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EXHIBIT 3
Annex 7.4
to the Option Agreement
SHAREHOLDERS AGREEMENT
OF
INVERSIONES SQ HOLDING S.A.
Shareholders Agreement (the "Agreement") made and entered into this ___ day of
[___], ____ by and among SQ Grand Cayman Corp., a corporation organized and
existing under the laws of Cayman Islands, Xx Xxxxxxx Xxxxxx Xxxx (hereinafter
both "SQGC"), and Norsk Hydro [ ], a corporation organized and existing under
the laws of Norway, with a registered branch in Santiago, Chile ("Hydro").
I) A) RECITALS
WHEREAS pursuant to the Letter of Intent executed on May 21, 2001 by and
among Hydro and SQGC (the "LOI"), and pursuant to the Option Agreement executed
on _____, 2001 by and among Hydro and SQGC (the "Option Agreement"), wish to
establish a Shareholders Agreement that will govern the management of
Inversiones SQ Holding S.A. (the "Company" or "SQH") from the consummation of
the transactions contemplated by the Option Agreement and the Subscription
Agreement (the "Subscription Agreement"),
WHEREAS, on the date hereof, SQGC and Hydro have consummated the
transactions contemplated by the Option Agreement and the Subscription Agreement
whereby the Company has issued new shares of the capital stock of the Company in
an amount equal to 49,00% of the aggregate outstanding capital of the Company
following such issuance (the "New Shares") and the New Shares have been
subscribed by Hydro (the "Subscription"),
WHEREAS, SQ Grand Cayman Corp. holds 99,9% of the Company and Xx Xxxxxxx
Xxxxxx Xxxx holds 0,1% of the Company.
NOW THEREFORE, for and in consideration of the mutual representations,
warranties, covenants and agreements contained herein and intending to be
legally bound hereby, the parties hereto agree as follows:
B) DEFINITIONS
Terms defined in the Option Agreement and the Subscription Agreement shall for
the purposes of this Agreement have the meanings ascribed to them in those
agreements. Except as otherwise specified or as the context may otherwise
require, the following terms shall have the respective meanings set forth below
whenever used in this Agreement:
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"Bylaws" shall mean the bylaws of the Company.
"Hydro Shares" shall have the meaning set forth in Section 2.2.
"NG" shall mean Norte Grande S.A.
"OB" shall mean Sociedad de Inversiones Oro Xxxxxx X.X.
"SQGC Shares" shall have the meaning set forth in Section 2.2.
"PC" shall mean Sociedad de Inversiones Pampa Calichera S.A.
"SQM" shall mean Sociedad Quimica y Minera de Chile S.A.
"Shares" shall have the meaning set forth in Section 2.1.
"Transfer" shall have the meaning set forth in Section 2.3.
II. THE COMPANY
2.1. By-laws and Shares. The by-laws of the Company are hereby attached
as Schedule I hereof, as amended by SQGC reflecting the relevant
provisions of the Option Agreement, the Subscription Agreement and
this Agreement, and the same are currently and validly in force.
Prior to the closing of the SQGC loan, the capital of the Company is
of 00.000.000.000 Chilean pesos and the same is currently divided
into ________ nominative, registered, issued and subscribed shares
(the "Shares") with no par value, of which all Shares are fully
paid. All such Shares are voting shares, entitled to one vote per
share and do not have nor enjoy privileges or preferences of any
type or class and are not subject to any other shareholders
agreement than this Agreement.
2.2. SQGC Shares and Hydro Shares. SQGC is the current owner of [_]
Shares (the "SQGC Shares"), representing 51% of the total Shares of
the Company, and Hydro is the current owner of [ ] Shares (the
"Hydro Shares") representing 49% of the total Shares of the Company.
All such SQGC Shares and Hydro Shares are paid and are currently and
respectively registered in the name of SQGC and Hydro in the
Registry of Shareholders of the Company, free of any and all liens.
2.3. Sale, Pledge or Transfer of Shares. Each Party hereto agrees that it
will not during the three (3) first years of the term of this
Agreement, sell, assign, pledge, convey or otherwise transfer or
dispose of any of the SQGC Shares or the Hydro Shares (any of the
foregoing, a "Transfer") without the prior written consent of the
other Party and which requested consent may be freely denied.
Together with the execution of this Agreement, the Parties undertake
to register this Agreement in the Registry of Shareholders of the
Company in order for it to be opposable to third parties.
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2.4. Right of First Offer and Tag Along. Notwithstanding the provisions
of Section 2.3 herein, in the event that either Party shall receive
a bona fide offer from an independent third party in order to buy
all or any portion of its shares ("Bona Fide Purchase Offer") it
shall give notice to the other Party. Within 30 days after the
receipt of such notice, the Party receiving such notice shall have
the right to:
a) Purchase the shares subject to the Bona Fide Purchase Offer on
the same terms and conditions as set forth in the Bona Fide
Purchase Offer;
b) Decline to purchase, or failure to exercise such right in 30
days counted from receipt of the above mentioned notice, and
permit the sale to the third party on the same terms and
conditions as set forth in the Bona Fide Purchase Offer; or
c) Elect to participate in the sale pursuant to the Bona Fide
Purchase Offer, in which event each Party shall be permitted
to sell a proportional number of shares to the third party on
the same terms and conditions as set forth in the Bona Fide
Purchase Offer (or such greater number of shares as the third
party may be willing to purchase under such circumstances, in
each case, divided proportionately between the parties).
2.5. SQGC Option. After 10 years, as of the date hereof, SQGC will have
the right to sell to any third party, subject to 2.6 below, all of
the SQGC Shares (the "SQGC Option") for an amount equal to the
greater of:
1. SUBSCRIPTION VALUE FORMULA.
a. The subscription value paid for Hydro's interest (the
subscription value and the amount of any deferred
subscription value paid by Hydro pursuant to the
Subscription Agreements), plus
b. 7% per annum from the date of the payment(s) of such
subscription(s) on the amount of such subscription(s),
minus
c. cash dividends received by Hydro; minus
d. 7% per annum from the date of payment(s) of such
dividends on the amount of such dividends; or
2. MARKET VALUE FORMULA. An amount equal to 51% of:
a. The market value of the SQM shares owned, directly or
indirectly, by SQH (less minority interests at the NG,
OB and/or PC levels), plus
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b. Fair market value of the other tangible assets, if any,
determined by an independent party with suitable
qualifications, of NG, OB and PC (less minority
interests at each level), minus
c. The aggregate liabilities of SQH, NG, OB and PC (plus
minority interests at each level).
2.6. Exercise of SQGC Option. Hydro will have the right to buy all of the
SQGC Shares under the foregoing conditions during the term of 6
months after receipt of notice of the exercise by SQGC of the SQGC
Option. If Hydro rejects or does not exercise such right in the
above mentioned 6 month term after receipt of notice of the exercise
by SQGC of the SQGC Option, SQGC can negotiate with an independent
third party for the bona fide sale of all of the SQGC Shares for a
price not less than the amount ascertained according to Section 2.5
above and, in conducting such negotiations, SQGC shall have the
right, and, upon the request of Hydro, SQGC shall have the
obligation, to negotiate to sell to such independent third party not
only all of the SQGC Shares but all of the Hydro Shares as well. In
such events, SQGC will be deemed authorized to act on behalf of
Hydro to sell all the Shares, each Party receiving their
proportional share of the price. In order to facilitate the dealings
with third parties Hydro shall execute the corresponding power of
attorney to that effect.
In the event that SQGC shall conduct a tender offer or auction
process for the sale of shares pursuant to the SQGC Option, Hydro
shall be permitted to participate in such process at Hydro's option.
2.7. If as a consequence of the exercise of the rights contained in this
Section II, Hydro acquires direct or indirect control of SQH, Hydro
shall comply with the applicable provisions of the Ley xx Xxxxxxx de
Valores (Ley 18.045) in force at such time.
III. BOARD OF DIRECTORS
3.1. Directors. The Company has a Board of Directors composed of five (5)
Directors and their alternates. Three (3) of the five Directors and
their respective alternates shall be appointed by SQGC and the other
two (2) Directors and their respective alternates shall be appointed
by Hydro. The President of the Company shall be one of the Directors
appointed by SQGC. The alternate Directors shall not vote except in
absence of the corresponding Director.
3.2. Term of Directors. The Directors shall remain in office for the
longest term permitted by Chilean Law, and will in any event remain
in office until replaced by the Shareholders Meeting. In the event
any Director were to resign, die or otherwise be unable to continue
exercising his duties as such, the Parties agree that the Board of
Directors will elect as a replacement the
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person indicated by the Party that designated such Director. In the
event any Shareholder wishes to remove any member of the Board of
Directors elected by such Shareholder and such Director does not
resign, the parties agree to immediately call for an extraordinary
shareholders meeting to remove the whole Board of Directors and
elect their replacements, which can be any of the Directors
designated before. .
3.3. Board Summons. The Board of Directors may be summoned by any
Director giving proper notice as required by the Bylaws of the
Company. The Board of Directors may not adopt decisions on points or
matters not expressly mentioned in the order of the day unless all
members are present and they so agree.
3.4. Powers of the Board of Directors. The Board of Directors shall have
the powers of administration and disposition of the Company's assets
as provided in the Bylaws or by the laws of Chile, except as set
forth in Section 3.6 of this Agreement. Without limitation on the
generality of the foregoing, the Board of Directors may:
1) represent the Company legally before third parties;
2) appoint and remove managers, commercial agents and employees
of the Company, and fix their salaries, wages, and bonuses;
3) settle the ordinary and extraordinary expenses of the
Company and its administration;
4) receive amounts of money due to the Company and to pay those
owed by the company;
5) determine the placement of available funds;
6) issue, accept, endorse and cancel bills of exchange, checks,
notes and all types of commercial papers;
7) contract all kinds of credits or loans, by opening bank
credits or in any other manner;
8) open or close bank accounts and operate them by checks or in
any other manner with the signature of the persons approved
by the Board;
9) discount commercial papers and, generally make all kinds of
bank transactions;
10) execute all type of contracts and transactions pursuant to
3.5 and/or 3.6.;
11) to call Shareholder Meetings;
12) entering into, amending, modifying, terminating (partially
or completely), or granting any waiver under or give any
consent with respect to any contract; and
13) generally, the Board of Directors is empowered to carry out
acts of administration and representation as it considers
necessary to best safeguard the interests of the Company.
3.5. Quorum and Vote. In order to be valid, the deliberations and
decisions of the Board of Directors shall be taken with the presence
vote of at least 3
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members, principals or alternates, of the Board of Directors and the
favorable vote of the majority of the members.
3.6. Special Quorum and Votes. The following actions and decisions with
respect to the Company and its business or the proposals of the
board to the shareholders meetings in connection with such subjects
shall require the presence and favorable vote of at least 4
Directors, out of which at least 1 (one) shall be a Director elected
by Hydro, for matters indicated in 3.6.a below and the presence and
the favorable vote of all Directors of the Company for matters
indicated in 3.6.b below:
3.6.a
1. Issue new shares in SQH, engage in any spin off or engage with
any person in any merger, de-merger or other material and
substantial changes with respect to the capital structure of the
Company;
2. enter into any lines of business other than those in which the
Company is currently engaged or enter into or amend any material
contract not reasonably related to the Company's basic business;
3. amend the bylaws or articles of incorporation of SQH;
4. make capital investments in excess of USD 2 million;
5. incur debt in excess of USD 2 million;
6. change the dividend policy (after adoption of a policy requiring
maximum distributions permitted by law);
7. take any action with respect to any bankruptcy, reorganization,
liquidation, winding up, dissolution or adoption of any plan for
the same for the Company; or
8. make any material change in the accounting practices of the
Company.
3.6.b
Dispose of, or incur any lien on, all or substantially all of its
assets and specifically with respect to the shares of NG it owns.
3.7. If any of the foregoing decisions are submitted to and decided upon
by the Shareholders Meeting of the Company, then the votes of 100%
of the Shares will be required in order to approve such a
resolution.
3.8. The above mentioned agreements do not impose any restriction on the
shareholders in order to make independent proposals to the
shareholders meetings related to the aforementioned subjects if any
of them are included in the competence of such assembly, but the
matter should be decided by the same required quorum of 100%.
Additionally, each shareholder shall have the right, according to
Chilean law, to request the board in order to convene shareholders
meetings to decide any matter included in the competence of the same
assembly.
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IV. BOARD REPRESENTATION AND VOTING OF SHARES IN NG, OB, PC AND SQM
4.1. Board representation. The Parties agree that Hydro shall have the
right to designate at least one person to be elected to the boards
of directors of NG, OB, PC and SQM and the Parties undertake to take
all such measures necessary to ensure that such person designated by
Hydro shall be elected as a Director of NG, OB, PC and SQM.
Furthermore, with the purpose of electing another person designated
by Hydro to the boards of NG, OB, PC and SQM, the Parties undertake
to carry out their best efforts to use the remainder of the votes,
including proxies obtained from third parties, in the corresponding
shareholders meetings, after due calculation of the number of votes
necessary to appoint three (3) directors suggested by SQGC in NG,
OB, PC and two (2) members in the case of SQM in order to assure the
effective issuance of the votes and actual election of the members
suggested by SQGC. The Parties shall collaborate to the effect that
the President of SQM shall always be one of the persons suggested by
SQGC.
V. ACCOUNTING PRACTICES
To the extent permitted by applicable Law and administrative feasibility,
the Parties shall seek to change the accounting system of the Company from
its current CH peso system to a US Dollar based system for financial and
tax purposes.
VI. CHANGE OF CONTROL
In the event that Xxxxx Xxxxx Lerou (or his heirs) shall not control
Pacific Atlantic Corporation, a Cayman Islands corporation ("Patco"), and
SQGC, Hydro shall have the right to purchase the shares of SQH owned by
Patco or SQGC for the price determined in accordance with the Market Value
Formula set forth in Section 2.5 (2). In the event that Norsk Hydro ASA
shall not control the fertilizer business currently conducted as "Hydro
Plant Nutrition", SQGC shall have the right to exercise the SQGC Option.
VII. CHANGE OF GUARANTOR
Upon the exercise of the Hydro Option, SQH shall offer to become the
guarantor of the debt of SQH, NG, OB and PC currently guaranteed by Xx.
Xxxxx Xxxxx Lerou, subject to the consent of the lenders with respect to
such debt and the release of Xx. Xxxxx Xxxxx Lerou from such guarantees.
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VIII. TERM AND TERMINATION
The term of this Agreement shall commence on the date hereof, and remain
in full force and effect (i) until either Party ceases to be a
shareholder of the Company or (ii) when together they own less than 51%
of the Shares, whichever occurs first.
IX. GENERAL PROVISIONS
9.1. Amendment and Waiver. This Agreement may be amended, supplemented or
modified only by written instruments duly executed by or on behalf
of each party hereto. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit
thereof, but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term
or condition of this Agreement, in any one or more instances, shall
be deemed to be or construed as a waiver of the same or any other
term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by Law or otherwise
afforded, will be cumulative and not alternative.
9.2. Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been given only if
delivered personally or by facsimile or mailed (first class postage
prepaid or by air courier) to the intended recipient at the address
for notices specified herein.
All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section, be
deemed given upon delivery, (ii) if delivered by facsimile
transmission to the facsimile number as provided in this Section, be
deemed given upon receipt, and (iii) if delivered by mail in the
manner described above to the address as provided in this Section,
be deemed given upon receipt (in each case regardless of whether
such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication
is to be delivered pursuant to this Section). Any party from time to
time may change its address, facsimile number or other information
for the purpose of notices to that party by giving notice specifying
such change to the other party hereto.
If to SQGC: Inversiones SQ Holding X.X.
Xxxxxxx Xxxxxxx 000
Xxxxxxxx, Xxxxx
Attn.: Xxxxxx Xxxxxx Huidobro Xxx-Xxxxxxx
Cc: Xxxxxx Xxxxxx, Esq,
Huerfanos 835 p. 00
Xxxxxxxx, Xxxxx
If to Hydro: Norsk Hydro [ ]
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c/oNorsk Hydro ASA
Legal Department
0240 Oslo, Norway
Attn.: Xx. Xxxx Xxxxx
9.3. Publicity. Hydro and SQGC will consult with each other upon any
press releases or public announcements pertaining to the
transactions contemplated by this Agreement and shall not issue any
such press releases or make any such public announcements before
such consultation and agreement, except as may be required by
applicable law in which case the party proposing to issue such press
release or make such public announcement shall use all reasonable
efforts to consult in good faith with the other party before any
such issuance or announcement.
9.4. Confidentiality. Neither SQGC nor the Company or its subsidiaries
shall provide any information deemed confidential or privileged
unless there is a direct interest in the relevant deal or matter, or
has a satisfactory indirect interest such as guarantor of the
obligation of another party or in any other way, in which cases, the
delivery of information shall be decided by the competent board or
shareholder's meeting, as required by applicable law.
Each party hereto agrees to keep information obtained by it pursuant
hereto confidential in accordance with such party's customary
practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and
not disclose any of such information other than (a) to such party's
employees, representatives, attorneys, auditors, agents or
affiliates who are advised of the confidential nature of such
information, (b) to the extent such information presently is or
hereafter becomes available to such party on a non-confidential
basis and without a breach of a similar confidentiality obligation
from any source or such information that is in the public domain at
the time of disclosure, (c) to the extent disclosure is required by
Law (including applicable securities Laws), regulations, subpoenas
or judicial order or process (provided that notice of such
requirement or order shall be promptly furnished to the other party
unless such notice is legally prohibited), (d) to transferees or
prospective transferees who agree to be bound by the provisions of
this Section, (e) to the extent required in connection with any
litigation between any parties hereto with respect to this Agreement
or (f) with the other party's prior written consent.
9.5. Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of Chile.
9.6. Arbitration. The parties shall endeavor to resolve any controversy,
claim or dispute arising between them out of or relating to this
Agreement including without limitation, the interpretation of any
provision thereof or the breach, termination or invalidity thereof
(a "DISPUTE"), by discussions in good faith in a
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spirit of mutual good will, and that, if necessary, a meeting of
senior management of the parties shall be convened if the Dispute is
not solved amicably within thirty (30) days of the Dispute arising.
If any of such Disputes cannot be resolved within forty five (45)
days as of the date the Dispute arose, then such Dispute shall be
exclusively and finally settled by arbitration. It is specifically
understood and agreed that any Dispute may be submitted to
arbitration irrespective of the magnitude thereof, the amount in
controversy or whether such Dispute would otherwise be considered
justifiable or ripe for resolution by a court. Only if the panel is
already established, it is specifically agreed that any legal
action, including the filing of any precautionary actions (medidas
precautorias), pre-judicial actions (medidas prejudiciales) shall be
known and resolved by the arbitral tribunal, as appointed
hereinbelow.
Unless the parties agree otherwise, the arbitration shall be
conducted in accordance with the Rules of Arbitration of the
International Chamber of Commerce ("ICC") as in effect on the date
of this Agreement, except to the extent such rules conflict with the
provisions of this arbitration section in which event the provisions
of this section shall control.
The arbitration shall be conducted in the Spanish language, provided
that, any witness whose native language is not Spanish may give
testimony in English or Norwegian, with simultaneous translation
into Spanish. In this case the translator shall be appointed by the
arbitral tribunal and any party shall have the right to participate
in such examinations and cross-examinations accompanied by a
translator hired by such party. Each party shall bear its own costs
in connection with such arbitration, unless the arbitrators
determine otherwise.
The arbitral tribunal consist of three arbitrators from the
following list to be appointed in the same order of this list.
List of Arbitrators:
1. - Xxxx Xxxxxxxxx Xxxx
2. - Xxxx Xxxxxxx Xxxxxxxx Xxxxxx
3. - Xxxx Xxxx Xxxx Xxxxxx
4. - Xxxxxxxx Xxxxxx Tocornal
5. - Xxxxxxx Xxxxxxx xx Xxxxxx
6. - Xxxxxx Xxxxxxx Xxxxxx Xxxxxx
7. - Xxxxxxx Xxxxxxx Xxxxxxxxxx
8. - Xxxx Xxxxx Errazuriz Grez
9. - Xxxxxx Xxxxxxxxxx Xxxx
10.- Xxxx Xxxxxxxxx Xxxxxxxxx Irarrazabal.
11.- Xxxx Xxxxxxx Xxxxx Xxxx
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If it has turned to be impossible to appoint 3 arbitrators from the
list, the parties shall agree on the name(s) of the missing
arbitrator(s). If the parties cannot agree on the name of the
arbitrators needed to complete the three member panel within 15 days
as of the date the last arbitrator of the list refused or is
evidenced that cannot assume the position, then the ICC shall
appoint enough arbitrators to complete the 3 member panel.
The arbitration shall be conducted in the city of Xxxxxxxx, Chile,
or such other place as is unanimously agreed in writing by the
parties to the arbitration. The arbitrators shall act as arbitros
arbitradores. Consequently, and as this Agreement is governed by the
laws of the Republic of Chile, any Dispute existing between the
parties shall be settled under such laws, with the exception of the
procedural provisions contained in the ICC's Rules, if such rules
are to be used under this clause, which provisions shall be applied.
Any decision or award of the arbitral tribunal shall be final and
binding upon the parties to the arbitration proceeding. Any rights
to appeal or to review of such award by any court or tribunal are
hereby waived, to the extend permitted by law. The arbitral award
may be enforced against the parties to the arbitration proceeding or
their assets wherever they may be found and judgement upon the
arbitral award may be entered in any court having jurisdiction
thereof.
9.7. Indirect acquisitions. Unless provided otherwise in this agreement,
the parties shall remain the owners of 49% of the shares of the
Company, in the case of Hydro, and 51% in the case of SQGC. In the
event that either party has the opportunity to purchase shares of
NG, OB, PC or SQM, directly or indirectly, such party shall present
such opportunity to SQH. In the event that the other party votes
against the acquisition by SQH, the party presenting such
opportunity shall be deemed authorized to acquire shares directly in
NG, OB, PC and SQM, in which case the party acquiring such shares
undertakes the obligation to exercise the voting powers of those
shares through SQH, by granting all the proxies to SQH. In the case
of an indirect acquisition carried out through an affiliate person,
each party guarantees that the direct owner shall act to produce the
same effect, providing SQH with the above mentioned powers, proxies
or delegations.
IN WITNESS WHEREOF, each party hereto has signed this Agreement, or caused its
duly authorized officer to sign this Agreement, as of the date first above
written.
SQGC
By:
-----------------------------------
Name:
Title:
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Xx. XXXXXXX XXXXXX XXXX
HYDRO
By:
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Name:
Title:
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