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Exhibit 10.35
AGREEMENT
on the Establishment of Limited Liability Company
concluded today according to the Czech Commercial Code
1. SFMT-Czech, Inc., registered office National Corporate Research, Ltd. 0
Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx, Xxxxxx xx Xxxx, X.X.X., business seat 000
Xxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000, X.X.X. (hereinafter "SFMT"), and
2. B & H, s.r.o., Xxx-xxxxx 00/000, 000 00 Xxxxx 0 (hereinafter "B & H")
I.
BASIC PROVISIONS
Section 1
BUSINESS NAME AND SEAT
1. The business name of the Company is: SFMT Czech Net.
spol. s.r.o.
2. The seat of the Company is: Nad lomem 14/746, 147 00
Praha 4
Section 2
SCOPE OF BUSINESS ACTIVITIES
1. The scope of business activities of the Company is:
a) Sale and operations of private telecommunications services through
satellite (within the extent of the given licenses) and commercial
activities connected with it
b) Sale and purchase of merchandise for the purpose of further sale
2. The Executive of the Company shall submit within 3 days after the
conclusion of this Agreement to the appropriate telecommunication
authority the petition for the licence for activity mentioned in para 1.
a) and at the same time shall announce the activity mentioned under para
1. b) to the appropriate Trades Bureau. He shall at the same time appoint
the responsible representative of the Company.
3. Members have agreed that B & H s.r.o. shall be the trade representative of
the Company. For this purpose a contract between the Company and B & H
s.r.o. on non-exclusive trade representation according to para 664 ff of
the Commercial Code shall be concluded within one month after the
establishment of the Company, however the Company shall be permitted to
engage other companies or
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organizations to market telecommunications services on its behalf.
Section 3
REGISTERED CAPITAL
The registered capital of the Company is 3,000,000 [ILLEGIBLE].
Section 4
INVESTMENTS
1. Founders of the Company are obliged to invest into the registered capital
of the Company within one month after the conclusion of this Agreement to
the newly opened bank account of the Company
a) SFMT financial investment in the amount of 2,400,000 [ILLEGIBLE]
b) B & H s.r.o. financial investment in the amount of 600,000
[ILLEGIBLE].
2. The shareholdings of the members in the registered capital are therefore
as follows:
a) SFMT 80%
b) B & H 20%
3. The Executive of the Company shall also be the administrator of the
investments.
II.
RIGHTS AND DUTIES OF MEMBERS
Section 5
RIGHTS OF MEMBERS
Each member has in particular the following rights:
a) The right to a share of profits that the General Meeting has resolved for
distribution among members.
b) The right to receive information on the activities of the Company, the
right to request such information from the Executive and to inspect all
documents of the Company during normal business hours and with reasonable
notice period.
c) The right to participate in the General Meeting, the right to submit
resolutions to the General Meeting and to express opinion on its
consideration.
d) to participate by voting in the decision making of the General Meeting.
e) The right to propose the convening of an extraordinary General Meeting,
evtl. convene a General Meeting under conditions mentioned in Section 129,
para 2 of the Commercial Code.
f) The right to transfer the ownership interest to another person under
conditions agreed upon in this Agreement in Section 17.
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g) The right of first refusal to new investments under conditions agreed upon
in this Agreement in Section 15.
h) The right to settlement in the event of termination of its participation
in the Company and in the event of termination of the Company.
i) The right to an entrepreneur's remuneration in case of personal
participation in the activities of the Company if it is a participation
outside a labour law relationship.
SECTION 6
DUTIES OF MEMBERS
Members are obliged in particular:
a) to fulfill obligations imposed on them by this Agreement and by General
Meeting Resolutions
b) to respect the directives of the Executives in personal participation in
the activities of the Company
c) not to form on the territory of the Czech Republic other commercial
companies with the same scope of activities (Section 2/1a) nor to
participate as members in such scope of activities in other legal entities
in the Czech Republic.
SECTION 7
SANCTIONS FOR VIOLATION OF OBLIGATIONS
1. In the event of violation of the Agreement the affected member may request
the convening of the General Meeting with the motion that the violation of
law be remedied. If remedy is not secured member or the Company may
request protection in a Court action.
2. The General Meeting may resolve to submit a motion for expulsion of a
member in the event that this member deliberately or by gross negligence
has violated one of its substantial obligations. The Court shall proceed
according to the principles of civil law proceedings.
3. The provisions of paras 1 and 2 as well as the provisions of Section 4,
para 2 do not affect the obligation for compensation of reasonable damages.
III.
COMPANY BODIES
SECTION 8
GENERAL MEETING
1. The General Meeting shall be the highest body of the Company.
2. The General Meeting can take decisions only if both members are present.
However, if either Member refuses to attend two consecutive
regularly called General Meetings
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the third General Meeting may take decisions by votes of the present
Member according to the present Agreement, in accordance with the existing
Commercial Code.
3. Apart from authority mentioned in the law (Section 125 of the Commercial
Code) the General Meeting shall further be authorized:
a) To approve the strategy of Company's activities and its modifications.
b) To approve the entrepreneur's renumeration of members participating in
the activities of the Company outside a labour law relationship.
c) To decide which dispositions with the assets of the Company are subject
to its prior consent.
d) To decide on the method for distribution of profit and how to cover the
losses of the Company.
e) To decide on the amendements of the founding agreement.
f) In the event that the Company shall have at least 50 employees the
General Meeting may decide that the Company shall adopt Statutes in
which the internal organization and principles of its economy shall be
regulated in more detail than the present Agreement. In such case these
Statutes are subject to the approval by the General Meeting.
g) To decide on the motion to expel a member.
h) To resolve on the merger, division or integration of the Company or on
its transformation in an other commercial company. It shall also decide
on winding up of the Company.
i) To appoint and recall members of the Executive Council and to approve
its competencies and principles of its activity.
j) To appoint and recall the Executive of the Company.
4. The General Meeting may at any time reserve its decision of cases which
otherwise belong in the competence of the Executive Council and the
Executives. In case of competence disputes the resolution of the General
Meeting is decisive.
5. At each session the General Meeting shall elect its Chairman. In the
election of a Chairman each member has one vote.
6. In all matters voted upon by the General Meeting, unless otherwise
specified in this Agreement each member shall have one vote per every
100,000 Kc of its investments. Unless otherwise provided, such actions
require a majority of votes.
7. For decisions on matters mentioned
a) Under provisions of Section 127, para 4 of the Commercial Code.
b) In provisions of Xxxxxxx 0, xxxx 0 x), x), x), x) and in Section 8,
para 4 of this Agreement,
c) In approval of the Statutes of the Company
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approval by at least a two thirds majority of all members votes shall be
required, subject to an exception where such acts occur as a result of the
exercise by SFMT of its rights under Section 15, para 1.
However, unanimity of all votes is required for matters under paras 3 e)
and 3 h) above if these decisions would adversely affect the interest of
minority member (members) to the extent that the basic principles of the
present Agreement would be changed.
8. The Executive is obliged to attend the General Meeting. If he/she is not
at the same time a member, he/she shall have only an advisory function.
9. The Executive shall record the proceedings of the General Meeting in a
Protocol.
Section 9
Executive Council
1. The General Meeting shall elect within one month after signature of this
Agreement a Executive Council of the Company. The Executive Council shall
have three members. SFMT shall appoint two members and B & H one
member. The Executive Council shall elect from among its member its
Chairman.
2. The Executive Council is an operative body of the Company for its
management between the General Meetings and shall report to the General
Meeting. Specific authority and principles of its activity shall be
determined in a General Meeting resolution.
3. The Executive Council may give binding instructions to the Company
Executive.
Section 10
Executive
1. The Executive is authorized to decide on all matters which the law or this
Agreement does not reserve to the General Meeting or which the General
Meeting has not reserved for its decision.
2. The Executive is in his/her activities bound by the directives of the
Executive Council according to Section 9, para 3 of this Agreement.
3. The Executive is bound by the ban on competitive conduct within the extent
mentioned in Section 136 of the Commercial Code with the following
modification:
a) The Executive is allowed to participate in the activities of another
company as a member with unlimited liability if it is not a company in
competition with this Company as defined in Section 2 1a) above
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b) The Executive is not allowed to perform activities as statutory organ
or a member of a statutory organ of any legal entity; this applies
also in case mentioned under subpara a) above.
4. The Executive is Ing. Xxxxx Xxxxxxx residing in Xxxxxxxx 000, 000 00
Xxxxxx 0, birth No. 400604/116.
5. The Executive acts for the Company in such a way that he shall sign
documents under the printed or written name of the Company and shall, as a
rule, give his executive function.
IV.
ECONOMY OF THE COMPANY
SECTION 11
ACCOUNTING PERIOD
1. The first accounting period begins on the day of the establishment of the
Company and ends on 31 December of the year in which the Company was
established.
2. Other accounting periods are identical with calendar years.
SECTION 12
DUTIES OF THE EXECUTIVE IN THE ECONOMY OF THE COMPANY
1. The Executive is responsible for the proper economy of the Company and for
its harmonization with the approved conception to the General Meeting and
to individual members.
2. The Executive is obliged to make arrangements for the proper book-keeping
of the Company and for ordinary and extraordinary balance sheets. These
are submitted with the motion for distribution of profit and with the
annual report to the General Meeting for consideration and decision.
3. The Executive is obliged to compile an annual report for every accounting
period also if it is not required by legal regulation. In a separate
exhibit to the annual report he shall give the data which are to be
published.
SECTION 13
RESERVE FUND
1. The Company shall establish a Reserve Fund in the amount of 10% of its
registered capital. The Reserve Fund shall be fed on an annual basis by
5% of net profit until the Reserve Fund reaches the level of 10% of the
registered capital.
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2. The Executive is authorized to decide on the use of the Reserve Fund after
prior consent of the Executive Council. He shall inform the next General
Meeting on the disposition with the Reserve Fund and on its level.
Section 14
DISTRIBUTION OF PROFIT
1. Distribution of profit shall be decided upon by the General Meeting on
proposal by the Executive after consideration by the Executive Council.
2. The General Meeting shall decide what part of the profit shall the Company
use for its further development and what part shall be used for
distribution of profit between members after deduction of taxes and
supplement of the Reserve Fund.
3. Profit shall be distributed between members proportionally according to
their shareholdings.
V.
CHANGES OF REGISTERED CAPITAL
Section 15
INCREASE OF REGISTERED CAPITAL
1. Increase of registered capital shall be decided upon by two third majority
of votes on the proposal of anyone of them. SFMT may increase registered
capital as required by reasonable and prudent business practice in line
with the needs of the operation by the Company.
2. The priority right for new investments to increase the registered capital
according to Section 143 of the Commercial Code is set for existing
members within one month as from the General Meeting resolution on
increase of registered capital.
3. The decision to increase the registered capital shall also provide for the
method by which the registered capital of the Company shall be increased.
The Executive shall see to it that the agreed method and the legal
regulation in accepting the obligations for new investments shall be
abided by. The Executive shall also apply for the registration of the
change of the registered capital of the Company within 7 days after this
change has occurred.
Section 16
REDUCTION OF REGISTERED CAPITAL
1. The reduction of registered capital shall be decided upon
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by the General Meeting as agreed in Section 8, para 7 of this Agreement.
2. With the reduction of the registered capital the members investments shall
be decreased proportionately if the reduction is not due to the
termination of membership of a member in the Company and if at the same
time a transfer of succession of its shareholding to another person has
not taken place; in such a case the registered capital shall be
reduced by the reduction of number of investments.
3. The registered capital of the Company and the investments of its members
must not fall below the legal minimum.
4. The Executive shall be obliged to publicize the reduction of the
registered capital twice, the second publication within 30 days after the
first one in the Economic Gazette. After settlement eventually cover for
those creditors claims which were submitted within the time given by law
the Executive shall without undue delay submit a petition for
re-registration of the change of the registered capital of the Company in
the Companies Register.
VI.
DISPOSITION WITH OWNERSHIP INTEREST
Section 17
TRANSFER OF OWNERSHIP INTEREST
1. A member may transfer its ownership interest to another member without the
approval by the General Meeting. SFMT-Czech, Inc. can transfer its
ownership interests without the approval by the General Meeting to a
wholly-owned subsidiary to be formed by SFMT-Czech, Inc. in the Czech
Republic.
2. If a member does not exercise its right, the other member should be free
to sell its interest to any third party for a period of three months. In
the event a member receives a bona fide offer to purchase its interest,
then the terms and conditions of such offer should control the purchase
price and conditions under which the other member should be entitled to
purchase the interest. If however, the member that received the offer to
purchase its interest attempts to sell such interest at a lower price or
upon more favorable terms than those which the other member declined to
purchase, then such interest must first be offered to the other member at
such reduced price or more favorable terms. All sales to third parties
are subject to the condition that the party purchasing the interest become
a party to this Agreement.
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3. The transfer of ownership interest shall be effective for the Company as
of the day on which the Executive has received a copy of the transfer
contract.
Section 18
DIVISION OF OWNERSHIP INTEREST
Ownership interest can be divided only with the consent of the General
Meeting and only in the following cases:
a) In the case of transfer of ownership interest according to Section 16,
para 1
b) Transfer of ownership interest to legal successor of the member.
Section 19
FREE OWNERSHIP INTEREST
1. The General Meeting shall decide how the Executive shall dispose of an
ownership interest which has become free due to the fact that members have
not exercised their priority right or due to the fact that there is no
available third party purchaser.
2. If the decision according to para 1 stipulates that the free share shall
be transferred to a person who is not a member and the transfer has not
been successful, this ownership interest shall be divided among the
present members proportionately according to their shareholdings.
VII.
WINDING UP AND TERMINATION OF THE COMPANY
Section 20
WINDING UP OF THE COMPANY
1. In addition to reasons for winding up of the Company mentioned in the law,
the Company shall also be wound up by a unanimous resolution of the
General Meeting and on proposal of a member according to para 2.
2. Any member may submit a proposal that the Court should wind up the Company
according to the Czech Commercial law.
Section 21
RESOLUTION OF THE GENERAL MEETING TO WIND UP THE COMPANY
1. The General Meeting, when deciding to wind up the Company, shall also
resolve whether the Company shall be wound up with liquidation or without
liquidation.
2. The Resolution to wind up the Company without liquidation shall also
specify the day of winding up of the Company and shall instruct the
Executive to arrange for the entry
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of the winding up of the Company in the Companies Register.
3 In the Resolution to wind up the Company with liquidation the General
Meeting shall specify the day of starting the liquidation, shall appoint
the liquidator and shall decide on the renumeration of the liquidator. The
General Meeting shall instruct the Executive to submit in time the
petition for entry of these facts in the Companies Register.
VIII.
Final Provisions
Section 22
Settlement of Disputes
The Parties to this Agreement shall endeavor to reach an amicable settlement
of disputes arising hereunder. However, if they are unable to resolve any
dispute by amicable settlement, such dispute shall be settled by binding
arbitration under the arbitration Rules of the Stockholm Chamber of Commerce
(the "Rules")by three arbitrators appointed in accordance with the Rules.
The President of the Chamber of Commerce, Stockholm (Sweden) shall act as the
"appointing authority" under the Rules. Parties hereby irrevocably waive
the right to submit such disputes, or to appeal, to any court. The seat of
the arbitration tribunal shall be Stockholm, Sweden. The language of the
arbitration shall be English. This submission and agreement to arbitrate
shall be specifically enforceable. Any award rendered by an arbitration
tribunal shall be final and binding on the Parties, and the judgement upon
the award rendered may be entered in any court having jurisdiction thereof.
Section 23
Expenses of the Establishment of the Company
The Court and administrative charges connected with the establishment
of the Company shall be born by the Company and shall be accounted for as
its first expenses. Other expenses shall be borne by each member.
Section 24
Number of Copies. A Signature Specimen
1. This Agreement has been done in 6 copies in Czech and English. In case
of differences the English version shall control. Each of the members
shall receive 2 copies, 1 copy shall be deposited with the Companies
Register and the remaining copy shall be deposited by the Executive in
the archives of the Company.
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2. The signature given below this Agreement serves also as the signature
specimen.
3. The Executive of the Company is authorized to submit the application for
registration of the Company in the Companies Register. His signature on
the petition or on the power of attorney for the appointed attorney, shall
also serve as signature specimen.
Done in Prague July, 1994
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For SFMT-Czech, Inc. For B & H
/s/XXXXX X. XXXX /s/ ING. XXXXXXXXX XXXXXX
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Xxxxx X. Xxxx Ing. Xxxxxxxxx Xxxxxx
Vice President Executive
B & H, s.r.o.
Nad lomem 14/746
147 00 Praha 4
[Illegible]
Louis Xxxxxx Xxxx, nar. 12. sept. 1942, 0000 XXXXX Xx. XXX-0000, XXXXXXXXXXXX,
XX 00000, X.X.X.
[Illegible]
12.7.1994
Xxxxxx Xxxxxxxx [SEAL]
