SHAREHOLDERS AGREEMENT
BRASILSAT HARALD S/A
XXXX INDUSTRIES, INC.
PREAMBLE
By this private instrument, at one side,
1. BRASILSAT HARALD S/A, with its head office and legal domicile
at Curitiba, Parana, Brazil, at Xxx XX 0, Xxxxxxxxxx Xxxx xx Xxxxxxxx,
hereinafter referred to as "BrasilSat", in this act represented by Joao do
Espirito Xxxxx Xxxxx - President Director - and Joao Xxxxxxxxx xx Xxxxx -
Vice President Director;
and, at other side,
2. XXXX Industries, Inc., with its head office at 6718 X. Xxxxx
Road, P.O. Box 2000, Peoria, Illinois, USA, in this act represented by Xxxxx
X. Xxxxxxxxx - President and Chief Executive Officer, and Xxxxxxx X. Xxxx -
Vice-President;
WHEREAS, BrasilSat is currently engaged, among other things, in the
design, engineering, manufacture, marketing, sales, distribution and
installation of angle and solid leg towers;
WHEREAS, XXXX is currently engaged, among other things, in the design,
engineering, manufacture, marketing, sales, distribution and installation of
tubular leg towers, poles, steel accessories and equipment shelters;
WHEREAS, BrasilSat is the lessor of the land and constructions
presently being used by BrasilSat for its tower facilities and has agreed in
principle and obtained authorization from the owner of the land to sublease
to the Company hereinafter described a portion of the land and constructions
for a manufacturing and storage and operations facility;
WHEREAS, BrasilSat and XXXX have agreed in principle to incorporate a
Company in Brazil (the "Company") for the purpose of the design, engineering,
manufacture, marketing, sales, distribution and installation of the Products
in the Territory as defined in Clause One definitions;
WHEREAS, BrasilSat and XXXX concluded the necessary researches for the
implementation of this association and have obtained the authorizations of
its competent boards to incorporate a Company;
WHEREAS, BrasilSat and XXXX ratify totally the terms of the Memorandum
of Understandings executed by October 1, 1997, which contains the fundamental
principles that regulate the association between them;
DECIDE to execute this Shareholders Agreement (the "Agreement") to
establish the principles and basic conditions of the operations of the
Company, in accordance with article 118, of the Corporation Law, and in the
following terms:
CLAUSE ONE - DEFINITIONS
For the purposes of this Agreement, the following terms shall mean the
defined hereby:
(a) "Agreement" means this Shareholders Agreement.
(b) "BrasilSat" means BrasilSat Harald S/A;
(c) "XXXX" means XXXX Industries, Inc.;
(d) "Parties" means in the plural both BrasilSat and XXXX referred
jointly and in the singular, only one of them;
(e) "Company" means the close capital corporation to be
incorporated by the Parties;
(f) Towers - towers and other similar structures manufactured of
steel members, designed to support antennas and other devises required to be
raised above ground level;
(g) "Poles" - tubular structures made of steel, concrete, fiber
glass or other materials, designed to support antennas and other devices
required to be raised above ground level, for use in the communications
markets in the Territory and other as yet unknown applications;
(h) "Equipment Shelters" - relocatable enclosures constructed of a
variety of materials including concrete, steel, fiberglass and others, which
are designed to house electronic equipment in connection with the tower and
steel poles and other as yet unknown applications;
(i) "Steel Accessories Components" - platforms, braces, dish
mounts, antenna mounts, safety cables and devices, lighting hardware and
grounding materials for the tower and poles;
(j) "Products" - Poles, Equipment Shelters and Steel Accessories
Components when referred collectively; Towers shall be considered as Products
only under the conditions set forth in Clause 3.4;
(k) "Installation Services" - all installations and site services
related to the above Products;
(l) "Galvanizing" - the process of applying molten zinc to steel;
(m) "Territory" means South America and such other territories as
the parties may hereafter mutually agree;
(n) "Corporation Law" means Law nDEG. 6.404/76 and all its latter
alterations.
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CLAUSE TWO OF THE
INCORPORATION OF THE COMPANY
2.1 The parties shall incorporate a Company, called XXXX-BRASILSAT
S/A, with main place of business and domicile in Curitiba, Capital of the
State of Parana, in which BrasilSat shall detain 51% (fifty-one percent) of
the voting capital and XXXX shall detain 49% (forty-nine percent) of the
voting capital.
2.2 In the act of incorporation of the Company, BrasilSat shall
subscribe and pay for 51% (fifty-one percent) of the shares of stock of the
Company; and XXXX shall subscribe and pay for 49% (forty-nine percent) of the
share of stock of the Company. Any additional working capital that may be
required for the operation of the Company will be obtained through additional
capital contributions or through normal banking facilities as agreed by
BrasilSat and XXXX.
2.3 XXXX will, pursuant to a Technology License and Technical
Assistance Agreement to be executed with the Company, provide the Company, at
no cost, with technical information, design criteria and specifications,
manufacturing methods, process and know-how of a highly technical nature for
the design, engineering, manufacture, marketing, sale and installation of the
Products, and, will license the Company, at no cost, to use XXXX'x name and
trademarks in connection with the sale of the Products. In the same manner
BrasilSat will license the Company, at no cost, to use BrasilSat's name and
trademarks in connection with the sale of the Products.
2.4 BrasilSat and XXXX will, pursuant to a Supply Agreement to be
executed with the Company, provide the Company with required parts and other
capital and production items at manufacturing or acquisition costs plus 10%
for handling, where economic or other advantage exists to the Company. All
freight and other expenses will be the responsibility of the Company, when it
may apply.
2.5 BrasilSat will sublease to the Company for a maximum of a
two-year term a portion of the land and construction that are presently being
used by BrasilSat, according to Lease Agreement to be executed by the
Parties. BrasilSat will vacate that portion of its facilities to be leased to
the Company, as well as obtain all necessary authorization from the owner of
the property. The Company will be responsible for the required leasehold
improvements.
CLAUSE THREE OF THE
PURPOSES OF THE COMPANY
3.1 The Company shall have as purpose the design, engineering,
manufacture, marketing, sales, distribution and installation of the Products
in the Territory.
3.2 The Company has the exclusive right to sell all Products and
those developed in the future to all markets within the Territory. This
exclusivity is subject to existing XXXX distribution contracts and shall
depend in the ability and willingness of the Company to provide economic and
logistic advantages to the target market in the Territory.
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3.3 The Company will use "XXXX" and "BrasilSat" name and trademarks
to maximize market acceptance of the Products.
3.4 XXXX'x tubular leg towers shall be included in the purposes of
the Company after a 12 (twelve) to 18 (eighteen) month period, counted from
October 2, 1997, at XXXX'x option. During this period of 12 (twelve) to 18
(eighteen) months BrasilSat will be the exclusive distributor of XXXX'x
designed Towers in Brazil, observing the same conditions established in 3.2.
During this period of 12 (twelve) to 18 (eighteen) months XXXX will be the
exclusive distributor of BrasilSat's towers outside of Brazil. BrasilSat
retains and shall have forever the right to manufacture and sell angle and
solid leg towers. XXXX retains and shall have forever the right to
manufacture and sell XXXX tubular leg towers if they are not included in the
purposes of the Company after the 12 (twelve) to 18 (eighteen) months.
CLAUSE FOUR OF THE
ADMINISTRATION OF THE COMPANY
4.1 The Parties compromise to vote at the General Assembly in a way
that two of the members of the Directory shall be persons appointed by
BrasilSat and the other shall be person appointed by XXXX.
4.2 The parties compromise to appoint the offices of the Directory
observing the following rules:
(a) BrasilSat shall appoint the President Director and the
Commercial Director;
(b) XXXX shall appoint the Chief Financial Officer;
4.3 BrasilSat acknowledges that the Chief Financial Officer, as the
only representative of XXXX in the Directory, must be involved in all
relevant activities of the Company and participate in a direct and effective
form in its administration, in all its aspects. With the purpose of
guaranteeing such involvement and participation, BrasilSat will take all the
measures necessary to make that its appointed Directors respect this
condition and the powers that the Statute assignees to the Chief Financial
Officer.
Sole Paragraph - According to this, it shall be preferentially
assigned to the Chief Financial Officer, observing the orientation
of the General Assembly and jointly with other Director as
established in Clause 24 of the Statutes of the Company:
(a) co-sign all checks above R$ 25.000,00; (b) co-sign all compromises
and contracts that involve debits of more than R$ 25.000,00.
4.4 The Parties compromise to vote at the General Assembly in a way
that the services of external auditors hired by the Company are executed by
an audit company indicated by XXXX, selected among external audit companies
of international reputation, such as, but not limited to, Price Xxxxxxxxxx,
Xxxxxx Xxxxxxxx, KPMG and Coopers & Xxxxxxx, respecting the market value for
this kind of professional service.
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4.5 The Parties compromise to vote at the General Assembly in a way
that the legal advisors of the Company are fluent in English.
CLAUSE FIVE
RESTRICTION ON THE TRANSFERENCE OF SHARES
AND OPTION TO BUY AND SELL SHARES
5.1 Except to wholly owned subsidiaries or in the hypothesis of
Clauses Six of this Agreement, neither BrasilSat or XXXX will for any reason
sell, assign, transfer or otherwise dispose of its shares of the Company
either acquired or subscribed to as of the incorporation of Company, or at
any future time, during a period of three (3) years following the
incorporation date of the Company.
5.2 After the period mentioned in 5.1 above, any sale, assignment,
transfer or other disposition of shares of the Company, including those
effected by legal requirements, and those that may result from a pledge or
other encumbrance of, or lien imposed on the shares, will require the prior
offer of these shares to the other Party in this Agreement, through written
notification, which may exercise its right of preference in the acquisition
of these shares in a period of 60 (sixty) days, acquisition which must refer
to the totality of the offered shares.
5.3 The offer referred to in 5.2 shall be accompanied by the price
of the shares, which shall attend their fair market value, according to
evaluation done by a company among one of those acknowledged capability in
this activity, such as, but not limited to, Banco Pactual, Banco Garantia,
X.X. Xxxxxx, Xxxxxx Xxxxxxx, etc., evaluation which shall accompany the
offer. The Party offering its shares shall assume all the costs related to
the evaluation and the payment of the fees to this company. The offer shall
also mention the time and form of payment.
5.4 If the Party that receives the offer does not exercise its
right of preference in the acquisition of all the shares offered for sale in
a period of 60 (sixty) days, then the other Party shall be free to sell the
totality of the offered shares to a third party as long as it does for the
same price and conditions established in the offer.
Paragraph First. The third party can not be a direct or indirect
competitor of the Party that remains as partner in the Company, in
any of its areas or sections of doing business, unless the Party
agrees, in express and written terms, to have this competitor as
partner in the Company.
Paragraph Second. In any situation the shares can only be sold to
a third party if it agrees to sign and assume all the conditions
and obligations established in this Agreement.
5.5 Neither Parties - BrasilSat or XXXX - or any of their
controlled or affiliated companies, for a period of 2 (two) years after the
transference of the shares, shall act in an ostensible way towards making
employees to leave the Company.
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CLAUSE SIX
OPTION TO BUY AND SELL SHARES IN CASE OF DEADLOCK
6.1 In case of a deadlock between the Parties to deliberate about
any matter, without the possibility of them, by their selves, reaching a
satisfactory solution, shall be observed the following procedure:
(i) for a period of 30 (thirty) days after the deadlock any Party has
the right to change its positions and eliminate the deadlock
through the calling of an Extraordinary General Assembly that
shall deliberate again about the matter and in which the calling
Party shall cast its vote in a form that shall eliminate the
deadlock;
(ii) if no resolution sufficient to solve the deadlock is forwarded in
the 30 (thirty) day period mentioned in (i), any Party may address
to the other an accurate and determined proposal for the buy or
sell of the totality of its shares, establishing at the same time
the proposed price, in accordance with the evaluation procedure
established Clause 5.3;
(iii) the Party to which is destined the offer shall have the option to
purchase the participation in the social capital of the proposing
shareholder, for the price and conditions proposed, or sell its
corresponding participation, for the same price and conditions, in
180 (one hundred and eighty) days from the receipt of the offer,
not being allowed any other alternative;
(iv) the acceptance of the proposal to buy or sell the participation in
the social capital shall be communicated to the proposing Party
within 180 (one hundred and eighty) days. In the absence of any
manifestation regarding the acceptance of the offer by the Party
to which the offer was destined, its silence shall be interpreted
as an effective acceptance of the proposal by the Party to which
the offer was destined, being it obliged to buy or sell the shares
in the terms of the received offer;
(v) the price of the shares to be transferred will be payable in cash
against the registration in the respective Book of Shares or
otherwise as may be sufficient to transfer ownership, observing
all formalities required by the applicable legislation; the
payment of the price and transference of the shares shall occur
within the 180 (one hundred and eighty) days mentioned in (iii)
above.
6.2 A deadlock is deemed existent whenever the General Assembly is
not able to deliberate on certain matters because of a tide voting or because
it was not reached the qualified majority required by law or by the Statutes.
The deadlock shall be proved by the written minutes of the General Assembly
or by a written notification from one Party to the other, mentioning the
existence of the deadlock.
6.3 In the hypothesis of XXXX or BrasilSat's leave of the Company,
whatever may be the cause, either voluntarily in the hypothesis of Clause
Five, or motivated by a deadlock as established in this Clause Six, the
company appointed to evaluate the price of sale of the shares, shall
aggregate to it the value referent to the technology so far assimilated by
the Company. In
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the same way, BrasilSat or XXXX, respectively, shall, if it is the case, do
what is necessary to alter the social denomination of the Company, in order
that is taken out from it any use or reference to the term XXXX or BrasilSat,
as well as cease immediately any use of the trademark XXXX or BrasilSat, or
any other trademark, logotype, or other distinctive sign that is property of
XXXX or of BrasilSat, registered or not, in the marketing of the Products of
the Company.
CLAUSE SEVEN
EXERCISE OF THE RIGHT OF VOTE FOR THE
INSTALLATION OF THE FISCAL COUNCIL
The Parties compromise to deliberate for the installation of the
Fiscal Council in the General Assembly, besides the cases expressly
established in the law, only when exist mutual consent regarding its
installation.
CLAUSE EIGHT
DECLARATIONS AND GUARANTEES BY THE PARTIES
8.1 BrasilSat declares and guarantees to XXXX the following:
(a) it is a company duly incorporated and validly existing under the
laws of Brazil and has the requirements to execute this Agreement,
as well as to execute the operations herein established, and
accomplish the obligations following therefrom;
(b) the execution of this Agreement and the accomplishment of the
operations herein established have been duly and validly
authorized by all necessary corporate boards, not being required
any other corporate authorization from BrasilSat for the execution
of the obligations here established;
(c) the execution of this Agreement, the execution of the operations
herein established and the accomplishment of the obligations by
BrasilSat does not conflict or result in violation of any
disposition of:
(c.1) its bylaws;
(c.2) any contract under which BrasilSat is liable;
(c.3) any legal regulation to which BrasilSat and/or its assets
is submitted.
(d) does not exist against BrasilSat any suit or procedure,
administrative or judicial, raising from obligations or duty
legally constituted before the enforcement of this Agreement and
that, for any reason, may affect with burdens the patrimony of the
Company or of XXXX, being considered as this, but not limited to,
tax, labor, security or environmental related obligations or,
furthermore, that may affect or prevent, in a substantial way, the
accomplishment of the obligations assumed by BrasilSat under this
Agreement;
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(e) BrasilSat has financial capacity to comply with the monetary
related obligations assumed under this Agreement and Related
Agreements.
8.2 XXXX declares and guarantees to BrasilSat the following:
(a) it is a company duly incorporated and validly existing under the
laws of the State of Delaware, United States of America, and has
the requirements to execute this Agreement, as well as to execute
the operations herein established, and accomplish the obligations
following therefrom;
(b) the execution of this Agreement and the accomplishment of the
operations herein established have been duly and validly
authorized by all necessary corporate boards, not being required
any other corporate authorization from XXXX for the execution of
the obligations herein established;
(c) the execution of this Agreement, the execution of the operations
herein established and the accomplishment of the obligations by
XXXX does not conflict or result in violation of any disposition
of:
(c.1) its bylaws;
(c.2) any contract under which XXXX is liable;
(c.3) any legal regulation to which XXXX and/or its assets is
submitted.
(d) does not exist against XXXX any suit or procedure, administrative
or judicial, raising from obligations or duty legally constituted
before the enforcement of this Agreement and that, for any reason,
may affect with burdens the patrimony of the Company or of
BrasilSat, being considered as this, but not limited to tax,
labor, security or environmental related obligations or,
furthermore, that may affect or prevent, in a substantial way, the
accomplishment of the obligations assumed by XXXX under this
Agreement;
(e) XXXX has financial capacity to comply with the monetary related
obligations assumed under this Agreement and Related Agreements.
CLAUSE NINE
RESPONSIBILITIES AND INDEMNIFICATIONS
9.1 BrasilSat assumes the obligation to indemnify the Company and
XXXX by the total amount of its losses of any nature, including costs and
reasonable expenses with lawyers, that have been suffered by the Company or
XXXX as consequence of (i) inexactitude or falsity of any declaration given
in this Agreement; (ii) non accomplishment of any guarantee given in favor of
the Company and/or XXXX; (iii) non accomplishment of any obligation assumed
under this Agreement.
9.2 XXXX assumes the obligation to indemnify the Company and
BrasilSat by the total amount of its losses of any nature, including costs
and reasonable expenses with lawyers,
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that have been suffered by the Company or BrasilSat as consequence of (i)
inexactitude or falsity of any declaration given in this Agreement; (ii) non
accomplishment of any guarantee given in favor of the Company and/or
BrasilSat; (iii) non accomplishment of any obligation assumed under this
Agreement.
CLAUSE TEN
GOVERNING LAW
This Agreement shall be governed by the applicable Brazilian laws.
CLAUSE ELEVEN
NO WAIVER
The failure by any of the Parties to object, at any time, to a Party's
non-compliance, in whole or in part, with any of the obligations of the
Agreement, shall not imply in renunciation or waiver of such obligations, nor
shall signify novation, which can not be presumed, being the mentioned
obligations valid and enforceable at any time, until occurs the complete
fulfillment of all the obligations established in this Agreement.
CLAUSE TWELVE
SEVERABILITY
The non validity or non effectiveness of one of the dispositions of
this Agreement shall not have effect on the validity or effectiveness or the
other dispositions.
CLAUSE THIRTEEN
ASSIGNMENT
This Agreement can not be transferred or assigned by any of the
Parties, partially or in its totality, without the previous authorization of
the other Party.
CLAUSE FOURTEEN
SUCCESSION
This Agreement is binding between the Parties and its successors or
assignees under any title, which have to accomplish the totality of its
corresponding obligations under this Agreement.
CLAUSE FIFTEEN
ALTERATIONS
Any alterations in this Agreement shall be valid when done in writing
and executed by both Parties.
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CLAUSE SIXTEEN
TITLES
The titles of the clauses of this Agreement are used only as
reference, not defining, limiting or restraining any of its terms and
conditions.
CLAUSE SEVENTEEN
COMMUNICATIONS
17.1 All communications, notices or demands related to the execution
of this Agreement shall be done in writing, delivered with protocol, sent by
mail with returned receipt and sent by fax to the following addresses:
When to BrasilSat:
BrasilSat Harald S/A
At. Joao do Espirito Xxxxx Xxxxx
Rua Xxxxxxxxx Xxxxxxx, 220, Curitiba, PR, Brasil
(CEP 82720-000)
Fax: nDEG. (000) 000-0000)
c/c Joao Xxxxxxxxx xx Xxxxx
When to XXXX:
XXXX Industries, Inc.
At. Xxxxx X. Xxxxxxxxx
0000 X. Xxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx XXX 00000
Fax: nDEG. (000) 000-0000
c/c Xxxxxxx X. Xxxx
0000 Xxxxxxxxxx Xxxx.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx XXX 00000
Fax: nDEG. (000) 000-0000
and
XXXX'x attorneys in fact in Brazil.
17.2 In case of change of address, the Parties shall communicate
this fact to the other, and, if they do not, it shall be deemed as good and
valid the communications, notices and notifications done to the address and
fax numbers referred to in this Clause.
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CLAUSE EIGHTEEN
LANGUAGE
This Agreement shall be signed also in Portuguese. However, in the
event of difference between the versions in different languages, the
Portuguese version shall prevail.
CLAUSE NINETEEN
COURT
To decide any conflict from the application or interpretation of this
Agreement the Courts of Curitiba, Capital of the State of Parana, shall be
the competent venue, with the exclusion of any other, no matter how
privileged it may be.
And being this the intention of the parties, they sign this instrument
in 4 (four) copies with same content and for its legal effects, in the
presence of two witnesses also nominated and signed.
Curitiba, december 29, 1997
/s/ Xxxx Xxxxxxxx Xxxxx Xxxxx /s/ Xxxxx X. Xxxxxxxxx
------------------------------------ ------------------------------------
BrasilSat Harald S/A XXXX Industries, Inc.
Witness:
1. /s/ Joao Xxxxxxxxx xx Xxxxx 2. /s/ Xxxxxxx X. Xxxx
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RG 32 40776-8 RG 00000-000-0
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