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EXHIBIT 10.2
XXXXX INTERNATIONAL (BRAZIL), LTD.
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "Agreement") is made as of January
29, 1997, by and among XxXxx International (Brazil), Ltd., a Virginia
corporation, formerly named Wireless Ventures of Brazil, Inc. (the "Company"),
and the Persons listed as Shareholders on Exhibit I attached hereto, as amended
from time to time, including XxXxx International, Ltd., a Washington
corporation ("MIL"), Telcom Ventures, LLC, a Delaware limited liability company
("Telcom") and the other Shareholders listed as the Founders on the signature
pages to this Agreement (the "Founders") (collectively, the "Shareholders" and,
individually, a "Shareholder").
RECITALS
The Founders are the owners of all of the Company's Class B Common
Stock and MIL is the owner of all of the Company's Class A Common Stock
(together with the Class B Common Stock, the "Common Stock"), and the
Shareholders desire to enter into certain agreements relating to transfers of
Common Stock and other issues relating to the Company.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are acknowledged and to further the interests of the
Company and its present and future Shareholders, the parties agree as follows:
1. TRANSFERABILITY
1.1 TRANSFERS
Except as otherwise provided in this Agreement, no Shareholder may
sell, assign, transfer, pledge, hypothecate, mortgage, encumber or otherwise
transfer to any Person (as defined in the Agreement and Plan of Merger between
Nextel Communications, Inc., Dial Call Indimich, Inc. and the Company dated
October 28, 1996 (the "Merger Agreement")) other than to one of its Affiliates
(as defined in the Merger Agreement) or other than in connection with the grant
of a security interest to secure a bona fide third-party financing
(collectively, "Transfer," including, with correlative meanings, the terms
"Transferring" and "Transferred") all or any part of any shares of Common Stock
or other securities of the Company convertible into or exercisable for Common
Stock (collectively, the "Shares") unless the Shareholder proposing such a
Transfer (the "Selling Shareholder") has complied with the provisions of this
Section 1. For purposes of this Section 1, all shares of the Company's Class A
Common Stock and Class B Common Stock shall be treated as shares of the same
class.
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1.2 RESTRICTIVE LEGEND
Each certificate representing (a) Shares or (b) any other securities
issued in respect of the Shares upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event shall be stamped or
otherwise imprinted with a legend setting forth the transfer restrictions
imposed by this Agreement and applicable law as required by Section 10.2. The
Shareholders consent to the Company' making a notation on its records and
giving instructions to any transfer agent of the Shares in order to implement
the restrictions on Transfer established in this Section 1.
1.3 RIGHT OF FIRST REFUSAL
1.3.1 TRANSFERS BY SHAREHOLDERS
Except as otherwise provided in this Agreement, no
Founder may Transfer any interest, direct or indirect, in all or any part of
the Shares owned by such Shareholder (a) during the period beginning on the
date hereof and ending on the date two years and 90 days after the date hereof
(the "Grace Period") and (b) after the expiration of the Grace Period, unless,
in the case of this clause (b) only, (i) the Selling Shareholder shall have
made an offer to sell such Shares to the other Shareholders and the Company as
provided in this Section 1.3 and (ii) such offer shall not have been accepted
in the manner described in this Section 1.3. No Shareholder (including the
Founders collectively) having beneficial ownership of less than 10% of the
Common Stock at the time of any proposed Transfer by any other Shareholder
shall have rights of first refusal as provided in this Section 1.3.
1.3.2 OFFER BY SELLING SHAREHOLDER
The offer referred to in Section 1.3.1 shall consist
of a written offer (the "Offer") to the other Shareholders entitled to rights
of first refusal (the "Offerees") to sell the Shares proposed to be Transferred
(the "Offered Shares"). The Offer shall set forth (a) a statement of intention
to effect a Transfer, (b) the number and class of Offered Shares, (c) the terms
and conditions of the proposed Transfer, including (i) the purchase price for
the Offered Shares and (ii) the identity and beneficial ownership of the third
party or parties having made a bona fide offer to purchase the Offered Shares
on such terms and conditions, and (d) the desired closing date of the
transaction.
1.3.3 ACCEPTANCE OF OFFER
Within 30 days after its receipt of the Offer, the
Offerees may, at their option, accept the Offer as to all or less than all of
the Offered Shares by giving irrevocable written notice to the Selling
Shareholder, the Company and the other Shareholders prior to the expiration of
such 30-day period.
1.3.4 PRO RATA PORTION
The Offered Shares shall first be allocated to the
Offerees. If the Offerees shall not have offered to purchase all the Offered
Shares, the Company may elect to
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purchase any remaining Offered Shares. To the extent that more than one
Offeree shall have elected to purchase Offered Shares pursuant to Section
1.3.3, each such Offeree may purchase up to its pro rata portion of such
Offered Shares as determined in accordance with this Section 1.3.4. Each
Offeree's pro rata portion of the Offered Shares is that proportion of the
Offered Shares as the number of shares of voting capital stock of the Company
held by such Offeree bears to the aggregate number of shares of voting capital
stock of the Company held by such Offeree and all other Offerees who have
exercised their rights of first refusal under this Section 1.3.
1.3.5 CLOSING
If the Offer is accepted as to all the Offered Shares, the
parties shall use their best efforts to complete the closing of such purchase
within 30 days after acceptance of the Offer. If, after expiration of such
30-day period, the closing of such purchase of all Offered Shares shall not
have occurred (unless closing is subject only to receipt of required
governmental or regulatory approvals) through no fault of the Selling
Shareholder, then the Selling Shareholder may treat the Offer as having been
rejected in its entirety. If the Offer is not accepted as to all the Offered
Shares as provided in this Section 1.3, or is deemed to be rejected as set
forth in the previous sentence, the Selling Shareholder may for a period of 60
days after such nonacceptance or deemed rejection Transfer the Offered Shares
to the third party or parties designated in the Offer and on the terms and
conditions specified in the Offer. A proposed Transfer after the expiration of
such 60-day period or on any other terms shall again be subject to the rights
of first refusal and other provisions of this Section 1.
1.4 TAG-ALONG RIGHTS
1.4.1 TRANSFERS BY MIL
Except as otherwise provided in this Agreement, neither MIL
nor any Affiliate of MIL may Transfer all or any part of the Shares owned by
MIL or such Affiliate unless (a) MIL or such Affiliate shall have sent to each
other Shareholder (each a "Tag-Along Offeree") a written offer (the "Tag-Along
Offer") to include in such Transfer all or any portion of such Tag-Along
Offeree's Tag-Along Shares (as defined below) at the same price and on the same
terms as MIL or such Affiliate shall Transfer its Shares and (b) such offer
shall not have been accepted in the manner described in this Section 1.4. Each
Tag-Along Offeree's "Tag-Along Shares," which shall be calculated separately
for each class of Shares included in the Offered Shares, shall mean that number
of Shares of such class as is equal to the number of Shares of such class then
owned by such Tag-Along Offeree multiplied by a fraction, the numerator of
which is the number of Shares of such class being sold by MIL and its
Affiliates and the denominator of which is the number of Shares of such class
then owned by MIL and its Affiliates.
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1.4.2 TAG-ALONG OFFER
The Tag-Along Offer shall consist of a written offer to the
Tag-Along Offerees to include Tag-Along Shares in the Shares proposed to be
Transferred (the "Proposed Shares"). The Tag-Along Offer shall set forth (a) a
statement of intention to effect such a Transfer, (b) the number and class of
Proposed Shares, (c) the terms and conditions of the proposed Transfer,
including the purchase price for the Proposed Shares, and (d) the desired
closing date of the transaction.
1.4.3 ACCEPTANCE OF TAG-ALONG OFFER
Within 30 days after its receipt of the Tag-Along Offer, each
Tag-Along Offeree may, at its option, accept the Tag-Along Offer as to all or
less than all of such Tag-Along Offeree's Tag-Along Shares by giving
irrevocable written notice to MIL, the Company and the other Shareholders prior
to the expiration of such 30-day period. Any Tag-Along Shares to be
Transferred by Tag-Along Offerees shall be substituted for an equal number of
Proposed Shares.
1.4.4 CLOSING
MIL and those Tag-Along Offerees having accepted the Tag-Along
Offer shall use their best efforts to complete the closing of any such Transfer
within 30 days after the end of the 30-day offering period. If MIL and the
Tag-Along Offerees shall fail to complete such Transfer within such 30-day
closing period (unless closing is delayed due to the need for required
governmental or regulatory approvals), or if MIL and the Tag-Along Offerees
propose to effect a Transfer on different terms than those permitted by the
Tag-Along Offer pursuant to Section 1.4.2, then any proposed Transfer shall
again be subject to all the Transfer restrictions set forth in this Section 1.
1.5 DRAG-ALONG RIGHTS OF MIL
1.5.1 RIGHT TO REQUIRE SALE OF THE COMPANY
Notwithstanding the other provisions of this Section 1, if MIL
and its Affiliates seek to effect a transaction involving a bona fide sale of
their entire interest in the Company to an unrelated third party or parties (a
"Buyer"), whether by sale of shares, sale of all or substantially all assets,
merger or otherwise (a "Sale"), the other Shareholders will, upon notice from
MIL after compliance with the provisions of this Section 1.5, take all
commercially reasonable actions required to assist in effecting such Sale,
including, without limitation, Transferring or agreeing to Transfer the Shares
owned by them at a price equal to that at which MIL is Transferring Shares and
otherwise on identical terms and voting in favor of a transaction that results
in such a Transfer.
1.5.2 PROCEDURE
MIL shall give written notice to the Company's Board of
Directors (the "Board") and the other Shareholders of MIL's intent to effect a
Sale of the Company.
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MIL may for a period of 180 days after such notice seek to effect a Sale of the
Company to a Buyer. If such Sale shall not have closed within such 180-day
period (unless closing is delayed due to the need for required governmental or
regulatory approval), any proposed Transfer shall again be subject to all the
Transfer restrictions set forth in this Section 1.
1.6 NO OTHER TRANSFER EFFECTIVE
Except as provided in this Section 1, no Transfer of any right, title
or interest in the Shares shall be effective, and the Company shall not record
or recognize any such Transfer, until there has been compliance with the
provisions of this Agreement. If no Offer is made as herein required, the
Shareholders may nevertheless exercise their rights hereunder as to the Shares
subject to any proposed Transfer, and they may do so at any time, including
after the Transfer of the Shares.
2. VOTING
2.1 VOTING OF SHARES
Each Shareholder shall vote all Shares owned by such Shareholder, or
as to which such Shareholder has voting power, pursuant to the provisions of
this Agreement.
2.2 ELECTION OF DIRECTORS
In elections of directors of the Company, the Shareholders shall vote
in favor of (a) one or more candidates designated by the Founders, which
candidates would represent no more than 10% of the directors of the Company;
provided that so long as the Founders shall collectively own 10% or more of the
Common Stock, the Founders shall have the right to designate at least one
candidate for election to the Board and (b) all other candidates, all of whom
shall have been designated by MIL. If at any time the Founders shall
collectively own less than 10% of the Common Stock, the director or directors
designated for election to the Board by the Founders (the "Founder Director")
shall resign as a director. The Founders shall not have the right to designate
any candidates for election to the board of directors or comparable governing
body of any subsidiary of the Company.
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2.3 VOTING TRUST
If MIL and its Affiliates shall at any time have beneficial ownership
of less than 50% but more than 25% of the Common Stock, the Founders and the
Founder Director shall, subject to their fiduciary duties to the Company and
all Shareholders, execute any legal document required by appropriate law, and
thereafter cast all votes in favor of or against matters to be approved by the
shareholders of the Company or the Board, as the case may be, in the same
manner as MIL and its Affiliates and the directors nominated thereby,
respectively; provided that this Section 2.3 shall not diminish any rights
which the Founders otherwise have under Article Seven of the Company's Articles
of Incorporation.
3. REPURCHASE AT OPTION OF COMPANY OF COMMON STOCK OWNED BY FOUNDERS
(a) If the Founder Director fails to approve any action proposed
to the Board pursuant to Article Seven of the Company's Articles of
Incorporation, or if the holders of Class B Common Stock fail to approve any
such action proposed to the shareholders of the Company, the Company shall have
the right, by written notice to the Founders given within 30 days of the vote
of the Board, and upon approval of a simple majority of the directors of the
Company (excluding the Founder Director), to repurchase all, but not less than
all, of the Common Stock then owned by the Founders. Such repurchase shall
close within 30 days of the final determination of Fair Market Value, subject
only to completion of the appraisal process and receipt of required
governmental or regulatory approvals. The repurchase price (the "Repurchase
Price") shall equal the Appraised Fair Market Value (as defined below) of the
Company as of the exercise date multiplied by a fraction, the numerator of
which is the number of shares of Common Stock then owned by the Founders and
the denominator of which is the total number of Shares (calculated on a fully
diluted basis at the stated exercise price of all options). The Repurchase
Price shall, at the Company's election, be payable in cash, common stock of
Nextel Communications, Inc. ("Nextel Common Stock") or any combination thereof.
Any Nextel Common Stock used as part of the Repurchase Price shall be either
registered with the U.S. Securities and Exchange Commission (the "SEC") or
registrable at the election of the Founders, exercisable by Telcom on behalf of
the Founders, within 30 days after closing of the repurchase right. The Nextel
Common Stock shall be valued at the average of the closing price of the Nextel
Common Stock on the principal trading market on which such shares are traded
over the 20 trading days prior to closing of the repurchase transaction. If
paid in cash, the Repurchase Price shall be payable in four equal quarterly
installments, beginning on the date of closing of the repurchase right and on
each three-month anniversary thereof, with interest accruing on the unpaid
principal at an annual rate equal to the annual rate of interest publicly
announced by The Chase Manhattan Bank, N.A., or any successor thereto, in New
York City as its prime rate from time to time (the "Prime Rate") plus 1%.
(b) For purposes of this Agreement, "Fair Market Value" means the
price that an unrelated third party would pay if it were to acquire all
outstanding Shares (including all outstanding vested options at the stated
exercise price thereof) in an arm's-length
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transaction, assuming that the Shares were being sold in a manner designed to
attract all possible participants and without taking into consideration a
control premium or minority discount. The "Appraised Fair Market Value" shall
be determined in accordance with the following procedures: MIL shall select an
investment banking firm of recognized national standing (the "First
Appraiser"), which shall appraise the Fair Market Value and deliver its
appraisal to the Company, Telcom and MIL, within 60 days of its engagement. If
Telcom shall disagree with the Fair Market Value determined by such appraiser,
then Telcom shall have the right to appoint an additional investment banking
firm of recognized national standing (the "Second Appraiser"). If Telcom does
not engage a Second Appraiser within 30 days of the First Appraiser's delivery
of its appraisal, the First Appraiser's appraisal shall be the Appraised Fair
Market Value. If Telcom engages a Second Appraiser, the Second Appraiser will
appraise the Fair Market Value, and deliver its appraisal to the Company,
Telcom and MIL, within 60 days of its engagement. If such difference between
the two appraisals is less than 20% of the lower appraised value, then the
Appraised Fair Market Value shall be the average of the two appraisals. If the
difference is greater than or equal to 20% of the lower appraised value, the
two appraisers shall engage a third independent investment banking firm of
recognized national standing (the "Third Appraiser"), which shall appraise the
Fair Market Value within 60 days of its engagement. The Appraised Fair Market
Value shall be the average of the two appraised values which are closest in
absolute U.S. dollars. All appraisals of Fair Market Value shall be as of the
date of notice of exercise of the right. The expenses of the First Appraiser
shall be borne by the Company; the expenses of the Second Appraiser, if any,
shall be borne by the Founders; and the expenses of the Third Appraiser, if
any, shall be borne equally by the Company and the Founders.
4. FOREIGN OWNERSHIP RULES
If at any time Brazilian law requires a reduction in the ownership of
the Company by any parties then owning Shares, then
(a) Shares shall be sold on the same date pro
rata by all Shareholders required to sell Shares on the same terms;
(b) such sales shall be at Appraised Fair Market
Value, or as close thereto as achievable under the then-current regulatory
conditions;
(c) such sales shall be made only to purchasers
acceptable to MIL, which acceptance shall not be unreasonably withheld; and
(d) the parties shall use their reasonable best efforts
to sell such Shares for cash.
5. CAPITAL CALLS, PREEMPTIVE RIGHTS AND PLEDGES OF COMPANY STOCK
5.1 GRACE PERIOD FOR FOUNDERS
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Notwithstanding any capital contributions by any Shareholder to the
Company during the Grace Period, the Founders shall have no obligation to make
any pro rata capital contribution to the Company, and the Shares held by the
Founders as of the date hereof shall retain an aggregate interest in dividends
and other cash or noncash distributions by the Company equal to their aggregate
percentage ownership of the Common Stock (19% as of the date hereof, as such
percentage may be reduced by the issuance of additional shares of Common Stock
to any third party in accordance with Section 5.2) (the "Founders'
Percentage"). The issuance of Common Stock to MIL or its Affiliates in
connection with any such capital contributions shall not reduce the Founders'
Percentage.
5.2 PREEMPTIVE RIGHTS
The Company may at any time issue additional shares of Common Stock to
any third party at fair market value, as determined in good faith by a majority
of the directors of the Company, so long as, after such issuance, the Founders'
Percentage is not reduced to less than 17%. If the Company intends to issue
additional shares of Common Stock to a third party such that the Founders would
own in the aggregate less than 17% of the Common Stock, the Company shall
deliver to the Founders a written notice at least 30 days prior to such
proposed issuance. The Founders shall have the right, exercisable upon
irrevocable written notice delivered to the Company at least 10 days prior to
the date of proposed issuance, to purchase additional shares of Common Stock
such that after such issuance, the Founders would own in the aggregate no more
than 17% of the Common Stock; provided that the Founders may exercise their
preemptive rights only if the Founders in the aggregate exercise such rights
with respect to the maximum number of shares of Common Stock permitted
hereunder. If some but not all of the Founders exercise such right, the number
of shares issuable to each exercising Founder shall bear the same proportion to
the aggregate number of shares issuable to all exercising Founders as the
number of shares held by such exercising Founder prior to such issuance bears
to the aggregate of shares held by all exercising Founders.
5.3 FOUNDERS' "TRUE-UP" OPTION
On or prior to the last day of the Grace Period, the Founders shall
have the option, exercisable by Telcom on behalf of the Founders, to pay to the
Company an amount (the "Antidilution Payment") equal to:
FP x CC
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where
"FP" is the Founders' Percentage; and
"CC" is the sum of (a) the aggregate amount of all capital contributions made
to the Company by shareholders other than the Founders during the Grace Period
and (b) the amount of each such capital contribution, multiplied by the Prime
Rate plus 1%, per
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annum, for each capital contribution from the date such contribution was made
to the date of payment of the Antidilution Payment.
The Company shall deliver to Telcom a notice setting forth the
calculation of the Antidilution Payment at least 30 days prior to the last day
of the Grace Period; provided that the failure of the Company to deliver such
calculation in a timely manner shall not affect the parties' rights and
obligations hereunder; provided, further, that if such notice is not delivered
in a timely manner, Telcom shall pay the Antidilution Payment upon the later of
the last day of the Grace Period and 15 days after delivery of such notice.
Any Antidilution Payment shall be free of all withholding with respect to taxes
of any nature, and if the Founders are required by applicable law to make any
such withholding with respect to any such payment, such Antidilution Payment
shall be increased so that after making all required withholdings, the Company
shall receive an amount equal to the amount it would have received had such
withholdings not been made. Upon receipt in full of the Antidilution Payment,
the Company shall issue to the Founders on a pro rata basis, based on the
number of shares then owned by each Founder, shares of Common Stock such that
the percentage of the Common Stock owned by the Founders after such transfer
equals the Founders' Percentage. If Telcom does not make the Antidilution
Payment on the last day of the Grace Period, the Founders' interests in
dividends and other cash or noncash distributions by the Company shall
thereafter be proportionate to their respective shareholdings in the Company.
If, within the 30-day period prior to the last day of the Grace
Period, (a) MIL shall have offered to sell shares of Common Stock owned by MIL
to Telcom for a price that is the economic equivalent of the transaction
contemplated by the first paragraph of this Section 5.3, (b) Telcom shall have
declined such offer and shall have made the Antidilution Payment to the
Company, resulting in the Company being, in the judgment of a majority of the
Board of Directors, over-capitalized, and (c) the Company immediately makes a
dividend payment to the Shareholders in an aggregate amount less than or equal
to the Antidilution Payment, then Telcom shall immediately make an additional
payment to each Shareholder so that such Shareholder shall have received an
amount equal to the dividend to which such Shareholder would be entitled if no
taxes of any nature were payable with respect to such dividend payment.
5.4 PLEDGES OF COMMON STOCK
If the Company or any of the WVB Affiliates shall enter into a
financing arrangement pursuant to which the lender requires the pledge of all
of the Common Stock as security for such financing, and MIL and its Affiliates
agree to pledge the Common Stock owned by them, then the Founders shall
simultaneously pledge the Common Stock owned by them on the same terms and
conditions as MIL and its Affiliates; provided that such lender shall have no
recourse against the Founders in connection with such financing other than to
the Common Stock so pledged and such pledge shall expressly permit the exercise
and consummation of any repurchase right held by a holder of Class B Common
Stock pursuant to the Company's Articles of Incorporation.
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6. INTEREST OF SPOUSE
6.1 INTEREST OF SPOUSE SUBJECT TO AGREEMENT
Any property interest in the Shares now owned or hereafter acquired by
the spouse of a Shareholder shall be subject to the terms of this Agreement and
shall be subject to the same restrictions on Transfer described in Section 1 as
if such interests were owned by a Shareholder and as if such spouse were a
Shareholder.
6.2 SIGNATURE OF SPOUSES
Each Shareholder's spouse signing this Agreement acknowledges that he
or she has read this Agreement and understands its contents, specifically this
Section 6. Notwithstanding the foregoing, absence of a spouse's signature
hereto shall not alter the effectiveness hereof or the enforceability of the
provisions contained herein as against such spouse or any Shareholder.
Each spouse acknowledges that he or she has had the opportunity to
obtain separate and independent counsel of his or her own choosing prior to
signing this Agreement and has waived such right. Each spouse agrees that the
Shares and any interest, community or otherwise, he or she has in them are
subject to the provisions of this Agreement. Each spouse also agrees that his
or her Shareholder-spouse may join in any future amendments or modifications of
this Agreement without any further signature, acknowledgment, agreement or
consent on his or her part and he or she designates his or her
Shareholder-spouse attorney-in-fact for this purpose. Furthermore, each spouse
agrees to take no action at any time to hinder the operation of this Agreement
as to the Shares in which he or she has an interest.
7. TERMINATION
This Agreement shall lapse and be of no further force or effect upon
the first of the following to occur:
(a) Merger, Sale or Liquidation. The approval by
the Board and the Shareholders, as required by law and by the Company's
Articles of Incorporation and Bylaws, of the merger of the Company with any
other company as a result of which securities representing all or substantially
all of the voting power of the Company are held by Persons that had less than a
majority interest, directly or indirectly, in such securities prior to such
merger, or of the sale of all or substantially all of the assets of the
Company, or of its liquidation.
(b) Agreement of Shareholders. The written
agreement of holders of not less than 97% of the Common Stock to the
termination of this Agreement.
(c) Public Offering. The closing of an offering
by the Company of its equity securities to the public pursuant to a
registration statement filed pursuant to the
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U.S. Securities Act of 1933, as amended (the "Act"), or the equivalent
legislation of another country.
(d) Lapse of Time. The expiration of 21 years
after the death of the last to die of the individual Shareholders named herein.
8. REGISTRATION RIGHTS
8.1 DEFINITIONS
For purposes of these registration rights:
(a) The terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act, and the
declaration or ordering of effectiveness of such registration statement or
document;
(b) The term "Registrable Securities" means any
Common Stock held by the Holders, including Common Stock issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which
is issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of, such Common Stock, excluding in all cases, however,
any Registrable Securities sold by a Person in a transaction in which its
rights under this Agreement are not assigned;
(c) The number of shares of "Registrable
Securities then outstanding" shall be determined by the number of shares of
Common Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities which are,
Registrable Securities;
(d) The term "Holder" means MIL, the Founders or any of
their Affiliates or permitted transferees; and
(e) The term "Initiating Holders" means the
Holders who initiate the request for registration under Section 8.2(a).
8.2 REQUEST FOR REGISTRATION
(a) If at any time following six months after the closing of the
Company's initial public offering, the Company shall receive a written request
from MIL or any of its Affiliates or from Holders of at least 50% of the
Registrable Securities then held by the Founders that the Company file a
registration statement under the Act covering the registration for an
underwritten public offering of Registrable Securities with estimated aggregate
gross proceeds of at least $10,000,000, based on a good-faith estimate of the
market price of the Common Stock, then the Company shall, within 10 days of the
receipt thereof, give written notice of such request to all Holders and shall,
subject to the limitations contained in this Section 8, effect the registration
under the Act of all Registrable Securities which the Holders request to be
registered by their giving written
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notice to the Company within 20 days of the mailing by the Company of its
previous notice to the Holders.
(b) The right of any Holder to include its Registrable Securities
in such registration shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company as provided in Section 8.4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders, which
underwriter must also be reasonably acceptable to the Company. Notwithstanding
any other provision of this Section 8.2, if the underwriter advises the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the
number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder.
(c) The Company is obligated to effect only one registration
pursuant to this Section 8.2 on behalf of MIL and its Affiliates and one
registration pursuant to this Section 8.2 on behalf of the Founders, their
Affiliates and permitted transferees; provided that, if the number of
Registrable Securities to be registered by either such group is reduced
pursuant to Section 8.2(b) to less than 75% of the Registrable Securities
requested to be registered by such group, such registration shall not be deemed
to be such group's demand registration pursuant to this Section 8.2(c).
(d) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 8.2 a
certificate signed by the President of the Company stating that, in the good
faith judgment of the Board, it would be seriously detrimental to the Company
and its shareholders for such registration statement to be filed and it is
therefore essential to defer the filing of such registration statement, the
Company shall have the right to defer such filing for a period of not more than
90 days after receipt of the request of the Initiating Holders.
8.3 COMPANY REGISTRATION
If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its stock or other securities under
the Act in connection with the public offering of such securities solely for
cash (other than a registration relating solely to the sale of securities to
participants in a Company stock plan, or a registration on any form that does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities), the
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Company shall, at each such time, promptly give each Holder written notice of
such registration. Upon the written request of each Holder given within 20
days after mailing of such notice by the Company, the Company shall, subject to
the provisions of Section 8.7, cause to be registered under the Act all of the
Registrable Securities that each such Holder has so requested.
8.4 OBLIGATIONS OF THE COMPANY
Whenever required under this Agreement to effect the registration of
any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective;
(b) Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such registration statement;
(c) Furnish to the Holders such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of all securities covered by
such registration statement;
(d) Use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holders; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions;
(e) In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering. Each Holder participating in such underwriting shall also enter into
and perform its obligations under such an agreement; and
(f) Notify each Holder of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered
under the Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
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8.5 FURNISH INFORMATION
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement that the selling Holders shall
furnish to the Company such information regarding themselves, the Registrable
Securities held by them and the intended method of disposition of such
securities as shall be reasonably required to effect the registration of their
Registrable Securities and to execute such documents in connection with such
registration as the Company may reasonably request.
8.6 EXPENSES OF REGISTRATION
In connection with any registration pursuant to this Agreement, the
Company shall be responsible for the payment of all expenses of the
registration, with the exception of underwriting commissions and discounts
which shall be paid by the Company, the Holders and any other selling security
holders in proportion to the aggregate value of the securities offered for sale
by each of them. Notwithstanding the preceding sentence, Holders participating
in a registration pursuant to Section 8.2 shall be responsible for the payment
of all expenses directly related to such registration.
8.7 UNDERWRITING REQUIREMENTS
The Company shall not be required under Section 8.3 to include any of
the Holders' securities in an underwritten offering of the Company's securities
unless such Holders accept the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it. If the total amount of
securities, including Registrable Securities, requested by Holders to be
included in such offering exceeds the amount of securities that the
underwriters reasonably believe compatible with the success of the offering,
then the Company shall be required to include in the offering only that number
of such securities, including Registrable Securities, that the underwriters
believe will not jeopardize the success of the offering. The securities to be
included in the registration in the event of such a reduction shall be
apportioned first to the Company, then pro rata among the selling Holders
according to the total amount of securities requested to be sold in such
registration by such Holders, or in such other proportions as shall mutually be
agreed to by such selling Holders.
8.8 DELAY OF REGISTRATION
No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement.
8.9 INDEMNIFICATION
In the event any Registrable Securities are included in a registration
statement under this Agreement:
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(a) To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, the partners, officers, agents,
employees and directors of each Holder, any underwriter (as defined in the Act)
for such Holder and each Person, if any, who Controls (as defined in the Merger
Agreement) such Holder or underwriter within the meaning of the Act or the U.S.
Securities Exchange Act of 1934, as amended (the "1934 Act"), against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final
prospectus contained therein, in light of the circumstances under which they
were made, or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, any
state securities law or any rule or regulation promulgated under the Act, the
1934 Act or any state securities law; and the Company will reimburse each such
Holder, partner, officer, agent, employee or director, underwriter or
Controlling Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 8.9(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably
withheld, nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation occurring in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by, or on behalf of, any such Holder, underwriter or Controlling
Person.
(b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its officers,
directors, agents or employees, each Person, if any, who Controls the Company
within the meaning of the Act, any underwriter and any other Holder selling
securities in such registration statement or any of its partners, officers,
directors, agents or employees or any Person who Controls such Holder, against
any losses, claims, damages or liabilities (joint or several) to which the
Company or any such officer, director, agent, employee, Controlling Person, or
underwriter, or other such Holder or its partner, officer, director, agent,
employee or Controlling Person may become subject, under the Act, the 1934 Act
or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by, or on behalf of, such Holder expressly for use in connection with
such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such partner, officer,
director, agent, employee, Controlling Person, underwriter or other such
Holder, partner, officer, director, agent, employee or
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Controlling Person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 8.9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld.
(c) Promptly after receipt by an indemnified
party under this Section 8.9 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
8.9, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly notified, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if, in the opinion of
counsel for the indemnifying party, representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a reasonable period of
time of the commencement of any such action shall relieve such indemnifying
party of any liability to the indemnified party under this Section 8.9 to the
extent prejudicial to its ability to defend such action, but the omission so to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 8.9.
8.10 "MARKET STAND-OFF" AGREEMENT
The Holders hereby agree that they shall not, to the extent reasonably
requested by the Company and an underwriter of Common Stock (or other
securities) of the Company, sell or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any Registrable Securities for
180 days following the effective date of a registration statement of the
Company filed under the Act; provided, however, that all officers and directors
of the Company and all other Persons with registration rights (whether or not
pursuant to this Agreement) enter into similar agreements. In order to enforce
the foregoing covenant, the Company may impose stop-transfer instructions with
respect to the Registrable Securities of the Holders (and the shares or
securities of every other Person subject to the foregoing restriction) until
the end of such period.
8.11 RIGHT TO TERMINATE REGISTRATION
The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 8 prior to the effectiveness of
such registration whether or not any Holder has elected to include securities
in such registration.
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9. NONCOMPETITION
Each Shareholder agrees that, until one year following termination of
this Agreement with respect to such Shareholder, neither such Shareholder nor
any Affiliate Controlled by such Shareholder shall in any way, by action or
inaction, directly or indirectly, for itself or for the benefit of any other
Person, own, manage, operate, join, Control or participate in the ownership,
management, operation or Control of any Person that competes with the Company
or any Affiliate thereof, or agrees to do any of the foregoing, in the business
of Specialized Mobile Radio or paging in Brazil, other than wireless radio
engineering, design or program management services and the manufacture and sale
of related software and hardware products; provided that neither any
Shareholder nor any Affiliate Controlled by such Shareholder may maintain an
equity interest in any Person in which it owns an equity interest as of the
date hereof, which equity interest entitles any Shareholder or any Affiliate
Controlled by such Shareholder to control of policymaking or day-to-day
operations of such Person or in connection with which any Shareholder or any
Affiliate Controlled by such Shareholder has a representative on the board of
directors, if such Person elects to engage in the business of cellular
communications or Personal Communications Systems in Brazil.
10. MISCELLANEOUS
10.1 SPECIFIC ENFORCEMENT
Each Shareholder expressly agrees that the Company and the other
Shareholders will be irreparably damaged if this Agreement is not specifically
enforced. Upon a breach or threatened breach of the terms, covenants and/or
conditions of this Agreement by any Shareholder, each of the Company and the
other Shareholders shall, in addition to all other remedies, be entitled to a
temporary or permanent injunction, without showing any actual damage, and/or a
decree for specific performance, in accordance with the provisions of this
Agreement.
10.2 LEGEND
Each certificate evidencing any Shares shall bear a legend
substantially as follows:
The securities represented by this certificate are subject to
the terms and conditions of the Shareholders Agreement among
the Company and its Shareholders dated as of January 29, 1997,
as at any time amended, and may not be sold, transferred or
encumbered except in accordance with the terms and provisions
of such Agreement, a copy of which is on file at the principal
executive office of the Company and will be furnished to the
holder of this certificate upon request and without charge.
10.3 DELIVERY OF INFORMATION
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The Company shall deliver to each Shareholder and upon written request
to any other Shareholder of the Common Stock:
(a) as soon as practicable, but in any event
within 120 days after the end of each fiscal year of the Company, an income
statement for such fiscal year, a balance sheet of the Company as of the end of
such year and a statement of cash flows for such year, such financial
statements to be prepared in accordance with U.S. generally accepted accounting
principles and audited by independent certified public accountants of
nationally recognized standing selected by the Company, and
(b) as soon as practicable, but in any event
within 60 days after the end of each of the first three fiscal quarters, an
income statement for such fiscal quarter, a balance sheet of the Company as of
the end of such quarter and a statement of cash flows for such quarter, such
financial statements to be prepared in accordance with U.S. generally accepted
accounting principles and any other operating information provided to the
Board.
10.4 INSPECTION
The Company shall permit each Shareholder owning more than 5% of the
Common Stock at such Shareholder's expense to visit and inspect the Company's
properties, to examine its books of accounts and records and to make copies and
extracts therefrom, and to discuss the Company's business prospects, affairs,
finances and accounts with its officers, all at such reasonable times as may be
requested by such Shareholder and for purposes reasonably related to the
business of the Company.
10.5 COMPLIANCE WITH LAWS
Each Shareholder represents, warrants and covenants that it and any
director, officer, agent, employee or other Person acting on its behalf or on
behalf of any Affiliate of it (a) have not been and will not be involved in the
offering, paying or giving of anything of value, either directly or indirectly,
to a government official, political party or candidate for political office to
influence such Person or entity in the discharge of his, her or its official
duties, (b) have not engaged and will not engage in any such unlawful conduct
during the time of carrying out their duties and (c) have maintained and will
maintain accounting books and records in reasonable detail and institute
internal controls to ensure that such books and records accurately reflect
corporate transactions and the disposition of assets.
10.6 NOTICES
Notices given hereunder shall be deemed to have been duly given on the
date of personal delivery, on the date of facsimile transmittal (provided the
addressor confirms receipt of any facsimile by the addressee), on the day after
delivery by overnight courier or three days after mailing if mailed by
certified or registered mail, return receipt requested, postage prepaid, to the
party being notified at his, her or its address specified on the
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applicable signature page or such other address of which the addressee may
subsequently notify the other parties in writing.
10.7 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof, and neither this Agreement nor any
provision hereof may be waived, modified, amended or terminated except by a
written agreement signed by the Company and holders of 97% of the Common Stock;
provided, however, that any new shareholder of the Company may execute this
Agreement without the consent of the Founders. No waiver of any breach or
default hereunder shall be considered valid unless in writing, and no such
waiver shall be deemed a waiver of any subsequent breach or default of the same
or similar nature.
10.8 GOVERNING LAW; SUCCESSORS AND ASSIGNS
This Agreement shall for all purposes be governed by and construed in
accordance with the laws of the state of Virginia and shall be binding upon the
heirs, personal representatives, executors, administrators, successors and
permitted assigns of the parties. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the
state of Virginia or any Virginia state court if any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, and (c) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court sitting
in the state of Virginia or a Virginia state court.
10.9 HEADINGS
The headings of the sections of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
10.10 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which together shall constitute
one and the same instrument.
10.11 SEVERABILITY
If any provision of this Agreement shall be held to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render illegal,
invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or unenforceable
provision were not contained herein.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date
and year first above written.
THE COMPANY:
XxXXX INTERNATIONAL (BRAZIL), LTD.
By /s/ XXXXX X. XXXXXXXXX
--------------------------------------
Its President
----------------------------------
Address:
Facsimile number:
THE SHAREHOLDERS:
XxXXX INTERNATIONAL, LTD.
By /s/ XXXXX X. XXXXXXXXX
--------------------------------------
Its President
----------------------------------
Address: 0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile number: (000) 000-0000
THE FOUNDERS:
TELCOM VENTURES, LLC
By /s/ XXXXXXXX XXXXX
--------------------------------------
Its President
----------------------------------
Address: Arlington Courthouse Plaza II
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile number: (000) 000-0000
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below approves this Agreement and constitutes and appoints Xxxxxxxx
Xxxxx and Xxxxx Xxxxx, duly authorized officers of Telcom Ventures, LLC, and
each of them, his, her or its true and lawful attorney-in-fact, agent and
proxy, with full power of substitution and resubstitution, for him, her or it
and in his, her or its name, place and stead, in any and all capacities, to
take all actions hereunder, including the signing of any and all amendments
hereto, and to vote all common stock of the Company held by the undersigned, at
a meeting of shareholders or by written consent, with the powers that the
undersigned would possess if personally present at a meeting of shareholders,
granting unto said attorneys-in-fact, agents and proxies and each of them full
power and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he, she or it might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact, agents and proxies or any of them,
or their or his, her or its substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
SOUTH BEACH VENTURES INC.
By /s/ XXXXXX XXXXXXX
--------------------------------------
Its Director
----------------------------------
Address:
Facsimile number:
/s/ XXXXXXXX XXXXX
------------------------------------------
XXXXXXXX XXXXX
Address:
Facsimile number:
/s/ XXXXX XXXXX
------------------------------------------
XXXXX XXXXX
Address:
Facsimile number:
THE XXXXX XXX SINGH EDUCATION
TRUST
By /s/ XXXXX XXXXX
--------------------------------------
Its Trustee
----------------------------------
Address:
Facsimile number:
22
THE SAMIR XXX XXXXX EDUCATION
TRUST
By /s/ XXXXX XXXXX
--------------------------------------
Its Trustee
----------------------------------
Address:
Facsimile number:
/s/ XXXXXX XXXXX by [sig]
------------------------------------------
XXXXXX XXXXX
Address:
Facsimile number:
/s/ XXXXXXX XXXXXX by [sig]
------------------------------------------
XXXXXXX XXXXXX
Address:
Facsimile number:
23
Annex to
Shareholders
Agreement
RESTATED ARTICLES OF INCORPORATION
OF
XXXXX INTERNATIONAL (BRAZIL), LTD.
FIRST. The name of the corporation is XXXXX INTERNATIONAL (BRAZIL),
LTD. (the "Corporation").
SECOND. The Corporation shall have two classes of common stock, Class
A Common Stock, par value one cent ($0.01) per share ("Class A Common Stock"),
and Class B Common Stock, par value one cent ($0.01) per share ("Class B Common
Stock"). The total number of shares which the Corporation shall have the
authority to issue is 45,000,000 shares of Class A Common Stock and 5,000,000
shares of Class B Common Stock.
A. Voting Rights. On all matters other than the
election of Directors, and except as required by law, the shares of
Class A Common Stock and Class B Common Stock shall vote together as a
single class, with each share of Class A Common Stock having 90/81
votes per share and each share of Class B Common Stock having 10/19
votes per share.
B. Board of Directors. The holders of the
outstanding shares of Class A Common Stock ("Class A Holders") shall
have the right, as a class, to elect nine Directors. The holders of
the outstanding shares of Class B Common Stock ("Class B Holders")
shall have the right, as a class, to elect one Director.
C. Redemption Right of Class B Common Stock.
Class B Holders shall be entitled to cause the Corporation to redeem
all outstanding shares of Class B Common Stock on the terms set forth
below.
(i) At any time after October 31, 2001
and prior to November 1, 2003, or at any time after a Change of
Control shall have occurred, the holder or holders of a majority of
the then outstanding shares of Class B Common Stock may deliver a
request for redemption to the Corporation, and upon receipt of such a
request the Corporation shall be required to redeem all outstanding
shares of Class B Common Stock on the terms specified below.
(ii) The Corporation shall schedule a
closing (the "Closing") for such redemption on a date selected by the
Corporation within six months of delivery of such notice, subject only
to receipt of all required governmental or regulatory approvals, and
shall promptly notify all Class B Holders of the time, date and place
of the Closing.
(iii) At the Closing, the Corporation
shall redeem all outstanding shares of Class B Common Stock for a
price (the "Redemption Price") equal to the Appraised Fair Market
Value of the Corporation as of the exercise date, multiplied by a
fraction, the numerator of which is the number of shares of Class B
Common
24
Stock outstanding and the denominator of which is the number of shares
of Common Stock (calculated on a fully-diluted basis at the stated
exercise price of all options) then outstanding. The Redemption Price
shall, at the Corporation's election, be payable in cash,
publicly-traded common stock of any entity owning not less than 50% of
the outstanding shares of Class A Common Stock ("Public Company Common
Stock") or any combination thereof. Any Public Company Common Stock
transferred as part of the Redemption Price shall be shares that are
registered with the Securities and Exchange Commission or that are
required to be so registered within 30 days after the Closing. The
Public Company Common Stock shall be valued at the average of the
closing prices on the principal market on which such stock is traded
during the 20 trading days prior to the Closing. If paid in cash, the
Redemption Price shall be payable in four equal quarterly
installments, beginning on the date of closing of the repurchase right
and on each three-month anniversary thereof, with interest accruing on
the unpaid principal at the Prime Rate plus 1%.
For purposes of these Articles of Incorporation, a
"Change of Control" means the acquisition by any person, entity or
group after January 31, 1997 of the power, directly or indirectly, to
elect a majority of the Corporation's Directors.
For purposes of these Articles of Incorporation,
"Fair Market Value" means the price that an unrelated third party
would pay if it were to acquire all outstanding equity interests of
the Corporation (including all outstanding vested options) in an
arm's-length transaction, assuming that such interests were being sold
in a manner designed to attract all possible participants and without
taking into consideration a control premium or minority discount. The
"Appraised Fair Market Value" shall be determined in accordance with
the following procedures: the Corporation shall select an investment
banking firm of recognized national standing which has not provided
services to the Corporation or any affiliate of the Corporation (an
"Independent Appraiser") within the preceding 24 months (the "First
Appraiser") which shall appraise the Fair Market Value and deliver its
appraisal to the Corporation and the Class B Holders within 60 days of
its engagement. If the majority of the Class B Holders shall disagree
with the Fair Market Value determined by such Independent Appraiser
then the majority of Class B Holders shall have the right to appoint
an additional Independent appraiser (the "Second Appraiser"). If the
Class B Holders do not engage a Second Appraiser within 30 days of the
First Appraiser's delivery of its appraisal, the First Appraiser's
appraisal shall be the Appraised Fair Market Value. If the Class B
Holders engage a Second Appraiser, the Second Appraiser will appraise
the Fair Market Value, and deliver its appraisal to the Corporation
and the Class B Holders within 60 days of its engagement. If such
difference between the two appraisals is 20% or less of the lower
appraised value, the Appraised Fair Market Value will be the average
of the two appraisals. If such difference between the two appraisals
is more than 20% of the lower appraised value, the two appraisers
shall engage a third Independent Appraiser (the "Third Appraiser"),
which shall appraise the Fair Market Value within 60 days of its
engagement. The Appraised Fair Market Value
25
shall be the average of the two appraised values which are closest in
absolute dollars. All appraisals of Fair Market Value shall be as of
the date of receipt by the Corporation of the request for redemption
right. The expenses of the First Appraiser shall be borne by the
Corporation; the expenses of the Second Appraiser, if any, shall be
borne by the Class B Holders, and the expenses of a Third Appraiser,
if any, shall be borne equally by the Corporation on the one hand and
the Class B Holders on the other hand.
For purposes of these Articles of Incorporation,
"Prime Rate" means the rate announced by The Chase Manhattan Bank,
N.A., or any successor thereto, in New York City from time to time as
its "base" or "prime" rate.
D. No Preemptive Rights. The Class A Holders
and the Class B Holders shall have no preemptive right to purchase or
subscribe for any shares of capital stock of the Corporation of any
class whether now or hereafter authorized or any securities
convertible into or exchangeable for shares of Common Stock.
E. Other Rights. Except as otherwise stated
herein, the rights of shares of Class A Common Stock and Class B
Common Stock shall be equal in all respects.
THIRD: The purpose of the corporation is to engage in any lawful
activity for which corporations may be organized under the Virginia Stock
Corporation Act.
FOURTH: No officer or Director shall be personally liable to the
Corporation or its shareholders in any proceedings brought by a shareholder in
the right of the Corporation or brought by or on behalf of shareholders of the
Corporation, for monetary damages assessed against an officer or Director
arising out of a single transaction, occurrence or course of conduct.
Notwithstanding the foregoing sentence, an officer or Director shall be liable
to the extent provided by applicable law for (i) willful misconduct, (ii) a
knowing violation of criminal law, (iii) a knowing violation of federal or
state securities law, including, without limitation, xxxxxxx xxxxxxx or
manipulation of the market for any security, or (iv) any transaction from which
the officer or Director derived an improper personal benefit. Neither the
subsequent amendment or repeal of this Article FOURTH shall apply to or have
any effect on the liability of any officer or Director of the Corporation for
or with respect to any acts or omissions of such officer or Director occurring
prior to the date of any amendment or repeal of this Article FOURTH.
FIFTH: The following actions shall require the affirmative vote of
two-thirds of the number of Directors in office, including the Director elected
by the Class B holders:
(a) The amendment of the Articles of
Incorporation or Bylaws of the Corporation other than in the ordinary course of
business.
(b) The creation of any equity security senior to
the existing Common Stock or the amendment of any provision or rights of the
existing classes of capital stock.
26
(c) Permitting or causing the Corporation or any
of its material subsidiaries to issue voting securities that have voting rights
different from those to which then-issued voting securities are entitled.
(d) The dissolution, liquidation or spin-off of
the Corporation or any material WVB Affiliates (as defined in the Agreement and
Plan of Merger relating to the Corporation dated as of October 28, 1996 (the
"Merger Agreement")) or any portion thereof, or merging or effecting any
acquisition involving the Corporation or any material WVB Affiliates, or
selling all or substantially all of the Corporation's (or any material WVB
Affiliate's) assets, except (i) as provided in the Merger Agreement or (ii) in
transactions involving only the Corporation and Affiliates of the Corporation.
(e) Permitting or causing the Corporation or any
of its subsidiaries (or any other Person to the extent the Corporation
directly or indirectly controls such Person) to enter into any material
contract, agreement or undertaking with XxXxx International, Ltd. or any of its
Affiliates (other than the Corporation or its subsidiaries) other than on an
arm's-length, fair-market-value basis.
(f) Permitting or causing the Corporation or any
of its Affiliates to issue, allot or dispose of securities or rights to receive
securities of the Company, including options (but excluding employee options),
other than for cash at fair market value.
For purposes of these Articles of Incorporation, "Affiliate" of any
Person (the "Subject") shall mean any other Person that, directly or
indirectly, Controls or is Controlled by or is under common Control with the
Subject.
For purposes of these Articles of Incorporation, "Control" (including,
with correlative meanings, the terms "Controlled by" and "under common Control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
For purposes of these Articles of Incorporation, "Person" shall mean
any individual, partnership, joint-stock company, limited liability company,
firm, corporation, association, unincorporated organization, joint venture,
trust or other entity.
