SHAREHOLDERS' AGREEMENT dated as of 24th January 2008 among B&D FOOD CORP. and NICOLA DEVELOPMENT and JOÃO GILBERTO CODOGNOTTO and FLAXMAN TRADING S.A. (BVI)
SHAREHOLDERS'
AGREEMENT
dated
as
of 24th January 2008
among
B&D
FOOD CORP.
and
NICOLA
DEVELOPMENT
and
▇▇▇▇
▇▇▇▇▇▇▇▇ CODOGNOTTO
and
▇▇▇▇▇▇▇
TRADING S.A.
(BVI)
SHAREHOLDERS'
AGREEMENT
THIS
SHAREHOLDERS' AGREEMENT is entered into as of this 24th day of January 2008,
by
and among B&D Food Corp. (“B&D”), a company incorporated in the United
States of America, Nicola Development, a Panamá Company represented by its
attorney in fact Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇ Codognotto (“JGC”), a Brazilian citizen, and
▇▇▇▇▇▇▇ Trading S.A., a company incorporated in the British Virgin Islands
(the
"Company").
WHEREAS
JGC is the holder of Common Shares issued by the Company and ▇▇▇▇ ▇▇▇▇▇▇▇▇
Codognotto is the holder of a Golden Share issued by the Company;
WHEREAS
B&D is the holder of Preferred Registered Shares issued by the
Company;
WHEREAS
the following companies incorporated in Brazil, Socan Produtos Alimentícios
Ltda., Geskan Indústria e Comércio Ltda. and ▇▇▇▇▇ Canaan Indústria e Comércio
Ltda. (the “Invested Companies”), are affiliates of the Company;
1.
DEFINITIONS AND INTERPRETATION
1.1.
The
section headings used herein are inserted for reference purposes only and not
in
any way affect the meaning or interpretation of this Agreement.
1.2.
As
used in this Agreement, the masculine, feminine or neuter gender, and the
singular or plural, shall be deemed to include the others whenever and wherever
the context so requires.
1.3.
Unless the context otherwise requires, the terms defined in this Section 1.3
shall have the meanings herein specified for all purposes of this
Agreement:
“Affiliate”
mean any Person which directly or indirectly Controls, is Controled by, or
is
under common Control with, the indicated Person;
“Agreement”
means this Shareholders' Agreement and the schedules hereto;
“Preferred
Registered Shares” means Preferred registered Shares in the capital of the
Company, held by B&D;
“Common
Shares” means Common Shares in the capital of the Company held by JGC or a
company indicated by him;
“Golden
Share” means the Golden Share in the capital of the Company held by ▇▇▇▇
▇▇▇▇▇▇▇▇ Codognotto;
“Person”
means any natural person, corporation, limited liability company, trust,
association, company, partnership, joint venture or other entity and any
governmental agency, instrumentality or political subdivision;
“Shares”
means shares in the capital of the Company of whatever class, including Common
Shares, Preferred Registered Shares and the Golden Share currently issued or
hereafter acquired;
“Shareholders”
means B&D and JGC and their respective Permitted Transferees from time to
time in accordance herewith;
“Transfer”
means in relation to any Share or any legal or beneficial interest in a Share,
includes, whether voluntarily or involuntarily, (i) the sale, transfer, lease,
assignment, grant, renunciation, alienation, or disposal of such Share or of
any
right or interest which a Person may have in the Company as a result of such
right or interest in that Share; (ii) entering into any agreement in respect
of
the votes attached to such Share; (iii) creating or granting any Encumbrance
over or in respect of such Share except if the Person in whose favour the
Encumbrance has been given or created will have agreed in writing to be bound
by
the provisions of this Agreement; and (iv) any agreement (whether or not subject
to conditions) to do or create or grant any of the foregoing.
2.
TRANSFER OF SHARES
2.1. Each
Shareholder undertakes that it will not Transfer any of its Shares during the
term of this Agreement otherwise than in accordance with the provisions of
this
Agreement.
2.2. Any
attempted Transfer other than in accordance with this Agreement shall be void
ab
initio,
and the
Company shall not give effect to any Transfer made in contravention of the
provisions of this section or any other express provision of this Agreement
and
shall not reflect on its records any changes in record ownership of the Shares
pursuant to any such attempted Transfer.
3.
RIGHTS OF SHARES
Common
Shares
| 3.1. |
Other
than other rights referred to in the Articles of Association of the
Company and the rights of Preferred Registered Shares and the Golden
Share, Common Shares shall have rights to vote in the general meetings
of
shareholders of the Company and to receive
dividends.
|
Preferred
Registered Shares
| 3.2. |
The
Preferred Registered Shares issued by the Company gives to its holders
the
following rights:
|
| (l) |
to
indicate and elect two (2) Directors of the Company, out of the total
of 3
(three) Directors, being agreed that one of these directors shall be
▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇. ▇▇. ▇▇▇▇▇ cannot be destituted by the preferred
registered shares owner in any event. And in case ▇▇. ▇▇▇▇▇ is deemed
incapable to practice any acts or in case of death, a substitute director
shall be automatically appointed, and such director shall be ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. , or whoever she indicates. Mr. Carlos agrees with
her
indication and accepts the function. No corporate act shall be necessary
to empower him, since this document shall be considered as final and
binding;
|
| (m) |
to
veto for the period of 3 (three) years counted as of the present date,
any
direct or indirect transaction with the assets of the Company, as follows:
(i) the sale of quotas or rights to acquire quotas or participation
in the
invested companies Socan
Produtos Alimentícios Ltda., Geskan Indústria e Comércio Ltda. and ▇▇▇▇▇
Canaan Indústria e Comércio Ltda. (the “Invested Companies”); (ii) the
creation
of a security interest in, or pledging or otherwise encumbering any
part
or all of the Invested Companies quotas; and (iii) the renting or leasing
of any property of the Company except if necessary for the normal
conduction of the business of the
Company;
|
| (n) |
to
veto for the period of 3 (three) years counted as of the present date,
the
reorganization, consolidation, merger, liquidation, readjustment of,
or
other change in the Invested Companies;
|
| (o) |
to
veto for the period of 3 (three) years counted as of the present date,
any
direct or indirect transaction with the assets of the Invested Companies,
as follows: (i) the sale of quotas or rights to acquire quotas or
participation in the Invested Companies;
(ii) the creation
of a security interest in, or pledging or otherwise encumbering any
part
or all of the Invested Companies assets except if necessary for the
normal
conduction of the businesses of the Invested Companies; and (iii) the
renting or leasing of any property of the Invested Companies except
if
necessary for the normal conduction of the businesses of the Invested
Companies;
|
| (p) |
convert
the Preferred Registered Shares into 198 Common Shares after the payment
to the holders, or to anyone indicated by the holders, of the Common
Shares of the Company of the amount of US$ 37,500,000.00 payable,
alternatively, in following forms, within six (six) months from this
date
(the “Payment Date”): (a) with the delivery of 50.000.000 shares issued by
B&D Food Corp., if and when such shares reaches the minimum market
price of US$ 0.75 each and the liquidity of those shares reaches de
percentage of 2.5% of total outstanding/issued shares as a daily average
for the six month, prior to the Payment Date; or (b) in cash, for the
amount of US$ 37,500,000.00, prior to the Payment Date; or (c) a
combination of shares issued by B&D Food Corp. and cash, as provided
for in items “(a)” and “(b)” above until the Payment Date; Nothwistanding
JGC may opt to receive the 50.000.000 shares issued by B&D Food Corp
irrespectively of the share price at anytime within the 36 months,
by
receiving those shares JGC shall cause the company to convert the
preferred register shares into common shares as stated bellow (f).As
of
this date B&D Food Corp has 147.900.000 shares
outstanding.
|
| (q) |
The
holders of Common Shares are irrevocably obliged to, upon receiving
the
cash and/or the shares of B&D Food Corp., as referred to in item “(e)”
above, approve and cause the conversion of Preferred Registered Shares
into Common Shares;
|
| (r) |
The
Preferred Registered Shares shall be cancelled, without the right of
their
Preferred Registered Shareholders to any money, right or indemnification,
if not converted into Common Shares after the payment of the price
(cash
or B&D Food Corp. shares) referred to in item “(e)”
above;
|
| (s) |
To
veto any amendment to the Articles of Association either by shareholders
or directors of the Company during the period counted as of the present
date until the Payment Date;
|
| (t) |
Any
shareholders or director of the Company or the Invested Companies
intending to perform or carry on any of the transactions described
above,
shall give 10-day prior notice to the Preferred registered Shares holders
so that they can use their veto powers to impede or halt any of the
above
mentioned transactions;
|
| (u) |
Preferred
Registered Shares shall not have rights to received any dividends from
the
Company;
|
| (v) |
Other
than the powers referred to above, no other right is conferred to the
Preferred Shares.
|
Golden
Share
| 3.3. |
The
Golden Share issued by the Company gives its holders the following
rights:
|
| (a) |
to
indicate and elect one (1) Director of the Company or any substitute,
out
of the total of 3 (three) Directors;
|
| (b) |
to
veto the election of any Director of the Company or the Invested
Companies;
|
| (c) |
to
veto any direct or indirect transaction with the assets of the Company,
including but not limited to (i) the sale of quotas or rights to acquire
quotas or participation in invested companies, including but not limited
to Socan
Produtos Alimentícios Ltda., Geskan Indústria e Comércio Ltda. and ▇▇▇▇▇
Canaan Indústria e Comércio Ltda. (the “Invested Companies”); (ii) the
creation
of a security interest in, or pledging or otherwise encumbering any
part
or all of the Invested Companies quotas; and (iii) the renting or leasing
of any property of the Company;
|
| (d) |
to
veto the reorganization, consolidation, merger, liquidation, readjustment
of, or other change in any corporation, company, or association in
which
the Company has, indirect or indirectly, an interest or shareholding,
including the Invested Companies;
|
| (e) |
to
veto any direct or indirect transaction with the assets of the Invested
Companies, including but not limited to (i) the sale of quotas or rights
to acquire quotas or participation in invested companies, including
but
not limited to the
Invested Companies; (ii) the creation
of a security interest in, or pledging or otherwise encumbering any
part
or all of the Invested Companies assets; (iii) the renting or leasing
of
any property of the Invested Companies; and (iv) the exchanging of
any
assets of the company;
|
| (f) |
To
veto any amendment to the Articles of Association either by shareholders
or directors of the Company in the Company and/or in the Invested
Companies. The only authorized person to be able to represent the Company
in Brazil shall be the attorney in fact appointed by ▇▇▇▇ ▇▇▇▇▇▇▇▇
Codognotto;
|
| (g) |
Any
shareholders or director of the Company or the Invested Companies
intending to perform or carry on any of the transactions described
above,
shall give 10-day prior notice to the Golden Share holder so that he
can
use his veto powers to impede or halt any of the above mentioned
transactions;
|
| (h) |
The
Golden Share shall be cancelled, without the right of its holder to
any
money, right or indemnification, when the Preferred registered Shares
are
converted into Common Shares after the payment of the price (cash or
B&D Food Corp. shares) referred to in item “(e)” of the Clause 3.2
above;
|
| 3.4. |
Each
Shareholder undertakes to exercise all voting rights and to cause that
all
directors indicated by them exercise its powers in accordance with
this
Agreement.
|
3.5.
Nomination of the representative of the company in Brazil as Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Codognotto or any appointee of his irrevocable for the period of 3 years. In
case of necessary absence of ▇▇. ▇▇▇▇▇▇▇▇ or in case he is deemed incapable
to
practice any acts, a substitute director shall be automatically appointed,
and
such director shall be ▇▇▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Codognotto or whoever she
indicates. Mrs. ▇▇▇▇ agrees with her indication and accepts the function. No
corporate act shall be necessary to empower her, since this document shall
be
considered as final and binding.
3.6.
It
is hereby agreed that the registered trademarks (or on the process of
registration) brand names, ▇▇▇▇▇, Jubileu, Marumbi, Guaiba for sugar and Coffee,
Perola for sugar, and Medalia de Ouro for coffee, which are currently assets
of
Socan are not part of this agreement being the sole ownership
of
JGC
or ▇▇▇▇
▇▇▇▇▇▇▇▇ Codognotto.
4. GOVERNING
LAW AND DISPUTE RESOLUTION
4.1.
This
Agreement shall be governed by and construed in all respects in accordance
with
the laws of the British Virgin Islands. Any disputes among the Parties shall
be
resolved by the Courts of New York.
5.
DURATION AND TERMINATION
This
Agreement shall continue in full force and effect for thirty six (36) months
from this date.
6.
WAIVERS
6.1.
No
delay in exercising or failure to exercise any right or remedy under this
Agreement shall operate as a waiver thereof nor shall any single or partial
exercise of any right or remedy preclude either the further exercise thereof
or
the exercise of any other right or remedy provided in this
Agreement.
6.2.
In
the event that any party shall expressly waive any breach, default or omission
hereunder, without the prior written consent of the other parties hereto, no
such waiver shall apply to, or operate as, a waiver of similar breaches,
defaults or omissions or be deemed to be a waiver of any other breach, default
or omission hereunder.
7.
ASSIGNMENT
No
party
hereto shall be entitled to transfer this Agreement or any of its rights and
obligations hereunder without the prior written consent of the other
parties.
8.
ENTIRE AGREEMENT
8.1.
This
Agreement constitutes the entire agreement between the parties hereto concerning
the subject matter hereof and supersedes all prior agreements between the
parties concerning the subject matter hereof. Except as provided herein, no
amendment, change or additions hereto shall be effective or binding on any
party
unless reduced to writing and executed by all of the parties
hereto.
8.2.
Each
of the parties acknowledges that in entering into this Agreement it is not
relying on any representation or other statement which is not set out in this
Agreement.
8.3.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Subject to the
immediately preceding sentence, this Agreement shall not run to the benefit
of
or be enforceable by any Person other than a party to this Agreement and its
successors and permitted assigns.
9.
NOTICES
9.1.
All
notices and communications under this Agreement shall be given in writing and
shall be delivered to the relevant party or sent by registered airmail or
facsimile to the address of that party or that party's facsimile number
specified in Section 9.2. Unless otherwise specified herein, each notice or
other communication shall be deemed effective or having been given (i) on the
date received, if personally delivered, (ii) eight (8) business days after
being
sent, if sent by registered airmail, or (iii) one (1) business day after being
sent, if sent by telecopier with confirmation of transmission.
9.2.
Notices and communications shall be addressed as follows:
For
B&D Food :
▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,▇▇,▇▇▇▇
Att:
▇▇▇▇▇▇ ▇▇▇▇▇▇
For
JGC
Rua
senador Mozart Lago 251-D
Faz.
Botafogo, Acari-Rio De Janeiro-RJ -21530-210
or
such
other address of a party, Person and/or fax number as that party shall have
notified in writing to all other parties in accordance with Section
9.1.
9.3.
All
notices and communications shall be given and made in the English
language.
10.
COUNTERPARTS
This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, with the same effect as if all parties had
signed the same document. All such counterparts shall be deemed an original,
shall be construed together and shall constitute one and the same
instrument.
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its duly authorised representative as of the date first set forth
above.
B&D
Food Corp.
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Chairman
▇▇▇▇
▇▇▇▇▇▇▇▇ Codognotto
By:
/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇ Codognotto
Title:
____________________
▇▇▇▇▇▇▇
Trading S.A.
By:
/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇ Codognotto
Title:
____________________