EXHIBIT 3.1
Commonwealth of The Bahamas IBC 01
The International Business Companies Act
(No. 2 of 1990)
Certificate of Incorporation (Section 11 and 12)
No. 69,832 B ULTRAPETROL (BAHAMAS) LIMITED
I, JACINDA P. BUTLER ASST ....... Registrar General of the Commonwealth of
The Bahamas Do Hereby Certify pursuant to the International Business Companies
Act.(No.2 of 1990) that all the requirements of the said Act in respect of
incorporation have been satisfied, and that
ULTRAPETROL (BAHAMAS) LIMITED
is incorporated in the Commonwealth of The Bahamas as an International Business
Company this 23RD day of DECEMBER 1997
Given under my hand and seal
at Nassau in the Common-
wealth of The Bahamas
/s/ J. P. Butler
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ASST. REGISTRAR GENERAL
THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989
AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION
OF
ULTRAPETROL (BAHAMAS) LIMITED
1. The name of the company is ULTRAPETROL (BAHAMAS) LIMITED (the "COMPANY").
2. The Registered Office of the Company shall be located at the Chambers of
Harry B. Sands & Company in the Island of New Providence, one of the
Islands of the Commonwealth of The Bahamas.
3. The Registered Agent of the Company shall be Harry B. Sands & Company,
Chambers, P.O. Box N-624, in the Island of New Providence, one of the
Islands of the Commonwealth of The Bahamas.
4. The objectives or purposes of the Company are:
(a) to engage in the following activities, in the Commonwealth of The
Bahamas or abroad, on its own account or on the account of third
parties (whether or not associated with the Company), namely:
(i) to own, operate and manage vessels for its own account and on
behalf of third parties, to act as a representative with
respect to vessels and to engage in other related activities,
inherent or complementary to said purposes;
(ii) to engage and operate in the maritime, fluvial and lacustrine
transportation, whether regular or irregular, domestic or
international, of cargoes, correspondence and maritime works
and services in general;
(iii) to render sea navigation training services to personnel;
(iv) with respect to the above-mentioned purposes and, in general,
every activity developed in accordance with its powers or
objectives, the Company may own, lease, charter and operate
vessels designated for time charter, consecutive voyage
charter, bareboat charter or any other charter related to the
use of such vessels for the purpose of (A) engaging in
activities of transportation, transshipment and unloading
operations and cargo complement; (B) developing loading,
discharge and stowing operations; (C) rendering towage
services; (D) acting as ship brokers and/or freighters; (E)
acting as maritime agents and representing its own and third
party vessels; (F) building vessels and naval appliances; (G)
exploiting public and private franchises of any kind; (H)
participating in bids to construct ports and operate them; and
(I) representing third parties in any manner in the maritime
business;
(v) to execute all necessary acts, representations, agencies,
commissions, consignments, business activities, and management
of properties, stocks and enterprises in general; and
(b) to engage in any other act or activity, business or otherwise,
which is not prohibited under the International Business
Companies Act, 1989 or any other law that is then currently in
force in the Commonwealth of The Bahamas.
5. The Company shall have an authorized capital of U.S. $100,000.00 with an
aggregate par value of U.S. $100,000.00. Shares of capital stock of the
Company shall be issued in the currency of The United States of America.
The number of shares into which the share capital is divided shall be
issued as registered shares and registered shares shall not be exchanged
for bearer shares.
6. The total number of shares which the Company shall have the authority to
issue is Ten Million (10,000,000) shares of capital stock as follows;
(a) Five Million (5,000,000) ordinary voting common shares at par value
U.S. $0.01 per share; and
(b) Five Million (5,000,000) ordinary non-voting common shares at par
value U.S. $0.01 per share.
7. Subject to the foregoing, the Directors shall have the authority and power
to fix by resolution any such designations, powers, preferences, rights,
qualifications, limitations and restrictions (if any) as shall appertain
to any class or series of capital stock of the Company.
8. The Company may exercise any of the powers granted under the International
Business Companies Act, 1989 without any of the limitations imposed
thereby unless such limitations shall be otherwise expressly contained or
set out in this Memorandum of Association or the Articles of Association
of the Company.
9. The Memorandum of Association and the Articles of Association of the
Company may only be restated, amended, supplemented or otherwise modified
as provided in the Articles of Association of the Company.
10. The liability of the Shareholders of the Company is limited to the amount
unpaid on the shares of capital stock of the Company held by them.
ADOPTED as of this 16th day of March, A.D. 2000.
COMMONWEALTH OF THE BAHAMAS
REGISTRAR GENERAL'S DEPARTMENT
I certify the foregoing to be a true
copy of the original document.
/s/ [ILLEGIBLE]
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Asst. Registrar General
MAR 16 2000
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REGISTRATION No.: 69,832 B
ULTRAPETROL (BAHAMAS) LIMITED
CERTIFICATE
I, Leon R. Potier, Assistant Secretary of Ultrapetrol (Bahamas) Limited,
pursuant to Section 72 (1) of the International Business Companies Act, 2000,
hereby certify the following to be a true and correct copy of Resolutions of all
Members passed on the 30th day of April, A.D. 2001, to amend Sections 2.2, 2.4
and 2.14 (b) of the Third Amended and Restated Articles of Association of the
Company:-
Section 2.2 "That the Board of Directors shall consists of Five (5)
members, which Five (5) members shall be comprised of Two (2) individuals
(plus alternates) nominated by Solimar (the "Solimar Directors") and three
(3) individuals (plus alternates) nominated by Los Avellanos (the "Los
Avellanos Directors")".
Section 2.4 "A Quorum for the transaction of business of the Board of
Directors and the taking of any action and adoption of any resolution
shall be present at any meeting of the Board of Directors if (i) at least
three (3) directors are present and participating in such meeting, and
(ii) at least one (1) of such directors present and participating is a
Solimar Director."
Section 2.14(b) "Until such time as each of the Shareholders Agreement and
the Amended and Restated Articles of Association of the Company are (Thus)
amended and restated, all actions of the Board of Directors set forth in
Section 2.8 (b) of the Shareholders Agreement and Section 2.14(b) of the
said Articles of Association of the Company shall require a vote of at
least Four (4) directors (notwithstanding the provisions of such Section
2.8(b) of the Shareholders Agreement and such Section 2.14(b) of the
Amended and Restated Articles of Association of the Company, which are
hereby preempted until further agreement of the Shareholders)."
DATED THE 30TH DAY OF APRIL, A.D. 2001
/s/ Leon R. Potier
-----------------------------
LEON R. POTIER
ASSISTANT SECRETARY
ULTRAPETROL (BAHAMAS) LIMITED [SEAL]
THE INTERNATIONAL BUSINESS COMPANIES ACT, 1989
THIRD AMENDED AND RESTATED ARTICLES OF ASSOCIATION
OF
ULTRAPETROL (BAHAMAS) LIMITED
These Articles of Association (the "ARTICLES") of Ultrapetrol (BAHAMAS)
Limited (the "COMPANY") shall constitute the Regulations of the Company.
Capitalized terms used in these Articles and not otherwise defined shall be used
as defined in Article XII "Definitions and Rules of Construction."
ARTICLE I
SHAREHOLDERS
SECTION 1.1 ANNUAL MEETING. The annual meeting of the Shareholders of the
Company shall be held either within or without the Commonwealth of The Bahamas,
at such place as the Board of Directors may designate in the call or in a waiver
of notice thereof, on the first (1st) Thursday in September of each year (or if
such day is not a Business Day, then on the next succeeding day that is a
Business Day) for the purpose of electing Directors and for the transaction of
such other business as may properly be brought before the meeting.
SECTION 1.2 SPECIAL MEETINGS. Special Meetings of the Shareholders may be
called by the Board of Directors or by the President, and shall be called by the
President or by the Secretary upon the written request of the holders of record
of at least twenty percent (20%) of the shares of Capital Stock of the Company,
issued and outstanding and entitled to vote, at such times and at such place
either within or without the Commonwealth of The Bahamas as may be stated in the
call or in a waiver of notice thereof.
SECTION 1.3 NOTICE OF MEETINGS. (a) Notice of the time, place and purpose
of every meeting of the Shareholders shall be served personally or by airmail,
telex, telegram, telefax, cable or other electronic means at the discretion of
the Directors. Such notice shall be served not less than ten days nor more than
sixty days before the date of the meeting to each Shareholder of record
entitled to vote, at such Shareholder's post office address shown in the Share
Register (or, in the case of joint holders of the same share or shares of
Capital Stock of the Company, at the address of the holder first named in the
Share Register, and notice so given shall be sufficient notice to all such joint
holders) or at such other address as shall be furnished in writing by him to the
Company for such purpose. Notice of a meeting shall be deemed to be waived by a
Shareholder by his or its attendance at a relevant meeting unless the
Shareholder is attending such meeting solely for the purpose of objecting to the
failure to give notice thereof. Such further notice shall be given as may be
required by law or by these Articles.
(b) Any notice that is delivered by post shall be deemed to have been
served within seven days of posting, and in proving such service it shall be
sufficient to prove that the letter containing the notice was properly
addressed, stamped and delivered into the care of the postal authorities.
SECTION 1.4 QUORUM. No business shall be transacted nor shall any action
be taken at any general meeting unless a quorum of the Shareholders is present.
A quorum for the transaction of business and the taking of any action shall be
present at any meeting of the Shareholders if the Shareholders owning 65% of the
Common Stock or other voting Capital Stock of the Company are present at such
meeting; provided that for the period beginning on the date of the Shareholders
Agreement and ending on the last Installment Date, Solimar's presence
at such meeting shall be required to establish a quorum at any meeting of the
Shareholders. If at any meeting of the Shareholders there shall not be such a
quorum present, the Shareholders present thereat shall adjourn the meeting until
a quorum shall have been obtained; provided that if a quorum shall not be
obtained as required by the immediately preceding sentence of this Section 1.4
within ten (10) days after the adjournment of any meeting, such first sentence
shall be disregarded and a quorum for the transaction of business and the taking
of any action shall require the presence of the Shareholders owning a majority
of the Common Stock or other voting Capital Stock of the Company.
SECTION 1.5 ORGANIZATION OF MEETINGS. (a) The President of the Company, or
in his absence, any Vice-President, shall preside as Chairman ("CHAIRMAN") at
meetings of the Shareholders. If both are absent, the Shareholders shall choose
one of the Shareholders present at the meeting to be Chairman. The Secretary of
the Company, or in such individual's absence, an Assistant Secretary, shall act
as Secretary of the meeting, if present.
(b) The Chairman, with the consent of the Shareholders in attendance in
Person or by proxy at the meeting, may adjourn such meeting to any time and
place as he shall determine; but no business shall be transacted at any
adjourned meeting other than the business left unfinished at the meeting from
which the adjournment took place.
SECTION 1.6 PROXIES. A Shareholder may be represented at a meeting of the
Shareholders by a proxy. The instrument appointing a proxy shall be in writing,
signed by the Shareholder or by such Shareholder's duly authorized attorney and
may be a private or public document.
SECTION 1.7 VOTING. (a) At each meeting of the Shareholders, except as
otherwise provided by Section 1.7(e)or by statute, every holder of record of
shares of Capital Stock of the Company entitled to vote shall be entitled to one
vote in Person or by proxy for each share of such Capital Stock standing in his
name in the records of the Company; provided however, that the Chairman shall
not have a second or casting vote. Where a Shareholder which is not an
individual wishes to be present at a meeting, it must be represented by a proxy.
Where there are joint registered holders of any shares of Capital Stock of the
Company, the vote of the most senior Shareholder who tenders a vote, whether in
Person or by proxy, shall be accepted, to the exclusion of the votes of the
other joint holders, and for this purpose seniority shall be determined by the
order in which the names are listed in the Share Register in respect of the
joint holding.
(b) Subject to Sections 1.7(c) and 1.7(e), any question presented to or
action taken by the Shareholders shall be approved or disapproved at a meeting
at which a quorum shall be present and acting throughout (as provided in Section
1.4) in accordance with the votes of the Shareholders holding a majority of the
shares of Common Stock and other voting Capital Stock of the Company present at
such meeting.
(c) Subject to Section 1.8, the following matters shall require the
affirmative vote of each Initial Shareholder that holds at the time of the
making of any such decision at least 20% of the Common Stock and any other
Capital Stock of the Company (and certain Transferees of an Initial
Shareholder):
(i) any amendment, restatement or other modification to the
Memorandum and Articles of Association or any other modification of the
legal structure or form of the Company and any Subsidiary, including,
without limitation, changing the number of members of the Board of
Directors or changing the name of the Company, but excluding the creation
of new direct or indirect wholly-owned Subsidiaries;
(ii) the issuance of Common Stock or any other Capital Stock of the
Company or any Subsidiary (other than (A) the issuance of Capital Stock of
a Subsidiary to the Company or any other direct or indirect wholly-owned
Subsidiary, or (B) the issuance of Common Stock or any other Capital Stock
of the Company pursuant to the provisions of Article II and Section 8.6 of
the Stock Purchase Agreement) or any direct or indirect purchase,
redemption, repurchase or other direct or indirect acquisition by the
Company or any Subsidiary of the Common Stock or any other Capital Stock
of the Company or any Subsidiary; provided that the issuance of Common
Stock or any other Capital Stock
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of the Company in connection with an Initial Public Offering or a
subsequent public offering of the Common Stock or other Capital Stock of
the Company shall not require the approval of the Initial Shareholder (or
certain of their Transferees that were granted the rights of an Initial
Shareholder in accordance with the terms of the Shareholders Agreement)
unless such issuance (whether individually or in combination with prior
issuances in connection with public offerings) is of a number of shares of
Common Stock or any other Capital Stock of the Company in excess of 35% of
the total number of shares of Capital Stock of the Company on a
fully-diluted basis after giving effect to such issuance;
(iii) the declaration, accrual or payment of any dividends or any
other distributions of cash, securities or other property on or in respect
of the Common Stock or any other Capital Stock of the Company or any
Subsidiary;
(iv) any merger, consolidation, spin-off, recapitalization or
other reorganization of the Company or any Transfer by the Company or any
Subsidiary of any shares of Capital Stock of any Subsidiary;
(v) the liquidation, dissolution, or winding-up of the Company or
any Subsidiary or the filing by the Company or any Subsidiary of a
petition for protection under any reorganization or bankruptcy procedures
or the making by the Company or any Subsidiary of any out-of-court
arrangements with creditors generally or rescheduling of debt obligations;
(vi) with respect to accounting practices of the Company and the
Subsidiaries, unless required by law (A) any material departure from GAAP,
(B) implementation of any standards or procedures recommended to the
Company or any Subsidiary by their auditors with respect to the
preparation and presentation of financial statements, or (C) any changes
in the accounting principles used in the preparation of the financial
statements of the Company or any Subsidiary whether or not such changes
are consistent with GAAP;
(vii) any grant by any holder of any shares of Common Stock or
other Capital Stock of the Company or any Subsidiary of any Lien (other
than pursuant to certain other shareholders agreements permitted under the
Shareholders Agreement) over any such shares of Common Stock or other
Capital Stock of the Company other than Liens granted by any holder of any
shares of Common Stock or other Capital Stock of the Company over shares
of Common Stock or other Capital Stock of the Company that were acquired
pursuant to (a) an Initial Public Offering, (b) a subsequent public
offering of the Common Stock or other Capital Stock of the Company, or (c)
a subsequent brokered sale of Common Stock or other Capital Stock of the
Company listed on a Relevant Stock Exchange that has not been privately
negotiated; and
(viii) any Transfer (whether in one transaction or a series of
related transactions occurring within a twelve (12) month period) by the
Company or any Subsidiary of more than 50% of the assets or properties of
the Company and the Subsidiaries on a consolidated basis.
(d) Notwithstanding any other provision in these Articles to the
contrary, except as otherwise provided in the Shareholders Agreement, no
Transferee of an Initial Shareholder shall be considered to be an Initial
Shareholder for the purposes of Section 1.7(c).
(e) Notwithstanding any other provision in these Articles to the
contrary, so long as the clause (ii) of the definition of Change of Control in
the Indenture is in effect, in the event the Founding Shareholders at any time
own in the aggregate, less than 35% of the voting Capital Stock of the Company
and any person (as the term "person" is defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934 of the United States, as amended) holds more
than 35% of the voting Capital Stock of the Company at such time, the Founding
Shareholders shall be entitled to elect a majority of the Board of Directors. In
such event, every holder of record of shares of Capital Stock of the Company
entitled to vote other than the Founding Shareholders shall be entitled to one
vote in Person or by proxy for each share of such Capital Stock standing
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in his name in the records of the Company to elect the remaining members of the
Board of Directors.
(f) At all elections of directors, the voting shall be by ballot or in
such other manner as may be determined by the Shareholders present in Person or
by proxy entitled to vote at such election. With respect to any other matter
presented to the Shareholders for their consideration at a meeting, any
Shareholder entitled to vote may, on any question, demand a vote by ballot. If a
ballot is demanded, it shall be taken in such manner as the Chairman directs and
the result of such ballot shall be deemed to be the resolution of the
Shareholders.
(g) A complete list of the Shareholders entitled to vote at each such
meeting, arranged in alphabetical order, with the address of each, and the
number of shares of Capital Stock of the Company registered in the name of each
Shareholder (the "SHARE REGISTER"), shall be prepared by the Secretary and shall
be open to the examination of any Shareholder, for any purpose gennane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any Shareholder who is present.
(h) At any general meeting of the Shareholders, unless a ballot is
demanded by a Shareholder present in Person or by proxy, a declaration by the
Chairman that a resolution has been carried and an entry to that effect in the
book of proceedings of the Shareholders shall be sufficient evidence of the
fact, without proof of the number or proportion of the votes recorded in favor
of or against such resolution.
SECTION 1.8 EXCEPTIONS TO 20% SHAREHOLDING REQUIREMENT. (a) For the period
beginning on the date of the Shareholders Agreement and ending on the last
Installment Date, Solimar shall be deemed to hold at least 20% of the Capital
Stock of the Company regardless of the number of shares of Capital Stock it
actually holds at such time.
(b) For purposes of determining whether an Initial Shareholder holds at
least 20% of the shares of Capital Stock of the Company, shares of Capital Stock
of the Company held by such Initial Shareholder shall be aggregated with those
of certain of its Transferees under the circumstances described in the
Shareholders Agreement.
(c) Subject to the proviso in Section 1.8(d), if, solely as a result of
the issuance of shares of Capital Stock of the Company to a Purchaser Indemnitee
pursuant to Section 8.6 of the Stock Purchase Agreement, a Founding Shareholder
holds less than 20% of the shares of Capital Stock of the Company, such Founding
Shareholder shall be deemed to hold 20% of the shares of Capital Stock of the
Company for purposes of these Articles so long as such Founding Shareholder
holds at least 15% of the shares of Capital Stock of the Company.
(d) If, solely as a result of the issuance of shares of Capital Stock of
the Company in an Initial Public Offering or a subsequent primary public
offering of Capital Stock of the Company, an Initial Shareholder holds less than
20% of the shares of Capital Stock of the Company, such Initial Shareholder
shall be deemed to hold 20% of the shares of Capital Stock of the Company for
purposes of these Articles so long as such Initial Shareholder holds at least
10% of the shares of Capital Stock of the Company; provided that if, solely as a
result of the issuance of shares of Capital Stock of the Company to a Purchaser
Indemnitee pursuant to Section 8.6 of the Stock Purchase Agreement, after the
dilution described in the beginning of this Section 1.8(d), a Founding
Shareholder holds at least 75% of the number of shares of Capital Stock it holds
after giving effect to such Initial Public Offering or subsequent primary public
offering (but no less than 7.5% of the shares of Capital Stock of the Company),
such Founding Shareholder shall be deemed to hold 20% of the shares of Capital
Stock of the Company for purposes of these Articles.
SECTION 1.9 RESOLUTIONS OF MEETINGS. All resolutions passed at any meeting
shall be recorded in the minutes of meeting, which minutes shall be made in
English, and a copy thereof circulated to each Shareholder for approval and
countersignature promptly after such meeting.
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SECTION 1.10 INSPECTORS OF ELECTION. The Board of Directors in advance of
any meeting of the Shareholders may appoint one or more Inspectors of Election
to act at the meeting or any adjournment thereof. If Inspectors of Election are
not so appointed, the Chairman of the meeting may, and on the request of any
Shareholder entitled to vote shall, appoint one or more Inspectors of Election.
Each Inspector of Election, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of Inspector of
Election at such meeting with strict impartiality and according to the best of
his ability. If appointed, Inspectors of Election shall take charge of the polls
and, when the vote is completed, shall make a certificate of the result of the
vote taken and of such other facts as may be required by law.
SECTION 1.11 ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Shareholders may be taken without a meeting, without
prior notice and without a vote, if, prior to such action, a written consent or
consents thereto, setting forth such action, is signed either personally or by
proxy by the holders of record of all shares of Capital Stock of the Company
issued and outstanding and entitled to vote thereon. Such consent or consents
shall constitute the minutes of the annual or general meeting, which shall be
deemed to have been duly held, notwithstanding the fact that no Shareholder
meeting was actually held or that there may have been technical defects in the
proceedings, and a resolution in writing signed by all of the Shareholders
aforesaid shall be as valid and effectual as if it had been passed at a meeting
of the Shareholders duly called and constituted.
SECTION 1.12 CONFERENCE TELEPHONE. A meeting of the Shareholders may, and
shall at the request of any Initial Shareholder, be held by telephone or other
electronic or conferencing means if all of the Shareholders present at such
meeting are able to clearly hear each other and be heard.
ARTICLE II
DIRECTORS
SECTION 2.1 MANAGEMENT OF THE COMPANY. The Company shall have a board of
directors (the "BOARD OF DIRECTORS") which shall direct and oversee the
management and affairs of the Company and which may exercise all the powers of
the Company that are not expressly reserved to the Shareholders under the
Articles, the Act or any other laws of the Commonwealth of The Bahamas.
SECTION 2.2 NUMBER OF DIRECTORS. The Board of Directors of the Company at
all times shall consist of nine (9) members.
SECTION 2.3 ELECTION. Directors shall be elected by the Shareholders at
the annual meeting of the Shareholders in accordance with the voting provisions
contained in Section 1.7.
SECTION 2.4 QUORUM. A quorum for the transaction of business and the
taking of any action shall be present at any meeting of the Board of Directors
if a majority of the Directors are present; provided that, so long as the
Shareholders Agreement remains in effect and any of Los Avellanos, SII and
Solimar remain party thereto, such majority includes at least two (2) Solimar
Directors, one (1) Los Avellanos Director and one (1) SII Director. If at any
meeting of the Board of Directors there shall not be such a quorum present, the
members present thereat shall adjourn the meeting until a quorum shall have been
obtained; provided that if a quorum shall not be obtained as required by the
proviso in the first sentence of this Section 2.4 within ten (10) days after the
adjournment of any meeting, such proviso shall be disregarded and a quorum for
the transaction of business and the taking of any action shall require the
presence of a majority of the Directors.
SECTION 2.5 TERM. Unless otherwise removed in accordance with Section 2.7,
the Directors Shall hold office until their successors shall have been duly
appointed and shall have (qualified. Section 42(4) of the Act shall not apply.
SECTION 2.6 VACANCIES. If a vacancy on the Board of Directors occurs for
any reason (including death, resignation or removal) while the Shareholders
Agreement remains in effect, if
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any of Los Avellanos, SII and Solimar remain party thereto, they shall cause
their respective Directors to elect a substitute Director, who shall be
nominated by the Shareholder which nominated the Director who is being replaced,
to serve until his successor is duly appointed and shall have qualified.
SECTION 2.7 REMOVAL. Subject to the terms of the Shareholders Agreement,
the Directors shall be subject to removal by the Shareholders.
SECTION 2.8 QUALIFICATIONS. (a) A Director shall not be required to be a
Shareholder of the Company in order to qualify as a Director.
(b) Each Director shall hold office according to the terms of his
appointment. In addition to the provisions of Section 42(2) of the Act, a
Director shall vacate his office if he becomes bankrupt or makes any arrangement
or composition with his creditors generally, or becomes of unsound mind or of
such infirm health as to be incapable of managing his affairs. Section 42(3)(a)
of the Act shall not apply.
(c) A Director may hold concurrently with his office as Director any
other office or position of profit (except that of auditor) with the Company or
any other company or legal entity in which the Company may hold an interest as
Shareholder or otherwise for such remuneration and on such other terms and
conditions as the Directors may determine and shall not be accountable to the
Company for the same.
SECTION 2.9 CHAIRMAN. The Board of Directors shall annually elect a
Chairman from among the Directors. The Chairman shall have the functions and
duties as set forth in these Articles.
SECTION 2.10 POWERS OF THE DIRECTORS. (a) Subject to Sections 1.7(c) and
2.14(b), the Directors shall have full power to manage and dispose of the
properties of the Company, including those which by law require a special power
of attorney, and may, therefore, sell, mortgage, alienate and otherwise dispose
of such properties without the consent of the Shareholders or a meeting of the
Shareholders. Subject to Section 2.14(b), the Directors may (i) enter into all
necessary legal proceedings on behalf of the Company for the performance of the
purposes of the Company; (ii) enter into relationships with banking and other
credit institutions, whether public or private, within or without the
Commonwealth of The Bahamas; (iii) establish agencies, branches and other types
of representations within or without the Commonwealth of The Bahamas; (iv) enter
into purchase, sale, exchange, or lease agreements and all other types of
contractual arrangements, including (A) time charters, consecutive voyage
charters or bareboat charters, (B) contracts related to the leasing, renting or
importing of all types of goods, (C) assignments of vessels, their spare parts,
apparatus, accessories, and materials and supplies, and (D) insurance agreements
necessary to cover the risks affecting services provided by the Company, the
properties of the Company or of those hired by the Company to provide services,
or the risks affecting third parties which may arise in connection with any of
the properties of the Company or of those hired by the Company; (v) carry out
all commercial activities normally engaged in by the Company in the ordinary
course of business; (vi) mortgage vessels, facilities and other personal and
real properties; (vii) abandon ships and other properties of the Company in
favor of underwriters of any state, or of any other third party, if it is deemed
to be in the best interests of the Company; (viii) carry out (A) all of the
industrial operations, commercial transactions and contracts directly or
indirectly related to the purposes of the Company and (B) the credit operations,
with or without express warranty, aimed to facilitate the Company's normal
operational development for the performance of activities related, accessory and
complementary to those constituting its main purposes; (ix) enter into
agreements of temporary association for commercial purposes without formal
partnership, of "Union Transitoria de Empresas" and of "Agrupacion de
Colaboracion Empresaria;" (x) grant to one or more persons special judicial
powers of attorney (including those necessary for criminal complaint) and extra-
judicial powers with such purpose and scope as the Board of Directors may
deem convenient; and (xi) engage in any other act of disposition, investment,
management or exploitation.
(b) Subject to Section 2.14(b), the Directors may, on behalf of the
Company, (i) raise, borrow or secure money; (ii) mortgage, pledge or otherwise
charge the Company's assets for such purposes; and (iii) issue securities
whenever money is borrowed or as security for any debt, liability or obligation
of the Company, as approved by resolution of the Directors. Subject to
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Section 2.14(b), the Directors may, by resolution, guarantee the repayment or
performance of any liability, debt or obligation of any Person and secure the
same by mortgage, pledge or other charge on any of the Company's assets.
SECTION 2.11 MEETINGS, NOTICE, VALIDITY, PROXIES. (a) Meetings of the
Board of Directors shall be held at such place either within or without the
Commonwealth of The Bahamas, as may from time to time be fixed by resolution of
the Board of Directors, or as may be specified in the call or in a waiver of
notice thereof. Subject to Section 2.11(b), meetings of the Board of Directors
may be convened by the President or, in his absence, by any Vice-President or
Director. The President or, in his absence, a Vice-President shall preside as
Chairman at meetings of the Board of Directors and if both are not present
within fifteen minutes from the time appointed by the meeting of the Board of
Directors, the Directors present may vote one of their number to be the
Chairman. The Chairman of the meeting shall not be entitled to a second or
casting vote.
(b) Until June 30, 2001, regular meetings of the Board of Directors
shall be held at least once every two (2) months and at such additional times
as may be fixed by a resolution of the Board of Directors. Thereafter, regular
meetings of the Board of Directors shall be held at times and intervals as shall
be decided by the Board of Directors; provided that such regular meetings shall
be held at least once every calendar quarter. Special meetings of the Board of
Directors may be held at any time upon the written request of any Shareholder
holding at least 20% of the Common Stock and other voting Capital Stock of the
Company, any Director or the Company.
(c) At least ten (10) days prior written notice shall be given to each
Director of any meeting of the Board of Directors, which notice shall state the
date, time and place of the proposed meeting; provided that this requirement
shall be waived by a Director by his attendance at a relevant meeting unless
such Director is attending such meeting solely for the purpose of objecting to
the failure to give notice thereof.
(d) Any action required or permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting if a consent in writing,
setting forth the action taken, is signed by all of the Directors, and such
consent shall have the same force and effect as a unanimous vote at a meeting.
(e) A meeting of the Board of Directors may, and shall at the request of
any Director, be held by telephone or other electronic or conferencing means if
all of the Directors present at such meeting are able to clearly hear each other
and be heard.
(f) The Board of Directors shall ensure that all resolutions passed at
any meeting of the Board of Directors shall be recorded in the minutes of
meeting, which minutes shall be made in English and a copy thereof circulated to
each Director for approval and countersignature promptly after such meeting. A
resolution in lieu of a meeting of the Board of Directors provided in writing
and signed by all of the Directors shall have the same validity and effect as a
resolution that is passed at a meeting of the Board of Directors duly called and
constituted.
(g) Any Director may be represented by and vote by a proxy or proxies at
a meeting. Such proxy or proxies need not be Directors, must be designated in
writing and may or may not have power to delegate.
SECTION 2.12 ALTERNATE DIRECTORS. (a) Any alternate Director appointed
shall be deemed to be a Director and not an agent of the Director so appointing
him.
(b) A Director by an instrument in his own handwriting deposited at the
Registered Office of the Company may revoke, at any time, the appointment of his
alternate. If a Director shall die or cease to hold office, the appointment of
his alternate shall thereupon cease and terminate. Any alternate Director shall
be deemed to be the Director he represents.
(c) Any alternate Director shall be designated by the Shareholder which
nominated the Director for whom the alternate Director is being designated. In
the case of a vacancy, an alternate Director will replace the resigning or
removed Director and Section 42(4) of the Act shall not apply.
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SECTION 2.13 CORPORATE DIRECTORS. A Director that is a corporate entity
may appoint, by written instrument deposited at the Registered Office of the
Company, any individual as its representative for the purposes of representing
such Director at meetings of the Board of Directors or meetings of a committee
of the Board of Directors and transacting the business of the Company.
SECTION 2.14 VOTING. (a) Subject to Section 2.14(b), any question
presented to or action taken by the Board of Directors shall be approved or
disapproved at a meeting, at which a quorum shall be present and acting
throughout (as provided in Section 2.3), by a decision of a simple majority of
the Directors present at the relevant meeting and entitled to vote.
(b) So long as the Shareholders Agreement remains in effect and Los
Avellanos, SII and Solimar, respectively, remain parties thereto, the following
matters shall require the affirmative vote of seven (7) Directors; provided that
such supermajority shall include at least three (3) Solimar Directors and four
(4) Founding Shareholders Directors:
(i) approval of, and any amendments, restatements, supplements,
updates or modifications to, each Annual Budget and the Business Plan, the
termination of the Business Plan, or the adoption of a subsequent business
plan for the Company, including the Subsidiaries;
(ii) appointment or dismissal of the Chief Executive Officer and
the approval of, and any amendments, restatements, supplements or
modifications to, the employment agreement with such individual; provided
that if the Solimar Directors determine in good faith that a reasonable
basis exists for the termination of the Chief Executive Officer for Cause
and request the dismissal of the Chief Executive Officer for Cause, the
Founding Shareholders shall cause their designated Directors to vote in
favor of such dismissal;
(iii) acquisition or sale of assets (either tangible or intangible)
by the Company or any Subsidiary having a value greater than U.S.
$500,000.00 (or an amount equivalent thereto in any other currency),
except (A) acquisitions and sales specifically approved in an Annual
Budget, or (B) acquisitions and sales made in connection with the
provisioning, repairing, or maintenance of any of the Vessels; provided
that in the determination of the advisability of purchasing a Vessel as
contemplated by Section 3 of the Shareholders Non-Competition Agreement,
the Directors who are designated by a Shareholder which is the Principal
Owner, an Affiliate of the Principal Owner or an Affiliate of the
Principal Owner Affiliate that is considering the purchase of such Vessel
for its own account, shall be deemed to have an interest in such
transaction and shall abstain from voting in the determination of the
Company's advisability of purchasing such Vessel and, in such case, the
approval of a majority of the Directors that do not have an interest in
such transaction shall be required to approve the purchase of such Vessel
by the Company or any of the Subsidiaries;
(iv) incurrence of any Indebtedness by the Company or any
Subsidiary, other than (A) trade payables incurred in the ordinary course
of business or Indebtedness provided for in an Annual Budget, or (B)
entering into working capital facilities (in an aggregate amount no
greater than U.S. $10,000,000.00 (or an amount equivalent thereto in any
other currency));
(v) early redemption of the Notes or voluntary prepayment or early
redemption of any other Indebtedness of the Company or any Subsidiary
(other than (A) trade payables or working capital facilities incurred in
the ordinary course of business, or (B) as provided for in an Annual
Budget);
(vi) creation of any Lien by the Company or any Subsidiary over any
asset, interest or undertaking that is not provided for in an Annual
Budget or that is not in the ordinary course of business, where the amount
required to discharge such Lien exceeds U.S. $250,000.00 (or an amount
equivalent thereto in any other currency);
(vii) granting by the Company or any Subsidiary of loans, advances,
guarantees or indemnities to third Persons not in the ordinary course of
business;
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(viii) making or committing to make capital expenditures by the
Company or any Subsidiary in excess of those provided for in an Annual
Budget;
(ix) entering by the Company or any Subsidiary into joint ventures,
partnership schemes, profit sharing arrangements or franchising
agreements, having a duration of more than one (1) year;
(x) entering by the Company or any Subsidiary into licensing,
trademark, copyright or know-how agreements with third Persons in which
the annual fees on royalties exceed U.S. $100,000.00 (or an amount
equivalent thereto in any other currency) or where the intellectual
property involved is material to or necessary for the operation of the
business of the Company or any Subsidiary;
(xi) entering by the Company or any Subsidiary into any Related
Party Transaction which (A) is not in the ordinary course of business, (B)
is not on an arm's-length basis, or (C) involves a potential conflict of
interest between the Company and the relevant Person; provided that so
long as the Indenture requires that a Related Party Transaction in excess
of U.S. $250,000.00 (or an amount equivalent thereto in any other
currency) be approved by a majority of the Directors that do not have an
interest in such Related Party Transaction, Solimar shall cause the
Solimar Directors to give their approval to such Related Party Transaction
if Solimar is satisfied, in its sole discretion, that such Related Party
Transaction is on an arm's-length basis; provided further that in the case
of a Related Party Transaction in excess of U.S. $250,000.00 (or an amount
equivalent thereto in any other currency) involving a Vessel Contract, an
approval by the Los Avellanos Directors or the SII Directors, as the case
may be, that do not have an interest in such Related Party Transaction
shall for purposes hereof be deemed to be an approval by the Solimar
Directors; provided further that if, upon Solimar's review of the facts
and circumstances of any such Related Party Transaction that was deemed
approved by the Solimar Directors or any Related Party Transaction that
was less than U.S. $250,000.00 (or an amount equivalent thereto in any
other currency), Solimar determines that such Related Party Transaction
was not on an arm's-length basis, the approval of all subsequent Related
Party Transactions shall require the majority of the Directors not
interested in such Related Party Transactions and the second proviso of
this Section 2.14(b)(xi) shall be disregarded;
(xii) except as provided in the Shareholders Agreement, any
expenditure or commitment for (A) the acquisition by the Company or any
Subsidiary of any Capital Stock in any other Person, or (B) the
acquisition by the Company or any Subsidiary of all or substantially all
of the assets of any other Person or any line of business of such other
Person regardless of whether such transaction takes the form of an asset
purchase, a stock purchase, a merger, a sale and leaseback or any other
form;
(xiii) establishment by the Company or any Subsidiary of any new
line of business or division, including, without limitation, any
commitment to contract, purchase, manage or lease any terminal operations;
any material change in or addition to the nature or scope of the business
of the Company or any Subsidiary, including, without limitation, any
geographical expansion outside that contemplated in the Business Plan and
outside the expansion of routes and employment of the Vessels in the
ordinary course of business;
(xiv) approval of compensation to, benefits and incentive programs,
including, without limitation, incentive stock option plans, for the
employees of the Company and the Subsidiaries that earn more than U.S.
$75,000.00 (or an amount equivalent thereto in any other currency) on an
annual basis in salary, bonuses and other compensation;
(xv) entering into, making any material modification to, amending or
terminating any contract, agreement, or arrangement that the Company or
any Subsidiary is a party to which requires payments in excess of U.S.
$100,000.00 (or an amount equivalent thereto in any other currency) on an
annual basis or is otherwise material to such Person, outside the ordinary
course of business;
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(xvi) appointment or removal of the auditors for the Company or any
Subsidiary;
(xvii) engagement or removal by the Company or any Subsidiary of any
outside consultants or advisors (including, without limitation, lawyers,
investment bankers, accountants) the fees of which are estimated to exceed
U.S. $75,000.00 (or an amount equivalent thereto in any other currency)
with respect to (A) any matter for which they are engaged, or (B) any
series of matters or an ongoing engagement of at least twelve (12) months
in duration;
(xviii) commencement of any litigation, arbitration, or other legal
proceeding by the Company or any Subsidiary relating to any claim or
assessment where the amount at issue is in excess of U.S. $1,000,000.00
(or an amount equivalent thereto in any other currency), other than in the
ordinary course of business, and settlement by the Company or any
Subsidiary of any litigation, arbitration, or other legal proceeding
relating to any claim or assessment where the amount at issue is in excess
of U.S. $250,000.00 (or an amount equivalent thereto in any other
currency);
(xix) establishment or dissolution of any Subsidiary having, or
anticipated to have, assets or liabilities of more than U.S. $100,000.00
(or an amount equivalent thereto in any other currency); and
(xx) establishment or dissolution of any committees of the Board of
Directors and the delegation of any functions and duties to any such
committee, including the Executive Committee, the Audit Committee and the
Compensation Committee.
SECTION 2.15 COMPENSATION. The Company shall pay to each Director an
annual fee equal to U.S. $75.000.00 which fee shall be payable in quarterly
installments in advance on the first day of each of January, April, July and
October or as otherwise determined by the Board of Directors. In addition, the
Company shall reimburse the Directors for their reasonable travel, lodging and
other related expenses incurred in connection with attendance at meetings of the
Board of Directors and any committees thereof.
ARTICLE III
COMMITTEES
SECTION 3.1 COMMITTEES. The Shareholders shall cause the Board of
Directors to establish an Executive Committee (the "Executive Committee"), an
Audit Committee (the "Audit Committee") and a Compensation Committee (the
"Compensation Committee"), each of which shall report to the Board of Directors.
Each such Committee shall only have authority to oversee, monitor and make
recommendations, as more fully described in clauses (b) through (d) of this
Article and shall not have any decision-making authority, except as may be
delegated to it by the Board of Directors from time to time.
SECTION 3.2 EXECUTIVE COMMITTEE. The Executive Committee shall monitor the
activities and performance of the Chief Executive Officer in his management of
the Company and fulfillment of the Business Plan and the relevant Annual Budget
and perform such other functions on specific matters delegated to it from time
to time by the Board of Directors. The Executive Committee shall consist of five
(5) members, three (3) of whom shall be designated by the Board of Directors
from the Founding Shareholders Directors and two (2) of whom shall be designated
by the Board of Directors from the Solimar Directors. Meetings of the Executive
Committee shall be held at least two (2) times every month or more frequently as
may be determined by a majority of the members of the Executive Committee, and
shall include the participation of the Chief executive Officer, unless otherwise
determined by a majority of the members of the Executive Committee. The
Executive Committee shall promptly and in writing report the results of each
meeting of the Executive Committee to the Board of Directors.
SECTION 3.3 AUDIT COMMITTEE. The Audit Committee shall (i) liaise among
the Board of Directors, the external auditors and internal auditors of the
Company, if any, (ii) recommend to the Board of Directors an independent
auditing firm and approve the compensation payable to such auditing firm, (iii)
review and assess the scope of the audit work performed by the external
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auditor, and (iv) monitor the Company's accounting and auditing systems and
recommend internal audit procedures, policies and controls. The Audit Committee
shall review with the Company's management the following upon the completion of
the annual audit examination: (A) the Company's audited consolidated annual
financial statements and related footnotes, (B) the results of the external
audit report, (C) any significant changes required in the external auditor's
audit plan, (D) disputes with management encountered during the course of the
audit, and (E) management letters issued by the external auditors regarding
internal accounting controls and procedures. The Audit Committee may request
either from the external or internal auditors, if applicable, special studies,
investigations, or other services as it relates to matters of interest or
concern to the Audit Committee. The Audit Committee shall consist of three (3)
members, one (1) of whom shall be designated by the Board of Directors from the
Founding Shareholders Directors and two (2) of whom shall be designated by the
Board of Directors from the Solimar Directors. The members of the Audit
Committee and all Persons acting on the behalf of the Audit Committee shall have
full and free access to review the books and records of the Company in
connection with their functions hereunder. Meetings of the Audit Committee shall
be conducted at the times and in the manner as determined by the members of the
Audit Committee. An executive officer or manager of the Company may be a member
of the Audit Committee, provided that such Person shall be required to leave a
meeting of the Audit Committee if so requested by the other members of the Audit
Committee. The Audit Committee shall promptly and in writing report the results
of each meeting of the Audit Committee to the Board of Directors.
SECTION 3.4 COMPENSATION COMMITTEE. The Compensation Committee shall
oversee and manage issues relating to the compensation of the Company's
employees and executives, and manage issues relating to the Stock Option Plan.
The Compensation Committee shall consist of three (3) members who are not
employed by the Company as executive officers or managers, one (1) of whom shall
be designated by the Board of Directors from the Founding Shareholders Directors
and two (2) of whom shall be designated by the Board of Directors from the
Solimar Directors. Meetings of the Compensation Committee shall be conducted at
the times and in the manner as determined by the members of the Compensation
Committee. The Compensation Committee shall promptly and in writing report the
results of each meeting of the Compensation Committee to the Board of Directors.
SECTION 3.5 VACANCIES. Any vacancy on any of the Executive Committee, the
Audit Committee or the Compensation Committee and any removal of a member of any
such committee shall be treated in a similar fashion as with a vacancy or
removal of a Director as provided in Sections 2.6 and 2.7.
ARTICLE IV
OFFICERS
SECTION 4.1 TITLES AND ELECTION. (a) The officers of the Company, who
shall be chosen by the Board of Directors at its first meeting after each annual
meeting of the Shareholders, shall be a Chief Executive Officer who shall also
serve as President, a Treasurer and a Secretary. The Board of Directors from
time to time may elect one or more Vice Presidents, Assistant Secretaries,
Assistant Treasurers and such other officers and agents as it shall deem
necessary, and may define their powers and duties.
(b) Any number of offices may be held by the same Person. Any Person,
including a Director, may be appointed by resolution of the Directors to be an
officer or agent of the Company; and the Directors may entrust to or confer upon
such officer or agent any of the powers and authorities, including the power and
authority to affix the common seal of the Company, exercisable by the Directors
upon such terms and conditions as the Board of Directors think fit, either
collaterally with, or to the exclusion of, its own powers and subject to
limitations provided under the Act and any regulations prescribed by the
enabling resolution.
SECTION 4.2 REMOVAL. Except in the case of the Chief Executive Officer and
subject to the provisions of any employment agreement between the Company and
any officer, any officer may be removed, either with or without cause, at any
time, by the affirmative vote of a majority of the Board of Directors.
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SECTION 4.3 RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors or to the Secretary. Such resignation
shall take effect at the time specified therein, and, unless otherwise specified
therein. the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 4.4 VACANCIES. If the office of any officer or agent becomes
vacant by reason of death, resignation, retirement, disqualification, removal
from office or otherwise, the Directors may choose a successor, who shall hold
office for the unexpired term in respect of which such vacancy occurred.
SECTION 4.5 CHIEF EXECUTIVE OFFICER; PRESIDENT. The Chief Executive
Officer (the "Chief Executive Officer") shall be the President of the Company
and, in the absence of the Chairman, shall preside at all meetings of the Board
of Directors, and of the Shareholders. Subject to the Memorandum and
Articles of Association and his employment agreement with the Company, the Chief
Executive Officer shall exercise the powers and perform the duties usual to the
chief executive officer and, subject to the control of the Board of Directors,
shall exercise general management and control of the day-to-day affairs and
business of the Company, fulfill the Business Plan and the relevant Annual
Budget and implement the orders and resolutions of the Board of Directors and
orders and resolutions duly made by the Executive Committee in accordance with
powers expressly delegated to it by the Board of Directors in accordance with
Section 2.14(b)(xxi). The Chief Executive Officer shall attend all meetings of
the Executive Committee, subject to the penultimate sentence of clause (b) of
Article III. The Chief Executive Officer shall be subject to removal as provided
in his employment agreement. The Chief Executive Officer shall appoint and
discharge employees and agents of (the Company (other than officers elected by
the Board of Directors) and fix their compensation. Subject to Sections 1.7(c)
and 2.14(b), the Chief Executive Officer shall have the power to execute bonds,
mortgages and other contracts, agreements and instruments of the Company, and
shall do and perform such other duties as from time to time may be assigned to
the Chief Executive Officer by the Board of Directors.
SECTION 4.6 VICE PRESIDENTS. If chosen, the Vice Presidents, in the
order of their seniority, shall, in the absence or disability of the Chief
Executive Officer, exercise all of the powers and duties of the Chief Executive
Officer and President, and otherwise perform such duties as are delegated to
them by the Chief Executive Officer. Such Vice Presidents shall have the power
to execute bonds, notes, mortgages and other contracts, agreements and
instruments of the Company, and shall do and perform such other duties incident
to the office of Vice President and as the Board of Directors or the Chief
Executive Officer shall direct.
SECTION 4.7 SECRETARY. The Secretary shall attend all sessions of the
Board of Directors and all meetings of the Shareholders and record all votes and
the minutes of proceedings in a book to be kept for that purpose. The Secretary
shall give, or cause to be given, notice of all meetings of the Shareholders and
of the Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors. The Secretary shall affix the seal of the
Company to any instrument requiring it, and when so affixed, it shall be
attested by the signature of the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer who may affix the seal to any such
instrument in the event of the absence or disability of the Secretary. The
Secretary shall have and be the custodian of the stock records and all other
books, records and papers of the Company (other than financial) and shall see
that all books, reports, statements, certificates and other documents and
records (other than financial records) required by law are properly kept and
filed.
SECTION 4.8 TREASURER. The Treasurer shall have the custody of the Company
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Company and shall deposit all moneys,
and other valuable effects in the name and to the credit of the Company, in such
depositories as may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the Company as may be ordered by the Board, taking proper
vouchers for such disbursements, and shall render to the directors whenever they
may require it, an account of all his transactions as Treasurer and of the
financial condition of the Company.
SECTION 4.9 DUTIES OF OFFICERS MAY BE DELEGATED. (a) in case of the
absence or disability of any officer of the Company, or for any other reason
that the Board of Directors may
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deem sufficient, the Board of Directors may delegate, for the time being, the
powers or duties, or any of them, of such officer to any other officer, or to
any Director.
(b) Any officer that is a corporate entity may appoint by written
instrument deposited at the Registered Office of the Company any individual as
its representative to carry out the duties and exercise the powers and
authorities attaching to such office.
SECTION 4.10 SALARIES. Subject to Section 2.14(b), the salaries of
officers and agents shall be fixed by resolution of the Directors, subject to
any resolution of the Shareholders.
ARTICLE V
INDEMNIFICATION
SECTION 5.1 ACTIONS BY OTHERS. The Company (a) shall indemnify any Person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that he is or was a Director or an officer of the
Company and (b) except as otherwise required by Section 5.3, may indemnify any
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was an employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee, agent of or participant in another Person, against
expenses (including attorneys' fees), judgments, fines and amounts actually and
reasonably incurred by such Person in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Person did
not act in good faith and in a manner which such Person reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
SECTION 5.2 ACTIONS BY OR IN THE RIGHT OF THE COMPANY. The Company shall
indemnify any Person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that he is or
was a Director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee, agent of or
participant in another Person against expenses (including attorneys' fees)
actually and reasonably incurred by such Person in connection with the defense
or settlement of such action a suit if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such Person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Company unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such Person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
SECTION 5.3 SUCCESSFUL DEFENSE. To the extent that a Person who is or was
a Director, officer, employee or agent of the Company has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
Section 5.1 or Section 5.2, or in defense of any claim, issue or matter therein,
such Person shall be indemnified through the use of Company funds against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 5.4 SPECIFIC AUTHORIZATION. Any indemnification under Section 5.1
or Section 5.2 (unless ordered by a court) shall be made by the Company only as
authorized in the specific case upon a determination that indemnification of the
Director, officer, employee or agent is proper in the circumstances because such
Person has met the applicable standard of
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conduct set forth in said Sections 5.1 and 5.2. Such determination shall be made
(a) by the Board of Directors by a majority vote of a quorum consisting of the
Directors who were not parties to such action, suit or proceeding, or (b) if
such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested Directors so directs, by independent legal counsel in a written
opinion, or (c) by the Shareholders.
SECTION 5.5 ADVANCE OF EXPENSES. Expenses incurred by any Person who may
have a right of indemnification under this Article in defending a civil or
criminal action, suit or proceeding may be paid by the Company in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on behalf
of the Director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the Company
pursuant to this Article 5.
SECTION 5.6 RIGHT OF INDEMNITY NOT EXCLUSIVE. The indemnification provided
by this Article V shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled under any by-law, agreement, vote
of Shareholders or disinterested Directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a Person.
SECTION 5.7 INSURANCE. The Company may purchase and maintain insurance on
behalf of any Person who is or was a Director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of or participant in another Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of such Person's status as such, whether or not the Company would
have the power to indemnify him against such liability under the provisions of
this Article V.
SECTION 5.8 INVALIDITY OF ANY PROVISIONS OF THIS ARTICLE. The invalidity
or unenforceability of any provision of this Article V shall not affect the
validity or enforceability of the remaining provisions of this Article V.
ARTICLE VI
CAPITAL STOCK
SECTION 6.1 SHARES. (a) The Company shall issue ordinary, registered
shares of its Capital Stock that may be endorsed or unendorsed. Shares of
Capital Stock of the Company may be issued with such designations, powers,
preferences, rights, limitations and/or restrictions with regard to dividend,
voting, return of capital or otherwise as the Directors may determine by
resolution, without prejudice to any rights attaching to any shares of Capital
Stock of the Company and subject to the provisions of the Act.
(b) Any new shares of Capital Stock issued to increase the authorized
share capital of the Company shall be issued upon such terms and conditions and
with such rights and privileges and other attributes annexed thereto as the
Directors shall determine by resolution and, except as otherwise provided by the
terms of such issuance, such shares of Capital Stock shall be considered part of
the original share capital for all purposes under the Act and these Articles.
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SECTION 6.2 CERTIFICATES. (a) The interest of each Shareholder shall be
evidenced by certificates for shares of Capital Stock of the Company in such
form as the Board of Directors may from time to time prescribe. The signatures
or common seal on the certificates of stock may be facsimiles. In case any
director, directors, officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on, any such certificate
or certificates shall cease to be such director, directors, officer or officers
of the Company, whether because of death, resignation or otherwise, before such
certificate or certificates shall have been delivered by the Company, such
certificate or certificates may nevertheless be adopted by the Company and be
issued and delivered as though the Person or Persons who signed such certificate
or certificates or whose facsimile signature or signatures shall have been used
thereon had not ceased to be such director, directors, officer or officers of
the Company.
(b) Every Shareholder shall be entitled to one certificate for the
shares of Capital Stock of the Company registered in his name or to several
certificates, each for one or more of such shares of Capital Stock of the
Company. In respect of shares of Capital Stock of the Company held jointly by
two or more Persons, the Company shall not be bound to issue more than one
certificate, and delivery of a certificate in respect of the share or shares of
Capital Stock of the Company to one of several joint holders shall constitute
delivery to all.
(c) The Company shall be entitled to treat the Shareholder designated in
the share certificate as absolute owner thereof and shall not be bound to
recognize any equitable or other claim to or interest in such shares of Capital
Stock of the Company on the part of any other Person except as required by these
Articles or by order of a court of competent jurisdiction under authority of the
Act or other laws of the Commonwealth of The Bahamas. For the purposes of this
Article, where any Person is unconditionally entitled to be registered as the
holder of a share of Capital Stock of the Company, he, and not the registered
holder of such share, shall be deemed to be a Shareholder of the Company in
respect of that share of Capital Stock of the Company.
SECTION 6.3 RECORD DATES. The Board of Directors may fix in advance a
date, not less than ten nor more than sixty days preceding the date of any
meeting of the Shareholders, or the date for the payment of any dividend, or the
date for the distribution or allotment of any rights, or the date when any
change, conversion or exchange of shares of Capital Stock of the Company shall
go into effect, as a record date for the determination of the Shareholders
entitled to notice of, and to vote at, any such meeting, or entitled to receive
payment of any such dividend, or to receive any distribution or allotment of
such rights, or to exercise the rights in respect of any such change, conversion
or exchange of shares of Capital Stock of the Company, and in such case only
such Shareholders as shall be Shareholders of record on the date so fixed shall
be entitled to such notice of, and to vote at, such meeting, or to receive
payment of such dividend, or to receive such distribution or allotment or rights
or to exercise such rights, as the case may be, notwithstanding any transfer of
any stock on the books of the Company after any such record date fixed as
aforesaid.
SECTION 6.4 LOST CERTIFICATES. In the event that any certificate
representing shares of Capital Stock of the Company is lost, stolen, destroyed
or mutilated, the Board of Directors may authorize the issuance of a new
certificate of the same tenor and for the same number and type of shares of
Capital Stock of the Company in lieu thereof. The Board of Directors may in its
discretion, before the issuance of such new certificate, require the owner of
the lost, stolen, destroyed or mutilated certificate, or the legal
representative of the owner to make an affidavit or affirmation setting forth
such facts as to the loss, destruction or mutilation as it deems necessary, and
to give the Company a bond in such reasonable sum as it directs to indemnify the
Company against any loss or liability which the Company or its Directors may
incur by reason of wrongful or fraudulent use or representation made by any
Person by virtue of the possession of such certificate.
ARTICLE VII
SHARE TRANSFERS
SECTION 7.1 GENERALLY. Shareholders who are parties to the Shareholders
Agreement may not Transfer nor permit the Transfer of any of the Common Stock or
any other Capital Stock of the Company currently held or hereafter acquired by
any of them other than in accordance with the provisions thereof.
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SECTION 7.2 DRAG-ALONG RIGHTS. (a) After March 16, 2003, in the event that
any Initial Shareholder wishes to effect a Sale of the Company, such Initial
Shareholder shall promptly give written notice (the "DRAG-ALONG NOTICE") to the
other Shareholders (the "DRAG-ALONG SHAREHOLDERS") (with a copy to the Company)
at least thirty (30) days prior to the closing of such proposed Sale of the
Company. The Drag-Along Notice shall state (i) the name of the Person to which
the Sale of the Company would be made, (ii) the nature of such Sale of the
Company (acquisition of Capital Stock, assets, merger, etc.), (iii) the
specifics of the consideration proposed to be paid by the acquirer in connection
with such Sale of the Company, and (iv) all other material terms and conditions
of the proposed transaction.
(b) Subject to Section 7.2(c), at the request of the Initial
Shareholder proposing the Sale of the Company, each Drag-Along Shareholder shall
(and shall cause its designated Directors to, as applicable) (i) take all
necessary or desirable action within such Drag-Along Shareholder's control such
that any proposal or resolution requested by such Initial Shareholder in
connection with such Sale of the Company is implemented by the Company, (ii)
consent to and raise no objection against such Sale of the Company, and (iii) if
such Sale of the Company is structured as a sale of all of the Capital Stock of
the Company, each such Drag-Along Shareholder shall sell all of the Capital
Stock of the Company held by it for the same consideration and otherwise on the
same terms and conditions as are set forth in the Drag-Along Notice.
(c) Notwithstanding any other provision in these Articles or the
Shareholders Agreement to the contrary:
(i) Neither Solimar nor any Transferee of Solimar shall be
required (and shall not cause the Solimar Directors) to take all necessary
or desirable action or consent to and raise no objection against a Sale
of the Company proposed by either Founding Shareholder or to sell all of
the shares of Common Stock and other Capital Stock of the Company held by
it in connection with any Sale of the Company, as applicable, if the IRR
to be received by Solimar in such Sale of the Company would not exceed
35%; and
(ii) Solimar shall not have the right to request each
Drag-Along Shareholder (and each Drag-Along Shareholder shall not have the
obligation) to take all necessary or desirable action and to consent to
and raise no objection against a Sale of the Company proposed by Solimar,
and sell all of the shares of Common Stock and other Capital Stock of the
Company held by such Drag-Along Shareholders in connection with such Sale
of the Company, as applicable, if the IRR to be received by Solimar, in
such Sale of the Company would not exceed 20%; provided that if, as a
result of the operation of Section 8.6 of the Stock Purchase Agreement,
and after giving effect to the maximum U.S. $15,000,000.00 capital
contribution to be made by the Founding Shareholders, Solimar, holds more
than 65% of the shares of Common Stock and other Capital Stock of the
Company, the Drag-Along Shareholders shall take all necessary or desirable
action, shall consent to and raise no objection against a Sale of the
Company proposed by Solimar, and shall sell all of the shares of Common
Stock and other Capital Stock of the Company held by such Drag-Along
Shareholders in connection with such Sale of the Company, as applicable,
without regard to the IRR requirements stated in this Section 7.2(c)(ii).
(d) The provisions of this Section 7.2 shall not apply to any Sale
of the Company in which an Initial Shareholder receives a control premium or any
other consideration not offered to the Drag-Along Shareholders.
SECTION 7.3 TAG-ALONG RIGHTS. (a) Except under certain circumstances as
provided in the Shareholders Agreement, in the event that a Shareholder (the
"SELLING SHAREHOLDER") proposes to effect a sale of any of the shares of Common
Stock or other Capital Stock of the Company held by such Shareholder (the
"TAG-ALONG STOCK") to any Person, such Selling Shareholder shall promptly give
written notice (the "TAG-ALONG NOTICE") to the other Shareholders (the
"TAG-ALONG SHAREHOLDERS") (with a copy to the Company) at least thirty (30)
days prior to the closing of such proposed sale. The Tag-Along Notice shall
state (i) the name of the Person to which the Selling Shareholder proposes to
sell the Tag-Along Stock, (ii) the number and class of shares of Tag-Along Stock
the Selling Shareholder proposes to sell, (iii) the
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per share purchase price for the Tag-Along Stock and the total consideration to
be delivered to the Selling Shareholder, and (iv) all other material terms and
conditions of the proposed transaction.
(b) Each Tag-Along Shareholder shall have the right to participate
in such sale on the same terms and conditions as set forth in the Tag-Along
Notice and to sell all or a portion of the Common Stock or other Capital Stock
of the Company owned by it as determined in accordance with the calculation set
forth in Section 7.3(c) (the "PARTICIPATING SHAREHOLDERS"), by delivering to the
Selling Shareholder written notice within thirty (30) days after receipt of the
Tag-Along Notice of its intent to participate in such sale, which notice shall
indicate the maximum number of shares of Common Stock or other Capital Stock of
the Company held by the Participating Shareholder which it desires to sell in
such sale (which number may be in excess of the number of shares of the
Tag-Along Stuck).
(c) The Selling Shareholder shall use its reasonable best efforts
to interest the proposed purchaser of the Tag-Along Stock in purchasing, in
addition to the Tag-Along Stock, the shares of Common Stock and other Capital
Stock of the Company which the Participating Shareholders wish to sell. If such
proposed purchaser does not wish to purchase all of the shares of Common Stock
and other Capital Stock of the Company made available by the Selling Shareholder
and the Participating Shareholders, then each Participating Shareholder shall be
entitled to sell a "pro rata portion" (as defined below) of the shares of Common
Stock and other Capital Stock of the Company held by it and the number of shares
of Tag-Along Stock that the Selling Shareholder may sell shall be
correspondingly reduced. For purposes of this Section 7.3(c), "PRO RATA PORTION"
shall mean for each Participating Shareholder a fraction the numerator of which
is the number of shares of Tag-Along Stock proposed to be sold in the Tag-Along
Notice and the denominator of which is the total number of shares of Common
Stock and other Capital Stock of the Company owned by the Selling Shareholder
immediately prior to the sale proposed in the Tag-Along Notice.
(d) Any Participating Shareholder shall effect its participation
in the sale described in the Tag-Along Notice by delivering on the date
scheduled for such sale to the proposed purchaser one or more certificates, in
proper form for transfer, which represent the shares of Common Stock and other
Capital Stock of the Company which such Participating Shareholder is entitled to
sell in accordance with this Section 7.3. The proposed purchaser shall
concurrently therewith remit to each Participating Shareholder that portion of
the sale proceeds to which such Participating Shareholder is entitled by reason
of its participation in such sale. The sale of the shares of Common Stock and
other Capital Stock of the Company in any sale proposed in the Tag-Along Notice
shall be effected only on the terms and conditions set forth in the Tag-Along
Notice.
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ARTICLE VIII
PREEMPTIVE RIGHTS
(a) In the event the Company desires at any time and from time to time
after the date of the Shareholders Agreement to issue any New Stock, the
Shareholders shall have the preemptive right to purchase a portion of such New
Stock as provided in this Article VIII. In the event of each proposed issuance
of New Stock, the Company shall first deliver to each Shareholder a written
notice (the "NOTICE OF PROPOSED ISSUANCE") stating (i) the number and class of
shares of New Stock which the Company then desires to issue (the "OFFERED NEW
STOCK"), (ii) the price per share at which such Offered New Stock is proposed to
be issued, (iii) the expected timing of such issuance, (iv) all other material
terms and conditions of the proposed issuance, and (v) that the Shareholders
have the right to purchase the Offered New Stock on the terms set forth in such
Notice of Proposed Issuance.
(b) The offer constituted by the Notice of Proposed Issuance shall
remain open for acceptance by the Shareholders for a thirty (30) day period,
beginning on the date which is two (2) days after the Company sends the Notice
of Proposed Issuance pursuant to clause (a) of this Article VIII and ending at
midnight on the thirtieth (30th) day following the date such period begins.
Each Shareholder electing to purchase a portion of the shares of Offered New
Stock (a "SUBSCRIBER") must give written notice of its election to the Company
no later than the last day of such thirty (30) day period and must state in such
notice the number of shares of Offered New Stock that such Subscriber wishes to
purchase. If a Shareholder shall for any reason fail or refuse to give such
written notice to the Company within such thirty (30) day period, such
Shareholder shall, for all purposes of this Article VIII, be deemed to have
refused (in that particular instance only) to purchase any shares of such
Offered New Stock and to have waived (in that particular instance only) all of
its rights under this Article VIII to purchase any of such Offered New Stock.
(c) Each Subscriber shall have the right to purchase that number of
shares of Offered New Stock as shall be equal to the number of shares of Offered
New Stock multiplied by a fraction, the numerator of which shall be the number
of shares of Capital Stock of the Company then owned by such Shareholder on a
fully-diluted basis and the denominator of which shall be the aggregate number
of shares of Capital Stock of the Company issued and outstanding on a
fully-diluted basis (excluding the Offered New Stock).
(d) Each Subscriber shall have a right of over-subscription such that if
any other Shareholder fails to elect to purchase its full proportionate share of
the Offered New Stock or any Subscriber fails to purchase its proportionate
share of the Offered New Stock, as the case may be, the other Subscriber(s)
shall, among them, have the right to purchase up to the balance of such Offered
New Stock not so purchased. The Subscribers may exercise such right of over-
subscription by electing to purchase more than their proportionate share of the
Offered New Stock by so indicating in their written notice to the Company. If,
as a result thereof, such over-subscriptions exceed the total number of the
Offered New Stock available in respect of such over-subscription privilege, the
over-subscribing Subscribers shall be cut back with respect to
over-subscriptions on a pro rata basis in accordance with their respective
ownership in the Company or as they may otherwise agree among themselves.
ARTICLE IX
DIVIDENDS AND DISTRIBUTIONS
SECTION 9.1 GENERALLY. (a) The Company shall pay dividends and
distributions on its shares of Capital Stock to the extent such funds are in
excess of the amount needed to meet the anticipated obligations of the Company.
(b) Subject to the rights of holders of shares of Capital Stock of the
Company who are entitled to special rights as to dividends, all dividends shall
be declared and paid pari passu to the Shareholders of record at the date of the
declaration of the dividend, but no dividend shall be paid on those shares of
Capital Stock of the Company which are held by the Company as treasury shares.
If several persons are registered as joint holders of any shares of Capital
Stock
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of the Company, any of them may give effectual receipt for any dividend or other
moneys payable in respect of the shares.
(c) No dividend shall bear interest against the Company.
SECTION 9.2 AMOUNT AND FORM OF DIVIDEND PAYMENTS. (a) Dividends shall only
be paid out of the net profits of the Company and, except as provided in Section
9.3(b), shall only be paid in cash. No dividend will be declared or become
payable if the same contravenes any of the provisions of any Financial
Instrument to which the Company may be a party or is otherwise bound.
(b) The Directors, at their discretion, may deduct from the dividends
payable to any Shareholder all sums of money as may be owing by such Shareholder
to the Company; and the Directors shall keep such records of dividends paid and
deductions made as are necessary to reflect the financial position in this
regard.
SECTION 9.3 OTHER PERMISSIBLE USES OF SURPLUS AMOUNTS. (a) Subject to
Section 2.14(b), the Directors may, (i) before recommending any dividend, set
aside out of the profits of the Company such sum as they deem necessary as a
reserve fund to meet contingencies, equalize dividends, for special dividends or
bonuses, for repairing, improving, or maintaining any of the property of the
Company, or for such other purpose as the Directors shall in their absolute
discretion think conducive to the interests of the Company; (ii) invest the
several sums so set aside upon such investments as they deem necessary; and from
time to time vary such investments and dispose of all or any part thereof for
the benefit of the Company; or (iii) divide the reserve fund into any special
fund as they deem necessary and employ the reserve fund or any part thereof in
the business of the Company without being bound to keep the same separate from
the other assets.
(b) Subject to Sections 1.7(c) and 2.14(b), the Directors may resolve to
capitalize, in whole or in part, (i) the amount then available in any of the
Company's reserve accounts or profit and loss accounts or (ii) profits otherwise
available for distribution to the Shareholders, and distribute such amount
amongst the Shareholders, not in cash, but rather in fully paid shares,
debentures or other securities of the Company in the same proportion as such
Shareholders would have been entitled to if the equivalent amount had been
distributed as a cash dividend.
(c) Subject to Sections 1.7(c) and 2.14(b), if the Directors resolve to
capitalize such undistributed profits as aforesaid, they shall have full power
to make all decisions and provisions and to take all actions necessary to effect
the capitalization and consequent issuance of shares, debentures or other
securities to the Shareholders according to their respective entitlement and to
enter into such agreements with the Shareholders entitled to a distribution upon
capitalization as they deem appropriate, which agreements shall be binding on
such Shareholders.
SECTION 9.4 NOTICE OF DIVIDEND DECLARATIONS. Notice of any dividend that
is declared shall be given in a manner herein prescribed for notices to the
Shareholders.
SECTION 9.5 RECORDS. The Directors shall keep such accounts and records of
the capitalization of profits and distribution as they deem appropriate and in
the case of an issuance of bonus shares, the Directors shall make the necessary
entries in the Share Register in accordance with the requirements of these
Articles and the Act.
SECTION 9.6 CHECKS, NOTES. All checks and drafts on the Company's bank
accounts and all bills of exchange and promissory notes, and all acceptances,
obligations and other instruments for the payment of money, may be signed by the
President, any Vice President or the Treasurer and may also be signed by such
other officer or officers, agent or agents, as shall be thereunto authorized
from time to time by the Board of Directors.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 FISCAL YEAR. The fiscal year of the Company shall be
determined by the Board of Directors.
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SECTION 10.2 CORPORATE SEAL. The seal of the Company shall be circular in
form and contain the name of the Company. Such seal may be altered from time to
time at the discretion of the Board of Directors. The Directors shall provide
for the safe custody of the seal which shall not be used except by the authority
of a resolution of Directors.
SECTION 10.3 BOOKS; FINANCIAL AND OTHER INFORMATION. (a) The Company shall
maintain a system of internal accounting controls in accordance with GAAP and at
all times keep proper books of record and account. Such books of record and
account shall be kept at such office of the Company as the Board of Directors
shall determine, within or without the Commonwealth of The Bahamas. In addition,
there shall also be kept at the registered office of the Company, minutes of
the proceedings of the Shareholders, Board of Directors and committees, and the
Share Register, containing the names and addresses of the Shareholders, the
number of shares of Capital Stock of the Company held by them, respectively, and
the dates when they respectively became the owners of record thereof, and in
which the transfer of stock shall be registered, and such other books and
records as the Board of Directors may from time to time determine.
(b) Subject to any other rights afforded to holders of shares of Capital
Stock under Bahamian law, each Initial Shareholder and each other Shareholder
holding at least 20% of the shares of Capital Stock of the Company at such time
shall have the right, at such Shareholder's expense, to visit and inspect during
regular business hours any of the premises where the business of the Company and
the Subsidiaries is conducted, and to discuss the affairs, finances and accounts
of the Company and the Subsidiaries with their respective officers, and to have
access to and review the Company's and the Subsidiaries' books of account and
records, including banking records and correspondence with present or past
external auditors, and other information reasonably requested, all at such
reasonable times and as often as may be reasonably requested; provided that
neither the Company nor any Subsidiary shall be obligated under this Section
10.3 with respect to a Shareholder that is a competitor or with respect to
information which the Board of Directors determines in good faith is
confidential and should not, therefore, be disclosed.
SECTION 10.4 LIQUIDATION OF THE COMPANY. Subject to the terms of the
Indenture, in the event of any liquidation, dissolution or winding up of the
Company, the net proceeds thereof will be distributed to all of the holders of
the Capital Stock of the Company pro rata to their respective percentage
ownership of such Capital Stock as of such liquidation, dissolution or winding
up.
ARTICLE XI
AMENDMENTS
These Articles may be amended in accordance with the provisions of
Section 1.7(c)(i). Any proposal to amend or repeal these Articles or to adopt
new Articles shall be staled in the notice of the meeting of the Shareholders,
or in the waiver of notice thereof, as the case may be, unless all of the
holders of record of all of the shares of stock of the Company, issued and
outstanding and entitled to vote, are present at such meeting.
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ARTICLE XII
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 12.1 DEFINITIONS. When used in these Articles of Association, the
following terms shall have the respective meanings specified therefor below:
"ACCESSION AGREEMENT" shall mean each Accession Agreement to be entered
into by the Company and each Transferee, substantially in the form of Exhibit A
to the Shareholders Agreement, which, when so entered into, shall be an integral
part of such Agreement.
"ACT" shall mean the International Business Companies Act, 1989.
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by, or under common Control with,
such Person.
"ANNUAL BUDGET" shall mean the operating and financial plan of the Company
for each year.
"APPRAISAL PROCEDURE" shall mean the following procedure to determine the
fair market value for purposes of the definition of Fair Market Value (for
purposes of this definition, the "VALUATION AMOUNT"):
(a) the Shareholders shall endeavor in good faith to determine
jointly the Valuation Amount within ten (10) Business Days of an event
requiring the determination of Fair Market Value;
(b) if the Shareholders are not able to agree on the Valuation
Amount within the period stated in clause (a) above, the Valuation Amount
shall be determined by an investment banking firm of international
recognition with experience in the maritime sector, which firm the
Shareholders shall endeavor in good faith to jointly select within five
(5) Business Days after the end of the ten (10) Business Day period stated
in clause (a) above;
(c) if the Shareholders select an investment banking firm as
provided in clause (b) above, such investment banking firm shall have
thirty (30) Business Days from the date of its retention to determine the
Valuation Amount, which determination shall be final and binding upon the
Shareholders;
(d) if the Shareholders fail to select an investment banking firm
as provided in clause (b) above, each of Solimar and the other
Shareholders shall separately retain an investment banking firm of
international recognition with experience in the maritime sector within
five (5) Business Days after the end of the five (5) Business Day period
stated in clause (b) above and instruct such investment banking firm to
determine the Valuation Amount within thirty (30) Business Days from the
date of its retention;
(e) if the Valuation Amounts determined by the two (2) investment
banking firms retained by Solimar and the other Shareholders pursuant to
clause (d) above are within a range of less than or equal to 15% of the
higher Valuation Amount, the final Valuation Amount shall be the average
of such two (2) Valuation Amounts, which average Valuation Amount shall be
final and binding upon Solimar and the other Shareholders;
(f) if the Valuation Amounts determined by the two (2) investment
banking firms retained by Solimar and the other Shareholders pursuant to
clause (d) above are not within the range described in clause (e) above,
Solimar and the other Shareholders shall cause their respective investment
banking firms to select a third investment banking firm of international
recognition with experience in the maritime sector within five (5)
Business Days of the date of the determination of the Valuation Amounts
pursuant to clause (e) above, which third investment banking firm shall
determine the Valuation Amount within thirty (30) Business Days of its
retention; and
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(g) if a third investment banking firm is required to be retained
as provided in clause (f) above, the final Valuation Amount shall be the
average of the two (2) Valuation Amounts which are closest to each other,
which average Valuation Amount shall be final and binding upon the
Shareholders unless the third Valuation Amount is within 5% of the average
of the high and low Valuation Amounts, in which case such third Valuation
Amount shall be final and binding upon the Shareholders.
The fees and expenses of any investment banking firm retained in
connection with the determination of the Valuation Amount as provided above
shall be paid by the Shareholders pro rata to their ownership of shares of
Capital Stock of the Company.
"ARTICLES" shall mean these Amended and Restated Articles of Association
of the Company, as they may be amended from time to time in accordance with the
provisions hereof.
"AUDIT COMMITTEE" shall have the meaning assigned to such term in Section
3.1(a).
"BOARD OF DIRECTORS" shall have the meaning assigned to such term in
Section 2.1.
"BUSINESS DAY" shall mean any day, other than a Saturday, Sunday or a day
on which banks located in New York City or Nassau, the Commonwealth of The
Bahamas shall be authorized or required by law to close.
"BUSINESS PLAN" shall mean the initial five (5) year business plan of the
Company and the Subsidiaries for the fiscal year ending December 31, 2000
through the fiscal year ending December 31, 2004, as amended or supplemented
from time to time.
"CAPITAL STOCK" shall mean (a) as to any Person that is a corporation, the
authorized capital stock of such Person, including all classes and series of
common, preferred, voting and nonvoting capital stock, and (b) as to any Person
that is not a corporation or an individual, the ownership interests in such
Person, including, without limitation, the right to share in profits and losses,
the right to receive distributions of cash and property, and the right to
receive allocations of items of income, gain, loss, deduction and credit and
similar items from such Person, whether or not such interests include voting or
similar rights entitling the holder thereof to exercise control over such
Person.
"CAUSE" shall mean one or more of the following grounds for termination of
the employment of the Chief Executive Officer:
(a) the Chief Executive Officer shall have been convicted by a
court of competent jurisdiction of, or pleaded guilty or nolo contendere
to, or made a written admission of the commission of, a felony or
equivalent crime in any jurisdiction, based on his or her commission of a
criminal act;
(b) any material breach by the Chief Executive Officer of any
provision of his employment agreement with the Company, the Memorandum and
Articles of Association or any similar document or instrument governing
the Subsidiaries or any other agreement between the company and the Chief
Executive Officer, which breach continues for a period of thirty (30) or
more days following written notice thereof by any Shareholder or any
Director to the Chief Executive Officer;
(c) any act by the Chief Executive Officer involving moral
turpitude, fraud or misrepresentation with respect to his duties for the
Company or any of the Subsidiaries;
(d) gross negligence or willful misconduct on the part of the
Chief Executive Officer in the performance of his duties for the Company
or any of the Subsidiaries;
(e) use of alcohol or illegal drugs interfering with the
performance of the Chief Executive Officer's duties for the Company or any
of the Subsidiaries, which use continues for a period of thirty (30) or
more days following written notice thereof by any Shareholder or any
Director to the Chief Executive Officer;
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(f) the budgeted revenues and earnings as set out in an Annual
Budget have not been substantially met by the Company and the Subsidiaries
on a consolidated basis during a period of two (2) consecutive years.
"CHAIRMAN" shall have the meaning assigned to such term in Section 1.5(a).
"CHIEF EXECUTIVE OFFICER" shall have the meaning assigned to such term in
Section 4.5.
"COMMON STOCK" shall mean the ordinary common shares of the Company, par
value $.01 per share.
"COMPANY" shall mean Ultrapetrol (Bahamas) Limited.
"COMPENSATION COMMITTEE" shall have the meaning assigned to such term in
Section 3.1(a)
"CONTROL", "CONTROLLED" or "CONTROLLING" shall mean, with respect to any
Person, any circumstances in which such Person is directly or indirectly
controlled by another Person by virtue of the latter Person having the power to
(a) elect, or cause the election of (whether by way of voting Capital Stock, by
contract, or otherwise), the majority of the members of the board of directors
or a similar corporate body of the former Person, or (b) direct (whether by way
of voting Capital Stock, by contract or otherwise) the affairs and policies of
such Person.
"CONTINGENT OBLIGATION" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (the "PRIMARY OBLIGATIONS") of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefore, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof; provided
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonable anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"DIRECTOR" shall mean a member of the Board of Directors.
"DOLLARS" OR "U.S.$" shall mean the lawful currency of the United
States of America.
"DRAG-ALONG NOTICE" shall have the meaning assigned to such term in
Section 7.2(a).
"DRAG-ALONG SHAREHOLDERS" shall have the meaning assigned to such term in
Section 7.2(a).
"EXECUTIVE COMMITTEE" shall have the meaning assigned to such term in
Section 3.1(a).
"FAIR MARKET VALUE" shall mean (a) as to Non-Cash Consideration consisting
of property other than Liquid Securities, the "Fair Market Value" of such
property, as determined in accordance with the Appraisal Procedure, using any
appropriate valuation method, assuming an arms-length sale to an independent
party, (b) as to (i) Non-Cash Consideration consisting of Liquid Securities
(such Liquid Securities are referred to in this definition, collectively, as the
"SECURITIES"), the Twenty Day Average of the average closing prices of such
securities' sales on all securities exchanges on which such securities may at
the time be listed, or, if there have been no sales on any such exchanges on any
day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such securities are not so
listed, the average of the representative bid and asked prices quoted in any
market system as of
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4:00 p.m., New York City time, on such day, or, if on any day such securities
are not quoted in any market system, the average of the highest bid and lowest
asked prices on such day in any over-the-counter market (and in each such case
excluding any trades that are not bona fide, arm's-length transactions). If at
any time such securities are not listed on any securities exchange or quoted in
any market system or any over-the-counter market, the "Fair Market Value" of
such property shall be as determined in accordance with the Appraisal Procedure,
using an appropriate or generally accepted valuation method, assuming an
arms-length sale to an independent party. In determining the Fair Market Value
of a share or unit of a security, as the case may be, a sale of all of the
issued and outstanding shares or units of such security will be assumed, without
(contractual or otherwise) applicable thereto or any discount for minority
interests and assuming (A) that the ownership of the security is widely
distributed and not closely held by a control Person or group, (B) the
conversion or exchange of all securities then outstanding that are convertible
into or exchangeable for such securities, and (C) the exercise of all rights and
warrants then outstanding and exercisable to purchase such securities or
securities convertible into or exchangeable for such securities; provided that
such assumption will not include those securities, rights and warrants
convertible into shares or units, as the case may be, of such securities where
the conversion, exchange or exercise price per share or unit, as the case may
be, is greater than the Fair Market Value; provided further that Fair Market
Value shall be determined with regard to the relative priority of each class or
series of such securities (if more than one class or series exists).
"FINANCIAL INSTRUMENTS" shall mean a contractual arrangement establishing
financial rights and obligations between contracting parties and shall include:
(i) a "credit instrument," which is a financial instrument issued
by a financial institution, (namely an organization whose primary business
activities relate to monetary matters and financial services including,
but without limitation to, a bank, trust company, insurance company,
investment dealer and credit union) whereby the issuer, pursuant to stated
conditions, undertakes to provide credit to, or meet the obligations of,
the parties specified in the instrument;
(ii) a "derivative instrument," which is a contract that transfers
one or more of the financial risks inherent in a financial instrument,
entered into as a hedging or income-generating activity; and
(iii) a bond, bond indenture, trust deed or indenture, debenture,
mortgage, note, or other certificate of indebtedness, loan agreement, or
any document creating a liability represented by a contractual obligation
to deliver cash or another financial asset.
"FOUNDING SHAREHOLDERS" shall mean collectively SII and Los Avellanos.
"FOUNDING SHAREHOLDERS DIRECTORS" shall mean the Los Avellanos Directors
and the SII Directors.
"FULLY-DILUTED BASIS" shall mean, with respect to the Common Stock or any
other Capital Stock of the Company, at any date as of which the number of shares
thereof is to be determined, all shares of Common Stock or any other Capital
Stock of the Company, as the case may be, outstanding at such date and all
shares of Common Stock or any other Capital Stock of the Company, as the case
may be, issuable pursuant to vested and exercisable options, warrants or other
rights to purchase or acquire, or securities convertible into, shares of Common
Stock or any other Capital Stock of the Company, as the case may be, outstanding
on such date.
"GAAP" shall mean generally accepted accounting principles in the United
States consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any government (or any subdivision
thereof, whether federal, central, provincial or local) of any country or
jurisdiction, or any agency, authority, board, bureau, commission, department,
judicial or administrative body, instrumentality, regulatory authority or
similar body or instrumentality thereof, or any governmental court or tribunal.
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"INDEBTEDNESS" shall mean, as to any Person, without duplication, (a) all
indebtedness (including principal, interest, fees and charges) of such person
for borrowed money or for the deferred purchase price of property or services
other than trade payables and accrued expenses arising in the ordinary course of
business in accordance with customary trade terms, (b) the maximum amount
available to be drawn under all letters of credit issued for the account of such
Person and all unpaid drawings in respect of such letters of credit, (c) all
Indebtedness of the types described in this definition secured by any Lien on
any property owned by such Person, whether or not such Indebtedness has been
assumed by such Person, (d) all capitalized lease obligations of such Person,
(e) all obligations of such Person to pay a specified purchase price for goods
or services, whether or not delivered or accepted, (for example, take-or-pay
and similar obligations), (f) all Contingent Obligations of such Person, (g)
all obligations under any interest rate protection agreements, currency
protection agreements, interest rate swaps, control disbursement accounts,
repurchase agreements, reverse repurchase agreements, caps, collars,
derivatives, currency hedge agreements or other similar types of agreements, and
(h) any premiums and other amounts payable to any third party pursuant to any
mandatory prepayment obligations under the terms of any Indebtedness as a
result of the consummation of the transactions contemplated hereby.
"INDENTURE" shall mean the indenture dated March 30, 1998 between the
Company and Allfirst Bank (formerly known as The First National Bank of
Maryland), as trustee, entered into in connection with the issuance of the Notes
by the Company.
"INITIAL PUBLIC OFFERING" shall mean the initial underwritten public
offering by the Company of the Common Stock or any other Capital Stock of the
Company pursuant to an effective registration statement under the Securities Act
or a similar statute in any other jurisdiction.
"INITIAL SHAREHOLDERS" shall collectively mean Los Avellanos, SII and
Solimar; provided that the term Initial Shareholder shall not include any
Transferee (other than the Investors or a Permitted Transferee) that has
acquired any of such Initial Shareholder's Common Stock or any other Capital
Stock of the Company and has thus become a party to the Shareholders Agreement
as a Shareholder.
"INSTALLMENT DATE" shall have the meaning assigned to such term in the
Stock Purchase Agreement.
"INVESTORS" shall mean WSUP Investors LDC, a limited duration company
organized under the laws of Cayman Islands, and LA1F.
"IRR" shall mean the annual rate (assuming annual compounding), determined
in accordance with principles customarily used in the financial community in
calculating internal rate of return on investment, which, if used to discount to
present value the payments in cash or cash equivalents made or received by
Solimar for or in respect of the Solimar Stock during the period from the date
of receipt by Solimar of the Net Proceeds back to the date of the acquisition of
such Solimar Stock (with all amounts, if any received in any currency other than
Dollars converted into Dollars at the exchange rate in effect, as quoted by
Bloomberg for similar financial transactions, as of the date of receipt of such
amounts), would cause the net present value (on such date) of such investments
to equal zero (0). In calculating the IRR: (a) the principal of first in, first
out shall be used in determining which shares of Solimar Stock are deemed to
have been Transferred in a Sale of the Company; (b) each payment received in
cash or cash equivalents by Solimar for or in respect of such Solimar Stock
(including any prior dividends actually received thereon) shall be treated as a
cash inflow with a positive value, and each payment made by Solimar in respect
of such Solimar Stock (including payments made or amounts withheld in respect of
taxes, if any, solely with respect to taxes imposed on payments between the
Commonwealth of the Bahamas, on the one hand, and Cayman Islands or Bermuda, on
the other hand) shall be treated as a cash outflow with a negative value; (c)
each such payment received or made described in clause (b) above shall be
discounted from the date actually made or received to the date of Solimar's
initial acquisition of such Solimar Stock, with the payments for subsequent
acquisitions of Solimar Stock being treated as cash outflows as of the date of
each such subsequent acquisition; and (d) payments in reimbursement of any
out-of-pocket expenses incurred by any of the Investors, Solimar or the Solimar
Directors with respect to the acquisition or holding of the Solimar Stock shall
not be treated as a cash inflow and therefore shall be
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disregarded. For the avoidance of doubt, any director or monitoring fees
received by any Solimar Director or Solimar shall not be considered payments in
respect of the Solimar Stock and shall be disregarded.
"LAIF" shall mean AIG-GE Capital Latin American Infrastructure Fund L.P.,
a limited partnership organized under the laws of Bermuda.
"LIEN" shall mean any lien, security interest, option, right of first
refusal, easement, mortgage, charge, indenture, deed of trust, right of way,
restriction on the use of real property, encroachment, license to third parties,
lease to third parties, security agreement, or any other encumbrance and other
restriction or limitation on use of real or personal property or irregularities
in title thereto.
"LIQUID SECURITIES" shall mean any equity or debt securities of any
Person for which there is an available market and the realizable fair market
value of which is easily determinable.
"LOS AVELLANOS" shall mean Inversiones Los Avellanos S.A., a company
organized under the laws of Chile.
"LOS AVELLANOS DIRECTORS" shall mean the three (3) individuals (plus
alternates) nominated to the Board of Directors by Los Avellanos in accordance
with the Shareholders Agreement.
"MEMORANDUM AND ARTICLES OF ASSOCIATION" shall mean the Memorandum and
Articles of Association of the Company, as each may be amended from time to time
in accordance with the provisions hereof and thereof.
"NET PROCEEDS" shall mean the cash, cash equivalents or Non-Cash
Consideration received by Solimar or its Transferees as a result of a Sale of
the Company minus: (a) the commissions, fees, legal expenses and other
transaction costs and expenses payable by Solimar or its Transferees in
connection with such Sale of the Company; (b) the aggregate amount of any
accrued but unpaid dividends or other distributions on the Solimar Stock at such
time, and (c) the portion of the fees and expenses payable by Solimar or its
Transferees in connection with determining the Fair Market Value of the Non-Cash
Consideration.
"NEW STOCK" shall mean (a) any shares of Common Stock or any other Capital
Stock of the Company not issued on the date of the Shareholders Agreement, (b)
any rights, options, or warrants to purchase such Common Stock or other Capital
Stock of the Company, and (c) any Capital Stock of the Company that is, or may
become, convertible into, exercisable, exchangeable, or carrying rights to
subscribe for Common Stock or other Capital Stock of the Company; provided that
New Stock shall not include (i) the Common Stock issued pursuant to Article II
and Section 8.6 of the Stock Purchase Agreement, (ii) the Capital Stock of the
Company issued pursuant to the Stock Option Plan, (iii) the Capital Stock of the
Company issued in an Initial Public Offering or any subsequent primary public
offering, (iv) the Capital Stock of the Company issued pursuant to the Warrant
Agreement and (v) the Capital Stock of the Company issued in connection with a
Sale of the Company.
"NON-CASH CONSIDERATION" shall mean all consideration, other than cash or
cash equivalents, including, without limitation, Liquid Securities, received by
Solimar or its Transferees in a Sale of the Company.
"NOTES" shall mean the U.S. $135,000,000.00 aggregate principal amount of
10 1/2% First Preferred Ship Mortgage Notes due 2008 issued pursuant to the
Indenture.
"NOTICE OF PROPOSED ISSUANCE" shall have the meaning assigned to such term
in Article VIII.
"OFFERED NEW STOCK" shall have the meaning assigned to such term in
Article VIII.
"OFFERED STOCK" shall have the meaning assigned to such term in Section
7.3(a).
"PARTICIPATING SHAREHOLDERS" shall have the meaning assigned to such term
in Section 7.3(b).
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"PERMITTED TRANSFEREE" shall mean a Transferee of LAIF which (a) at the
time of such Transfer is a wholly-owned subsidiary of LAIF and (b) executes and
delivers an Accession Agreement.
"PERSON" shall mean any individual, limited public company, limited
private company, partnership, corporation, limited liability company, business
trust, joint stock company, unincorporated association, joint venture,
investment fund, other entity of whatever nature or Governmental Authority.
"PRINCIPAL OWNER AFFILIATE" shall mean a Person that is directly or
indirectly Controlled by one or several Principals Owners and, for the avoidance
of doubt, shall not include any Person in which one or several Principal Owners
collectively own a minority of the Capital Stock and do not in any way have
Control of such Person as a result of such minority ownership.
"PRINCIPAL OWNERS" shall mean, collectively, SIPSA S.A., a publicly traded
company organized under the laws of Chile, Solfina S.A., a company organized
under the laws of Argentina Mero N.V., a company organized under the laws of the
Commonwealth of The Bahamas, Interpetrol S.A., a company organized under the
laws of Argentina, and Trafigura Beheer B.V., a company organized under the laws
of the Netherlands.
"PURCHASER INDEMNITEE" shall mean Solimar, the Investors, the other direct
and indirect shareholders of Solimar and permitted Transferees.
"REGULAR TRADE" shall mean any waterborne transportation business carried
on frequently or actively through contracts of affreightment or consecutive
voyages or similar successive cargo arrangements.
"RELATED PARTY TRANSACTION" shall mean any contract, agreement
arrangement, or other transaction (whether written or oral), or any series of
Related Party Transactions, between the Company or any of the Subsidiaries, on
the one hand, and (a) any Affiliate of the Company, (b) any holder of Common
Stock or any other Capital Stock of the Company, (c) any Affiliate of any holder
of Common Stock or any other Capital Stock of the Company, (d) any officer,
Director or employee of the Company or any officer, director or employee of any
of the Subsidiaries, or (e) any Person holding, directly or indirectly, a
substantial economic interest in any of the foregoing Persons (other than
individuals), on the other hand.
"RELEVANT STOCK EXCHANGE" shall mean any stock exchange in the United
States or in any other jurisdiction, whose listing requirements are no more
burdensome or restrictive than those of any stock exchange located in the United
States, on which the Common Stock or any other Capital Stock of the Company may
be listed from time to time.
"SALE OF THE COMPANY" shall mean a single transaction or series of related
transactions pursuant to which a Person (other than an Affiliate of the Initial
Shareholders) will acquire (a) all of the issued and outstanding Common Stock
and any other Capital Stock of the Company (whether by a Transfer of such Stock,
or by merger, consolidation, amalgamation or reorganization), or (b) all or
substantially all of the assets of the Company and the Subsidiaries on a
consolidated basis; provided that (i) any such Sale of the Company is achieved
pursuant to an arm's length transaction, (ii) the consideration payable in
connection with such Sale of the Company is either cash or Liquid Securities,
and (iii) the consideration payable in connection with such Sale of the Company
is required to be distributed pro rata to all of the holders of the Common Stock
and any other Capital Stock of the Company pursuant to their percentage
ownership of such Capital Stock of the Company.
"SECURITIES ACT" shall mean the Securities Act of 1933 of the United
States, as amended, or any similar federal statute and the rules and regulations
of the Securities and Exchange Commission of the United States thereunder, as
amended from time to time.
"SELLING SHAREHOLDER" shall have the meaning assigned to such term in
Section 7.3(a).
"SHAREHOLDERS" shall mean, collectively, holders of shares of Capital
Stock of the Company.
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"SHAREHOLDERS AGREEMENT" shall mean that certain Shareholders Agreement,
dated as of March 16, 2000, by and among the Company, Los Avellanos. SII and
Solimar, as amended, restated, modified or supplemented from time to time.
"SHAREHOLDERS NON-COMPETITION AGREEMENT" shall mean the Shareholders
Non-Competition Agreement, dated as of March 16,2000, by and among the initial
Shareholders, the Principal Owners (other than Solfina S.A.) and the Investors.
"SHARE REGISTER" shall have the meaning assigned to such term in Section
1.7(g).
"SII" shall mean Societe Internationale D'Investissements S.A. a company
organized under the laws of the Commonwealth of the Bahamas
"SII DIRECTORS" shall mean the two (2) individuals (plus alternates)
nominated to the Board of Directors by SII in accordance with the Shareholders
Agreement.
"SOLIMAR" shall mean Solimar Holdings LDC, a limited duration company
organized under the laws of Cayman Islands; provided that upon a Transfer of all
or a portion of the Solimar Stock to the Investors or a Permitted Transferee,
the term Solimar shall mean Solimar and/or the Investors and/or such Permitted
Transferee, as the case may be.
"SOLIMAR DIRECTORS" shall mean the four (4) individuals (plus alternates)
nominated to the Board of Directors by Solimar in accordance with Shareholders
Agreement.
"SOLIMAR STOCK" shall mean the Common Stock and any other Capital Stock of
the Company (a) purchased by Solimar on each Installment Dare, and (b) if any,
purchased by Solimar pursuant to the terms of the Shareholders Agreement.
"STOCK OPTION PLAN" shall mean an incentive stock option plan for the
Directors and the management of the Company to be adopted by the Company, as
amended from time to time.
"STOCK PURCHASE AGREEMENT" shall mean that certain Stock Purchase
Agreement, dated as of March 7, 2000, by and among the Company, Solimar, Los
Avellanos and SII.
"SUBSCRIBER" shall have the meaning assigned to such term in Article VIII.
"SUBSIDIARIES" shall mean (a) any Person at least 50% of whose Capital
Stock having by the terms thereof ordinary voting power to elect a majority of
the directors of such Person (whether or not at the time such Capital Stock of
such Person shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by the Company and/or one or more of the
Subsidiaries, (b) any Person in which the Company and/or one or more of the
Subsidiaries holds at least 50% of the Capital Stock at the time, and (c) any
Person in which the Company and/or one or more of the Subsidiaries possesses,
directly or indirectly, the power to direct or cause the direction of the
affairs or management of such Person.
"TAG-ALONG NOTICE" shall have the meaning assigned to such term in Section
7.3(a).
"TAG-ALONG SHAREHOLDERS" shall have the meaning assigned to such term in
Section 7.3(a).
"TAG-ALONG STOCK" shall have the meaning assigned to such term in Section
7.3(a).
"TRANSFER" shall mean the sale, transfer, exchange, gift, mortgage,
alienation, pledge, assignment, hypothecation, encumbering or other disposition,
voluntarily or involuntarily, by operation of law or otherwise (or an agreement
to do any of the foregoing).
"TRANSFEREE" shall mean a Person that has acquired any shares of Common
Stock or other Capital Stock of the Company from a Shareholder; provided that
the term Transferee shall not include a Person that acquired such Common Stock
or other Capital Stock of the Company pursuant to (a) an Initial Public
Offering, (b) a subsequent public offering by the Company or a Shareholder of
the Common Stock or any other Capital Stock of the Company, or (c) a subsequent
brokered sale of Common Stock or other Capital Stock of the Company listed on a
Relevant Stock Exchange that has not been privately negotiated.
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"TWENTY DAY AVERAGE" shall mean, with respect to any prices used in
connection with the calculation of Fair Market Value, the average of such prices
over the twenty (20) Business Days ending on the Business Day immediately prior
to the day as of which "Fair Market Value" is being determined.
"VESSEL CONTRACTS" shall mean agreements, contracts or commitments with
respect to the spot chartering of the Vessels entered into in the ordinary
course of business of the Company or any of the Subsidiaries.
"VESSELS" shall mean all of the ocean-going and river vessels that are
owned, leased, time chartered to, consecutive voyage chartered to, bareboat
chartered to or operated by the Company or any of its Subsidiaries.
"WARRANT AGREEMENT" shall mean the Warrant Agreement to be entered into
between the Company and WS Capital Holdings LLC.
SECTION 12.2 RULES OF CONSTRUCTION. In these Articles, unless the context
otherwise requires:
(a) any reference in these Articles to "writing" or cognate
expressions includes a reference to facsimile transmission or comparable
means of communication;
(b) words importing the singular number shall include the plural
and vice versa, words importing the masculine shall include the feminine
and neuter gender and vice versa;
(c) references to Sections are references to sections of these
Articles, unless otherwise stated;
(d) references to "day" or "days" are to calendar days; and
(e) references to any agreement or document shall he construed as
a reference to such agreement or document as the same may have been, or
may from time to time be, amended, varied, novated or supplemented.
ADOPTED AS OF 25TH DAY OF MAY, A.D. 2000.
COMMONWEALTH OF THE BAHAMAS
REGISTRATION GENERAL'S DEPARTMENT
I certify the foregoing to be a true copy of the
original document
/s/ [ILLEGIBLE]
--------------------------------
Registrar General
MAY 25 2000
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