EX-10.14 18 file015.htm SHAREHOLDERS AGREEMENT

SHAREHOLDERS' AGREEMENT

BY AND AMONG

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PASCUAL MASTELLONE
VICTORIO BRUNO MASTELLONE
JOSE MASTELLONE
DALLPOINT INVESTMENTS LTD.
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Buenos Aires, March 4, 1999

SHAREHOLDERS' AGREEMENT

This Shareholders' Agreement (the "Agreement") dated March 4, 1999, by and
among:

Mr. Pascual MASTELLONE, bearer of identity card DNI 4,889,103, domiciled in
General Rodriguez, Province of Buenos Aires, at Brown 957;

Mr. Victorio Bruno MASTELLONE, bearer of identity card L.E. No. 4,908,288,
domiciled in General Rodriguez, Province of Buenos Aires, at Ejercito Argentino
884;

Mr. Jose MASTELLONE, bearer of identity card L.E. No. 4,913,592, domiciled in
General Rodriguez, Province of Buenos Aires, at Ejercito Argentino 884;
(collectively referred to as the "Mastellone Brothers") and

Dallpoint Investments Ltd. (hereinafter "Dallpoint") a company duly organized
and existing under the laws of the British Virgin Islands, domiciled for the
purposes hereof in Buenos Aires at Av. Corrientes 311, 5th Floor, Capital City,
herein represented by Mr. Carlos Marcelo Agote, in his capacity as
attorney-in-fact. The Mastellone Brothers and Dallpoint shall be individually
referred to as "Party" or "Shareholder" and collectively as "Parties" or
"Shareholders".

WHEREAS

A. On August 3, 1998, the Parties entered into a "Shareholders' Agreement",
governing the relation between the Parties as of that date.

B. On August 23, 1998, the Parties entered into a "Shareholders' Agreement"
providing for additional contributions, and governing the terms and
conditions of such contributions.

C. On December 2, 1998, the Parties entered into an "Amended Shareholders'
Agreement".

D. On the date hereof the Parties have entered into a "Stock Purchase
Agreement" under which Dallpoint acquired from Mastellone Brothers certain
shares issued by Mastellone Hnos S.A. (the "Company").

E. The above mentioned "Stock Purchase Agreement" also provides for the
subscription by Dallpoint of all the shares to be issued by the Company
upon a Capital Stock increase called by the Board of Directors on the date
hereof.

F. Upon consummation of the above mentioned transfer of shares and the
subscription by Dallpoint of the new shares to be issued pursuant to the
Company's Capital Stock increase, the Company's ownership structure shall
be as follows:

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SHAREHOLDER CLASS A SHARES CLASS B SHARES TOTAL
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Pascual Mastellone 43,482,328 27,178,770 70,661,098
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Victorio Bruno Mastellone 43,482,324 27,178,767 70,661,091
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Jose Mastellone 43,482,324 27,178,767 70,661,091
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Dallpoint Investments Ltd. 51,500,000 52,910,665 104,410,665
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TOTAL 181,946,976 134,446,969 316,393,945
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G. In the light of the new equity interests of the Parties in the Company, and
in order to have a single document governing the relation among
Shareholders, the Parties have agreed to terminate the documents mentioned
in the Whereas Clauses A, B and C hereof and enter into a new Shareholders'
Agreement.

NOW, THEREFORE, the Parties agree as follows:

Section 1. Effectiveness of Agreement.
---------------------------

1.1. The Parties agree that as of this date and upon execution hereof, this
Agreement shall govern the relation between the Parties in all matters
provided for herein. Therefore, this Agreement shall be binding, both
directly and indirectly, on and as among the Shareholders, their
successors, heirs, assignees, legal representatives, trustees, etc.

1.2. The Parties expressly agree that this Agreement supersedes: (i) the
"Shareholders' Agreement made by and among the Parties on August 3, 1998;
(ii) the "Shareholders' Agreement dated October 23, 1998; and (iii) the
"Amended Shareholders' Agreement", dated December 2, 1998.

1.3. The documents referred to in the preceding paragraph shall be
automatically terminated and cease to be valid and/or effective; and the
Parties hereby acknowledge and agree that they have no claims against
each other in connection with such termination.

1.4. The Parties agree to cause the Company and its management and auditing
bodies, as well as any and all companies and/or entities in which the
Company holds an equity interest, and their respective management and
auditing bodies, to abide and cause abidance to this Agreement. Each
Party shall be liable for the faithful performance of its obligations
under this Agreement.

2. Bylaws
------

2.1. Attached hereto as Schedule 2.1 is a copy of the Company's Bylaws, as in
effect. The Parties represent that, except for the change in the Capital
Stock as may be resolved at the Special General Meeting of Shareholders
called for March 24, 1999, no amendment to the Bylaws is pending
implementation or registration as of the date hereof.

3. Company's Board of Directors
----------------------------

3.1. The Parties agree that the Board of Directors shall consist of three (3)
regular members, and that an equal number of alternates may be appointed.

3.2. Notwithstanding the foregoing, in the event the Parties desire to
increase the number of members of the Board of Directors, it is hereby
agreed that the Board of Directors shall at all times consist of an odd
number of regular members and that an equal number of alternates may be
appointed.

3.3. Where the Company's Board of Directors consists of three regular members,
Dallpoint shall have the right to appoint one Regular Director and one
alternate Director. If the Company's Board of Directors consists of five
or seven regular members, Dallpoint shall have the right to appoint two
Regular Directors and an equal number of alternates. If the Company's
Board of Directors consists of nine regular members, Dallpoint shall have
the right to appoint three Regular Directors and an equal number of
alternates.

3.4. The Board of Directors shall adopt resolutions with the approval of at
least one Regular Director appointed by Dallpoint. The foregoing shall
apply provided that the Director(s) appointed by Dallpoint attend the
relevant meeting, and that such Director(s)' refusal to approve the
matters at issue shall be reasonably founded.

3.5. All meetings of the Company's Board of Directors shall be called on at
least forty-eight hour days' notice by the Chairman, by letter and/or
facsimile to the address and/or telephone number designated by each
Director. The notice of meeting shall contain the items of the agenda to
be discussed thereat, and attach any documents related thereto.

3.6. Notwithstanding the provisions of the Bylaws, the Board of Directors
shall hold at least one meeting monthly.

Section 4. Board of Directors of subsidiaries and affiliates
-------------------------------------------------

4.1. The Parties expressly agree that Dallpoint may at its sole option and at
any time as it may determine, appoint at least one Regular Director and
one alternate Director to the Board of Directors of each of the companies
in which the Company shall hold an equity interest (other than Danone
S.A. and Lacteos Longchamps S.A and the company to be organized pursuant
to the provisions of the agreement entered into with Challener Holding
Inc., dated January 22, 1999).

4.2. In the event Dallpoint makes an appointment as provided for herein above,
the Board of Directors of the relevant subsidiary and/or affiliate shall
adopt its resolutions with the approval of at least the Director
appointed by Dallpoint. The foregoing shall apply provided that the
Director appointed by Dallpoint attends the relevant meeting, and that
such Director's refusal to approve the matters at issue be reasonably
founded.

Section 5. Audit Committee of the Company and its subsidiaries and affiliates.
-------------------------------------------------------------------

5.1. The Parties agree that the business and affairs of the Company and of any
and all companies in which the Company holds an equity interest shall be
audited, respectively, by an Audit Committee consisting of three (3)
regular members and three (3) alternate members.

5.2. Dallpoint may at all times appoint at least one (1) regular member and
one (1) alternate member to the Audit Committee of the Company and of all
such companies or entities in which the Company shall hold an equity
interest (other than Danone S.A. and Lacteos Longchamps S.A and the
company to be organized pursuant to the provisions of the agreement
entered into with Challener Holding Inc., dated January 22, 1999).

5.3. In addition, at least one (1) regular member and one (1) alternate member
of the Company's Audit Committee shall be a partner of the Company's
independent audit firm selected in accordance with Section 6 of this
Agreement.

5.4. At the option of Dallpoint, at least one (1) regular member and one (1)
alternate member of the Audit Committees of the companies or entities in
which the Company shall hold an equity interest shall be a partner of the
Company's independent audit firm selected in accordance with Section 6 of
this Agreement.

Section 6. Independent Auditors
--------------------

The Company's independent auditors shall be selected by the Parties from the
list of entities included in Schedule 6 hereof. In the event that in the
reasonably founded opinion of any of the Parties it is desirable to change the
selected independent auditors, the Parties agree that new independent auditors
shall be selected from the list of firms included in Schedule 6 hereof.

Section 7. Meetings of Shareholders
------------------------

7.1. With respect to the matters provided for in Schedule 7.1 hereof, the
presence of Dallpoint's representative shall be necessary to constitute a
quorum, and any resolution thereon shall require the affirmative vote of
such representative.

7.2. If any of the matters provided for in Schedule 7.1 is to be discussed or
resolved at a meeting of shareholders of any of the Company's
subsidiaries or affiliates, the Parties agree to previously discuss such
matters at a Meeting of Shareholders of the Company, or else to agree on
any other method to Dallpoint's satisfaction ensuring that the relevant
matters shall not be approved without Dallpoint's consent.

Section 8. Limitation on the transfer of Shares and Rights
-----------------------------------------------

8.1. As a general principle, unless the Company's shares list on any stock
exchange and/or self-regulated market, the Parties agree that they shall
not sell, transfer, assign, pledge and/or otherwise encumber, create any
lien or usufruct on, trade, convey title to, or dispose of, whether under
a trust or otherwise, its shares; and shall not sell, transfer, assign,
create any lien on, trade, convey title to or in any manner dispose of,
whether under a trust or otherwise, the rights of first refusal,
preemptive rights, or irrevocable contributions on account of the
subscription of Shares, or debt securities convertible into capital
stock, or any other negotiable economic right or interest in the
Company's shares, without first providing for the exercise of the right
of first refusal agreed in Section 9.

8.2 The above restriction shall not apply to any transfer by any of the
Parties to a parent company and/or subsidiary; provided, however, that
prior notice thereof shall be given to the other Parties.

Section 9. Right of first refusal
----------------------

9.1. In the event that any of the Parties desires to sell all or any portion
of its shareholding, preemptive rights or residual pre-emptive right (the
"Selling Party"), such Party shall, prior to consummating any sale to
third parties, give written notice of its desire to sell, for the other
parties to exercise their right of first refusal- in a percentage equal
to that of their respective holdings less the Selling Party's holding-
according to the following procedure:

a. The Selling Party shall give written notice to the other Parties of
its decision to sell, specifying: (i) number of shares offered for
sale; (ii) price, term, form of payment and terms and conditions of
the offer and, if there is a third party interested in purchasing the
shares offered for sale, such third party's name, address and
telephone number (hereinafter the "Offer for Sale"). The other
Parties shall have thirty (30) calendar days from receipt of the
Offer for Sale to accept it or reject it. Acceptance of the Offer for
Sale shall constitute an irrevocable obligation to purchase the
shares and/or rights offered thereunder on terms and conditions
identical to those stated in the above mentioned notice. Failure to
answer to, or non-acceptance of an Offer for Sale within the term
stated above shall be deemed a rejection of the Offer for Sale, in
which event the Selling Party may dispose of the rights and/or shares
offered thereunder, within sixty (60) days of notice of Offer for
Sale to the other Parties, on terms and conditions identical to those
specified in the Offer for Sale.

b. If any third party should make a purchase offer ("Purchase Offer")
with respect to the Selling Party's shares, the Selling Party shall,
prior to consummating the sale: (i) allow the other Parties to
exercise the right of first refusal provided for in the preceding
paragraph, for which purpose the Selling Party shall give notice of
the terms and conditions of the Purchase Offer to the other Parties,
which will have thirty (30) calendar days to accept it or reject it.
Upon rejection or failure to answer by the other Parties, the Selling
Party shall give effect to the transfer of shares and/or rights
provided for in the Purchase Offer not later than sixty (60) days of
notice of the Purchase Offer, on terms and conditions identical to
those specified therein. If the relevant shares and/or rights are not
sold within such term, the Selling Party shall be required to follow
this procedure again; (ii) as the case may be, inform the relevant
third party of (a) the option provided for in Section 10, and (b) the
preemptive right of the Parties; and (iii) give written notice to
such third party of the full contents of this clause.

9.2. Any Offer for Sale or Purchase Offer shall be deemed irrevocable after
notice thereof has been given.

9.3. As used herein, Purchase Offer shall be any act by any third party,
whether a natural or legal person, aimed at acquiring all or any of the
shares and/or rights thereon. The foregoing shall not apply to Company's
redemption of its shares.

9.4. Upon infringement of any of the provisions of this Section 9, this
Agreement shall be automatically terminated for Selling Party's breach,
and the other Parties shall be entitled to damages.

9.5. The restriction agreed by the Parties shall not apply to any transfer by
any of the Parties to a parent company and/or subsidiary; provided,
however, that prior notice thereof

shall be given to the other Parties. The restriction also does not apply
where the Company's shares are listed on any Stock Exchange or
self-regulated market.

Section 10. Public Offering of Company's Shares
-----------------------------------

10.1. In the event that Dallpoint considers that it is convenient for the
Company to issue shares to be publicly offered, the Parties agree to take
the necessary corporate action to obtain the requisite approvals.

10.2. Additionally, in the event that Dallpoint gives written notice to the
Mastellone Brothers of its intention to sell through the Bolsa de
Comercio de Buenos Aires [Buenos Aires Stock Exchange] all or any portion
of the Company's shares held by it, the Mastellone Brothers agree to
adopt all requisite resolutions of shareholders, and to cause their
representatives at the Board of Directors to take such action as may be
necessary for the Company to obtain as soon as possible the appropriate
approvals from the Buenos Aires Stock Exchange, any other self-regulated
market and the Comision Nacional de Valores [Argentine Securities and
Exchange Commission] to make a public offering of its shares.

10.3. Dallpoint shall designate the placement agent(s) and determine jointly
with such agents the system to be applied to, as well as the price and
other terms and conditions for, the subscription of the shares.

10.4. The Parties agree that, prior to taking any action aimed at obtaining the
approvals provided for in 10.1 and 10.2, the Bylaws shall be amended to
eliminate such provisions as in the Parties opinion are inconvenient for,
or prevent or hinder, the normal placement of shares by public offering.

10.5. In the event that the Mastellone Brothers determine to have the Company's
shares listed on the Buenos Aires Stock Exchange and/or any
self-regulated market in order to sell their equity interest in the
Company, the Parties agree to take the necessary corporate action to
obtain the requisite approvals. Notwithstanding the foregoing, prior to
taking any action in connection therewith, the shareholder desiring to
sell its shares shall allow the other parties to exercise the right of
first refusal set forth in Section 9. For all purposes thereof, the
purchase price shall be the price of the shares of holders desiring to
have their shares listed, as shown in the most recent audited balance
sheet prepared by the Company and filed with the Buenos Aires Stock
Exchange (book value) as of the date of notice to the other shareholders.
Notwithstanding the foregoing, any holder desiring to sell its shares
may, prior to giving the above mentioned notice, request, at its own cost
and expense, the valuation of the Company by two internationally
recognized Investment Banks. In this event, the price payable for the
shares shall be the average of these two valuations. If accepted, the
offer, together with the payment of the price, shall be made within
ninety (90) days of acceptance. Any shareholder desiring to have its
shares listed shall select the Placement Agent and bear the costs
thereof.

Section 11. Distribution of Dividends - Business and Investment Plan
--------------------------------------------------------

11.1. The Parties agree to use their best efforts and adopt such decisions as
are necessary for the Company to distribute the maximum amount of
dividends permitted, subject to the restrictions resulting from the
various agreements executed by the Company to the date hereof.

11.2. The Board of Directors may execute any kind of agreement imposing
additional restrictions on the distribution of dividends, provided that
any decision or agreement affecting the right to distribute dividends
shall require prior approval at a Meeting of Shareholders, which shall
adopt the relevant resolution in accordance with Section 7 hereof.

11.3. A business and investment plan is attached hereto as Schedule 11.3. This
plan shall be carried out by the Company with funds to be contributed by
Dallpoint upon subscription of the Capital Increase.

Section 12. Company's Management
--------------------

12.1. The Company shall be managed by the current management team.

12.2. In the event Mr. Pascual Mastellone shall not serve as President of the
Company, the Parties agree to cause a Director appointed by Dallpoint to
serve as Vice President.

12.3. Nominees to the Company's management offices and General Management
Office shall be approved by the Board of Directors.

12.4. It is expressly agreed that Dallpoint shall have special influence on the
Company's internal audit area and division, and that it may, based on a
reasonable and founded criterion, develop new internal management and
audit policies related to such area and/or division, and appoint any
additional employees in connection therewith. In addition, Dallpoint may,
at any time, conduct an internal audit of the Company or of such areas as
it may deem fit, at its own cost.

12.5. The Parties undertake to cause all Company's management offices and all
companies and/or entities in which the Company holds an equity interest
(other than Danone S.A. and Lacteos Longchamps S.A.) to issue a monthly
report -which shall be delivered to Shareholders at the address set forth
in the preamble to this Agreement- containing updated information on the
matters discussed by such management offices and/or subsidiaries and/or
affiliates after the last report. The Parties undertake to use their best
efforts to cause Danone S.A. and Lacteos Longchamps S.A. to issue reports
of their respective activities at regular intervals.

12.6. Notwithstanding the foregoing, it is understood and agreed that for so as
long as this Agreement is in full force and effect, and in addition to
the accounting books and records that pursuant to provisions of law the
Company shall keep and make available to shareholders according to
section 67 and related sections of Argentine Act 19,550, Shareholders
shall have the right to demand that the Chairman of the Board of
Directors, through its legal representatives or designated directors, as
the case may be, make available to Shareholders any contract, agreement,
evidence of payment, balance sheet, receipt, book and, generally, any
document related to the business and affairs of

the Company and/or its subsidiaries and/or affiliates, and the Board of
Directors shall take all actions necessary to ensure that such
information is furnished to the requesting Shareholder within 48 hours
after request.

Section 13. Representations and Warranties
------------------------------

Each Shareholder represent and warrants that (a) the execution and performance
of this Agreement do not and will not contravene, or result in a breach of the
terms of, any agreement or instrument to which such Shareholder is a party or by
which such Shareholder is bound, or constitute a violation of any decree,
judgement or order of any court or governmental agency or authority, and (b)
this Agreement constitutes the legal, valid and binding obligation of each
Shareholder, enforceable in accordance with its terms.

Section 14. Prior Agreement
---------------

This Agreement shall prevail over any provision to the contrary contained in the
Company's Bylaws, and in case of conflict, the Parties agree to use their best
reasonable efforts to amend the Bylaws to make them consistent with the
provisions hereof.

Section 15. Confidentiality
---------------

Each Shareholder shall, for a term of three (3) years after it shall have
transferred its shares in the Company, keep confidential, with respect to any
person other than its associates or shareholders, any and all information
obtained in its capacity as shareholder, or through directors, unless such
information is required to be disclosed to any domestic or foreign government
authority entitled to request it, and provided such Shareholder shall give prior
notice of that circumstance to the Company and the other Parties.

Section 16. Effectiveness
-------------

This Agreement shall become effective upon execution and continue in full force
and effect during the term of duration of the Company, unless (i) earlier
terminated by the Parties' mutual agreement in writing, or (ii) Dallpoint's
interest in the Company's capital stock shall be lower than 15% (fifteen per
cent). In any of these two events, the parties shall not be entitled to make any
claim or demand damages against each other. The provisions of Section 15 shall
survive the termination of this agreement, irrespective of the reasons therefor.

Section 17. Governing Law
-------------

This Agreement shall be governed by and construed in accordance with the laws of
the Republic of Argentina. Any dispute arising out of or in connection with this
Agreement, or the construction or performance hereof shall be submitted to the
exclusive jurisdiction of the General Arbitration Board of the Buenos Aires
Stock Exchange. Without prejudice to this arbitration jurisdiction, the Parties
agree that where court assistance is required due to lack of imperium of the
above mentioned General Arbitration Board, any dispute in connection herewith
shall be submitted to the Ordinary Commercial Courts of the City of Buenos
Aires, with exclusion of any other court. The Mastellone Brothers hereby waive
the right to file a motion requesting security for costs of litigation (cautio
judicatum solvi), provided for in section 348 of the Argentine Federal Code of
Procedures in Civil and Commercial Matters.

Section 18. Notices
-------

18.1. Any notices or other communications required or permitted under this
Agreement shall be in writing and will be deemed given on the date they
are received, whether delivered personally or by certified mail, postage
prepaid, return receipt requested. All such notices shall be given at the
domiciles set forth in the preamble of this Agreement, which shall be
deemed valid for all purposes hereof.

18.2 Any Party may change its domicile for notices, by written notice to the
other Parties as specified in the foregoing paragraph.

IN WITNESS WHEREOF, this Agreement is executed in two (2) counterparts, in the
City of Buenos Aires, on the date first above written.

/s/ Carlos Agote

/s/ Pascual Mastellone

/s/ Victorio Mastellone

/s/ Jose Moreno