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EXHIBIT 10.32
COMPANY AGREEMENT
This Company Agreement is made as of July 1995, by and
BETWEEN:
The Societe Nationale de Financement
a societe anonyme monegasque
headquartered in Monaco
registered with the Monaco R.C.I
Hereinafter referred to as "SNF",
ON THE FIRST PART,
AND:
GTS X.X.X.
a societe anonyme monesgasque
headquartered in Monaco
registered with the Monaco R.C.I
Hereinafter referred to as "GTS",
ON THE SECOND PART,
AND:
The Principality of Monaco
represented by Mr. the Administrator of the Domaine
Hereinafter referred to as "OMT",
ON THE THIRD PART.
RECITALS
WHEREAS, the GTS group has substantial expertise and capability in the
provision of telecommunications services, marketing telecommunications
services, procurement of equipment, design of systems, engineering and
consulting services, and in the provision of management, financial and
technical support in the telecommunications field;
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WHEREAS, SNF is a societe anonyme monegasque engaged in investment activities,
the capital of which is owned by the Principality of Monaco;
WHEREAS, OMT is the public operator of the Principality of Monaco, a signatory
of the International Telephone Union and other similar international
organizations, possessing significant infrastructure, technical resources and
advanced technology, whose participation hereto is the main reason for the
parties to enter into this Agreement and to create the Company;
WHEREAS, the OMT wants to develop its international activity through the
Company;
WHEREAS, GTS and SNF desire to combine their efforts through the formation of
the Company with the purposes set forth in Article 3 of the by-laws of the
Company; and
WHEREAS, the by-laws of the Company are being filed concurrently with the
execution of this Agreement for authorization.
NOW THEREFORE, GTS, SNF and OMT mutually covenant and agree as follows:
ARTICLE 1. PURPOSE OF THE AGREEMENT
1.1. This Agreement involves the creation of a joint venture the name of
which shall be "Monaco Telecom International" (the "Company"), having the
by-laws of a societe anonyme monegasque, operating in the Principality of
Monaco (GTS and SNF together being defined as the "Stockholders" and each
individually as "Stockholder"), and the determination of the terms and
conditions of the cooperation between the parties.
1.2 GTS and SNF commit to forthwith form the Company in the form of a
Societe Anonyme Monegasque pursuant to the laws of the Principality of Monaco.
The Stockholders shall take all actions necessary and appropriate to organize
the Company in accordance with this Agreement.
ARTICLE 2. PURPOSE OF THE COMPANY
2.1. The purpose of the Company is:
(a) to provide international voice telephony, data and other
communications services through the facilities and infrastructure
owned and/or leased and operated by OMT, including, terrestrial and
submarine cable, satellite links and wireless systems;
(b) to provide advanced carrier services, communications related
engineering, marketing, and technical support services to the foreign
customers of the Company;
(c) to provide training, installation, consulting, billing, and
other related services to customers of the Company;
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(d) to design, install and maintain wide area networks and local area
networks for the customers of the Company;
(e) to import, export, rent, lease, procure, exploit and resell
telecommunications and other equipment;
(f) to acquire, manage, develop and sell, patents, trademarks and licenses
relating to the activities of the Company;
(g) to acquire, own, lease, rent or sell assets, securities and/or real
estate, deal in or engage in, commercial transactions that relate to the
business of the Company, or otherwise enhance the development of the Company and
its business;
(h) to own shares, in Monaco and outside of Monaco, in any company having
an activity in the communications field; and
2.2. The service provisions relative to the development, operation and
marketing of telecommunications services shall be provided in conformity with
the regulations applicable to Monegasque public operator issued by the and the
Monegasque department of telecommunications, division of the State of Monaco in
charge of telecommunication regulations.
ARTICLE 3. SHARE CAPITAL - CAPITAL CONTRIBUTIONS
3.1. The initial capital of the Company shall be eight million French
Francs (8,000,000 FRF), consisting of eight thousand shares of capital stock
par value one thousand FRF.
3.2. SNF and GTS shall each subscribe in cash to one half of all the
capital shares on the date that the by-laws of the Company are approved.
3.3. SNF and GTS shall transfer one share to each of their respective
nominees to the Board of Directors of the Company, to the extent required by
the laws and regulations of the Principality of Monaco.
3.4. Approval of the general assembly is required in order to increase the
capital of the Company. In the event that the Company requires additional
capital or other funds for current account and one stockholder does not agree
to make such contribution to the capital or current account in cash, then the
other stockholder shall have the right to extend to the Company a loan in the
full amount of the proposed additional capital or other funds.
On January 15 of the calendar year following the date of the loan, the
stockholder who did not make the loan shall have the right to contribute an
amount equal to one half of the principal amount of the loan. If such
stockholder does so, then the stockholder that made the loan shall be repaid
one half the principal amount of the loan and all accrued
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interest on the entirety of the principal of the loan and shall convert into
capital the other half of the principal amount of the loan.
The loan made by the stockholder shall bear interest at the rate of
LIBOR plus 2.5% per year on the basis of a 360 day year from the date the loan
is made to the date it is either converted into capital or repaid in full. For
the purposes of this Agreement, LIBOR shall be the average French Franc London
Interbank Offered Rate per annum for a period approximately equal to that of
the loan and an amount approximately equal to that of the loan, as recorded by
Banque Nationale de Paris, Credit Agricole and Societe Generale at about 11:00
a.m. in Paris on the date of the loan.
In the event that the loan is not converted into capital and not fully
repaid by the Company on January 15 of the calendar year following the date the
loan is made, the loan shall be converted automatically into a six month term
loan and principal and interest shall mature on July 15 of the calendar year
following the date the loan is made, and shall be amortized in six equal
installments of principal and interest.
In the event that the Company does not repay the loan in full on its
maturity date, then the stockholders shall get together to discuss an equitable
settlement of the loan, including converting the loan into equity by the
lending stockholder.
In the event that any capacity procured by the OMT (including cable and
satellite) shall be funded or financed by GTS, then the OMT and SNF agree that
all such capacity shall be used exclusively by, or for the benefit of, the
Company.
ARTICLE 4. GENERAL ASSEMBLIES
4.1. General assemblies shall be held as described in the Company's
by-laws. Stockholders can validly vote in ordinary and extraordinary meetings
only if holders representing at least seventy five percent of the capital
shares are present or represented ("Quorum"). In the event that a Quorum is not
present at the General Assembly upon first convocation, then the Board shall
reconvene the General Assembly with 15 days notice. Such second General
Assembly shall not require that a quorum be met.
4.2. Except as provided hereafter, all decisions of the General Assembly
shall be decided by a seventy five percent majority. Unanimous approval of the
General Assembly shall be required before any decisions are made concerning the
following major issues: (1) amendment of the by-laws of the Company; (2)
termination and dissolution of the Company; (3) merger of the Company with
other legal entities; (4) transfers of a substantial part of the Company's
assets or of its business; and (5) distributions of profits.
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ARTICLE 5. BOARD OF DIRECTORS - ADMINISTRATEUR DELEGUE
5.1 Board of Directors
The business and affairs of the Company shall be managed under the
direction of the Board of Directors. The Board of Directors shall consist of
four or six directors appointed by the Stockholders, of which one half shall be
appointed from a list presented by SNF, and the other half shall be appointed
from a list presented by GTS.
The Chairman of the Board shall be elected from those directors on the
list presented by SNF.
The term of mandate of the Directors and the Administrateur Delegue
shall be six years; their mandate may be renewed by nomination of the
Stockholders from a list presented by the Stockholder having presented the
departing Director.
In the event of revocation, resignation or death, the director in
question may be replaced by a director appointed from a list presented by the
Stockholder on whose list the departing director was. The General Assembly
voting on the replacement of such director shall be convened as soon as
practicable.
All decisions of the Board of Directors shall be validly voted if
seventy five percent of the directors are present or represented ("Quorum"). In
the event that a Quorum is not present at the Board of Directors upon first
convocation, then it shall be reconvened with 15 days notice and no quorum
shall be required. The decisions shall be adopted by a majority of seventy five
percent of the members of the Board of Directors, subject to what is mentioned
below.
The Board of Directors shall delegate all of its powers to the
Administrateur Delegue, except for the following decisions:
- establishing the annual accounts;
- nominating and removing the Administrateur Delegue;
- authorizing expenditures that are not included in the annual
budget or business plan that exceed 2,000,000 FRF;
decisions for which the Board of Directors shall retain its power and shall
rule on as described above; and
- adoption of the budget;
- adoption of annual business plan or annual financial plan;
- recommendation of distribution of profits to the Stockholders;
- possibility of creating an Advisory Committee and designating
its members.
for which the Board of Directors shall rule on in unanimity of the Directors
present or represented. In the event of disagreement within the Board of
Directors, such decisions
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shall be submitted to the approval of the General Assembly by the Board of
Directors as soon as possible.
5.2. Administrateur Delegue
The Company shall have an Administrateur Delegue chosen among the
directors appointed from the list presented by GTS, who shall be the chief
officer of the Company responsible for the management of the day-to-day
operations of the Company.
(a) The Administrateur Delegue of the Company shall be appointed
by the Directors among those appearing on the list presented by GTS. The
Administrateur Delegue shall assume general management of the Company.
The Stockholders have agreed to propose to have Xx. Xxxxxx X. Xxxxxxx
elected, a Director appointed from the list presented by GTS, to serve as the
first Administrateur Delegue.
(b) After consultation with GTS and the OMT, the Head of
Engineering shall be appointed by the Administrateur Delegue. Under the
supervision of the Administrateur Delegue, the Head of Engineering shall be
responsible for the design and development of all elements of the network, the
systems and sub-systems necessary for the Company (including satellite,
fiber-optic, commutation and elements of network management);
(c) After consultation with GTS and the OMT, the Head of
Operations shall be appointed by the Administrateur Delegue. Under the
supervision of the Administrateur Delegue, the Head Operations shall be
responsible for the installation and monitoring of the equipment, contracts and
provision for services, in particular the billing, network management and
systems support activities;
(d) After consultation with SNF and the OMT, the Head of Finance
shall be appointed by the Administrateur Delegue. Under the supervision of the
Administrateur Delegue, the Head of Finance shall be responsible for the
financial and accounting forecasts, timely preparing the financial statements
and the relationships with accounting firms, credit establishments and
governmental bodies.
(e) After consultation with SNF and the OMT, the Head of Marketing
and Sales shall be appointed by the Administrateur Delegue. Under the
supervision of the Administrateur Delegue, the Head of Marketing and Sales
shall be responsible for the marketing, sales, and for defining objectives, in
particular, market studies, price setting, development of the sales and
distribution networks, client service and all aspects concerning services
quality and client satisfaction.
5.3. Personnel
Expenses for personnel working for the Company shall be assumed by the
Company whether directly or through external services. The Administrateur
Delegue
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shall approve of the employees and related costs prior to their starting their
work with the Company.
5.4. Financial Records
All appropriate accounting records and statements of the Company shall
be prepared and kept in the French language and in accordance with Monegasque
Generally Accepted Accounting Principles. Furthermore, in order to satisfy GTS'
reporting requirements in the United States, such accounting records and
statements shall also be prepared in the English language and converted to
separate records and statements that are consistent with United States
Generally Accepted Accounting Principles, and shall be audited by the
independent auditors of the parent company of GTS.
5.5 Invoicing
All invoices sent by the parties to the Company shall be subject to
the prior approval of the Administrateur Delegue.
The parties hereto agree that a director chosen from the directors on
the list presented by SNF or a person outside the Company chosen by SNF, shall
be responsible to accept, together with the Administrateur Delegue, those
expenses to be incurred by the Company which relate to the services mentioned
in Article 6 of the Agreement to be rendered by the parties to the Agreement to
the Company, that would not have been contemplated in the annual business plan.
Any refusal to incur these expenses will have to be justified in
writing. In case of disagreement over incurring an expense between the
Administrateur Delegue and the person designated by SNF, such expense shall
have to be authorized by the Board of Directors at a majority of seventy five
percent.
Article 6. Provision of Services
The commitment of the parties in the Company shall be reflected by the
provision of the following contributions to achieving the optimal functioning
of the Company.
6.1. Services Provided by GTS
(a) GTS shall provide to the Company marketing services to
potential customers of the services provided by the Company, in all
non-Monegasque geographic regions where the Company can offer competitive
prices.
(b) GTS shall provide transit traffic from its affiliated
companies in the Czech Republic and in the Russian Federation, provided that
the rates charged by the Company are competitive to rates otherwise available
to such affiliates. GTS also agrees to offer the services of the Company to
other affiliates of GTS.
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(c) GTS shall provide its know-how in view of developing and
educating the personnel working for the Company.
(d) GTS shall be responsible for the development of new business
opportunities for the Company.
(e) GTS shall be responsible for the design and planning of the
network and interconnectivity among systems served by the Company through OMT.
6.2. Services Provided by SNF/OMT
(a) SNF and OMT shall provide to the Company, through the OMT,
open access to all telecommunications infrastructure, equipment, facilities and
capacity that is owned, leased, operated or available to OMT.
(b) SNF and the OMT shall provide to the Company through the OMT,
open access to and all of the advantages associated with the OMT's status as
the public operator, in particular to the United Nations International
Telephone Union and other internationally recognized organizations in the
telecommunications field, and the ability through the OMT to negotiate and
enter into transit and correspondent agreements with other signatories to the
United Nations International Telephone Union and such other internationally
recognized organizations on behalf of the Company.
(c) SNF and the OMT shall provide services to the Company through
the OMT, including maintaining all infrastructure, equipment and facilities
available to the OMT.
(d) SNF and the OMT shall allow the Company to obtain through the
OMT the most competitive operator accounting rates available to and paid by the
OMT with the different network operators and to provide sufficient capacity for
all of the Company's traffic. When customer traffic requires transit through
the OMT international switch, then the price charged by the OMT to the Company
shall be, as above, plus the best operator accounting transit rates offered to
operators. The parties hereto agree to negotiate on this basis in good faith,
case by case, the prices between them upon the actual utilization of capacity.
ARTICLE 7. TRANSFER OF SHARES
7.1 Except for the transfer of shares to Directors in an amount
necessary for them to be Directors, a Stockholder who wishes to proceed with the
sale of the shares of the Company (hereafter the "Seller"), must notify such
intent to the other Stockholder and to the Company by registered letter with
return receipt requested (hereafter the "Initial Notification"). Such
notifications will have to indicate the name, first name and domicile or name
and registered office of the buyer(s) beneficiary of the sale, together with, if
legal entities, the names and first names of the controlling individuals, the
number of shares the sale of which is envisaged, the offered price, the payment
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conditions and the modalities which would accompany the sale, as well as any
justification attesting the reality of the envisaged offer for sale.
7.2 The non selling Stockholder may, in the conditions provided for
hereunder. exercise a right of first refusal on the shares offered for sale by
the Seller.
7.3 Any Stockholder wishing to exercise its right of first refusal must,
within a delay of 45 days from the Initial Notification, inform the Seller that
it wishes to exercise its right of first refusal. A failure to answer within
the above delay shall be deemed to be a waiver of the right of first refusal.
7.4 In case of non exercise of the right of first refusal at the expiry of
the delays defined in this Article, the ordinary General Assembly shall vote
upon the approval or not of the purchaser within 45 days of the expiration of
the 45 days mentioned above.
7.5 After such period, the General Assembly shall notify to the Seller
whether the purchaser is or not approved. If the Seller is GTS, SNF shall
withhold its approval only if the financial and technical capacities of the
purchaser proposed by GTS are not equivalent to those of GTS. In case of
refusal of the proposed purchaser, the General Assembly shall within 45 days
following such refusal find a purchaser who will purchase all the shares to be
sold, for the price proposed by the Seller and expressly agreed to by the
initial purchaser presented by it. It is hereby understood that the Seller
shall not vote against the purchaser presented by the General Assembly.
If at the end of such three months period, the purchaser proposed by
the General Assembly has not effectively purchased the shares, then the
approval of the initial purchaser shall be deemed granted.
7.6 The right of first refusal and the prior approval defined in this
Article also apply without limitation, to any form of transfer of the property
of the shares of the Company (exchange, donation, partial or total sale of the
full ownership, the bare ownership or the beneficial ownership) to the
contribution in kind of the shares, in particular in case of merger or spin off
and public auction.
Each Stockholder undertakes not to pledge its shares of the Company.
In case of sale by public auction, an injunction will have to be
delivered by the Seller to purchaser, to become familiar with the
Specifications Conditions with an indication of the dates, places and hours set
for the auction.
7.7 The word "share" as used in this Agreement shall apply to all shares
of the Company which the signatories hold and all those which could be granted
for any reason whatsoever (sale, exchange, donation, legacy, free allocation,
merger or spin off) as well as all rights or subscription rights attached to
such shares or to any security issued by the Company and representing or giving
the right to a fraction of the share capital or the voting rights.
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7.8 For any form of transfer of shares for which the delays provided for
in this article would be incompatible with the delay for the realization of the
envisaged transfer, and in particular in case of sale of the subscription
rights relating to an increase in capital, the signatories of this Agreement
undertake to accommodate the precited delays so that the beneficiary of the
right of first refusal may be in a position to exercise its right of first
refusal within the legal delays applying to each type operation and that the
prior approval procedure be followed.
ARTICLE 8. STOCKHOLDER STABILITY DURING THE START-UP PHASE
SNF and GTS agree, for the duration of the Company start-up, as to the
importance of their respective presence in the Company. Consequently, they
agree to not transfer their respective ownership interests in the capital of
the Company for a period of five (5) years counting from the signing of the
Agreement.
ARTICLE 9. REPRESENTATIONS
The execution of this Agreement by the undersigned and the delivery
and performance by each of them of this Agreement: do not and shall not result
in the breach of, or constitute a default under, or require the consent under,
its constitutive documents.
Furthermore, the execution of this Agreement by the undersigned and
the delivery and performance by each of them shall not breach any other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound or affected.
Moreover, the execution of this Agreement by the undersigned and the
delivery and performance by each of them shall not breach any applicable law or
regulation.
Finally, this Agreement shall constitute each undersigned's valid,
binding and enforceable obligation in accordance with the term of this
Agreement upon the authorization of the Company.
ARTICLE 10. CONFIDENTIALITY
(a) All technology, know-how, trade secrets and proprietary and
other information belonging to any Stockholder or the OMT and made available to
the Company ("Confidential Information") shall continue to be the property of
the Stockholder or the OMT making such available to the Company, and shall be
used by the other Stockholders and the OMT exclusively for the purposes of the
business of the Company, unless the Stockholder making the Confidential
Information available to the Company provides its express prior written
permission for use by any other Stockholder for any purpose other than the
business of the Company.
(b) Each Stockholder and/or the OMT who has received the
Confidential Information shall, and shall require that its employees, agents,
consultants or other representatives shall, keep confidential and use all
Confidential Information only for the
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benefit of the Company, and preserve all Confidential Information for the
benefit of the party which provided the Confidential Information.
(c) No Protection shall be granted to Confidential Information that is
or becomes: (i) generally available to the public, other than through
disclosure by a Stockholder or the OMT; (ii) rightfully obtained from a third
party without restriction of confidentiality; (iii) released in writing from
the obligation of confidentiality by the Stockholder or the OMT to which the
Confidential information belongs; or (iv) which is required to be disclosed
by law or judicial process or any other required publicity.
Article 11. Press Releases - Announcements
No Stockholder nor the OMT shall make any formal press release, public
announcement, news release, or other form of publicity relating to the Company
or its business, without prior consultation with the other Stockholders and
their consent to the substantive content of such release, announcement. Neither
Stockholder nor the OMT shall unreasonably withhold its consent to any formal
press or news release, public announcement, or other publicity relating to the
Company or its business.
Article 12. Compliance with this Agreement
12.1 It is explicitly agreed that the provisions of this Agreement apply to
all Company in instruments held by the undersigned, and to all Company
instruments that could be allocated thereto for any reason whatsoever
(assignment, donation, bequest, attribution, merger or split), as well as to
all subscription rights or bonds attached to such instruments or to any
investment security or bond issued by the Company representing or giving right
to a share of capital stock.
12.2 In addition to other transfer restrictions herein contained, the
parties hereto undertake to not assign or transmit, in any form whatsoever, the
ownership, usufruct, or bare ownership of their instruments except to
individuals or legal entities that first explicitly agree to submit to the
provisions of this Agreement, and who shall, to this effect, be incorporated
among the signatories of this Agreement.
Article 13. Liability
Each party promises the others to comply with and have their appointed
representatives in the company bodies comply with, the Provisions of this
Agreement.
Each party agrees to indemnify and guaranty the other parties and
their representatives against all loss or damage borne by the others in the
event of neglect or violation of any of its obligations under this Agreement
subject to this violation not being dictated by law.
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Article 14. Amendments
No amendment, notification or addition to this Agreement may be
legally valid except by means of an additional clause signed by the parties
bound by this Agreement.
Article 15. Notifications
Any notification or serving of writ mentioned in this Agreement must
be made by certified letter with return receipt requested, to the respective
corporate head offices of the parties with a copy addressed to the General
Counsel of GTS-Europe South, Inc., 0000 Xxxxxxx Xxxxx North Tower, 12th floor,
XxXxxx, Xxxxxxxx 00000, Xxxxxx Xxxxxx. The parties can change their
notification address by notifying such new address to the other parties hereto
Article 16. Severability
In the event that one or several provisions of this Agreement are
invalid or subsequently become invalid. in whole or in part, the validity of
the other provisions of the Agreement shall not be affected. The parties must
then replace the invalid provision by a provision as closely related as
possible to the objective of the invalid provision.
Article 17. Disputes - Applicable Law
This Agreement is subject to Monaco law. Any dispute arising in
connection to this Agreement shall be addressed to the competent monegasque
courts.
Article 18. Term
The term of this Agreement shall be twenty five years.
Article 19. Company Agreement Governs
In the case of any discrepancies between this Agreement and the
by-laws of the Company, the provisions of this Agreement shall control the
relationship among the Stockholders, and the Articles of Association of the
Company shall be modified in such a manner as to be consistent with this
Agreement.
Article 20. Enter into Force
The provisions of this Agreement relating to the management of the
Company shall become enforceable upon the authorization of the by-laws.
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Signed in four originals.
The Societe Nationale de Financement GTS X.X.X.
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Title: Title: Administrateur Delegue
Name: Name: Xxxxxx X. Xxxxxxx
The Principality of Monaco
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Title: Monsieur l'Administrateur des Domaines
Name:
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[ILLEGIBLE]
Signe en quatre originaux.
La Societe Nationale de Financement GTS X.X.X.
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Titre: Titre: Administrateur Delegue
Nom: Nom: Xxxxxx X. Xxxxxxx
La Principaute de Monaco
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Titre: Monsieur l'Administrateur des Domaines
Nom:
