINT BUSINESS VENTURES OUTSIDE THE TERRITORY
The Parties hereby agree to explore and review from time to time, as
the opportunities may arise, the possibility of jointly undertaking
further Internet-related and other business ventures outside the
Territory, it being understood that there is no obligation to jointly
undertake such opportunities.
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2. MIGRATION OF HORIZONTAL PORTAL SPECIFIC ASSETS TO THE COMPANY
2.1. The provisions of this Article 2 shall apply to the transfer of all
the Horizontal Portal activities of the Parties and their respective
Controlled and Minority Operators existing or under development as of
the Transfer Date.
2.2. The provisions of this Clause 2.2 set forth specific transfer
provisions in respect of certain specific existing Horizontal Portal
activities of the Parties or of their respective Controlled Operators
and shall prevail in the event of conflicts with the general
provisions of Clauses 2.3 through 2.10. The Parties hereby undertake
to follow the course of action set forth below with respect to those
specific activities identified below.
2.2.1 AOL Interest
The Vivendi Group Parties hereby undertake to use whatever
rights they may have in accordance with and subject to
applicable law and regulations, governing charters and
shareholder agreements, to cause CEGETEL and Canal+, holders
(through a joint subsidiary) of a 55% interest in AOL
Compuserve France (the "AOL INTEREST"), to (i) divest
themselves of the AOL Interest by no later than one year from
the date hereof or (ii) to exchange the AOL Interest for a
minority interest (which shall represent no more than 15% of
the share capital and shall have no management rights
attached to it) in AOL Compuserve Europe and to sell such
minority interest at the time of the initial public offering
of AOL Compuserve Europe. For the avoidance of doubt, there
shall be no obligation on the part of the Company to acquire
the AOL Interest.
2.2.2 Vivendi's interests in Scoot PLC and Scoot Europe BV
("SCOOT")
(a) The Parties shall jointly assess, within three months from
the date hereof, the desirability of transferring Scoot
(whether by sale or contribution) to the Company at fair
market value, (determined in accordance with the procedure
set forth in Annex 2.2.2(a) hereto.
(b) If no agreement is reached between the Parties on the
transfer of Scoot, the Parties acknowledge that Scoot shall
be deemed for purposes of this Joint Venture Agreement to be
a Controlled Content and or Services Supplier and the
provisions of Clause 1.4.3 shall apply to Scoot.
2.2.3 (i)France
(a) The Company shall have the option, within three months from
the date hereof, to acquire (i)France from the Vivendi Group
Parties, and the Vivendi Group Parties hereby undertake to
sell and transfer (i)France to the Company (or to any Local
Subsidiary which the Company may designate) upon the exercise
by the Company of the aforementioned option, for a purchase
price equal to the purchase price paid by Vivendi in
accordance with the purchase agreement
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entered into between Vivendi and and the former shareholders
of (i)France dated April 20, 2000, the provisions of which
relating to the purchase price are set forth in Annex
2.2.3(a) hereto.
(b) If (i)France is not transferred to the Company in accordance
with the provisions of Clause 2.2.3(a) above prior to the
expiration of the aforementioned three month period, the
Vivendi Group Parties hereby agree that (i)France shall not
be distributed by any Controlled Operator of the Vivendi
Group Parties as an exclusive Default Horizontal Portal, and
shall remain a stand-alone portal.
2.2.4 Italia On Line/Libero portal.
(a) Vodafone shall have the option, exercisable at any time by
written notice to Vivendi within twelve months from the date
hereof, to propose that Italia on Line and the Libero portal
(hereafter jointly referred to as "IOL") be transferred to
the Company. In the event Vodafone exercises such option, the
Parties shall jointly assess, within three months from the
date of exercise of the option, the desirability of
transferring (whether by sale or contribution) IOL to the
Company at fair market value, on such terms and conditions as
the Parties may agree. If no agreement on the transfer of
IOL is reached between the Parties, the Parties shall, during
the same three month period, explore alternatives to the
transfer of IOL such that the Vodafone Parties may comply
with their respective non-compete obligations under Clause
1.3.6 of this Joint Venture Agreement. If (i) no agreement
is reached within such three month period, or (ii) if
Vodafone does not exercise the aforementioned option within
the twelve month period, the Parties hereby agree that (x)
Infostrada may continue to offer IOL as a Horizontal Portal
for its customers, and (y) in such case, Vodafone will be
exempt from the provisions of Clauses 1.3.6 and 1.4.2 with
respect to Infostrada, provided in both (x) and (y) that
Vodafone commences a process in order to divest itself of the
IOL interest (either through a direct disposal of IOL or a
disposal of Infostrada), through whatever means Vodafone (in
its sole discretion) deems appropriate (included but not
limited to an offering of a portion of the shares therein on
a public stock exchange) within three months from (1) the
date of exercise of the option referred to above, or (2) if
the option is not exercised, from the expiration of the
twelve month period during which such option can be
exercised, as the case may be.
(b) The Company may enter into an Operator Agreement with a
Competing Operator of Infostrada as of six months from the
date hereof, provided IOL has not been transferred to the
Company prior to such six month period.
(c) Prior to commencing any trade sale of IOL and/or Infostrada,
Vodafone shall first explore and discuss with Vivendi the
possibility of selling IOL and/or Infostrada, as the case may
be, to Vivendi. Nothing herein shall be interpreted as
requiring any member of the Vodafone Group to sell IOL and/or
Infostrada to Vivendi or any member of the Vivendi Group.
2.2.5 Arcor Online, Xxxxxxx.xxx and O.tel.o Online
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The Vodafone Parties undertake to procure that Arcor Online,
Xxxxxxx.xxx and O.tel.o Online are transferred to the Company
or to the German Local Subsidiary, within one year from the
date hereof, in consideration for the payment of fair market
value in cash (determined in accordance with the procedure
set forth in Annex 2.2.2(a)).
2.2.6 OMNITEL 2000:
(a) The Parties shall use their respective best efforts, (and
Vodafone shall use its best efforts to obtain all consents
required therefor from Xxxx Atlantic), to reach within nine
months from the date hereof, or any other period agreed by
the Parties, a three-way arrangement (the Vodafone and
Vivendi Group Parties and Xxxx Atlantic) in view of causing
Omnitel to promptly (i) enter into an Operator Agreement with
the Company (or with the Italian Local Subsidiary), and (ii)
transfer to the Company (or the Italian Local Subsidiary) the
OMNITEL 2000 activity, together with all Relevant Assets (as
defined in Clause 2.3) linked to OMNITEL 2000 (the "OMNITEL
2000 TRANSFER"), all at cost (as further described in Clause
2.2.6(b) below), with the opportunity (at Vodafone's choice)
for Xxxx Atlantic to take all or part of the portion of the
20% Italian Local Subsidiary equity interest to be given to
Omnitel pursuant to Clause 2.10 hereunder. The portion of the
20% Italian Local Subsidiary equity interest to be given to
Omnitel pursuant to Clause 2.10 hereto shall be reduced by
the amount of equity in the Italian Local Subsidiary given to
Xxxx Atlantic.
(b) Upon completion of the OMNITEL 2000 Transfer, the Company
shall reimburse Omnitel in cash for (i) the costs associated
with the completion of the transfer itself, and (ii) all
development costs incurred by Omnitel in connection with the
OMNITEL 2000 activity and Relevant Assets, as reasonably
justified by Omnitel.
(c) If the Parties fail to put into place such a three-way
arrangement within the aforementioned nine months , the
Company and the Italian Local Subsidiary shall be free to
enter into any Operator Agreement or other similar
arrangement with any other Mobile Telco in Italy in
connection with MAP and, if Vodafone is not in breach of its
obligations under this Clause 2.2.6, Vodafone and Omnitel
will be exempt from the provisions of Clause 1.3.6 with
respect to Pronto Italia S.p.l. and Omnitel and Omnitel may
offer and distribute OMNITEL 2000 as its default Horizontal
Portal.
2.2.7 Relevant Assets of Vodafone UK and D2
(a) Vodafone hereby agrees to cause the Relevant Assets (as
defined in Clause 2.3 below) held by Vodafone UK and D2 to be
transferred to the Company (or to the relevant Local
Subsidiary) for cash at cost (as further described in Clause
2.2.7(b) below) by no later than 30 June 2000 in the case of
Vodafone UK and by no later than six months from the date
hereof in the case of D2 .
(b) Upon completion of the transfer of each one of the
aforementioned Relevant Assets, the Company (or the Local
Subsidiary, as the case may be) to which the
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transfer has been made shall reimburse the contributing
Operator for (i) the costs associated with the completion of
the transfer itself, and (ii) all development costs incurred
by the Operator in connection with the corresponding Relevant
Assets, as reasonably justified by the relevant Operator.
2.2.8 Relevant Assets of SFR
(a) Vivendi and Vodafone shall use their respective best efforts,
and Vivendi shall use its best efforts to obtain all consents
required, if any, from the other shareholders in CEGETEL and
SFR, to cause the Relevant Assets (as defined in Clause 2.3
below) held by SFR to be transferred to the Company (or to
the French Local Subsidiary) for cash at cost (as further
described in Clause 2.2.8(b) below) by no later than 30 June
2000.
(b) Upon completion of the transfer of the aforementioned
Relevant Assets, the Company (or the French Local Subsidiary,
as the case may be) to which the transfer has been made shall
reimburse SFR for (i) the costs associated with the
completion of the transfer itself, and (ii) all development
costs incurred by the SFR in connection with the
corresponding Relevant Assets, as reasonably justified by
SFR.
2.2.9 Between the date hereof and the date of signature of each
relevant Operator Agreement providing a transition plan for
the transfer by SFR, Vodafone UK and D2, respectively, of
their Relevant Assets to the Company, the Parties undertake
to use whatever rights they may have in accordance with and
subject to applicable law, governing charters and shareholder
agreements, if any, to cause each such Operator (i) to avoid
entering into any new agreements with third parties (unless
authorisation to assign such agreements to the Company is
obtained at the outset), the performance of which would cause
the relevant Group of Parties to be in breach of their
obligations under Clause 1.3.6 at the time of completion of
the transfer of their respective Relevant Assets, (ii) to let
any such agreements already in force as of the date hereof
expire, and (iii) to refrain from launching new Web-Based
Services other than in consultation with the Company.
2.2.10 (a) The Obligations in Clause 2.2 shall not apply in
respect of particular Relevant Assets referred to in
this Clause 2.2 to the extent that there are any
legal or regulatory prohibitions (including, without
limitation, prohibitions that may exist under
applicable law with regard to dealings between a
company and a related party and/or with regard to
legal duties owed to minority shareholders)
preventing the transfer of such Relevant Asset.
(b) Failure to transfer any of the Relevant Assets
mentioned in this Clause 2.2 as provided for herein
for any of the reasons set forth in the foregoing
paragraph (a) shall not constitute a breach of this
Joint Venture Agreement by the relevant Party or
Parties, provided such Party or Parties have used
their respective best efforts to find an
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alternative arrangement in the spirit of this Clause
2.2 which does not run afoul of such legal or
regulatory prohibitions.
(c) The provisions of this Clause 2.2 shall not apply
with respect to a particular Group of Parties and/or
to a particular Controlled Operator to the extent
that any third party uses its Veto Rights (as defined
below) to prevent the transfer of the Relevant
Assets.
2.3. The provisions of this Clause 2.3 through 2.9, do not apply to
the specific Horizontal Portal activities described in Clause
2.2 above unless otherwise expressly indicated in such Clause
2.2. As used in Clauses 2.3 through 2.10 (and in Clause 2.2
where an express reference hereto is made), the following words
and phrases shall have the meaning set out below.
"Relevant Assets" means all assets used by the
relevant Operator solely to
operate or develop its Horizontal
Portal business (including,
without limitation, technological
platforms, existing relevant
content/services distribution
agreements, user/visitor base,
research and development costs,
personnel, as all such assets
exist on the Transfer Date;
"Transfer Date" a date no later than one year from
the date of this Agreement;
"Wholly Owned Operators" means any Operator in which one or
more Parties holds (directly or
indirectly) at any time during the
term of this Joint Venture Agreement
all of the equity interests;.
"Majority Controlled Operators" means any Operator in which one or
more Parties holds (directly or
indirectly) at any time during the
term of this Joint Venture Agreement
more than 51% but less than 100% of
the voting equity interests and
where no third party has any Veto
Rights and/or which is a company
which is not listed on a recognised
stock exchange.
"Subsidiary Operators" means any Operator in which one or
more Parties holds (directly or
indirectly) at any time during the
term of this Joint Venture Agreement
more than 51% but less than 100% of
the voting equity interests and
where a third party has any Veto
Rights and/or which is a company
which is listed on a recognised
stock exchange.
"Minority Operators" means any Operator in which one or
more Parties hold (directly or
indirectly) at any time during the
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term of this Joint Venture Agreement
a voting equity interest of 50% or
less.
"Veto Rights" means any contractual or legal rights
which may prevent the transfer of
Relevant Assets from any Operator to
the Company or any Local Subsidiary.
2.4. Wholly Owned Operators
2.4.1. Each Party undertakes to procure that by no later than the
Transfer Date all Relevant Assets owned by its respective
Wholly Owned Operators are transferred to the Company at cost
for cash.
2.4.2. The obligations in Clause 2.4.1 shall not apply in respect of
particular Relevant Assets held by a Wholly Owned Operator to
the extent that there are any legal or regulatory
prohibitions preventing the transfer of such Relevant Assets.
2.4.3. If any Relevant Assets are not transferred as provided for in
Clause 2.4 by the Transfer Date due to any of the reasons set
forth in Clause 2.4.2 above, the CEO's of the Parties shall
meet to review the situation during the 3 months following
the Transfer Date and the Parties agree to use their
respective best efforts to find an alternative arrangement
within such three month period in the spirit of this Clause
2.4 which does not run afoul of such legal or regulatory
prohibitions . Nothing herein shall prevent the Chief
Executive Officers of the Parties from meeting to review any
such situation earlier if it becomes evident that any
Relevant Assets will not be transferred by the Transfer Date.
2.5. Majority Controlled Operators
2.5.1. Each Party shall use its respective best efforts to procure
that, by no later than the Transfer Date, all Relevant Assets
owned by its respective Majority Controlled Operators are
transferred to the Company at cost.
2.5.2 Clause 2.5.1 shall not apply in respect of a particular
Relevant Asset to the extent that there are any legal or
regulatory prohibitions (including, without limitation,
prohibitions that may exist under applicable law with regard
to dealings between a company and a related party and/or with
regard to legal duties owed to minority and/or public
shareholders) preventing the transfer of such Relevant Asset.
2.5.3 The Parties acknowledge that in order to secure the
co-operation of the Majority Controlled Operators,
consideration for the Relevant Assets to be transferred
pursuant to Clause 2.5.1 above can be offered by the Company
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(other than with respect to Relevant Assets held by Majority
Controlled Operators in France, Germany, Italy and the UK) as
follows in decreasing order of preference:
(a) in cash;
(b) in a combination of Clause 2.5.3(a) and Clause
2.5.3(c); or
(c) by way of a minority equity stake for the minority
shareholder(s) of the Majority Controlled Operator in
the Local Subsidiary based in the same country as
(or, if none, the Local Subsidiary providing the
service to) the Majority Controlled Operator.
2.5.4 If any Relevant Assets are not transferred as provided for in
Clause 2.5 by the Transfer Date due to any of the reasons set
forth in Clause 2.5.2 above, the CEO's of the Parties shall
meet to review the situation during the 3 months following
the Transfer Date and the Parties agree to use their
respective best efforts to find an alternative arrangement
within such three month period in the spirit of this Clause
2.5 which does not run afoul of such legal or regulatory
prohibitions. Nothing herein shall prevent the Chief
Executive Officers of the Parties from meeting to review any
such situation earlier if it becomes evident that any
Relevant Assets will not be transferred by the Transfer Date.
2.6 Subsidiary Operators
2.6.1 Each Party shall use its respective best efforts to procure
that, by no later than the Transfer Date, all Relevant Assets
owned by its respective Subsidiary Operators are transferred
to the Company or any Local Subsidiary at cost.
2.6.2 The Parties acknowledge that in order to secure the
co-operation of the Subsidiary Operators, consideration for
the Relevant Assets to be transferred pursuant to Clause
2.6.1 above can be offered by the Company (other than with
respect to Relevant Assets held by Subsidiary Operators in
France, Germany, Italy and the UK) as follows in decreasing
order of preference:
(a) in cash;
(b) in a combination of Clause 2.6.2(a) and Clause
2.6.2(c); or
(c) by way of a minority equity stake for the minority
shareholder(s) of the Subsidiary Operator in the
Local Subsidiary based in the same country as (or, if
none, the Local Subsidiary providing the service to)
the Subsidiary Operator;
2.6.3 The obligations in Clause 2.6.1 are subject to the following
exceptions:
(a) Clause 2.6.1 shall not apply with respect to a
Relevant Asset to the extent that there are any
legal or regulatory prohibitions (including, without
limitation, prohibitions that may exist under
applicable law
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with regard to dealings between a company and a
related party and/or with regard to legal duties
owed to minority and/or public shareholders)
preventing the transfer of such Relevant Asset.
(b) Clause 2.6.1 shall not apply with respect to a
particular Subsidiary Operator to the extent that if
any third party uses its Veto Rights to prevent the
transfer of Relevant Assets.
2.6.4 If any Relevant Assets are not transferred as provided for in
Clause 2.6 by the Transfer Date due to any of the reasons set
forth in Clause 2.6.3 above, the CEO's of the Parties shall
meet to review the situation during the 3 months following
the Transfer Date and the Parties agree to use their
respective best efforts to find an alternative arrangement
within such three month period in the spirit of this Clause
2.6 which does not run afoul of such legal or regulatory
prohibitions . Nothing herein shall prevent the Chief
Executive Officers of the Parties from meeting to review any
such situation earlier if it becomes evident that any
Relevant Assets will not be transferred by the Transfer Date.
2.7 Minority Operators
2.7.1 Each Party hereby undertakes, in respect of any Minority
Operator in which it has a stake, to promptly use best
efforts to assist in establishing contacts with, and
commencing discussions between, the Company and such Minority
Operator, with the purpose of procuring that Relevant Assets
owned by its respective Minority Operators are transferred to
the Company at cost by no later than the Transfer Date.
2.7.2 The Parties acknowledge that in order to secure the
co-operation of the Minority Operators, consideration for the
Relevant Assets to be transferred pursuant to Clause 2.7.1
above can be offered by the Company (other than with respect
to Relevant Assets held by Subsidiary Operators in France,
Germany, Italy and the UK) as follows in decreasing order of
preference:
(a) in cash;
(b) in a combination of Clause 2.7.2(a) and Clause
2.7.2(c); or
(c) by way of a minority equity stake for the Majority
shareholder(s) of the Minority Operator in the Local
Subsidiary based in the same country as (or, if none,
the Local Subsidiary providing the service to) the
Minority Operator.
2.8 For the avoidance of doubt, the Wholly Owned, Majority Owned,
Subsidiary and Minority Operators shall, prior to the Transfer
Date, be able to continue conducting any Horizontal Portal
activity they may have and the Parties shall not therefor be
deemed to be in breach of their undertakings under Clause 1.3.6
of this Joint Venture Agreement.
2.9 [Number reserved.]
2.10 Equity stakes in the French, German, Italian and UK Local Subsidiaries
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1. The Company is to hold 80% (and not 100 %) of the Local
Subsidiaries in France, UK, Germany and Italy (the "Big 4
Local Subsidiaries"). The remaining 20 % to be held by the
relevant local Mobile Telco and Pay-TV Operators in each such
country as follows:
UK 20 % Vodafone UK
Germany 20 % D2
France 20 % to be allocated between Canal+,
Canal Satellite and SFR in
proportion to their respective
number of subscribers in France as
of 30 April 2000.
Italy 20 % to be allocated between Pronto
Italia S.p.l or Omnitel (at
Vodafone's choice) and Tele+ in
proportion to their respective
number of subscribers in Italy as of
30 April 2000.
Each relevant Operator may (at its option) hold its interests in the
Big 4 Local Subsidiaries through a wholly-owned subsidiary (a "LOCAL
PERMITTED TRANSFEREE"), whether in such Operator's local country or
otherwise, provided that such Local Permitted Transferee remains at
all times a wholly owned subsidiary of such Operator. If any Local
Permitted Transferee to which shares of any Big 4 Local Subsidiary
have been transferred in compliance with this paragraph ceases for any
reason to qualify as a Local Permitted Transferee of the relevant
Operator, the provisions of Clause 3.4.2(b) shall apply MUTATIS
MUTANDIS.
2. Vodafone UK, D2, Pronto Italia S.p.l. or Omnitel, Tele+, SFR,
Canal+, Canal Satellite (hereinafter referred to as the "Big
Four Local Operators") may subscribe to the respective Big 4
Local Subsidiary equity interests at the same price, at the
same times and otherwise onthe same terms and conditions as
the Company's subscription to its 80 % interest in such Big 4
Local Subsidiaries , as such terms and conditions will be
decided by the Board. Failure of a Big 4 Local Operator to
subscribe and to pay-in its pro rata share in the relevant
Big 4 Local Subsidiary shall result in dilution of the Big 4
Local Operator in question.
3. The right to subscribe an equity interest in the relevant Big
4 Local Subsidiary by each of the Big 4 Local Operators shall
be conditional upon each such Operator signing an Operator
Agreement with such relevant Big 4 Local Subsidiary.
4. The Big 4 Local Operator holding a minority stake in a Big 4
Local Subsidiary shall have those rights accorded under
relevant local law to a stock holder holding the percentage
interest in question. In particular (and without limitation)
the board of the Big 4 Local Subsidiary shall consist of an
equal number of representatives of the Vivendi Group Parties
and the Vodafone Group Parties, named in accordance with the
provisions of this Joint Venture Agreement, and all decisions
of such board shall be taken in accordance with the relevant
provisions of the Joint Venture Agreement. The Parties agree
that if so required by Xxxx Atlantic to obtain its consent to
the signature of an Operator Agreement between the Company
and Omnitel, and to the transfer of
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the Relevant Assets, in accordance with Clause 2.2.6 hereof,
one seat on the board of the Italian Local Subsidiary shall
be offered either (at Vodafone's choice) to Pronto Italia
S.p.l., Omnitel or Xxxx Atlantic. If the board of the Italian
Local Subsidiary includes a representative of Pronto Italia,
Omnitel or of Xxxx Atlantic, all decisions of such board
shall be taken with the favourable vote of all of the board
members appointed by the Vivendi Group Parties and by the
Vodafone Group Parties (which, for the avoidance of doubt,
shall not include the representative of Pronto Italia S.p.l.,
or Omnitel, as the case may be) present at the board meeting
in question. Other than in the specific case provided above
for the Italian Local Subsidiary, Big 4 Local Operators in
the remaining Big 4 countries shall have the right to appoint
a non-voting observer to board meetings of the relevant Big 4
Local Subsidiary.
5. The approval of the business plan for the Big 4 Local
Subsidiaries shall be submitted to majority shareholder vote
at the Local Subsidiary level.
6. No sale or transfer by any means whatsoever of shares held by
a Big 4 Local Operator in a Big 4 Local Subsidiary to any
person shall be permitted other than as follows :
a. If the Vivendi Group Parties or the Vodafone Group
Parties transfer their equity interest in the Company
to a third party, their related Big 4 Local Operators
can transfer their equity interest in the relevant
Big 4 Local Subsidiary at same time and to the same
third party, subject to rights of first refusal in
favour of the Company. (The transferring party not to
vote in the Company's decision to exercise the
aforementioned right of first refusal.)
b. If an Operator Agreement with a Big 4 Local Operator
expires without renewal or otherwise is terminated,
the Company has a call on the relevant big 4 Local
Subsidiary equity interest held by the relevant Big 4
Local Operator, at a price equivalent to fair market
value, determined as set forth in Annex 2.2.2(a)
hereto. The parent of the Big 4 Local Operator whose
Operator Agreement is not renewed shall not vote in
the Company's decision to exercise the aforementioned
call.
c. In the event of an IPO of the Company, each Big 4
Local Operator at its option may be included in block
of shares to be sold by such Local Operator's parent
company, by way of exchanging the relevant number of
Big 4 Local Subsidiary shares for Company shares.
d. The provisions of this Clause 2.10.6 shall apply,
mutatis mutandis, to the shares held by all Local
Permitted Transferees in a Big 4 Local Subsidiary.
7. The Big 4 Local Subsidiaries in which there are Big 4 Local
Operators as minority shareholders shall endeavour to
distribute to and among their shareholders all of their
profits lawfully available for distribution in each financial
year, subject to (as determined by the board of each Big 4
Local Subsidiary) such reasonable and proper cash, accounting
and legal reserves to
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meet the requirements set out in the annual budget and the
business plan from time to time.
2.11 No additional equity stakes
Nothing in Clauses 2.3 through 2.7 shall be deemed to require the
Company to offer any equity in any of the Big 4 countries to any
Person other than the 20% equity stake in each one of the
aforementioned Big 4 Local Subsidiaries to be held by the relevant Big
4 Local Operators in accordance with Clause 2.10 hereto.
2.12 Governance Rights of Third Parties.
The Parties shall procure that in cases where equity participation in
a Local Subsidiary is offered to a third party (including to any Big 4
Local Operator), the governance rights and indirect joint control of
such Local Subsidiary shall remain vested in the Parties. Any
representation on the board of directors of such Local Subsidiary
granted to such third party shall be granted in such a way as to not
undermine the joint control of the Local Subsidiary by the VEP
Shareholder and the Vnet Shareholder.
2.13 Adjustment of Capital Contributions
(a) The Parties agree that wherever in this Joint Venture Agreement a
contribution in kind to capital by a Shareholder is contemplated such
contribution shall only be made when the Parties have agreed on the
mechanism (and the terms and conditions) by which the other
Shareholder shall make such contributions to capital in kind such that
the total contributions in kind by the Shareholders are made
contemporaneously and for values that will preserve at all times the
50/50 split of the Company's share capital between the two
Shareholders, or any such other split as shall exist following a
dilution pursuant to Clause 3.2(c).
(b) The Parties agree that wherever this Joint Venture Agreement
contemplates issuing a minority equity interest in a Local Subsidiary
to any person (other than pursuant to Clause 2.10, which shall be
governed by the provisions of Clause 2.10), the provisions of Section
2.12 and the restrictions on transfers of minority equity interests as
set forth in Clause 2.10.5 shall apply.
2.14 Tax Efficiency
With regard to all asset transfers set forth in this Clause 2, the Parties
shall use their best efforts to ensure that assets are transferred in such a
way as to minimise any tax charges (including specifically (a) capital gains
tax and (b) tax charges resulting from the transfer of an asset at cost where
an implied market value is attributed to the value of the transaction) incurred
by such transfer. The Parties agree to maintain flexibility in structuring
transactions in a tax efficient way for both the Parties and the Company and
agree to include leasing of assets as a specific alternative.
3. FORMATION, ORGANIZATION AND MANAGEMENT OF THE COMPANY
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The Shareholders undertake to exercise, or refrain from exercising, their
voting and other rights as members of the Company, and all the Parties
undertake to take all such actions within their respective powers, so as to
procure that the formation, organization and management of the Company is
conducted in accordance with the provisions of this Agreement and in
particular, but without limitation, this Clause 3 and with the Articles to the
extent consistent with the provisions of this Agreement.
3.1 FORMATION OF THE COMPANY
The Shareholders hereby undertake to incorporate the Company by no later than
15 June 2000, in England, and shall procure that the Company shall have the
following characteristics:
(a) The Company's corporate name shall be Vizzavi Ltd.;
(b) The Company shall be formed as a limited company under the laws of
England and Wales;
(c) The Company's registered office shall be as agreed between the
Parties;
(d) The Company's auditors shall be Xxxxxx Xxxxxxxx and Deloitte & Touche;
(e) The financial year of the Company shall end on 31 March;
(f) The Company shall adopt the Articles;
(g) The initial authorized share capital shall be sufficient to allow the
Company to issue shares beyond the initial subscription amount, at
nominal value, up to the total amount initially committed by the
Parties pursuant to 3.2(a) below. The Company's initial issued share
capital shall be one thousand (1000) Euros divided into an equal
number of "VEP Shares" and "Vnet Shares" having the rights provided
for by this Joint Venture Agreement . All of the shares of one class
shall be subscribed and fully paid up in cash by the VEP Shareholder
and all of the shares of the other class shall be subscribed and fully
paid up in cash by the Vnet Shareholder, in each case no later than 30
June 2000. The VEP Shares and the Vnet Shares shall have the same
rights and obligations attached to them, except as expressly set out
in this Agreement.
(h) The Parties agree that an incentive stock option plan, phantom stock
plan or other similar program providing for reasonable grants of
incentive stock options or phantom stock would be beneficial to the
Company, and the Shareholders agree to cooperate in good faith with a
view towards establishing such a plan within three months from the
date hereof on terms agreed to by the Board of the Company. The
aggregate of all securities allocated or issued pursuant to all
incentive stock option plans shall not at any time represent more than
ten percent (10%) of all the issued and outstanding share capital of
the Company (on a fully diluted basis). Any securities allocated to
an incentive stock option plan shall be newly issued and shall,
accordingly, dilute in equal proportions the percentage of the total
Company share capital held by each Shareholder. Any such incentive
plan shall be structured in a tax efficient way.
(i) Any incentive stock option plan, phantom stock plan or other similar
program providing for reasonable grants of incentive stock options or
phantom stock at the
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Local Subsidiary level shall be subject, mutatis mutandis, to the same
10% ceiling provided for in Clause 3.1(h) above. Any securities
allocated to such a Local Subsidiary incentive stock option plan shall
be newly issued and shall, accordingly, dilute in equal proportions
the percentage of the total Local Subsidiary share capital held by
each of such Local Subsidiary's shareholders. Any such incentive plan
shall be structured in a tax efficient way.
3.2 FINANCING OF THE COMPANY.
(a) (i) Each of the Shareholders hereby agrees to an initial capital
commitment of Euros 100 million (the "INITIAL COMMITMENT")
during the first twenty four (24) months of the Company
(which Initial Commitments shall, for the avoidance of doubt,
include the amount initially subscribed by each Shareholder
pursuant to Clause 3.1(g) above), i.e. a total aggregate
Initial Commitment by both Shareholders of Euros 200 million,
the balance to be paid in by the Shareholders to the Company,
as and when decided by the Board, in proportion to each
Shareholder's respective holdings of Company share capital at
the time, provided that any expenditure of the Initial
Commitment shall be subject to Board approval of the Initial
Budget and Plan in accordance with Clause 3.2(a)(ii) below.
In the event that the Board is unable to agree on calling any
part of the Initial Commitments during the first twenty four
(24) months of the Company, either Shareholder may, at the
expiration of the aforementioned time frame, by written
notice to the other Shareholder, require an additional
capital contribution by the Shareholders of up to the
aggregate amount of uncalled Initial Commitments, in
proportion to their respective holdings of Company shares at
the time.
(ii) Upon the formation of the Company, the first Chief Executive
Officer of the Company as identified in Clause 3.3.4(a)(i)
shall prepare the Annual Budget for the initial year and the
Business Plan for the first three years of the operation of
the Company (together the "INITIAL BUDGET AND PLAN") and
shall, within 30 days of the formation of the Company submit
such Initial Budget and Plan to the Board. The Parties shall
cause a meeting of the Board to be called within 7 days of
the submission of the proposed Initial Budget and Plan for
the consideration of the Initial Budget and Plan.
(b) Subject to the provisions of Clause 3.2(c), any proposal (a "FINANCING
PROPOSAL") by the Board to raise additional capital for the Company,
beyond the Initial Commitment, by way of share subscriptions from
Shareholders ("CONTRIBUTIONS"), shall be made by written notice to the
Shareholders , giving details of the amount(s), manner and time(s) for
payment, and shall require the consent of both Shareholders (in
writing or by resolution in general meeting). Any Contributions shall
be made in proportion to the percentages of the Company's issued share
capital held by the Shareholders, subject to the provisions of Clause
3.2(c). Approval by the Shareholders of any Financing Proposal
(including, for the avoidance of doubt, any Financing Proposal
comprised in any annual budget proposal) shall constitute their
respective commitments to make any Contributions called for by such
Financing Proposal as and when due, except to the extent that, at the
time of such approval, a Shareholder's consent reserves the right to
decline to make any such Contribution (in which case such
Shareholder's interest in the Company shall be subject to dilution as
provided by Clause 3.2(c) as and when Contributions are made by the
other Shareholder, if such
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Shareholder does not then pay its Contribution). At the time of
approval of any Financing Proposal, the Shareholders shall also
procure the passing of all such resolutions of the Company, and take
such other actions, as may be necessary to enable the Company to issue
shares in accordance with such Financing Proposal and as provided by
Clause 3.2(c) if the same should become applicable.
(c) If any Shareholder (referred to for this purpose as the "DEFAULTING
SHAREHOLDER", whether or not such failure amounts to a breach of this
Agreement) fails to pay any part of the Initial Commitment or to make
any Contribution committed pursuant to Clause 3.2(b) above, or does
not pay any committed Contribution under a Financing Proposal approved
pursuant to Clause 3.2(b), the other ("NON-DEFAULTING") Shareholder
shall be entitled, but not obligated, to contribute the shortfall by
way of loan. The non-Defaulting Shareholder's loan shall at the
option of the non-Defaulting Shareholder (exercisable by written
notice to the Company), be capitalised (in whole or in part) by the
issue to the non-Defaulting Shareholder, in satisfaction of such
loan(at the non-Defaulting Shareholder's choice) either (i) of such
number of new shares in the Company as shall have a nominal value,
equal to the principal amount capitalised, or (ii) such lesser number
of Company shares as shall have a fair market value (as determined by
the non-defaulting Shareholder) equal to such principal amount. To
the extent that the non-Defaulting Shareholder elects to contribute
and capitalise the shortfall, the Defaulting Shareholder shall cease
to be liable to pay the shortfall in any committed Contribution and
shall not be liable for any damages in respect of any breach of this
Agreement involved in the failure to pay the same as and when due.
Each Shareholder hereby irrevocably consents to any issue of shares in
the Company made pursuant to this Clause 3.2. The share ownership of
the Defaulting Shareholder, as the case may be (the "DILUTED
SHAREHOLDER") shall be diluted accordingly (and references to a
"Diluted Shareholder" in this Agreement mean any Defaulting
Shareholder whose interest in the Company has been so diluted). In
the event of any such dilution, and notwithstanding the provisions of
Clauses 3.3.1 and 3.3.5:
(i) the Shareholders' rights to appoint Directors shall
thereafter be calculated in accordance with the formula set
out in Clause 3.2(d), except that a Shareholder whose stake
falls below 20% of the total share capital of the Company
held by the Shareholders shall no longer have the right to
appoint a Director and shall procure that any Directors
appointed by it shall resign forthwith;
(ii) Board meetings shall be quorate with a simple majority of
Directors entitled to attend and vote;
(iii) Board decisions, including those relating to the Significant
Matters, shall be taken by a simple majority of all Board
members present , other than decisions on the Restricted
Matters set out in Clause 3.3.3 , which shall require the
favorable vote of at least one of the Directors appointed by
the Diluted Shareholder (except in the event that the Diluted
Shareholder's stake in the total share capital of the Company
held by the Shareholders is diluted below 20%, in which case
the Diluted Shareholder will no longer have any rights to
appoint Directors);
(iv) general shareholders' meeting of the Company shall be quorate
with a simple majority of shareholders entitled to attend and
vote pursuant to applicable law
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unless there are only two shareholders, in which case a
quorum shall be the shareholder holding more than 50% of the
issued shares in the Company;
(v) decisions of the general shareholders' meetings of the
Company shall be taken pursuant to applicable law subject to
the proviso that the Restricted Matters set out in Clause
3.3.3 shall require the consent of the Diluted Shareholder
(except in the event that the Diluted Shareholder's stake in
the total share capital of the Company held by the
Shareholders is diluted below 20%, in which case none of the
Restricted Matters will require the favorable vote of the
Diluted Shareholder;
(vi) for so long as the Diluted Shareholder holds at least 20% of
the total share capital of the Company held by the
Shareholders, the Company shall take no action with respect
to any Restricted Matter unless such action is first approved
by the Board or by a general shareholders meeting, as
provided by Clause 3.3.1(a) below; and
(vii) the Diluted Shareholder's rights under 3.3.4(a) shall
terminate.
(d) In the event that the shareholding of any Shareholder(s) falls below 50%
but remains above 20% of the total share capital of the Company held by
the Shareholders and for so long as such shareholding remains at that
level, the Board shall at all times have 10 Directors and the number of
Directors that such Shareholder may appoint and remove from time to time
shall be equal to D calculated using the following formula and such
Shareholder shall remove forthwith any Directors appointed by that
Shareholder in excess of the number of Directors that Shareholder is
entitled to appoint:
S
D = --- x 10
T
Where: "S" represents the number of fully paid
shares in the Company held by such
Shareholder;
"T" represents the total number of fully
paid shares in the Company held by both
Shareholders; and
"D", represents the number of Directors
that such Shareholder is entitled to
appoint, provided that, if not a whole
number, D shall be rounded down to the
nearest whole number, unless D is less than
1, in which case it shall be rounded up to
one.
(e) Unless otherwise agreed by both Shareholders, no Contributions shall
involve the issue of partly-paid Company shares.
(f) Without prejudice to the provisions of Clause 3.3.2(p), the Company
can, if so agreed by the Board, raise additional funds by way of debt.
3.3. MANAGEMENT OF THE COMPANY
3.3.1 BOARD OF DIRECTORS
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(a) The Shareholders undertake to procure that responsibility for deciding
general policy matters and determining the overall business and
financial strategy of the Company be vested, subject to applicable
law, in the Board and that subject to Clause 3.2(c):
(i) all Significant Matters and the Restricted Matters set out in
Clause 3.3.3(a) and 3.3.3(i) shall require prior Board
approval; and
(ii) the Restricted Matters set out in Clauses 3.3.3(b) to (h)
inclusive shall require the consent of the Vnet Shareholder
and the VEP Shareholder.
(b) Subject to the provisions of Clause 3.2(c) above, the Board shall
comprise at all times 4 non-executive Directors appointed by the VEP
Shareholder, and the Chief Executive Officer of the Company appointed
as provided for in Clause 3.3.4 below and 4 non-executive Directors
appointed by the Vnet Shareholder, and the Chief Financial Officer of
the Company appointed as provided for in Clause 3.3.4 below). Each
Shareholder undertakes to vote, or cause to be voted, on any
resolution for the appointment or removal of any Director in
accordance with a notice given by the VEP Shareholder, in the case of
a VEP Director, and by the Vnet Shareholder, in the case of a Vnet
Director, to the other Shareholder at or prior to the meeting at which
such resolution is to be proposed (or, in the case of a written
resolution, prior to or at the time of the adoption of such written
resolution). Each Shareholder shall ensure that all Directors
designated by it are fit and proper to manage the Company. The Chief
Executive Officer and the Chief Financial Officer are sometimes
referred to herein as the "Executive Directors". The other Directors,
are sometimes referred to herein as the "Non-Executive Directors", and
each a "Non-Executive Director."
(c) Any vacancy which may arise shall be filled through a new appointment
by the Shareholder having initially made the corresponding
appointment.
(d) Any vacancy left unfilled for a period of 3 months shall be filled by
action of the Shareholders or the Board in accordance with the
Articles and/or applicable law.
(e) The Chairman and Vice-Chairman of the Board shall be non-executive
members of the Board, shall each be appointed by the Board, from among
the Directors, for two-year terms and neither shall have tie-breaking
votes. The first Chairman shall be nominated by the Vnet Shareholder
and the first Vice-Chairman by the VEP Shareholder; at the expiration
of their respective two year terms, their successors shall be
respectively nominated by the Shareholder who did not appoint their
respective predecessor, and shall be appointed by the Board, such
alternating Chairmanship and Vice-Chairmanship between persons
appointed by the Vnet Shareholder and the VEP Shareholder to continue
for the duration of this Agreement.
(f) The notice period for the calling of Board meetings of the Company
shall not be less than 14 days unless such number of Directors as is
required for a quorum agree otherwise in respect of any particular
meeting.
(g) The Board shall meet at least once per calendar quarter. A quorum of
Directors shall consist of at least two VEP Non-Executive Directors
and two Vnet Non-Executive Directors.
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(h) Subject to Clause 3.2(c) above, all decisions of the Board shall
require the favorable vote of all of the Non Executive Directors
present (either in person or by telephone or other teleconferencing
facilities) at the meeting.
(i) In the event of a deadlock of the Board (i) the matter in dispute
shall be referred for resolution to the respective Chief Executive
Officers of Vodafone, on the one hand, and either Vivendi or Canal+
(as nominated by Vivendi), on the other hand, and (ii) if such Chief
Executive Officers are unable to resolve the deadlock, if the deadlock
concerns (x) in any way the authorization by the Board of the Annual
Budget, the Annual Budget of the previous fiscal year shall be rolled
over once to the new fiscal year with a line-item increase of 5% and
shall be deemed to be a Financing Proposal approved by the Parties for
purposes of their financing obligations thereunder, and (y) any other
matters, the situation status quo on the matter shall prevail. No
other specific deadlock resolution procedures shall exist other than
those provided by law.
(j) By decision of the Board, one or more administrative or operational
committees of the Board may be created and delegated such
responsibilities and powers with respect to day to day management of
the Company as the Board may designate.
3.3.2 SIGNIFICANT MATTERS
The Parties agree that, in addition to those matters requiring prior
authorization of the Board in accordance with applicable law, none of
the following actions shall be undertaken by or on behalf of the
Company, nor by or on behalf of any Local Subsidiary without prior
authorization, and in accordance with the instructions, of the Board:
(a) Signature, renegotiation, renewal or termination of any Operator
Agreement as provided for herein, including with any third party
Operator in such countries within the Territory in which no Controlled
or Minority Operator operates.
(b) Signature, renegotiation, renewal or termination of any Controlled
Content and/or Support Services Supplier Agreement or of any other
agreement with Content and/or Support Services Suppliers which are
material to the conduct of the Company's business.
(c) Issuing a guarantee as security for the obligations of any other party
or granting any pledge or other interest over any assets of the
Company as security for any obligation of any such other party;
(d) Adopting the Annual Budget and the Business Plan (and all formal
revisions thereto);
(e) Transferring or leasing any significant asset of the Company other
than as provided for in the Annual Budget;
(f) Proposing to the Shareholders' meeting or making appropriation of
profits (i.e. for payment as dividends, for allocation to
discretionary reserves, or for retention as retained earnings) ;
(g) Proposing to the Shareholders' meeting or approving any amendments to
the Company's Articles or other governing charter or agreement, as the
case may be, or
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issuing any Company shares or other securities, whether by way of a
private placement or of a public offering;
(h) Requests for additional Contributions from the Shareholders;
(i) Creation of Local Subsidiaries, which may include third party
shareholders, as may be decided by the Board of the Company, provided
with respect to each such Local Subsidiary that the Shareholders
shall, to the extent of the Company's interest in the Local
Subsidiary, at all times have an equal number of representatives on
the board of the Local Subsidiary and that the provisions of this
Joint Venture Agreement regarding decisions by the Board of the
Company shall apply mutatis mutandis to the boards of the Local
Subsidiaries ;;
(j) Acquisition of any interest in any entity, whether for purposes of
investment or control.
(k) Exercise of voting and any other rights in connection with the shares
or other interests held by the Company in the Local Subsidiaries;
(l) Entering into, renegotiating, renewing or terminating any licensing or
other agreements with regard to technology and software (including,
without limitation, with regard to the choice of the platform or
platforms to be used for MAP) which is material from a technological
strategy or policy perspective for the conduct of the Company's
business;
(m) Entering into, renegotiating, renewing or terminating any licensing or
other agreement in connection with the use of the Brand.
(n) Entering into, renegotiating, renewing or terminating any partnership
agreement, joint venture agreement, merger, business combination
agreement or any other strategic alliance;
(o) Undertaking any capital expenditures other than as provided for in the
Annual Budget;
(p) Incurring debt for an amount in excess of Euro 10 million, other than
as provided for in the Annual Budget;
(q) Entering into, renegotiating or renewing any contract pursuant to
which the Company assumes obligations in excess of Euro 10 million,
other than as specifically provided for in the Annual Budget;
(r) All other actions specifically attributed to the Board by this Joint
Venture Agreement.
3.3.3 RESTRICTED MATTERS
For purposes of Clause 3.2(c) above, Restricted Matters shall mean:
(a) the Company or any Local Subsidiary entering into any merger,
acquisition or business combination agreement which is
material to the Company taken as a whole.
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(a) The issue or allotment of, or the grant of any option over
any of the Company's shares or other securities or the
reorganisation of the Company's share capital in any way
other than in situations where the Diluted Shareholder is
offered the opportunity to participate in the operation in
question with cash in proportion to its existing shareholding
in the Company,
(c) any reduction of the share capital of the Company or of any
other undistributable reserve of the Company involving a
repayment of capital to any Shareholder or the creation of
any distributable reserve;
(d) any repurchase or redemption by the Company of its own
shares, or the giving of financial assistance by the Company
for the acquisition of its own shares pursuant to Sections
155-157 of the Companies Act;
(e) any alteration to the provisions of the Memorandum of
Association of the Company, the adoption of new Articles of
Association of the Company, or any alteration to the Articles
or the variation of any rights of any class of Shares;
(f) the implementation by the Company of any Scheme of
Arrangement pursuant to Section 425 of the Companies Act;
(g) any resolution to wind up the Company and/or to dispose of or
realise all or substantially all of its assets and any
extraordinary resolution to sanction a division of assets in
kind upon a winding up;
(h) any transaction entered into by the Company or any Local
Subsidiary which would, if the Company shares were listed
under the Listing Rules of the Financial Services Authority,
qualify as both a "related party transaction" and a Class 2
or larger transaction, for purposes of such Listing Rules as
in effect at the date of this Joint Venture Agreement, unless
the Company supplies the Diluted Shareholder with a written
opinion of an independent professional valuer or investment
bank to the effect that such transaction is fair and
reasonable to the Company and its shareholders taken as a
whole.
(i) The selection and/or any change to the auditors of the
Company.
3.3.4 CORPORATE OFFICERS
(a) Appointment and removal
(i) The Chief Executive Officer and the Chief Technical Officer
of the Company shall be designated, removed and replaced by
the Board upon proposition of the VEP Shareholder and consent
of the Vnet Shareholder not to be unreasonably withheld or
delayed (which consent shall be deemed to include the Vnet
Shareholder's undertaking to cause the Vnet Directors to vote
accordingly). It is acknowledged that Vodafone has proposed,
and the Vivendi Group Parties have accepted, that Xxxx
Xxxxxxx be appointed as the first Chief Executive of the
Company.
(ii) The Chief Financial Officer and the Chief Marketing Officer
of the Company shall be designated, removed and replaced by
the Board upon proposition of
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the Vnet Shareholder and consent of the VEP Shareholder not
to be unreasonably withheld or delayed (which consent shall
be deemed to include the VEP Shareholder's undertaking to
cause the VEP Directors to vote accordingly).
(ii) In addition to the aforementioned officers, the Company shall have
such officers, with such responsibilities and duties, as the Chief
Executive Officer may designate.
(b) Compensation
(i) The compensation package, and the terms and conditions of
employment of the Chief Executive Officer, Chief Financial
Officer, Chief Technical Officer and Chief Marketing Officer
shall be determined by the Board without the vote of the
Executive Directors.
(ii) The compensation package, and the terms and conditions of
employment of the remaining Company officers shall be
determined by the Chief Executive Officer within the limits
set forth to that effect in the Annual Budget.
3.3.5 SHAREHOLDERS MEETINGS
(a) Unless otherwise required under applicable law, shareholders of the
Company shall receive notice of each shareholders' meeting at least
thirty (30) calendar days before the scheduled date of such meeting or
such shorter period as may be agreed in writing by the Shareholders.
The Company shall have at least one shareholders' meeting each
calendar year. Such meeting will take place at such time and place as
is determined by the Board.
(b) Subject to Clause 3.2(c) above, a general shareholders' meeting of the
Company shall be quorate when the VEP Shareholder and the Vnet
Shareholder are both present or represented, by proxy or by any other
means of attendance permitted under the Articles.
(c) Subject to Clause 3.2(c) above, decisions of the general shareholders'
meeting of the Company shall require a favorable vote of both the VEP
Shareholder and the Vnet Shareholder. In case of an equality of votes,
the chairman of such general meeting, if one has been appointed, shall
have no casting vote.
3.3.6 ANNUAL BUDGET AND BUSINESS PLAN
(a) The Chief Executive Officer of the Company shall propose, and the
Board shall approve subject to such alterations as the Board thinks
fit, an annual budget (the "ANNUAL BUDGET") with respect to each
financial year of the Company no later than thirty (30) days prior to
the commencement of the financial year, provided, however, that the
initial Annual Budget shall be prepared in accordance with the
provisions of Clause 3.2(a)(ii) above. The Annual Budget shall include
a projected profit and loss statement, an income and expenditure
projection, a projected cash flow statement, and a projected year end
balance sheet. The Board and the Chief Executive Officer shall cause
the Company to conduct its operations in accordance with the Annual
Budget.
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(b) The Chief Executive Officer of the Company shall prepare a three -year
business plan (the "BUSINESS PLAN") in accordance with the provisions
of Clause 3.2(a) above. The Business Plan shall be reviewed by the
Board on a yearly basis no later than thirty (30) days prior to the
commencement of each fiscal year. The Business Plan shall set forth in
reasonable detail certain financial performance goals, including,
without limitation, with respect to revenues, profits, return on net
assets and return on equity for the period subject thereto.
3.3.7 FINANCIAL AND ADMINISTRATIVE POLICIES
(a) The Parties have agreed that both Deloitte Touche and Xxxxxx Xxxxxxxx
shall be appointed auditors of the Company. Furthermore, they have
agreed that, for each Group of Parties' consolidation purposes, two
full audits will be conducted, one as of 31 December and the other as
of 31 March of each year.
(b) The Parties have agreed that the Company shall adopt the Vodafone
group's financial and administrative policies as described by Vodafone
to the Vivendi Group Parties prior to the date hereof, or as otherwise
notified by Vodafone to the Company from time to time subject, in the
event of changes entailing a significant impact on the Company's own
financial situation and/or administrative practice, to the consent by
Vivendi, which consent shall not be unreasonably withheld.
3.4 SHARE TRANSFER RESTRICTIONS
3.4.1 Each of the Shareholders hereby undertakes that, subject only to the
exceptions expressly set forth in Clause 3.4.2 hereunder, it shall not
without the prior written approval of the other Shareholder, from the
day of the creation of the Company and for three years from the date of
this signature of this Joint Venture Agreement (the "LOCK-IN PERIOD"),
and thereafter subject to the conditions set forth in Clause 3.4.3 (i)
sell, transfer, assign, grant options over, or otherwise dispose of,
Company shares or any legal or beneficial interest in any Company
shares, including by way of merger or operation of the law, or (ii)
create or permit any security or other encumbrance whatsoever to exist
over any Company share, or (iii) enter into any agreement undertaking
to do any of the foregoing ("TRANSFER").
3.4.2 Transfers to Permitted Transferees
(a) Each of the Shareholders shall be free to Transfer all of its Company
shares to one or more Permitted Transferees, provided that each such
Permitted Transferee enters into a Deed of Adherence, and only after
each such Permitted Transferee has delivered to the non-transferring
Shareholder a written undertaking whereby, if any legal or beneficial
interest in such Permitted Transferee ceases to be wholly owned,
directly or indirectly, by Vodafone or by Vivendi or Vnet (or, in the
case of a Permitted Transferee that is wholly owned, directly or
indirectly, by Vnet, if there is a change of control of the Vnet
Shareholder, as such term is defined in Clause 3.6.4), as the case may
be, such Company shares shall be transferred to Vodafone or to Vnet, as
the case may be, or to another entity or entities in which all legal
and beneficial interests are and remain wholly owned, directly or
indirectly by Vodafone or by Vivendi or Vnet (provided, in the case of
Vnet, there has been no change of control of the Vnet Shareholder, as
such term is defined in Clause 3.6.4), as the case may be.
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(b) If any Shareholder ("a Disqualified Shareholder") to which shares have
been transferred by a permitted transfer referred to in paragraph (a)
above (or any series of permitted transfers) (i) ceases, as a result of
any event ("a Disqualifying Event"), to qualify as a Permitted
Transferee of the original transferor, and (ii) fails to transfer all
the Company shares held by it to the original transferor or an entity
which does qualify as a Permitted Transferee of such original
transferor either before the Disqualifying Event or within 28 days
thereafter, then the other Shareholder shall have the right by written
notice to the Disqualified Shareholder within 90 days after becoming
aware of the Disqualifying Event, to require the Disqualified
Shareholder either to transfer its Company shares within 10 days to a
party permitted to receive them as referred to in sub-paragraph (ii)
above or to sell all of them to the other Shareholder at their nominal
value.
(c) Where there is more than one entity that comprises the VEP Shareholder
or the Vnet Shareholder, as the case may be, and where there are rights
exercisable by a Shareholder under this Joint Venture Agreement, such
rights shall be exercised by all such entities as a group and not
separately, and all obligations of a Shareholder under this Joint
Venture Agreement shall be joint and several obligations of such
entities to be satisfied as a group.
3.4.3 Right of First Refusal; Tag-Along Rights
(a) After the expiration of the Lock-in Period, a Shareholder may, subject
to the conditions set forth in this Clause 3.4.3, Transfer all (but not
part) of its Company shares.
(b) Sale Notice. If, after the Lock-In Period has expired, a Shareholder
(the "SELLER") desires to accept a bona fide offer from a third party
(a "THIRD PARTY OFFER") to purchase all (but not part) of the Seller's
shares in the Company (the "OFFERED SHARES"), the Seller shall give
notice (the "SALE NOTICE") in accordance with Article 37 of the
Articles.
(c) Option. If the Seller desires to accept a Third Party Offer, the other
Shareholder (the "OPTION HOLDER") will thereupon have the option
(subject to Clause 3.4.3(d) below), exercisable within fifteen 15 days
after the Sale Notice is received by the Option Holder, (such time
period, the "EXERCISE PERIOD"), either:
(i) to acquire from the Seller, all (but not part) of the
Offered Shares at the same price and on the same
terms and conditions as the Third Party Offer; or
(ii) to require as a condition to the proposed transaction
that all, but not less than all, of its shares in the
Company be concurrently purchased by the Seller's
proposed buyer at the same price and on the same
terms and conditions.
(d) If the Option Holder holds less than 20% of the total share capital of
the Company held by the Shareholders at the time of receipt by it of
the Sale Notice, it shall only have the option set forth in Clause
3.4.3(c)(ii) above, to the exclusion of any right of first refusal on
the Offered Shares.
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(e) Non-Exercise. In the event that the Option Holder decides not to
exercise either option in Clause 3.4.3(c), the transfer by the Seller
of all (but not part) of the Offered Shares pursuant to this Clause
3.4.3 shall be conditional upon the execution and delivery by the
transferee of a Deed of Adherence and completion of the transfer within
90 days from the end of the Exercise Period.
(g) Required Form of Consideration. No Shareholder may offer or sell its
respective Company shares, pursuant to this Clause 3.4.3 except (i) on
an "all cash" "immediately payable" basis paid by the transferee, or
(ii) in exchange for securities publicly traded in sufficiently liquid
markets such that their receipt by the Seller is the financial
equivalent of an "all cash", "immediate payment" by the transferee;
provided always that this Clause (g) shall not be construed to prohibit
agreements or arrangements for retention of part of the consideration
pending, or for adjustment to the amount of consideration upwards or
downwards by reference to, a determination of the financial position of
the Company as at the date of sale of the Shares or the quantification
of any asset or liability as at such time, or any comparable
arrangement, or normal warranty and/or indemnity arrangements.
3.5 FUTURE IPO
The Parties agree that it is their intent (a) to take the Company
public as soon as possible by listing it in an exchange to be mutually
agreed upon, subject to the performance of the Company and to
appropriate market conditions, and (b) subject to Section 3.2(c), to
retain joint control of the Company upon any such initial or subsequent
public offering (each of the VEP Shareholder and the Vnet Shareholder
keeping thereupon an equal proportion of all issued and outstanding
Company shares as the other).
3.6 CHANGE OF CONTROL PROVISIONS
3.6.1 Upon the direct or indirect change of control of a Shareholder, the
other Shareholder (the "OPTION BENEFICIARY") shall have the right,
exercisable at any time from the completion of the change of control
until six months from the latter of the public announcement of the
completion of such change of control by any relevant market authority,
or the formal notification of such change of control to the Shareholder
whose control is not changing, either (i) to purchase all the shares in
the Company held by the Shareholder whose control has changed (the
"CALL OPTION") or (ii) to require such Shareholder to purchase all the
Option Beneficiary's shares in the Company (the "PUT OPTION", together
with the Call Option collectively the "OPTIONS" or individually the
"OPTION"), at their fair market value (the "OPTION PRICE") to be
determined as provided by Clause 3.6.2. In the event of an exercise of
either Option, the rights of the selling Shareholder with respect to
any Shareholder loans outstanding between the Company and such
Shareholder shall be acquired by the purchasing Shareholder by payment
to the selling Shareholder of the amounts outstanding under such loans
including any accrued interest thereon. The purchasing Shareholder
shall use reasonable endeavours to replace (or, if such replacement is
not possible, provide a counter indemnity for) any guarantees of
Company obligations made by the Selling Shareholder, which obligations
shall be taken into consideration in the calculation of the Option
Price.
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3.6.2 In the event of failure of mutual agreement by the Shareholders on the
Option Price within 45 days (the "INITIAL AGREEMENT PERIOD") after
delivery by the Option Beneficiary to the other Shareholder of a notice
by virtue of which the Option Beneficiary exercises either the Put or
the Call Option (the "OPTION EXERCISE NOTICE"), as the case may be,
each Shareholder shall within 10 days after the expiration of the
Initial Agreement Period appoint an investment bank of its choice to
determine the Option Price. The investment banks thus appointed shall
determine their respective valuations within 20 days of their
respective appointments. If the difference between the valuations made
by each one of the investment banks thus appointed represents less than
10% of each such valuation, the Option Price shall be the average of
the two valuations. If the difference between the valuations represents
more than 10% of any one of the valuations, the two aforementioned
investment banks shall, within 40 days from the expiration of the
Initial Agreement Period, appoint a third investment bank to carry out
a third evaluation. The Option Price shall then be the average between
the third valuation and such valuation made by one of the investment
banks initially appointed by the Shareholders which shall be the
closest to the third valuation. If the two investment banks are unable
to reach an agreement on the third investment bank within the
aforementioned time limit, the third investment bank, which shall be
internationally recognized and independent of each of the Parties,
shall be appointed by the President of the International Court of
Arbitration of the International Chamber of Commerce in Paris, at the
request of any one of the Shareholders, provided however that in the
event that the third investment bank has not been so appointed within
30 calendar days of the request, such request shall be withdrawn and
the third investment bank shall be appointed by the President of the
Commercial Court of Paris, in a REFERE proceeding, at the request of
any Shareholder. The valuation process by the investment banks
appointed by the Shareholders shall be completed no later than thirty
days after the expiration of the Initial Agreement Period (as defined
above) and the valuation process of the third investment bank shall be
completed no later than 30 days after its appointment.
3.6.3 A direct or indirect change of control of the VEP Shareholder shall be
deemed to have occurred when any Person holds, directly or indirectly,
a majority of the voting share capital of such VEP Shareholder.
3.6.4 A direct or indirect change of control of the Vnet Shareholder shall
(except as set forth in Clause 3.6.5 below) be deemed to have occurred
when (a) any Person holds directly or indirectly a majority of the
voting share capital of Vivendi or of Canal+, or (b) there has been a
change of control of Vnet. For the purposes of this Clause 3.6.4 (and
except as set forth in Clause 3.6.5 below), there shall be deemed to be
a change of control of Vnet when (i) Vivendi ceases to hold, directly
or indirectly, at least 50% of the voting share capital of Vnet, or
(ii) Vivendi alone or Vivendi and Canal+ cease to together control the
management of Vnet, or (iii) Vivendi ceases to own at least 34% of the
voting rights of Canal+, or (iv) Vivendi is no longer the largest
shareholder of Canal+; provided always that none of the events
described in (iii) and (iv) shall constitute a change of control of
Vnet if, concurrently with any such event, Vivendi holds, directly or
indirectly a majority of the voting share capital of Vnet.
3.6.5 The following will not be deemed to constitute a direct or indirect
change of control of the Vnet Shareholder: (i) a merger (by way of
fusion absorption) of Vivendi and Canal+, with either Vivendi (or a
wholly owned subsidiary) or Canal+ (or a "transaction co" held as to
100% either by Vivendi or Canal+ immediately prior to
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such merger) as the surviving entity provided that no third Person or
Persons acting in concert hold, directly or indirectly a majority of
the voting share capital of the surviving entity, or (ii) a reverse
take over by Canal+ of Vivendi, provided that no third Person or
Persons acting in concert hold, directly or indirectly, a majority of
the voting share capital of Canal + and, in both cases (i) and (ii)
above, provided further that the management of Vnet and the voting
capital of Vnet remains Controlled by Vivendi and/or Canal+ with one
under the Control of the other or as a single merged entity (including
the "transaction co"), as the case may be.
3.6.6 Any restructuring of Vodafone by which a holding company structure is
interposed between Vodafone and its public shareholders shall not be
deemed to constitute a direct or indirect change of control of the VEP
Shareholder or Vodafone, provided that no third Person, alone or in
concert with others, hold directly or indirectly more than 50% of the
voting share capital of such new holding company.
3.7 Consortium Relief
The Parties agree that consortium relief will be considered in the event that
either the Company or the Shareholders realise tax losses and the losses will be
surrendered in an equitable manner to the Company, the Parties and the
Shareholders, with the appropriate payment being received for the surrender of
the losses.
3.8 The Shareholders shall make all reasonable efforts to procure that:-
(a) the Annual General Meeting of the Company at which audited accounts in
respect of the preceding financial year are laid before the
Shareholders is held not later than six months after the end of the
relevant financial year;
(b) the Company auditors shall at the expense of the Company be instructed
to report as to the amount of the profits for each accounting reference
period which are available for distribution by the Company at the same
time as they sign their report on the audited accounts for the
accounting reference period in question; and
(c) the Company distributes to and among its members all of its profits
lawfully available for distribution in each financial year, subject to
(as determined by the Board) such reasonable and proper cash,
accounting and legal reserves to meet the requirements set out in the
Annual Budget and the Business Plan from time to time.
(d) Without prejudice to the provisions of Clause 3.2 above, the Parties
shall endeavour to work together in order to evaluate and determine the
most appropriate funding mechanism to satisfy the capital requirements
of the Company and to structure the transactions contemplated herein,
including the asset transfers contemplated herein, and operate the
Company's business in the most tax efficient manner both for the
Company as well as for the Parties.
3.9 GUARANTEE
3.9.1 Vodafone irrevocably and unconditionally guarantees to the Vivendi
Group of Parties the due and punctual performance by the VEP
Shareholder and Vivendi and Canal +
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jointly and severally, irrevocably and unconditionally guarantee to the
Vodafone Group of Parties the due and punctual performance by the Vnet
Shareholder, in each case of all obligations under this Agreement,
including, without limitation, all obligations under Clause 3 of this
Agreement. In this Clause3.9, "Guarantor" means Vodafone, on the one
hand, or Vivendi and Canal + jointly and severally, on the other, in
their respective capacities as Guarantors and "Guaranteed Party" means
the relevant Shareholder whose obligations are guaranteed by the
Guarantor under this Clause. Each Guarantor undertakes with the other
Group of Parties that if its Guaranteed Party shall fail in any respect
to fulfill any of its obligations under this Agreement, such Guarantor
will be liable and the other Group of Parties shall be at liberty to
act as if the Guarantor were the Party principally bound by such
obligations.
3.9.2 Each guarantee contained in this Clause 3.9. is a continuing guarantee
and shall remain in force until all obligations of the Guaranteed Party
under this Agreement have been fully performed.
3.9.3 If and whenever a Guaranteed Party defaults for any reason whatsoever
in the performance of any obligation or liability undertaken or
expressed to be undertaken by such Guaranteed Party (including the
payment when due of any amount) under this Agreement, the Guarantor
with respect to such Guaranteed Party shall (forthwith upon demand by
the other Group of Parties) unconditionally perform and satisfy the
obligation or liability in regard to which such default has been made
in the manner prescribed by this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Each Group of Parties represents and warrants to the other Group of
Parties as set out in this Clause 4 (references to a Party below
meaning each Party within the relevant Group of Parties).
4.1 Such Party is a corporation duly organised and validly existing under
the laws of its jurisdiction of incorporation (as referred to in the
opening paragraphs of this Agreement) and has the corporate power and
authority to own or lease all of its properties and assets and to carry
on its business as now being conducted.
4.2 Such Party has full corporate power and authority to enter into,
execute and deliver this Agreement and to perform its obligations
hereunder and implement the transactions contemplated hereby. The
execution and delivery of this Agreement and the implementation of the
transactions contemplated by it have been duly and validly approved by
the Board of Directors of such Party and no other corporate proceedings
on the part of such Party are necessary to authorise or enable it to
enter into this Agreement and implement the transactions contemplated
by it.
4.3 This Agreement has been duly and validly executed and delivered by each
Party and (assuming the due authorisation, execution and delivery by
all other Parties hereto) constitutes a valid and binding obligation of
such Party enforceable against it in
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accordance with its terms. Neither the execution and delivery of this
Agreement by such Party, nor the performance by it of its obligations
hereunder and implementation of the transactions contemplated by this
Agreement will:-
(a) violate any provision of its Memorandum and Articles of
Association (or equivalent constitutional documents); or
(subject to the consents and approvals referred to in Clause
4.4 being duly obtained) violate any law, rule, regulation,
judgment, order, writ or decree applicable to such Party or
any of its properties or assets;
(b) violate, conflict with, result in a breach of any provision
of, constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, any
agreement or instrument to which such Party is a party or by
which its property or assets is bound.
4.4 Except for the consents, clearances or approvals listed in Clauses 5
and 6, no consents or approvals of, or filings or registrations with,
any court, administrative agency, commission or other governmental
authority or instrumentality, are necessary in connection with the
execution, delivery and performances by each Party of this Agreement
and the implementation by such Party of the transactions contemplated
hereby.
5. CONDITIONS PRECEDENT
This Joint Venture Agreement is entered into subject to the following
conditions:
5.1 CLEARANCE BY THE COMMISSION OF THE EUROPEAN COMMUNITIES
(a) The Parties' rights and obligations under this Joint Venture Agreement,
other than with regard to confidentiality, are conditional upon the
following:
(i) if this Agreement gives rise to a concentration with a
Community dimension pursuant to Council Regulation (EC)
4064/89 (as amended) (the "Mergers Regulation"), the adoption
of a decision by the Commission of the European Communities
(the "COMMISSION") approving the concentration, either
unconditionally or subject to the fulfillment of certain
conditions or commitments which the Vodafone Group of Parties,
on the one hand, and the Vivendi Group of Parties, on the
other hand, consider acceptable, or failure of the Commission
to adopt a decision within the required time periods; and
(ii) in the event of any action by any EU Member State under a
national law procedure which is permissible notwithstanding
the Commission's jurisdiction under the Merger Regulation, or,
in the absence of the Commission's jurisdiction under the
Merger Regulation, in the event any merger filing is required
to be made by the Parties under the nation rules of any EU
Member State, the adoption by each of the competent
authorities in those EU Member States of a decision of
equivalent effect to any of those set out in Clause 5.1(a)(i)
(this Clause 5.1(a)(ii) being interpreted mutatis mutandis).
(iii) in the event of any action by any state other than an EU
Member State under a national law procedure or pursuant to any
merger filing required to be made
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by the Parties under national rules prior to the completion of
the transaction contempated herein, and to the extent that
such filing legally requires the Parties to suspend the
completion of the transactions contemplated herein until
clearance is specifically obtained, the adoption by each of
the competent authorities in those states of a decision of
equivalent effect to any of those set out in Clause 5.1 (a)(i)
(this Clause 5.1 being interpreted mutatis mutandis).
(b) The Parties hereby undertake to cooperate with one another to ensure
that all information necessary or desirable to complete the required
filing to be submitted to the Commission or applicable national
authorities (or to respond to any requests for further information
consequent thereupon), is supplied in a proper, timely and accurate
fashion so that such filing or additional information may be promptly
submitted to the Commission or applicable national authorities within
the corresponding deadlines.
(c) If at the outset of, or during, its review of the aforementioned filing
by the Parties, the Commission requests from the Parties certain
undertakings as a condition to authorizing the Joint Venture, the
Parties shall promptly meet and shall make all reasonable efforts to
decide, in the mutual interests of the Parties, on an appropriate
course to give effect to the requirements of the Commission.
(d) To the extent that the undertakings made by Vodafone with respect to
providing availablity of < wholesale services ...which includes ...
access to internet portals > as set forth in the < Divestment
Undertaking > dated April 12, 2000 entered into by Vodafone in
connection with the Mannesmann merger (a copy of the non confidential
version of which has been supplied to Vivendi) apply to any matter
contained in this Joint Venture Agreement (including the Annexes) and
the Operator Agreements to be entered into by the Company, the Parties
hereby acknowledge and agree that they shall cause the Company to take
such actions as are required to ensure compliance with the relevant and
applicable provisions of the Divestment Undertaking and the Company
shall consent to such waivers and modifications to the Operator
Agreements that may be required to ensure compliance with the
Divestment Undertaking. If so requested by the Vivendi Group Party the
same waivers and modifications shall apply to all Operator Agreements.
6. COVENANTS IN CONNECTION WITH REGULATORY APPROVALS AND/OR REQUIREMENTS
6.1 REGULATORY APPROVALS
The Parties shall use their reasonable efforts to assist the Company in
obtaining such approvals, consents, clearances and similar actions from
public authorities as may from time to time be necessary or appropriate
in order to enter into the different agreements provided for herein
and, in general, in order to develop, operate and promote MAP and the
Company and offer the Services as provided for herein.
6.2 REGULATORY REQUIREMENTS
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If the conduct of the Company's business as provided for herein is in
any way regulated as of the date hereof or during such time as this
Agreement remains in force between the Parties, the Parties shall use
their reasonable efforts to take all requisite steps to comply, or to
cause the Company to comply, with all such regulations.
7. DURATION
Each Party shall be bound by this Joint Venture Agreement for as long
as it holds (directly or indirectly) Company shares. Thereafter, each
Party shall remain bound to the extent provided for in Clause 1.3.6(a)
above.
8. (NUMBER RESERVED)
9. CONFIDENTIALITY
9.1 Each of the Parties agrees to keep secret and confidential and not to
use disclose or divulge to any third party or to enable or cause any
Person to become aware of (except for the purposes of the Company's
business) any confidential information relating to the Company
including but not limited to intellectual property (whether owned or
licensed by the Company), lists of customers, reports, notes, memoranda
and all other documentary records pertaining to the Company or its
business affairs, finances, suppliers, customers or contractual or
other arrangements but excluding any information which:
(a) is in the public domain (otherwise than through the wrongful disclosure
of any Person);
(b) can be proved in writing as having been in the possession of the
relevant third party, other than through the wrongful disclosure of any
Person;
(c) becomes available to the relevant Party to this Agreement from a third
party, other than through the wrongful disclosure of any Person,
(d) is required to be disclosed by law or regulations or the rules of any
stock exchange or other regulatory body (provided that in such
circumstances the relevant Party shall, to the extent reasonably
practicable, consult with the Company and the other Parties in relation
to, and allow them an opportunity to review and comment on, the form
and content of such disclosure)
(e) to the extent that such disclosure is necessary or appropriate in
connection with the enforcement of rights under this Agreement;
9.2 The Parties shall use all reasonable endeavours to procure the
observance of the above-mentioned restrictions, including by their
respective Group Companies and shall take all reasonable steps to
minimise the risk of disclosure of confidential information, by
ensuring that only they themselves and such of their employees and
directors as well as those of their respective Group Companies whose
duties will require them to possess any of such information shall have
access thereto, and will be instructed to treat the same as
confidential.
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9.3 The obligation contained in this Clause 9 shall endure, even after the
termination of this Agreement, without limit in point of time except as
set out above.
10. NOTICES
10.1 Any notice given under this Agreement shall be in writing in the
English language and shall be:-
(a) delivered by hand; or
(b) sent by pre-paid airmail (or by first class post in the case of
communications within the United Kingdom); or
(c) sent by fax (confirmed by pre-paid airmail or first class post as
appropriate placed in the post on or on the day after the date of
transmission);
to the address or fax number set out below or to such other address or
fax number as may from time to time be notified to the other party in
writing.
Notices to any one or more of the Vodafone Group Notices to any one or more of the
Parties shall be sent to all of the following: Vivendi Group Parties shall be sent to
all of the following:
Chief Executive Officer President directeur general
Vodafone AirTouch Plc Vivendi S.A.
The Courtyard 00, xxxxxx xx Xxxxxxxxx
0-0 Xxxxxx Xx. Xxxxx, Xxxxxx 00000
Xxxxxxx, Xxxxxxxxx Fax: 00.33.1.71.71.17.17
XX00 0XX
England
Fax 00.44.1635 645 205 President directeur general
Canal+
(with a copy to the Company's Secretary 85/89 quai Andre Citroen
Fax 00.00.0000.000.000) Xxxxx, Xxxxxx 00000[Xxxxxxx]
Fax: 00.33.1.40.60.70.50
Vodafone European Portal Limited President directeur general
c/o Vodafone AirTouch Group Services Vivendi Net
Limited (address to be notified to the Vodafone
Company's Secretaries and Legal Group Parties promptly after
Department incorporation of Vivendi Net)
Xxx Xxxxxxxxx
0-0 Xxxxxx Xx.
Xxxxxxx, Xxxxxxxxx
XX00 0XX
Xxxxxxx
Fax 00.00.0000.000.000
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10.2 Any notice given under Clause 10.1 shall be deemed to have been
received:-
(a) on the date of delivery if delivered by hand prior to 5:00 pm on a
business day, otherwise on the next business day following the date of
delivery;
(b) on the second business day from and including the day of posting in the
case of pre-paid first class post within the United Kingdom; or
(c) on the tenth business day from and including the day of posting in the
case of pre-paid airmail; or
(d) on the next business day following the day of transmission in the case
of facsimile (confirmed by pre-paid first class post/airmail as
provided above).
In this Clause, business day shall mean any day other than a Saturday,
Sunday or any other day which is a public holiday in the place at or to
which the notice or correspondence is left or despatched.
10.3 Service of any legal proceedings concerning or arising out of this
Agreement shall be effected by delivery to the other party at the
address referred to in Clause 10.1 above or to the other party's
registered or principal office.
11. REMEDIES
No remedy conferred by any of the provisions of this Agreement is
intended to be exclusive of any other remedy which is otherwise
available at law, in equity, by statute or otherwise, and each and
every other remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law,
in equity, by statute or otherwise.
12. WAIVER
12.1 Failure or delay by either party to exercise any right or remedy under
this Agreement shall not be deemed to be a waiver of that right or
remedy, or prevent it from exercising that or any other right or remedy
on that occasion or on any other occasion.
12.2 No waiver by a Party of any condition or of the breach of any term,
covenant, representation, warranty or undertaking contained in this
Agreement, whether by conduct or otherwise, in any one or more
instances shall be deemed to be or construed as a further or continuing
waiver of any such condition or breach or a waiver of any other
condition or deemed to be or construed as the waiver of the breach of
any other term, covenant, representation, warranty or undertaking in
this Agreement.
13. VARIATION
No amendment, change or addition hereto shall be effective or binding
on any of the Parties unless reduced to writing and executed by all the
Parties.
14. COUNTERPARTS
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This Agreement may be executed in several counterparts (whether
original or facsimile counterparts) and upon due execution of all such
counterparts by one or more Parties, each counterpart shall be deemed
to be an original hereof.
15. [ARTICLE NUMBER RESERVED]
16. ENTIRE AGREEMENT, AMENDMENTS
16.1 This Agreement, and any other agreements referred to herein constitute
the entire agreement and understanding of the parties with regard to
the subject matter of this Agreement, and supersedes all prior oral or
written agreements, representations, understandings or arrangements
between the Parties relating to the subject matter of this Agreement,
other than Clauses 1.1.1(c), 3, 4, 5, 6, 7, 8, 9, 10 and 11 of the
Letter of Intent between Vodafone and Vivendi dated 30 January 2000, as
amended, which shall remain in full force and effect.
16.2 Except as expressly set forth in this Agreement, neither party grants
to the other by implication, estoppel or otherwise, any right, title
license or interest in any intellectual property right.
16.3 Each of the Parties acknowledges and agrees that in entering into this
Agreement, and the documents referred to in it, it does not rely, has
not relied, and shall have no remedy in respect of, any statement,
representation, warranty or understanding (whether negligently or
innocently made) of any Person (whether party to this Agreement or not)
other than as expressly set out in this Agreement, or the agreements
contemplated hereunder.
16.4 The parties irrevocably and unconditionally waive any rights and/or
remedies they may have to the fullest extent permitted by law
(including without limitation the right to claim damages and/or to
rescind this Agreement) in respect of any misrepresentation other than
a misrepresentation which is contained in this Agreement. Nothing in
this paragraph 16.4 shall, however, operate to limit or exclude any
liability for fraud.
16.5 No change shall be made to this Agreement except in writing in the
English language signed by the duly authorised representatives of both
parties.
17 ASSIGNMENT
This Agreement shall be binding on the Parties hereto and their
respective successors and assigns. None of the Parties hereto shall be
entitled to assign this Agreement or any of its rights and obligations
hereunder except to a Permitted Transferee of that Party's shares in
the Company who has executed a Deed of Adherence.
18. CONFLICT WITH THE ARTICLES OF ASSOCIATION
Subject to any applicable law in the event of any conflict between this
Agreement and the Memorandum of Association of the Company or the
Articles of Association of the Company, the terms of this Agreement
shall prevail and in such event the Parties shall procure such
modification to the Memorandum of Association or the Articles of
Association of the Company as shall be necessary.
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19. NO PARTNERSHIP
Nothing in this Agreement shall constitute or be deemed to constitute a
partnership between the Parties or any of them.
20. FURTHER ASSURANCE
Each Party shall co-operate with the others and execute and deliver to
the others such other instruments and documents and take such other
actions as may be reasonably requested from time to time in order to
carry out, evidence and confirm their rights and the intended purpose
of this Agreement.
21 PUBLICITY
21.1 In the absence of specific agreement between the parties, neither party
shall issue any news release or public announcement, written or oral,
whether to the public or press, relating to this Agreement including
its existence, the subject matter to which it relates, performance
under it or any of its terms, or to any amendment.
21.2 The provisions of Clause 21.1 do not apply to any announcement or
disclosure relating to or connected with or arising out of this
Agreement to the extent the same is required by applicable law or
regulations or the rules of any stock exchange or other regulatory body
(provided that in such circumstances the relevant Party shall, to the
extent reasonably practicable, consult with the Company and the other
Parties in relation to, and allow them an opportunity to review and
comment on, the form and content of such disclosure).
22. GOVERNING LAW / SETTLEMENT OF DISPUTES
22.1 This Joint Venture Agreement will be governed by and construed in
accordance with the laws of England and Wales.
22.2 All disputes arising in connection with this Joint Venture Agreement,
including its interpretation, validity, performance or termination,
shall be finally settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce (the "ICC") as
existing as of the date of commencement of the arbitration proceedings
by three (3) arbitrators appointed as follows. Each Group of Parties
shall designate one (1) arbitrator and the two arbitrators thus
appointed shall designate the Chairman of the tribunal by mutual
agreement within thirty (30) days after the date on which the
appointment of the second arbitrator is notified to the first
arbitrator by the ICC, failing which, upon the request of either of the
parties, the Chairman of the tribunal shall be designated by the ICC as
promptly as practicable. The proceedings shall take place in Brussels.
22.3 The Parties acknowledge that nothing in this Clause 22 shall prevent a
Party from seeking in any court of competent jurisdiction specific
performance or other injunctive relief.
23. Vivendi and Canal+ shall cause Vnet, promptly upon its creation, to
sign this Joint Venture Agreement.
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IN WITNESS whereof this Agreement has been entered into the day and year first
written above.
Vodafone Airtouch Plc Vivendi S.A. Canal+ S.A.
--------------------- -------------- -------------
By By By
Vodafone European Platform Vivendi Net S.A.
------------------- ---------------------------------
By By
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LIST OF ANNEXES
1.2(j) Controlled and Minority Operators as of the date of signing of
the Joint Venture Agreement
1.2(n) Deed of Adherence
1.2(kk)(a) Operator Agreements Term Sheets for Mobile Telco
1.2(kk)(b) Operator Agreements Term Sheets for Pay-TV
1.5.1(a) Exact typeface and casing of Brand
2.2.2(a) Fair market value determination procedure (LOI Annex 2)
2.2.3(a) Purchase price formula for (i)France
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ANNEX 2.2.2(a)
FAIR MARKET VALUE DETERMINATION PROCEDURE
Unless otherwise expressly agreed to by the Parties, the fair market value price
(the "AGREED PRICE") of the assets in question shall be determined as follows:
the Vivendi Group Parties, on the one hand, and the Vodafone Group Parties, on
the other hand, shall each appoint an internationally recognized investment bank
of its choice to determine the Agreed Price. If the difference between the
valuations made by each one of the investment banks thus appointed represents
less than 10% of each such valuation, the Agreed Price shall be the average of
the two valuations. If the difference between the valuations represents more
than 10% of any one of the valuations, the two aforementioned investment banks
shall appoint a third investment bank to carry out a third evaluation. The
Agreed Price shall then be the average between the third valuation and such
valuation made by one of the investment banks initially appointed by each of the
Parties which shall be the closest to the third valuation. If the two investment
banks are unable to reach an agreement on the third investment bank within 5
days, the third investment bank, which shall be internationally recognized and
independent of each of the Parties, shall be appointed by the President of the
International Court of Arbitration of the International Chamber of Commerce, at
the request of the Vivendi Group Parties or the Vodafone Group Parties provided
however that in the event that the third investment bank has not been so
appointed within 30 calendar days of the request, such request shall be
withdrawn and the third investment bank shall be appointed by the President of
the Commercial Court of Paris, in a refere proceeding, at the request of Vivendi
or Vodafone.
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ANNEX 1.2(n)
THIS DEED OF ADHERENCE is made the [ ] day of [ ]
BETWEEN:
(1) [ ] of [ ] (hereinafter called "the
Covenantor").
SUPPLEMENTAL to a Shareholders Agreement dated the [ ] day of [ ]
and made between the following parties
1. Vodafone AirTouch Plc (hereafter referred to as "VODAFONE"), a corporation
organized and existing under the laws of England and Wales;
2. Vodafone European Portal Limited (hereinafter referred to as "VEP"), a
corporation organized under the laws of the England and Wales;
3. Vivendi S.A. (hereafter referred to as "VIVENDI"), a corporation organized
and existing under the laws of France;
4. Canal + S.A. (hereafter referred to as "CANAL+"), a corporation organized and
existing under the laws of France; and
5. Vivendi Net S.A. (hereafter referred to as "VNET"), a corporation organized
and existing under the laws of Belgium.
("the Shareholders Agreement").
WITNESSETH as follows:-
1. The Covenantor hereby confirms that it has been supplied with a copy of
the Shareholders Agreement and hereby covenants with each of the
Persons named in the First Schedule hereto to observe, perform and be
bound by all the terms of the Shareholders Agreement which are capable
of applying to the Covenantor and which have not been performed at the
date hereof to the intent and effect that the Covenantor shall be
deemed with effect from the date on which the Covenantor is registered
as a member of the Company to be a Party to the Shareholders Agreement
and a Shareholder (as defined in the Shareholders Agreement).
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2. This Deed shall be governed by and construed in accordance with the
laws of England.
THE FIRST SCHEDULE
(1) [ ], a company registered in England under Number [ ]
whose registered office is at [ ];
(2) [ ], a company registered in England under Number [ ]
whose registered office is at [ ];
(3) [ ], a company registered in England under Number [ ]
whose registered office is at [ ];
(4) [ ], a company registered in England under Number [ ]
whose registered office is at [ ].
EXECUTED AS A DEED the day and year first before written.
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