EXHIBIT 10.14
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(B)(4),
200.83 and 230.406
FIRST AMENDMENT TO THE
JOINT VENTURE
AND
STRATEGIC PARTNERING AGREEMENT
THIS FIRST AMENDMENT TO THE JOINT VENTURE AND STRATEGIC PARTNERING AGREEMENT
(the "AMENDMENT") is made and entered into as of this 18th day of August, 2000,
by and between
A. TECH ION INDUSTRIAL BRAZIL S.A., a corporation organized and existing under
the laws of Brazil, with a principal place of business at Xx. Xxxxxxxx
x/xx, Xxxxxxxxxx Xxxxxxxx, Xxxxxx, 00000-000, Xxxxxx ("TECH ION"); and
B. SUREBEAM CORPORATION, a corporation organized and existing under the laws
of the State of Delaware, United States of America ("USA") with a principal
place of business at 0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000,
XXX, or one of its subsidiaries ("SUREBEAM CORPORATION"); (hereinafter
referred to collectively as the "PARTIES" and individually as a "PARTY"
except where otherwise indicated), with the consent and joinder of
C. XXXX FRANCISCO BUFARA XX XXXXXXXX, Brazilian individual, bearer of the
identity card no RG 01.736.772-3, resident at Xxx Xxxxxxx Xxxxxxxxx
Xxxxxxxx xx 000, Xxx Xxxxx, Xxxxxx; and
D. JFBM PARTICIPACOES LTDA., a corporation organized and existing under the
laws of Brazil, with a principal place of business at Xx. Xxxx xx Xxxxx xx
0000, xxxx 00.
WHEREAS:
1. The Parties have entered into a Joint Venture and Strategic Partnering
Agreement on May 18, 2000 (the "AGREEMENT"), establishing several provisions
with respect to the formation of a joint venture between the Parties to exploit
and engage in the business of food and food products irradiation in Brazil;
2. The Parties have agreed to amend certain provisions of the Agreement, in
accordance with Section 12.14 thereof,
1
* Confidential Treatment Requested
Now, therefore, in consideration of the premises and mutual covenants and
agreements contained herein, the Parties hereby agree to enter into this First
Amendment to the Agreement, pursuant to the clauses and conditions set forth
below.
CLAUSE ONE - AMENDMENTS
1.1 In accordance with Section 12.14 of the Agreement, the Parties hereby
agree to amend the Agreement as follows:
SECTION 1 - "TRADEMARK LICENSE AGREEMENT: The definition of "Trademark License
Agreement" shall read as follows:
"TRADEMARK LICENSE AGREEMENT" MEANS THE AGREEMENT TO BE EXECUTED
BETWEEN SUREBEAM CORPORATION AND/OR TECH ION, AS THE CASE MAY BE, AS
LICENSOR(S), AND THE COMPANY, AS LICENSEE, IN FORM AND SUBSTANCE
SATISFACTORY TO THE PARTIES."
Section 2.1(a): Section 2.1(a) shall read as follows:
"2.1(a) TITAN SUREBEAM AND SUREBEAM HOLDING COMPANY LTDA. A COMPANY
HAVING THE NAME TITAN SUREBEAM BRAZIL, OR SUCH OTHER NAME AS DETERMINED
BY SUREBEAM CORPORATION, WILL BE FORMED BY SUREBEAM CORPORATION, AT ITS
OWN EXPENSE. TITAN SUREBEAM BRAZIL WILL BE INCORPORATED UNDER THE LAWS
OF THE UNITED STATES. AFTER DULY FORMED AND REGISTERED, TITAN SUREBEAM
BRAZIL WILL CAUSE THE FORMATION, AT ITS OWN EXPENSE, OF A COMPANY
HAVING THE NAME A FULLY OWNED SUBSIDIARY NAMED SUREBEAM HOLDING COMPANY
LTDA., SUCH COMPANY TO BE TITAN SUREBEAM BRAZIL AND SUREBEAM HOLDING
COMPANY LTDA. SHALL SERVE AS SUREBEAM CORPORATION'S VEHICLES TO HOLD
THE INTEREST IN THE JOINT VENTURE COMPANY SUREBEAM BRAZIL LTDA."
Section 2.6(c): Section 2.6(c) shall read as follows:
"2.6(c) SUREBEAM CORPORATION, THROUGH ITS SUBSIDIARY "SUREBEAM HOLDING
COMPANY LTDA.", SHALL HAVE THE DISCRETIONARY RIGHT, EXERCISABLE AT ANY
TIME WITHIN 20 YEARS AS OF THE CLOSING DATE, TO SUBSCRIBE FOR
ADDITIONAL QUOTAS OF THE COMPANY'S CAPITAL IN ORDER TO CAUSE SUREBEAM
HOLDING COMPANY LTDA. TO HOLD A MAXIMUM 50% EQUITY OWNERSHIP INTEREST
IN THE COMPANY, BY PAYMENT OF US$1,000,000.00 (ONE MILLION DOLLARS) TO
THE COMPANY, VIA CAPITAL INCREASE OR ANY OTHER SUITABLE ARRANGEMENTS TO
BE AGREED BY THE PARTIES. [...***...] AGREES TO WAIVE ITS RIGHT OF
FIRST REFUSAL TO PARTICIPATE IN SUCH CAPITAL INCREASE AND TO SIGN ANY
DOCUMENT REQUIRED BY LAW AND BY THE OTHER PARTY TO EFFECT THE CAPITAL
INCREASE."
2
* Confidential Treatment Requested
SECTION 3.2. The new date for the conclusion of the Post Closing Obligations set
forth in Section 3.2 of the Agreement shall be December 20, 2000.
"3.2 CLOSING DATE. THE CLOSING DATE IS THE DATE MENTIONED IN THE
PREAMBLE OF THIS AGREEMENT. IN THE EVENT THAT THE POST CLOSING
OBLIGATIONS LISTED IN SECTION 3.3 ARE NOT COMPLIED WITH ON OR BEFORE
DECEMBER 20, 2000, THROUGH THE FAULT OF NEITHER PARTY, THIS AGREEMENT
SHALL AUTOMATICALLY TERMINATE UNLESS THE PARTIES OTHERWISE AGREE IN
WRITING, AND, UPON SUCH TERMINATION, THE PARTIES SHALL HAVE NO FURTHER
OBLIGATIONS HEREUNDER."
SECTION 6.1: Section 6.1 shall read as follows:
"6.1. PURCHASE AGREEMENT. TECH ION WILL PURCHASE ELECTRON BEAM AND
X-RAY SYSTEMS, EQUIPMENT AND SERVICES [...***...] FROM [...***...] IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE EQUIPMENT PURCHASE
AGREEMENT TO BE ENTERED INTO BY THE PARTIES. THE PRICES OF SUCH
SYSTEMS, EQUIPMENT AND SERVICES WILL BE AT PRICES NOT EXCEEDING THE
MARKET VALUE OF SUCH SYSTEMS, EQUIPMENT AND SERVICES, AND AS SET FORTH
IN THE EQUIPMENT PURCHASE AGREEMENT. THE MARKET VALUE WILL BE EQUAL TO
THE PRICE OF SUBSTANTIALLY SIMILAR SYSTEMS, EQUIPMENT AND SERVICES,
UNDER SUBSTANTIALLY SIMILAR TERMS AND CONDITIONS, THAT COULD BE
OBTAINED ON THE OPEN MARKET. THE MARKET VALUE WILL BE REVIEWED ANNUALLY
BY THE BOARD OF DIRECTORS AND WILL BE COMPARED TO, AMONG OTHER THINGS,
WRITTEN PROPOSALS CONTAINING SUBSTANTIALLY SIMILAR SCOPE OF WORK UNDER
SUBSTANTIALLY SIMILAR TERMS AND CONDITIONS. ADDITIONALLY, THE TECH ION
WILL BE THE SOLE AND EXCLUSIVE PROVIDER OF ELECTRON BEAM AND X-RAY
SYSTEMS, EQUIPMENT AND SERVICES TO TECH ION DURING THE TERM OF THIS
AGREEMENT, AS LONG AS THE PRICES CHARGED BY [...***...] ARE
[...***...]."
CLAUSE TWO - REPRESENTATION AND WARRANTIES
2.1 Each Party represents and warrants that (a) the execution of this
Amendment by it has been duly authorized by all necessary and
appropriate corporate or governmental action, (b) the execution of this
Amendment and the performance of its obligations hereunder will not
conflict with, or result in a breach of or default under, any agreement
or instrument material to it, to which it is a party or by which it is
bound, or any order, decree or judgment of any court or governmental
agency or body, and (c) this Amendment together with the Agreement
constitute the valid and legally binding obligation of such Party,
enforceable in accordance with its terms, except as such enforceability
may be affected by principles of bankruptcy, reorganization or other
similar laws of general applicability.
CLAUSE THREE - GENERAL PROVISIONS
3.1 If any provision of this Amendment shall be determined by any court of
competent jurisdiction to be invalid or unenforceable, the remainder of
this Amendment or of the
3
* Confidential Treatment Requested
Agreement other than that portion determined to be invalid or
unenforceable shall not be affected thereby, and each valid provision
hereof shall be enforced to the fullest extent permitted by law.
3.2 This Amendment, together with the Agreement constitute the entire
agreement between the parties, and supersedes all prior agreements or
understandings between them with respect to the matters referred to
herein.
3.3 The Parties hereby confirm and ratify all terms and conditions of the
Agreement that were not subject to amendments pursuant to Clause one
Herein, which terms and conditions shall remain in full force and
effect, including the Post Closing Obligations.
3.4 This Amendment shall not be governed by, and construed in accordance
with, the laws of Brazil.
IN WITNESS WHEREOF, the Parties have duly executed and delivered this as an
instrument as of this 18th day of August, 2000 in three (3) copies of equal form
substance, with the undersigned witnesses.
TECH ION INDUSTRIAL BRASIL S.A. SUREBEAM CORPORATION
By: /s/ XXXX FRANCISCO BUFARA XX XXXXXXXX By: /s/ XXXXX X. XXXXXXXXX
-------------------------------------- ---------------------------------
Name: Xxxx Francisco Bufara xx Xxxxxxxx Name: Xxxxx X. Xxxxxxxxx
-------------------------------
Title: Chairman Title: President & CEO
------------------------------
JFBM PARTICIPACOES LTDA.
By: /s/ XXXX FRANCISCO BUFARA XX XXXXXXXX /s/ XXXX FRANCISCO BUFARA XX XXXXXXXX
-------------------------------------- -------------------------------------
Name: Xxxx Francisco Bufara de Xxxxxxxx XXXX FRANCISCO BUFARA DE
Title: President XXXXXXXX
WITNESSES:
1. : /s/ ILLEGIBLE 2. /s/ XXXXX X. XXXXXXX
------------------------------------- -----------------------------------
Name: ILLEGIBLE Name: Xxxxx X. Xxxxxxx
ID: 10915403-0, IFP ID: VP & CFO
4
* Confidential Treatment Requested
JOINT VENTURE
AND
STRATEGIC PARTNERING AGREEMENT
THIS JOINT VENTURE AND STRATEGIC PARTNERING AGREEMENT (the "AGREEMENT") is
made and entered into as of this 18th day of May, 2000, by and between
TECHION INDUSTRIAL BRAZIL S.A., a corporation organized and existing under
the laws of Brazil, with a principal place of business at Xx. Xxxxxxxx
x/xxxxx, Xxxxxxxxxx Xxxxxxxx, Xxxxxx, 00000-000, Xxxxxx, (hereinafter
referred to as "TECH ION"), and SUREBEAM CORPORATION, a corporation organized
and existing under the laws of the State of Delaware, United States of
America ("USA") with a principal place of business at 0000 Xxxxxxx Xxxx Xxxx,
Xxx Xxxxx, Xxxxxxxxxx, 00000, XXX, or one of its subsidiaries (hereinafter
referred to as "SUREBEAM CORPORATION"), (hereinafter referred to collectively
as the "PARTIES" and individually as a "PARTY" except where otherwise
indicated), with the consent and joinder of XXXX FRANCISCO BUFARA XX
XXXXXXXX, Brazilian individual, bearer of the identity card north RG
01.736.772-3, resident at Xxx Xxxxxxx Xxxxxxxxx Xxxxxxxx xxxxx 000, Xxx
Xxxxx, Xxxxxx (hereinafter referred to as "XXXXXXXX"); and JFBM PARTICIPACOES
LTDA., a corporation organized and existing under the laws of Brazil, with a
principal place of business at Xx. Xxxx xx Xxxxx xxxxx 0000, xxxx 00, Xxxxxx
(hereinafter referred to as "JFBM"). (Xxxxxxxx and JFBM hereinafter referred
to collectively as "TECH ION'S SHAREHOLDERS").
WITNESSETH
WHEREAS, Surebeam Corporation, a company engaged in designing, manufacturing,
selling, installing, operating and servicing product disinfestation,
pasteurization and sterilization equipment and systems, including its patented
electron beam and x-ray equipment and systems, wishes to establish a wholly
owned subsidiary, Titan Surebeam Brazil, or some similar named organization
(hereinafter "TITAN SUREBEAM BRAZIL"); and
WHEREAS, Tech Ion is engaged in the business of buying and selling of food and
food products in Brazil; and
5
* Confidential Treatment Requested
WHEREAS, Surebeam Corporation, through its subsidiary Titan Surebeam Brazil, and
Tech Ion wish to jointly establish Surebeam Brazil (hereinafter the "COMPANY"),
a company organized under the laws of the country of Brazil, with the desire to
jointly engage in the business of providing food and food product irradiation
and pasteurization services and industrial irradiation equipment to various food
companies in Brazil, including food producers and food wholesalers using
Surebeam Corporation's patented electron beam and x-ray technology; and
WHEREAS, the Parties intend for the Company to be the exclusive means by which
Tech Ion or any of its Affiliates obtains electron beam and x-ray systems,
equipment and services; and
WHEREAS, the Parties desire to set forth their mutual understandings regarding
the relations among them, and their respective rights and obligations, with
respect to the Company.
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows.
1. DEFINITIONS.
DEFINED TERMS. In this Agreement, the following words and expressions shall have
the meanings as follows:
"AFFILIATE" means any firm, company or corporation of which a party with respect
to which the term is used directly or indirectly controls, is controlled by or
is under common control with, such Party. As used in the preceding sentence,
"control means the right to exercise, directly or indirectly, more than fifty
percent (50%) of the voting rights attributable to the shares of the controlled
entity, or possessing, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled entity, including
without limitation, the power to appoint its managing director.
This "AGREEMENT" means this agreement including all annexes, exhibits and
attachments.
The "BOARD" means the Board of Directors of the Company.
The "BUSINESS PLAN" means the business plan for each of the Company's fiscal
years; the Business Plan for the first fiscal year to be mutually agreed in
writing by the Parties prior to the Closing.
"DIRECTOR" means a director of the Company.
"EQUIPMENT PURCHASE AGREEMENT" means the agreement to be executed between Titan
Surebeam Brazil and the Company in form and substance satisfactory to the
Parties.
6
"EQUITY QUOTAS" means the quotas of the Company outstanding from time to time,
having a par value per quota as specified in the Company's Articles of
Organization.
"NET ASSET VALUE" means the sum of the Company's consolidated capital, paid-in
surplus and retained earnings (deficit) accounts as determined in accordance
with generally accepted accounting principles in Brazil.
"PERSON" as used herein includes any person, firm or company or group of persons
or unincorporated body.
A "QUOTAHOLDER" means any beneficial holder of the Equity Quotas of the Company.
The "TERRITORY" means the country of Brazil.
"TRADEMARK LICENSE AGREEMENT" means the agreement to be executed between
Surebeam Corporation, as licensor, and the Company, as licensee, in form and
substance satisfactory to the parties.
2. THE COMPANY.
2.1 FORMATION.
(a) TITAN SUREBEAM AND SUREBEAM HOLDING COMPANY LTDA. A company having
the name Titan Surebeam Brazil, or such other name as determined by
Surebeam Corporation, will be formed by Surebeam Corporation, at its
own expense. Titan Surebeam Brazil will be incorporated under the laws
of the United States prior to the Closing and will be the controller
of Surebeam Holding Company Ltda., which shall have head offices in
Brazil and be formed under Brazilian laws prior to the Closing Date.
(b) SUREBEAM BRAZIL. The joint venture company having the name Surebeam
Brazil Ltda., or such other name as the Parties mutually agree, will
be incorporated under the laws of Brazil as soon as possible after the
Closing, and will assume the corporate form of a limited liability
quota company ("SOCIEDADE POR QUOTAS DE RESPONSABILIDADE LIMITADA").
Subject to the Surebeam Corporation's prior review and written
approval, Tech Ton will arrange for the Company to adopt the Articles
of Organization in the form and substance satisfactory to the Parties.
The provisions of the Articles of Organization shall be interpreted
and applied, to the maximum possible extent in a manner consistent
with and subject to the provisions hereof.
2.2 BUSINESS PURPOSE. The business and scope of activities of the Company shall
include the following
7
(a) To provide food and food product irradiation and pasteurization
services and equipment, and industrial irradiation equipment, to
various food companies in Brazil, including Tech Ion and other food
producers and food wholesalers using Surebeam Corporation's patented
electron beam and x-ray technology; and
(b) To provide other irradiation services and equipment in the Territory,
as the Board shall determine from time to time.
2.3 AUTHORIZATION. The Key Officers of the Company shall have the authority to
apply for and obtain any and all governmental authorizations, registrations,
permits or approvals necessary or desirable for the proper conduct of the
foregoing activities and to lease or purchase any real or personal property,
equipment, supplies or services and take any other lawful actions which may be
necessary incidental or convenient to the conduct of its business as
contemplated herein.
2.4 REGISTERED OFFICE. The registered office of the Company shall be such
address in Brazil as the Parties shall determine from time to time.
2.5 FISCAL YEAR. The fiscal year of the Company shall be the annual period
commencing January 1 of each year, or such other annual period as the Parties
shall determine from time to time.
2.6 CAPITALIZATION.
(a) The Company shall have an initial capital stock to be agreed by the
Parties. Titan Surebeam Brazil hereby agrees to subscribe for a number
of quotas of the Equity Quotas that will cause Titan Surebeam Brazil
to have a 19.9% interest in the Company, and Tech Ion hereby agrees to
subscribe for a number of quotas of the Equity Quotas that will cause
Tech Ion to have an 80.1% interest in the Company. Prior to the start
of the Company's operations, the Parties will approve a capital
increase of the Company in an amount to be mutually agreed and fully
subscribed by the Parties pursuant to their respective equity interest
in the Company.
(b) Any further increases of the Company's capital will depend on mutual
approval by the Parties and shall be subscribed and paid in by them
pursuant to their respective equity interest in the Company. The
Parties shall neither unreasonably withhold their approval for any
capital increase nor withhold their approval to the detriment of the
Company's business. If the approval is unreasonably withheld, then,
the Party denying its approval agrees to waive its right of first
refusal to participate in such capital increase and to sign any
document required by law and by the other Party to effect such capital
increase. In case the approval is withheld to the detriment of the
Company's business, then the Party withholding its approval shall
either agrees to waive its right of first refusal to participate in
such capital increase and to sign any document required by law and by
the other Party to effect such capital increase or shall liquidate its
investment in the Company in a
8
form to be opportunely agreed by the Parties.
(c) Titan Surebeam Brazil shall have the discretionary right, through its
subsidiary to be formed and called Surebeam Holding Company Ltda.,
exercisable at any time within 20 years as of the Closing Date, to
subscribe for additional quotas of the Company's capital in order for
Surebeam Holding Company Ltda. to have a 50% equity ownership interest
in the Company, by payment of US$1,000,000.00 (one million dollars).
[...***...] agrees to waive its right of first refusal to participate
in such capital increase and to sign any document required by law and
by the other Party to effect the capital increase.
2.7 WORKING CAPITAL LINE OF CREDIT.
(a) Surebeam Corporation or another Affiliate of The Titan Corporation,
will provide a working capital line of credit to Tech Ion of up to
[...***...] dollars ($[...***...]), with an interest rate of
[...***...] percent ([...***...]%) per year. This line of credit will
be 100% fully secured by the stock and assets of Tech Ion until fully
funded and transferred by Tech Ion to the Company, PROVIDED that such
transfer is (i) duly evidenced by Tech Ion; and (ii) not made as an
equity contribution in exchange for Equity Quotas. Provided that these
conditions are complied with, the line of credit will be 100% fully
secured by the stock and assets of the Company in accordance with the
terms of separate Pledge Agreements to be entered into by the
appropriate parties.
(b) The line of credit will be used to [...***...] of [...***...] and the
Company with respect to the [...***...]. [...***...] will review all
requests for funds made by [...***...] and [...***...] to determine,
in its reasonable discretion, whether or not such requests are for
valid business purposes with respect to the [...***...].
2.8 BUSINESS PLAN. The Company shall conduct its operations in accordance with
an annual plan (the "BUSINESS PLAN") which will be prepared by the President and
presented to the Board at least thirty (30) days prior to the beginning of each
of the Company's fiscal years. The Business Plan for the first fiscal year shall
include a capital budget detailing the capital expenditures necessary to enable
the Company to implement operations, and any other proposed capital
expenditures, and an operating budget, including a projected cash flow statement
for the period to which the budget relates. The Business Plan sets forth the
initial capitalization of the Company required to fund the capital budget and
any projected shortfalls in the operating budget. Each subsequent Business Plan
shall be consistent with the Company's then current strategic plan and shall
include a capital and operating budget for the relevant fiscal year and specify
any dividend or other quotaholder distributions, and shall be implemented
following unanimous ratification and approval by the Board of Directors. Absent
such unanimous ratification and approval by the Board, the Business Plan shall
be subject to the approval of a majority of the Quotaholders.
9
*Confidential Treatment Requested
3. REPRESENTATIONS.
3.1 The Parties represent and warrant that each of the following conditions
have been satisfied prior to the Closing;
(a) No government or governmental, or state agency or regulatory body
have:
(i) instituted or commenced or threatened any action, suit or
investigation to restrain, prohibit or otherwise challenge the
transactions to be effected hereby or contemplated herein or
(ii) threatened to take any legal action as a result or in
anticipation of the implementation of this Agreement, or
(iii) proposed or enacted any statute, order or regulation which would
prohibit, materially restrict or materially delay implementation
of this Agreement.
(b) There are no liens, pledges, or outstanding interests on The Parties
that might adversely effect the transactions contemplated in this
Agreement.
3.2 CLOSING DATE. The Closing Date is the date mentioned in the preamble of
this agreement. In the event that the post closing obligations listed in Section
3.3. are not complied with on or before November 20, 2000, through the fault of
neither Party, this Agreement shall automatically terminate unless the Parties
otherwise agree in writing, and, upon such termination, the Parties shall have
no further obligations hereunder.
3.3 POST CLOSING OBLIGATIONS.
(a) All approvals, consents, licenses and registrations from or with any
agency or regulatory authority of the Government of Brazil, necessary
to start the operations of the Company, shall be obtained.
(b) Suitable arrangements have been made for (i) procuring or providing
mutually agreed sites for locating the Company's facilities as well as
all necessary rights of way or easements, (ii) full access to the site
for Titan Surebeam Brazil and its contractors, (iii) all necessary
permits, licenses and approvals for the importation and installation
of the required equipment facilities in Brazil, and (vi) all approvals
for expatriate personnel necessary to install or operate the
equipment.
(c) An amendment to the Company's Articles of Organization will be
executed by the Parties setting forth: (i) a capital increase of the
Company to be fully subscribed by the Parties in accordance with the
provisions of Section 2.6 (a) hereof; (ii) the members of the
Company's Board of Directors appointed in accordance with the
10
provisions of Section 4.2 (a) hereof; (iii) the Key Officers of the
Company appointed in accordance with the provisions of Section 4.4
hereof.
(d) Tech Ion and Titan Surebeam Brazil will each make its equity
contribution in accordance with this Agreement.
(e) The Parties will enter into the Trademark Licensing Agreement, Stock
Option Agreement, Pledge Agreements and other ancillary agreements
that the Parties deem appropriate.
4. MANAGEMENT OF THE COMPANY.
4.1 MANAGEMENT AUTHORITY. Subject to the terms of this Agreement, the Company
shall be managed by the Board of Directors and by the Key Officers, as provided
herein.
4.2 THE BOARD OF DIRECTORS.
(a) The Board of Directors will consist initially of four (4) Directors,
each of which has equal voting rights regardless of the [...***...] in
the Company, and one of the two Directors indicated by [...***...]
shall be appointed as chairman of the Board. [...***...] shall be
entitled to appoint two (2) Directors, and [...***...] shall be
entitled to appoint two (2) Directors. Each Party shall be entitled,
but not required, to designate an alternate Director for each Director
it designates. Each Party shall have the right to replace the Director
designated by such Party, upon the giving of written notice to the
other Party and to the Company, at which time the Parties shall
execute an amendment to the Company's Articles of Organization to
provide for the withdrawal of such Director and the appointment of a
new member for the Board. Any vacancy shall be filled by the nominees
of the Party which designated the Director whose unavailability caused
such vacancy. Alternate Directors designated by any Party may serve in
the place of the Director designated by such Party if such Director is
absent from or unable to attend a Board meeting.
(b) In the event of a tie vote upon an issue submitted to the Board of
Directors for approval, the Chairman, or his designee, shall meet in
person with the [...***...] of [...***...], or his designee, and
attempt to resolve the tie. If the tie is not resolved within thirty
(30) days of the meeting, them the matter will be submitted to
arbitration in accordance with Section 12.7 hereof.
(c) The Parties shall cause the directors appointed by them to elect as
the Chairman of the Board Mr. Xxxx Francisco Bufara xx Xxxxxxxx.
(d) Regular meetings of the Board of Directors shall be held on regular
dates fixed in advance at least once per calendar quarter. Notice for
each meeting shall be given in accordance with the Articles of
Organization and the law.
11
* Confidential Treatment Requested
(e) No action shall be taken by the Board of Directors in the absence of a
quorum, which shall consist of not less than one director appointed by
[...***...] and one director appointed by [...***...]. Each Director
shall have one (1) vote. Except as otherwise expressly provided in
this Agreement, or in the Articles of Organization, all actions and
decisions of the Board of Directors shall require the affirmative vote
of a majority of the Directors (or alternate Directors) present at a
meeting of the Board of Directors duly called and held in accordance
with this Section 4.2. In the event a member of the Board of Directors
cannot be present at a meeting, such Director's alternate may attend
in such Director's place and such alternate shall so notify the
Secretary of the Company at or prior to the meeting. The Company shall
bear the cost and expense of the attendance of Directors at Board
meetings. The Board may also take action by written consent as may be
permitted by governing law. The Directors may participate in a Board
of Directors meeting by means of video conference call or telephone
conference call by means of which all Directors participating in the
meeting can hear each other and such participation will constitute
presence in person at such meeting.
4.3 ACTIONS REQUIRING SPECIAL APPROVAL.
(a) Actions of the Key Officers involving any of the matters enumerated
below shall be previously approved upon or pursuant to a majority vote
of the Directors (or alternate Directors) present at a meeting of the
Board of Directors duly called and held:
(i) the sale, mortgage, charge, lien, pledge or encumbrance of any of
the Company's assets unless such assets are sold or financed in
the ordinary course of business or the sale is made in connection
with the replacement of any assets sold;
(ii) the acquisition or formation of any subsidiary company or joint
venture or the making of any investments in any other company or
in any business other than in the food or food product
irradiation business;
(iii) the incurrence of any indebtedness or financial guarantees on
behalf of the Company which is greater than the equivalent in
Brazilian currency to US$100,000.00 (one hundred thousand US
Dollars);
(iv) the execution of any contract by or on behalf of the Company for
any purchases which are outside of the ordinary course of the
Company's business, irrespective of the amount involved;
(v) the voluntary discontinuance of a material business activity of
the Company or termination of the Company's business;
(vi) any lending by the Company, other than deposits with a banking or
financial institution;
12
* Confidential Treatment Requested
(b) Actions involving any of the matters enumerated below shall be
previously approved upon or pursuant to a unanimous vote of the
Quotaholders present at a Quotaholders' meeting duly called and held:
(i) the voluntary winding up or liquidation of the Company except as
may be provided for by specific provisions of this Agreement;
(ii) increasing or reducing the number of Directors of the Company or
any partially or wholly owned subsidiaries of the Company;
(iii) any changes to Quotaholders' contribution of debt or equity
capital or Quotaholders' debt guarantees, surety or indemnity,
and approval of any increases the Quotaholders' funding of the
Company (including equity contributions, Quotaholder loans,
Quotaholder debt guarantees, sureties or indemnities);
(iv) any amendment of the Company's Articles of Organization; the
registration of any Equity Quotas transfers acquired by any
transfer of Equity Quotas from one Quotaholder to another
Quotaholder or to a third party, except for transfers of Equity
Quotas made pursuant to Section 8 hereof.
4.4 KEY OFFICERS. The Key Officers of the Company shall be the President, Chief
Operating Officer, Chief Financial Officer and an officer without specific
designation. The Parties agree to cause the directors they indicated to appoint
as the President of the Company any such person the Chairman may designate,
subject to the prior written approval of Surebeam Corporation, which approval
shall not be unreasonably withheld. The Parties agree to cause the directors
they indicated to appoint as the Chief Financial Officer any such person Tech
Ion may designate, subject to the prior written approval of Surebeam
Corporation, which approval shall not be unreasonably withheld. The Key Officers
shall be confirmed by a majority vote of the Board of Directors.
(a) Each and every act and document involving any liability or obligation
to the Company, such as deeds of any nature whatsoever, checks,
promissory notes, bills of exchange, money orders, debt instruments,
in general, in addition to any agreement, including loan agreements,
and any other documents unspecified herein, shall be JOINTLY signed
by:
(i) two Key Officers, one indicated by [...***...] and one indicated
by [...***...]; or
(ii) one Key Officer and one attorney-in-fact vested with specific
powers, , one indicated by [...***...] and one indicated by
[...***...]; or
(iii) two (2) attorneys-in-fact vested with specific powers, one
indicated by [...***...] and one indicated by [...***...].
13
* Confidential Treatment Requested
4.5 PRESIDENT. The President shall have such authority as shall be granted to
him under the terms of this Agreement or as may from time to time be delegated
by him by the Board of Directors. The President shall be an employee of the
Company. Without limiting generality of the foregoing, the President shall have
the power to, jointly with another Key Officer:
(a) hire and discharge employees of the Company on behalf of the Company,
and generally determine the terms and conditions of their employment,
but subject to all applicable laws and regulations, and subject to the
labor and employment policies set by the Board of Directors;
(b) determine the prices and terms at which the goods and services of the
Company shall be marketed and provided, subject to any specific
directions of the Board of Directors;
(c) purchase goods and services required to be purchased by the Company,
and determine the terms of such purchase, subject to any specific
directions of the Board of Directors;
(d) conclude contracts and agreements in the Company's name and ensure
their fulfillment; and all other material contracts shall require the
approval of the Board of Directors;
(e) represent the Company on its relations with organizations, firms and
institutions including governmental authorities, subject to and
consistent with the policies of the Board of Directors;
(f) enter into loan agreements and generally attend to the financial
matters of the corporation, subject to any restrictions imposed by the
Board;
(g) promote and publicize the Company's products and services consistent
with the policies of the Board of Directors;
(h) account for the Company's operations in accordance with this Agreement
and any requirements imposed by the Board of Directors; and
(i) prepare the Company's strategic business plan in consultation with the
Board of Directors which shall set forth the mission, objectives and
direction of the Company.
4.6 VACANCIES. When a vacancy occurs in any of the executive offices including,
without limitation, in the office of the President, whether by death,
resignation, expiration of term
14
* Confidential Treatment Requested
or otherwise, it shall be filled in the manner set forth in the appropriate
Section above.
4.7 REMOVAL OF OFFICERS AND AGENTS. In the case of any officer or agent of the
Company nominated or appointed by either [...***...] or [...***...], either such
entity shall be empowered to remove such officer or agent at its sole discretion
following consultation with the Board of Directors. The Parties shall remove the
other officers or agents immediately upon determination of the Board of
Directors whenever the best interests of the Company will be served by the
removal. The removal shall be without prejudice to the contract rights, if any,
of the person so removed.
4.8 VOTING AGREEMENT. [...***...] will exercise all voting rights and powers
available to it in relation to the Company as well as procure the Directors
nominated by it on the Board of Directors to act in such manner as to give full
effect to the terms of this Agreement.
5. ACCOUNTS, REPORTS AND RIGHT OF INSPECTION.
5.1 BOOKS, RECORDS AND REPORTS.
(a) Xxxxxx Xxxxxxxx, LLP (hereinafter the "AUDITORS") will be the
independent audit firm for the Company and for Tech Ion.
(b) The Company shall maintain proper books and accounts on an accrual
basis in accordance with the provisions of this Agreement. All
financial reports referred to below shall be prepared in accordance
with Brazil's generally accepted accounting principles applied on a
consistent basis ("GAAP") and shall also be presented in accordance
with, or reconciled to, United States GAAP. Annually, upon the close
of the Fiscal Year (or as otherwise approved by the Board of
Directors), all such books and accounts of the Company and Tech Ion
shall be audited by the Auditors. Additionally, both Tech Ion and the
Company will be subject to quarterly reviews by the Auditors as set
forth below.
(c) Each Party shall be furnished with the following:
(i) within thirty (30) days after the end of each calendar month, a
monthly income and cash flow statement from the Company;
(ii) within forty-five (45) days after the end of each of the first
three quarters of each Fiscal Year, balance sheets of the Company
as of the end of such quarter and a statement of changes in
financial position of the Company for such quarter and for the
year to date, in each case prepared in accordance with Brazil and
U.S. GAAP and setting forth each case in comparative form the
figures as at the end of and for the previous Fiscal
15
* Confidential Treatment Requested
Year and such other financial information as may be reasonably
requested by the Board of Directors;
(iii) within 120 days after the end of each Fiscal year, audited
financial statements prepared in accordance with Brazil and
U.S. GAAP, including a balance sheet of the Company as at
the end of such year, a statement of income and earnings and
a statement of changes in financial position for the Company
for such year, and setting forth in each case in comparative
form the figures as at the end of and for the previous
Fiscal Year, together with all necessary notes and the
report of the accountants on such financial statements; and
(iv) at such times as the Board of Directors shall designate, such
other reports as may be requested by the Board of Directors.
5.2 RIGHT OF INSPECTION. Each Party, through its duly authorized
representatives, shall have the right, at its own expense, to examine and
inspect, at any reasonable time and for any purpose, any of the books, records
and accounts of the Company.
6. OTHER COVENANTS.
6.1 PURCHASE AGREEMENT. The Company will purchase electron beam and x-ray
systems, equipment and services [...***...] from [...***...] in accordance with
the terms and conditions of the Equipment Purchase Agreement to be entered into
by the parties. The prices of such systems, equipment and services will be at
prices not exceeding the market value of such systems, equipment and services,
and as set forth in the Equipment Purchase Agreement. The market value will be
equal to the price of substantially similar systems, equipment and services,
under substantially similar terms and conditions, that could be obtained on the
open market. The market value will be reviewed annually by the Board of
Directors and will be compared to, among other things, written proposals
containing substantially similar scope of work under substantially similar terms
and conditions. Additionally, the Company will be the sole and exclusive
provider of electron beam and x-ray systems, equipment and services to Tech Ion
during the term of this Agreement, as long as the prices charged by [...***...]
are [...***...].
(a) SECURITY. All electron beam and x-ray systems and equipment sold by
Titan Surebeam Brazil to the Company may be fully secured, as to 100%
of its value, by any or all of the following, at [...***...]
discretion:
(i) the systems, services and equipment being purchased;
(ii) the capital stock of the Company; and
(iii) the capital stock of Tech Ion.
(b) Financing.
16
* Confidential Treatment Requested
(i) [...***...] may elect, in its sole discretion, to obtain
financing for the equipment, systems and services sold to the
Company. If [...***...] makes this election, and such financing
is obtained, the payment of [...***...] of profit or fixed
payment, as described in 6.1(b)(ii) below, will not be in effect
and the Company will service such debt. Tech Ion and the Company
will assist Titan Surebeam Brazil in obtaining such financing.
(ii) If [...***...] elects, in its sole discretion, not to obtain
financing for the equipment, systems and services sold to the
Company, then the Company will make fixed monthly payments to
[...***...] for the purchase price based on a [...***...]
amortization with a [...***...] interest rate, until all the
electron beam or x-ray systems, services and equipment provided
by [...***...] to the Company, including any financing costs,
have been paid in full. Once [...***...] is paid in full for such
equipment, systems and services, Titan Surebeam Brazil or
Surebeam Holding Company Ltda. will be entitled to receive 19.9%
and Tech Ion the other 80.1% of the Company's net, after-tax
profit. Besides this distribution, Titan Surebeam Brazil or
Surebeam Holding Company Ltda. shall enter into a Technology
License Agreement whereby one or the other will receive a royalty
payment equal to 19.9% of the net profits.
6.2 COOPERATION. The Company and Tech Ion will work together to obtain for the
Company long term agreements from food companies, food producers, food
wholesalers and other potential customers in the food industry in Brazil for the
provision of food and food products irradiation services, systems and equipment.
Tech Ion will assist the Company in locating and obtaining facilities in Brazil
for the performance of such agreements and for the conduct of the Company's
business in general. Additionally, Tech Ion agrees to be a significant and
primary customer of the Company and agrees to enter into long term "take or pay"
type service contracts with the Company for the irradiation of food and food
products at market rates or competitive pricing.
6.3 [...***...]
6.4 RIGHT OF FIRST REFUSAL. Should [...***...] determine that electron beam
and/or x-ray systems, equipment and services are not the preferred source of
irradiation for a particular application, then [...***...] and the Company shall
have a right of first refusal to collectively provide the non-
17
* Confidential Treatment Requested
electron beam or electron beam system, equipment or services, which can come
either from Brazil or from abroad. If [...***...] and the Company elect not to
provide the non-electron/x-xxx xxxx system, equipment or services, then
[...***...] may obtain such non-electron/x-xxx xxxx system, equipment or
services from a third party source or provide the system, equipment, or services
itself.
6.5 TRADEMARKS. The Parties agree that trademarks, service marks, trade names,
logos, insignia and symbols (hereinafter collectively referred to as "INSIGNIA")
of any Party or any of its Affiliates will not be used by any other Party or the
Company in any way or manner without the prior written approval of the Party
owning such Insignia. Such approval shall be limited to the particular instance
giving rise to the need for such approval and shall not be construed as an
ongoing license or approval to use such Insignia in any other instances unless
otherwise agreed to by both parties in writing. The Parties will submit to the
owner of such Insignia all sales promotions, press releases and other publicity
matters furnished by them in connection with this Agreement in which any of the
Insignia is mentioned or language from which the connection of such Insignia may
be inferred or implied.
The Company will enter into Trademark License Agreements with both Surebeam
Corporation and Tech Ion pursuant to which the Company shall use the Surebeam
Corporation and Tech Ion Insignias, respectively, either alone or in co-branding
the Company's services, and in marketing and promoting the sale of such
services, subject to marketing considerations.
6.6 TECHNOLOGY DEVELOPMENT/PATENTS. If any technology development is required
by the Company during the term of this Agreement, [...***...] will be given a
right of first refusal to provide such technology development on reasonable
market terms. If for any reason [...***...] elects not to provide such
technology development to the Company, then Tech Ion shall have the right to
provide such technology development on reasonable market terms. [...***...] and
Tech Ion, as the case may be, will be the owner of any and all rights to the
technology developed by them, including the rights to any patents that may
result, and will grant to the Company a non-exclusive, royalty-free license to
use such developed technology so long as [...***...] and Tech Ion [...***...]
the Company, respectively. Any such development shall be pursuant to a separate
development agreement that will incorporate these principal terms. If neither
[...***...] nor Tech Ion elect not to provide such technology development, the
Company may have such work performed by a third party. The rights to the
technology developed by such third party will be owned by the Company, including
any patents that may result, and the Company will grant to [...***...] and to
Tech Ion a non-exclusive, royalty-free license to use such developed technology
so long as Titan Surebeam Brazil and Tech-Ion [...***...] the Company,
respectively. Any such development shall be pursuant to a separate development
agreement that will incorporate these principal terms.
Any technology developed during the term of this Agreement, as described above,
shall
18
* Confidential Treatment Requested
be applied, licensed, and/or exploited in Latin America exclusively through the
Company during the term of this Agreement. If such technology is applied,
licensed and/or exploited outside of Latin America, then the Company will be
entitled to receive [...***...] of the resulting net, after tax, profits with
respect thereto during the term of the Agreement.
6.7 COMPLIANCE WITH LAWS. In performing the transactions contemplated in this
Agreement, each Party shall comply with, and shall cause the Company to comply
with, all applicable laws, rules and regulations of Brazil, and the U.S. Foreign
Corrupt Practices Act, as applicable, and each Party shall hold the other
harmless from its failure to do so.
Neither Party nor the Company shall offer, give, promise or pay or cause to be
offered, given, promised or be paid directly or indirectly any money or thing of
value to any political party or official thereof, any candidate for political
office, or any officer, employee or agent of any government or instrumentality
of any government for the purposes of
(i) influencing any act or decision of such party, official thereof,
candidate, officer, employee or agent in his or its official
capacity, including a decision to fail to perform his or its
official functions with respect to any transaction contemplated
herein; or,
(ii) inducing any such party official thereof, candidate, officer,
employee or agent to use his or its influence with a government
or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality in order to assist
either Party or the Company in obtaining or retaining business
from or with, or directing business to, any person, firm or
corporation.
Neither Party nor the Company shall offer, give promise to pay, or cause to be
offered, given, promised or be paid any money or thing of value directly or
indirectly to any directors, officers, officials, employees or shareholders of
any nongovernmental customer or prospective customer or to such person's family,
or that are otherwise illegal under applicable law.
6.8 NON-COMPETE.
(a) Based on the intention of the Parties that the Company is to be the
exclusive means by which the Parties or any of their Affiliates its
Affiliates either obtain and/or provide, as applicable in accordance
with the activities of each Party, electron beam and x-ray systems,
equipment and services in Brazil, the Parties agree that, as long as
each of them is a Party to this Agreement, neither such Party, nor any
of its Affiliates, shall, without the prior written consent of the
Company, either individually or in association with others, establish,
facilitate the business of,
19
* Confidential Treatment Requested
operate, control, or have an ownership interest in or an employment
relationship with, directly or indirectly, any entity that carries on
the business of providing food and food product irradiation and
pasteurization services and industrial irradiation equipment using
electron beam and x-ray systems or technology to various food
companies in Brazil, or any other business activity undertaken by the
Company.
(b) the Parties shall promptly notify the Company in writing of any offer
they receive to enter into an arrangement that could result in a
violation of Section 6.1(a) and shall promptly remit to the Company
any profits, compensation, or other remuneration that such Party
receives as result of a violation of Section 6.1(a).
(c) Nothing in this Section 6.1 shall prevent the Parties from owning
[...***...].
(d) As a condition to employment or other engagement by the Company, the
Board of Directors may require that any officer or other employee of
the Company, or any consultant or other independent contractor engaged
by the Company, enter into a covenant similar to the provisions of
Section 6.1(a) and (b), both on his or her own behalf, on behalf of
his or her extended family, or on behalf of his or her employer, as
the case may be.
7. CONFIDENTIALITY. For purposes of this Section 7, the term "PARTY" shall be
interpreted to mean Surebeam Corporation, Tech Ion, Titan Surebeam Brazil
and the Company.
7.1 Each Party undertakes with the others to keep and procure that its
Affiliates, directors and employees keep in strict confidence all information,
knowledge, experience, data, drawings, designs and other material of a
confidential nature ("INFORMATION") communicated to it by or acquired from the
other or as a result of this Agreement. Included in the definition of
Information is information relating to the business of the Company as well as
information relating to the business of Surebeam Corporation (whether or not
such information relates to the territory in which the Company or Surebeam
Corporation or Titan Surebeam Brazil does business). No Party shall disclose any
such Information to any person whatsoever other than its directors or employees
directly concerned in the performance of this Agreement and the affairs of the
Company. Information made available to a Party as a result of the performance of
this Agreement shall not be used in competition with the other Party.
7.2 The provisions of this Section shall not apply to information which the
party concerned can prove was in its possession at the date of receipt or which
becomes public knowledge (except by reason or default of such Party) or which
such Party obtains from some other person with good legal title thereto, or is
independently developed by such Party.
7.3 Notwithstanding the provisions of this Section, each Party shall be at
liberty to disclose information where, and to the extent that, such disclosure
is properly made pursuant to
20
* Confidential Treatment Requested
and in accordance with a relevant statutory obligation or as otherwise may be
required by the Company in its business and regulatory activities with
government agencies, vendors or bankers; PROVIDED however that the disclosing
Party shall take reasonable steps to obtain, if possible, a written
confidentiality undertaking from the person to whom it wishes to disclose such
information, that is consistent with the terms of this Section and that the
Party from whom the disclosing party obtained the relevant information is given
prior written notice of such disclosure.
7.4 The provisions of this Section 7 shall remain in force for a period of
three years after termination of this Agreement for any reason.
8. SALE AND ASSIGNMENT OF OWNERSHIP.
8.1 TRANSFER RESTRICTION. Neither Tech Ion nor Titan Surebeam Brazil shall
sell, assign, give, pledge, encumber or otherwise transfer any Equity Quotas
owned by it, whether voluntarily or by operation of law, unless:
(a) such transfer complies with all applicable Brazil laws;
(b) the proposed transferee agrees in writing to assume all of the
obligations of the transferring Quotaholder and to comply with this
Agreement;
(c) the proposed transfer complies with the requirements of either Section
8.2 or 8.3 below; and
(d) in the case of a proposed transfer pursuant to Section 8.3, (i) a
period of three years has elapsed following the start of operations of
the Company, and (ii) the proposed transferee is not a provider of
irradiation systems, services and equipment in competition with
Surebeam Corporation or Titan Surebeam Brazil, or is otherwise engaged
in a business substantially similar to Surebeam Corporation or Titan
Surebeam Brazil unless Surebeam Corporation or Titan Surebeam Brazil
consents in writing to such transferee.
All sales, assignments, pledges or other transfers of ownership interests in the
Company not in compliance with the requirements of clauses (b), (c) or (d) above
shall require the prior majority approval of the Board of Directors.
8.2 PERMITTED TRANSFER. Either Tech Ion or Titan Surebeam Brazil may at any
time pledge, assign or transfer the [...***...] owned by it to any Affiliate of
such entity (a "PERMITTED TRANSFEREE"), provided that the transferor entity
guarantees in writing the performance by the transferee of the transferred
obligations and the transferee and transferor agree in writing that should such
transferee cease to be an Affiliate of transferor the transferee will reassign
its interest and obligations to the transferor and the transferor will accept.
No such assignment pledge or transfer under this Section 8.2 shall relieve an
entity of any of its obligations hereunder, including, without limitation, those
arising under Section 7.
21
* Confidential Treatment Requested
8.3 SALE OF TECH ION. Tech Ion's Shareholders agree that they shall not sell or
otherwise transfer to any third party, all or any part of the capital stock of
Tech Ion without the prior written consent of Surebeam Corporation, which
consent shall not be unreasonably withheld. Tech Ion hereby agrees that it shall
not sell or otherwise transfer substantially all its assets without the prior
written consent of Surebeam Corporation, which consent shall not be unreasonably
withheld. In the event that Surebeam Corporation does not consent to such sales
or transfers, then Surebeam Corporation shall acquire such stock or assets of
Tech Ion under the same terms and conditions offered by the third party offeror,
PROVIDED, HOWEVER, that the third party offer is confirmable as being valid, at
no greater than fair market value, and under reasonable terms and conditions.
8.4 RIGHTS OF FIRST REFUSAL.
(a) Each Quotaholder of the Company hereby extends to the other
Quotaholder a right of first refusal with respect to the sale of the
Equity Quotas held by it or its Affiliates. The price of the Equity
Quotas will be determined by an independent public accounting firm
mutually agreed to by the Parties. Additionally, if at any time during
the term hereof either Quotaholder or its respective Affiliates (the
"OFFEROR PARTY") receives a bona fide offer from a third party ("THIRD
PARTY OFFEROR") to purchase said Equity Quotas which offer is
acceptable to the Offeror Party ("THIRD PARTY OFFER"), then the
Offeror Party shall first offer to sell said Quotas to the other
Quotaholder at the same price and an the same terms as have been
offered by the Third Party Offeror.
(b) In the event either Quotaholder receives an unsolicited offer from a
third party or parties for the purchase of such Quotaholder's Equity
Quotas, the Quotaholder receiving such offer will promptly inform the
other Quotaholder of the name, business and address of the third
party.
(c) The Offeror Party's notice of the offer to the other Quotaholder shall
set forth the name and address of the Third Party Offeror, the per
quota price offered by the Third Party Offeror, the number of Equity
Quotas to which the offer applies and the other terms of the Third
Party Offer.
(d) The Offeror Party's offer shall remain effective for acceptance by the
other Quotaholder (the "ACCEPTANCE PERIOD") for 45 days from the date
of the Offeror Party's notice. During the Acceptance Period, the other
Quotaholder may accept the offer to purchase all, and not only a part
of, the Equity Quotas offered by the Offeror Party by giving written
notice of such acceptance to the Offeror Party.
(e) If the other Quotaholder rejects or fails to accept such offer, the
Offeror Party shall, subject to the prior written consent of such
other Quotaholder, which consent shall not be unreasonably withheld,
have the right, exercisable not later than 90 days following the
expiration of the Acceptance Period, to consummate the sale of the
offered quotas to the Third Party Offeror at a price not lower than,
22
and on terms not more favorable than the Third Party Offer. If the
Offeror Party does not consummate such sale within said 90-day period,
such offered Equity Quotas shall again be subject in all respects to
the terms, conditions, and restrictions provided in this Section 8.4.
(f) If the other Quotaholder agrees to purchase the offered Equity Quotas
pursuant to this Section 8.4, the closing shall take place not later
than thirty (30) days following the other Quotaholder's notice of
acceptance. The time and place of the closing shall be mutually
agreed.
9. TERMINATION.
9.1 Any non-defaulting Party (the "INNOCENT PARTY") shall have the right to give
notice in writing as appropriate to the other Party (THE "DEFAULTING PARTY")
that the Innocent Party intends to exercise its right to call for the transfer
of the Defaulting Party's Equity Quotas to the Innocent Party in any of the
following events.
(a) material breach by the Defaulting Party of any of its obligations
under this Agreement and failure by such Defaulting Party to remedy
such breach (if capable of remedy) [...***...] of being required by
the Innocent Party by notice so to do.
(b) a voluntary arrangement being proposed or approved or an
administration order being made or a receiver or administrative
receiver being appointed in respect of the Defaulting Party or of a
substantial part of the Defaulting Party's assets or undertaking or a
winding-up resolution or petition being passed or presented in
relation to the Defaulting Party (otherwise than for the purposes of
reconstruction or amalgamation) or any circumstances arising which
entitle the Court or a creditor to appoint a receiver, administrative
receiver or administrator or to present a winding-up petition or to
make a winding-up order in respect of the Defaulting Party or other
similar or equivalent action being taken against or by the Defaulting
Party by reason of its insolvency or in consequence of debt
9.2 [...***...] the Innocent Party giving notice under Section 9.1 of its
intention to exercise its rights to call for the transfer of the Defaulting
Party's Equity Quotas to it, the Innocent Party shall have the right by written
notice to call upon the Defaulting Party to transfer its Equity Quotas to the
Innocent Party or any other person or entity designated by the Innocent Party,
at a value equal to such proportion of the Net Asset Value of the Company as the
number of Quotas held by the Defaulting Party bears to the total number of
issued Quotas. The Company's Auditors shall, by reference to the most recently
available quarterly accounts of the Company, determine the Net Asset Value of
the Company. The Auditors' valuation shall be delivered to all Parties within
thirty (30) days of the date of the notice referred to in this Section.
23
* Confidential Treatment Requested
9.3 The transfer contemplated by this Section shall be completed within thirty
(30) days of the receipt of the Auditors' valuation; PROVIDED, HOWEVER, that if
either Party has commenced an arbitration of the issues relating to the alleged
material breach upon which such call for the transfer of the defaulting Party's
Equity Quotas is based, such transfer shall be held in abeyance pending the
issuance of the arbitral award and shall be subject to the terms of the arbitral
award.
9.4 This Agreement shall terminate automatically upon either Tech Ion or Titan
Surebeam Brazil ceasing to bold any Equity Quotas (other than in the case of a
transfer or assignment under Section 8.2), or upon a winding-up resolution being
passed or a winding-up order being made in respect of the Company. Termination
shall not affect the accrued rights of the parties hereunder. Termination shall
not affect those provisions of this Agreement of a continuing nature.
10. FORCE MAJEURE, CHANGES IN LAW OR REGULATION
10.1 FORCE MAJEURE. Neither Party shall be liable for failure to perform its
obligations hereunder due to causes beyond its control, including but not
limited to, acts of God, fire, flood or other catastrophes; any law, order,
regulation or request of governmental authority of competent jurisdiction,
national emergencies, insurrections, riots, wars, or strikes, lock-outs, work
stoppages or other labor difficulties, power failures, severe weather conditions
or acts or omissions of transportation common carriers. In the event that either
Party is unable to perform any of its obligations under this Agreement for
reasons described in this Section, the non-performing Party shall immediately
give notice to the other Party and do everything reasonably possible to remedy
the condition and resume performance as soon as possible. Upon receipt of such
notice, the obligations under this Agreement which the affected Party is unable
to perform because of such condition shall be suspended for so long as such
condition exists and the relevant cure periods hereunder shall be extended for
the period of time that such condition exists.
10.2 CHANGES IN LAW OR REGULATION. In the event of any material change in the
law affecting the implementation of any provision contained in this Agreement or
the operation or management of the Company in the manner contemplated hereby,
the Parties shall endeavor to agree to appropriate variations to this Agreement
as a consequence. If the Parties are unable to reach agreement within ninety
days of notice in writing from one Party to the others informing them of any
such change, then the Parties may cause the Company to wind up and terminate
this Agreement, and Tech Ion shall cooperate in passing any resolution necessary
in order to effect the same.
11. NOTICES. Any notice or other document which may be given by either Party
under this Agreement shall be deemed to have been duly given if left at or
sent by post (whether by letter or, where the parties agree, by magnetic
tape or any other form), telex or facsimile transmission (confirming the
same by post) or, where the parties expressly agree, by registered
electronic mail, to the addresses set forth above or as may be changed by a
Party from time to time upon written notice to the other Party. Any such
communication shall be deemed to have been made to the other Party on the
day on which such
24
communication ought to have been received in due course of post, telex or
facsimile transmission.
12. MISCELLANEOUS.
12.1 NO AGENCY. Nothing in or arising out of this Agreement is to be taken as
constituting a partnership or agency relationship between the Parties, and no
Party shall have the right or authority to bind or commit the other in any
manner or for any purposes whatsoever, other than as expressly provided for
herein with respect to the Company.
12.2 REPRESENTATIONS. Each Party represents and warrants that (a) the execution
of this Agreement by it has been duly authorized by all necessary and
appropriate corporate or governmental action, (b) the execution of this
Agreement and the performance of its obligations hereunder will not conflict
with, or result in a breach of or default under, any agreement or instrument
material to it, to which it is a party or by which it is bound, or any order,
decree or judgment of any court or governmental agency or body, and (c) this
Agreement constitutes the valid arid legally binding obligation of such Party,
enforceable in accordance with its terms, except as such enforceability may be
affected by principles of bankruptcy, reorganization or other similar laws of
general applicability.
12.3 SURVIVAL. Notwithstanding any investigation or audit conducted before or
after the execution of this Agreement or the decision of a Party to complete the
execution of this Agreement, each Party shall be entitled to rely upon the
representations, warranties and agreements set forth herein and in any
agreement, document, statement, list, certificate or instrument furnished to
such Party in connection with the performance of this Agreement.
12.4 FURTHER ACTION. Each Party agrees to perform any further acts, give further
assurances and execute and deliver any further documents as may be necessary or
convenient to carry out the provisions and intent of this Agreement. Each Party
shall use and exercise its rights and powers (as to voting or otherwise) in and
in relation to the Company in order to give full effect to the provisions of
this Agreement. The Parties will do all acts required, including but not limited
to, passing appropriate resolutions of the Company, to cause the Company to
undertake to perform the obligations imposed upon it by the terms of the
Agreement.
12.5 GOVERNING LAW: CONSTRUCTION.
(a) The laws of Brazil shall govern this Agreement and the transactions
contemplated hereby that are subject to the mandatory provisions of
such laws including the corporate governance of the Company.
(b) Captions and titles of clauses and sections are for the convenience of
the reader only and shall be of no force and effect.
25
12.6 NO WAIVER. No relaxation, forbearance, delay or indulgence by either party
in enforcing any of the terms and conditions of this Agreement or the granting
of time by either party to the other shall prejudice affect or restrict the
rights and powers of such party hereunder nor shall any waiver by either party
of any breach hereof operate as a waiver of or in relation to any subsequent or
continuing breach hereof
12.7 DISPUTE RESOLUTION. In case of any dispute arising between the Parties
under or in connection with this Agreement or of any deadlock regarding an issue
submitted to the Board of Directors for approval, the Chairman of Titan Surebeam
Brazil and the Chairman of Tech Ion, or their designees, shall meet in person
and attempt to resolve the tie. If the tie is not resolved within thirty (30)
days of the meeting, then the matter shall be submitted to the Brazil-Canada
Chamber of Commerce, in Sao Paulo, Brazil, for arbitration in accordance with
the Brazilian Law. Each Party shall be entitled to elect 1 (one) arbitrator (and
a substitute for him/her) within 30 (thirty) days of submission of the matter to
arbitration. The 2 (two) arbitrators shall jointly designate within 30 (thirty)
days a third arbitrator to preside the arbitration. If either Party fails to
appoint an arbitrator or if the arbitrators fail to elect the third one, then
such arbitrator shall be designated by the President of the Brazil-Canada
Chamber of Commerce, in Sao Paulo, Brazil. The arbitral award is to be given in
writing, within 60 (sixty) days from the constitution of the arbitration
tribunal, or from the substitution of an arbitrator, in English. It shall be
final and binding upon both Parties and shall be enforceable in accordance with
its terms and conditions. The cost of the arbitration, including a reasonable
allowance for attorneys' fees, shall be borne by the losing Party or as
otherwise specified in the ruling of the arbitration tribunal. All proceedings
and records of the arbitration shall be conducted and maintained in the English
language. The Parties agree that the award is to be considered as a settlement
of the dispute between them and shall accept it as the true expression of their
own determination in connection therewith. The Parties agree that either Party
may have the need to obtain immediate relief from the Judiciary. Therefore, the
filing for and obtainment of injunctive relief (or another type of remedy which
cannot be obtained from an arbitration tribunal under Brazilian law) in
connection with this Agreement shall be accepted, and shall not be considered a
breach hereof. In this case, the jurisdiction will be of the courts of the City
of Sao Paulo.
12.8 TAX WITHHOLDING. The Company shall withhold from all amounts paid to any
Quotaholder of the Company which is not a Brazilian corporation, citizen or
resident, as remittances of dividends or interest, such amount of Brazilian
withholding tax as required by applicable legislation and shall remit any
amounts so withheld to the relevant taxing authority. The Company shall furnish
to each such Quotaholder such tax receipts or other official documentation with
respect to the payment of taxes so withheld and remitted as may be issued by the
taxing authority within ten (10) business days of receiving such documents.
12.9 BINDING ON SUCCESSOR. NON-ASSIGNABILITY. This Agreement shall be binding
upon and inure to the benefit of each of the Parties and their respective
successors and permitted assigns; PROVIDED that, except as otherwise specified
in Section 8, no Party may assign
26
any rights or delegate any duties under this Agreement, in whole or in part,
without the prior written consent of the other Party,
12.10 COUNTERPARTS. This Agreement may be executed in two counterparts, each of
which shall be deemed an original but both of which shall constitute one and the
same document.
12.11 SEVERABILITY. If any provision of this Agreement shall be determined by
any court of competent jurisdiction to be invalid or unenforceable, the
remainder of the Agreement other than that portion determined to he invalid or
unenforceable shall not be affected thereby, and each valid provision hereof
shall be enforced to the fullest extent permitted by law.
12.12 SPECIFIC PERFORMANCE. Each Party acknowledges and agrees that the remedy
at law for any breach of any of the provisions of this Agreement would be
inadequate, and agrees and consents that temporary and permanent injunctive and
other relief may be granted without proof of actual damage or inadequacy of
legal remedy, in any proceeding which may be brought to enforce such provisions.
Accordingly, each of the Parties to this Agreement shall be entitled to claim in
court the specific performance of the obligations assumed by the other Party
hereunder, or of any portion thereof, in pursuance of Article 118 of Law No.
6.404, of December 15, 1976, the Brazilian Corporate Law, and the relevant
sections of Brazilian Code of Civil Procedure, including but not limited to,
Articles 461, 632 and 639.
12.13 COSTS. The expenses involved in the preparation and consummation of this
Agreement and any other agreements or transactions contemplated herein shall be
borne by the Party incurring such expenses.
12.14 ENTIRE AGREEMENT, AMENDMENTS. This Agreement, together with any annexes,
attachments or exhibits hereto, constitutes the entire agreement between the
parties, and supersedes all prior agreements or understandings between them with
respect to the matters referred to herein. This Agreement may be modified or
amended only by an instrument in writing signed by the duly authorized
representatives of both Parties.
12.15 This Amendment shall be executed in two (2) counterparts and annexed to
the Agreement, being each of which deemed an original but both of which shall
constitute one and the same document.
IN WITNESS HEREOF, the Parties hereto have duly executed and delivered this as
an instrument as of this 18th day of August, 2000.
TECH ION INDUSTRIAL BRASIL S.A. SUREBEAM CORPORATION
By: /s/ Xxxx Francisco Bufara xx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------- -----------------------------
27
Name: Xxxx Francisco Bufara xx Xxxxxxxx Name: Xxxxx Xxxxxxxxx
----------------------------------- -----------------------------
Title: President Title: President & CEO
----------------------------------- -----------------------------
JFBM PARTICIPACOES LTDA
By:/s/ Xxxx Francisco Bufara xx Xxxxxxxx /s/ Xxxx Francisco Bufara xx Xxxxxxxx
-------------------------------------- -------------------------------------
Name: Xxxx Francisco Bufara de Xxxxxxxx Xxxx Francisco Bufara xx Xxxxxxxx
------------------------------
Title: President
-----------------------------
WITNESSES
2. /s/ ILLEGIBLE 2. /s/ ILLEGIBLE
--------------------------------- -----------------------------------
Name: Name:
ID: ID:
28
